Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4 Form S-4 Registration Statement 253 1.33M
2: EX-2.1 Amended & Restated Agreement & Plan of Reorg 50 253K
3: EX-2.2 Form of Agree. of Merger of Jts Corp.& Atari Corp. 8 31K
4: EX-3.1 Restated Certificate of Incorp - Jt Storage 21 72K
5: EX-3.2 Form of Restated Cert. of Incorp - Jts Corp. 4 24K
6: EX-3.3 By-Laws of Jt Storage, Inc. 14 48K
7: EX-3.4 Form of By-Laws of Jts Corporation (Post Merger) 28 135K
8: EX-4.1 Form of Common Stock Certificate Jts Corporation 2 20K
9: EX-4.2 Jt Storage Registration Rights Agreement 18 79K
10: EX-4.3 Atari & Security Pac.Natl Bank Indenture 4/29/87 94 263K
11: EX-4.4 Federated Grp/Security Pacific Natl Bank Indenture 102 366K
12: EX-4.5 Federated Group/Security Pacific 1st Sup Indenture 8 31K
13: EX-4.6 Warrant to Purchase Common Stock/Venture Lending 15 63K
14: EX-4.7 Warrant to Purchase Stock/Silicon Valley Bank 9 45K
15: EX-4.8 Warrant to Purchse Common Stock/Lunenburg S.A. 7 33K
16: EX-5.1 Opinion of Cooley Godward Et. Al. 1 17K
17: EX-8.1 Form of Cooley Godward Tax Opinion 3 23K
18: EX-8.2 Form of Wilson Sonsini Et. Al Tax Opinion 3 22K
19: EX-9.1 Atari Corp. Amended & Restated Voting Agreement 5 32K
20: EX-9.2 Jt Storage Amended & Restated Voting Agreement 5 32K
21: EX-10.1 Jt Storage 1995 Sop Amended & Restated 3/19/96 33 106K
30: EX-10.10 Restricted Stk Pur Agree/Kenneth D. Wing 1/2/96 22 77K
31: EX-10.11 Restricted Stk Pur Agree/W. Virginia Walker 1/5/96 22 78K
32: EX-10.12 Restricted Stk Pur Agree/David B. Pearce 1/2/96 21 70K
33: EX-10.13 Convertible Promissory Note 5 24K
34: EX-10.14 Promissory Note/Certain Principal Stkhldrs 1/19/96 6 25K
35: EX-10.15 Subord Secured Convertible Prom Note/Atari 2/13/96 35 136K
36: EX-10.16 Stock Purchase Agreement/Lunenburg 4/4/96 29 138K
37: EX-10.17 Draft/Technical Know How License Agreement 12 45K
38: EX-10.18 Lease Jts & Cilker Revocable Trust 6/15/95 41 161K
39: EX-10.19 Loan Agree Modular Elec (I) & Indusrial Credit 37 94K
22: EX-10.2 Jt Storage 1996 Non-Employee Directors Sop 3/19/96 14 52K
40: EX-10.20 Loan Agree Modular & Industrial Credit 10/11/94 44 113K
41: EX-10.21 Loan Agree Modular Electronic/Credit Invest India 19 48K
42: EX-10.22 Agreed Order Comprising Controversies 2/4/94 27 90K
43: EX-10.23 Master Agreement/Teac & Jt Storage, Inc. 32 95K
44: EX-10.24 License Agree Teac & Jt Storage 2/24/94 28 110K
45: EX-10.25 Development Agree Compaq & Jt Storage 6/16/94 32 120K
46: EX-10.26 Purchase Agree/Jts & Compaq 6/16/94 11 48K
47: EX-10.27 Technology Transfer Agree Western Digital 2/3/95 42 89K
48: EX-10.28 Agree Jt Storage & Pont Peripherals 1/31/95 24 100K
23: EX-10.3 Putnam Streamlined Standard 401(K) & Profit Shar 109 365K
24: EX-10.4 Indemnity Agreement 7 33K
25: EX-10.5 Employment Agreement 4 27K
26: EX-10.6 Jt Storage Consulting Agreement/Roger W. Johnson 5 29K
27: EX-10.7 Restricted Stk Pur Agree/David T. Mitchell 1/2/96 22 76K
28: EX-10.8 Restricted Stk Pur Agree/David T. Mitchell 3/6/96 21 79K
29: EX-10.9 Restricted Stk Pur Agree/Sirjang Lal Tandon 3/6/96 21 79K
49: EX-21.1 List of Subsidiaries 1 13K
50: EX-23.1 Consent of Arthur Andersen LLP 1 14K
51: EX-23.2 Consent of Deloitte & Touche LLP 1 14K
52: EX-27.1 Financial Data Schedule 1 16K
53: EX-99.1 Form of Jts Proxy 2 16K
54: EX-99.2 Form of Atari Proxy 2 16K
EX-10.3 — Putnam Streamlined Standard 401(K) & Profit Shar
Exhibit Table of Contents
Exhibit 10.3
PUTNAM STREAMLINED STANDARD 401(k) AND PROFIT SHARING PLAN
PLAN AGREEMENT #001
By executing this Plan Agreement, the Employer establishes a 401(k) and profit
sharing plan and trust upon the terms and conditions of Putnam Basic Plan
Document #06, as supplemented and modified by the provisions elected by the
Employer in this Plan Agreement. Please consult a tax or legal advisor and
review this entire form before you sign it. If you fail to fill out this Putnam
Plan Agreement properly, the Plan may be disqualified. THIS PLAN AGREEMENT MUST
BE ACCEPTED BY PUTNAM IN ORDER FOR THE EMPLOYER TO RECEIVE FUTURE AMENDMENTS TO
THE PUTNAM STREAMLINED STANDARD 401(k) AND PROFIT SHARING PLAN.
* * * * *
1. Employer Information. The Employer adopting this Plan is:
A. Employer Name: JT STORAGE, INC.
B. Employer Identification Number: 77-0364572
C. Employer Address: 166 BAYPOINTE PARKWAY
SAN JOSE, CA 95134
D. SIC Code: _______
E. Employer Contact: Name: MARGARET CAREY
Title: MGR/HR Phone #: 408-468-1701
F. Fiscal Year: February 1st through January 31st
------------ ------------
(month/day) (month/day)
G. Type of Entity (check one):
X Corporation Partnership Subchapter S Corporation
--- --- ---
Sole proprietorship Other
--- --- ---------------------------
H. Plan Name: JTS CORPORATION EMPLOYEE 401(k) SAVINGS PLAN
I. Plan Number: 001
-1-
2. Plan Information
A. Plan Year. Check one:
X (1) The Calendar Year
-----
(2) The Plan Year will be the same as the Fiscal Year
----- of the Employer shown in 1.F. above. If the Fiscal
Year of the Employer changes, the Plan Year will
change accordingly.
(3) The Plan Year will be the period of 12 months
----- beginning on the first day of ________ (month) and
ending on the last day of ________________ (month).
B. Effective Date of Adoption of Plan.
(1) Are you adopting this Plan to replace an existing plan?
a. Yes X b. No
----- -----
(2) If you answered Yes in 2.B.(1) above, please complete
the following:
a. Effective Date of Existing Plan: ______________.
b. Effective Date of Replacement Plan:
_____ (i) The first day of the Plan Year in which
this Replacement Plan is adopted.
_____ (ii) The day as of which this Replacement Plan
is adopted.
If you answered No in 2.B.(1) above, the Effective Date of your
adoption of this Plan will be the first day of the current Plan
Year.
3. Eligibility for Plan Participation (Plan Section 3.1). Employees will
be eligible to participate in the Plan when they complete the
requirements you select in A, B, C and D below.
A. Classes of Eligible Employees. The Plan shall cover all
employees who have met the age and service requirements with
the following exclusions:
X (1) No exclusions. All job classifications will be
----- eligible.
X (2) The Plan shall exclude employees in a unit of
----- Employees covered by a collective bargaining
agreement with respect to which retirement
benefits were the subject of good faith
bargaining, with the exception of the following
collective bargaining units, which shall be
included: _________________.
X (3) The Plan shall exclude employees who are
----- non-resident aliens without U.S. source income.
2
B. Age Requirement (check and complete (1) or (2) below):
X (1) No minimum age required for participation
-----
(2) Employees must reach age 21 (not over 21) to
----- participate
C. Service Requirements.
To become eligible, an employee must complete (choose one):
(1) No minimum service required. Skip to 4.A below.
-----
(2) One 6-month Eligibility Period
-----
(3) One 12-month Eligibility Period
-----
X (4) One 3-month Eligibility Period (must be less than
----- 12)
D. (For New Plans Only) Will all eligible Employees be required
to meet the age and service requirements specified in B and C
above?
X (1) Yes
-----
(2) No; all Employees who meet the age requirement on
----- the Effective Date will be eligible as of the
Effective Date, even if they have not met the
service requirements.
4. Contributions
A. Elective Deferrals (Plan Section 4.2).
Your Plan will allow employees to elect pre-tax contributions
under Section 401(k) of the Code. Indicate below the maximum
percentage of Earnings that a Participant may elect as Elective
Deferrals for each year:
15% of Earnings
3
B. Employer Matching Contributions (Plan Section 4.8).
Will you make matching contributions to the Plan?
(1) No
-----
X (2) Yes (if Yes, check a or b)
-----
X a. discretionary matching contributions
-----
b. fixed matching contributions (check and
----- complete i, ii or iii)
(i) ___% of Elective Deferrals
-----
(ii) ___% of Elective Deferrals that
----- do not exceed ___% of Earnings
(iii) ___% of Elective Deferrals that
----- do not exceed $________
C. Employer Profit Sharing Contributions (Plan Section 5.1). Will
you make Employer Profit Sharing Contributions to the Plan?
X (1) Yes (2) No
----- -----
5. Top-Heavy Minimum Contributions (Plan Section 14.3). Skip paragraphs A
and B below if you do not maintain any other qualified plan that is not
being replaced by this Plan.
A. For any Plan Year in which the Plan is Top-Heavy, the Top-Heavy
minimum contribution (or benefit) for Non-Key Employees
participating both in this Plan and another qualified plan
maintained by the Employer will be provided in (check (1)
or (2)):
(1) This Plan (2) The other qualified plan
----- -----
B. If you maintain a defined benefit plan in addition to this
Plan, and the Top-Heavy Ratio (as defined in Plan Section
14.2(c)) for the combined plans is between 60% and 90%, you may
elect to provide an increased minimum allocation or benefit
pursuant to Plan Section 14.4. Specify your election by
completing the statement below:
The employer will provide and increased (specify contribution
or benefit) __________________________________________in its
(specify defined contribution or defined benefit ____________
plan as permitted under Plan Section 14.4.
4
6. Other Plans. You must complete this section if you maintain or ever
maintained a defined benefit plan in which any Participant in this Plan
is (or was) a participant or could become a participant. If a
Participant in the Plan is or has ever been a participant in a defined
benefit plan maintained by you, the plans will meet the limits of
Article 6 in the manner you describe below:
---------------------------------------------------------------
---------------------------------------------------------------
If you have ever maintained a defined benefit plan, state below
the interest rate and mortality table to be used in
establishing the present value of any benefit under the defined
benefit plan for purposes of computing the top-heavy ratio:
Interest rate: %___________________
Mortality Table: ___________________
7. Compensation (Plan Section 2.7).
Compensation for purposes of the Plan will be the amount of the
following that is actually paid by your Business to an employee during
the Plan Year (check (1) or (2)):
(1) Form W-2 earnings as defined in Section 2.7 of the Plan.
-----
X (2) Form W-2 earnings as defined in Section 2.7 of the Plan, plus
----- any amounts withheld from the employee under a 401(k) plan,
cafeteria plan, SARSEP, tax sheltered 403(b) arrangement, or
Code Section 457 deferred compensation plan, and
contributions described in Code Section 414(h)(2) that are
picked up by a governmental employer.
8. Distributions and Withdrawals.
A. Retirement Distributions.
1. Normal Retirement Age (Plan Section 7.1). Normal
retirement age will be 65 (not over age 65).
2. Early Retirement (Plan Section 7.1). Select one:
X a. No Early Retirement will be permitted.
-----
b. Early Retirement will be permitted at age 55.
-----
c. Early Retirement will be permitted at age
----- ___ with at least ________ Years of Service.
5
3. Annuities (Plan Section 9.3). This Plan will permit
distributions in the form of a life annuity only if this
Plan replaces or serves as a transferee plan for an
existing Plan that permits distributions in a life
annuity form.
Did your prior plan offer a life annuity form of
distribution?
a. Yes b. No
---- ----
B. Hardship Distributions (Plan Section 12.2). Will your Plan
permit hardship distributions?
(1) No
----
X (2) Yes. Indicate below from which Accounts hardship
---- withdrawals will be permitted:
X a. Elective Deferral Account
-----
X b. Rollover Account
-----
c. Employer Matching Account
-----
d. Employer Profit Sharing Account
-----
C. Loans. (Plan Section 12.4). Will your Plan permit loans to
employees from the vested portion of all their Accounts?
X (1) Yes (2) No
----- -----
9. Vesting (Plan Article 8).
A. Time of Vesting (select (1) or (2) below and complete vesting
schedule).
X (1) Single Vesting Schedule:
----
The vesting schedule selected below will apply to both
Employer Matching Contributions and Employer Profit
Sharing Contributions.
(2) Dual Vesting Schedules:
----
The vesting schedule marked with an "MC" below will
apply to Employer Matching Contributions and the
vesting schedule marked with a "PS" below will apply
to Employer Profit Sharing Contributions.
6
(3) Vesting Schedules:
X a. 100% vesting immediately upon participation
----- in the Plan.
b. Five-Year Graded Schedule:
-----
Vested Percentage 20% 40% 60% 80% 100%
--- --- --- --- ----
Years of Service 1 2 3 4 5
c. Six-Year Graded Schedule:
-----
Vested Percentage 20% 40% 60% 80% 100%
--- --- --- --- ----
Years of Service 2 3 4 5 6
d. Seven-Year Graded Schedule:
-----
Vested Percentage 20% 40% 60% 80% 100%
--- --- --- --- ----
Years of Service 3 4 5 6 7
e. Three-Year Cliff Schedule:
-----
Vested Percentage 0% 100%
--- ----
Years of Service 0-2 3
f. Five-Year Cliff Schedule:
-----
Vested Percentage 0% 100%
--- ----
Years of Service 0-4 5
g. Other Schedule (must be at least as favorable
----- as Seven-Year Graded Schedule or Five-Year
Cliff Schedule):
(i) Vested Percentage __% __% __% __% __%
(ii) Years of Service
--- --- --- --- ---
7
(4) Top Heavy Schedule:
If you selected above an "Other Schedule," specify in the
space below the schedule that will apply after the Plan
is top-heavy. The schedule you specify must be at least
as favorable to employees, at all years of service, as
either the Six-Year Graded Schedule or the Three-Year
Cliff Schedule. The top-heavy vesting schedule will be:
(i) the same "Other Schedule" selected above
----
(ii) the following schedule.
----
(i) Vested Percentage __% __% __% __% __%
(ii) Years of Service
--- --- --- --- ---
(iii) Six-Year Graded Schedule
----
(iv) Three-Year Cliff Schedule
----
B. Service for Vesting (select (1) or (2)).
X (1) All of an employee's service will be used to determine his
---- Years of Service for purposes of vesting
(2) An employee's Years of Service for vesting will include
---- all years except:
--- a. (New plan) service before the effective date of the
plan
--- b. (Existing plan) service before the effective date of
the existing plan
10. Investments (Plan Sections 12.2 and 13.3).
A. Available Investment Products (Plan Section 13.2). The investment
options available under the Plan are identified in the Service
Agreement or such other written instructions between the Employer
and Putnam, as the case may be. All Investment Products must be
sponsored, underwritten, managed or expressly agreed to in writing
by Putnam. If there is any amount in the Trust Fund for which no
instructions or unclear instructions are delivered, it will be
invested in the default option selected by the Employer in its
Service Agreement with Putnam until instructions are received in
good order, and the Employer will be deemed to have selected the
option indicated in its Service Agreement, or such other written
instruction as the case may be, as an available Investment Product
for that purpose.
8
B. Employer Stock. (Skip this paragraph if you did not designate
Employer Stock as an investment under the Service Agreement.)
1. Voting. Employer Stock will be voted as follows:
a. In accordance with the Employer's
------- instructions.
b. In accordance with the Participant's
------- instructions. Participants are hereby
appointed named fiduciaries for the purpose
of the voting of Employer Stock in
accordance with Section 13.8.
2. Tendering. Employer stock will be tendered as follows:
a. In accordance with the Employer's
------- instructions.
b. In accordance with the Participant's
------- instructions. Participants are hereby
appointed named fiduciaries for the purpose
of the tendering of Employer Stock in
accordance with Section 13.8.
11. Administration.
Plan Administrator (Plan Section 15.1). You may appoint a person or a
committee to serve as Plan Administrator. If you do not appoint a Plan
Administrator, the Plan provides that the Employer will be the Plan
Administrator. The initial Plan Administrator will be (check one):
X (1) This person: JT STORAGE, INC.
-------
(2) A committee composed of these people:
-------
-----------------------------------------
-----------------------------------------
-----------------------------------------
12. Reliance on Opinion Letter. If you ever maintained or you later adopt
any plan in addition to this Plan (including a welfare benefit fund, as
defined in Section 419(e) of the Code, which provides post-retirement
medical benefits allocated to separate accounts for key employees, as
defined in Section 419A(d)(3) of the Code; or an individual medical
account, as defined in Section 415(1)(2) of the Code), you may not rely
on an opinion letter issued to Putnam by the National Office of the
Internal Revenue Service as evidence that the Plan is qualified under
Section 401 of the Internal Revenue Code. If you maintain or adopt
multiple plans, in order to obtain reliance with respect to plan
qualification of the Plan, you must receive a determination letter from
the appropriate Key District Office of Internal Revenue. Putnam will
prepare an application for such a letter upon your request at a fee
agreed upon by the parties. It is the responsibility of the Employer to
ascertain whether a determination letter is required with respect to
qualification of the Plan and to request Putnam to prepare the
application for such determination letter if such service is desired.
Putnam will inform you of all amendments it makes to the prototype plan.
Putnam will also inform you if it discontinues or abandons the prototype
plan. This Plan Agreement #001 may be used only in conjunction with
Putnam's Basic Plan Document #06.
9
* * * * *
If you have any questions regarding this Plan Agreement, contact
Putnam at:
Putnam Defined Contribution Plans
One Putnam Place B2B
859 Willard Street
Quincy, MA 02269
Phone: 1-800-752-5766
10
* * * * *
EMPLOYER'S ADOPTION OF
PUTNAM STREAMLINED STANDARD 401(k) AND
PROFIT SHARING PLAN
The Employer named below hereby adopts a PUTNAM STREAMLINED STANDARD 401(k) AND
PROFIT SHARING PLAN, and appoints PUTNAM FIDUCIARY TRUST COMPANY to serve as
Trustee of the Plan. The Employer acknowledges that it has received copies of
the current prospectus for each Investment Product available under the Plan,
and represents that it will deliver copies of the then current prospectus for
each such Investment Product to each Participant before each occasion on which
the Participant makes an investment instruction as to his Account. The
Employer further acknowledges that the Plan will be recognized by Putnam as a
Putnam Streamlined Standard 401(k) and Profit Sharing Plan only upon Putnam's
acceptance of this Plan Agreement.
Investment Options
The Employer hereby elects the following as the investment options available
under the Plan:
PUTNAM MONEY MARKET FUND PUTNAM NEW OPPORTUNITIES FUND
PUTNAM DIVERSIFIED INCOME TRUST PUTNAM OVERSEAS GROWTH FUND
PUTNAM GROWTH AND INCOME FUND II PUTNAM VISTA FUND
The following investment option shall be the default option: PUTNAM MONEY
MARKET FUND (select the default option from among the investment options
listed above).
Employer Signature
Employer signature(s) to adopt Plan: Date of signature:
/s/ W. VIRGINIA WALKER 1/22/96
------------------------------------------- ---------------------
------------------------------------------- ---------------------
Please print name(s) of authorized person(s) signing above:
W. Virginia Walker
-------------------------------------------
-------------------------------------------
A new Plan Agreement must be signed by the last day of the Plan Year in which
the Plan is to be effective.
11
* * * * *
ACCEPTANCE OF PUTNAM FIDUCIARY TRUST COMPANY
AS TRUSTEE
The Trustee accepts appointment in accordance with the terms and conditions of
the Plan, effective as of the date of execution by the Employer set forth above.
Putnam Fiduciary Trust Company, Trustee
By:
----------------------------------------------------------------------------
12
* * * * *
ACCEPTANCE BY PUTNAM
Putnam hereby accepts this Employer's Plan as a prototype established under
Putnam Basic Plan Document #06.
Putnam Mutual Funds Corp.
By:
-----------------------------------
13
* * * * *
ACCEPTANCE OF OTHER TRUSTEE
Complete this part only if you have appointed a Trustee other than Putnam
Fiduciary Trust Company. (Note: You may appoint a trustee other than Putnam
Fiduciary Trust Company only with Putnam's express permission.) Note: Putnam
may impose an annual maintenance fee as a condition of its acceptance of this
plan as a Putnam Streamlined Standard 401(k) and Profit Sharing Plan.
, Trustee
----------------------------
By: Trustee's Tax I.D. Number
--------------------------- ----------------
(Trustee)
--------------------------------------------------------------------------
Address of Trustee
Person for Putnam to Contact: Telephone:
------------------ ----------------
14
PUTNAM BASIC PLAN DOCUMENT #06
PUTNAM BASIC PLAN DOCUMENT #06
TABLE OF CONTENTS
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PAGE
ARTICLE 1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1. Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2. Affiliated Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3. Authorized Leave of Absence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.4. Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.5. CODA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6. Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.7. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.8. Date of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.9. Deductible Employee Contribution Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.10. Deferral Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.11. Disabled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.12. Earned Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.13. Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.14. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.15. Elective Deferral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.16. Elective Deferral Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.17. Eligibility Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.18. Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.19. Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.20. Employer Matching Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.21. Employer Matching Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.22. Employer Profit Sharing Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.23. Employer Profit Sharing Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.24. Employer Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.25. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.26. Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.27. Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.28. Hour of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.29. Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.30. Investment Company Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.31. Investment Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.32. Leased Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.33. Non-Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.34. One-Year Eligibility Break . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
-i-
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2.35. One-Year Vesting Break . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.36. Owner-Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.37. Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.38. Participant Contribution Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.39. Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.40. Plan Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.41. Plan Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.42. Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.43. Putnam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.44. Qualified Domestic Relations Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.45. Qualified Matching Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.46. Qualified Matching Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.47. Qualified Nonelective Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.48. Qualified Nonelective Contribution Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.49. Qualified Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.50. Recordkeeper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.51. Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.52. Rollover Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.53. Self-Employed Individual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.54. Service Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.55. Shareholder-Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.56. Trust and Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.57. Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.58. Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.59. Year of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 3. PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3. 1. Initial Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.2. Resumed Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.3. Benefits for Owner-Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.4. Changes in Classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 4. CASH OR DEFERRED ARRANGEMENT UNDER SECTION 401(k)
(CODA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.1. General Provisions Applicable to Contributions Under Both Articles 4 and 5 . . . . . . . . . . . 17
4.2. CODA Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.3. Annual Limit on Elective Deferrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.4. Distribution of Certain Elective Deferrals . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.5. Satisfaction of ADP and ACP Tests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.6. Actual Deferral Percentage Test Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.7. Distribution of Excess Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.8. Employer Matching Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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4.9. Average Contribution Percentage Test Limit and Aggregate Limit . . . . . . . . . . . . . . . . . 23
4.10. Distribution of Excess Aggregate Contributions . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.11. Qualified Nonelective Contributions; Qualified Matching
Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.12. Restriction on Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.13. Forfeitures of Employer Matching Contributions . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.14. Special Effective Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 5. OTHER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5. 1. Employer Profit Sharing Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.2. Forfeitures of Employer Profit Sharing Contributions . . . . . . . . . . . . . . . . . . . . . . 28
5.3. Rollover Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.4. No After-Tax Participant Contributions or Deductible Employee
Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 6. LIMITATIONS ON ALLOCATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6. 1. No Additional Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.2. Additional Master or Prototype Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.3. Additional Non-Master- or Non-Prototype Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.4. Additional Defined Benefit Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.5. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 7. ELIGIBILITY FOR DISTRIBUTION OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7. 1. Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.2. Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.3. Other Termination of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 8. VESTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.1. Vested Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.2. Vesting of Accounts of Returned Former Employees . . . . . . . . . . . . . . . . . . . . . . . . 37
8.3. Forfeiture of Non-Vested Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.4. Special Rule in the Event of a Withdrawal . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.5. Vesting Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE 9. PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.1. Distribution of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.2. Restriction on Immediate Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.3. Optional Forms of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.4. Distribution Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.5. Lost Distributee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.6. Direct Rollovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.7. Distributions Required by a Qualified Domestic Relations Order . . . . . . . . . . . . . . . . . 43
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ARTICLE 10. JOINT AND SURVIVOR ANNUITY REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.1. Applicability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.2. Qualified Joint and Survivor Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.3. Qualified Preretirement Survivor Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.4. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.5. Notice Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
10.6. Transitional Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE 11. MINIMUM DISTRIBUTION REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
11.1. General Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
11.2. Required Beginning Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
11.3. Limits on Distribution Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
11.4. Determination of Amount to Be Distributed Each Year . . . . . . . . . . . . . . . . . . . . . . 53
11.5. Death Distribution Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
11.6. Transitional Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE 12. WITHDRAWALS AND LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.1. Withdrawals from Participant Contribution Accounts . . . . . . . . . . . . . . . . . . . . . . . 57
12.2. Withdrawals on Account of Hardship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.3. Withdrawals After Reaching Age 59 1/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
12.4. Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
12.5. Procedure; Amount Available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
12.6. Protected Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
12.7. Restrictions Concerning Transferred Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE 13. TRUST FUND AND INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
13.1. Establishment of Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
13.2. Management of Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
13.3. Investment Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
13.4. Valuation of the Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
13.5. Distributions on Investment Company Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
13.6. Registration and Voting of Investment Company Shares . . . . . . . . . . . . . . . . . . . . . . 65
13.7. Investment Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
13.8. Employer Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
13.9. Insurance Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
13.10. Registration and Voting of Non-Putnam Investment Company
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE 14. TOP-HEAVY PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
14.1. Superseding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
14.2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
14.3. Minimum Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
14.4. Adjustment of Fractions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
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14.5. Minimum Vesting Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE 15. ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
15.1. Plan Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
15.2. Claims Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
15.3. Employer's Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
15.4. Recordkeeper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
15.5. Prototype Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
ARTICLE 16. TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
16.1. Powers and Duties of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
16-2. Limitation of Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
16.3. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
16.4. Reliance on Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
16.5. Action Without Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
16.6. Advice of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
16.7. Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
16.8. Access to Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
16.9. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
16.10. Persons Dealing with Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
16.11. Resignation and Removal; Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
16.12. Action of Trustee Following Resignation or Removal . . . . . . . . . . . . . . . . . . . . . . . 82
16.13. Effect of Resignation or Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
16.14. Fiscal Year of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
16.15. Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
16.16. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
ARTICLE 17. AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
17.1. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
17.2. Delegation of Amendment Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
ARTICLE 18. TERMINATION OF THE PLAN AND TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
18.1. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
18.2. Events of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
18.3. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
18.4. Approval of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
ARTICLE 19. TRANSFERS TO OR FROM OTHER QUALIFIED PLANS;
MERGERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
19.1. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
19.2. Amounts Transferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
19.3. Merger or Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
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ARTICLE 20. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
20.1. Notice of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
20.2. No Employment Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
20.3. Distributions Exclusively From Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
20.4. No Alienation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
20.5. Provision of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
20.6. No Prohibited Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
20.7. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
20.8. Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
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PUTNAM BASIC PLAN DOCUMENT #06
ARTICLE 1. INTRODUCTION
By executing the Plan Agreement, the Employer has established a
retirement plan (the "Plan") according to the terms and conditions of the Plan
Agreement and this Putnam Basic Plan Document #06, for the purpose of providing
a retirement fund for the benefit of Participants and Beneficiaries. A Plan
established hereunder pursuant to a Plan Agreement is intended to qualify under
section 401 (a) and section 401(k) of the Code.
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ARTICLE 2. DEFINITIONS
The terms defined in Sections 2.1 through 2.59 appear generally
throughout the document. Article 4 contain additional definitions of terms
related to the cash or deferred arrangement (CODA) contained in this Plan and
Section 10.4 contains additional definitions related to distributions from the
Plan. Articles 6 and 11 contain additional definitions of terms used only in
those Articles.
2.1. Account means any of, and Accounts means all of, a
Participant's Elective Deferral Account, Employer Matching Account, Qualified
Nonelective Contribution Account, Qualified Matching Account, Employer Profit
Sharing Account, Participant Contribution Account, Rollover Account, and
Deductible Employee Contribution Account.
2.2. Affiliated Employer for purposes of the Plan other than
Article 6, means the Employer and a trade or business, whether or not
incorporated, which is any of the following:
(a) A member of a group of controlled corporations
(within the meaning of Section 414(b) of the Code) which includes the
Employer; or
(b) A trade or business under common control (within the
meaning of Section 414(c) of the Code) with the Employer; or
(c) A member of an affiliated service group (within the
meaning of Section 414(m) of the Code) which includes the Employer; or
(d) An entity otherwise required to be aggregated with
the Employer pursuant to Section 414(o) of the Code.
In determining an Employee's service for vesting and for eligibility
to participate in the Plan, all employment with Affiliated Employers will be
treated as employment by the Employer.
For purposes of Article 6 only, the definitions in paragraphs (a) and
(b) of this Section 2.2 shall be modified by adding at the conclusion of the
parenthetical phrase in each such paragraph the words "as modified by Section
415(h) of the Code."
2.3. Authorized Leave of Absence means a leave of absence from
employment granted in writing by an Affiliated Employer. Authorized Leave of
Absence shall be granted on account of military service for any period during
which an Employee's right to re-employment is guaranteed by law, and for such
other reasons and periods as an Affiliated Employer shall consider proper,
provided that Employees in similar situations shall be similarly treated.
-2-
2.4. Beneficiary means a person entitled to receive benefits under
the Plan upon the death of a Participant, in accordance with Section 7.2 and
Articles 10 and 11
2.5. CODA means the cash or deferred arrangement that meets the
requirements of Section 401(k) of the Code, as described in Article 4.
2.6. Code means the Internal Revenue Code of 1986, as amended.
2.7. Compensation means all of an Employee's compensation
determined in accordance with the definition elected by the Employer in the
Plan Agreement. For purposes of that election, 'Form W-2 earnings" means
"wages" as defined in Section 3401 (a) of the Code in connection with income
tax withholding at the source, and all other compensation paid to the Employee
by the Employer in the course of its trade or business, for which the Employer
is required to furnish the Employee with a written statement under Sections
6041 (d), 6051(a)(3) and 6052 of the Code, determined without regard to
exclusions based on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in Section 3401(a)(2)
of the Code). Compensation shall include only amounts actually paid to the
Employee during the Plan Year. In addition, if the Employer so elects in the
Plan Agreement, Compensation shall include any amount which is contributed to
an employee benefit plan for the Employee by the Employer pursuant to a salary
reduction agreement, and which is not includible in the gross income of the
Employee under Section 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code. (For
a self-employed person, the relevant term is Earned Income, as defined in
Section 2.12.)
2.8. Date of Employment means the first date on which an Employee
performs an Hour of Service; or, in the case of an Employee who has incurred
one or more One-Year Eligibility Breaks and who is treated as a new Employee
under the rules of Section 3.2, the first date on which he performs an Hour of
Service after his return to employment.
2.9. Deductible Employee Contribution Account means an account
maintained on the books of the Plan on behalf of a Participant, in which are
recorded amounts contributed by him to the Plan on a tax-deductible basis under
prior law, and the income, expenses, gains and losses thereon.
2.10. Deferral Agreement means an Employee's agreement to make one
or more Elective Deferrals in accordance with Section 4.2.
2.11. Disabled means unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less am 12 months. The
permanence and degree of such impairment shall be supported by medical
evidence.
-3-
2.12. Earned Income means a Self-Employed Individual's net earnings
from self-employment in the trade or business with respect to which the Plan is
established, excluding items not included in gross income and the deductions
allocable to such items, and reduced by (i) contributions by the Employer to
qualified plans, to the extent deductible under Section 404 of the Code, and
(ii) the deduction allowed to the taxpayer under Section 164(f) of the Code for
taxable years beginning after December 31, 1989.
2.13. Earnings, for determining all benefits provided under the Plan
for all Plan Years beginning after December 31, 1988, means the first $200,000
(as adjusted by the Secretary of the Treasury at the same time and in the same
manner as under Section 415(d) of the Code, except that the dollar increase
effective on any January 1 is effective for ALL Plan Years beginning in the
calendar year in which that January 1 occurs, and the first such dollar
increase is effective on January 1, 1990) of the sum of the Compensation and
the Earned Income received by an Employee during a Plan Year. Notwithstanding
the foregoing, for Plan Years beginning after December 31, 1993, Earnings means
the first $150,000 (as adjusted periodically by the Secretary of the Treasury
for inflation) of the sum of the Compensation and Earned Income received by an
Employee during a Plan Year. To calculate an allocation to a Participant's
Account for any Plan Year shorter than 12 months, the dollar limit on Earnings
must be multiplied by a fraction of which the denominator is 12 and the
numerator is the number of months in the Plan Year. In determining the
Earnings of a Participant, the rules of Section 414(q)(6) of the Code shall
apply, except that in applying those rules the term "family" shall include only
the Participant's spouse and the Participant's lineal descendants who have not
reached age 19 by the last day of the Plan Year. If, as a result of the
application of such rules, the applicable Earnings limitation described above
is exceeded, then the limitation shall be prorated among the affected
individuals in proportion to each such individual's Earnings as determined
under this Section prior to the application of this limitation.
2.14. Effective Date means the first day of the Plan Year in which
the Plan is adopted, provided that, if the Employer is adopting the Plan as an
amendment to an existing plan, the Effective Date will be the date elected by
the Employer in the Plan Agreement, which date shall be no earlier than the
first day of the Plan Year in which the Plan is adopted. If the Plan Agreement
indicates that the Employer is adopting the Plan as an amendment of an existing
plan, the provisions of the existing plan apply to all events preceding the
Effective Date, except as to specific provisions of the Plan which set forth a
retroactive effective date in accordance with Section 1140 of the Tax Reform
Act of 1986.
2.15. Elective Deferral means any contribution made to the Plan by
the Employer at the election of a Participant, in lieu of cash compensation,
including contributions made pursuant to a Deferral Agreement or other deferral
mechanism.
2.16. Elective Deferral Account means an account maintained on the
books of the Plan, in which are recorded a Participant's Elective Deferrals and
the income, expenses, gains and losses incurred thereon.
-4-
2.17. Eligibility Period means a period of service with the Employer
which an Employee is required to complete in order to commence participation in
the Plan. A 12-month Eligibility Period is a period of 12 consecutive months
beginning on an Employee's most recent Date of Employment or any anniversary
thereof, in which he is credited with at least 1,000 Hours of Service. A
6-month Eligibility Period is a period of 6 consecutive months beginning on an
Employee's most recent Date of Employment or any anniversary thereof, or on the
6-month anniversary of such Date of Employment or any anniversary thereof, in
which he is credited with at least 500 Hours of Service. If the Employer has
selected another period of service as the Eligibility Period under the Plan,
Eligibility Period means the period so designated in the Plan Agreement in
which the Employee is credited with a number of Hours of Service equal to the
product of 1,000 multiplied by a fraction having a numerator equal to the
number of months in the Eligibility Period designated in the Plan Agreement and
a denominator of 12. Notwithstanding the foregoing, if an Employee is credited
with 1,000 Hours of Service during a 12-consecutive-month period following his
Date of Employment or any anniversary thereof, he shall be credited with an
Eligibility Period. In the case of an Employee in a seasonal industry (as
defined under regulations prescribed by the Secretary of Labor) in which the
customary extent of employment during a calendar year is fewer than 1,000 Hours
of Service in the case of a 12-month Eligibility Period, the number specified
in any regulations prescribed by the Secretary of Labor dealing with years of
service shall be substituted for 1,000.
2.18. Employee means a common law Employee of an Affiliated
Employer; in the case of an Affiliated Employer which is a sole proprietorship,
the sole proprietor thereof, in the case of an Affiliated Employer which is a
partnership, a partner thereof, and a Leased Employee of an Affiliated
Employer. The term "Employee" includes an individual on Authorized Leave of
Absence, a Self-Employed Individual and an Owner-Employee.
2.19. Employer means the Employer named in the Plan Agreement and
any successor to all or the major portion of its assets or business which
assumes the obligations of the Employer under the Plan Agreement.
2.20. Employer Matching Account means an account maintained on the
books of the Plan, in which are recorded the Employer Matching Contributions
made on behalf of a Participant and the income, expenses, gains and losses
incurred thereon.
2.21. Employer Matching Contribution means a contribution made by
the Employer (i) to the Plan pursuant to Section 4.8, or (ii) to another
defined contribution plan on account of a Participant's "elective deferrals" or
"employee contributions," as those terms are used in Section 401(m)(4) of the
Code
2.22. Employer Profit Sharing Account means an account maintained on
the books of the Plan on behalf of a Participant, in which are recorded the
amounts allocated for his benefit
-5-
from contributions by the Employer under Section 5.1 and the income, expenses,
gains and losses incurred thereon.
2.23. Employer Profit Sharing Contribution means a contribution made
for the benefit of a Participant by the Employer pursuant to Section 5.1.
2.24. Employer Stock means securities constituting "qualifying
employer securities" of an Employer within the meaning of Section 407(d)(5) of
ERISA.
2.25. ERISA means the Employee Retirement Income Security Act of
1974, as amended.
2.26. Forfeiture means a nonvested amount forfeited by a former
Participant, pursuant to Section 8.3, or an amount forfeited by a former
Participant or Beneficiary who cannot be located, pursuant to Section 9.5.
2.27. Highly Compensated Employee means an Employee if (i) the
Employee is a 5 % owner during the Plan Year; (ii) the Employee's compensation
for the Plan Year exceeds $75,000 (as adjusted pursuant to Section 415(d) of
the Code); (iii) the Employee's compensation for the Plan Year exceeds $50,000
(as adjusted pursuant to Section 415(d) of the Code) and the Employee is in the
top-paid group of Employees; or (iv) the Employee is an officer of the Employer
and received compensation during the Plan Year that is greater than 50% of the
dollar limitation under Code Section 415(b)(1)(A).
The lookback provisions of Code Section 414(q) do not apply to
determining Highly Compensated Employees. An Employer may choose to apply this
test on the basis of the Employer's workforce as of a single day during the
Plan Year ("snapshot day"). In applying this test on a snapshot basis, the
Employer shall determine who is a Highly Compensated Employee on the basis of
the data as of the snapshot day. If the determination of who is a Highly
Compensated Employee is made earlier than the last day of the Plan Year, the
Employee's compensation that is used to determine an Employee's status must be
projected for the Plan Year under a reasonable method established by the
Employer.
Notwithstanding the foregoing, in addition to those Employees who are
determined to be highly compensated on the Plan's snapshot day, as described
above, where there are Employees who are not employed on the snapshot day but
who are taken into account for purposes of testing under Section 4.6 or 4.9,
the Employer must treat as a Highly Compensated Employee any Eligible Employee
for the Plan Year who:
(a) terminated prior to the snapshot day and was a Highly
Compensated Employee in the prior year;
-6-
(b) terminated prior to the snapshot day and was a 5 %
owner, (ii) had compensation for the Plan Year greater than or equal
to the projected compensation of any Employee who is treated as a
Highly Compensated Employee on the snapshot day (except for Employees
who are Highly Compensated Employees solely because they are 5 %
owners or officers), or (iii) was an officer and had compensation
greater than or equal to the projected compensation of any other
officer who is a Highly Compensated Employee on the snapshot day
solely because that person is an officer; or
(c) becomes employed subsequent to the snapshot day and
(i) is a 5 % owner, (ii) has compensation for the Plan Year greater
than or equal to the projected compensation of any Employee who is
treated as a Highly Compensated Employee on the snapshot day (except
for Employees who are Highly Compensated Employees solely because they
are 5 % owners or officers), or (iii) is an officer and has
compensation greater than or equal to the projected compensation of
any other officer who is a Highly Compensated Employee on the snapshot
day solely because that person is an officer.
If during a Plan Year an Employee is a family member of either a 5 %
owner who is an Employee, or a Highly Compensated Employee who is one of the
ten most highly paid Highly Compensated Employees ranked on the basis of
compensation paid by the Employees during the year, then the family member and
the 5 % owner or top-ten-Highly-Compensated-Employee shall be treated as a
single Employee receiving compensation and Plan contributions or benefits equal
to the sum of the compensation and contributions or benefits of the family
member and the 5 % owner or top-ten-Highly-Compensated-Employee. For purposes
of this Section 2.27, family members include the spouse, lineal ascendants and
descendants of the Employee and the spouses of such lineal ascendants and
descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the top-paid
group, the number of Employees treated as officers and the compensation that is
considered, will be made in accordance with Section 414(q) of the Code and the
regulations thereunder. The Plan Administrator is responsible for identifying
the Highly Compensated Employees and reporting such data to the Recordkeeper.
2.28. Hour of Service means each hour described in paragraphs (a),
(b), (c), (d) or (e) below, subject to paragraphs (f) and (g) below.
(a) Each hour for which an Employee is paid, or entitled
to payment, for the performance of duties for an Affiliated Employer.
These hours shall be credited to the Employee for the computation
period or periods in which the duties are performed.
(b) Each hour for which an Employee is paid, or entitled
to payment, by an Affiliated Employer on account of a period of time
during which no duties are
-7-
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No
more than 501 Hours of Service shall be credited under this paragraph
for any single continuous period of absence (whether or not such
period occurs in a single computation period) unless the Employee's
absence is not an Authorized Leave of Absence. Hours under this
paragraph shall be calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations, which are
incorporated herein by this reference.
(c) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by an Affiliated
Employer. The same Hours of Service shall not be credited under both
paragraph (a) or paragraph (b), as the case may be, and under this
paragraph (c); and no more than 501 Hours of Service shall be credited
under this paragraph (c) with respect to payments of back pay, to the
extent that such pay is agreed to or awarded for a period of time
described in paragraph (b) during which the Employee did not perform
or would not have performed any duties. These hours shall be credited
to the Employee for the computation period or periods to which the
award or agreement pertains rather than the computation period in
which the award, agreement or payment is made.
(d) Each hour during an Authorized Leave of Absence.
Such hours shall be credited at the rate of a customary full work week
for an Employee.
(e) Solely for purposes of determining whether a One-Year
Vesting Break or a One-Year Eligibility Break has occurred, each hour
which otherwise would have been credited to an Employee but for an
absence from work by reason of: the pregnancy of the Employee, the
birth of a child of the Employee, the placement of a child with the
Employee in connection with the adoption of the child by the Employee,
or caring for a child for a period beginning immediately after its
birth or placement. If the Plan Administrator cannot determine the
hours which would normally have been credited during such an absence,
the Employee shall be credited with eight Hours of Service for each
day of absence. No more than 501 Hours of Service shall be credited
under this paragraph by reason of any pregnancy or placement. Hours
credited under this paragraph shall be treated as Hours of Service
only in the Plan Year or Eligibility Period or both, as the case may
be, in which the absence from work begins, if necessary to prevent the
Participant's incurring a One-Year Vesting Break or One-Year
Eligibility Break in that period, or, if not, in the period
immediately following that in which the absence begins. The Employee
must timely furnish to the Employer information reasonably required to
establish (i) that an absence from work is for a reason specified
above, and (ii) the number of days for which the absence continued.
(f) Hours of Service shall be determined on the basis of
actual hours for which an Employee is paid or entitled to payment.
-8-
(g) If the Employer maintains the plan of a predecessor
Employer, service for the predecessor Employer shall be treated as
service for the Employer. If the Employer does not maintain the plan
of a predecessor Employer, service for the predecessor Employer shall
not be treated as service for the Employer.
(h) Hours of Service shall be credited to a Leased
Employee as though he were an Employee.
2.29. Investment Company means an open-end registered investment
company for which Putnam Mutual Funds Corp., or its affiliate acts as principal
underwriter, or for which Putnam Investment Management, Inc. or its affiliate
serves as an investment adviser; provided that its prospectus offers its shares
under the Plan.
2.30. Investment Company Shares means shares issued by an Investment
Company.
2.31. Investment Products means any of the investment products
specified by the Employer in accordance with Section 13.2, from the group of
those products sponsored, underwritten or managed by Putnam as shall be made
available by Putnam under the Plan, and such other products as shall be
expressly agreed to in writing by Putnam for availability under the Plan.
2.32. Leased Employee means any person (other than an Employee of
the recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or
for the recipient and related persons determined in accordance with Section
414(n)(6) of the Code) on a substantially full time basis for a period of at
least one year, and such services are of a type historically performed by
Employees in the business field of the recipient Employer. The compensation of
a Leased Employee for purposes of the Plan means the Compensation (as defined
in Section 2-7) of the Leased Employee attributable to services performed for
the recipient Employer. Contributions or benefits provided to 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. Provided that leased Employees do not constitute more than
20% of the recipient's nonhighly compensated workforce, a leased Employee shall
not be considered an Employee of the recipient if he is covered by a money
purchase pension plan providing: (1) a nonintegrated Employer contribution rate
of at least 10% of compensation (as defined in Section 415(c)(3) of the Code,
but including amounts contributed pursuant to a salary reduction agreement
which are excludable from the Employee's gross income under Section 125,
Section 402(e)(3), Section 402(h)(1)(B) or Section 403(b) of the Code), (2)
immediate participation, and (3) full and immediate vesting.
2.33. Non-Highly Employee means an Employee who is not a Highly
Compensated Employee.
-9-
2.34. One-year Eligibility Break means a 12-month Eligibility Period
during which an individual is not credited with more than 500 Hours of Service;
provided, however, that in the case of an Employee in a seasonal industry,
there shall be substituted for 500 the number of Hours of Service specified in
any regulations of the Secretary of Labor dealing with breaks in service.
2.35. One-Year Vesting Break means a Plan Year during which an
individual is not credited with more than 500 Hours of Service; provided,
however, that in the case of an Employee in a seasonal industry, there shall be
substituted for 500 the number of Hours of Service specified in any regulations
of the Secretary of Labor dealing with breaks in service.
2.36. Owner-Employee means the sole proprietor of an Affiliated
Employer that is a sole proprietorship, or a partner owning more than 1O % of
either the capital or profits interest of an Affiliated Employer that is a
partnership. The Plan Administrator shall be responsible for identifying
Owner-Employees to the Recordkeeper.
2.37. Participation means each Employee who has met the requirement
for participation in Article 3. An Employee is not a Participant for any period
before the entry date applicable to him.
2.38. Participant Contribution Account means an account maintained
on the books of the Plan, in which are recorded after-tax contributions made by
a Participant under a predecessor plan to which this Plan serves as an
amendment or successor and any income, expenses, gains or losses incurred on
such Contributions. No additional after-tax contributions may be made under
the Plan or credited to this Account. All Participant Contribution Accounts
will be fully vested at all times.
2.39. Plan means the form of defined contribution retirement plan
and trust agreement adopted by the Employer, consisting of the Plan Agreement
and the Putnam Basic Plan Document #06 as set forth herein, together with any
and all amendments and supplements thereto.
2.40. Plan Administrator means the Employer or its appointee
pursuant to Section 15.1.
2.41. Plan Agreement means the separate agreement entered into
between the Employer and the Trustee and accepted by Putnam, under which the
Employer adopts the Plan and selects among its optional provisions.
2.42. Plan Year means the period of 12 consecutive months specified
by the Employer in the Plan Agreement, as well as any initial short plan year
period specified by the Employer in the Plan Agreement.
-10-
2.43. Putnam means (i) Putnam Mutual Funds Corp., or a company
affiliated with it which Putnam Mutual Funds Corp. has designated as its agent,
performing specified actions or procedures in its capacity as sponsor of this
prototype Plan, and (ii) Putnam Fiduciary Trust Company when performing in the
capacity as Recordkeeper or Trustee.
2.44. Qualified Domestic Relations Order means any judgment, decree
or order (including approval of a property settlement agreement) which
constitutes a "qualified domestic relations order" within the meaning of Code
Section 414(p). A judgment, decree or order shall not fail to be a Qualified
Domestic Relations Order merely because it requires a distribution to an
alternate payee (or the segregation of accounts pending distribution to an
alternate payee) before the Participant is otherwise entitled to a distribution
under the Plan.
2.45. Qualified Matching Account means an account maintained on the
books of the Plan, in which are recorded the Qualified Matching Contributions
made on behalf of a Participant and the income, expense, gain and loss
attributable thereto.
2.46. Qualified Matching Contribution means a contribution made by
the Employer that: (i) is allocated with respect to Elective Deferrals of a
Participant who is a Non-Highly Compensated Employee, (ii) is fully vested at
all times and (iii) is distributable only in accordance with Section 4.12.
2.47. Qualified Nonelective Contribution means a contribution (other
than an Employer Matching Contribution or Qualified Matching Contribution) made
by the Employer on behalf of a Participant who is a Non-Highly Compensated
Employee, that: (i) a Participant may not elect to receive in cash until, it is
distributed from the Plan; (ii) is fully vested at all times; and (iii) is
distributable only in accordance with Section 4.12.
2.48. Qualified Nonelective Contribution Account means an account
maintained on the books of the Plan, in which are recorded the Qualified
Nonelective Contributions made on behalf of a Participant and the income,
expense, gain and loss attributable thereto.
2.49. Qualified Participant means any Participant who is an active
Employee on the last day of the Plan Year in question or who is credited with
more than 500 Hours of Service during the Plan Year in question or whose
Retirement, death or disability occurred during the Plan Year in question.
2.50. Recordkeeper means Putnam and any successor thereto designated
by the Employer to perform the duties described in Section 15.4. The terms and
conditions of Putnam's service in the capacity as Recordkeeper will be as
specified in the Service Agreement.
2.51. Retirement means ceasing to be an Employee in accordance with
Section 7. 1.
-11-
2.52. Rollover Account means an account established for an Employee
who makes a rollover contribution to the Plan pursuant to Section 5.3.
2.53. Self-Employed Individual means an individual whose personal
services are a material income-producing factor in the trade or business for
which the Plan is established, and who has Earned Income for the taxable year
from that trade or business, or would have Earned Income but for the fact that
the trade or business had no net profits for the taxable year.
2.54. Service Agreement means the service agreement entered into
between the Employer and Putnam or its successor as Recordkeeper.
2.55. Shareholder-Employee means any officer or Employee of an
electing small business corporation, within the meaning of Section 1362 of the
Code, who on any day during a taxable year of the Employer owns (or is
considered as owning under Section 318(a)(1) of the Code) more than 5 % of the
outstanding stock of the Employer. The Plan Administrator shall be responsible
for identifying Shareholder-Employees to the Recordkeeper.
2.56. Trust and Trust Fund mean the trust fund established under
Section 13. 1.
2.57. Trustee means the person, or the entity with trustee powers,
named in the Plan Agreement as trustee, and any successor thereto.
2.58. Valuation Date means each day when the New York Stock Exchange
is open, or such other date or dates as the Employer may designate by written
agreement with the Recordkeeper.
2.59. Year of Service means a Plan Year in which an Employee is
credited with at least 1,000 Hours of Service; provided, however, that in the
case of an Employee in a seasonal industry (as defined under regulations
prescribed by the Secretary of Labor) in which the customary extent of
employment during a calendar year is fewer than 1,000 Hours of Service, the
number specified in any regulations prescribed by the Secretary of Labor
dealing with years of service shall be substituted for 1,000. An Employee's
Years of Service shall include service credited prior to the Effective Date
under any predecessor plan. If the initial Plan Year is shorter than 12
months, each Employee who is credited with at least 1,000 Hours of Service in
the 12-month period ending on the last day of the initial Plan Year shall be
credited with a Year of Service with respect to the initial Plan Year.
If the Employer has so elected in the Plan Agreement, Years of Service
for vesting shall not include service completed during a period in which the
Employer did not maintain the' Plan or any predecessor plan (as defined under
regulations prescribed by the Secretary of the Treasury).
-12-
Years of Service for vesting shall include service in any plan Year
(or comparable period prior to the Effective Date) completed before the
Employee reached age 18.
Years of Service for eligibility and vesting shall not include service
for an employer that is not an Affiliated Employer, provided, however, Years of
Service for eligibility and vesting shall include employment by a business
acquired by the Employer, before the date of the acquisition, if the Plan is
the amendment of a predecessor plan maintained by such acquired business.
-13-
ARTICLE 3. PARTICIPATION
3.1. Initial Participation. Upon completion of the eligibility for
Plan participation requirements specified in the Plan Agreement, an Employee
shall begin participation in the Plan as of the later of (i) the first day of
the first, fourth, seventh or tenth month of the Plan Year, whichever next
follows or coincides with the date of completion of such eligibility
requirements, or (ii) the Effective Date; provided, however, that:
(a) if the Plan is adopted as an amendment of a
predecessor plan of the Employer, every Employee who was participating
under the predecessor plan when it was so amended shall become a
Participant in the Plan as of the Effective Date, whether or not he
has satisfied the age and service requirements specified in the Plan
Agreement; and
(b) if the Employer so specifies in the Plan Agreement,
any individual who is (i) a nonresident alien receiving no earned
income from an Affiliated Employer which constitutes income from
sources within the United States, or (ii) included in a unit of
Employees covered by a collective bargaining agreement between the
Employer and Employee representatives (excluding from the term
"Employee representatives" any organization of which more than half of
the members are Employees who are owners, officers, or executives of
an Affiliated Employer), if retirement benefits were the subject of
good faith bargaining and no more than 2 % of the Employees covered by
the collective bargaining agreement are professionals as defined in
Section 1.410(b)-9 of the Income Tax Regulations, shall not
participate in the Plan until the later of the date on which he ceases
to be described in clause (i) or (ii), whichever is applicable, or the
entry date specified by the Employer in the Plan Agreement; and
(c) if the Plan is not adopted as an amendment of a
predecessor plan of the Employer, all Employees on the Effective Date
who have satisfied the age requirement (versus the service
requirement) designated in the Plan Agreement shall begin
participation on the Effective Date, if the Employer so elects in the
Plan Agreement; and
(d) a Participant shall cease to participate in the Plan
when he becomes a member of a class of Employees ineligible to
participate in the Plan, and shall resume participation immediately
upon his return to a class of Employees eligible to participate in the
Plan.
3.2. Resumed Participation. A former Employee who incurs a
One-Year Eligibility Break after having become a Participant shall participate
in the Plan as of the date on which he again becomes an Employee, if (i) his
Accounts had become partially or fully vested before he incurred a One-Year
Vesting Break, or (ii) he incurred fewer than five consecutive One-Year
-14-
Eligibility Breaks. In any other case, when he again becomes an Employee he
shall be treated as a new Employee under Section 3. 1.
3.3. Benefits for Owner-Employees. If the Plan provides
contributions or benefits for one or more Owner-Employees who control both the
trade or business with respect to which the Plan is established and one or more
other trades or businesses, the Plan and plans established with respect to such
other trades or businesses must, when looked at as a single plan, satisfy
Sections 401(a) and (d) of the Code with respect to the Employees of this and
all such other trades or businesses. If the Plan provides contributions or
benefits for one or more Owner- Employees who control one or more other trades
or businesses, the Employees of each such other trade or business must be
included in a plan which satisfies Sections 401(a) and (d) of the Code and
which provides contributions and benefits not less favorable than those
provided for such Owner-Employees under the Plan. If an individual is covered
as an Owner-Employee under the PH-INS of two or more trades or businesses which
he does not control and such individual controls a trade or business, then the
contributions or benefits of the Employees under the plan of the trade or
business which he does control must be as favorable as those provided for him
under the most favorable plan of the trade or business which he does not
control. For purposes of this Section 3.3, an Owner-Employee, or two or more
Owner-Employees, shall be considered to control a trade or business if such
Owner-Employee, or such two or more Owner-Employees together:
(a) own the entire interest in an unincorporated trade
or business, or
(b) in the case of a partnership, own more than 50% of
either the capital interest or the profits interest in such
partnership.
For purposes of the preceding sentence, an Owner-Employee or two or
more Owner-Employees shall be treated as owning any interest in a partnership
which is owned, directly or indirectly, by a partnership which such
Owner-Employee or such two or more Owner-Employees are considered to control
within the meaning of the preceding sentence.
3.4. Changes in Classification. If a Participant ceases to be a
member of a classification of Employees eligible to participate in the Plan,
but does not incur a One-Year Eligibility Break, he will continue to be
credited with Years of Service for vesting while he remains an Employee, and he
will resume participation as of the date on which he again becomes a member of
a classification of Employees eligible to participate in the Plan. If such a
Participant incurs a One-Year Eligibility Break, Section 3.2 will apply. If a
Participant who ceases to be a member of a classification of Employees eligible
to participate in the Plan becomes a member of a classification of Employees
eligible to participate in another plan of the Employer, his Account, if any,
under the Plan shall, upon the Administrator's direction, be transferred to the
plan in which he has become eligible to participate, if such plan permits
receipt of such Account.
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If an Employee who is not a member of a classification of Employees
eligible to participate in the Plan satisfies the age and service requirements
specified in the Plan Agreement, he will begin to participate immediately upon
becoming a member of an eligible classification. If such an Employee has
account balances under another plan of the Employer, such account balances
shall be transferred to the Plan upon the Employee's commencement of
participation in the Plan, if such other plan permits such transfer.
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ARTICLE 4. CASH OR DEFERRED ARRANGEMENT UNDER SECTION 401 (k) (CODA)
4.1. General Provisions A Contributions Under Both Articles 4 and
5.
(a) Payment and Crediting of Contributions. The Employer
may specify that contributions will be made to the Plan only under the
CODA, or that Employer Profit Sharing Contributions described in
Section 5.1 may also be made. The Employer shall pay to the order of
the Trustee the aggregate contributions to the Trust Fund for each
Plan Year. Each contribution shall be accompanied by instructions
from the Employer, in the manner prescribed by Putnam. Neither the
Trustee nor Putnam shall be under any duty to inquire into the
correctness of the amount or the timing of any contribution, or to
collect any amount if the Employer fails to make a contribution as
provided in the Plan.
(b) Time for Payment. Elective Deferrals will be
transferred to the Trustee as soon as such contributions can
reasonably be segregated from the general assets of the Employer, but
in any event within 90 days after the date on which the Compensation
to which such contributions relate is paid. The aggregate of all
other contributions with respect to a Plan Year shall be transferred
to the Trustee no later than the due date (including extensions) for
filing the Employer's federal income tax return for that Plan Year.
(c) Allocations under CODA. Allocations to Participants'
Accounts of contributions made pursuant to this Article 4 shall be
made as soon as administratively feasible after their receipt by the
Trustee, but in any case shall not be allocated as of a day later than
the last day of the Plan Year for which the contributions were made.
(d) Limitations on Allocations. All allocations shall be
subject to the limitations in Article 6.
(e) Establishment of Accounts. The Employer will
establish and maintain (or cause to be established and maintained) for
each Participant individual accounts adequate to disclose his interest
in the Trust Fund, including such of the following separate accounts
as shall apply to the Participant: Elective Deferral Account, Employer
Matching Account, Qualified Nonelective Account, Qualified Matching
Account, Employer Profit Sharing Account, Participant Contribution
Account, Deductible Employee Contribution Account, and Rollover
Account. The maintenance of such accounts shall be only for
recordkeeping purposes, and the assets of separate accounts shall not
be required to be segregated for purposes of investment. For purposes
of the Plan, a Participant is treated as benefiting under the Plan for
any Plan Year during which the Participant received or is deemed to
receive an allocation to an Account in accordance with Treasury
Regulation Section 1.410(b)-3(a).
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(f) Restoration of Accounts. Notwithstanding any other
provision of the Plan, for any Plan Year in which it is necessary to
restore any portion of a Participant's Account pursuant to Section
8.3(b) or 9.5, to the extent that the amount of Forfeitures available
is insufficient to accomplish such restoration, the Employer shall
contribute the amount necessary to eliminate the insufficiency,
regardless of whether the contribution is currently deductible by the
Employer under Section 404 of the Code.
4.2. CODA Participation. Each Employee who has met the eligibility
requirements of Article 3 may make Elective Deferrals to the Plan by completing
and returning to the Plan Administrator a Deferral Agreement which provides
that the Participant's cash compensation from the Employer will be reduced by
the amount indicated in the Deferral Agreement, and that the Employer will
contribute an equivalent amount to the Trust on behalf of the Participant. The
following rules will govern Elective Deferrals:
(a) Subject to the limits specified in the Plan Agreement
and set forth in Section 4.3, a Deferral Agreement may apply to any
amount or percentage of the Earnings payable to a Participant in each
year, including any bonuses payable to a Participant from TIME to
TIME.
(b) In accordance with such reasonable rules as the Plan
Administrator shall specify, a Deferral Agreement will become
effective as soon as is administratively feasible after the Deferral
Agreement is returned to the Plan Administrator, and will remain
effective until it is modified or terminated. No Deferral Agreement
may become effective retroactively.
(c) A Participant may modify his Deferral Agreement by
completing and returning to the Plan Administrator a new Deferral
Agreement as of the first business day of any of the first, fourth,
seventh and tenth months of the Plan Year, and any such modification
will become effective as described in paragraph (b).
(d) A Participant may terminate his Deferral Agreement at
any time upon advance written notice to the Plan Administrator, and
any such termination will become effective as described in paragraph
(b).
4.3. Annual Limit on Elective Deferrals. During any taxable year
of a Participant, his Elective Deferrals under the Plan and any other qualified
plan of an Affiliated Employer shall not exceed the dollar limit contained in
Section 402(g) of the Code in effect at the beginning of the taxable year.
With respect to any taxable year, a Participant's Elective Deferrals for
purposes of this Section 4.3 include all Employer contributions made on his
behalf pursuant to an election to defer under any qualified CODA as described
in Section 401(k) of the Code, any simplified employee pension cash or deferred
arrangement (SARSEP) as described in Section 402(h)(1)(B) of the Code, any
eligible deferred compensation plan under Section 457 of the
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Code, any plan described under Section 501(c)(18) of the Code, and any Employer
contributions made on behalf of the Participant for the purchase of an annuity
contract under Section 403(b) of the Code pursuant to a salary reduction
agreement. The limit under Section 402(g) of the Code on the amount of
Elective Deferrals of a Participant who receives a hardship withdrawal pursuant
to Section 12.2 shall be reduced, for the taxable year next following the
withdrawal, by the amount of Elective Deferrals made in the taxable year of the
hardship withdrawal.
4.4. Distribution of Certain Elective Deferrals. "Excess Elective
Deferrals" means those Elective Deferrals described in Section 4.3 that are
includible in a Participant's gross income under Section 402(g) of the Code, to
the extent that the Participant's aggregate elective deferrals for a taxable
year exceed the dollar limitation under that Code Section. Excess Elective
Deferrals shall be treated as Annual Additions under the Plan, whether or not
they are distributed under this Section 4.4. A Participant may designate to the
Plan any Excess Elective Deferrals made during his taxable year by notifying
the Employer on or before the following March 15 of the amount of the Excess
Elective Deferrals to be so designated. A Participant who has Excess Elective
Deferrals for a taxable year, taking into account only his Elective Deferrals
under the Plan and any other plans of the Affiliated Employers, shall be deemed
to have designated the entire amount of such Excess Elective Deferrals.
Notwithstanding any other provision of the Plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto, shall be
distributed no later than April 15 to any Participant to whose Account Excess
Elective Deferrals were so designated or deemed designated for the preceding
year. The income or loss allocable to Excess Elective Deferrals is the income
or loss allocable to the Participant's Elective Deferral Account for the
taxable year multiplied by a fraction, the numerator of which is the
Participant's Excess Elective Deferrals for the year and the denominator of
which is the Participant's Account balance attributable to Elective Deferrals
without regard to any income or loss occurring during the year.
To the extent that the return to a Participant of his Elective
Deferrals would reduce an Excess Amount (as defined in Section 6.5(f)), such
Excess Deferrals shall be distributed to the Participant in accordance with
Article 6.
4.5. Satisfaction of ADP and ACP Tests. In each Plan Year, the
Plan must satisfy the ADP test described in Section 4.6 and the ACP test
described in Section 4.9. The Employer may cause the Plan to satisfy the ADP or
ACP test or both tests for a Plan Year by any of the following methods or by
any combination of them:
(a) By the distribution of Excess Contributions in
accordance with Section 4.7, or the distribution of Excess Aggregate
Contributions in accordance with Section 4.10, or both; or
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(b) By making Qualified Nonelective Contributions or
Qualified Matching Contributions or both, in accordance with Section
4.11.
4.6. Actual Deferral Percentage Test Limit. The Actual Deferral
Percentage (hereinafter "ADP") for Participants who are Highly Compensated
Employees for each Plan Year and the ADP for Participants who are Non-Highly
Compensated Employees for the same Plan Year must satisfy one of the following
tests:
(a) The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for Participants
who are Non-Highly Compensated Employees for the same Plan Year
multiplied by 1.25; or
(b) The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for Participants
who are Non-Highly Compensated Employees for the same Plan Year
multiplied by 2.0, provided that the ADP for Participants who are
Highly Compensated Employees does not exceed the ADP for Participants
who are Non-Highly Compensated Employees by more than two percentage
points.
The following special rules shall apply to the computation of the ADP:
(c) "Actual Deferral Percentage" means, for a specified
group of Participants for a Plan Year, the average of the ratios
(calculated separately for each Participant in the group) of (1) the
amount of Employer contributions actually paid over to the Trust on
behalf of the Participant for the Plan Year to (2) the Participant's
Earnings for the Plan Year. Employer contributions on behalf of any
Participant shall include: (i) his Elective Deferrals, including
Excess Elective Deferrals of Highly Compensated Employees, but
excluding (A) Excess Elective Deferrals of Non-Highly Compensated
Employees that arise solely from Elective Deferrals made under the
Plan or another plan maintained by an Affiliated Employer, and (B)
Elective Deferrals that are taken into account in the Average
Contribution Percentage test described in Section 4.9 (provided the
ADP test is satisfied both with and without exclusion of these
Elective Deferrals), and excluding Elective Deferrals returned to a
Participant to reduce an Excess Amount as defined in Section 6.5(f);
(ii) such amount of Qualified Nonelective Contributions, if any, as
shall be necessary to enable the Plan to satisfy the ADP test and not
used to satisfy the ACP test; and (iii) such amount of Qualified
Matching Contributions, if any, as shall be necessary to enable the
Plan to satisfy the ADP test and not used to satisfy the ACP test.
For purposes of computing Actual Deferral Percentages, an Employee who
would be a Participant but for his failure to make Elective Deferrals
shall be treated as a Participant on whose behalf no Elective
Deferrals are made.
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(d) In the event that the Plan satisfies the requirements
of Sections 401 (k), 401(a)(4), or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other plans
satisfy the requirements of such Sections of the Code only if
aggregated with the Plan, then this Section 4.6 shall be applied by
determining the ADP of Employees as if all such plans were a single
plan. For Plan Years beginning after December 31, 1989, plans may be
aggregated in order to satisfy Section 401(k) of the Code only if they
have the same Plan Year.
(e) The ADP for any Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have
Elective Deferrals allocated to his Accounts under two or more CODAs
described in Section 401(k) of the Code that are maintained by the
Affiliated Employers shall be determined as if such Elective Deferrals
were made under a single CODA. If a Highly Compensated Employee
participates in two or more CODAs that have different Plan Years, all
CODAs ending with or within the same calendar year shall be treated as
a single CODA, except that CODAs to which mandatory disaggregation
applies in accordance with regulations issued under Section 401(k) of
the Code shall be treated as separate CODAs.
(f) For purposes of determining the ADP of a Participant
who is a 5 % owner or one of the ten most highly-paid Highly
Compensated Employees, the Elective Deferrals and the Earnings of such
a Participant shall include the Elective Deferrals and Earnings for
the Plan Year of his Family Members (as defined in Section 414(q)(6)
of the Code). Family Members of such Highly Compensated Employees
shall be disregarded as separate employees in determining the ADP both
for Participants who are Non-Highly Compensated Employees and for
Participants who are Highly Compensated Employees.
(g) For purposes of the ADP test, Elective Deferrals,
Qualified Nonelective Contributions and Qualified Matching
Contributions must be made before the last day of the 12-month period
immediately following the Plan Year to which those contributions
relate.
(h) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, used in satisfying the test.
(i) The determination and treatment of the ADP amounts of
any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
4.7. Distribution of Excess Contributions. "Excess Contributions"
means, with respect to any Plan Year, the excess of:
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(a) The aggregate amount Of Employer contributions
actually taken into account in computing the ADP of Highly Compensated
Employees for the Plan Year, over
(b) The maximum amount of Employer contributions
permitted by the ADP test, determined by reducing contributions made
on behalf of Highly Compensated Employees in order of their ADPs,
beginning with the highest of such percentages.
Notwithstanding any other provision of the Plan, Excess Contributions,
plus any income and minus any loss allocable thereto, shall be distributed no
later than the last day of each Plan Year to Participants to whose Accounts
Excess Contributions were allocated for the preceding Plan Year. The income or
loss allocable to Excess Contributions is the income or loss allocable to the
Participant's Elective Deferral Account for the Plan Year multiplied by a
fraction, the numerator of which is the Participant's Excess Contributions for
the year and the denominator is the Participant's account balance attributable
to Elective Deferrals without regard to any income or loss occurring during the
Plan Year. If such excess amounts are distributed more than 2 1/2 months after
the last day of the Plan Year in which the excess amounts arose, an excise tax
equal to 10% of the excess amounts will be imposed on the Employer maintaining
the Plan. Such distributions shall be made to Highly Compensated Employees on
the basis of the respective portions of the Excess Contributions attributable
to each of them. Excess Contributions shall be allocated to a Participant who
is a family member subject to the family member aggregation rules of Section
414(q)(6) of the Code in the proportion that the Participant's Elective
Deferrals bear to the combined Elective Deferrals (and other amounts treated as
Elective Deferrals) of all of the Participants aggregated to determine his
family members' combined ADP. Excess Contributions shall be treated as Annual
Additions under the Plan.
4.8. Employer Matching Contributions. If so specified in the Plan
Agreement, the Employer will make Employer Matching Contributions to the Plan
in accordance with the Plan Agreement, but no Employer Matching Contribution
shall be made with respect to an Elective Deferral that is returned to a
Participant because it represents an Excess Elective Deferral, an Excess
Contribution, an Excess Aggregate Contribution or an Excess Amount (as defined
in Section 6.5(f)); and if an Employer Matching Contribution has nevertheless
been made with respect to such an Elective Deferral, the Employer Matching
Contribution shall be forfeited, notwithstanding any other provision of the
Plan. Employer Matching Contributions will be allocated among the Employer
Matching Accounts of Participants in proportion to their Elective Deferrals as
specified by the Employer in the Plan Agreement. Employer Matching Accounts
shall become vested according to the vesting schedule specified in the Plan
Agreement, but regardless of that schedule shall be fully vested upon the
Participant's Retirement, or, if earlier, attainment of the normal retirement
age specified in the Plan Agreement, his death during employment with an
Affiliated Employer, and in accordance with Section 18.3.
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4.9. Average Contribution Percentage Test Limit and Aggregate
Limit. The Average Contribution Percentage (hereinafter "ACP") for
Participants who are Highly Compensated Employees for each Plan Year and the
ACP for Participants who are Non-Highly Compensated Employees for the same Plan
Year must satisfy one of the following tests:
(a) The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for Participants
who are Non-Highly Compensated Employees for the same Plan Year
multiplied by 1.25; or
(b) The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for Participants
who are Non-Highly Compensated Employees for the same Plan Year
multiplied by two (2), provided that the ACP for Participants who are
Highly Compensated Employees does not exceed the ACP for Participants
who are Non-Highly Compensated Employees by more than two percentage
points.
The following rules shall apply to the computation of the ACP:
(c) "Average Contribution Percentage" means the average
of the Contribution Percentages of the Eligible Participants in a
group.
(d) "Contribution Percentage" means the ratio (expressed
as a percentage) of a Participant's Contribution Percentage Amounts to
the Participant's Earnings for the Plan Year.
(e) "Contribution Percentage Amounts" means the sum of
the Participant Contributions, Employer Matching Contributions, and
Qualified Matching Contributions (to the extent not taken into account
for purposes of the ADP test) made under the Plan on behalf of the
Participant for the Plan Year. Such Contribution Percentage Amounts
shall include Forfeitures of Excess Aggregate Contributions or
Employer Matching Contributions allocated to the Participant's
Account, taken into account in the year in which the allocation is
made. Qualified Nonelective Contributions, if any, necessary to
enable the Plan to satisfy the ACP test and not used to satisfy the
ADP test shall be included in the Contribution Percentage Amounts.
Elective Deferrals shall also be included in the Contribution
Percentage Amounts to the extent, if any, needed to enable the Plan to
satisfy the ACP test, so long as the ADP test is met before the
Elective Deferrals are used in the ACP test, and continues to be met
following the exclusion of those Elective Deferrals that are used to
meet the ACP test.
(f) "Eligible Participant" means any Employee who is
eligible to make an Elective Deferral, if Elective Deferrals are taken
into account in the calculation of the
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Contribution Percentage, or to receive an Employer Matching
Contribution (or a Forfeiture thereof) or a Qualified Matching
Contribution.
(g) "Aggregate Limit" means the sum of (i) 125% of the
greater of the ADP of the Non-Highly Compensated Employees for the
Plan Year, or the ACP of Non-Highly Compensated Employees under the
Plan subject to Code Section 401(m) for the Plan Year beginning with
or within the Plan Year of the CODA, and (ii) the lesser of 200% of,
or two plus, the lesser of the ADP or ACP. "Lesser" is substituted
for 'greater" in clause (i) of the preceding sentence, and "greater"
is substituted for "lesser" after the phrase "two plus the" in clause
(ii) of the preceding sentence, if that formulation will result in a
larger Aggregate Limit.
(h) If one or more Highly Compensated Employees
participate in both a CODA and a plan subject to the ACP test
maintained by an Affiliated Employer, and the sum of the ADP and ACP
of those Highly Compensated Employees subject to either or both tests
exceeds the Aggregate Limit, then the ACP of those Highly Compensated
Employees who also participate in a CODA will be reduced (beginning
with the Highly Compensated Employee whose ACP is the highest) so that
the Aggregate Limit is not exceeded. The amount by which each Highly
Compensated Employee's Contribution Percentage Amount is reduced shall
be treated as an Excess Aggregate Contribution. In determining the
Aggregate Limit, the ADP and ACP of Highly Compensated Employees are
determined after any corrections required to meet the ADP and ACP
tests. The Aggregate Limit will be considered satisfied if both the
ADP and ACP of the Highly Compensated Employees does not exceed 1.25
multiplied by the ADP and ACP of the Non-Highly Compensated Employees.
(i) For purposes of this section, the Contribution
Percentage for any Participant who is a Highly Compensated Employee
and who is eligible to have Contribution Percentage Amounts allocated
to his account under two or more plans described in Section 401 (a) of
the Code, or CODAs described in Section 401(k) of the Code, that are
maintained by an Affiliated Employer, shall be determined as if the
total of such Contribution Percentage Amounts was made under each
plan. If a Highly Compensated Employee participates in two or more
CODAs that have different plan years, all CODAs ending with or within
the same calendar year shall be treated as a single CODA, except that
CODAs to which mandatory disaggregation applies in accordance with
regulations issued under Section 401(k) of the Code shall be treated
as separate CODAs.
(j) In the event that the Plan satisfies the requirements
of Sections 401(m), 401(a)(4) or 410(b) of the Code only if aggregated
with one or more other plans, or if one or more other plans satisfy
the requirements of such Sections of the Code only if aggregated with
the Plan, then this Section 4.9 shall be applied by determining the
Contribution Percentage of Employees as if all such plans were a
single plan. For Plan
-24-
Years beginning after December 31, 1989, plans may BE aggregated in
order to satisfy Section 401(m) of the Code only if they have the same
Plan Year.
(k) For purposes of determining the Contribution
Percentage of a Participant who is a 5 % owner or one of the ten most
highly-paid Highly Compensated Employers, the Contribution Percentage
Amounts and Earnings of the Participant shall include the Contribution
Percentage Amounts and Earnings for the Plan Year of Family Members
(as defined in Section 414(q)(6) of the Code). Family Members of such
Highly Compensated Employees shall be disregarded as separate
employees in determining the Contribution Percentage both for
Participants who are Non-Highly Compensated Employees and for
Participants who are Highly Compensated Employees.
(l) For purposes of the ACP test, Matching Contributions,
Qualified Matching Contributions and Qualified Nonelective
Contributions will be considered made for a Plan Year if made no later
than the end of the 12-month period beginning on the day after the
close of the Plan Year.
(m) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, used in the ACP test.
(n) The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
4.10. Distribution of Excess AGGREGATE Contributions.
Notwithstanding any other provision of the Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto, shall be
forfeited if forfeitable, or if not forfeitable, distributed no later than the
last day of each Plan Year to Participants to whose Accounts such Excess
Aggregate Contributions were allocated for the preceding Plan Year. The income
or loss allocable to Excess Aggregate Contributions is the income or loss
allocable to the Participant's Employer Matching Account, QUALIFIED Matching
Account (IF any, and IF all amounts therein are not used in the ADP test), and,
if applicable, Qualified Nonelective Contribution Account, Participant
Contribution Account and Elective Deferral Account for the Plan Year,
multiplied by a fraction, the numerator of which is the Participant's Excess
Aggregate Contributions for the year and the denominator of which is the
Participant's account balance(s) attributable to Contribution Percentage
Amounts without regard to any income or loss occurring during the Plan Year.
Excess Aggregate Contributions shall be allocated to a Participant who is
subject to the family member aggregation rules of Section 414(q)(6) of the Code
in the proportion that the Participant's Employer Matching Contributions (and
other amounts treated as his Employer Matching Contributions) bear to the
combined Employer Matching Contributions (and other amounts treated as Employer
Matching Contributions) of all of the Participants aggregated to determine its
family members' combined ACP. If excess amounts attributable to Excess,
-25-
Aggregate contributions are distributed more than 21/2 months after the last
day of the Plan Year in which such excess amounts arose, an excise tax equal to
10% of the excess amounts will be imposed on the Employer maintaining the Plan.
Excess Aggregate Contributions shall be treated as Annual Additions under the
Plan.
Excess Aggregate Contributions shall be forfeited if forfeitable, or
distributed on a pro-rata basis from the Participant's Participant Contribution
Account, Employer Matching Account, and Qualified Matching Account (and, if
applicable, the Participant's Qualified Nonelective Account or Elective
Deferral Account, or both).
Excess Aggregate Contributions means, with respect to any Plan Year,
the excess of:
(a) The aggregate Contribution Percentage Amounts taken
into account in computing the numerator of the Contribution Percentage
and actually made on behalf of Highly Compensated Employees for the
Plan Year, over
(b) The maximum Contribution Percentage Amounts permitted
by the ACP test and the Aggregate Limit (determined by reducing
contributions made on behalf of Highly Compensated Employees in order
of their Contribution Percentages, beginning with the highest of such
percentages).
Such determination shall be made after first determining Excess
Elective Deferrals pursuant to Section 4.4, and then determining Excess
Contributions pursuant to Section 4.7.
4.11. Qualified Nonelective Contributions - Qualified Matching
Contributions. The Employer may make Qualified Nonelective Contributions for a
Plan Year which, if made, shall be allocated to the Qualified Nonelective
Contribution Accounts of Qualified Participants who are Non-Highly Compensated
Employees, in proportion to the Earnings of such Qualified Participants for the
Plan Year. The Employer may make Qualified Matching Contributions for a Plan
Year which, if made shall be allocated to the Qualified Matching Accounts of
Participants who are Non-Highly Compensated Employees, in proportion to the
Elective Deferrals of such Participants for the Plan Year.
4.12. Restriction on Distributions. Except as provided in Sections
4.4, 4.7 and 4.10, no distribution may be made from a Participant's Elective
Deferral Account, Qualified Nonelective Account or Qualified Matching Account
until the occurrence of one of the following events:
(a) The Participant's Disability, death or termination of
employment with the Affiliated Employers;
(b) Termination of the Plan without the establishment of
another defined contribution plan other than an employee stock
ownership plan as defined in Section
-26-
4975(e) or Section 409 of the Code, or a simplified employee pension
plan as defined in Section 408(k) of the Code;
(c) The Participant's attainment of age 59 1/2; or
(d) In the case of an Employer that is a corporation, the
disposition by the Employer to an unrelated entity of (i)
substantially all of the assets (within the meaning of Section
409(d)(2) of the Code) used in a trade or business of the Employer, if
the Employer continues to maintain the Plan after the disposition, but
only with respect to Employees who continue employment with the entity
acquiring such assets; or (ii) the Employer's interest in a subsidiary
(within the meaning of Section 409(d)(3) of the Code), if the Employer
continues to maintain the Plan after the disposition, but only with
respect to Employees who continue employment with such subsidiary.
In addition, if the Employer has elected in the Plan Agreement to permit
such distributions, a distribution may be made from a Participant's Elective
Deferral Account in the event of his financial hardship as described in Section
12.2. All distributions upon any of the events listed above are subject to the
conditions of Article 10, Joint and Survivor Annuity Requirements. In
addition, distributions made after March 31, 1988, on account of an event
described in subsection (b) or (d) above must be made in a lump sum.
4.13. Forfeitures of Employer Matching Contributions. Forfeitures
of Employer Matching Contributions, other than Excess Aggregate Contributions,
shall be made in accordance with Section 8.3. Forfeitures of Employer Matching
Contributions in a Plan Year shall be applied to reduce other contributions
required of the Employer.
4.14. Special Effective Dates. If the Plan is adopted as an
amendment of an existing plan, the provisions of Sections 4.3 and Section 4.7
through 4. 1 1 are effective as of the first day of the first Plan Year
beginning after December 31, 1986.
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ARTICLE 5. OTHER CONTRIBUTIONS
5.1. Employer Profit Sharing Contributions.
(a) Amount of Annual Contribution. If the Employer so
elects in the Plan Agreement, the Employer may in each Plan Year
contribute an amount to the Trust Fund determined in the Employer's
own discretion, which contribution plus any amount reapplied for the
Plan Year under Section 6. 1 (d) shall not exceed the amount
deductible under Section 404 of the Code. Employer Profit Sharing
Contributions may be made in any Plan Year whether or not the Employer
has current or accumulated profits for that Plan Year.
(b) Allocation of Employer Profit Sharing Contributions.
The Employer Profit Sharing Contribution (and any amounts reapplied
under Section 6. 1 (d)) for the Plan Year shall be allocated as of the
last day of each Plan Year to the Employer Profit Sharing Accounts of
each Qualified Participant in proportion to the Earnings of each such
Qualified Participant for the Plan Year.
5.2. Forfeitures of Employer Profit Sharing Contributions.
Forfeitures of Employer Profit Sharing Contributions shall be made in
accordance with Section 8.3. Forfeitures of Employer Profit Sharing
Contributions shall be applied to reduce other contributions required of the
Employer.
5.3. Rollover Contributions. An Employee in an eligible class may
contribute at any time cash or other property (which is not a collectible
within the meaning of Section 408(m) of the Code) acceptable to the Trustee
representing qualified rollover amounts under Sections 402, 403, or 408 of the
Code. Amounts so contributed shall be credited to a Rollover Account for the
Participant.
5.4. No After-Tax Participant Contributions or Deductible Employee
Contributions. The Plan Administrator shall not accept either after-tax
Participant Contributions or deductible employee contributions, other than
those held in a Participant Contribution Account or a Deductible Employee
Contribution Account transferred from a predecessor plan of the Employer.
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ARTICLE 6. LIMITATIONS ON ALLOCATIONS
6.1. No Additional Plan. If the Participant does not participate
in and has never participated in another qualified plan, or a welfare benefit
fund (as defined in Section 419(e) of the Code), or an individual medical
account (as defined in Section 415(l)(2) of the Code) which provides an Annual
Addition as defined in Section 6.5(a), maintained by an Affiliated Employer:
(a) The amount of Annual Additions (as defined in Section
6.5(a)) which may be credited to the Participant's Accounts for any
Limitation Year will not exceed the lesser of the Maximum Annual
Additions or any other limitation contained in this Plan. If the
Employer contribution that would otherwise be contributed or allocated
to the Participant's Account 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.
(b) Before determining a Participant's actual Section 415
Compensation for a Limitation Year, the Employer may determine the
Maximum Annual Additions for the Participant on the basis of a
reasonable estimation of the Participant's Section 415 Compensation
for the Limitation Year, uniformly determined for all Participants
similarly situated.
(c) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Annual Additions for the
Limitation Year will be determined on the basis of the Participant's
actual Section 415 Compensation for the Limitation Year.
(d) If pursuant to paragraph (c), or as a result of a
reasonable error in determining the amount of Elective Deferrals that
may be made by a Participant, the Annual Additions exceed the Maximum
Annual Additions, the Excess Amount will be disposed of as follows:
(1) Elective Deferrals, to the extent they would
reduce the Excess Amount, will be returned to the Participant.
(2) If after the application of (1) above an
Excess Amount still exists, and the Participant is covered by
the Plan at the end of the Limitation Year, the Excess Amount
in the Participant's Accounts will be used to reduce Employer
contributions (including any allocation of Forfeitures) for
such Participant in the next Limitation Year, and each
succeeding Limitation Year if necessary.
(3) If after the application of (1) above an
Excess Amount still exists, and the Participant is not covered
by the Plan at the end of a Limitation Year,
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the Excess Amount will be held unallocated in a suspense
account. The 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.
(4) If a suspense account is in existence at any
time during a Limitation Year pursuant to this Section 6.l(d),
it will participate in the allocation of the Trust's
investment gains and losses. If a suspense account is in
existence at any time during a particular Limitation Year, all
amounts in the suspense account must be allocated and
reallocated to Participants' Accounts before any Employer 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.
6.2. Additional Master or Prototype Plan. If in addition to this
Plan a Participant is covered under another qualified Master or Prototype
defined contribution plan or a welfare benefit fund (as defined in Section
419(e) of the Code), or an individual medical account (as defined in Section
415(l)(2) of the Code) which provides an Annual Addition as defined in Section
6.5(a), maintained by an Affiliated Employer during any Limitation Year:
(a) The Annual Additions which may be credited to a
Participant's Accounts under this Plan for any such Limitation Year
will not exceed the Maximum Annual Additions reduced by the Annual
Additions credited to a Participant's accounts under the other plans
and welfare benefit funds for the same Limitation Year. If the Annual
Additions with respect to the Participant under other defined
contribution plans and welfare benefit funds maintained by an
Affiliated Employer are less than the Maximum Annual Additions, and
the Employer contribution that would otherwise be contributed or
allocated to the Participant's Accounts under this Plan would cause
the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated to this Plan will be
reduced so that the Annual Additions under all such plans and funds
for the Plan Year will equal the MAXIMUM Annual Additions. If the
Annual Additions with respect to the Participant under such other
defined contribution plans and welfare benefit funds in the aggregate
are equal to or greater than the Maximum Annual Additions, no amount
will be contributed or allocated to the Participant's Accounts under
this Plan for the Limitation Year.
(b) Before determining a Participant's actual Section 415
Compensation for a Limitation Year, the Employer may determine the
Maximum Annual Additions for the Participant in the manner described
in Section 6. 1 (b)
(c) As soon as is administratively feasible after the end
of the Plan Year, the Maximum Annual Additions for the Plan Year will
be determined on the basis of the Participant's actual Section 415
Compensation for the Plan Year.
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(d) If, pursuant to Section 6.2(c) or as a result of the
allocation of Forfeitures, or of a reasonable error in determining the
amount of Elective Deferrals that may be made by him, a Participant's
Annual Additions under this Plan and such other plans would result in
an Excess Amount for a Limitation Year, the Excess Amount will be
deemed to consist of the Annual Additions last allocated under any
qualified Master or Prototype defined contribution plan, except that
Annual Additions to any welfare benefit fund or individual medical
account will be deemed to have been allocated first regardless of the
actual allocation date.
(e) If an Excess Amount was allocated to a Participant on
an allocation date of this Plan which coincides with an allocation
date of another plan, the Excess Amount attributed to this Plan will
be the product of X and Y, where (X) is the total Excess Amount
allocated as of such date, and (Y) is the ratio of: (1) the Annual
Additions allocated to the Participant for the Limitation Year as of
such date under this Plan to (2) the total Annual Additions allocated
to the Participant for the Limitation Year as of such date under this
and all the other qualified Master or Prototype defined contribution
plans.
(f) Any Excess Amount attributed to this Plan will be
disposed of in the manner described in Section 6.1(d)
6.3. Additional Non-Master or Non-Prototype Plan. If the
Participant is covered under another qualified defined contribution plan
maintained by an Affiliated Employer which is not a Master or Prototype plan,
Annual Additions which may be credited to the Participant's Accounts under this
Plan for any Limitation Year will be limited in accordance with Section 6.2 as
though the other plan were a Master or Prototype plan.
6.4. Additional Defined Benefit Plan. If an Affiliated Employer
maintains, or at any time maintained, a qualified defined benefit plan covering
any Participant in this Plan, the sum of the Participant's Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction will not exceed 1.0 in any
Limitation Year. The Annual Additions which may be credited to the
Participant's Accounts under this Plan for any Limitation Year will be limited
in accordance with the Plan Agreement.
6.5. Definitions.
(a) Annual Additions means the sum of the following
amounts credited to a, Participant's Accounts for the Limitation Year:
(1) Employer contributions;
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(2) For any Limitation Year beginning after
December 31, 1986, Participant Contributions;
(3) Forfeitures;
(4) Amounts allocated after March 31, 1984, to
any individual medical account, as defined in Section
415(l)(2) of the Code, which is part of a pension or annuity
plan maintained by an Affiliated Employer;
(5) Amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years ending after
such date, which are attributable to postretirement medical
benefits allocated to the separate account of a key Employee,
as defined in Section 419A(d)(3) of the Code, under a welfare
benefit fund as defined in Section 419(e) of the Code,
maintained by an Affiliated Employer; and
(6) Excess Elective Deferrals, Excess
Contributions (including recharacterized Elective Deferrals)
and Excess Aggregate Contributions.
For this purpose, any Excess Amount applied under Sections 6.
1 (d) or 6.2(e) in the Limitation Year to reduce Employer
contributions will be considered Annual Additions for such Limitation
Year. Any rollover contribution will not be considered an Annual
Addition.
(b) Section 415 Compensation means, for a Self-Employed
Individual, his Earned Income; and for any other Participant, his
"Form W-2 earnings" as defined in Section 2.7.
For purposes of applying the limitations of this Article 6, Section
415 Compensation for a Limitation Year is the Section 415 Compensation
actually paid or made available during such Limitation Year.
(c) Defined Benefit Fraction means a fraction, the
numerator of which is the sum of the Participant's Projected Annual
Benefits under all the defined benefit plans (whether or not
terminated) maintained by the Affiliated Employers, and the
denominator of which is the lesser of 125 % of the dollar limitation
in effect for the Limitation Year under Sections 415(b) and (d) of the
Code, or 140% of the Participant's Highest Average Compensation
including any adjustments under Section 415(b) of the Code.
Notwithstanding the foregoing, if the Participant was a Participant as
of the first day of the first Limitation Year beginning after December
31, 1986, in one or more defined benefit plans maintained by an
Affiliated Employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125 % of the sum of
the annual benefits under such plans which the Participant had accrued
as
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of the close of the last Limitation Year beginning before January 1,
1987, disregarding any change in the terms and conditions of the Plan
after May 5, 1986. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the
requirements of Section 415 of the Code for all Limitation Years
beginning before January 1, 1987.
(d) Defined Contribution Dollar Limitation means $30,000
or if greater, one-fourth of the defined benefit dollar limitation set
forth in Section 415(b)(1) of the Code as in effect for the Limitation
Year.
(e) Defined Contribution Fraction means a fraction, the
numerator of which is the sum of the Annual Additions to the
Participant's accounts under all the defined contribution plans
(whether or not terminated) maintained by Affiliated Employers for the
current and all prior Limitation Years (including the Annual Additions
attributable. to the Participant's nondeductible Employee
contributions to all defined benefit plans, whether or not terminated,
maintained by the Affiliated Employers, and the Annual Additions
attributable to all welfare benefit funds, as defined in Section
419(e) of the Code, and individual medical accounts, as defined in
Section 415(l)(2) of the Code), and the denominator of which is the
sum of the Maximum Annual Additions for the current and all prior
Limitation Years of service with the Affiliated Employers (regardless
of whether a defined contribution plan was maintained by any
Affiliated Employer). The Maximum Annual Additions in any Plan Year
is the lesser of 125 % of the dollar limitation determined under
Sections 415(b) and (d) of the Code in effect under Section
415(c)(1)(A) of the Code, or 35 % of the Participant's Section 415
Compensation for such year. If the Employee was a Participant as of
the end of the first day of the first Limitation Year beginning after
December 31, 1986 in one or more defined contribution plans maintained
by an Affiliated Employer which were in existence on May 6, 1986, the
numerator of this fraction will be adjusted if the SUM of this
fraction and the Defined Benefit Fraction would otherwise exceed 1.0
under the terms of this Plan. Under the adjustment, an amount equal
to product of the excess of the sum of the fractions over 1.0,
multiplied by the denominator of THIS fraction, will be permanently
subtracted from the numerator of this fraction. The adjustment is
calculated using the fractions as they would be computed as of THE end
of the last Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the Plan after
May 5, 1986, but using the Section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987. The
Annual Addition for any Limitation Year beginning before January 1,
1987, shall not be recomputed to treat 100% of nondeductible Employee
contributions as Annual Additions.
(f) Excess Amount means, with respect to any Participant,
the amount by which Annual Additions exceed the Maximum Annual
Additions.
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(g) Highest Average Compensation means the average
compensation for the three consecutive Years of Service with the
Employer that produces the highest average. A Year of Service with
the Employer is determined based on the Plan Year.
(h) Limitation Year means the Plan Year. All qualified
plans maintained by the Employer must use the same Limitation Year.
If the Limitation Year is amended to a different period of 12
consecutive months, the new Limitation Year must begin on a date
within the Limitation Year in which the amendment is made.
(i) Master or Prototype plan means a plan the form of
which is the subject of a favorable opinion letter from the Internal
Revenue Service.
(j) Maximum Annual Additions, which is the maximum annual
addition that may be contributed or allocated to a Participant's
account under the plan for any Limitation Year, means an amount not
exceeding the lesser of (a) the Defined Contribution Dollar Limitation
or (b) 25 % of the Participant's Section 415 Compensation for the
Limitation Year. The compensation limitation referred to in (b) shall
not apply to any contribution for medical benefits (within the meaning
of Section 401(h) or Section 419A(f)(2) of the Code) which is
otherwise treated as an Annual Addition under Section 415(l)(1) or
Section 419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different period of 12 consecutive
months, the Maximum Annual Additions will not exceed the Defined
Contribution Dollar Limitation multiplied by the following fraction:
number of months in the
short Limitation Year
-----------------------
12
(k) Projected Annual Benefit means the annual retirement
benefit (adjusted to an actuarially equivalent straight life annuity
if such benefit is expressed in a form other than a straight life
annuity or Qualified Joint and Survivor Annuity) to which the
Participant would be entitled under the terms of the Plan assuming:
(1) The Participant win continue employment until
normal retirement age under the Plan (or current age, if
later), and
(2) The Participant's Section 415 Compensation
for the current Limitation Year and all other relevant factors
used to determine benefits under the plan will remain constant
for all future Limitation Years.
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ARTICLE 7. ELIGIBILITY FOR DISTRIBUTION OF BENEFITS
7.1. Retirement. After his Retirement, the amount credited to a
Participant's Accounts will be distributed to him in accordance with Article 9.
The termination of a Participant's employment with the Affiliated Employers
after he has (i) attained the normal retirement age specified in the Plan
Agreement, (ii) fulfilled the requirements for early retirement (if any)
specified in the Plan Agreement, or (iii) become Disabled will constitute his
Retirement. Upon a Participant's Retirement (or, if earlier, his attainment of
the normal retirement age specified in the Plan Agreement or fulfillment of the
requirements for early retirement, if any, specified in the Plan Agreement),
the Participant's Accounts shall become fully vested, regardless of the vesting
schedule specified by the Employer in the Plan Agreement. A Participant who
separates from service with any vested balance in his Accounts, after
satisfying the service requirements for early retirement (if any is specified
in the Plan Agreement) but before satisfying the age requirement for early
retirement (if any is specified in the Plan Agreement), shall be entitled to a
fully vested early retirement benefit upon his satisfaction of such age
requirement.
7.2. Death. If a Participant dies before the distribution of his
Accounts has been completed, his Beneficiary will be entitled to distribution
of benefits in accordance with Article 9. A Participant's Accounts will become
My vested upon his death before termination of his employment with the
Affiliated Employers, regardless of the vesting schedule specified by the
Employer in the Plan Agreement.
A Participant may designate a Beneficiary by completing and returning
to the Plan Administrator a form provided for this purpose. The form most
recently completed and returned to the Plan Administrator before the
Participant's death shall supersede any earlier form. If a Participant has not
designated any Beneficiary before his death, or if no Beneficiary so designated
survives the Participant, his Beneficiary shall be his surviving spouse, or if
there is no surviving spouse, his estate. A married Participant may designate
a Beneficiary other than his spouse only if his spouse consents in writing to
the designation, and the spouse's consent acknowledges the effect of the
consent and is witnessed by a notary public or a representative of the Plan.
The beneficiary or beneficiaries named in the designation to which the spouse
has so consented may not be changed without further written spousal consent
unless the terms of the spouse's original written consent expressly permit such
a change, and acknowledge that the spouse voluntarily relinquishes the right to
limit the consent to a specific beneficiary. The marriage of a Participant
shall nullify any designation of a beneficiary previously executed by the
Participant. If it is established to the satisfaction of the Plan
Administrator that the Participant has no spouse or that the spouse cannot be
located, the requirement of spousal consent shall not apply. Any spousal
consent, or establishment that spousal consent cannot be obtained, shall apply
only to the particular spouse involved.
7.3. Other Termination of Employment. A Participant whose
employment terminates for any reason other than his Retirement or death will be
entitled to distribution, in accordance
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with Article 9, or benefits equal to the amount of the vested balance of his
Accounts as determined under Article 8.
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ARTICLE 8. VESTING
8.1. Vested Balance. The vested balance of a Participant's
Accounts will be determined as follows:
(a) General Rule. A Participant's Elective Deferral
Account, Qualified Nonelective Contribution Account, Qualified
Matching Account, Participant Contribution Account and Rollover
Account shall be fully vested at all times. The vested portion of his
Employer Matching Account and Employer Profit Sharing Account shall be
equal to the percentage that corresponds, in the vesting schedule
specified in the Plan Agreement, to the number of Years of Service
credited to the Participant as of the end of the Year of Service in
which his employment terminates.
(b) Retirement. All of a Participant's Accounts shall
become fully vested upon his Retirement or his earlier attainment of
the normal retirement age elected by the Employer in the Plan
Agreement.
For so long as a former Employee does not receive a distribution (or a
deemed distribution) of the vested portion of his Accounts, the undistributed
portion shall be held in a separate account which shall be invested pursuant to
Section 13.3 and shall share in earnings and losses of the Trust Fund pursuant
to Section 13.4 in the same manner as the Accounts of active Participants
8.2. Vesting of Accounts of Returned Former Employees. The
following rules apply in determining the vested portion of the Accounts of a
Participant who incurs one or more consecutive One-Year Vesting Breaks and then
returns to employment with an Affiliated Employer:
(a) If the Participant incurred fewer than five
consecutive One-Year Vesting Breaks, then all of his Years of Service
will be taken into account in determining the vested portion of his
Accounts, as soon as he has completed one Year of Service following
his return to employment.
(b) If the Participant incurred five or more consecutive
One-Year Vesting Breaks,then:
(1) no Year of Service completed after his return
to employment will be taken into account in determining the
vested portion of his Accounts as of any time before he
incurred the first One-Year Vesting Break;
(2) years of Service completed before he incurred
the first One-Year Vesting Break will not be taken into
account in determining the vested portion of his Accounts as
of any time after his return to employment (i) unless some
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portion of his Employer Contribution Account or Employer
Matching Account had become vested before he incurred the
first One- Year Vesting Break, and (ii) until he has completed
one Year of Service following his return to employment; and
(3) separate sub-accounts will be maintained for
the Participant's pre-break and post-break Employer
Contribution Account and Employer Matching Account, until both
sub-accounts become fully vested. Both sub-accounts will
share in the earnings and losses of the Trust Fund.
8.3. Forfeiture of Non-Vested Amounts. The portion of a former
Employee's Accounts that has not become vested under Section 8. 1 shall become
a Forfeiture in accordance with the following rules, and shall be applied in
accordance with Section 4.13 or Section 5.2.
(a) If Distribution Is Made. If any or all of the vested
portion of a Participant's Accounts is distributed in accordance with
Section 9.1 or 9.2 before the Participant incurs five consecutive
One-Year Vesting Breaks, the nonvested portion of his Accounts shall
become a Forfeiture in the Plan Year in which the distribution occurs.
For purposes of this Section 8.3, if the value of the vested portion
of A Participant's Accounts is zero, the Participant shall be deemed
to have received a distribution of the entire vested balance of his
Accounts on the day his employment terminates. If the Participant
elects to have distributed less than the entire vested portion of his
Employer Contribution Account or Employer Matching Accounts, the part
of the nonvested portion that will become a Forfeiture is the total
nonvested portion multiplied by a fraction, the numerator of which is
the amount of the distribution and the denominator of which is the
total value of the entire vested portion of such Accounts.
(b) Right of Repayment. If a Participant who receives a
distribution pursuant to paragraph (a) returns to employment with an
Affiliated Employer, the balance of his Employer Contribution Account
and Employer Matching Account will be restored to the amount of such
balance on the date of distribution, if he repays to the Plan the full
amount of the distribution, before the earlier of (i) the fifth
anniversary of his return to employment or (ii) the date he incurs
five consecutive One-Year Vesting Breaks following the date of
distribution. If an Employee is deemed to receive a distribution
pursuant to this Section 8.3, and he resumes employment covered under
this Plan before the date he incurs five consecutive One-Year Vesting
Breaks, upon his reemployment the Employer-derived account balance of
the Employee will be restored to the amount on the date of such deemed
distribution. Such restoration will be made, first, from the amount
of any Forfeitures available for reallocation as of the last day of
the Plan Year in which repayment is made, to the extent thereof; and
to the extent that
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Forfeitures are not available or are insufficient to restore the
balance, from contributions made by the Employer pursuant to Section
4.1(f).
(c) If No Distribution Is Made. If no distribution (nor
deemed distribution) is made to a Participant before he incurs five
consecutive One-Year Vesting Breaks, the nonvested portion of his
Accounts shall become a Forfeiture at the end of the Plan Year that
constitutes his fifth consecutive One-Year Vesting Break.
(d) Adjustment of Accounts. Before a Forfeiture is
incurred, a Participant's Accounts shall share in earnings and losses
of the Trust Fund pursuant to Section 13.4 in the same manner as the
Accounts of active Participants.
(e) Accumulated Deductible Contributions. For Plan Years
be before January 1, 1989, a Participant's vested Account balance
shall not include accumulated deductible contributions within the
meaning of Section 72(o)(5)(B) of the Code.
8.4. Special Rule in the Event of a Withdrawal. If a withdrawal
pursuant to Section 12.2 or 12.3 is made from a Participant's Employer Profit
Sharing Account or Employer Matching Account before the Account is fully
vested, and the Participant may subsequently increase the vested percentage in
the Account, then a separate account will be established at the time of the
withdrawal, and at any relevant time after the withdrawal the vested portion of
the separate account will be equal to the amount "X" determined by the
following formula:
X = P(AB + D) - D
For purposes of the formula, P is the Participant's vested percentage at the
relevant time, AB is the account balance at the relevant time, and D is the
amount of the withdrawal.
8.5. Vesting Election. If the Plan is amended to change any
vesting schedule, or is amended in any way that directly or indirectly affects
the computation of a Participant's vested percentage, each Participant who has
completed not less than three Years of Service may elect, within a reasonable
period after the adoption of the amendment or change, in a writing filed with
the Employer to have his vested percentage computed under the Plan without
regard to such amendment. For a Participant who is not credited with at least
one Hour of Service in a Plan Year beginning after December 31, 1988, the
preceding sentence shall be applied by substituting 'five Years of Service' for
"three Years of Service". The period during which the election may be made
shall commence with the date the amendment is adopted, or deemed to be made,
and shall end on the latest of (a) 60 days after the amendment -is adopted; (b)
60 days after the amendment becomes effective; or (c) 60 days after the
Participant is issued written notice of the amendment by the Employer.
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ARTICLE 9. PAYMENT OF BENEFITS
9.1. Distribution of Accounts. A Participant or Beneficiary who
has become eligible for a distribution of benefits pursuant to Article 7 may
elect to receive such benefits at any time, subject to the terms and conditions
of this Article 9, Article 10 and Article 11. Unless a Participant or
Beneficiary elects otherwise, distribution of benefits will begin no later than
the 60th day after the end of the Plan Year in which the latest of the
following events occurs:
(a) The Participant attains age 65 (or if earlier, the
normal retirement age specified by the Employer in the Plan
Agreement); or
(b) The tenth anniversary of the year in which the
Participant commenced participation in the Plan; or
(c) The Participant's employment with the Affiliated
Employers terminates.
A Beneficiary who is the surviving spouse of a Participant may elect to have
distribution of benefits begin within the 90-day period following the
Participant's death.
For purposes of this Section 9. 1, the failure of a Participant (and
his spouse, if spousal consent is required pursuant to Article 10) to consent
to a distribution while a benefit is 'immediately distributable" within the
meaning of Section 9.2 shall be considered an election to defer commencement of
payment. The vested portion of a Participant's Accounts will be distributed in
a lump slim in cash no later than 60 days after the end of the Plan Year in
which his employment terminates, if at the time the Participant first became
entitled to a distribution the value of such vested portion derived from
Employer and Employee contributions does not exceed $3,500. Commencement of
distributions in any case shall be subject to Section 9.4.
9.2. Restriction on Immediate Distributions. A Participant's
account balance is considered "immediately distributable" if any part of the
account balance could be distributed to the Participant (or his surviving
spouse) before the Participant attains, or would have attained if not deceased,
the later of the normal retirement age specified in the Plan Agreement or age
62.
(a) If the value of a Participant's vested account
balance derived from Employer and Employee contributions exceeds (or
at the time of any prior distribution exceeded) $3,500, and the
account balance is immediately distributable, the Participant and his
spouse (or where either the Participant or the spouse has died, the
survivor) must consent to any such distribution, unless an exception
described in paragraph (b) applies. The consent of the Participant
and his spouse shall be obtained in writing within the 90-day period
ending on the annuity starting date, which is the first day of the
first period for which an amount is paid as an annuity (or any other
form). The Plan Administrator shall notify the Participant and the
spouse, no less than 30 days and
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no more than 90 days before the annuity starting date, of the right to
defer any distribution until the Participant's account balance is no
longer immediately distributable. Such notification shall include a
general description of the material features of the optional forms of
benefit available under the Plan and an explanation of their relative
values, in a manner that would satisfy the notice requirements of
Section 417(a)(3) of the Code. If a distribution is one to which
Sections 401(a)(11) and 417 of the Code do not apply, such
distribution may commence less than 30 days after the required
notification is given, provided that:
(1) the Plan Administrator clearly informs the
Participant that the Participant has a right to a period of at
least 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.
(b) Notwithstanding paragraph (a), only the Participant
need consent to the commencement of a distribution in the form of a
Qualified Joint and Survivor Annuity while the account balance is
immediately distributable. Furthermore, if payment in the form of a
Qualified Joint and Survivor Annuity is not required with respect to
the Participant pursuant to Section 1 0. I (b) of the Plan, only the
Participant need consent to the distribution of an account balance
that is immediately distributable. Neither the consent of the
Participant nor the spouse shall be required to the extent that a
distribution is required to satisfy Section 401(a)(9) or Section 415
of the Code. In addition, upon termination of the Plan, if the Plan
does not offer an annuity option purchased from a commercial provider,
and no Affiliated Employer maintains another defined contribution plan
(other than an employee stock ownership plan as defined in Section
4975(e)(7) of the Code), a Participant's account balance shall be
distributed to the Participant without his consent. If any Affiliated
Employer maintains another defined contribution plan (other than an
employee stock ownership plan as defined in Section 4975(e)(7) of the
Code), a Participant's account balance shall be transferred to that
defined contribution plan without his consent, unless he consents to
an immediate distribution. For purposes of determining the
applicability of the foregoing consent requirements to distributions
made before the first day of the first Plan Year beginning after
December 31, 1988, the Participant's vested account balance shall not
include amounts attributable to accumulated deductible employee
contributions within the meaning of Section 72(o)(5)(B) of the Code.
9.3. Optional Forms of Distribution. If at the time a Participant
first becomes entitled to a distribution the value of his vested Account
balance derived from Employer and Employee contributions does not exceed
$3,500, distribution shall be made in a lump SUM in cash. Subject to the
preceding sentence and to the rules of Article 10 concerning joint and survivor
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annuities, a Participant or Beneficiary may elect to receive benefits in any of
the following optional forms:
(a) A lump sum payment in cash or in kind or in a
combination of both;
(b) A series of installments over a period certain that
meets the requirements of Article II; or
(c) In the event that the Plan is adopted as an amendment
to an existing plan, any optional form of distribution available under
the existing plan. Such optional forms of distribution may be made
available where necessary through the purchase by the Plan
Administrator of an appropriate annuity contract from a commercial
provider, with terms complying with the requirements of Article 11.
If the Plan is a direct or indirect transferee of a defined benefit
plan, money purchase plan, target benefit plan, stock bonus plan, or
profit sharing plan which is subject to the survivor annuity
requirements of Sections 40 1 (a)(11) and 417 of the Code, the
provisions of Article 1O shall apply.
9.4. Distribution Procedure. The Trustee shall make or commence
distributions to or for the benefit of Participants only on receipt of an
instruction from the Employer in writing or by such other means as shall be
acceptable to the Trustee, certifying that a distribution of a Participant's
benefits is payable pursuant to the Plan, and specifying the time and manner of
payment. The amount to be distributed shall be determined as of the Valuation
Date coincident with or next following the Employer's order. The Trustee shall
be fully protected in acting upon the directions of the Employer in making
benefit distributions, and shall have no duty to determine the rights or
benefits of any person under the Plan or to inquire into the right or power of
the Employer to direct any such distribution. The Trustee shall be entitled to
assume conclusively that any determination by the Employer with respect to a
distribution meets the requirements of the Plan. The Trustee shall not be
required to make any payment hereunder in excess of the net realizable value of
the assets of the Account in question at the time of such payment, nor to make
any payment in cash unless the Employer has furnished instructions as to the
assets to be converted to cash for the purposes of making payment.
9.5. Lost Distributee. In the event that the Plan Administrator is
unable with reasonable effort to locate a person entitled to distribution under
the Plan, the Accounts distributable to such A person shall become a Forfeiture
at the end of the third Plan Year after the Plan Administrator's efforts to
locate such person began; provided, however, that the amount of the Forfeiture
shall be restored in the event that such person thereafter submits a claim for
benefits under the Plan. Such restoration will be made, first, from the amount
of Forfeitures available for reallocation as of the last day of the Plan Year
in which the claim is made, to the extent thereof-, and to the extent that
Forfeitures are not available or are insufficient to restore the balance, from
contributions made by the Employer pursuant to Section 4.1 (f). A Forfeiture
occurring under this Section 9.5 shall be used to reduce the
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amount of contributions required of the Employer as described in Section 4.13
and Section 5.2.
9.6. Direct Rollovers. This Section 9.6 applies to distributions
made on or after January 1, 1993. Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the manner prescribed by
the Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover. For purposes of this Section 9.6, the
following definitions shall apply:
(a) Eligible Rollover Distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributees and the distributee's Designated Beneficiary (as defined
in Section 11. 3), or for a specified period of ten years or more, any
distribution to the extent such distribution is required under section
401(a)(9) of the Code, and the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to employer securities).
(b) Eligible Retirement Plan. An eligible retirement
plan is an individual retirement account described in section 408(a)
of the Code, an individual retirement annuity described in section
408(b) of the Code, an annuity plan described in section 403(a) of the
Code, or a qualified trust described in section 401(a) of the Code,
that accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(c) Distributee. A distributee includes an Employee or
former Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's spouse or
former spouse who is the alternate payee under a Qualified Domestic
Relations Order are distributees with regard to the interest of the
spouse or former spouse.
(d) Direct Rollover. A direct rollover is a payment by
the Plan to the eligible retirement plan specified by the distributee.
9.7. Distributions Required by a Qualified Domestic Relations
Order. To the extent required by a Qualified Domestic Relations Order, the
Plan Administrator shall make distributions from a Participant's Accounts to
any alternate payee named in such order in a
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manner consistent with the distribution options OTHERWISE AVAILABLE under the
Plan, regardless of whether the Participant is otherwise entitled to A
distribution at such time under the Plan.
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ARTICLE 10. JOINT AND SURVIVOR ANNUITY REQUIREMENTS
10.1. Applicability.
(a) Generally. The provisions of Sections 10.2 through
10.5 shall generally apply to a Participant who is credited with at
least one Hour of Service on or after August 23, 1984, and such other
Participants as provided in Section 10.6.
(b) Exception for Certain Plans. The provisions of
Sections 10.2 through 10.5 shall not apply to a Participant if: (i)
the Participant does not or cannot elect payment of benefits in the
form of a life annuity, and (ii) on the death of the Participant, his
Vested Account Balance will be paid to his surviving spouse (unless
there is no surviving spouse, or the surviving spouse has consented to
the designation of another Beneficiary in a manner conforming to a
Qualified Election) and the surviving spouse may elect to have
distribution of the Vested Account Balance (adjusted in accordance
with Section 13.4 for gains or losses occurring after the
Participant's death) commence within the 90-day period following the
date of the Participant's death. The Participant may waive the spousal
death benefit described in this paragraph (b) at any time, provided
that no such waiver shall be effective unless it satisfies the
conditions applicable under Section 10-4(c) to a Participant's waiver
of a Qualified Preretirement Survivor Annuity. The exception in this
paragraph (b) shall not be operative with respect to a Participant if
the Plan:
(1) is a direct or indirect transferee of a
defined benefit plan, money purchase pension plan, target
benefit plan, stock bonus plan, or profit sharing plan which
is subject to the survivor annuity requirements of Sections
401 (a)(11) and 417 of the Code; or
(2) is adopted as an amendment of a plan that did
not qualify for the exception in this paragraph (b) before the
amendment was adopted.
For purposes of this paragraph (b), Vested Account Balance
shall have the meaning provided in Section 10.4(f). The provisions of
Sections 10.2 through 10.6 set forth the survivor annuity requirements
of Sections 401 (a)(11) and 417 of the Code.
(c) Exception for Certain Amounts. The provisions of
Sections 10.2 through 10.5 shall not apply to any distribution made on
or after the first day of the first Plan Year beginning after December
31, 1988, from or under a separate account attributable solely to
accumulated deductible employee contributions as defined in Section
72(o)(5)(B) of the Code, and maintained on behalf of a Participant in
a money purchase pension plan or a target benefit plan, provided that
the exceptions applicable to certain profit sharing plans under
paragraph (b) are applicable with respect to the separate account (for
this purpose, Vested Account Balance means the Participant's
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separate account balance attributable solely to accumulated deductible
employee -contributions within the meaning of Section 72(o)(5)(B) of
the Code).
10.2. Qualified Joint and Survivor Annuity. Unless an optional form
of benefit is selected pursuant to a Qualified Election within the go-day
period ending on the Annuity Starting Date, a married Participant's Vested
Account Balance will be paid in the form of A Qualified Joint and Survivor
Annuity and an unmarried Participant's Vested Account Balance will be paid in
the form of a life annuity. In either case, the Participant may elect to have
such an annuity distributed upon his attainment of the Earliest Retirement Age
under the Plan.
10.3. Qualified Preretirement Survivor Annuity. Unless an optional
form of benefit has been selected within the Election Period pursuant to a
Qualified Election, the Vested Account Balance of a Participant who dies before
the Annuity Starting Date shall be applied toward the purchase of an annuity
for the life of his surviving spouse (a "Qualified Preretirement Survivor
Annuity"). The surviving spouse may elect to have such an annuity distributed
within a reasonable period after the Participant's death. For purposes of this
Article 10, the term "spouse" means the current spouse or surviving spouse of a
Participant, except that a former spouse will be treated as the spouse or
surviving spouse (and a current spouse will not be treated as the spouse or
surviving spouse) to the extent provided under A qualified domestic relations
order as described in Section 414(p) of the Code.
10.4. Definitions. The following definitions apply:
(a) "Election Period" means the period beginning on the
first day of the Plan Year in which a Participant attains age 35 and
ending on the date of the Participant's death. If a Participant
separates from service before the first day of the Plan Year in which
he reaches age 35, the Election Period with respect to his account
balance as of the date of separation shall begin on the date of
separation. A Participant who will not attain age 35 as of the end of
a Plan Year may make a special Qualified Election to waive the
Qualified Preretirement Survivor Annuity for the period beginning on
the date of such election and ending on the first day of the Plan Year
in which the Participant will attain age 35. Such an election shall
not be valid unless the Participant receives a written explanation of
the Qualified Preretirement Survivor Annuity in such terms as are
comparable to the explanation required under Section 10.5. Qualified
Preretirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the
Participant attains age 35. Any new waiver on or after that date
shall be subject to the full requirements of this article.
(b) "Earliest Retirement Age" means the earliest date on
which the Participant could elect to receive Retirement benefits under
the Plan.
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(c) "Qualified Election" means a waiver of a Qualified
Joint and Survivor Annuity or a Qualified Preretirement Survivor
Annuity. Any such waiver shall not be effective unless: (1) the
Participant's spouse consents in writing to the waiver; (2) the waiver
designates a specific Beneficiary, including any class of
beneficiaries or any contingent beneficiaries, which may not be
changed without spousal consent (unless the spouse's consent expressly
permits designations by the Participant without any further spousal
consent); (3) the spouse's consent acknowledges the effect of the
waiver; and (4) the spouse's consent is witnessed by a plan
representative or notary public. Additionally, a Participant's waiver
of the Qualified Joint and Survivor Annuity shall not be effective
unless the waiver designates a form of benefit payment which may not
be changed without spousal consent (unless the spouse's consent
expressly permits designations by the Participant without any further
spousal consent). If it is established to the satisfaction of a plan
representative that there is no spouse or that the spouse cannot be
located, a waiver will be deemed a Qualified Election. Any consent by
a spouse obtained under these provisions (and any establishment that
the consent of a spouse may not be obtained) shall be effective only
with respect to the particular spouse involved. A consent that
permits designations by the Participant without any requirement of
further consent by the spouse must acknowledge that the spouse has the
right to limit the consent to a specific Beneficiary and a specific
form of benefit where applicable, and that the spouse voluntarily
elects to relinquish either or both of those rights. A revocation of
a prior waiver may be made by a Participant without the consent of the
spouse at any time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under this
provision shall be valid unless the Participant has received notice as
provided in Section 10.5.
(d) "Qualified Joint and Survivor Annuity" means an
immediate annuity for the life of a Participant, with a survivor
annuity for the life of the spouse which is not less than 50% and not
more than 100% of the amount of the annuity which is payable during
the joint lives of the Participant and the spouse, and which is the
amount of benefit that can be purchased with the Participant's Vested
Account Balance. The percentage of the survivor annuity under the
Plan shall be 50%.
(e) "Annuity Starting Date" means the first day of the
first period for which an amount is paid as an annuity (or any other
form).
(f) "Vested Account Balance" means the aggregate value of
the Participant's vested account balance derived from Employer and
Employee contributions (including rollovers), whether vested before or
upon death, including the proceeds of insurance contracts, if any, on
the Participant's life. The provisions of this Article 10 shall apply
to a Participant who is vested in amounts attributable to Employer
contributions, Employee contributions or both at the time of death or
distribution.
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(g) "Straight life annuity" means an annuity payable in
equal installments for the life of the Participant that terminates
upon the Participant's death.
10.5. Notice Requirements. In the case of a Qualified Joint and
Survivor Annuity, no less than 30 days and no more than 90 days before a
Participant's Annuity Starting Date the Plan Administrator shall provide to him
a written explanation of (i) the terms and conditions of a Qualified Joint and
Survivor Annuity, (ii) the Participant's right to make, and the effect of, an
election to waive the Qualified Joint and Survivor Annuity form of benefit,
(iii) the rights of the Participant's spouse, and (iv) the right to make, and
the effect of, a revocation of a previous election to waive the Qualified Joint
and Survivor Annuity.
In the case of a Qualified Preretirement Survivor Annuity, within the
applicable period for a Participant the Plan Administrator shall provide to him
a written explanation of the Qualified Preretirement Survivor Annuity, in terms
and manner comparable to the requirements applicable to the explanation of a
Qualified Joint and Survivor Annuity as described in the preceding paragraph.
The applicable period for a Participant is whichever of the following periods
ends last: (i) the period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the close -of the Plan
Year preceding the Plan Year in which the Participant attains age 35; (ii) a
reasonable period ending after an individual becomes a Participant; (iii) a
reasonable period ending after this Article 10 first applies to the
Participant. Notwithstanding the foregoing, in the case of a Participant who
separates from service before attaining age 35, notice must be provided within
a reasonable period ending after his separation from service.
For purposes of applying the preceding paragraph, a reasonable period
ending after the enumerated events described in (ii) and (iii) is the end of
the two-year period beginning one year before the date the applicable event
occurs, and ending one year after that date. In the case of a Participant who
separates from service before the Plan Year in which he reaches age 35, notice
shall be provided within the two-year period beginning one year before the
separation and ending one year after the separation. If such a Participant
thereafter rearm to employment with the Employer, the applicable period for the
Participant shall be redetermined.
10.6. Transitional Rules.
(a) Any living Participant not receiving benefits on August
23, 1984, who would otherwise not receive the benefits prescribed by
the preceding Sections of this Article 10, must be given the
opportunity to elect to have those Sections apply if the Participant
is credited with at least one Hour of Service under the Plan or a
predecessor plan in a Plan Year beginning on or after January 1, 1976,
and the Participant had at least ten years of vesting service when he
or she separated from service.
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(b) Any living Participant not receiving benefits on
August 23, 1984, who was credited with at least one Hour of Service
under the Plan or a predecessor plan on or after September 2, 1974,
and who is not otherwise credited with any service in a Plan Year
beginning on or after January 1, 1976, must be given the opportunity
to have his benefits paid in accordance with paragraph (d) of this
Section 10-6.
(c) The respective opportunities to elect (as described
in paragraphs (a) and (b) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984, and
ending on the date benefits would otherwise commence to be paid to
those Participants.
(d) Any Participant who has so elected pursuant to
paragraph (b) of this Section 10. 6, and any Participant who does not
elect under paragraph (a), or who meets the requirements of paragraph
(a) except that he does not have at least ten years of vesting service
when he separates from service, shall have his benefits distributed in
accordance with all of the following requirements, if his benefits
would otherwise have been payable in the form of a life annuity:
(1) Automatic joint and survivor annuity. If
benefits in the form of a life annuity become payable to a
married Participant who:
(A) begins to receive payments under the
Plan on or after normal retirement age; or
(B) dies on or after normal retirement
age while still working for the Employer; or
(C) begins to receive payments on or
after the qualified early retirement age; or
(D) separates from service on or after
attaining normal retirement age (or the qualified
early retirement age) and after satisfying the
eligibility requirements for the payment of benefits
under the Plan and thereafter dies before beginning
to receive such benefits;
then such benefits will be received under the Plan in the form
of a Qualified Joint and Survivor Annuity, unless the
Participant has elected otherwise during the election period,
which must begin at least six months before the Participant
attains qualified early retirement age and end not more than
90 days before the commencement of benefits. Any election
hereunder will be in writing and may be changed by the
Participant at any time.
-49-
(2) Election of early survivor annuity. A
Participant who is employed after attaining the qualified
early retirement age will be given the opportunity to elect
during the election period to have a survivor annuity payable
on death. If the Participant elects the survivor annuity,
payments under such annuity must not be less than the payments
which would have been made to the spouse under the Qualified
Joint and Survivor Annuity if the Participant had retired on
the day before his death. Any election under this provision
will be in writing and may be changed by the Participant at
any time. The election period begins on the later of (i) the
90th day before the Participant attains the qualified early
retirement age, or (ii) the date on which participation
begins, and ends on the date the Participant terminates
employment.
(3) For purposes of this Section 10.6, qualified
early retirement age is the latest of the earliest date under
the Plan on which the Participant may elect to receive
Retirement benefits, the first day of the 120th month
beginning before the participant reaches normal retirement
age, or the date the Participant begins participation.
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ARTICLE 11. MINIMUM DISTRIBUTION REQUIREMENTS
11.1. General Rules. Subject to Article 10, Joint and Survivor
Annuity Requirements, the requirements of this Article I I shall apply to any
distribution of a Participant's interest and will take precedence over any
inconsistent provisions of the Plan. All distributions required under this
Article I I shall be determined and made in accordance with the Income Tax
Regulations issued under Section 401(a)(9) of the Code (including proposed
regulations, until the adoption of final regulations), including the minimum
distribution incidental benefit requirement of Section 1.401(a)(9)-2 of the
proposed regulations.
11.2. Required BEGINNING Date. The entire interest of a Participant
must be distributed, or begin to be distributed, no later than the
Participant's required beginning date, determined as follows.
(a) General Rule. The required beginning date of a
Participant is the first day of April of the calendar year following
the calendar year in which the Participant attains age 70 1/2.
(b) Transitional Rules. The required beginning date of a
Participant who attains age 70 1/2 before January 1, 1988, shall be
determined in accordance with (1) or (2) below:
(1) Non-5 % owners. The required beginning date
of a Participant who is not a 5 % owner is the first day of
April of the calendar year following the calendar year in
which the later of his Retirement or his ATTAINMENT of age 70
1/2 occurs.
(2) 5 % owners. The required beginning date of a
Participant who is a 5 % owner during any year beginning after
December 31, 1979, is the first day of April following the
later of.
(A) the calendar year in which the
Participant attains age 70 1/2, or
(B) the earlier of the calendar year
with or within which ends the Plan Year in which the
Participant becomes a 5 % owner, or the calendar year
in which the Participant retires.
The required beginning date of a Participant who is not a 5 %
owner, who attains age 70 1/2 during 1988 and who has not retired as
of January 1, 1989, is April 1, 1990.
-51-
(c) Rules for 5 % Owners. A Participant is treated as a
5 % owner for purposes of this Section 11. 2 if he is a 5 % owner as
defined in Section 416(i) of the Code (determined in accordance with
Section 416 but without regard to whether the Plan is top heavy) at
any time during the Plan Year ending with or within the calendar year
in which he attains age 66 1/2, or any subsequent Plan Year. Once
distributions have begun to a 5 % owner under this Section 11. 2, they
must continue, even if the Participant ceases to be a 5 % owner in a
subsequent year.
11.3. Limits on Distribution Periods. As of the first Distribution
Calendar Year, distributions not made in a single sum may be made only over one
or a combination of the following periods:
(a) the life of the Participant,
(b) the life of the Participant and his Designated
Beneficiary,
(c) a period certain not extending beyond the Life
Expectancy of the Participant, or
(d) a period certain not extending beyond the Joint and
Last Survivor Expectancy of the Participant and his Designated
Beneficiary.
"Designated Beneficiary" means the individual who is designated as the
Beneficiary under the Plan in accordance with Section 401(a)(9) of the Code and
the regulations issued thereunder (including proposed regulations, until the
adoption of final regulations) and Section 7.2.
"Distribution Calendar Year' means a calendar year for which a minimum
distribution is required under Section 401(a)(9) of the Code and this Section
11.3. 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. For
distributions beginning after the Participant's death, the first Distribution
Calendar Year is the calendar year in which distributions are required to begin
pursuant to Section 11.5.
"Life Expectancy" and 'Joint and Last Survivor Expectancy" are
computed by use of the expected return multiples in Tables V and VI of Section
1.72-9 of the Income Tax Regulations. Unless otherwise elected by the
Participant (or his spouse, in the case of distributions described in Section
11.5(b)) by the time distributions are required to begin, Life Expectancies
shall be recalculated annually. Any such election shall be irrevocable as to
the Participant (or spouse) and shall apply to all subsequent years. The Life
Expectancy of a nonspouse beneficiary may not be recalculated.
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11.4. Determination of Amount to Be Distributed Each Year. interest
is to be distributed in other than a single sum, the following minimum
distribution rules shall apply on or after the required beginning date.
paragraphs (a) through (d) apply to distributions in forms other than the
purchase of an annuity contract.
(a) If a Participant's Benefit (as defined below) is to
be distributed over (1) a period not extending beyond the Life
Expectancy of the Participant or the Joint Life and Last Survivor
Expectancy of the Participant and his Designated Beneficiary, or (2) a
period not extending beyond the Life Expectancy of the Designated
Beneficiary, the amount required to be distributed for each calendar
year, beginning with distributions for the first Distribution Calendar
Year, must at least equal the quotient obtained by dividing the
Participant's Benefit by the Applicable Life Expectancy (as defined
below).
(b) For calendar years beginning before January 1, 1989,
if the Participant's spouse is not the Designated Beneficiary, the
method of distribution selected must assure that at least 50% of the
present value of the amount available for distribution is paid within
the Life Expectancy of the Participant.
(c) For calendar years beginning after December 31, 1988,
the amount to be distributed each year, beginning with distributions
for the first Distribution Calendar Year, shall not be less than the
quotient obtained by dividing the Participant's Benefit by the lesser
of (1) the Applicable Life Expectancy or (2) if the Participant's
spouse is not the Designated Beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of Section 1.4 01(a)(9)-2
of the Proposed Income Tax Regulations. Distributions after the death
of the Participant shall be distributed using the Applicable Life
Expectancy in paragraph (a) above as the relevant divisor, without
regard to Proposed Regulations Section 1.401(a)(9)-2.
(d) The minimum distribution required for the
Participant's first Distribution Calendar Year must be made on or
before the Participant's required beginning date. The minimum
distribution for other calendar years, including the minimum
distribution for the Distribution Calendar Year in which the
Employee's required beginning date occurs, must be made on or before
December 31 of that Distribution Calendar Year.
(e) If the Participant's Benefit is distributed in the
form of an annuity contract purchased from an insurance company,
distributions thereunder shall be in accordance with the requirements
of Section 401(a)(9) of the Code and the regulations issued thereunder
(including proposed regulations, until the adoption of final
regulations).
"Applicable Life Expectancy" means the Life Expectancy (or Joint and
Last Survivor Expectancy) calculated using the attained age of the Participant
(or Designated Beneficiary) as
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of the Participant's (or Designated Beneficiary's) birthday in the applicable
calendar year, reduced by one for each calendar year which has elapsed since
the date Life Expectancy was first calculated. If Life Expectancy is being
recalculated, the Applicable Life Expectancy shall be the Life Expectancy as so
recalculated. The applicable calendar year shall be the first Distribution
Calendar Year, and if Life Expectancy is being recalculated such succeeding
calendar year. If annuity payments commence in accordance with Section 11.4(e)
before the required beginning date, the applicable calendar year is the year
such payments commence. If distribution is in the form of an immediate annuity
purchased after the Participant's death with the Participant's remaining
interest in the Plan, the applicable calendar year is the year of purchase.
"Participant's Benefit" 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 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.
For purposes of the preceding sentence, if any portion of the minimum
distribution for the first Distribution Calendar Year is made in the second
Distribution Calendar Year on or before the required beginning date, the amount
of the minimum distribution made in the second Distribution Calendar Year shall
be treated as if it had been made in the immediately preceding Distribution
Calendar Year.
11.5. Death Distribution Provisions.
(a) Distribution Beginning before Death. If the
Participant dies after distribution of his interest has begun, the
remaining portion of his interest will continue to be distributed at
least as rapidly as under the method of distribution being used before
the Participant's death.
(b) Distribution Beginning after Death. If the
Participant dies before distribution of his interest begins,
distribution of his entire interest shall be completed by December 31
of the calendar year containing the fifth anniversary of the
Participant's death, except to the extent that an election is made to
receive distributions in accordance with (1) or (2) below:
(1) If any portion of the Participant's interest
is payable to a Designated Beneficiary, distributions may be
made over the Designated Beneficiary's life, or over a period
certain not greater than the Life Expectancy of the Designated
Beneficiary, commencing on or before December 31 of the
calendar year immediately following the calendar year in which
the Participant died; or
(2) If the Designated Beneficiary is the
Participant's surviving spouse, the date distributions are
required to begin in accordance with (1) above
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shall not be earlier than the later of (i) December 31 of the
calendar Year immediately following the calendar year in which
the Participant died, and (ii) December 31 of the calendar
year in which the Participant would have attained age 70 1/2
If the Participant has not made an election pursuant to this
Section 11.5 by the time of his death, the Participant's Designated
Beneficiary must elect the method of distribution no later than the
earlier of (i) December 31 of the calendar year in which distributions
would be required to begin under this Section 11.5, or (ii) December
31 of the calendar year which contains the fifth anniversary of the
date of death of the Participant. If the Participant has no
Designated Beneficiary, or if the Designated Beneficiary does not
elect a method of distribution, distribution of the Participant's
entire interest must be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death.
(c) For purposes of paragraph (b), if the surviving
spouse dies after the Participant, but before payments to the spouse
begin, the provisions of paragraph (b), with the exception of
subparagraph (2) therein, shall be applied as if the surviving spouse
were the Participant.
(d) For purposes of this Section 11.5, any amount paid to
a child of the Participant will be treated as if it had been paid to
the surviving spouse of the Participant if the amount becomes payable
to the surviving spouse when the child reaches the age of majority.
(e) For the purposes of this Section 11.5, distribution
of a Participant's interest is considered to begin on the
Participant's required beginning date (or, if paragraph (c) above is
applicable, the date distribution is required to begin to the
surviving spouse pursuant to paragraph (b) above). If distribution in
the form of an annuity contract described in Section 11.4(e)
irrevocably commences to the Participant before the required beginning
date, the date distribution is considered to begin is the date
distribution actually commences.
11.6. Transitional Rule. Notwithstanding the other requirements of
this Article 11, and subject to the requirements of Article 10, Joint and
Survivor Annuity Requirements, distribution on behalf of any Participant,
including a 5 % owner, may be made in accordance with all of the following
requirements (regardless of when such distribution commences):
(a) The distribution is one which would not have
disqualified the Trust under Section 401(a)(9) of the Internal Revenue
Code of 1954 as in effect before its amendment by the Deficit
Reduction Act of 1984.
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(b) The distribution is in accordance with a method of
distribution -designated by the Employee whose interest in the Trust
is being distributed or, if the Employee is deceased, by a Beneficiary
of the Employee.
(c) The designation specified in paragraph (b) was in
writing, was signed by the Employee or the Beneficiary, and was made
before January 1, 1984.
(d) The Employee had accrued a benefit under the Plan as
of December 31, 1983.
(e) The method of distribution designated by the Employee
or the Beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made, and in the
case of any distribution upon the Employee's death, the Beneficiaries
of the Employee listed in order of priority.
A distribution upon death will not be covered by this transitional
rule unless the information in the designation contains the required
information described above with respect to the distributions to be made upon
the death of the Employee. For any distribution which commences before January
1, 1984, but continues after December 31, 1983, the Employee or the Beneficiary
to whom such distribution is being made will BE presumed to have designated the
method of distribution under which the distribution is being made, if the
method of distribution was specified in writing and the distribution satisfies
the requirements in paragraphs (a) and (e).
If a designation is revoked, any subsequent distribution must satisfy
the requirements of Section 401(a)(9) of the Code and the regulations
thereunder. If a designation is revoked after the date distributions are
required to begin, the Trust must distribute by the end of the calendar year
following the calendar year in which the revocation occurs the total amount not
yet distributed which would have been required to have been distributed to
satisfy Section 401(a)(9) of the Code and the regulations thereunder, but for
the designation described in paragraphs (b) through (e). For calendar years
beginning after December 31, 1988, such distributions must meet the minimum
distribution incidental benefit requirements in Section 1.401(a)(9)-2 of the
Proposed Income Tax Regulations. Any changes in the designation generally will
be considered to be a revocation of the designation, but the mere substitution
or addition of another beneficiary (one not named in the designation) under the
designation will not be considered to be A revocation of the designation, so
long as the substitution or addition does not alter the period over which
distributions are to be made under the designation, directly or indirectly (for
example, by altering the relevant measuring life). In the case of an amount
transferred or rolled over from one plan to another plan, the rules in Q&A J-2
and Q&A J-3 of Section 1.401(a)(9)-l of the Proposed Income Tax Regulations
shall apply.
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ARTICLE 12. WITHDRAWALS AND LOANS
12.1. Withdrawals from Participant Contribution Accounts. Subject
to the requirements of Article 10, a Participant may upon written notice (or in
such other manner as shall be made available and agreed upon by the Employer
and Putnam) to the Employer withdraw any amount from his Participant
Contribution Account (if any). A withdrawn amount may not be repaid to the
Plan. No Forfeiture will occur solely as a result of an Employee's withdrawal
from a Participant Contribution Account.
12.2. Withdrawals on Account of Hardship.
(a) If the Employer has so elected in the Plan Agreement,
upon a Participant's written request (or in such other manner as shall
be made available and agreed upon by the Employer and Putnam), the
Plan Administrator may permit a withdrawal of FUNDS from the vested
portion of the Participant's Accounts on account of the Participant's
financial hardship, which must be demonstrated to the satisfaction of
the Plan Administrator, provided, that no hardship withdrawal shall be
made from Qualified Nonelective Contribution Account or Qualified
Matching Account. In considering such requests, the Plan Administrator
shall apply uniform standards that do not discriminate in favor of
Highly Compensated Employees. If hardship withdrawals are permitted
from more than one of the Elective Deferral Account, Rollover Account,
Employer Matching Account, and Employer Profit Sharing Account, they
shall be made first from a Participant's Elective Deferral Account,
then from his Rollover Account, then from his Employer Matching
Account, and finally from his Employer Profit Sharing Account. A
withdrawn amount may not be repaid to the Plan.
(b) The maximum amount that may be withdrawn on account of
hardship from an Elective Deferral Account after December 31, 1988,
shall not exceed the sum of (1) the amount credited to the Account as
of December 31, 1988, and (2) the aggregate amount of the Elective
Deferrals made by the Participant after December 31, 1988, and before
the hardship withdrawal.
(c) Hardship withdrawals shall be permitted only on
account of the following financial needs:
(1) Expenses for medical care described in Section
213(d) of the Code for the Participant, his spouse, children
and dependents, or necessary for these persons to obtain such
care;
(2) Purchase of the principal residence of the
Participant (excluding regular mortgage payments);
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(3) Payment of tuition and related educational
fees and room and board expenses for the upcoming 12 months of
post-secondary education for the Participant, his spouse,
children or dependents; or
(4) Payments necessary to prevent the
Participant's eviction from, or the foreclosure of a mortgage
on, his principal residence.
(d) Hardship withdrawals shall be subject to the spousal
consent requirements contained in Sections 411 (a)(11) and 417 of the
Code, to the same extent that those requirements apply to a
Participant pursuant to Section 10. 1.
(e) A hardship distribution will be permitted to a
Participant only upon satisfaction of the following conditions:
(1) The Participant has obtained all nontaxable
loans and all distributions other than hardship withdrawals
available to him from all plans maintained by the Affiliated
Employers;
(2) The hardship withdrawal does not exceed the
amount of the Participant's financial need as described in
paragraph (b) plus any amounts necessary to pay federal, state
and local income taxes and penalties reasonably anticipated to
result from the withdrawal;
(3) With respect to withdrawals from an Elective
Deferral Account, all plans maintained by the Affiliated
Employers provide that the Participant's Elective Deferrals
and voluntary after-tax contributions will be suspended for a
period of 12 months following his receipt of a hardship
withdrawal; and
(4) With respect to withdrawals from an Elective
Deferral Account, all plans maintained by the Affiliated
Employers provide that the amount of Elective Deferrals that
the Participant may make in his taxable year immediately
following the year of a hardship withdrawal will not exceed
the applicable limit under Section 402(g) of the Code for the
taxable year, reduced by the amount of Elective Deferrals made
by the Participant in the taxable year of the hardship
withdrawal.
12.3. Withdrawals After Reaching Age 59 1/2. A Participant who has
reached age 59 1/2 may upon written request to the Employer (or in such other
manner as shall be made available and agreed upon by the Employer and Putnam)
withdraw during his employment any amount not exceeding the vested balance of
his Accounts. A withdrawn amount may not be repaid to the Plan.
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12.4. Loans. If the Employer has so elected in the Plan Agreement,
the Employer may direct the Trustee to make a loan to a Participant or
Beneficiary from the vested portion of his Accounts, subject to the following
terms and conditions and to such reasonable additional rules and regulations as
the Plan Administrator may establish for the orderly operation of the program:
(a) The Plan Administrator shall administer the loan
program subject to the terms and conditions of this Section 12.4.
(b) A Participant's or Beneficiary's request for a loan
shall be submitted to the Plan Administrator by means of a written
application on a form supplied by the Plan Administrator (or in such
other manner as shall be made available and agreed upon by the
Employer and Putnam). Applications shall be approved or denied by the
Plan Administrator on the basis of its assessment of the borrower's
ability to collateralize and repay the loan, as revealed in the loan
application.
(c) Loans shall be made to all Participants and
Beneficiaries on a reasonably equivalent basis. Loans shall not be
made available to Highly Compensated Employees (as defined in Section
414(q) of the Code) in amounts greater than the amounts made available
to other Employees (relative to the borrower's Account balance).
(d) Loans must be evidenced by the Participant's
promissory note for the amount of the loan payable to the order of the
Trustee, and adequately secured by assignment of not more than fifty
percent (50%) of the Participant's entire right, title and interest in
and to the Trust Fund, exclusive of any asset as to which Putnam is
not the Trustee.
(e) Loans must bear a reasonable interest rate comparable
to the rate charged by commercial lenders in the geographical area for
similar loans. The Plan Administrator shall not discriminate among
Participants in the matter of interest rates, but loans may bear
different interest rates if, in the opinion of the Plan Administrator,
the difference in rates is justified by conditions that would
customarily be taken into account by a commercial lender in the
Employer's geographical area.
(f) The period for repayment for any loan shall not
exceed five years, except in the case of a loan used to acquire a
dwelling unit which within a reasonable time is to be used as the
principal residence of the Participant, in which case the repayment
period may exceed five years The terms of a loan shall require that it
be repaid in level payments of principal and interest not less
frequently then quarterly throughout the repayment period, except that
alternative arrangements for repayment. may apply in the event that
the borrower is on unpaid leave of absence for a period not to exceed
one year.
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(g) To the extent that a Participant would be required
under Article 10 to obtain the consent of his spouse to a distribution
of an immediately distributable benefit other than a Qualified Joint
and Survivor Annuity, the consent of the Participant's spouse shall be
required for the use of his Account as security for a loan. The
spouse's consent must be obtained no earlier than the beginning of the
90-day period that ends on the date on which the loan is to be so
secured, and obtained in accordance with the requirements of Section
10.4(c) for a Qualified Election. Any such consent shall thereafter
be binding on the consenting spouse and any subsequent spouse of the
Participant. A new consent shall be required for use of the Account
as security for any extension, renewal, renegotiation or revision of
the original loan.
(h) If valid spousal consent has been obtained in
accordance with Section 12.4(g), then notwithstanding any other
provision of the Plan the portion of the Participant's account balance
used as a security interest held by the Plan by reason of a loan
outstanding to the Participant shall be taken into account for
purposes of determining the amount of the account balance payable at
the time of death or distribution, but only if the reduction is used
as repayment of the loan. If less than 100 % of the Participant's
vested account balance (determined without regard to the preceding
sentence) is payable to the surviving spouse, then the account balance
shall be adjusted by first reducing the vested account balance by the
amount of the security used as repayment of the loan, and then
determining the benefit payable to the surviving spouse.
(i) In the event of default on a loan by a Participant
who is an active Employee, foreclosure on the Participant's Account as
security will not occur until the Employer has reported to the Trustee
the occurrence of an event permitting distribution from the Plan in
accordance with Article 9 or Section 4.12.
(j) No loan shall be made to an Owner-Employee or a
Shareholder-Employee unless a prohibited transaction exemption is
obtained by the Employer.
(k) No loan to any Participant or Beneficiary can be made
to the extent that the amount of the loan, when added to the
outstanding balance of all other loans to the Participant or
Beneficiary, would exceed the lesser of (a) $50,000 reduced by the
excess (if any) of the highest outstanding balance of loans during the
one year period ending on the day before the loan is made, over the
outstanding balance of loans from the Plan on the date the loan is
made, or (b) one-half the value of the vested account balance of the
Participant. For the purpose of the above limitation, all loans from
all qualified plans of the Affiliated Employers are aggregated.
(1) Loans shall be considered investments
directed by a Participant pursuant to Section 13.3. The amount
loaned shall be charged solely against the
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Accounts of the Participant, and repaid amounts and interest
shall be credited solely thereto.
12.5. Procedure; Amount Available. Withdrawals and loans shall be
made subject to the terms and conditions applicable to distributions pursuant
to Section 9.4, except that the amount of any withdrawal or loan shall be
determined by reference to the vested balance of the Participant's Account as
of the most recent Valuation Date preceding the withdrawal or loan, and shall
not exceed the amount of the vested account balance.
12.6. Protected Benefits. Notwithstanding any provision to the
contrary, if an Employer amends an existing retirement plan ("prior plan") by
adopting this Plan, to the extent any withdrawal option or form of payment
available under the prior plan is an optional form of benefit within the
meaning of Code Section 411 (d)(6), such option or form of payment shall
continue to be available to the extent required by such Code Section.
12.7. Restrictions Concerning Transferred Assets. Notwithstanding
any provision to the contrary, if an Employer amends an existing defined
benefit or money purchase pension plan ('prior pension plan') by adopting this
Plan, accrued benefits attributable to the assets and liabilities transferred
from the prior pension plan (which accrued benefits include the account balance
of such Participant in the Plan attributable to such accrued benefits as of the
date of the transfer and any earnings on such account balance subsequent to the
transfer) shall be distributable only on or after the events upon which
distributions are or were permissible under the prior pension plan.
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ARTICLE 13. TRUST FUND AND INVESTMENTS
13.1. Establishment of Trust Fund. The Employer and the Trustee
hereby agree to the establishment of a Trust Fund consisting of all amounts as
shall be contributed or transferred from time to time to the Trustee pursuant
to the Plan, and all earnings thereon. The Trustee shall hold the assets of
the Trust Fund for the exclusive purpose of providing benefits to Participants
and Beneficiaries and defraying the reasonable expenses of administering the
Plan, and no such assets shall ever revert to the Employer, except that:
(a) contributions made by the Employer by mistake of
fact, as determined by the Employer, may be returned to the Employer
within one (1) year of the date of payment,
(b) contributions that are conditioned on their
deductibility under Section 404 of the Code may be returned to the
Employer, to the extent disallowed, within one (1) year of the
disallowance of the deduction,
(c) contributions that are conditioned on the initial
qualification of the Plan under the Code, and all investment gains
attributable to them, may be returned to the Employer within one (1)
year after such qualification is denied by determination of the
Internal Revenue Service, but only if an application for determination
of such qualification is made within the time prescribed by law for
filing the Employer's federal income tax return for its taxable year
in which the Plan is adopted, or such later date as the Secretary of
the Treasury may prescribe, and
(d) amounts held in a suspense account may be returned to
the Employer on termination of the Plan, to the extent that they may
not then be allocated to any Participant's Account in accordance with
Article 6.
All Employer contributions under the Plan other than those made
pursuant to Section 4.1 (f) are hereby expressly conditioned on the initial.
qualification of the Plan and their deductibility under the Code. Investment
gains attributable to contributions returned pursuant to Subsections (a) and
(b) shall not be returned to the contributing Employer, and investment losses
attributable to such contributions shall reduce the amount returned.
13.2. Management of Trust Fund. The assets of the Trust Fund shall
be held in trust by the Trustee and accounted for in accordance with this
Article 13, and shall be invested in accordance with Section 13.3 in the
Investment Products specified by the Employer in the Plan Agreement and from
time to time thereafter in writing (or in such other manner as shall be made
available and agreed upon by the Employer and Putnam). The Employer shall have
the exclusive authority and discretion to select the Investment Products
available under the Plan. in making that selection, the Employer shall use the
care, skill, prudence and diligence under the circumstances then prevailing
that a prudent person acting in a like capacity and familiar
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with such matters would use in the conduct of an enterprise of like character
and with like aims. The Employer shall cause the available Investment Products
to be diversified sufficiently to minimize the risk of large losses, unless
under the circumstances it is clearly prudent not to do so. It is especially
intended that the Trustee shall have no discretionary authority to determine
the investment of Trust assets. Notwithstanding the foregoing, assets of the
Trust Fund shall also be invested in Employer Stock if so elected by the
Employer and agreed to by Putnam under the Service Agreement.
13.3. Investment Instructions. All amounts held in the Trust Fund
under the Plan shall be invested in Investment Products solely in accordance
with the instructions of the Participant to whose Accounts they are allocable,
as delivered to Putnam in accordance with the Service Agreement. Instructions
shall apply to future contributions, past accumulations, or both, according to
their terms, and shall be communicated by the Employer to Putnam in accordance
with procedures prescribed in the Service Agreement. Instructions shall be
effective prospectively, coincident with or within a reasonable time after
their receipt in good order by Putnam. An instruction once received shall
remain in effect until it is changed by the provision of a new instruction.
New instructions shall be accepted by Putnam on any valuation date.
In the event that the Employer adopts this Putnam prototype Plan as an
amendment to or restatement of an existing plan, the Employer shall specify one
or more Investment Products to serve as the sole investments for all
Participants' Accounts during the period in which existing records of the Plan
are transferred to the Recordkeeper. During that period, new investment
instructions as to existing assets of the Plan cannot be carried out, nor can
distributions be made from the Plan except to the extent permitted under the
terms of the Service Agreement. The Employer and the Recordkeeper shall use
their best efforts to minimize the duration of the period to which the
preceding sentence applies.
To the extent specifically authorized and provided in the Service
Agreement, the Employer may direct the Trustee to establish as an Investment
Product a fund all of the assets of which shall be invested in shares of stock
of the Employer that constitute "qualifying employer securities' within the
meaning of section 407(d)(5) of ERISA ("Employer Stock"). The Plan
Administrator as named fiduciary shall continually monitor the suitability of
acquiring and holding Employer Stock under the fiduciary duty rules of section
404(a)(1) of ERISA (as modified by section 404(a)(2) of ERISA) and the
requirements of section 404(c) of ERISA, and shall be responsible for ensuring
that the procedures relating to the purchase, holding and sale of Employer
Stock, and the exercise of any and all rights with respect to such Employer
Stock shall be in accordance with section 404(c) of ERISA unless the Employer
retains voting, tender or similar rights with respect to the Employer Stock.
The Trustee shall not be liable for any loss, or by reason of any breach, which
arises from the direction of the Plan Administrator with respect to the
acquisition and holding of Employer Stock. The Employer shall be responsible
for determining whether, under the circumstances prevailing at a given time,
its fiduciary duty to Plan Participants and Beneficiaries under the Plan and
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ERISA-requires that the Employer follow the advice of independent counsel as to
the voting and tender or retention of Employer Stock.
Putnam shall be under no duty to question or review the directions
given by the Employer or to make suggestions to the Employer in connection
therewith. Putnam shall not be liable for any loss, or by reason of any
breach, that arises from the Employer's exercise or non- exercise of rights
under this Article 13, or from any direction of the Employer unless it is clear
on the face of the direction that the actions to be taken under the direction
are prohibited by the fiduciary duty rules of Section 404(a) of ERISA. All
interest, dividends and other income received with respect to, and any proceeds
received from the sale or other disposition of, securities or other property
held in an investment fund shall be credited to and reinvested in such
investment fund, and all expenses of the Trust that are properly allocated to a
particular investment fund shall be so allocated and charged. The Employer may
at any time direct Putnam to eliminate any investment fund or funds, and Putnam
shall thereupon dispose of the assets of such investment fund and reinvest the
proceeds thereof in accordance with the directions of the Employer.
Neither the Employer nor the Trustee nor Putnam shall be responsible
for questioning any instructions of a Participant or for reviewing the
investments selected therein, or for any loss resulting from instructions of a
Participant or from the failure of a Participant to provide or to change
instructions. Neither Putnam nor the Trustee shall have any duty to question
any instructions received from the Employer or a Participant or to review the
investments selected thereby, nor shall Putnam or the Trustee be responsible
for any loss resulting from instructions received from the Employer or a
Participant or from the failure of the Employer or a Participant to provide or
to change instructions. In the event that Putnam or the Trustee receives a
contribution under the Plan as to which no instructions are delivered, or such
instructions as are delivered are unclear to Putnam or the Trustee, such
contribution shall be invested until clear instructions are received in the
default investment option set forth in the Service Agreement or other written
agreement between the Employer and Putnam, or if no such option is so set
forth, the Employer, by execution of the Plan Agreement, shall affirmatively
elect to have such contributions invested in the Putnam Money Market Fund.
Neither Putnam nor the Trustee shall have any discretionary authority or
responsibility in the investment of the assets of the Trust Fund.
13.4. Valuation of the Trust Fund. As of each Valuation Date, the
Trustee shall determine the fair market value of the Trust Fund, and the net
earnings or losses and expenses of the Trust Fund for the period elapsed since
the most recent previous Valuation Date shall be allocated among the Accounts
of Participants. Earnings, losses and expenses which pertain to investments
which are specifically held for a given Participant's Account shall be
allocated solely to that Account. In the event that an investment is not
specifically held for a given Participant's Account, the earnings, losses and
expenses pertaining to that investment shall be allocated among all
Participants' Accounts in the ratio that each such Account bears to the total
of all Accounts of all Participants. Each Participant's Accounts shall be
adjusted pursuant to
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this Section 13.4 until such time as they are either fully distributed or
forfeited, regardless of whether the Participant continues to be an Employee.
13.5. Distribution on Investment Company Shares. Subject to Section
9.3, all dividends and capital gains or other distributions received on any
Investment Company Shares credited to Participant's Account will (unless
received in additional Investment Company Shares) be reinvested in full and
fractional shares of the same Investment Company at the price determined as
provided in the then current prospectus of the Investment Company. The shares
so received or purchased upon such reinvestment will be credited to such
accounts. If any dividends or capital gain or other distributions may be
received on such Investment Company Shares at the election of the shareholder
in additional shares or in cash or other property, the Trustee will elect to
receive such dividends or distributions in additional Investment Company
Shares.
13.6. Registration and Voting of Investment Company Shares. All
Investment Company Shares shall be registered in the name of the Trustee or its
nominee. Subject to any requirements of applicable law, the Trustee will
transmit to the Employer copies of any notices of shareholders' meetings,
proxies and proxy-soliciting materials, prospectuses and the ANNUAL or other
reports to shareholders, with respect to Investment Company Shares held in the
Trust Fund. The Trustee shall act in accordance with directions received from
the Employer with respect to matters to be voted upon by the shareholders of
the Investment Company. Such directions must be in writing on a form approved
by the Trustee, signed by the Employer and delivered to the Trustee within the
time prescribed by it. The Trustee will not vote Investment Company Shares as
to which it receives no written directions.
13.7. Investment Manager. The Employer, with the consent of Putnam,
may appoint an investment manager, as defined in Section 3(38) of the ERISA,
with respect to all or a portion of the assets of the Trust Fund. The Trustee
shall have no liability in connection with any action or nonaction pursuant to
directions of such an investment manager.
13.8. Employer Stock.
(a) Voting Rights. Notwithstanding any other provision
of the Plan, the provisions of this Section 13.8(a) shall govern the
voting of Employer Stock held by Putnam as Trustee under the Plan.
The Trustee shall vote Employer Stock in accordance with the
directions of the Employer unless the Employer has elected in the Plan
Agreement that Participants shall be appointed named fiduciaries as to
the voting of Employer Stock and shall direct the Trustee as to the
voting of Employer Stock in accordance with the provisions of this
Section 13.8(a). In either case, the Employer shall be responsible for
determining whether, under the circumstances prevailing at a given
time, its fiduciary duty to Participants and Beneficiaries under the
Plan and ERISA requires that the Employer follow the advice of
independent counsel as to, the voting of Employer Stock. The
remainder of this Section 13.8(a) applies only if the
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Employer elects in the Plan Agreement that participants shall direct
the Trustee as to the voting of Employer Stock. For purposes of this
Section 13.8(a), the term "Participant" includes any Beneficiary with
an Account in the Plan which is invested in Employer Stock.
When the issuer of Employer Stock files preliminary proxy
solicitation materials with the Securities and Exchange Commission,
the Employer shall cause a copy of all the materials to be
simultaneously sent to the Trustee, and the Trustee shall prepare a
voting instruction form based upon these materials. At the time of
mailing of notice of each annual or special stockholders' meeting of
the issuer of Employer Stock, the Employer shall cause a copy of the
notice and all proxy solicitation materials to be sent to each
Participant, together with the foregoing voting instruction form to be
returned to the Trustee or its designee. The form shall show the
number of full and fractional shares of Employer Stock credited to the
Participant's accounts, whether or not vested. For purposes of this
Section 13.8(a), the number of shares of Employer Stock deemed
credited to a Participant's Accounts shall be determined as of the
date of record determined by the Employer for which an allocation has
been completed and Employer Stock has actually been credited to
Participant's Accounts. Procedures for the execution of purchases and
sales of Employer Stock shall be as set forth in the Service
Agreement. The Employer shall provide the Trustee with a copy of any
materials provided to Participants and shall certify to the Trustee
that the materials have been mailed or otherwise sent to Participants.
Each Participant shall have the right to direct the Trustee as
to the manner in which to vote that number of shares of Employer Stock
held under the Plan (whether or not vested) equal to a fraction, of
which the numerator is the number of shares of Employer Stock credited
to his Account and the denominator is the number of shares of Employer
Stock credited to all Participants' Accounts. Such directions shall
be communicated in writing (or in such other manner as shall be made
available and agreed upon by the Employer and Putnam) and shall be
held in confidence by the Trustee and not divulged to the Employer, or
any officer or employee thereof, or any other persons. Upon its
receipt of directions, the Trustee shall vote the shares of Employer
Stock as directed by the Participant. The Trustee shall not vote
those shares of employer Stock credited to the Accounts of
Participants for which no voting directions are received. With
respect to shares of Employer Stock held in the Trust which are not
credited to a Participant's Account, the Plan Administrator shall
retain the status of named fiduciary and shall direct the voting of
such Employer Stock.
(b) Tendering Rights. Notwithstanding any other
provision of the Plan, the provisions of this Section 13.8(b) shall
govern the tendering of Employer Stock by Putnam as Trustee under the
Plan. In the event of a tender offer, the Trustee shall tender
Employer Stock in accordance with the directions of the Employer
unless the Employer has elected in the Plan Agreement that
Participants shall be appointed named
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fiduciaries as to the tendering of Employer Stock in accordance with
the provisions of this Section 13.8(b). The remainder of this Section
13.8(b) applies only if the Employer elects in the Plan Agreement that
Participants shall direct the Trustee as to the tendering of Employer
Stock. For purposes of this Section 13.8(b), the term "Participant"
includes any Beneficiary with an Account in the Plan which is invested
in Employer Stock.
Upon commencement of a tender offer for any Employer Stock,
the Employer shall notify each Plan Participant, and use its best
efforts to distribute timely or cause to be distributed to
Participants the same information that is distributed to shareholders
of the issuer of Employer Stock in connection with the tender offer,
and after consulting with the Trustee shall provide at the Employer's
expense a means by which Participants may direct the Trustee whether
or not to tender the Employer Stock credited to their Accounts
(whether or not vested). The Employer shall provide to the Trustee a
copy of any material provided to Participants and shall certify to the
Trustees that the materials have been mailed or otherwise sent to
Participants.
Each Participant shall have the right to direct the Trustee to
tender or not to tender some or all of the shares of Employer Stock
credited to his Accounts. Directions from a Participant to the
Trustee concerning the tender of Employer Stock shall be communicated
in writing (or in such other manner as shall be made available and
agreed upon by the Employer and Putnam) as is agreed upon by the
Trustees and the Employer. The Trustee shall tender or not tender
shares of Employer Stock as directed by the Participant. A
Participant who has directed the Trustee to tender some or all of the
shares of Employer Stock credited to his Accounts may, at any time
before the tender offer withdrawal date, direct the Trustee to
withdraw some or all of the tendered shares, and the Trustee shall
withdraw the directed number of shares from the tender offer before
the tender offer withdrawal deadline. A Participant shall not be
limited as to the number of directions to tender or withdraw that he
may give to the Trustee. The Trustee shall not tender shares of
Employer Stock credited to a Participant's Accounts for which it has
received no directions from the Plan Participant. The Trustee shall
tender that number of shares of Employer Stock not credited to
Participants' Accounts determined by multiplying the total number of
such shares by a fraction, the numerator of which is the number of
shares of Employer Stock credited to Participants' Accounts for which
the Trustee has received directions from Participants to tender (which
directions have not been withdrawn as of the date of this
determination), and the denominator of which is the total number of
shares of Employer Stock credited to Participants' Accounts.
A direction by a Participant to the Trustee to tender shares
of Employer Stock credited to his Accounts shall not be considered a
written election under the Plan by the Participant to withdraw or to
have distributed to him any or all of such shares. The Trustee shall
credit to each account of the Plan Participant from which the tendered
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shares were taken the proceeds received by the Trustee in exchange for
the shares of Employer Stock tendered from that account. Pending
receipt of directions through the Administrator from the Participant
as to the investment of the proceeds of the tendered shares, the
Trustee shall invest the proceeds as the Administrator shall direct.
To the extent that any Participant gives no direction as to the
tendering of Employer stock that he has the right to direct under this
Section 13.8(a), the Trustee shall not tender such Employer Stock.
(c) Other Rights. With respect to all rights in
connection with Employer Stock other than the right to vote and the
right to tender, Participants are hereby appointed named fiduciaries
to the same extent (if any) as provided in the foregoing paragraphs of
this Section 13.8 with regard to the right to vote, and the Trustee
shall follow the directions of Participants and the Plan Administrator
with regard to the exercise of such rights to the same extent as with
regard to the right to vote.
13.9. Insurance Contracts. If so provided in the Plan Agreement or
other agreement between the Employer and the Trustee, the Plan Administrator
may direct the Trustee to receive and hold or apply assets of the Trust to the
purchase of individual or group insurance or annuity contracts ("Policies' or
"contracts") issued by any insurance company and in a form approved by the Plan
Administrator (including contracts under which the contract holder is granted
options to purchase insurance or annuity benefits), or financial agreements
which are backed by group insurance or annuity contracts ("financial
agreements"). If such investments are to be made, the Plan Administrator shall
direct the Trustee to execute and deliver such applications and other documents
as are necessary to establish record ownership, to value such policies,
contracts or financial agreements under the method of valuation selected by the
Plan Administrator, and to record or report such values to the Plan
Administrator or any investment manager selected by the Plan Administrator, in
the form and manner agreed to by the Plan Administrator.
The Plan Administrator may direct the Trustee to exercise or may
exercise directly the powers of contract holder under any policy, contract or
financial agreement, and the Trustee shall exercise such powers only upon
direction of the Plan Administrator. The Trustee shall have no authority to
act in its own discretion, with respect to the terms, acquisition, valuation,
continued holding and/or disposition of any such policy, contract or financial
agreement or any asset held thereunder. The Trustee shall be under no duty to
question any direction of the Plan Administrator or to review the form of any
such policy, contract or financial agreement or the selection of the issuer
thereof, or to make recommendations to the Plan Administrator or to any issuer
with respect to the form of any such policy, contract or financial agreement.
The Trustee shall be fully protected in acting in accordance with
written directions of the Plan Administrator, and shall be under no liability
for any loss of any kind which may result by reason of any action taken or
omitted by it in accordance with any direction of the Plan Administrator, or by
reason of inaction in the absence of written directions from the Plan
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Administrator. In the event that the Plan Administrator directs that any
monies or property be paid or delivered to the contract holder other than for
the benefit of specific individual beneficiaries, the Trustee agrees to accept
such monies or property as assets of the Trust subject to all the terms hereof.
13.10. Registration and Voting of Non-Putnam Investment Company
Shares. All shares of registered investment companies other than Investment
Companies shall be registered in the name of the Trustee or its nominee.
Subject to any requirements of applicable law and to the extent provided in an
agreement between Putnam and a third party investment provider, the Trustee
shall transmit to the Employer copies of any notices of shareholders' meetings,
proxies or proxy-soliciting materials, prospectuses or the annual or other
reports to shareholders, with respect to shares of registered investment
companies other than Investment Companies held in the Trust Fund. The Trustee
shall vote shares of registered investment companies other than Investment
Companies in accordance with the directions of the Employer. Directions as to
voting such shares must be in writing on a form approved by the Trustee or such
other manner acceptable to the Trustee, signed by the addressee and delivered
to the Trustee within the time prescribed by it. The Trustee shall vote those
shares of registered investment companies other than Investment Companies for
which no voting directions are received in the same proportion as it votes
those shares for which it has received voting directions.
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ARTICLE 14. TOP-HEAVY PLANS
14.1. Superseding Effect. For any Plan Year beginning after
December 3 1, 1983, in which Plan is determined to be a Top-Heavy Plan under
Section 14.2(b), the provisions of this Article 15 will supersede any
conflicting provisions in the Plan or the Plan Agreement.
14.2. Definitions. For purposes of this Article 14, the terms below
shall be defined as follows:
(a) Key Employee means any Employee or former Employee
(and the Beneficiaries of such Employee) who at any time during the
determination period was: (i) an officer of the Employer having annual
compensation greater than 50% of the amount in effect under Section
415(b)(1)(A) of the Code; (ii) an owner (or considered an owner under
Section 318 of the Code) of one of the ten largest interests in the
Employer having annual compensation exceeding the dollar limitation
under Section 415(c)(1)(A) of the Code; (iii) a 5 % owner of the
Employer; or (iv) a I % owner of the Employer having annual
compensation of more than $150,000. Annual compensation means
compensation satisfying the definition elected by the Employer in the
Plan Agreement, but including amounts contributed by the Employer
pursuant to a salary reduction agreement which are excludable from the
Employee's gross income under Section 125, Section 402(a)(8), Section
402(h) or Section 403(b) of the Code. The determination period is the
Plan Year containing the Determination Date and the four preceding
Plan Years. The determination of who is a Key Employee will be made
in accordance with Section 416(i)(1) of the Code and the Regulations
thereunder.
(b) Top-Heavy: The Plan is Top-Heavy for any Plan Year
beginning after December 31, 1983, if any of the following conditions
exists:
(1) If the Top-Heavy Ratio for this Plan exceeds
60 % and this Plan is not part of any Required Aggregation
Group or Permissive Aggregation Group of plans.
(2) If this Plan is a part of a Required
Aggregation Group of plans but not part of a Permissive
Aggregation Group and the Top-Heavy Ratio for the group of
plans exceeds 60%.
(3) If this plan is part of a Required
Aggregation Group and part of a Permissive Aggregation Group
of Plans and the Top-Heavy Ratio for the Permissive
Aggregation group exceeds 60%.
(c) Top-Heavy Ratio means the following:
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(1) If the Employer maintains one or more
qualified defined contribution plans (or any simplified
employee pension plan) and the Employer has not maintained any
qualified defined benefit plan which during the 5-year period
ending on the Determination Date(s) has or has had accrued
benefits, the Top-Heavy ratio for this Plan alone or for the
Required or Permissive Aggregation Group as appropriate is a
fraction, the numerator of which is the sum of the account
balances of all Key Employees as of the Determination Date(s)
(including any part of any account distributed in the 5-year
period ending on the Determination Date(s)), and the
denominator of which is the sum of all account balances
(including any part of any account balance distributed in the
5-year period ending on the Determination Date(s)), both
computed in accordance with Section 416 of the Code and the
regulations thereunder. Both the numerator and denominator of
the Top-Heavy Ratio are increased to reflect any contribution
not actually made as of the Determination Date, but which is
required to be taken into account on that date under Section
416 of the Code and the regulations thereunder.
(2) If the Employer maintains one or more
qualified defined contribution plans (or any simplified
employee pension plan) and the Employer maintains or has
maintained one or more qualified defined benefit plans which
during the 5-year period ending on the Determination Date(s)
has or has had any accrued benefits, the Top-Heavy Ratio for
any Required or Permissive Aggregation Group as appropriate is
a fraction, the numerator of which is the sum of account
balances under the aggregated qualified defined contribution
plan or plans for all Key. Employees, determined in
accordance with (1) above, and the Present Value of accrued
benefits under the aggregated qualified defined benefit plan
or plans for all Key Employees as of the Determination
Date(s), and the denominator of which is the sum of the
account balances under the aggregated qualified defined
contributions plan or plans for all Participants, determined
in accordance with (1) above, and the Present Value of accrued
benefits under the qualified defined benefit plan or plans for
all Participants as of the Determination Date(s), all
determined in accordance with Section 416 of the Code and the
regulations thereunder. The accrued benefits under a defined
benefit plan in both the numerator and denominator of the
Top-Heavy Ratio are increased for any distribution of an
accrued benefit made in the 5-year period ending on the
Determination Date.
(3) For purposes of (1) and (2) above, the value
of account balances and the Present Value of accrued benefits
will 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 Section 416 of the
Code and the regulations thereunder for the first and second
Plan Years of a defined benefit plan. The account balances
and accrued benefits of a Participant (A)
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who is not a Key Employee but who was a Key Employee in a
prior Plan Year, or (B) who has not been credited with at
least one Hour of Service for the Employer during the 5-year
period ending on the Determination Date, will be disregarded.
The calculation of the Top-Heavy Ratio, and the extent to
which distributions, rollovers and transfers are taken into
account will be made in accordance with Section 416 of the
Code and the regulations thereunder. Deductible Employee
contributions will not be taken into account for purposes of
computing the Top-Heavy Ratio. When aggregating plans, the
value of account balances and accrued benefits will be
calculated with reference to the Determination Dates that fall
within the same calendar year.
The accrued benefit of a Participant other than a Key Employee
shall be determined under (a) the method, if any, that
uniformly applies for accrual purposes under all defined
benefit plans maintained by the Employer, or (b) if there is
no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional
rule of Section 411 (b)(1)(C) of the Code.
(d) Permissive Aggregation Group means the Required
Aggregation Group of plans plus any other qualified plan or plans (or
simplified employee pension plan) of the Employer which, when
considered as a group with the Required Aggregation Group, would
continue to satisfy the requirements of Sections 401(a)(4) and 410 of
the Code.
(e) Required Aggregation Group means (i) each qualified
plan of the Employer in which at least one Key Employee participates
or participated at any time during the determination period
(regardless of whether the Plan has terminated) and (ii) any other
qualified plan of the Employer which enables a plan described in (i)
to meet the requirements of Section 401(a)(4) or 410 of the Code.
(f) Determination Date means, for any Plan Year
subsequent to the first Plan Year, the last day of the preceding Plan
Year. For the first Plan Year of the Plan, the Determination Date is
the last day of that Plan Year.
(g) Valuation Date means the last day of the Plan Year.
(h) Present Value means present value based only on the
interest and mortality rates specified by the Employer in the Plan
Agreement.
14.3. Minimum Allocation.
(a) Except as otherwise provided in paragraphs (c) and
(d) below, the Employer contributions and Forfeitures (if any)
allocated on behalf of any Participant
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who is not a Key Employee shall not be less than the lesser of 3 % of
such Participant's Earnings, or in the case where the Employer has no
defined benefit plan which designates this Plan to satisfy Section 401
of the Code, the largest percentage of Employer contributions and
Forfeitures, as a percentage of the Key Employee's Earnings, allocated
on behalf of any Key Employee for that year. The minimum allocation
is determined without regard to any Social Security contribution.
This minimum allocation shall be made even though, under other Plan
provisions, the Participant would not otherwise be entitled to receive
an allocation, or would have received a lesser allocation of the
Employer's contributions and Forfeitures for the Plan Year because of
(1) the Participant's failure to be credited with at least 1,000 Hours
of Service, or (2) the Participant's failure to make mandatory
Employee contributions to the Plan, or (3) the Participant's receiving
Earnings less than a stated amount. Neither Elective Deferrals,
Employer Matching Contributions nor Qualified Matching Contributions
for non-Key Employees shall be taken into account for purposes of
satisfying the requirement of this Section 14.3(a).
(b) For purposes of computing the minimum allocation,
Earnings will mean Section 415 Compensation as defined in Section 6-
5(b) of the Plan.
(c) The provision in paragraph (a) above shall not apply
to any Participant who was not employed by the Employer on the last
day of the Plan Year.
(d) The provision in paragraph (a) above shall not apply
to any Participant to the extent he is covered under any other plan or
plans of the Employer, and the Employer has provided in the Plan
Agreement that the minimum allocation requirement applicable to
Top-Heavy Plans will be met in the other plan or plans.
(e) The minimum allocation required (to the extent
required to be nonforfeitable under Section 416(b) of the Code) may
not be forfeited under Sections 411 (a)(3)(B) or (D) of the Code.
14.4. Adjustment of Fractions. For any Plan Year in which the Plan
is Top-Heavy, the Defined Benefit Fraction and the Defined Contribution
Fraction described in Article 6 shall each be computed using 100% of the dollar
limitations specified in Sections 415(b)(1)(A) and 415(c)(1)(A) instead of 125
%. The foregoing requirement shall not apply if the Top-Heavy Ratio does not
exceed 90 % and the Employer has elected in the Plan Agreement to provide
increased minimum allocations or benefits satisfying Section 416(h)(2) of the
Code.
14.5. Minimum Vesting Schedules. For any Plan Year in which this
Plan is Top-Heavy and for any subsequent Plan Year, a minimum vesting schedule
will automatically apply to the Plan, as follows:
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(a) If the Employer has selected in the Plan Agreement as
the Plan's regular vesting schedule 100% immediate vesting, the
Three-year Cliff, Five-Year Graded or Six-Year Graded schedule, then
the schedule selected in the Plan Agreement shall continue to apply
for any Plan Year to which this Section 14.5 applies.
(b) If the Employer has selected in the Plan Agreement as
the Plan's regular vesting schedule the Five-Year Cliff schedule, then
the Three-Year Cliff schedule shall apply in any Plan Year to which
this Section 14.5 applies.
(c) If the Employer has selected in the Plan Agreement as
the Plan's regular vesting schedule the Seven-Year Graded schedule,
then the Six-Year Graded schedule shall apply in any Plan Year to
which this Section 14.5 applies.
(d) If the Employer has selected in the Plan Agreement as
the Plan's regular vesting schedule a schedule other than those
described in paragraphs (a), (b) and (c), then the Top-Heavy schedule
specified by the Employer in the Plan Agreement for this purpose shaft
apply in any Plan Year to which this Section 14.5 applies.
The minimum vesting schedule applies to all benefits within the
meaning of Section 41 1 (a)(7) of the Code except those attributable to
Elective Deferrals, rollover contributions described in Section 5.3, Qualified
Matching Contributions, Qualified Nonelective Contributions, or Participant
Contributions, but including benefits accrued before the effective date of
Section 416 of the Code and benefits accrued before the Plan became Top-Heavy.
Further, no reduction in a Participant's nonforfeitable percentage may occur in
the event the Plan's status as Top- Heavy changes for any Plan Year. However,
the vested portion of the Employer Profit Sharing Account or Employer Matching
Account of any Employee who does not have an Hour of Service after the Plan has
initially become Top-Heavy will be determined without regard to this Section
14.5.
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ARTICLE 15. ADMINISTRATION OF THE PLAN
15.1. Plan Administrator. The Plan shall be administered by the
Employer, as Plan Administrator and Named Fiduciary within the meaning of
ERISA, under rules of uniform application; provided, however, that the Plan
Administrator's duties and responsibilities may be delegated to a person
appointed by the Employer or a committee established by the Employer for that
purpose, in which case the committee shall be the Plan Administrator and Named
Fiduciary. The members of such a committee shall act by majority vote, and may
by majority vote authorize any one or ones of their number to act for the
committee. The person or committee (if any) initially appointed by the
Employer may be named in the Plan Agreement, but the Employer may remove any
such person or committee member by written notice to him, and any such person
or committee may resign by written notice to the Employer, without the
necessity of amending the Plan Agreement. To the extent permitted under
applicable law, the Plan Administrator shall have the sole authority to enforce
the terms hereof on behalf of any and all persons having or claiming any
interest under the Plan, and shall be responsible for the operation of the Plan
in accordance with its terms. The Plan Administrator shall have discretionary
authority to determine all questions arising out of the administration,
interpretation and application of the Plan, all of which determinations shall
be conclusive and binding on all persons. The Plan Administrator, in carrying
out its responsibilities under the Plan, may rely upon the written opinions of
its counsel and on certificates of physicians. Subject to the provisions of
the Plan and applicable law, the Plan Administrator shall have no liability to
any person as a result of any action taken or omitted hereunder by the Plan
Administrator.
15.2. Claims Procedure. Claims for participation in or distribution
of benefits under the Plan shall be made in writing to the Plan Administrator,
or an agent designated by the Plan Administrator whose name SHALL have been
communicated to all Participants and other persons as required by law. If any
claim so made is denied in whole or in part, the claimant shall be furnished
promptly by the Plan Administrator with a written notice:
(a) setting forth the reason for the denial,
(b) making reference to pertinent Plan provisions,
(c) describing any additional material or information
from the claimant which is necessary and why, and
(d) explaining the claim review procedure set forth herein.
Within 60 days after denial of any claim for participation or
distribution under the Plan, the claimant may request in writing a review of
the denial by the Plan Administrator. Any claimant seeking review hereunder
shall be entitled to examine all pertinent documents and to submit issues and
comments in writing. The Plan Administrator shall render a decision
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on review hereunder; provided, that if the Plan Administrator determines that a
hearing would be appropriate, its decision on review shall be rendered within
120 days after receipt of the request for review. The decision on review shall
be in writing and shall state the reason for the decision, referring to the
Plan provisions upon which it is based.
15.3. Employer's Responsibilities. The Employer shall be
responsible for:
(a) Keeping records of employment and other matters
containing all relevant data pertaining to any person affected hereby
and his eligibility to participate, allocations to his Accounts, and
his other rights under the Plan;
(b) Periodic, timely filling of all statements, reports
and returns required to be filed by ERISA;
(c) Timely preparation and distribution of disclosure
materials required by ERISA;
(d) Providing notice to interested parties as required by
Section 7476 of the Code;
(e) Retention of records for periods required by law; and
(f) Seeing that all persons required to be bonded on
account of handling assets of the Plan are bonded.
15.4. Recordkeeper. The Recordkeeper is hereby designated as agent
of the Employer under the Plan to perform directly or through agents certain
ministerial duties in connection with the Plan, in particular:
(a) To keep and regularly furnish to the Employer a
detailed statement of each Participant's Accounts, showing
contributions thereto by the Employer and the Participant, Investment
Products purchased therewith, earnings thereon and Investment Products
purchased therewith, and each redemption or distribution made for any
reason, including fees or benefits; and
(b) To the extent agreed between the Employer and the
Recordkeeper, to prepare for the Employer or to assist the Employer to
prepare such returns, reports or forms as the Employer shall be
required to furnish to Participants and Beneficiaries or other
interested persons and to the Internal Revenue Service or the
Department of Labor; all as may be more fully set forth in the Service
Agreement. If the Employer does not appoint another person or entity
as Recordkeeper, the Employer itself shall be the Recordkeeper.
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15.5. Prototype Plan. Putnam is the sponsor of the Putnam Basic
Plan Document, a prototype plan approved as to form by the Internal Revenue
Service. provided that an Employer's adoption of the Plan is made known to and
accepted by Putnam in accordance with the Plan Agreement, Putnam will inform
the Employer of amendments to the prototype plan and provide such other
services in connection with the Plan as may be agreed between Putnam and the
Employer. Putnam may impose for its services as sponsor of the prototype plan
such fees as it may establish from time to time in a fee schedule addressed to
the Employer. Such fees shall, unless paid by the Employer, be paid from the
Trust Fund, and shall in that case be charged pro rata against the Accounts of
all Participants. The Trustee is expressly authorized to cause Investment
Products to be sold or redeemed for the purpose of paying such fees.
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ARTICLE 16. TRUSTEE
16.1. Powers and Duties of the Trustee. The Trustee shall have the
authority, in addition to any authority given by law, to exercise the following
powers in the administration of the Trust:
(a) To invest all or a part of the Trust Fund in
Investment Products in accordance with the investment instructions
delivered by the Employer pursuant to Section 13.3, without
restriction to investments authorized for fiduciaries, including
without limitation any common, collective or commingled trust fund
maintained by the Trustee (or any other such fund, acceptable to
Putnam and the Trustee, that qualifies for exemption from federal
income tax pursuant to Revenue Ruling 81-100). Any investment in, and
any terms and conditions of, any such common, collective or commingled
trust fund available only to employee trusts which meet the
requirements of the Code, or corresponding provisions of subsequent
income tax laws of the United States, shall constitute an integral
part of this Agreement;
(b) If Putnam and the Trustee have consented thereto in
writing, to invest without limit in stock of the Employer or any
affiliated company;
(c) To dispose of all or part of the investments,
securities or other property which may from time to time or at any
time constitute the TRUST Fund in accordance with the written
directions furnished by the Employer for the investment of
Participants' separate Accounts or the payment of benefits or expenses
of the Plan, and to make, execute and deliver to the purchasers
thereof good and sufficient deeds of conveyance therefore, and all
assignments, transfers and other legal instruments, either necessary
or convenient for passing the title and ownership thereto, free and
discharged of all trusts and without liability on the part of such
purchasers to see to the application of the purchase money;
(d) To hold cash uninvested to the extent necessary to
pay benefits or expenses of the Plan;
(e) To follow the directions of an investment manager
appointed pursuant to Section 13.7;
(f) To cause any investment of the Trust Fund to be
registered in the name of the Trustee or the name of its nominee or
nominees or to retain such investment unregistered or in a form
permitting transfer by delivery; provided that the books and records
of the Trustee shall at all times show that all such investments are
part of the Trust Fund;
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(g) Upon written direction of or through the Employer, to
vote in person or by proxy (in accordance with Sections 13.6 and 13.10
and, in the case of stock of the Employer, at the direction of the
Employer or Participants in accordance with 13.8)on with respect to
all securities that are part of the TRUST Fund;
(h) To consult and employ any suitable agent to act on
behalf of the Trustee and to contract for legal, accounting, clerical
and other services deemed necessary by the Trustee to manage and
administer the Trust Fund according to the terms of the Plan;
(i) Upon the written direction of the Employer, to make
loans from the Trust Fund to Participants in amounts and on terms
approved by the Plan Administrator in accordance with the provisions
of the Plan; provided that the Employer shall have the sole
responsibility for computing and collecting all loan repayments
required to be made under the Plan; and
(j) To pay from the Trust Fund all taxes imposed or levied
with respect to the Trust Fund or any part thereof under existing or
future laws, and to contest the validity or amount of any tax
assessment, claim or demand respecting the Trust Fund or any part
thereof.
16.2. Limitation of Responsibilities. Except as may otherwise be
required under applicable law, neither the Trustee nor any of its agents shall
have any responsibility for:
(a) Determining the correctness of the amount of any
contribution for the sole collection or payment of contributions,
which shall be the sole responsibility of the Employer;
(b) Loss or breach caused by any Participant's exercise
of control over his Accounts, which shall be the sole responsibility
of the Participant;
(c) Loss or breach caused by the Employer's exercise of
control over Accounts pursuant to Section 13.3, which shall be THE
sole responsibility of the Employer;
(d) Performance of any other responsibilities not
specifically allocated to them under the Plan.
16.3. Fees and Expenses. The Trustee's fees for performing its
duties hereunder shall be such reasonable amounts as shall be established by
the Trustee from time to time in a fee schedule addressed to the Employer.
Such fees, any taxes of any kind which may be levied or assessed upon or in
respect of the Trust Fund and any and all expenses reasonably incurred by the
Trustee shall, unless paid by the Employer, be paid from the Trust Fund and
shall, unless
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allocable to the Accounts of specific Participants, be charged pro rata against
the Accounts of all Participants. The Trustee is expressly authorized to cause
Investment Products to be sold or redeemed for the purpose of paying such
amounts. Charges and expenses incurred in connection with a specific
Investment Product, unless allocable to the Accounts of specific Participants,
shall be charged pro rata against the Accounts of all Participants for whose
benefit amounts have been invested in the specific Investment Product.
16.4. Reliance on Employer. The Trustee and its agents shall rely
upon any decision of the Employer, or of any person authorized by the Employer,
purporting to be made pursuant to the terms of the Plan, and upon any
information or statements submitted by the Employer or such person (including
those relating to the entitlement of any Participant to benefits under the
Plan), and shall not inquire as to the basis of any such decision or
information or statements, and shall incur no obligation or liability for any
action taken or omitted in reliance thereon. The Trustee and its agents shall
be entitled to rely on the latest written instructions received from the
Employer as to the person or persons authorized to act for the Employer
hereunder, and to sign on behalf of the Employer any directions or
instructions, until receipt from the Employer of written notice that such
authority has been revoked.
16.5. Action Without Instructions. If the Trustee receives no
instructions from the Employer in response to communications sent by registered
or certified mail to the Employer at its last known address as shown on the
books of the Trustee, then the Trustee may make such determinations with
respect to administrative matters arising under the Plan as it considers
reasonable, notwithstanding any prior instructions or directions given by or on
behalf of the Employer, but subject to any instruction or direction given by or
on behalf of the Participants. To the extent permitted by applicable law, any
determination so made will be binding on all persons having or claiming any
interest under the Plan or Trust, and the Trustee will incur no obligation or
responsibility for any such determination made in good faith or for any action
taken pursuant thereto. In making any such determination the Trustee may
require that it be furnished with such relevant documents as it reasonable
considers necessary.
16.6. Advice of Counsel. The Trustee may consult with legal counsel
(who may, but need not be, counsel for the Employer) concerning any questions
which may arise with respect to its rights and duties under the Plan, and the
opinion of such counsel shall be full and complete protection to the extent
permitted by applicable law in the respect of any action taken or omitted by
the Trustee hereunder in accordance with the opinion of such counsel.
16.7. Accounts. The Trustee shall keep full accounts of all
receipts and disbursements which pertain to investments in Investment Products,
and of such other transactions as it is required to perform hereunder. Within
a reasonable time following the close of each Plan Year, or upon its removal or
resignation or upon termination of the Trust and at such other times as may be
appropriate, the Trustee shall render to the Employer and any other persons as
may be required by law an account of its administration of the Plan and Trust
during the
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period since the last previous such accounting, including such information as
may be required by law. The written approval of any account by the Employer
and all other persons to whom an account is rendered shall be final and binding
as to all matters and transactions stated or shown therein, upon the Employer
and Participants and all persons who then are or thereafter become interested
in the Trust. The failure of the Employer or any other person to whom an
account is rendered to notify the party rendering the account within 60 days
after the receipt of any account of his or its objection to the account shall
be the equivalent of written approval. If the Employer or any other person to
whom an account is rendered files any objections within such 60-day period with
respect to any matters or transactions stated or shown in the account and the
Employer or such other person and the party rendering the account cannot
amicably settle the questions raised by such objections, the party rendering
the account and the Employer or such person shall have the right to have such
questions settled by judicial proceedings, although the Employer or such other
person to whom an account is rendered shall have, to the extent permitted by
applicable law, only 60 days from filing of written objection to the account to
commence legal proceedings. Nothing herein contained shall be construed so as
to deprive the Trustee of the right to have a judicial settlement of its
accounts. In any proceeding for a judicial settlements of any account or for
instructions, the only necessary parties shall be the Trustee, the Employer and
persons to whom an account is required by law to be rendered.
16.8. Access to Records. The Trustee shall give access to its
records with respect to the Plan at reasonable times and on reasonable notice
to any person required by law to have access to such records.
16.9. Successors. Any corporation into which the Trustee may merge
or with which it may consolidate or any corporation resulting from any such
merger or consolidation shall be the successor of the Trustee without the
execution or filing of any additional instrument or the performance of any
further act.
16.10. Persons Dealing with Trustee. No person dealing with the
Trustee shall be bound to see to the application of any money or property paid
or delivered to the Trustee or to inquire into the validity or propriety of any
transactions.
16.11. Resignation and Removal: Procedure. The Trustee may resign at
any time by giving 60 days' written notice to the Employer and to Putnam. The
Employer may remove the Trustee at any time by giving 60 days' written notice
to the party removed and to Putnam. In any case of resignation or removal
hereunder, the period of notice may be reduced to such shorter period as is
satisfactory to the Trustee and the Employer. Notwithstanding anything to the
contrary herein, any resignation hereunder shall take effect at the time notice
thereof is given if the Employer may no longer participate in the prototype
Plan and is deemed to have an individually designed plan at the time notice is
given.
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16.12. Action of Trustee Following Resignation or Removal. When the
resignation or removal of the Trustee becomes effective, the Trustee shall
perform all acts necessary to transfer the Trust Fund to its successor.
However, the Trustee may reserve such portion of the Trust Fund as it may
reasonably determine to be necessary for payment of its fees and any taxes and
expenses, and any balance of such reserve remaining after payment of such fees,
taxes and expenses shall be paid over to its successor. The Trustee shall have
no responsibility for acts or omissions occurring after its resignation becomes
effective.
16.13. Effect of Resignation or Removal. Resignation or removal of
the Trustee shall not terminate the Trust. In the event of any vacancy in the
position of Trustee, whether the vacancy occurs because of the resignation or
removal of the Trustee, the Employer shall appoint a successor to fill the
vacant position. If the Employer does not appoint such a successor who accepts
appointment by the later of 60 days after notice of resignation or removal is
given or by such later date as the Trustee and Employer may agree in writing to
postpone the effective date of the Trustee's resignation or removal, the
Trustee may apply to a court of competent jurisdiction for such appointment or
cause the Trust to be terminated effective as of the date specified by the
Trustee in writing delivered to the Employer. Each successor Trustee so
appointed and accepting a trusteeship hereunder shall have all of the rights
and powers and all of the duties and obligations of the original Trustee, under
the provisions hereof, but shall have no responsibility for acts or omissions
before he becomes a Trustee.
16.14. Fiscal Year of Trust. The fiscal year of the Trust will
coincide with the Plan Year.
16.15. Limitation of Liability. Except as may otherwise be required
by law and other provisions of the Plan, no fiduciary of the Plan, within the
meaning of Section 3(21) of ERISA, shall be liable for any losses incurred with
respect to the management of the Plan, nor shall he or it be liable for any
acts or omissions except those caused by his or its own negligence or bad faith
in failing to carry out his or its duties under the terms contained in the
Plan.
16.16. Indemnification. Subject to the limitations of applicable
law, the Employer agrees to indemnify and hold harmless (i) all fiduciaries,
within the meaning of ERISA Sections 3(21) and 404, and (ii) Putnam, for all
liability occasioned by any act of such party or omission to act, in good faith
and without gross negligence, and for all expenses incurred by any such party
in determining its duty or liability under ERISA with respect to any question
under the Plan.
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ARTICLE 17. AMENDMENT
17.1. General. The Employer reserves the power at any time or times
to amend the provisions of the Plan and the Plan Agreement to any extent and in
any manner that it may deem advisable. If, however, the Employer makes any
amendment (including an amendment occasioned by a waiver of the minimum funding
requirement under Section 412(d) of the Code) other than
(a) a change in an election made in the Plan Agreement,
(b) amendments stated in the Plan Agreement which allow
the Plan to satisfy Section 415 and to avoid duplication of minimums
under Section 416 of the Code because of the required aggregation of
multiple plans, or
(c) model amendments published by the Internal Revenue
Service which specifically provide that their adoption will not cause
the Plan to be treated as individually designed,
the Employer shall cease to participate in this prototype Plan and will be
considered to have an individually designed plan. In that event, Putnam shall
have no further responsibility to provide to the Employer any amendments or
other material incident to the prototype plan, and Putnam may resign
immediately as Trustee and as Recordkeeper. Any amendment shall be made by
delivery to the Trustee (and the Recordkeeper, if any) of a written instrument
executed by the Employer providing for such amendment. Upon the delivery of
such instrument to the Trustee, such instrument shall become effective in
accordance with its terms as to all Participants and all persons having or
claiming any interest hereunder, provided, that the Employer shall not have the
power:
(1) to amend the Plan in such a manner as would
cause or permit any part of the assets of the Trust to be
diverted to purposes other than the exclusive benefit of
Participants or their Beneficiaries, or as would cause or
permit any portion of such assets to revert to or become the
property of the Employer.
(2) to amend the Plan retroactively in such a
manner as would have the effect of decreasing a Participant's
accrued benefit, except that a Participant's Account balance
may be reduced to the extent permitted under Section 412(c)(8)
of the Code. For purposes of this paragraph (2), an amendment
shall be treated as reducing a Participant's accrued benefit
if it has the effect of reducing his Account balance, or of
eliminating an optional form of benefit with respect to
amounts attributable to contributions made performed before
the adoption of the amendment; or
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(3) to amend the Plan so as to decrease the
portion of a Participant's Account balance that has become
vested, as compared to the portion that was vested, under the
terms of the Plan without regard to the amendment, as of the
later of the date the amendment is adopted or the date it
becomes effective.
(4) to amend the Plan in such a manner as would
increase the duties or liabilities of the Trustee or the
Recordkeeper unless the Trustee or the Recordkeeper consents
thereto in writing.
17.2. Delegation of Amendment Power. The Employer and all
sponsoring organizations of the Putnam Basic Plan Document delegate to Putnam
Mutual Funds Corp., the power to amend the Plan (including the power to amend
this Section 17.2 to name a successor to which such power of amendment shall be
delegated), for the purpose of adopting amendments which are certified to
Putnam Mutual Funds Corp., by counsel satisfactory to it, as necessary or
appropriate under applicable law, including any regulation or ruling issued by
the United States Treasury Department or any other federal or state department
or agency; provided that Putnam Mutual Funds Corp., or such successor may amend
the Plan only if it has mailed a copy of the proposed amendment to the Employer
at its last known address as shown on its books by the date on which it
delivers a written instrument providing for such amendment, and only if the
same amendment is made on said date to all plans in this form as to which
Putnam Mutual Funds Corp., or such successor has a similar power of amendment.
If a sponsoring organization does not adopt any amendment made by Putnam Mutual
Funds Corp., such sponsoring organization shall cease to participate in this
prototype Plan and will be considered to have an individually designed plan.
If, upon the submission of this Putnam Basic Plan Document #06 to the Internal
Revenue Service for a determination letter, the Internal Revenue Service
determines that changes are required to the Basic Plan Document but not to the
form of Plan Agreement, Putnam shall furnish a copy of the revised Basic Plan
Document to the Employer and the Employer will not be required to execute a
revised Plan Agreement.
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ARTICLE 18. TERMINATION OF THE PLAN AND TRUST
18.1. General. The Employer has established the plan and the Trust
with the bona fide intention and expectation that contributions will be
continued indefinitely, but the Employer shall have no obligation or liability
whatsoever to maintain the Plan for any given length of time and may
discontinue contributions under the Plan or terminate the Plan at any time by
written notice delivered to the Trustee, without any liability whatsoever for
any such discontinuance or termination.
18.2. Events of Termination. The Plan will terminate upon the
happening of any of the following events:
(a) Death of the Employer, if a sole proprietor, or
dissolution or termination of the Employer, unless within 60 days
thereafter provision is made by the successor to the business with
respect to which the Plan was established for the continuation of the
Plan, and such continuation is approved by the Trustee;
(b) Merger, consolidation or reorganization of the
Employer 'into one or more corporations or organizations, unless the
surviving corporations or organizations adopt the Plan by an
instrument in writing delivered to the Trustee within 60 days after
such a merger, consolidation and reorganization;
(c) Sale of all or substantially all of the assets of the
Employer, unless the purchaser adopts the Plan by an instrument in
writing delivered to the Trustee within 60 days after the sale;
(d) The institution of bankruptcy proceedings by or
against the Employer, or a general assignment by the Employer to or
for the benefit of its creditors; or
(e) Delivery of notice of termination as provided in
Section 18.1.
18.3. Effect of Termination. Notwithstanding any other provisions
of this Plan, other than Section 18.4, upon termination of the Plan or complete
discontinuance of contributions thereunder, each Participant's Accounts will
become fully vested and nonforfeitable, and upon partial termination of the
Plan, the Accounts of each Participant affected by the partial termination will
become fully vested and nonforfeitable. The Employer shall notify the Trustee
in writing of such termination, partial termination or complete discontinuance
of contributions. In the event of the complete termination of the Plan or
discontinuance of contributions, the Trustee will, after payment of all
expenses of the Trust Fund, make distribution of the Trust assets to the
Participants or other persons entitled thereto, in such form as the Employer
may direct pursuant to Article 10 or, in the absence of such direction, in a
single payment in cash or in kind. Upon completion of such distributions under
this Article,
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the Trust win terminate, the Trustee will be relieved from its obligations
under the Trust, and no Participant or other person will have any further claim
thereunder.
18.4. Approval of Plan. Notwithstanding any other provision of the
Plan, if the Employer fails to obtain or to retain the approval by the Internal
Revenue Service of the Plan as a qualified plan under Section 401 (a) of the
Code, then (i) the Employer shall promptly notify the Trustee, and (ii) the
Employer may no longer participate in the Putnam prototype plan, but will be
deemed to have an individually designed plan. If it is determined by the
Internal Revenue Service that the Plan upon its initial adoption does not
qualify under Section 401 (a) of the Code, all assets then held under the Plan
will be returned within one year of the denial of initial qualification to the
Participants and the Employer to the extent attributable to their respective
contributions and any income earned thereon, but only if the application for
qualification is made by the time prescribed by law for filing the Employer's
federal income tax return for the taxable year in which the Plan is adopted, or
such later date as the Secretary of the Treasury may prescribe. Upon such
distribution, the Plan will be considered to be rescinded and to be of no force
or effect.
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ARTICLE 19. TRANSFERS TO OR FROM OTHER QUALIFIED PLANS; MERGERS
19.1. General. Notwithstanding any other provision hereof, subject
to the approval of the Trustee there may be transferred to the Trustee all or
any of the assets held (whether by a trustee, custodian or otherwise) in
respect of any other plan which satisfies the applicable requirements of
Section 401 (a) of the Code and which is maintained for the benefit of any
Employee (provided, however, that the Employee is not a member of a class of
Employees excluded from eligibility to participate in the Plan). Any such
assets so transferred shall be accompanied by written instructions from the
Employer naming the persons for whose benefit such assets have been transferred
and showing separately the respective contributions made by the Employer and by
the Participants and the current value of the assets attributable thereto.
Notwithstanding the foregoing, if a Participant's employment classification
changes under Section 3.4 such that he begins participation in another plan of
the Employer, his Account, if any, shall, upon the Administrator's direction,
be transferred to the plan in which he has become eligible to participate, if
such plan permits receipt of such Account.
19.2. Amounts Transferred. The Employer shall credit any assets
transferred pursuant to Section 19.1 or Section 3.4 to the appropriate Accounts
of THE persons for whose benefit such assets have been transferred. Any
amounts credited as contributions previously made by an employer or by such
persons under such other plan shall be treated as contributions previously made
under the Plan by the Employer or by such persons, as the case may be.
19.3. Merger or Consolidation. The Plan shall not be merged or
consolidated with any other plan, nor shall any assets or liabilities of the
Trust Fund be transferred to any other plan, unless each Participant would
receive a benefit immediately after the transaction, if the Plan then
terminated, which is equal to or greater than the benefit he would have been
entitled to receive immediately before the transaction if the Plan had then
terminated.
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ARTICLE 20. MISCELLANEOUS
20.1. Notice of Plan. The Plan shall be communicated to all
Participants by the Employer on or before the last day on which such
communication may be made under applicable law.
20.2. No Employment Rights. Neither the establishment of the Plan
and the Trust, nor any amendment thereof, nor the creation of any fund or
account, nor the payment of any benefits shall be construed as giving to any
Participant or any other person any legal or equitable right against the
Employer, or the Trustee, except as provided herein or by ERISA; and in no
event shall the terms of employment or service of any Participant be modified
or in any way be affected hereby.
20.3. Distributions Exclusively From Plan. Participants and
Beneficiaries shall look solely to the assets held in the Trust purchased
pursuant to the Plan for the payment of any benefits under the Plan.
20.4. No Alienation. The benefits provided hereunder shall not be
subject to alienation, assignment, garnishment, attachment, execution or levy
of any kind, and any attempt to cause such benefits to be so subjected shall
not be recognized, except as provided in Section 12.4 or in accordance with a
Qualified Domestic Relations Order. The Plan Administrator shall determine
whether a domestic relations order is qualified in accordance with written
procedures adopted by the Plan Administrator. Notwithstanding the foregoing,
an order shall not fail to be a Qualified Domestic Relations Order merely
because it requires a distribution to an alternate payee (or the segregation of
accounts pending distribution to an alternate payee) before the Participant is
otherwise entitled to a distribution under the Plan.
20.5. Provision of Information. The Employer and the Trustee shall
furnish to each other such information relating to the Plan and Trust as may be
required under the Code or ERISA and any regulations issued or forms adopted by
the Treasury Department or the Labor Department or otherwise thereunder.
20.6. No Prohibited Transactions. The Employer and the Trustee
shall, to the extent of their respective powers and authority under the Plan,
prevent the Plan from engaging in any transaction known by that person to
constitute a transaction prohibited by Section 4975 of the Code and any rules
or regulations with respect thereto.
20.7. Governing Law. The Plan shall be construed, administered,
regulated and governed in all respects under and by the laws of the United
States, and to the extent permitted by such laws, by the laws of the
Commonwealth of Massachusetts
20.8. Gender. Whenever used herein, a pronoun in the masculine
gender includes the feminine gender unless the context clearly indicates
otherwise.
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Dates Referenced Herein
| Referenced-On Page |
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This ‘S-4’ Filing | | Date | | First | | Last | | | Other Filings |
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| | |
Filed on: | | 6/24/96 | | | | | | | None on these Dates |
| | 12/31/93 | | 25 |
| | 1/1/93 | | 64 |
| List all Filings |
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