Registration No. 333-_______________.
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT
under
The Securities Act of 1933
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Mylan Laboratories Inc.
(Exact Name of Issuer as specified in its charter)
Pennsylvania 25-1211621
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1030 Century Building
130 Seventh Street
Pittsburgh, Pennsylvania 15222
(Address of principal executive offices) (Zip Code)
Bertek Pharmaceuticals, Inc.
401(k) Savings Plan and Trust
(Full Title of Plan)
Milan Puskar
Chief Executive Officer
1030 Century Building
130 Seventh Street
Pittsburgh, Pennsylvania 15222
(Name and address of agent for service)
(412) 232-0100
(Telephone number, including area code, of agent for service)
Copy to:
David G. Edwards, Esquire
Doepken Keevican & Weiss
58th Floor, USX Tower
600 Grant Street
Pittsburgh, Pennsylvania 15219
CALCULATION OF REGISTRATION FEE
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered (1) Offering Price Aggregate Registration Fee (2)
per Share (2) Offering Price (2)
Common Stock $.01 par 250,000 $20.25 $5,062,500 $1,493.44
value
(1) Plus any additional shares that may hereafter become issuable as a result
of the adjustment and antidilution provisions of the Bertek
Pharmaceuticals, Inc. 401(k) Savings Plan and Trust.
(2) Estimated for the purpose of calculating the registration fee pursuant to
Rule 457(c) for the shares registered hereunder, being the average ($20.25)
of the high ($20.50) and low ($20.00) prices for the Registrant's Common
Stock on the New York Stock Exchange on December 17, 1997.
In accordance with Rule 464 under the Securities Act of 1933, as amended, this
Registration Statement is effective automatically on the date of filing with the
Securities and Exchange Commission.
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein.
PART I. INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Item 1. Plan Information
The documents containing the information specified in Part I of this
Registration Statement will be sent or given to plan participants by Mylan
Laboratories Inc. (the "Registrant") as specified by Rule 428(b)(1) of the
Securities Act of 1933, as amended (the "Securities Act"). Such documents are
not required to be and are not filed with the Securities and Exchange Commission
(the "Commission") either as part of this Registration Statement or as a
prospectus or prospectus supplement pursuant to Rule 424. These documents and
the documents incorporated by reference in this Registration Statement pursuant
to Item 3 of Part II of this Form S-8, taken together, constitute a prospectus
that meets the requirements of Section 10(a) of the Securities Act. Copies of
the information incorporated by refence in Item 3 of Part II of this Form S-8
will be delivered to plan participants, without charge, upon written or oral
request made to Patricia A. Sunseri, Vice President-Investor and Public
Relations, 130 Seventh Street, 1030 Century Building, Pittsbsurgh, Pennsylvania
15222, telephone (412) 232-0100.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Commission by the Registrant
pursuant to the Exchange Act are incorporated by reference in this Prospectus:
1. Annual Report on Form 10-K for the year ended March 31, 1997.
2. Quarterly Report on Form 10-Q for the quarter ended June 30, 1997.
3. Quarterly Report on Form 10-Q for the quarter ended September 30,
1997.
4. The description of the Registrant's Common Stock included in the
Registration Statement on Form 8-A filed April 3, 1986.
All documents subsequently filed by the Registrant with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment to this Registration Statement which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing of such documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the Common Stock being offered hereby will be passed upon
for the Registrant by Doepken, Keevican &Weiss Professional Corporation,
Pittsburgh, Pennsylvania. Robert W. Smiley, who is of counsel to the law firm of
Doepken Keevican & Weiss, is also a Director and Secretary of, and General
Counsel to, the Registrant.
Item 6. Indemnification of Directors and Officers
In accordance with the Pennsylvania Business Corporation Law (the "PBCL"),
the Registrant's By-Laws provide that a director of the Registrant shall not be
personally liable for monetary damages for any action taken, or any failure to
take any action, unless the director has breached or failed to perform the
duties required under Pennsylvania law and the breach or failure to perform
constitutes self-dealing, willful misconduct or recklessness.
As permitted by PBCL, the Registrant's By-Laws provide that directors and
officers of the Registrant are indemnified under certain circumstances for
expenses, judgments, fines or settlements incurred in connection with
1
suits and other legal proceedings. The PBCL allows indemnification in cases
where the person "acted in good faith and in a manner he reasonably believed to
be in, or not opposed to the best interests of the corporation and, with respect
to any criminal proceeding, had no reasonable cause to believe his conduct was
unlawful."
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits.
4.1 Bertek Pharmaceuticals, Inc. 401(k) Savings Plan and Trust.
4.2 Amended and Restated Articles of Incorporation of the Registrant.
4.3 Bylaws of the Registrant, as amended to date.
5.1 Opinion of Doepken Keevican & Weiss Professional Corporation.
23.1 Consent of Doepken Keevican & Weiss Professional Corporation (included in
the opinion filed as Exhibit 5.1 to this Registration Statement).
23.2 Consent of Deloitte & Touche LLP relating to its report regarding Mylan
Laboratories Inc.
23.3 Consent of Deloitte & Touche LLP relating to its report regarding Somerset
Pharmaceuticals, Inc.
24.1 Powers of Attorney (included on signature page of the Registration
Statement).
Item 9. Undertakings.
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this registration statement;
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post- effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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(3) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(4) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(5) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
of expenses incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Pittsburgh, State of Pennsylvania, on December 22,
1997.
Mylan Laboratories Inc.
(Registrant)
By: /s/ Milan Puskar
Milan Puskar, Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, the
undersigned, being the administrators of the Bertek Pharmaceuticals, Inc. 401(k)
Savings Plan and Trust, have duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Houston, State of Texas, on December 22, 1997.
Bertek 401(k) Savings Plan and Trust
/s/David Satter
David Satter, Plant Administrator
/s/William Richardson
William Richardson, Plan Administsrator
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Milan Puskar and Patricia A. Sunseri and each of
them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities to sign any
or all amendments to this Registration Statement, including post-effective
amendments, and to file the same with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys- in-fact and agents of any of them, or any substitute or substitutes,
lawfully do or cause to be done by virtue hereof.
4
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
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/s/ Milan Puskar Chairman, Chief Executive December 22, 1997
Milan Puskar and President (principal
executive officer)
/s/ Dana G. Barnett Executive Vice President December 22, 1997
Dana G. Barnett and Director
Laurence S. DeLynn Director December 22, 1997
Laurence S. DeLynn
/s/ Robert W. Smiley Secretary and Director December 22, 1997
Robert W. Smiley
/s/ Patricia A. Sunseri Vice President and Director December 22, 1997
Patricia A. Sunseri
/s/ John C. Gaisford Director December 22, 1997
John C. Gaisford, M.D.
C.B. Todd Senior Vice President December 22, 1997
C.B. Todd and Director
/s/ Donald C. Schilling Vice President of Finance December 22, 1997
Donald C. Schilling (principal accounting and
financial officer)
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Index to Exhibits
4.1 Bertek Pharmaceuticals, Inc. 401(k) Savings Plan and Trust.
Exhibit 4.1
ADOPTION AGREEMENT #001
NONSTANDARDIZED CODE ss.401(k) PROFIT SHARING PLAN
The undersigned, Bertek Pharmaceuticals Inc. ("Employer"), by executing
this Adoption Agreement, elects to become a participating Employer in the Texas
Commerce Ban National Association Defined Contribution Master Plan (basic plan
document #03) by adopting the accompanying Plan and Trust in full as if the
Employer were a signatory that Agreement. The Employer makes the following
elections granted under the provisions under the Master Plan.
ARTICLE I
DEFINITIONS
1.02 TRUSTEE. The Trustee executing this Adoption Agreement is: (Choose (a)
or (b))
[ ] (a) A discretionary Trustee. See Section 10.03[A] of the Plan.
[x] (b) A nondiscretionary Trustee. See Section 10.03[B] of the Plan. [Note:
The Employer may not elect Option (b) if a Custodian executes the Adoption
Agreement.]
1.03 PLAN. The name of the Plan adopted by the Employer is Bertek
Pharmaceuticals Inc. 401(k) Savings Plan and Trust.
1.07 EMPLOYEE. The following Employees are not eligible to participate in
the Plan: (Choose (a) or at least one of (b) though (g))
[ ] (a) No exclusions.
[ ] (b) Collective bargaining employees (as defined in Section 1.07 of the
Plan). [ Note: If the Employer excludes union employees from the Plan, the
Employer must be able to provide evidence that retirement benefits were the
subject of good faith bargaining.]
[x] (c) Nonresident aliens who do not receive any earned income (as defined in
Code ss. 911(d)(2)) from the Employer which constitutes United Stated
source income (as defined in Code ss.861(a)(3)).
[ ] (d) Commission Salesmen.
[ ] (e) Any Employee compensated on a salaried basis.
[ ] (f) Any Employee compensated on an hourly basis.
[ ] (g) (Specify)___________________ .
1.
Leased Employees. Any Leased Employee treated as an Employee under Section 1.31
of the Plan, is: (Choose (h) or (i))
[x] (h) Not eligible to participate in the Plan
[ ] (i) Eligible to participate in the Plan, unless excluded by reason of an
exclusion classification elected under this Adoption Agreement Section
1.07.
Related Employers. If any member of the Employer's related group (as defined in
Section 1.30 of the Plan) executes a Participation Agreement to this Adoption
Agreement, such member's Employees are eligible to participate in this Plan,
unless excluded by reason of an exclusion classification under this Adoption
Agreement Section 1.07. In addition: (Choose (j) or (k))
[x] (j) No other related group member's Employees are eligible to participate
in the Plan.
[ ] (k) The following nonparticipating related group member's Employees are
eligible to participate in the Plan unless excluded by reason of an
exclusion classification elected under this Adoption Agreement Section
1.07: .
1.12 COMPENSATION.
Treatment of elective contributions. (Choose (a) or (b) )
[x] (a) "Compensation" includes elective contributions made by the Employer on
the Employee's behalf.
[ ] (b) "Compensation" does not include elective contributions.
Modifications to Compensation definition. (Choose (c) or at least one of (d)
through (j))
[x] (c) No modifications other than as elected under Options (a) or (b).
[ ] (d) The plan excludes Compensation in excess of $ .
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[ ] (e) In lieu of the definition in Section 1.12 of the Plan, Compensation
means any earnings reportable as W-2 wages for Federal income tax
withholding purposes, subject to any other election under this Adoption
Agreement Section 1.12.
[ ] (f) The Plan excludes bonuses.
[ ] (g) The Plan excludes overtime.
[ ] (h) The Plan excludes Commissions.
[ ] (i) Compensation will not include Compensation from a related employer
(as defined in Section 1.30 of the Plan) that has not executed a
Participation Agreement in this Plan unless,
2.
pursuant to Adoption Agreement Section 1.07, the Employees of that related
employer are eligible to participate in this Plan.
[ ] (j) (Specify)
If, for any Plan Year, the Plan uses permitted disparity in the contribution or
allocation formula elected under Article III, any election of Options (f), (g),
(h) or (j) is ineffective for such Plan Year with respect to any Nonhighly
Compensated Employee.
Special definition for matching contributions. "Compensation" for purposes of
any matching contribution formula under Article iii means: (Choose (k) or (l)
only if applicable)
[x] (k) Compensation as defined in this Adoption Agreement Section 1.12.
[ ] (l) (Specify)
Special definition for salary reduction contributions. An Employee's salary
reduction agreement applies to his Compensation determined prior to the
reduction authorized by that salary reduction agreement, with the following
exceptions: (Choose (m) or at least one of (n) or (p), if applicable)
[x] (m) No exceptions.
[ ] (n) If the Employee makes elective contributions to another plan
maintained by the Employer, the Advisory Committee will determine the
amount of the Employee's salary reduction contribution for the withholding
period: (Choose (1) or (2))
[ ] (1) After the reduction for such period of elective contributions to
the other plan(s)
[ ] (2) Prior to the reduction for such period of elective contributions
to the other plan(s)
[ ] (o) (Specify)______________________________.
1.17 PLAN YEAR/LIMITATION YEAR.
Plan Year. Plan Year means: (Choose (a) or (b))
[X] (a) The 12 consecutive month period ending every December 31.
[ ] (b) (Specify)_______________________________.
Limitation Year. The Limitation Year is: (Choose (c) or (d))
[x] (c) The Plan Year.
3.
[ ] (d) The 12 consecutive month period ending every .
1.18 EFFECTIVE DATE.
New Plan. The "Effective Date" of the Plan is .
Restated Plan. The restated Effective Date is January 1, 1996. This Plan is a
substitution and amendment of an existing retirement plan(s) originally
established January 1, 1985. [Note: See the Effective Date Addendum.]
1.27 HOUR OF SERVICE. The crediting method for Hours of Service is:
(Choose (a) or (b))
[x] (a) The actual method.
[ ] (b) The_______________ equivalency method, except:
[ ] (1) No exceptions.
[ ] (2) The actual method applied for purposes of:
(Choose at least one)
[ ] (i) Participation under Article II.
[ ] (ii) Vesting under Article V.
[ ] (iii) Accrual of benefits under Section 3.06.
[Note: On the blank line, insert "daily," "weekly," "semi-monthly payroll
periods" or "monthly."]
1.29 SERVICE FOR PREDECESSOR EMPLOYER. In addition to the predecessor
service the Plan must credit by reason of Section 1.29 of the Plan, the Plan
credits Service with the following predecessor employer(s): Winthrop Wound Care
Division of Winthrop Pharmaceuticals. Service with the designated predecessor
employer(s) applies: (Choose at least one of (a) or (b); (c) is available only
in addition to (a) or (b))
[x] (a) For purposes of participation under Article II.
[x] (b) For purposes of vesting under Article V.
[x] (c) Except the following Service: Service prior to January 1, 1998.
[Note: If Plan does not credit any predecessor service new this provision,
insert "N/A" in the first blank line. The Employer may attach a schedule to this
Adoption Agreement, in the same format at this Section 1.29, designating
additional predecessor employers and the applicable service crediting
elections.]
4.
1.31 LEASED EMPLOYEES. If a Leased Employee is a Participant in the Plan
and also participates in a plan maintained by the leasing organization: (Choose
(a) or (b))
[N/A] (a) The Advisory Committee will determine the Leased Employee's
allocation of Employer contributions under Article III without taking
into account the Leased Employee's allocation, if any, under the
leasing organization's plan.
[ ] (b) The Advisory Committee will reduce a Leased Employee's allocation
of Employer nonelective contributions (other than designated qualified
nonelective contributions) under this Plan by the Leased Employee's
allocation under the leasing organization's plan, but not only to the
extent that allocation is attributable to the Leased Employee's service
provided to the Employer. The leasing organization's plan:
[ ] (1) Must be a money purchase plan which would satisfy the
definition under Section 1.31 of a safe harbor plan,
irrespective of whether the safe harbor exception applies.
[ ] (2) Must satisfy the features and, if a defined benefit
plan, the method of reduction described in an addendum to this
Adoption Agreement, numbered 1.31.
ARTICLE III
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY.
Eligibility conditions. To become a Participant in the Plan, an Employee must
satisfy the following eligibility conditions: (Choose (a) or (b) or both; (c) is
optional as an additional election)
[x] (a) Attainment of age 21 (specify age, not exceeding 21).
[x] (b) Service requirement. (Choose one of (1) through (3))
[ ] (1) One Year of Service
[x] (2) 6 months (not exceeding 12) following the Employee's
Employment Commencement Date.
[ ] (3) One Hour of Service.
[ ] (c) Special requirements for non-401(k) portion of plan.
(Make elections under (1) and under (2))
[ ] (1) The requirements of this Option (c) apply to
participation in: (Choose at least one of (i)
through (iii))
5.
[ ] (i) The allocation of Employer nonelective contributions
and Participant forfeitures.
[ ] (ii) The allocation of Employer matching contributions
(including forfeitures allocated as matching contributions).
[ ] (iii) The allocation of Employer qualified nonelective
contributions.
[ ] (2) For participation in the allocations described in (1), the
eligibility conditions are: (Choose at least one of (i) through
(iv))
[ ] (i) (One or two) Year(s) of Service, without an
intervening Break in Service (as described in Section
2.03(A) of the Plan) if the requirement is two Years of
Service.
[ ] (ii) months (not exceeding 24) following the Employee's
Employment Commencement Date.
[ ] (iii) One Hour of Service.
[ ] (iv) Attainment of age (Specify age, not exceeding 21).
Plan Entry Date. "Plan Entry Date" means the effective Date and: (Choose (d),
(e) or (f))
[ ] (d) Semi-annual Entry Dates. The first day of the Plan Year and the first
day of the seventh month of the Plan Year.
[ ] (e) The first day of the Plan Year.
[x] (f) (Specify entry dates) January 1, April 1, July 1 or October 1.
Time of Participation. An Employee will become a Participant (and, if
applicable, will participate in the allocations described in Option (c)(1)),
unless excluded under Adoption Agreement Section 1.07, on the Plan Entry Date
(if employed on that date): (Choose (g), (h) or (i))
[x] (g) immediately following
[ ] (h) immediately preceding
[ ] (i) nearest
the date the Employee completes the eligibility conditions described in Options
(a) and (b) (or in Option (c)(2) if applicable) of this Adoption Agreement
Section 2.01. [Note: The Employer must coordinate the selection of (g), (h) or
(i) with the "Plan Entry Date" selection in (d), (e) or (f). Unless otherwise
excluded under Section 1.07, the Employee must become a Participant by the
earlier of: (i) the first day of the Plan Year beginning after the date the
Employee completes the age
6.
and service requirements of Code ss.410(a); or (2) 6 months after the date the
Employee completes those requirements.]
Dual eligibility. The eligibility conditions of the Section 2.01 apply to:
(Choose (j) or (k))
[x] (j) All Employees of the Employer, except: (Choose (1) or (2))
[x] (1) No exceptions.
[ ] (2) Employees who are Participants in the Plan as of the
Effective Date.
[ ] (k) Solely to an Employee employed by the Employer
after___________________. If the Employee was employed by the Employer on
or before the specified date, the Employee will become a Participant:
(Choose (1), (2) or (3))
[ ] (1) On the latest of the Effective Date, his Employment
Commencement Date or the date he attains age__________
(not to exceed 21).
[ ] (2) Under the eligibility conditions in effect under the
Plan prior to the restated Effective Date. If the restated
Plan required more than one Year of Service to participate,
the eligibility condition under this Option (2) for
participation in the Code ss. 401(k) arrangement under this
Plan is one Year of Service for the Plan Years beginning after
December 31, 1998. [For restated plans only]
[ ] (3) (Specify)_______________________.
2.02 YEAR OF SERVICE - PARTICIPATION
Hours of Service. An Employee must complete: (Choose (a) or (b))
[ ] (a) 1,000 Hours of Service
[x] (b) 1 Hours of Service
during an eligibility computation period to receive credit for a Year of
Service. [Note: The Hours of Service requirement may not exceed 1,000]
Eligibility computation period. After the initial eligibility computation period
described in Section 2.02 of the Plan, the Plan measures the eligibility
commutation period as: (Choose (c) or (d))
[ ] (c) The 12 consecutive month period beginning with each anniversary
of an Employee's Employment commencement Date.
[x] (d) The Plan year, beginning with the Plan Year which includes the
first anniversary of the Employee's Employment Commencement Date.
7.
2.03 AMOUNT.
Part I. [Options (a) through (g)] Amount of Employer's contribution. The
Employer's annual contribution to the Trust will equal to the total amount of
deferral contributions, matching contributions, qualified nonelective
contributions and nonelective contributions, as determined under this Section
3.01. (Choose any combination of (a), (b), (c) and (d), or choose (e))
[x] (a) Deferral contributions (Codess.401(k) arrangement).
(Choose (1) or (2) or both)
[x] (1) Salary reduction arrangement. The Employer must contribute
the amount by which the Participants have reduced their
Compensation for the Plan Year, pursuant to their salary
reduction agreements on file with the Advisory Committee. A
reference in the Plan to salary reduction contributions is a
reference to these amounts.
[ ] (2) Cash or deferred arrangement. The Employer will
contribute on behalf of each Participant the portion of the
Participant's proportionate share of the cash or deferred
contribution which he has not elected to receive in cash. See
Section 14.02 of the Plan. The Employer's cash or deferred
contribution is the amount the Employer may from time to time
deem advisable which the Employer designates as a cash or
deferred contribution prior to making that contribution to the
Trust.
[x] (b) Matching contributions. The Employer will make matching
contributions in accordance with the formula(s) elected in Part II of
this Adoption Agreement Section 3.01.
[ ] (c) Designated qualified nonelective contributions. The Employer, in
its sole discretion, may contribute an amount which it designates as a
qualified nonelective contribution.
[x] (d) Nonelective contributions.
(Choose any combination of (1) through (3))
[x] (1) Discretionary contribution. The amount (or additional
amount) the Employer may from time to time deem advisable.
[ ] (2)_____% of the Compensation of all Participants under
the Plan, determined for the Employer's taxable year for which
it makes the contribution.
[Note: The percentage selected may not exceed 15%]
[ ] (3)______ % of Net Profits but not more than ________.
[ ] (e) Frozen Plan. This Plan is a frozen Plan effective_________.
The Employer will not contribute to the Plan with respect to
any period following the stated date.
Net Profits. The Employer: (Choose (f) or (g))
[x] (f) Need not have Net Profits to make its annual contribution
under this Plan.
8.
[ ] (g) Must have current or accumulated Net Profits to make its
annual contribution under this Plan.
[ ] (g) Must have current not accumulated
Net Profits exceeding $ To make the
------------------
following contributions: (Choose at least one)
[ ] (1)Cash or deferred contributions described in Option (a)(2).
[ ] (2)Matching contributions described in Option (b), except: .
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[ ] (3)Qualified nonelective contributions described in Option (c)
[ ] (4)Nonelective contributions described in Option (d).
The term "Net profits" means the Employer's net income or profits for any
taxable year determined by the Employer upon the basis of its books of account
in accordance with generally accepted accounting practices consistently applied
without any deductions for Federal and state taxes upon income or for
contributions made by the Employer under this Plan or under any other employee
benefit plan the Employer maintains. The term "Net Profits" specifically
excludes N/A . {Note:
Enter "N/A" if no exclusions apply.]
If the Employer requires Net Profits for matching contributions and the Employer
does not have sufficient Net Profits under Option (g), it will reduce the
matching contribution under a fixed formula on a probata basis for all
participants. A Participant's share of the reduced contribution will bear the
same ratio as the matching contribution the Participant would have received if
Net Profits were sufficient bears to the total matching contribution all
Participants would have received if Net Profits were sufficient. If more than
one member of a related group (as defined in Section 1.30) execute this Adoption
Agreement, each participating member will determine Net Profits separately but
will not apply this reduction unless, after combining the separately determined
net Profits, the aggregate Net Profits are insufficient to satisfy the matching
contribution liability. "Net Profits" includes both current and accumulated Net
Profits.
Part II. [Options (h) through (j)] Matching contribution formula. [Note: If the
Employer elected Option (b), complete Options (h), (i) and (j).]
[x] (h) Amount of matching contributions. For each Plan Year, the Employer's
matching contribution is: (Choose any combination of (1), (2), (3), (4) and
(5))
[x] (1) An amount equal to 50% of each Participant's eligible
contributions for the Plan Year.
[ ] (2) An amount equal to % of each Participant's first tier of
eligible contributions for the Plan year, plus the allowing matching
percentage(s) for the following subsequent tiers of eligible
contributions for the Plan .
9.
[ ] (3) Discretionary formula.
[ ] (i) An amount (or additional amount) equal to a matching
percentage the Employer from time to time may deem advisable of
the Participant's eligible contributions for the Plan Year.
[ ] (ii) An amount (or additional amount) equal to a matching
percentage the Employer from time to time may deem advisable of
each tier of the Participant's eligible contributions for the
Plan Year.
[ ] (4) An amount equal to the following percentage of each
Participant's eligible contributions for the Plan Year, based on
the Participant's Years of Service:
Number of Years of Service Matching Percentage
-- --
-- --
-- --
-- --
The Advisory Committee will apply this formula by determining Years of
Service as follows:
[x] (5) A Participant's matching contributions may not:
(Choose (i) or (ii))
[x] (i) Exceed $1,200.00.
[ ] (ii) Be less than__________________ .
Related Employers. If two or more related employers (as defined in
Section 1.30) contribute to this Plan, the related employers may elect different
matching contribution formulas by attaching to the Adoption Agreement a
separately completed copy of this Part II. Note: Separate matching contribution
formulas create separate current benefit structures that must satisfy the
minimum participation test of Code ss.401(a)(26).]
[x] (i) Definition of eligible contributions. Subject to the requirements of
Option (j), the term "eligible contributions" means: (Choose any
combination of (1) through (3))
[x] (1) Salary reduction contributions.
10.
[ ] (2) Cash or deferred contributions (including any part of
the participant's proportionate share of the cash or
deferred contribution which the Employer defers without the
Participant's election).
[ ] (3) Participant mandatory contributions, as designated
in Adoption Agreement Section 4.01. See Section 14.04
of the Plan.
[x] (j) Amount of eligible contributions taken into account. When
determining a Participant's eligible contributions taken into account
under the matching contributions formula(s), the following rules apply:
(Choose any combination of (1) through (4))
[ ] (1) The Advisory Committee will take into account all
eligible contributions credited for the Plan Year.
[x] (2) The Advisory Committee will disregard eligible
contributions exceeding six percent (6%) of a Participant's
Compensation.
[ ] (3) The Advisory Committee will treat as the first tier of
eligible contributions, an amount not exceeding:
___________________________.
The subsequent tiers of eligible contributions are: __________.
[ ] (4) (specify) _____________________________________.
Part III. [Options (k) and (l)]. Special rules for Code 401(d) Arrangement.
(Choose (k) or (l), or both, as applicable).
[x] (k) Salary Reduction Agreements. The following rules and restrictions apply
to an Employee's salary reduction agreement: (Make a selection under (1),
(2), (3) and (4))
(l) Limitation on amount. The Employee's salary reduction contributions:
(Choose (i) or at least one of (ii) or (iii).
[ ] (i) No minimum limitation other than as provided in the Plan.
[x] (ii) May not exceed 17% of Compensation for the Plan Year, subject to
the annual additions limitation described in Part 2 of Article III and
the 402(g) limitation described in Section 14.07 of the Plan.
[ ] (iii) Based on percentages of Compensation must equal at least
___________.
(2) An Employee may revoke, on a prospective basis, a salary reduction
agreement: (Choose (i), (ii), (iii), or (iv))
[ ] (i) Once during any Plan Year but not later than ______ of the Plan
Year.
11.
[ ] (ii) As of any Plan Entry Date.
[ ] (iii) As of the first day of any month.
[ ] (iv) (Specify, but must be at least once per Plan Year) As of
any payroll period.
(3) An Employee who revokes his salary reduction agreement may file a
new salary reduction agreement with an effective date: (Choose (i),
(ii), (iii) or (iv))
[ ] (i) No earlier than the first day of the next Plan Year.
[ ] (ii) As of any subsequent Plan Entry Date.
[ ] (iii) As of the first day of any month subsequent to the
month in which he revoked an Agreement.
[x] (iv) (Specify, but must be at least once per Plan Year
following the Plan Year of revocation) As of the first day
of a Plan quarter.
(4) A Participant may increase or may decrease, on a prospective basis,
his salary reduction percentage or dollar amount: (Choose (i), (ii),
(iii) or (iv))
[ ] (i) As of the beginning of each payroll period.
[ ] (ii) As of the first day of each month.
[ ] (iii) As of any Plan Entry Date.
[x] (iv) (specify, but must permit an increase or a decrease at
least once per Plan Year) as of the first day of a Plan
quarter.
[ ] (l) Cash or deferred contributions. For each Plan Year for which the
Employer makes a designated cash or deferred contribution, a
Participant may elect to receive directly in cash not more than the
following portion (or, if less, the 402(g) limitation described in
Section 14.07 of the Plan) of his proportionate share of that cash or
deferred contribution:
(Choose (1) or (2))
[ ] (1) All or any portion
[ ] (2) _______________________%.
3.04 CONTRIBUTION ALLOCATION. The Advisory Committee will allocate
deferral contributions, matching contributions, qualified nonelective
contributions an nonelective contributions in accordance with Section 14.06 and
the elections under this Adoption Agreement Section 3.04.
12.
Part I. [Options (a) through (d)]. Special Accounting Elections.
(Choose whichever elections are applicable to the Employer's Plan)
[x] (a) Matching Contributions Account. The Advisory Committee will allocate
matching contributions to a Participant's" (Choose (1) or (2); (3) is
available only in addition to (1))
[x] (1) Regular Matching Contributions Account.
(2) Qualified Matching Contributions Account.
[ ] (3) Except, matching contributions under Option(s) - of
Adoption Agreement Section 3.01 are allocable to the
Qualified Matching Contributions Account.
[x] (b) Special Allocation Dates for Salary Reduction Contributions. The
Advisory Committee will allocate salary reduction contributions as of
the Accounting Date and as of the following additional allocation
dates: As soon as administratively feasible following receipt by the
Trustee.
[x] (c) Special Allocation Dates for Matching Contributions. The Advisory
Committee will allocate matching contributions as of the Accounting
Date and as of the following additional allocation dates: As soon as
administratively feasible following receipt by the Trustee.
[ ] (d) Designated Qualified Nonelective Contributions - Definition of
Participant. For purposes of allocating the designated qualified
nonelective contribution, "participant" means: (Choose (1), (2) or (3))
[ ] (1) All Participants.
[ ] (2) Participants who are Nonhighly Compensated Employees
for the Plan Year.
[ ] (3) (Specify) ____________________________________________.
Part II. Method of Allocation - Nonelective Contribution. Subject to any
restoration allocation required under Section 5.04, the Advisory Committee will
allocate and credit each annual nonelective contribution (and Participant
forfeitures treated as nonelective contributions) to the Employer Contributions
Account of each participant who satisfies the conditions of Section 3.06, in
accordance with the allocation method selected under this Section3.04. If the
Employer elects Option (3)(3) Option (g)(2) or Option (h), for the first 3% of
Compensation allocated to all Participants, "Compensation" does not include any
exclusions elected under Adoption Agreement Section 1.12 (other than the
exclusion of elective contributions), and the Advisory Committee must take into
account the participant's Compensation for the entire Plan Year. (Choose an
allocation method under (e), (f), (g) or (h); (i) is mandatory if the Employer
elects (f), (g) or (h); (j) is optional in additional to any other election.)
13.
[x] (e) Nonintegrated Allocation Formula. (Choose (1) or (2))
[x] (1) The Advisory Committee will allocate the annual
nonelective contributions in the same ratio that each
Participant's Compensation for the Plan Year bears to the
total Compensation of all Participants for the Plan Year.
[ ] (2) The Advisory Committee will allocate the annual
nonelective contributions in the same ratio that each
Participants for the Plan Year. For purposes of this Option
(2), "Participant" means, in addition to a Participant who
satisfies the requirements of Section 3.06 for the Plan
Year, any other Participant entitled to a top heavy minimum
allocation under Section 3.04(B), but such Participant's
allocation will not exceed 3% of this Compensation for the
Plan Year.
[ ] (f) Two-Tiered Integrated Allocation Formula - Maximum Disparity.
First the Advisory Committee will allocate the annual Employer
nonelective contributions in the same ratio that each Participant's
Compensation plus Excess Compensation for the Plan Year bears to the
total Compensation plus Excess Compensation of all Participants for the
Plan Year. The allocation under this paragraph, as a percentage of each
Participant's Compensation plus Excess Compensation, must not exceed
the applicable percentage (5.7%, 5.4% or 4.3%) listed under the Maximum
Disparity Table following Option (i).
The Advisory Committee then will allocate any remaining nonelective
contributions in the same ratio that each Participant's Compensation
for the Plan Year bears to the total Compensation of all participants
for the Plan Year.
[ ] (g) Three-Tiered Integrated Allocation Formula. First, the Advisory
Committee will allocate the annual Employer nonelective contributions in
the same ratio that each Participant's Compensation for the Plan Year bears
to the total Compensation of all Participants for the Plan Year. The
allocation under this paragraph, as a percentage of each Participant's
Compensation may not exceed the applicable percentage (5.7%, 5.4% or 4.3%)
listed under the Maximum Disparity Table following Option (i). Solely for
purposes of the allocation in this first paragraph, "Participant" means, in
addition to a Participant who satisfies the requirements of Section 3.06
for the Plan Year; (Choose (1) or (2))
[ ] (1) No other Participant
[ ] (2) Any other Participant entitled to a top heavy minimum
allocation under Section 3.04(B), but such Participant's
allocation under this Option (g) will not exceed 3% of his
Compensation for the Plan Year.
As a second tier allocation, the Advisory Committee will allocate the
nonelective contributions in the same ratio that each Participant's
Excess Compensation for the Plan Year bears to the total Excess
Compensation of all Participants for the Plan Year. The allocation
under this paragraph, as a percentage of each participant's Excess
Compensation, may not exceed the allocation percentage in the first
paragraph.
14.
Finally, the Advisory Committee will allocate any remaining nonelective
contributions in the same ratio that each Participant's Compensation
for the Plan Year bears to the total Compensation of all Participants
for the Plan Year.
[ ] (h) Four-Tiered Integrated Allocation Formula. First, the Advisory
Committee will allocate the annual Employer nonelective contributions
in the same ratio that each Participant's Compensation for the Plan
Year bears to the total Compensation of all Participants for the Plan
Year, but not exceeding 3% of each Participant's Compensation. Solely
for purposes of this first tier allocation, a "Participant" means, in
addition to any participant who satisfies the requirements of Section
3.06 for the Plan Year, any other Participant entitled to a top heavy
minimum allocation under Section 304(B) of the Plan.
As a second tier allocation, the Advisory Committee will allocate the
nonelective contributions in the same ratio that each Participant's
Excess Compensation for the Plan Year bears to the total Excess
Compensation of all Participants for the Plan Year, but not exceeding
3% of each Participant's Excess Compensation.
As a third tier allocation, the Advisory Committee will allocate the
annual Employer contributions in the same ratio that each Participant's
Compensation plus Excess Compensation for the Plan Year bears to the
total Compensation plus Excess Compensation of all Participants for the
Plan Year. The allocation under this paragraph, as a percentage of each
Participant's Compensation plus Excess Compensation, must not exceed
the applicable percentage (2.7%, 2.4% of 1.3%) listed under the Maximum
Disparity Table following Option (i).
The Advisory Committee then will allocate any remaining nonelective
contributions in the same ratio that each Participant's Compensation
for the Plan Year bears to the total Compensation of all participants
for the Plan Year.
[ ] (i) Excess Compensation. For purposes of Option (f), (g) or (h), "Excess
Compensation" means Compensation in excess of the following Integration
Level: (Choose (1) and (2))
[ ] (1) ____% (not exceeding 100%) of the taxable wage base, as
determined under Section 230 of the Social Security Act, in effect on
the first day of the Plan Year: (Choose any combination of (i) and
(ii) or choose (iii))
[ ] (i) Rounded to ___________ (but not exceeding the taxable
wage base)
[ ] (ii) But not greater than $__________.
[ ] (iii) Without any further adjustment or limitation.
[ ] (2) $____________ [Note: Not exceeding the taxable wage base for the
Plan in which this Adoption Agreement first is effective.]
15.
Maximum Disparity Table. For purposes of Options (f), (g) and (h),
the applicable percentage is:
Integration Level (as Applicable Percentages for Applicable Percentages
percentage of taxable wage base) Option (f) or Option (g) for Option (h)
100% 5.7% 2.7%
More than 80% but less than 100% 5.4% 2.4%
More than 20% (but not less than
$10,001) and not more than 80% 4.3% 1.3%
20% (or $10,000, if greater) or less 5.7% 2.7%
[ ] (j) Allocation offset. The Advisory Committee will reduce a Participant's
allocation otherwise made under Part II of this Section 3.04 by the
Participant's allocation under the following qualified plan(s) maintained
by the Employer: ________________________.
The Advisory Committee will determine this allocation reduction: (Choose (1) and
(2))
[ ] (1) By treating the term "nonelective contribution" as including all
amounts paid or accrued by the Employer during the Plan Year to the
qualified plan(s) referenced under this Option (j). If a Participant
under this Plan also participates in that other plan, the Advisory
Committee will treat the amount the Employer contributes for or during
a Plan Year on behalf of a particular Participant under such other
plan as an amount allocated under this Plan to that Participant's
Account for that Plan Year. The Advisory Committee will make the
computation of allocation required under the immediately preceding
sentence before making any allocation of nonelective contributions
under this section 3.04.
[ ] (2) In accordance with the formula provided in an addendum to this
Adoption Agreement, numbered 3.04(j).
Top Heavy Minimum Allocation - Method of Compliance. If a Participant's
allocation under this Section 3.04 is less than the top heavy minimum allocation
to which he is entitled under Section 3.04(B): (Choose (k) or (l))
[x] (k) The Employer will make any necessary additional contribution to the
Participant's Account, as described in Section 3.04(B)(7)(a) of the
Plan.
[ ] (l) The Employer will satisfy the top heavy minimum allocation under
the following plan(s) it maintains: ___________________________.
However, the Employer will make any necessary additional contribution
to satisfy the top heavy minimum allocation for an Employee covered
only under this Plan and not under the other plan(s) designated in this
Option (l). See Section 3.04(B)(7)(b) of the Plan.
16.
If the Employer maintains another plan, the Employer may provide in an addendum
to this Adoption Agreement, numbered Section 3.04, any modifications to the Plan
necessary to satisfy the top heavy requirements under Code ss.416.
Related employers. If two or more related employers (as defined in Section 1.30)
contribute to this Plan, the Advisory Committee must allocate all Employer
nonelective contributions (and forfeitures treated as nonelective contributions)
to each Participant in the Plan, in accordance with the elections in this
Adoption Agreement Section 3.04: (Choose (m) or (n))
[x] (m)Without regard to which contributing related group member employs the
Participant.
[ ] (n) Only to the Participants directly employed by the contribution
Employer. If a Participant receives Compensation from more than one
contributing Employer, the Advisory Committee will determine the
allocations under this Adoption Agreement Section 3.04 by prorating
among the participating Employers the Participant's Compensation and,
if applicable, the Participant's Integration Level under Option (i).
3.05 FORFEITURE ALLOCATION. Subject to any restoration allocation
required under Sections 5.04 or 9.14, the Advisory Committee will allocate a
Participant forfeiture in accordance with Section 3.04: (Choose (a) or (b); (c)
and (d) are optional in addition to (a) or (b))
[ ] (a) As an Employer nonelective contribution for the Plan Year in
which the forfeiture occurs, as if the Participant forfeiture were an
additional nonelective contribution for that Plan Year.
[x] (b) To reduce the Employer matching contributions and nonelective
contributions for the Plan Year: (Choose (1) or (2)
[ ] (1) in which the forfeiture occurs.
[x] (2) immediately following the Plan Year in which the
forfeiture occurs.
[ ] (c) To the extent attributable to matching contributions:
(Choose (1), (2) or (3))
[ ] (1) In the manner elected under Options (a) or (b).
[ ] (2) First to reduce Employer matching contributions for
the Plan Year: (Choose (i) or (ii))
[ ] (i) in which the forfeiture occurs,
[ ] (ii) immediately following the Plan Year in which
the forfeiture occurs,then as elected in Options (a)
or (b).
17.
[ ] (3) As a discretionary matching contribution for the Plan
Year in which the forfeiture occurs, in lieu of the manner
elected under Options (a) or (b).
[ ] (d) First to reduce the Plan's ordinary and necessary administrative
expenses for the Plan Year and then will allocate any remaining
forfeitures in the manner described in Options (a), (b) or (c),
whichever applies. If the Employer elects Option (c), the forfeitures
used to reduce Plan expenses: (Choose (1) or (2))
[ ] (1) relate proportionately to forfeitures described in
Option (c) and to forfeitures described in
Options (a) or (b).
[ ] (2) relate first to forfeitures described in Option_____.
Allocation of forfeited excess aggregate contributions. The Advisory Committee
will allocate any forfeited excess aggregate contributions (as described in
Section 14.09): Choose (e) (f) or (g))
[x] (e) To reduce Employer matching contributions for the Plan Year:
(Choose (1) or (2))
[ ] (1) in which the forfeiture occurs.
[x] (2) immediately following the Plan Year in which the
forfeiture occurs.
[ ] (f) As Employer discretionary matching contributions for the Plan
Year in which forfeited, except the Advisory Committee will not
allocate these forfeitures to the Highly Compensated Employees who
incurred the forfeitures.
[ ] (g) In accordance with Options (a) through (d), whichever applies,
except the Advisory Committee will not allocate these forfeitures under
Option (a) or under Option (c)(3) to the Highly Compensated Employees
who incurred the forfeitures.
3.06 ACCRUAL OF BENEFIT.
Compensation taken into account. For the Plan Year in which the Employee first
becomes a Participant, the Advisory Committee will determine the allocation of
any cash or deferred contribution, designated qualified nonelective contribution
or nonelective contribution by taking into account: (Choose (a) or (b))
[ ] (a) The Employee's Compensation for the entire Plan Year.
[x] (b) The Employee's Compensation for the portion of the Plan Year in which
the Employee actually is a Participant in the Plan.
Accrual Requirements. Subject to the suspension of accrual requirements of
Section 3.06(E) of the Plan, to receive an allocation of cash or deferred
contributions, matching contributions, designated qualified nonelective
contributions, nonelective contributions and Participant forfeitures, if any,
for
18.
the Plan Year, a Participant must satisfy the conditions described in the
following elections: (Choose (c) or at least one of (d) through (f))
[ ] (c) Safe harbor rule. If The Participant is employed by the Employer
on the last day of the Plan Year, the Participant must complete at
least one Hour of Service for that Plan Year. If the Participant is not
employed by the Employer on the last day of the Plan Year, the
Participant must complete at least 501 Hours of Service during the Plan
Year.
[x] (d) Hours of Service condition. The Participant must complete the
following minimum number of Hours of Service during the Plan Year:
(Choose at least one of (1) through (5))
[ ] (1) 1,000 Hours of Service
[ ] (2) (Specify, but the number of Hours of Service may not
exceed 1,000) one (1).
[x] (3) No Hour of Service requirement if the Participant
terminates employment during the Plan Year on account
of: (Choose (i), (ii) or (iii))
[x] (i) Death.
[x] (ii) Disability.
[x] (iii) Attainment of Normal Retirement Age in the
current Plan Year or in a prior Plan Year.
[ ] (4) ______ Hours of Service (not exceeding 1,000) if the
Participant terminates employment with the Employer during
the Plan Year, subject to any election in Option (3).
[ ] (5) No Hour of Service requirement for an allocation of
the following contributions: _____________________________.
[x] (e) Employment condition. The Participant must be employed by the
Employer on the last day of the Plan Year, irrespective of whether he
satisfies any Hours of Service condition under Option (d), with the
following exceptions: (Choose (1) or at least one of (2) through (5))
[ ] (1) No exceptions.
[x] (2) Termination of employment because of death.
[x] (3) Termination of employment because of disability.
[x] (4) Termination of employment following attainment of
Normal Retirement Age.
19.
[ ] (5) No employment condition for the following
contributions: _____________.
[x] (f) (Specify other conditions, if applicable): A Participant must be
employed on the last day of a Plan quarter to receive a matching
contribution.
Suspension of Accrual Requirements. The suspension of accrual requirements of
Section 3.06(E) of the Plan: (Choose (g), (h) or (i))
[ ] (g) Applies to the Employer's Plan.
[x] (h) Does not apply to the Employer's Plan.
[ ] (i) Applies in modified form to the Employer's Plan, as
described in an addendum to this Adoption Agreement,
numbered Section 3.06(E).
Special accrual requirements for matching contributions. If the Plan allocates
matching contributions on two or more allocation dates for a Plan Year, the
Advisory Committee, unless otherwise specified in Option (l), will apply any
Hours of Service condition by dividing the required Hours of Service on a pro
rata basis to the allocation periods included in that Plan Year. Furthermore, a
Participant who satisfies the conditions described in this Adoption Agreement
Section 3.06 will receive an allocation of matching contributions (and
forfeitures treated as matching contributions) only if the Participant satisfies
the following additional condition(s): (Choose (j) or lat least one of (k) or
(l))
[ ] (j) No additional conditions.
[ ] (k) The Participant is not a Highly Compensated Employee for the
Plan Year. This Option (k) applies to: (Choose (1) or (2))
[ ] (1) All matching contributions.
[ ] (2) Matching contributions described in Option(s) _______
of Adoption Agreement Section 3.01.
[x] (l) (Specify) (1) Excess matching contributions will be forfeited
unless distributed pursuant to Section 14.08 or 14.09. (2) An employee
who participates in the Jefferson Pilot Retirement Plan shall not share
in an allocation of matching contributions.
3.15 MORE THAN ONE PLAN LIMITATION. If the provisions of Section
3.15 apply, the Excess Amount attributed to this Plan
equals: (Choose (a), (b) or (c))
[ ] (a) The product of:
(i) the total Excess Amount allocated as of such date
(including any amount which the Advisory Committee would
have allocated but for the limitations of Code ss.415),
times
20.
(ii) the ratio of (1) the amount allocated to the
Participant as of such date under this Plan divided by (2)
the total amount allocated as of such date under all
qualified defined contribution plans (determined without
regard to the limitations of Code ss.415).
[x] (b) The total Excess Amount.
[ ] (c) None of the Excess Amount.
3.18 DEFINED BENEFIT PLAN LIMITATION.
Application of limitation. The limitation under Section 3.18 of the Plan:
(Choose (a) and (b))
[x] (a) Does not apply to the Employer's Plan because the Employer does not
maintain and never has maintained a defined benefit plan covering any
Participant in this Plan.
[ ] (b)Applies to the Employer's Plan. To the extent necessary to satisfy
the limitation under Section 3.18, the Employer will reduce:
(Choose (1) or (2))
[ ] (1) The Participant's projected annual benefit under the
defined benefit plan under which the Participant
participates.
[ ] (2) Its contribution or allocation on behalf of the
Participant to the defined contribution plan under which the
Participant participates and then, if necessary, the
Participant's projected annual benefit under the defined
benefit plan under which the Participant participates.
[Note: If the Employer selected (a), the remaining options in this Section 3.18
do not apply to the Employer's Plan.]
Coordination with top heavy minimum allocation. The Advisory Committee will
apply the top heavy minimum allocation provisions of Section 3.04(B) of the Plan
with the following modifications:
(Choose (c) or at least one of (d) or (e))
[ ] (c) No modifications.
[ ] (d) For Non-Key Employees participating only in this Plan, the top
heavy minimum allocation is the minimum allocation described in Section
3.04(B) determined by substituting ___% (not less than 4%) for "3%,
except: (Choose (i) or (ii))
[ ] (i) No exceptions.
[ ] (ii) Plan Years in which the top heavy ratio exceeds 90%.
[ ] (e) For Non-Key Employees also participating in the defined
benefit plan, the top heavy minimum is: (Choose (1) or (2))
21.
[ ] (1) 5% of Compensation (as determined under Section 3.04(B
or the Plan) irrespective of the contribution rate of any
Key Employee, except: (Choose (i) or (ii))
[ ] (i) No exceptions.
[ ] (ii) Substituting "7 1/2%" for "5%" if the top
heavy ratio does not exceed 90%.
[ ] (2) 0%. [Note: The Employer may not select this
Option (2) unless the defined benefit plan satisfies the top
heavy minimum benefit requirements of Code ss.416
for these Non-Key Employees.]
Actuarial Assumptions for Top Heavy Calculation. To determine the top heavy
ratio, the Advisory Committee will use the following interest rate and mortality
assumptions to value accrued benefits under a defined benefit plan:
_________________________________________________.
If the elections under this Section 3.18 are not appropriate to satisfy the
limitations of Section 3.18, or the top heavy requirements under Code ss.416,
the Employer must provide the appropriate provisions in an addendum to this
Adoption Agreement.
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. The Plan:(Choose (a)
or (b); (c) is available only with (b))
[x] (a) Does not permit Participant nondeductible contributions.
[ ] (b) Permits Participant nondeductible contributions, pursuant
to Section 14.04 of the Plan.
[ ] (c) The following portion of the Participant's nondeductible
contributions for the Plan year are mandatory contributions under
Option (i)(3) of Adoption Agreement Section 3.01:
(Choose (1) or (2))
[ ] (1) The amount which is not less than: _________________.
[ ] (2) The amount which is not greater than: _____________.
Allocation dates. The Advisory Committee will allocate nondeductible
contributions for each Plan Year as of the Accounting Date and the following
additional allocation dates: (Choose (d) or (e))
[ ] (d) No other allocation dates.
[ ] (e) (Specify) _________________________________.
22.
As of an allocation date, the Advisory Committee will credit all nondeductible
contributions made for the relevant allocation period. Unless otherwise
specified in (e), a nondeductible contribution relates to an allocation period
only if actually made to the Trust no later than 30 days after that allocation
period ends.
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. Subject to the
restrictions of Article VI, the following distribution options apply to a
Participant's Mandatory Contributions Account, if any, prior to his Separation
from Service. (Choose (a) or at least one of (b) through (d))
[ ] (a) No distribution options prior to Separation from Service.
[ ] (b) The same distribution options applicable to the Deferral
Contributions Account prior to the Participant's Separation from
Service, as elected in Adoption Agreement Section 6.03.
[ ] (c) Until he retires, the Participant has a continuing election
to receive all or any portion of his Mandatory Contributions Account
if: (Choose (1) or at least one of (2) through (4))
[ ] (1) No conditions.
[ ] (2) The mandatory contributions have accumulated for at
least ____ Plan Years since the Plan Year for which
contributed.
[ ] (3) The Participant suspends making nondeductible
contributions for a period of ____ months.
[ ] (4) (Specify) ___________________________________.
[ ] (d) (Specify) _______________________________________.
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is:
(Choose (a) or (b))
[ ] (a) ____ [State age, but may not exceed age 65].
[x] (b) The later of the date the Participant attains 65 years of age or
the 5th anniversary of the first day of the Plan Year in which the
Participant commenced participation in the Plan. [The age selected may
not exceed age 65 and the anniversary selected may not exceed the 5th.]
5.02 PARTICIPANT DEATH OR DISABILITY. The 100% vesting rule under
Section 5.02 of the Plan: (Choose (a) or choose one or both of
(b) and (c))
23.
[ ] (a) Does not apply.
[x] (b) Applies to death.
[x] (c) Applies to disability.
5.03 VESTING SCHEDULE.
Deferral Contributions Account/Qualified Matching Contributions
Account/Qualified Nonelective Contributions Account/Mandatory Contributions
Account. A Participant has a 100% Nonforfeitable interest at all times in his
Deferral Contributions Account, has Qualified Matching Contributions Account,
his Qualified Nonelective Contributions Account and in his Mandatory
Contributions Account.
Regular Matching Contributions Account/Employer Contributions Account. With
respect to a Participant's Regular Matching Contributions Account and Employer
Contributions Account, the Employer elects the following vesting schedule:
(Choose (a) or (b); (c) and (d) are available only as additional options)
[ ] (a) Immediate vesting. 100% Nonforfeitable at all times. [Note: The
Employer must elect Option (a) if the eligibility conditions under Adoption
Agreement Section 2.01(c) require 2 years of service or more than 12 months
of employment.]
[x] (b) Graduated Vesting Schedules.
Top Heavy Schedule Non Top Heavy Schedule
(Mandatory) (Optional)
Years of Nonforfeitable Years of Nonforfeitable
Service Percentage Service Percentage
------- ---------- ------- ----------
Less than 1 0% Less than 1 0%
1 0% 1 0%
2 20% 2 0%
3 50% 3 50%
4 75% 4 75%
5 100% 5 100%
6 or more 100% 6 100%
7 or more 100%
[ ] (c) Special vesting election for Regular Matching Contributions Account.
In lieu of the election under Options (a) or (b), the Employer elects the
following vesting schedule for a Participant's Regular Matching
Contributions Account: (Choose (1) or (2))
[ ] (1) 100% Nonforfeitable at all times.
24.
[ ] (2) In accordance with the besting schedule described in the
addendum of this Adoption Agreement, numbered 5.03(c). [Note: If the
Employer elects this Option (c)(2), the addendum must designate the
applicable vesting schedule(s) using the same format as used in Option
(b).]
[Note: Under Options (b) and (c)(2), the Employer must complete a Top Heavy
Schedule which satisfied Code ss.416. The Employer, at its option, may complete
a Non Top Heavy Schedule. The Non Top Heavy Schedule must satisfy Code
ss.411(a)(2). Also see Section 7.05 of the Plan.]
[x] (d) The Top Heavy Schedule under Option (b) (and, if applicable, under
Option (c)(2)) applies: (Choose (1) or (2)
[ ] (1) Only in a Plan Year for which the Plan is top heavy.
[x] (2) In the Plan Year for which the Plan first is top heavy and
then in all subsequent Plan Years. [Note: The Employer may not
elect Option (d) unless it has completed a Non Top Heavy
Schedule.]
Minimum vesting. (Choose (e) or (f))
[x] (e) The Plan does not apply a minimum vesting rule.
[ ] (f) A Participant's Nonforfeitable Accrued Benefit will never be less
than the lesser of $__________ or his entire Accrued Benefit, even if
the application of a graduated vesting schedule under Options (b) or
(c) would result in a smaller Nonforfeitable Accrued Benefit.
Life Insurance Investments. The Participant's Accrued Benefit attributable to
insurance contracts purchased on his behalf under Article XI is: (Choose (g) or
(h))
[N/A ] (g) Subject to the vesting election under Options (a), (b) or (c).
[ ] (h) 100% Nonforfeitable at all times, irrespective of the vesting
election under Options (b) or (c)(2).
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED
PARTICIPANTS/RESTORATION OF FORFEITED ACCRUED BENEFIT. The deemed cash-out
rule described in Section 5.04(C) of the Plan: (Choose (a) or (b))
[ ] (a) Does not apply.
[x] (b) Will apply to determine the timing of forfeitures for 0% vested
Participants. A Participant is not a 0% vested Participant if he has a
Deferral Contributions Account.
5.06 YEAR OF SERVICE - VESTING.
25.
Vesting computation period. The Plan measures a Year of Service on the basis of
the following 12 consecutive month periods: (Choose (a) or (b))
[x] (a) Plan Years.
[ ] (b) Employment Years. An Employment year is the 12 consecutive month
period measured from the Employee's Employment Commencement Date and
each successive 12 consecutive month period measured from each
anniversary of that Employment Commencement Date.
Hours of Service. The minimum number of Hours of Service an Employee must
complete during a vesting computation period to receive credit for a Year of
Service is: (Choose (c) or (d))
[x] (c) 1,000 Hours of Service.
[ ] (d) _____ Hours of Service. [Note: The Hours of Service requirement may
not exceed 1,000.]
5.08 INCLUDED YEARS OF SERVICE - VESTING. The Employer specifically
excludes the following Years of Service: (Choose (a) or at least one of (b)
through (e))
[ ] (a) None other than as specified in Section 5.08(a) of the Plan.
[ ] (b) Any Year of Service before the Participant attained the age of _____.
Note: The age selected may not exceed age 18.]
[ ] (c) Any Year of Service during the period the Employer did not maintain
this Plan or a predecessor plan.
[x] (d) Any Year of Service before a Break in service if the number of
consecutive Breaks in Service equals or exceeds the greater of 5 or the
aggregate number of the Years of Service prior to the Break. This exception
applies only if the Participant is 0% vested in his Accrued Benefit derived
from Employer contributions at the time he has a Break in Service.
Furthermore, the aggregate number of Years of Service before a Break in
Service do not include any Years of Service not required to be taken into
account under this exception by reason of any prior Break in Service.
[ ] (e) Any Year of Service earned prior to the effective date of ERISA if
the Plan would have disregarded that Year of Service on account of an
Employee's Separation from Service under a Plan provision in effect and
adopted before January 1, 1974.
ARTICLE VI
TIME AND METHOD OF PAYMENTS OF BENEFITS
26.
Code ss.411(d)(6) Protected Benefits. The elections under this Article VI may
not eliminate Code ss.411(d)(6) protected benefits. To the extent the elections
would eliminate a Code ss.411(d)(6) protected benefit, see Section 13.02 of the
Plan. Furthermore, if the elections liberalize the optional forms of benefit
under the Plan, the more liberal options apply on the later of the adopt date or
the Effective Date of this Adoption Agreement.
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT.
Distribution date. A distribution date under the Plan means any day of the Plan
Year. [Note: The Employer must specify the appropriate date(s). The specified
distribution dates primarily establish annuity starting dates and the notice and
consent periods prescribed by the Plan. The Plan allows the Trustee an
administratively practicable period of time to make the actual distribution
relating to a particular distribution date.]
Nonforfeitable Accrued Benefit Not Exceeding $3,500. Subject to the limitations
of Section 6.01(A)(1), the distribution date for distribution of a
Nonforfeitable Accrued Benefit not exceed $3,500 is: (Choose (a), (b), (c), (d)
or (e))
[ ] (a) ________________________________________________________________ of
the ____________________Plan Year beginning after the Participant's
Separation from Service.
[x] (b) as soon as administratively feasible following receipt by the Trustee
of the last Participant deposit following the Participant's Separation form
Service.
[ ] (c) ________________________________________________________________ of
the Plan Year after the Participant incurs ____ Break(s) in Service (as
defined in Article V).
[ ] (d) ______________________________following the Participant's attainment
of Normal Retirement Age, but not earlier than ___________ days following
his Separation from Service.
[ ] (e) (Specify) ___________________________________________.
Nonforfeitable Accrued benefit Exceeds $3,500. See the elections under Section
6.03.
Disability. The distribution date, subject to Section 6.01(A)(3), is: (Choose
(f), (g) or (h))
[ ] (f) __________________________________________________________ after the
Participant terminates employment because of disability.
[x] (g) The same as if the Participant had terminated employment without
disability.
[ ] (h) (Specify) ___________________________________________.
27.
Hardship. (Choose (i) or (j))
[x] (i) The Plan does not permit a hardship distribution to a Participant who
has separated from Service.
[ ] (j) The Plan permits a hardship distribution to a Participant who has
separated from Service in accordance with the hardship distribution policy
stated in: (Choose (1), (2) or (3))
[ ] (1) Section 6.01(A)(4) of the Plan.
[ ] (2) Section 14.11 of the Plan.
[ ] (3) The addendum to this Adoption Agreement, numbered Section 6.01.
Default on a Loan. If a Participant or Beneficiary defaults on a loan made
pursuant to a loan policy adopted by the Advisory Committee pursuant to Section
9.04, the Plan: (Choose (k), (l) or (m))
[x] (k) Treats the default as a distributable event. The Trustee, at the time
of the default, will reduce the Participant's Nonforfeitable Accrued
Benefit by the lesser of the amount in default (plus accrued interest) or
the Plan's security interest in that Nonforfeitable Accrued Benefit. To the
extent the loan is attributable to the Participant's Deferral Contributions
Account, Qualified Matching Contributions Account or Qualified Nonelective
Contributions Account, the Trustee will not reduce the Participant's
Nonforfeitable Accrued Benefit unless the Participant has separated from
Service or unless the Participant has attained age 59 1/2.
[ ] (l) Does not treat the default as a distributable event. When an
otherwise distributable event first occurs pursuant to Section 6.01 or
Section 6.03 of the Plan, the Trustee will reduce the Participant's
Nonforfeitable Accrued Benefit by the lesser of the amount in default (plus
accrued interest) or the Plan's security interest in that Nonforfeitable
Accrued Benefit.
[ ] (m) (Specify) __________________________________________.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. The Advisory Committee will
apply Section 6.02 of the Plan with the following modifications: (Choose (a) or
at least one of (b), (c), (d) and (e))
[ ] (a) No modifications.
[ ] (b) Except as required under Section 6.01 of the Plan, a lump sum
distribution is not available:
_________________________________________________________________.
[x] (c) An installment distribution: (Choose (1) or at least one of (2) or (3))
[ ] (1) Is not available under the Plan.
28.
[ ] (2) May not exceed the lesser of ________ years or the maximum
period permitted under Section 6.02.
[x] (3) (Specify) is not available for account balances which accrued
prior to May 15, 1990.
[ ] (d) The Plan permits the following annuity options:
__________________________.
Any Participant who elects a life annuity option is subject to the
requirements of Sections 6.04(A), (B), (C) and (D) of the Plan. See
Section 6.04(E). [Note: The Employer may specify additional annuity
options in an addendum to this Adoption Agreement, numbered 6.02(d).]
[ ] (e) If the Plan invests in qualifying Employer securities, as described
in Section 10.03(F), a Participant eligible to elect distribution under
Section 6.03 may elect to receive that distribution in Employer securities
only in accordance with the provisions of the addendum to this Adoption
Agreement, numbered 6.02(e).
6.03 BENEFIT PAYMENT ELECTIONS.
Participant Elections After Separation from Service. A Participant who is
eligible to make distribution elections under Section 6.03 of the Play may elect
to commence distribution of his Nonforfeitable Accrued Benefit: (Choose at least
one of (a) through (c))
[ ] (a) As of any distribution date, but not earlier than
__________________________ of the ______________ Plan year beginning after
the Participant's Separation from Service.
[x] (b) As of the following date(s): (Choose at least one of Options (1)
through (6))
[ ] (1) Any distribution date after the close of the Plan Year in which
the Participant attains Normal Retirement Age.
[x] (2) Any distribution date following his Separation from Service with
the Employer.
[ ] (3) Any distribution date in the _____________ Plan Year(s)
beginning after his Separation from Service.
[ ] (4) Any distribution date in the Plan Year after the Participant
incurs ________ Break(s) in Service (as defined in Article V).
[ ] (5) Any distribution date following attainment of age _______ and
completion of at least _______ Years of Service (as defined in Article
V).
[ ] (6) (Specify) ___________________________________________.
29.
[ ] (c) (Specify) _________________________________________________.
The distribution events described in the election(s) made under Options
(a), (b) or (c) apply equally to all Accounts maintained for the Participant
unless otherwise specified in Option (c).
Participant Elections Prior to Separation from Service - Regular Matching
Contributions Account and Employer Contributions Account. Subject to the
restrictions of Article VI, the following distribution options apply to a
Participant's Regular Matching Contributions Account and Employer contributions
Account prior to his Separation from Service: (Choose (d) or at least one of (e)
through (h))
[ ] (d) No distribution options prior to Separation from Service.
[x] (e) Attainment of Specified Age. Until he retires, the Participant has a
continuing election to receive all or any portion of his Nonforfeitable
interest in these Accounts after he attains: (Choose (1) or (2))
[ ] (1) Normal Retirement Age.
[x] (2) 59 1/2 years of age and is at least 100% vested in these Accounts.
[Note: If the percentage is less than 100%, see the special vesting
formula in Section 5.03.]
[ ] (f) After a participant has participated in the Plan for a period of not
less than _____ years and he is 100% vested in these Accounts, until he
retires, the Participant has a continuing election to receive all or any
portion of the Accounts. [Note: The number in the blank space may not be
less than 5.].
[x] (g) Hardship. A Participant may elect a hardship distribution prior to his
Separation from Service in accordance with the hardship distribution
policy: (Choose (1), (2) or (3); (4) is available only as an additional
option)
[ ] (1) Under Section 6.01(A)(4) of the Plan.
[x] (2) Under Section 14.11 of the Plan.
[ ] (3) Provided in the addendum to this Adoption Agreement, numbered
Section 6.03.
[ ] (4) In no event may a participant receive a hardship distribution
before he is at least ______% vested in thee Accounts. [Note: If the
percentage in the blank is less than 100%, see the special vesting
formula in Section 5.03.].
[ ] (h) (Specify)______________________.
[Note: The Employer may use an addendum, numbered 6.03, to provide additional
language authorized Options (b) (6), (c), (g)(3) or (h) of this Adoption
Agreement Section 6.03.]
30.
Participant elections Prior to Separation from Service - Deferral Contributions
Account, Qualified Matching Contributions Account and Qualified Nonelective
Contributions Account. Subject to the restrictions of Article VI, the following
distribution options apply to a participant's Deferral Contributions Account,
Qualified Matching Contributions Account and Qualified Nonelective Contributions
Account prior to his Separation from Service: (Choose (i) or at least one of (j)
through (l)
[ ] (i) No distribution options prior to Separation from Service.
[x] (j) Until he retires, the participant has a continuing election to receive
all or any portion of these Accounts after he attains: (Choose (1) or (2))
[ ] (1) The later of Normal Retirement Age or age 59 1/2.
[x] (2) Age 59 1/2 (at least 59 1/2).
[x] (k) Hardship. A Participant, prior to this Separation from Service, may
elect a hardship distribution from his Deferral Contributions Account in
accordance with the hardship distribution policy under Section 14.11 of the
Plan.
[ ] (1) (Specify) . [Note: Option (1) may not permit in service distributions
prior to age 59 1/2 (other than hardship) and may not modify the hardship
policy described in Section 14.11.)
Sale of trade or business/subsidiary. If the Employer sells substantially all of
the assets (within the meaning of Code ss.409(d)(3)), a Participant who
continues employment with the acquiring corporation is eligible for distribution
from his Deferral Contributions Account, Qualified Matching Contributions
Account and qualified Nonelective Contributions Account: (Choose (m) or (n))
[ ] (m) Only ad described in this Adoption Agreement Section 6.03 for
distributions prior to Separation from Service.
[x] (n) As if he has a Separation from Service. After March 31,1988, a
distribution authorized solely by reason of this Option (n) must constitute
a lump sum distribution, determined in a manner consistent with Code
ss.401(k)(10) and the applicable Treasury regulations.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES.
The annuity distribution requirements of Section 6.04 (Choose (a) or (b))
[x] (a) Apply only to a Participant described in Section 604(E) of the Plan
(relating to the profit sharing exception to the joint and survivor
requirements).
[ ] (b) Apply only to all Participants.
31.
ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. If a distribution (other
than a distribution from a segregated Account and other than a corrective
distribution described in Sections 14.07, 14.08, 14.09 or 14.10 of the Plan)
occurs more than 90 days after the most recent valuation date, the distribution
will include interest at: (Choose (a), (b) or (c))
[x] (a) 0% per annum. [Note: The percentage may equal 0%.]
[ ] (b) The 90 day Treasury bill rate in effect at the beginning of the
current valuation period.
[ ] (c) (Specify) .
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS.
Pursuant to Section 14.12, to determine the allocation of net income, gain or
loss: (complete only those items, if any, which are applicable to the Employer's
Plan).
[x] (a) For salary reduction contributions, the Advisory Committee will:
(Choose (1), (2),(3), (4) or (5)
[ ] (1) Apply Section 9.11 without modification.
[ ] (2) Use the segregated account approach described in Section 14.12.
[ ] (3) Use the weighted average method described in Section 14.12,
based on a __________ weighting period.
[ ] (4) Treat as part of the relevant Account at the beginning of the
valuation period ____% of the salary reduction contributions: (Choose
(i) or (ii))
[ ] (i) made during that valuation period.
[ ] (ii) made by the following specified time:
_______________________.
[x] (5) Apply the allocation method described in the addendum to this Adoption
Agreement numbered 9.11(a).
[x] (b) For matching contributions, the Advisory Committee will: (Choose (1),
(2), (3) or (4))
[ ] (1) Apply Section 9.11 without modification. [ ] (2) Use the
weighted average method described in Section 14.12, based on a
____________ weighted period.
32.
[ ] (3) Treat as part of the relevant Account at the beginning of the
valuation period _____% of the matching contributions allocated during
the valuation period.
[x] (4) Apply the allocation method described in the addendum to this
Adoption Agreement numbered 9.11(b).
[ ] (c) For Participant nondeductible contributions, the Advisory Committee
will: (Choose (1), (2), (3), (4) or (5))
[ ] (1) Apply Section 9.11 without modification.
[ ] (2) Use the segregated account approach described in Section 14.12.
[ ] (3) Use the weighted average method described in Section 14.12,
based on a
_____________ weighting period.
[ ] (4) Treat as part of the relevant Account at the beginning of the
valuation period ______% of the Participant nondeductible
contributions: (Choose (i) or (ii))
[ ] (i) made during that valuation period.
[ ] (ii) made by the following specified time: .
[ ] (r) Apply the allocation method described in the addendum to this
Adoption Agreement numbered 9.11(c).
ARTICLE X
TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
10.03 INVESTMENT POWERS. Pursuant to Section 10.03[F] of the plan, the
aggregated investments in qualifying Employer securities and in qualifying
Employer real property: (Choose (a) or (b))
[ ] (a) May not exceed 10% of Plan assets.
[x] (b) May not exceed 100% of Plan assets. [Note: the percentage may not
exceed 100%.]
10.04 VALUATION OF TRUST. In addition to each Accounting Date, the Trustee
must value the Trust Fund on the following valuation date(s): (Choose (a) or
(b))
[ ] (a) No other mandatory valuation dates.
(b) (Specify) any day of the Plan Year upon which assets may be purchased
or sold, commonly referred to as "Daily" accounting.
33.
EFFECTIVE DATE ADDENDUM
(Restated Plans Only)
The Employer must complete this addendum only if the restated Effective
Date specified in Adoption Agreement Section 1.18 is different than the restated
effective date for at least one of the provisions listed in this addendum. In
lieu of the restated Effective Date in Adoption Agreement Section 1.18, the
following special effective dates apply: (Choose whichever elections apply)
[ ] (a) Compensation definition. The Compensation definition of Section 1.12
(other than the $200,000 limitation) is effective for Plan Years beginning
after _____________. [Note: May not be effective later than the first day
of the first Plan Year beginning after the Employer executed this Adoption
Agreement to restate the Plan for the Tax Reform Act of 1986, if
applicable.]
[ ] (b) Eligibility conditions. The eligibility conditions specified in
Adoption Agreement Section 2.01 are effective for Plan Years beginning
after _________________.
[ ] (c) Suspension of Years of Service. The suspension of Years of Service
rule elected under Adoption Agreement Section 1.03 is effective for Plan
Years beginning after ----------------.
[ ] (d) Contribution/allocation formula. The contribution formula elected
under Adoption Agreement Section 3.01 and the method of allocation elected
under Adoption Agreement Section 3.04 is effective for Plan Years beginning
after _________________.
[ ] (e) Accrual requirements. The accrual requirements of Section 3.06 are
effective for
Plan Years beginning after ___________________.
[ ] (f) Employment condition. The employment condition of Section 3.06 is
effective for
Plan Years beginning after ___________________.
[ ] (g) Elimination of Net Profits. The requirement for the Employer not to
have net profits to contribute to this Plan is effective for Plan Years
beginning after ___________________. [Note: The date specified may not be
earlier than December 31, 1985].
[ ] (h) Vesting Schedule. The special allocation provisions elected under
Adoption Agreement Section 9.11 are effective for Plan Years beginning
after ___________________.
[ ] (i) Allocation of Earnings. The special allocation provisions elected
under Adoption Agreement Section 9.11 are effective for Plan Years
beginning after _______________.
[ ] (j) (Specify) (1) Valuation of Trust. The valuation provision selected
under Adoption Agreement Section 10.14 are effective on the date assets are
transferred to the AVE$TA system. (2) Allocation of Earning. The Special
allocation provisions elected under Adoption Agreement Section 9.11 are
effective the date assets are transferred to the AVE$TA system. (3)
Trustee. The trustee provision selected under Adoption Agreement
34.
Section 1.02 will be effective on the date assets are transferred to
the AVE$TA system. (4) Contribution/Allocation Formula. The
contribution formula elected under Adoption Agreement 3.01 and the
method of allocation elected under Adoption Agreement Section 3.04 is
effective April 1, 1996.
For Plan Years prior to the special Effective Date, the terms of the
Plan prior to its restatement under this Adoption Agreement will control for
purposes of the designated provisions. A special Effective Date may not result
in the delay of a Plan provision beyond the permissible Effective Date under any
applicable law requirements.
35.
Execution Page
The Trustee (and Custodian, if applicable), by executing this Adoption
Agreement, accepts its position and agrees to all of the obligations,
responsibilities and duties imposed upon the Trustee (or Custodian) under the
Master Plan and trust. The Employer hereby agrees to the provisions of this Plan
and Trust, and in witness of its agreement, the Employer by its duly authorized
officers, has executed this Adoption Agreement, and the Trustee (and Custodian,
if applicable) signified its acceptance, on this ________________ day of
___________________, 199_.
Name and EIN of Employer: _________________________________________
Signed: __________________________________________________________________
Name(s) of Trustee: _______________________________________
Signed: _____________________________________________________________
---------------------------------------------------------------
Name of Custodian: ____________________________________________________
Signed:_______________________________________________________________
[Note: A Trustee is mandatory, but a Custodian is optional. See Section 10.03 of
the Plan.]
Plan Number. The 3-digit plan number the Employer assigns to this Plan for ERISA
reporting purposes (Form 5500 Series) is: 001.
Use of Adoption Agreement. Failure to complete properly the elections in this
Adoption Agreement may result in disqualification of the Employer's Plan. The
3-digit number assigned to this Adoption Agreement (see page 1) is solely for
the Master Plan Sponsor's recordkeeping purposes and does not necessarily
correspond to the plan number the Employer designated in the prior paragraph.
Master Plan Sponsor. The Master Plan Sponsor identified on the first page of the
basic plan document will notify all adopting employers of any amendment of this
Master Plan or of any abandonment or discontinuance by the Master Plan Sponsor
of its maintenance of this Master Plan. For inquiries regarding the adoption of
the Master Plan, the Master Plan Sponsor's intended meaning of any plan
provisions or the effect of the opinion letter issued to the Master Plan
Sponsor, please contact the Master Plan Sponsor at the following address and
telephone Number: P.O. Box 2558, AVE$TA Division, Houston Texas 77252-8432 (713)
750-7906.
Reliance on Opinion Letter. The Employer may not rely on the Master Plan
Sponsor's opinion letter covering this Adoption Agreement. For reliance on the
Plan's qualification, the Employer must obtain a determination letter from the
applicable IRS Key District office.
36.
N/A
PARTICIPATION AGREEMENT
For Participation by Related Group Members (Plan Section 1.30)
The undersigned Employer, by executing this Participation Agreement,
elects to become a Participating Employer in the Plan identified in Section 1.03
of the accompanying Adoption Agreement, as if the Participating Employer were a
signatory to that Agreement. The Participating Employer accepts, and agrees to
be bound by, all of the elections granted under the provisions of the Master
Plan as made by ________________________ the Signatory Employer to the Execution
Page of the Adoption Agreement.
1. The Effective Date of the undersigned Employer's participation in the
designated Plan is: ________________
2. The undersigned Employer's adoption of this Plan constitutes:
[ ] (a) The adoption of a new plan by the participating Employer.
[ ] (b) The adoption of an amendment and restatement of a plan currently
maintained by the Employer, identified as _____________________________,
and having an original effective date of _____________.
Dated this ____________ day of ________________, 19__.
Name of Participating Employer: __________________________
__________________________________________________________________
Signed: _____________________________
Participating Employer's EIN: __________
Acceptance by the Signatory Employer to the Execution Page of the Adoption
Agreement and by the Trustee.
Name of Signatory Employer: _________________
Accepted: _________________
[Date] Signed ______________________________________
Name(s) of Trustee: _________________________
Accepted: _________________
[Date] Signed ______________________________________
[Note: Each Participating Employer must execute a separate
Participation Agreement. See The Execution Page of the Adoption
Agreement for important Master Plan information.]
37.
Addendum 5.03(A)
Adoption Agreement #011
Nonstandardized Code ss.401(k) Profit Sharing Plan
In lieu of the special vesting formula used in Section 503(A), to determine the
Participant's Nonforfeitable Accrued Benefit derived from Employer
contributions, the Advisory Committee will use the following formula: P(AB+D)-D.
To apply this formula, "P" is the Participant's current vesting percentage at
the relevant time, "AB" is the Participant's Employer-derived Accrued Benefit at
the relevant time and "D" is the amount of the earlier distribution.
38.
Addendum 9.11
Adoption Agreement #011
Nonstandardized Code ss.401(k) Profit Sharing Plan
Section 9.11(a)(5) and (b)(4) apply with the following modifications:
Participants shall not be entitled to share in any earnings allocated after
payment of the entire vested balance except to the extent the funds were
advanced from the participant's account at the time of payment.
Contributions received in an account subsequent to the distribution of the total
vested balance shall be entitled to earnings until the vested balance is
distributed.
39.
Addendum 10.03 [B] To
Adoption Agreement #011
Nonstandardized Code ss.401(k) Profit Sharing Plan
Funds held in the AVESTA Trust may be made available to Participants for
Direction of Investments. Initially the funds available for investment will be:
AVESTA Money Market Fund
Dreyfus 100% U S Treasury Intermediate Term Fund, L.P.
Federated Stock and Bond
Federated Max-Cap Fund Institutional Class
Franklin Small Cap Growth Fund
Mylan Laboratories Common Stock
The Plan Administrator may designate additional funds, including AVESTA Trust
Funds, or discontinue any such funds by delivery of written instruction to the
Trustee.
Any account balances held by the Trust which have not been directed by the
Participant will be invested in the AVESTA Money Market Fund.
40.
Addendum 6.01(e4) To
Adoption Agreement #011
Nonstandardized Code ss.401(k) Profit Sharing Plan
The following additional provisions concerning qualifying employer securities
are included as part of the Adoption Agreement completed by Bertek
Pharmaceuticals Inc. ("Employer"), in accordance with Section 6.02(e) of the
Adoption Agreement:
(1) Establishment of Mylan Laboratories Corporation Common Stock Fund. The
investment options in Section 10.03[F] of the Plan include the ability
to invest in "qualifying employer securities", as defined in Section
407(d)(5) ERISA, which specifically includes share ("Share") of common
stock of Mylan Laboratories Inc., a Pennsylvania corporation ("Mylan
Laboratories Common Stock"). Texas Commerce Bank National Association
("Trustee") is expressly authorized to invest so much of the Trust Fund
(up to 50% thereof as provided in Section 10.03 of the Adoption
Agreement) in Mylan Laboratories Common Stock as is necessary to invest
Participant Account balances in Mylan Laboratories Common Stock as is
necessary to invest Participant Account balances in Mylan Laboratories
Common Stock in accordance with the directions of the Participants
under Section 10.03[B] of the Plan.
(2) Dividends and Income. All cash dividends, stock dividends, stock splits
received by the Trustee with respect to Mylan Laboratories Common Stock
previously credited to a Participant's Account shall be credited to
that Account upon receipt by the Trustee. All cash dividends will be
used to purchase shared of Mylan Laboratories Common Stock.
(3) Purchases and Sales of Common Stock. Except as provided below with
respect to matching purchases and sales, all purchases and sales of
Mylan Laboratories Common Stock shall be on the open market, unless
other arrangements are mutually agreed upon in writing by the Employer
and the Trustee. Such purchases and sales of Mylan Laboratories Common
Stock shall be made in accordance with the following rules:
(a) In making purchases of Mylan Laboratories Common Stock on the
open market, the Trustee shall execute the purchases or sales of
Shares as soon as reasonably possible following the receipt of
instructions from the Participant, and shall do so, in so far as
reasonably possible, in the same manner for all participant's
similarly situated. The Trustee shall determine, in its sole
discretion (but in so far as reasonably possible, treating all
participants similarly situated in the same manner) the average
price assigned to shared of Mylan Laboratories Common Stock
purchased in the "pricing period" during which such sale or
purchase occurs.
(b) The Trustee may, in its discretion, make separate trades or
may match the pending purchase and sale orders and only
execute the "net" purchase or sale. The Price of such "net"
transaction (or the average price assigned as provided in (a)
if applicable) shall be deemed to be the price paid or
obtained for the Shares which are netted. The
41.
Trustee shall take any action that is deems to be necessary or
appropriate to ensure to the extent, if any, necessary to
comply with applicable law that there is payment of no more,
or receipt of no less, than "adequate consideration" (as that
term is defined in Section 3(19) of ERISA and regulations or
other guidance issued thereunder by the appropriate
governmental authority) on the date of the transaction (as
determined by the Trustee) in the case of the purchase or sale
of Mylan Laboratories Common Stock.
(c) Any brokerage commissions, transfer fees and other similar
expenses actually incurred in any such sale or purchase shall
be equitably allocated among the Shares purchased and sold
(including, without limitation, Shares which are netted)
during such pricing period.
(d) Purchases shall be made only in full Shares. Any cash
allocated to a Participant's Mylan Laboratories Common Stock
Account which is not so invested shall be invested in a money
market fund within a reasonable time of its receipt.
(e) It shall be the responsibility of the Employer to insure that
the Plan is registered under the Federal Securities Act of
1933, and no purchase of Shares will be made if the Trustee
knows such registration is not in effect.
4. Voting and Tender of Shares. The right to vote ("Voting Rights") and the
right to tender ("Tender Rights") Shares allocated to a participant's
Account(s) shall be passed through to such Participant. The Company may
appoint an agent, (hereinafter "Designated Agent") who shall be responsible
for soliciting and tabulating proxies and tenders from Plan Participants
or, in the absence of any such appointment, the Trustee shall perform such
functions (future references shall, for convenience, assume a Designated
Agent has been appointed). The Trustee shall provide Participant data
required for such solicitation via magnetic media to the Designated Agent,
to the extent the Participant account records contain the information
required. Such information includes, but is not limited to: Participant
name, Participant social security number, number of Mylan Laboratories
Common Stock shares held on the record date, and Participant mailing
address. The Employer will provide the same information and materials to
the Designated Agent (and to the Trustee for its records) for distribution
to Plan Participants as is provided to other holders of Mylan Laboratories
Common Stock, and the Designated Agent shall certify to the Trustee that
all such materials have been mailed or otherwise sent to all Participants.
The results of the participant's exercise of his Voting Rights or his
Tender Rights will be provided by the Designated Agent to the Trustee in
time for the Trustee to vote or tender (as the case may be) the shares in
accordance with Participants' instructions.
In the absence of the exercise of his Voting Rights or his Tender Rights
shares held in a Participant's Account(s) shall not be voted or tendered
(as the case may be) by the Trustee.
42.
Shares held in the Trust other than in Participant's Account(s) shall
not be voted or tender by the Trustee except at the specific written
direction of the Employer.
Participant voting instructions may be transmitted in any reasonable
form agreed upon by the Trustee and the Designated Agent.
(5) The Trustee and the Designated Agent shall act with respect to all
matters relating to the exercise of Voting Rights and Tender Rights in
such a way as to reasonably insure that there is no disclosure to the
Employer or a related party of a Participant's vote or of acceptance of
a tender offer. Notwithstanding the foregoing, unless otherwise advised
in writing by the representative of the Employer responsible for
working with the Trustee and Designated Agent to maintain
confidentiality, and the Trustee may furnish the Employer with
information relation to the overall purchase, sale, voting, tender or
similar matter relating to all of the Shares held by the Trustee so
long as such information does not identify, and cannot be reasonably
anticipated as identifying the actions of any specific Participant with
respect to such Shares.
Without limiting the generality of the foregoing, the Designated Agent
shall establish procedures for the exercise of Tender Rights which will
insure that a Participant who has directed any Designated Agent to
tender or withhold from tender any or all of the shares may, at any
time prior to the tender offer withdrawal deadline, instruct the
Designated Agent to withdraw or tender, and the Designated Agent shall
withdraw or tender such shares prior to the tender offer tender or
withdrawal deadline. A Participant shall not be limited as to the
number of instructions to tender or withdraw that the Participant may
give to the Designated Agent.
(6) Distribution of Accrued Benefits. The portion of a Participant's
Accrued Benefit payable under Article VI (other than a Hardship
Withdrawal, which shall always be distributed in cash) shall be
distributed entirely in cash or entirely by delivery of shares as
directed by the Participant. In the event the Participant directs a
distribution in cash, the Trustee shall sell the Shares allocated to
his Account as near as reasonably possible (as determined under a
uniform procedure designed to treat Participants similarly situated in
a similar manner) to the date of distribution.
(7) Account Realignment. Participants may realign account investments at
any time, including, without limitation, the Mylan Laboratories Common
Stock Account.
Partial Account Liquidation. All in-service account liquidations, for
such events as withdrawals, fee payments, or participant loans, shall
be pro rata, across all funds in the source of sources liquidated
including, without limitation, the Mylan Laboratories Common Stock.
43.
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
DEFINED CONTRIBUTION MASTER PLAN
AND
TRUST AGREEMENT
Defined Contribution Master Plan
TABLE OF CONTENTS
ALPHABETICAL LISTING OF DEFINITIONS.......................iv
ARTICLE I, DEFINITIONS
1.01 Employer ...................................1.01
1.02 Trustee ....................................1.01
1.03 Plan .......................................1.01
1.04 Adoption Agreement .........................1.01
1.05 Plan Administrator .........................1.01
1.06 Advisory Committee .........................1.02
1.07 Employee ...................................1.02
1.08 Self-Employed Individual/
Owner-Employee .............................1.02
1.09 Highly Compensated Employee ................1.02
1.10 Participant ................................1.03
1.11 Beneficiary ................................1.03
1.12 Compensation ...............................1.03
1.13 Earned Income ..............................1.05
1.14 Account ....................................1.05
1.15 Accrued Benefit ............................1.05
1.16 Nonforfeitable .............................1.05
1.17 Plan Year/Limitation Year ..................1.05
1.18 Effective Date .............................1.05
1.19 Plan Entry Date ............................1.05
1.20 Accounting Date ............................1.06
1.21 Trust ......................................1.06
1.22 Trust Fund .................................1.06
1.23 Nontransferable Annuity ....................1.06
1.24 ERISA ......................................1.06
1.25 Code .......................................1.06
1.26 Service ....................................1.06
1.27 Hour of Service ............................1.06
1.28 Disability .................................1.07
1.29 Service for Predecessor Employer ...........1.07
1.30 Related Employers ..........................1.08
1.31 Leased Employees ...........................1.08
1.32 Special Rules for Owner-Employees ..........1.09
1.33 Determination of Top Heavy Status ..........1.09
1.34 Paired Plans ...............................1.11
1.35 Retirement Investment Trust ................1.11
ARTICLE II, EMPLOYEE PARTICIPANTS
2.01 Eligibility ................................2.01
2.02 Year of Service - Participation ............2.01
2.03 Break in Service - Participation ...........2.01
2.04 Participation upon Re-employment ...........2.01
2.05 Change in Employee Status ..................2.02
2.06 Election Not to Participate ................2.02
ARTICLE III, EMPLOYER CONTRIBUTIONS AND
FORFEITURES
3.01 Amount .....................................3.01
3.02 Determination of Contribution ..............3.01
3.03 Time of Payment of Contribution ............3.01
3.04 Contribution Allocation ....................3.01
3.05 Forfeiture Allocation ......................3.03
3.06 Accrual of Benefit .........................3.03
3.07 - 3.16 Limitations on Allocations ...........3.05
3.17 Special Allocation Limitation ..............3.07
3.18 Defined Benefit Plan Limitation ............3.07
3.19 Definitions - Article III ..................3.07
ARTICLE IV, PARTICIPANT CONTRIBUTIONS
4.01 Participant Nondeductible
Contributions ..............................4.01
4.02 Participant Deductible Contributions .......4.01
4.03 Participant Rollover Contributions .........4.01
4.04 Participant Contribution -
Forfeitability .............................4.02
4.05 Participant Contribution -
Withdrawal/Distribution ....................4.02
4.06 Participant Contribution -
Accrued Benefit ............................4.02
ARTICLE V, TERMINATION OF SERVICE -
PARTICIPANT VESTING
5.01 Normal Retirement Age ......................5.01
5.02 Participant Disability or Death ............5.01
5.03 Vesting Schedule ...........................5.01
5.04 Cash-out Distributions to Partially -
Vested Participants/Restoration of
Forfeited Accrued Benefit ..................5.01
5.05 Segregated Account for Repaid
Amount .....................................5.03
5.06 Year of Service - Vesting ..................5.03
5.07 Break in Service - Vesting .................5.03
5.08 Included Years of Service - Vesting ........5.03
5.09 Forfeiture Occurs ..........................5.03
ARTICLE VI, TIME AND METHOD OF PAYMENT
OF BENEFITS
6.01 Time of Payment of Accrued Benefit .........6.01
6.02 Method of Payment of Accrued Benefit .......6.02
6.03 Benefit Payment Elections ..................6.04
6.04 Annuity Distributions to Participants
and Surviving Spouses ......................6.06
6.05 Waiver Election - Qualified Joint
and Survivor Annuity .......................6.07
6.06 Waiver Election - Preretirement
Survivor Annuity ...........................6.08
6.07 Distributions Under Domestic
Relations Orders ...........................6.08
ARTICLE VII, EMPLOYER ADMINISTRATIVE
PROVISIONS
7.01 Information to Committee ...................7.01
7.02 No Liability ...............................7.01
7.03 Indemnity of Certain Fiduciaries ...........7.01
7.04 Employer Direction of Investment ...........7.02
7.05 Amendment to Vesting Schedule ..............7.02
ARTICLE VIII, PARTICIPANT ADMINISTRATIVE
PROVISIONS
8.02 Beneficiary Designation.....................8.01
8.02 No Beneficiary Designation/Death
of Beneficiary..............................8.01
Defined Contribution Master Plan
TABLE OF CONTENTS
8.03 Personal Data to Committee...........................8.02
8.04 Address for Notification.............................8.02
8.05 Assignment or Alienation.............................8.02
8.06 Notice of Change in Terms............................8.02
8.07 Litigation Against the Trust.........................8.02
8.08 Information Available................................8.02
8.09 Appeal Procedure for Denial
of Benefits..........................................8.02
8.10 Participant Direction of Investment..................8.03
ARTICLE IX, ADVISORY COMMITTEE - DUTIES
WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.01 Members' Compensation, Expenses......................9.01
9.02 Term.................................................9.01
9.03 Powers...............................................9.01
9.04 General..............................................9.01
9.05 Funding Policy.......................................9.02
9.06 Manner of Action.....................................9.02
9.07 Authorized Representative............................9.02
9.08 Interested Member....................................9.02
9.09 Individual Accounts..................................9.02
9.10 Value of Participant's Accrued Benefit...............9.02
9.11 Allocation and Distribution of Net
Income Gain or Loss..................................9.03
9.12 Individual Statement.................................9.03
9.13 Account Charged......................................9.03
9.14 Unclaimed Account Procedure..........................9.04
ARTICLE X, TRUSTEE AND CUSTODIAN, POWERS
AND DUTIES
10.01 Acceptance..........................................10.01
10.02 Receipt of Contributions............................10.01
10.03 Investment Powers...................................10.01
10.04 Records and Statements..............................10.06
10.05 Fees and Expenses from Fund.........................10.06
10.06 Parties to Litigation...............................10.07
10.07 Professional Agents.................................10.07
10.08 Distribution of Cash or Property....................10.07
10.09 Distribution Directions.............................10.07
10.10 Third Party/Multiple Trustees.......................10.07
10.11 Resignation.........................................10.07
10.12 Removal.............................................10.08
10.13 Interim Duties and Successor Trustee................10.08
10.14 Valuation of Trust..................................10.08
10.15 Limitation on Liability - If Investment
Manager, Ancillary Trustee or
Independent Fiduciary Appointed.....................10.08
10.16 Investment in Group Trust Fund......................10.08
10.17 Appointment of Ancillary Trustee
or Independent Fiduciary............................10.09
10.18 Evidence of Action by Advisory
Committee...........................................10.09
10.19 Allocation of Responsibilities
Among Fiduciaries...................................10.10
10.20 Special Provisions Regarding
Retirement Investment Trusts........................10.10
ARTICLE XI, PROVISIONS RELATING TO
INSURANCE AND INSURANCE COMPANY
11.01 Insurance Benefits..................................11.01
11.02 Limitation on Life Insurance
Protection..........................................11.01
11.03 Definitions.........................................11.02
11.04 Dividend Plan.......................................11.02
11.05 Insurance Company Not a Party
to Agreement........................................11.02
11.06 Insurance Company Not
Responsible for Trustee's Actions...................11.03
11.07 Insurance Company Reliance
on Trustee's Signature..............................11.03
11.08 Acquittance.........................................11.03
11.09 Duties of Insurance Company.........................11.03
ARTICLE XII, MISCELLANEOUS
12.01 Evidence............................................12.01
12.02 No Responsibility for Employer
Action..............................................12.01
12.03 Fiduciaries Not Insurers............................12.01
12.04 Waiver of Notice....................................12.01
12.05 Successors..........................................12.01
12.06 Word Usage..........................................12.01
12.07 State Law...........................................12.01
12.08 Employer's Right to Participate.....................12.01
12.09 Employment Not Guaranteed...........................12.02
ARTICLE XIII, EXCLUSIVE BENEFIT,
AMENDMENT, TERMINATION
13.01 Exclusive Benefit...................................13.01
13.02 Amendment by Employer...............................13.01
13.03 Amendment by Master Plan Sponsor....................13.02
13.04 Discontinuance......................................13.02
13.05 Full Vesting on Termination.........................13.02
13.06 Merger/Direct Transfer..............................13.02
13.07 Termination.........................................13.03
ARTICLE XIV, CODE ss.401(k) AND CODE ss.401(m)
ARRANGEMENTS
14.01 Application.........................................14.01
14.02 Code ss.401(k) Arrangement............................14.01
14.03 Definitions.........................................14.01
14.04 Matching Contributions/
Employee Contributions..............................14.03
14.05 Time of Payment of Contributions....................14.04
14.06 Special Allocation Provisions -
Deferral Contributions, Matching
Contributions and Qualified
Nonelective Contributions...........................14.04
14.07 Annual Elective Deferral
Limitation..........................................14.05
14.08 Actual Deferral Percentage
("ADP") Test........................................14.06
14.09 Nondiscrimination Rules for
Employer Matching Contributions/
Participant Nondeductible
2.
Defined Contribution Master Plan
ALPHABETICAL LISTING OF DEFINITIONS
Section Reference
Plan Definition (Page Number)
Contributions.........................................14.08
14.10 Multiple Use Limitation...............................14.10
14.11 Distribution Restrictions.............................14.10
14.12 Special Allocation Rules..............................14.12
100% Limitation..........................................3.19(l) (3.07)
Account.....................................................1.14 (1.05)
Accounting Date.............................................1.20 (1.06)
Accrued Benefit.............................................1.15 (1.05)
Actual Deferral Percentage ("ADP") Test...................14.08 (14.06)
Adoption Agreement..........................................1.04 (1.01)
Advisory Committee..........................................1.06 (1.02)
Annual Addition..........................................3.19(a) (3.07)
Average Contribution Percentage Test......................14.09 (14.08)
Beneficiary.................................................1.11 (1.03)
Break in Service for Eligibility Purposes...................2.03 (2.01)
Break in Service for Vesting Purposes.......................5.07 (5.03)
Cash-out Distribution.......................................5.04 (5.01)
Code........................................................1.25 (1.06)
Code ss.411(d)(6) Protected Benefits........................13.02 (13.01)
Compensation................................................1.12 (1.03)
Compensation for Code ss.401(k)
Purposes.........................................14.03(f) (14.02)
Compensation for Code ss.415 Purposes......................3.19(b) (3.08)
Compensation for Top Heavy Purposes...................1.33(B)(3) (1.10)
Contract(s)............................................11.03(c) (11.02)
Custodian Designation..................................10.03[B] (10.03)
Deemed Cash-out Rule.....................................5.04(C) (5.02)
Deferral Contributions.................................14.03(g) (14.02)
Deferral Contributions Account.........................14.06(A) (14.04)
Defined Benefit Plan.....................................3.19(i) (3.09)
Defined Benefit Plan Fraction............................3.19(j) (3.09)
Defined Contribution Plan................................3.19(h) (3.08)
Defined Contribution Plan Fraction.......................3.19(k) (3.09)
Determination Date....................................1.33(B)(7) (1.11)
Disability..................................................1.28 (1.07)
Distribution Date...........................................6.01 (6.01)
Distribution Restrictions..............................14.03(m) (14.03)
Earned Income...............................................1.13 (1.05)
Effective Date..............................................1.18 (1.05)
Elective Deferrals.....................................14.03(h) (14.02)
Elective Transfer......................................13.06(A) (13.02)
Eligible Employee......................................14.03(n) (14.03)
Employee....................................................1.07 (1.02)
Employee Contributions.................................14.03(n) (14.03)
Employer....................................................1.01 (1.01)
Employer Contribution Account.............................14.06 (14.04)
Employer for Code ss.415 Purposes..........................3.19(c) (3.08)
Employer for Top Heavy Purposes.......................1.33(B)(6) (1.11)
Employment Commencement Date................................2.02 (2.01)
ERISA.......................................................1.24 (1.06)
Excess Aggregate Contributions.........................14.09(D) (14.09)
Excess Amount............................................3.19(d) (3.08)
Excess Contributions......................................14.08 (14.07)
Exempt Participant..........................................8.01 (8.01)
3.
Defined Contribution Master Plan
ALPHABETICAL LISTING OF DEFINITIONS
Section Reference
Plan Definition (Page Number)
Section Reference
Plan Definition (Page Number)
Forfeiture Break in Service........................................5.08 (5.03)
Group Trust Fund.................................................10.16 (10.08)
Hardship.....................................................6.01(A)(4) (6.01)
Hardship for Code ss.401(k) Purposes.............................1411(A) (14.10)
Highly Compensated Employee........................................1.09 (1.02)
Highly Compensated Group......................................14.03(d) (14.02)
Hour of Service....................................................1.27 (1.06)
Incidental Insurance Benefits.................................11.01(A) (11.01)
Indemnity..........................................................7.03 (7.01)
Insurable Participant.........................................11.03(d) (11.02)
Investment Manager..............................................9.04(i) (9.01)
Issuing Insurance Company.....................................11.03(b) (11.02)
Joint and Survivor Annuity......................................6.04(A) (6.06)
Key Employee.................................................1.33(B)(1) (1.10)
Leased Employees...................................................1.31 (1.08)
Limitation Year...............................1.17 and 3.19(e) (1.05 and 3.08)
Loan Policy.....................................................9.04(A) (9.02)
Mandatory Contributions.......................................14.03(A) (14.03)
Mandatory Contributions Account...............................14.04(A) (14.03)
Master or Prototype Plan........................................3.19(f) (3.08)
Matching Contributions........................................14.03(i) (14.02)
Maximum Permissible Amount......................................3.19(g) (3.08)
Minimum Distribution Incidental Benefit.........................6.02(A) (6.03)
Multiple Use Limitation..........................................14.10 (14.10)
Named Fiduciary...............................................10.03[D] (10.05)
Nonelective Contributions.....................................14.03(j) (14.02)
Nonforfeitable.....................................................1.16 (1.05)
Nonhighly Compensated Employee................................14.03(b) (14.02)
Nonhighly Compensated Group...................................14.03(e) (14.02)
Non-Key Employee.............................................1.33(B)(2) (1.10)
Nontransferable Annuity............................................1.23 (1.06)
Normal Retirement Age..............................................5.01 (5.01)
Owner-Employee.....................................................1.08 (1.02)
Paired Plans.......................................................1.34 (1.11)
Participant........................................................1.10 (1.03)
Participant Deductible Contributions...............................4.02 (4.01)
Participant Forfeiture.............................................3.05 (3.03)
Participant Loans.............................................10.03[E] (10.06)
Participant Nondeductible Contributions............................4.01 (4.01)
Permissive Aggregation Group.................................1.33(B)(5) (1.11)
Plan...............................................................1.03 (1.01)
Plan Administrator.................................................1.05 (1.01)
Plan Entry Date....................................................1.19 (1.05)
Plan Year..........................................................1.17 (1.05)
Policy........................................................11.03(a) (11.02)
Predecessor Employer...............................................1.29 (1.07)
Preretirement Survivor Annuity..................................6.04(B) (6.06)
Qualified Domestic Relations Order.................................6.07 (6.08)
Qualified Matching Contributions..............................14.03(k) (14.03)
Qualified Nonelective Contributions...........................14.03(l) (14.03)
Qualifying Employer Real Property.............................10.03[F] (10.06)
Qualifying Employer Securities................................10.03[F] (10.06)
Related Employers..................................................1.30 (1.08)
Required Aggregation Group...................................1.33(B)(4) (1.11)
Required Beginning Date.........................................6.01(B) (6.02)
Retirement Investment Trust........................................1.35 (1.11)
Rollover Contributions.............................................4.03 (4.01)
Self-Employed Individual...........................................1.08 (1.02)
Service............................................................1.26 (1.06)
Term Life Insurance Contract.....................................11.03 (11.02)
Top Heavy Minimum Allocation....................................3.04(B) (3.01)
Top Heavy Ratio....................................................1.33 (1.09)
Trust..............................................................1.21 (1.06)
Trustee............................................................1.02 (1.01)
Trustee Designation...........................................10.03[A] (10.01)
Trust Fund.........................................................1.22 (1.06)
Weighted Average Allocation Method...............................14.12 (14.12)
Year of Service for Eligibility Purposes...........................2.02 (2.01)
Year of Service for Vesting Purposes...............................5.06 (5.03)
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
DEFINED CONTRIBUTION MASTER PLAN AND TRUST AGREEMENT
BASIC PLAN DOCUMENT #03
Texas Commerce Bank National Association, in its capacity as Master
Plan Sponsor, establishes this Master Plan intended to conform to and qualify
under ss.401 and ss.501 of the Internal Revenue Code of 1986, as amended. An
Employer establishes a Plan and Trust under this Master Plan by executing an
Adoption Agreement. If the Employer adopts this Plan as a restated Plan in
substitution for, and in amendment of, an existing plan, the provisions of this
Plan, as a restated Plan, apply solely to an Employee whose employment with the
Employer terminates on or after the restated Effective Date of the Employer's
Plan. If an Employee's employment with the Employer terminates prior to the
restated Effective Date, that Employee is entitled to benefits under the Plan as
the Plan existed on the date of the Employees termination of employment.
ARTICLE I
DEFINITIONS
1.01 "Employer" means each employer who adopts this Plan by executing
an Adoption Agreement.
1.02 "Trustee" means the person or persons who as Trustee execute the
Employer's Adoption Agreement, or any successor in office who in writing accepts
the position of Trustee. The Employer must designate in its Adoption Agreement
whether the Trustee will administer the Trust. as a discretionary Trustee or as
a nondiscretionary Trustee. If a person acts as a discretionary Trustee, the
Employer also may appoint a Custodian. See Article X. If the Master Plan Sponsor
is a bank, savings and loan, credit union or similar financial institution, a
person other than the Master Plan Sponsor (or its affiliate) may not serve as
Trustee or as Custodian of the Employer's Plan without the written consent of
the Master Plan Sponsor.
1.03 "Plan" means the retirement plan established or continued by the
Employer in the form of this Agreement, including the Adoption Agreement under
which the Employer has elected to participate in this Master Plan. The Employer
must designate the name of the Plan in its Adoption Agreement. An Employer may
execute more than one Adoption Agreement offered under this Master Plan, each of
which will constitute a separate Plan and Trust established or continued by that
Employer. The Plan and the Trust created by each adopting Employer is a separate
Plan and a separate Trust, independent from the plan and the trust of any other
employer adopting this Master Plan. All section references within the Plan are
Plan section references unless the context clearly indicates otherwise.
1.04 "Adoption Agreement" means the document executed by each Employer
adopting this Master Plan. The terms of this Master Plan as modified by the
terms of an adopting Employees Adoption Agreement constitute a separate Plan and
Trust to be construed as a single
Agreement. Each elective provision of the Adoption Agreement corresponds by
section reference to the section of the Plan which grants the election. Each
Adoption Agreement offered under this Master Plan is either a Nonstandardized
Plan or a Standardized Plan, as identified in the preamble to that Adoption
Agreement. The provisions of this Master Plan apply equally to Nonstandardized
Plans and to Standardized Plans unless otherwise specified.
1.05 "Plan Administrator" is the Employer unless the Employer
designates another person to hold the position of Plan Administrator. In
addition to his other duties, the Plan Administrator has full responsibility for
compliance with the reporting and disclosure rules under the Code and ERISA as
respects the Plan and Trust.
1.06 "Advisory Committee" means the Employees Advisory Committee as
from time to time constituted.
1.07 "Employee" means any employee (including a Self-Employed
Individual) of the Employer. The Employer must specify in its Adoption Agreement
any Employee, or class of Employees, not eligible to participate in the Plan. If
the Employer elects to include Collective bargaining employees, the exclusion
applies to any employee of the Employer included in a unit of employees covered
by an agreement which the Secretary of Labor finds to be a collective bargaining
agreement between employee representatives and one or more employers unless the
collective bargaining agreement requires the employee to be included within the
Plan. The term "employee representatives" does not include any organization more
than half the members of which are owners, officers, or executives of the
Employer.
1.08 "Self-Employed Individual/Owner-Employee." "Self-Employed
Individual" means an individual who has Earned Income (or who would have had
Earned Income but for the fact that the trade or business did not have net
earnings) for the taxable year from the trade or business for which the Plan is
established. "Owner-Employee" means a Self-Employed Individual who is the sole
proprietor in the case of a sole proprietorship. If the Employer is a
partnership, "Owner-Employee" means a Self-Employed Individual who is a partner
and owns more than 10% of either the capital or profits interest of the
partnership.
1.09 "Highly Compensated Employee" means an Employee who, during the
Plan-Year or during the preceding 12-month period:
(a) is a more than 5% owner of the Employer (applying the
constructive ownership rules of Code ss.318, and applying the
principles of Code ss.318, for an unincorporated entity);
(b) has Compensation in excess of $75,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year);
2.
(c) has Compensation in excess of $50,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year) and is part of
the top-paid 20% group of employees (based on Compensation for the
relevant year); or
(d) has Compensation in excess of 50% of the dollar amount
prescribed in Code ss.415(b)(1)(A) (relating to defined benefit plans)
and is an officer of the Employer.
If the Employee satisfies the definition in clause (b), (c) or (d) in
the Plan Year but does not satisfy clause (b), (c) or (d) during the preceding
12-month period and does not satisfy clause (a) in either period, the Employee
is a Highly Compensated Employee only if he is one of the 100 most highly
compensated Employees for the Plan Year. The number of officers taken into
account under clause (d) will not exceed the greater of 3 or 10% of the total
number (after application of the Code ss.414(q) exclusions) of Employees, but no
more than 50 officers. If no Employee satisfies the Compensation requirement in
clause (d) for the relevant year, the Advisory Committee will treat the highest
paid officer as satisfying clause (d) for that year.
For purposes of this Section 1.09, "Compensation" means Compensation as
defined in Section 1.12, except any exclusions from Compensation elected in the
Employer's Adoption Agreement Section 1.12 do not apply, and Compensation must
include "elective contributions" (as defined in Section 1.12). The Advisory
Committee must make the determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of the top paid 20%
group, the top 100 paid Employees, the number of officers includible in clause
(d) and the relevant Compensation, consistent with Code ss.414(q) and
regulations issued under that Code section. The Employer may make a calendar
year election to determine the Highly Compensated Employees for the Plan Year,
as prescribed by Treasury regulations. A calendar year election must apply to
all plans and arrangements of the Employer. For purposes of applying any
nondiscrimination test required under the Plan or under the Code, in a manner
consistent with applicable Treasury regulations, the Advisory Committee will
treat a Highly Compensated Employee and family members (a spouse, a lineal
ascendant or descendant, or a spouse of a lineal ascendant or descendant) as a
single Highly Compensated Employee, but only if the Highly Compensated Employee
is a more than 5% owner or is one of the 10 Highly Compensated Employees with
the greatest Compensation for the Plan Year. This aggregation rule applies to a
family member even if that family member is a Highly Compensated Employee
without aggregation.
The term "Highly Compensated Employee" also includes any former
Employee who separated from Service (or has a deemed Separation from Service, as
determined under Treasury regulations) prior to the Plan Year, performs no
Service for the Employer during the Plan Year, and was a Highly Compensated
Employee either for the separation year or any Plan Year ending on or after his
55th birthday. If the former Employee's Separation from Service occurred prior
to January 1, 1987, he is a Highly Compensated Employee only if he satisfied
clause (a) of this
3.
Section 1.09 or received Compensation in excess of $50,000 during: (1) the year
of his Separation from Service (or the prior year); or (2) any year ending after
his 54th birthday.
1.10 "Participant" is an Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01.
1.11 "Beneficiary" is a person designated by a Participant who is or
may become entitled to a benefit under the Plan. A Beneficiary who becomes
entitled to a benefit under the Plan remains a Beneficiary under the Plan until
the Trustee has fully distributed his benefit to him. A Beneficiary's right to
(and the Plan Administrator's, the Advisory Committee's or a Trustee's duty to
provide to the Beneficiary) information or data concerning the Plan does not
arise until he first becomes entitled to receive a benefit under the Plan.
1.12 "Compensation" means, except as provided in the Employer's
Adoption Agreement, the Participant's Earned Income, wages, salaries, fees for
professional service and other amounts received for personal services actually
rendered in the course of employment with the Employer maintaining the plan
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses). The Employer must elect in its Adoption Agreement
whether to include elective contributions in the definition of Compensation.
"Elective contributions" are amounts excludible from the Employee's gross income
under Code ss.ss.125, 402(a)(8), 402(h) or 403(b), and contributed by the
Employer, at the Employee's election, to a Code ss.401(k) arrangement, a
Simplified Employee Pension, cafeteria plan or tax-sheltered annuity. The term
"Compensation" does not include:
(a) Employer contributions (other than "elective
contributions," if includible in the definition of Compensation under
Section 1.12 of the Employer's Adoption Agreement) to a plan of
deferred compensation to the extent the contributions are not included
in the gross income of the Employee for the taxable year in which
contributed, on behalf of an Employee to a Simplified Employee Pension
Plan to the extent such contributions are excludible from the
Employee's gross income, and any distributions from a plan of deferred
compensation, regardless of whether such amounts are includible in the
gross income of the Employee when distributed.
(b) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by an
Employee either becomes freely transferable or is no longer subject to
a substantial risk of forfeiture.
(c) Amounts realized from the sale, exchange or other
disposition of stock acquired under a stock option described in Part
II, Subchapter D, Chapter I of the Code.
(d) Other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the extent that the
premiums are not includible in
4.
the gross income of the Employee), or contributions made by an Employer
(whether or not under a salary reduction agreement) towards the
purchase of an annuity contract described in Code ss.403(b) (whether or
not the contributions are excludible from the gross income of the
Employee), other than "elective contributions," if elected in the
Employer's Adoption Agreement.
Any reference in this Plan to Compensation is a reference to the
definition in this Section 1.12, unless the Plan reference specifies a
modification to this definition. The Advisory Committee will take into account
only Compensation actually paid for the relevant period. A Compensation payment
includes Compensation by the Employer through another person under the common
paymaster provisions in Code ss.ss.3121 and 3306.
(A) Limitations on Compensation.
(1) Compensation dollar limitation. For any Plan Year beginning after
December 31, 1988, the Advisory Committee must take into account only
the first $200,000 (or beginning January 1, 1990, such larger amount as
the Commissioner of Internal Revenue may prescribe) of any
Participant's Compensation. For any Plan Year beginning prior to
January 1, 1989, this $200,000 limitation (but not the family
aggregation requirement described in the next paragraph) applies only
if the Plan is top heavy for such Plan Year or operates as a deemed top
heavy plan for such Plan Year.
(2) Application of compensation limitation to certain family members.
The $200,000 Compensation limitation applies to the combined
Compensation of the Employee and of any family member aggregated with
the Employee under Section 1.09 who is either (i) the Employee's
spouse; or (ii) the Employee's lineal descendant under the age of 19.
If, for a Plan Year, the combined Compensation of the Employee and such
family members who are Participants entitled to an allocation for that
Plan Year exceeds the $200,000 (or adjusted) limitation, "Compensation"
for each such Participant, for purposes of the contribution and
allocation provisions of Article III, means his Adjusted Compensation.
Adjusted Compensation is the amount which bears the same ratio to the
$200,000 (or adjusted) limitation as the affected Participant's
Compensation (without regard to the $200,000 Compensation limitation)
bears to the combined Compensation of all the affected Participants in
the family unit. If the Plan uses permitted disparity, the Advisory
Committee must determine the integration level of each affected family
member Participant prior to the proration of the $200,000 Compensation
limitation, but the combined integration level of the affected
Participants may not exceed $200,000 (or the adjusted limitation). The
combined Excess Compensation of the affected Participants in the family
unit may not exceed $200,000 (or the adjusted limitation) minus the
affected Participants' combined integration level (as determined under
the preceding sentence). If the combined Excess Compensation exceeds
this limitation, the Advisory Committee will prorate the Excess
Compensation limitation among the affected Participants in the family
unit in proportion to each such individual's Adjusted Compensation
minus his integration
5.
level. If the Employer's Plan is a Nonstandardized Plan, the Employer
may elect to use a different method in determining the Adjusted
Compensation of the affected Participants by specifying that method in
an addendum to the Adoption Agreement, numbered Section 1.12.
(B) Nondiscrimination. For purposes of determining whether the Plan
discriminates in favor of Highly Compensated Employees, Compensation means
Compensation as defined in this Section 1.12 except: (1) the Employer may elect
to include or to exclude elective contributions, irrespective of the Employees
election in its Adoption Agreement regarding elective contributions; and (2) the
Employer will not give effect to any elections made in the "modifications to
Compensation definition" section of Adoption Agreement Section 1.12. The
Employees election described in clause (1) must be consistent and uniform with
respect to all Employees and all plans of the Employer for any particular Plan
Year. If the Employees Plan is a Nonstandardized Plan, the Employer,
irrespective of clause (2), may elect to exclude from this nondiscrimination
definition of Compensation any items of Compensation excludible under Code
ss.414(s) and the applicable Treasury regulations, provided such adjusted
definition conforms to the nondiscrimination requirements of those regulations.
1.13 "Earned Income" means net earnings from self-employment in the
trade or business with respect to which the Employer has established the Plan,
provided personal services of the individual are a material income producing
factor. The Advisory Committee will determine net earnings without regard to
items excluded from gross income and the deductions allocable to those items.
The Advisory Committee will determine net earnings after the deduction allowed
to the Self-Employed Individual for all contributions made by the Employer to a
qualified plan and, for Plan Years beginning after December 31, 1989, the
deduction allowed to the Self-Employed under Code ss.164(f) for self-employment
taxes.
1.14 "Account" means the separate account(s) which the Advisory
Committee or the Trustee maintains for a Participant under the Employees Plan.
1.15 "Accrued Benefit" means the amount standing in a Participant's
Account(s) as of any date derived from both Employer contributions and Employee
contributions, if any.
1.16 "Nonforfeitable" means a Participant's or Beneficiary's
unconditional claim, legally enforceable against the Plan to the Participant's
Accrued Benefit.
1.17 "Plan Year" means the fiscal year of the Plan, the consecutive
month period specified in the Employer's Adoption Agreement. The Employees
Adoption Agreement also must specify the "Limitation Year" applicable to the
limitations on allocations described in Article III. If the Employer maintains
Paired Plans, each Plan must have the same Plan Year.
6.
1.18 "Effective Date" of this Plan is the date specified in the
Employer's Adoption Agreement.
1.19 "Plan Entry Date" means the date(s) specified in Section 2.01 of
the Employer's Adoption Agreement.
1.20 "Accounting Date" is the last day of an Employer's Plan Year.
Unless otherwise specified in the Plan, the Advisory Committee will make all
Plan allocations for a particular Plan Year as of the Accounting Date of that
Plan Year.
1.21 "Trust" means the separate Trust created under the Employer's
Plan.
1.22 "Trust Fund" means all property of every kind held or acquired by
the Employer's Plan, other than incidental benefit insurance contracts.
1.23 "Nontransferable Annuity" means an annuity which by its terms
provides that it may not be sold, assigned, discounted, pledged as collateral
for a loan or security for the performance of an obligation or for any purpose
to any person other than the insurance company. If the Plan distributes an
annuity contract, the contract must be a Nontransferable Annuity.
1.24 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.25 "Code" means the Internal Revenue Code of 1986, as amended.
1.26 "Service" means any period of time the Employee is in the employ
of the Employer, including any period the Employee is on an unpaid leave of
absence authorized by the Employer under a uniform, nondiscriminatory policy
applicable to all Employees, "Separation from Service" means the Employee no
longer has an employment relationship with the Employer maintaining this Plan.
1.27 "Hour of Service" means:
(a) Each Hour of Service for which the Employer, either
directly or indirectly, pays an Employee, or for which the Employee is
entitled to payment, for the performance of duties. The Advisory
Committee credits Hours of Service under this paragraph (a) to the
Employee for the computation period in which the Employee performs the
duties, irrespective of when paid;
(b) Each Hour of Service for back pay, irrespective of
mitigation of damages, to which the Employer has agreed or for which
the Employee has received an award. The Advisory Committee credits
Hours of Service under this paragraph (b) to the Employee
7.
for the computation period(s) to which the award or the agreement
pertains rather than for the computation period in which the award,
agreement or payment is made; and
(c) Each Hour of Service for which the Employer, either
directly or indirectly, pays an Employee, or for which the Employee is
entitled to payment (irrespective of whether the employment
relationship is terminated), for reasons other than for the performance
of duties during a computation period, such as leave of absence,
vacation, holiday, sick leave, illness, incapacity (including
disability), layoff, jury duty or military duty. The Advisory Committee
will credit no more than 501 Hours of Service under this paragraph (c)
to an Employee on account of any single continuous period during which
the Employee does not perform any duties (whether or not such period
occurs during a single computation period). The Advisory Committee
credits Hours of Service under this paragraph (c) in accordance with
the rules of paragraphs (b) and (c) of Labor Reg. ss.2530.200b-2 which
the Plan, by this reference, specifically incorporates in full within
this paragraph (c).
The Advisory Committee will not credit an Hour of Service under more
than one of the above paragraphs. A computation period for purposes of this
Section 127 is the Plan Year, Year of Service period, Break in Service period or
other period, as determined under the Plan provision for which the Advisory
Committee is measuring an Employees Hours of Service. The Advisory Committee
will resolve any ambiguity with respect to the crediting of an Hour of Service
in favor of the Employee.
(A) Method of crediting Hours of Service. The Employer must elect in its
Adoption Agreement the method the Advisory Committee will use in crediting an
Employee with Hours of Service. For purposes of the Plan, "actual" method means
the determination of Hours of Service from records of hours worked and hours for
which the Employer makes payment or for which payment is due from the Employer.
If the Employer elects to apply an "equivalency" method, for each equivalency
period for which the Advisory Committee would credit the Employee with at least
one Hour of Service, the Advisory Committee will credit the Employee with: (i)
10 Hours of Service for a daily equivalency; (ii) 45 Hours of Service for a
weekly equivalency; (iii) 95 Hours of Service for a semimonthly payroll period
equivalency; and (iv) 190 Hours of Service for a monthly equivalency.
(B) Maternity/paternity leave. Solely for purposes of determining whether the
Employee incurs a Break in Service under any provision of this Plan, the
Advisory Committee must credit Hours of Service during an Employee's unpaid
absence Period due to maternity or paternity leave. The Advisory Committee
considers an Employee on maternity or paternity leave if the Employee's absence
is due to the Employee's pregnancy, the birth of the Employee's child, the
placement with the Employee of an adopted child, or the care of the Employee's
child immediately following the child's birth or placement. The Advisory
Committee credits Hours of Service under this paragraph on the basis of the
number of Hours of Service the Employee would receive if he were paid during the
absence period or, if the Advisory Committee cannot determine the number of
8.
Hours of Service the Employee would receive, on the basis of 8 hours per day
during the absence period. The Advisory Committee will credit only the number
(not exceeding 501) of Hours of Service necessary to prevent an Employee's Break
in Service. The Advisory Committee credits all Hours of Service described in
this paragraph to the computation period in which the absence period begins or,
if the Employee does not need these Hours of Service to prevent a Break in
Service in the computation period in which his absence period begins, the
Advisory Committee credits these Hours of Service to the immediately following
computation period.
1.28 "Disability" means the Participant, because of a physical or
mental disability, will be unable to perform the duties of his customary
position of employment (or is unable to engage in any substantial gainful
activity) for an indefinite period which the Advisory Committee considers will
be of long continued duration. A Participant also is disabled if he incurs the
permanent loss or loss of use of a member or function of the body, or is
permanently disfigured, and incurs a Separation from Service. The Plan considers
a Participant disabled on the date the Advisory Committee determines the
Participant satisfies the definition of disability. The Advisory Committee may
require a Participant to submit to a physical examination in order to confirm
disability. The Advisory Committee will apply the provisions of this Section
1.28 in a nondiscriminatory, consistent and uniform manner. If the Employer's
Plan is a Nonstandardized Plan, the Employer may provide an alternate definition
of disability in an addendum to its Adoption Agreement, numbered Section 1.28.
1.29 SERVICE FOR PREDECESSOR EMPLOYER. If the Employer maintains the
plan of a predecessor employer, the Plan treats service of the Employee with the
predecessor employer as service with the Employer. If the Employer does not
maintain the plan of a predecessor employer, the Plan does not credit service
with the predecessor employer, unless the Employer identifies the predecessor in
its Adoption Agreement and specifies the purposes for which the Plan will credit
service with that predecessor employer.
1.30 RELATED EMPLOYERS. A related group is a controlled group of
corporations (as defined in Code ss.414(b)), trades or businesses (whether or
not incorporated) which are under common control (as defined in Code ss.414(c))
or an affiliated service group (as defined in Code ss.414(m) or in Code
ss.414(o)). If the Employer is a member of a related group, the term "Employer"
includes the related group members for purposes of crediting Hours of Service,
determining Years of Service and Breaks in Service under Articles II and V,
applying the Participation Test and the Coverage Test under Section 3.06(E),
applying the limitations on allocations in Part 2 of Article III, applying the
top heavy rules and the minimum allocation requirements of Article III, the
definitions of Employee, Highly Compensated Employee, Compensation and Leased
Employee, and for any other purpose required by the applicable Code section or
by a Plan provision. However, an Employer may contribute to the Plan only by
being a signatory to the Execution Page of the Adoption Agreement or to a
Participation Agreement to the Employer's Adoption Agreement. If one or more of
the Employees related group members become Participating Employers by executing
a Participation Agreement to the Employer's Adoption Agreement, the term
"Employer" includes the participating related group members for
9.
all purposes of the Plan, and "Plan Administrator" means the Employer that is
the signatory to the Execution Page of the Adoption Agreement.
If the Employer's Plan is a Standardized Plan, all Employees of the
Employer or of any member of the Employees related group, are eligible to
participate in the Plan, irrespective of whether the related group member
directly employing the Employee is a Participating Employer. If the Employer's
Plan is a Nonstandardized Plan, the Employer must specify in Section 1.07 of its
Adoption Agreement, whether the Employees of related group members that are not
Participating Employers are eligible to participate in the Plan. Under a
Nonstandardized Plan, the Employer may elect to exclude from the definition of
"Compensation" for allocation purposes any Compensation received from a related
employer that has not executed a Participation Agreement and whose Employees are
not eligible to participate in the Plan.
1.31 LEASED EMPLOYEES. The Plan treats a Leased Employee as an Employee
of the Employer. A Leased Employee is an individual (who otherwise is not an
Employee of the Employer) who, pursuant to a leasing agreement between the
Employer and any other person, has performed services for the Employer (or for
the Employer and any persons related to the Employer within the meaning of Code
ss.144(a)(3)) on a substantially full time basis for at least one year and who
performs services historically performed by employees in the Employer's business
field. If a Leased Employee is treated as an Employee by reason of this Section
1.31 of the Plan, "Compensation" includes Compensation from the leasing
organization which is attributable to services performed for the Employer.
(A) Safe harbor plan exception. The Plan does not treat a Leased Employee as an
Employee if the leasing organization covers the employee in a safe harbor plan
and, prior to application of this safe harbor plan exception, 20% or less of the
Employer's Employees (other than Highly Compensated Employees) are Leased
Employees. A safe harbor plan is a money purchase pension plan providing
immediate participation, full and immediate vesting and a nonintegrated
contribution formula equal to at least 10% of the employee's compensation
without regard to employment by the leasing organization on a specified date.
The safe harbor plan must determine the 10% contribution on the basis of
compensation as defined in Code ss.415(c)(3) plus elective contributions (as
defined in Section 1.12).
(B) Other requirements. The Advisory Committee must apply this Section 1.31 in a
manner consistent with Code ss.ss.1414(n) and 414(o) and the regulations issued
under those Code sections. The Employer must specify in the Adoption Agreement
the manner in which the Plan will determine the allocation of Employer
contributions and Participant forfeitures on behalf of a Participant if the
Participant is a Leased Employee covered by a plan maintained by the leasing
organization.
1.32 SPECIAL RULES FOR OWNER-EMPLOYEES. The following special provisions
and restrictions apply to Owner-Employees:
10.
(a) If the Plan provides contributions or benefits for an
Owner-Employee or for a group of Owner-Employees who controls the trade
or business with respect to which this Plan is established and the
Owner-Employee or Owner-Employees also control as Owner-Employees one
or more other trades or businesses, plans must exist or be established
with respect to all the controlled trades or businesses so that when
the plans are combined they form a single plan which satisfies the
requirements of Code ss.401(a) and Code ss.401(d) with respect to the
employees of the controlled trades or businesses.
(b) The Plan excludes an Owner-Employee or group of
Owner-Employees if the Owner-Employee or group of Owner-Employees
controls any other trade or business, unless the employees of the other
controlled trade or business participate in a plan which satisfies the
requirements of ss.Code 401(a) and ss.Code 401(d). The other qualified
plan must provide contributions and benefits which are not less
favorable than the contributions and benefits provided for the
Owner-Employee or group of Owner-Employees under this Plan, or if an
Owner-Employee is covered under another qualified plan as an
Owner-Employee, then the plan established with respect to the trade or
business he does control must provide contributions or benefits as
favorable as those provided under the most favorable plan of the trade
or business he does not control. If the exclusion of this paragraph (b)
applies and the Employer's Plan is a Standardized Plan, the Employer
may not participate or continue to participate in this Master Plan and
the Employees Plan becomes an individually-designed plan for purposes
of qualification reliance.
(c) For purposes of paragraphs (a) and (b) of this Section
1.32, an Owner-Employee or group of Owner-Employees controls a trade or
business if the Owner-Employee or Owner-Employees together (1) own the
entire interest in an unincorporated trade or business, or (2) in the
case of a partnership, own more than 50% of either the capital interest
or the profits interest in the partnership.
1.33 DETERMINATION OF TOP HEAVY STATUS. If this Plan is the only
qualified plan maintained by the Employer, the Plan is top heavy for a Plan Year
if the top heavy ratio as of the Determination Date exceeds 60%. The top heavy
ratio is a fraction, the numerator of which is the sum of the present value of
Accrued Benefits of all Key Employees as of the Determination Date and the
denominator of which is a s sum determined for all Employees. The Advisory
Committee must include in the top heavy ratio, as part of the present value of
Accrued Benefits, any contribution not made as of the Determination Date but
includible under Code ss.416 and the applicable Treasury regulations, and
distributions made within the Determination Period. The Advisory Committee must
calculate the top heavy ratio by disregarding the Accrued Benefit (and
distributions, if any, of the Accrued Benefit) of any Non-Key Employee who was
formerly a Key Employee, and by disregarding the Accrued Benefit (including
distributions, if any, of the Accrued Benefit) of an individual who has not
received credit for at least one Hour of Service with the Employer during the
Determination Period. The Advisory Committee must calculate the top heavy ratio,
including the extent to which it must take into account distributions, rollovers
and transfers, in accordance with Code ss.416 and the regulations under that
Code section.
11.
If the Employer maintains other qualified plans (including a simplified
employee pension plan), or maintained another such plan which now is terminated,
this Plan is top heavy only if it is part of the Required Aggregation Group, and
the top heavy ratio for the Required Aggregation Group and for the Permissive
Aggregation Group, if any, each exceeds 60%. The Advisory Committee will
calculate the top heavy ratio in the same manner as required by the first
paragraph of this Section 1.33, taking into account all plans within the
Aggregation Group. To the extent the Advisory Committee must take into account
distributions to a Participant, the Advisory Committee must include
distributions from a terminated plan which would have been part of the Required
Aggregation Group if it were in existence on the Determination Date. The
Advisory Committee will calculate the present value of accrued benefits under
defined benefit plans or simplified employee pension plans included within the
group in accordance with the terms of those plans, Code ss.416 and the
regulations under that Code section. If a Participant in a defined benefit plan
is a Non-Key Employee, the Advisory Committee will determine his accrued benefit
under the accrual method, if any, which is applicable uniformly to all defined
benefit plans maintained by the Employer or, if there is no uniform method, in
accordance with the slowest accrual rate permitted under the fractional rule
accrual method described in Code ss.411(b)(1)(C). If the Employer maintains a
defined benefit plan, the Employer must specify in Adoption Agreement Section
3.18 the actuarial assumptions (interest and mortality only) the Advisory
Committee will use to calculate the present value of benefits from a defined
benefit plan. If an aggregated plan does not have a valuation date coinciding
with the Determination Date, the Advisory Committee must value the Accrued
Benefits in the aggregated plan as of the most recent valuation date falling
within the twelve-month period ending on the Determination Date, except as Code
ss.416 and applicable Treasury regulations require for the first and second plan
year of a defined benefit plan. The Advisory Committee will calculate the top
heavy ratio with reference to the Determination Dates that fall within the same
calendar year.
(A) Standardized Plan. If the Employer's Plan is a Standardized Plan, the Plan
operates as a deemed top heavy plan in all Plan Years, except, if the
Standardized Plan includes a Code ss.401(k) arrangement, the Employer may elect
to apply the top heavy requirements only in Plan Years for which the Plan
actually is top heavy. Under a deemed top heavy plan, the Advisory Committee
need not determine whether the Plan actually is top heavy. However, if the
Employer, in Adoption Agreement Section 3.18, elects to override the 100%
limitation, the Advisory Committee will need to determine whether a deemed top
heavy Plan's top heavy ratio for a Plan Year exceeds 90%.
(B) Definitions. For purposes of applying the provisions of this Section 1.33:
(1) "Key Employee" means, as of any Determination Date, any Employee or
former Employee (or Beneficiary of such Employee) who, for any Plan
Year in the Determination Period: (i) has Compensation in excess of 50%
of the dollar amount prescribed in Code ss.415(b)(1)(A) (relating to
defined benefit plans) and is an officer of the Employer; (ii) has
12.
Compensation in excess of the dollar amount prescribed in Code
ss.6415(c)(1)(A) (relating to defined contribution plans) and is one of
the Employees owning the ten largest interests in the Employer; (iii)
is a more than 5% owner of the Employer; or (iv) is a more than 1%
owner of the Employer and has Compensation of more than $150,000. The
constructive ownership rules of Code ss.318 (or the principles of that
section, in the case of an unincorporated Employer,) will apply to
determine ownership in the Employer. The number of officers taken into
account under clause (i) will not exceed the greater of 3 or 10% of the
total number (after application of the Code ss.414(q) exclusions) of
Employees, but no more than 50 officers. The Advisory Committee will
make the determination of who is a Key Employee in accordance with Code
ss.416(i)(1) and the regulations under that Code section.
(2) "Non-Key Employee" is an employee who does not meet the definition
of Key Employee.
(3) "Compensation" means Compensation as determined under Section 1.09
for purposes of identifying Highly Compensated Employees.
(4) "Required Aggregation Group" means: (i) each qualified plan of the
Employer in which at least one Key Employee participates at any time
during the Determination Period; and (ii) any other qualified plan of
the Employer which enables a plan described in clause (i) to meet the
requirements of Code ss.401(a)(4) or of Code ss.410.
(5) "Permissive Aggregation Group" is the Required Aggregation Group
plus any other qualified plans maintained by the Employer, but only if
such group would satisfy in the aggregate the requirements of Code
ss.401(a)(4) and of Code 410. The Advisory Committee will determine the
Permissive Aggregation Group.
(6) "Employer" means the Employer that adopts this Plan and any related
employers described in Section 1.30.
(7) "Determination Date" for any Plan Year is the Accounting Date of
the preceding Plan Year or, in the case of the first Plan Year of the
Plan, the Accounting Date of that Plan Year. The "Determination Period"
is the 5 year period ending on the Determination Date.
1.34 "Paired Plans" means the Employer has adopted two Standardized
Plan Adoption Agreements offered with this Master Plan, one Adoption Agreement
being a Paired Profit Sharing Plan and one Adoption Agreement being a Paired
Pension Plan. A Paired Profit Sharing Plan may include a Code ss.401(k)
arrangement. A Paired Pension Plan must be a money purchase pension plan or a
target benefit pension plan. Paired Plans must be the subject of a favorable
opinion letter issued by the National Office of the Internal Revenue Service.
This Master Plan
13.
does not pair any of its Standardized Plan Adoption Agreements with Standardized
Plan Adoption Agreements under a defined benefit master plan.
1.35 "Retirement Investment Trust" means the open-end, diversified,
management investment company, or any successor thereto by change of name or
otherwise, that offers collective investment funds for retirement accounts as to
which Texas Commerce Bank National Association or an affiliated bank serves as a
trustee. The Retirement Investment Trust is explained concisely in the current
Retirement Investment Trust Prospectus.
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY. Each Employee becomes a Participant in the Plan in
accordance with the participation option selected by the Employer in its
Adoption Agreement. If this Plan is a restated Plan, each Employee who was a
Participant in the Plan on the day before the Effective Date continues as a
Participant in the Plan, irrespective of whether he satisfies the participation
conditions in the restated Plan, unless otherwise provided in the Employer's
Adoption Agreement.
2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an Employee's
participation in the Plan under Adoption Agreement Section 2.01, the Plan takes
into account all of his Years of Service with the Employer, except as provided
in Section 2.03. "Year of Service" means an eligibility computation period
during which the Employee completes not less than the number of Hours of Service
specified in the Employer's Adoption Agreement. The initial eligibility
computation period is the first 12 consecutive month period measured from the
Employment Commencement Date. The Plan measures succeeding eligibility
computation periods in accordance with the option selected by the Employer in
its Adoption Agreement. If the Employer elects to measure subsequent periods on
a Plan Year basis, an Employee who receives credit for the required number of
Hours of Service during the initial eligibility computation period and during
the first applicable Plan Year will receive credit for two Years of Service
under Article II. "Employment Commencement Date" means the date on which the
Employee first performs an Hour of Service for the Employer. If the Employer
elects a service condition under Adoption Agreement Section 2.01 based on
months, the Plan does not apply any Hour of Service requirement after the
completion of the first Hour of Service.
2.03 BREAK IN SERVICE - PARTICIPATION. An Employee incurs a "Break in
Service" if during any 12 consecutive month period he does not complete more
than 500 Hours of Service with the Employer. The "12 consecutive month period"
under this Section 2.03 is the same 12 consecutive month period for which the
Plan measures "Years of Service" under Section 2.02.
(A) 2-year Eligibility. If the Employer elects a 2 years of service condition
for eligibility purposes under Adoption Agreement Section 2.01, the Plan treats
an Employee who incurs a one
14.
year Break in Service and who has never become a Participant as a new Employee
on the date he first performs an Hour of Service for the Employer after the
Break in Service.
(B) Suspension of Years of Service. The Employer must elect in its Adoption
Agreement whether a Participant will incur a suspension of Years of Service
after incurring a one year Break in Service. If this rule applies under the
Employer's Plan, the Plan disregards a Participant's Years of Service until the
Participant completes another Year of Service and the Plan suspends the
Participant's participation in the Plan. If the Participant completes a Year of
Service following his Break in Service, the Plan restores that Participant's
pre-Break Years of Service (and the Participant resumes active participation in
the Plan) retroactively to the first day of the computation period in which the
Participant earns the first post-Break Year of Service. The initial computation
period under this Section 2.03(B) is the 12 consecutive month period measured
from the date the Participant first receives credit for an Hour of Service
following the one year Break in Service period. The Plan measures any subsequent
periods, if necessary, in a manner consistent with the computation period
selection in Adoption Agreement Section 2.02. This Section 2.03(B) does not
affect a Participant's vesting credit under Article V and, during a suspension
period, the Participant's Account continues to share fully in Trust Fund
allocations under Section 9.11. Furthermore, this Section 2.03(B) will not
result in the restoration of any Year of Service disregarded under the Break in
Service rule of Section 2.03(A).
2.04 PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose employment
with the Employer terminates will re-enter the Plan as a Participant on the date
of his re-employment, subject to the Break in Service rule, if applicable, under
Section 2.03(B). An Employee who satisfies the Plan's eligibility conditions but
who terminates employment with the Employer prior to becoming a Participant will
become a Participant on the later of the Plan Entry Date on which he would have
entered the Plan had he not terminated employment or the date of his
re-employment, subject to the Break in Service rule, if applicable, under
Section 2.03(B). Any Employee who terminated employment prior to satisfying the
Plan's eligibility conditions becomes a Participant in accordance with Adoption
Agreement Section 2.01.
2.05 CHANGE IN EMPLOYEE STATUS. If a Participant has not incurred a
Separation from Service but ceases to be eligible to participate in the Plan, by
reason of employment within an employment classification included by the
Employer under Adoption Agreement Section 1.07, the Advisory Committee must
treat the Participant as an Excluded Employee during the period such a
Participant is subject to the Adoption Agreement exclusion.
The Advisory Committee determines a Participant's sharing in the allocation of
Employer contributions and Participant forfeitures, if applicable, by
disregarding his Compensation paid by the Employer for services rendered in his
capacity as an Excluded Employee. However, during such period of exclusion, the
Participant, without regard to employment classification, continues to receive
credit for vesting under Article V for each included Year of Service and the
Participant's Account continues to share fully in Trust Fund allocations under
Section 9.11.
15.
If an Excluded Employee who is not a Participant becomes eligible to
participate in the Plan by reason of a change in employment classification, he
will participate in the Plan immediately if he has satisfied the eligibility
conditions of Section 2.01 and would have been a Participant had he not been an
Excluded Employee during his period of Service. Furthermore, the Plan takes into
account all of the Participant's included Years of Service with the Employer as
an Excluded Employee for purposes of vesting credit under Article V.
2.06 ELECTION NOT TO PARTICIPATE. The Employer's Plan is a Standardized
Plan, the Plan does not permit an otherwise eligible Employee nor any
Participant to elect not to participate in the Plan. If the Employer's Plan is a
Nonstandardized Plan, the Employer must specify in its Adoption Agreement
whether an Employee is eligible to participate, or any present Participant, may
elect not to participate in the Plan. For an election to be effective for a
particular Plan Year, the Employee or Participant must file the election in
writing with the Plan Administrator not later than the time specified in the
Employer's Adoption Agreement. The Employer may not make a contribution under
the Plan for the Employee or for the Participant for the Plan Year for which the
election is effective, nor for any succeeding Plan Year, unless the Employee or
Participant re-elects to participate in the Plan. After an Employee's or
Participant's election not to participate has been effective for at least the
minimum period prescribed by the Employer's Adoption Agreement the Employee or
Participant may re-elect to participate in the Plan for any Plan Year and
subsequent Plan Year. An Employee or Participant may re-elect to participate in
the Plan by filing his election in writing with the Plan Administrator not later
than the time specified in the Employer's Adoption Agreement. An Employee or
Participant who reelects to participate may again elect not to participate only
as permitted in the Employer's Adoption Agreement. If an Employee is a
Self-Employed Individual, the Employee's election (except as permitted by
Treasury regulations without creating a Code ss.401(k) arrangement with respect
to that Self-Employed Individual) must be effective no later than the date the
Employee first would become a Participant in the Plan and the election is
irrevocable. The Plan Administrator must furnish an Employee or a Participant
any form required for purposes of an election under this Section 2.06. An
election timely filed is effective for the entire Plan Year.
A Participant who elects not to participate may not receive a
distribution of his Accrued Benefit attributable either to Employer or to
Participant contributions except as provided under Article IV or under Article
VI. However, for each Plan Year for which a Participant's election not to
participate is effective, the Participant's Account, if any, continues to share
in Trust Fund allocations under Article IX. Furthermore, the Employee or the
Participant receives vesting credit under Article V for each included Year of
Service during the period the election not to participate is effective.
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
Part 1. Amount of Employer Contributions and Plan Allocations; Sections 3.01
through 3.06
16.
3.01 AMOUNT. For each Plan Year, the Employer contributes to the Trust
the amount determined by application of the contribution option selected by the
Employer in its Adoption Agreement. The Employer may not make a contribution to
the Trust for any Plan Year to the extent the contribution would exceed the
Participants' Maximum Permissible Amounts.
The Employer contributes to this Plan on the condition its contribution
is not due to a mistake of fact and the Revenue Service will not disallow the
deduction for its contribution. The Trustee, upon written request from the
Employer, must return to the Employer the amount of the Employer's contribution
made by the Employer by mistake of fact or the amount of the Employer's
contribution disallowed as a deduction under Code ss.404. The Trustee will not
return any portion of the Employer's contribution under the provisions of this
paragraph more than one year after.
(a) The Employer made the contribution by mistake of fact; or
(b) The disallowance of the contribution as a deduction, and
then, only to the extent of the disallowance.
The Trustee will not increase the amount of the Employer contribution
returnable under this Section 3.01 for any earnings attributable to the
contribution, but the Trustee will decrease the Employer contribution returnable
for any losses attributable to it. The Trustee may require the Employer to
furnish it whatever evidence the Trustee deems necessary to enable the Trustee
to confirm the amount the Employer has requested be returned is properly
returnable under ERISA.
3.02 DETERMINATION OF CONTRIBUTION. The Employer, from its records,
determines the amount of any contributions to be made by it to the Trust under
the terms of the Plan.
3.03 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its
contribution for each Plan Year in one or more installments without interest.
The Employer must make its contribution to the Plan within the time present by
the Code or applicable Treasury regulations. Subject to the consent of the
Trustee, the Employer may make its contribution in property rather than in cash,
provided the contribution of property is not a prohibited transaction under the
Code or under ERISA.
3.04 CONTRIBUTION ALLOCATION.
(A) Method of Allocation. The Employer must specify in its Adoption Agreement
the manner of allocating each annual Employer contribution to this Trust.
(B) Top Heavy Minimum Allocation. The Plan must comply with the provisions of
this Section 3.04(B), subject to the elections in the Employer's Adoption
Agreement.
17.
(1) Top Heavy Minimum Allocation Under Standardized Plan. Subject to
the Employer's election under Section 3.04(B)(3), the top heavy minimum
allocation requirement applies to a Standardized Plan for each Plan Year,
irrespective of whether the Plan is top heavy.
(a) Each Participant employed by the Employer on the last day
of the Plan Year will receive a top heavy minimum allocation for that
Plan Year. The Employer may elect in Section 3.04 of its Adoption
Agreement to apply this paragraph (a) only to a Participant who is a
Non-Key Employee.
(b) Subject to any overriding elections in Section 3.18 of the
Employer's Adoption Agreement, the top heavy minimum allocation is the
lesser of 3% of the Participant's Compensation for the Plan Year or the
highest contribution rate for the Plan Year made on behalf of any
Participant for the Plan Year. However, if the Employee participates in
Paired Plans, the top heavy minimum allocation is 3% of his
Compensation. It under Adoption Agreement Section 3.04, the Employer
elects to apply paragraph (a) only to a Participant who is a Non-Key
Employee, the Advisory Committee will determine the "highest
contribution rate" described in the first sentence of this paragraph
(b) by reference only to the contribution rates of Participants who are
Key Employees for the Plan Year.
(2) Top Heavy Minimum Allocation Under Nonstandardized Plan. The top
heavy minimum allocation requirement applies to a Nonstandardized Plan only in
Plan Years for which the Plan is top heavy. Except as provided in the Employer's
Adoption Agreement, if the Plan is top heavy in any Plan Year:
(a) Each Non-Key Employee who is a Participant and is employed
by the Employer on the last day of the Plan Year will receive a top
heavy minimum allocation for that Plan Year, irrespective of whether he
satisfies the Hours of Service condition under Section 3.06 of the
Employer's Adoption Agreement; and
(b) The top heavy minimum allocation is the lesser of 3% of
the Non-Key Employee's Compensation for the Plan Year or the highest
contribution rate for the Plan Year made on behalf of any Key Employee.
However, if a defined benefit plan maintained by the Employer which
benefits a Key Employee depends on this Plan to satisfy the anti-
discrimination rules of Code ss.401(a)(4) or the coverage rules of Code
ss.410 (or another plan benefiting the Key Employee so depends on such
defined benefit plan), the top heavy minimum allocation is 3% of the
Non-Key Employee's Compensation regardless of the contribution rate for
the Key Employees.
(3) Special Election for Standardized Code ss.401(k) Plan. If the
Employer's Plan is a Standardized Code ss.401(k) Plan, the Employer may elect in
Adoption Agreement Section 3.04 to apply the top heavy minimum allocation
requirements of Section 3.04(B)(1) only for Plan Years in which the Plan
actually is a top heavy plan.
18.
(4) Special Definitions. For purposes of this Section 3.04(B), the term
"Participant" includes any Employee otherwise eligible to participate in the
Plan but who is not a Participant because of his Compensation level or because
of his failure to make elective deferrals under a Code ss.401(k) arrangement or
because of his failure to make mandatory contributions. For purposes of
subparagraph (1)(b) or (2)(b), "Compensation" means Compensation as defined in
Section 1.12, except Compensation does not include elective contributions,
irrespective of whether the Employer has elected to include these amounts in
Section 1.12 of its Adoption Agreement, any exclusion selected in Section 1.12
of the Adoption Agreement (other than the exclusion of elective contributions)
does not apply, and any modification to the definition of Compensation in
Section 3.06 does not apply.
(5) Determining Contribution Rates. For purposes of this Section
3.04(B), a Participant's contribution rate is the sum of all Employer
contributions (not including Employer contributions to Social Security) and
forfeitures allocated to the Participant's Account for the Plan Year divided by
his Compensation for the entire Plan Year. However, for purposes of satisfying a
Participant's top heavy minimum allocation in Plan Years beginning after
December 31, 1988, the Participant's contribution rate does not include any
elective contributions under a Code ss.401(k) arrangement nor any Employer
matching contributions allocated on the basis of those elective contributions or
on the basis of employee contributions, except a Nonstandardized Plan may
include in the contribution rate any matching contributions not necessary to
satisfy the nondiscrimination requirements of Code ss.401(k) or of Code
ss.401(m).
If the Employee is a Participant in Paired Plans, the Advisory
Committee will consider the Paired Plans as a single Plan to determine a
Participant's contribution rate and to determine whether the Plans satisfy this
top heavy minimum allocation requirement. To determine a Participant's
contribution rate under "a Nonstandardized Plan, the Advisory Committee must
treat all qualified top heavy defined contribution plans maintained by the
Employer (or by any related Employers described in Section 1.30) as a single
plan.
(6) No Allocations. If, for a Plan Year, there are no allocations of
Employer contributions or forfeitures for any Participant (for purposes of
Section 3.04 (B)(1)(b)) or for any Key Employee (for purposes of Section
3.04(B)(2)(b)), the Plan does not require any top heavy minimum allocation for
the Plan Year, unless a top heavy minimum allocation applies because of the
maintenance by the Employer of more than one plan.
(7) Election of Method. The Employer must specify in its Adoption
Agreement the manner in which the Plan will satisfy the top heavy minimum
allocation requirement.
(a) If the Employer elects to make any necessary additional
contribution to this Plan, the Advisory Committee first will allocate
the Employer contributions (and Participant forfeitures, if any) for
the Plan Year in accordance with the provisions of Adoption Agreement
Section 3.04. The Employer then will contribute an additional amount
for the Account of any Participant entitled under this Section 3.04(B)
to a top
19.
heavy minimum allocation and whose continuation rate for the Plan Year,
under this Plan and any other plan aggregated under paragraph (5), is
less than the top heavy minimum allocation. The additional amount is
the amount necessary to increase the Participant's contribution rate to
the top heavy minimum allocation. The Advisory Committee will allocate
the additional contribution to the Account of the Participant on whose
behalf the Employer makes the contribution.
(b) If the Employer elects to guarantee the top heavy minimum
allocation under another plan, this Plan does not provide the top heavy
minimum allocation and the Advisory Committee will allocate the annual
Employer contributions (and Participant forfeitures) under the Plan
solely in accordance with the allocation method selected under Adoption
Agreement Section 3.04.
3.05 FORFEITURE ALLOCATION. The amount of a Participant's Accrued
Benefit forfeited under the Plan is a Participant forfeiture. The Advisory
Committee will allocate Participant forfeitures in the manner specified by the
Employer in its Adoption Agreement. The Advisory Committee will continue to hold
the undistributed, non-vested portion of a terminated Participant's Accrued
Benefit in his Account solely for his benefit until a forfeiture occurs at the
time specified in Section 5.09 or if applicable, until the time specified in
Sect-ion 9.14. Except as provided under Section 5.04, a Participant will not
share in the allocation of a forfeiture of any portion of his Accrued Benefit.
3.06 ACCRUAL OF BENEFIT. The Advisory Committee will determine the
accrual of benefit (Employer contributions and Participant forfeitures) on the
basis of the Plan Year in accordance with the Employer's elections in its
Adoption Agreement.
(A) Compensation Taken Into Account. If Employer must specify in its Adoption
Agreement the compensation the Advisory Committee is to take into account in
allocating an Employer contribution to a Participant's Account for the Plan Year
in which the Employee first becomes a Participant. For all other Plan Years, the
Advisory Committee will take into account only the Compensation determined for
the portion of the Plan Year in which the Employee actually is a Participant.
The Advisory Committee must take into account the Employee's entire Compensation
for the Plan Year to determine whether the Plan satisfies the top heavy minimum
allocation requirement of Section 3.04(B). The Employer, in an addendum to its
Adoption Agreement numbered 3.06(A), may elect to measure Compensation for the
Plan Year for allocation purposes on the basis of a specified period other than
the Plan Year.
(B) Hours of Service Requirement. Subject to the applicable minimum allocation
requirement of Section 3.04, the Advisory Committee will not allocate any
portion of an Employer contribution for a Plan Year to any Participant's Account
if the Participant does not complete the applicable minimum Hours of Service
requirement specified in the Employer's Adoption Agreement.
20.
(C) Employment Requirement. If the Employer's Plan is a Standardized Plan, a
Participant who, during a particular Plan Year, completes the accrual
requirements of Adoption Agreement Section 3.06 will share in the allocation of
Employer contributions for that Plan Year without regard to whether he is
employed by the Employer on the Accounting Date of that Plan Year. If the
Employer's Plan is a Nonstandardized Plan, the Employer must specify in its
Adoption Agreement whether the Participant will accrue a benefit if he is not
employed by the Employer on the Accounting Date of the Plan Year. If the
Employer's Plan is a money purchase plan or a target benefit plan, whether
Nonstandardized or Standardized, the Plan conditions benefit accrual on
employment with the Employer on the last day of the Plan Year for the Plan Year
in which the Employer terminates the Plan.
(D) Other Requirements. If the Employer's Adoption Agreement includes options
for other requirements affecting the Participant's accrual of benefits under the
Plan, the Advisory Committee will apply this Section 3.06 in accordance with the
Employer's Adoption Agreement selections.
(E) Suspension of Accrual Requirements Under Nonstandardized Plan. If the
Employer's Plan is a Nonstandardized Plan, the Employer may elect in its
Adoption Agreement to suspend the accrual requirements elected under Adoption
Agreement Section 3.06 if, for any Plan Year beginning after December 31, 1989,
the Plan fails to satisfy the Participation Test or the Coverage Test. A Plan
satisfies the Participation Test if, on each day of the Plan Year, the number of
Employees who benefit under the Plan is at least equal to the lesser of 50 or
40% of the total number of Includible Employees as of such day. A Plan satisfies
the Coverage Test if, on the last day of each quarter of the Plan Year, the
number of Nonhighly Compensated Employees who benefit under the Plan is at least
equal to 70% of the total number of Includible Nonhighly Compensated Employees
as of such day. "Includible" Employees are all Employees other than: (1) those
Employees excluded from participating in the Plan for the entire Plan Year by
reason of the collective bargaining unit exclusion or the nonresident alien
exclusion under Adoption Agreement Section 1.07 or by reason of the
participation requirements of Sections 2.01 and 2.03; and (2) any Employee who
incurs a Separation from Service during the Plan Year and fails to complete at
least 501 Hours of Service for the Plan Year. A "Nonhighly Compensated Employee"
is an Employee who is not a Highly Compensated Employee and who is not a family
member aggregated with a Highly Compensated Employee pursuant to Section 1.09 of
the Plan.
For purposes of the Participation Test and the Coverage Test, an
Employee is benefiting under the Plan on a particular date if, under Adoption
Agreement Section 3.04, he is entitled to an allocation for the Plan Year. Under
the Participation Test, when determining whether an Employee is entitled to an
allocation under Adoption Agreement Section 3.04, the Advisory Committee will
disregard any allocation required solely by reason of the top heavy minimum
allocation, unless the top heavy minimum allocation is the only allocation made
under the Plan for the Plan Year.
21.
If this Section 3.06(E) applies for a Plan Year, the Advisory Committee
will suspend the accrual requirements for the Includible Employees who are
Participants, beginning first with the Includible Employee(s) employed with the
Employer on the last day of the Plan Year, then the Includible Employee(s) who
have the latest Separation from Service during the Plan Year, and continuing to
suspend in descending order the accrual requirements for each Includible
Employee who incurred an earlier Separation from Service from the latest to the
earliest Separation from Service date, until the Plan satisfies both the
Participation Test and the Coverage Test for the Plan Year. If two or more
Includible Employees have a Separation from Service on the same day, the
Advisory Committee will suspend the accrual requirements for all such Includible
Employees, irrespective of whether the Plan can satisfy the Participation Test
and the Coverage Test by accruing benefits for fewer than all such Includible
Employees. If the Plan suspends the accrual requirements for an Includible
Employee, that Employee will share in the allocation of Employer contributions
and Participant forfeitures, if any, without regard to the number of Hours of
Service he has earned for the Plan Year and without regard to whether he is
employed by the Employer on the last day of the Plan Year. If the Employer's
Plan includes Employer matching contributions subject to Code ss.401(m), this
suspension of accrual requirements applies separately to the Code ss.401(m)
portion of the Plan, and the Advisory Committee will treat an Employee as
benefiting under that portion of the Plan if he is an Eligible Employee for
purposes of the Code ss.401(m) nondiscrimination test. The Employer may modify
the operation of this Section 3.06(E) by electing appropriate modifications in
Section 3.06 of its Adoption Agreement.
Part 2. Limitations on Allocations: Sections 3.07 through 3.19
[Note: Sections 3.07 through 3.10 apply only to Participants in this Plan
who do not participate, and who have never participated, in another qualified
plan or in a welfare benefit fund (as defined in Code ss.419(e)) maintained by
the Employer.]
3.07 The amount of Annual Additions which the Advisory Committee may
allocate under this Plan on a Participant's behalf for a Limitation Year may not
exceed the Maximum Permissible Amount. If the amount the Employer otherwise
would contribute to the Participant's Account would cause the Annual Additions
for the Limitation Year to exceed the Maximum Permissible Amount, the Employer
will reduce the amount of its contribution so the Annual Additions for the
Limitation Year will equal the Maximum Permissible Amount. If an allocation of
Employer contributions, pursuant to Section 3.04, would result in an Excess
Amount (other than an Excess Amount resulting from the circumstances described
in Section 3.10) to the Participant's Account, the Advisory Committee will
reallocate the Excess Amount to the remaining Participants who are eligible for
an allocation of Employer contributions for the Plan Year in which the
Limitation Year ends. The Advisory Committee will make this reallocation on the
basis of the allocation method under the Plan as if the Participant whose
Account otherwise would receive the Excess Amount is not eligible for an
allocation of Employer contributions.
22.
3.08 Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Advisory Committee may determine the
Maximum Permissible Amount on the basis of the Participant's estimated annual
Compensation for such Limitation Year. The Advisory Committee must make this
determination on a reasonable and uniform basis for all Participants similarly
situated. The Advisory Committee must reduce any Employer contributions
(including any allocation of forfeitures) based on estimated annual Compensation
by any Excess Amounts carried over from prior years.
3.09 As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the Maximum Permissible
Amount for such Limitation Year on the basis of the Participant's actual
Compensation for such Limitation Year.
3.10 If, pursuant to Section 3.09, or because of the allocation of
forfeitures, there is an Excess Amount with respect to a Participant for a
Limitation Year, the Advisory Committee will dispose of such Excess Amount as
follows:
(a) The Advisory Committee will return any nondeductible voluntary
Employee contributions to the Participant to the extent the return
would reduce the Excess Amount.
(b) It after the application of paragraph (a), an Excess Amount still
exists, and the Plan covers the Participant at the end of the
Limitation Year, then the Advisory Committee will use the Excess
Amount(s) to reduce future Employer contributions (including any
allocation of forfeitures) under the Plan for the next Limitation Year
and for each succeeding Limitation Year, as is necessary, for the
Participant. If the Employer's Plan is a profit sharing plan, the
Participant may elect to limit his Compensation for allocation purposes
to the extent necessary to reduce his allocation for the Limitation
Year to the Maximum Permissible Amount and eliminate the Excess Amount.
(c) If, after the application of paragraph (a), an Excess Amount still
exists, and the Plan does not cover the Participant at the end of the
Limitation Year, then the Advisory Committee will hold the Excess
Amount unallocated in a suspense account. The Advisory Committee will
apply the suspense account to reduce Employer Contributions (including
allocation of forfeitures) for all remaining Participants in the next
Limitation Year, and in each succeeding Limitation Year if necessary.
Neither the Employer nor any Employee may contribute to the Plan for
any Limitation Year in which the Plan is unable to allocate fully a
suspense account maintained pursuant to this paragraph (c).
(d) The Advisory Committee will not distribute any Excess Amount(s) to
Participants or to former Participants.
[Note: Sections 3.11 through 3.16 apply only to Participants who, in
addition to this Plan, participate in one or more plans (including Paired
Plans), all of which are qualified Master or
23.
Prototype defined contribution plans or welfare benefit funds (as defined in
Code ss.419(e)) maintained by the Employer during the Limitation Year.]
3.11 The amount of Annual Additions which the Advisory Committee may
allocate under this Plan on a Participant's behalf for a Limitation Year may not
exceed the Maximum Permissible Amount, reduced by the sum of any Annual
Additions allocated to the Participant's Accounts for the same Limitation Year
under this Plan and such other defined contribution plan. If the amount the
Employer otherwise would contribute to the Participant's Account under this Plan
would cause the Annual Additions for the Limitation Year to exceed this
limitation, the Employer will reduce the amount of its contribution so the
Annual Additions under all such plans for the Limitation Year will equal the
Maximum Permissible Amount. If an allocation of Employer contributions, pursuant
to Section 3.04, would result in an Excess Amount (other than an Excess Amount
resulting from the circumstances described in Section 3.10) to the Participant's
Account, the Advisory Committee will reallocate the Excess Amount to the
remaining Participants who are eligible for an allocation of Employer
contributions for the Plan Year in which the Limitation Year ends. The Advisory
Committee will make this reallocation on the basis of the allocation method
under the Plan as if the Participant whose Account otherwise would receive the
Excess Amount is not eligible for an allocation of Employer contributions.
3.12 Prior to the determination of the Participant's actual
Compensation for the Limitation Year, the Advisory Committee may determine the
amounts referred to in 3.11 above on the basis of the Participant's estimated
annual Compensation for such Limitation Year. The Advisory Committee will make
this determination on a reasonable and uniform basis for all Participants
similarly situated. The Advisory Committee must reduce any Employer contribution
(including allocation of forfeitures) based on estimated annual Compensation by
any Excess Amounts carried over from prior years.
3.13 As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the amounts referred to
in 3.11 on the basis of the Participant's actual Compensation for such
Limitation Year.
3.14 If pursuant to Section 3.13, or because of the allocation of
forfeitures, a Participant's Annual Additions under this Plan and all such other
plans result in an Excess Amount, such Excess Amount will consist of the Amounts
last allocated. The Advisory Committee will determine the Amounts last allocated
by treating the Annual Additions attributable to a welfare benefit fund as
allocated first, irrespective of the actual allocation date under the welfare
benefit fund.
24.
3.15 The Employer must specify in its Adoption Agreement the Excess
Amount attributed to this Plan, if the Advisory Committee allocates an Excess
Amount to a Participant on an allocation date of this Plan which coincides with
an allocation date of another plan.
3.16 The Advisory Committee will dispose of any Excess Amounts
attributed to this Plan as provided in Section 3.10.
[Note: Section 3.17 applies only to Participants who, in addition to this
Plan, participate in one or more qualified plans which are qualified defined
contribution plans other than a Master or Prototype plan maintained by the
Employer during the Limitation Year.]
3.17 SPECIAL ALLOCATION LIMITATION. The amount of Annual Additions
which the Advisory Committee may allocate under this Plan on behalf of any
Participant are limited in accordance with the provisions of Section 3. 11
through 3.16, as though the other plan were a Master or Prototype plan, unless
the Employer provides other limitations in an addendum to the Adoption
Agreement, numbered Section 3.17.
3.18 DEFINED BENEFIT PLAN LIMITATION. If the Employer maintains a
defined benefit plan, or has ever maintained a defined benefit plan which the
Employer has terminated, then the sum of the defined benefit plan fraction and
the defined contribution plan fraction for any Participant for any Limitation
Year must not exceed 1.0 The Employer must provide in Adoption Agreement Section
3.18 the manner in which the Plan will satisfy this limitation. The Employer
also must provide in its Adoption Agreement Section 3.18 the manner in which the
Plan will satisfy the top heavy requirements of Code ss.416 after taking into
account the existence December 11, 1997 (or prior maintenance) of the defined
benefit plan.
3.19 DEFINITIONS - ARTICLE III. For purposes of Article III the following
terms ------------------------- mean:
(a) "Annual Addition" - The sum of the following amounts
allocated on behalf of a Participant for a Limitation Year, of (i) all
Employer contributions; (ii) all forfeitures; and (iii) all Employee
contributions. Except to the extent provided in Treasury regulations,
Annual Additions include excess contributions described in Code
ss.401(k), excess aggregate contributions described in Code ss.401(m)
and excess deferrals described in Code ss.402(g), irrespective of
whether the plan distributes or forfeits such excess amounts. Annual
Additions also include Excess Amounts reapplied to reduce Employer
contributions under Section 3.10. Amounts allocated after March 31,
1984, to an individual medical account (as defined in Code
ss.415(1)(2)) included as part of a defined benefit plan maintained by
the Employer are Annual Additions. Furthermore, Annual Additions
include contributions paid or accrued after December 31, 1985, for
taxable years ending after December 31, 1985, attributable to
post-retirement medical benefits allocated to the separate account of a
key employee (as defined in Code ss.419A(d)(3)) under a welfare benefit
fund (as defined in Code ss.419(e)) maintained by the Employer.
25.
(b) "Compensation" - For purposes of applying the limitations of Part 2
of this Article III, "Compensation" means Compensation as defined in
Section 1.12, except Compensation does not include elective
contributions, irrespective of whether the Employer has elected to
include these amounts as Compensation under Section 1.12 of its
Adoption Agreement, and any exclusion selected in Section 1.12 of the
Adoption Agreement (other than the exclusion of elective contributions)
does not apply.
(c) "Employer" - The Employer that adopts this Plan and any related
employers described in Section 1.30. Solely for purposes of applying
the limitations of Part 2 of this Article III, the Advisory Committee
will determine related employers described in Section 1.30 by modifying
Code ss.ss.414(b) and (c) in accordance with Code ss.415(h).
(d) "Excess Amount" - The excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
(e) "Limitation Year" - The period selected by the Employer under
Adoption Agreement Section 1.17. All qualified plans of the Employer
must use the same Limitation Year. If the Employer amends the
Limitation Year to a different 12 consecutive month period, the new
Limitation Year must begin on a date within the Limitation Year for
which the Employer makes the amendment, creating a short Limitation
Year.
(f) "Master or Prototype Plan" - A plan the form of which is the
subject of a favorable notification letter or a favorable opinion
letter from the Internal Revenue Service.
(g) "Maximum Permissible Amount" - The lesser of (i) $30,000 (or, if
greater, one-fourth of the defined benefit dollar limitation under Code
ss.415(b)(1)(A)), or (ii) 25% of the Participant's Compensation for the
Limitation Year. If there is a short Limitation Year because of a
change in Limitation Year, the Advisory Committee will multiply the
$30,000 (or adjusted) Limitation by the following fraction:
Number of months in the short Limitation Year
12
(h) "Defined contribution plan" - A retirement plan which provides for
an individual account for each participant and for benefits based
solely on the amount contributed to the participant's account, and any
income, expenses, gains and losses, and any forfeitures of accounts of
other participants which the plan may allocate to such participant's
account. The Advisory Committee must treat all defined contribution
plans (whether or not terminated) maintained by the Employer as a
single plan. Solely for purposes of the limitations of Part 2 of this
Article III, the Advisory Committee will treat employee contributions
made to a defined benefit plan maintained by the Employer as a separate
defined contribution plan. The Advisory Committee also will treat as a
defined
26.
contribution plan an individual medical account (as defined in Code
ss.415(i)(2)) included as part of a defined benefit plan maintained by
the Employer and, for taxable years ending after December 31, 1985, a
welfare benefit fund under Code ss.419(e) maintained by the Employer to
the extent there are post-retirement medical benefits allocated to the
separate account of a key employee (as defined in Code ss.419A(d)(3)).
(i) "Defined benefit plan" - A retirement plan which does not provide
for individual accounts for Employer contributions. The Advisory
Committee must treat all defined benefit plans (whether or not
terminated) maintained by the Employer as a single plan.
[Note: - The definitions in paragraphs (j), (k) and (1) apply only if the
limitation described in Section 3.18 applies to the Employees Plan.]
27.
(j) "Defined benefit plan fraction" -
Projected annual benefit of the Participant under the defined
benefit plan(s) The lesser of (i) 125% (subject to the "100%
limitation" in paragraph (1)) of the
dollar limitation in effect under Code ss.415(b)(1)(A) for the Limitation Year,
or (ii) 140% of the Participant's average Compensation for his
high three (3) consecutive Years of Service
To determine the denominator of this fraction, the Advisory Committee
will make any adjustment required under Code ss.415(b) and will
determine a Year of Service, unless otherwise provided in an addendum
to Adoption Agreement Section 3.18, as a Plan Year in which the
Employee completed at least 1,000 Hours of Service. The "projected
annual benefit" is the annual retirement benefit (adjusted to an
actuarially equivalent straight life annuity if the plan expresses such
benefit in a form other than a straight life annuity or qualified joint
and survivor annuity) of the Participant under the terms of the defined
benefit plan on the assumptions he continues employment until his
normal retirement age (or current age, if later) as stated in the
defined benefit plan, his compensation continues at the same rate as in
effect in the Limitation Year under consideration until the date of his
normal retirement age and all other relevant factors used to determine
benefits under the defined benefit plan remain constant as of the
current Limitation Year for all future Limitation Years.
Current Accrued Benefit. If the Participant accrued benefits in one or
more defined benefit plans maintained by the Employer which were in
existence on May 6, 1986, the dollar limitation used in the denominator
of this fraction will not be less than the Participant's Current
Accrued Benefit. A Participant's Current Accrued Benefit is the sum of
the annual benefits under such defined benefit plans which the
Participant had accrued as of the end of the 1986 Limitation Year (the
last Limitation Year beginning before January 1, 1987), determined
without regard to any change in the terms or conditions of the Plan
made after May 5, 1986, and without regard to any cost of living
adjustment occurring after May 5, 1986. This Current Accrued Benefit
rule applies only if the defined benefit plans individually and in the
aggregate satisfied the requirements of Code ss.415 as in effect at the
end of the 1986 Limitation Year.
(k) "Defined contribution plan fraction" -
Thesum, as of the close of the Limitation Year, of the
Annual Additions to the Participant's Account under the
defined contribution plan(s)
The sum of the lesser of the following amounts
determined for the Limitation Year and for each prior Year of
Service with the Employer:(i) 125%
(subject to the "100% limitation" in paragraph (1)) of the dollar
limitation in effect under Code ss.415(c)(1)(A) for the
Limitation Year (determined without regard to
28.
the special dollar limitations for employee stock ownership plans), or
(ii) 35% of the Participant's Compensation for the Limitation Year
For purposes of determining the defined contribution plan fraction, the
Advisory Committee will not recompute Annual Additions in Limitation
Years beginning prior to January 1, 1987, to treat all Employee
contributions as Annual Additions. If the Plan satisfied Code ss.415
for Limitation Years beginning prior to January 1, 1987, the Advisory
Committee will redetermine the defined contribution plan fraction and
the defined benefit plan fraction as of the end of the 1986 Limitation
Year, in accordance with this Section 3.19. If the sum of the
redetermined fractions exceeds 1.0, the Advisory Committee will
subtract permanently from the numerator of the defined contribution
plan fraction an amount equal to the product of (1) the excess of the
sum of the fractions over 1.0, times (2) the denominator of the defined
contribution plan fraction. In making the adjustment, the Advisory
Committee must disregard any accrued benefit under the defined benefit
plan which is in excess of the Current Accrued Benefit. This Plan
continues any transitional rules applicable to the determination of the
defined contribution plan fraction under the Employees Plan as of the
end of the 1986 Limitation Year.
(l) "100% Limitation." If the 100% limitation applies, the Advisory
Committee must determine the denominator of the defined benefit plan
fraction and the denominator of the defined contribution plan fraction
by substituting 100% for 125%. If the Employer's Plan is a Standardized
Plan the 100% limitation applies in all Limitation Years, subject to
any override provisions under Section 3.18 of the Employer's Adoption
Agreement. If the Employer overrides the 100% limitation under a
Standardized Plan, the Employer must specify in its Adoption Agreement
the manner in which the Plan satisfies the extra minimum benefit
requirement of Code ss.416(h) and the 100% limitation must continue to
apply if the Plan's top heavy ratio exceeds 90%. If the Employer's Plan
is a Nonstandardized Plan the 100% limitation applies only if: (i) the
Plan's top heavy ratio exceeds 90%; or (ii) the Plan's top heavy ratio
is greater than 60%, and the Employer does not elect in its Adoption
Agreement Section 3.18 to provide extra minimum benefits which satisfy
Code ss.416(h)(2).
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. This Plan does not permit
Participant nondeductible contributions unless the Employer maintains its Plan
under a Code ss.401(k) Adoption Agreement. If the Employer does not maintain its
Plan under a Code ss.401(k) Adoption Agreement and, prior to the adoption of
this Master Plan, the Plan accepted Participant nondeductible contributions for
a Plan Year beginning after December 31, 1986, those contributions must satisfy
the requirements of Code ss.401(m). This Section 4.01 does not prohibit
29.
the Plan's acceptance of Participant nondeductible contributions prior to the
first Plan Year commencing after the Plan Year in which the Employer adopts this
Master Plan.
4.02 PARTICIPANT DEDUCTIBLE CONTRIBUTIONS. A qualified Plan may not
accept Participant deductible contributions after April 15, 1987. If the
Employer's Plan includes Participant deductible contributions ("DECs") made
prior to April 16, 1987, the Advisory Committee must maintain a separate
accounting for the Participant's Accrued Benefit attributable to DECs, including
DECs which are part of a rollover contribution described in Section 4.03. The
Advisory Committee will treat the accumulated DECs as part of the Participant's
Accrued Benefit for all purposes of the Plan, except for purposes of determining
the top heavy ratio under Section 133. The Advisory Committee may not use DECs
to purchase life insurance on the Participant's behalf.
4.03 PARTICIPANT ROLLOVER CONTRIBUTIONS. Any Participant, with the
Employer's written consent and after filing with the Trustee the form present by
the Advisory Committee, may contribute cash or other property to the Trust other
than as a voluntary contribution if the contribution is a "rollover
contribution" which the Code permits an employee to transfer either directly or
indirectly from one qualified plan to another qualified plan. Before accepting a
rollover contribution, the Trustee may require an Employee to furnish
satisfactory evidence that the proposed transfer is in fact a "rollover
contribution" which the Code permits an employee to make to a qualified plan. A
rollover contribution is not an Annual Addition under Part 2 of Article III.
The Trustee will invest the rollover contribution in a segregated
investment Account for the Participant's sole benefit unless the Trustee (or the
Named Fiduciary, in the case of a nondiscretionary Trustee designation), in its
sole discretion, agrees to invest the rollover contribution as part of the Trust
Fund. The Trustee will not have any investment responsibility with respect to a
Participant's segregated rollover Account. The Participant, however, from time
to time, may direct the Trustee in writing as to the investment of his
segregated rollover Account in property, or property interests, of any kind,
real, personal or mixed; provided however, the Participant may not direct the
Trustee to make loans to his Employer. A Participant's segregated rollover
Account alone will bear any extraordinary expenses resulting from investments
made at the direction of the Participant. As of the Accounting Date (or other
valuation date) for each Plan Year, the Advisory Committee will allocate and
credit the net income (or net loss) from a Participant's segregated rollover
Account and the increase or decrease in the fair market value of the assets of a
segregated rollover Account solely to that Account. The Trustee is not liable
nor responsible for any loss resulting to any Beneficiary, nor to any
Participant, by reason of any sale or investment made or other action taken
pursuant to and in accordance with the direction of the Participant. In all
other respects, the Trustee will hold, administer and distribute a rollover
contribution in the same manner as any Employer contribution made to the Trust.
An eligible Employee, prior to satisfying the Plan's eligibility
conditions, may make a rollover contribution to the Trust to the same extent and
in the same manner as a Participant. If
30.
an Employee makes a rollover contribution to the Trust prior to satisfying the
Plan's eligibility conditions, the Advisory Committee and Trustee must treat the
Employee as a Participant for all purposes of the Plan except the Employee is
not a Participant for purposes of sharing in Employer contributions or
Participant forfeitures under the Plan until he actually becomes a Participant
in the Plan. If the Employee has a Separation from Service prior to becoming a
Participant, the Trustee will distribute his rollover contribution Account to
him as if it were an Employer contribution Account.
4.04 PARTICIPANT CONTRIBUTION-FORFEITABILITY. A Participant's Accrued
Benefit is, at all times, 100% Nonforfeitable to the extent the value of his
Accrued Benefit is derived from his Participant contributions described in this
Article IV.
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. A
Participant, by giving prior written notice to the Trustee, may withdraw all or
any part of the value of his Accrued Benefit derived from his Participant
contributions described in this Article IV. A distribution of Participant
contributions must comply with the joint and survivor requirements described in
Article VI, if those requirements apply to the P ant. A Participant may not
exercise his right to withdraw the value of his Accrued Benefit derived from his
Participant contributions more than once during any Plan Year. The Trustee, in
accordance with the direction of the Advisory Committee, will distribute a
Participant's unwithdrawn Accrued Benefit attributable to his Participant
contributions in accordance with the provisions of Article VI applicable to the
distribution of the Participant's Nonforfeitable Accrued Benefit.
4.06 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT - The Advisory
Committee must maintain a separate Account(s) in the name of each Participant to
reflect the Participant's Accrued Benefit under the Plan derived from his
Participant contributions. A Participant's Accrued Benefit derived from his
Participant contributions as of any applicable date is the balance of his
separate Participant contribution Account(s).
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT AGE. The Employer must define Normal Retirement
Age in its Adoption Agreement. A Participant's Accrued Benefit derived from
Employer contributions is 100% Nonforfeitable upon and after his attaining
Normal Retirement Age (if employed by the Employer on or after that date).
5.02 PARTICIPANT DISABILITY OR DEATH. The Employer may elect in its
Adoption Agreement to provide a Participant's Accrued Benefit derived from
Employer contributions will be
31.
100% Nonforfeitable if the Participant's Separation from Service is a
result of his death or his disability-
5.03 VESTING SCHEDULE. Except as provided in Sections 5.01 and 5.02 for
each Year of Service, a Participant's Nonforfeitable percentage of his Accrued
Benefit derived from Employer contributions the percentage in the vesting
schedule completed by the Employer in its Adoption Agreement.
(A) Election of Special Vesting Formula. If the Trustee makes a distribution
(other than a cash-out distribution described in Section 5.04) to a
partially-vested Participant, and the Participant has not incurred a Forfeiture
Break in Service at the relevant time, the Advisory Committee will establish a
separate Account for the Participant's Accrued Benefit. At any relevant time
following the distribution, the Advisory Committee will determine the
Participant's Nonforfeitable Accrued Benefit derived from Employer contributions
in accordance with the following formula: P(AB + (R x D)) - (R x D).
To apply this formula, "P" is the Participant's current vesting
percentage at the relevant time, "AB" is the Participant's Employer-derived
Accrued Benefit at the relevant time, "R" is the ratio of "AB" to the
Participant's Employer-derived Accrued Benefit immediately following the earlier
distribution and "D" is the amount of the earlier distribution. If under a
restated Plan, the Plan has made distribution to a partially-vested Participant
prior to its restated Effective Date and is unable to apply the cash-out
provisions of Section 5.04 to that prior distribution, this special vesting
formula also applies to that Participant's remaining Account. The Employer, in
an addendum to its Adoption Agreement, numbered Section 5.03, may elect to
modify this formula to read as follows: P(AB + D) - D.
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/
RESTORATION OF FORFEITED ACCRUED BENEFIT. If, pursuant to Article VI, a
partially vested Participant receives a cash-out distribution before he incurs a
Forfeiture Break in Service (as defined in Section 5.08), the cash-out
distribution will result in an immediate forfeiture of the nonvested portion of
the Participant's Accrued Benefit derived from Employer contributions. See
Section 5.09. A partially-vested Participant is a Participant whose
Nonforfeitable Percentage determined under Section 5.03 is less than 100%. A
cash-out distribution is a distribution of the entire present value of the
Participant's Nonforfeitable Accrued Benefit.
(A) Restoration and Conditions upon Restoration. A partially-vested Participant
who is reemployed by the Employer after receiving a cash-out distribution of the
Nonforfeitable percentage of his Accrued Benefit may repay the Trustee the
amount of the cash-out distribution attributable to Employer contributions,
unless the Participant no longer has a right to restoration by reason of the
conditions of this Section 5.04(A). If a partially-vested Participant makes the
cash-out distribution repayment, the Advisory Committee, subject to the
conditions of this Section 5.04(A), must restore his Accrued Benefit
attributable to Employer contributions to the same dollar amount as the dollar
amount of his Accrued Benefit on the Accounting Date, or other valuation date,
32.
immediately preceding the date of the cash-out distribution, unadjusted for any
gains or losses occurring subsequent to that Accounting Date, or other valuation
date. Restoration of the Participant's Accrued Benefit includes restoration of
all Code ss.411(d)(6) protected benefits with respect to that restored Accrued
Benefit in accordance with applicable Treasury regulations. The Advisory
Committee will not restore a re-employed Participant's Accrued Benefit under
this paragraph if:
(1) 5 years have elapsed since the Participant's first re-employment
date with the Employer following the cash-out distribution; or
(2) The Participant incurred a Forfeiture Break in Service (as defined
in Section 5.08). This condition also applies if the Participant makes
repayment within the Plan Year in which he incurs the Forfeiture Break
in Service and that Forfeiture Break in Service would result in a
complete forfeiture of the amount the Advisory Committee otherwise
would restore.
(B) Time and Method of Restoration. If neither of the two conditions preventing
restoration of the Participant's Accrued Benefit applies, the Advisory Committee
will restore the Participant's Accrued Benefit as of the Plan Year Accounting
Date coincident with or immediately following the repayment. To restore the
Participant's Accrued Benefit, the Advisory Committee, to the extent
necessary, will allocate to the Participant's Account:
(1) First, the amount, if any, of Participant forfeitures the Advisory
Committee would otherwise allocate under Section 3.05;
(2) Second, the amount, if any, of the Trust Fund net income or gain
for the Plan Year; and
(3) Third, the Employer contribution for the Plan Year to the extent
made under a discretionary formula.
In an addendum to its Adoption Agreement numbered 5.04(B), the Employer
may eliminate as a means of restoration any of the amounts described in clauses
(1), (2) and (3) or may change the order of priority of these amounts. To the
extent the amounts described in clauses (1), (2) and (3) are insufficient to
enable the Advisory Committee to make the required restoration, the Employer
must contribute, without regard to any requirement or condition of Section 3.01,
the additional amount necessary to enable the Advisory Committee to make the
required restoration. If, for a particular Plan Year, the Advisory Committee
must restore the Accrued Benefit of more than one re-employed Participant, then
the Advisory Committee will make the restoration allocations to each such
Participant's Account in the same proportion that a Participant's restored
amount for the Plan Year bears to the restored amount for the Plan Year of all
re-employed
33.
Participants. The Advisory Committee will not take into account any allocation
under this Section 5.04 in applying the limitation on allocations under Part 2
of Article III.
(C) 0% Vested Participant. The Employer must specify in its Adoption Agreement
whether the deemed cash-out rule applies to a 0% vested Participant. A 0% vested
Participant is a Participant whose Accrued Benefit derived from Employer
contributions is entirely forfeitable at the time of his Separation from
Service. If the Participant's Account is not entitled to an allocation of
Employer contributions for the Plan Year in which he has a Separation from
Service, the Advisory Committee will apply the deemed cash-out rule as if the 0%
vested Participant received a cash-out distribution on the date of the
Participant's Separation from Service. If the Participant's Account is entitled
to an allocation of Employer contributions or Participant forfeitures for the
Plan Year in which he has a Separation from Service, the Advisory Committee will
apply the deemed cash-out rule as if the 0% vested Participant received a
cash-out distribution on the first day of the first Plan Year beginning after
his Separation from Service. For purposes of applying the restoration provisions
of this Section 5.04, the Advisory Committee will treat the 0% vested
Participant as repaying his cash-out "distribution" on the first date of his
reemployment with the Employer. If the deemed cash-out rule does not apply to
the Employer's Plan, a 0% vested Participant will not incur a forfeiture until
he incurs a Forfeiture Break in Service.
5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT. Until the Advisory Committee
restores the Participant's Accrued Benefit, as described in Section 5.04, the
Trustee will invest the cash-out amount the Participant has repaid in a
segregated Account maintained solely for that Participant. The Trustee must
invest the amount in the Participant's segregated Account in Federally insured
interest bearing savings account(s) or time deposit(s) (or a combination of
both), or in other fixed income investments. Until commingled with the balance
of the Trust Fund on the date the Advisory Committee restores the Participant's
Accrued Benefit, the Participant's segregated Account remains a part of the
Trust, but it alone shares in any income it earns and it alone bears any expense
or loss it incurs. Unless the repayment qualifies as a rollover contribution,
the Advisory Committee will direct the Trustee to repay to the Participant as
soon as is administratively practicable the full amount of the Participant's
segregated Account if the Advisory Committee determines either of the conditions
of Section 5.04(A) prevents restoration as of the applicable Accounting Date,
notwithstanding the Participant's repayment.
5.06 YEAR OF SERVICE - VESTING. For purposes of vesting under Section
5.03, Year of Service means any 12-consecutive month period designated in the
Employer's Adoption Agreement during which an Employee completes not less than
the number of Hours of Service (not exceeding 1,000) specified in the Employees
Adoption Agreement. A Year of Service includes any Year of Service earned prior
to the Effective Date of the Plan, except as provided in Section 5.08.
5.07 BREAK IN SERVICE - VESTING. For purposes of this Article V, a
Participant incurs a "Break in Service" if during any vesting computation period
he does not complete more than 500 Hours of Service. If pursuant to Section
5.06, the Plan does not require more than 500
34.
Hours of Service to receive credit for a Year of Service, a Participant incurs a
Break in Service in a vesting computation period in which he fails to complete a
Year of Service.
5.08 INCLUDED YEARS OF SERVICE - VESTING. For purposes of determining
"Years of Service" under Section 5.06, the Plan takes into account all Years of
Service an Employee completes with the Employer except:
(a) For the sole purpose of determining a Participant's Nonforfeitable
percentage of his Accrued Benefit derived from Employer contributions
which accrued for his benefit prior to a Forfeiture Break in Service,
the Plan disregards any Year of Service after the Participant first
incurs a Forfeiture Break in Service. The Participant incurs a
Forfeiture Break in Service when he incurs 5 consecutive Breaks in
Service.
(b) The Plan disregards any Year of Service excluded under the
Employer's Adoption Agreement.
The Plan does not apply the Break in Service rule under Code
ss.411(a)(6)(B). Therefore, an Employee need not complete a Year of Service
after a Break in Service before the Plan takes into account the Employee's
otherwise includible Years of Service under this Article V.
5.09 FORFEITURE OCCURS. A Participant's forfeiture, if any, of his
Accrued Benefit derived from Employer contributions occurs under the Plan on the
earlier of:
(a) The last day of the vesting computation period in which the
Participant first incurs a Forfeiture Break in Service; or
(b) The date the Participant receives a cash-out distribution.
The Advisory Committee determines the percentage of a Participant's
Accrued Benefit forfeiture, if any, under this Section 5.09 solely by reference
to the vesting schedule of Section 5.03. A Participant does not forfeit any
portion of his Accrued Benefit for any other reason or cause except as expressly
provided by this Section 5.09 or as provided under Section 9.14.
ARTICLE VI
TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Unless, pursuant to Section
6.03, the Participant or the Beneficiary elects in writing to a different time
or method of payment,
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the Advisory Committee will direct the Trustee to commence distribution of a
Participant's Nonforfeitable Accrued Benefit in accordance with this Section
6.01. A Participant must consent, in writing, to any distribution required under
this Section 6.01 if the present value of the Participant's Nonforfeitable
Accrued Benefit, at the time of the distribution to the Participant, exceeds
$3,500 and the Participant has not attained the later of Normal Retirement Age
or age 62. Furthermore, the Participant's spouse also must consent, in writing,
to any distribution, for which Section 6.04 requires the spouse's consent. For
all purposes of this Article VI, the term "annuity starting date" means the
first day of the first period for which the Plan pays an amount as an annuity or
in any other form. A distribution date under this Article VI, unless otherwise
specified within the Plan, is the date or dates the Employer specifies in the
Adoption Agreement, or as soon as administratively practicable following that
distribution date. For purposes of the consent requirements under this Article
VI, if the present value of the Participant's Nonforfeitable Accrued Benefit, at
the time of any distribution, exceeds $3,500, the Advisory Committee must treat
that present value as exceeding $3,500 for purposes of all subsequent Plan
distributions to the Participant.
(A) Separation from Service For a Reason Other Than Death.
(1) Participant's Nonforfeitable Accrued Benefit Not Exceeding $3,500.
If the Participant's Separation from Service is for any reason other than death,
the Advisory Committee will direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit in a lump sum, on the distribution date the
Employer specifies in the Adoption Agreement but in no event later than the 60th
day following the close of the Plan Year in which the Participant attains Normal
Retirement Age. If the Participant has attained Normal Retirement Age at the
time of his Separation from Service, the distribution under this paragraph will
occur no later than the 60th day following the close of the Plan Year in which
the Participant's Separation from Service occurs.
(2) Participant's Nonforfeitable Accrued Benefit Exceeds $3,500. If the
Participant's Separation from Service is for any reason other than death, the
Advisory Committee will direct the Trustee to commence distribution of the
Participant's Nonforfeitable Accrued Benefit in a form and at the time elected
by the Participant, pursuant to Section 6.03. In the absence of an election by
the Participant, the Advisory Committee will direct the Trustee to distribute
the Participant's Nonforfeitable Accrued Benefit in a lump sum (or, if
applicable, the normal annuity form of distribution required under Section
6.04), on the 60th day following the close of the Plan Year in which the latest
of the following events occurs: (a) the Participant attains Normal Retirement
Age; (b)the Participant attains age 62; or (c) the Participant's Separation from
Service.
(3) Disability. If the Participant's Separation from Service is because
of his disability, the Advisory Committee will direct the Trustee to pay the
Participant's Nonforfeitable Accrued Benefit in lump sum, on the distribution
date the Employer specifies in the Adoption Agreement,
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subject to the notice and consent requirements of this Article VI and subject to
the applicable mandatory commencement dates described in Paragraphs (1) and (2).
(4) Hardship. Prior to the time at which the Participant may receive
distribution under Paragraphs (1), (2) or (3), the Participant may request a
distribution from his Nonforfeitable Accrued Benefit in an amount necessary to
satisfy a hardship, if the Employer elects in the Adoption Agreement to permit
hardship distributions. Unless the Employer elects otherwise in the Adoption
Agreement a hardship distribution must be on account of any of the following:
(a) medical expenses; (b) the purchase (excluding mortgage payments) of the
Participant's principal residence; (c) post-secondary education tuition, for the
next semester or quarter, for the Participant or for the Participant's spouse,
children or dependents; (d) to prevent the eviction of the from his principal
residence or the foreclosure on the mortgage of the Participant's family member;
or (f) the Participant's disability. A partially-vested Participant may not
receive a hardship distribution described in this Paragraph (A)(4) prior to
incurring a Forfeiture Break in Service, unless the hardship distribution is a
cash-out distribution (as defined in Article V). The Advisory Committee will
direct the Trustee to make the hardship distribution as soon as administratively
practicable after the Participant makes a valid request for the hardship
distribution.
(B) Required Beginning Date. If any distribution commencement date described
under Paragraph (A) of this Section 6.01, either by Plan provision or by
Participant election (or nonelection), is later than the Participant's Required
Beginning Date, the Advisory Committee instead must direct the Trustee to make
distribution on the Participant's Required Beginning Date, subject to the
transitional election, if applicable under Section 6.03(D). A Participant's
Required Beginning Date is the April 1 following the close of the calendar year
in which the Participant attains age 70 1/2. However, if the Participant, prior
to incurring a Separation from Service, attained age 70 1/2 by January 1, 1988,
and, for the five Plan Year period ending in the calendar year in which he
attained age 70 1/2 and for all subsequent years, the Participant was not a more
than 5% owner, the Required Beginning Date is the April 1 following the close of
the calendar year in which the Participant separates from Service or, if
earlier, the April 1 following the close of the calendar year in which the
Participant becomes a more than 5% owner. Furthermore, if a Participant who was
not a more than 5% owner attained age 70 1/2 during 1988 and did not incur a
Separation from Service prior to January 1, 1989, his Required Beginning Date is
April 1, 1990. A mandatory distribution at the Participant's Required Beginning
Date will be in lump sum (or, if applicable, the normal annuity form of
distribution required under Section 6.04) unless the Participant, pursuant to
the provisions of this Article VI, makes a valid election to receive an
alternative form of payment.
(C) Death of the Participant. The Advisory Committee will direct the Trustee, in
accordance with this Section 6.01(C), to distribute to the Participant's
Beneficiary the Participant's Nonforfeitable Accrued Benefit remaining in the
Trust at the time of Participant's death. Subject to the requirements of Section
6.04, the Advisory Committee will determine the death benefit by
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reducing the Participant's Nonforfeitable Accrued Benefit by any security
interest the Plan has against that Nonforfeitable Accrued Benefit by reason of
an outstanding Participant loan.
(1) Deceased Participant's Nonforfeitable Accrued Benefit Does Not
Exceed $3,500. The Advisory Committee, subject to the requirements of Section
6.04, must direct the Trustee to distribute the deceased Participant's
Nonforfeitable Accrued Benefit in a single sum as soon as administratively
practicable following the Participant's death or, if later, the, date on which
the Advisory Committee receives notification of or otherwise confirms the
Participant's death.
(2) Deceased Participant's Nonforfeitable Accrued Benefit Exceeds
$3,500. The Advisory Committee will direct the Trustee to distribute the
deceased Participant's Nonforfeitable Accrued Benefit at the time and in the
form elected by the Participant or, if applicable by the Beneficiary, as
permitted under this Article VI. In the absence of an election, subject to the
requirements of Section 6.04, the Advisory Committee will direct the Trustee to
distribute the Participant's undistributed Nonforfeitable Accrued Benefit in a
lump sum on the first distribution date following the close of the Plan Year in
which the Participant's death occurs or, if later, the first distribution date
following the date the Advisory Committee receives notification of or otherwise
confirms the Participant's death.
If the death benefit is payable in full to the Participant's surviving
spouse, the surviving spouse, in addition to the distribution options provided
in this Section 6.01(C), may elect distribution at any time or in any form
(other than a joint and survivor annuity) this Article VI would permit for a
Participant.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to the annuity
distribution requirements, if any, prescribed by Section 6.04, and any
restriction; prescribed by Section 6.03, a Participant or Beneficiary may elect
distribution under one, or any combination, of the following methods: (a) by
payment in a lump sum; or (b) by payment in monthly, quarterly or annual
installments over a fixed reasonable period of time, not exceeding the life
expectancy of the Participant, or the joint life and last survivor expectancy of
the Participant and his Beneficiary. The Employer may elect in its Adoption
Agreement to modify the methods of payment available under this Section 6.02.
The distribution options permitted under this Section 6.02 are
available only if the present value of the Participant Nonforfeitable Accrued
Benefit, at the time of the distribution to the Participant, exceeds $3,500. To
facilitate installment payments under this Article VI, the Advisory Committee
may direct the Trustee to segregate all or any part of the Participant's Accrued
Benefit in a separate Account. The Trustee will invest the Participant's
segregated Account in Federally insured interest bearing savings account(s) or
time deposit(s) (or a combination of both), or in other fixed income
investments. A segregated Account remains a part of the Trust, but it alone
shares in any income it earns, and it alone bears any expense or loss it incurs.
A Participant or Beneficiary may elect to receive an installment distribution in
the form of a Nontransferable Annuity Contract. Under an installment
distribution, the Participant or Beneficiary, at any time, may elect to
accelerate the
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payment of all, or any portion, of the Participant's unpaid Nonforfeitable
Accrued Benefit, subject to the requirements of Section 6.04.
(A) Minimum Distribution Requirements for Participants. The Advisory Committee
may not direct the Trustee to distribute the Participant's Nonforfeitable
Accrued Benefit, nor may the Participant elect to have the Trustee distribute
his Nonforfeitable Accrued Benefit, under a method of payment which, as of the
Required Beginning Date, does not satisfy the minimum distribution requirements
under Code ss.401(a)(9) and the applicable Treasury regulations. The minimum
distribution for a calendar year equals the Participant's Nonforfeitable Accrued
Benefit as of the latest valuation date preceding the beginning of the calendar
year divided by the Participant's life expectancy or, if applicable, the joint
and last survivor expectancy of the Participant and his designated Beneficiary
(as determined under Article VIII subject to the requirements of the Code
401(a)(9) regulations). The Advisory Committee will increase the Participant's
Nonforfeitable Accrued Benefit, as determined on the relevant valuation date,
for contributions or forfeitures allocated after the valuation date and by
December 31 of the valuation calendar year, and will decrease the valuation by
distributions made after the valuation date and by December 31 of the valuation
calendar year. For purposes of this valuation, the Advisory Committee will treat
any portion of the minimum distribution for the first distribution calendar year
made after the close of that year as a distribution occurring in that first
distribution calendar year. In computing a minimum distribution, the Advisory
Committee must use the unisex life expectancy multiples under Treas. Reg.
ss.1.72-9. The Advisory Committee, only upon the Participant's written request,
will compute the minimum distribution for a calendar year subsequent to the
first calendar year for which the Plan requires a minimum distribution by
redetermining the applicable life expectancy. However, the Advisory Committee
may not redetermine the joint life and last survivor expectancy of the
Participant and a nonspouse designated Beneficiary in a manner which takes into
account any adjustment to a life expectancy other than the Participant's life
expectancy.
If the Participant's spouse is not his designated Beneficiary, a method
of payment to the Participant (whether by Participant election or by Advisory
Committee direction) may not provide more than incidental benefits to the
Beneficiary. For Plan Years beginning after December 31, 1988, the Plan must
satisfy the minimum distribution incidental benefit ("MDIB") requirement in the
Treasury regulations issued under Code ss.401(a)(9) for distributions made on or
after the Participant's Required Beginning Date and before the Participant's
death. To satisfy the MDIB requirement the Advisory Committee will compute the
minimum distribution required by this Section 6.02(A) by substituting the
applicable MDIB divisor for the applicable life expectancy factor, if the MDIB
divisor is a lesser number. Following the Participant's death, the Advisory
Committee will compute the minimum distribution required by this Section 6.02(A)
solely on the basis of the applicable life expectancy factor and will disregard
the MDIB factor. For Plan Years beginning prior to January 1, 1989, the Plan
satisfies the incidental benefits requirement if the distributions to the
Participant satisfied the MDIB requirement or if the present value of the
retirement benefits payable solely to the Participant is greater than 50% of the
present value of the total benefits payable to the Participant and his
Beneficiaries. The Advisory Committee must determine whether benefits to the
Beneficiary are
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incidental as of the date the Trustee is to commence payment of the retirement
benefits to the Participant, or as of any date the Trustee redetermines the
payment period to the Participant.
The minimum distribution for the first distribution calendar year is
due by the Participants Required Beginning Date. The minimum distribution for
each subsequent distribution calendar year, including the calendar year in which
the Participant's Required Beginning Date occurs, is due by December 31 of that
year. If the Participant receives distribution in the form of a Nontransferable
Annuity Contract, the distribution satisfies this Section 6.02(A) if the
contract complies with the requirements of Code ss.401(a)(9) and the applicable
Treasury regulations.
(B) Minimum Distribution Requirements for Beneficiaries. The method of
distribution to the Participant's Beneficiary must satisfy Code ss.401(a)(9) and
the applicable Treasury regulations. If the participant's death occurs after his
Required Beginning Date or, if earlier, the date the Participant commences an
irrevocable annuity pursuant to Section 6.04, the method of payment to the
Beneficiary must provide for completion of payment over a period which does not
exceed the payment period which had commenced for the Participant. If the
Participant's death occurs prior to his Required Beginning Date, and the
Participant had not commenced an irrevocable annuity pursuant to Section 6.04,
the method of payment to the Beneficiary, subject to Section 6.04, must provide
for completion of payment to the Beneficiary over a period not exceeding: (i) 5
years after the date of the Participant's death; or (ii) if the Beneficiary is a
designated Beneficiary, the designated Beneficiary's life expectancy. The
Advisory Committee may not direct payment of the Participant's Nonforfeitable
Accrued Benefit over a period described in clause (ii) unless the Trustee will
commence payment to the designated Beneficiary no later than the December 31
following the close of the calendar year in which the Participant's death
occurred or, if later, and the designated Beneficiary is the Participant's
surviving spouse, December 31 of the calendar year in which the Participant's
surviving spouse would have attained age 70 1/2. If the Trustee will make
distribution in accordance with clause (ii), the minimum distribution for a
calendar year equals the Participant's Nonforfeitable Accrued Benefit as of the
latest valuation date preceding the beginning of the calendar year divided by
the designated Beneficiary's life expectancy. The Advisory Committee must use
the unisex life expectancy multiples under Treas. Reg. ss.1.72-9 for purposes of
applying this paragraph. The Advisory Committee, only upon the written request
of the Participant or of the Participant's surviving spouse, will recalculate
the life expectancy of the Participant's surviving spouse not more frequently
than annually, but may not recalculate the lifer expectancy of a nonspouse
designated Beneficiary after the Trustee commences payment to the designated
Beneficiary. The Advisory Committee will apply this paragraph by treating any
amount paid to the Participant's child, which becomes payable to the
Participant's surviving spouse upon the child's attaining the age of majority,
as paid to the Participant surviving spouse. Upon the Beneficiary's written
request, the Advisory Committee must direct the Trustee to accelerate payment of
all, or any portion, of the Participant's unpaid Accrued Benefit, as soon as
administratively practicable following the effective date of that request.
6.03 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days, but not later
than 30 days, before the Participant's annuity starting date, the Advisory
Committee must provide a benefit
40.
notice to a Participant who is eligible to make an election under this Section
6.03. The benefit notice must explain the optional forms of benefit in the Plan,
including the material features and relative values of those options, and the
Participant's right to defer distribution until he attains the later of Normal
Retirement Age or age 62.
If a Participant or Beneficiary makes an election prescribed by this
Section 6.03, the Advisory Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in accordance with that election.
Any election under this Section 6.03 is subject to the requirements of Section
6.02 and of Section 6.04. The Participant or Beneficiary must make an election
under this Section 6.03 by filing his election with the Advisory Committee at
any time before the Trustee otherwise would commence to pay a Participant's
Accrued Benefit in accordance with the requirements of Article VI.
(A) Participant Elections After Separation from Service. If the present value of
a Participant's Nonforfeitable Accrued Benefit exceeds $3,500, he may elect to
have the Trustee commence distribution as of any distribution date permitted
under the Employer's Adoption Agreement Section 6.03. The Participant may
reconsider an election at any to the annuity starting date and elect to commence
distribution as of any other distribution date permitted under the Employees
Adoption Agreement Section 6.03. If the Participant is partially-vested in his
Accrued Benefit, an election under this Paragraph (A) to distribute prior to the
Participant's incurring a Forfeiture Break in Service (as defined in Section
5.08), must be in the form of a cash-out distribution (as defined in Article V).
A Participant may not receive a cash-out distribution if, prior to the time the
Trustee actually makes the cash-out distribution, the Participant returns to
employment with the Employer. Following his attainment of Normal Retirement Age,
a Participant who has separated from Service may elect distribution as of any
distribution date, irrespective of the elections under Adoption Agreement
Section 6.03.
(B) Participant Elections Prior to Separation from Service. The Employer must
specify in its Adoption Agreement the distribution election rights, if any, a
Participant has prior to his Separation from Service. A Participant must make an
election under this Section 6.03(B) on a form prescribed by the Advisory
Committee at any time during the Plan Year for which his election is to be
effective. In his written election, the Participant must specify the percentage
or dollar amount he wishes the Trustee to distribute to him. The Participant's
election relates solely to the percentage or dollar amount specified in his
election form and his right to elect to receive an amount, if any, for a
particular Plan Year greater than the dollar amount or percentage specified in
his election form terminates on the Accounting Date. The Trustee must make a
distribution to a Participant in accordance with his election under this Section
6.03(B) within the 90 day period (or as soon as administratively practicable)
after the Participant files his written election with the Trustee. The Trustee
will distribute the balance of the Participant's Accrued Benefit not distributed
pursuant to his election(s) in accordance with the other distribution provisions
of this Plan.
(C) Death Benefit Elections. If the present value of the deceased Participant's
Nonforfeitable Accrued Benefit exceeds $3,500, the Participant's Beneficiary may
elect to have the Trustee
41.
distribute the Participant's Nonforfeitable Accrued Benefit in a form and within
a period permitted under Section 6.02. The Beneficiary's election is subject to
any restrictions designated in writing by the Participant and not revoked as of
his date of death.
(D) Transitional Elections. Notwithstanding the provisions of Sections 6.01 and
6.02 the Participant (or Beneficiary) signed a written distribution designation
prior to January 1, 1994, the Advisory Committee must distribute the
Participant's Nonforfeitable Accrued Benefit in accordance with that
designation, subject however, to the survivor requirements, if applicable, of
Sections 6.04, 6.05 and 6.06. This Section 6.03(D) does not apply to a pre-1984
distribution designation, and the Advisory Committee will not comply with that
designation, if any of the following applies: (1) the method of distribution
would have disqualified the Plan under Code 401(a)(9) as in effect on December
31, 1983; (2) the Participant did not have an Accrued Benefit as of December 31,
1983; (3) the distribution designation does not specify the timing and form of
the distribution and the death Beneficiaries (in order of priority); (4) the
substitution of a Beneficiary modifies the payment period of the distribution;
or, (5) the Participant (or Beneficiary) modifies or revokes the distribution
designation. In the event of a revocation, the Plan must distribute, no later
than December 31 of the calendar year following the year of revocation, the
amount which the Participant would have received under Section 6.02(A) if the
distribution designation had not been in effect or, if the Beneficiary revokes
the distribution designation, the amount which the Beneficiary would have
received under Section 6.02(B) if the distribution designation had not been in
effect. The Advisory Committee will apply this Section 6.03(D) to rollovers and
transfers in accordance with Part J of the Code ss.401(a)(9) Treasury
regulations.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES.
(A) Joint and Survivor Annuity. The Advisory Committee must direct the Trustee
to distribute a married or unmarried Participant's Nonforfeitable Accrued
Benefit in the form of a qualified joint and survivor annuity, unless the
Participant makes a valid waiver election (described in Section 6.05) within the
90 day period ending on the annuity starting date. If, as of the annuity
starting date, the Participant is married, a qualified joint and survivor
annuity is an immediate annuity which is purchasable with the Participant's
Nonforfeitable Accrued Benefit and which provides a life annuity for the
Participant and a survivor annuity payable for the remaining life of the
Participant's surviving spouse equal to 50% of the amount of the annuity payable
during the life of the Participant. If, as of the annuity starting date, the
Participant is not married, a qualified joint and survivor annuity is an
immediate life annuity for the Participant which is purchasable with the
Participant's Nonforfeitable Accrued Benefit. On or before the annuity starting
date, the Advisory Committee without Participant or spousal consent, must direct
the Trustee to pay the Participant's Nonforfeitable Accrued Benefit in a lump
sum, in lieu of a qualified joint and survivor annuity, in accordance with
Section 6.01, if the Participant's Nonforfeitable Accrued Benefit is not greater
than $3,500. This Section 6.04(A) applies only to a Participant who has
completed at least one Hour of Service with the Employer after August 22, 1984.
42.
(B) Preretirement Survivor Annuity. If a married Participant dies prior to his
annuity starting date, the Advisory Committee will direct the Trustee to
distribute a portion of the Participant's Nonforfeitable Accrued Benefit to the
Participant's surviving spouse in the form of a preretirement survivor annuity,
unless the Participant has a valid waiver election (as described in Section
6.06) in effect, or unless the Participant and his spouse were not married
throughout the one year period ending on the date of his death. A preretirement
survivor annuity is an annuity which is purchasable with 50% of the
Participant's Nonforfeitable Accrued Benefit (determined as of the date of the
Participant's death) and which is payable for the life of the Participant's
surviving spouse. The value of the preretirement survivor annuity is
attributable to Employer contributions and to Employee contributions in the same
proportion as the Participant's Nonforfeitable Accrued Benefit is attributable
to those contributions. The portion of the Participant's Nonforfeitable Accrued
Benefit not payable under this paragraph is payable to the Participant's
Beneficiary, in accordance with the other provisions of this Article VI. If the
present value of the preretirement survivor annuity does not exceed $3,500, the
Advisory Committee, on or before the annuity starting date, must direct the
Trustee to make a lump sum distribution to the Participant's surviving spouse,
in lieu of a preretirement survivor annuity. This Section 6.40(B) applies only
to a Participant who dies after August 22, 1984, and either (i) completes at
least one Hour of Service with the Employer after August 22, 1984, or (ii)
separated from Service with at least 10 Years of Service (as defined in Section
5.06) and completed at least one Hour of Service with the Employer in a Plan
Year beginning after December 31, 1975.
(C) Surviving Spouse Elections. If the present value of the preretirement
survivor annuity exceeds $3,500, the Participant's surviving spouse may elect to
have the Trustee commence payment of the preretirement survivor annuity at any
time following the date of the Participant's death, but not later than the
mandatory distribution periods described in Section 6.02, and may elect any of
the forms of payment described in Section 6.02 in lieu of the preretirement
survivor annuity. In the absence of an election by the surviving spouse, the
Advisory Committee must direct the Trustee to distribute the preretirement
survivor annuity on the first distribution date following the close of the Plan
Year in which the latest of the following events occurs: (i) the Participant's
death; (ii) the date the Advisory Committee receives notification of or
otherwise confirms the Participant's death; (iii) the date the Participant would
have attained Normal Retirement Age; or (iv) the date the Participant would have
attained age 62.
(D) Special Rules. If the Participant has in effect a valid waiver election
regarding the qualified joint and survivor annuity or the preretirement survivor
annuity, the Advisory Committee must direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in accordance with Sections 6.01,
6.02 and 6.03. The Advisory Committee will reduce the Participant's
Nonforfeitable Accrued Benefit by any security interest (pursuant to any offset
rights authorized by Section 10.03(E) held by the Plan by reason of a
Participant loan to determine the value of the Participant's Nonforfeitable
Accrued Benefit distributable in the form of a qualified joint and survivor
annuity or preretirement survivor annuity, provided any post-August 18, 1985,
loan satisfied the spousal consent requirement described in Section 10.03(E) of
the Plan. For purposes of applying this Article VI, the Advisory Committee
treats a former spouse as the Participant's spouse or surviving spouse to the
extent
43.
provided under a qualified domestic relations order described in Section 6.07.
The provisions of this Section 6.04, and of Sections 6.05 and 6.06, apply
separately to the portion of the Participant's Nonforfeitable Accrued Benefit
subject to the qualified domestic relations order and to the portion of the
Participant's Nonforfeitable Accrued Benefit not subject to that order.
(E) Profit Sharing Plan Election. If this Plan is a profit sharing plan, the
Employer must elect the extent to which the preceding provisions of Section 6.04
apply. If the Employer elects to apply this Section 6.04 only to a Participant
described in this Section 6.04(E), the preceding provisions of this Section 6.04
apply only to the following Participants: (1) a Participant as respects whom the
Plan is a direct or indirect transferee from a plan subject to the Code ss.417
requirements and the Plan received the transfer after December 31, 1984, unless
the transfer is an elective transfer described in Section 13.06; (2) a
Participant who elects a life annuity distribution (if Section 6.02 or Section
13.02 of the Plan requires the Plan to provide a life annuity distribution
option); and (3) a Participant whose benefits under a defined benefit plan
maintained by the Employer are offset by benefits provided under this Plan. If
the Employer elects to apply this Section 6.04 to all Participants, the
preceding provisions of this Section 6.04 apply to all Participants described in
the first two paragraphs of this Section 6.04, without regard to the limitations
of this Section 6.04(E). Sections 6.05 and 6.06 only apply to Participants to
whom the preceding provisions of this Section 6.04 apply.
6.05 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY. Not earlier
than 90 days, but not later than 30 days, before the Participant's annuity
starting date, the Advisory Committee must provide the Participant a written
explanation of the terms and conditions of the qualified joint and survivor
annuity, the Participant's right to make, and the effect of an election to waive
the joint and survivor form of benefit, the rights of the Participant's spouse
regarding the waiver election and the Participant's right to make, and the
effect of, a revocation of a waiver election. The Plan does not limit the number
of times the Participant may revoke a waiver of the qualified joint and survivor
annuity or make a new waiver during the election period.
A married Participant's waiver election is not valid unless (a) the
Participant's spouse (to whom the survivor annuity is payable under the
qualified joint and survivor annuity), after the Participant has received the
written explanation described in this Section 6.05, has consented in writing to
the waiver election, the spouse's consent acknowledges the effect of the
election, and a notary public or the Plan Administrator (or his representative)
witnesses the spouse's consent, (b) the spouse consents to the alternate form of
payment designated by the Participant or to any change in that designated form
of payment, and (c) unless the spouse is the Participant's sole primary
Beneficiary, the spouse consents to the Participant's Beneficiary designation or
to any change in the Participant's Beneficiary designation. The spouse's consent
to a waiver of the qualified joint and survivor annuity is irrevocable, unless
the Participant revokes the waiver election. The spouse may execute a blanket
consent to any form of payment designation or to any Beneficiary designation
made by the Participant, if the spouse acknowledges the right to limit that
consent to a specific designation but, in writing, waives that right. The
consent requirements of this Section 6.05 apply to a former spouse of the
Participant, to the extent required under a qualified domestic relations order
described in Section 6.07.
44.
The Advisory Committee will accept as valid a waiver election which
does not satisfy the spousal consent requirements if the Advisory Committee
establishes the Participant does not have a spouse, the Advisory Committee is
not able to locate the Participant's spouse, the Participant is legally
separated or has been abandoned (within the meaning of State law) and the
Participant has a court order to that effect, or other circumstances exist under
which the Secretary of the Treasury will excuse the consent requirement. If the
Participant's spouse is legally incompetent to give consent, the spouse's legal
guardian (even if the guardian is the Participant) may give consent.
6.06 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. The
Advisory Committee must provide a written explanation of the preretirement
survivor annuity to each married Participant, within the following period which
ends last: (1) the period beginning on the first day of the Plan Year in which
the Participant attains age 32 and ending on the last day of the Plan Year in
which the Participant attains age 34; (2) a reasonable period after an Employee
becomes a Participant; (3) a reasonable period after the joint and survivor
rules become applicable to the Participant; or (4) a reasonable period after a
fully subsidized preretirement survivor annuity no longer satisfies the
requirements for a fully subsidized benefit. A reasonable period described in
clauses (2), (3) and (4) is the period beginning one year before and ending one
year after the applicable event. If the Participant separates from Service
before attaining age 35, clauses (1), (2), (3) and (4) do not apply and the
Advisory Committee must provide the written explanation within the period
beginning one year before and ending one year after the Separation from Service.
The written explanation must describe, in a manner consistent with Treasury
regulations, the terms and conditions of the preretirement survivor annuity
comparable to the explanation of the qualified joint and survivor annuity
required under Section 6.05. The Plan does not limit the number of times the
Participant may revoke a waiver of the preretirement survivor annuity or make a
new waiver during the election period.
A Participant's waiver election of the preretirement survivor annuity
is not valid unless (a) the Participant makes the waiver election no earlier
than the first day of the Plan Year in which he attains age 35 and (b) the
Participant's spouse (to whom the preretirement survivor annuity is payable)
satisfies the consent requirements described in Section 6.05, except the spouse
need not consent to the form of benefit payable to the designated Beneficiary.
The spouse's consent to the waiver of the preretirement survivor annuity is
irrevocable, unless the Participant revokes the waiver election. Irrespective of
the time of election requirement described in clause (a), if the Participant
separates from Service prior to the first day of the Plan Year in which he
attains age 35, the Advisory Committee will accept a waiver election as respects
the Participant's Accrued Benefit attributable to his Service prior to his
Separation from Service. Furthermore, if a Participant who has not separated
from Service makes a valid waiver election, except for the timing requirement of
clause (a), the Advisory Committee will accept that election as valid, but only
until the first day of the Plan Year in which the Participant attains age 35. A
waiver election described in this paragraph is not valid unless made after the
Participant has received the written explanation described in this Section 6.06.
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing contained in
this Plan prevents the Trustee, in accordance with the direction of the Advisory
45.
Committee, from complying with the provisions of a qualified domestic relations
order (as defined in Code ss.414(p)). This Plan specifically permits
distribution to an alternate payee under a qualified domestic relations order at
any time, irrespective of whether the Participant has attained his earliest
retirement age (as defined under Code ss.414(p)) under the Plan. A distribution
to an alternate payee prior to the Participant's attainment of earliest
retirement age is available only if: (1) the order specifies distribution at
that time or permits an agreement between the Plan and the alternate payee to
authorize an earlier distribution; and (2) if the present value of the alternate
payee's benefits under the Plan exceeds $3,500, and the order requires, the
alternate payee consents to any distribution occurring prior to the
Participant's attainment of earliest retirement age. The Employer, in an
addendum to its Adoption Agreement numbered 6.07, may elect to limit
distribution to an alternate payee only when the Participant has attained his
earliest retirement age under the Plan. Nothing in this Section 6.07 gives a
Participant a right to receive distribution at a time otherwise not permitted
under the Plan nor does it permit the alternate payee to, receive a form of
payment not otherwise permitted under the Plan.
The Advisory Committee must establish reasonable procedures to
determine the qualified status of a domestic relations order. Upon receiving a
domestic relations order, the Advisory Committee promptly will notify the
Participant and any alternate payee named in the order, in writing of the
receipt of the order and the Plan's procedures for determining the qualified
status of the order. Within a reasonable period of time after receiving the
domestic relations order, the Advisory Committee must determine the qualified
status of the order and must notify the Participant and each alternate payee, in
writing, of its determination. The Advisory Committee must provide notice under
this paragraph by mailing to the individual's address specified in the domestic
relations order, or in a manner consistent with Department of Labor regulations.
If any portion of the Participant's Nonforfeitable Accrued Benefit is
payable during the period the Advisory Committee is making its determination of
the qualified status of the domestic relations order, the Advisory Committee
must make a separate accounting of the amounts payable. If the Advisory
Committee determines the order is a qualified domestic relations order within 18
months of the date amounts first are payable following receipt of the order, the
Advisory Committee will direct the Trustee to distribute the payable amounts in
accordance with the order. If the Advisory Committee does not make its
determination of the qualified status of the order within the 18-month
determination period, the Advisory Committee will direct the Trustee to
distribute the payable amounts in the manner the Plan would distribute if the
order did not exist and will apply the order prospectively if the Advisory
Committee later determines the order is a qualified domestic relations order.
To the extent it is not inconsistent with the provisions of the
qualified domestic relations order, the Advisory Committee may direct the
Trustee to invest any partitioned amount in a segregated subaccount or separate
account and to invest the account in Federally insured, interest-bearing savings
account(s) or time deposit(s) (or a combination of both), or in other fixed
income investments. A segregated subaccount remains a part of the Trust, but it
alone shares in any income it earns, and it alone bears any expense or loss it
incurs. The Trustee will make any payments or
46.
distributions, required under this Section 6.07 by separate benefit checks or
other separate distribution to the alternate payee(s).
ARTICLE VII
EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 INFORMATION TO COMMITTEE. The Employer must supply current
information to the Advisory Committee as to the name, date of birth, date of
employment, annual compensation, leaves of absence, Years of Service and date of
termination of employment of each Employee who is, or who will be eligible to
become, a Participant under the Plan together with any other information which
the Advisory Committee considers necessary. The Employer's records as to the
current information the Employer furnishes to the Advisory Committee are
conclusive as to all persons.
7.02 NO LIABILITY. The Employer assumes no obligation or responsibility
to any of its Employees, Participants or Beneficiaries for any act of, or
failure to act, on the part of its Advisory Committee (unless the Employer is
the Advisory Committee), the Trustee, the Custodian, if any, or the Plan
Administrator (unless the Employer is the Plan Administrator).
7.03 INDEMNITY OF CERTAIN FIDUCIARIES. Subject to the provisions of
this Section 7.03, to the full extent permitted by law, the Employer shall
indemnify each past, present and future Plan Administrator, member of the
Advisory Committee and Trustee (or Custodian) (hereinafter all such indemnified
persons and entities shall be jointly and severally referred to as the
"Indemnified Party") against, and each Indemnified Party shall be entitled
without further act on his part to indemnity from the Employer for, any and all
losses, liabilities, costs and expenses (including the amount of judgments,
court costs, reasonable attorneys' fees, and the amount of approved settlements
made with a view to the curtailment of costs of litigation, other than amounts
paid to the Employer itself) incurred by such Indemnified Party in connection
with or arising out of any pending, threatened or anticipated possible action,
suit or other proceeding, including any investigation that might lead to such a
proceeding, in which he is or may be involved by reason of or in connection with
his being or having been a Plan Administrator, member of the Advisory Committee,
Trustee or Custodian, whether or not he continues to be a Plan Administrator,
member of the Advisory Committee, Trustee or Custodian at the time of incurring
any such losses, liabilities, costs and expenses (collectively, the "Losses");
provided, however, that such indemnity shall not include any losses,
liabilities, costs and expenses incurred by such Indemnified Party (i) with
respect to any matters as to which he is finally adjudged in any such action,
suit or proceeding to have been guilty of gross negligence, bad faith or
intentional misconduct in the performance of his duties as a Plan Administrator,
member of the Advisory Committee, Trustee or Custodian, or (ii) with respect to
any matter to the extent that a settlement thereof is effected in an amount in
excess of the amount approved by the Employer, which approval shall not be
unreasonably withheld.
The Employer's obligation hereunder to indemnify the Indemnified Party
shall exist without regard to the cause or causes of the matters for which
indemnity is owed and expressly includes (but is not limited to) the Losses,
directly or indirectly, relating to, based upon,, arising out of, or resulting
47.
from any conceivable or possible combination of negligence, fault or wrong
doing, it being the express specific intent of the Employer to provide the
maximum possible indemnification protection hereunder, but excluding any such
Losses that are found by a court of competent jurisdiction to have resulted
solely from gross negligence, bad faith or intentional misconduct.
No right of indemnification hereunder shall be available to, or
enforceable by, any such Indemnified Party unless, within sixty (60) days after
his actual receipt of service of process in any such action, suit or other
proceeding (or such longer period as may be approved by the Employer), he shall
have offered the Employer, in writing, the opportunity to handle and defend same
at its sole expense. The decision by the Employer to handle the proceeding shall
conclusively determine that such Indemnified Party is entitled to the indemnity
provided herein unless then otherwise expressly agreed by the Indemnified Party.
Until and unless a final judicial determination has been made that indemnity is
not applicable, all such Indemnified Party's expenses shall be promptly and
fully paid or reimbursed by the Employer upon demand by such person. The
foregoing right of indemnification shall inure to the benefit of the successors
and assigns, and of the heirs, executors, administrators and personal
representatives of each such Indemnified Party and shall be in addition to all
other rights to which each such Indemnified Party may be entitled as a matter of
law, contract, or otherwise. The indemnification provisions of this Section 7.03
shall not relieve any Indemnified Party from any liability he may have under
ERISA for breach of a fiduciary duty. Furthermore, any Indemnified Party and the
Employer may execute a letter agreement further delineating the indemnification
agreement of this Section 7.03, provided the letter agreement must be consistent
with and does not violate ERISA. Subject to the above provisions of this Section
7.03, the indemnification provisions of this Section 7.03 extend to each
Indemnified Party except to the extent provided by a letter agreement executed
by the Employer and any person who otherwise would be an Indemnified Party under
this Section 7.03.
7.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer has the right to
direct the Trustee with respect to the investment and re-investment of assets
comprising the Trust Fund only if the Trustee consents in writing to permit such
direction. If the Trustee consents to Employer direction of investment, the
Trustee and the Employer must execute a letter agreement as a part of this Plan
containing such conditions, limitations and other provisions they deem
appropriate before the Trustee will follow any Employer direction as respects
the investment or re-investment of any part of the Trust Fund.
7.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves the
right to amend the vesting schedule at any time, the Advisory Committee will not
apply the amended vesting schedule to reduce the Nonforfeitable percentage of
any Participant's Accrued Benefit derived from Employer contributions
(determined as of the later of the date the Employer adopts the amendment, or
the date the amendment becomes effective) to a percentage less than the
Nonforfeitable percentage computed under the Plan without regard to the
amendment. An amended vesting schedule will apply to a Participant only if the
Participant receives credit for at least one Hour of Service after the new
schedule becomes effective.
48.
If the Employer makes a permissible amendment to the vesting schedule,
each Participant having at least 3 Years of Service with the Employer may elect
to have the percentage of his Nonforfeitable Accrued Benefit computed under the
Plan without regard to the amendment. For Plan Years beginning prior to January
1, 1989, the election described in the preceding sentence applies only to
Participants having at least 5 Years of Service with the Employer. The
Participant must file his election with the Advisory Committee within 60 days of
the latest of (a) the Employer's adoption of the amendment; (b) the effective
date of the amendment; or (c) his receipt of a copy of the amendment. The
Advisory Committee, as soon as practicable, must forward a true copy of any
amendment to the vesting schedule to each affected Participant, together with an
explanation of the effect of the amendment, the appropriate form upon which the
Participant may make an election to remain under the vesting schedule provided
under the Plan prior to the amendment and notice of the time within which the
Participant must make an election to remain under the prior vesting schedule.
The election described in this Section 7.05 does not apply to a Participant if
the amended vesting schedule provides for vesting at least as rapid at all times
as the vesting schedule in effect prior to the amendment. For purposes of this
Section 7.05, an amendment to the vesting schedule includes any Plan amendment
which directly or indirectly affects the computation of the Nonforfeitable
percentage of an Employee's rights to his Employer derived Accrued Benefit.
Furthermore, the Advisory Committee must treat any shift in the vesting
schedule, due to a change in the Plan's top heavy status, as an amendment to the
vesting schedule for purposes of this Section 7.05.
ARTICLE VIII
PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 BENEFICIARY DESIGNATION. Any Participant may from time to time
designate, in writing, any person or persons, contingently or successively, to
whom the Trustee will pay his Nonforfeitable Accrued Benefit (including any life
insurance payable to the Participant's Account) in the event of his death and
the Participant may designate the form and method of payment. The Advisory
Committee will prescribe the form for the written designation of Beneficiary
and, upon the Participant's filing the form with the Advisory Committee, the
form effectively revokes all designations filed prior to that date by the same
Participant.
(A) Coordination with survivor requirements. If the joint and survivor
requirements of Article VI apply to the Participant, this Section 8.01 does not
impose any special spousal consent requirements on the Participant's Beneficiary
designation. However, in the absence of spousal consent (as required by Article
VI) to the Participant's Beneficiary designation: (1) any waiver of the joint
and survivor annuity or of the pre-retirement survivor annuity is not valid; and
(2) if the Participant dies prior to his annuity starting date, the
Participant's Beneficiary designation will apply only apply to the portion of
the death benefit which is not payable as a pre-retirement survivor annuity.
Regarding clause (2), if the Participant's surviving spouse is a primary
Beneficiary under the Participant's Beneficiary designation, the Trustee will
satisfy the spouse's interest in the Participant's death benefit first from the
portion which is payable as a pre-retirement survivor annuity.
49.
(B) Profit sharing plan exception. If the Plan is a profit sharing plan, the
Beneficiary designation of a married Exempt Participant is not valid unless the
Participant's spouse consents (in a manner described in Section 6.05) to the
Beneficiary designation. An "Exempt Participant" is a Participant who is not
subject to the joint and survivor requirements of Article VI. The spousal
consent requirement in this paragraph does not apply if the Exempt Participant
and his spouse are not married throughout the one year period ending on the date
of the Participant's death, or if the Participant's spouse is the Participant's
sole primary Beneficiary.
8.02 NO BENEFICIARY DESIGNATION/DEATH OF BENEFICIARY. If a Participant
fails to name a Beneficiary in accordance with Section 8.01, or if the
Beneficiary named by a Participant predeceases him, then the Trustee will pay
the Participant's Nonforfeitable Accrued Benefit in accordance with Section 6.02
in the following order of priority, unless the Employer specifies a different
order of priority in an addendum to its Adoption Agreement, to:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted children,
in equal shares;
(c) The Participant's surviving parents, in equal shares; or
(d) The Participant's estate.
If the Beneficiary does not predecease the Participant, but dies prior
to distribution of the Participant's entire Nonforfeitable Accrued Benefit, the
Trustee will pay the remaining Nonforfeitable Accrued Benefit to the
Beneficiary's estate unless the Participant's Beneficiary designation provides
otherwise or unless the Employer provides otherwise in its Adoption Agreement.
If the Plan is a profit sharing plan, and the Plan includes Exempt Participants,
the Employer may not specify a different order of priority in the Adoption
Agreement unless the Participant's surviving spouse will be first in the
different order of priority. The Advisory Committee will direct the Trustee as
to the method and to whom the Trustee will make payment under this Section 8.02.
8.03 PERSONAL DATA TO COMMITTEE. Each Participant and each Beneficiary
of a deceased Participant must furnish to the Advisory Committee such evidence,
data or information as the Advisory Committee considers necessary or desirable
for the purpose of administrating the Plan. The provisions of this Plan are
effective for the benefit of each Participant upon the condition precedent that
each Participant will furnish promptly full true and complete evidence, data and
information when requested by the Advisory Committee, provided the Advisory
Committee advises each Participant of the effect of his failure to comply with
its request.
8.04 ADDRESS FOR NOTIFICATION. Each ant and each Beneficiary of a
deceased Participant must file with the Advisory Committee from time to time, in
writing, his post office address and any change of post office address. Any
communication, statement or notice addressed to a Participant, or Beneficiary,
at his last post office address filed with the Advisory Committee, or
50.
as shown on the records of the Employer, binds the Participant, or Beneficiary,
for all purposes of this Plan.
8.05 ASSIGNMENT OR ALIENATION. Subject to Code ss.401(p) relating to
qualified domestic relations orders, neither a Participant nor a Beneficiary may
anticipate, assign or alienate (either at law or in equity) any benefit provided
under the Plan, and the Trustee will not recognize any such anticipation,
assignment or alienation. Furthermore, a benefit under the Plan is not subject
to attachment, garnishment, levy, execution or other legal or equitable process.
8.06 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within the time
prescribed by ERISA and the applicable regulations, must furnish all
Participants and Beneficiaries a summary description of any material amendment
to the Plan or notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.
8.07 LITIGATION AGAINST THE TRUST. A court of competent jurisdiction
may authorize any appropriate equitable relief to redress violations of ERISA or
to enforce any provisions of ERISA or the terms of the Plan. A fiduciary may
receive reimbursement of expenses properly and actually incurred in the
performance of his duties with the Plan.
8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any
Beneficiary may examine copies of the Plan description, latest annual report,
any bargaining agreement, this Plan and Trust, contract or any other instrument
under which the Plan was established or is operated. The Plan Administrator will
maintain all of the items listed in this Section 8.08 in his office, or in such
other place or places as he may designate from time to time in order to comply
with the regulations issued under ERISA, for examination during reasonable
business hours. Upon the written request of a Participant or Beneficiary the
Plan Administrator must h him with a copy of any item listed in this Section
8.08. The Plan Administrator may make a reasonable charge to the requesting
person for the copy so furnished.
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. A Participant or a
Beneficiary ("Claimant") may file with the Advisory Committee a written claim
for benefits, if the Participant or Beneficiary determines the distribution
procedures of the Plan have not provided him his proper Nonforfeitable Accrued
Benefit. The Advisory Committee must render a decision on the claim within 60
days of the Claimant's written claim for benefits. The Plan Administrator must
provide adequate notice in writing to the Claimant whose claim for benefits
under the Plan the Advisory Committee has denied. The Plan Administrator's
notice to the Claimant must set forth:
(a) The specific reason for the denial;
(b) Specific references to pertinent Plan provisions on which the
Advisory Committee based its denial;
51.
(c) A description of any additional material and information needed for
the Claimant to perfect his claim and an explanation of why the
material or information is needed; and
(d) That any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Advisory Committee within 75
days after receipt of the Plan Administrator's notice of denial of
benefits. The Plan Administrators notice must further advise the
Claimant that his failure to appeal the action to the Advisory
Committee in writing within the 75-day period will render the Advisory
Committee's determination final binding and conclusive.
If the Claimant should appeal to the Advisory Committee, he, or his
duly authorized representative, may submit, in writing, whatever issues and
comments he, or his duly authorized representative, feels are pertinent. The
Claimant, or his duly authorized representative, may review pertinent Plan
documents. The Advisory Committee will re-examine all facts related to the
appeal and make a final determination as to whether the denial of benefits is
justified under the circumstances. The Advisory Committee must advise the
Claimant of its decision within 60 days of the Claimant's written request for
review, unless special circumstances (such as a hearing) would make the
rendering of a decision within the 60-day limit unfeasible, but in no event may
the Advisory Committee render a decision respecting a denial for a for benefits
later than 120 days after its receipt of a request for review.
The Plan Administrator's notice of denial of benefits must identify the
name of each member of the Advisory Committee and the name and address of the
Advisory Committee member to whom the Claimant may forward his appeal.
8.10 PARTICIPANT DIRECTION OF INVESTMENT. A Participant has the right
to direct the Trustee with respect to the investment or re-investment of the
assets comprising the Participant's individual Account only if the Trustee
consents in writing to permit such direction. If the Trustee consents to
Participant direction of investment the Trustee will accept direction from each
Participant on a written election form (or other written agreement), as a part
of this Plan, containing such conditions, limitations and other provisions the
parties deem appropriate. The Trustee or, with the Trustee's consent, the
Advisory Committee, may establish written procedures, incorporated specifically
as part of this Plan, relating to Participant direction of investment under this
Section 8.10. The Trustee will maintain a segregated investment Account to the
extent a Participant's Account is subject to Participant self-direction. The
Trustee is not liable for:-any loss, nor is the Trustee liable for any breach,
resulting from a Pa ant's direction of the investment of any part of his
directed Account.
The Advisory Committee, to the extent provided in a written loan policy
adopted under Section 9.04, will treat a loan made to a Participant as a
Participant direction of investment under this Section 8.10. To the extent of
the loan outstanding at any time, the borrowing Participant's Account alone
shares in any interest paid on the loan, and it alone bears any expense or loss
it incurs in connection with the loan. The Trustee may retain any principal or
interest paid on the borrowing Participant's loan in an interest bearing
segregated Account on behalf of the borrowing
52.
Participant until the Trustee (or the Named Fiduciary, in the case of a
nondiscretionary Trustee) deems it appropriate to add the amount paid to the
Participant's separate Account under the Plan.
If the Trustee consents to Participant direction of investment of his
Account, the Plan treats any post-December 31, 1981, investment by a
Participant's directed Account in collectibles (as defined by Code ss.408(m) as
deemed distribution to the Participant for Federal income tax purposes.
ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.01 MEMBERS' COMPENSATION, EXPENSES. The Employer must appoint an
Advisory Committee to administer the Plan, the members of which may or may not
be Participants in the Plan, or which may be the Plan Administrator acting
alone. In the absence of an Advisory Committee appointment, the Plan
Administrator assumes the powers, duties and responsibilities of the Advisory
Committee. The members of the Advisory Committee will serve without compensation
for services as such, but the Employer will pay all expenses of the Advisory
Committee, except to the extent the Trust properly pays for such expenses,
pursuant to Article X.
9.02 TERMS. Each member of the Advisory Committee serves until the
appointment of his successor.
9.03 POWERS. In case of a vacancy in the membership of the Advisory
Committee, the remaining members of the Advisory Committee may exercise any and
all of the powers, authority, duties and discretion conferred upon the Advisory
Committee pending the filing of the vacancy.
9.04 GENERAL. The Advisory Committee has the following powers and
duties:
(a) To select a Secretary, who need not be a member of the Advisory
Committee;
(b) To determine the rights of eligibility of an Employee to
participate in the Plan, the value of a Participant's Accrued benefit
and the Nonforfeitable percentage of each Participant's Accrued
Benefit;
(c) To construe and enforce the terms of the Plan and the rules and
regulations it adopts; including interpretation of the Plan documents
and documents related to the Plan's operation;
(e) To direct the Trustee as respects the crediting and distribution
of the Trust;
(f) To review and render decisions respecting a claim for (or denial of
a claim for) a benefit under the Plan;
53.
(g) To furnish the Employer with information which the Employer may
require for tax or other purposes;
(h) To engage the service of agents whom it may deem advisable to
assist it with the performance of its duties;
I) To engage the service of an Investment Manger or Managers (as
defined in ERISA ss.3(38), each of whom will have full power and
authority to manage, acquire or dispose (or direct the Trustee with
respect to acquisition or disposition) of any Plan asset under its
control;
(j) To establish, in its sole discretion, a nondiscriminatory policy
(see Section 9.04(A)) which the Trustee must observe in making loans,
if any, to Participants and Beneficiaries; and
(k) To establish and maintain a funding standard account and to make
credits and charges to the account to the extent required by and in
accordance with the provisions of the Code.
The Advisory Committee must exercise all of its powers, duties and
discretion under the Plan in a uniform and nondiscriminatory manner.
(A) Loan Policy. If the Advisory Committee adopts a loan policy, pursuant to
paragraph (j), the loan policy must be a written document and must include: (1)
the identity of the person or positions authorized to administer the participant
loan program; (2) a procedure for applying for the loan; (3) the criteria for
approving or denying a loan; (4) the limitations, if any, on the types and
amounts of loans available; (5) the procedure for determining a reasonable rate
of interest; (6) the types of collateral which may secure the loan; and (7) the
events constituting default and the steps the Plan will take to preserve plan
assets in the event of default. This Section 9.04 specifically incorporates a
written loan policy as part of the Employer's Plan.
9.05 FUNDING POLICY. The Advisory Committee will review, not less often
than annually, all pertinent Employee information and Plan data in order to
establish the funding policy of the Plan and to determine the appropriate
methods of carrying out the Plan's objective. The Advisory Committee must
communicate periodically, as it deems appropriate, to the Trustee and to any
Plan Investment Manger the Plan's short-term and long-term financial needs so
investment policy can be coordinated with Plan financial requirements.
9.06 MANNER OF ACTION. The decision of a majority of the members appointed
and qualified controls.
9.07 AUTHORIZED REPRESENTATIVE. The Advisory Committee may authorize any
one of its members, or its Secretary, to sign on its behalf any notices,
directions, applications,
54.
certificates, consents, approvals, waivers, letters or other documents. The
Advisory Committee must evidence this authority by an instrument signed by all
members and filed with the Trustee.
9.08 INTERESTED MEMBER. No member of the Advisory Committee may decide
or determine any matter concerning the distribution, nature or method of
settlement of his own benefits under the Plan, except in exercising an election
available to that member in his capacity as a participant, unless the Plan
Administrator is acting alone in the capacity of the Advisory Committee.
9.09 INDIVIDUAL ACCOUNTS. The Advisory Committee will maintain, or
direct the Trustee to maintain, a separate Account, or multiple Accounts, in the
name of each Participant to reflect the Participant's Accrued Benefit under the
Plan, If a Participant re-enters the Plan subsequent to his having a Forfeiture
Break in Service, the Advisory Committee, or the Trustee, must maintain a
separate Account for the Participant's pre-Forfeiture Break in Service Accrued
Benefit and a separate Account for his post-Forfeiture Break in Service Accrued
Benefit, unless the Participant's entire Accrued Benefit under the Plan is 100%
Nonforfeitable.
The Advisory Committee will make its allocations, or request the
Trustee to make its allocations, to the Accounts of the Participants in
accordance with the provisions of Section 9.11. The Advisory Committee may
direct the Trustee to maintain a temporary segregated investment Account in the
name of a Participant to prevent a distortion of income, gain or loss
allocations under Section 9.11. The Advisory Committee must maintain records of
its activities.
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. The value of each
Participant's Accrued Benefit consists of that proportion of the net worth (at
fair market value) of the Employer's Trust Fund which the net credit balance in
his Account (exclusive of the cash value of incidental benefit insurance
contracts) bears to the total net credit balance in the Accounts (exclusive of
the cash value of the incidental benefit insurance contracts) of all
Participants plus the cash surrender value of any incidental benefit insurance
contracts held by the Trustee on the Participant's life.
For purposes of a distribution under the Plan, the value of a
Participant's Accrued Benefit is its value as of the valuation date immediately
preceding the date of the distribution. Any distribution (other than a
distribution from a segregated Account) made to a Participant (or to his
Beneficiary) more than 90 days after the most recent valuation date may include
interest on the amount of the distribution as an expense of the Trust Fund. The
interest, if any, accrues from such valuation date to the date of the
distribution at the rate established in the Employer's Adoption Agreement.
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN. A "valuation date"
under this Plan is each Accounting Date and each interim valuation date
determined under Section 10.14. As of each date the Advisory Committee must
adjust Accounts to reflect net
55.
income, gain or loss since the last valuation date. The valuation period is the
period beginning the day after the last valuation date and ending on the current
valuation date.
(A) Trust Fund Accounts. The allocation provisions of this paragraph apply to
all Participant Accounts other than segregated investment Accounts. The Advisory
Committee first will adjust the Participant Accounts, as those Accounts stood at
the beginning of the current valuation period, by reducing the Accounts for any
forfeitures arising under Section 5.09 or under Section 9.14, for amounts
charged during the valuation period to the Accounts in accordance with Section
9.13 (relating to distributions) and Section 11.01 (relating to insurance
premiums), and for the cash value of incidental benefit insurance contracts. The
Advisory Committee then, subject to the restoration allocation requirements of
Section 5.04 or of Section 9.14, will allocate the net income, gain or loss is
the net income (or net loss), including the increase or decrease in the fair
market value of assets, since the last valuation date.
(B) Segregated Investment Accounts. A segregated investment Account receives all
income it earns and bears all expense or loss it incurs. The Advisory Committee
will adopt uniform and nondiscriminatory procedures for determining income or
loss of a segregated investment Account in a manner which reasonably reflects
investment directions relating to pooled investments and investment directions
occurring during a valuation period. As of the valuation date, the Advisory
Committee must reduce a segregated Account for any forfeiture arising under
Section 5.09 after the Advisory Committee has made all other allocations,
changes or adjustments to the Account for the Plan Year.
(C) Additional rules. An Excess Amount or suspense account described in Part 2
of Article III does not share in the allocation of net income, gain or loss
described in Section 9.11. If the Employer maintains its Plan under a Code
ss.401(k) Adoption Agreement, the Employer may specify in its Adoption Agreement
alternate valuation provisions authorized by that Adoption Agreement. This
Section 9.11 applies solely to the allocation of net income, gain or loss of the
Trust. The Advisory Committee will allocate the Employer contributions and
Participant forfeitures, if any, in accordance with Article III.
9.12 INDIVIDUAL STATEMENT. As soon as practicable after the Accounting
Date of each Plan Year, but within the time prescribed by ERISA and the
regulations under ERISA, the Plan Administrator will deliver to each Participant
(and to each Beneficiary) a statement reflecting the condition of his Accrued
Benefit in the Trust as of that date and such other information ERISA required
may be furnished the Participant or Beneficiary. No Participant, except a member
of the Advisory Committee, has the right to inspect the records reflecting the
Account of any other Participant.
9.13 ACCOUNT CHARGED. The Advisory Committee will charge a Participant's
Account for all distributions made from that Account to the Participant, to his
Beneficiary or to
56.
an alternate payee. The Advisory Committee also will charge a Participant's
Account for any administrative expenses incurred by the Plan directly related to
that Account.
9.14 UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require either the
Trustee or the Advisory Committee to search for, or to ascertain the whereabouts
of, any Participant of Beneficiary. At the time the Participant's or
Beneficiary's benefit becomes distributable under Article VI, the Advisory
Committee, by certified or registered mail addressed to his last known address
of record with the Advisory Committee or the Employer, must notify any
Participant, or Beneficiary, that he is entitled to a distribution under this
Plan. The notice must quote the provisions of this Section 9.14 and otherwise
must comply with the notice requirements of Article VI. If the Participant, or
Beneficiary, fails to claim his distributive share or make his whereabouts known
in writing to the Advisory Committee within 6 months from the date of mailing of
the notice, the Advisory Committee will treat the Participant's or Beneficiary's
unclaimed payable Accrued Benefit as forfeited and will reallocate the unclaimed
payable Accrued Benefit in accordance with Section 3.05. A forfeiture under this
paragraph will occur at the end of the notice period or, if later, the earliest
date applicable Treasury regulations would permit the forfeiture. Pending
forfeiture, the Advisory Committee, following the expiration of the notice
period, may direct the Trustee to segregate the Nonforfeitable Accrued Benefit
in a segregated Account and to invest that segregated Account in Federally
insured interest bearing savings accounts or time deposits (or in a combination
of both), or in other fixed income investments.
If a Participant or Beneficiary who has incurred a forfeiture of his
Accrued Benefit under the provisions of the first paragraph of this Section 9.14
makes a claim, at any time, for his forfeited Accrued Benefit, the Advisory
Committee must restore the Participant's or Beneficiary's forfeited Accrued
Benefit to the same dollar amount as the dollar amount of the Accrued Benefit
forfeited, unadjusted for any gains or losses occurring subsequent to the date
of the forfeiture. The Advisory Committee will make the restoration during the
Plan Year in which the Participant or Beneficiary makes the claim, first from
the amount, if any, of Participant forfeitures the Advisory Committee otherwise
would allocate for the Plan Year, then from the amount, if any, of the Trust
Fund net income or gain for the Plan Year and then from the amount, or
additional amount, the Employer contributes to enable the Advisory Committee to
make the required restoration. The Advisory Committee must direct the Trustee to
distribute the Participant's or Beneficiary's restored Accrued Benefit to him
not later than 60 days after the close of the Plan Year in which the Advisory
Committee restores the forfeited Accrued Benefit. The forfeiture provisions of
this Section 9.14 apply solely to the Participant's or to the Beneficiary's
Accrued Benefit derived from Employer contributions.
ARTICLE X
TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
57.
10.01 ACCEPTANCE. The Trustee accepts the Trust created under the Plan
and agrees to perform the obligations imposed. The Trustee must provide bond for
the faithful performance of its duties under the Trust to the extent required by
ERISA.
10.02 RECEIPT-OF CONTRIBUTIONS. The Trustee is accountable to the
Employer for the funds contributed to it by the Employer, but does not have any
duty to see that the contributions received comply with the provisions of the
Plan. Trustee is not obliged to collect any contributions from the Employer, nor
is obliged to see that funds deposited with it are deposited according to the
provisions of the Plan.
10.03 INVESTMENT POWERS.
(A) Discretionary Trustee Designation. If the Employer, in Adoption Agreement
Section 1.02, designates the Trustee to administer the Trust as a discretionary
Trustee, then the Trustee has full discretion and authority with regard to the
investment of the Trust Fund, except with respect to a Plan asset under the
control or direction of a properly appointed Investment Manager or with respect
to a Plan asset properly subject to Employer, Participant or Advisory Committee
direction of investment. The Trustee must coordinate its investment policy with
Plan financial needs as communicated to it by the Advisory Committee. The
Trustee is authorized and empowered, but not by way of limitation, with the
following powers, rights and duties:
(a) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds (including mutual
funds established and maintained as collective investment funds for
trust accounts by the Trustee or its affiliate), put and call options
traded on a national exchange, United States retirement plan bonds,
corporate bonds, debentures, convertible debentures, commercial paper,
U.S. Treasury Bills U.S. Treasury notes and other direct or indirect
obligations of the United States Government or its agencies, improved
or unimproved real estate situated in the United States, limited
partnerships, insurance contracts of any type, mortgages, notes,
including but not limited to master notes, or other property of any
kind, real or personal or mixed, whether tangible or intangible or
productive of income, to buy or sell options on common stock on a
nationally recognized exchange with or without holding the underlying
common stock, to buy and sell commodities, commodity options and
contracts for the future delivery of commodities, and to make any other
investments the Trustee deems appropriate, as a prudent man would do
under like circumstances with due regard for the purposes of this Plan.
Any investment made or retained by the Trustee in good faith is proper
but must be of a kind constituting a diversification considered by law
suitable for trust investments.
(b) To retain in cash so much of the Trust Fund as it may deem
advisable to satisfy the liquidity needs of the Plan and to deposit any
cash held in the Trust fund in a bank account at reasonable interest
and to hold uninvested at any time, without liability for interest
thereon for a reasonable period of time, any amount of money received
by the Trustee or raised by
58.
the Trustee from the sale of investments or otherwise until same can
be reinvested or disbursed.
(c) To invest, if the Trustee is a bank or similar financial
institution supervised by the United States or by a State, in any type
of deposit of the Trustee (or of a bank related to the Trustee within
the meaning of Code ss.414(b)) at a reasonable rate of interest or in a
common trust fund, as described in Code ss.584, or in a collective
investment fund, the provisions of which govern the investment of such
assets and which the Plan incorporates by this reference, which the
Trustee (or its affiliate, as defined in Code ss.1504) maintains
exclusively for the collective investment of money contributed by the
bank (or the affiliate) in its capacity as trustee and which conforms
to the rules of the Comptroller of the Currency.
(d) To manage, sell, contract to sell, grant options to purchase,
convey, exchange, transfer, abandon, improve, repair, insure, lease for
any term even though commencing in the future or extending beyond the
term of the Trust, and otherwise deal with all property, real or
personal, in such manner, for such considerations and on such terms and
conditions as the Trustee decides.
(e) To credit and distribute the Trust as directed by the Advisory
Committee. The Trustee is not obliged to inquire as to whether any
payee or distributee is entitled to any payment or whether the
distribution is proper or within the terms of the Plan, or as to the
manner of making any payment or distribution. The Trustee is
accountable only to the Advisory Committee for any payment or
distribution made by it in good faith on the order or direction of the
Advisory Committee.
(f) To borrow money, to assume indebtedness, extend mortgages and
encumber by mortgage or pledge.
(g) To compromise, contest, arbitrate or abandon claims and demands,
in its discretion.
(h) To have with respect to the Trust all of the rights of an
individual owner, including the power to give proxies, to participate
in any voting trusts, mergers, consolidations or liquidations, and to
exercise or sell stock subscriptions or conversion rights.
(i) To lease for oil, gas and other mineral purposes and to create
mineral severances by grant or reservation; to pool or unitize
interests in oil, gas and other minerals; and to enter into operating
agreements and to execute division and transfer orders.
(j) To hold any securities or other property in the name of the Trustee
or its nominee, with depositories or agent depositories, in Federal
Reserve Book-Entry or bearer form or in another form as it may deem
best without disclosing the relationship.
59.
(k) To perform any and all other acts in its judgment necessary or
appropriate for the proper and advantageous management, investment and
distribution of the Trust.
(1) To retain any funds or property subject to any dispute without
liability for the payment of interest and to decline to make payment or
delivery of the funds or property until final adjudication is made by a
court of competent jurisdiction.
(m) To file all tax returns required of the Trustee.
(n) To furnish to the Employer, the Plan Administrator and the Advisory
Committee an annual statement of account showing the condition of the
Trust Fund and all investments, receipts, disbursements and other
transactions effected by the Trustee during the Plan Year covered by
the statement and also stating the assets of the Trust held at the end
of the Plan Year, which accounts are conclusive on all persons,
including the Employer, the Plan Administrator and the Advisory
Committee, except as to any act or transaction concerning which the
Employer, the Plan Administrator or the Advisory Committee files with
the Trustee written exceptions or objections within 90 days after the
receipt of the accounts or for which ERISA authorizes a longer period
within which to object. Nothing herein contained shall impair the right
of the Trustee to a judicial settlement, in any state or federal court
of competent jurisdiction, of any account including the final
accounting, rendered by the Trustee.
(o) To begin, maintain or defend any litigation necessary in connection
with the administration of the Plan, except that the Trustee is not
obliged or required to do so unless indemnified to its satisfaction.
(p) To invest any of the funds of the Trust into the Retirement
Investment Trust, or any other open-end, diversified, management
investment company that is specified in an addendum to the Employer's
Adoption Agreement and that offers collective investment funds for
retirement accounts as to which Texas Commerce Bank National
Association or any affiliated bank serves as a trustee.
(q) To exercise all the rights, powers, options and privileges now or
hereafter granted to trustees under applicable state law (as defined in
Section 12.07), except such as conflict with the terms of the Plan or
ERISA. The Trustee shall have, hold, manage, control, use, invest and
reinvest, disburse and dispose of the Trust Fund as if the Trustee were
the owner thereof in fee simple instead of in trust, subject only to
such limitations as are required under applicable state law (as defined
in Section 12.07) that cannot be waived, and subject to ERISA.
(B) Nondiscretionary Trustee Designation/Appointment of Custodian. If the
Employer, in its Adoption Agreement Section 1.02, designates the Trustee to
administer the Trust as -a nondiscretionary Trustee, then the Trustee will not
have any discretion or authority with regard to the investment of the Trust
Fund, but must act solely as a directed trustee of the funs contributed to
60.
it. A nondiscretionary Trustee, as directed trustee of the funds held by it
under the Employer's Plan, is authorized and empowered, by way of limitation,
with the following powers, rights and duties, each of which the nondiscretionary
Trustee exercises solely as directed trustee in accordance with the written
direction of the Named Fiduciary (except to the extent a Plan asset is subject
to the control and management of a properly appointed Investment Manager or
subject to Advisory Committee or Participant direction of investment):
(a) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds (including mutual
funds established and maintained as collective investment funds for
trust accounts by the Trustee or its affiliate), put and call options
traded on a national exchange, United States retirement plan bonds,
corporate bonds, debentures, convertible debentures, commercial paper,
U.S. Treasury Bills, U.S. Treasury notes and other direct or indirect
obligations of the United States Government or its agencies, improved
or unimproved real estate situated in the United States limited
partnerships, insurance contracts of any type, mortgages, notes,
including or not limited to master notes, or other property of any
kind, real or personal or mixed, whether tangible or intangible or
productive of income, to buy or sell options on common stock on a
nationally recognized exchange with or without holding the underlying
common stock, to buy and sell commodities, commodity options and
contracts for the future delivery of commodities, and to make any other
investments the Named Fiduciary deems appropriate.
(b) To retain in cash so much of the Trust Fund as the Named Fiduciary
may direct in writing to satisfy liquidity needs of the Plan and to
deposit any cash held in the Trust Fund in a bank account at reasonable
interest, including, specific authority to invest in any type of
deposit of the Trustee (or of a bank related to the Trustee within the
meaning of Code Section 414(b) at reasonable interest and to hold
uninvested at any time as directed by the Named Fiduciary, without
liability for interest thereon for a reasonable period of time, any
amount of money received by the Trustee or raised by the Trustee from
the sale of investments or otherwise until same can be reinvested or
disbursed.
(c) To sell, contract to sell, grant options to purchase, convey,
exchange, transfer, abandon, improve, repair, insure, lease for any
term even though commencing in the future or extending beyond the term
of the Trust, and otherwise deal with all property, real or personal in
such manner, for such considerations and on such terms and conditions
as the Named Fiduciary directs in writing.
(d) To credit and distribute the Trust as directed by the Advisory
Committee. The Trustee is not obliged to inquire as to whether any
payee or distributee is entitled to any payment or whether the
distribution is proper or within the terms of the Plan or as to the
manner of making any payment or distribution. The Trustee is
accountable only to the Advisory Committee for any payment or
distribution made by it in good faith on the order or direction of the
Advisory Committee.
61.
(e) To borrow -money, to assume indebtedness, extend mortgages and
encumber by mortgage or pledge.
(f) To have with respect to the Trust all of the rights of an
individual owner, including the power to give proxies, to participate
in any voting trusts, mergers, consolidations or liquidations, and to
exercise or sell stock subscriptions or conversion rights, provided the
exercise of any such powers is in accordance with and at the written
direction of the Named Fiduciary.
(g) To lease for oil, gas and other mineral purposes and to create
mineral severances by grant or reservation; to pool or unitize
interests in oil, gas and other minerals; and to enter into operating
agreements and to execute division and transfer orders, provided the
exercise of any such powers is in accordance with and at the written
direction of the Named Fiduciary.
(h) To hold any securities or other property in the name of the
nondiscretionary Trustee or its nominee, with depositories or agent
depositories, in Federal Reserve Book-Entry or bearer form or in
another form as the Named Fiduciary may deem best, with or without
disclosing the custodial relationship.
(i) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make payment
or delivery of the funds or property until a court of competent
jurisdiction makes final adjudication.
(j) To file all tax returns required of the Trustee.
(k) To furnish to the Named Fiduciary, the Employer, the Plan
Administrator and the Advisory Committee an annual statement of account
showing the condition of the Trust Fund and all investments, receipts,
disbursements and other transactions effected by the nondiscretionary
Trustee during the Plan Year covered by the statement and also stating
the assets of the Trust held at the end of the Plan Year, which
accounts are conclusive on all persons, including the Named Fiduciary,
the Employer, the Plan Administrator and the Advisory Committee, except
as to any act or transaction concerning which the Named Fiduciary, the
Employer, the Plan Administrator or the Advisory Committee files with
the nondiscretionary Trustee written exceptions or objections within 90
days after the receipt of the accounts or for which ERISA authorizes a
longer period within which to object. Nothing herein contained shall
impair the right of the nondiscretionary Trustee to a judicial
settlement, in any state or federal court of competent jurisdiction, of
any account including the final accounting, rendered by the
nondiscretionary Trustee.
(l) To begin, maintain or defend any litigation necessary in connection
with the administration of the Plan, except that the Trustee is not
obliged or required to do so unless indemnified to its satisfaction.
62.
(m) To exercise all the rights, powers, options and privileges now or
hereafter granted to trustees under applicable state law (as defined in
Section 12.07), except such as conflict with the terms of the Plan or
ERISA. The Trustee shall have, hold, manage, control, use, invest and
reinvest, disburse and dispose of the Trust Fund as if the Trustee were
the owner thereof in fee simple instead of in trust, subject only to
such limitations as are required under applicable state law (as defined
in Section 12.07) that cannot be waived, and subject to ERISA.
(n) To invest any of the funds of the Trust into the Retirement
Investment Trust, or any other open-end, diversified, management
investment company that is specified in an addendum to the Employer's
Adoption Agreement and that offers collective investment funds for
retirement accounts as to which Texas Commerce Bank National
Association or any affiliated bank serves as a trustee.
Appointment of Custodian. The Employer may appoint a Custodian under
the Plan, the acceptance by the Custodian indicated on the execution page of the
Employer's Adoption Agreement. If the Employer appoints a Custodian, the
Employer's Plan must have a discretionary Trustee, as described in Section
10.03(A). A Custodian has the same powers, rights and duties as a
nondiscretionary Trustee, as described in this Section 10.03(B). The Custodian
accepts the terms of the Plan and Trust by executing the Employer's Adoption
Agreement. Any reference in the Plan to a Trustee also is a reference to a
Custodian where the context of the Plan dictates. A limitation of the Trustee's
liability by Plan provision also acts as a limitation of the Custodian's
liability. Any action taken by the Custodian at the discretionary Trustee's
direction satisfies any provision in the Plan referring to the Trustee's taking
that action.
Modification of Powers/Limited Responsibility. The Employer and the
Custodian or nondiscretionary Trustee, by letter agreement, may limit the powers
of the Custodian or nondiscretionary Trustee to any combination of powers listed
within this Section 10.03(B). If there is a Custodian or a nondiscretionary
Trustee under the Employer's Plan, then the Employer, in adopting this Plan
acknowledges the Custodian or nondiscretionary Trustee has no discretion with
respect to the investment or re-investment of the Trust Fund and that the
Custodian or nondiscretionary Trustee is acting solely as custodian or as
directed trustee with respect to the assets comprising the Trust Fund.
(C) Limitation of Powers of Certain Custodians. If a Custodian is a bank which,
under its governing state law, does not possess trust powers, then paragraphs
(a), (c), (e), (f), (g) of Section 10.03(B), Section 10.16 and Article XI do not
apply to that bank and that bank only has the power and authority to exercise
the remaining powers, rights and duties under Section 10.03(B).
(D) Named Fiduciary/Limitation of Liability of Nondiscretionary Trustee or
Custodian. Under a nondiscretionary Trustee designation, the Named Fiduciary
under the Employer's Plan has the sole responsibility for the management and
control of the Employer's Trust Fund, except with respect to a Plan asset under
the control or direction of a properly appointed Investment Manager
63.
or with respect to a Plan asset properly subject to participant or Advisory
Committee direction of investment. If the Employer appoints a Custodian, the
Named Fiduciary is the discretionary Trustee. Under a nondiscretionary Trustee
designation, unless the Employer designates in writing another person or persons
to serve as Named Fiduciary, the Named Fiduciary under the Plan is the president
of a corporate Employer, the managing partner of a partnership Employer or the
sole proprietor, as appropriate. The Named Fiduciary will exercise its
management and control of the Trust Fund through its written direction to the
nondiscretionary Trustee or to the Custodian, whichever applies to the
Employer's Plan.
The nondiscretionary Trustee or Custodian has no duty to review or to
make recommendations regarding investments made at the written direction of the,
Named Fiduciary. The nondiscretionary Trustee or Custodian must retain any
investment obtained at the written direction of the Named Fiduciary until
further directed in writing by the Named Fiduciary to dispose of such
investment. The nondiscretionary Trustee or Custodian is not liable in any
manner or for any reason for making, retaining or disposing of any investment
pursuant to any written direction described in this paragraph. Furthermore, the
Employer agrees to indemnify and to hold the nondiscretionary Trustee or
Custodian harmless from any damages, costs or expenses, including reasonable
counsel fees, which the nondiscretionary Trustee or Custodian may incur as a
result of any claim asserted against the nondiscretionary Trustee, the Custodian
or the Trust arising out of the nondiscretionary Trustee's or Custodian's
compliance with any written direction described in this paragraph.
(E) Participant Loans. This Section 10.03(E) specifically authorizes the Trustee
to make loans on a nondiscriminatory basis to a Participant or to a Beneficiary
in accordance with the loan policy established by the Advisory Committee,
provided: (1) the loan policy satisfies the requirements of Section 9.04; (2)
loans are available to all Participants and Beneficiaries on a reasonably
equivalent basis and are not available in a greater amount for Highly
Compensated Employees than for other Employees; (3) any loan is adequately
secured and bears a reasonable rate of interest; (4) the loan provides for
repayment within a-specified time; (5) the default provisions of the note
prohibit offset of the Participant's Nonforfeitable Accrued Benefit prior to the
time the Trustee otherwise would distribute the Participant's Nonforfeitable
Accrued Benefit; (6) the amount of the loan does not exceed (at the time the
Plan extends the loan) the present value of the Participant's Nonforfeitable
Accrued Benefit; and (7) the loan otherwise conforms to the exemption provided
by Code ss.4975(d)(1). If the joint and survivor requirements of Article VI
apply to the Participant, the Participant may not Pledge any portion of his
Accrued Benefit as security for a loan made after August 18, 1985, unless,
within the 90 day period ending on the date the pledge becomes effective, the
Participant's spouse, if any, consents (in a manner described in Section 6.05
other than the requirement relating to the consent of a subsequent spouse) to
the security or, by separate consent, to an increase in the amount of security.
If the Employer is an unincorporated trade or business, a Participant who is an
Owner-Employee may not receive a loan from the Plan, unless he has obtained a
prohibited transaction exemption from the Department of Labor. If the Employer
is an "S Corporation," a Participant who is a shareholder-employee (an employee
or an officer) who, at any time during the Employer's taxable year, owns more
than 5%, either directly or by attribution under Code ss.318(a)(1), of the
Employer's outstanding stock may not receive a loan from the Plan, unless
64.
he has obtained a prohibited transaction exemption from the Department of Labor.
If the Employer is not an unincorporated trade or business nor an "S
Corporation," this Section 10.03(E) does not impose any restrictions on the
class of Participants eligible for a loan from the Plan.
(F) Investment in qualifying Employer securities and qualifying Employer real
property. The investment options in this Section 10.03(F) include the -ability
to invest in qualifying-Employer securities or qualifying Employer real
property, as defined in and as limited by ERISA. If the Employer's Plan is a
Nonstandardized profit sharing plan, it may elect in its Adoption Agreement to
permit the aggregate investments in qualifying Employer securities and in
qualifying Employer real property to exceed 10% of the value of Plan assets.
Unless the qualifying Employer Securities are readily traded on an established
securities market, the Named Fiduciary shall obtain from an "independent
appraiser," within the meaning of Section 401(a)(28)(C) of the Code, an annual
appraisal of such qualified Employer Securities with respect to activities
carried on by the Plan. A copy of such independent appraisal shall be attached
to this Agreement each year.
10.04 RECORDS AND STATEMENTS. The records of the Trustee pertaining to
the Plan must be open to the inspection of the Plan Administrator, the Advisory
Committee and the Employer at all reasonable times and may be audited from time
to time by any person or persons as the Employer, Plan Administrator or Advisory
Committee may specify in writing. The Trustee must furnish the Plan
Administrator or Advisory Committee with whatever information relating to the
Trust Fund the Plan Administrator or Advisory Committee considers necessary.
10.05 FEES AND EXPENSES FROM FUND. A Trustee or Custodian will receive
reasonable annual compensation as may be agreed upon from time to time between
the Employer and the Trustee or Custodian. No person who is receiving full pay
from the Employer may receive compensation for services as Trustee or as
Custodian. The Trustee will pay from the Trust Fund all fees and expenses
reasonably incurred by the Plan, to the extent such fees and expenses are for
the ordinary and necessary administration and operation of the Plan, unless the
Employer pays such fees and expenses. Any fee or expense paid directly or
indirectly, by the Employer is not an Employer contribution to the Plan,
provided the fee or expense relates to the ordinary and necessary administration
of the Fund. If all or a portion of the Trust is invested by the Trustee in the
Retirement Investment Trust, then funds from the Trust that are so invested
shall be subject to the compensation and expenses that are set forth in the
then-effective Prospectus of the Retirement Investment trust, which will be
provided to the Employer when funds from the Trust are so invested. The
provisions of this Section 10.05 shall equally apply to any other open-end,
diversified management company described in Section 10.03(A)(p).
10.06 PARTIES TO LITIGATION. Except as otherwise provided by ERISA, no
Participant or Beneficiary is a necessary party or is required to receive notice
of process in any court proceeding involving the Plan, the Trust Fund or any
fiduciary of the Plan. Any final judgment entered in any proceeding will be
conclusive upon the Employer, the Plan Administrator, the Advisory Committee,
the Trustee, Custodian, Participants and Beneficiaries.
65.
10.07 PROFESSIONAL -AGENTS. The Trustee may employ and pay from the
Trust Fund reasonable compensation to agents, attorneys, accountants and other
persons to advise the Trustee as in its opinion may be necessary. The Trustee
may delegate to any agent, attorney, accountant or other person selected by it
any non-Trustee power or duty vested in it by the Plan, and the Trustee may act
or refrain from acting on the advice or opinion of any agent, attorney,
accountant or other person so selected.
10.08 DISTRIBUTION OF CASH OR PROPERTY. The Trustee may make
distribution under the Plan in cash or property, or partly in each, at its fair
market value as determined by the Trustee. For purposes of a distribution to a
Participant or to a Participant's designated Beneficiary or surviving spouse,
"property" includes a Nontransferable Annuity Contract, provided the contract
satisfies the requirements of this Plan.
10.09 DISTRIBUTION DIRECTIONS. If no one claims a payment or
distribution made from the Trust, the Trustee must promptly notify the Advisory
Committee and then dispose of the payment in accordance with the subsequent
direction of the Advisory Committee.
10.10 THIRD PARTY/MULTIPLE TRUSTEES. No person dealing with the Trustee
is obligated to see to the proper application of any money paid or property
delivered to the Trustee, or to inquire whether the trustee has acted pursuant
to any of the terms of the Plan. Each person dealing with the Trustee may act
upon any notice, request or representation in writing by the Trustee, or by the
Trustee's duly authorized agent, and is not liable to any person in so acting.
The certificate of the Trustee that it is acting in accordance with the Plan
will be conclusive in favor of any person relying on the certificate. If more
than two persons act as Trustee, a decision of the majority of such persons
controls with respect to any decision regarding the administration or investment
of the Trust Fund or of any portion of the Trust Fund with respect to which such
persons act as Trustee. However, the signature of only one Trustee is necessary
to effect any transaction on behalf of the Trust.
10.11 RESIGNATION. The Trustee or Custodian may resign its position at
any time by giving 30 days' written notice in advance to the Employer and to the
Advisory Committee. If the Employer fails to appoint a successor Trustee within
60 days of its receipt of the Trustee's written notice of resignation, the
Trustee will treat the Employer as having appointed itself as Trustee and as
having filed its acceptance of appointment with the former Trustee. The
Employer, in its sole discretion, may replace a Custodian. If the Employer does
not replace a Custodian, the discretionary Trustee will assume possession of
Plan assets held by the former Custodian.
10.12 REMOVAL. The Employer, by giving 30 days' written notice in
advance to the Trustee, may remove any Trustee or Custodian. In the event of the
resignation or removal of a Trustee, the Employer must appoint a successor
Trustee if it intends to continue the Plan. If two-or more persons hold the
position of Trustee, in the event of the removal of one such person, during any
period the selection of a replacement is pending, or during any period such
person is unable to serve for any reason, the remaining person or persons will
act as the Trustee.
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10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE. Each successor Trustee
succeeds to the title to the Trust vested in his predecessor by accepting in
writing his appointment as successor Trustee and by filing the acceptance with
the former Trustee and the Advisory Committee without the signing or filing of
any further statement. The resigning or removed Trustee, upon receipt of
acceptance in writing of the Trust by the successor Trustee, must execute all
documents and do all acts necessary to vest the title of record in any successor
Trustee. Each successor Trustee has and enjoys all of the powers, both
discretionary and ministerial, conferred under this Agreement upon his
predecessor. A successor Trustee is not personally liable for any act or failure
to act of any predecessor Trustee, except as required under ERISA. With the
approval of the Employer and the Advisory Committee, a successor Trustee, with
respect to the Plan, may accept the account rendered and the property delivered
to it by a predecessor Trustee without incurring any liability or responsibility
for so doing.
10. 14 VALUATION OF TRUST. The Trustee must value the Trust Fund as of
each Accounting Date to determine the fair market value of each Participant's
Accrued Benefit in the Trust. The Trustee also must value the Trust Fund on such
other valuation dates as directed in writing by the Advisory Committee or as
required by the Employer's Adoption Agreement.
10.15 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER, ANCILLARY
TRUSTEE OR INDEPENDENT FIDUCIARY APPOINTED. The Trustee is not liable for the
acts or omissions of any Investment Manager the Advisory Committee may appoint,
nor is the Trustee under any obligation to invest or otherwise manage any asset
of the Plan which is subject to the management of a properly appointed
Investment Manager. The Advisory Committee, the Trustee and any properly
appointed Investment Manager may execute a letter agreement as a part of this
Plan delineating the duties, responsibilities and liabilities of the Investment
Manager with respect to any part of the Trust Fund under the control of the
Investment Manager.
The limitation on liability described in this Section 10.15 also
applies to the acts or omissions of any ancillary trustee or independent
fiduciary properly appointed under Section 10.17 of the Plan. However, if a
discretionary Trustee, pursuant to the delegation described in Section 10.17 of
the Plan, appoints an ancillary trustee, the discretionary Trustee is
responsible for the periodic review of the ancillary trustee's actions and must
exercise its delegated authority in accordance with the terms of the Plan and in
a manner consistent with ERISA. The Employer, the discretionary Trustee and an
ancillary trustee may execute a letter agreement as a part of this Plan
delineating any indemnification agreement between the parties.
10.16 INVESTMENT IN GROUP TRUST FUND. The Employer, by adopting this
Plan, specifically authorizes the Trustee to invest all or any portion of the
assets comprising the Trust Fund in any group trust fund which at the time of
the investment provides for the pooling of the assets of plans qualified under
Code ss.401(a). This authorization applies solely to a group trust fund exempt
from taxation under Code ss.501(a) and the trust agreement of which satisfies
the requirements of Revenue Ruling 81-100. The provisions of the group trust
fund agreement, as amended from time to time, are by this reference incorporated
within this Plan and Trust. The provisions of the group
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trust fund will govern any investment of Plan assets in that fund. The Employer
must specify in an attachment to its adoption agreement the group trust fund(s)
to which this authorization applies. If the Trustee is acting as a
nondiscretionary Trustee, the investment in the group trust fund is available
only in accordance with a proper direction, by the Named Fiduciary, in
accordance with Section 10.03(B). Pursuant to paragraph (c) of Section 10.03(A)
of the Plan, a Trustee has the authority to invest in certain common trust funds
and collective investment funds without the need for the authorizing addendum
described in this Section 10.16.
Furthermore, at the Employer's direction, the Trustee, for collective
investment purposes, may combine into one trust fund the Trust created under
this Plan with the Trust created under any other qualified retirement. plan the
Employer maintains. However, the Trustee must maintain separate records of
account for the assets of each Trust in order to reflect properly each
Participant's Accrued Benefit under the plan(s) in which he is a Participant.
10.17 APPOINTMENT OF ANCILLARY TRUSTEE-OR INDEPENDENT FIDUCIARY.
The Employer, in writing, may appoint any person in any State to act as
ancillary trustee with respect to a designated portion of the Trust Fund,
subject to the consent required under Section 1.02 if the Master Plan Sponsor is
a financial institution. An ancillary trustee must acknowledge in writing its
acceptance of the terms and conditions of its appointment as ancillary trustee
and its fiduciary status under ERISA. The ancillary trustee has the rights,
powers, duties and discretion as the Employer may delegate, subject to any
limitations or directions specified in the instrument evidencing appointment of
the ancillary trustee and to the terms of the Plan or of ERISA. The investment
powers delegated to the ancillary trustee may include any investment powers
available under Section 10.03 of the Plan including the right to invest any
portion of the assets of the Trust Fund in a common trust fund, as described in
Code ss.584, or in any collective investment fund, the provisions of which
govern the investment of such assets and which the Plan incorporates by this
reference, but only if the ancillary trustee is a bank or similar financial
institution supervised by the United States or by a State and the ancillary
trustee (or its affiliate, as defined in Code ss.1504) maintains the common
trust fund or collective investment fund exclusively for the collective
investment of money contributed by the ancillary trustee (or its affiliate) in a
trustee capacity and which conforms to the rules of the Comptroller of the
Currency. The Employer also may appoint as an ancillary trustee, the trustee of
any group trust fund designated for investment pursuant to the provisions of
Section 10.16 of the Plan.
The ancillary trustee may resign its position at any time by providing
at least 30 days' advance written notice to the Employer, unless the Employer
waives this notice requirement. The Employer, in writing, may remove an
ancillary trustee at any time. In the event of resignation or removal, the
Employer may appoint another ancillary trustee, return the assets to the control
and management of the Trustee or receive such assets in the capacity of
ancillary trustee. The Employer may delegate its responsibilities under this
Section 10.17 to a discretionary Trustee under the Plan, but not to a
nondiscretionary Trustee or to a Custodian, subject to the acceptance by the
discretionary Trustee of that delegation.
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If the US. Department of Labor ("the Department") requires engagement
of an independent fiduciary to have control or management of all or a portion of
the Trust Fund, the Employer will appoint such independent fiduciary, as
directed by the Department. The independent fiduciary will have the duties,
responsibilities and powers prescribed by the Department and will exercise those
duties, responsibilities and powers in accordance with the terms, restrictions
and conditions established by the Department and, to the extent not inconsistent
with ERISA, the terms of the Plan. The independent fiduciary must accept its
appointment in writing and must acknowledge its status as a fiduciary of the
Plan.
10.18 EVIDENCE OF ACTION BY ADVISORY COMMITTEE. Any action to be taken
or any direction to be given by the Advisory Committee shall be taken or given
by written instrument signed on behalf of the Advisory Committee by the person
or persons designated by the Advisory Committee to give notification,
instructions or advice to the Trustee, as the case may be. The chairman of the
Advisory Committee shall certify to the Trustee the name or names of any person
or persons designated to give notifications, instructions or advice to the
Trustee. Until the Advisory Committee notifies the Trustee that any such person
is no longer authorized to act for the Advisory Committee, the Trustee may
continue to rely on the authority of such person.
The Trustee may rely upon any certificate, notice or direction
purporting to have been signed on behalf of the Advisory Committee which the
Trustee believes to have been signed by the person or persons authorized to act
for the Advisory Committee.
In the event that any dispute shall arise as to the persons to whom
payment of any funds or delivery of any assets shall be made by the Trustee, the
Trustee may withhold such payment or delivery until such dispute shall have been
determined by a court of competent jurisdiction or shall have been settled by
the parties concerned.
The Employer hereby agrees to indemnify the Trustee against any and all
claims, liabilities, costs or expenses incurred by the Trustee resulting from
the breach or an alleged breach of a fiduciary duty to the Plan by a party other
than the Trustee, including, but not limited to, any fiduciary duty or
responsibility owed to the Plan by an Investment Manager appointed hereunder or
any predecessor trustee; provided, however, that, except as otherwise provided
in Section 7.03, nothing herein shall be construed as an indemnification of the
Trustee for any claims, liabilities, costs or expenses resulting from a breach
of its own fiduciary duties with respect to the Plan or Trust or its own gross
negligence or misconduct
Communications to the Trustee shall be sent to the Trustee's registered
office or to such other address as the Trustee may specify in writing. No
communication shall be binding upon the Trust Fund or the Trustee until it is
received by the Trustee.
Communications to the Advisory Committee or to the Employer shall be
sent to the Employer's principal office or to such other address as the Employer
may specify in writing.
69.
10.19 ALLOCATION OF RESPONSIBILITIES AMONG FIDUCIARIES. For purposes of
ERISA, it is recognized that the Employer, Trustee, Plan Administrator, Advisory
Committee and the Investment Manager, if any, are fiduciaries (collectively
referred to herein as the "Fiduciaries"), but only with respect to those
specific powers, duties, responsibilities and obligations as are specifically
given them under the Plan; provided, however, that nothing herein shall prevent
a Fiduciary from acting in more than one fiduciary capacity under the Plan. Each
Fiduciary may rely upon any such direction, information or action of another
Fiduciary as being proper under the Plan and in the absence of actual knowledge
to the contrary is not required under the Plan to inquire into the propriety of
any such direction, information or action. It is intended that each Fiduciary
shall be responsible for the proper exercise of its own powers, duties,
responsibilities and obligations under the Plan and, except as otherwise
provided by applicable law which cannot be waived, shall not be responsible for
any act or failure to act of another Fiduciary. No Fiduciary guarantees the
Trust fund in any manner against investment loss or depreciation in asset
values.
10.20 SPECIAL PROVISIONS REGARDING RETIREMENT INVESTMENT TRUSTS.
If the Trustee invests funds of the Trust in the Retirement Investment Trust,
funds so invested will be subject to the fees charged by the Retirement
Investment Trust and the otherwise applicable Trustee fees may be modified as
described in Section 10.05 of this Plan, which may result in an overall increase
in the total fees charged to the Trust, all as more fully set forth in the
current Prospectus of the Retirement Investment Trust (the "Prospectus"). The
Plan Administrator shall specifically authorize the Supervisory Committee of the
Retirement Investment Trust to appoint an investment advisor according to its
Rules and Procedures and to pay the investment advisor the fees and expenses
described in the Prospectus. Furthermore, with respect to any investment in the
Retirement Investment Trust, the Employer shall waive in advance its right under
Texas law to receive written confirmations of purchases and sales of interests
in the Retirement Investment Trust. The Employer shall acknowledge to the
Trustee receipt of the current Prospectus and shall deliver a copy thereof to
each Participant in the Plan, if direction of investment is permitted, and shall
deliver to each Participant making contributions and each new Participant, a
copy of the then-current Prospectus. The provisions of this Section 10.20 shall
equally apply to any other open-ended, diversified management company described
in Section 10.03(A)(p).
ARTICLE XI
PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
11.01 INSURANCE BENEFIT. The Employer may elect to provide incidental
life insurance benefits for insurable Participants who consent to life insurance
benefits by signing the appropriate insurance company application form. The
Trustee will not purchase any incidental life insurance benefit for any
Participant prior to an allocation to the Participant's Account. At an insured
Participant's written direction, the Trustee will use all or any portion of the
Participant's nondeductible voluntary contributions, if any, to pay insurance
premiums covering the Participant's life. This Section 11.01 also authorizes the
purchase of life insurance, for the benefit of the Participant, on the life of a
family member of the Participant or on any person in whom the Participant
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has an insurable interest. However, if the policy is on the joint of the
Participant and another person, the Trustee may not maintain that policy if that
other person predeceases the Participant.
The Employer will direct the Trustee as to the insurance company and
insurance agent through which the Trustee is to purchase the insurance
contracts, the amount of the coverage and the applicable dividend plan. Each
application for a policy, and the policies themselves, must designate the
Trustee as sole owner, with the right reserved to the Trustee to exercise any
right or option contained in the policies, subject to the terms and provisions
of this Agreement. The Trustee must be the named beneficiary for the Account of
the insured Participant. Proceeds of insurance contracts paid to the
Participant's Account under this Article XI are subject to the distribution
requirements of Article V and of Article VI. The Trustee will not retain any
such proceeds for the benefit of the Trust.
The Trustee will charge the premiums on any incidental benefit
insurance contract covering the life of a Participant against the Account of
that Participant. The Trustee will hold all incidental benefit insurance
contracts issued under the Plan as assets of the Trust created under the Plan.
(A) Incidental Insurance benefits. The aggregate of life insurance
premiums paid for the benefit of a Participant at all times, may not exceed the
following percentages of the aggregate of the Employer's contributions allocated
to any Participant's Account: (i) 49% in the case of the purchase of ordinary
life insurance contracts; or (ii) 25% in the case of the purchase of term life
insurance or universal life insurance contracts. If the Trustee purchases a
combination of ordinary life insurance contract(s) and term life insurance or
universal life insurance contract(s), then the sum of one-half of the premiums
paid for the ordinary life insurance contract(s) and the premiums paid for the,
term life insurance or universal life insurance contract(s) may not exceed 25%
25% of the Employer contributions allocated to any Participant's Account.
(B) Exception for certain profit sharing plans. If the Employees Plan
is a profit sharing plan, the incidental - insurance benefits requirement does
not apply to the Plan if the Plan purchases life insurance benefits only from
Employer contributions accumulated in the Participant's Account for at least two
years (measured from the allocation date).
11.02 LIMITATION ON LIFE INSURANCE PROTECTION, The Trustee will not
continue any life insurance protection for any Participant beyond his annuity
starting date (as defined in Article VI). If the Trustee holds any incidental
benefit insurance contract(s) for the benefit of a Participant when he
terminates his employment (other than by reason of death), the Trustee must
proceed as follows:
(a) If the entire cash value of the contract(s) is vested in
the terminating Participant, or if the contract(s) will have no cash
value at the end of the policy year in which termination of employment
occurs, the Trustee will transfer the contract(s) to the Participant
endorsed so as to vest in the transferee all right, title and interest
to the contract(s), free and
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clear of the Trust; subject however, to restrictions as to surrender or
payment of benefits as the issuing insurance company may permit and as
the Advisory Committee directs;
(b) If only part of the cash value of the contract(s) is
vested in the terminating Participant, the Trustee, to the extent the
Participant's interest in the cash value of the contract(s) is not
vested, may adjust the Participant's interest in the value of his
Account attributable to Trust assets other than incidental benefit
insurance contracts and proceed as in (a), or the Trustee must effect a
loan from the issuing insurance company on the sole security of the
contract(s) for an amount equal to the difference between the cash
value of the contract(s) at the end of the policy year in which
termination of employment and the amount of the cash value that is
vested in the terminating Participant, and the Trustee must the
contract(s) endorsed so as to vest in the transferee all right, title
and, interest to the contract(s), free and clear of the Trust; subject
however, to the restrictions as to surrender or payment of benefits as
the issuing insurance company may permit and the Advisory Committee
directs;
(c) If no part of the cash value of the contract(s) is vested
in the terminating Participant, the Trustee must surrender the
contract(s) for cash proceeds as may be available.
In accordance with the written direction of the Advisory Committee, the
Trustee will make any transfer of contract(s) under this Section 11.02 on the
Participant's annuity starting date (or as sign as administratively practicable
after that date). The Trustee may not transfer any contract under this Section
11.02 which contains a method of payment not specifically authorized by Article
VI or which fails to comply with the joint and survivor annuity requirements, if
applicable, of Article VI. In this regard, the Trustee either must convert such
a contract to cash and distribute the cash instead of the contract, or before
making the transfer, require the issuing company to delete the unauthorized
method of payment option from the contract.
11.03 DEFINITIONS. For purposes of this Article XI:
(a) "Policy" means an ordinary life insurance contract or a
term life insurance contract issued by an insurer on the life of a
Participant.
(b) "Issuing insurance company" is any life insurance company
which has issued a policy upon application by the Trustee under the
terms of this Agreement.
(c) "Contract" or "Contracts" means a policy of insurance. In
the event of any conflict between the provisions of this Plan and the
terms of any contract or policy of insurance issued in accordance with
this Article XI, the provisions of the Plan control.
(d) "Insurable Participant" means a Participant to whom an
insurance company, upon an application being submitted in accordance
with the Plan, will issue insurance coverage, either as a standard risk
or as a risk in an extra mortality classification.
72.
11.04 DIVIDEND PLAN. The dividend plan is premium reduction unless the
Advisory Committee directs the Trustee to the contrary. The Trustee must use all
dividends for a contract to purchase insurance benefits or additional insurance
benefits for the Participant on whose life the insurance company has issued the
contract. Furthermore, the Trustee must arrange, where possible, for all
policies issued on the lives of Participants under the Plan to have the same
premium due date and all ordinary life insurance contracts to contain guaranteed
cash values with as uniform basic options as are possible to obtain. The term
"dividends" includes policy dividends, refunds of premiums and other credits.
11.05 INSURANCE COMPANY NOT A PARTY TO AGREEMENT. No insurance
company, solely in its capacity as an issuing insurance company, is a party to
this Agreement nor is the company responsible for its validity.
11.06 INSURANCE COMPANY NOT RESPONSIBLE FOR TRUSTEE'S ACTIONS.
No insurance company, solely in its capacity as an issuing insurance company,
meet the terms of this Agreement nor is responsible for any action taken by the
Trustee.
11.07 INSURANCE COMPANY RELIANCE ON TRUSTEE'S SIGNATURE. For the
purpose of making application to an insurance company and in the exercise of any
right or option contained in any policy, the insurance company may rely upon the
signature of the Trustee and is saved harmless and completely discharged in
acting at the direction and authorization of the Trustee.
11.08 ACQUITTANCE. An insurance company is discharged from all
liability for any amount paid to the Trustee or paid in accordance with the
Trustee, and is not obliged to see to the distribution or further application of
any moneys it so pays.
11.09 DUTIES OF INSURANCE COMPANY. Each insurance company must keep
such funds and accounts within funds and accounts within funds, and supply such
information as may be necessary for the proper administration of the Plan under
which it is carrying insurance benefits.
Note:- The provisions of this Article XI are not applicable, and the
Plan may not invest in insurance contracts, if a Custodian signatory to the
Adoption Agreement is a bank which has not acquired trust powers from its
governing state banking authority.
ARTICLE XII
MISCELLANEOUS
12.01 EVIDENCE. Anyone required to give evidence under the terms of the
Plan may do so by certificate, affidavit, document or other information which
the person to act in reliance may consider pertinent, reliable and genuine, and
to have been signed, made or presented by the proper party or parties. The
Advisory Committee and the Trustee are fully protected in acting and relying
upon any evidence described under the immediately preceding sentence.
73.
12.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee nor
the Advisory Committee has any obligation or responsibility with respect to any
action required by the Plan to be taken by the Employer, any Participant or
eligible Employee, or for the failure of any of the above persons to act or make
any payment or contribution, or to otherwise provide any benefit contemplated
under this Plan. Furthermore, the Plan does not require the Trustee or the
Advisory Committee to collect any contribution required under the Plan, or to
determine the correctness of the amount of any Employer contribution. Neither
the Trustee nor the Advisory Committee need inquire into or be responsible for
any action or failure to act on the part of the others, or on the part of any
other person who has any responsibility regarding the management, administration
or operation of the Plan, whether by the express terms of the Plan or by a
separate agreement authorized by the Plan or by the applicable provisions of
ERISA. Any action required of a corporate Employer must be by its Board of
Directors or its designate.
12.03 FIDUCIARIES NOT INSURERS. All benefits payable under the Plan
shall be paid or provided for solely from the Trust Fund. The Trustee, the
Advisory Committee, the Plan Administrator and the Employer in no way guarantee
the Trust Fund from loss or depreciation. The Employer does not guarantee the
payment of any money which may be or becomes due to any person from the Trust
Fund. The liability of the Advisory Committee and the Trustee to make any
payment from the Trust Fund at any time and all times is limited to the then
available assets of the Trust.
12.04 WAIVER OF NOTICE. Any person entitled to notice under the Plan
may waive the the notice, unless the Code or Treasury regulations prescribe the
notice or ERISA specifically or impliedly prohibits such a waiver.
12.05 SUCCESSORS. The Plan is binding upon all persons entitled to
benefits under the Plan, their respective heirs and legal representatives, upon
the Employer, its successors and assigns, and upon the Trustee, the Advisory
Committee, the Plan Administrator and their successors.
12.06 WORD USAGE. Words used in the masculine also apply to the
feminine where applicable, and wherever the context of the Employer's Plan
dictates, the plural includes the singular and the singular includes the plural.
12.07 STATE LAW. The law of the state of the Master Plan Sponsor's
principal place of business (unless otherwise designated in an addendum to the
Employees Adoption Agreement) will determine all questions arising with respect
to the provisions of this Agreement except to the extent superseded by Federal
Law.
12.08 EMPLOYER'S RIGHT TO PARTICIPATE. If the Employer's Plan fails to
qualify or to maintain qualification or if the Employer makes any amendment or
modification to a provision of this Plan (other than a proper completion of an
elective provision under the Adoption Agreement or the attachment of an addendum
authorized by the Plan or by the Adoption Agreement), the Employer may no longer
participate under this Master Plan. The Employer also may not participate (or
continue to participate) in this Master Plan if the Trustee or Custodian (or a
change in the Trustee
74.
or Custodian) does not satisfy the requirements of Section 1.02 of the Plan. If
the Employer is not entitled to participate under this Master Plan, the
Employees Plan is an individually-designed plan and the reliance procedures
specified in the applicable Adoption Agreement no longer will apply.
12.09 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or
with respect to the establishment of the Trust, or any modification or amendment
to the Plan or Trust, or in the creation of any Account, or the payment of any
benefit gives any Employee, Employee-Participant or any Beneficiary any right to
continue employment, any legal or equitable right against the Employer, or
Employee of the Employer, or against the Trustee, or its agents or employees, or
against the Plan Administrator, except as expressly provided by the Plan, the
Trust, ERISA or by a separate agreement.
ARTICLE XIII
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the
Employer has no beneficial interest in any asset of the Trust and no part of any
asset in the Trust may ever revert to or be repaid to an Employer, either
directly or indirectly, nor, prior to the satisfaction of all liabilities with
respect to the Participants and their Beneficiaries under the Plan, may any part
of the corpus or income of the Trust Fund, or any asset of the Trust, be (at any
time used for, or diverted to, purposes other than the exclusive benefit of the
Participants or their Beneficiaries. However, if the Commissioner of Internal
Revenue, upon the Employer's request for initial approval of this Plan,
determines the Trust created under the Plan is not a qualified trust exempt from
the Employer, will return the Employer's contributions (and increment
attributable to the contributions) to the Employer. The Trustee must make the
return of the Employer contribution under this Section 13.01 within one year of
a final disposition of the Employer's request for initial approval of the Plan.
The Employer's Plan and Trust will terminate upon the Trustee's return of the
Employees contributions.
13.02 AMENDMENT BY EMPLOYER. The Employer has the right at any time and
from time to time:
(a) To amend the elective provisions of the Adoption Agreement in any
manner it deems necessary or advisable in order to qualify (or
maintain qualification of) this Plan and the Trust created under it
under the provisions of Code ss. 401(a);
(b) To amend the Plan to allow the Plan to operate under a waiver of the
minimum funding requirement; and
(c) To amend this Agreement in any other manner.
No amendment may authorize or permit any of the Trust Fund (other than
the part which is required to pay taxes and administration expenses) to be used
for or diverted to purposes other than for the exclusive benefit of the
Participants or their Beneficiaries or estates. No amendment may cause or permit
any portion of the Trust Fund to revert to or become a property of the Employer.
75.
The Employer also may not make any amendment which affects the rights, duties or
responsibilities of the Trustee, the Plan Administrator or the Advisory
Committee without the written consent of the affected Trustee, the Plan
Administrator or the affected member of the Advisory Committee. The Employer
must make all amendments in writing. Each amendment must state the date to which
it is either retroactively or prospectively effective. See Section 12.08 for the
effect of certain amendments adopted by the Employer.
(A) Code 1411(d)(6) protected benefits. An amendment (including the adoption of
this Plan as a restatement of an existing plan ) may not decrease a
Participant's Accrued Benefit, except to the extent permitted under Code
6412(c)(8), and may not reduce or eliminate Code 411(d)(6) protected benefits
determined immediately prior to the adoption date (or, if later, the effective
date) of the amendment. An amendment reduces or eliminates Code ss. 41l(d)(6)
protected benefits if the amendment has the effect of either (1) eliminating or
reducing an early retirement benefit or a retirement-type subsidy (as defined in
Treasury regulations), or (2) except as provided by Treasury regulations,
eliminating an optional form of benefit. The Advisory Committee must disregard
an amendment to the extent application of the amendment would fail to satisfy
this paragraph. If the Advisory Committee must disregard an amendment because
the amendment would violate clause (1) or clause (2), the Advisory Committee
must maintain a schedule of the early retirement option or other optional forms
of benefit the Plan must continue for the affected Participants.
13.03 AMENDMENT BY MASTER PLAN SPONSOR. The Master Plan Sponsor (or
PPD, as agent of the Master Plan Sponsor), without the Employer's consent, may
amend the Plan and Trust, from time to time, in order to confirm the Plan and
Trust to any requirement for qualification of the Plan and Trust under the
Internal Revenue Code. The Master Plan Sponsor may not amend the Plan in any
manner which would modify any election made by the Employer under the Plan
without the Employer's written consent. Furthermore, the Master Plan Sponsor may
not amend the Plan in any manner which would violate the proscription of Section
13.02. A Trustee does not have the power to amend the Plan or Trust.
13.04 DISCONTINUANCE. The Employer has the right, at any time, to
suspend or discontinue its contributions under the Plan, and to terminate, at
any time, this Plan and the Trust created under this Agreement. The Plan will
terminate upon the first to occur of the following:
(a) The date terminated by action of the Employer,.
(b) The dissolution or merger of the Employer, unless the
successor makes provision to continue the Plan, in which event the
successor must substitute itself as the Employer under this Plan. Any
termination of the Plan resulting from this paragraph (b) is not
effective until compliance with any applicable notice requirements
under ERISA.
13.05 FULL VESTING ON TERMINATION. Upon either full or partial termination
of the Plan, or, if applicable, upon complete discontinuance of profit sharing
plan contributions to the
76.
Plan, an affected Participant's right to his Accrued Benefit is 100%
Nonforfeitable, irrespective of the Nonforfeitable percentage which otherwise
would apply under Article V.
13.06 MERGER/DIRECT TRANSFER. The Trustee may not consent to, or be a
party to, any merger or consolidation with another plan, or to a transfer of
assets or liabilities to another plan, unless immediately after the merger,
consolidation or transfer, the surviving Plan provides each Participant a
benefit equal to or greater than the benefit each Participant would have
received had the Plan terminated immediately before the merger or consolidation
or transfer. The Trustee possesses the specific authority to enter into merger
agreements or direct transfer of assets agreements with the trustees of other
retirement plans described in Code ss. 401(a), including an elective transfer,
and to accept the direct transfer of plan assets, or to transfer plan assets, as
a party to any such agreement.
The Trustee may accept a direct transfer of plan assets on behalf of an
Employee prior to the date the Employee satisfies the Plan's eligibility
conditions. If the Trustee accepts such a direct transfer of plan assets, the
Advisory Committee and Trustee must treat the Employee as a Participant for all
purposes of the Plan except the Employee is not a Participant for purposes of
sharing in Employer contributions or Participant forfeitures under the Plan
until he actually becomes a Participant in the Plan.
(A) Elective transfers. The Trustee, after August 9, 1988, may not consent to,
or be a party to a merger, consolidation or transfer of assets with a defined
benefit plan, except with respect to an elective transfer, or unless the
transferred benefits are in the form of paid-up individual annuity contracts
guaranteeing the payment of the transferred benefits in accordance with the
terms of the transferor plan and in a manner consistent with the Code and with
ERISA. The Trustee will hold, administer and distribute the transferred assets
as a part of the Trust Fund and the Trustee must maintain a separate Employer
contribution Account for the benefit of the Employee on whose behalf the Trustee
accepted the transfer in order to reflect the value of the transferred assets.
Unless a transfer of assets to this Plan is an elective transfer, the Plan will
preserve all Code ss. 41l(d)(6) protected benefits with respect to those
transferred assets, in the manner described in Section 13.02. A transfer is an
elective transfer if: (1) the transfer satisfies the first paragraph of this
Section 13.06; (2) the transfer is voluntary, under a fully informed election by
the Participant; (3) the Participant has an alternative that retains his Code
ss. 411(d)(6) protected benefits (including an option to leave his benefit in
transferor plan, if that plan is not terminating); (4) the transfer satisfies
the applicable spousal consent requirements of the Code; (5) the transferor plan
satisfies the joint and survivor notice requirements of the Code, if the
Participant's transferred benefit is the joint and survivor notice requirements
of the Code, if the Participant's transferred benefit is subject to those
requirements; (6) the Participant has a right to immediate distribution from the
transferor plan, in lieu of the elective transfer, (7) the transferred benefit
is at least the greater of the single sum distribution provided by the
transferor plan for which the Participant is eligible or the present value of
the Participant's accrued benefit under the transferor plan payable at that
plan's normal retirement age; (8) the Participant has a 100% Nonforfeitable
interest in the transferred benefit; and (9) the transfer otherwise satisfies
applicable Treasury regulations. An elective transfer may occur between
qualified plans of any type. Any direct transfer of assets from a defined
benefit plan after August 9, 1988,
77.
which does not satisfy the requirements of this paragraph will render the
Employees Plan individually- designed. See Section 12-08.
(B) Distribution restrictions under Code ss.401(k). If the Plan receives a
direct transfer (by merger or otherwise) of elective contributions (or amounts
treated as elective contributions) under a Plan with a Code ss.401(k)
arrangement, the distribution restrictions of Code ss.401(k)(2) and (10)
continue to apply to those transferred elective contributions.
13.07 TERMINATION.
(A) Procedure. Upon termination of the Plan, the distribution provisions of
Article VI remain operative, with the following exceptions:
(1) if the present value of the Participant's Nonforfeitable Accrued
Benefit does not exceed $3,500, the Advisory Committee will direct the
Trustee to distribute the Participant's Nonforfeitable Accrued Benefit
to him in lump sum as soon as administratively practicable after the
Plan terminates; and
(2) if the present value of the Participant's Nonforfeitable Accrued
Benefit exceeds $3,500, the Participant or the Beneficiary, in addition
to the distribution events permitted under Article VI, may elect to
have the Trustee commence distribution of his Nonforfeitable Accrued
Benefit as soon as administratively practicable after the Plan
terminates.
To liquidate the Trust, the Advisory Committee will purchase a deferred
annuity contract for each Participant which protects the Participant's
distribution rights under the Plan, if the Participant's Nonforfeitable Accrued
Benefit $3,500 and the Participant does not elect an immediate distribution
pursuant to Paragraph (2).
If the Employer's Plan is a profit sharing plan, in lieu of the
preceding provisions of this Section 13.07 and the distribution provisions of
Article VI, the Advisory Committee will direct the Trustee to distribute each
Participant's Nonforfeitable Accrued Benefit, in lump sum, as soon as
administratively practicable after the termination of the Plan, irrespective of
the present value of the Participant's Nonforfeitable Accrued Benefit and
whether the Participant consents to that distribution. This paragraph does not
apply if: (1) the Plan provides an annuity option; or (2) as of the period
between the Plan termination date and the final distribution of assets, the
Employer maintains any other defined contribution plan (other than an ESOP). The
Employer, in an addendum to its Adoption Agreement numbered 13.07, may elect not
to have this paragraph apply.
The Trust will continue until the Trustee in accordance with the
direction of the Advisory Committee has distributed all of the benefits under
the Plan. On each valuation date, the Advisory Committee will credit any part of
a Participant's Accrued Benefit retained in the Trust with its proportionate
share of the Trust's income, expenses, gains and losses, both realized and
unrealized. Upon termination of the Plan, the amount, if any, in a suspense
account under Article III will revert
78.
to the Employer, subject to the conditions of the Treasury regulations
permitting such a reversion. A resolution or amendment to freeze all benefit
accrual but otherwise to continue maintenance of this Plan, is not a termination
for purposes of this Section 13.07.
(B) Distribution restrictions under Code ss.401(k). If the Employer's Plan
includes a Code ss.401(k) arrangement or if transferred assets described in
Section 13.06 are subject to the distribution restrictions of Code ss.401(k)(2)
and (10), the special distribution provisions of this Section 13.07 are subject
to the restrictions of this paragraph. The portion of the Participant's
Nonforfeitable Accrued Benefit attributable to elective contributions (or to
amounts treated under the Code ss.401(k) arrangement as elective contributions)
is not distributable on account of Plan termination, as described in this
Section 13.07, unless: (a) the Participant otherwise is entitled under the Plan
to a distribution of that portion of his Nonforfeitable Accrued Benefit; or (b)
the Plan termination occurs without the establishment of a successor plan. A
successor plan under clause (b) is a defined contribution plan (other than an
ESOP) maintained by the Employer (or by a related employer) at the time of the
termination of the Plan or within the period ending twelve months after the
final distribution of assets. A distribution made after March 31, 1988, pursuant
to clause (b), must be part of a lump sum distribution to the Participant of his
Nonforfeitable Accrued Benefit.
79.
ARTICLE XIV
CODE ss.401(k) AND CODE ss.401(m) ARRANGEMENTS
14.01 APPLICATION. This Article XIV applies to an Employees Plan only
if the Employer is its Plan under a Code 401(k) Adoption Agreement.
14.02 CODE ss.401(k) ARRANGEMENT. The Employer will elect in Section
3.01 of its Adoption Agreement the terms of the Code ss.401(k) arrangement, if
any, under the Plan. If the Employer's Plan is a Standardized Plan the Code
ss.401(k) arrangement must be a salary reduction arrangement. If the Employer's
Plan is a Nonstandardized Plan, the Code ss.401(k) arrangement may be a
reduction arrangement or a cash or deferred arrangement.
(A) Salary Reduction Arrangement. If the Employer elects a reduction
arrangement, any Employee eligible to participate in the Plan may file a salary
reduction agreement with the Advisory Committee. The salary reduction agreement
may not be effective earlier than the following date which occurs last: (i) the
Employee's Plan Entry Date (or, in the case of a reemployed Employee, his
re-participation date under Article II); (ii) the execution date of the
Employee's salary reduction agreement; (iii) the date the Employer adopts the
Code ss.401(k) arrangement by executing the Adoption Agreement; or (iv) the
effective date of the Code ss.401(k) arrangement, as specified in the Employer's
Adoption Agreement. Regarding clause (i), an Employee subject to the Break in
Service rule of Section 2.03(B) of the Plan may not enter into a reduction
agreement until the Employee has completed a sufficient number of Hours of
Service to receive credit for a Year of Service (as defined in Section 2.02)
following his reemployment commencement date. A salary reduction agreement must
specify the amount of Compensation (as defined in Section 1.12) or percentage of
Compensation the Employee wishes to defer. The salary reduction agreement will
apply only to Compensation which becomes currently available to the Employee
after the effective date of the salary reduction agreement. The Employer will
apply a reduction election to all Compensation (and to increases in such
Compensation) unless the Employee specifies in his reduction agreement to limit
the election to certain Compensation. The Employer will specify in Adoption
Agreement Section 3.01 the rules and restrictions applicable to the Employees
salary reduction agreements.
(B) Cash or deferred arrangement. If the Employer elects a cash or deferred
arrangement, a Participant may elect to make a cash election against his
proportionate share of the Employees Cash or Deferred Contribution, in
accordance with the Employees elections in Adoption Agreement Section 3.01. A
Participant's proportionate share of the Employees Cash or Deferred Contribution
is the percentage of the total Cash or Deferred Contribution which bears the
same ratio that the Participant's Compensation for the Plan Year bears to the
total Compensation of all Participants for the Plan Year. For purposes of
determining each Participant's proportionate share of the Cash or Deferred
Contribution, a Participant's Compensation is his Compensation as determined
under Section 1.12 of the Plan (as modified by Section 3.06 for allocation
purposes), excluding any effect
80.
the proportionate share may have on the Participant's Compensation for the Plan
Year. The Advisory Committee will determine the proportionate share prior to the
Employer's actual contribution to the Trust, to provide the Participants the
opportunity to file cash elections. The Employer will pay directly to the
Participant the portion of his proportionate share the Participant has elected
to receive in cash.
(C) Election not to participate. A Participant's or Employee's election not to
participate, pursuant to Section 2.06, includes his right to enter into a salary
reduction agreement or to share in the allocation of a Cash or Deferred
Contribution, unless the Participant or Employee limits the effect of the
election to the non-401(k) portions of the Plan.
14.03 DEFINITIONS. For purposes of this Article XIV:
(a) "Highly Compensated Employee" means an Eligible Employee who
satisfies the definition in Section 1.09 of the Plan. Family members
aggregated as a single Employee under Section 1.09 constitute a single
Highly Compensated Employee, whether a particular family member is a
Highly Compensated Employee or a Non-Highly Compensated Employee
without the application of family aggregation.
(b) "Non-Highly Compensated Employee" means an Eligible Employee who is
not a Highly Compensated Employee and who is not a family member
treated as a Highly Compensated Employee.
(c) "Eligible Employee" means, for purposes of the ADP test described
in Section 14.08, an Employee who is eligible to enter into a salary
reduction agreement for the Plan Year, irrespective of whether he
actually enters into such an agreement, and a Participant who is an
allocation of the Employer's Cash or Deferred Contribution for the Plan
Year. For purposes of the ACP test described in Section 14.09, an
"Eligible Employee" means a Participant who is eligible to receive an
allocation of matching contributions (or would be eligible if he made
the type of contributions necessary to receive an allocation of
matching contributions) ,and a Participant who is eligible to make
nondeductible contributions, irrespective of whether he actually makes
nondeductible contributions. An Employee continues to be an Eligible
Employee during a period the Plan suspends the Employee's right to make
elective deferrals or nondeductible contributions following a hardship
distribution.
(d) "Highly Compensated Group" means the group of Eligible Employees
who are Highly Compensated Employees for the Plan Year.
(e) "Non-Highly Compensated Group" means the group of Eligible
Employees who are Non-Highly Compensated Employees for the Plan Year.
81.
(f) "Compensation" means, except as specifically provided in this
Article XIV, Compensation as defined for nondiscrimination purposes in
Section 1.12(B) of the Plan. To compute an Employee's ADP or ACP, the
Advisory Committee may limit Compensation taken into account to
Compensation received only for the portion of the Plan Year in which
the Employee was an Eligible Employee and only for the portion of the
Plan Year in which the Plan or the Code ss.401(k) arrangement was in
effect.
(g) "Deferral contributions" are Salary Reduction Contributions and
Cash or Deferred Contributions the Employer contributes to the Trust on
behalf of an Eligible Employee irrespective of whether, in the case of
Cash or Deferred Contributions, the contribution is at the election of
the Employee. For Salary Reduction Contributions, the terms "deferral
contributions" and "elective deferrals" have the same meaning.
(h) "Elective deferrals" are all Salary Reduction Contributions and
that portion of any Cash or Deferred Contribution which the Employer
contributes to the Trust at the election of an Eligible Employee. Any
portion of a Cash or Deferred Contribution contributed to the Trust
because of the Employee's failure to make a cash election is an
elective deferral. However, any portion of a Cash or Deferred
Contribution over which the Employee does not have a cash election is
not an elective deferral Elective deferrals do not include amounts
which have become currently available to the Employee prior to the
election nor amounts designated as nondeductible contributions at the
time of deferral or contribution.
(i) "Matching contributions" are contributions made by the Employer on
account of elective deferrals under a Code ss.401(k) arrangement or on
account of employee contributions. Matching contributions also include
Participant forfeitures allocated on account of such elective deferrals
or employee contributions.
(j) "Nonelective contributions" are contributions made by the Employer
which are not subject to a deferral election by an Employee and which
are not matching contributions.
(k) "Qualified matching contributions" are matching contributions which
are 100% Nonforfeitable at all times and which are subject to the
distribution restrictions described in paragraph (m). Matching
contributions are not 100% Nonforfeitable at all times if the Employee
has a 100% Nonforfeitable interest because of his Years of Service
taken into account under a vesting schedule. Any matching contributions
allocated to a Participant's Qualified Matching Contributions Account
under the Plan automatically satisfy the definition of qualified
matching contributions.
(1) "Qualified nonelective contributions" are nonelective contributions
which are 100% Nonforfeitable at all times and which are subject to the
distribution restrictions described in paragraph (m). Nonelective
contributions are not 100% Nonforfeitable at all times if the
82.
Employee has a 100% Nonforfeitable interest because of his Years of
Service taken into account under a vesting schedule. Any nonelective
contributions allocated to a Participant's Qualified Nonelective
Contributions Account under the Plan automatically satisfy the
definition of qualified nonelective contributions.
(m) "Distribution restrictions" means the Employee may not receive a
distribution of the specified contributions (nor earnings on those
contributions) except in the event of (1) the Participant's death,
disability, termination of employment or attainment of age 59 1/2, (2)
financial hardship satisfying the requirements of Code ss.401(k) and
the applicable Treasury regulations, (3) a plan termination, without
establishment of a successor defined contribution plan (other than an
ESOP), (4) a sale of substantially all of the assets (within the
meaning of Code ss.409(d)(2)) used in a trade or business, but only to
an employee who continues employment with the corporation acquiring
those assets, or (5) a sale by a corporation of its interest in a
subsidiary (within the meaning of Code ss.409(d)(3)), but only to an
employee who continues employment with the subsidiary. For Plan Years
beginning after December 31, 1988, a distribution on account of
financial hardship, as described in clause (2), may not include
earnings on elective deferrals credited as of a date later than
December 31, 1988, and may not include qualified matching contributions
and qualified nonelective contributions, nor any earnings on such
contributions, credited after December 31, 1988. A plan does not
violate the distribution restrictions if, instead of the December 31,
1988, date in the preceding sentence the plan specifies a date not
later than the end of the last Plan Year ending before July 1, 1989. A
distribution described in clauses (3), (4) or (5), if made after March
31, 1988, must be a lump sum distribution, as required under Code
ss.401(k)(10).
(n) "Employee contributions" are contributions made by a Participant on
an after-tax basis, whether voluntary or mandatory, and designated, at
the time of contribution, as an employee (or nondeductible)
contribution. Elective deferrals and deferral contributions are not
employee contributions. Participant nondeductible contributions, made
pursuant to Section 4.01 of the Plan, are employee contributions.
14.04 MATCHING CONTRIBUTIONS / EMPLOYEE CONTRIBUTIONS. The
Employer may elect in Adoption Agreement Section 3.01 to provide matching
contributions. The Employer also may elect in Adoption Agreement Section 4.01 to
permit or to require a Participant to make nondeductible contributions.
(A) Mandatory contributions. Any Participant nondeductible contributions
eligible for matching contributions are mandatory contributions. The Advisory
Committee will maintain a separate accounting, pursuant to Section 4.06 of the
Plan, to reflect the Participant's Accrued Benefit derived from his mandatory
contributions. The Employer, under Adoption Agreement Section 4.05, may
prescribe special distribution restrictions which will apply to the Mandatory
Contributions Account prior to the Participant's Separation from Service.
Following his Separation from Service,
83.
the general distribution provisions of Article VI apply to the distribution of
the Participant's Mandatory Contributions Account.
14.05 TIME OF PAYMENT OF CONTRIBUTIONS. The Employer must make Salary
Reduction Contributions to the Trust within an administratively reasonable
period of time after withholding the corresponding Compensation from the
Participant. Furthermore, the Employer must make Salary Reduction Contributions,
Cash or Deferred Contributions, Employer matching contributions (including
qualified Employer matching contributions) and qualified Employer nonelective
contributions no later than the time prescribed by the Code or by applicable
Treasury regulations. Salary Reduction Contributions and Cash or Deferred
Contributions are Employer contributions for all purposes under this Plan,
except to the extent the Code or Treasury regulations prohibit the use of these
contributions to satisfy the qualification requirements of the Code.
14.06 SPECIAL ALLOCATION PROVISIONS - DEFERRED CONTRIBUTIONS,
MATCHING CONTRIBUTIONS AND QUALIFIED NONELECTIVE CONTRIBUTIONS. To
make allocations under the Plan, the Advisory Committee must establish a
Deferral Contributions Account, a Qualified Matching Contributions Account, a
Regular Matching Contributions Account, a Qualified Nonelective Contributions
Account and an Employer Contributions Account for each Participant.
(A) Deferral contributions. The Advisory Committee will allocate to each
Participant's Deferral Contributions Account the amount of Deferral
Contributions the Employer makes to the Trust on behalf of the Participant. The
Advisory Committee will make this allocation as of the last day of each Plan
Year unless, in Adoption Agreement Section 3.04, the Employer elects more
frequent allocation dates for salary reduction contributions.
(B) Matching contributions. The Employer must specify in its Adoption Agreement
whether the Advisory Committee will allocate matching contributions to the
Qualified Matching Contributions Account or to the Regular Matching
Contributions Account of each Participant. The Advisory Committee will make this
allocation as of the last day of each Plan Year unless, in Adoption Agreement
Section 3.04, the Employer elects more frequent allocation dates for matching
contributions.
(1) To the extent the Employer makes matching contributions under a
fixed matching contribution formula, the Advisory Committee will
allocate the matching contribution to the Account of the Participant on
whose behalf the Employer makes that contribution. A fixed matching
contribution formula is a formula under which the Employer contributes
a certain percentage or dollar amount on behalf of a Participant based
on that Participant's deferral contributions or nondeductible
contributions eligible for a match, as specified in Section 3.01 of the
Employer's Adoption Agreement The Employer may contribute on a
Participant's behalf under a specific matching contribution formula
only if the Participant satisfies the
84.
accrual requirements for matching contributions specified in Section
3.06 of the Employer's Adoption Agreement and only to the event the
matching contribution does not exceed the Participant's annual
additions limitation in Part 2 of Article III
(2) To the extent the Employer makes matching contributions under a
discretionary formula, the Advisory Committee will allocate the
discretionary matching contributions to the Account of each Participant
who satisfies the accrual requirements for matching contributions
specified in Section 3.06 of the Employees Adoption Agreement. The
allocation of discretionary matching contributions to a Participant's
Account is in the same proportion that each Participant's eligible
contributions bear to the total eligible contributions of all
Participants. If the discretionary formula is a tiered formula, the
Advisory Committee will make this allocation separately with eligible
contributions, allocating in such manner the amount of the matching
contributions made with respect to that tier. "Eligible contributions"
are the Participant's deferral contributions or nondeductible
contributions eligible for an allocation of matching contributions, as
specified in Section 3.01 of the Employer's Adoption Agreement.
If the matching contribution formula applies both to deferral
contributions and to Participant nondeductible contributions, the matching
contributions apply first to deferral contributions. Furthermore, the matching
contribution formula does not apply to deferral contributions that are excess
deferrals under Section 14.07. For this purpose: (a) excess deferrals relate
first to deferral contributions for the Plan Year not otherwise eligible for a
matching contribution; and (2) if the Plan Year is not a calendar year, the
deferrals for a Plan Year are the last elective deferrals made for a calendar
year. Under a Standard Plan, an Employee forfeits any matching contribution
attributable to an excess contribution or to an excess aggregate contribution,
unless distributed pursuant to Sections 14.08 or 14.09. Under a Nonstandardized
Plan, this forfeiture rule applies only if specified in Adoption Agreement
Section 3.06. The provisions of Section 3.05 govern the treatment of any
forfeiture described in this paragraph, and the Advisory Committee will compute
a Participant's ACP under 14.09 by disregarding the forfeiture.
(C) Qualified nonelective contributions. If the Employer, at the time of
contribution, designates a contribution to be a qualified nonelective
contribution for the Plan Year, the Advisory Committee will allocate that
qualified nonelective contribution to the Qualified Nonelective Contributions
Account of each Participant eligible for an allocation of that designated
contribution, as specified in Section 3.04 of the Employees Adoption Agreement.
The Advisory Committee will make the allocation to each eligible Participant's
Account in the same ratio that the Participant's Compensation for the Plan Year
bears to the total Compensation of all eligible Participants for the Plan Year.
The Advisory Committee will determine a Participant's Compensation in accordance
with the general definition of Compensation under Section 1.12 of the Plan, as
modified by the Employer in Sections 1.12 and 3.06 of its Adoption Agreement.
85.
(D) Nonelective contributions. To the extent the Employer makes nonelective
contributions for the Plan Year which, at the time of contribution, it does not
designate as qualified nonelective contributions, the Advisory Committee will
allocate those contributions in accordance with the elections under Section 3.04
of the Employer's Adoption Agreement. For purposes of the special
nondiscrimination tests described in Sections 14.08 and 14.09, the Advisory
Committee may treat nonelective contributions allocated under this paragraph as
qualified nonelective contributions, if the contributions otherwise satisfy the
definition of qualified nonelective contributions.
14.07 ANNUAL ELECTIVE DEFERRAL LIMITATION.
(A) Annual Elective Deferred Limitation. An Employee's elective deferrals for a
calendar year beginning after December 31, 1986, may not exceed the 402(g)
limitation. The 402(g) limitation is the greater of $7,000 or the adjusted
amount determined by the Secretary of the Treasury. It pursuant to a salary
reduction agreement or pursuant to a cash or deferral election, the Employer
determines the Employee's elective deferrals to the Plan for a calendar year
would exceed the 402(g) limitation, the Employer will suspend the Employee's
reduction agreement, if any, until the following January 1 and pay in cash the
portion of a cash or deferral election which would result in the Employee's
elective deferrals for the calendar year exceeding the 402(g) limitation. If the
Advisory Committee determines an Employee's elective deferrals already
contributed to the Plan for a calendar year exceed the 402(g) limitation, the
Advisory Committee will distribute the amount in excess of the 402(g) limitation
(the "excess deferral"), as adjusted for allocable income, no later than April
15 of the following calendar year. If the Advisory Committee distributes the
excess deferral by the appropriate April 15, it may make the distribution
irrespective of any other provision under this Plan or under the Code. The
Advisory Committee will reduce the amount of excess deferrals for a calendar
year distributable to the Employee by the amount of excess contributions (as
determined in Section 14.08), if any, previously distributed to the Employee for
the Plan Year beginning in that calendar year.
If an Employee participates in another plan under which he makes
elective deferrals pursuant to a Code ss.401(k) arrangement, elective deferrals
under a Simplified Employee Pension, or salary reduction contributions to a
tax-sheltered annuity, irrespective of whether the Employer maintains the other
plan, he may provide the Advisory committee a written claim for excess deferrals
made for a calendar year. The Employee must submit the claim no later than the
March 1 following the close of the particular calendar year and the claim must
specify the amount of the Employee's elective deferrals under this Plan which
are excess deferrals. If the Advisory Committee received a timely claim, it will
distribute the excess deferral (as adjusted for allocable income) the Employee
has assigned to this Plan, in accordance with the distribution procedure
described in the immediately preceding paragraph.
(B) Allocable Income. For purposes of making a distribution of excess deferrals
pursuant to this Section 14.07, allocable income means net income or net loss
allocable to the excess deferrals for
86.
the calendar year in which the Employee made the excess deferral, determined in
a manner which is uniform, nondiscriminatory and reasonably reflective of the
manner used by the Plan to allocate income to Participants' Accounts.
14.08 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST. For each Plan Year, the
Advisory Committee must determine whether the Plan's Code ss.401(k) arrangement
satisfied either of the following ADP tests:
(i) The average ADP for the Highly Compensated Group does not exceed
1.25 times the average ADP of the Non-Highly Compensated Group; or
(ii) The average ADP for the Highly Compensated Group does not exceed
the average ADP for the Non-Highly Compensated Group by more than two
percentage points (or the lesser percentage permitted by the multiple
use limitation in Section 14.10) and the average ADP for the Highly
Compensated Group is not more than twice the average ADP for the
Non-Highly Compensated Group.
(A) Calculation of ADP. The average ADP for a group is the average of the
separate ADPs calculated for each Eligible Employee who is a member of that
group. An Eligible Employee's ADP for a Plan Year is the ratio of the Eligible
Employee's deferral contributions for the Plan Year to the Employee's
Compensation for the Plan Year. For aggregated family members treated as a
single Highly Compensated Employee, the ADP of the family unit is the ADP
determined by combining the deferral contributions and Compensation of all
aggregated family members. A Non-Highly Compensated Employee's ADP does not
include elective deferrals made to this Plan or to any other Plan maintained by
the Employer, to the extent such elective deferrals exceed the 402(g) limitation
described in Section 14.07(A).
The Advisory Committee, in a manner consistent with Treasury
regulations, may determine the ADPs of the Eligible Employees by taking into
account qualified nonelective contributions or qualified matching contributions,
or both, made to this Plan or to any other qualified Plan maintained by the
Employer. The Advisory committee may not include qualified nonelective
contributions in the ADP test unless the allocation of nonelective contributions
is nondiscriminatory when the Advisory Committee takes into account all
nonelective contributions (including the qualified nonelective contributions)
and also when the Advisory Committee takes into account only the nonelective
contributions not used in either the ADP test described in this Section 14.08 or
the ACP test described in Section 14.09. For Plan Years beginning after December
31, 1989, the Advisory Committee may not include int he ADP test any qualified
nonelective contributions or qualified matching contributions under another
qualified plan unless that plan has the same plan year as this Plan. The
Advisory Committee must maintain records to demonstrate compliance with the ADP
test, including the extent to which the Plan used qualified nonelective
contributions or qualified matching contributions to satisfy the test.
87.
For Plan Years beginning prior to January 1, 1992, the Advisory
Committee may elect to apply a separate ADP test to each component group under
the Plan. Each component group separately must satisfy the commonality
requirement of the Code ss.401(k) regulations and the minimum coverage
requirements of Code ss.410(b). A component group consists of all the
allocations and other benefits, rights and features provided that group of
Employees. An Employee may not be part of more than one component group. The
correction rules described in this Section 14.08 apply separate to each
component group.
(B) Special aggregation rule for Highly Compensated Employees. To determine the
ADP of any Highly Compensated Employee, the deferral contributions taken into
account must include any elective deferrals made by the Highly Compensated
Employee under any other Code ss.401(k) arrangement maintained by the Employer,
unless the elective deferrals are to an ESOP. If the plans containing the Code
ss.401(k) arrangements have different plan years, the Advisory Committee will
determine the combined deferral contributions on the basis of the plan years
ending in the same calendar year.
(C) Aggregation of certain Code ss.401(k) arrangements. If the Employer treats
two plans as a unit for coverage or nondiscrimination purposes, the Employer
must combine the Code ss.401(k) arrangements under such plans to determine
whether either plan satisfies the ADP test. This aggregation rule applies to the
ADP determination for all Eligible Employees, irrespective of whether an
Eligible Employee is a Highly Compensated Employee or a Non-Highly Compensated
Employee. For Plan Years beginning after December 31, 1989, an aggregation of
Code ss.401(k) arrangements under this paragraph does not apply to plans which
have different plan years and, for Plan Years beginning after December 31, 1988,
the Advisory Committee may not aggregate an ESOP (or the ESOP portion of a plan)
with a non-ESOP plan (or non-ESOP portion of a plan).
(D) Characterization of excess contributions. If, pursuant to this Section
14.08, the Advisory Committee has elected to include qualified matching
contributions in the average ADP, the Advisory Committee will treat excess
contributions as attributable proportionately to deferral contributions and to
qualified matching contributions allocated on the basis of those deferral
contributions. If the total amount of a Highly Compensated Employee's excess
contributions for the Plan Year exceeds his deferral contributions or qualified
matching contributions for the Plan Year, the Advisory Committee will treat the
remaining portion of his excess contributions as attributable to qualified
nonelective contributions. The Advisory Committee will reduce the amount of
excess contributions for a Plan Year distributable to a Highly Compensated
Employee by the amount of excess deferrals (as determined in Section 14.07), if
any, previously distributed to that Employee for the Employee's taxable year
ending in that Plan Year.
(E) Distribution of excess contributions. If the Advisory Committee determined
the Plan fails to satisfy the ADP test for a Plan Year, it must distribute the
excess contributions, as adjusted for allocable income, during the next Plan
Year. However, the Employer will incur an excise tax equal
88.
to 10% of the amount of excess contributions for a Plan Year not distributed to
the appropriate Highly Compensated Employees during the first 2 1/2 months of
that next Play Year. The excess contributions are the amount of deferral
contributions made by the Highly Compensated Employees which causes the Plan to
fail to satisfy the ADP test. The Advisory Committee will distribute to each
Highly Compensated Employee his respective share of the excess contributions.
The Advisory Committee will determine the respective shares of excess
contributions by starting with the Highly Compensated Employee(s) who has the
greater ADP, reducing his ADP (but not below the next highest ADP), then, if
necessary, reducing the ADP of the Highly Compensated Employee(s) at the next
highest ADP level (including the ADP of the Highly Compensated Employee(s) whose
ADP the Advisory Committee already has reduced), and continuing in this manner
until the average ADP for the Highly Compensated Group satisfies the ADP test.
If the Highly Compensated Employee is part of an aggregated family group, the
Advisory Committee, in accordance with the applicable Treasury regulations, will
determine each aggregated family member's allocable share of the excess
contributions assigned to the family unit.
(F) Allocable Income. To determine the amount of the corrective distribution
required under this Section 14.08, the Advisory Committee must calculate the
allocable income for the Play Year in which the excess contributions arose.
"Allocable income" means net income or net loss. To calculate allocable income
for the Plan Year, the Advisory Committee will use a uniform and
nondiscriminatory method which reasonably reflects the manner used by the Plan
to allocate income to Participants' Accounts.
14.09 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING
CONTRIBUTIONS/PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. For Plan Years beginning
after December 31, 1986, the Advisory Committee must determine whether the
annual
Employer matching contributions (other than qualified matching contributions
used in the ADP under Section 14.08), if any, and the Employee contributions, if
any, satisfy either of the following average contribution percentage ("AC")
tests:
(i) The ACP for the Highly Compensated Group does not exceed 1.25 times
the ACP of the Non-Highly Compensated Group; or
(ii) The ACP for the Highly Compensated Group does not exceed the ACP
for the Non-Highly Compensated Group by more than two percentage points
(or the lesser percentage permitted by the multiple use limitation in
Section 14.10) and the ACP for the Highly Compensated Group is not more
than twice the ACP for the Non-Highly Compensated Group.
(A) Calculation of ACP. The average contribution percentage for a group is the
average of the separate contribution percentages calculated for each Eligible
Employee who is a member of that group. An Eligible Employee's contribution
percentage for a Plan Year is the ratio of the eligible
89.
Employee's aggregate contributions for the Plan year to the Employee's
Compensation for the Plan Year. "Aggregate contributions" are Employer matching
contributions (other than qualified matching contributions used in the ADP test
under Section 14.08) and employee contributions (as defined in Section 14.03).
For aggregated family members treated as a single Highly Compensated Employee,
the contribution percentage of the family unit is the contribution percentage
determined by combining the aggregate contributions and Compensation of all
aggregated family members.
The Advisory Committee, in a manner consistent with Treasury
regulations, may determine the contribution percentages of the Eligible
Employees by taking into account qualified nonelective contributions (other than
qualified nonelective contributions used in the ADP test under Section 14.08) or
elective deferrals, or both, made to this Plan or to any other qualified Plan
maintained by the Employer. The Advisory Committee may not include qualified
nonelective contributions in the ACP test unless the allocation of nonelective
contributions is nondiscriminatory when the Advisory committee takes into
account all nonelective contributions (including the qualified nonelective
contributions) and also when the Advisory Committee takes into account only the
nonelective contributions not used in either the ADP test described in Section
14.08 or the ACP test described in this Section 14.09. The Advisory committee
may not include elective deferrals in the ACP test, unless the Plan which
includes the elective deferrals satisfied the ADP test both with and without the
elective deferrals included in this ACP test. For Plan Years beginning after
December 31, 1989, the Advisory Committee may not include in the ACP test any
qualified nonelective contributions or elective deferrals under another
qualified plan unless that plan has the same plan year as this Plan. The
Advisory Committee must maintain records to demonstrate compliance with the ACP
test, including the extent to which the Plan used qualified nonelective
contributions or elective deferrals to satisfy the test. For Plan Years
beginning prior to January 1, 1992, the component group testing rule permitted
under Section 14.08(A) also applies to the ACP test under this Section 14.09.
(B) Special aggregation rule for Highly Compensated Employees. To determine the
contribution percentage of any Highly Compensated Employee, the aggregate
contributions taken into account must include any matching contributions (other
than qualified matching contributions used in the ADP test) and any Employee
contributions made on his behalf to any other plan maintained by the Employer,
unless the other plan is an ESOP. If the plans have different plan years, the
Advisory Committee will determine the combined aggregate contributions on the
basis of the plan years ending in the same calendar year.
(C) Aggregation of certain plans. If the Employer treats two plans as a unit for
coverage or nondiscrimination purposes, the Employer must combine the plans to
determine whether either plan satisfied the ACP test. The aggregation rule
applies to the contribution percentage determination for all Eligible Employees,
irrespective of whether an Eligible Employee is a Highly Compensated Employee or
a Non-Highly Compensated Employee. For Plan Years beginning after December 31,
1989, an aggregation of plans under this paragraph does not apply to plans which
have different plan years, and for Plan Years beginning after December 31, 1988,
the Advisory Committee may not
90.
aggregate an ESOP (or the ESOP portion of a plan) with a non-ESOP plan (or
non-ESOP portion of a plan).
(D) Distribution of excess aggregate contributions. The Advisory Committee will
determine excess aggregate contributions after determining excess deferrals
under Section 14.07 and excess contributions under Section 14.08. If the
Advisory Committee determine the Plan fails to satisfy the ACP test for a Plan
Year, it must distribute the excess aggregate contributions, as adjusted for
allocable income, during the next Plan Year. However, the Employer will incur an
excise tax equal to 10% of the amount of excess aggregate contributions for a
Plan Year not distributed to the appropriate Highly Compensated Employees during
the first 2 1/2 months of that next Plan Year. The excess aggregate
contributions are the amount of aggregate contributions allocated on behalf of
the Highly Compensated Employees which causes the Plan to fail to satisfy the
ACP test. The Advisory Committee will distribute to each Highly Compensated
Employee his respective share of the excess aggregate contributions. The
Advisory Committee will determine the respective shares of excess aggregate
contributions by starting with the Highly Compensated Employee(s) who has the
greatest contribution percentage, reducing his contribution percentage (but not
below the next highest contribution percentage), then, if necessary, reducing
the contribution percentage of the Highly Compensated Employee(s) at the next
highest contribution percentage level (including the contribution percentage of
the Highly Compensated Employee(s) whose contribution percentage the Advisory
Committee already has reduced), and continuing in this manner until the ACP for
the Highly Compensated Group satisfied the ACP test. If the Highly Compensated
Employee is part of an aggregated family group, the Advisory Committee, in
accordance with the applicable Treasury regulations, will determine each
aggregated family member's allocable share of the excess aggregate contributions
assigned to the family unit.
(E) Allocable income. To determine the amount of the corrective distribution
required under this Section 14.09, the Advisory Committee must calculate the
allocable income for the Plan Year in which the excess aggregate contributions
arose. "Allocable income" means net income or et loss. The Advisory Committee
will determine allocable income in the same manner as described in Section
14.08(F) for excess contributions.
(F) Characterization of excess aggregate contributions. The Advisory Committee
will treat a Highly Compensated Employee's allocable share of excess aggregate
contributions in the following priority: (1) first as attributable to his
Employee contributions which are voluntary contributions, if any; (2) then as
matching contributions allocable with respect to excess contributions determined
under the ADP test described in Section 14.08; (3) then on a pro rata basis to
matching contributions and to the deferral contributions relating to those
matching contributions which the Advisory Committee has included in the ACP
test; (4) then on a pro rata basis to Employee contributions which are mandatory
contributions, if any, and to the matching contributions allocated on the basis
of those mandatory contributions; and (5) last to qualified nonelective
contributions used in the ACP test. To the extent the Highly Compensated
Employee's excess
91.
aggregate contributions are attributable to matching contributions, and he is
not 100% vested in his Accrued Benefit attributable to matching contributions,
the Advisory Committee will distribute only the vested portion and forfeit the
non-vested portion. The vested portion of the Highly Compensated Employee's
excess aggregate contributions attributable to Employer matching contributions
is the total amount of such excess aggregate contributions (as adjusted for
allocable income) multiplied by his vested percentage (determined as of the last
day of the Plan Year for which the Employer made the matching contribution). The
Employer will specify in Adoption Agreement Section 3.05 the manner in which the
Plan will allocate forfeited excess aggregate contributions.
14.10 MULTIPLE USE LIMITATION. For Plan Years beginning after December
31, 1988, if at least one Highly Compensated Employee is includible in the ADP
test under Section 14.08 and in the ACP test under Section 14.09, the sum of the
Highly Compensated Group's ADP and ACP may not exceed the multiple use
limitation.
The multiple use limitation is the sum of (i) and (ii);
(i) 145% of the greater of: (a) the ADP of the Non-Highly Compensated
Group under the Code ss.401(k) arrangement; or (b) the ACP of the
Non-Highly Compensated Group for the Plan Year beginning with or within
the Plan Year of the Code ss.401(k) arrangement.
(ii) 2% plus the lesser of (i)(a) or (i)(b), but no more than twice
the lesser of (i)(a) or (i)(b).
The Advisory Committee, in lieu of determining the multiple use
limitation as the sum of (i) and (ii), may elect to determine the multiple use
limitation as the sum of (iii) and (iv):
(iii) 125% of the lesser of: (a) the ADP of the Non-Highly Compensated
Group under the Code ss.401(k) arrangement; or (b) the ACP of the
Non-Highly Compensated Group for the Plan Year beginning with or within
the Plan Year of the Code ss.401(k) arrangement.
(iv) 2% plus the greater of (iii)(a) or (iii)(b), but no more than
twice the greater of (iii)(a) or (iii)(b).
The Advisory Committee will determine whether the Plan satisfies the
multiple use limitation after applying the ADP test under Section 14.08 and the
ACP test under Section 14.09 and after making any corrective distributions
required by those Sections. If, after applying this Section 14.10, the Advisory
Committee determines the Plan has failed to salsify the multiple use limitation,
the Advisory Committee will correct the failure by treating the excess amount as
excess contributions under Section 14.08 or as excess aggregate contributions
under Section 14.09, as it determines in its sole discretion. This Section 14.10
does not apply unless, prior to application of the multiple use
92.
limitation, the ADP and the ACP of the Highly Compensated Group each exceed 125%
of the respective percentages for the Non-Highly Compensated Group.
14.11 DISTRIBUTION RESTRICTIONS. The Employer must elect in Section
6.03 the Adoption Agreement the distribution events permitted under the Plan.
The distribution events applicable to the Participant's Deferral Contributions
Account, Qualified Nonelective Contributions Account and Qualified Matching
Contributions Account must satisfy the distribution restrictions described in
paragraph (m) of Section 14.03.
(A) Hardship distributions from Deferral Contributions Account. The Employer
must elect in Adoption Agreement Section 6.03 whether a Participant may receive
hardship distributions from his Deferral Contributions Account prior to the
Participant's Separation from Service. Hardship distributions from the Deferral
Contributions Account must satisfy the requirements of this Section 14.11. A
hardship distribution option may not apply to the Participant's Qualified
Nonelective Contributions Account or Qualified Matching Contributions Account,
except as provided in paragraph (3).
(1) Definition of hardship. A hardship distribution under this Section
14.11 must be on account of one or more of the following immediate and heavy
financial needs: (1) medical care described in Code ss.213(d) incurred by the
Participant, by the Participant's spouse, or by any of the Participant's
dependents, or necessary to obtain such medical care; (2) the purchase
(excluding mortgage payments) of a principal residence for the Participant; (3)
the payment of post-secondary education tuition and related educational fees,
for the next 12-month period, for the Participant, for the Participant's spouse,
or for any of the Participant's dependents (ad defined in Code ss.152); (4) to
prevent the eviction of the Participant form his principal residence or the
foreclosure on the mortgage of the Participant's principal residence; or (5) any
need prescribed by the Revenue Service in a revenue ruling, notice or other
document of general applicability which satisfies the safe harbor definition of
hardship.
(2) Restrictions. The following restrictions apply to a Participant who
receives a hardship distribution: (a) the Participant may not make elective
deferrals or employee contributions to the Plan for the 12-month period
following the date of his hardship distribution; (b) the distribution is not in
excess of the amount of the immediate and heavy financial need (including any
amounts necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result form the distribution; (c) the Participant must
have obtained all distributions, other than hardship distributions, and all
nontaxable loans (determined at the time of the loan) currently available under
this Plan and all other qualified plans maintained by the Employer; and (d) the
Participant agrees to limit elective deferrals under this Plan and under any
other qualified Plan maintained by the Employer, for the Participant's taxable
year immediately following the taxable year of the hardship distribution, to the
402(g) limitation (as described in Section 14.07), reduced by the amount of the
Participant's elective deferrals made in the taxable year of the hardship
93.
distribution. The suspension of elective deferrals and employee contributions
described in clause (a) also must apply to all other qualified plans and to all
non-qualified plans of deferred compensation maintained by the Employer, other
than any mandatory employee contribution portion of a defined benefit plan,
including stock option, stock purchase and other similar plans, but not
including health or welfare benefit plans (other than the cash or deferred
arrangement portion of a cafeteria plan).
(3) Earnings. For Plan Years beginning after December 31, 1988, a
hardship distribution under this Section 14.11 may not include earnings on an
Employee's elective deferrals credited after December 31, 1988. qualified
matching contributions and qualified nonelective contributions, and any earnings
on such contributions, credited as of December 31,1988, are subject to the
hardship withdrawal only if the Employer specifies in an addendum to this
Section 14.11. The addendum may modify the December 31, 1988, date for purposes
of determining credited amounts provided the date is not later than the end of
the last Plan Year ending before July 1, 1989.
(B) Distribution after Separation from Service. Following the Participant's
Separation from Service, the distribution events applicable to the Participant
apply equally to all of the Participant's Accounts, except as elected in Section
6.03 of the Employer's Adoption Agreement.
(C) Correction of Annual Additions Limitations. If, as a result of a reasonable
error in determining the amount of elective deferrals an Employee may make
without violating the limitations of Part 2 of Article III, an Excess Amount
results, the Advisory Committee will return the Excess Amount (as adjusted for
allocable income) attributable to the elective deferrals. The Advisory Committee
will make this distribution before taking any corrective steps pursuant to
Section 3.10 or to Section 3.16. The Advisory Committee will disregard any
elective deferrals returned under this Section 14.11(C) for purposes of Sections
14.07, 14.08 and 14.09.
14.12 SPECIAL ALLOCATION RULES. If the Code ss.401(k) arrangement
provides for salary reduction contributions, if the Plan accepts Employee
contributions, pursuant to Adoption Agreement Section 4.01, or if the Plan
allocates matching contributions as of any date other than the last day of the
Plan Year, the Employer must elect in Adoption Agreement 9.11 whether nay
special allocation provisions will apply under Section 9.11 of the Plan. For
purposes of the elections:
(a) A "segregated Account" direction means the Advisory Committee will
establish a segregated Account for the applicable contributions made on
the Participant's behalf during the Plan Year. The Trustee must invest
the segregated Account in Federally insured interest bearing savings
account(s) or time deposits, or a combination of both, or in any other
fixed income investments, unless otherwise specified in the Employer's
Adoption Agreement. As of the last day of each Plan Year (of, if
earlier, an allocation date coinciding with a valuation date described
in SECTION 9.22), the Advisory Committee will reallocate the segregated
94.
Account to the Participant's appropriate Account, in accordance with
Section 3.04 or Section 4.06, whichever applies to the contributions.
(b) A "weighted average allocation" method will treat a weighted
portion of the applicable contributions as if includible in the
Participant's Account as of the beginning of the valuation period. The
weighted portion is a fraction, the numerator of which is the number of
months in the valuation period, excluding each month in the valuation
period which begins prior to the contribution date of the applicable
contributions, and the denominator of which is the number of months in
the valuation period. The Employer may elect in its Adoption Agreement
to substitute a weighting period other than months for purposes of this
weighted average allocation.
95.
ARTICLE A
APPENDIX TO BASIC PLAN DOCUMENT
This Article is necessary to comply with the Unemployment Compensation
Amendments Act of 1992 and is an integral part of the basic plan document.
Section 12.08 applies to nay modification or amendment of this Article.
A-1 APPLICATION. This Article applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this Article, a distributee
may elect, at the time and in the manner prescribed by the Plan Administrator,
to have any portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct rollover.
A-2 DEFINITIONS.
(a) "Eligible rollover distribution" An eligible rollover
distribution is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover 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 ss.401(a)(9); and the portion of any
distribution that is not includible in gross income (determined without regard
to the exclusion of net unrealized appreciation with respect to employer
securities).
(b) "Eligible retirement plan." An eligible retirement plan is
an individual retirement account described in Code 408(a), an individual
retirement annuity described in Code ss.408(b), an annuity plan described in
Code 403(a), or a qualified trust described in Code 401(a), that accepts the
distributee's eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual retirement annuity.
(c) "Distributee." 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 ss.414(p), are distributees with regard to the interest of the spouse or
former spouse.
(d) "Direct rollover." A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the distributee.
96.
ARTICLE B
Appendix to Basic Plan Document
This Article is necessary to comply with the Omnibus Budget Reconciliation Act
of 1993 OBRA '93) and is an integral part of the basic plan document. Section
12.08 applies to any modification or amendment of this Article.
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for plan years
beginning on or after January 1, 1994, the annual compensation of each employee
taken into account under the plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation is determined (determination period)
beginning in such calendar year. If a determination period consists of fewer
than 12 months, the OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the determination
period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in this plan
to the limitation under Section 410(a)(17) of the Code shall mean the OBRA '93
annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into account in
determining an employee's benefits accruing in the current plan year, the
compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
97.
4.2 Amended and Restated Articles of Incorporation of the Registrant.
Exhibit 4.2
ARTICLES OF INCORPORATION
TO THE DEPARTMENT OF STATE:
COMMONWEALTH OF PENNSYLVANIA:
In compliance with the requirements of the Business
Corporation Law, Act of May 5, 1933, P.L. 364, as amended, the undersigned,
desiring that he may incorporate a business corporation, does hereby certify:
1. The name of the corporation is
FRM Corporation
2. The location and post office address of its initial
registered office in this Commonwealth is 747 Union Trust Building, Pittsburgh,
Pennsylvania 15219.
3. The corporation is organized under the provisions of the
Business Corporation Law, and shall have unlimited power to engage in and to do
any lawful act concerning any or all lawful business for which corporation may
be incorporated under the Business Corporation Law.
4. The term of existence of the corporation is perpetual.
5. `The aggregate number of shares which the corporation shall
have the authority to issue shall be 200,000 shares of Common Stock, par value
$0.20 per share.
6. The name and post office address of the incorporator, who
has subscribed for one share of Common Stock, is:
Charles C. Cohen
747 Union Trust Building
Pittsburgh, Pennsylvania 15219
7. The shareholders of the corporation shall not have
cumulative voting rights.
WITNESS the due execution hereof August 28, 1970.
------------------------------------
Filed in the Department of State on the _____ day of August,
1970.
-------------------------------------
Secretary of the Commonwealth
llm
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
OFFICE OF THE
SECRETARY OF THE COMMONWEALTH
To all to whom these Presents shall come, Greeting:
WHEREAS, Under the provisions of the Business Corporation Law, approved
the 5th day of May, Anno Domini one thousand nine hundred and thirty-three, P.L.
364, as amended, the Department of State is authorized and required to issue a
CERTIFICATE OF INCORPORATION
evidencing the incorporation of a business corporation organized under the terms
of that law.
AND WHEREAS, The stipulations and conditions of that law have been
fully complied with by the persons desiring to incorporate as
FRM Corporation
THEREFORE, KNOW YE, That subject to the Constitution of this
Commonwealth and under the authority of the Business Corporation Law, I do by
these presents, which I have caused to be sealed with the Great Seal of the
Commonwealth, create, erect, and incorporate the incorporators of and the
subscribers to the shares of the proposed corporation named above, their
associates and successors, and also those who may thereafter become subscribers
or holders of the shares of such corporation, into a body politic and corporate
in deed and in law by the name chosen hereinafter specified, which shall exist
perpetually and shall be invested with and have and enjoy all the powers,
privileges, and franchises incident to a business corporation and be subject to
all the duties, requirements and restrictions specified and enjoined in and by
the Business Corporation Law and all other applicable laws of this Commonwealth.
GIVENunder my Hand and the Great Seal of the the
Commonwealth, at the City of Harrisburg, this 31st day
of August in the year of our Lord one thousand nine
hundred and seventy and of the Common-wealth the one
hundred and ninety-fifth
-------------------------------------
--------------------------------
Secretary of the Commonwealth
ig
COMMONWEALTH OF PENNSYLVANIA
Articles DEPARTMENT OF STATE
of CORPORATION BUREAU
Amendment
- -------------------------------------------------------------------------------
In compliance with the requirements of Article VIII of the Business
Corporation Law approved the 5th day of May, 1933, P.L. 364, as amended, the
applicant desiring to amend its Articles hereby certifies, under its corporate
seal that:
1. The name of the corporation is
FRM Corporation
2. The location of its registered office is:
747 Union Trust Building, Pittsburgh, Pennsylvania
3. The corporation was formed under the Act of May 5, 1933, P.L. 364, as amended
4. Its date of incorporation is: August 31, 1970
5. (Strike out (a) or (b) below, whichever is not applicable)
(a) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
(b) The amendment was adopted by a consent in writing, setting
forth the action so taken, signed by all of the shareholders
entitled to vote thereon and filed with the Secretary of the
corporation.
6. At the time of the action of the shareholders:
(a) The total number of shares outstanding was: 75,000 Common
(b) The number of shares entitled to vote was:* 75,000 Common
7. In the action taken by the shareholders:
(a) The number of shares voted in favor of the amendment was:**
75,000 Common
(b) The number of shares voted against the amendment was:**
None
*If the shares of any class were entitled to vote as a class, the
number of shares of each class so entitled and the number of shares of all other
classes entitled to vote should be set forth.
**If the shares of any class were entitled to vote as a class, the
number of shares of such class and the number of shares of all other classes
voted for and against such amendment respectively should be set forth.
NOTE: If the effect of the amendment is to increase the authorized capital stock
of the corporation, excise tax at the rate of 1/5 of 1% on the amount of
increase will be due and payable with the filing of the amendment.
NOTE: Filing fee--$30.00 (In addition to any amount of excise tax due and owing)
8. The amendment adopted by the shareholders, set forth in full, follows
RESOLVED, that the aggregate number of shares of Common Stock,
par value $0.20 per share, which the Corporation shall have authority
to issue, be increased from 200,000 shares to 500,000 shares, and to
that end the proper officers be and are hereby authorized and directed
to cause preparation and filing of Articles of Amendment restating
paragraph 5 of the Articles of Incorporation to read as follows:
"5. The aggregate number of shares which the corporation
shall have the authority to issue shall be 500,000 shares of
Common Stock, par value $0.20 per share."
IN TESTIMONY WHEREOF, the applicant has caused these Articles of
Amendment to be signed by its President or Vice President and its corporate
seal, duly attested by its Secretary or Treasurer, to be hereunto affixed this
9th day of February, 1971.
FRM Corporation
By: ______________________________________
(Vice President)
Attest:
- ---------------------------------
(Secretary)
(CORPORATE)
( SEAL )
Approved and filed in the Department of State on the 16th day of
February A.D. 1971.
-------------------------------------------
Secretary of the Commonwealth
san
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
To All To Whom These Presents Shall Come, Greeting:
WHEREAS, In and by Article VIII of the Business Corporation Law,
approved the fifth day of May, Anno Domini one thousand nine hundred and
thirty-three, P.L. 364, as amended, the Department of State is authorized and
required to issue a
CERTIFICATE OF AMENDMENT
evidencing the amendment of the Articles of Incorporation of a business
corporation organized under or subject to the provisions of that Law, and
WHEREAS, The stipulations and conditions of that Law pertaining to the
amendment of Articles of Incorporation have been fully complied with by
FRM CORPORATION
THEREFORE, KNOW YE, That subject to the Constitution of this
Commonwealth and under the authority of the Business Corporation Law, I do by
these presents, which I have caused to be Sealed with the Great Seal of the
Commonwealth, extend the rights and powers of the corporation named above, in
accordance with the terms and provisions of the Articles of Amendment presented
by it to the Department of State, with full power and authority to use and enjoy
such rights and powers, subject to all the provisions and restrictions of the
Business Corporation Law and all other applicable laws of this Commonwealth.
Givenunder my Hand and the Great Seal of the Commonwealth,
at the City of Harrisburg, this 16th day of February in
the year of our Lord one thousand nine hundred and
seventy-one and of the Commonwealth the one hundred and
ninety-fifth
-----------------------------------
Secretary of the Commonwealth
sat
COMMONWEALTH OF PENNSYLVANIA
Articles DEPARTMENT OF STATE
of CORPORATION BUREAU
Amendment
---------------------------------------------------------
In compliance with the requirements of Article VIII of the Business
corporation Law approved the 5th day of May, 1933, P.L. 364, as amended, the
applicant desiring to amend its Articles hereby certifies, under its corporate
seal that:
1. The name of the corporation is:
FRM Corporation
2. The location of its registered office is:
747 Union Trust Building, Pittsburgh, Pennsylvania
3. The corporation was formed under the Act of May 5, 1933, P.L. 364, as
amended.
4. Its date of incorporation is: August 31, 1970
5. (Strike out (a) or (b) below, whichever is not applicable)
(a) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
(b) The amendment was adopted by a consent in writing, setting
forth the action so taken, signed by all of the shareholders
entitled to vote thereon and filed with the Secretary of the
corporation.
6. At the time of the action of the shareholders:
(a) The total number of shares outstanding was: 93,750 Common
(b) The number of shares entitled to vote was:* 93,750 Common
7. In the action taken by the shareholders:
(a) The number of shares voted in favor of the amendment was: **
93,750 Common
(b) The number of shares voted against the amendment was: **
None
* If the shares of any class were entitled to vote as a class, the number
of shares of each class so entitled and the number of shares of all other
classes entitled to vote should be set forth.
** If the shares of any class were entitled to vote as a class, the
number of shares of such class and the number of shares of all other classes
voted for and against such amendment respectively should be set forth.
NOTE: If the effect of the amendments is to increase the authorized capital
stock of the corporation, excise tax at the rate of 1/5 of 1% on the amount of
increase will be due and payable with the filing of the amendment.
NOTE; Filing fee--$30.00.(In addition to any amount of excise tax due and owing)
8. The amendment adopted by the shareholders, set forth in full, follows:
RESOLVED, that the Board of Directors does hereby propose
adoption by the shareholders, and the shareholders do hereby
adopt and approve amendments to the Articles of Incorporation,
as amended, whereby
(i) the name of the Corporation shall be changed to
Mylan Laboratories Inc.; and
(ii) the aggregate number of shares of
Common Stock, par value $0.20 per share, which the
Corporation shall have authority to issue shall be
increased to 3,000,000; and
(iii) the Articles of Incorporation shall be
restated in their entirety to read as follows:
(see Exhibit 1)
IN TESTIMONY WHEREOF, the applicant has caused these Articles of
Amendment to be signed by its President or Vice President and its corporate
seal, duly attested by its Secretary or Treasurer, to be hereunto affixed this
8th day of September, 1971.
By:
(President)
Attest:
(Treasurer)
Approved and filed in the Department of State on the
28th day of September A. D. 1971.
-------------------------- -----------------
-------------------------------
Secretary of the Commonwealth
EXHIBIT 1
MYLAN LABORATORIES INC.
RESTATED ARTICLES OF INCORPORATION
(as filed in the Department of State
September , 1971)
1. The name of the corporation is Mylan Laboratories Inc.
2. The location and post office address of its registered office in this
Commonwealth is Suite 2040, One Oliver Plaza, Pittsburgh, Pennsylvania 15222.
3. The corporation is organized under the provisions of the Business
Corporation Law, and shall have unlimited power to engage in and to do any
lawful act concerning any or all lawful business for which corporations may be
incorporated under the Business Corporation Law.
4. The term of existence of the corporation is perpetual.
5. The aggregate number of shares which the corporation shall have the
authority to issue shall be 3,000,000 shares of Common Stock, par value $0.20
per share.
6. The shareholders of the corporation shall not have cumulative voting
rights.
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
OFFICE OF THE
SECRETARY OF THE COMMONWEALTH
To all to whom these Presents shall come, Greeting:
WHEREAS, in and by Article VIII of the Business Corporation Law, approved
the fifth day of May, Anno Domini one thousand nine hundred and thirty-three,
the Department of State is authorized and required to issue a
CERTIFICATE OF AMENDMENT
evidencing the amendment and restatement of the Articles of Incorporation in
their entirety of a business corporation organized under or subject to the
provisions of that Law; and
WHEREAS, The stipulations and conditions of that Law pertaining to the
amendment of Articles of Incorporation have been fully complied with by
FRM CORPORATION
name changed to
MYLAN LABORATORIES INC.
HENCEFORTH The "Articles," as defined in Article I of the Business
Corporation Law, shall not include any prior documents;
THEREFORE, KNOW YE, That subject to the Constitution of this Commonwealth
and under the authority of the Business Corporation Law, I do by these presents,
which I have caused to be Sealed with the Great Seal of the Commonwealth, extend
the rights and powers of the corporation named above, in accordance with the
terms and provisions of the Articles of Amendment presented by it to the
Department of State, with full power and authority to use and enjoy such rights
and powers, subject to all the provisions and restrictions of the Business
Corporation Law and all other applicable laws of this Commonwealth.
GIVEN: under my Hand and the Great Seal of the Commonwealth,
at the City of Harrisburg, This 28th day of September ,
in the year of our Lord, one thousand nine hundred and
seventy- one, and of the Commonwealth, the one hundred
and ninety-sixth .
---------------------------------
Secretary of the Commonwealth
COMMONWEALTH OF PENNSYLVANIA
Articles DEPARTMENT OF STATE
of CORPORATION BUREAU
Amendment
- -------------------------------------------------------------------------------
In compliance with the requirements of Article VIII of the Business
Corporation Law approved the 5th day of May, 1933, P.L. 364, as amended, the
applicant desiring to amend its Articles hereby certifies, under its corporate
seal that:
1. The name of the corporation is
MYLAN LABORATORIES INC.
2. The location of its registered office is:
Suite 2040, One Oliver Plaza, Pittsburgh, Pennsylvania 15222
3. The corporation was formed under the Act of May 5, 1933, P.L. 364, as amended
4. Its date of incorporation is: August 31, 1970
5. (Strike out (a) or (b) below, whichever is not applicable)
(a) The meeting of the shareholders of the corporation at which
the amendment was adopted was held at the time and place and
pursuant to the kind and period of notice herein stated.
Time: The 8th day of November , 1972
------------------ -------------- --
Place: Lakeview Country Club, Morgantown, West Virginia
Kind and period of notice: Notice mailed October 20, 1972; in
form it complied with Regulation 14A under the Securities
Exchange Act of 1934.
(b) xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
6. At the time of the action of the shareholders:
(a) The total number of shares outstanding was: 1,251,431 Common
(b) The number of shares entitled to vote was: * 1,251,431 Common
7. In the action taken by the shareholders:
(a) The total number of shares outstanding was: **
973,288 Common
(b) The number of shares entitled to vote was:**
2,413 Common
*If the shares of any class were entitled to vote as a class, the number
of shares of each class so entitled and the number of shares of all other
classes entitled to vote should be set forth.
**If the shares of any class were entitled to vote as a class, the number
of shares of such class and the number of shares of all other classes voted for
and against such amendment respectively should be set forth.
NOTE: If the effect of the amendment is to increase the authorized capital stock
of the corporation, excise tax at the rate of 1/5 of 1% on the amount of
increase will be due and payable with the filing of the amendment.
EXHIBIT A
MYLAN LABORATORIES INC.
AMENDED AND RESTATED ARTICLES OF INCORPORATION
(as filed in the Department of State December , 1972)
1. The name of the corporation is Mylan Laboratories Inc.
2. The location and post office address of its registered office in this
Commonwealth is Suite 2040, One Oliver Plaza, Pittsburgh, Pennsylvania 15222.
3. The corporation is organized under the provisions of the Pennsylvania
Business Corporaiton Law, and shall have unlimited power to engage in and to do
any lawful act concerning any or all lawful business for which corporations may
be incorporated under the Business Corporation Law.
4. The term of existence of the corporation is perpetual.
5. The aggregate number of shares which the corporation shall have the
authority to issue shall be 3,000,000 shares of Common Stock, par value $0.20
per share.
6. The shareholders of the corporation shall not have cumulative voting
rights.
8. The amendment adopted by the shareholders, set forth in full, follows:
"Resolved, that the Restated Articles of Incorporation of
the Company, as heretofore amended, be further amended and
restated to read as follows: (see Exhibit A)
"Resolved, that upon the taking effect of said amendment and
restatement of the Restated Articles of Incorporation of the Company,
the shares of Common Stock of the Company, par value $0.20 per share,
issued and outstanding immediately prior to the taking effect of said
amendment and restatement shall be, and hereby they are, reclassified
in the ratio of two and one-half shares of Common Stock, par value
$0.20 per share, to one share of Common Stock, par value $0.50 per
share, and one share of Common Stock, par value $0.50 per share, shall
be deemed to be issued and outstanding upon the taking effect of said
amendment and restatement in respect of each two and one-half shares of
Common Stock, par value $0.20 per share, which shall be issued and
outstanding immediately prior to the taking effect of said amendment
and restatement.
"Resolved, that no fractional shares will be issued as a
result of the reclassification, and each shareholder otherwise entitled
to receive a fraction of a share of the Company's Common Stock, par
value $0.50 per share, shall be required to sell such fractional
interest to the Company at a price equal of $12.50 per full share of
reclassified Common Stock."
IN TESTIMONY WHEREOF, the applicatant has caused therse Articles of
Amendment to be signed by its President or Vice President and its corporate
seal, duly attested by its Secretary or Treasurer, to be hereunto affixed this
day of November , 19 72.
By:--------------------------------------
(President)
(Secretary or Treasurer)
Approved and filed in the Department of State on the
1st day of December , A.D. 1972.
------------------- -------------------
---------------------------------
Secretary of the Commonwealth
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
OFFICE OF THE
SECRETARY OF THE COMMONWEALTH
To all to whom these Presents shall come, Greeting:
WHEREAS, In and by Article VIII of the Business Corporation Law,
approved the fifth day of May, Anno Domini one thousand nine hundred and
thirty-three, the Department of State is authorized and required to issue a
CERTIFICATE OF AMENDMENT
evidencing the amendment and restatement of the Articles of Incorporation in
their entirety of a business corporatio organized under or subject to the
provisions of that Law; and
WHEREAS, The stipulations and conditions of that Law pertaining to the
amendment of Articles of Incorporation have been fully complied with by
MYLAN LABORATORIES INC.
HENCRFORTH, The "Articles," as defined in Article I of the Business
Corporation Law, shall not include any prior documents;
THEREFORE, KNOW YE, That subject to the Constitution of this
Commonwealth and under the authority of the Business Corporation Law, I do by
these presents, which I have caused to be Sealed with the Great Seal of the
Commonwealth, extend the rights and powers of the corporation named above, in
accordance with the terms and provisions of the Articles of Amendment presented
by it to the Department of State, with full power and authority to use and enjoy
such rights and powers, subject to all the provisions and restrictions of the
Business Corporation Law and all other applicable laws of this Commonwealth.
GIVENunder my Hand and the Great Seal of the Commonwealth,
at the City of Harrisburg, this 1st day of December ,
in the year of our Lord, one thousand nine hundred and
seventy-two and of the Commonwealth, the one hundred
and ninety-seventh.
Applicant's Account No.
Filing Fee: $40
AB-2 79-05 1075
243944
Statement of COMMONWEALTH OF PENNSYLVANIA
Change of Registered DEPARTMENT OF STATE
Office-Domestic CORPORATION BUREAU
Business Corporation
- --------------------------------------------------------------------------------
In compliance with the requirements of seciton 307 of the Business
Corporation Law, act of May 5, 1933 (P.L. 364) (15 P.S. ss.1307) the undersigned
corporation, desiring to effect a change in registered office, does hereby
certify that:
1. The name of the corporation is:
MYLAN LABORATORIES INC.
2. The address of its present registered office in this Commonwealth is (the
Department of State is hereby authorized to correct the following statement to
conform to the records of the Department):
2040 One Oliver Plaza
(NUMBER) (STREET)
Pittsburgh Pennsylvania 15222
- --------------------------------------------------------------------------------
(CITY) (ZIP CODE)
3. The address to which the registered office in this Commonwealth is to be
changed is:
1968 Two Oliver Plaza
(NUMBER) (STREET)
Pittsburgh Pennsylvania 15222
- ------------------------------------------------------------------------------
(CITY) (ZIP CODE)
4. Such change was authorized by resolution duly adopted by at least a majority
of the members of the board of directors of the corporation.
IN TESTIMONY WHEREOF, the udnersigned corporation has caused this
statement to be signed by a duly a uthorized officer, and its corporate seal,
duly attested by another such officer, to be hereunto affixed, this 10th day of
January , 19 79.
(NAME OF CORPORATION)
By:
(SIGNATURE)
(TITLE: PRESIDENT, VICE PRESIDENT, ETC.)
Attest:
(SIGNATURE)
SECRETARY
(TITLE: SECRETARY, ASSISTANT SECRETARY, ETC.)
(CORPORATE SEAL)
Applicant's Account No.
Filing Fee: $40
AB-2 81 - 80 1775
-------------------------------------------
Articles of COMMONWEALTH OF PENNSYLVANIA
Amendment - DEPARTMENT OF STATE
Domestic Business Corporation CORPORATION BUREAU
- -------------------------------------------------------------------------------
In compliance with the requirements of section 806 of the Business
Corporation Law, act of May 5, 1933 (P.L. 364) (15 P.S. ss.1806), the
undersigned corporation, desiring to amend its Aritcles, does hereby certify
that:
1. The name of the corporation is:
MYLAN LABORATORES INC.
2. The location of its registered office in this Commonwealth is (the Department
of State is hereby authorized to correct the following statement to conform to
the records of the Department):
1968 Two Oliver Plaza
(NUMBER) (STREET)
Pittsburgh Pennsylvania 15222
-----------------------------------------------------------------------------
(CITY) (ZIP CODE)
3. The statute by or under which it was incorporated is:
Pennsylvania Business Corporation Law, Act of May 5, 1933, P.L. 364, as amended
4. The date of its incorporation is: August 31, 1970
5. (Check, and if appropriate, complete one of the following):
[ ] The meeting, of the shareholders of the corporation at which the
amendment was adopted was held at the time and place and pursuant to the kind
and period of notice herein stated.
Time: The 18th day of December , 1981
-------------------- ------------------------------ --
Place: 1030 Century Building, Pittsburgh, Pennsylvania
Kind and period of notice Written Notice of Special Meeting of
Shareholders mailed November 20, 1981
|_| The amendment was adopted by a consent in writing, setting forth
the action so taken, signed by all of the shareholders entitled to vote thereon
and filed with the Secretary of the corporation.
6. At the time of the action of shareholders:
(a) The total number of shares outstanding was:
2,519,424 shares of Common Stock
(b) The number of shares entitled to vote was:
2,519,424 shares of Common Stock
7. In the action taken by the shareholders:
(a) The number of shares voted in favor of the amendment was:
1,970,913 shares of Common Stock
(b) The number of shares voted against the amendment was:
25,626 shares of Common Stock
8. The amendment adopted by the shareholders, set forth in full, is as follows:
RESOLVED, that the aggregate number of shares of Common Stock,
par value $0.50 per share, which the Corporation shall have authority
to issue, be increased form 3,000,000 shares to 10,000,000 shares, and
to that end the proper officers be and are hereby authorized and
directed to cause preparation and filing of Articles of Amendment
restating paragraph 5 of the Amended and Restated Articles of
Incorporation to read as follows:
"5. The aggregate number of shares which the corporation shall
have the authority to issue shall be 10,000,000 shares of Common
Stock, par value $0.50 per share."
IN TESTIMONY WHEREOF, the undersigned corporation has caused these
Articles of Amendment to be signed by a duly authorized officer and its
corporate seal, duly attested by another such officer, to be hereunto affixed
this 18th day of December , 19 81.
(NAME OF CORPORATION)
By:
MILAN PUSKAR (SIGNATURE)
Rorbert W. Smiley (SIGNATURE) President
(TITLE, PRESIDENT, VICE PRESIDENT, ETC.
(TITLE, SECRETARY, ASSISTANT SECRETARY, ETC.)
(CORPORATE SEAL)
INSTRUCTIONS FOR COMPLETION OF FORM:
A. Any necessary copies of Form DSCB: 17.2 (Consent to Appropriation
of Name) or Form DSCB: 17.3 (Consent to Use of Similar Name) shall
accompany Articles of Amendment effecting a change of name.
B. Any necessary governmental approvals shall accompany this form.
C. Where action is taken by partial written consent pursuant to the
Articles, the second alternate of Paragraph 5 should be modified
accordingly.
D. If the shares of any class were entitled to vote as a class, the
number of shares of each class so entitled and the number of
shares of all other classes entitled to vote should be set forth
in Paragraph 6(b).
E. If the shares of any class were entitled to vote as a class, the
number of shares of each class and the number of shares of all
other classes voted for and against such amendment respectively
should be set forth in Paragraph 7(a) and 7(b).
F. BCL ss.807 (15 P.S. ss. 1807) requires that the corporation shall
advertise its intention to file or the filing of Articles of
Amendment. Proofs of publication of such advertising should not be
delivered to the Department, but should be filed with the minutes
of the corporation.
COMMONWEALTH OF PENNSYVLANIA
DEPARTMENT OF STATE
To all to whom these Presents shall come, Greeting:
WHEREAS, In and by Arrticle VIII of the Business Corporation Law, approved
the fifth day of May, Anno Domini one thousand nine hundred and thirty-three, P.
L. 364, as amended, the Department of State is authorized and required to issue
a
CERTIFICATE OF AMENDMENT
evidencing the amendment of the Articles of Incorporation of a business
corporation organized under or subject to the provisions of that Law, and
WHEREAS, The stipulations and conditions of that Law pertaining to the
amendment of Articles of Incorporation have been fully complied with by
MYLAN LABORATORIES INC.
THEREFORE, KNOW YE, That subject to the Constitution of this
Commonwealth and under the authority of the Business Corporation Law, I do by
these presents, which I have caused to be Sealed with the Great Seal of the
Commonwealth, extend the rights and powers of the corporation named above, in
accordance with the terms and provisions of the Aricles of Amendment presented
by it to the Department of State, with full power and authority to use and enjoy
such rights and powers, subject to all the provisions and restrictions of the
Business Corporation Law and all other applicable laws of this Commonwealth.
Givenunder my Hand and the Great Seal of the Commonwealth,
at the City of Harrisburg, this 21st day of DECEMBER in
the year of our Lord one thousand nine hundred and
eightyty-one and of the Commonwealth the two hundred
and six.
------------------------------------
Secretary of the Commonwealth
Applicant's Account No.
Filing Fee: $40
AB-2 82-08 000988
243944
Statement of COMMONWEALTH OF PENNSYLVANIA
Change of Registered DEPARTMENT OF STATE
Office-Domestic CORPORATION BUREAU
Business Corporation
- -------------------------------------------------------------------------------
In compliance with the requirements of section 307 of the Business
Corporation Law, act of May 5, 1933 (P.L. 364) (15 P.S. ss.1307) the undersigned
corporation, desiring to effect a change in registered office, does hereby
certify that:
1. The name of the corporation is:
MYLAN LABORATORIES INC.
2. The address of its present registered office in this Commonwealth is (the
Department of State is hereby authorized to correct the following statement to
conform to the records of the Department):
1968 Two Oliver Plaza
(NUMBER) (STREET)
Pittsburgh Pennsylvania 15222
----------------------------------------------------------------------------
(CITY) (ZIP CODE)
3. The address to which the registered office in this Commonwealth is to be
changed is:
1030 Century Building, 130 Seventh Street
(NUMBER) (STREET)
Pittsburgh Pennsylvania 15222
- -------------------------------------------------------------------------------
(CITY) (ZIP CODE)
4. Such change was authorized by resolution duly adopted by at least a majority
of the members of the board of directors of the corporation.
IN TESTIMONY WHEREOF, the undersigned corporation has caused this
statement to be signed by a duly authorized officer, and its corporate seal,
duly attested by another such officer, to be hereunto affixed, this 29th day of
January , 19 82.
Mylan Laborastores Inc.
(NAME OF CORPORATION)
By:
Milan Puskar (SIGNATURE)
(TITLE: PRESIDENT, VICE PRESIDENT, ETC.)
Attest:
Robert W. Smiley (SIGNATURE)
SECRETARY
(TITLE: SECRETARY, ASSISTANT SECRETARY, ETC.)
(CORPORATE SEAL)
Applicant's Account No.
Filing Fee: $40
AB-2 8443 975
---------------------------------------
Articles of COMMONWEALTH OF PENNSYLVANIA
Amendment- DEPARTMENT OF STATE
Domestic Business Corporation CORPORATION BUREAU
- -------------------------------------------------------------------------------
In compliance with the requirements of Section 307 of the Business
Corporation Law, act of May 5, 1933 (P.L. 364) (15 P.S. ss.1806) the undersigned
corporation, desiring to effect a change in registered office, does hereby
certify that:
1. The name of the corporation is:
MYLAN LABORATORIES INC.
2. The location of its registered office in this Commonwealth is (the Department
of State is hereby authorized to correct the following statement to conform to
the records of the Department):
1030 Century Building 130 Seventh Street
-----------------------------------------------------------------------
(NUMBER) (STREET)
Pittsburgh Pennsylvania 15222
--------------------------------------------------------------------
(CITY) (ZIP CODE)
3. The statute by or under which it was incorporated is:
Act of May 5, 1933, P.L. 364, as amended.
-----------------------------------------------------------------------------
4. The date of its incorporation is: August 31, 1970
5. (Check, and if appropriate, complete one of the following):
|_| The meeting of the shareholders of the corporation at which the amendment
was adopted was held at the time and place and pursuant to the kind and period
of notice herein stated.
Time: The 22nd day of June , 1984
-------------------- --------------------------
Place: Sheraton Lakeview, Morgantown, West Virginia
Kind and period of notice Written Notice of Annual Meeting of
Shareholders mailed approximately May 12, 1984
The amendment was adopted by a consent in writing, setting forth the
action so taken, signed by all of the shareholders entitled to vote thereon and
filed with the Secretary of the corporation.
6. At the time of the action of shareholders:
(a) The total number of shares outstanding was:
7,949,996
- -------------------------------------------------------------------------------
(b) The number of shares entitled to vote was:
7,949,996
- --------------------------------------------------------------------------------
7. In the action taken by the shareholders:
(a) The number of shares voted in favor of the amendment was:
5,098,829
- --------------------------------------------------------------------------------
(b) The number of shares voted against the amendment was:
107,334
- --------------------------------------------------------------------------------
8. The amendments adopted by the shareholders, set forth in full, is as follows:
See Exhibit A and B attached hereto.
IN TESTIMONY WHEREOF, the undersigned corporation has caused these
Articles of Amendment to be signed by a duly authorized officer and its
corporate seal, duly attested by another such officer, to be hereunto affixed
this 22nd day of June , 1984.
MYLAN LABORATORIES INC.
(NAME OF CORPORATION)
Attest: By:
(SIGNATURE)
(SIGNATURE) President
(TITLE, PRESIDENT, VICE PRESIDENT, ETC.)
(TITLE, SECRETARY, ASSISTANT SECRETARY, ETC.)
(CORPORATE SEAL)
INSTRUCTIONS FOR COMPLETION OF FORM:
A. Any necessary copies of Form DSCB: 17.2 (Consent to Appropriation
of Name) or Form DSCB: 17.3 (Consent to Use of Similar Name) shall
accompany Articles of Amendment effecting a change of name.
B. Any necessary governmental approvals shall accompany this form.
C. Where action is taken by partial written consent pursuant to the
Articles, the second alternate of Paragraph 5 should be modified
accordingly.
D. If the shares of any class were entitled to vote as a class, the
number of shares of each class so entitled and the number of
shares of all other classes entitled to vote should be set forth
in Paragraph 6(b).
E. If the shares of any class were entitled to vote as a class, the
number of shares of each class and the number of shares of all
other classes voted for and against such amendment respectively
should be set forth in Paragraph 7(a) and 7(b).
F. BCL ss.807 (15 P.S. ss. 1807) requires that the corporation shall
advertise its intention to file or the filing of Articles of
Amendment. Proofs of publication of such advertising should not be
delivered to the Department, but should be filed with the minutes
of the corporation.
EXHIBIT A
AMENDMENT AND RESTATEMENT OF
PARAGRAPH 5 OF THE
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF MYLAN LABORATOREIS INC.
"5.A. The aggregate number of shares which the corporation
shall have authority to issue is fifty-five million (55,000,000) shares,
consisting of fifty million (50,000,000) shares of common stock, par value $0.50
per share (hereinafter referred to as the "Common Stock"), and five million
(5,000,000) shares of preferred stock, par value $0.50 per share (hereinafter
referred to as the "Preferred Stock").
B. The class of Preferred Stock may be divided into and issued
from time to time in one or more series. The designations, the relative
preferences and participating, optional and other special rights, and the
qualifications, limitations or restrictions of each such series, if any, may
differ from these of any and all other series; and the board of directors is
hereby expressly authorized to fix and determine, by resolution or resolutions
prior to the issuance of any shares of any series of the Preferred Stock, the
designations, preferences, relative, participating, optional and other special
rights and the qualifications, limitations or restrictions of such series,
including, without limiting the generality of the foregoing, the following:
(i) The date and time at which, and the terms and conditions
on which, dividends, if any, on such series of Preferred Stock may be
paid and may be cumulative;
(ii) The right, if any, of the holders of shares of such
series of Preferred Stock to vote and the manner of voting, except as
may otherwise be provided by paragraph 6 hereof or by the Pennsylvania
Business Corporation Law;
(iii) The right, if any, of the holders of shares of such
series of Preferred Stock to convert the same into or exchange the same
for other classes of stock of the corporation and the terms and
conditions for such conversion and exchange;
(iv) The redemption price or prices, if any, and the time at
which, and the terms and conditions on which, the shares of such series
of Preferred Stock may be redeemed;
(v) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for such series of Preferred Stock;
(vi) The rights of the holders of shares of such series of
Preferred Stock upon the voluntary or involuntary liquidation,
distribution or sale of assets, dissolution or winding up of the
corporation; and
(vii) The number of shares which shall constitute any such
series, which number may at any time or from time to time be increased
or decreased, but not below the number of shares thereof then
outstanding.
C. Holders of Common Stock shall be entitled to one vote per share in
the election of directors and in all other matters submitted for action by the
holders of Common Stock.
D. Except for and subject to those rights expressly granted in or by
virtue of subparagraph B of this paragraph 5 to the holders of the Preferred
Stock, or except as may be provided by the laws of the Commonwealth of
Pennsylvania, the holders of the Common Stock shall have exclusively all other
rights of shareholders."
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
TO ALL TO WHOM THESE PRESENTS SHALL COME, GREETING:
WHEREAS, in and by Article VIII of the Business Corporation Law,
approved the fifth day of May, Anno Domino one thousand nine hundred and
thirty-three, P.L. 364, as amended, the Department of State is authorized and
required to issue a
CERTIFICATE OF AMENDMENT
evidencing the amendment to the Articles of Incorporation of a business
corporation organized under or subject to the provisions of that Law, and
WHEREAS, the stipulations and conditions of that Law pertaining to the
amendment of Articles of Incorporation have been fully complied with by:
MYLAN LABORATORIES INC.
THEREFORE, KNOW YE, that subject to the Constitution of this
Commonwealth and under the authority of the Business Corporation Law, I do by
these presents, which I have caused to be sealed with the Great Seal of the
Commonwealth, extend the rights and powers of the corporation named above, in
accordance with the terms and provisions of the Articles of Amendment presented
by it to the Department of State, with full power and authority to use and enjoy
such rights and powers, subject to al the provisions and restrictions of the
Business Corporation Law and all other applicable laws of this Commonwealth.
GIVEN under my hand and the Great Seal of the Commonwealth, as
the City of Harrisburg, this __ day of June in the year of our Lord one thousand
nine hundred and eighty four and of the Commonwealth the two hundred and eighth.
-------------------------------
Secretary of the Commonwealth
154761_1.WPD
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
CORPORATE BUREAU
- ----------------------------------------------------------------------
In compliance with the requirements of Section 806 of the Business
Corporation Law, act of May 5, 1933 (P.L. 364) (15 P.S. ss. 1806), the
undersigned corporation, desiring to amend its Articles, does hereby certify
that:
1. The name of the corporation is:
Mylan Laboratories Inc.
- --------------------------------------------------------------------------------
2. The location of its registered office in this Commonwealth is (the Department
of State is hereby authorized to correct the following statement to confirm to
the records of the Department):
1030 Century Building, 120 Seventh Street
- ---------------------------------------------------------------------------
(Number) (Street)
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------
(City) (State) (Zip Code)
3. The state by or under which it was incorporated is:
Act of May 5, 1933, P.L. 364, as amended
- ----------------------------------------------------------------------------
4. The date of its incorporation is:
August 31, 1970
- ------------------------------------------------------------------------
5. (Check, and if appropriate, complete one of the following):
[X] The meeting of the shareholders of the corporation at which
the amendment was adopted was held at the time and place and
pursuant to the kind and period of notice herein stated:
Time: The 22nd day of June, 1988
Place: Sheraton Lakeview Inn, Morgantown, West Virginia
Kind and period of notice: Written Notice of Annual Meeting
mailed to Shareholders on May 23, 1988.
|_| The amendment was adopted by a consent in writing setting
forth the action so taken, signed by all of the shareholders entitled to vote
thereon and filed with the Secretary of the corporation.
6. At the time of the action of shareholders:
(a) The total number of shares outstanding was:
36,143,411 Shares of Common Stock as of 4/30/1988
- ----------------------------------------------------------------------------
(b) The number of shares entitled to vote was:
36,143,411 Shares of Common Stock as of 4/30/1988
- ------------------------------------------------------------------------------
7. In the action taken by the shareholders:
(a) The number of shares voted in favor of the amendment was:
29,232,097 Shares of Common Stock
- --------------------------------------------------------------------------------
(b) The number of shares voted against the amendment was:
1,241,843 Shares of Common Stock
- --------------------------------------------------------------------------------
8. The amendment adopted by the shareholders, set forth in full, as follows:
RESOLVED, that Paragraph 5.A of the Restated Articles of
Incorporation of Mylan Laboratories Inc. be amended and restated to
read in its entirety as follows:
5.A. The aggregate number of shares which the corporation
shall have authority to issue is one hundred five million
(105,000,000) shares, consisting of one hundred million
(100,000,000) shares of common stock, par value $.50 per share
(hereinafter referred to as the "Common Stock"), and five
million (5,000,000) shares of preferred stock, par value $.50
per share (hereinafter referred to as the "Preferred Stock").
IN TESTIMONY WHEREOF, the undersigned corporation has caused these
Articles of Amendment to be signed by a duly authorized officer and its
corporate seal, duly attested by another such officer, to be hereunto affixed
this 29th day of July, 1988.
MYLAN LABORATORIES INC.
By:____________________________________
Roy McKnight, Chairman
Attest:
- -----------------------------------
(Signature)
- -----------------------------------
Title: Secretary, Assistant Secretary, etc.
(CORPORATE SEAL)
INSTRUCTION FOR COMPLETION OF FORM:
A. Any necessary copies of Form DSCB:17.2 (Consent to
Appropriation of Name) or Form DSCB: 17.3 (Consent to Use of
Similar Name) shall accompany Articles of Amendment effecting
a change of name.
B. Any necessary governmental approvals shall accompany this form.
C. Where action is taken by partial written consent pursuant to
the Articles, the second alternate of Paragraph 5 should be
modified accordingly.
D. If the shares of any class were entitled to vote as a class,
the number of shares of each class so entitled and the number
of shares of all other classes entitled to vote should be set
forth in Paragraph 6(b).
E. If the shares of any class were entitled to vote as a class,
the number of shares of such class and the number of shares of
all other classes voted for and against such amendment
respectively should be set forth in Paragraphs 7(a) and 7(b).
F. BCL ss. 807 (P.S. ss. 1807) requires that the corporation
shall advertise its intention to file or the filing of
Articles of Amendment, Proofs of publication of such
advertising should not be delivered to the Department but
should be filed with the minutes of the corporation.
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
TO ALL TO WHOM THESE PRESENTS SHALL COME, GREETING:
WHEREAS, in and by Article VIII of the Business Corporation Law,
approved the fifth day of may, Anno Domino one thousand nine hundred and
thirty-three, P.L. 364, as amended, the Department of State is authorized and
required to issue a
CERTIFICATE OF AMENDMENT
evidencing the amendment to the Articles of Incorporation of a business
corporation organized under or subject to the provisions of that Law, and
WHEREAS, the stipulations and conditions of that Law pertaining to the
amendment of Articles of Incorporation have been fully complied with by:
MYLAN LABORATORIES INC.
THEREFORE, KNOW YE, that subject to the Constitution of this
Commonwealth and under the authority of the Business Corporation Law, I do by
these presents, which I have caused to be sealed with the Great Seal of the
Commonwealth, extend the rights and powers of the corporation named above, in
accordance with the terms and provisions of the Articles of Amendment presented
by it to the Department of State, with full power and authority to use and enjoy
such rights and powers, subject to al the provisions and restrictions of the
Business Corporation Law and all other applicable laws of this Commonwealth.
GIVEN under my hand and the Great Seal of the Commonwealth, as
the City of Harrisburg, this __ day of June in the year of our Lord one thousand
nine hundred and eighty four and of the Commonwealth the two hundred and eighth.
-------------------------------
Secretary of the Commonwealth
Microfilm Number --------------------------
Filed with the Department of State on
Entity Number --------------------------
-----------------------------
Secretary of the Commonwealth
ARTICLES OF AMENDMENT-DOMESTIC BUSINESS CORPORATION
DSCB:15-1915 (Rev 90)
In compliance with the requirements of 15 Pa.C.S. ss. 1915 (relating to
articles of amendment), the undersigned business corporation, desiring to amend
its Articles, hereby states that:
1. The name of the corporation is:
Mylan Laboratories Inc.
- --------------------------------------------------------------------------------
2. The (a) address of this corporation's current registered office in this
Commonwealth or (b) name of its commercial registered office provider and the
county of venue is (the Department is hereby authorized to correct the following
information to conform to the records of the Department):
1030 Century Building, 120 Seventh Street, Pittsburgh, Pennsylvania 15222
- --------------------------------------------------------------------------------
Number and Street City State Zip County
(b) c/o:
- -------------------------------------------------------------------------------
Name of Commercial Registered Office Provider County
For a corporation represented by a commercial registered office provider,
the county in (b) shall be deemed the county in which the corporation is located
for venue and official publication purposes.
3. The statute by or under which it was incorporated is: Act of May 5, 1933,
P.L. 364, as amended
4. The date of its incorporation is: August 31, 1970
5. (Check, and if appropriate complete, one of the following):
XX The amendment shall be effective upon filing these Articles of
Amendment in the Department of State.
___ The amendment shall be effective on
______________at ________________________
6. (Check one of the following): Date Hour
XX The amendment was adopted by the shareholders (or members)
pursuant to 15 Pa.C.S. ss.1914(a) and (b).
___ The amendment was adopted by the board of directors pursuant
to 15 Pa.C.S.ss.1914(c).
7. (Check, and if appropriate complete, one of the following):
___ The amendment adopted by the corporation, set forth in full,
is as follows:
XX The amendment adopted by the corporation is set forth in full
in Exhibit A attached hereto and made a part hereof.
DSCB:15-1915 (Rev 90)-2
8. (Check if the amendment restates the Articles):
----
The restated Articles of Incorporation supersede the original
Articles and all amendments thereto.
IN TESTIMONY WHEREOF, the undersigned corporation has caused these
Articles of Amendment to be signed by a duly authorized officer thereof this
______ day of April, 1993.
MYLAN LABORATORIES INC.
By:________________________________
(Signature)
Title: Secretary
MYLAN LABORATORIES INC.
EXHIBIT "A"
TO ARTICLES OF AMENDMENT
RESOLVED, that Paragraph 5.A of the Restated Articles of Incorporation
of Mylan Laboratories Inc. be amended and restated to read in its entirety as
follows:
5.A. The aggregate number of shares which the corporation
shall have authority to issue is 305,000,000 shares,
consisting of 300,000,000 shares of common stock, par
value $.50 per share (hereinafter referred to as the
"Common Stock"), and 5,000,000 shares of preferred
stock, par value $.50 per share (hereinafter referred
to as the "Preferred Stock").
Microfilm Number Filed with the Department of State on
Entity Number
Secretary of the Commonwealth
STATEMENT WITH RESPECT TO SHARES-DOMESTIC BUSINESS CORPORATION
DSCB:15-1522 (Rev 90)
In compliance with the requirements of 15 Pa.C.S. ss. 1522(b) (relating
to statement with respect to shares), the undersigned corporation, desiring to
state the designation and voting rights, preferences, limitations, and special
rights, if any, of a class or series of its shares, hereby states that:
1. The name of the corporation is:
Mylan Laboratories Inc.
- -------------------------------------------------------------------------
2. (Check and complete one of the following):
-----
The resolution amending the Articles under 15 Pa.C.S. ss. 1522(b)
(relating to divisions and determinations by the board), set forth in
full, is as follows:
XX The resolution amending the Articles under 15 Pa.C.S.ss.1522(b)
is set forth in full in Exhibit A
--
attached hereto and made a part hereof.
3. The aggregate number of shares of such class or series established and
designated by (a) such resolution, (b) all prior statements, if any, filed under
15 Pa.C.S. ss. 1522 or corresponding provisions of prior law with respect
thereto, and (c) any other provision of the Articles is 300,000 shares.
4. The resolution was adopted by the Board of Directors or an authorized
committee thereof on August 22, 1996
5. (Check, and if appropriate complete, one of the following):
-----
__ The resolution shall be effective upon the filing of this statement with
respect to shares in the Department of State.
-- -----
The resolution shall be effective on: at
Date Hour
IN TESTIMONY WHEREOF, the undersigned corporation has caused this
statement to be signed by a duly authorized officer thereof this 22 day of
August, 1996.
MYLAN LABORATORIES INC.
By:
Title:
Exhibit A
RESOLUTION OF BOARD OF DIRECTORS
TO AMEND ARTICLES OF INCORPORATION
TO ESTABLISH A SERIES OF PREFERRED SHARES
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of the Company in accordance with the provisions of the
Amended and Restated Articles of Incorporation of the Company and Section 1522
of the Pennsylvania Business Corporation Law, as amended, the Board of Directors
hereby adopts and approves an amendment to the Amended and Restated Articles of
Incorporation of the Company, as amended, which creates out of the authorized
but unissued shares of Preferred Stock, par value $0.50 per share, of the
Company a series of Preferred Stock, the designation and authorized number of
shares of which, and the terms and relative rights, preferences and limitations
of which, are as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the
"Series A Preferred Stock") and the number of shares constituting the
Series A Preferred Stock shall be 300,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors;
provided, (a) that no decrease shall reduce the number of shares of
Series A Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon
the exercise of outstanding options, rights, or warrants or upon the
conversion of any outstanding securities issued by the corporation
convertible into Series A Preferred Stock; and (b) no increase shall
cause the aggregate number of all shares of Preferred Stock that the
corporation is authorized to issue to be greater than is authorized by
these Amended and Restated Articles of Incorporation.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
other series of Preferred Stock of the corporation (or any similar
stock) ranking prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred
Stock, in preference to the holders of Common Stock, par value $0.50
per share (the "Common Stock"), of the corporation, and of any other
junior stock, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March, June,
September, and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1 or (b)
subject to the provision for adjustment hereinafter set forth, 1000
times the aggregate per share amount of all cash dividends, and 1000
times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common
Stock since the immediately preceding Quarterly Dividend Payment Date
or, with respect to the First Quarterly Dividend Payment Date, since
the first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) The corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) of this
Section immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $1 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date for
the first Quarterly Dividend Payment date, in which case dividends on
such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series A Preferred Stock
entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holder of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 1000 votes on all matters submitted to a vote of the
shareholders of the corporation. In the event the corporation shall at
any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein or in any other
Statement with Respect to Shares or other amendment of the Articles of
Incorporation creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series A Preferred Stock and
the holders of shares of Common Stock and any other capital stock of
the corporation having general voting rights shall vote together as one
class on all matters submitted to a vote of shareholders of the
corporation.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series A Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent
they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid in full, the
corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution, or winding up) to the
Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution, or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution, or winding up) to the
Series A Preferred Stock, provided that the corporation may at any time
redeem, purchase, or otherwise acquire shares of any such junior stock
in exchange for shares of any stock of the corporation ranking junior
(either as to dividends or upon dissolution, liquidation, or winding
up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any shares of
stock ranking on a parity with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(B) The corporation shall not permit any subsidiary of the
corporation to purchase or otherwise acquire for consideration any
shares of stock of the corporation unless the corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition
thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred stock and may be reissued
as part of a new series of Preferred Stock subject to the conditions
and restrictions on issuance set forth herein, in the Articles of
Incorporation, or in any other Articles of Amendment creating a series
of Preferred Stock, par value $0.50 per share, or any similar stock or
as otherwise required by law.
Section 6. Liquidation, Dissolution, or Winding Up. Upon any
liquidation, dissolution, or winding up of the corporation, no
distribution shall be made (1) to the holder of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution, or
winding up) to the Series A Preferred Stock unless the holders of
shares of Series A Preferred Stock outstanding shall have received out
of the assets of the Company available for distribution to its
shareholders after payment or provision for payment of any securities
ranking senior to the Series A Preferred Stock, for each share of
Series A Preferred Stock, subject to adjustment as hereinafter
provided, (A) $1000.00 plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared to the
date of such payment or, (B) if greater than the amount specified in
clause (1)(A) of this sentence, an amount equal to 1000 times the
aggregate amount to be distributed per share to holders of Common
Stock, as the same may be adjusted as herein provided, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution, or winding up) with the Series A
Preferred Stock, unless simultaneously therewith distributions are made
ratably on the Series A Preferred Stock and all such parity stock in
proportion to the total amounts to which the holders of all such shares
are entitled upon such liquidation, dissolution, or winding up. In the
event the corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate amount to
which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the provision in clause (1) of
the preceding sentence shall be adjusted by multiplying such amount by
a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the corporation shall
enter into any consolidation, merger, combination, or other transaction
in which the shares of Common Stock are exchanged for or changed into
other stock or securities, cash, and/or any other property, then in any
such case each share of Series A Preferred Stock shall at the same time
be similarly exchanged or changed into an amount per share, subject to
the provision or adjustment hereinafter set forth, equal to 1000 times
the aggregate amount of stock, securities, cash, and/or any other
property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the
corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in
each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Preferred Stock
shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to
all other series of the corporation's Preferred Stock.
Section 10. Amendment. The Articles of Incorporation of the corporation
shall not be amended in any manner that would materially alter or
change the powers, preferences, or special rights of the Series A
Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of
Series A Preferred Stock, voting together as a single class.
EXHIBIT B
AMENDMENT
ADDING PARAGRAPH 7 TO THE
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF MYLAN LABORATORIES INC.
7. Except as provided in subparagraph B below, no corporate
action of a character described in subparagraph A below, and no agreement, plan
or resolution providing therefor, shall be valid or binding upon the corporation
unless such corporate action shall have been approved in compliance with all
applicable provisions of the Pennsylvania Business Corporation Law and these
Articles and shall have been authorized by the affirmative vote of at least
seventy-five (75%) percent of the outstanding shares of Common Stock entitled to
vote, given in person or by proxy, at a meeting called for such purpose.
A.Corporate actions subject to the voting requirements of this
paragraph 7 shall be:
(i) any merger or consolidation to which the
corporation and an interested person are parties; or
(ii) any sale, lease, exchange or other disposition,
in a single transaction or series of related transactions, of
all or substantially all or a substantial part of the
properties or assets of the corporation to an interested
person; or
(iii) the adoption of any plan or proposal for the
liquidation or dissolution of the corporation under or
pursuant to which the rights or benefits inuring to an
interested person or different in kind or character from the
rights or benefits inuring to the other holders of Common
Stock; or
(iv) any transaction of a character described in
clause (i), (ii) or (iii) above involving an affiliate or
associate of an interested person or involving an associate of
any such affiliate.
B. The voting requirements of this paragraph 7 shall not apply
to any transaction of a character described in clause (i), (ii), (iii)
or (vi) of subparagraph A above should any of the following obtain with
respect to the transaction.
(a) The Board of Directors shall have approved the
transaction by a majority vote of all directors prior to the
time the interested person connected with the transaction
became an interested person.
(b) The Board of Directors shall have approved the
transaction prior to consummation thereof by a majority vote
of all directors disregarding the vote of each director who
was an interested person, or an affiliate, associate or agent
of such interested person, or an associate or agent of any
such affiliate.
C. For purposes of this paragraph 7, the following definitions
shall apply:
(i) "Affiliate" shall mean a person that directly, or
indirectly through one or more intermediaries, controls or is
controlled by or is under common control with another person.
(ii) "Associate" shall mean any corporation or
organization of which a person is an officer or partner or is,
directly or indirectly, the beneficial owner of ten percent or
more of any class of equity securities; or any trust or estate
in which a person has a ten percent or larger beneficial
interest or as to which a person serves as a trustee or in a
similar fiduciary capacity; or any relative or spouse of a
person and any relative of a spouse, who has the same
residence as such person.
(iii) "Beneficial Ownership" shall mean all shares
directly or indirectly owned by a person and all shares which
a person has the right to acquire through the exercise of any
option, warrant or right (whether or not currently
exercisable), through the conversion of a security, pursuant
to the power to revoke a trust, discretionary account or
similar arrangement, pursuant to automatic termination of a
trust, discretionary account or similar arrangement or
otherwise. All shares shall be deemed indirectly owned by a
person as to which such person enjoys benefits substantially
equivalent to those of ownership by reason of any contract,
understanding, relationship, agreement or other arrangement,
including without limitation any written or unwritten
agreement to act in concert.
(iv) "Control" shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of
the management and policies of a person, whether through
ownership of voting securities, by contract or otherwise.
(v) "Interested Person" shall mean any person who
beneficially owns ten percent or more of the outstanding
shares of Common Stock of the corporation.
(vi) "Person" shall mean an individual, a
corporation, a partnership, an association, a joint-stock
company, a trust, any unincorporated organization, a
government or political subdivision thereof, a person acting
through or in concert with one or more other persons and any
other entity.
(vii) "Substantial Part" shall mean more than twenty
percent of the total consolidated assets of the corporation,
as shown on its consolidated balance sheet as of the end of
the most recent fiscal year.
D. The affirmative vote of the holders of at least
seventy-five percent of the outstanding shares of Common Stock entitled
to vote shall be required to amend or repeal this paragraph 7."
4.3 Bylaws of the Registrant, as amended to date.
Exhibit 4.3
MYLAN LABORATORIES INC.
By-Laws*
ARTICLE I
Shareholders Section 1.01. Annual Meetings. Annual meetings of the
shareholders shall be held, commencing in 1972, on the second Wednesday of June
in each year if not a legal holiday, and if a legal holiday, then on the next
succeeding day which is not a legal holiday, at 11:00 o'clock A.M., at the
principal business office of the Corporation, or at such other date, time and
place as may be fixed by the Board of Directors. Any business may be transacted
at the annual meeting whether or not the notice calling such meeting shall have
contained a reference thereto, except as may otherwise be required by law.
Section 1.02. Special Meetings. Special meetings of the shareholders may be
called at any time by the President or the Board of Directors. Special meetings
shall be held at the principal business office of the Corporation, or at such
other place as may be fixed by the Board of Directors. No business may be
transacted at any special meeting other than that stated in the notice of
meeting and business which is germane thereto.
Section 1.03. Organization. The President, or in his absence the Vice
President having the greatest seniority, shall preside, and the Secretary, or in
his absence any Assistant Secretary, shall act as secretary, at all meetings of
the shareholders. -------- *As amended and in effect on December 22, 1997.
1.
Section 1.04. Business of Meetings. (a) At any annual meeting of the
shareholders, only such business will be conducted or considered as is properly
brought before the meeting. To be properly brought before an annual meeting,
business must be (i) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board, (ii) otherwise properly
brought before the meeting by the presiding officer or by or at the direction of
majority of the entire Board, or (iii) otherwise properly requested to be
brought before the meeting by a shareholder of the Corporation in accordance
with Section 1.04(b) of these By-laws.
(b) For business to be properly requested by a shareholder to be brought
before an annual meeting, the shareholder must (i) be a shareholder of the
Corporation of record at the time of the giving of the notice for such annual
meeting, (ii) be entitled to vote at such meeting, and (iii) have given timely
notice thereof in writing to the Secretary. To be timely, a shareholder's notice
must be delivered to or mailed and received at the principal executive offices
of the Corporation not less than 60 calendar days prior to the annual meeting;
provided, however, that in the event public announcement of the date of the
annual meeting is not made at least 75 calendar days prior to the date of the
annual meeting, notice by the shareholder to be timely must be so received not
later than the close of business on the 10th calendar day following the day on
which public announcement is first made of the date of the annual meeting. A
shareholder's notice to the Secretary must set forth as to each matter the
shareholder proposes to bring before the annual meeting (A) a description in
reasonable detail of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting, (B)
the name and address, as they appear on the Corporation's books, of the
shareholder proposing such business and the beneficial owner, if any, on whose
behalf the proposal is made, (c) the class
2.
and number of shares of the Corporation that are owned beneficially and of
record by the shareholder proposing such business and the beneficial owner, if
any, on whose behalf the proposal is made, and (D) any material interest of such
shareholder proposing such business and the beneficial owner, if any, on whose
behalf the proposal is made in such business. A shareholder must also comply
with all applicable requirements of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder with respect to the matters
set forth in this Section 1.04 of the By-laws. For purposes of this Section 1.04
of the By-laws, "public announcement" means disclosure in a press release
reported by the Dow Jones News Service, Associated Press, or comparable national
news service or in a document publicly filed by the Corporation with the
Securities and Exchange Commission pursuant to Sections 13, 14, or 15(d) of the
Securities Exchange Act of 1934, as amended, or furnished to shareholders.
Nothing in this Section 1.04 of the By-laws will be deemed to affect any rights
of shareholders to request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule a-8 under the Securities Exchange Act of 1934, as
amended.
(c) At a special meeting of shareholders, only such business may be
conducted or considered as is properly brought before the meeting. To be
properly brought before a special meeting, business must be (i) specified in the
notice of the meeting (or any supplement thereto) given by or at the direction
of the Chairman or a majority of the entire Board, or (ii) otherwise properly
brought before the meeting by the presiding officer or by or at the direction of
a majority of the entire Board.
(d) The determination of whether any business sought to be brought before
any annual or special meeting of the shareholders is properly brought before
such meeting in accordance with this Section 1.04 of the By-laws will be made by
the presiding officer of such meeting. If the presiding officer determines that
any business is not properly brought before such
3.
meeting, he or she will so declare to the meeting and any such business will not
be conducted or considered.
ARTICLE II
Directors
Section 2.01. Number, Election and Term of Office. The number of Directors
which shall constitute the full Board of Directors shall be such number, not
less than three, as shall be fixed by the Board of Directors or the
shareholders, provided, however, that if all the shares of the Corporation shall
be owned beneficially and of record by either one or two shareholders, the
number of Directors may be less than three but not less than the number of
shareholders. The shareholders shall elect a full Board of Directors at each
annual meeting of shareholders. Each Director shall hold office from the time of
his election, but shall be responsible from such time only if he consents to his
election; otherwise from the time he accepts office or attends his first meeting
of the Board. Each Director shall serve until the next annual meeting of
shareholders, and thereafter until his successor shall have elected and shall
qualify, or until his prior death, resignation or removal.
Section 2.01(a) Filling Vacancies. Any vacancy caused by the death,
resignation or removal of a director shall be filled by appointment thereto by
the Chairman, or in his absence, by the Vice Chairman of the Board of Directors
at the next meeting of the Board, and such Director so appointed shall serve for
the unexpired term of the Director causing such vacancy.
4.
Section 2.01(b) Nominations of Directors; Election. (i) Only persons who
are nominated in accordance with the following procedures will be eligible for
election at a meeting of shareholders as Directors of the Corporation.
(ii) Nominations of persons for election as Directors of the Corporation
may be made only at an annual meeting of shareholders (A) by or at the direction
of the Board or (B) by any shareholder who is a shareholder of record at the
time of giving of notice provided for in this Section 2.01(b) of the By-laws,
who is entitled to vote for the election of Directors at such meeting, and who
complies with the procedures set forth in this Section 2.01(b) of these Bylaws.
All nominations by shareholders must be made pursuant to timely notice in proper
written form to the Secretary.
(iii) To be timely, a shareholder's notice must be delivered to or mailed
and received at the principal executive offices of the Corporation not less than
60 calendar days prior to the annual meeting of shareholders; provided, however,
that in the event that public announcement of the date of the annual meeting is
not made at least 75 calendar days prior to the date of the annual meeting,
notice by the shareholder to be timely must be so received no later than the
close of business on the 10th calendar day following the day on which public
announcement is first made of the date of the annual meeting. To be in proper
written form, such shareholder's notice must set forth or include (A) the name
and address, as they appear on the Corporation's books, of the shareholder
giving the notice and of the beneficial owner, if any, on whose behalf the
nomination is made; (B) a representation that the shareholder giving the notice
is a holder of record of stock of the Corporation entitled to vote at such
annual meeting and intends to appear in person or by proxy at the annual meeting
to nominate the person or persons
5.
specified in the notice; (C) the class and number of shares of stock of the
Corporation owned beneficially and of record by the shareholder giving the
notice and by the beneficial owner, if any, on whose behalf the nomination is
made; (D) a description of all arrangements or understandings between or among
any of (1) the shareholder giving the notice, (2) the beneficial owner on whose
behalf the notice is given, (3) each nominee, and (4) any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the shareholder giving the notice; (E) such other
information regarding each nominee proposed by the shareholder giving the notice
as would be required to be included in a proxy statement filed pursuant to the
proxy rules of the Securities and Exchange Commission had the nominee been
nominated, or intended to be nominated, by the Board; and (F) the signed consent
of each nominee to serve as a Director of the Corporation if so elected. At the
request of the Board, any person nominated by the Board for election as a
Director must furnish to the Secretary that information required to be set forth
in a shareholder's notice of nomination which pertains to the nominee. The
presiding officer of any annual meeting will, if the facts warrant, determine
that a nomination was not made in accordance with the procedures prescribed by
this Section 2.01(b) of the By-laws, and if he or she should so determine, he or
she will so declare to the meeting and the defective nomination will be
disregarded. A shareholder must also comply with all applicable requirements of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder with respect to the matters set forth in this Section 2.01(b) of the
By-laws.
Section 2.02. Regular Meetings; Notice. Regular meetings of the Board of
Directors shall be held at such places and times as shall from time to time be
determined by resolution of the Board. Notice of such regular meetings of the
Board shall not be required to be given, except that
6.
whenever the time or place of such regular meetings shall be fixed or changed,
notice of such action shall be given promptly by telephone or otherwise to each
Director not participating in such action.
Section 2.03. Annual Meeting of the Board. The annual meeting of the Board
of Directors shall be held immediately after the annual meeting of the
shareholders and shall be the annual organization meeting of the
Directors-elect, at which meeting the new Board shall be organized and the
officers of the Corporation for the ensuing year shall be elected.
Section 2.04. Special Meetings; Notice. Special meetings of the Board may
be called at any time by a majority of the directors or by the President or
Secretary, to be held at such place and day and hour as shall be specific in the
notice or waiver of notice thereof. Notice of every special meeting of the Board
of Directors, stating the place, day and hour thereof, shall be given by
telephone or otherwise to each Director at least 24 hours before the time at
which the meeting is to be held.
Section 2.05. Organization. The Board of Directors shall elect a permanent
Chairman who shall preside at each meeting of the Board and shall have such
other duties as may, from time to time, be conferred upon him by the Board. In
the absence of the Chairman, the President shall preside at meetings of the
Board. The Secretary, or in his absence any Assistant Secretary, shall act as
secretary at all meetings of the Board of Directors. In the absence of the
Secretary and an Assistant Secretary, the chairman of the meeting shall
designate any person to act as secretary of the meeting.
Section 2.06. Meetings by Telephone. One or more of the Directors may
participate in any regular or special meeting of the Board of Directors or of a
committee of the Board of
7.
Directors by means of conferencing telephone or similar communications equipment
by means of which all persons participating in the meeting are able to hear each
other.
Section 2.07. Resignations. Any Director may resign by submitting to the
President his resignation, which shall become effective upon its receipt by the
President or as otherwise specified therein.
Section 2.08. Limitation of Director Liability. A director of the Company
shall not be personally liable for monetary damages as such for any action
taken, or any failure to take any action, unless (i) the director has breached
or failed to perform the duties of his office under Section 8363, Title 42 of
the Pennsylvania Consolidated Statutes (relating to standard of care and
justifiable reliance) and (ii) the breach or failure to perform constitutes
self-dealing, willful misconduct or recklessness; provided, however, that the
foregoing provisions of this Section 2.08 shall not apply to (i) the
responsibility or liability of a director pursuant to any criminal statute or
(ii) the liability of a director for payment of taxes pursuant to local, state
or federal law. Neither the amendment nor the repeal of this Section 2.08 shall
eliminate or reduce the effect of this Section 2.08 with respect to any matter
occurring, or any cause of action, suit or claim that, but for this Section
2.08, would accrue or arise, prior to such amendment or repeal. If Title 42 of
the Pennsylvania Consolidated Statutes is amended after approval by the
shareholders of this Section 2.08 to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of a director of the Company shall be eliminated or limited to the fullest
extent permitted by Title 42 as amended from time to time.
8.
ARTICLE III
Officers
Section 3.01. Officers. The Officers of the Corporation shall be the
President, such number of Vice Presidents as may be determined by the Board of
Directors, a Secretary and a Treasurer, all of whom shall be elected by the
Board of Directors. Any two or more offices may be held by the same person,
except the offices of the President and Secretary. Each officer shall hold
office until the next succeeding annual meeting of the Board of Directors and
thereafter until his successor shall have been elected and shall qualify, or
until his prior death, resignation or removal.
Section 3.02. Additional Officers; Other Agents and Employees. The Board of
Directors may from time to time elect such additional officers to hold office
for such periods, have such authority and perform such duties as may be provided
by resolution of the Board of Directors. The President may appoint from time to
time such other agents and employees as may be deemed advisable for the prompt
and orderly transaction of the business of the Corporation, prescribe their
duties and the conditions of their employment, fix their compensation and
dismiss them.
Section 3.03. The President. The President shall be the chief executive
officer of the Corporation. Subject to the control of the Board of Directors,
the President shall have general policy supervision of and general management
over all the property, business, operations and affairs of the Corporation, and
shall see that the policies and programs adopted or approved by the Board are
carried out. The President shall have and exercise such further powers and
duties as from time to time may be prescribed in these By-Laws or by the Board
of Directors.
9.
Section 3.04. The Vice Presidents. The Vice Presidents may be given by
resolution of the Board general executive powers, subject to the control of the
President, concerning one or more or all segments of the operations of the
Corporation. The Vice Presidents shall exercise such further powers and duties
as from time to time may be prescribed in these By-Laws or by the Board of
Directors or by the President.
Section 3.05 The Secretary and Assistant Secretaries. It shall be the duty
of the Secretary (a) to keep or cause to be kept at the registered office of the
Corporation an original or duplicate record of the proceedings of the
shareholders and the Board of Directors, and a copy of the Articles of
Incorporation and Certificate of Incorporation of the Corporation and of these
ByLaws; (b) to attend to giving and serving of notices of the Corporation as may
be required by law or these By-Laws; (c) to be custodian of the corporate
records and of the seal of the Corporation and see that the seal is affixed to
such documents as may be necessary or advisable; (d) to have charge of and keep
at the registered office of the Corporation, or cause to be kept at the office
of a transfer agent or registrar within the Commonwealth of Pennsylvania, the
stock books of the Corporation, and an original or duplicate share register,
giving the names of the shareholders in alphabetical order, and showing their
respective address, the number and classes of shares held by each, the number
and date of certificates issued for the shares, and the date of cancellation of
every certificate surrendered for cancellation; and (e) to perform all duties
incident to the office of Secretary, and such other duties as may be prescribed
by the Board of Directors or by the President from time to time. The Assistant
Secretaries shall assist the Secretary in the performance of his duties and
shall also exercise such further powers and duties as from time to time may be
conferred upon or assigned to them by the Board of Directors or by the
President.
10.
At the direction of the Secretary or in his absence or disability, an Assistant
Secretary shall perform the duties of the Secretary.
Section 3.06. The Treasurer and Assistant Treasurers. The Treasurer shall
be the principal officer in charge of financial and accounting matters,
including the proper keeping of complete and accurate books of account of all
the Corporation's business and transactions. The Treasurer shall (a) see that
the lists, books, reports, statements, certificates and other documents and
records required by law are properly prepared, kept and filed and (b) render
whatever reports as to the financial position and operations of the Corporation
may be required by the Board of Directors and officers. The Treasurer shall also
perform such other duties as may be prescribed by the Board of Directors or the
President from time to time. The Assistant Treasurer shall assist the Treasurer
in the performance of his duties and shall also exercise such further powers and
duties as from time to time may be conferred upon or assigned to them by the
Board of Directors or by the President. At the direction of the Treasurer or in
his absence or disability, an Assistant Treasurer shall perform the duties of
the Treasurer.
Section 3.07. The Controller and Assistant Controllers. The Controller
shall be the principal officer in charge of management of the Corporation's
funds. The controller shall (a) be in charge of the general offices of the
Corporation, and have custody of the contracts, insurance policies, leases,
deeds, and other business records; (b) have charge and custody of and be
responsible for the corporate securities and investments; (c) receive, endorse
for collection and give receipts for checks, notes, obligations, funds and
securities of the Corporation, and deposit monies and other valuable effects in
the name and to the credit of the Corporation, in such depositories as shall be
designated by the Board of Directors; and (d) subject to the provisions of
11.
Section 5.01 of the By-Laws, cause to be disbursed the funds of the Corporation
by payment in cash or by checks or drafts upon the authorized depositories of
the Corporation, and cause to be taken and preserved proper vouchers for such
disbursements. The Controller shall also perform such other duties as may be
prescribed by the Board of Director or the President from time to time. The
Assistant Controllers shall assist the Controller in the performance of his
duties as from time to time may be conferred upon or assigned to them by the
Board of Directors or by the President. At the discretion of the Controller or
in his absence or disability, an Assistant Controller shall perform the duties
of the Controller.
ARTICLE IV
Shares of Capital Stock
Section 4.01. Share Certificates. Every holder of stock of the Corporation
shall be entitled to a certificate or certificates, to be in such form as the
Board of Directors may from time to time prescribe, and signed by the President
or by a Vice President and the Secretary or the Treasurer or an Assistant
Secretary or an Assistant Treasurer, which shall represent and certify the
number of shares of stock owned by such holder.
Section 4.02. Transfer of Shares. Transfers of shares of stock of the
Corporation shall be made only on the books of the Corporation by the
shareholder or by his agent thereunto duly authorized by an instrument duly
executed and witnessed and filed with the Corporation, and upon surrender of the
share certificate or certificates for such shares properly endorsed.
12.
Section 4.03. Lost, Stolen, Destroyed or Mutilated Certificates. New
certificates for shares of stock may be issued to replace certificates lost,
stolen, destroyed or mutilated upon such conditions as the Board of Directors
may from time to time determine.
Section 4.04 Regulations Relating to Shares. The Board of Directors shall
have power and authority to make all such rules and regulations not inconsistent
with these By-Laws as it may deem expedient concerning the issue, transfer and
registration of certificates representing shares of the Corporation.
Section 4.05 Holders of Record. The Corporation shall be entitled to treat
the holder of record of any share or shares of stock as the holder and owner in
fact thereof and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise expressly provided by the laws of Pennsylvania.
ARTICLE V
Execution of Instruments;
Deposit and Withdrawal of Corporate Funds
Section 5.01. Notes, Checks, etc. All notes, drafts, acceptances, checks,
endorsements (other than for deposit), and all evidences of indebtedness of the
Corporation whatsoever, shall be signed by such officers or agents of the
Corporation, and subject to such requirements as to counter-signature or other
conditions, as the Board of Directors from time to time may determine.
Section 5.02. Execution of Instruments Generally. Except as provided in
Section 5.01, all contracts and other instruments requiring execution by the
Corporation may be signed by the
13.
President, any Vice President or the Treasurer; and authority to sign any such
contracts or instruments may be conferred by the Board of Directors upon any
other person or persons. Any person having authority to sign on behalf of the
Corporation may delegate, from time to time, by instrument in writing, all or
any part of such authority to any person or persons if authorized so to do by
the Board of Directors.
ARTICLE VI
General Provisions
Section 6.01. Offices. The principal business office of the Corporation
shall be at such place within or without the Commonwealth of Pennsylvania as the
Board of Directors from time to time designates.
Section 6.02. Corporate Seal. The Board of Directors shall prescribe the
form of a suitable corporate seal, which shall contain the full name of the
Corporation and the year and state of incorporation.
Section 6.03. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution
of the Board of Directors.
Resolution adopted at meeting of the Board of Directors dated September 23,
1972.
RESOLVED, that effective from and after March 31, 1972, the fiscal year of
the Corporation shall commence on the first day of April and end on the
thirty-first day of March in each year.
Section 6.04. Financial Reports to Shareholders. The Board shall cause the
preparation of financial statements reflecting the financial condition and
results of operations of the
14.
Corporation as at and for the period ending upon close of each fiscal year, and
shall engage independent certified public accountants to audit such financial
statements. The Board shall cause such financial statements and reports of
auditors to be furnished to the shareholders, and shall cause such other
financial statements, if any, as it deems advisable to be furnished to the
shareholders.
Section 6.05. Section 910 of the Pennsylvania Business Corporation Law
shall not be applicable to the Corporation.
ARTICLE VII
Indemnification of Officers and Directors
Section 7.01. Directors and officers of the Corporation shall be
indemnified as right to the fullest extent now or hereafter permitted by law in
connection with any actual or threatened civil, criminal, administrative or
investigative action, suit or proceeding (whether brought by or in the name of
the Corporation or otherwise) arising out of their service to the Corporation or
to another organization at the Corporation's request. Persons who are not
directors or officers of the Corporation may be similarly indemnified in respect
of such service to the extent authorized at any time by the Board of Directors.
The Corporation may maintain insurance to protect itself and any such director,
officer or other person against any liability, cost or expense incurred in
connection with any such action, suit or proceeding.
15.
ARTICLE VIII
Amendments
Section 8.01. Amendments. These By-Laws may be amended, altered and
repealed, and new By-Laws may be adopted, by the shareholders or the Board of
Directors of the Corporation at any regular or special meeting.
ARTICLE IX
Inapplicable Subchapters of Business Corporation Law of Pennsylvania
Section 9.01. Subchapter G. The provisions of Subchapter G to Chapter 25 of
the Business Corporation Law of Pennsylvania, as approved April 27, 1990, shall
not be applicable to this Corporation.
Section 9.02. Subchapter H. The provision of Subchapter H to Chapter 25 of
the Business Corporation Law of Pennsylvania, as approved April 27, 1990, shall
not be applicable to this Corporation.
16.
5.1 Opinion of Doepken Keevican & Weiss Professional Corporation.
23.1 Consent of Doepken Keevican & Weiss Professional Corporation
(included in the opinion filed as Exhibit 5.1 to this Registration
Statement).
23.2 Consent of Deloitte & Touche LLP relating to its report regarding
Mylan Laboratories Inc.
23.3 Consent of Deloitte & Touche LLP relating to its report regarding
Somerset Pharmaceuticals, Inc.
24.1 Powers of Attorney (included on signature page of the Registration
Statement).
6
EXHIBIT 5.1
DOEPKEN KEEVICAN & WEISS
58th Floor, USX Tower
600 Grant Street
Pittsburgh, Pennsylvania 15219
December 22, 1997
Mylan Laboratories Inc.
1030 Century Building
130 Seventh Street
Pittsburgh, Pennsylvania 15222
RE: Mylan Laboratories Inc.
Registration on Form S-8
Ladies and Gentlemen:
We have acted as counsel for Mylan Laboratories Inc., a Pennsylvania
corporation (the "Company"), in connection with the registration with the
Securities and Exchange Commission (the "SEC") by the Company of 250,000,000
shares of the Company's common stock (the "Common Stock") pursuant to the
Securities Act of 1933, as amended (the "Act").
In connection with the registration, we have examined the following:
(a) The Certificate of Incorporation and By-laws of the Company, each as
amended to date;
(b) The Registration Statement on Form S-8 (the "Registration Statement")
relating to the Common Stock, as filed with the SEC;
(c) The Bertek Pharmaceuticals, Inc. 401(k) Savings Plan and Trust (the
"Plan"); and
(d) Such other documents, records, opinions, certificates and papers as we
have deemed necessary or appropriate in order to give the opinions
hereinafter set forth.
Mylan Laboratories Inc.
December 22, 1997
Page 2
The opinions hereinafter expressed are subject to the following
qualifications and assumptions :
(i) In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals and the
conformity of all documents submitted to us as copies to the originals
thereof.
(ii) As to the accuracy of certain factual matters, we have relied on the
certificates of officers of the Company and certificates, letters,
telegrams or statements of public officials.
(iii)We express no opinion on the laws of any jurisdiction other than the
United States of America and the Pennsylvania Business Corporation
Law.
Based upon and subject to the foregoing, we are pleased to advise you that,
insofar as the laws of the Commonwealth of Pennsylvania and the United States of
America are concerned, it is our opinion that the 19,000,000 shares of Common
Stock to be issued under the Plan and sold by the Company pursuant to the
Registration Statement, have been duly authorized and, when issued and sold as
contemplated by the Registration Statement and the Plan, will be validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the use of our name in the Prospectus in
connection with the matters referred to under the caption "Legal Matters."
Very truly yours,
/s/ Doepken Keevican & Weiss
DOEPKEN KEEVICAN & WEISS
PROFESSIONAL CORPORATION
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Mylan Laboratories Inc. on Form S-8 of our report dated April 30, 1997,
incorporated by reference in the Annual Report on Form 10-K of Mylan
Laboratories Inc. for the year ended March 31, 1997.
/s/ Deloitte & Touche LLP
Pittsburgh, Pennsylvania
December 22, 1997
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Mylan Laboratories Inc. on Form S-8 of our report dated February 6,
1997, except for Note 12, as to which the date is March 7, 1997, relating
to the consolidated financial statements of Somerset Pharmaceuticals, Inc.
and subsidiaries as of December 31, 1996 and 1996 and for each of the three
years in the period ended December 31, 1996, appearing in the Annual Report
on Form 10-K of Mylan Laboratories Inc. for the year ended March 31, 1997.
/s/ Deloitte & Touche LLP
Pittsburgh, Pennsylvania
December 22, 1997
