1.1
“Act”
means the Employee Retirement Income Security Act of 1974, as it may be amended
from time to time.
1.2
“Administrator”
means the Employer unless another person or entity has been designated by
the
Employer pursuant to Section 2.2 to administer the Plan on behalf of the
Employer.
1.3
“Affiliated
Employer” means any corporation which is a member of a controlled group of
corporations (as defined in Code Section 414(b)) which includes the
Employer; any trade or business (whether or not incorporated) which is under
common control (as defined in Code Section 414(c)) with the Employer; any
organization (whether or not incorporated) which is a member of an affiliated
service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.4
“Aggregate
Account” means, with respect to each Participant, the value of all accounts
maintained on behalf of a Participant, whether attributable to Employer or
Employee contributions, subject to the provisions of
Section 10.2.
1.5
“Anniversary
Date” means the last day of the Plan Year.
1.6
“Beneficiary”
means the person (or entity) to whom the share of a deceased Participant's
total
account is payable, subject to the restrictions of Sections 7.2 and 7.5.
For purposes of Sections 7.5(e) and 7.5(f), “designate Beneficiary” is the
person designated under Code Section 401(a)(9) and
Regulation 1.401(a)(9)-4.
1.6
p.
1.7
“Code”
means the Internal Revenue Code of 1986, as amended or replaced from time
to
time.
1.8
“Company
Stock” means common stock issued by the Employer (or by a corporation which is a
member of the controlled group of corporations of which the Employer is a
member) which is readily tradeable on an established securities market. If
there
is no common stock which meets the foregoing requirement, the term “Company
Stock” means common stock issued by the Employer (or by a corporation which is a
member of the same controlled group) having a combination of voting power
and
dividend rights equal to or in excess of: (A) that class of common stock of
the Employer (or of any other such corporation) having the greatest voting
power, and (B) that class of common stock of the Employer (or of any other
such
corporation) having the greatest dividend rights. Noncallable preferred stock
shall be deemed to be “Company Stock” if such stock is convertible at any time
into stock which constitutes “Company Stock” hereunder and if such conversion is
at a conversion price which (as of the date of the acquisition by the Trust)
is
reasonable. For purposes of the preceding sentence, pursuant to Regulations,
preferred stock shall be treated as noncallable if after the call there will
be
a reasonable opportunity for a conversion which meets the requirements of
the
preceding sentence.
1.9
“Company
Stock Account” means the account of a Participant which is credited with the
shares of Company Stock purchased and paid for by the Trust Fund or contributed
to the Trust Fund.
A
separate accounting shall be maintained with respect to that portion of the
Company Stock Account attributable to a Participant's or the Participant's
Beneficiary's election pursuant to Section 7.5(c)(3) to reinvest cash
dividends in Company Stock. Any such Company Stock allocated to the Company
Stock Account shall be fully Vested at all times and shall not be subject
to
Forfeiture for any reason.
1.10
“Compensation”
with respect to any Participant means such Participant's wages as defined
in
Code Section 3401(a) and all other payments of compensation by the Employer
(in the course of the Employer's trade or business) for a Plan Year for which
the Employer is required to furnish the Participant a written statement under
Code Sections 6041(d), 6051(a)(3) and 6052. Compensation must be determined
without regard to any rules under Code Section 3401(a) that limit the
remuneration included in wages based on the nature or location of the employment
or the services performed (such as the exception for agricultural labor in
Code
Section 3401(a)(2)).
For
purposes of this Section, the determination of Compensation shall be made
by:
(a)
excluding
amounts which are contributed by the Employer pursuant to a salary reduction
agreement and which are not includible in the gross income of the Participant
under Code Sections 125, 132(f)(4), 402(e)(3),
402(h)(1)(B),
403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
For
a
Participant's initial year of participation, Compensation shall be recognized
as
of such Employee's effective date of participation pursuant to
Section 3.2.
Compensation
in excess of $200,000 (or such other amount provided in the Code) shall be
disregarded. Such amount shall be adjusted for increases in the cost of living
in accordance with Code Section 401(a)(17)(B), except that the dollar
increase in effect on January 1 of any calendar year shall be effective for
the Plan Year beginning with or within such calendar year. For any short
Plan
Year the Compensation limit shall be an amount equal to the Compensation
limit
for the calendar year in which the Plan Year begins multiplied by the ratio
obtained by dividing the number of full months in the short Plan Year by
twelve
(12).
If
any
class of Employees is excluded from the Plan, then Compensation for any Employee
who becomes eligible or ceases to be eligible to participate during a Plan
Year
shall only include Compensation while the Employee is an Eligible
Employee.
For
purposes of this Section, if the Plan is a plan described in Code
Section 413(c) or 414(f) (a plan maintained by more than one Employer), the
limitation applies separately with respect to the Compensation of any
Participant from each Employer maintaining the Plan.
1.11
“Contract”
or “Policy” means any life insurance policy, retirement income policy or annuity
policy (group or individual) issued pursuant to the terms of the Plan. In
the
event of any conflict between the terms of this Plan and the terms of any
contract purchased hereunder, the Plan provisions shall control.
1.12
“Distribution
Calendar Year” means a calendar year for which a minimum distribution pursuant
to Sections 7.5(e) and 7.5(f) is required. For distributions beginning
before the Participant's death, the first Distribution Calendar Year is the
calendar year immediately preceding the calendar year which contains the
Participant's required beginning date under Section 7.5(e). For
distributions beginning after the Participant's death, the first Distribution
Calendar Year is the calendar year in which distributions are required to
begin
under Section 7.5(f)(2). The required minimum distribution for the
Participant's first Distribution Calendar Year will be made on or before
the
Participant's required beginning date. The required minimum distribution
for
other Distribution Calendar Years, including the required minimum distribution
for the Distribution Calendar Year in which the Participant's required beginning
date occurs, will be made on or before December 31st of that Distribution
Calendar Year.
1.13
“Early
Retirement Date.” This Plan does not provide for a retirement date prior to
Normal Retirement Date.
1.14
“Eligible
Employee” means any Employee.
Employees
who are Leased Employees within the meaning of Code Sections 414(n)(2) and
414(o)(2) shall not be eligible to participate in this Plan.
Employees
whose employment is governed by the terms of a collective bargaining agreement
between Employee representatives (within the meaning of Code
Section 7701(a)(46))
and the Employer under which retirement benefits were the subject of good
faith
bargaining between the parties will not be eligible to participate in this
Plan
unless such agreement expressly provides for coverage in this Plan.
Employees
who are nonresident aliens (within the meaning of Code
Section 7701(b)(1)(B)) and who receive no earned income (within the meaning
of Code Section 911(d)(2)) from the Employer which constitutes income from
sources within the United States (within the meaning of Code
Section 861(a)(3)) shall not be eligible to participate in this
Plan.
Employees
of Affiliated Employers shall not be eligible to participate in this Plan
unless
such Affiliated Employers have specifically adopted this Plan in
writing.
Employees
classified by the Employer as independent contractors who are subsequently
determined by the Internal Revenue Service to be Employees shall not be Eligible
Employees.
1.15
“Employee”
means any person who is employed by the Employer or Affiliated Employer,
and
excludes any person who is employed as an independent contractor. Employee
shall
include Leased Employees within the meaning of Code Sections 414(n)(2) and
414(o)(2) unless such Leased Employees are covered by a plan described in
Code
Section 414(n)(5) and such Leased Employees do not constitute more than 20%
of the recipient's non-highly compensated work force.
1.16
“Employer”
means Cornerstone Community Bank and any successor which shall maintain this
Plan; and any predecessor which has maintained this Plan. The Employer is
a
corporation with principal offices in the State of Tennessee. In addition,
where
appropriate, the term Employer shall include any Participating Employer (as
defined in Section 12.1) which shall adopt this Plan.
1.17
“ESOP”
means an employee stock ownership plan that meets the requirements of Code
Section 4975(e)(7) and Regulation 54.4975-11.
1.18
“Fiduciary”
means any person who (a) exercises any discretionary authority or discretionary
control respecting management of the Plan or exercises any authority or control
respecting management or disposition of its assets, (b) renders investment
advice for a fee or other compensation, direct or indirect, with respect
to any
monies or other property of the Plan or has any authority or responsibility
to
do so, or (c) has any discretionary authority or discretionary
responsibility in the administration of the Plan.
1.19
“Fiscal
Year” means the Employer's accounting year of 12 months commencing on January 1
of each year and ending the following December 31.
1.20
“Forfeiture”
means that portion of a Participant's Account that is not Vested, and occurs
on
the last day of the Plan Year in which the Participant incurs five (5)
consecutive 1-Year Breaks in Service. In addition, the term Forfeiture shall
also include amounts deemed to be Forfeitures pursuant to any other provision
of
this Plan.
1.21
“Former
Participant” means a person who has been a Participant, but who has ceased to be
a Participant for any reason.
1.22
“415
Compensation” with respect to any Participant means such Participant's wages as
defined in Code Section 3401(a) and all other payments of compensation by
the Employer (in the course of the Employer's trade or business) for a Plan
Year
for which the Employer is required to furnish the Participant a written
statement under Code Sections 6041(d), 6051(a)(3) and 6052. “415
Compensation” must be determined without regard to any rules under Code
Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)).
For
purposes of this Section, the determination of “415 Compensation” shall include
any elective deferral (as defined in Code Section 402(g)(3)), and any
amount which is contributed or deferred by the Employer at the election of
the
Participant and which is not includible in the gross income of the Participant
by reason of Code Sections 125, 132(f)(4) and 457.
1.23
“Highly
Compensated Employee” means an Employee described in Code Section 414(q)
and the Regulations thereunder, and generally means any Employee who:
(a)
was
a
“five percent owner” as defined in Section 1.27(b) at any time during the
“determination year” or the “look-back year”; or
(b)
for
the
“look-back year” had “415 Compensation” from the Employer in excess of $80,000
and were in the Top Paid Group of Employees for the Plan Year. The $80,000
amount is adjusted at the same time and in the same manner as under Code
Section 415(d), except that the base period is the calendar quarter ending
September 30, 1996.
The
“determination year” means the Plan Year for which testing is being performed,
and the “look back year” means the immediately preceding twelve (12) month
period.
A
highly
compensated former Employee is based on the rules applicable to determining
Highly Compensated Employee status as in effect for the “determination year,” in
accordance with Regulation 1.414(q)-1T, A-4 and IRS Notice 97-45 (or
any superseding guidance).
In
determining who is a Highly Compensated Employee, Employees who are non-resident
aliens and who received no earned income (within the meaning of Code
Section 911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Affiliated Employers shall be taken into account
as
a single employer and Leased Employees within the meaning of Code
Sections 414(n)(2) and 414(o)(2) shall be considered Employees unless such
Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are
not covered in any qualified plan maintained by the Employer. The exclusion
of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Employer's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard
to
whether they performed services during the “determination year.”
1.24
“Highly
Compensated Participant” means any Highly Compensated Employee who is eligible
to participate in the component of the Plan being tested.
1.25
“Hour
of
Service” means (1) each hour for which an Employee is directly or
indirectly compensated or entitled to compensation by the Employer for the
performance of duties (these hours will be credited to the Employee for the
computation period in which the duties are performed); (2) each hour for
which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties
(such
as vacation, holidays, sickness, jury duty, disability, lay-off, military
duty
or leave of absence) during the applicable computation period (these hours
will
be calculated and credited pursuant to Department of Labor
regulation 2530.200b-2 which is incorporated herein by reference);
(3) each hour for which back pay is awarded or agreed to by the Employer
without regard to mitigation of damages (these hours will be credited to
the
Employee for the computation period or periods to which the award or agreement
pertains rather than the computation period in which the award, agreement
or
payment is made). The same Hours of Service shall not be credited both under
(1)
or (2), as the case may be, and under (3).
Notwithstanding
(2) above, (i) no more than 501 Hours of Service are required to be
credited to an Employee on account of any single continuous period during
which
the Employee performs no duties (whether or not such period occurs in a single
computation period); (ii) an hour for which an Employee is directly or
indirectly paid, or entitled to payment, on account of a period during which
no
duties are performed is not required to be credited to the Employee if such
payment is made or due under a plan maintained solely for the purpose of
complying with applicable worker's compensation, or unemployment compensation
or
disability insurance laws; and (iii) Hours of Service are not required to
be credited for a payment which solely reimburses an Employee for medical
or
medically related expenses incurred by the Employee.
For
purposes of (2) above, a payment shall be deemed to be made by or due from
the
Employer regardless of whether such payment is made by or due from the Employer
directly, or indirectly through, among others, a trust fund, or insurer,
to
which the Employer contributes or pays premiums and regardless of whether
contributions made or due to the trust fund, insurer, or other entity are
for
the benefit of particular Employees or are on behalf of a group of Employees
in
the aggregate.
For
purposes of this Section, Hours of Service will be credited for employment
with
other Affiliated Employers. The provisions of Department of Labor
regulations 2530.200b-2(b) and (c) are incorporated herein by
reference.
1.26
“Investment
Manager” means an entity that (a) has the power to manage, acquire, or
dispose of Plan assets and (b) acknowledges fiduciary responsibility to the
Plan in writing.
Such
entity must be a person, firm, or corporation registered as an investment
adviser under the Investment Advisers Act of 1940, a bank, or an insurance
company.
1.27
“Key
Employee” means an Employee as defined in Code Section 416(i) and the
Regulations thereunder. Generally, any Employee or former Employee (as well
as
each of the Employee's or former Employee's Beneficiaries) is considered
a Key
Employee if the Employee's or former Employee's, at any time during the Plan
Year that contains the “determination date,” has been included in one of the
following categories:
(a)
an
officer of the Employer (as that term is defined within the meaning of the
Regulations under Code Section 416) having annual “415 Compensation”
greater than $130,000 adjusted at the same time and in the same manner as
under
Code Section 415(d).
(b)
a
“five
percent owner” of the Employer. “Five percent owner” means any person who owns
(or is considered as owning within the meaning of Code Section 318) more
than five percent (5%) of the outstanding stock of the Employer or stock
possessing more than five percent (5%) of the total combined voting power
of all
stock of the Employer or, in the case of an unincorporated business, any
person
who owns more than five percent (5%) of the capital or profits interest in
the
Employer. In determining percentage ownership hereunder, employers that would
otherwise be aggregated under Code Sections 414(b), (c), (m) and (o)
shall be treated as separate employers.
(c)
a
“one
percent owner” of the Employer having an annual “415 Compensation” from the
Employer of more than $150,000. “One percent owner” means any person who owns
(or is considered as owning within the meaning of Code Section 318) more
than one percent (1%) of the outstanding stock of the Employer or stock
possessing more than one percent (1%) of the total combined voting power
of all
stock of the Employer or, in the case of an unincorporated business, any
person
who owns more than one percent (1%) of the capital or profits interest in
the
Employer. In determining percentage ownership hereunder, employers that would
otherwise be aggregated under Code Sections 414(b), (c), (m) and (o)
shall be treated as separate employers. However, in determining whether an
individual has “415 Compensation” of more than $150,000, “415 Compensation” from
each employer required to be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be taken into account.
For
purposes of this Section, the determination of “415 Compensation” shall be made
by including amounts which are contributed by the Employer pursuant to a
salary
reduction agreement and which are not includible in the gross income of the
Participant under Code Sections 125, 132(f)(4), 402(e)(3), 402(h)(1)(B),
403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
1.28
“Late
Retirement Date” means the first day of the month coinciding with or next
following a Participant's actual Retirement Date after having reached Normal
Retirement Date.
1.29
“Leased
Employee” means any person (other than an Employee of the recipient Employer)
who pursuant to an agreement between the recipient Employer and any other
person
or
entity
(“leasing organization”) has performed services for the recipient (or for the
recipient and related persons determined in accordance with Code
Section 414(n)(6)) on a substantially full time basis for a period of at
least one year, and such services are performed under primary direction or
control by the recipient Employer. Contributions or benefits provided a Leased
Employee by the leasing organization which are attributable to services
performed for the recipient Employer shall be treated as provided by the
recipient Employer. Furthermore, Compensation for a Leased Employee shall
only
include Compensation from the leasing organization that is attributable to
services performed for the recipient Employer. A Leased Employee shall not
be
considered an Employee of the recipient Employer:
(a)
if
such
employee is covered by a money purchase pension plan providing:
(1)
a
nonintegrated employer contribution rate of at least 10% of compensation,
as
defined in Code Section 415(c)(3);
(2)
immediate
participation;
(3)
full
and
immediate vesting; and
(b)
if
Leased
Employees do not constitute more than 20% of the recipient Employer's nonhighly
compensated work force.
1.30
“Life
Expectancy” computed, for purposes of Sections 7.5(e) and 7.5(f), using the
Single Life Table in Regulation 1.401(a)(9)-9.
1.31
“Non-Highly
Compensated Participant” means any Participant who is not a Highly Compensated
Employee.
1.32
“Non-Key
Employee” means any Employee or former Employee (and such Employee's or former
Employee's Beneficiaries) who is not a Key Employee.
1.33
“Normal
Retirement Age” means the Participant's 65th birthday. A Participant shall
become fully Vested in the Participant's Account upon attaining Normal
Retirement Age.
1.34
“Normal
Retirement Date” means the first day of the month coinciding with or next
following the Participant's Normal Retirement Age.
1.35
“1-Year
Break in Service” means the applicable computation period during which an
Employee has not completed more than 500 Hours of Service with the Employer.
Further, solely for the purpose of determining whether a Participant has
incurred a 1-Year Break in Service, Hours of Service shall be recognized
for
“authorized leaves of absence” and “maternity and paternity leaves of absence.”
Years of Service and 1-Year Breaks in Service shall be measured on the same
computation period.
“Authorized
leave of absence” means an unpaid, temporary cessation from active employment
with the Employer pursuant to an established nondiscriminatory policy, whether
occasioned by illness, military service, or any other reason.
A
“maternity or paternity leave of absence” means an absence from work for any
period by reason of the Employee's pregnancy, birth of the Employee's child,
placement of a child with the Employee in connection with the adoption of
such
child, or any absence for the purpose of caring for such child for a period
immediately following such birth or placement. For this purpose, Hours of
Service shall be credited for the computation period in which the absence
from
work begins, only if credit therefore is necessary to prevent the Employee
from
incurring a 1-Year Break in Service, or, in any other case, in the immediately
following computation period. The Hours of Service credited for a “maternity or
paternity leave of absence” shall be those which would normally have been
credited but for such absence, or, in any case in which the Administrator
is
unable to determine such hours normally credited, eight (8) Hours of Service
per
day. The total Hours of Service required to be credited for a “maternity or
paternity leave of absence” shall not exceed the number of Hours of Service
needed to prevent the Employee from incurring a 1-Year Break in
Service.
1.36
“Other
Investments Account” means the account of a Participant which is credited with
such Participant's share of the net gain (or loss) of the Plan, Forfeitures
and
Employer contributions in other than Company Stock and which is debited with
payments made to pay for Company Stock.
1.37
“Participant”
means any Eligible Employee who participates in the Plan and has not for
any
reason become ineligible to participate further in the Plan.
1.38
“Participant's
Account” means the account established and maintained by the Administrator for
each Participant with respect to such Participant's total interest in the
Plan
and Trust resulting from the Employer contributions.
1.39
“Participant's
Account Balance” means the account balance as of the last Valuation Date in the
calendar year immediately preceding the Distribution Calendar Year (valuation
calendar year) increased by the amount of any contributions made and allocated
or Forfeitures allocated to the account balance as of dates in the valuation
calendar year after the Valuation Date and decreased by distributions made
in
the valuation calendar year after the Valuation Date. The account balance
for
the valuation calendar year includes any amounts rolled over or transferred
to
the Plan either in the valuation calendar year or in the Distribution Calendar
Year if distributed or transferred in the valuation calendar year.
1.40
“Participant's
Rollover Account” means the account established and maintained by the
Administrator for each Participant with respect to such Participant's interest
in the Plan resulting from amounts transferred from another plan or “conduit”
Individual Retirement Account in accordance with Section 4.7.
A
separate accounting shall be maintained with respect to that portion of the
Participant's Rollover Account attributable to after-tax Employee
contributions.
1.41
“Participant's
Transfer Account” means the account established and maintained by the
Administrator for each Participant with respect to the Participant's total
interest in the Plan resulting from amounts transferred to this Plan from
a
direct plan-to-plan transfer and/or with respect to such Participant's interest
in the Plan resulting from amounts transferred from another qualified plan
or
“conduit” Individual Retirement Account in accordance with
Section 4.6.
1.42
“Plan”
means this instrument, including all amendments thereto.
1.43
“Plan
Year” means the Plan's accounting year of twelve (12) months commencing on
January 1 of each year and ending the following December 31.
1.44
“Regulation”
means the Income Tax Regulations as promulgated by the Secretary of the Treasury
or a delegate of the Secretary of the Treasury, and as amended from time
to
time.
1.45
“Retired
Participant” means a person who has been a Participant, but who has become
entitled to retirement benefits under the Plan.
1.46
“Retirement
Date” means the date as of which a Participant retires for reasons other than
Total and Permanent Disability, whether such retirement occurs on a
Participant's Normal Retirement Date or Late Retirement Date (see
Section 7.1).
1.47
“Terminated
Participant” means a person who has been a Participant, but whose employment has
been terminated other than by death, Total and Permanent Disability or
retirement.
1.48
“Top
Heavy Plan” means a plan described in Section 10.2(a).
1.49
“Top
Heavy Plan Year” means a Plan Year during which the Plan is a Top Heavy
Plan.
1.50
“Top-Paid
Group” means the top 20 percent of Employees who performed services for the
Employer during the applicable year, ranked according to the amount of “415
Compensation” received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased Employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be
considered Employees unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and are not covered in any qualified
plan maintained by the Employer. Employees who are non-resident aliens and
who
received no earned income (within the meaning of Code Section 911(d)(2))
from the Employer constituting United States source income within the meaning
of
Code Section 861(a)(3) shall not be treated as Employees. Furthermore, for
the purpose of determining the number of active Employees in any year, the
following additional Employees shall also be excluded, however, such Employees
shall still be considered for the purpose of identifying the particular
Employees in the Top-Paid Group:
(a)
Employees
with less than six (6) months of service;
(b)
Employees
who normally work less than 17 1/2 hours per week;
(c)
Employees
who normally work less than six (6) months during a year; and
(d)
Employees
who have not yet attained age twenty-one (21).
In
addition, if 90 percent or more of the Employees of the Employer are
covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between
Employee
representatives and the Employer, and the Plan covers only Employees who
are not
covered under such agreements, then Employees covered by such agreements
shall
be excluded from both the total number of active Employees as well as from
the
identification of particular Employees in the Top-Paid Group.
The
foregoing exclusions set forth in this Section shall be applied on a uniform
and
consistent basis for all purposes for which the Code Section 414(q)
definition is applicable.
1.51
“Total
and Permanent Disability” means a physical or mental condition of a Participant
resulting from bodily injury, disease, or mental disorder which renders such
Participant incapable of continuing usual and customary employment with the
Employer. The disability of a Participant shall be determined by a licensed
physician chosen by the Administrator. The determination shall be applied
uniformly to all Participants.
1.52
“Trustee”
means the person or entity named as trustee herein or in any separate trust
forming a part of this Plan, and any successors.
1.53
“Trust
Fund” means the assets of the Plan and Trust as the same shall exist from time
to time.
1.54
“Valuation
Date” means the Anniversary Date and may include any other date or dates deemed
necessary or appropriate by the Administrator for the valuation of the
Participant's accounts during the Plan Year, which may include any day that
the
Trustee, any transfer agent appointed by the Trustee or the Employer or any
stock exchange used by such agent, are open for business.
1.55
“Vested”
means the nonforfeitable portion of any account maintained on behalf of a
Participant.
1.56
“Year
of
Service” means the computation period of twelve (12) consecutive months, herein
set forth, during which an Employee has at least 1000 Hours of
Service.
For
purposes of eligibility for participation, the initial computation period
shall
begin with the date on which the Employee first performs an Hour of Service.
The
participation computation period beginning after a 1-Year Break in Service
shall
be measured from the date on which an Employee again performs an Hour of
Service. The participation computation period shall shift to the Plan Year
which
includes the anniversary of the date on which the Employee first performed
an
Hour of Service. An Employee who is credited with the required Hours of Service
in both the initial computation period (or the computation period beginning
after a 1-Year Break in Service) and the Plan Year which includes the
anniversary of the date on which the Employee first performed an Hour of
Service, shall be credited with two (2) Years of Service for purposes of
eligibility to participate.
For
vesting purposes, the computation periods shall be the Plan Year, excluding
periods prior to the Effective Date of the Plan.
The
computation period shall be the Plan Year if not otherwise set forth
herein.
Notwithstanding
the foregoing, for any short Plan Year, the determination of whether an Employee
has completed a Year of Service shall be made in accordance with Department
of
Labor regulation 2530.203-2(c). However, in determining whether an Employee
has completed a Year of Service for benefit accrual purposes in the short
Plan
Year, the number of the Hours of Service required shall be proportionately
reduced based on the number of full months in the short Plan Year.
Years
of
Service with any Affiliated Employer shall be recognized.
ARTICLE
II
ADMINISTRATION
2.1
POWERS
AND RESPONSIBILITIES OF THE EMPLOYER
(a)
In
addition to the general powers and responsibilities otherwise provided for
in
this Plan, the Employer shall be empowered to appoint and remove the Trustee
and
the Administrator from time to time as it deems necessary for the proper
administration of the Plan to ensure that the Plan is being operated for
the
exclusive benefit of the Participants and their Beneficiaries in accordance
with
the terms of the Plan, the Code, and the Act. The Employer may appoint counsel,
specialists, advisers, agents (including any nonfiduciary agent) and other
persons as the Employer deems necessary or desirable in connection with the
exercise of its fiduciary duties under this Plan. The Employer may compensate
such agents or advisers from the assets of the Plan as fiduciary expenses
(but
not including any business (settlor) expenses of the Employer), to the extent
not paid by the Employer.
(b)
The
Employer may, by written agreement or designation, appoint at its option
an
Investment Manager (qualified under the Investment Company Act of 1940 as
amended), investment adviser, or other agent to provide direction to the
Trustee
with respect to any or all of the Plan assets. Such appointment shall be
given
by the Employer in writing in a form acceptable to the Trustee and shall
specifically identify the Plan assets with respect to which the Investment
Manager or other agent shall have authority to direct the
investment.
(c)
The
Employer shall establish a “funding policy and method,” i.e., it shall determine
whether the Plan has a short run need for liquidity (e.g., to pay benefits)
or
whether liquidity is a long run goal and investment growth (and stability
of
same) is a more current need, or shall appoint a qualified person to do so.
The
Employer or its delegate shall communicate such needs and goals to the Trustee,
who shall coordinate such Plan needs with its investment policy. The
communication of such a “funding policy and method” shall not, however,
constitute a directive to the Trustee as to the investment of the Trust Funds.
Such “funding policy and method” shall be consistent with the objectives of this
Plan and with the requirements of Title I of the Act.
(d)
The
Employer shall periodically review the performance of any Fiduciary or other
person to whom duties have been delegated or allocated by it
under
the
provisions of this Plan or pursuant to procedures established hereunder.
This
requirement may be satisfied by formal periodic review by the Employer or
by a
qualified person specifically designated by the Employer, through day-to-day
conduct and evaluation, or through other appropriate ways.
(e)
The
Employer will furnish Plan Fiduciaries and Participants with notices and
information statements when voting rights must be exercised pursuant to
Section 8.4.
2.2
DESIGNATION
OF ADMINISTRATIVE AUTHORITY
The
Employer shall be the Administrator. The Employer may appoint any person,
including, but not limited to, the Employees of the Employer, to perform
the
duties of the Administrator. Any person so appointed shall signify acceptance
by
filing written acceptance with the Employer. Upon the resignation or removal
of
any individual performing the duties of the Administrator, the Employer may
designate a successor.
2.3
ALLOCATION
AND DELEGATION OF RESPONSIBILITIES
If
more
than one person is appointed as Administrator, the responsibilities of each
Administrator may be specified by the Employer and accepted in writing by
each
Administrator. In the event that no such delegation is made by the Employer,
the
Administrators may allocate the responsibilities among themselves, in which
event the Administrators shall notify the Employer and the Trustee in writing
of
such action and specify the responsibilities of each Administrator. The Trustee
thereafter shall accept and rely upon any documents executed by the appropriate
Administrator until such time as the Employer or the Administrators file
with
the Trustee a written revocation of such designation.
2.4
POWERS
AND DUTIES OF THE ADMINISTRATOR
The
primary responsibility of the Administrator is to administer the Plan for
the
exclusive benefit of the Participants and their Beneficiaries, subject to
the
specific terms of the Plan. The Administrator shall administer the Plan in
accordance with its terms and shall have the power and discretion to construe
the terms of the Plan and to determine all questions arising in connection
with
the administration, interpretation, and application of the Plan. Any such
determination by the Administrator shall be conclusive and binding upon all
persons. The Administrator may establish procedures, correct any defect,
supply
any information, or reconcile any inconsistency in such manner and to such
extent as shall be deemed necessary or advisable to carry out the purpose
of the
Plan; provided, however, that any procedure, discretionary act, interpretation
or construction shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the intent that
the
Plan shall continue to be deemed a qualified plan under the terms of Code
Section 401(a), and shall comply with the terms of the Act and all
regulations issued pursuant thereto. The Administrator shall have all powers
necessary or appropriate to accomplish the Administrator's duties under the
Plan.
The
Administrator shall be charged with the duties of the general administration
of
the Plan as set forth under the terms of the Plan, including, but not limited
to, the following:
(a)
the
discretion to determine all questions relating to the eligibility of Employees
to participate or remain a Participant hereunder and to receive benefits
under
the Plan;
(b)
to
compute, certify, and direct the Trustee with respect to the amount and the
kind
of benefits to which any Participant shall be entitled hereunder;
(c)
to
authorize and direct the Trustee with respect to all nondiscretionary or
otherwise directed disbursements from the Trust;
(d)
to
maintain all necessary records for the administration of the Plan;
(e)
to
interpret the provisions of the Plan and to make and publish such rules for
regulation of the Plan as are consistent with the terms hereof;
(f)
to
determine the size and type of any Contract to be purchased from any insurer,
and to designate the insurer from which such Contract shall be
purchased;
(g)
to
compute and certify to the Employer and to the Trustee from time to time
the
sums of money necessary or desirable to be contributed to the Plan;
(h)
to
consult with the Employer and the Trustee regarding the short and long-term
liquidity needs of the Plan in order that the Trustee can exercise any
investment discretion in a manner designed to accomplish specific
objectives;
(i)
to
establish and communicate to Participants a procedure for allowing each
Participant to direct the Trustee as to the distribution of such Participant's
Company Stock Account pursuant to Section 4.8;
(j)
to
establish and communicate to Participants a procedure and method to insure
that
each Participant will vote Company Stock allocated to such Participant's
Company
Stock Account pursuant to Section 8.4;
(k)
to
determine the validity of, and take appropriate action with respect to, any
qualified domestic relations order received by it; and
(l)
to
assist
any Participant regarding the Participant's rights, benefits, or elections
available under the Plan.
2.5
RECORDS
AND REPORTS
The
Administrator shall keep a record of all actions taken and shall keep all
other
books of account, records, policies, and other data that may be necessary
for
proper
administration
of the Plan and shall be responsible for supplying all information and reports
to the Internal Revenue Service, Department of Labor, Participants,
Beneficiaries and others as required by law.
2.6
APPOINTMENT
OF ADVISERS
The
Administrator, or the Trustee with the consent of the Administrator, may
appoint
counsel, specialists, advisers, agents (including nonfiduciary agents) and
other
persons as the Administrator or the Trustee deems necessary or desirable
in
connection with the administration of this Plan, including but not limited
to
agents and advisers to assist with the administration and management of the
Plan, and thereby to provide, among such other duties as the Administrator
may
appoint, assistance with maintaining Plan records and the providing of
investment information to the Plan's investment fiduciaries.
2.7
PAYMENT
OF EXPENSES
All
expenses of administration may be paid out of the Trust Fund unless paid
by the
Employer. Such expenses shall include any expenses incident to the functioning
of the Administrator, or any person or persons retained or appointed by any
Named Fiduciary incident to the exercise of their duties under the Plan,
including, but not limited to, fees of accountants, counsel, Investment
Managers, and other specialists and their agents, the costs of any bonds
required pursuant to Act Section 412, and other costs of administering the
Plan. Until paid, the expenses shall constitute a liability of the Trust
Fund.
Claims
for benefits under the Plan may be filed in writing with the Administrator.
Written or electronic notice of the disposition of a claim shall be furnished
to
the claimant within 90 days (45 days if the claim involves disability benefits)
after the application is filed, or such period as is required by applicable
law
or Department of Labor regulation. In the event the claim is denied, the
reasons
for the denial shall be specifically set forth in the notice in language
calculated to be understood by the claimant, pertinent provisions of the
Plan
shall be cited, and, where appropriate, an explanation as to how the claimant
can perfect the claim will be provided. In addition, the claimant shall be
furnished with an explanation of the Plan's claims review
procedure.
2.9
CLAIMS
REVIEW PROCEDURE
Any
Employee, former Employee, or Beneficiary of either, who has been denied
a
benefit by a decision of the Administrator pursuant to Section 2.8 shall be
entitled to request the Administrator to give further consideration to a
claim
by filing with the Administrator a written request for a hearing. Such request,
together with a written statement of the reasons why the claimant believes
the
claim should be allowed, shall be filed with the Administrator no later than
60
days (180 days if the denied benefit involves disability benefits) after
receipt
of the written or electronic notification provided for in Section 2.8. The
Administrator shall then conduct a hearing within the next 60 days (45 days
if
the claim involves disability benefits), at which the claimant may be
represented by an attorney or any other representative of such claimant's
choosing and expense and at which the claimant shall have an opportunity
to
submit written and oral evidence and arguments in support of the claim. At
the
hearing the claimant or the claimant's
representative
shall have an opportunity to review all documents in the possession of the
Administrator which are pertinent to the claim at issue and its disallowance.
Either the claimant or the Administrator may cause a court reporter to attend
the hearing and record the proceedings. In such event, a complete written
transcript of the proceedings shall be furnished to both parties by the court
reporter. The full expense of any such court reporter and such transcripts
shall
be borne by the party causing the court reporter to attend the hearing. A
final
decision as to the allowance of the claim shall be made by the Administrator
within 60 days (45 days if the claim involves disability benefits) of receipt
of
the appeal (unless there has been an extension of 60 days (45 days if the
claim
involves disability benefits) due to special circumstances, provided the
delay
and the special circumstances occasioning it are communicated to the claimant
within the 60 day period (45 day period if the claim involves disability
benefits). Such communication shall be written in a manner calculated to
be
understood by the claimant and shall include specific reasons for the decision
and specific references to the pertinent Plan provisions on which the decision
is based.
ARTICLE
III
ELIGIBILITY
3.1
CONDITIONS
OF ELIGIBILITY
Any
Eligible Employee who has completed one (1) Year of Service and has attained
age
19 shall be eligible to participate hereunder as of the date such Employee
has
satisfied such requirements.
3.2
EFFECTIVE
DATE OF PARTICIPATION
An
Eligible Employee shall become a Participant effective as of the earlier
of the
first day of the Plan Year or the first day of the seventh month of such
Plan
Year coinciding with or next following the date such Employee met the
eligibility requirements of Section 3.1, provided said Employee was still
employed as of such date (or if not employed on such date, as of the date
of
rehire if a 1-Year Break in Service has not occurred or, if later, the date
that
the Employee would have otherwise entered the Plan had the Employee not
terminated employment).
If
an
Employee, who has satisfied the Plan's eligibility requirements and would
otherwise have become a Participant, shall go from a classification of a
noneligible Employee to an Eligible Employee, such Employee shall become
a
Participant on the date such Employee becomes an Eligible Employee or, if
later,
the date that the Employee would have otherwise entered the Plan had the
Employee always been an Eligible Employee.
If
an
Employee, who has satisfied the Plan's eligibility requirements and would
otherwise become a Participant, shall go from a classification of an Eligible
Employee to a noneligible class of Employees, such Employee shall become
a
Participant in the Plan on the date such Employee again becomes an Eligible
Employee, or, if later, the date that the Employee would have otherwise entered
the Plan had the Employee always been an Eligible Employee. However, if such
Employee incurs a 1-Year Break in Service, eligibility will be determined
under
the Break in Service rules set forth in Section 3.7.
3.3
DETERMINATION
OF ELIGIBILITY
The
Administrator shall determine the eligibility of each Employee for participation
in the Plan based upon information furnished by the Employer. Such determination
shall be conclusive and binding upon all persons, as long as the same is
made
pursuant to the Plan and the Act. Such determination shall be subject to
review
pursuant to Section 2.9.
3.4
TERMINATION
OF ELIGIBILITY
In
the
event a Participant shall go from a classification of an Eligible Employee
to an
ineligible Employee, such Former Participant shall continue to vest in the
Plan
for each Year of Service completed while a noneligible Employee, until such
time
as the Participant's Account shall be forfeited or distributed pursuant to
the
terms of the Plan. Additionally, the Former Participant's interest in the
Plan
shall continue to share in the earnings of the Trust Fund.
3.5
OMISSION
OF ELIGIBLE EMPLOYEE
If,
in
any Plan Year, any Employee who should be included as a Participant in the
Plan
is erroneously omitted and discovery of such omission is not made until after
a
contribution by the Employer for the year has been made and allocated, then
the
Employer shall make a subsequent contribution, if necessary after the
application of Section 4.3(e), so that the omitted Employee receives a
total amount which the Employee would have received (including both Employer
contributions and earnings thereon) had the Employee not been omitted. Such
contribution shall be made regardless of whether it is deductible in whole
or in
part in any taxable year under applicable provisions of the Code.
3.6
INCLUSION
OF INELIGIBLE EMPLOYEE
If,
in
any Plan Year, any person who should not have been included as a Participant
in
the Plan is erroneously included and discovery of such inclusion is not made
until after a contribution for the year has been made and allocated, the
Employer shall be entitled to recover the contribution made with respect
to the
ineligible person provided the error is discovered within twelve (12) months
of
the date on which it was made. Otherwise, the amount contributed with respect
to
the ineligible person shall constitute a Forfeiture for the Plan Year in
which
the discovery is made.
3.7
REHIRED
EMPLOYEES AND BREAKS IN SERVICE
(a)
If
any
Participant becomes a Former Participant due to severance from employment
with
the Employer and is reemployed by the Employer before a 1-Year Break in Service
occurs, the Former Participant shall become a Participant as of the reemployment
date.
(b)
If
any
Participant becomes a Former Participant due to severance from employment
with
the Employer and is reemployed after a 1-Year Break in Service has occurred,
Years of Service shall include Years of Service prior to the 1-Year Break
in
Service subject to the following rules:
(1)
In
the
case of a Former Participant who under the Plan does not have a nonforfeitable
right to any interest in the Plan resulting from Employer contributions,
Years
of
Service before a period of 1-Year Break in Service will not be taken into
account if the number of consecutive 1-Year Breaks in Service equal or exceed
the greater of (A) five (5) or (B) the aggregate number of pre-break Years
of
Service. Such aggregate number of Years of Service will not include any Years
of
Service disregarded under the preceding sentence by reason of prior 1-Year
Breaks in Service.
(2)
A
Former
Participant who has not had Years of Ser
vice
before a 1-Year Break in Service disregarded pursuant to (1) above, and
completes a Year of Service for eligibility purposes shall participate in
the
Plan as of the date immediately following completion of a Year of
Service.
(c)
After
a
Former Participant who has severed employment with the Employer incurs
five (5) consecutive 1-Year Breaks in Service, the Vested portion of said
Former Participant's Account attributable to pre-break service shall not
be
increased as a result of post-break service. In such case, separate accounts
will be maintained as follows:
(1)
one
account for nonforfeitable benefits attributable to pre-break service;
and
(2)
one
account representing the Participant's Employer derived account balance in
the
Plan attributable to post-break service.
3.8
ELECTION
NOT TO PARTICIPATE
An
Employee may, subject to the approval of the Employer, elect voluntarily
not to
participate in the Plan. The election not to participate must be communicated
to
the Employer, in writing, within a reasonable period of time before the
beginning of a Plan Year.
ARTICLE
IV
CONTRIBUTION
AND ALLOCATION
4.1
FORMULA
FOR DETERMINING EMPLOYER CONTRIBUTION
(a)
For
each
Plan Year, the Employer shall contribute to the Plan such amount as shall
be
determined by the Employer.
(b)
The
Employer contribution shall not be limited to years in which the Employer
has
current or accumulated net profit. Additionally, to the extent necessary,
the
Employer shall contribute to the Plan the amount necessary to provide the
top
heavy minimum contribution. All contributions by the Employer shall be made
in
cash or in such property as is acceptable to the Trustee.
The
Employer may make its contribution to the Plan for a particular Plan Year
at
such time as the Employer, in its sole discretion, determines. If the Employer
makes a contribution for a particular Plan Year after the close of that Plan
Year, the Employer will designate to the Trustee the Plan Year for which
the
Employer is making its contribution.
4.3
ALLOCATION
OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a)
The
Administrator shall establish and maintain an account in the name of each
Participant to which the Administrator shall credit as of each Anniversary
Date,
or other Valuation Date, all amounts allocated to each such Participant as
set
forth herein.
(b)
The
Employer shall provide the Administrator with all information required by
the
Administrator to make a proper allocation of the Employer contribution for
each
Plan Year. Within a reasonable period of time after the date of receipt by
the
Administrator of such information, the Administrator shall allocate such
contribution to each Participant's Account in the same proportion that each
such
Participant's Compensation for the year bears to the total Compensation of
all
Participants for such year.
Only
Participants who have completed a Year of Service during the Plan Year and
are
actively employed on the last day of the Plan Year shall be eligible to share
in
the discretionary contribution for the year.
(c)
The
Company Stock Account of each Participant shall be credited as of each
Anniversary Date with Forfeitures of Company Stock and the Participant's
allocable share of Company Stock (including fractional shares) purchased
and
paid for by the Plan or contributed in kind by the Employer. Stock dividends
on
Company Stock held in the Participant's Company Stock Account shall be credited
to the Participant's Company Stock Account when paid to the Plan. Cash dividends
on Company Stock held in the Participant's Company Stock Account shall be
credited to the Participant's Other Investments Account when paid to the
Plan.
(d)
As
of
each Valuation Date, before the current valuation period allocation of Employer
contributions and Forfeitures, any earnings or losses (net appreciation or
net
depreciation) of the Trust Fund shall be allocated in the same proportion
that
each Participant's and Former Participant's nonsegregated accounts (other
than
each Participant's Company Stock Account) bear to the total of all Participants'
and Former Participants' nonsegregated accounts (other than each Participant's
Company Stock Account) as of such date.
Participants'
transfers from other qualified plans deposited in the general Trust Fund
shall
share in any earnings and losses (net appreciation or net depreciation) of
the
Trust Fund in the same manner provided above. Each
segregated
account maintained on behalf of a Participant shall be credited or charged
with
its separate earnings and losses.
(e)
On
or
before each Anniversary Date any amounts which became Forfeitures since the
last
Anniversary Date may be used to satisfy any contribution that may be required
pursuant to Section 3.5 and/or 7.8, or used to pay any administrative
expenses of the Plan. The remaining Forfeitures, if any, shall be allocated
each
year among the Participants' Accounts of Participants otherwise eligible
to
share in the allocation of discretionary contributions in the same proportion
that each such Participant's Compensation for the year bears to the total
Compensation of all such Participants for the year.
Provided,
however, that in the event the allocation of Forfeitures provided herein
shall
cause the “annual addition” (as defined in Section 4.4) to any
Participant's Account to exceed the amount allowable by the Code, the excess
shall be reallocated in accordance with Section 4.5.
(f)
For
any
Top Heavy Plan Year, Employees not otherwise eligible to share in the allocation
of contributions and Forfeitures as provided above, shall receive the minimum
allocation provided for in Section 4.3(h) if eligible pursuant to the
provisions of Section 4.3(j).
(g)
Notwithstanding
the foregoing, Participants who are not actively employed on the last day
of the
Plan Year due to Retirement (Normal or Late), Total and Permanent Disability
or
death shall share in the allocation of contributions and Forfeitures for
that
Plan Year.
(h)
Minimum
Allocations Required for Top Heavy Plan Years: Notwithstanding the foregoing,
for any Top Heavy Plan Year, the sum of the Employer contributions and
Forfeitures allocated to the Participant's Account of each Employee shall
be
equal to at least three percent (3%) of such Employee's “415 Compensation”
(reduced by contributions and forfeitures, if any, allocated to each Employee
in
any defined contribution plan included with this Plan in a Required Aggregation
Group). However, if (1) the sum of the Employer contributions and
Forfeitures allocated to the Participant's Account of each Key Employee for
such
Top Heavy Plan Year is less than three percent (3%) of each Key Employee's
“415
Compensation” and (2) this Plan is not required to be included in an
Aggregation Group to enable a defined benefit plan to meet the requirements
of
Code Section 401(a)(4) or 410, then the sum of the Employer contributions
and Forfeitures allocated to the Participant's Account of each Employee shall
be
equal to the largest percentage allocated to the Participant's Account of
any
Key Employee.
However,
no such minimum allocation shall be required in this Plan for any Employee
who
participates in another defined contribution plan subject to Code
Section 412 included with this Plan in a Required Aggregation
Group.
(i)
For
purposes of the minimum allocations set forth above, the percentage allocated
to
the Participant's Account of any Key Employee shall be equal to the ratio
of the
sum of the Employer contributions and Forfeitures allocated on behalf of
such
Key Employee divided by the “415 Compensation” for such Key
Employee.
(j)
For
any
Top Heavy Plan Year, the minimum allocations set forth above shall be allocated
to the Participant's Account of all Employees who are Participants and who
are
employed by the Employer on the last day of the Plan Year, including Employees
who have (1) failed to complete a Year of Service; and (2) declined to
make mandatory contributions (if required) to the Plan.
(k)
For
the
purposes of this Section, “415 Compensation” in excess of $150,000 (or such
other amount provided in the Code) shall be disregarded. Such amount shall
be
adjusted for increases in the cost of living in accordance with Code
Section 401(a)(17)(B), except that the dollar increase in effect on January
1 of any calendar year shall be effective for the Plan Year beginning with
or
within such calendar year. If “415 Compensation” for any prior determination
period is taken into account in determining a Participant's minimum benefit
for
the current Plan Year, the “415 Compensation” for such determination period is
subject to the applicable annual “415 Compensation” limit in effect for that
prior period. For this purpose, in determining the minimum benefit in Plan
Years
beginning on or after January 1, 1989, the annual “415 Compensation” limit in
effect for determination periods beginning before that date is $200,000 (or
such
other amount as adjusted for increases in the cost of living in accordance
with
Code Section 415(d) for determination periods beginning on or after January
1, 1989, and in accordance with Code Section 401(a)(17)(B) for
determination periods beginning on or after January 1, 1994). For
determination periods beginning prior to January 1, 1989, the $200,000
limit shall apply only for Top Heavy Plan Years and shall not be adjusted.
For
any short Plan Year the “415 Compensation” limit shall be an amount equal to the
“415 Compensation” limit for the calendar year in which the Plan Year begins
multiplied by the ratio obtained by dividing the number of full months in
the
short Plan Year by twelve (12).
(l)
Notwithstanding
anything in this Section to the contrary, all information necessary to properly
reflect a given transaction may not be available until after the date specified
herein for processing such transaction, in which case the transaction will
be
reflected when such information is received and processed. Subject to express
limits that may be imposed under the Code, the processing of any contribution,
distribution or other transaction may be delayed for any legitimate business
reason (including, but not limited to, failure of systems or computer programs,
failure of the means of the transmission of data, force majeure, the failure
of
a service provider to timely receive values or prices, and the correction
for
errors or omissions or the errors or omissions of any service provider).
The
processing date of a transaction will be binding for all purposes of the
Plan.
4.4
MAXIMUM
ANNUAL ADDITIONS
(a)
Notwithstanding
the foregoing, the maximum “annual additions” credited to a Participant's
accounts for any “limitation year” shall equal the lesser of: (1) $40,000
adjusted annually as provided in Code Section 415(d) pursuant to the
Regulations, or (2) one-hundred percent (100%) of the Participant's “415
Compensation” for such “limitation year.” If the Employer contribution that
would otherwise be contributed or allocated to the Participant's accounts
would
cause the “annual additions” for the “limitation year” to exceed the maximum
“annual additions,” the amount contributed or allocated will be reduced so that
the “annual additions” for the “limitation year” will equal the maximum “annual
additions,” and any amount in excess of the maximum “annual additions,” which
would have been allocated to such Participant may be allocated to other
Participants. For any short “limitation year,” the dollar limitation in (1)
above shall be reduced by a fraction, the numerator of which is the number
of
full months in the short “limitation year” and the denominator of which is
twelve (12).
(b)
For
purposes of applying the limitations of Code Section 415, “annual
additions” means the sum credited to a Participant's accounts for any
“limitation year” of (1) Employer contributions, (2) Employee
contributions, (3) forfeitures, (4) amounts allocated, after
March 31, 1984, to an individual medical account, as defined in Code
Section 415(l)(2) which is part of a pension or annuity plan maintained by
the Employer, (5) amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Code Section 419A(d)(3)) under a
welfare benefit plan (as defined in Code Section 419(e)) maintained by the
Employer and (6) allocations under a simplified employee pension plan.
Except, however, the “415 Compensation” percentage limitation referred to in
paragraph (a)(2) above shall not apply to: (1) any contribution for
medical benefits after separation from service (within the meaning of Code
Sections 401(h) or 419A(f)(2)) which is otherwise treated as an “annual
addition,” or (2) any amount otherwise treated as an “annual addition”
under Code Section 415(l)(1).
(c)
For
purposes of applying the limitations of Code Section 415, the transfer of
funds from one qualified plan to another is not an “annual addition.” In
addition, the following are not Employee contributions for the purposes of
Section 4.4(b): (1) rollover contributions (as defined in Code
Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3) and 457(e)(16));
(2) repayments of loans made to a Participant from the Plan;
(3) repayments of distributions received by an Employee pursuant to Code
Section 411(a)(7)(B) (cash-outs); (4) repayments of distributions
received by an Employee pursuant to Code Section 411(a)(3)(D) (mandatory
contributions); and (5) Employee contributions to a simplified employee
pension excludable from gross income under Code
Section 408(k)(6).
(d)
For
purposes of applying the limitations of Code Section 415, the “limitation
year” shall be the Plan Year.
(e)
For
the
purpose of this Section, all qualified defined contribution plans (whether
terminated or not) ever maintained by the Employer shall be treated as one
defined contribution plan.
(f)
For
the
purpose of this Section, if the Employer is a member of a controlled group
of
corporations, trades or businesses under common control (as defined by Code
Section 1563(a) or Code Section 414(b) and (c) as modified by Code
Section 415(h)), is a member of an affiliated service group (as defined by
Code Section 414(m)), or is a member of a group of entities required to be
aggregated pursuant to Regulations under Code Section 414(o), all Employees
of such Employers shall be considered to be employed by a single
Employer.
(g)
If
this
is a plan described in Code Section 413(c) (other than a plan described in
Code Section 413(f)), then all of the benefits or contributions
attributable to a Participant from all of the Employers maintaining this
Plan
shall be taken into account in applying the limits of this Section with respect
to such Participant. Furthermore, in applying the limitations of this Section
with respect to such a Participant, the total “415 Compensation” received by the
Participant from all of the Employers maintaining the Plan shall be taken
into
account.
(h)(1)
If
a
Participant participates in more than one defined contribution plan maintained
by the Employer which have different Anniversary Dates, the maximum “annual
additions” under this Plan shall equal the maximum “annual additions” for the
“limitation year” minus any “annual additions” previously credited to such
Participant's accounts during the “limitation year.”
(2)
If
a
Participant participates in both a defined contribution plan subject to Code
Section 412 and a defined contribution plan not subject to Code
Section 412 maintained by the Employer which have the same Anniversary
Date, “annual additions” will be credited to the Participant's accounts under
the defined contribution plan subject to Code Section 412 prior to
crediting “annual additions” to the Participant's accounts under the defined
contribution plan not subject to Code Section 412.
(3)
If
a
Participant participates in more than one defined contribution plan not subject
to Code Section 412 maintained by the Employer which have the same
Anniversary Date, the maximum “annual additions” under this Plan shall equal the
product of (A) the maximum “annual additions” for the “limitation year”
minus any “annual additions” previously credited under subparagraphs (1) or
(2) above, multiplied by (B) a fraction (i) the numerator of which is
the “annual additions” which would be credited to such Participant's accounts
under this Plan without regard to the limitations of Code Section 415 and
(ii) the denominator of which is such “annual additions” for all plans
described in this subparagraph.
(i)
Notwithstanding
anything contained in this Section to the contrary, the limitations, adjustments
and other requirements prescribed in this Section shall at all times comply
with
the provisions of Code Section 415 and the Regulations
thereunder.
4.5
ADJUSTMENT
FOR EXCESSIVE ANNUAL ADDITIONS
(a)
If,
as a
result of the allocation of Forfeitures, a reasonable error in estimating
a
Participant's Compensation, a reasonable error in determining the amount
of
elective deferrals (within the meaning of Code Section 402(g)(3)) that may
be made with respect to any Participant under the limits of Section 4.4 or
other facts and circumstances to which Regulation 1.415-6(b)(6) shall be
applicable, the “annual additions” under this Plan would cause the maximum
“annual additions” to be exceeded for any Participant, the “excess amount” will
be disposed of in one of the following manners, as uniformly determined by
the
Administrator for all Participants similarly situated.
(1)
If
the
Participant is covered by the Plan at the end of the “limitation year,” then the
“excess amount” will be used to reduce the Employer contribution (including
allocation of any Forfeitures) for such Participant in the next “limitation
year,” and each succeeding “limitation year” if necessary;
(2)
If,
after
the application of subparagraph (1) above, an “excess amount” still exists, and
the Participant is not covered by the Plan at the end of the “limitation year,”
then the “excess amount” will be held unallocated in a “Section 415
suspense account.” The “Section 415 suspense account” will be applied to
reduce future Employer contributions (including allocation of any Forfeitures)
for all remaining Participants in the next “limitation year,” and each
succeeding “limitation year” if necessary;
(3)
If
a
“Section 415 suspense account” is in existence at any time during the
“limitation year” pursuant to this Section, it will not participate in the
allocation of investment gains and losses of the Trust Fund. If a
“Section 415 suspense account” is in existence at any time during a
particular “limitation year,” all amounts in the “Section 415 suspense
account” must be allocated and reallocated to Participants' accounts before any
Employer contributions or any Employee contributions may be made to the Plan
for
that “limitation year.” “Excess amounts” may not be distributed to Participants
or Former Participants.
(b)
For
purposes of this Article, “excess amount” for any Participant for a “limitation
year” shall mean the excess, if any, of (1) the “annual additions” which
would be credited to the Participant's account under the terms of the Plan
without regard to the limitations of Code Section 415 over (2) the
maximum “annual additions” determined pursuant to Section 4.4.
(c)
For
purposes of this Section, “Section 415 suspense account” shall mean an
unallocated account equal to the sum of “excess amounts” for all Participants in
the Plan during the “limitation year.”
4.6
PLAN-TO-PLAN
TRANSFERS FROM QUALIFIED PLANS
(a)
With
the
consent of the Administrator, amounts may be transferred (within the meaning
of
Code Section 414(l)) to this Plan from other tax qualified plans under Code
Section 401(a) by Eligible Employees, provided that the trust from which
such funds are transferred permits the transfer to be made and the transfer
will
not jeopardize the tax exempt status of the Plan or Trust or create adverse
tax
consequences for the Employer. Prior to accepting any transfers to which
this
Section applies, the Administrator may require an opinion of counsel that
the
amounts to be transferred meet the requirements of this Section. The amounts
transferred shall be set up in a separate account herein referred to as a
Participant's Transfer Account. Furthermore, for vesting purposes, the
Participant's portion of the Participant's Transfer Account attributable
to any
transfer shall be subject to Section 7.4(b).
Except
as
permitted by Regulations (including Regulation 1.411(d)-4), amounts
attributable to elective contributions (as defined in
Regulation 1.401(k)-1(g)(3)), including amounts treated as elective
contributions, which are transferred from another qualified plan in a
plan-to-plan transfer (other than a direct rollover) shall be subject to
the
distribution limitations provided for in
Regulation 1.401(k)-1(d).
(b)
Amounts
in a Participant's Transfer Account shall be held by the Trustee pursuant
to the
provisions of this Plan and may not be withdrawn by, or distributed to the
Participant, in whole or in part, except as provided in Section 7.9 and
paragraph (c) of this Section. The Trustee shall have no duty or
responsibility to inquire as to the propriety of the amount, value or type
of
assets transferred, nor to conduct any due diligence with respect to such
assets; provided, however, that such assets are otherwise eligible to be
held by
the Trustee under the terms of this Plan.
(c)
At
Normal
Retirement Date, or such other date when the Participant or the Participant's
Beneficiary shall be entitled to receive benefits, the Participant's Transfer
Account shall be used to provide additional benefits to the Participant or
the
Participant's Beneficiary. Any distributions of amounts held in a Participant's
Transfer Account shall be made in a manner which is consistent with and
satisfies the provisions of Section 7.5, including, but not limited to, all
notice and consent requirements of Code Section 411(a)(11) and the
Regulations thereunder. Furthermore, such amounts shall be considered as
part of
a Participant's benefit in determining whether an involuntary cash-out of
benefits may be made without Participant consent.
(d)
The
Administrator may direct that Employee transfers made after a Valuation Date
be
segregated into a separate account for each Participant until such time as
the
allocations pursuant to this Plan have been made, at which time they may
remain
segregated or be invested as part of the general Trust Fund.
(e)
This
Plan
shall not accept any direct or indirect transfers (as that term is defined
and
interpreted under Code Section 401(a)(11) and the
Regulations
thereunder) from a defined benefit plan, money purchase plan (including a
target
benefit plan), stock bonus or profit sharing plan which would otherwise have
provided for a life annuity form of payment to the Participant.
(f)
Notwithstanding
anything herein to the contrary, a transfer directly to this Plan from another
qualified plan (or a transaction having the effect of such a transfer) shall
only be permitted if it will not result in the elimination or reduction of
any
“Section 411(d)(6) protected benefit” as described in
Section 9.1.
4.7
ROLLOVERS
FROM OTHER PLANS
(a)
With
the
consent of the Administrator, the Plan may accept a “rollover” by Eligible
Employees, provided the “rollover” will not jeopardize the tax-exempt status of
the Plan or create adverse tax consequences for the Employer. Prior to accepting
any “rollovers” to which this Section applies, the Administrator may require the
Employee to establish (by providing an opinion of counsel, or otherwise)
that
the amounts to be rolled over to this Plan meet the requirements of this
Section. The amounts rolled over shall be set up in a separate account herein
referred to as a Participant's Rollover Account. Such account shall be fully
Vested at all times and shall not be subject to Forfeiture for any
reason.
(b)
Amounts
in a Participant's Rollover Account shall be held by the Trustee pursuant
to the
provisions of this Plan and may not be withdrawn by, or distributed to the
Participant, in whole or in part, except as provided in Section 7.9 and
paragraph (c) of this Section. The Trustee shall have no duty or
responsibility to inquire as to the propriety of the amount, value or type
of
assets transferred, nor to conduct any due diligence with respect to such
assets; provided, however, that such assets are otherwise eligible to be
held by
the Trustee under the terms of this Plan.
(c)
At
such
date when the Participant or the Participant's Beneficiary shall be entitled
to
receive benefits, the Participant's Rollover Account shall be used to provide
additional benefits to the Participant or the Participant's Beneficiary.
Furthermore, amounts in the Participant's Rollover Account shall not be
considered as part of a Participant's benefit in determining whether an
involuntary cash-out of benefits may be made without Participant consent.
Any
distributions of amounts held in a Participant's Rollover Account shall be
made
in a manner which is consistent with and satisfies the provisions of
Section 7.5, including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations
thereunder.
(d)
The
Administrator may direct that Employee “rollovers” made after a Valuation Date
be segregated into a separate account for each Participant until such time
as
the allocations pursuant to this Plan have been made, at which time they
may
remain segregated or be invested as part of the general Trust Fund.
(e)
For
purposes of this Section the following definitions shall apply:
(1)
A
“rollover” means: (i) amounts transferred to this Plan directly from
another “eligible retirement plan;” (ii) distributions received by an
Employee from other “eligible retirement plans” which are eligible for tax-free
rollover to an “eligible retirement plan” and which are transferred by the
Employee to this Plan within sixty (60) days following receipt thereof;
(iii) amounts transferred to this Plan from a conduit individual retirement
account provided that the conduit individual retirement account has no assets
other than assets which (A) were previously distributed to the Employee by
another “eligible retirement plan,” (B) were eligible for tax-free rollover
to an “eligible retirement plan” and (C) were deposited in such conduit
individual retirement account within sixty (60) days of receipt thereof;
(iv) amounts distributed to the Employee from a conduit individual
retirement account meeting the requirements of clause (iii) above, and
transferred by the Employee to this Plan within sixty (60) days of receipt
thereof from such conduit individual retirement account; and (v) any other
amounts which are eligible to be rolled over to this Plan pursuant to the
Code.
(2)
An
“eligible retirement plan” means an individual retirement account described in
Code Section 408(a), an individual retirement annuity described in Code
Section 408(b) (other than an endowment contract), a qualified trust (an
employees' trust described in Code Section 401(a) which is exempt from tax
under Code Section 501(a)), an annuity plan described in Code
Section 403(a), an eligible deferred compensation plan described in Code
Section 457(b) which is maintained by an eligible employer described in
Code Section 457(e)(1)(A), and an annuity contract described in Code
Section 403(b).
4.8
DIRECTED
INVESTMENT ACCOUNT
(a)
Each
“Qualified Participant” may elect within ninety (90) days after the close of
each Plan Year during the “Qualified Election Period” to direct the Trustee in
writing as to the distribution in cash and/or Company Stock of 25 percent
of the
total number of shares of Company Stock acquired by or contributed to the
Plan
that have ever been allocated to such “Qualified Participant's” Company Stock
Account (reduced by the number of shares of Company Stock previously distributed
in cash and/or Company Stock pursuant to a prior election). In the case of
the
election year in which the last election can be made by the Participant,
the
preceding sentence shall be applied by substituting “50 percent” for “25
percent.” If the “Qualified Participant” elects to direct the Trustee as to the
distribution of the Participant's Company Stock Account, such direction shall
be
effective no later than 180 days after the close of the Plan Year to which
such
direction applies.
Notwithstanding
the above, if the fair market value (determined pursuant to Section 6.1 at
the Plan Valuation Date immediately preceding the first
day
on
which a “Qualified Participant” is eligible to make an election) of Company
Stock acquired by or contributed to the Plan and allocated to a “Qualified
Participant's” Company Stock Account is $500 or less, then such Company Stock
shall not be subject to this paragraph. For purposes of determining whether
the
fair market value exceeds $500, Company Stock held in accounts of all employee
stock ownership plans (as defined in Code Section 4975(e)(7)) and tax
credit employee stock ownership plans (as defined in Code Section 409(a))
maintained by the Employer or any Affiliated Employer shall be considered
as
held by the Plan.
(b)
For
the
purposes of this Section the following definitions shall apply:
(1)
“Qualified
Participant” means any Participant or Former Participant who has completed ten
(10) Years of Service as a Participant and has attained age 55.
(2)
“Qualified
Election Period” means the six (6) Plan Year period beginning with the first
Plan Year in which the Participant first became a “Qualified
Participant.”
4.9
QUALIFIED
MILITARY SERVICE
Notwithstanding
any provision of this Plan to the contrary, contributions, benefits and service
will be provided in accordance with Code Section 414(u).
ARTICLE
V
FUNDING
AND INVESTMENT POLICY
5.1
INVESTMENT
POLICY
(a)
The
Plan
is designed to invest primarily in Company Stock.
(b)
With
due
regard to subparagraph (a) above, the Administrator may also direct the
Trustee to invest funds under the Plan in other property described in the
Trust
or in life insurance policies to the extent permitted by subparagraph (c)
below, or the Trustee may hold such funds in cash or cash
equivalents.
(c)
With
due
regard to subparagraph (a) above, the Administrator may also direct the
Trustee to invest funds under the Plan in insurance policies on the life
of any
“keyman” Employee. The proceeds of a “keyman” insurance policy may not be used
for the repayment of any indebtedness owed by the Plan which is secured by
Company Stock. In the event any “keyman” insurance is purchased by the Trustee,
the premiums paid thereon during any Plan Year, net of any policy dividends
and
increases in cash surrender values, shall be treated as the cost of Plan
investment and any death benefit or cash surrender value received shall be
treated as proceeds from an investment of the Plan.
(d)
The
Plan
may not obligate itself to acquire Company Stock from a particular holder
thereof at an indefinite time determined upon the happening of an event such
as
the death of the holder.
(e)
The
Plan
may not obligate itself to acquire Company Stock under a put option binding
upon
the Plan. However, at the time a put option is exercised, the Plan may be
given
an option to assume the rights and obligations of the Employer under a put
option binding upon the Employer.
(f)
All
purchases of Company Stock shall be made at a price which, in the judgment
of
the Administrator, does not exceed the fair market value thereof. All sales
of
Company Stock shall be made at a price which, in the judgment of the
Administrator, is not less than the fair market value thereof. The valuation
rules set forth in Article VI shall be applicable.
5.2
TRANSACTIONS
INVOLVING COMPANY STOCK
(a)
No
portion of the Trust Fund attributable to (or allocable in lieu of) Company
Stock acquired by the Plan in a sale to which Code Section 1042 applies may
accrue or be allocated directly or indirectly under any plan maintained by
the
Employer meeting the requirements of Code Section 401(a):
(1)
during
the “Nonallocation Period,” for the benefit of
(i)
any
taxpayer who makes an election under Code Section 1042(a) with respect to
Company Stock,
(ii)
any
individual who is related to the taxpayer (within the meaning of Code
Section 267(b)), or
(2)
for
the
benefit of any other person who owns (after application of Code
Section 318(a) applied without regard to the employee trust exception in
Code Section 318(a)(2)(B)(i)) more than 25 percent of
(i)
any
class
of outstanding stock of the Employer or Affiliated Employer which issued
such
Company Stock, or
(ii)
the
total
value of any class of outstanding stock of the Employer or Affiliated
Employer.
(b)
Except,
however, subparagraph (a)(1)(ii) above shall not apply to lineal
descendants of the taxpayer, provided that the aggregate amount allocated
to the
benefit of all such lineal descendants during the “Nonallocation Period” does
not exceed more than five (5) percent of the Company Stock (or amounts
allocated in lieu thereof) held by the Plan which are attributable to a sale
to
the Plan by any person related to such descendants (within the meaning of
Code
Section 267(c)(4)) in a transaction to which Code Section 1042 is
applied.
(c)
A
person
shall be treated as failing to meet the stock ownership limitation under
paragraph (a)(2) above if such person fails such limitation:
(1)
at
any
time during the one (1) year period ending on the date of sale of Company
Stock to the Plan, or
(2)
on
the
date as of which Company Stock is allocated to Participants in the
Plan.
(d)
For
purposes of this Section, “Nonallocation Period” means the period beginning on
the date of the sale of the Company Stock and ending on the date which is
ten
(10) years after the date of sale.
ARTICLE
VI
VALUATIONS
6.1
VALUATION
OF THE TRUST FUND
The
Administrator shall direct the Trustee, as of each Valuation Date, to determine
the net worth of the assets comprising the Trust Fund as it exists on the
Valuation Date. In determining such net worth, the Trustee shall value the
assets comprising the Trust Fund at their fair market value (or their
contractual value in the case of a Contract or Policy) as of the Valuation
Date
and shall deduct all expenses for which the Trustee has not yet obtained
reimbursement from the Employer or the Trust Fund.
Valuations
must be made in good faith and based on all relevant factors for determining
the
fair market value of securities. In the case of a transaction between a Plan
and
a disqualified person, value must be determined as of the date of the
transaction. For all other Plan purposes, value must be determined as of
the
most recent Valuation Date under the Plan. An independent appraisal will
not in
itself be a good faith determination of value in the case of a transaction
between the Plan and a disqualified person. However, in other cases, a
determination of fair market value based on at least an annual appraisal
independently arrived at by a person who customarily makes such appraisals
and
who is independent of any party to the transaction will be deemed to be a
good
faith determination of value. Company Stock not readily tradeable on an
established securities market shall be valued by an independent appraiser
meeting requirements similar to the requirements of the Regulations prescribed
under Code Section 170(a)(1).
ARTICLE
VII
DETERMINATION
AND DISTRIBUTION OF BENEFITS
7.1
DETERMINATION
OF BENEFITS UPON RETIREMENT
Every
Participant may terminate employment with the Employer and retire for the
purposes hereof on the Participant's Normal Retirement Date. However, a
Participant may postpone the termination of employment with the Employer
to a
later date, in which event the participation of such Participant in the Plan,
including the right to receive allocations pursuant to
Section 4.3,
shall continue until such Participant's Late Retirement Date. Upon a
Participant's Retirement Date or attainment of Normal Retirement Date without
termination of employment with the Employer, or as soon thereafter as is
practicable, the Trustee shall distribute, at the election of the Participant,
all amounts credited to such Participant's Account in accordance with
Sections 7.5 and 7.6.
7.2
DETERMINATION
OF BENEFITS UPON DEATH
(a)
Upon
the
death of a Participant before the Participant's Retirement Date or other
termination of employment, all amounts credited to such Participant's Account
shall become fully Vested. If elected, distribution of the Participant's
Account
shall commence not later than one (1) year after the close of the Plan Year
in
which such Participant's death occurs. The Administrator shall direct the
Trustee, in accordance with the provisions of Sections 7.5 and 7.6, to
distribute the value of the deceased Participant's accounts to the Participant's
Beneficiary.
(b)
Upon
the
death of a Former Participant, the Administrator shall direct the Trustee,
in
accordance with the provisions of Sections 7.5 and 7.6, to distribute any
remaining Vested amounts credited to the accounts of a deceased Former
Participant to such Former Participant's Beneficiary.
(c)
The
Administrator may require such proper proof of death and such evidence of
the
right of any person to receive payment of the value of the account of a deceased
Participant or Former Participant as the Administrator may deem desirable.
The
Administrator's determination of death and of the right of any person to
receive
payment shall be conclusive.
(d)
The
Beneficiary of the death benefit payable pursuant to this Section shall be
the
Participant's spouse. Except, however, the Participant may designate a
Beneficiary other than the spouse if:
(1)
the
spouse has waived the right to be the Participant's Beneficiary, or
(2)
the
Participant is legally separated or has been abandoned (within the meaning
of
local law) and the Participant has a court order to such effect (and there
is no
“qualified domestic relations order” as defined in Code Section 414(p)
which provides otherwise), or
(3)
the
Participant has no spouse, or
(4)
the
spouse cannot be located.
In
such
event, the designation of a Beneficiary shall be made on a form satisfactory
to
the Administrator. A Participant may at any time revoke a designation of
a
Beneficiary or change a Beneficiary by filing written (or in such other form
as
permitted by the Internal Revenue Service) notice of such revocation or change
with the Administrator. However, the Participant's spouse
must
again consent in writing (or in such other form as permitted by the Internal
Revenue Service) to any change in Beneficiary unless the original consent
acknowledged that the spouse had the right to limit consent only to a specific
Beneficiary and that the spouse voluntarily elected to relinquish such
right.
(e)
In
the
event no valid designation of Beneficiary exists, or if the Beneficiary is
not
alive at the time of the Participant's death, the death benefit will be paid
in
the following order of priority to:
(1)
the
Participant's surviving spouse;
(2)
the
Participant's children, including adopted children, per stirpes;
(3)
the
Participant's surviving parents in equal shares; or
(4)
the
Participant's estate.
If
the
Beneficiary does not predecease the Participant, but dies prior to distribution
of the death benefit, the death benefit will be paid to the Beneficiary's
estate.
(f)
Notwithstanding
anything in this Section to the contrary, if a Participant has designated
the
spouse as a Beneficiary, then a divorce decree or a legal separation that
relates to such spouse shall revoke the Participant's designation of the
spouse
as a Beneficiary unless the decree or a qualified domestic relations order
(within the meaning of Code Section 414(p)) provides
otherwise.
(g)
Any
consent by the Participant's spouse to waive any rights to the death benefit
must be in writing (or in such other form as permitted by the Internal Revenue
Service), must acknowledge the effect of such waiver, and be witnessed by
a Plan
representative or a notary public. Further, the spouse's consent must be
irrevocable and must acknowledge the specific nonspouse
Beneficiary.
7.3
DETERMINATION
OF BENEFITS IN EVENT OF DISABILITY
In
the
event of a Participant's Total and Permanent Disability prior to the
Participant's Retirement Date or other termination of employment, all amounts
credited to such Participant's Account shall become fully Vested. In the
event
of a Participant's Total and Permanent Disability, the Administrator, in
accordance with the provisions of Sections 7.5 and 7.6, shall direct the
distribution to such Participant of all Vested amounts credited to such
Participant's Account. If such Participant elects, distribution shall commence
not later than one (1) year after the close of the Plan Year in which Total
and Permanent Disability occurs.
7.4
DETERMINATION
OF BENEFITS UPON TERMINATION
(a)
If
a
Participant's employment with the Employer is terminated for any reason other
than death, Total and Permanent Disability or retirement, then such Participant
shall be entitled to such benefits as are provided hereinafter pursuant to
this
Section 7.4.
If
a
portion of a Participant's Account is forfeited, Company Stock allocated
to the
Participant's Company Stock Account must be forfeited only after the
Participant's Other Investments Account has been depleted. If interest in
more
than one class of Company Stock has been allocated to a Participant's Account,
the Participant must be treated as forfeiting the same proportion of each
such
class.
Distribution
of the funds due to a Terminated Participant shall be made on the occurrence
of
an event which would result in the distribution had the Terminated Participant
remained in the employ of the Employer (upon the Participant's death, Total
and
Permanent Disability or Normal Retirement). However, at the election of the
Participant, the Administrator shall direct the Trustee that the entire Vested
portion of the Terminated Participant's Account to be payable to such Terminated
Participant as soon as administratively feasible after termination of
employment. Any distribution under this paragraph shall be made in a manner
which is consistent with and satisfies the provisions of Section 7.5 and
7.6, including, but not limited to, all notice and consent requirements of
Code
Section 411(a)(11) and the Regulations thereunder.
If
the
value of a Terminated Participant's Vested benefit derived from Employer
and
Employee contributions does not exceed $5,000, then the Administrator shall
direct the Trustee to cause the entire Vested benefit to be paid to such
Participant in a single lump sum as soon as administratively feasible after
termination of employment.
(b)
The
Vested portion of any Participant's Account shall be a percentage of the
total
amount credited to the Participant's Account determined on the basis of the
Participant's number of Years of Service according to the following
schedule:
|
Vesting
Schedule
|
|
|
Years
of Service
|
|
Percentage
|
|
|
|
|
|
|
|
Less
than 3
|
|
|
0
|
%
|
|
|
|
|
|
|
|
3
|
|
|
100
|
%
|
|
|
|
|
|
|
(c)
Notwithstanding
the vesting schedule above, upon the complete discontinuance of the Employer
contributions to the Plan or upon any full or partial termination of the
Plan,
all amounts then credited to the account of any affected Participant shall
become 100% Vested and shall not thereafter be subject to
Forfeiture.
(d)
The
computation of a Participant's nonforfeitable percentage of such Participant's
interest in the Plan shall not be reduced as the result of any direct or
indirect amendment to this Plan. In the event that the Plan is amended to
change
or modify any vesting schedule, or if the Plan is amended in any way that
directly or indirectly affects the computation of the Participant's
nonforfeitable percentage, or if the Plan is deemed amended by an automatic
change to a top heavy vesting schedule, then each Participant with at least
three (3) Years of Service as of the expiration date of the election period
may
elect to have such Participant's nonforfeitable percentage computed under
the
Plan without regard to such amendment or change. If a Participant fails to
make
such election, then such Participant shall be subject to the new vesting
schedule. The Participant's election period shall commence on the adoption
date
of the amendment and shall end sixty (60) days after the latest of:
(1)
the
adoption date of the amendment,
(2)
the
effective date of the amendment, or
(3)
the
date
the Participant receives written notice of the amendment from the Employer
or
Administrator.
(e)
In
determining Years of Service for purposes of vesting under the Plan, Years
of
Service prior to the Effective Date of the Plan and prior to the vesting
computation period in which an Employee attains age eighteen shall be
excluded.
7.5
DISTRIBUTION
OF BENEFITS
(a)
The
Administrator, pursuant to the election of the Participant, shall direct
the
Trustee to distribute to a Participant or such Participant's Beneficiary
any
amount to which the Participant is entitled under the Plan in one or more
of the
following methods:
(1)
One
lump-sum payment.
(2)
For
purposes of Sections 7.5(e) and 7.5(f), payments over a period certain in
monthly, quarterly, semiannual, or annual installments. The period over which
such payment is to be made shall not extend beyond the earlier of the
Participant's life expectancy (or the joint life expectancy of the Participant
and the Participant's “designated Beneficiary”).
(b)
Any
distribution to a Participant who has a benefit which exceeds $5,000, shall
require such Participant's written (or in such other form as permitted by
the
Internal Revenue Service) consent if such distribution commences prior to
the
time the benefit is “immediately distributable.” A benefit is “immediately
distributable” if any part of the benefit could be distributed to the
Participant (or surviving spouse) before the Participant attains (or would
have
attained if not deceased) the later of the Participant's Normal Retirement
Age
or age 62. With regard to this required consent:
(1)
The
Participant must be informed of the right to defer receipt of the distribution.
If a Participant fails to consent, it shall be deemed an election to
defer
the
commencement of payment of any benefit. However, any election to defer the
receipt of benefits shall not apply with respect to distributions which are
required under Section
7.5(e).
(2)
Notice
of
the rights specified under this paragraph shall be provided no less than
thirty (30) days and no more than ninety (90) days before the date the
distribution commences.
(3)
Written
(or such other form as permitted by the Internal Revenue Service) consent
of the
Participant to the distribution must not be made before the Participant receives
the notice and must not be made more than ninety (90) days before the date
the distribution commences.
(4)
No
consent shall be valid if a significant detriment is imposed under the Plan
on
any Participant who does not consent to the distribution.
Any
such
distribution may commence less than thirty (30) days after the notice
required under Regulation 1.411(a)-11(c) is given, provided that:
(1) the Administrator clearly informs the Participant that the Participant
has a right to a period of at least thirty (30) days after receiving the
notice to consider the decision of whether or not to elect a distribution
(and,
if applicable, a particular distribution option), and (2) the Participant,
after receiving the notice, affirmatively elects a distribution.
(c)
Notwithstanding
anything herein to the contrary, the Administrator may direct that cash
dividends on shares of Company Stock allocable to Participants' Company Stock
Accounts be:
(1)
Paid
by
the Employer directly in cash to the Participants in the Plan or their
Beneficiaries.
(2)
Paid
to
the Plan and distributed in cash to Participants in the Plan or their
Beneficiaries no later than ninety (90) days after the close of the Plan
Year in which paid.
(3)
At
the
election of Participants or their Beneficiaries, paid in accordance with
paragraph (1) or (2) above, or paid to the Plan and reinvested in Company
Stock; provided, however, that if cash dividends are reinvested in Company
Stock, then Company Stock allocated to the Participant's Company Stock Account
shall have a fair market value not less than the amount of cash dividends
which
would have been allocated to such Participant's Other Investment Account
for the
year.
(4)
Allocated
to Participants' Other Investment Accounts.
(d)
Any
part
of a Participant's benefit which is retained in the Plan after the Anniversary
Date on which the Participant's participation ends will continue to be treated
as a Company Stock Account or as an Other Investments
Account
(subject to Section 7.4(a)) as provided in Article IV. However,
neither account will be credited with any further Employer contributions
or
Forfeitures.
(e)
Notwithstanding
any provision in the Plan to the contrary, the distribution of a Participant's
benefits will be made in accordance with the following requirements and will
otherwise comply with Code Section 401(a)(9) and the Regulations
thereunder, the provisions of which are incorporated herein by
reference:
(1)
A
Participant's benefits will be distributed not later than April 1st of the
calendar year following the later of (i) the calendar year in which the
Participant attains age 70 1/2 or (ii) the calendar year in which the
Participant retires, provided, however, that this clause (ii) shall not
apply in the case of a Participant who is a “five (5) percent owner” at any time
during the Plan Year ending with or within the calendar year in which such
owner
attains age 70 1/2. Such distribution shall be equal to or greater than any
required distribution.
Alternatively,
distributions to a Participant must begin no later than the applicable
April 1st as determined above and must be made over a period certain
measured by the Life Expectancy of the Participant (or joint Life Expectancies
of the Participant and the Participant's “designated Beneficiary”) in accordance
with Regulations. Such distributions will be equal to or greater than any
required distribution.
(2)
Distributions
to a Participant and the Participant's Beneficiaries will only be made in
accordance with the incidental death benefit requirements of Code
Section 401(a)(9)(G) and the Regulations thereunder.
(3)
Unless
the Participant's interest is distributed in a single sum on or before the
required beginning date specified in (1) above, the minimum amount that will
be
distributed for each Distribution Calendar Year (including the first
Distribution Calendar Year and the Distribution Calendar Year that includes
the
Participant's date of death) is the lesser of:
(i)
the
quotient obtained by dividing the Participant's Account Balance by the
distribution period in the Uniform Lifetime Table set forth in
Regulation 1.401(a)(9)-9, using the Participant's age as of the
Participant's birthday in the Distribution Calendar Year; or
(ii)
if
the
Participant's sole “designated Beneficiary” for the Distribution Calendar Year
is the Participant's spouse, the quotient obtained by dividing the Participant's
Account Balance by the number in the Joint and Last Survivor Table set forth
in
Regulation 1.401(a)(9)-9, using the Participant's and spouse's attained
ages as of the Participant's and spouse's birthdays in the Distribution Calendar
Year.
(f)
Notwithstanding
any provision in the Plan to the contrary, distributions upon the death of
a
Participant will be made in accordance with the following requirements and
will
otherwise comply with Code Section 401(a)(9) and the Regulations
thereunder, the provisions of which are incorporated be reference.
(1)
If
the
Participant dies on or after the date distributions begin and there is a
“designated Beneficiary,” then the minimum amount that will be distributed for
each Distribution Calendar Year after the year of the Participant's death
is the
quotient obtained by dividing the Participant's Account Balance by the longer
of
the remaining Life Expectancy of the Participant or the remaining Life
Expectancy of the Participant's “designated Beneficiary,” determined as
follows:
(i)
The
Participant's remaining Life Expectancy is calculated using the age of the
Participant in the year of death, reduced by one for each subsequent
year.
(ii)
If
the
Participant's surviving spouse is the Participant's sole “designated
Beneficiary,” then the remaining Life Expectancy of the surviving spouse is
calculated for each Distribution Calendar Year after the year of the
Participant's death using the surviving spouse's age as of the spouse's birthday
in that year. For Distribution Calendar Years after the year of the surviving
spouse's death, the remaining Life Expectancy of the surviving spouse is
calculated using the age of the surviving spouse as of the spouse's birthday
in
the calendar year of the spouse's death, reduced by one for each subsequent
calendar year.
(iii)
If
the
Participant's surviving spouse is not the Participant's sole “designated
Beneficiary,” then the “designated Beneficiary's” remaining Life Expectancy is
calculated using the age of the beneficiary in the year following the year
of
the Participant's death, reduced by one for each subsequent year.
However,
if there is no “designated Beneficiary” as of September 30th of the year
after the year of the Participant's death, then the minimum amount that will
be
distributed for each Distribution Calendar Year after the year of the
Participant's death is the quotient obtained by dividing the Participant's
Account Balance by the Participant's remaining Life Expectancy calculated
using
the age of the Participant in the year of death, reduced by one for each
subsequent year.
(2)
If
a
Participant dies before the date distributions begin, then the Participant's
entire interest will be distributed, or begin to be distributed, no later
than
as follows:
(i)
If
the
Participant's surviving spouse is the Participant's sole “designated
Beneficiary,” then distributions to the surviving spouse will begin by
December 31st of the calendar year immediately
following
the calendar year in which the Participant died, or by December 31st of the
calendar year in which the Participant would have attained age 70 1/2,
if later.
(ii)
If
the
Participant's surviving spouse is not the Participant's sole “designated
Beneficiary,” then distributions to the “designated Beneficiary” will begin by
December 31st of the calendar year immediately following the calendar year
in which the Participant died.
(iii)
If
there
is no “designated Beneficiary” as of September 30th of the year following
the year of the Participant's death, the Participant's entire interest will
be
distributed by December 31st of the calendar year containing the fifth
anniversary of the Participant's death.
(iv)
If
the
Participant is survived by a “designated Beneficiary,” then the minimum amount
that will be distributed for each Distribution Calendar Year after the year
of
the Participant's death is the quotient obtained by dividing the Participant's
Account Balance by the remaining Life Expectancy of the Participant's
“designated Beneficiary,” determined as provided in
Section 7.5(f)(1).
(v)
If
the
Participant's surviving spouse is the Participant's sole “designated
Beneficiary” and the surviving spouse dies after the Participant but before
distributions to the surviving spouse begin, then this Section 7.5(f)(2),
other than Section 7.5(f)(2)(i), will apply as if the surviving spouse were
the Participant.
(3)
For
purposes of this Section 7.5(f), the Participant's death benefit will be
distributed to the Participant's Beneficiaries subject to the following
rules:
(i)
Distributions
are considered to begin on the Participant's required beginning date. However,
if Section 7.5(f)(2)(v) applies, distributions are considered to begin on
the date distributions are required to begin to the surviving
spouse.
(ii)
Unless
the Participant's interest is distributed in a single sum on or before the
required beginning date, as of the first Distribution Calendar Year
distributions will be made in accordance with Section 7.5(f).
(g)
Except
as
limited by Sections 7.5 and 7.6, whenever the Trustee is to make a
distribution or to commence a series of payments, the distribution or series
of
payments may be made or begun on such date or as soon thereafter as is
practicable. However, unless a Former Participant elects in writing to defer
the
receipt of benefits (such election may not result in a death benefit that
is
more
than
incidental), the payment of benefits shall begin not later than the sixtieth
(60th) day after the close of the Plan Year in which the latest of the following
events occurs:
(1)
the
date
on which the Participant attains the earlier of age 65 or the Normal Retirement
Age specified herein;
(2)
the
tenth
(10th) anniversary of the year in which the Participant commenced participation
in the Plan; or
(3)
the
date
the Participant terminates his service with the Employer.
(h)
If
a
distribution is made to a Participant who has not severed employment and
who is
not fully Vested in the Participant's Account and the Participant may increase
the Vested percentage in such account, then, at any relevant time the
Participant's Vested portion of the account will be equal to an amount (“X”)
determined by the formula:
X
equals
P(AB plus D) - D
For
purposes of applying the formula: P is the Vested percentage at the relevant
time, AB is the account balance at the relevant time, and D is the amount
of
distribution.
7.6
HOW
PLAN
BENEFIT WILL BE DISTRIBUTED
(a)
Distribution
of a Participant's benefit may be made in cash or Company Stock or both,
provided, however, that if a Participant or Beneficiary so demands, such
benefit
shall be distributed only in the form of Company Stock. Prior to making a
distribution of benefits, the Administrator shall advise the Participant
or the
Participant's Beneficiary, in writing (or such other form as permitted by
the
Internal Revenue Service), of the right to demand that benefits be distributed
solely in Company Stock.
(b)
If
a
Participant or Beneficiary demands that benefits be distributed solely in
Company Stock, distribution of a Participant's benefit will be made entirely
in
whole shares or other units of Company Stock. Any balance in a Participant's
Other Investments Account will be applied to acquire for distribution the
maximum number of whole shares or other units of Company Stock at the then
fair
market value. Any fractional unit value unexpended will be distributed in
cash.
If Company Stock is not available for purchase by the Trustee, then the Trustee
shall hold such balance until Company Stock is acquired and then make such
distribution, subject to Sections 7.5(g) and 7.5(e).
(c)
The
Trustee will make distribution from the Trust only on instructions from the
Administrator.
(d)
Notwithstanding
anything contained herein to the contrary, if the Employer charter or by-laws
restrict ownership of substantially all shares of
Company
Stock to Employees and the Trust Fund, as described in Code
Section 409(h)(2)(B)(ii)(I), then the Administrator shall distribute a
Participant's Account entirely in cash without granting the Participant the
right to demand distribution in shares of Company Stock.
(e)
Except
as
otherwise provided herein, Company Stock distributed by the Trustee may be
restricted as to sale or transfer by the by-laws or articles of incorporation
of
the Employer, provided restrictions are applicable to all Company Stock of
the
same class. If a Participant is required to offer the sale of Company Stock
to
the Employer before offering to sell Company Stock to a third party, in no
event
may the Employer pay a price less than that offered to the distributee by
another potential buyer making a bona fide offer and in no event shall the
Trustee pay a price less than the fair market value of the Company
Stock.
7.7
DISTRIBUTION
FOR MINOR OR INCOMPETENT BENEFICIARY
In
the
event a distribution is to be made to a minor or incompetent Beneficiary,
then
the Administrator may direct that such distribution be paid to the legal
guardian, or if none in the case of a minor Beneficiary, to a parent of such
Beneficiary or a responsible adult with whom the Beneficiary maintains
residence, or to the custodian for such Beneficiary under the Uniform Gift
to
Minors Act or Gift to Minors Act, if such is permitted by the laws of the
state
in which said Beneficiary resides. Such a payment to the legal guardian,
custodian or parent of a minor Beneficiary shall fully discharge the
Trustee
,
Employer, and Plan from further liability on account thereof.
7.8
LOCATION
OF PARTICIPANT OR BENEFICIARY UNKNOWN
In
the
event that all, or any portion, of the distribution payable to a Participant
or
Beneficiary hereunder shall, at the later of the Participant's attainment
of age
62 or Normal Retirement Age, remain unpaid solely by reason of the inability
of
the Administrator, after sending a registered letter, return receipt requested,
to the last known address, and after further diligent effort, to ascertain
the
whereabouts of such Participant or Beneficiary, the amount so distributable
shall be treated as a Forfeiture pursuant to the Plan. Notwithstanding the
foregoing, if the value of a Participant's Vested benefit derived from Employer
and Employee contributions does not exceed $5,000, then the amount distributable
may, in the sole discretion of the Administrator, either be treated as a
Forfeiture, or be paid directly to an individual retirement account described
in
Code Section 408(a) or individual retirement annuity described in Code
Section 408(b) at the time it is determined that the whereabouts of the
Participant or the Participant's Beneficiary cannot be ascertained. In the
event
a Participant or Beneficiary is located subsequent to the Forfeiture, such
benefit shall be restored, first from Forfeitures, if any, and then from
an
additional Employer contribution if necessary. However, regardless of the
preceding, a benefit which is lost by reason of escheat under applicable
state
law is not treated as a Forfeiture for purposes of this Section nor as an
impermissible forfeiture under the Code.
7.9
PRE-RETIREMENT
DISTRIBUTION
At
such
time as a Participant shall have attained the age of 65 years, the
Administrator, at the election of the Participant who has not severed employment
with the Employer, shall direct the Trustee to distribute all or a portion
of
the amount then credited to the
accounts
maintained on behalf of the Participant. However, no distribution from the
Participant's account shall occur prior to 100% vesting. In the event that
the
Administrator makes such a distribution, the Participant shall continue to
be
eligible to participate in the Plan on the same basis as any other Employee.
Any
distribution made pursuant to this Section shall be made in a manner consistent
with Sections 7.5 and 7.6, including, but not limited to, all notice and
consent requirements of Code Section 411(a)(11) and the Regulations
thereunder.
7.10
QUALIFIED
DOMESTIC RELATIONS ORDER DISTRIBUTION
All
rights and benefits, including elections, provided to a Participant in this
Plan
shall be subject to the rights afforded to any “alternate payee” under a
“qualified domestic relations order.” Furthermore, a distribution to an
“alternate payee” shall be permitted if such distribution is authorized by a
“qualified domestic relations order,” even if the affected Participant has not
separated from service and has not reached the “earliest retirement age” under
the Plan. For the purposes of this Section, “alternate payee,” “qualified
domestic relations order” and “earliest retirement age” shall have the meaning
set forth under Code Section 414(p).
ARTICLE
VIII
TRUSTEE
8.1
BASIC
RESPONSIBILITIES OF THE TRUSTEE
(a)
The
Trustee shall have the following categories of responsibilities:
(1)
Consistent
with the “funding policy and method” determined by the Employer, to invest,
manage, and control the Plan assets subject, however, to the direction of
the
Employer or an Investment Manager appointed by the Employer or any agent
of the
Employer;
(2)
At
the
direction of the Administrator, to pay benefits required under the Plan to
be
paid to Participants, or, in the event of their death, to their Beneficiaries;
and
(3)
To
maintain records of receipts and disbursements and furnish to the Employer
and/or Administrator for each Plan Year a written annual report pursuant
to
Section 8.7.
(b)
In
the
event that the Trustee shall be directed by the Employer, or an Investment
Manager or other agent appointed by the Employer with respect to the investment
of any or all Plan assets, the Trustee shall have no liability with respect
to
the investment of such assets, but shall be responsible only to execute such
investment instructions as so directed.
(1)
The
Trustee shall be entitled to rely fully on the written (or other form acceptable
to the Administrator and the Trustee, including, but not limited to, voice
recorded) instructions of the Employer, or any Fiduciary or nonfiduciary
agent
of the Employer, in the discharge of such duties, and shall not be liable
for
any loss or other liability, resulting from such
direction
(or lack of direction) of the investment of any part of the Plan
assets.
(2)
The
Trustee may delegate the duty of executing such instructions to any nonfiduciary
agent, which may be an affiliate of the Trustee or any Plan
representative.
(c)
If
there
shall be more than one Trustee, they shall act by a majority of their number,
but may authorize one or more of them to sign papers on their
behalf.
8.2
INVESTMENT
POWERS AND DUTIES OF THE TRUSTEE
(a)
The
Trustee shall invest and reinvest the Trust Fund to keep the Trust Fund invested
without distinction between principal and income and in such securities or
property, real or personal, wherever situated, as the Trustee shall deem
advisable, including, but not limited to, stocks, common or preferred, open-end
or close-end mutual funds, bonds and other evidences of indebtedness or
ownership, and real estate or any interest therein. The Trustee shall at
all
times in making investments of the Trust Fund consider, among other factors,
the
short and long-term financial needs of the Plan on the basis of information
furnished by the Employer. In making such investments, the Trustee shall
not be
restricted to securities or other property of the character expressly authorized
by the applicable law for trust investments; however, the Trustee shall give
due
regard to any limitations imposed by the Code or the Act so that at all times
the Plan may qualify as an Employee Stock Ownership Plan and Trust.
(b)
The
Trustee may employ a bank or trust company pursuant to the terms of its usual
and customary bank agency agreement, under which the duties of such bank
or
trust company shall be of a custodial, clerical and record-keeping
nature.
(c)
In
the
event the Trustee invests any part of the Trust Fund, pursuant to the directions
of the Administrator, in any shares of stock issued by the Employer, and
the
Administrator thereafter directs the Trustee to dispose of such investment,
or
any part thereof, under circumstances which, in the opinion of counsel for
the
Trustee, require registration of the securities under the Securities Act
of 1933
and/or qualification of the securities under the Blue Sky laws of any state
or
states, then the Employer at its own expense, will take or cause to be taken
any
and all such action as may be necessary or appropriate to effect such
registration and/or qualification.
8.3
OTHER
POWERS OF THE TRUSTEE
The
Trustee, in addition to all powers and authorities under common law, statutory
authority, including the Act, and other provisions of the Plan, shall have
the
following powers and authorities, to be exercised in the Trustee's sole
discretion:
(a)
To
purchase, or subscribe for, any securities or other property and to retain
the
same. In conjunction with the purchase of securities, margin accounts may
be
opened and maintained;
(b)
To
sell,
exchange, convey, transfer, grant options to purchase, or otherwise dispose
of
any securities or other property held by the Trustee, by private contract
or at
public auction. No person dealing with the Trustee shall be bound to see
to the
application of the purchase money or to inquire into the validity, expediency,
or propriety of any such sale or other disposition, with or without
advertisement;
(c)
To
vote
upon any stocks, bonds, or other securities; to give general or special proxies
or powers of attorney with or without power of substitution; to exercise
any
conversion privileges, subscription rights or other options, and to make
any
payments incidental thereto; to oppose, or to consent to, or otherwise
participate in, corporate reorganizations or other changes affecting corporate
securities, and to delegate discretionary powers, and to pay any assessments
or
charges in connection therewith; and generally to exercise any of the powers
of
an owner with respect to stocks, bonds, securities, or other property. However,
the Trustee shall not vote proxies relating to securities for which it has
not
been assigned full investment management responsibilities. In those cases
where
another party has such investment authority or discretion, the Trustee will
deliver all proxies to said party who will then have full responsibility
for
voting those proxies;
(d)
To
cause
any securities or other property to be registered in the Trustee's own name
or
in the name of one or more of the Trustee's nominees, in a clearing corporation,
in a depository, or in entry form or in bearer form, but the books and records
of the Trustee shall at all times show that all such investments are part
of the
Trust Fund;
(e)
To
borrow
or raise money for the purposes of the Plan in such amount, and upon such
terms
and conditions, as the Trustee shall deem advisable; and for any sum so
borrowed, to issue a promissory note as Trustee, and to secure the repayment
thereof by pledging all, or any part, of the Trust Fund; and no person lending
money to the Trustee shall be bound to see to the application of the money
lent
or to inquire into the validity, expediency, or propriety of any
borrowing;
(f)
To
keep
such portion of the Trust Fund in cash or cash balances as the Trustee may,
from
time to time, deem to be in the best interests of the Plan, without liability
for interest thereon;
(g)
To
accept
and retain for such time as the Trustee may deem advisable any securities
or
other property received or acquired as Trustee hereunder, whether or not
such
securities or other property would normally be purchased as investments
hereunder;
(h)
To
make,
execute, acknowledge, and deliver any and all documents of transfer and
conveyance and any and all other instruments that may be necessary or
appropriate to carry out the powers herein granted;
(i)
To
settle, compromise, or submit to arbitration any claims, debts, or damages
due
or owing to or from the Plan, to commence or defend suits or legal or
administrative proceedings, and to represent the Plan in all suits and legal
and
administrative proceedings;
(j)
To
employ
suitable agents and counsel and to pay their reasonable expenses and
compensation, and such agent or counsel may or may not be agent or counsel
for
the Employer;
(k)
To
apply
for and procure from responsible insurance companies, to be selected by the
Administrator, as an investment of the Trust Fund such annuity, or other
Contracts (on the life of any Participant) as the Administrator shall deem
proper; to exercise, at any time or from time to time, whatever rights and
privileges may be granted under such annuity, or other Contracts; to collect,
receive, and settle for the proceeds of all such annuity or other Contracts
as
and when entitled to do so under the provisions thereof;
(l)
To
invest
funds of the Trust in time deposits or savings accounts bearing a reasonable
rate of interest or in cash or cash balances without liability for interest
thereon;
(m)
To
invest
in Treasury Bills and other forms of United States government
obligations;
(n)
To
invest
in shares of investment companies registered under the Investment Company
Act of
1940;
(o)
To
deposit monies in federally insured savings accounts or certificates of deposit
in banks or savings and loan associations;
(p)
To
vote
Company Stock as provided in Section 8.4;
(q)
To
consent to or otherwise participate in reorganizations, recapitalizations,
consolidations, mergers and similar transactions with respect to Company
Stock
or any other securities and to pay any assessments or charges in connection
therewith;
(r)
To
deposit such Company Stock (but only if such deposit does not violate the
provisions of Section 8.4 hereof) or other securities in any voting trust,
or with any protective or like committee, or with a trustee or with depositories
designated thereby;
(s)
To
sell
or exercise any options, subscription rights and conversion privileges and
to
make any payments incidental thereto;
(t)
To
exercise any of the powers of an owner, with respect to such Company Stock
and
other securities or other property comprising the Trust Fund. The Administrator,
with the Trustee's approval, may authorize the Trustee to act on any
administrative matter or class of matters with respect to which direction
or
instruction to the Trustee by the Administrator is called for hereunder without
specific direction or other instruction from the Administrator;
(u)
To
sell,
purchase and acquire put or call options if the options are traded on and
purchased through a national securities exchange registered under the Securities
Exchange Act of 1934, as amended, or, if the options are not traded on a
national securities exchange, are guaranteed by a member firm of the New
York
Stock Exchange regardless of whether such options are covered; and
(v)
To
do all
such acts and exercise all such rights and privileges, although not specifically
mentioned herein, as the Trustee may deem necessary to carry out the purposes
of
the Plan.
The
Trustee shall vote all Company Stock held by it as part of the Plan assets
at
such time and in such manner as the Administrator shall direct. Provided,
however, that if any agreement entered into by the Trust provides for voting
of
any shares of Company Stock pledged as security for any obligation of the
Plan,
then such shares of Company Stock shall be voted in accordance with such
agreement. If the Administrator fails or refuses to give the Trustee timely
instructions as to how to vote any Company Stock as to which the Trustee
otherwise has the right to vote, the Trustee shall not exercise its power
to
vote such Company Stock and shall consider the Administrator's failure or
refusal to give timely instructions as an exercise of the Administrator's
rights
and a directive to the Trustee not to vote said Company Stock.
Notwithstanding
the foregoing, if the Employer has a registration-type class of securities,
each
Participant or Beneficiary shall be entitled to direct the Trustee as to
the
manner in which the Company Stock which is entitled to vote and which is
allocated to the Company Stock Account of such Participant or Beneficiary
is to
be voted. If the Employer does not have a registration-type class of securities,
each Participant or Beneficiary in the Plan shall be entitled to direct the
Trustee as to the manner in which voting rights on shares of Company Stock
which
are allocated to the Company Stock Account of such Participant or Beneficiary
are to be exercised with respect to any corporate matter which involves the
voting of such shares with respect to the approval or disapproval of any
corporate merger or consolidation, recapitalization, reclassification,
liquidation, dissolution, sale of substantially all assets of a trade or
business, or such similar transaction as prescribed in Regulations. For purposes
of this Section the term “registration-type class of securities” means:
(A) a class of securities required to be registered under Section 12
of the Securities Exchange Act of 1934; and (B) a class of securities which
would be required to be so registered except for the exemption from registration
provided in subsection (g)(2)(H) of such Section 12.
If
the
Employer does not have a registration-type class of securities and the by-laws
of the Employer require the Plan to vote an issue in a manner that reflects
a
one-man, one-vote philosophy, each Participant or Beneficiary shall be entitled
to cast one vote on an issue and the Trustee shall vote the shares held by
the
Plan in proportion to the results of the votes cast on the issue by the
Participants and Beneficiaries.
8.5
DUTIES
OF
THE TRUSTEE REGARDING PAYMENTS
At
the
direction of the Administrator, the Trustee shall, from time to time, in
accordance with the terms of the Plan, make payments out of the Trust Fund.
The
Trustee shall not be responsible in any way for the application of such
payments.
8.6
TRUSTEE'S
COMPENSATION AND EXPENSES AND TAXES
The
Trustee shall be paid such reasonable compensation as set forth in the Trustee's
fee schedule (if the Trustee has such a schedule) or as agreed upon in writing
by the Employer and the Trustee. However, an individual serving as Trustee
who
already receives full-time pay from the Employer shall not receive compensation
from the Plan. In addition, the Trustee shall be reimbursed for any reasonable
expenses, including reasonable counsel fees incurred by it as Trustee. Such
compensation and expenses shall be paid from the Trust Fund unless paid or
advanced by the Employer. All taxes of any kind whatsoever that may be levied
or
assessed under existing or future laws upon, or in respect of, the Trust
Fund or
the income thereof, shall be paid from the Trust Fund.
8.7
ANNUAL
REPORT OF THE TRUSTEE
(a)
Within
a
reasonable period of time after the later of the Anniversary Date or receipt
of
the Employer contribution for each Plan Year, the Trustee, or its agent,
shall
furnish to the Employer and Administrator a written statement of account
with
respect to the Plan Year for which such contribution was made setting
forth:
(1)
the
net
income, or loss, of the Trust Fund;
(2)
the
gains, or losses, realized by the Trust Fund upon sales or other disposition
of
the assets;
(3)
the
increase, or decrease, in the value of the Trust Fund;
(4)
all
payments and distributions made from the Trust Fund; and
(5)
such
further information as the Trustee and/or Administrator deems
appropriate.
(b)
The
Employer, promptly upon its receipt of each such statement of account, shall
acknowledge receipt thereof in writing and advise the Trustee and/or
Administrator of its approval or disapproval thereof. Failure by the Employer
to
disapprove any such statement of account within thirty (30) days after its
receipt thereof shall be deemed an approval thereof. The approval by the
Employer
of any statement of account shall be binding on the Employer and the Trustee
as
to all matters contained in the statement to the same extent as if the account
of the Trustee had been settled by judgment or decree in an action for a
judicial settlement of its account in a court of competent jurisdiction in
which
the Trustee, the Employer and all persons having or claiming an interest
in the
Plan were parties. However, nothing contained in this Section shall deprive
the
Trustee of its right to have its accounts judicially settled if the Trustee
so
desires.
8.8
AUDIT
(a)
If
an
audit of the Plan's records shall be required by the Act and the regulations
thereunder for any Plan Year, the Administrator shall direct the Trustee
to
engage on behalf of all Participants an independent qualified public accountant
for that purpose. Such accountant shall, after an audit of the books and
records
of the Plan in accordance with generally accepted auditing standards, within
a
reasonable period after the close of the Plan Year, furnish to the Administrator
and the Trustee a report of the audit setting forth the accountant's opinion
as
to whether any statements, schedules or lists that are required by Act
Section 103 or the Secretary of Labor to be filed with the Plan's annual
report, are presented fairly in conformity with generally accepted accounting
principles applied consistently.
(b)
All
auditing and accounting fees shall be an expense of and may, at the election
of
the Employer, be paid from the Trust Fund.
(c)
If
some
or all of the information necessary to enable the Administrator to comply
with
Act Section 103 is maintained by a bank, insurance company, or similar
institution, regulated, supervised, and subject to periodic examination by
a
state or federal agency, then it shall transmit and certify the accuracy
of that
information to the Administrator as provided in Act Section 103(b) within
one hundred twenty (120) days after the end of the Plan Year or by such
other date as may be prescribed under regulations of the Secretary of
Labor.
8.9
RESIGNATION,
REMOVAL AND SUCCESSION OF TRUSTEE
(a)
Unless
otherwise agreed to by both the Trustee and the Employer, a Trustee may resign
at any time by delivering to the Employer, at least thirty (30) days before
its
effective date, a written notice of resignation.
(b)
Unless
otherwise agreed to by both the Trustee and the Employer, the Employer may
remove a Trustee at any time by delivering to the Trustee, at least thirty
(30)
days before its effective date, a written notice of such Trustee's
removal.
(c)
Upon
the
death, resignation, incapacity, or removal of any Trustee, a successor may
be
appointed by the Employer; and such successor, upon accepting such appointment
in writing and delivering same to the Employer, shall, without further act,
become vested with all the powers and responsibilities of the
predecessor
as if such successor had been originally named as a Trustee herein. Until
such a
successor is appointed, the remaining Trustee or Trustees shall have full
authority to act under the terms of the Plan.
(d)
The
Employer may designate one or more successors prior to the death, resignation,
incapacity, or removal of a Trustee. In the event a successor is so designated
by the Employer and accepts such designation, the successor shall, without
further act, become vested with all the powers and responsibilities of the
predecessor as if such successor had been named as Trustee herein immediately
upon the death, resignation, incapacity, or removal of the
predecessor.
(e)
Whenever
any Trustee hereunder ceases to serve as such, the Trustee shall furnish
to the
Employer and Administrator a written statement of account with respect to
the
portion of the Plan Year during which the individual or entity served as
Trustee. This statement shall be either (i) included as part of the annual
statement of account for the Plan Year required under Section 8.7 or
(ii) set forth in a special statement. Any such special statement of
account should be rendered to the Employer no later than the due date of
the
annual statement of account for the Plan Year. The procedures set forth in
Section 8.7 for the approval by the Employer of annual statements of
account shall apply to any special statement of account rendered hereunder
and
approval by the Employer of any such special statement in the manner provided
in
Section 8.7 shall have the same effect upon the statement as the Employer's
approval of an annual statement of account. No successor to the Trustee shall
have any duty or responsibility to investigate the acts or transactions of
any
predecessor who has rendered all statements of account required by
Section 8.7 and this subparagraph.
8.10
TRANSFER
OF INTEREST
Notwithstanding
any other provision contained in this Plan, the Trustee at the direction
of the
Administrator shall transfer the Vested interest, if any, of a Participant
to
another trust forming part of a pension, profit sharing or stock bonus plan
maintained by such Participant's new employer and represented by said employer
in writing as meeting the requirements of Code Section 401(a), provided
that the trust to which such transfers are made permits the transfer to be
made.
8.11
TRUSTEE
INDEMNIFICATION
The
Employer agrees to indemnify and hold harmless the Trustee against any and
all
claims, losses, damages, expenses and liabilities the Trustee may incur in
the
exercise and performance of the Trustee's power and duties hereunder, unless
the
same are determined to be due to gross negligence or willful
misconduct.
(a)
Notwithstanding
any provision of the Plan to the contrary that would otherwise limit a
“distributee's” election under this Section, a “distributee” may elect, at the
time and in the manner prescribed by the Administrator, to have any portion
of
an “eligible rollover distribution” that is equal to at least $500 paid
directly
to an “eligible retirement plan” specified by the “distributee” in a “direct
rollover.”
(b)
For
purposes of this Section the following definitions shall apply:
(1)
An
“eligible rollover distribution” is any distribution of all or any portion of
the balance to the credit of the “distributee,” except that an “eligible
rollover distribution” does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the “distributee” or the
joint lives (or joint life expectancies) of the “distributee” and the
“distributee's” designated beneficiary, or for a specified period of ten years
or more; any distribution to the extent such distribution is required under
Code
Section 401(a)(9); the portion of any other distribution that is not
includible in gross income (determined without regard to the exclusion for
net
unrealized appreciation with respect to employer securities); any hardship
distribution described in Code Section 401(k)(2)(B)(i)(IV); and any other
distribution that is reasonably expected to total less than $200 during a
year.
(2)
An
“eligible retirement plan” is an individual retirement account described in Code
Section 408(a), an individual retirement annuity described in Code
Section 408(b), (other than an endowment contract), a qualified trust (an
employees' trust) described in Code Section 401(a) which is exempt from tax
under Code Section 501(a), an annuity plan described in Code
Section 403(a), an eligible deferred compensation plan described in Code
Section 457(b) which is maintained by an eligible employer described in
Code Section 457(e)(1)(A), and an annuity contract described in Code
Section 403(b), that accepts the “distributee's” “eligible rollover
distribution.” However, in the case of an “eligible rollover distribution” to
the surviving spouse, an “eligible retirement plan” is an individual retirement
account or individual retirement annuity.
(3)
A
“distributee” includes an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and the Employee's or former
Employee's spouse or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Code Section 414(p), are
“distributees” with regard to the interest of the spouse or former
spouse.
(4)
A
“direct
rollover” is a payment by the Plan to the “eligible retirement plan” specified
by the “distributee.”
ARTICLE
IX
AMENDMENT,
TERMINATION AND MERGERS
(a)
The
Employer shall have the right at any time to amend this Plan subject to the
limitations of this Section. However, any amendment which affects the rights,
duties or responsibilities of the Trustee or Administrator, may only be made
with the Trustee's or Administrator's written consent. Any such amendment
shall
become effective as provided therein upon its execution. The Trustee shall
not
be required to execute any such amendment unless the amendment affects the
duties of the Trustee hereunder.
(b)
No
amendment to the Plan shall be effective if it authorizes or permits any
part of
the Trust Fund (other than such part as is required to pay taxes and
administration expenses) to be used for or diverted to any purpose other
than
for the exclusive benefit of the Participants or their Beneficiaries or estates;
or causes any reduction in the amount credited to the account of any
Participant; or causes or permits any portion of the Trust Fund to revert
to or
become property of the Employer.
(c)
Except
as
permitted by Regulations (including Regulation 1.411(d)-4) or other IRS
guidance, no Plan amendment or transaction having the effect of a Plan amendment
(such as a merger, plan transfer or similar transaction) shall be effective
if
it eliminates or reduces any “Section 411(d)(6) protected benefit” or adds
or modifies conditions relating to “Section 411(d)(6) protected benefits”
which results in a further restriction on such benefit unless such
“Section 411(d)(6) protected benefits” are preserved with respect to
benefits accrued as of the later of the adoption date or effective date of
the
amendment. “Section 411(d)(6) protected benefits” are benefits described in
Code Section 411(d)(6)(A), early retirement benefits and retirement-type
subsidies, and optional forms of benefit. A Plan amendment that eliminates
or
restricts the ability of a Participant to receive payment of the Participant's
interest in the Plan under a particular optional form of benefit will be
permissible if the amendment satisfies the conditions in (1) and (2)
below:
(1)
The
amendment provides a single-sum distribution form that is otherwise identical
to
the optional form of benefit eliminated or restricted. For purposes of this
condition (1), a single-sum distribution form is otherwise identical only
if it
is identical in all respects to the eliminated or restricted optional form
of
benefit (or would be identical except that it provides greater rights to
the
Participant) except with respect to the timing of payments after
commencement.
(2)
The
amendment is not effective unless the amendment provides that the amendment
shall not apply to any distribution with an annuity starting date earlier
than
the earlier of: (i) the ninetieth (90th) day after the date the Participant
receiving the distribution has been furnished a summary that reflects the
amendment and that satisfies the Act
requirements
at 29 CFR 2520.104b-3 (relating to a summary of material modifications) or
(ii)
the first day of the second Plan Year following the Plan Year in which the
amendment is adopted.
9.2
TERMINATION
(a)
The
Employer shall have the right at any time to terminate the Plan by delivering
to
the Trustee and Administrator written notice of such termination. Upon any
full
or partial termination, all amounts credited to the affected Participants'
Accounts shall become 100% Vested as provided in Section 7.4 and shall not
thereafter be subject to forfeiture, and all unallocated amounts, including
Forfeitures, shall be allocated to the accounts of all Participants in
accordance with the provisions hereof.
(b)
Upon
the
full termination of the Plan, the Employer shall direct the distribution
of the
assets of the Trust Fund to Participants in a manner which is consistent
with
and satisfies the provisions of Sections 7.5 and 7.6. Except as permitted
by Regulations, the termination of the Plan shall not result in the reduction
of
“Section 411(d)(6) protected benefits” in accordance with
Section 9.1(c).
9.3
MERGER,
CONSOLIDATION OR TRANSFER OF ASSETS
This
Plan
and Trust may be merged or consolidated with, or its assets and/or liabilities
may be transferred to any other plan and trust only if the benefits which
would
be received by a Participant of this Plan, in the event of a termination
of the
Plan immediately after such transfer, merger or consolidation, are at least
equal to the benefits the Participant would have received if the Plan had
terminated immediately before the transfer, merger or consolidation, and
such
transfer, merger or consolidation does not otherwise result in the elimination
or reduction of any “Section 411(d)(6) protected benefits” in accordance
with Section 9.1(c).
ARTICLE
X
TOP
HEAVY
10.1
TOP
HEAVY
PLAN REQUIREMENTS
For
any
Top Heavy Plan Year, the Plan shall provide the special vesting requirements
of
Code Section 416(b) pursuant to Section 7.4 of the Plan and the
special minimum allocation requirements of Code Section 416(c) pursuant to
Section 4.3 of the Plan.
10.2
DETERMINATION
OF TOP HEAVY STATUS
(a)
This
Plan
shall be a Top Heavy Plan for any Plan Year in which, as of the “determination
date,” (1) the Present Value of Accrued Benefits of Key Employees and
(2) the sum of the Aggregate Accounts of Key Employees under this Plan and
all plans of an Aggregation Group, exceeds sixty percent (60%) of the Present
Value of Accrued Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation
Group.
(b)
Aggregate
Account: A Participant's Aggregate Account as of the “determination date” is the
sum of:
(1)
the
Participant's Account balance as of the most recent valuation occurring within
a
twelve (12) month period ending on the “determination date.” However, with
respect to Employees not performing services for the Employer during the
year
ending on the “determination date,” the Participant's Account balance as of the
most recent valuation occurring within a twelve (12) month period ending on
the “determination date” shall not be taken into account for purposes of this
Section.
(2)
an
adjustment for any contributions due as of the “determination date.” Such
adjustment shall be the amount of any contributions actually made after the
Valuation Date but due on or before the “determination date,” except for the
first Plan Year when such adjustment shall also reflect the amount of any
contributions made after the “determination date” that are allocated as of a
date in that first Plan Year.
(3)
any
Plan
distributions made within the Plan Year that includes the “determination date”
or, with respect to distributions made for a reason other than separation
from
service, disability or death, within the five (5) preceding Plan Years. The
preceding sentence shall also apply to distributions under a terminated plan
which, had it not been terminated, would have been aggregated with the Plan
under Code Section 416(g)(2)(A)(i). In the case of distributions made after
the Valuation Date and prior to the “determination date,” such distributions are
not included as distributions for top heavy purposes to the extent that such
distributions are already included in the Participant's Aggregate Account
balance as of the Valuation Date.
(4)
any
Employee contributions, whether voluntary or mandatory. However, amounts
attributable to tax deductible qualified voluntary employee contributions
shall
not be considered to be a part of the Participant's Aggregate Account
balance.
(5)
with
respect to unrelated rollovers and plan-to-plan transfers (ones which are
both
initiated by the Employee and made from a plan
maintained
by one employer to a plan maintained by another employer), if this Plan provides
the rollovers or plan-to-plan transfers, it shall always consider such rollovers
or plan-to-plan transfers as a distribution for the purposes of this Section.
If
this Plan is the plan accepting such rollovers or plan-to-plan transfers,
it
shall not consider such rollovers or plan-to-plan transfers as part of the
Participant's Aggregate Account balance.
(6)
with
respect to related rollovers and plan-to-plan transfers (ones either not
initiated by the Employee or made to a plan maintained by the same employer),
if
this Plan provides the rollover or plan-to-plan transfer, it shall not be
counted as a distribution for purposes of this Section. If this Plan is the
plan
accepting such rollover or plan-to-plan transfer, it shall consider such
rollover or plan-to-plan transfer as part of the Participant's Aggregate
Account
balance, irrespective of the date on which such rollover or plan-to-plan
transfer is accepted.
(7)
For
the
purposes of determining whether two employers are to be treated as the same
employer in (5) and (6) above, all employers aggregated under Code
Section 414(b), (c), (m) and (o) are treated as the same
employer.
(c)
“Aggregation
Group” means either a Required Aggregation Group or a Permissive Aggregation
Group as hereinafter determined.
(1)
Required
Aggregation Group: In determining a Required Aggregation Group hereunder,
each
plan of the Employer in which a Key Employee is a participant in the Plan
Year
containing the Determination Date or any of the four preceding Plan Years,
and
each other plan of the Employer which enables any plan in which a Key Employee
participates to meet the requirements of Code Sections 401(a)(4) or 410,
will be required to be aggregated. Such group shall be known as a Required
Aggregation Group.
In
the
case of a Required Aggregation Group, each plan in the group will be considered
a Top Heavy Plan if the Required Aggregation Group is a Top Heavy Group.
No plan
in the Required Aggregation Group will be considered a Top Heavy Plan if
the
Required Aggregation Group is not a Top Heavy Group.
(2)
Permissive
Aggregation Group: The Employer may also include any other plan not required
to
be included in the Required Aggregation Group, provided the resulting group,
taken as a whole, would continue to satisfy the provisions of Code
Sections 401(a)(4) and 410. Such group shall be known as a Permissive
Aggregation Group.
In
the
case of a Permissive Aggregation Group, only a plan that is part of the Required
Aggregation Group will be considered a Top Heavy Plan if the Permissive
Aggregation Group is a Top Heavy Group. No plan in the
Permissive
Aggregation Group will be considered a Top Heavy Plan if the Permissive
Aggregation Group is not a Top Heavy Group.
(3)
Only
those plans of the Employer in which the Determination Dates fall within
the
same calendar year shall be aggregated in order to determine whether such
plans
are Top Heavy Plans.
(4)
An
Aggregation Group shall include any terminated plan of the Employer if it
was
maintained within the last five (5) years ending on the Determination
Date.
(d)
“Determination
date” means (a) the last day of the preceding Plan Year, or (b) in the
case of the first Plan Year, the last day of such Plan Year.
(e)
Present
Value of Accrued Benefit: In the case of a defined benefit plan, the Present
Value of Accrued Benefit for a Participant other than a Key Employee, shall
be
as determined using the single accrual method used for all plans of the Employer
and Affiliated Employers, or if no such single method exists, using a method
which results in benefits accruing not more rapidly than the slowest accrual
rate permitted under Code Section 411(b)(1)(C). The determination of the
Present Value of Accrued Benefit shall be determined as of the most recent
valuation date that falls within or ends with the 12-month period ending
on the
Determination Date except as provided in Code Section 416 and the
Regulations thereunder for the first and second plan years of a defined benefit
plan.
(f)
“Top
Heavy Group” means an Aggregation Group in which, as of the Determination Date,
the sum of:
(1)
the
Present Value of Accrued Benefits of Key Employees under all defined benefit
plans included in the group, and
(2)
the
Aggregate Accounts of Key Employees under all defined contribution plans
included in the group,
exceeds
sixty percent (60%) of a similar sum determined for all
Participants.
ARTICLE
XI
MISCELLANEOUS
11.1
PARTICIPANT'S
RIGHTS
This
Plan
shall not be deemed to constitute a contract between the Employer and any
Participant or to be a consideration or an inducement for the employment
of any
Participant or Employee. Nothing contained in this Plan shall be deemed to
give
any Participant or Employee the right to be retained in the service of the
Employer or to interfere with the right of the Employer to discharge any
Participant or Employee at any time regardless of the effect which such
discharge shall have upon the Employee as a Participant of this
Plan.
11.2
ALIENATION
(a)
Subject
to the exceptions provided below, and as otherwise permitted by the Code
and
Act, no benefit which shall be payable out of the Trust Fund to any person
(including a Participant or the Participant's Beneficiary) shall be subject
in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber, or charge the same shall be void; and no such benefit
shall in any manner be liable for, or subject to, the debts, contracts,
liabilities, engagements, or torts of any such person, nor shall it be subject
to attachment or legal process for or against such person, and the same shall
not be recognized by the Trustee, except to such extent as may be required
by
law.
(b)
Subsection (a)
shall not apply to a “qualified domestic relations order” defined in Code
Section 414(p), and those other domestic relations orders permitted to be
so treated by the Administrator under the provisions of the Retirement Equity
Act of 1984. The Administrator shall establish a written procedure to determine
the qualified status of domestic relations orders and to administer
distributions under such qualified orders. Further, to the extent provided
under
a “qualified domestic relations order,” a former spouse of a Participant shall
be treated as the spouse or surviving spouse for all purposes under the
Plan.
(c)
Subsection (a)
shall not apply to an offset to a Participant's accrued benefit against an
amount that the Participant is ordered or required to pay the Plan with respect
to a judgment, order, or decree issued, or a settlement entered into in
accordance with Code Sections 401(a)(13)(C) and (D).
11.3
CONSTRUCTION
OF PLAN
This
Plan
and Trust shall be construed and enforced according to the Code, the Act
and the
laws of the State of Tennessee, other than its laws respecting choice of
law, to
the extent not pre-empted by the Act.
11.4
GENDER
AND NUMBER
Wherever
any words are used herein in the masculine, feminine or neuter gender, they
shall be construed as though they were also used in another gender in all
cases
where they would so apply, and whenever any words are used herein in the
singular or plural form, they shall be construed as though they were also
used
in the other form in all cases where they would so apply.
11.5
LEGAL
ACTION
In
the
event any claim, suit, or proceeding is brought regarding the Trust and/or
Plan
established hereunder to which the Trustee, the Employer or the Administrator
may be a party, and such claim, suit, or proceeding is resolved in favor
of the
Trustee, the Employer or the Administrator, they shall be entitled to be
reimbursed from the Trust Fund for any and all costs,
attorney's
fees, and other expenses pertaining thereto incurred by them for which they
shall have become liable.
11.6
PROHIBITION
AGAINST DIVERSION OF FUNDS
(a)
Except
as
provided below and otherwise specifically permitted by law, it shall be
impossible by operation of the Plan or of the Trust, by termination of either,
by power of revocation or amendment, by the happening of any contingency,
by
collateral arrangement or by any other means, for any part of the corpus
or
income of any Trust Fund maintained pursuant to the Plan or any funds
contributed thereto to be used for, or diverted to, purposes other than the
exclusive benefit of Participants, Former Participants, or their
Beneficiaries.
(b)
In
the
event the Employer shall make an excessive contribution under a mistake of
fact
pursuant to Act Section 403(c)(2)(A), the Employer may demand repayment of
such excessive contribution at any time within one (1) year following the
time of payment and the Trustees shall return such amount to the Employer
within
the one (1) year period. Earnings of the Plan attributable to the
contributions may not be returned to the Employer but any losses attributable
thereto must reduce the amount so returned.
(c)
Except
for Sections 3.5, 3.6, and 4.1(b), any contribution by the Employer to the
Trust Fund is conditioned upon the deductibility of the contribution by the
Employer under the Code and, to the extent any such deduction is disallowed,
the
Employer may, within one (1) year following the final determination of the
disallowance, whether by agreement with the Internal Revenue Service or by
final
decision of a competent jurisdiction, demand repayment of such disallowed
contribution and the Trustee shall return such contribution within one (1)
year
following the disallowance. Earnings of the Plan attributable to the
contribution may not be returned to the Employer, but any losses attributable
thereto must reduce the amount so returned.
11.7
EMPLOYER'S
AND TRUSTEE'S PROTECTIVE CLAUSE
The
Employer, Administrator and Trustee, and their successors, shall not be
responsible for the validity of any Contract issued hereunder or for the
failure
on the part of the insurer to make payments provided by any such Contract,
or
for the action of any person which may delay payment or render a Contract
null
and void or unenforceable in whole or in part.
11.8
INSURER'S
PROTECTIVE CLAUSE
Except
as
otherwise agreed upon in writing between the Employer and the insurer, an
insurer which issues any Contracts hereunder shall not have any responsibility
for the validity of this Plan or for the tax or legal aspects of this Plan.
The
insurer shall be protected and held harmless in acting in accordance with
any
written direction of the Trustee, and shall have no duty to see to the
application of any funds paid to the Trustee, nor be required to question
any
actions directed by the Trustee. Regardless of any provision of this Plan,
the
insurer shall not be required to take or permit any action or allow any benefit
or privilege contrary to the terms of any Contract which it issues hereunder,
or
the rules of the insurer.
11.9
RECEIPT
AND RELEASE FOR PAYMENTS
Any
payment to any Participant, the Participant's legal representative, Beneficiary,
or to any guardian or committee appointed for such Participant or Beneficiary
in
accordance with the provisions of the Plan, shall, to the extent thereof,
be in
full satisfaction of all claims hereunder against the Trustee and the Employer,
either of whom may require such Participant, legal representative, Beneficiary,
guardian or committee, as a condition precedent to such payment, to execute
a
receipt and release thereof in such form as shall be determined by the Trustee
or Employer.
11.10
ACTION
BY
THE EMPLOYER
Whenever
the Employer under the terms of the Plan is permitted or required to do or
perform any act or matter or thing, it shall be done and performed by a person
duly authorized by its legally constituted authority.
11.11
NAMED
FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The
“named Fiduciaries” of this Plan are (1) the Employer, (2) the
Administrator and (3) the Trustee, and (4) any Investment Manager
appointed hereunder. The named Fiduciaries shall have only those specific
powers, duties, responsibilities, and obligations as are specifically given
them
under the Plan including, but not limited to, any agreement allocating or
delegating their responsibilities, the terms of which are incorporated herein
by
reference. In general, the Employer shall have the sole responsibility for
making the contributions provided for under Section 4.1; and shall have the
authority to appoint and remove the Trustee and the Administrator; to formulate
the Plan's “funding policy and method;” and to amend or terminate, in whole or
in part, the Plan. The Administrator shall have the sole responsibility for
the
administration of the Plan, including, but not limited to, the items specified
in Article II of the Plan, as the same may be allocated or delegated
thereunder. The Trustee shall have the sole responsibility of management
of the
assets held under the Trust, except to the extent directed pursuant to
Article II or with respect to those assets, the management of which has
been assigned to an Investment Manager, who shall be solely responsible for
the
management of the assets assigned to it, all as specifically provided in
the
Plan. Each named Fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the provisions
of
the Plan, authorizing or providing for such direction, information or action.
Furthermore, each named Fiduciary may rely upon any such direction, information
or action of another named Fiduciary as being proper under the Plan, and
is not
required under the Plan to inquire into the propriety of any such direction,
information or action. It is intended under the Plan that each named Fiduciary
shall be responsible for the proper exercise of its own powers, duties,
responsibilities and obligations under the Plan as specified or allocated
herein. No named Fiduciary shall guarantee the Trust Fund in any manner against
investment loss or depreciation in asset value. Any person or group may serve
in
more than one Fiduciary capacity.
11.12
HEADINGS
The
headings and subheadings of this Plan have been inserted for convenience
of
reference and are to be ignored in any construction of the provisions
hereof.
11.13
APPROVAL
BY INTERNAL REVENUE SERVICE
Notwithstanding
anything herein to the contrary, if, pursuant to an application for
qualification filed by or on behalf of the Plan by the time prescribed by
law
for filing the Employer's return for the taxable year in which the Plan is
adopted, or such later date that the Secretary of the Treasury may prescribe,
the Commissioner of Internal Revenue Service or the Commissioner's delegate
should determine that the Plan does not initially qualify as a tax-exempt
plan
under Code Sections 401 and 501, and such determination is not contested,
or if contested, is finally upheld, then if the Plan is a new plan, it shall
be
void ab initio and all amounts contributed to the Plan by the Employer, less
expenses paid, shall be returned within one (1) year and the Plan shall
terminate, and the Trustee shall be discharged from all further obligations.
If
the disqualification relates to an amended plan, then the Plan shall operate
as
if it had not been amended.
11.14
UNIFORMITY
All
provisions of this Plan shall be interpreted and applied in a uniform,
nondiscriminatory manner. In the event of any conflict between the terms
of this
Plan and any Contract purchased hereunder, the Plan provisions shall
control.
11.15
SECURITIES
AND EXCHANGE COMMISSION APPROVAL
The
Employer may request an interpretative letter from the Securities and Exchange
Commission stating that the transfers of Company Stock contemplated hereunder
do
not involve transactions requiring a registration of such Company Stock under
the Securities Act of 1933. In the event that a favorable interpretative
letter
is not obtained, the Employer reserves the right to amend the Plan and Trust
retroactively to their Effective Dates in order to obtain a favorable
interpretative letter or to terminate the Plan.
ARTICLE
XII
PARTICIPATING
EMPLOYERS
12.1
ADOPTION
BY OTHER EMPLOYERS
Notwithstanding
anything herein to the contrary, with the consent of the Employer and Trustee,
any other corporation or entity, whether an affiliate or subsidiary or not,
may
adopt this Plan and all of the provisions hereof, and participate herein
and be
known as a Participating Employer, by a properly executed document evidencing
said intent and will of such Participating Employer.
12.2
REQUIREMENTS
OF PARTICIPATING EMPLOYERS
(a)
Each
such
Participating Employer shall be required to use the same Trustee as provided
in
this Plan.
(b)
The
Trustee may, but shall not be required to, commingle, hold and invest as
one
Trust Fund all contributions made by Participating Employers, as well as
all
increments thereof.
(c)
Any
expenses of the Plan which are to be paid by the Employer or borne by the
Trust
Fund shall be paid by each Participating Employer in the same proportion
that
the total amount standing to the credit of all Participants employed by such
Employer bears to the total standing to the credit of all
Participants.
12.3
DESIGNATION
OF AGENT
Each
Participating Employer shall be deemed to be a party to this Plan; provided,
however, that with respect to all of its relations with the Trustee and
Administrator for the purpose of this Plan, each Participating Employer shall
be
deemed to have designated irrevocably the Employer as its agent. Unless the
context of the Plan clearly indicates the contrary, the word “Employer” shall be
deemed to include each Participating Employer as related to its adoption
of the
Plan.
12.4
EMPLOYEE
TRANSFERS
In
the
event an Employee is transferred between Participating Employers, accumulated
service and eligibility shall be carried with the Employee involved. No such
transfer shall effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall thereupon
become obligated hereunder with respect to such Employee in the same manner
as
was the Participating Employer from whom the Employee was
transferred.
12.5
PARTICIPATING
EMPLOYER CONTRIBUTION AND FORFEITURES
Any
contribution or Forfeiture subject to allocation during each Plan Year shall
be
allocated only among those Participants of the Employer or Participating
Employer making the contribution or by which the forfeiting Participant was
employed. However, if the contribution is made, or the forfeiting Participant
was employed, by an Affiliated Employer, in which event such contribution
or
Forfeiture shall be allocated among all Participants of all Participating
Employers who are Affiliated Employers in accordance with the provisions
of this
Plan. On the basis of the information furnished by the Administrator, the
Trustee may keep separate books and records concerning the affairs of each
Participating Employer hereunder and as to the accounts and credits of the
Employees of each Participating Employer. The Trustee may, but need not,
register Contracts so as to evidence that a particular Participating Employer
is
the interested Employer hereunder, but in the event of an Employee transfer
from
one Participating Employer to another, the employing Participating Employer
shall immediately notify the Trustee thereof.
12.6
AMENDMENT
Amendment
of this Plan by the Employer at any time when there shall be a Participating
Employer hereunder shall only be by the written action of each and every
Participating Employer and with the consent of the Trustee where such consent
is
necessary in accordance with the terms of this Plan.
12.7
DISCONTINUANCE
OF PARTICIPATION
Any
Participating Employer shall be permitted to discontinue or revoke its
participation in the Plan at any time. At the time of any such discontinuance
or
revocation, satisfactory evidence thereof and of any applicable conditions
imposed shall be delivered to the Trustee. The Trustee shall thereafter
transfer, deliver and assign Contracts and other Trust Fund assets allocable
to
the Participants of such Participating Employer to such new trustee as shall
have been designated by such Participating Employer, in the event that it
has
established a separate qualified retirement plan for its Employees provided,
however, that no such transfer shall be made if the result is the elimination
or
reduction of any “Section 411(d)(6) protected benefits” as described in
Section 9.1(c). If no successor is designated, the Trustee shall retain
such assets for the Employees of said Participating Employer pursuant to
the
provisions of Article VII hereof. In no such event shall any part of the
corpus
or income of the Trust as it relates to such Participating Employer be used
for
or diverted for purposes other than for the exclusive benefit of the Employees
of such Participating Employer.
12.8
ADMINISTRATOR'S
AUTHORITY
The
Administrator shall have authority to make any and all necessary rules or
regulations, binding upon all Participating Employers and all Participants,
to
effectuate the purpose of this Article.
IN
WITNESS WHEREOF, this Plan has been executed the day and year first above
written.
Cornerstone
Community Bank
EMPLOYER
ATTEST
Nathaniel
F. Hughes
By:
\s\ Nathaniel F. Hughes
TRUSTEE
CERTIFICATE
OF CORPORATE RESOLUTION
The
undersigned Secretary of Cornerstone Community Bank (the Corporation) hereby
certifies that the following resolutions were duly adopted by the board of
directors of the Corporation on July 18, 2005, and that such resolutions
have
not been modified or rescinded as of the date hereof:
RESOLVED,
that the form of Employee Stock Ownership Plan and Trust effective July 1,
2005,
presented to this meeting is hereby approved and adopted and that the proper
officers of the Corporation are hereby authorized and directed to execute
and
deliver to the Trustee of the Plan one or more counterparts of the
Plan.
RESOLVED,
that for purposes of the limitations on contributions and benefits under
the
Plan, prescribed by Section 415 of the Internal Revenue Code, the
“limitation year” shall be the Plan Year.
RESOLVED,
that not later than the due date (including extensions hereof) of the
Corporation's federal income tax return for each of its fiscal years hereafter,
the Corporation shall contribute to the Plan for each such fiscal year such
amount as shall be determined by the board of directors of the Corporation
and
that the Treasurer of the Corporation is authorized and directed to pay such
contribution to the Trustee of the Plan in cash or property and to designate
to
the Trustee the year for which such contribution is made.
RESOLVED,
that the proper officers of the Corporation shall act as soon as possible
to
notify the employees of the Corporation of the adoption of the Employee Stock
Ownership Plan by delivering to each employee a copy of the summary description
of the Plan in the form of the Summary Plan Description presented to this
meeting, which form is hereby approved.
The
undersigned further certifies that attached hereto as Exhibits A, B and C,
respectively, are true copies of Cornerstone Community Bank Employee Stock
Ownership Plan, Summary Plan Description and Funding Policy and Method approved
and adopted in the foregoing resolutions.
Secretary
Date
CORNERSTONE
COMMUNITY BANK EMPLOYEE STOCK OWNERSHIP
PLAN
FUNDING
POLICY AND METHOD
A
pension
benefit plan (as defined in the Employee Retirement Income Security Act of
1974)
has been adopted by the company for the purpose of rewarding long and loyal
service to the company by providing to employees additional financial security
at retirement. Incidental benefits are provided in the case of disability,
death
or other termination of employment.
Since
the
principal purpose of the plan is to provide benefits at normal retirement
age,
the principal goal of the investment of the funds in the plan should be both
security and long-term stability with moderate growth commensurate with the
anticipated retirement dates of participants. Investments, other than “fixed
dollar” investments, should be included among the plan's investments to prevent
erosion by inflation. However, investments should be sufficiently liquid
to
enable the plan, on short notice, to make some distributions in the event
of the
death or disability of a participant.