JETBLUE AIRWAYS CORPORATION
401(k) RETIREMENT PLAN
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER 15
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY 16
2.3 POWERS AND DUTIES OF THE ADMINISTRATION 16
2.4 RECORDS AND REPORTS 18
2.5 APPOINTMENT OF ADVISORS 18
2.6 PAYMENT OF EXPENSES 18
2.7 CLAIMS PROCEDURE 18
2.8 CLAIMS REVIEW PROCEDURE 19
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY 19
3.2 EFFECTIVE DATE OF PARTICIPATION 20
3.3 DETERMINATION OF ELIGIBILTY 20
3.4 TERMINATION OF ELIGIBILITY 20
3.5 OMISSION OF ELIGIBLE EMPLOYEE 21
3.6 INCLUSION OF INELIGIBLE EMPLOYEE 21
3.7 REHIRED EMPLOYEES AND BREAKS IN SERVICE 21
3.8 ELECTION NOT TO PARTICIPATE 22
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION 23
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION 23
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION 27
4.4 ALLOCATION OF CONTRIBUTION AND EARNING3 27
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS 32
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS 35
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS 38
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS 41
4.9 MAXIMUM ANNUAL ADDITIONS 44
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS 46
4.11 ROLLOVERS AND PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS 48
4.12 DIRECTED INVESTMENT ACCOUNT 50
4.13 QUALIFIED MILITARY SERVICE 53
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND 53
5.2 METHOD OF VALUATION 53
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT 53
6.2 DETERMINATION OF BENEFITS UPON DEATH 54
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY 55
6.4 DETERMINATION OF BENEFITS UPON TERMINATION 56
6.5 DISTRIBUTION OF BENEFITS 57
6.6 DISTRIBUTION OF BENEFITS UPON DEATH 60
6.7 TIME OF SEGREGATION OR DISTRIBUTION 61
6.8 DISTRIBUTION FOR MINOR OF INCOMPETENT BENEFICIARY 61
6.9 LOCATION OF PARTICIPANT OF BENEFICIARY UNKNOWN 61
6.10 PRE-RETIREMENT DISTRIBUTION 62
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP 62
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION 64
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE 64
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE 65
7.3 OTHER POWERS OF THE TRUSTEE 66
7.4 LOANS TO PARTICIPANT'S 68
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS 70
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES 70
7.7 ANNUAL REPORT OF THE TRUSTEE 71
7.8 AUDIT 71
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE 72
7.10 TRANSFER OF INTEREST 73
7.11 TRUSTEE INDEMNIFICATION 73
7.12 DIRECT ROLLOVER 73
7.13 EMPLOYER SECURITIES AND REAL PROPERTY 75
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT 75
8.2 TERMINATION 76
8.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS 76
ARTICLE IX
TOP HEAVY PROVISIONS
9.1 TOP HEAVY PLAN REQUIREMENTS 77
9.2 DETERMINATION OF TOP HEAVY STATUS 77
ARTICLE X
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS 80
10.2 ALIENATION 8O
10.3 CONSTRUCTION OF PLAN 81
10.4 GENDER AND NUMBER 82
10.5 LEGAL ACTION 82
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS 82
10.7 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE 83
10.8 INSURER'S PROTECTIVE CLAUSE 83
10.9 RECEIPT AND RELEASE FOR PAYMENTS 83
10.10 ACTION BY THE EMPLOYER 83
10.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY 83
10.12 HEADINGS 84
10.13 APPROVAL BY INTERNAL REVENUE SERVICE 84
10.14 UNIFORMITY 85
JETBLUE AIRWAYS CORPORATION
401(k) RETIREMENT PLAN
THIS AGREEMENT hereby adopted this 31st day of December, 2001, by
jetBlue Airways Corporation (herein referred to as the "Employer") and John D.
Owen, Thomas E. Kelly and Vincent Stablie (herein collectively 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, 1999 (hereinafter called the "Effective Date"),
known as jetBlue Airways Corporation 401k Retirement 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 reserved the
right and power 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, 1999, except as otherwise
provided herein, 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 Employees 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 corporation (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 organazation (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 Particiapnt, whether attributable to
Employer or Employee contributions, subject to tne provisions of Section 9.2.
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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.
1.7 "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)).
For purposes of this Section, the determination of Compensation
shall be made by:
(a) excluding, for purposes of the Employer's discretionary
profit sharing contributions pursuant to Section 4.1(c), the
following items: per diem allowances and other similar types of
expense reimbursements, the value of company-paid group term life
insurance; moving allowances, relocation adjustments and other
similar payments and allowances; automobile expense allowances and
reimbursements; annual bonuses to officers and directors, but not
excluding cash incentive awards and other types of cash bonuses to
team members other than officers and directors; the value of other
non-cash fringe benefits, such as incentive passes and "positive
space" travel benefits; PTO payouts; any taxable compensation that
may result from the grant or exercise of stock-based compensation;
any other type of deferred compensation; severance pay and payments
in the nature of severance benefits; non-taxable sick pay, workers
compensation payments and payments under short-term and long-term
disability plans; and payments under a pilots' loss of license
income replacement plan.
(b) excluding, for purposes of salary reduction elections
pursuant to Section 4.2 and Employer matching contributions pursuant
to Section 4.1(b), the following items: per diem allowances and
other similar types of expense reimbursements, the value of
company-paid group term life insurance; moving allowances,
re1ocaton adjustments and other similar payments and allowances;
automobile expense allowances and reimbursements; the value of other
non-cash fringe benefits, such as incentive passes and "positive
space" travel benefits; any taxable compensation that may result
from the grant or exercise of
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stock-based compensation; any other type of deferred
compensation; severance pay and payments in the nature of
severance benefits; non-taxable sick day; workers compensation
payments and payments under any long-term disability plan; and
payments under a pilots' loss of license income replacement plan.
(c) 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 as of such Employee's effective date of participation in the
component of the Plan for which Compensation is being used pursuant to Section
3.2.
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 on 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).
If any class of Employees is excluded from the Plan, then
Compensation for any Employee who becomes eligible or ceases to be eligible to
participate during a Plan Year shall include only the portion of his
Compensation earned while the Employee is an Eligible Employee.
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 4.1O(a).
1.11 "Designated Investment Alternative" means a specific investment
identified by name by the Employer (or such other Fiduciary who has been given
the authority to select investment options) as an available investment under the
Plan to which Plan assets may be
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invested by the Trustee pursuant to the investment direction of a Participant.
1.12 "Directed Investment Option" means one or more of the following:
(a) a Designated Investment Alternative.
(b) any other investment permitted by the Plan and the
Participant Direction Procedures to which Plan assets may be
invested by the Trustee pursuant to the investment direction of a
Participant.
1.13 "Early Retirement Date." This Plan does not provide for a retirement
date prior to Normal Retirement Date.
1.14 "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, any Employer
Qualified Non-Elective Contribution made pursuant to 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.
1.15 "Eligible Employee" means any Employee except as specified below.
Employees whose employment is governed by the terms of a collective
bargaining agreement between Employee representatives (within the meaning of
Code Section 7701 (a) (46)) and the Employer under which retirement benefits
were the subject of good faith bargaining between the parties will not be
eligible to participate in this Plan unless such agreement expressly provides
for coverage on this Plan.
Employees of Affiliated Employers shall rot be eligible to
participate on 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.
Employees classified by the Employer as flight attendants on a
short-term contract of one year or less shall not be Eligible Employees.
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1.16 "Employee" means any person who is employed by the Employer.
1.17 "Employer" means jetBlue Airways Corporation and any successor which
shall maintain this Plan; any predecessor which has maintained this Plan.
The Employer is a corporation, with principal offices in the State of New York.
1.18 "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) and any qualified nonelective 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.
1.19 "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).
1.20 "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 end 4.4(g), Excess Deferred Compensation shall continue
to be treated as Employer contributions even of 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
extant such Excess Deferred Compensation occurs pursuant to Section 4.2(d).
1.21 "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
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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.
1.22 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on January 1st of each year and ending the following December 31st.
1.23 "Forfeiture" means that portion of a Participant's Account that is
not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of the
Participant's Account of a Former Participant who has severed
employment with the Employer, or
(b) the last day of the Plan Year in which a Former
Participant who has severed employment with the Employer incurs five
(5) consecutive 1-Year Breaks in Service.
Regardless of the preceding provisions, if a Former Participant is
eligible to share in the allocation of Employer contributions or Forfeitures in
the year in which the Forfeiture would otherwise occur, then the Forfeiture will
not occur until the end of the first Plan year for which the former Partcipant
is not eligible to share in the allocation of Employer contributions or
Forfeitures. Furthermore, the term "Forfeiture" shall also include amounts
deemed to be Forefeiture pursuant to any other provision of this Plan.
1.24 "Former Participant" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.25 "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 Purposes of this Section, the determination of "415
Compensation" shall occlude any elective deferral (as defined on 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.
1.26 "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
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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.
1.27 "Highly Compensated Employee" means, for Plan Years beginning after
December 31, 1996, an Employee described on Code Section 414(q) and the
Regulations thereunder, and generally means any Employee who:
(a) was a "five percent owner" as defined in Section 1.32(c)
at any time during the "determination year" or the "lookback year";
or
(b) for the "lookback year" had "415 Compensation" from the
Employer in excess of $80,000 and was in the Top-Paid Group for the
"lookback 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 "lookback 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, A4 and IRS
Notice 9745 (or any superseding guidance).
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.
In determining who is a Highly Compensated Employee, Employees who
are nonresident 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
Employer. Additionally, all Affiliated Employers shall be taken into account as
a single employer any 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."
1.28 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to particiapate in the component
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of the Plan being tested.
1.29 "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 compensation 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, layoff, 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 entit1ed 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.
For purposes of (2) above, a payment shall be deemed to be made by
or due from the Employer regardless 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.
Notwithstanding the foregoing, for purposes of vesting hereunder, a
Participant shall be credited with Hours of Service on the basis of his payroll
period in accordance with the equivalencies set forth in Department of Labor
regulation 2530.200b-3(e)(1), which is incorporated herein by reference.
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)
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are incorporated herein by reference.
1.30 "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).
1.31 "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.
1.32 "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 unicorporated 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.
(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
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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 4l4(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 includibie
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.
1.33 "Late Retirement Date" means the first day of the month coinciding
with or next following a Participant's actual Retirement Date after having
reached Normal Retirement Date.
1.34 "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, 2001, excluding
amounts that are not includible in gross income under Code
Section 132(f)(4);
(2) immediate participation;
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(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more tnan 20% of the
recipient Employer's non-highly compensated work force.
1.35 "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 and any Qualified Non-Elective
Contribution used in the "Actual Deferral Percentage" tests.
1.36 "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.
1.37 "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.
1.38 "Normal Retirement Age" means the Participant's 60th birthday. A
Participant shall become fully Vested in the Participant's Account upon
attaining Normal Retirement Age.
1.39 "Formal Retirement Date" means the first day of the month coinciding
with or next following the Participant's Normal Retirement Age.
1.40 "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 emp1oyment 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 on 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 created for the computation period in which the
absence from work begins, only of credit therefore is necessary to prevent the
Employee
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from incurring a 1-Year Break in Service, or, on any other case, on the
immediately following computation period. The Hours of Service credited for
"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.
1.41 "Participant" means any Eligible Employee who participates in the
Plan and has not for any reason become ineligible to participate further in the
Plan.
1.42 "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 and provided to Participants who have Participant Directed Accounts.
1.43 "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(c) and any Employer Qualified
Non-Elective Contributions.
1.44 "Participant's Combined Account" means the total aggregate amount of
each Participant's Elective Account and Participant's Account.
1.45 "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.
1.46 "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 room 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 and any Employer Qualified Non-Elective Contributions.
1.47 "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 those Plan from a direct plan-to-plan
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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 on 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."
1.48 "Plan" means this instrument, including all amendments thereto.
1.49 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending the following December 31st,
except for the first Plan Year which commenced October 1st.
1.50 "Qualified Non-Elective Contribution" means any Employer
contributions made pursuant to Section 4.6(b) and Section 4.8(f). Such
contributions shall be considered an Elective Contribution for the purposes of
the Plan and used to satisfy the "Actual Deferral Percentage" tests or the
"Actual Contributions Percentage" tests.
1.51 "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.
1.52 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.53 "Retirement Date" means the date as of which a Participant retires
for reasons other than Total and Permanent Disability, whether such retiremnet
occurs on a Participant's Normal Retirement Date or Late Retirement Date (see
Section 6.1).
1.54 "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.
1.55 "Top Heavy Plan" means a plan described in Section 9.2(a).
1.56 "Top Heavy Plan Year" means a Plan Year during which the Plan is a
Top Heavy Plan.
1.57 "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 plan
plan
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maintained by the Employer. Employees who are nonresident aliens who received
no earned income (with 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).
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.
1.58 "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 determined by a
licensed physician chosen by the Administrator. The determination shall be
applied uniformly to all Participants.
1.59 "Trustee" means the person or entity named as trustee herein or in
any separate trust forming a part of this Plan, and any successors.
1.60 "Trust Fund" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.61 "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 Participant's accounts during the Plan Year, which may
include any day that the Trustee, any
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transfer agent appointed by the Trustee or the Employer or any stock exchange
used by such agent, are open for business.
1.62 "Vested" means the nonforfeitable portion of any account maintained
on behalf of a Participant.
1.63 "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.
For vesting purposes, the computation periods shall be the Plan
Year, including periods prior to the Effective Date of the Plan.
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).
Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITES 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 on connection with the exercise of its fiduciary duties
under this Plan. The Employer may compensate such agents or
advisers from one assets of the Plan as fiducary expenses (but
not including any business (settlor) expenses of the Emp1oyer, 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 which respect to any
or all of the Plan assets. Such appointment shell 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
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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 or those 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.
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 ADMINITRATOR
The primary responsibility of the Administrator is to administrator
the Plan for the exclusive benefit of the Participants and the 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 on 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 cased
upon uniform principles consistently applied and shall be consistent with the
-16-
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, inducing,
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 Paln in order that the
Trustee can exercise any investment discretion in a manner designed
to accomplish specific objectives;
(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 act as the named Fiduciary responsibile for
communications with Participants as needed to maintain Plan
compliance with Act Section 404(c), including, but not limited to,
the receipt and transmitting of Participant's directions as to the
investment of their account(s) under the Plan and the formulation of
policies, rules, and
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procedures pursuant to which Participants may give investment
instructions with respect to the investment of their accounts;
(k) to determine the validity of, and take appropriate action
with respect to, any qualified domestic relations order received by
it; and
(l) 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.
2.3 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, agents (including
such fiduciary 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 on 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
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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 to the notice on 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.
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 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
An Eligible Employee shall be eligible to participate hereunder on
the date of such Employee's employment with the Employer.
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3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee, with respect to salary reduction elections
pursuant to Section 4.2 and Employer matching contributions pursuant to Section
4.1(b), shall become a Participant efective 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).
However, with respect to Employer discretionary contributions
pursuant to Section 4.1(c), an Eligible Employee shall become a Participant
effective as of the date on which such Employee satisfies the eligibility
requirements of Section. 3.1.
If an Employee, who has satisfied the Plan's eligibility
requirements and would otherwise have become a Participant, shall go from a
classification of a non-eligible Employee to an Eligible Employee, such
Employee shall become a Participant on the date such Employee becomes an
Eligible Employee or, if later, the date that the Employee would have otherwise
entered the Plan had the Empoyee always been an Eligible Employee.
If an Employee, who has satisfied the Plan's eligibility
requirements and would otherwise become a Participant, shall go from a
classification of an Eligible Employee to a non-eligible class of Employees,
such Employee shall become a Partiipant in the Plan on the date such Employee
again becomes an Eligible Employee, or, if later, the date that the Employee
would have otherwise entered the Plan had the Employee always been an Eligible
Employee. However, if such Employee incurs a 1-Year Break in Service,
eligibility will be determined under the Break in Service rules set forth in
Section 3.7.
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 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
non-eligible 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.
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3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Particlpant in the Plan is erroneously omitted and discovery of such ommission
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 seen
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 provide 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 AND BREAKS IN SERVICES
(a) If any Participant becomes a Former Participant due to
severance from employment with the Employer and is re-employed by
the Employer before a 1-Year Break in Service occurs, the Former
Participant shall become a Participant as of the re-employment
date.
(b) If any Participant becomes a former Participant due to
severance from employment with the Employer and is re-employed
after a 1-Year Break in Service has occurred, Years of Service shall
include years of Service prior to the 1-Year Break in Service
subject to the following rules:
(I) In the case of a Former Participant who under the
Plan does not have a nonforfeitable right to an
interest in the Plan resulting from Employer
contributions, Years of Service before a period of
1-Year Break in Service will not be taken into account
if the number of consecutive 1-Year Breaks in Service
equal or exceed the greater of (A) five (5) or (B) the
aggregate number of pre-break Years of Service. Such
aggregate number of Years of Service will not include
any Years of Service disregarded under the preceding
sentence by reason of prior 1-Year Breaks in Services.
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(2) A Former Participant shall participate on the Plan
as of the date of re-employment.
(c) After a Former Participant who has severed
employment with the Employer incurs five 5) consecutive 1-Year
Breaks in Service, the Vested portion of said Former
Participant's Account attributable to pre-break service shall
not be increased as a result of post-break service. In such
case, separate accounts will be maintained as follows:
(1) one account for nonforfeitable benefits attributable
to pre-break service; and
(2) one account representing the Participant's Employer
derived account balance in the Plan attributable to
post-break service.
(d) If any Participant becomes a Former Participant due
to severance of employment with the Employer and is
re-employed by the Employer before five (5) consecutive 1-Year
Breaks in Service, and such Former Participant had received a
distribution of the entire Vested interest prior to
re-employment, then the forfeited account shall be reinstated
only if the Former Participant repays the full amount which
had been distributed. Such repayment must be made before the
earlier of five (5) years after the first date on which the
Participant is subsequently re-employed by the Employer or the
close of the first period of five (5) consecutive 1-Year
Breaks in Service commencing after the distribution. If a
distribution occurs for any reason other than a severance of
employment, the time for repayment may not end earlier than
five (5) years after the date of distribution. In the event
the Former Participant does repay the full amount distributed,
the undistributed forfeited portion of the Participant's
Account must be restored in full, unadjusted by any gains or
losses occurring subsequent to the Valuation Date preceding
the distribution. The source for such reinstatement may be
Forfeitures occurring during the Plan Year. If such source is
insufficient, then the Employer will contribute an amount
which is sufficient to restore any such forfeited Accounts
provided, however, that if a discretionary contribution is
made for such year pursuant to Section 4.1(c), such
contribution will first be applied to restore any such
Accounts and the remainder shall be allocated in accordance
with Section 4.4.
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
-22-
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.
(b) On behalf of each Participant who elects to defer
Compensation in accordance with Section 4.2(a) hereof, a matching
contribution equal to 100% of each such Participant's Deferred
Compensation not in excess of 3% of his Compensation, which amount
shall be deemed an Employer Non-Elective Contribution.
In applying the foregoing matching formula, the matching
contribution shall be accrued separately for each pay period during
the Plan Year, and only Deferred Compensation not in excess of 3% of
a Participant's Compensation in any such pay period shall be
considered. Except, however, in applying the matching formula
specified above for the Plan Years beginning January 1, 2000, and
January 1, 2001, respectively, salary reductions up to 3% of
Compensation for the entire Plan Year shall be considered.
(c) A discretionary amount, which amount, if any, shall be
deemed an Employer Non-Elective Contribution.
(d) 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 Compensation which
would have been received in the Plan Year, but for the deferral
election, by up to 15%. A deferral election (or modiication 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
3l, 2000, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee
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contributions described in. Code Section 414(h)(2) that are treated
as Employer contributions.
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.
(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 or 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
-24-
(6) the proven financial hardship of a Participant subject to
the limitations of Section 6.l1.
(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, than 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
l.402(g)-l(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
-25-
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;
(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 saving 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
-26-
exceed thirty (30) days, after entering the Plan pursuant to
Section 3.2. If the Participant fails to make an i3nitial
salary deferral election within such time, then such
Participant may thereafter make an election in accordance with
the rules govering 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 at any time
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. Any modification shall not
have retroactive effect and shall remain in force until
revoked.
(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.
-27-
(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 Non-Elective Contribution
made pursuant to Section 4.1(b), to each 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 Non-Elective Contribution
made pursuant to Section 4.1(c), 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 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 made
available to reinstate previously forfeited account balances of
Former Participants, if any, in accordance with Section 3.7(d), be
used to satisfy any contribution that may be required pursuant to
Sections 3.5 and 6.9, or be used to pay any administrative expenses
of the Plan. The remaining Forfeitures, if any, shall be used to
reduce the Employer's contributions hereunder for the Plan Year in
which such Forfeitures occur.
(d) For any Top Heavy Plan Year, 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
(Normal or Late), Total and Permanent
-28-
Disability or death shall share in the allocation of contributions
for that Plan Year.
(f) As of each Valuation Date, before the current valuation
period allocation of Employer contributions, 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 nonsegregated accounts bear to the total of all
Participants' and Former Participants' 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 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 Employee shall be equal to at least three
percent (3%) of such Employee's "415 Compensation" (reduced by
contributions and forfeitures, if any, allocated to each 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 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
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 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
-29-
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 Employees who are Participants and who are employed by the
Employer on the last day of the Plan Year, including 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) 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 or 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 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).
(k) 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.
(l) Notwithstanding anything in this Section to the contrary,
all information necessary to properly reflect a
-30-
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.
(m) 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 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,
-31-
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.
4.5 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 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
-32-
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.
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.
(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
-33-
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 981 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 1.41O(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 981, 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
-34-
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).
4.6 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.
(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 adjusted for Income; and
(iii) shall be designated by the Employer as a
distribution of Excess Contributions (and Income).
(2) Any distribution of less than the entire amount of Excess
Contributions shall be treated as a pro rata
-35-
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 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) Compensated
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
-36-
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 4.5(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, 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
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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 Constitution Percentage" for Plan Years
beginning after December 31, 1996 for the Highly Compensated
Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly
Compensated Participant group (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
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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) 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 47(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.
(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) allocated to their
accounts, elective deferrals (as defined in Regulation
1.402(g)-1(b)) and qualified nonelective contributions (as defined
in Code Section 401(m)(4)(C)) contributed to any plan maintained
by the Employer. Such elective deferrals and qualified nonelective
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 nonelective 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
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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 981
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.
(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
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"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 981, 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 Vested portion of such contributions (and Income
allocable to such contributions) and, if forfeitable, forfeit such
non-Vested contributions attributable to Employer matching
contributions (and Income allocable to such forfeitures) 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.
If the correction of Excess Aggregate Contributions
attributable to Employer matching contributions is not in proportion
to the Vested and non-Vested portion of such contributions, then the
Vested portion of the Participant's Account attributable to Employer
matching contributions after the correction shall be subject to
Section 6.5(g).
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(b) Any distribution and/or forfeiture of less than the entire
amount of Excess Aggregate Contributions (and Income) shall be
treated as a pro rata distribution and/or forfeiture 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). Forfeitures of
Excess Aggregate Contributions shall be treated in accordance with
Section 4.4.
(c) Excess Aggregate Contributions, including forfeited
matching contributions, shall be treated as Employer contributions
for purposes of Code Sections 404 and 415 even if distributed from
the Plan.
Forfeited matching contributions that are reallocated to
Participants' Accounts for the Plan Year in which the forfeiture
occurs shall be treated as an "annual addition" pursuant to Section
4.9(b) for the Participants to whose Accounts they are reallocated
and for the Participants from whose Accounts they are forfeited.
(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:
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(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
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
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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, 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.
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).
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(b) For purposes of applying the limitations of Code Section
415, "annual additions" means the sum credited to a Participant's
accounts or 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 tom 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) (cashouts);
(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.
(e) For the purpose of this Section 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
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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 addition" 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.
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
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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 any gains
attributable to such Deferred Compensation) will be
distributed to the Participant and the Employer matching
contributions (and 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.
(b) For purposes of this Article, "excess amount" for any
Participant for a "limitation year" shall mean the
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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
Participants, 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." The portion of the
Participant's Transfer/Rollover Account attributable to any transfer
shall be fully Vested at all times and shall not be subject to
Forfeiture for any reason, except as otherwise provided in the
conditions governing such transferor in an amendment to the Plan
relating to such transfer.
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 Participants, 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 the Participant's Transfer/Rollover Account and shall be
fully Vested at all times and not subject to Forfeiture for any
reason.
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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 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 within 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 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) The Administrator, at the election of the Participant,
shall direct the Trustee to distribute all or a portion of the
amount credited to the Participant's Transfer/Rollover Account. 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 cashout 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
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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.
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.
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(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 transition will be binding for
all purposes of the Plan and considered the applicable Valuation
Date for an investment transaction.
(d) The Participant Direction Procedures shall provide an
explanation of the circumstances under which Participants and their
Beneficiaries may give investment instructions, including, but need
not be limited to, the following:
(1) the conveyance of instructions by the Participants and
their Beneficiaries to invest Participant Directed Accounts in
Directed Investment Options;
(2) the name, address and phone number of the Fiduciary (and,
if applicable, the person or persons designated by the
Fiduciary to act on its behalf) responsible for providing
information to the Participant or a Beneficiary upon request
relating to the Directed Investment Options;
(3) applicable restrictions on transfers to and from any
Designated Investment Alternative;
(4) any restrictions on the exercise of voting, tender and
similar rights related to a Directed Investment Option by the
Participants or their Beneficiaries;
(5) a description of any transaction fees and expenses which
affect the balances in Participant Directed Accounts in
connection with the purchase or sale of Directed Investment
Options; and
(6) general procedures for the dissemination of
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investment and other information relating to the Designated
Investment Alternatives as deemed necessary or appropriate,
including but not limited to a description of the following:
(i) the investment vehicles available under the Plan,
including specific information regarding any Designated
Investment Alternative;
(ii) any designated Investment Managers; and
(iii) a description of the additional information which
may be obtained upon request from the Fiduciary
designated to provide such information.
(e) 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, (hereinafter referred to as the "Stock Rights") as follows:
(1) each Participant or Beneficiary shall direct the Trustee
to vote or otherwise exercise such Stock Rights in accordance
with the provisions, conditions and terms of any such Stock
Rights;
(2) such directions shall be provided to the Trustee by the
Participant or Beneficiary in accordance with the procedure as
established by the Administrator and the Trustee shall vote or
otherwise exercise such Stock Rights with respect to which it
has received directions too so under this Section; and
(3) to the extent to which a Participant or Beneficiary does
not instruct the Trustee to vote or otherwise exercise such
Stock Rights, such Participant or Beneficiaries shall be
deemed to have directed the Trustee that such Stock Rights
remain nonvoted and unexercised.
(f) Any information regarding investments available under the
Plan, to the extent not required to be described in the Participant
Direction Procedures, may be provided to the Participant in one or
more written documents (or in any other form including, but not
limited to, electronic media) which are separate from the
Participant Direction Procedures and are not thereby incorporated by
reference into this Plan.
(g) The Administrator may, in its discretion, include in or
exclude by amendment or other action from the Participant Direction
Procedures such instructions, guidelines or policies as it deems
necessary or appropriate
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to ensure proper administration of the Plan, and may interpret the
same accordingly.
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.
However, a Participant may postpone the termination of employment with the
Employer to a later date, in which event the
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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.
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
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(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.
(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 to 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.
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6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) If a Participant's employment with the Employer is
terminated for any reason other 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 or Normal Retirement). However, at the
election of the 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 in the
Participant's Account attributable to Employer discretionary
contributions made pursuant to Section 4.1(c) immediately upon entry
into the Plan.
(c) The Vested portion of any Participant's Account
attributable to Employer matching contributions made pursuant to
Section 4.1(b) shall be a percentage of the total of such amount
credited to the Participant's Account determined on the basis of the
Participant's number of Years of Service according to the following
schedule:
Vesting Schedule
Years of Service Percentage
1 20%
2 40%
3 60%
4 80%
5 100%
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(d) Notwithstanding the vesting schedule above, the Vested
percentage of a Participant's Account shall not be less than the
Vested percentage attained as of the later of the effective date or
adoption date of this amendment and restatement.
(e) Notwithstanding the vesting schedule above, upon the
complete discontinuance of the Employer contributions to the Plan or
upon any full or partial termination of the Plan, all amounts then
credited to the account of any affected Participant shall become
100% Vested and shall not thereafter be subject to Forfeiture.
(f) 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:
(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 lump-sum payment in
cash. Except, however, this provision shall not be effective for
distributions 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's requirements at
29 CFR 2520.104b-3 (relating to a summary of material
modifications) and (ii) January 1, 2003; and prior to such effective
date the installment settlement option previously
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provided under the terms of the Plan in effect prior to the adoption
of this provision shall also be available to the Participant
receiving the distribution in addition to the lump sum settlement
option.
(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 occurs 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.
(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
distribution 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.
(4) No consent shall be void 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
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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.
(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 may, at the election of the
Participant or the Participant's spouse, be redetermined in
accordance with Regulations. The election, once made, shall be
irrevocable. If no election is made by the time distributions must
commence, then the life expectancy of the Participant and the
Participant's spouse shall not be subject to recalculation. 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.
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(f) All annuity Contracts under this Plan shall be
nontransferable 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.
(g) If a distribution is made to a Participant who has not
severed employment and who is not fully Vested in the Participant's
Account and the Participant may increase the Vested percentage in
such account, then, at any relevant time the Participant's Vested
portion of the account will be equal to an amount ("X") determined
by the formula:
X equals P(AB plus D) - D
For purposes of applying the formula: P is the Vested
percentage at the relevant time, AB is the account balance at the
relevant time, and D is the amount of distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) The death benefit payable pursuant to. Section 6.2 shall
be paid to the Participant's Beneficiary in one lump-sum payment in
cash subject to the rules of Section 6.6(b).
(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.
However, in the event that the Participant's spouse
(determined as of the date of the Participant's death) is the
designated Beneficiary, then in lieu of the preceding rules,
distributions must be made over a period not extending beyond the
life expectancy of the spouse and must commence on or before the
later of: (1) December 31st of the calendar year immediately
following the calendar year in which the Participant died; or (2)
December 31st of the
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calendar year in which the Participant would have attained age 70
1/2. If the surviving spouse dies before distributions to such
spouse begin, then the 5-year distribution requirement of this
Section shall apply as if the spouse was the Participant.
(c) 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 the distribution may be made 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 occur
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 or 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
certified letter, return receipt requested, to the last known address of such
person, to ascertain the whereabouts of
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such Participant or Beneficiary, the amount so distributable shall be treated as
a Forfeiture pursuant to the Plan. Notwithstanding the foregoing, effective
January 1, 2001, if the value of a Participant's Vested benefit derived from
Employer and Employee contributions does not exceed $5,000, then the amount
distributable may, in the sole discretion of the Administrator, either be
treated as a Forfeiture, or be paid directly to an 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
impermissible forfeiture under the Code.
6.10 PRE-RETIREMENT DISTRIBUTION
Unless otherwise provided, 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 Vested amount then credited to the
accounts maintained on behalf of the Participant, excluding that portion of his
Participant's Account attributable to Employer discretionary contributions made
pursuant to Section 4.1(c). 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.
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 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 shall be reduced accordingly.
Withdrawal under this Section is deemed to be on account of an
immediate and heavy financial need of the Participant only if the
withdrawal is for:
(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
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Code Section 152) or necessary for these persons to obtain
medical cares 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) 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; or
(4) Payments necessary to prevent the eviction of the
Participant from the Participant's principal residence or
foreclosure on the mortgage on that residence.
(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
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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) 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.
(d) 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 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
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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 or 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.
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
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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 on
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 recordkeeping nature.
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;
(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
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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;
(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
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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;
(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;
(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;
(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.
7.4 LOANS TO PARTICIPANTS.
(a) The Trustee may, in the Trustee's discretion,
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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 nonforfeitable
accrued benefit of the Participant under the Plan, excluding
that portion of his Participant's Account attributable to
Employer discretionary contributions made pursuant to Section
4.1(c).
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
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authorized to administer the Participant loan program;
(2) a projecture for applying for loans;
(3) the basis on which loans will be approved or denied;
(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 0F 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
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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:
(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
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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.
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
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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.
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
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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 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."
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7.13 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold "qualifying
Employer securities" and "qualifying Employer real property," as those terms
are defined in the Act, provided, however, that the Trustee shall not be
permitted to acquire any "qualifying Employer securities" or "qualifying
Employer real property" if, immediately after the acquisition of such securities
or property, the fair market value of all "qualifying Employer securities" and
"qualifying Employer real property" held by the Trustee hereunder should amount
to more than 100% 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
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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:
(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 through the purchase of irrevocable nontransferable
deferred commitments from an insurer. 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
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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).
ARTICLE IX
TOP HEAVY PROVISIONS
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
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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. 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
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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 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
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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.
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
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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, or 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.
(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 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
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according to the Code, the Act and the laws of the State of New York, other than
its laws respecting choice of law, to the extent not preempted 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(d), 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 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
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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.
10.1O 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,
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(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
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 sole responsibility for the administration of
the Plan, including, not limited to, the items specified in Article II of the
Plan, as same may be allocated or delegated thereunder. The Administrator shall
act as the named Fiduciary responsible for communicating with Participant
according to the Participant Direction Procedures. 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
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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, there 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.
IN WITNESS WHEREOF, this Plan has been executed as of the day and
year first above written, to become effective October 1, 1999, except as
otherwise specifically provided herein.
JETBLUE AIRWAYS CORPORATION
By: /s/ John D. Owen
-----------------------------------------
Name: John D. Owen
Title: CFO
/s/ John D. Owen
---------------------------------------------
John D. Owen, Trustee
/s/ Thomas E. Kelly
---------------------------------------------
Thomas E. Kelly, Trustee
/s/ Vincent J. Stabile
---------------------------------------------
Vincent Stabile, Trustee
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401(k) Retirement Plan - JetBlue Airways Corp.
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