Amendment to Registration of Securities (General Form) — Form 10
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-12B/A Form 10 73 387K
2: EX-3.2 Articles of Amendment and Restatement 9 20K
3: EX-3.4 Bylaws 22 80K
8: EX-10.10 Supplemental Retirement Plan 16 32K
4: EX-10.5 Trademark License Agreement 16 38K
5: EX-10.6 1997 Stock Option Plan 14 59K
6: EX-10.8 Stock Option Reformation Agreement 8 27K
7: EX-10.9 Retirement and Profit Sharing Plan 95 300K
9: EX-22 List of Subsidiaries 1 5K
10: EX-99.1 Consent 1 6K
EXHIBIT 10.9
GETTY PETROLEUM MARKETING INC. RETIREMENT AND PROFIT SHARING PLAN
AND ALL SUPPORTING FORMS HAVE BEEN PRODUCED FOR
MARKLEY ACTUARIAL SERVICES, INC.
Copyright 1995 Corbel
All Rights Reserved
GETTY PETROLEUM MARKETING INC. RETIREMENT AND PROFIT SHARING PLAN
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.2 DETERMINATION OF TOP HEAVY STATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.7 RECORDS AND REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.8 APPOINTMENT OF ADVISERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.9 INFORMATION FROM EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.10 PAYMENT OF EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.11 MAJORITY ACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.12 CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.13 CLAIMS REVIEW PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.2 APPLICATION FOR PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.3 EFFECTIVE DATE OF PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.4 DETERMINATION OF ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.5 TERMINATION OF ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.6 OMISSION OF ELIGIBLE EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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3.7 INCLUSION OF INELIGIBLE EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.8 ELECTION NOT TO PARTICIPATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS . . . . . . . . . . . . . . . . . . . . . . . 34
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS . . . . . . . . . . . . . . . . . . . . . . . . 47
4.9 MAXIMUM ANNUAL ADDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.11 TRANSFERS FROM QUALIFIED PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.12 DIRECTED INVESTMENT ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.2 METHOD OF VALUATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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6.2 DETERMINATION OF BENEFITS UPON DEATH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.3 DISABILITY RETIREMENT BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
6.4 DETERMINATION OF BENEFITS UPON TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
6.5 DISTRIBUTION OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.6 DISTRIBUTION OF BENEFITS UPON DEATH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.7 TIME OF SEGREGATION OR DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.8 DISTRIBUTION FOR MINOR BENEFICIARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.10 ADVANCE DISTRIBUTION FOR HARDSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.11 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . 74
6.12 DIRECT ROLLOVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
7.2 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
7.3 MERGER OR CONSOLIDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
7.4 LOANS TO PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
ARTICLE VIII
MISCELLANEOUS
8.1 PARTICIPANT'S RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
8.2 ALIENATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
8.3 CONSTRUCTION OF PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
8.4 GENDER AND NUMBER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
8.5 LEGAL ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
8.6 PROHIBITION AGAINST DIVERSION OF FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
8.7 BONDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
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8.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
8.9 INSURER'S PROTECTIVE CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
8.10 RECEIPT AND RELEASE FOR PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
8.11 ACTION BY THE EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
8.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY . . . . . . . . . . . . . . . . . . . . . . . . 83
8.13 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
8.14 APPROVAL BY INTERNAL REVENUE SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
8.15 UNIFORMITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
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GETTY PETROLEUM MARKETING INC. RETIREMENT AND PROFIT SHARING PLAN
THIS PLAN, hereby adopted this ___________________ day of
_________________________, 19____, by Getty Petroleum Marketing Inc. (herein
referred to as the "Employer").
W I T N E S S E T H:
WHEREAS, the Employer desires to recognize the contribution
made to its successful operation by its employees and to reward such
contribution by means of a 401(k) Profit Sharing Plan for those employees who
shall qualify as Participants hereunder;
NOW, THEREFORE, effective February 1, 1997, (hereinafter
called the "Effective Date"), the Employer hereby establishes a Profit Sharing
Plan (the "Plan") for the exclusive benefit of the Participants and their
Beneficiaries, on the following terms:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
1.2 "Administrator" means the person or entity designated by the
Employer pursuant to Section 2.4 to administer the Plan on behalf of the
Employer.
1.3 "Affiliated Employer" means any corporation which is a member
of a controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated)
which is under common control (as defined in Code Section 414(c)) with the
Employer; any organization (whether or not incorporated) which is a member of
an affiliated service group (as defined in Code Section 414(m)) which includes
the Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each Participant,
the value of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions, subject to the provisions
of Section 2.2.
1.5 "Anniversary Date" means December 31.
1.6 "Beneficiary" means the person to whom the share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
6.2 and 6.6.
1.7 "Code" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
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1.8 "Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments
of compensation by the Employer (in the course of the Employer's trade or
business) for a Plan Year for which the Employer is required to furnish the
Participant a written statement under Code Sections 6041(d), 6051(a)(3) and
6052. Compensation must be determined without regard to any rules under Code
Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)).
For purposes of this Section, the determination of
Compensation shall be made by:
(a) including amounts which are contributed by
the Employer pursuant to a salary reduction agreement and
which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3), 402(h)(1)(B),
403(b) or 457, and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
For a Participant's initial year of participation,
Compensation shall be recognized for the entire Plan Year.
Compensation in excess of $200,000 shall be disregarded. Such
amount shall be adjusted at the same time and in such manner as permitted under
Code Section 415(d), except that the dollar increase in effect on January 1 of
any calendar year shall be effective for the Plan Year beginning with or within
such calendar year and the first adjustment to the $200,000 limitation shall be
effective on January 1, 1990. For any short Plan Year the Compensation limit
shall be an amount equal to the Compensation limit for the calendar year in
which the Plan Year begins multiplied by the ratio obtained by dividing the
number of full months in the short Plan Year by twelve (12). In applying this
limitation, the family group of a Highly Compensated Participant who is subject
to the Family Member aggregation rules of Code Section 414(q)(6) because such
Participant is either a "five percent owner" of the Employer or one of the ten
(10) Highly Compensated Employees paid the greatest "415 Compensation" during
the year, shall be treated as a single Participant, except that for this
purpose Family Members shall include only the affected Participant's spouse and
any lineal descendants who have not attained age nineteen (19) before the close
of the year. If, as a result of the application of such rules the adjusted
$200,000 limitation is exceeded, then the limitation shall be prorated among
the affected Family Members in proportion to each such Family Member's
Compensation prior to the application of this limitation, or the limitation
shall be adjusted in accordance with any other method permitted by Regulation.
However, for purposes of Section 4.4(b), the preceding sentence shall not apply
in determining the portion of
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the Compensation of a Participant which is below Excess Compensation.
In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual Compensation of
each Employee taken into account under the Plan shall not exceed the OBRA '93
annual compensation limit. The OBRA '93 annual compensation limit is $150,000,
as adjusted by the Commissioner for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). The cost of living adjustment in
effect for a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 12 months, the
OBRA '93 annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and the
denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under Code Section 401(a)(17) shall
mean the OBRA '93 annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken
into account in determining an Employee's benefits accruing in the current Plan
Year, the Compensation for that prior determination period is subject to the
OBRA '93 annual compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning before the first
day of the first Plan Year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.
If, as a result of such rules, the maximum "annual addition"
limit of Section 4.9(a) would be exceeded for one or more of the affected
Family Members, the prorated Compensation of all affected Family Members shall
be adjusted to avoid or reduce any excess. The prorated Compensation of any
affected Family Member whose allocation would exceed the limit shall be
adjusted downward to the level needed to provide an allocation equal to such
limit. The prorated Compensation of affected Family Members not affected by
such limit shall then be adjusted upward on a pro rata basis not to exceed each
such affected Family Member's Compensation as determined prior to application
of the Family Member rule. The resulting allocation shall not exceed such
individual's maximum "annual addition" limit. If, after these adjustments, an
"excess amount" still results, such "excess amount" shall be disposed of in the
manner described in Section 4.10(a) pro rata among all affected Family Members.
1.9 "Contract" or "Policy" means any life insurance policy,
retirement income or annuity policy, or annuity contract (group or individual)
issued pursuant to the terms of the Plan.
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1.10 "Deferred Compensation" with respect to any Participant means
the amount of the Participant's total Compensation which has been contributed
to the Plan in accordance with the Participant's deferral election pursuant to
Section 4.2 excluding any such amounts distributed as excess "annual additions"
pursuant to Section 4.10(a).
1.11 "Early Retirement Date" means the first day of the month
(prior to the Normal Retirement Date) coinciding with or following the date on
which a Participant or Former Participant attains age 55 and has completed at
least 6 Years of Service with the Employer (Early Retirement Age). A
Participant shall become fully Vested upon satisfying this requirement if still
employed at his Early Retirement Age.
A Former Participant who terminates employment after
satisfying the service requirement for Early Retirement and who thereafter
reaches the age requirement contained herein shall be entitled to receive his
benefits under this Plan.
1.12 "Elective Contribution" means the Employer's contributions to
the Plan of Deferred Compensation excluding any such amounts distributed as
excess "annual additions" pursuant to Section 4.10(a). In addition, any
Employer Qualified Non-Elective Contribution made pursuant to Section 4.6 shall
be considered an Elective Contribution for purposes of the Plan. Any such
contributions deemed to be Elective Contributions shall be subject to the
requirements of Sections 4.2(b) and 4.2(c) and shall further be required to
satisfy the discrimination requirements of Regulation 1.401(k)-1(b)(5), the
provisions of which are specifically incorporated herein by reference.
1.13 "Eligible Employee" means any Employee.
Employees whose employment is governed by the terms of a
collective bargaining agreement between Employee representatives (within the
meaning of Code Section 7701(a)(46)) and the Employer under which retirement
benefits were the subject of good faith bargaining between the parties will not
be eligible to participate in this Plan unless such agreement expressly
provides for coverage in this Plan or two percent or more of the Employees of
the Employer who are covered pursuant to that agreement are professionals as
defined in Regulation 1.410(b)-9.
Employees of Affiliated Employers shall not be eligible to
participate in this Plan unless such Affiliated Employers have specifically
adopted this Plan in writing.
1.14 "Employee" means any person who is employed by the Employer or
Affiliated Employer, but excludes any person who is an independent contractor.
Employee shall include Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and such Leased Employees do
4
not constitute more than 20% of the recipient's non-highly compensated work
force.
1.15 "Employer" means Getty Petroleum Marketing Inc. and any
successor which shall maintain this Plan; and any predecessor which has
maintained this Plan. The Employer is a corporation, with principal offices in
the State of New York.
1.16 "Excess Aggregate Contributions" means, with respect to any
Plan Year, the excess of the aggregate amount of the Employer matching
contributions made pursuant to Section 4.1(b) and any qualified non-elective
contributions or elective deferrals taken into account pursuant to Section
4.7(c) on behalf of Highly Compensated Participants for such Plan Year, over
the maximum amount of such contributions permitted under the limitations of
Section 4.7(a).
1.17 "Excess Compensation" with respect to any Participant means
the Participant's Compensation which is in excess of the Taxable Wage Base. For
any short year, the Taxable Wage Base shall be reduced by a fraction, the
numerator of which is the number of full months in the short year and the
denominator of which is twelve (12).
1.18 "Excess Contributions" means, with respect to a Plan Year, the
excess of Elective Contributions made on behalf of Highly Compensated
Participants for the Plan Year over the maximum amount of such contributions
permitted under Section 4.5(a). Excess Contributions shall be treated as an
"annual addition" pursuant to Section 4.9(b).
1.19 "Excess Deferred Compensation" means, with respect to any
taxable year of a Participant, the excess of the aggregate amount of such
Participant's Deferred Compensation and the elective deferrals pursuant to
Section 4.2(f) actually made on behalf of such Participant for such taxable
year, over the dollar limitation provided for in Code Section 402(g), which is
incorporated herein by reference. Excess Deferred Compensation shall be treated
as an "annual addition" pursuant to Section 4.9(b) when contributed to the Plan
unless distributed to the affected Participant not later than the first April
15th following the close of the Participant's taxable year. Additionally, for
purposes of Sections 2.2 and 4.4(g), Excess Deferred Compensation shall
continue to be treated as Employer contributions even if distributed pursuant
to Section 4.2(f). However, Excess Deferred Compensation of Non-Highly
Compensated Participants is not taken into account for purposes of Section
4.5(a) to the extent such Excess Deferred Compensation occurs pursuant to
Section 4.2(d).
1.20 "Family Member" means, with respect to an affected
Participant, such Participant's spouse and such Participant's lineal
descendants and ascendants and their spouses, all as described in Code Section
414(q)(6)(B).
5
1.21 "Fiduciary" means any person who (a) exercises any
discretionary authority or discretionary control respecting management of the
Plan or exercises any authority or control respecting management or disposition
of its assets, (b) renders investment advice for a fee or other compensation,
direct or indirect, with respect to any monies or other property of the Plan or
has any authority or responsibility to do so, or (c) has any discretionary
authority or discretionary responsibility in the administration of the Plan,
including, but not limited to, the Trustee, the Employer and its representative
body, and the Administrator.
1.22 "Fiscal Year" means the Employer's accounting year of 12
months commencing on February 1st of each year and ending the following January
31st.
1.23 "Forfeiture" means that portion of a Participant's Account
that is not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion
of a Terminated Participant's Account, or
(b) the last day of the Plan Year in which the
Participant incurs five (5) consecutive 1-Year Breaks in
Service.
Furthermore, for purposes of paragraph (a) above, in the case
of a Terminated Participant whose Vested benefit is zero, such Terminated
Participant shall be deemed to have received a distribution of his Vested
benefit upon his termination of employment. Restoration of such amounts shall
occur pursuant to Section 6.4(e)(2). In addition, the term Forfeiture shall
also include amounts deemed to be Forfeitures pursuant to any other provision
of this Plan.
1.24 "Former Participant" means a person who has been a
Participant, but who has ceased to be a Participant for any reason.
1.25 "415 Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments
of compensation by the Employer (in the course of the Employer's trade or
business) for a Plan Year for which the Employer is required to furnish the
Participant a written statement under Code Sections 6041(d), 6051(a)(3) and
6052. "415 Compensation" must be determined without regard to any rules under
Code Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)).
1.26 "414(s) Compensation" with respect to any Participant means
such Participant's "415 Compensation" paid during a Plan Year. The amount of
"414(s) Compensation" with respect to any
6
Participant shall include "414(s) Compensation" for the entire twelve (12)
month period ending on the last day of such Plan Year.
For purposes of this Section, the determination of "414(s)
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457, and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
"414(s) Compensation" in excess of $200,000 shall be
disregarded. Such amount shall be adjusted at the same time and in such manner
as permitted under Code Section 415(d), except that the dollar increase in
effect on January 1 of any calendar year shall be effective for the Plan Year
beginning with or within such calendar year and the first adjustment to the
$200,000 limitation shall be effective on January 1, 1990. For any short Plan
Year the "414(s) Compensation" limit shall be an amount equal to the "414(s)
Compensation" limit for the calendar year in which the Plan Year begins
multiplied by the ratio obtained by dividing the number of full months in the
short Plan Year by twelve (12). In applying this limitation, the family group
of a Highly Compensated Participant who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Participant is either
a "five percent owner" of the Employer or one of the ten (10) Highly
Compensated Employees paid the greatest "415 Compensation" during the year,
shall be treated as a single Participant, except that for this purpose Family
Members shall include only the affected Participant's spouse and any lineal
descendants who have not attained age nineteen (19) before the close of the
year.
In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual Compensation of
each Employee taken into account under the Plan shall not exceed the OBRA '93
annual compensation limit. The OBRA '93 annual compensation limit is $150,000,
as adjusted by the Commissioner for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). The cost of living adjustment in
effect for a calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 12 months, the
OBRA '93 annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and the
denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under Code Section 401(a)(17) shall
mean the OBRA '93 annual compensation limit set forth in this provision.
7
If Compensation for any prior determination period is taken
into account in determining an Employee's benefits accruing in the current Plan
Year, the Compensation for that prior determination period is subject to the
OBRA '93 annual compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning before the first
day of the first Plan Year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.
1.27 "Highly Compensated Employee" means an Employee described in
Code Section 414(q) and the Regulations thereunder, and generally means an
Employee who performed services for the Employer during the "determination
year" and is in one or more of the following groups:
(a) Employees who at any time during the
"determination year" or "look-back year" were "five percent
owners" as defined in Section 1.33(c).
(b) Employees who received "415 Compensation"
during the "look-back year" from the Employer in excess of
$75,000.
(c) Employees who received "415 Compensation"
during the "look-back year" from the Employer in excess of
$50,000 and were in the Top Paid Group of Employees for the
Plan Year.
(d) Employees who during the "look-back year"
were officers of the Employer (as that term is defined within
the meaning of the Regulations under Code Section 416) and
received "415 Compensation" during the "look-back year" from
the Employer greater than 50 percent of the limit in effect
under Code Section 415(b)(1)(A) for any such Plan Year. The
number of officers shall be limited to the lesser of (i) 50
employees; or (ii) the greater of 3 employees or 10 percent of
all employees. For the purpose of determining the number of
officers, Employees described in Section 1.59(a), (b), (c) and
(d) shall be excluded, but such Employees shall still be
considered for the purpose of identifying the particular
Employees who are officers. If the Employer does not have at
least one officer whose annual "415 Compensation" is in excess
of 50 percent of the Code Section 415(b)(1)(A) limit, then the
highest paid officer of the Employer will be treated as a
Highly Compensated Employee.
(e) Employees who are in the group consisting of
the 100 Employees paid the greatest "415 Compensation" during
the "determination year" and are also described in (b), (c) or
(d) above when these paragraphs are modified to substitute
"determination year" for "look-back year."
8
The "determination year" shall be the Plan Year for which
testing is being performed, and the "look-back year" shall be the immediately
preceding twelve-month period.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457, and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions. Additionally, the
dollar threshold amounts specified in (b) and (c) above shall be adjusted at
such time and in such manner as is provided in Regulations. In the case of such
an adjustment, the dollar limits which shall be applied are those for the
calendar year in which the "determination year" or "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees
who are non-resident aliens and who received no earned income (within the
meaning of Code Section 911(d)(2)) from the Employer constituting United States
source income within the meaning of Code Section 861(a)(3) shall not be treated
as Employees. Additionally, all Affiliated Employers shall be taken into
account as a single employer and Leased Employees within the meaning of Code
Sections 414(n)(2) and 414(o)(2) shall be considered Employees unless such
Leased Employees are covered by a plan described in Code Section 414(n)(5) and
are not covered in any qualified plan maintained by the Employer. The exclusion
of Leased Employees for this purpose shall be applied on a uniform and
consistent basis for all of the Employer's retirement plans. Highly Compensated
Former Employees shall be treated as Highly Compensated Employees without
regard to whether they performed services during the "determination year."
1.28 "Highly Compensated Former Employee" means a former Employee
who had a separation year prior to the "determination year" and was a Highly
Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. Notwithstanding the foregoing, an
Employee who separated from service prior to 1987 will be treated as a Highly
Compensated Former Employee only if during the separation year (or year
preceding the separation year) or any year after the Employee attains age 55
(or the last year ending before the Employee's 55th birthday), the Employee
either received "415 Compensation" in excess of $50,000 or was a "five percent
owner." For purposes of this Section, "determination year," "415 Compensation"
and "five percent owner" shall be determined in accordance with Section 1.27.
Highly Compensated Former Employees shall be treated as Highly Compensated
Employees. The method set forth in this Section for determining who is a
"Highly Compensated Former Employee" shall be applied on a uniform and
consistent basis for all purposes for which the Code Section 414(q) definition
is applicable.
9
1.29 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
1.30 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties during the applicable computation period; (2)
each hour for which an Employee is directly or indirectly compensated or
entitled to compensation by the Employer (irrespective of whether the
employment relationship has terminated) for reasons other than performance of
duties (such as vacation, holidays, sickness, jury duty, disability, lay-off,
military duty or leave of absence) during the applicable computation period;
(3) each hour for which back pay is awarded or agreed to by the Employer
without regard to mitigation of damages. These hours will be credited to the
Employee for the computation period or periods to which the award or agreement
pertains rather than the computation period in which the award, agreement or
payment is made. The same Hours of Service shall not be credited both under (1)
or (2), as the case may be, and under (3).
1.31 "Income" means the income or losses allocable to "excess
amounts" which shall equal the allocable gain or loss for the "applicable
computation period". The income allocable to "excess amounts" for the
"applicable computation period" is determined by multiplying the income for the
"applicable computation period" by a fraction. The numerator of the fraction is
the "excess amount" for the "applicable computation period." The denominator of
the fraction is the total "account balance" attributable to "Employer
contributions" as of the end of the "applicable computation period", reduced by
the gain allocable to such total amount for the "applicable computation period"
and increased by the loss allocable to such total amount for the "applicable
computation period". The provisions of this Section shall be applied:
(a) For purposes of Section 4.2(f), by substituting:
(1) "Excess Deferred Compensation" for "excess amounts";
(2) "taxable year of the Participant" for "applicable
computation period";
(3) "Deferred Compensation" for "Employer contributions"; and
(4) "Participant's Elective Account" for "account balance."
(b) For purposes of Section 4.6(a), by substituting:
10
(1) "Excess Contributions" for "excess amounts";
(2) "Plan Year" for "applicable computation period";
(3) "Elective Contributions" for "Employer
contributions"; and
(4) "Participant's Elective Account" for "account
balance."
(c) For purposes of Section 4.8(a), by substituting:
(1) "Excess Aggregate Contributions" for "excess
amounts;"
(2) "Plan Year" for "applicable computation period;"
(3) "Employer matching contributions made pursuant to
Section 4.1(b) and any qualified non-elective
contributions or elective deferrals taken into account
pursuant to Section 4.7(c)" for "Employer contributions;"
and
(4) "Participant's Account" for "account balance."
Income allocable to any distribution of Excess Deferred
Compensation on or before the last day of the taxable year of the Participant
shall be calculated from the first day of the taxable year of the Participant
to the date on which the distribution is made pursuant to either the
"fractional method" or the "safe harbor method." Under such "safe harbor
method," allocable Income for such period shall be deemed to equal ten percent
(10%) of the Income allocable to such Excess Deferred Compensation multiplied
by the number of calendar months in such period. For purposes of determining
the number of calendar months in such period, a distribution occurring on or
before the fifteenth day of the month shall be treated as having been made on
the last day of the preceding month and a distribution occurring after such
fifteenth day shall be treated as having been made on the first day of the next
subsequent month.
1.32 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.33 "Key Employee" means an Employee as defined in Code Section
416(i) and the Regulations thereunder. Generally, any
11
Employee or former Employee (as well as each of his Beneficiaries) is
considered a Key Employee if he, at any time during the Plan Year that contains
the "Determination Date" or any of the preceding four (4) Plan Years, has been
included in one of the following categories:
(a) an officer of the Employer (as that term is
defined within the meaning of the Regulations under Code
Section 416) having annual "415 Compensation" greater than 50
percent of the amount in effect under Code Section
415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415
Compensation" from the Employer for a Plan Year greater than
the dollar limitation in effect under Code Section
415(c)(1)(A) for the calendar year in which such Plan Year
ends and owning (or considered as owning within the meaning of
Code Section 318) both more than one-half percent interest and
the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five
percent owner" means any person who owns (or is considered as
owning within the meaning of Code Section 318) more than five
percent (5%) of the outstanding stock of the Employer or stock
possessing more than five percent (5%) of the total combined
voting power of all stock of the Employer or, in the case of
an unincorporated business, any person who owns more than five
percent (5%) of the capital or profits interest in the
Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate
employers.
(d) a "one percent owner" of the Employer having
an annual "415 Compensation" from the Employer of more than
$150,000. "One percent owner" means any person who owns (or is
considered as owning within the meaning of Code Section 318)
more than one percent (1%) of the outstanding stock of the
Employer or stock possessing more than one percent (1%) of the
total combined voting power of all stock of the Employer or,
in the case of an unincorporated business, any person who owns
more than one percent (1%) of the capital or profits interest
in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under
Code Sections 414(b), (c), (m) and (o) shall be treated as
separate employers. However, in determining whether an
individual has "415 Compensation" of more than $150,000, "415
Compensation" from each employer required to be aggregated
under Code Sections 414(b), (c), (m) and (o) shall be taken
into account.
12
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457, and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
1.34 "Late Retirement Date" means the first day of the month
coinciding with or next following a Participant's actual Retirement Date after
having reached his Normal Retirement Date.
1.35 "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 Code
Section 414(n)(6)) 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. Contributions or benefits
provided a Leased Employee by the leasing organization which are attributable
to services performed for the recipient employer shall be treated as provided
by the recipient employer. A Leased Employee shall not be considered an
Employee of the recipient:
(a) if such employee is covered by a money
purchase pension plan providing:
(1) a non-integrated employer contribution rate
of at least 10% of compensation, as defined in Code
Section 415(c)(3), but including amounts which are
contributed by the Employer pursuant to a salary
reduction agreement and which are not includible in
the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457,
and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
(2) immediate participation; and
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more
than 20% of the recipient's non-highly compensated work force.
1.36 "Month of Service" means a calendar month during any part of
which an Employee completed an Hour of Service. Except, however, a Participant
shall be credited with a Month of Service for each month during the 12 month
computation period in which he has not incurred a 1-Year Break in Service.
13
1.37 "Non-Elective Contribution" means the Employer's contributions
to the Plan excluding, however, contributions made pursuant to the
Participant's deferral election provided for in Section 4.2 and any Qualified
Non-Elective Contribution.
1.38 "Non-Highly Compensated Participant" means any Participant who
is neither a Highly Compensated Employee nor a Family Member.
1.39 "Non-Key Employee" means any Employee or former Employee (and
his Beneficiaries) who is not a Key Employee.
1.40 "Normal Retirement Age" means the Participant's 65 birthday,
or his 5th anniversary of joining the Plan, if later. A Participant shall
become fully Vested in his Participant's Account upon attaining his Normal
Retirement Age.
1.41 "Normal Retirement Date" means the first day of the month
coinciding with or next following the Participant's Normal Retirement Age.
1.42 "1-Year Break in Service" means the applicable computation
period of 12 consecutive months during which an Employee fails to accrue a
Month of Service. Further, solely for the purpose of determining whether a
Participant has incurred a 1-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and paternity
leaves of absence." Years of Service and 1-Year Breaks in Service shall be
measured on the same computation period.
An Employee shall not be deemed to have incurred a 1-Year
Break in Service if he completes an Hour of Service within 12 months following
the last day of the month during which his employment terminated.
"Authorized leave of absence" means an unpaid, temporary
cessation from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
A "maternity or paternity leave of absence" means, for Plan
Years beginning after December 31, 1984, an absence from work for any period by
reason of the Employee's pregnancy, birth of the Employee's child, placement of
a child with the Employee in connection with the adoption of such child, or any
absence for the purpose of caring for such child for a period immediately
following such birth or placement. For this purpose, Hours of Service shall be
credited for the computation period in which the absence from work begins, only
if credit therefore is necessary to prevent the Employee from incurring a
1-Year Break in Service, or, in any other case, in the immediately following
computation period.
14
1.43 "Participant" means any Eligible Employee who participates in
the Plan as provided in Sections 3.2 and 3.3, and has not for any reason become
ineligible to participate further in the Plan.
1.44 "Participant's Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer's Non-Elective
Contributions.
A separate accounting shall be maintained with respect to that
portion of the Participant's Account attributable to Employer matching
contributions made pursuant to Section 4.1(b) and Employer discretionary
contributions made pursuant to Section 4.1(c).
1.45 "Participant's Combined Account" means the total aggregate
amount of each Participant's Elective Account and Participant's Account.
1.46 "Participant's Elective Account" means the account established
and maintained by the Administrator for each Participant with respect to his
total interest in the Plan and Trust resulting from the Employer's Elective
Contributions. A separate accounting shall be maintained with respect to that
portion of the Participant's Elective Account attributable to Elective
Contributions pursuant to Section 4.2 and any Employer Qualified Non-Elective
Contributions.
1.47 "Plan" means this instrument, including all amendments
thereto.
1.48 "Plan Year" means the Plan's accounting year of twelve (12)
months commencing on January 1st of each year and ending the following December
31st. There will be a short Plan Year for the period February 1, 1997 to
December 31, 1997. For the short Plan Year, any Hours or Service requirement
of the Plan will be reduced by 1/12th.
1.49 "Pre-Retirement Survivor Annuity" is an immediate annuity for
the life of the Participant's spouse the payments under which must be equal to
the amount of benefit which can be purchased with the accounts of a Participant
used to provide the death benefit under the Plan.
1.50 "Qualified Non-Elective Contribution" means the Employer's
contributions to the Plan that are made pursuant to Section 4.6. Such
contributions shall be considered an Elective Contribution for the purposes of
the Plan and used to satisfy the "Actual Deferral Percentage" tests.
In addition, the Employer's contributions to the Plan that are
made pursuant to Section 4.8(h) which are used to satisfy the "Actual
Contribution Percentage" tests shall be
15
considered Qualified Non-Elective Contributions and be subject to the
provisions of Sections 4.2(b) and 4.2(c).
1.51 "Regulation" means the Income Tax Regulations as promulgated
by the Secretary of the Treasury or his delegate, and as amended from time to
time.
1.52 "Retired Participant" means a person who has been a
Participant, but who has become entitled to retirement benefits under the Plan.
1.53 "Retirement Date" means the date as of which a Participant
retires whether such retirement occurs on a Participant's Normal Retirement
Date, Early or Late Retirement Date (see Section 6.1).
1.54 "Super Top Heavy Plan" means a plan described in Section
2.2(b).
1.55 "Taxable Wage Base" means, with respect to any Plan Year, the
contribution and benefit base in effect under Section 230 of the Social
Security Act at the beginning of the Plan Year.
1.56 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by death or
retirement.
1.57 "Top Heavy Plan" means a plan described in Section 2.2(a).
1.58 "Top Heavy Plan Year" means a Plan Year during which the Plan
is a Top Heavy Plan.
1.59 "Top Paid Group" means the top 20 percent of Employees who
performed services for the Employer during the applicable year, ranked
according to the amount of "415 Compensation" (determined for this purpose in
accordance with Section 1.27) received from the Employer during such year. All
Affiliated Employers shall be taken into account as a single employer, and
Leased Employees within the meaning of Code Sections 414(n)(2) and 414(o)(2)
shall be considered Employees unless such Leased Employees are covered by a
plan described in Code Section 414(n)(5) and are not covered in any qualified
plan maintained by the Employer. Employees who are non-resident aliens and who
received no earned income (within the meaning of Code Section 911(d)(2)) from
the Employer constituting United States source income within the meaning of
Code Section 861(a)(3) shall not be treated as Employees. Additionally, for the
purpose of determining the number of active Employees in any year, the
following additional Employees shall also be excluded; however, such Employees
shall still be considered for the purpose of identifying the particular
Employees in the Top Paid Group:
16
(a) Employees with less than six (6) months of
service;
(b) Employees who normally work less than 17 1/2
hours per week;
(c) Employees who normally work less than six (6)
months during a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the
Employer are covered under agreements the Secretary of Labor finds to be
collective bargaining agreements between Employee representatives and the
Employer, and the Plan covers only Employees who are not covered under such
agreements, then Employees covered by such agreements shall be excluded from
both the total number of active Employees as well as from the identification of
particular Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be
applied on a uniform and consistent basis for all purposes for which the Code
Section 414(q) definition is applicable.
1.60 "Trustee" means the person or entity named as trustee herein
or in any separate trust forming a part of this Plan, and any successors.
1.61 "Trust Fund" means the assets of the Plan and Trust as the
same shall exist from time to time.
1.62 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.63 "Year of Service" means twelve (12) consecutive Months of
Service.
For vesting purposes, the computation period shall be the
Plan Year.
For all other purposes, the computation period shall be the
Plan Year.
Years of Service with Getty Petroleum Corp. and any Affiliated
Employer shall be recognized.
17
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the
special vesting requirements of Code Section 416(b) pursuant to Section 6.4 of
the Plan and the special minimum allocation requirements of Code Section 416(c)
pursuant to Section 4.4 of the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any
Plan Year in which, as of the Determination Date, (1) the
Present Value of Accrued Benefits of Key Employees and (2) the
sum of the Aggregate Accounts of Key Employees under this Plan
and all plans of an Aggregation Group, exceeds sixty percent
(60%) of the Present Value of Accrued Benefits and the
Aggregate Accounts of all Key and Non-Key Employees under this
Plan and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee
for any Plan Year, but such Participant was a Key Employee for
any prior Plan Year, such Participant's Present Value of
Accrued Benefit and/or Aggregate Account balance shall not be
taken into account for purposes of determining whether this
Plan is a Top Heavy or Super Top Heavy Plan (or whether any
Aggregation Group which includes this Plan is a Top Heavy
Group). In addition, if a Participant or Former Participant
has not performed any services for any Employer maintaining
the Plan at any time during the five year period ending on the
Determination Date, any accrued benefit for such Participant
or Former Participant shall not be taken into account for the
purposes of determining whether this Plan is a Top Heavy or
Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan
for any Plan Year in which, as of the Determination Date, (1)
the Present Value of Accrued Benefits of Key Employees and (2)
the sum of the Aggregate Accounts of Key Employees under this
Plan and all plans of an Aggregation Group, exceeds ninety
percent (90%) of the Present Value of Accrued Benefits and the
Aggregate Accounts of all Key and Non-Key Employees under this
Plan and all plans of an Aggregation Group.
(c) Aggregate Account: A Participant's
Aggregate Account as of the Determination Date is the sum of:
(1) his Participant's Combined Account balance
as of the most recent valuation occurring within
18
a twelve (12) month period ending on the
Determination Date;
(2) an adjustment for any contributions due as
of the Determination Date. Such adjustment shall be
the amount of any contributions actually made after
the valuation date but due on or before the
Determination Date, except for the first Plan Year
when such adjustment shall also reflect the amount
of any contributions made after the Determination
Date that are allocated as of a date in that first
Plan Year.
(3) any Plan distributions made within the Plan
Year that includes the Determination Date or within
the four (4) preceding Plan Years. However, in the
case of distributions made after the valuation date
and prior to the Determination Date, such
distributions are not included as distributions for
top heavy purposes to the extent that such
distributions are already included in the
Participant's Aggregate Account balance as of the
valuation date. Notwithstanding anything herein to
the contrary, all distributions, including
distributions made prior to January 1, 1984, and
distributions under a terminated plan which if it
had not been terminated would have been required to
be included in an Aggregation Group, will be
counted. Further, distributions from the Plan
(including the cash value of life insurance
policies) of a Participant's account balance because
of death shall be treated as a distribution for the
purposes of this paragraph.
(4) any Employee contributions, whether
voluntary or mandatory. However, amounts
attributable to tax deductible qualified voluntary
employee contributions shall not be considered to be
a part of the Participant's Aggregate Account
balance.
(5) with respect to unrelated rollovers and
plan-to-plan transfers (ones which are both
initiated by the Employee and made from a plan
maintained by one employer to a plan maintained by
another employer), if this Plan provides the
rollovers or plan-to-plan transfers, it shall always
consider such rollovers or plan-to-plan transfers as
a distribution for the purposes of this Section. If
this Plan is the plan accepting such rollovers or
plan-to-plan transfers, it shall not consider such
rollovers or plan-to-plan
19
transfers as part of the Participant's Aggregate
Account balance.
(6) with respect to related rollovers and
plan-to-plan transfers (ones either not initiated by
the Employee or made to a plan maintained by the
same employer), if this Plan provides the rollover
or plan-to-plan transfer, it shall not be counted as
a distribution for purposes of this Section. If this
Plan is the plan accepting such rollover or
plan-to-plan transfer, it shall consider such
rollover or plan-to-plan transfer as part of the
Participant's Aggregate Account balance,
irrespective of the date on which such rollover or
plan-to-plan transfer is accepted.
(7) For the purposes of determining whether two
employers are to be treated as the same employer in
(5) and (6) above, all employers aggregated under
Code Section 414(b), (c), (m) and (o) are treated as
the same employer.
(d) "Aggregation Group" means either a Required
Aggregation Group or a Permissive Aggregation Group as
hereinafter determined.
(1) Required Aggregation Group: In determining
a Required Aggregation Group hereunder, each plan of
the Employer in which a Key Employee is a
participant in the Plan Year containing the
Determination Date or any of the four preceding Plan
Years, and each other plan of the Employer which
enables any plan in which a Key Employee
participates to meet the requirements of Code
Sections 401(a)(4) or 410, will be required to be
aggregated. Such group shall be known as a Required
Aggregation Group.
In the case of a Required Aggregation Group, each
plan in the group will be considered a Top Heavy
Plan if the Required Aggregation Group is a Top
Heavy Group. No plan in the Required Aggregation
Group will be considered a Top Heavy Plan if the
Required Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer
may also include any other plan not required to be
included in the Required Aggregation Group, provided
the resulting group, taken as a whole, would
continue to satisfy the provisions of Code Sections
401(a)(4) and 410. Such group shall be known as a
Permissive Aggregation Group.
20
In the case of a Permissive Aggregation Group, only
a plan that is part of the Required Aggregation
Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is a Top Heavy Group.
No plan in the Permissive Aggregation Group will be
considered a Top Heavy Plan if the Permissive
Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which
the Determination Dates fall within the same
calendar year shall be aggregated in order to
determine whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any
terminated plan of the Employer if it was maintained
within the last five (5) years ending on the
Determination Date.
(e) "Determination Date" means (a) the last day
of the preceding Plan Year, or (b) in the case of the first
Plan Year, the last day of such Plan Year.
(f) Present Value of Accrued Benefit: In the
case of a defined benefit plan, the Present Value of Accrued
Benefit for a Participant other than a Key Employee, shall be
as determined using the single accrual method used for all
plans of the Employer and Affiliated Employers, or if no such
single method exists, using a method which results in benefits
accruing not more rapidly than the slowest accrual rate
permitted under Code Section 411(b)(1)(C). The determination
of the Present Value of Accrued Benefit shall be determined as
of the most recent valuation date that falls within or ends
with the 12-month period ending on the Determination Date
except as provided in Code Section 416 and the Regulations
thereunder for the first and second plan years of a defined
benefit plan.
(g) "Top Heavy Group" means an Aggregation
Group in which, as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of
Key Employees under all defined benefit plans
included in the group, and
(2) the Aggregate Accounts of Key Employees
under all defined contribution plans included in the
group,
exceeds sixty percent (60%) of a similar
sum determined for all Participants.
21
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint
and remove the Trustee and the Administrator from time to time
as it deems necessary for the proper administration of the
Plan to assure that the Plan is being operated for the
exclusive benefit of the Participants and their Beneficiaries
in accordance with the terms of the Plan, the Code, and the
Act.
(b) The Employer shall establish a "funding
policy and method," i.e., it shall determine whether the Plan
has a short run need for liquidity (e.g., to pay benefits) or
whether liquidity is a long run goal and investment growth
(and stability of same) is a more current need, or shall
appoint a qualified person to do so. The Employer or its
delegate shall communicate such needs and goals to the
Trustee, who shall coordinate such Plan needs with its
investment policy. The communication of such a "funding policy
and method" shall not, however, constitute a directive to the
Trustee as to investment of the Trust Funds. Such "funding
policy and method" shall be consistent with the objectives of
this Plan and with the requirements of Title I of the Act.
(c) The Employer shall periodically review the
performance of any Fiduciary or other person to whom duties
have been delegated or allocated by it under the provisions of
this Plan or pursuant to procedures established hereunder.
This requirement may be satisfied by formal periodic review by
the Employer or by a qualified person specifically designated
by the Employer, through day-to-day conduct and evaluation, or
through other appropriate ways.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any
person, including, but not limited to, the Employees of the Employer, shall be
eligible to serve as an Administrator. Any person so appointed shall signify
his acceptance by filing written acceptance with the Employer. An Administrator
may resign by delivering his written resignation to the Employer or be removed
by the Employer by delivery of written notice of removal, to take effect at a
date specified therein, or upon delivery to the Administrator if no date is
specified.
The Employer, upon the resignation or removal of an
Administrator, shall promptly designate in writing a successor to this
position. If the Employer does not appoint an Administrator, the Employer will
function as the Administrator.
22
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Employer and
accepted in writing by each Administrator. In the event that no such delegation
is made by the Employer, the Administrators may allocate the responsibilities
among themselves, in which event the Administrators shall notify the Employer
and the Trustee in writing of such action and specify the responsibilities of
each Administrator. The Trustee thereafter shall accept and rely upon any
documents executed by the appropriate Administrator until such time as the
Employer or the Administrators file with the Trustee a written revocation of
such designation.
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to
administer the Plan for the exclusive benefit of the Participants and their
Beneficiaries, subject to the specific terms of the Plan. The Administrator
shall administer the Plan in accordance with its terms and shall have the power
and discretion to construe the terms of the Plan and to determine all questions
arising in connection with the administration, interpretation, and application
of the Plan. Any such determination by the Administrator shall be conclusive
and binding upon all persons. The Administrator may establish procedures,
correct any defect, supply any information, or reconcile any inconsistency in
such manner and to such extent as shall be deemed necessary or advisable to
carry out the purpose of the Plan; provided, however, that any procedure,
discretionary act, interpretation or construction shall be done in a
nondiscriminatory manner based upon uniform principles consistently applied and
shall be consistent with the intent that the Plan shall continue to be deemed a
qualified plan under the terms of Code Section 401(a), and shall comply with
the terms of the Act and all regulations issued pursuant thereto. The
Administrator shall have all powers necessary or appropriate to accomplish his
duties under this Plan.
The Administrator shall be charged with the duties of the
general administration of the Plan, including, but not limited to, the
following:
(a) the discretion to determine all questions
relating to the eligibility of Employees to participate or
remain a Participant hereunder and to receive benefits under
the Plan;
(b) to compute, certify, and direct the Trustee
with respect to the amount and the kind of benefits to which
any Participant shall be entitled hereunder;
23
(c) to authorize and direct the Trustee with
respect to all nondiscretionary or otherwise directed
disbursements from the Trust;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and
to make and publish such rules for regulation of the Plan as
are consistent with the terms hereof;
(f) to determine the size and type of any
Contract to be purchased from any insurer, and to designate
the insurer from which such Contract shall be purchased;
(g) to compute and certify to the Employer and
to the Trustee from time to time the sums of money necessary
or desirable to be contributed to the Plan;
(h) to consult with the Employer and the
Trustee regarding the short and long-term liquidity needs of
the Plan in order that the Trustee can exercise any investment
discretion in a manner designed to accomplish specific
objectives;
(i) to prepare and distribute to Employees a
procedure for notifying Participants and Beneficiaries of
their rights to elect joint and survivor annuities and
Pre-Retirement Survivor Annuities as required by the Act and
Regulations thereunder;
(j) to prepare and implement a procedure to
notify Eligible Employees that they may elect to have a
portion of their Compensation deferred or paid to them in
cash;
(k) to assist any Participant regarding his
rights, benefits, or elections available under the Plan.
2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and
shall keep all other books of account, records, and other data that may be
necessary for proper administration of the Plan and shall be responsible for
supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by law.
24
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, and other persons as
the Administrator or the Trustee deems necessary or desirable in connection
with the administration of this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the
Employer shall supply full and timely information to the Administrator on all
matters relating to the Compensation of all Participants, their Hours of
Service, their Years of Service, their retirement, death, disability, or
termination of employment, and such other pertinent facts as the Administrator
may require; and the Administrator shall advise the Trustee of such of the
foregoing facts as may be pertinent to the Trustee's duties under the Plan. The
Administrator may rely upon such information as is supplied by the Employer and
shall have no duty or responsibility to verify such information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust
Fund unless paid by the Employer. Such expenses shall include any expenses
incident to the functioning of the Administrator, including, but not limited
to, fees of accountants, counsel, and other specialists and their agents, and
other costs of administering the Plan. Until paid, the expenses shall
constitute a liability of the Trust Fund. However, the Employer may reimburse
the Trust Fund for any administration expense incurred.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.5, if there shall be more than
one Administrator, they shall act by a majority of their number, but may
authorize one or more of them to sign all papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing
with the Administrator. Written notice of the disposition of a claim shall be
furnished to the claimant within 90 days after the application is filed. In the
event the claim is denied, the reasons for the denial shall be specifically set
forth in the notice in language calculated to be understood by the claimant,
pertinent provisions of the Plan shall be cited, and, where appropriate, an
explanation as to how the claimant can perfect the claim will be provided. In
addition, the claimant shall be
25
furnished with an explanation of the Plan's claims review procedure.
2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who
has been denied a benefit by a decision of the Administrator pursuant to
Section 2.12 shall be entitled to request the Administrator to give further
consideration to his claim by filing with the Administrator (on a form which
may be obtained from the Administrator) a request for a hearing. Such request,
together with a written statement of the reasons why the claimant believes his
claim should be allowed, shall be filed with the Administrator no later than 60
days after receipt of the written notification provided for in Section 2.12.
The Administrator shall then conduct a hearing within the next 60 days, at
which the claimant may be represented by an attorney or any other
representative of his choosing and at which the claimant shall have an
opportunity to submit written and oral evidence and arguments in support of his
claim. At the hearing (or prior thereto upon 5 business days written notice to
the Administrator) the claimant or his representative shall have an opportunity
to review all documents in the possession of the Administrator which are
pertinent to the claim at issue and its disallowance. Either the claimant or
the Administrator may cause a court reporter to attend the hearing and record
the proceedings. In such event, a complete written transcript of the
proceedings shall be furnished to both parties by the court reporter. The full
expense of any such court reporter and such transcripts shall be borne by the
party causing the court reporter to attend the hearing. A final decision as to
the allowance of the claim shall be made by the Administrator within 60 days of
receipt of the appeal (unless there has been an extension of 60 days due to
special circumstances, provided the delay and the special circumstances
occasioning it are communicated to the claimant within the 60 day period). Such
communication shall be written in a manner calculated to be understood by the
claimant and shall include specific reasons for the decision and specific
references to the pertinent Plan provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed one (1) Year of
Service and has attained age 21 shall be eligible to participate hereunder as
of the date he has satisfied such requirements. Effective September 30, 1996,
any Eligible Employee who has completed six (6) Months of Service and has
attained age 21 shall be eligible to participate in the salary reduction
election and related matching contribution, but the one (1) Year of Service
requirement will continue to apply to determine participation for
26
the Employer's Non-Elective Contribution. However, any Employee who was a
Participant in the Plan prior to the effective date of this amendment and
restatement shall continue to participate in the Plan. The Employer shall give
each prospective Eligible Employee written notice of his eligibility to
participate in the Plan prior to the close of the Plan Year in which he first
becomes an Eligible Employee.
3.2 APPLICATION FOR PARTICIPATION
In order to become a Participant hereunder, each Eligible
Employee shall make application to the Employer for participation in the Plan
and agree to the terms hereof. Upon the acceptance of any benefits under this
Plan, such Employee shall automatically be deemed to have made application and
shall be bound by the terms and conditions of the Plan and all amendments
hereto.
3.3 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as
of the first day of the calendar quarter coinciding with or next following the
date on which such Employee met the eligibility requirements of Section 3.1,
provided said Employee was still employed as of such date (or if not employed
on such date, as of the date of rehire if a 1-Year Break in Service has not
occurred).
In the event an Employee who is not a member of an eligible
class of Employees becomes a member of an eligible class, such Employee will
participate immediately if such Employee has satisfied the minimum age and
service requirements and would have otherwise previously become a Participant.
3.4 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each
Employee for participation in the Plan based upon information furnished by the
Employer. Such determination shall be conclusive and binding upon all persons,
as long as the same is made pursuant to the Plan and the Act. Such
determination shall be subject to review per Section 2.13.
3.5 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a
classification of an Eligible Employee to an ineligible
Employee, such Former Participant shall continue to vest in
his interest in the Plan for each Year of Service completed
while a noneligible Employee, until such time as his
Participant's Account shall be forfeited or distributed
pursuant to the terms of the Plan. Additionally, his interest
in the Plan shall continue to share in the earnings of the
Trust Fund.
27
(b) In the event a Participant is no longer a
member of an eligible class of Employees and becomes
ineligible to participate but has not incurred a 1-Year Break
in Service, such Employee will participate immediately upon
returning to an eligible class of Employees. If such
Participant incurs a 1-Year Break in Service, eligibility will
be determined under the break in service rules of the Plan.
3.6 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission
is not made until after a contribution by his Employer for the year has been
made, the Employer shall make a subsequent contribution with respect to the
omitted Employee in the amount which the said Employer would have contributed
with respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any
taxable year under applicable provisions of the Code.
3.7 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been
included as a Participant in the Plan is erroneously included and discovery of
such incorrect inclusion is not made until after a contribution for the year
has been made, the Employer shall not be entitled to recover the contribution
made with respect to the ineligible person regardless of whether or not a
deduction is allowable with respect to such contribution. In such event, the
amount contributed with respect to the ineligible person shall constitute a
Forfeiture (except for Deferred Compensation which shall be distributed to the
ineligible person) for the Plan Year in which the discovery is made.
3.8 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer,
elect voluntarily not to participate in the Plan. The election not to
participate must be communicated to the Employer, in writing, at least thirty
(30) days before the beginning of a Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
28
(a) The amount of the total salary reduction
elections of all Participants made pursuant to Section 4.2(a),
which amount shall be deemed an Employer's Elective
Contribution.
(b) On behalf of each Participant who is
eligible to share in matching contributions for the Plan Year,
a discretionary matching contribution equal to a percentage of
each such Participant's Deferred Compensation, the exact
percentage to be determined each year by the Employer, which
amount shall be deemed an Employer's Non-Elective
Contribution.
Except, however, in applying the matching
percentage specified above, only salary reductions, excluding
bonus reductions, up to 6% of compensation (excluding bonus)
per pay period shall be considered.
(c) A discretionary amount, which amount shall
be deemed an Employer's Non-Elective Contribution.
(d) Notwithstanding the foregoing, however, the
Employer's contributions for any Plan Year shall not exceed
the maximum amount allowable as a deduction to the Employer
under the provisions of Code Section 404. All contributions by
the Employer shall be made in cash or in such property as is
acceptable to the Trustee.
(e) Except, however, to the extent necessary to
provide the top heavy minimum allocations, the Employer shall
make a contribution even if it exceeds the amount which is
deductible under Code Section 404.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer his
Compensation which would have been received in the Plan Year,
but for the deferral election, by up to 15%. A deferral
election (or modification of an earlier election) may not be
made with respect to Compensation which is currently available
on or before the date the Participant executed such election
or, if later, the latest of the date the Employer adopts this
cash or deferred arrangement, or the date such arrangement
first became effective. A special election will be permitted
for an annual bonus, if applicable.
The amount by which Compensation is reduced
shall be that Participant's Deferred Compensation and be
treated as an Employer Elective Contribution and allocated to
that Participant's Elective Account.
29
(b) The balance in each Participant's Elective
Account shall be fully Vested at all times and shall not be
subject to Forfeiture for any reason.
(c) Amounts held in the Participant's Elective
Account may not be distributable earlier than:
(1) a Participant's termination of employment
or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the
establishment or existence of a "successor plan," as
that term is described in Regulation
1.401(k)-1(d)(3);
(4) the date of disposition by the Employer to
an entity that is not an Affiliated Employer of
substantially all of the assets (within the meaning
of Code Section 409(d)(2)) used in a trade or
business of such corporation if such corporation
continues to maintain this Plan after the
disposition with respect to a Participant who
continues employment with the corporation acquiring
such assets;
(5) the date of disposition by the Employer or
an Affiliated Employer who maintains the Plan of its
interest in a subsidiary (within the meaning of Code
Section 409(d)(3)) to an entity which is not an
Affiliated Employer but only with respect to a
Participant who continues employment with such
subsidiary; or
(6) the proven financial hardship of a
Participant, subject to the limitations of Section
6.10.
(d) For each Plan Year, a Participant's
Deferred Compensation made under this Plan and all other
plans, contracts or arrangements of the Employer maintaining
this Plan shall not exceed, during any taxable year of the
Participant, the limitation imposed by Code Section 402(g), as
in effect at the beginning of such taxable year. If such
dollar limitation is exceeded, a Participant will be deemed to
have notified the Administrator of such excess amount which
shall be distributed in a manner consistent with Section
4.2(f). The dollar limitation shall be adjusted annually
pursuant to the method provided in Code Section 415(d) in
accordance with Regulations.
30
(e) In the event a Participant has received a
hardship distribution from his Participant's Elective Account
pursuant to Section 6.10 or pursuant to Regulation
1.401(k)-1(d)(2)(iv)(B) from any other plan maintained by the
Employer, then such Participant shall not be permitted to
elect to have Deferred Compensation contributed to the Plan on
his behalf for a period of twelve (12) months following the
receipt of the distribution. Furthermore, the dollar
limitation under Code Section 402(g) shall be reduced, with
respect to the Participant's taxable year following the
taxable year in which the hardship distribution was made, by
the amount of such Participant's Deferred Compensation, if
any, pursuant to this Plan (and any other plan maintained by
the Employer) for the taxable year of the hardship
distribution.
(f) If a Participant's Deferred Compensation
under this Plan together with any elective deferrals (as
defined in Regulation 1.402(g)-1(b)) under another qualified
cash or deferred arrangement (as defined in Code Section
401(k)), a simplified employee pension (as defined in Code
Section 408(k)), a salary reduction arrangement (within the
meaning of Code Section 3121(a)(5)(D)), a deferred
compensation plan under Code Section 457, or a trust described
in Code Section 501(c)(18) cumulatively exceed the limitation
imposed by Code Section 402(g) (as adjusted annually in
accordance with the method provided in Code Section 415(d)
pursuant to Regulations) for such Participant's taxable year,
the Participant may, not later than March 1 following the
close of the Participant's taxable year, notify the
Administrator in writing of such excess and request that his
Deferred Compensation under this Plan be reduced by an amount
specified by the Participant. In such event, the Administrator
may direct the Trustee to distribute such excess amount (and
any Income allocable to such excess amount) to the Participant
not later than the first April 15th following the close of the
Participant's taxable year. Any distribution of less than the
entire amount of Excess Deferred Compensation and Income shall
be treated as a pro rata distribution of Excess Deferred
Compensation and Income. The amount distributed shall not
exceed the Participant's Deferred Compensation under the Plan
for the taxable year. Any distribution on or before the last
day of the Participant's taxable year must satisfy each of the
following conditions:
(1) the distribution must be made after the
date on which the Plan received the Excess Deferred
Compensation;
31
(2) the Participant shall designate the
distribution as Excess Deferred Compensation; and
(3) the Plan must designate the distribution as
a distribution of Excess Deferred Compensation.
Any distribution made pursuant to this
Section 4.2(f) shall be made first from unmatched Deferred
Compensation and, thereafter, simultaneously from Deferred
Compensation which is matched and matching contributions which
relate to such Deferred Compensation. However, any such
matching contributions which are not Vested shall be forfeited
in lieu of being distributed.
(g) Notwithstanding Section 4.2(f) above, a
Participant's Excess Deferred Compensation shall be reduced,
but not below zero, by any distribution of Excess
Contributions pursuant to Section 4.6(a) for the Plan Year
beginning with or within the taxable year of the Participant.
(h) At Normal Retirement Date, or such other
date when the Participant shall be entitled to receive
benefits, the fair market value of the Participant's Elective
Account shall be used to provide additional benefits to the
Participant or his Beneficiary.
(i) All amounts allocated to a Participant's
Elective Account may be treated as a Directed Investment
Account pursuant to Section 4.12.
(j) Employer Elective Contributions made
pursuant to this Section may be segregated into a separate
account for each Participant in a federally insured savings
account, certificate of deposit in a bank or savings and loan
association, money market certificate, or other short-term
debt security acceptable to the Trustee until such time as the
allocations pursuant to Section 4.4 have been made.
(k) The Employer and the Administrator shall
implement the salary reduction elections provided for herein
in accordance with the following:
(1) A Participant may commence making elective
deferrals to the Plan only after first satisfying
the eligibility and participation requirements
specified in Article III. However, the Participant
must make his initial salary deferral election
within a reasonable time, not to exceed thirty (30)
days, after entering the Plan pursuant to Section
3.3. If the Participant fails to make an initial
salary deferral election
32
within such time, then such Participant may thereafter make an
election in accordance with the rules governing modifications. The
Participant shall make such an election by entering into a written
salary reduction agreement with the Employer and filing such
agreement with the Administrator. Such election shall initially be
effective beginning with the pay period following the acceptance of
the salary reduction agreement by the Administrator, shall not have
retroactive effect and shall remain in force until revoked.
(2) A Participant may modify a prior election
during the Plan Year and concurrently make a new
election within a reasonable time before the first
pay period of each month, when such modification is
to be effective. Any modification shall not have
retroactive effect and shall remain in force until
revoked.
(3) A Participant may elect to prospectively
revoke his salary reduction agreement in its
entirety at any time during the Plan Year. Such
revocation shall become effective as of the
beginning of the first pay period coincident with or
next following the expiration of the notice period.
Furthermore, the termination of the Participant's
employment, or the cessation of participation for
any reason, shall be deemed to revoke any salary
reduction agreement then in effect, effective
immediately following the close of the pay period
within which such termination or cessation occurs.
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its
contribution to the Plan for each Plan Year within the time prescribed by law,
including extensions of time, for the filing of the Employer's federal income
tax return for the Fiscal Year.
However, Employer Elective Contributions accumulated through
payroll deductions shall be paid to the Trustee as of the earliest date on
which such contributions can reasonably be segregated from the Employer's
general assets, but in any event within ninety (90) days from the date on which
such amounts would otherwise have been payable to the Participant in cash. The
provisions of Department of Labor regulations 2510.3-102 are incorporated
herein by reference. Furthermore, any additional Employer contributions which
are allocable to the Participant's Elective Account for a Plan Year shall be
paid to the Plan no
33
later than the twelve-month period immediately following the close of such Plan
Year.
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and
maintain an account in the name of each Participant to which
the Administrator shall credit as of each Anniversary Date all
amounts allocated to each such Participant as set forth
herein.
(b) The Employer shall provide the
Administrator with all information required by the
Administrator to make a proper allocation of the Employer's
contributions for each Plan Year. Within a reasonable period
of time after the date of receipt by the Administrator of such
information, the Administrator shall allocate such
contribution as follows:
(1) With respect to the Employer's Elective
Contribution made pursuant to Section 4.1(a), to
each Participant's Elective Account in an amount
equal to each such Participant's Deferred
Compensation for the year.
(2) With respect to the Employer's Non-Elective
Contribution made pursuant to Section 4.1(b), to
each Participant's Account in accordance with
Section 4.1(b).
Any Participant actively employed during the Plan
Year shall be eligible to share in the matching
contribution for the Plan Year.
(3) With respect to the Employer's Non-Elective
Contribution made pursuant to Section 4.1(c), in the
following manner:
(i) A dollar amount equal to 5.7%
of the sum of each Participant's total
Compensation plus Excess Compensation shall
be allocated to each Participant's Account.
If the Employer does not contribute such
amount for all Participants, each
Participant will be allocated a share of
the contribution in the same proportion
that his total Compensation plus his total
Excess Compensation for the Plan Year bears
to the total Compensation plus the total
Excess Compensation of all Participants for
that year.
(ii) The balance of the Employer's
Non-Elective Contribution over the amount
allocated above, if any, shall be allocated
34
to each Participant's Account in the same
proportion that his total Compensation for
the Plan Year bears to the total
Compensation of all Participants for such
year.
Only Participants who have completed a Year of
Service with 1,000 Hours during the Plan Year and
are actively employed on the last day of the Plan
Year shall be eligible to share in the discretionary
contribution for the year.
(c) As of each Anniversary Date any amounts
which became Forfeitures since the last Anniversary Date shall
first be made available to reinstate previously forfeited
account balances of Former Participants, if any, in accordance
with Section 6.4(e)(2). The remaining Forfeitures, if any,
shall be used to pay expenses of the Plan described in Section
2.10 and the remaining amount, if any to reduce the
contribution of the Employer hereunder for the Plan Year in
which such Forfeitures occur in the following manner:
(1) Forfeitures attributable to Employer
matching contributions made pursuant to Section
4.1(b) shall be used to reduce the Employer's
contribution for the Plan Year in which such
Forfeitures occur.
(2) Forfeitures attributable to Employer
discretionary contributions made pursuant to Section
4.1(c) shall be used to reduce the Employer's
contribution for the Plan Year in which such
Forfeitures occur.
(d) For any Top Heavy Plan Year, Non-Key
Employees not otherwise eligible to share in the allocation of
contributions as provided above, shall receive the minimum
allocation provided for in Section 4.4(g) if eligible pursuant
to the provisions of Section 4.4(i).
(e) Participants who are not actively employed
on the last day of the Plan Year due to Retirement (Early,
Normal or Late) or death shall share in the allocation of
contributions for that Plan Year only if otherwise eligible in
accordance with this Section.
(f) As of each Anniversary Date or other
valuation date, before the current valuation period allocation
of Employer contributions and after allocation of Forfeitures,
any earnings or losses (net appreciation or net depreciation)
of the Trust Fund
35
shall be allocated in the same proportion that each
Participant's and Former Participant's nonsegregated accounts
bear to the total of all Participants' and Former
Participants' nonsegregated accounts as of such date.
Participants' transfers from other
qualified plans deposited in the general Trust Fund shall
share in any earnings and losses (net appreciation or net
depreciation) of the Trust Fund in the same manner provided
above. Each segregated account maintained on behalf of a
Participant shall be credited or charged with its separate
earnings and losses.
(g) Minimum Allocations Required for Top Heavy
Plan Years: Notwithstanding the foregoing, for any Top Heavy
Plan Year, the sum of the Employer's contributions allocated
to the Participant's Combined Account of each Non-Key Employee
shall be equal to at least three percent (3%) of such Non-Key
Employee's "415 Compensation" (reduced by contributions and
forfeitures, if any, allocated to each Non-Key Employee in any
defined contribution plan included with this plan in a
Required Aggregation Group). However, if (1) the sum of the
Employer's contributions allocated to the Participant's
Combined Account of each Key Employee for such Top Heavy Plan
Year is less than three percent (3%) of each Key Employee's
"415 Compensation" and (2) this Plan is not required to be
included in an Aggregation Group to enable a defined benefit
plan to meet the requirements of Code Section 401(a)(4) or
410, the sum of the Employer's contributions allocated to the
Participant's Combined Account of each Non-Key Employee shall
be equal to the largest percentage allocated to the
Participant's Combined Account of any Key Employee. However,
in determining whether a Non-Key Employee has received the
required minimum allocation, such Non-Key Employee's Deferred
Compensation and matching contributions needed to satisfy the
"Actual Contribution Percentage" tests pursuant to Section
4.7(a) shall not be taken into account.
However, no such minimum allocation shall
be required in this Plan for any Non-Key Employee who
participates in another defined contribution plan subject to
Code Section 412 providing such benefits included with this
Plan in a Required Aggregation Group.
(h) For purposes of the minimum allocations set
forth above, the percentage allocated to the Participant's
Combined Account of any Key Employee shall be equal to the
ratio of the sum of the
36
Employer's contributions allocated on behalf of such
Key Employee divided by the "415 Compensation" for such Key
Employee.
(i) For any Top Heavy Plan Year, the minimum
allocations set forth above shall be allocated to the
Participant's Combined Account of all Non-Key Employees who
are Participants and who are employed by the Employer on the
last day of the Plan Year, including Non-Key Employees who
have (1) failed to complete a Year of Service; and (2)
declined to make mandatory contributions (if required) or, in
the case of a cash or deferred arrangement, elective
contributions to the Plan.
(j) For the purposes of this Section, "415
Compensation" shall be limited to $200,000. Such amount shall
be adjusted at the same time and in the same manner as
permitted under Code Section 415(d), except that the dollar
increase in effect on January 1 of any calendar year shall be
effective for the Plan Year beginning with or within such
calendar year and the first adjustment to the $200,000
limitation shall be effective on January 1, 1990. For any
short Plan Year the "415 Compensation" limit shall be an
amount equal to the "415 Compensation" limit for the calendar
year in which the Plan Year begins multiplied by the ratio
obtained by dividing the number of full months in the short
Plan Year by twelve (12).
In addition to other applicable limitations
set forth in the Plan, and notwithstanding any other provision
of the Plan to the contrary, for Plan Years beginning on or
after January 1, 1994, the annual Compensation of each
Employee taken into account under the Plan shall not exceed
the OBRA '93 annual compensation limit. The OBRA '93 annual
compensation limit is $150,000, as adjusted by the
Commissioner for increases in the cost of living in accordance
with Code Section 401(a)(17)(B). The cost of living adjustment
in effect for a calendar year applies to any period, not
exceeding 12 months, over which Compensation is determined
(determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the
OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in
the determination period, and the denominator of which is 12.
For Plan Years beginning on or after
January 1, 1994, any reference in this Plan to the limitation
under Code Section 401(a)(17) shall mean the OBRA '93 annual
compensation limit set forth in this provision.
37
If Compensation for any prior determination
period is taken into account in determining an Employee's
benefits accruing in the current Plan Year, the Compensation
for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior
determination period. For this purpose, for determination
periods beginning before the first day of the first Plan Year
beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
(k) Notwithstanding anything herein to the
contrary, Participants who terminated employment for any
reason during the Plan Year shall share in the salary
reduction contributions made by the Employer for the year of
termination without regard to the Hours of Service credited.
(l) If a Former Participant is reemployed after
five (5) consecutive 1-Year Breaks in Service, then separate
accounts shall be maintained as follows:
(1) one account for nonforfeitable benefits
attributable to pre-break service; and
(2) one account representing his status in the
Plan attributable to post-break service.
(m) Notwithstanding anything to the contrary,
if this is a Plan that would otherwise fail to meet the
requirements of Code Sections 401(a)(26), 410(b)(1) or
410(b)(2)(A)(i) and the Regulations thereunder because
Employer contributions would not be allocated to a sufficient
number or percentage of Participants for a Plan Year, then the
following rules shall apply:
(1) The group of Participants eligible to share
in the Employer's contribution for the Plan Year
shall be expanded to include the minimum number of
Participants who would not otherwise be eligible as
are necessary to satisfy the applicable test
specified above. The specific Participants who shall
become eligible under the terms of this paragraph
shall be those who are actively employed on the last
day of the Plan Year and, when compared to similarly
situated Participants, have completed the greatest
number of Hours of Service in the Plan Year.
(2) If after application of paragraph (1)
above, the applicable test is still not satisfied,
then the group of Participants eligible to share in
the Employer's contribution for the Plan Year shall
be further expanded to include the minimum
38
number of Participants who are not actively employed
on the last day of the Plan Year as are
necessary to satisfy the applicable test. The
specific Participants who shall become eligible to
share shall be those Participants, when compared to
similarly situated Participants, who have completed
the greatest number of Hours of Service in the Plan
Year before terminating employment.
(3) Nothing in this Section shall permit the
reduction of a Participant's accrued benefit.
Therefore any amounts that have previously been
allocated to Participants may not be reallocated to
satisfy these requirements. In such event, the
Employer shall make an additional contribution equal
to the amount such affected Participants would have
received had they been included in the allocations,
even if it exceeds the amount which would be
deductible under Code Section 404. Any adjustment to
the allocations pursuant to this paragraph shall be
considered a retroactive amendment adopted by the
last day of the Plan Year.
(4) Notwithstanding the foregoing, for any Top
Heavy Plan Year beginning after December 31, 1992,
if the portion of the Plan which is not a Code
Section 401(k) or 401(m) plan would fail to satisfy
Code Section 410(b) if the coverage tests were
applied by treating those Participants whose only
allocation (under such portion of the Plan) would
otherwise be provided under the top heavy formula as
if they were not currently benefiting under the
Plan, then, for purposes of this Section 4.4(m),
such Participants shall be treated as not benefiting
and shall therefore be eligible to be included in
the expanded class of Participants who will share in
the allocation provided under the Plan's non top
heavy formula.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan
Year, the annual allocation derived from Employer Elective
Contributions to a Participant's Elective Account shall
satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the
Highly Compensated Participant group shall not be
more than the "Actual Deferral Percentage" of the
Non-Highly Compensated Participant group multiplied
by 1.25, or
39
(2) The excess of the "Actual Deferral
Percentage" for the Highly Compensated Participant
group over the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group shall not
be more than two percentage points. Additionally,
the "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not exceed the
"Actual Deferral Percentage" for the Non-Highly
Compensated Participant group multiplied by 2. The
provisions of Code Section 401(k)(3) and Regulation
1.401(k)-1(b) are incorporated herein by reference.
However, in order to prevent the multiple use of the
alternative method described in (2) above and in
Code Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals
pursuant to Section 4.2 and to make Employee
contributions or to receive matching contributions
under this Plan or under any other plan maintained
by the Employer or an Affiliated Employer shall have
his actual contribution ratio reduced pursuant to
Regulation 1.401(m)-2, the provisions of which are
incorporated herein by reference.
(b) For the purposes of this Section "Actual
Deferral Percentage" means, with respect to the Highly
Compensated Participant group and Non-Highly Compensated
Participant group for a Plan Year, the average of the ratios,
calculated separately for each Participant in such group, of
the amount of Employer Elective Contributions allocated to
each Participant's Elective Account for such Plan Year, to
such Participant's "414(s) Compensation" for such Plan Year.
The actual deferral ratio for each Participant and the "Actual
Deferral Percentage" for each group shall be calculated to the
nearest one-hundredth of one percent. Employer Elective
Contributions allocated to each Non-Highly Compensated
Participant's Elective Account shall be reduced by Excess
Deferred Compensation to the extent such excess amounts are
made under this Plan or any other plan maintained by the
Employer.
(c) For the purpose of determining the actual
deferral ratio of a Highly Compensated Employee who is subject
to the Family Member aggregation rules of Code Section
414(q)(6) because such Participant is either a "five percent
owner" of the Employer or one of the ten (10) Highly
Compensated Employees paid the greatest "415 Compensation"
during the year, the following shall apply:
40
(1) The combined actual deferral ratio for the
family group (which shall be treated as one Highly
Compensated Participant) shall be determined by
aggregating Employer Elective Contributions and
"414(s) Compensation" of all eligible Family Members
(including Highly Compensated Participants).
However, in applying the $200,000 limit to "414(s)
Compensation," Family Members shall include only the
affected Employee's spouse and any lineal
descendants who have not attained age 19 before the
close of the Plan Year.
(2) The Employer Elective Contributions and
"414(s) Compensation" of all Family Members shall be
disregarded for purposes of determining the "Actual
Deferral Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into
account in paragraph (1) above.
(3) If a Participant is required to be
aggregated as a member of more than one family group
in a plan, all Participants who are members of those
family groups that include the Participant are
aggregated as one family group in accordance with
paragraphs (1) and (2) above.
(d) For the purposes of Sections 4.5(a) and
4.6, a Highly Compensated Participant and a Non-Highly
Compensated Participant shall include any Employee eligible to
make a deferral election pursuant to Section 4.2, whether or
not such deferral election was made or suspended pursuant to
Section 4.2.
(e) For the purposes of this Section and Code
Sections 401(a)(4), 410(b) and 401(k), if two or more plans
which include cash or deferred arrangements are considered one
plan for the purposes of Code Section 401(a)(4) or 410(b)
(other than Code Section 410(b)(2)(A)(ii)), the cash or
deferred arrangements included in such plans shall be treated
as one arrangement. In addition, two or more cash or deferred
arrangements may be considered as a single arrangement for
purposes of determining whether or not such arrangements
satisfy Code Sections 401(a)(4), 410(b) and 401(k). In such a
case, the cash or deferred arrangements included in such plans
and the plans including such arrangements shall be treated as
one arrangement and as one plan for purposes of this Section
and Code Sections 401(a)(4), 410(b) and 401(k). Plans may be
aggregated under this paragraph (e) only if they have the same
plan year.
41
Notwithstanding the above, an employee
stock ownership plan described in Code Section 4975(e)(7) or
409 may not be combined with this Plan for purposes of
determining whether the employee stock ownership plan or this
Plan satisfies this Section and Code Sections 401(a)(4),
410(b) and 401(k).
(f) For the purposes of this Section, if a
Highly Compensated Participant is a Participant under two or
more cash or deferred arrangements (other than a cash or
deferred arrangement which is part of an employee stock
ownership plan as defined in Code Section 4975(e)(7) or 409)
of the Employer or an Affiliated Employer, all such cash or
deferred arrangements shall be treated as one cash or deferred
arrangement for the purpose of determining the actual deferral
ratio with respect to such Highly Compensated Participant.
However, if the cash or deferred arrangements have different
plan years, this paragraph shall be applied by treating all
cash or deferred arrangements ending with or within the same
calendar year as a single arrangement.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's
Elective Contributions made pursuant to Section 4.4 do not satisfy one of the
tests set forth in Section 4.5(a), the Administrator shall adjust Excess
Contributions pursuant to the options set forth below:
(a) On or before the fifteenth day of the third
month following the end of each Plan Year, the Highly
Compensated Participant having the highest actual deferral
ratio shall have his portion of Excess Contributions
distributed to him until one of the tests set forth in Section
4.5(a) is satisfied, or until his actual deferral ratio equals
the actual deferral ratio of the Highly Compensated
Participant having the second highest actual deferral ratio.
This process shall continue until one of the tests set forth
in Section 4.5(a) is satisfied. For each Highly Compensated
Participant, the amount of Excess Contributions is equal to
the Elective Contributions on behalf of such Highly
Compensated Participant (determined prior to the application
of this paragraph) minus the amount determined by multiplying
the Highly Compensated Participant's actual deferral ratio
(determined after application of this paragraph) by his
"414(s) Compensation." However, in determining the amount of
Excess Contributions to be distributed with respect to an
affected Highly Compensated Participant as determined herein,
such amount shall be reduced by any Excess Deferred
Compensation previously distributed to
42
such affected Highly Compensated Participant for his taxable year
ending with or within such Plan Year.
(1) With respect to the distribution of Excess
Contributions pursuant to (a) above, such
distribution:
(i) may be postponed but not later
than the close of the Plan Year following
the Plan Year to which they are allocable;
(ii) shall be made first from
unmatched Deferred Compensation and,
thereafter, simultaneously from Deferred
Compensation which is matched and matching
contributions which relate to such Deferred
Compensation. However, any such matching
contributions which are not Vested shall be
forfeited in lieu of being distributed;
(iii) shall be adjusted for Income;
and
(iv) shall be designated by the
Employer as a distribution of Excess
Contributions (and Income).
(2) Any distribution of less than the entire
amount of Excess Contributions shall be treated as a
pro rata distribution of Excess Contributions and
Income.
(3) The determination and correction of Excess
Contributions of a Highly Compensated Participant
whose actual deferral ratio is determined under the
family aggregation rules shall be accomplished by
reducing the actual deferral ratio as required
herein, and the Excess Contributions for the family
unit shall then be allocated among the Family
Members in proportion to the Elective Contributions
of each Family Member that were combined to
determine the group actual deferral ratio.
(b) Within twelve (12) months after the end of
the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy one of the
tests set forth in Section 4.5(a). Such contribution shall be
allocated to the Participant's Elective Account of each
Non-Highly Compensated Participant in the same proportion that
each Non-Highly Compensated Participant's Compensation for the
year bears to the total Compensation of all Non-Highly
Compensated Participants.
43
(c) If during a Plan Year the projected
aggregate amount of Elective Contributions to be allocated to
all Highly Compensated Participants under this Plan would, by
virtue of the tests set forth in Section 4.5(a), cause the
Plan to fail such tests, then the Administrator may
automatically reduce proportionately or in the order provided
in Section 4.6(a) each affected Highly Compensated
Participant's deferral election made pursuant to Section 4.2
by an amount necessary to satisfy one of the tests set forth
in Section 4.5(a).
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for
the Highly Compensated Participant group shall not exceed the
greater of:
(1) 125 percent of such percentage for the
Non-Highly Compensated Participant group; or
(2) the lesser of 200 percent of such
percentage for the Non-Highly Compensated
Participant group, or such percentage for the
Non-Highly Compensated Participant group plus 2
percentage points. However, to prevent the multiple
use of the alternative method described in this
paragraph and Code Section 401(m)(9)(A), any Highly
Compensated Participant eligible to make elective
deferrals pursuant to Section 4.2 or any other cash
or deferred arrangement maintained by the Employer
or an Affiliated Employer and to make Employee
contributions or to receive matching contributions
under this Plan or under any other plan maintained
by the Employer or an Affiliated Employer shall have
his actual contribution ratio reduced pursuant to
Regulation 1.401(m)-2. The provisions of Code
Section 401(m) and Regulations 1.401(m)-1(b) and
1.401(m)-2 are incorporated herein by reference.
(b) For the purposes of this Section and
Section 4.8, "Actual Contribution Percentage" for a Plan Year
means, with respect to the Highly Compensated Participant
group and Non-Highly Compensated Participant group, the
average of the ratios (calculated separately for each
Participant in each group) of:
(1) the sum of Employer matching contributions
made pursuant to Section 4.1(b) on behalf of each
such Participant for such Plan Year; to
44
(2) the Participant's "414(s) Compensation"
for such Plan Year.
(c) For purposes of determining the "Actual
Contribution Percentage" and the amount of Excess Aggregate
Contributions pursuant to Section 4.8(d), only Employer
matching contributions (excluding Employer matching
contributions forfeited or distributed pursuant to Sections
4.2(f) and 4.6(a)(1) or forfeited pursuant to Section 4.8(a))
contributed to the Plan prior to the end of the succeeding
Plan Year shall be considered. In addition, the Administrator
may elect to take into account, with respect to Employees
eligible to have Employer matching contributions pursuant to
Section 4.1(b) allocated to their accounts, elective deferrals
(as defined in Regulation 1.402(g)-1(b)) and qualified
non-elective contributions (as defined in Code Section
401(m)(4)(C)) contributed to any plan maintained by the
Employer. Such elective deferrals and qualified non-elective
contributions shall be treated as Employer matching
contributions subject to Regulation 1.401(m)-1(b)(5) which is
incorporated herein by reference. However, the Plan Year must
be the same as the plan year of the plan to which the elective
deferrals and the qualified non-elective contributions are
made.
(d) For the purpose of determining the actual
contribution ratio of a Highly Compensated Employee who is
subject to the Family Member aggregation rules of Code Section
414(q)(6) because such Employee is either a "five percent
owner" of the Employer or one of the ten (10) Highly
Compensated Employees paid the greatest "415 Compensation"
during the year, the following shall apply:
(1) The combined actual contribution ratio for
the family group (which shall be treated as one
Highly Compensated Participant) shall be determined
by aggregating Employer matching contributions made
pursuant to Section 4.1(b) and "414(s) Compensation"
of all eligible Family Members (including Highly
Compensated Participants). However, in applying the
$200,000 limit to "414(s) Compensation", Family
Members shall include only the affected Employee's
spouse and any lineal descendants who have not
attained age 19 before the close of the Plan Year.
(2) The Employer matching contributions made
pursuant to Section 4.1(b) and "414(s) Compensation"
of all Family Members shall be disregarded for
purposes of determining the "Actual Contribution
Percentage" of the
45
Non-Highly Compensated Participant group except
to the extent taken into account in paragraph (1)
above.
(3) If a Participant is required to be
aggregated as a member of more than one family group
in a plan, all Participants who are members of those
family groups that include the Participant are
aggregated as one family group in accordance with
paragraphs (1) and (2) above.
(e) For purposes of this Section and Code
Sections 401(a)(4), 410(b) and 401(m), if two or more plans of
the Employer to which matching contributions, Employee
contributions, or both, are made are treated as one plan for
purposes of Code Sections 401(a)(4) or 410(b) (other than the
average benefits test under Code Section 410(b)(2)(A)(ii)),
such plans shall be treated as one plan. In addition, two or
more plans of the Employer to which matching contributions,
Employee contributions, or both, are made may be considered as
a single plan for purposes of determining whether or not such
plans satisfy Code Sections 401(a)(4), 410(b) and 401(m). In
such a case, the aggregated plans must satisfy this Section
and Code Sections 401(a)(4), 410(b) and 401(m) as though such
aggregated plans were a single plan. Plans may be aggregated
under this paragraph (e) only if they have the same plan year.
Notwithstanding the above, an employee
stock ownership plan described in Code Section 4975(e)(7) or
409 may not be aggregated with this Plan for purposes of
determining whether the employee stock ownership plan or this
Plan satisfies this Section and Code Sections 401(a)(4),
410(b) and 401(m).
(f) If a Highly Compensated Participant is a
Participant under two or more plans (other than an employee
stock ownership plan as defined in Code Section 4975(e)(7) or
409) which are maintained by the Employer or an Affiliated
Employer to which matching contributions, Employee
contributions, or both, are made, all such contributions on
behalf of such Highly Compensated Participant shall be
aggregated for purposes of determining such Highly Compensated
Participant's actual contribution ratio. However, if the plans
have different plan years, this paragraph shall be applied by
treating all plans ending with or within the same calendar
year as a single plan.
(g) For purposes of Sections 4.7(a) and 4.8, a
Highly Compensated Participant and Non-Highly Compensated
Participant shall include any Employee eligible to have
Employer matching contributions
46
pursuant to Section 4.1(b) (whether or not a deferral
election was made or suspended pursuant to Section 4.2(e))
allocated to his account for the Plan Year.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that the "Actual Contribution
Percentage" for the Highly Compensated Participant group
exceeds the "Actual Contribution Percentage" for the
Non-Highly Compensated Participant group pursuant to Section
4.7(a), the Administrator (on or before the fifteenth day of
the third month following the end of the Plan Year, but in no
event later than the close of the following Plan Year) shall
direct the Trustee to distribute to the Highly Compensated
Participant having the highest actual contribution ratio, his
Vested portion of Excess Aggregate Contributions (and Income
allocable to such contributions) and, if forfeitable, forfeit
such non-Vested Excess Aggregate Contributions attributable to
Employer matching contributions (and Income allocable to such
forfeitures) until either one of the tests set forth in
Section 4.7(a) is satisfied, or until his actual contribution
ratio equals the actual contribution ratio of the Highly
Compensated Participant having the second highest actual
contribution ratio. This process shall continue until one of
the tests set forth in Section 4.7(a) is satisfied.
If the correction of Excess Aggregate
Contributions attributable to Employer matching contributions
is not in proportion to the Vested and non-Vested portion of
such contributions, then the Vested portion of the
Participant's Account attributable to Employer matching
contributions after the correction shall be subject to Section
6.5(h).
(b) Any distribution and/or forfeiture of less
than the entire amount of Excess Aggregate Contributions (and
Income) shall be treated as a pro rata distribution and/or
forfeiture of Excess Aggregate Contributions and Income.
Distribution of Excess Aggregate Contributions shall be
designated by the Employer as a distribution of Excess
Aggregate Contributions (and Income). Forfeitures of Excess
Aggregate Contributions shall be treated in accordance with
Section 4.4.
(c) Excess Aggregate Contributions, including
forfeited matching contributions, shall be treated as Employer
contributions for purposes of Code Sections 404 and 415 even
if distributed from the Plan.
47
Forfeited matching contributions that are
reallocated to Participants' Accounts for the Plan Year in
which the forfeiture occurs shall be treated as an "annual
addition" pursuant to Section 4.9(b) for the Participants to
whose Accounts they are reallocated and for the Participants
from whose Accounts they are forfeited.
(d) For each Highly Compensated Participant,
the amount of Excess Aggregate Contributions is equal to the
Employer matching contributions made pursuant to Section
4.1(b) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section
4.7(c) on behalf of the Highly Compensated Participant
(determined prior to the application of this paragraph) minus
the amount determined by multiplying the Highly Compensated
Participant's actual contribution ratio (determined after
application of this paragraph) by his "414(s) Compensation."
The actual contribution ratio must be rounded to the nearest
one-hundredth of one percent. In no case shall the amount of
Excess Aggregate Contribution with respect to any Highly
Compensated Participant exceed the amount of Employer matching
contributions made pursuant to Section 4.1(b) and any
qualified non-elective contributions or elective deferrals
taken into account pursuant to Section 4.7(c) on behalf of
such Highly Compensated Participant for such Plan Year.
(e) The determination of the amount of Excess
Aggregate Contributions with respect to any Plan Year shall be
made after first determining the Excess Contributions, if any,
to be treated as voluntary Employee contributions due to
recharacterization for the plan year of any other qualified
cash or deferred arrangement (as defined in Code Section
401(k)) maintained by the Employer that ends with or within
the Plan Year.
(f) If the determination and correction of
Excess Aggregate Contributions of a Highly Compensated
Participant whose actual contribution ratio is determined
under the family aggregation rules, then the actual
contribution ratio shall be reduced and the Excess Aggregate
Contributions for the family unit shall be allocated among the
Family Members in proportion to the sum of Employer matching
contributions made pursuant to Section 4.1(b) and any
qualified non-elective contributions or elective deferrals
taken into account pursuant to Section 4.7(c) of each Family
Member that were combined to determine the group actual
contribution ratio.
48
(g) If during a Plan Year the projected
aggregate amount of Employer matching contributions to be
allocated to all Highly Compensated Participants under this
Plan would, by virtue of the tests set forth in Section
4.7(a), cause the Plan to fail such tests, then the
Administrator may automatically reduce proportionately or in
the order provided in Section 4.8(a) each affected Highly
Compensated Participant's projected share of such
contributions by an amount necessary to satisfy one of the
tests set forth in Section 4.7(a).
(h) Notwithstanding the above, within twelve
(12) months after the end of the Plan Year, the Employer may
make a special Qualified Non-Elective Contribution on behalf
of Non-Highly Compensated Participants in an amount sufficient
to satisfy one of the tests set forth in Section 4.7(a). Such
contribution shall be allocated to the Participant's Elective
Account of each Non-Highly Compensated Participant in the same
proportion that each Non-Highly Compensated Participant's
Compensation for the year bears to the total Compensation of
all Non-Highly Compensated Participants. A separate accounting
shall be maintained for the purpose of excluding such
contributions from the "Actual Deferral Percentage" tests
pursuant to Section 4.5(a).
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum
"annual additions" credited to a Participant's accounts for
any "limitation year" shall equal the lesser of: (1) $30,000
(or, if greater, one-fourth of the dollar limitation in effect
under Code Section 415(b)(1)(A)) or (2) twenty-five percent
(25%) of the Participant's "415 Compensation" for such
"limitation year." For any short "limitation year," the dollar
limitation in (1) above shall be reduced by a fraction, the
numerator of which is the number of full months in the short
"limitation year" and the denominator of which is twelve (12).
(b) For purposes of applying the limitations of
Code Section 415, "annual additions" means the sum credited to
a Participant's accounts for any "limitation year" of (1)
Employer contributions, (2) Employee contributions, (3)
forfeitures, (4) amounts allocated, after March 31, 1984, to
an individual medical account, as defined in Code Section
415(l)(2) which is part of a pension or annuity plan
maintained by the Employer and (5) amounts derived from
contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are
49
attributable to post-retirement medical benefits allocated to
the separate account of a key employee (as defined in Code
Section 419A(d)(3)) under a welfare benefit plan (as defined
in Code Section 419(e)) maintained by the Employer. Except,
however, the "415 Compensation" percentage limitation referred
to in paragraph (a)(2) above shall not apply to: (1) any
contribution for medical benefits (within the meaning of Code
Section 419A(f)(2)) after separation from service which
is otherwise treated as an "annual addition," or (2) any
amount otherwise treated as an "annual addition" under Code
Section 415(l)(1).
(c) For purposes of applying the limitations of
Code Section 415, the transfer of funds from one qualified
plan to another is not an "annual addition." In addition, the
following are not Employee contributions for the purposes of
Section 4.9(b)(2): (1) rollover contributions (as defined in
Code Sections 402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3));
(2) repayments of loans made to a Participant from the Plan;
(3) repayments of distributions received by an Employee
pursuant to Code Section 411(a)(7)(B) (cash-outs); (4)
repayments of distributions received by an Employee pursuant
to Code Section 411(a)(3)(D) (mandatory contributions); and
(5) Employee contributions to a simplified employee pension
excludable from gross income under Code Section 408(k)(6).
(d) For purposes of applying the limitations of
Code Section 415, the "limitation year" shall be the Plan
Year.
(e) The dollar limitation under Code Section
415(b)(1)(A) stated in paragraph (a)(1) above shall be
adjusted annually as provided in Code Section 415(d) pursuant
to the Regulations. The adjusted limitation is effective as of
January 1st of each calendar year and is applicable to
"limitation years" ending with or within that calendar year.
(f) For the purpose of this Section, all
qualified defined benefit plans (whether terminated or not)
ever maintained by the Employer shall be treated as one
defined benefit plan, and all qualified defined contribution
plans (whether terminated or not) ever maintained by the
Employer shall be treated as one defined contribution plan.
(g) For the purpose of this Section, if the
Employer is a member of a controlled group of corporations,
trades or businesses under common control (as defined by Code
Section 1563(a) or Code Section
50
414(b) and (c) as modified by Code Section 415(h)), is
a member of an affiliated service group (as defined by Code
Section 414(m)), or is a member of a group of entities
required to be aggregated pursuant to Regulations under Code
Section 414(o), all Employees of such Employers shall be
considered to be employed by a single Employer.
(h) For the purpose of this Section, if this
Plan is a Code Section 413(c) plan, all Employers of a
Participant who maintain this Plan will be considered to be a
single Employer.
(i)(1) If a Participant participates in more than
one defined contribution plan maintained by the Employer which
have different Anniversary Dates, the maximum "annual
additions" under this Plan shall equal the maximum "annual
additions" for the "limitation year" minus any "annual
additions" previously credited to such Participant's accounts
during the "limitation year."
(2) If a Participant participates in both a
defined contribution plan subject to Code Section
412 and a defined contribution plan not subject to
Code Section 412 maintained by the Employer which
have the same Anniversary Date, "annual additions"
will be credited to the Participant's accounts under
the defined contribution plan subject to Code
Section 412 prior to crediting "annual additions" to
the Participant's accounts under the defined
contribution plan not subject to Code Section 412.
(3) If a Participant participates in more than
one defined contribution plan not subject to Code
Section 412 maintained by the Employer which have
the same Anniversary Date, the maximum "annual
additions" under this Plan shall equal the product
of (A) the maximum "annual additions" for the
"limitation year" minus any "annual additions"
previously credited under subparagraphs (1) or (2)
above, multiplied by (B) a fraction (i) the
numerator of which is the "annual additions" which
would be credited to such Participant's accounts
under this Plan without regard to the limitations of
Code Section 415 and (ii) the denominator of which
is such "annual additions" for all plans described
in this subparagraph.
(j) If an Employee is (or has been) a
Participant in one or more defined benefit plans and one or
more defined contribution plans maintained by
51
the Employer, the sum of the defined benefit plan
fraction and the defined contribution plan fraction for any
"limitation year" may not exceed 1.0.
(k) The defined benefit plan fraction for any
"limitation year" is 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 Employer, and the denominator of which is
the lesser of 125 percent of the dollar limitation determined
for the "limitation year" under Code Sections 415(b) and (d)
or 140 percent of the highest average compensation, including
any adjustments under Code Section 415(b).
Notwithstanding the above, 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 the Employer which
were in existence on May 6, 1986, the denominator of this
fraction will not be less than 125 percent of the sum of the
annual benefits under such plans which the Participant had
accrued as of the close of the last "limitation year"
beginning before January 1, 1987, disregarding any changes 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 Code Section 415 for all "limitation years" beginning
before January 1, 1987.
(l) The defined contribution plan fraction for
any "limitation year" is a fraction, the numerator of which is
the sum of the annual additions to the Participant's Account
under all the defined contribution plans (whether or not
terminated) maintained by the Employer 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 Employer, and the annual
additions attributable to all welfare benefit funds, as
defined in Code Section 419(e), and individual medical
accounts, as defined in Code Section 415(l)(2), maintained by
the Employer), and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior
"limitation years" of service with the Employer (regardless of
whether a defined contribution plan was maintained by the
Employer). The maximum aggregate amount in any "limitation
year" is the lesser of 125 percent of the dollar limitation
determined under Code Sections 415(b) and (d) in effect under
Code Section
52
415(c)(1)(A) or 35 percent of the Participant's
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 the 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 the product of (1) the
excess of the sum of the fractions over 1.0 times (2) 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 made after May 5, 1986, but using the
Code 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 all Employee
contributions as annual additions.
(m) Notwithstanding the foregoing, for any
"limitation year" in which the Plan is a Top Heavy Plan, 100
percent shall be substituted for 125 percent in Sections
4.9(k) and 4.9(l) unless the extra minimum allocation is being
provided pursuant to Section 4.4. However, for any "limitation
year" in which the Plan is a Super Top Heavy Plan, 100 percent
shall be substituted for 125 percent in any event.
(n) Notwithstanding anything contained in this
Section to the contrary, the limitations, adjustments and
other requirements prescribed in this Section shall at all
times comply with the provisions of Code Section 415 and the
Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of a reasonable error in
estimating a Participant's Compensation, a reasonable error in
determining the amount of elective deferrals (within the
meaning of Code Section 402(g)(3)) that may be made with
respect to any Participant under the limits of Section 4.9 or
other facts and circumstances to which Regulation
1.415-6(b)(6) shall be applicable, the "annual additions"
under this Plan would cause the maximum "annual additions" to
be exceeded for any
53
Participant, the Administrator shall (1) distribute any
elective deferrals (within the meaning of Code Section
402(g)(3)) or return any voluntary Employee contributions
credited for the "limitation year" to the extent that the
return would reduce the "excess amount" in the Participant's
accounts (2) hold any "excess amount" remaining after the
return of any elective deferrals or voluntary Employee
contributions in a "Section 415 suspense account" (3) use the
"Section 415 suspense account" in the next "limitation year"
(and succeeding "limitation years" if necessary) to reduce
Employer contributions for that Participant if that
Participant is covered by the Plan as of the end of the
"limitation year," or if the Participant is not so covered,
allocate and reallocate the "Section 415 suspense account" in
the next "limitation year" (and succeeding "limitation years"
if necessary) to all Participants in the Plan before any
Employer or Employee contributions which would constitute
"annual additions" are made to the Plan for such "limitation
year" (4) reduce Employer contributions to the Plan for such
"limitation year" by the amount of the "Section 415 suspense
account" allocated and reallocated during such "limitation
year."
(b) For purposes of this Article, "excess
amount" for any Participant for a "limitation year" shall mean
the excess, if any, of (1) the "annual additions" which would
be credited to his account under the terms of the Plan without
regard to the limitations of Code Section 415 over (2) the
maximum "annual additions" determined pursuant to Section 4.9.
(c) For purposes of this Section, "Section 415
suspense account" shall mean an unallocated account equal to
the sum of "excess amounts" for all Participants in the Plan
during the "limitation year." The "Section 415 suspense
account" shall not share in any earnings or losses of the
Trust Fund.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator,
amounts may be transferred from other qualified plans by
Participants, provided that the trust from which such funds
are transferred permits the transfer to be made and the
transfer will not jeopardize the tax exempt status of the Plan
or Trust or create adverse tax consequences for the Employer.
The amounts transferred shall be set up in a separate account
herein referred to as a "Participant's Rollover Account." Such
account shall be fully Vested at all times and shall not be
subject to Forfeiture for any reason.
54
(b) Amounts in a Participant's Rollover Account
shall be held by the Trustee pursuant to the provisions of
this Plan and may not be withdrawn by, or distributed to the
Participant, in whole or in part, except as provided in
paragraphs (c) and (d) of this Section.
(c) Except as permitted by Regulations
(including Regulation 1.411(d)-4), amounts attributable to
elective contributions (as defined in Regulation
1.401(k)-1(g)(3)), including amounts treated as elective
contributions, which are transferred from another qualified
plan in a plan-to-plan transfer shall be subject to the
distribution limitations provided for in Regulation
1.401(k)-1(d). In no event may the distribution be less than
$500.
(d) At Normal Retirement Date, or such other
date when the Participant or his Beneficiary shall be entitled
to receive benefits, the fair market value of the
Participant's Rollover Account shall be used to provide
additional benefits to the Participant or his Beneficiary. Any
distributions of amounts held in a Participant's Rollover
Account shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code
Sections 417 and 411(a)(11) and the Regulations thereunder.
Furthermore, such amounts shall be considered as part of a
Participant's benefit in determining whether an involuntary
cash-out of benefits without Participant consent may be made.
(e) The Administrator may direct that employee
transfers made after a valuation date be segregated into a
separate account for each Participant in a federally insured
savings account, certificate of deposit in a bank or savings
and loan association, money market certificate, or other short
term debt security acceptable to the Trustee until such time
as the allocations pursuant to this Plan have been made, at
which time they may remain segregated or be invested as part
of the general Trust Fund, to be determined by the
Administrator.
(f) All amounts allocated to a Participant's
Rollover Account may be treated as a Directed Investment
Account pursuant to Section 4.12.
(g) For purposes of this Section, the term
"qualified plan" shall mean any tax qualified plan under Code
Section 401(a). The term "amounts transferred from other
qualified plans" shall mean: (i) amounts transferred to this
Plan directly from
55
another qualified plan; (ii) distributions from another
qualified plan which are eligible rollover distributions and
which are either transferred by the Employee to this Plan
within sixty (60) days following his receipt thereof or are
transferred pursuant to a direct rollover; (iii) amounts
transferred to this Plan from a conduit individual retirement
account provided that the conduit individual retirement
account has no assets other than assets which (A) were
previously distributed to the Employee by another qualified
plan as a lump-sum distribution (B) were eligible for
tax-free rollover to a qualified plan and (C) were deposited
in such conduit individual retirement account within sixty
(60) days of receipt thereof and other than earnings on said
assets; and (iv) amounts distributed to the Employee from a
conduit individual retirement account meeting the requirements
of clause (iii) above, and transferred by the Employee to
this Plan within sixty (60) days of his receipt thereof from
such conduit individual retirement account.
(h) Prior to accepting any transfers to which
this Section applies, the Administrator may require the
Employee to establish that the amounts to be transferred to
this Plan meet the requirements of this Section and may also
require the Employee to provide an opinion of counsel
satisfactory to the Employer that the amounts to be
transferred meet the requirements of this Section.
(i) Notwithstanding anything herein to the
contrary, a transfer directly to this Plan from another
qualified plan (or a transaction having the effect of such a
transfer) shall only be permitted if it will not result in the
elimination or reduction of any "Section 411(d)(6) protected
benefit" as described in Section 7.1.
4.12 DIRECTED INVESTMENT ACCOUNT
(a) The Administrator, in his sole discretion,
may determine that all Participants be permitted to direct the
Trustee as to the investment of all or a portion of the
interest in any one or more of their individual account
balances. If such authorization is given, Participants may,
subject to a procedure established by the Administrator and
applied in a uniform nondiscriminatory manner, direct the
Trustee in writing to invest any portion of their account in
specific assets, specific funds or other investments permitted
under the Plan and the directed investment procedure. That
portion of the account of any Participant so directing will
thereupon be considered a
56
Directed Investment Account, which shall not share in Trust
Fund earnings.
(b) A separate Directed Investment Account
shall be established for each Participant who has directed an
investment. Transfers between the Participant's regular
account and his Directed Investment Account shall be charged
and credited as the case may be to each account. The Directed
Investment Account shall not share in Trust Fund earnings, but
it shall be charged or credited as appropriate with the net
earnings, gains, losses and expenses as well as any
appreciation or depreciation in market value during each Plan
Year attributable to such account.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each
Anniversary Date, and at such other date or dates deemed necessary by the
Administrator, herein called "valuation date," to determine the net worth of
the assets comprising the Trust Fund as it exists on the "valuation date." In
determining such net worth, the Trustee shall value the assets comprising the
Trust Fund at their fair market value as of the "valuation date" and shall
deduct all expenses for which the Trustee has not yet obtained reimbursement
from the Employer or the Trust Fund.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the
Trust Fund which are listed on a registered stock exchange, the Administrator
shall direct the Trustee to value the same at the prices they were last traded
on such exchange preceding the close of business on the "valuation date." If
such securities were not traded on the "valuation date," or if the exchange on
which they are traded was not open for business on the "valuation date," then
the securities shall be valued at the prices at which they were last traded
prior to the "valuation date." Any unlisted security held in the Trust Fund
shall be valued at its bid price next preceding the close of business on the
"valuation date," which bid price shall be obtained from a registered broker or
an investment banker. In determining the fair market value of assets other than
securities for which trading or bid prices can be obtained, the Trustee may
appraise such assets itself, or in its discretion, employ one or more
appraisers for that purpose and rely on the values established by such
appraiser or appraisers.
57
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the
Employer and retire for the purposes hereof on his Normal Retirement Date or
Early Retirement Date. However, a Participant may postpone the termination of
his employment with the Employer to a later date, in which event the
participation of such Participant in the Plan, including the right to receive
allocations pursuant to Section 4.4, shall continue until his Late Retirement
Date. Upon a Participant's Retirement Date, or as soon thereafter as is
practicable, the Trustee shall distribute all amounts credited to such
Participant's Combined Account in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his
Retirement Date or other termination of his employment, all
amounts credited to such Participant's Combined Account shall
become fully Vested. The Administrator shall direct the
Trustee, in accordance with the provisions of Sections 6.6 and
6.7, to distribute the value of the deceased Participant's
accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute any
remaining Vested amounts credited to the accounts of a
deceased Former Participant to such Former Participant's
Beneficiary.
(c) Any security interest held by the Plan by
reason of an outstanding loan to the Participant or Former
Participant shall be taken into account in determining the
amount of the Pre-Retirement Survivor Annuity.
(d) The Administrator may require such proper
proof of death and such evidence of the right of any person to
receive payment of the value of the account of a deceased
Participant or Former Participant as the Administrator may
deem desirable. The Administrator's determination of death and
of the right of any person to receive payment shall be
conclusive.
(e) Unless otherwise elected in the manner
prescribed in Section 6.6, the Beneficiary of the death
benefit shall be the Participant's spouse, who shall receive
such benefit in the form of a Pre-Retirement Survivor Annuity
pursuant to Section 6.6. Except,
58
however, the Participant may designate a Beneficiary
other than his spouse if:
(1) the Participant and his spouse have validly
waived the Pre-Retirement Survivor Annuity in the
manner prescribed in Section 6.6, and the spouse has
waived his or her right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has
been abandoned (within the meaning of local law) and
the Participant has a court order to such effect
(and there is no "qualified domestic relations
order" as defined in Code Section 414(p) which
provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a
Beneficiary shall be made on a form satisfactory to the
Administrator. A Participant may at any time revoke his
designation of a Beneficiary or change his Beneficiary by
filing written notice of such revocation or change with the
Administrator. However, the Participant's spouse must again
consent in writing to any change in Beneficiary unless the
original consent acknowledged that the spouse had the right to
limit consent only to a specific Beneficiary and that the
spouse voluntarily elected to relinquish such right. In the
event no valid designation of Beneficiary exists at the time
of the Participant's death, the death benefit shall be payable
to his estate.
6.3 DISABILITY RETIREMENT BENEFITS
No disability benefits, other than those payable upon
termination of employment, are provided in this Plan.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date
coinciding with or subsequent to the termination of a
Participant's employment for any reason other than death or
retirement, the Administrator may direct the Trustee to
segregate the amount of the Vested portion of such Terminated
Participant's Combined Account and invest the aggregate amount
thereof in a separate, federally insured savings account,
certificate of deposit, common or collective trust fund of a
bank or a deferred annuity. In the event the Vested portion of
a Participant's Combined Account is not segregated, the amount
shall remain in a separate account for the
59
Terminated Participant and share in allocations
pursuant to Section 4.4 until such time as a distribution is
made to the Terminated Participant.
Distribution of the funds due to a
Terminated Participant shall be made on the occurrence of an
event which would result in the distribution had the
Terminated Participant remained in the employ of the Employer
(upon the Participant's death, Early or Normal Retirement).
However, at the election of the Participant, the Administrator
shall direct the Trustee to cause the entire Vested portion of
the Terminated Participant's Combined Account to be payable to
such Terminated Participant. Any distribution under this
paragraph shall be made in a manner which is consistent with
and satisfies the provisions of Section 6.5, including, but
not limited to, all notice and consent requirements of Code
Sections 417 and 411(a)(11) and the Regulations thereunder.
If the value of a Terminated Participant's
Vested benefit derived from Employer and Employee
contributions does not exceed $3,500 and has never exceeded
$3,500 at the time of any prior distribution, the
Administrator shall direct the Trustee to cause the entire
Vested benefit to be paid to such Participant in a single lump
sum.
For purposes of this Section 6.4, if the
value of a Terminated Participant's Vested benefit is zero,
the Terminated Participant shall be deemed to have received a
distribution of such Vested benefit.
(b) The Vested portion of any Participant's
Account shall be a percentage of the total amount credited to
his Participant's Account determined on the basis of the
Participant's number of Years of Service according to the
following schedule:
[Download Table]
Vesting Schedule
Years of Service Percentage
Less than 2 0 %
2 20 %
3 40 %
4 60 %
5 80 %
6 100 %
(c) Notwithstanding the vesting schedule above,
upon the complete discontinuance of the Employer's
contributions to the Plan or upon any full or partial
termination of the Plan, all amounts credited to the account
of any affected Participant shall become 100%
60
Vested and shall not thereafter be subject to Forfeiture.
(d) The computation of a Participant's
nonforfeitable percentage of his interest in the Plan shall
not be reduced as the result of any direct or indirect
amendment to this Plan. For this purpose, the Plan shall be
treated as having been amended if the Plan provides for an
automatic change in vesting due to a change in top heavy
status. In the event that the Plan is amended to change or
modify any vesting schedule, a Participant with at least three
(3) Years of Service as of the expiration date of the election
period may elect to have his nonforfeitable percentage
computed under the Plan without regard to such amendment. If a
Participant fails to make such election, then such Participant
shall be subject to the new vesting schedule. The
Participant's election period shall commence on the adoption
date of the amendment and shall end 60 days after the latest
of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written
notice of the amendment from the Employer or
Administrator.
(e)(1) If any Former Participant shall be
reemployed by the Employer before a 1-Year Break in Service
occurs, he shall continue to participate in the Plan in the
same manner as if such termination had not occurred.
(2) If any Former Participant shall be
reemployed by the Employer before five (5)
consecutive 1-Year Breaks in Service, and such
Former Participant had received, or was deemed to
have received, a distribution of his entire Vested
interest prior to his reemployment, his forfeited
account shall be reinstated only if he repays the
full amount distributed to him before the earlier of
five (5) years after the first date on which the
Participant is subsequently reemployed by the
Employer or the close of the first period of five
(5) consecutive 1-Year Breaks in Service commencing
after the distribution, or in the event of a deemed
distribution, upon the reemployment of such Former
Participant. In the event the Former Participant
does repay the full amount distributed to him, or in
the event of a deemed distribution, the
undistributed portion of the
61
Participant's Account must be restored in full,
unadjusted by any gains or losses occurring
subsequent to the Anniversary Date or other
valuation date coinciding with or preceding his
termination. The source for such reinstatement shall
first be any Forfeitures occurring during the year.
If such source is insufficient, then the Employer
shall contribute an amount which is sufficient to
restore any such forfeited Accounts provided,
however, that if a discretionary contribution is
made for such year pursuant to Section 4.1(c), such
contribution shall first be applied to restore any
such Accounts and the remainder shall be allocated
in accordance with Section 4.4.
(3) If any Former Participant is reemployed
after a 1-Year Break in Service has occurred, Years
of Service shall include Years of Service prior to
his 1-Year Break in Service subject to the following
rules:
(i) If a Former Participant has a
1-Year Break in Service, his pre-break and
post-break service shall be used for
computing Years of Service for eligibility
and for vesting purposes only after he has
been employed for one (1) Year of Service
following the date of his reemployment with
the Employer;
(ii) Any Former Participant who
under the Plan does not have a
nonforfeitable right to any interest in the
Plan resulting from Employer contributions
shall lose credits otherwise allowable
under (i) above if his consecutive 1-Year
Breaks in Service equal or exceed the
greater of (A) five (5) or (B) the
aggregate number of his pre-break Years of
Service;
(iii) After five (5) consecutive
1-Year Breaks in Service, a Former
Participant's Vested Account balance
attributable to pre-break service shall not
be increased as a result of post-break
service;
(iv) If a Former Participant who has
not had his Years of Service before a
1-Year Break in Service disregarded
pursuant to (ii) above completes one (1)
Year of Service for eligibility purposes
following his reemployment with the
Employer, he shall
62
participate in the Plan retroactively from
his date of reemployment;
(v) If a Former Participant who has
not had his Years of Service before a
1-Year Break in Service disregarded
pursuant to (ii) above completes a Year of
Service (a 1-Year Break in Service
previously occurred, but employment had not
terminated), he shall participate in the
Plan retroactively from the first day of
the Plan Year during which he completes one
(1) Year of Service.
6.5 DISTRIBUTION OF BENEFITS
(a)(1) Unless otherwise elected as provided below,
a Participant who is married on the "annuity starting date"
and who does not die before the "annuity starting date" shall
receive the value of all of his benefits in the form of a
joint and survivor annuity. The joint and survivor annuity is
an annuity that commences immediately and shall be equal in
value to a single life annuity. Such joint and survivor
benefits following the Participant's death shall continue to
the spouse during the spouse's lifetime at a rate equal to 50%
of the rate at which such benefits were payable to the
Participant. This joint and 50% survivor annuity shall be
considered the designated qualified joint and survivor annuity
and automatic form of payment for the purposes of this Plan.
However, the Participant may elect to receive a smaller
annuity benefit with continuation of payments to the spouse at
a rate of seventy-five percent (75%) or one hundred percent
(100%) of the rate payable to a Participant during his
lifetime, which alternative joint and survivor annuity shall
be equal in value to the automatic joint and 50% survivor
annuity. An unmarried Participant shall receive the value of
his benefit in the form of a life annuity. Such unmarried
Participant, however, may elect in writing to waive the life
annuity. The election must comply with the provisions of this
Section as if it were an election to waive the joint and
survivor annuity by a married Participant, but without the
spousal consent requirement. The Participant may elect to have
any annuity provided for in this Section distributed upon the
attainment of the "earliest retirement age" under the Plan.
The "earliest retirement age" is the earliest date on which,
under the Plan, the Participant could elect to receive
retirement benefits.
(2) Any election to waive the joint and
survivor annuity must be made by the Participant in
writing during the election period and be
63
consented to by the Participant's spouse. If
the spouse is legally incompetent to give consent,
the spouse's legal guardian, even if such guardian
is the Participant, may give consent. Such election
shall designate a Beneficiary (or a form of
benefits) that may not be changed without spousal
consent (unless the consent of the spouse expressly
permits designations by the Participant without the
requirement of further consent by the spouse). Such
spouse's consent shall be irrevocable and must
acknowledge the effect of such election and be
witnessed by a Plan representative or a notary
public. Such consent shall not be required if it is
established to the satisfaction of the Administrator
that the required consent cannot be obtained because
there is no spouse, the spouse cannot be located, or
other circumstances that may be prescribed by
Regulations. The election made by the Participant
and consented to by his spouse may be revoked by the
Participant in writing without the consent of the
spouse at any time during the election period. The
number of revocations shall not be limited. Any new
election must comply with the requirements of this
paragraph. A former spouse's waiver shall not be
binding on a new spouse.
(3) The election period to waive the joint and
survivor annuity shall be the 90 day period ending
on the "annuity starting date."
(4) For purposes of this Section, the "annuity
starting date" means the first day of the first
period for which an amount is paid as an annuity,
or, in the case of a benefit not payable in the form
of an annuity, the first day on which all events
have occurred which entitle the Participant to such
benefit.
(5) With regard to the election, the
Administrator shall provide to the Participant no
less than 30 days and no more than 90 days before
the "annuity starting date" a written explanation
of:
(i) the terms and conditions of the
joint and survivor annuity, and
(ii) the Participant's right to
make, and the effect of, an election to
waive the joint and survivor annuity, and
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(iii) the right of the Participant's
spouse to consent to any election to waive
the joint and survivor annuity, and
(iv) the right of the Participant to
revoke such election, and the effect of
such revocation.
(b) In the event a married Participant duly
elects pursuant to paragraph (a)(2) above not to receive his
benefit in the form of a joint and survivor annuity, or if
such Participant is not married, in the form of a life
annuity, the Administrator, pursuant to the election of the
Participant, shall direct the Trustee to distribute to a
Participant or his Beneficiary any amount to which he is
entitled under the Plan in one or more of the following
methods:
(1) One lump-sum payment in cash;
(2) Payments over a period certain in monthly,
quarterly, semiannual, or annual cash installments.
In order to provide such installment payments, the
Administrator may (A) segregate the aggregate amount
thereof in a separate, federally insured savings
account, certificate of deposit in a bank or savings
and loan association, money market certificate or
other liquid short-term security or (B) purchase a
nontransferable annuity contract for a term certain
(with no life contingencies) providing for such
payment. The period over which such payment is to be
made shall not extend beyond the Participant's life
expectancy (or the life expectancy of the
Participant and his designated Beneficiary).
(3) Purchase of or providing an annuity.
However, such annuity may not be in any form that
will provide for payments over a period extending
beyond either the life of the Participant (or the
lives of the Participant and his designated
Beneficiary) or the life expectancy of the
Participant (or the life expectancy of the
Participant and his designated Beneficiary).
(c) The present value of a Participant's joint
and survivor annuity derived from Employer and Employee
contributions may not be paid without his written consent if
the value exceeds, or has ever exceeded, $3,500 at the time of
any prior distribution. Further, the spouse of a Participant
must consent in writing to any immediate distribution. If the
value of the Participant's benefit derived from Employer and
65
Employee contributions does not exceed $3,500 and has
never exceeded $3,500 at the time of any prior distribution,
the Administrator may immediately distribute such benefit
without such Participant's consent. No distribution may be
made under the preceding sentence after the "annuity starting
date" unless the Participant and his spouse consent in writing
to such distribution. Any written consent required under this
paragraph must be obtained not more than 90 days before
commencement of the distribution and shall be made in a manner
consistent with Section 6.5(a)(2).
(d) Any distribution to a Participant who has a
benefit which exceeds, or has ever exceeded, $3,500 at the
time of any prior distribution shall require such
Participant's consent if such distribution commences prior to
the later of his Normal Retirement Age or age 62. With regard
to this required consent:
(1) No consent shall be valid unless the
Participant has received a general description of
the material features and an explanation of the
relative values of the optional forms of benefit
available under the Plan that would satisfy the
notice requirements of Code Section 417.
(2) The Participant must be informed of his
right to defer receipt of the distribution. If a
Participant fails to consent, it shall be deemed an
election to defer the commencement of payment of any
benefit. However, any election to defer the receipt
of benefits shall not apply with respect to
distributions which are required under Section
6.5(e).
(3) Notice of the rights specified under this
paragraph shall be provided no less than 30 days and
no more than 90 days before the "annuity starting
date".
(4) Written consent of the Participant to the
distribution must not be made before the Participant
receives the notice and must not be made more than
90 days before the "annuity starting date".
(5) No consent shall be valid if a significant
detriment is imposed under the Plan on any
Participant who does not consent to the
distribution.
(e) Notwithstanding any provision in the Plan
to the contrary, the distribution of a Participant's
66
benefits, whether under the Plan or through the
purchase of an annuity contract, shall be made in accordance
with the following requirements and shall otherwise comply
with Code Section 401(a)(9) and the Regulations thereunder
(including Regulation 1.401(a)(9)-2), the provisions of which
are incorporated herein by reference:
(1) A Participant's benefits shall be
distributed to him not later than April 1st of the
calendar year following the later of (i) the
calendar year in which the Participant attains age
70 1/2 or (ii) the calendar year in which the
Participant retires, provided, however, that this
clause (ii) shall not apply in the case of a
Participant who is a "five (5) percent owner" at any
time during the five (5) Plan Year period ending in
the calendar year in which he attains age 70 1/2 or,
in the case of a Participant who becomes a "five (5)
percent owner" during any subsequent Plan Year,
clause (ii) shall no longer apply and the required
beginning date shall be the April 1st of the
calendar year following the calendar year in which
such subsequent Plan Year ends. Alternatively,
distributions to a Participant must begin no later
than the applicable April 1st as determined under
the preceding sentence and must be made over the
life of the Participant (or the lives of the
Participant and the Participant's designated
Beneficiary) or the life expectancy of the
Participant (or the life expectancies of the
Participant and his designated Beneficiary) in
accordance with Regulations. Notwithstanding the
foregoing, clause (ii) above shall not apply to any
Participant unless the Participant had attained age
70 1/2 before January 1, 1988 and was not a "five
(5) percent owner" at any time during the Plan Year
ending with or within the calendar year in which the
Participant attained age 66 1/2 or any subsequent
Plan Year.
(2) Distributions to a Participant and his
Beneficiaries shall only be made in accordance with
the incidental death benefit requirements of Code
Section 401(a)(9)(G) and the Regulations thereunder.
(f) For purposes of this Section, the life
expectancy of a Participant and a Participant's spouse (other
than in the case of a life annuity) shall not be redetermined
in accordance with Code Section 401(a)(9)(D). Life expectancy
and joint and last
67
survivor expectancy shall be computed using the return multiples in
Tables V and VI of Regulation 1.72-9.
(g) All annuity Contracts under this Plan shall
be non-transferable when distributed. Furthermore, the terms
of any annuity Contract purchased and distributed to a
Participant or spouse shall comply with all of the
requirements of the Plan.
(h) If a distribution is made at a time when a
Participant is not fully Vested in his Participant's Account
(employment has not terminated) and the Participant may
increase the Vested percentage in such account:
(1) a separate account shall be established for
the Participant's interest in the Plan as of the
time of the distribution; and
(2) at any relevant time, the Participant's
Vested portion of the separate account shall be
equal to an amount ("X") determined by the formula:
X equals P(AB plus (R x D)) - (R x D)
For purposes of applying the formula: P is the
Vested percentage at the relevant time, AB is the
account balance at the relevant time, D is the
amount of distribution, and R is the ratio of the
account balance at the relevant time to the account
balance after distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below,
a Vested Participant who dies before the annuity starting date
and who has a surviving spouse shall have his death benefit
paid to his surviving spouse in the form of a Pre-Retirement
Survivor Annuity. The Participant's spouse may direct that
payment of the Pre-Retirement Survivor Annuity commence within
a reasonable period after the Participant's death. If the
spouse does not so direct, payment of such benefit will
commence at the time the Participant would have attained the
later of his Normal Retirement Age or age 62. However, the
spouse may elect a later commencement date. Any distribution
to the Participant's spouse shall be subject to the rules
specified in Section 6.6(g).
(b) Any election to waive the Pre-Retirement
Survivor Annuity before the Participant's death must be made
by the Participant in writing during the election
68
period and shall require the spouse's irrevocable consent in the same
manner provided for in Section 6.5(a)(2). Further, the spouse's
consent must acknowledge the specific nonspouse Beneficiary.
Notwithstanding the foregoing, the nonspouse Beneficiary need not be
acknowledged, provided the consent of the spouse acknowledges that
the spouse has the right to limit consent only to a specific
Beneficiary and that the spouse voluntarily elects to relinquish such
right.
(c) The election period to waive the
Pre-Retirement Survivor Annuity shall begin on the first day
of the Plan Year in which the Participant attains age 35 and
end on the date of the Participant's death. An earlier waiver
(with spousal consent) may be made provided a written
explanation of the Pre-Retirement Survivor Annuity is given to
the Participant and such waiver becomes invalid at the
beginning of the Plan Year in which the Participant turns age
35. In the event a Vested Participant separates from service
prior to the beginning of the election period, the election
period shall begin on the date of such separation from
service.
(d) With regard to the election, the
Administrator shall provide each Participant within the
applicable period, with respect to such Participant (and
consistent with Regulations), a written explanation of the
Pre-Retirement Survivor Annuity containing comparable
information to that required pursuant to Section 6.5(a)(5).
For the purposes of this paragraph, the term "applicable
period" means, with respect to a Participant, whichever of the
following periods ends last:
(1) 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;
(2) A reasonable period after the individual
becomes a Participant;
(3) A reasonable period ending after the Plan
no longer fully subsidizes the cost of the
Pre-Retirement Survivor Annuity with respect to the
Participant;
(4) A reasonable period ending after Code
Section 401(a)(11) applies to the Participant; or
69
(5) A reasonable period after separation from
service in the case of a Participant who separates
before attaining age 35. For this purpose, the
Administrator must provide the explanation beginning
one year before the separation from service and
ending one year after such separation. If such a
Participant thereafter returns to employment with
the Employer, the applicable period for such
Participant shall be redetermined.
For purposes of applying this Section
6.6(d), a reasonable period ending after the enumerated events
described in paragraphs (2), (3) and (4) is the end of the two
year period beginning one year prior to the date the
applicable event occurs, and ending one year after that date.
(e) If the present value of the Pre-Retirement
Survivor Annuity derived from Employer and Employee
contributions does not exceed $3,500 and has never exceeded
$3,500 at the time of any prior distribution, the
Administrator shall direct the immediate distribution of such
amount to the Participant's spouse. No distribution may be
made under the preceding sentence after the annuity starting
date unless the spouse consents in writing. If the value
exceeds, or has ever exceeded, $3,500 at the time of any prior
distribution, an immediate distribution of the entire amount
may be made to the surviving spouse, provided such surviving
spouse consents in writing to such distribution. Any written
consent required under this paragraph must be obtained not
more than 90 days before commencement of the distribution and
shall be made in a manner consistent with Section 6.5(a)(2).
(f)(1) In the event the death benefit is not paid
in the form of a Pre-Retirement Survivor Annuity, it shall be
paid to the Participant's Beneficiary by either of the
following methods, as elected by the Participant (or if no
election has been made prior to the Participant's death, by
his Beneficiary), subject to the rules specified in Section
6.6(g):
(i) One lump-sum payment in cash;
(ii) Payment in monthly, quarterly,
semi-annual, or annual cash installments
over a period to be determined by the
Participant or his Beneficiary. After
periodic installments commence, the
Beneficiary shall have the right to direct
the Trustee to reduce the period over which
such periodic installments shall be made,
70
and the Trustee shall adjust the cash amount of
such periodic installments accordingly.
(2) In the event the death benefit payable
pursuant to Section 6.2 is payable in installments,
then, upon the death of the Participant, the
Administrator may direct the Trustee to segregate
the death benefit into a separate account, and the
Trustee shall invest such segregated account
separately, and the funds accumulated in such
account shall be used for the payment of the
installments.
(g) Notwithstanding any provision in the Plan
to the contrary, distributions upon the death of a Participant
shall be made in accordance with the following requirements
and shall otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder. If it is determined pursuant to
Regulations that the distribution of a Participant's interest
has begun and the Participant dies before his entire interest
has been distributed to him, the remaining portion of such
interest shall be distributed at least as rapidly as under the
method of distribution selected pursuant to Section 6.5 as of
his date of death. If a Participant dies before he has begun
to receive any distributions of his interest under the Plan or
before distributions are deemed to have begun pursuant to
Regulations, then his death benefit shall be distributed to
his Beneficiaries by December 31st of the calendar year in
which the fifth anniversary of his date of death occurs.
However, the 5-year distribution
requirement of the preceding paragraph shall not apply to any
portion of the deceased Participant's interest which is
payable to or for the benefit of a designated Beneficiary. In
such event, such portion shall be distributed over the life of
such designated Beneficiary (or over a period not extending
beyond the life expectancy of such designated Beneficiary)
provided such distribution begins not later than December 31st
of the calendar year immediately following the calendar year
in which the Participant died. However, in the event the
Participant's spouse (determined as of the date of the
Participant's death) is his Beneficiary, the requirement that
distributions commence within one year of a Participant's
death shall not apply. In lieu thereof, distributions must
commence on or before the later of: (1) December 31st of the
calendar year immediately following the calendar year in which
the Participant died; or (2) December 31st of the calendar
year in which the Participant would have attained age 70 1/2.
If the surviving spouse dies
71
before distributions to such spouse begin, then the 5-year
distribution requirement of this Section shall apply as if the
spouse was the Participant.
(h) For purposes of this Section, the life
expectancy of a Participant and a Participant's spouse (other
than in the case of a life annuity) shall not be redetermined
in accordance with Code Section 401(a)(9)(D). Life expectancy
and joint and last survivor expectancy shall be computed using
the return multiples in Tables V and VI of Regulation 1.72-9.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the
Trustee is to make a distribution or to commence a series of payments on or as
of an Anniversary Date, the distribution may be made or begun on such date or
as soon thereafter as is practicable. However, unless a Former Participant
elects in writing to defer the receipt of benefits (such election may not
result in a death benefit that is more than incidental), the payment of
benefits shall begin not later than the 60th day after the close of the Plan
Year in which the latest of the following events occurs: (a) the date on which
the Participant attains the earlier of age 65 or the Normal Retirement Age
specified herein; (b) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or (c) the date the Participant terminates
his service with the Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom
the Beneficiary maintains his residence, or to the custodian for such
Beneficiary under the Uniform Gift to Minors Act or Gift to Minors Act, if such
is permitted by the laws of the state in which said Beneficiary resides. Such a
payment to the legal guardian, custodian or parent of a minor Beneficiary shall
fully discharge the Trustee, Employer, and Plan from further liability on
account thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution
payable to a Participant or his Beneficiary hereunder shall, at the later of
the Participant's attainment of age 62 or his Normal Retirement Age, remain
unpaid solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a
Forfeiture pursuant to the
72
Plan. In the event a Participant or Beneficiary is located subsequent to his
benefit being reallocated, such benefit shall be restored.
6.10 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the
Participant, shall direct the Trustee to distribute to any
Participant in any one Plan Year up to the lesser of 100% of
his Participant's Elective Account valued as of the last
Anniversary Date or other valuation date or the amount
necessary to satisfy the immediate and heavy financial need of
the Participant. Any distribution made pursuant to this
Section shall be deemed to be made as of the first day of the
Plan Year or, if later, the valuation date immediately
preceding the date of distribution, and the Participant's
Elective Account shall be reduced accordingly. Withdrawal
under this Section shall be authorized only if the
distribution is on account of:
(1) Expenses for medical care described in Code
Section 213(d) previously incurred by the
Participant, his spouse, or any of his dependents
(as defined in Code Section 152) or necessary for
these persons to obtain medical care;
(2) The costs directly related to the purchase
of a principal residence for the Participant
(excluding mortgage payments);
(3) Payment of tuition and related educational
fees for the next twelve (12) months of
post-secondary education for the Participant, his
spouse, children, or dependents; or
(4) Payments necessary to prevent the eviction
of the Participant from his principal residence or
foreclosure on the mortgage of the Participant's
principal residence.
(b) No distribution shall be made pursuant to
this Section unless the Administrator, based upon the
Participant's representation and such other facts as are known
to the Administrator, determines that all of the following
conditions are satisfied:
(1) The distribution is not in excess of the
amount of the immediate and heavy financial need of
the Participant. The amount of the immediate and
heavy financial need may include any amounts
necessary to pay any federal, state, or local income
taxes or penalties reasonably anticipated to result
from the distribution;
73
(2) The Participant has obtained all
distributions, other than hardship distributions,
and all nontaxable (at the time of the loan) loans
currently available under all plans maintained by
the Employer;
(3) The Plan, and all other plans maintained by
the Employer, provide that the Participant's
elective deferrals and voluntary Employee
contributions will be suspended for at least twelve
(12) months after receipt of the hardship
distribution or, the Participant, pursuant to a
legally enforceable agreement, will suspend his
elective deferrals and voluntary Employee
contributions to the Plan and all other plans
maintained by the Employer for at least twelve (12)
months after receipt of the hardship distribution;
and
(4) The Plan, and all other plans maintained by
the Employer, provide that the Participant may not
make elective deferrals for the Participant's
taxable year immediately following the taxable year
of the hardship distribution in excess of the
applicable limit under Code Section 402(g) for such
next taxable year less the amount of such
Participant's elective deferrals for the taxable
year of the hardship distribution.
(c) Notwithstanding the above, distributions
from the Participant's Elective Account pursuant to this
Section shall be limited solely to the Participant's total
Deferred Compensation as of the date of distribution, reduced
by the amount of any previous distributions pursuant to this
Section. In no event may the withdrawal be less than $500.
(d) Any distribution made pursuant to this
Section shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code
Sections 417 and 411(a)(11) and the Regulations thereunder.
6.11 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached the "earliest
retirement age" under the Plan. For the purposes of
74
this Section, "alternate payee," "qualified domestic relations order" and
"earliest retirement age" shall have the meaning set forth under Code Section
414(p).
6.12 DIRECT ROLLOVER
(a) Notwithstanding any provision of the Plan
to the contrary that would otherwise limit a distributee's
election under this Section, a distributee may elect, at the
time and in the manner prescribed by the 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.
(b) For purposes of this Section the
following definitions shall apply:
(1) An eligible rollover distribution is any
distribution of all or any portion of the balance to
the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of
substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives
(or joint life expectancies) of the distributee and
the distributee's designated beneficiary, or for a
specified period of ten years or more; any
distribution to the extent such distribution is
required under Code Section 401(a)(9); 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).
(2) An eligible retirement plan is an
individual retirement account described in Code
Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan
described in Code Section 403(a), or a qualified
trust described in Code Section 401(a), that accepts
the distributee's eligible rollover distribution.
However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account
or individual retirement annuity.
(3) A distributee includes an Employee or
former Employee. In addition, the Employee's or
former Employee's surviving spouse and the
Employee's or former Employee's spouse or former
spouse who is
75
the alternate payee under a qualified domestic
relations order, as defined in Code Section 414(p),
are distributees with regard to the interest of the
spouse or former spouse.
(4) A direct rollover is a payment by the plan
to the eligible retirement plan specified by the
distributee.
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT
(a) The Employer shall have the right at any
time to amend the Plan, subject to the limitations of this
Section. Any such amendment shall be adopted by formal action
of the Employer's board of directors and executed by an
officer authorized to act on behalf of the Employer. However,
any amendment which affects the rights, duties or
responsibilities of the Trustee and Administrator may only be
made with the Trustee's and Administrator's written consent.
Any such amendment shall become effective as provided therein
upon its execution. The Trustee shall not be required to
execute any such amendment unless the Trust provisions
contained herein are a part of the Plan and the amendment
affects the duties of the Trustee hereunder.
(b) No amendment to the Plan shall be effective
if it authorizes or permits any part of the Trust Fund (other
than such part as is required to pay taxes and administration
expenses) to be used for or diverted to any purpose other than
for the exclusive benefit of the Participants or their
Beneficiaries or estates; or causes any reduction in the
amount credited to the account of any Participant; or causes
or permits any portion of the Trust Fund to revert to or
become property of the Employer.
(c) Except as permitted by Regulations, no Plan
amendment or transaction having the effect of a Plan amendment
(such as a merger, plan transfer or similar transaction) shall
be effective to the extent it eliminates or reduces any
"Section 411(d)(6) protected benefit" or adds or modifies
conditions relating to "Section 411(d)(6) protected benefits"
the result of which is a further restriction on such benefit
unless such protected benefits are preserved with respect to
benefits accrued as of the later of the adoption date or
effective date of the amendment. "Section 411(d)(6) protected
benefits" are benefits described in Code Section 411(d)(6)(A),
early retirement benefits and
76
retirement-type subsidies, and optional forms of benefit.
7.2 TERMINATION
(a) The Employer shall have the right at any
time to terminate the Plan by delivering to the Trustee and
Administrator written notice of such termination. Upon any
full or partial termination, all amounts credited to the
affected Participants' Combined Accounts shall become 100%
Vested as provided in Section 6.4 and shall not thereafter be
subject to forfeiture, and all unallocated amounts shall be
allocated to the accounts of all Participants in accordance
with the provisions hereof.
(b) Upon the full termination of the Plan, the
Employer shall direct the distribution of the assets of the
Trust Fund to Participants in a manner which is consistent
with and satisfies the provisions of Section 6.5.
Distributions to a Participant shall be made in cash or
through the purchase of irrevocable nontransferable deferred
commitments from an insurer. Except as permitted by
Regulations, the termination of the Plan shall not result in
the reduction of "Section 411(d)(6) protected benefits" in
accordance with Section 7.1(c).
7.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan and trust only if the
benefits which would be received by a Participant of this Plan, in the event of
a termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 7.1(c).
7.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's
discretion, make loans to Participants and Beneficiaries under
the following circumstances: (1) loans shall be made available
to all Participants and Beneficiaries on a reasonably
equivalent basis; (2) loans shall not be made available to
Highly Compensated Employees in an amount greater than the
amount made available to other Participants and Beneficiaries;
(3) loans shall bear a reasonable rate of interest; (4) loans
shall be adequately secured; and
77
(5) shall provide for repayment over a reasonable period of
time.
(b) Loans made pursuant to this Section (when
added to the outstanding balance of all other loans made by
the Plan to the Participant) shall be limited to the lesser
of:
(1) $50,000 reduced by the excess (if any) of
the highest outstanding balance of loans from the
Plan to the Participant during the one year period
ending on the day before the date on which such loan
is made, over the outstanding balance of loans from
the Plan to the Participant on the date on which
such loan was made, or
(2) one-half (1/2) of the present value of the
non-forfeitable accrued benefit of the Participant
under the Plan.
(c) Loans shall provide for level amortization
with payments to be made not less frequently than each pay
period over a period not to exceed five (5) years. However,
loans used to acquire any dwelling unit which, within a
reasonable time, is to be used (determined at the time the
loan is made) as a principal residence of the Participant
shall provide for periodic repayment over a reasonable period
of time that may exceed five (5) years. Notwithstanding the
foregoing, loans made prior to January 1, 1987 which are used
to acquire, construct, reconstruct or substantially
rehabilitate any dwelling unit which, within a reasonable
period of time is to be used (determined at the time the loan
is made) as a principal residence of the Participant or a
member of his family (within the meaning of Code Section
267(c)(4)) may provide for periodic repayment over a
reasonable period of time that may exceed five (5) years.
Additionally, loans made prior to January 1, 1987, may provide
for periodic payments which are made less frequently than each
pay period and which do not necessarily result in level
amortization.
(d) Any loan made pursuant to this Section
where the Vested interest of the Participant is used to secure
such loan shall require the written consent of the
Participant's spouse in a manner consistent with Section
6.5(a). Such written consent must be obtained within the
90-day period prior to the date the loan is made. However, no
spousal consent shall be required under this paragraph if the
total accrued benefit subject to the security is not in excess
of $3,500.
(e) Any loans granted or renewed shall be made
pursuant to a Participant loan program. Such loan
78
program shall be established in writing and must include, but need
not be limited to, the following:
(1) the identity of the person or positions
authorized to administer the Participant loan
program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of
loans offered;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a Participant
loan; and
(7) the events constituting default and the steps that
will be taken to preserve Plan assets.
Such Participant loan program shall be
contained in a separate written document which, when properly
executed, is hereby incorporated by reference and made a part
of the Plan. Furthermore, such Participant loan program may
be modified or amended in writing from time to time without
the necessity of amending this Section.
ARTICLE VIII
MISCELLANEOUS
8.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between
the Employer and any Participant or to be a consideration or an inducement for
the employment of any Participant or Employee. Nothing contained in this Plan
shall be deemed to give any Participant or Employee the right to be retained in
the service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect
which such discharge shall have upon him as a Participant of this Plan.
8.2 ALIENATION
(a) Subject to the exceptions provided below,
no benefit which shall be payable out of the Trust Fund to any
person (including a Participant or his Beneficiary) shall be
subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge,
79
encumbrance, or charge, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or charge
the same shall be void; and no such benefit shall in any
manner be liable for, or subject to, the debts, contracts,
liabilities, engagements, or torts of any such person, nor
shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized by
the Trustee, except to such extent as may be required by law.
(b) This provision shall not apply to the
extent a Participant or Beneficiary is indebted to the Plan,
as a result of a loan from the Plan. At the time a
distribution is to be made to or for a Participant's or
Beneficiary's benefit, such proportion of the amount
distributed as shall equal such loan indebtedness shall be
paid by the Trustee to the Trustee or the Administrator, at
the direction of the Administrator, to apply against or
discharge such loan indebtedness. Prior to making a payment,
however, the Participant or Beneficiary must be given written
notice by the Administrator that such loan indebtedness is to
be so paid in whole or part from his Participant's Combined
Account. If the Participant or Beneficiary does not agree that
the loan indebtedness is a valid claim against his Vested
Participant's Combined Account, he shall be entitled to a
review of the validity of the claim in accordance with
procedures provided in Sections 2.12 and 2.13.
(c) This provision shall not apply to a
"qualified domestic relations order" defined in Code Section
414(p), and those other domestic relations orders permitted to
be so treated by the Administrator under the provisions of the
Retirement Equity Act of 1984. The Administrator shall
establish a written procedure to determine the qualified
status of domestic relations orders and to administer
distributions under such qualified orders. Further, to the
extent provided under a "qualified domestic relations order,"
a former spouse of a Participant shall be treated as the
spouse or surviving spouse for all purposes under the Plan.
8.3 CONSTRUCTION OF PLAN
This Plan shall be construed and enforced according to the Act
and the laws of the State of New York, other than its laws respecting choice of
law, to the extent not preempted by the Act.
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8.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine
or neuter gender, they shall be construed as though they were also used in
another gender in all cases where they would so apply, and whenever any words
are used herein in the singular or plural form, they shall be construed as
though they were also used in the other form in all cases where they would so
apply.
8.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which the Trustee or
the Administrator may be a party, and such claim, suit, or proceeding is
resolved in favor of the Trustee or Administrator, they shall be entitled to be
reimbursed from the Trust Fund for any and all costs, attorney's fees, and
other expenses pertaining thereto incurred by them for which they shall have
become liable.
8.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise
specifically permitted by law, it shall be impossible by
operation of the Plan or of the Trust, by termination of
either, by power of revocation or amendment, by the happening
of any contingency, by collateral arrangement or by any other
means, for any part of the corpus or income of any trust fund
maintained pursuant to the Plan or any funds contributed
thereto to be used for, or diverted to, purposes other than
the exclusive benefit of Participants, Retired Participants,
or their Beneficiaries.
(b) In the event the Employer shall make an
excessive contribution under a mistake of fact pursuant to Act
Section 403(c)(2)(A), the Employer may demand repayment of
such excessive contribution at any time within one (1) year
following the time of payment and the Trustees shall return
such amount to the Employer within the one (1) year period.
Earnings of the Plan attributable to the excess contributions
may not be returned to the Employer but any losses
attributable thereto must reduce the amount so returned.
8.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act and regulations thereunder, shall be bonded in an amount
not less than 10% of the amount of the funds such Fiduciary handles; provided,
however, that the minimum bond shall be $1,000 and the maximum bond, $500,000.
The amount of funds handled shall be determined at the beginning of each Plan
81
Year by the amount of funds handled by such person, group, or class to be
covered and their predecessors, if any, during the preceding Plan Year, or if
there is no preceding Plan Year, then by the amount of the funds to be handled
during the then current year. The bond shall provide protection to the Plan
against any loss by reason of acts of fraud or dishonesty by the Fiduciary
alone or in connivance with others. The surety shall be a corporate surety
company (as such term is used in Act Section 412(a)(2)), and the bond shall be
in a form approved by the Secretary of Labor. Notwithstanding anything in the
Plan to the contrary, the cost of such bonds shall be an expense of and may, at
the election of the Administrator, be paid from the Trust Fund or by the
Employer.
8.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors,
shall be responsible for the validity of any Contract issued hereunder or for
the failure on the part of the insurer to make payments provided by any such
Contract, or for the action of any person which may delay payment or render a
Contract null and void or unenforceable in whole or in part.
8.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not have
any responsibility for the validity of this Plan or for the tax or legal
aspects of this Plan. The insurer shall be protected and held harmless in
acting in accordance with any written direction of the Trustee, and shall have
no duty to see to the application of any funds paid to the Trustee, nor be
required to question any actions directed by the Trustee. Regardless of any
provision of this Plan, the insurer shall not be required to take or permit any
action or allow any benefit or privilege contrary to the terms of any Contract
which it issues hereunder, or the rules of the insurer.
8.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for such Participant or
Beneficiary in accordance with the provisions of the Plan, shall, to the extent
thereof, be in full satisfaction of all claims hereunder against the Trustee
and the Employer, either of whom may require such Participant, legal
representative, Beneficiary, guardian or committee, as a condition precedent to
such payment, to execute a receipt and release thereof in such form as shall be
determined by the Trustee or Employer.
82
8.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted
or required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
8.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2)
the Administrator and (3) the Trustee. The named Fiduciaries shall have only
those specific powers, duties, responsibilities, and obligations as are
specifically given them under the Plan. In general, the Employer shall have the
sole responsibility for making the contributions provided for under Section
4.1; and shall have the sole authority to appoint and remove the Trustee and
the Administrator; to formulate the Plan's "funding policy and method"; and to
amend or terminate, in whole or in part, the Plan. The Administrator shall have
the sole responsibility for the administration of the Plan, which
responsibility is specifically described in the Plan. The Trustee shall have
the sole responsibility of management of the assets held under the Trust,
except those assets, the management of which has been assigned to an Investment
Manager, who shall be solely responsible for the management of the assets
assigned to it, all as specifically provided in the Plan. Each named Fiduciary
warrants that any directions given, information furnished, or action taken by
it shall be in accordance with the provisions of the Plan, authorizing or
providing for such direction, information or action. Furthermore, each named
Fiduciary may rely upon any such direction, information or action of another
named Fiduciary as being proper under the Plan, and is not required under the
Plan to inquire into the propriety of any such direction, information or
action. It is intended under the Plan that each named Fiduciary shall be
responsible for the proper exercise of its own powers, duties, responsibilities
and obligations under the Plan. No named Fiduciary shall guarantee the Trust
Fund in any manner against investment loss or depreciation in asset value. Any
person or group may serve in more than one Fiduciary capacity. In the
furtherance of their responsibilities hereunder, the "named Fiduciaries" shall
be empowered to interpret the Plan and Trust and to resolve ambiguities,
inconsistencies and omissions, which findings shall be binding, final and
conclusive.
8.13 HEADINGS
The headings and subheadings of this Plan have been inserted
for convenience of reference and are to be ignored in any construction of the
provisions hereof.
83
8.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the
contrary, contributions to this Plan are conditioned upon the
initial qualification of the Plan under Code Section 401. If
the Plan receives an adverse determination with respect to its
initial qualification, then the Plan may return such
contributions to the Employer within one year after such
determination, provided the application for the determination
is made by the time prescribed by law for filing the
Employer's return for the taxable year in which the Plan was
adopted, or such later date as the Secretary of the Treasury
may prescribe.
(b) Notwithstanding any provisions to the
contrary, except Sections 3.6, 3.7, and 4.1(e), any
contribution by the Employer to the Trust Fund is conditioned
upon the deductibility of the contribution by the Employer
under the Code and, to the extent any such deduction is
disallowed, the Employer may, within one (1) year following
the disallowance of the deduction, demand repayment of such
disallowed contribution and the Trustee shall return such
contribution within one (1) year following the disallowance.
Earnings of the Plan attributable to the excess contribution
may not be returned to the Employer, but any losses
attributable thereto must reduce the amount so returned.
8.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied
in a uniform, nondiscriminatory manner. In the event of any conflict between
the terms of this Plan and any Contract purchased hereunder, the Plan
provisions shall control.
84
IN WITNESS WHEREOF, this Plan has been executed the day and
year first above written.
Signed, sealed, and delivered
in the presence of:
Getty Petroleum Marketing Inc.
______________________________ By__________________________
EMPLOYER
______________________________
WITNESSES AS TO EMPLOYER
85
DEAR CORBEL CLIENT:
Enclosed is the package you ordered. This package includes IRS Forms 5307 (Rev
3/96) and 5300 (Rev 1/96). Although we are providing both tax submission forms,
only one form (the 5307 OR the 5300) must be submitted.
Form 5307 will be used for most plan submissions under Corbel's Volume
Submitter Program. This will entitle you to pay a reduced User Fee. However,
the 5300 is being made available to you for submission if the plan will NOT
qualify under the Volume Submitter Program. Generally, this will occur if
special language changes are so substantial that the IRS will not accept the
plan under the Volume Submitter Program.
There are two sheets enclosed entitled "Form 5307 Submission Instructions" and
"Form 5300 Submission Instructions" which you should review and follow
carefully. It's especially important to pay close attention to the 5307/5300
and other tax forms since there is information not available in our files which
you or the employer must complete.
Finally, you may only submit Form 5307 or Form 5300 if the employer or the
employer's representative includes IRS Schedule Q, Nondiscrimination
Requirements (Schedule Q enclosed). In addition to Schedule Q, you must also
include various demonstrations pursuant to Schedule Q. Corbel has provided
demonstrations 2, 4 and 9.
Remember, submit either Form 5307 or Form 5300, but not both.
Thanks for the opportunity to serve you.
CORBEL
CERTIFICATE OF CORPORATE RESOLUTION
The undersigned Secretary of Getty Petroleum Marketing Inc.
(the Corporation) hereby certifies that the following resolutions were duly
adopted by the board of directors of the Corporation on ______________________,
and that such resolutions have not been modified or rescinded as of the date
hereof:
RESOLVED, that the form of Profit Sharing Plan effective
February 1, 1997, presented to this meeting is hereby approved and adopted and
that the proper officers of the Corporation are hereby authorized and directed
to execute and deliver to the Trustee of the Plan one or more counterparts of
the Plan.
RESOLVED, that for purposes of the limitations on
contributions and benefits under the Plan, prescribed by Section 415 of the
Internal Revenue Code, the "limitation year" shall be the Plan Year.
RESOLVED, that not later than the due date (including
extensions hereof) of the Corporation's federal income tax return for each of
its fiscal years hereafter, the Corporation shall contribute to the Plan for
each such fiscal year such amount as shall be determined by the board of
directors of the Corporation and that the Treasurer of the Corporation is
authorized and directed to pay such contribution to the Trustee of the Plan in
cash or property and to designate to the Trustee the year for which such
contribution is made.
RESOLVED, that the proper officers of the Corporation shall
act as soon as possible to notify the employees of the Corporation of the
adoption of the Profit Sharing Plan by delivering to each employee a copy of
the summary description of the Plan in the form of the Summary Plan Description
presented to this meeting, which form is hereby approved.
The undersigned further certifies that attached hereto as
Exhibits A, B and C, respectively, are true copies of Getty Petroleum Marketing
Inc. Retirement and Profit Sharing Plan, Summary Plan Description and Funding
Policy and Method approved and adopted in the foregoing resolutions.
__________________________________
Secretary
Date: ____________________________
GETTY PETROLEUM MARKETING INC. RETIREMENT AND PROFIT SHARING PLAN
FUNDING POLICY AND METHOD
A pension benefit plan (as defined in the Employee Retirement
Income Security Act of 1974) has been adopted by the company for the purpose of
rewarding long and loyal service to the company by providing to employees
additional financial security at retirement. Incidental benefits are provided
in the case of disability, death or other termination of employment.
Since the principal purpose of the plan is to provide benefits
at normal retirement age, the principal goal of the investment of the funds in
the plan should be both security and long-term stability with moderate growth
commensurate with the anticipated retirement dates of participants.
Investments, other than "fixed dollar" investments, should be included among
the plan's investments to prevent erosion by inflation. However, investments
should be sufficiently liquid to enable the plan, on short notice, to make some
distributions in the event of the death or disability of a participant.
Dates Referenced Herein and Documents Incorporated by Reference
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