1
As filed with the Securities and Exchange Commission on October 2, 1997
Registration No. 333-
................................................................................
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
................................................................................
GAYLORD ENTERTAINMENT COMPANY*
(Exact name of registrant as specified in its charter)
DELAWARE 73-0664379
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
ONE GAYLORD DRIVE
NASHVILLE, TENNESSEE 37214
(Address of Principal Executive Offices) Zip Code)
AMENDED AND RESTATED GAYLORD ENTERTAINMENT COMPANY 401(K) SAVINGS PLAN
(Full title of the plan)
F. M. WENTWORTH, JR.
ONE GAYLORD DRIVE
NASHVILLE, TENNESSEE 37214
(Name and address of agent for service)
(615) 316-6500
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registration
registered ** registered share *** price *** fee
- --------------------------------------------------------------------------------------------------
Common Stock, $.01 par value 250,000 shares $29.34375 $7,335,938 $2,224
==================================================================================================
* Formerly known as New Gaylord Entertainment Company.
** In addition, pursuant to Rule 416(c) under the Securities Act of 1933
and General Instruction F to Form S-8, this Registration Statement also
covers an indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plan described herein.
*** The offering price is estimated solely for the purpose of determining
the amount of the registration fee. Such estimate has been calculated
in accordance with Rule 457(c) and Rule 457(h) and is based upon the
average of the high and low prices per share of the Registrant's Common
Stock as reported on the New York Stock Exchange on October 1, 1997.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Gaylord Entertainment Company,
formerly known as New Gaylord Entertainment Company (the "Registrant"), with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), are hereby incorporated by reference as
of their respective dates:
(1) The Registrant's effective Registration Statement on Form 10,
containing among other things, audited financial statements
for the Registrant's latest fiscal year ended December 31,
1996.
(2) The Annual Report on Form 11-K of the Gaylord Entertainment
Company 401(k) Savings Plan for the plan's fiscal year ended
December 31, 1996.
(3) The description of the Registrant's Common Stock contained in
the effective Registration Statement on Form 10 filed by the
Registrant to register the Common Stock under the Exchange
Act, including all amendments and reports filed for the
purpose of updating such description prior to the termination
of the offering of the Common Stock offered hereby.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14, and 15(d) of the Exchange Act after the date hereof and prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in any
other subsequently filed document which also is incorporated by reference
herein) modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed to constitute a part hereof except as so modified
or superseded.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to authority conferred by DGCL Section 102(b)(7), the
Registrant's Restated Certificate of Incorporation, as amended, contains a
provision providing that no director of the Registrant shall be liable to it or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent that such exemption from liability or limitation
thereof is not permitted under the DGCL as then in effect or as the same may be
amended. This provision is intended to eliminate the risk that a director might
incur personal liability to the Registrant or its stockholders for breach of the
duty of care.
DGCL Section 145 contains provisions permitting, and in some situations
requiring, Delaware corporations, such as the Registrant, to provide
indemnification to their officers and directors for losses and litigation
expenses incurred in connection with their service to the corporation in those
capacities. The By-laws of the Registrant contain provisions requiring
indemnification by the Registrant of, and advancement of expenses to, its
directors and officers to the fullest extent permitted by law. Among other
things, these provisions provide indemnification for the Registrant's officers
and directors against liabilities for judgments in and settlements of lawsuits
and other proceedings and for the advance and payment of fees and expenses
reasonably incurred by the director or officer in defense of any such lawsuit or
proceeding.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index (page II-6) and Item 9(D) below.
ITEM 9. UNDERTAKINGS.
A. The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933, as
amended (the "Securities Act"); (ii) to reflect in the prospectus any facts or
events arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement; (iii) to include any material information with respect
to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement; provided, however, that paragraph (A)(1)(i) and (A)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
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(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
B. The Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
D. The Registrant hereby undertakes that, in lieu of an opinion of
counsel and/or an Internal Revenue Service ("IRS") determination letter that the
Plan is qualified under Section 401 of the Internal Revenue Code, the Registrant
has and will submit the Plan and any amendment thereto to the IRS in a timely
manner and has made and will make all changes required by the IRS in order to
qualify the Plan under Section 401 of the Internal Revenue Code.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that is has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8, and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Nashville, State of Tennessee, on the 1st day of
October, 1997.
GAYLORD ENTERTAINMENT COMPANY, formerly
known as New Gaylord Entertainment Company
By: /s/ Terry E. London
-------------------------------------
Terry E. London
President and Chief Executive
Officer
KNOW ALL BY THESE PRESENTS, each person whose signature appears below
hereby constitutes and appoints E. K. Gaylord II and Terry E. London, and each
of them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place, and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Edward L. Gaylord
- ------------------------ Chairman of the Board October 1, 1997
Edward L. Gaylord
/s/ Terry E. London
- ------------------------ President, Chief Executive Officer, October 1, 1997
Terry E. London Chief Financial Officer (Acting),
and Director (principal executive,
financial and accounting officer)
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/s/ E. K. Gaylord II
- ----------------------------- Vice-Chairman of the Board October 1, 1997
E. K. Gaylord II
- ----------------------------- Director October __, 1997
Joe M. Rodgers
/s/ Christine Gaylord Everest
- ----------------------------- Director October 1, 1997
Christine Gaylord Everest
/s/ Martin C. Dickinson
- ----------------------------- Director October 1, 1997
Martin C. Dickinson
/s/ Mary Agnes Wilderotter
- ------------------------------ Director October 1, 1997
Mary Agnes Wilderotter
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Administrator of the Amended and Restated Gaylord Entertainment Company
401(k) Savings Plan has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Nashville, State of Tennessee, on October 1, 1997.
Amended and Restated Gaylord Entertainment Company
401(k) Savings Plan
By: Plan Committee for the Amended and Restated
Gaylord Entertainment Company 401(k) Savings Plan
By: /s/ Michel C. Hopper
-----------------------------------------
Name: Michel C. Hopper
---------------------------------------
Title: Member of Benefit Trust Committee
--------------------------------------
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
3.1 Restated Certificate of Incorporation (incorporated by reference to
Exhibit 3.1 of the Registrant's effective Registration Statement on
Form 10, as amended, relating to the Common Stock)
3.2 Restated Bylaws (incorporated by reference to Exhibit 3.2 of the
Registrant's effective Registration Statement on Form 10, as amended,
relating to the Common Stock)
4 Amended and Restated Gaylord Entertainment Company 401(k) Savings
Plan, as amended
23 Consent of Arthur Andersen LLP
24 Power of Attorney (included at Pages II-4 and II-5)
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Exhibit 4
Approved by Board/Comp. Comm.
11/8/96
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
as amended and restated
effective April 1, 1996
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PREAMBLE
The purpose of this Plan and Trust is to provide, in accordance with its
provisions, a defined contribution plan providing retirement and other related
benefits for those Employees of the Employer who are eligible to participate
hereunder. This document is a complete amendment and restatement of the
Retirement Savings Plan and Trust for Employees of Gaylord Entertainment and
Affiliated and Adopting Corporations ("Prior Plan"), which was originally
effective as of October 1, 1980.
It is intended that the Plan qualify for approval under Sections 401 and
410 through 417 of the Internal Revenue Code. It is intended that the Trust
qualify for approval under Section 501 of the Code. It is further intended that
the Plan comply with the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA). In case of any ambiguity in the Plan's language, it will be
interpreted to accomplish the Plan's intent of qualifying under the Code and
complying with ERISA.
This Plan and Trust is exclusively for the benefit of the eligible
Employees and their Beneficiaries. Neither the Employer, the Plan Administrator
nor the Trustee will apply or interpret the terms of the Plan in any manner that
permits discrimination in favor of Highly Compensated Employees. All Employees
under similar circumstances will be treated alike.
The undersigned Employer and Trustee hereby adopt this restatement of the
Gaylord Entertainment Company 401(k) Savings Plan to be effective as of April 1,
1996.
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TABLE OF CONTENTS
PAGE NO.
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ARTICLE 1 - DEFINITIONS 1-1
ARTICLE 2 - PARTICIPATION 2-1
ARTICLE 3 - PARTICIPANT ACCOUNTS 3-1
ARTICLE 4 - ACCOUNTING AND VALUATION 4-1
ARTICLE 5 - RETIREMENT BENEFITS 5-1
ARTICLE 6 - DEATH BENEFIT 6-1
ARTICLE 7 - LIMITATIONS ON BENEFITS 7-1
ARTICLE 8 - MISCELLANEOUS 8-1
ARTICLE 9 - ADMINISTRATION 9-1
ARTICLE 10 - AMENDMENT OR TERMINATION OF PLAN 10-1
ARTICLE 11 - TRUSTEE AND TRUST FUND 11-1
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ARTICLE 1
DEFINITIONS
As used in this document, unless otherwise defined or required by the context,
the following terms have the meanings set forth in this Article 1. Some of the
terms used in this document are not defined in Article 1, but for convenience
are defined as they are introduced in the text.
1.01 Account
Account means a separate account maintained for each Participant reflecting
applicable contributions, applicable forfeitures, investment income (loss)
allocated to the account and distributions.
1.02 Accounting Date, Valuation Date
The term Accounting Date means the last day of each Accounting Period and
any other days within the Accounting Period upon which, consistent with
established methods and guidelines, the Plan Administrator applies the
accounting procedures specified in Section 4.02. The term Valuation Date,
unless otherwise specified, means any business day on which the New York
Stock Exchange is open.
1.03 Accounting Period
Accounting Period means each of the 3-month periods which end on March
31st, June 30th, September 30th and December 31st.
1.04 Accrued Benefit
A Participant's Accrued Benefit means the total value, as of a given date,
of his Accounts determined as of the Valuation Date immediately preceding
the date of determination. A Participant's Accrued Benefit will not be
reduced solely on account of any increase in the Participant's age or
service or on account of an amendment to the Plan.
A Participant's Vested Accrued Benefit is equal to his Vested Percentage of
that portion of his Accrued Benefit which is subject to the Vesting
Schedule plus 100% of the remaining portion of his Accrued Benefit.
1.05 Beneficiary
Beneficiary means the person, persons, trust or other entity who is
designated to receive any amount payable upon the death of a Participant.
1.06 Cash-Out Distribution
Cash-Out Distribution means, as described in Article 5, a distribution to a
Participant upon termination of employment of his Vested Accrued Benefit.
1.07 Code and ERISA
Code means the Internal Revenue Code of 1986, as it may be amended from
time to time, and all regulations issued thereunder. Reference to a section
of the Code includes that section and any comparable section or sections of
any future legislation that amends, supplements or supersedes such section
and any regulations issued thereunder.
ERISA means Public Law No. 93-406, the Employee Retirement Income Security
Act of 1974, as it may be amended from time to time, and all regulations
issued thereunder. Reference to a section of ERISA includes that section
and any comparable section or sections of any future legislation that
amends, supplements or supersedes such section and any regulations issued
thereunder.
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1.08 Compensation
Except where otherwise specifically provided in this Plan, Compensation
means Aggregate Compensation as defined in Section 7.03(a).
Compensation also includes any amounts contributed by the Employer or any
Related Employer on behalf of any Employee pursuant to a salary reduction
agreement which are not includable in the gross income of the Employee due
to Code Section 125, 402(e)(3), 402(h) or 403(b).
Notwithstanding the foregoing, for all purposes under this Plan,
Compensation in excess of the Statutory Compensation Limit will be
disregarded. For purposes of applying this compensation limit, a Family
Member of a Highly Compensated Employee is subject to the single aggregate
compensation limit imposed on the Highly Compensated Employee if the Family
Member is either the Employee's spouse or is a lineal descendant who has
not attained the age of 19 by the end of the Plan Year.
Statutory Compensation Limit means $150,000 ($200,000 for Plan Years
beginning before 1994), as adjusted in accordance with Code Section
401(a)(17)(B).
1.09 Effective Date
The Effective Date of the Plan is October 1, 1980.
Except as specified elsewhere in this document, the effective date of this
restatement of the Plan is April 1, 1996.
Sections 1.12, 1.18, 1.32, 1.33, 1.36, 4.05 and Article 7 are effective
January 1, 1987.
1.10 Eligible Employee Classification
An Eligible Employee Classification is a classification of Employees, the
members of which are eligible to participate in the Plan. The Plan covers
all employee classifications except Leased Employees, Employees classified
by the Employer as Casual Employees, hourly Employees hired on an on-call
basis, nonresident non-U.S. citizens and individuals covered by a
collective bargaining agreement, unless the agreement provides for
participation in the Plan by covered Employees.
1.11 Eligible Participant
All Participants are Eligible Participants.
1.12 Employee
(a) In General
An Employee is any person who is employed by the Employer or a
Participating Employer.
(b) Leased Employee
A Leased Employee means any person who, pursuant to an agreement
between the Employer or any Related Employer ("Recipient Employer")
and any other person ("leasing organization"), has performed services
for the Recipient Employer 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.
Any Leased Employee will be treated as an Employee of the Recipient
Employer; however, contributions or benefits provided by the leasing
organization which are attributable to the services performed for the
Recipient Employer will be treated as provided by the Recipient
Employer. If all Leased Employees constitute less than 20% of the
Employer's non-highly-compensated work force within the meaning of
Code Section 414(n)(1)(C)(ii),
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then the preceding sentence will not apply to any Leased Employee if
such Employee is covered by a money purchase pension plan ("Safe
Harbor Plan") which provides: (1) a nonintegrated employer
contribution rate of at least 10% of compensation, (2) immediate
participation, and (3) full and immediate vesting.
Years of Eligibility Service for purposes of eligibility to
participate in the Plan and Years of Vesting Service for purposes of
determining a Participant's Vested Percentage include service by an
Employee as a Leased Employee.
1.13 Employer
The Employer and Plan Sponsor is Gaylord Entertainment Company. A
Participating Employer is any organization which has adopted this Plan and
Trust in accordance with Section 8.07.
The term Predecessor Employer means any prior employer to which the
Employer is the successor, including any Predecessor Employer for which the
Employer maintains the obligations of a Predecessor Plan established by the
Predecessor Employer. Service with a Predecessor Employer will be included
as Service with the Employer for all purposes under this Plan.
1.14 Employment Commencement Date
The date an Employee first performs an Hour of Service for the Employer is
his Employment Commencement Date.
1.15 Entry Date
Entry Date means the January 1st, April 1st, July 1st or October 1st which
coincides with or next follows the date upon which the eligibility
requirements are met.
1.16 Fiscal Year
Fiscal Year means the taxable year of the Plan Sponsor. The Fiscal Year of
the Plan Sponsor is the 12 month period beginning January 1 and ending
December 31.
1.17 Forfeiture
The term Forfeiture refers to that portion, if any, of a Participant's
Accrued Benefit which is in excess of his Vested Accrued Benefit following
the termination of the Participant's employment.
A Forfeiture is considered to occur as of the earlier of (a) the last day
of the Plan Year in which occurs the end of the fifth of 5 consecutive One
Year Breaks-in-Service or (b) the date a Cash-Out Distribution occurs in
accordance with the provisions of Article 5.
1.18 Highly Compensated Definitions
(a) Compensation
For purposes of this Section, Compensation means Aggregate
Compensation as defined in Section 7.03(a) plus amounts contributed by
the Employer pursuant to a salary reduction agreement which are
excludable from the gross income of the Employee under Code Section
125, 402(e)(3), 402(h) or 403(b). Compensation in excess of the
Statutory Compensation Limit will be disregarded.
(b) Determination Year
Determination Year means the Plan Year for which the determination of
who is Highly Compensated is being made.
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(c) Family Member
Family Member means an Employee who is the spouse, a lineal ascendant
or descendant, or the spouse of a lineal ascendant or descendant of:
- a 5-percent owner (within the meaning of Code Section 416(i)) of
the Employer or any Related Employer who is an active or former
Employee; or
- a Highly Compensated Employee who is one of the 10 most highly
compensated employees ranked on the basis of Compensation paid by
the Employer during the Determination Year or the Lookback Year.
For purposes of this Section, the Family Member and the Highly
Compensated Employee will be considered one Employee. A Family
Member's Compensation and benefits will be aggregated with those of
the Highly Compensated Employee irrespective of whether the Family
Member would otherwise be treated as a Highly-Compensated Employee or
is in a category of Employees which may be excluded in determining the
number of Employees in the Top-Paid Group.
If an Employee is required to be aggregated as a member of more than
one family group, all eligible employees who are members of those
family groups which include that employee will be aggregated as one
family group.
For purposes of applying the compensation limit under Code Section
401(a)(17), a Family Member is subject to the single aggregate
compensation limit imposed on the Highly Compensated Employee if the
Family Member is either the Employee's spouse or is a lineal
descendant who has not attained the age of 19 by the end of the Plan
Year.
(d) Highly Compensated Employee
Highly Compensated Employee means any individual who is a Highly
Compensated Active Employee or a Highly Compensated Former Employee
within the meaning of Code Section 414(q) and the regulations
thereunder.
(e) Highly Compensated Active Employee
Highly Compensated Active Employee means any individual who during the
Determination Year or the Lookback Year:
(1) Was at any time a 5-percent Owner (within the meaning of Code
Section 416(i)) of the Employer or any Related Employer;
(2) Received Compensation from the Employer and all Related Employers
in excess of $75,000 (or any greater amount determined by
regulations issued by the Secretary of the Treasury under Code
Section 415(d));
(3) Received Compensation from the Employer and all Related Employers
in excess of $50,000 (or any greater amount determined by
regulations issued by the Secretary of the Treasury under Code
Section 415(d)) and was in the Top-Paid Group of Employees; or
(4) Was an Officer of the Employer or any Related Employer (as that
term is defined in the regulations under Code Section 416(i)) and
received Compensation greater than 50% of the Defined Benefit
Dollar Limit described in Section 7.03(f) for the applicable
year. For this purpose, if no Officer received enough
Compensation to be a Highly Compensated Employee under the
preceding sentence, the highest-paid Officer will be treated as a
Highly Compensated Employee. The maximum number of Officers who
will be treated as Highly Compensated Active Employees under this
paragraph is equal to 10% of
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all Employees determined without regard to statutory or other
exclusions, subject to a minimum of 3 Employees and a maximum of
50 Employees.
No individual described in subparagraphs (2), (3) or (4) above will be
treated as a Highly Compensated Active Employee for the Determination
Year unless he (i) was a Highly Compensated Active Employee for the
Lookback Year (or would have been except that he was not among the 100
most highly compensated Employees of the Employer and all Related
Employers for the Lookback Year) or (ii) was among the 100 most highly
compensated Employees of the Employer and all Related Employers for
the Determination Year.
(f) Highly Compensated Former Employee
Highly Compensated Former Employee means any Former Employee who had a
Separation Year (within the meaning of Treasury Regulation Section
1.414(q)-1T Q&A-5) and was a Highly Compensated Active Employee for
either the Separation Year or any Determination Year ending on or
after the Employee's 55th birthday.
(g) Highly Compensated Group
Highly Compensated Group means all Highly Compensated Employees.
(h) Lookback Year
Lookback Year means the 12-month period immediately preceding the
Determination Year.
(i) Non-Highly Compensated Employee
Non-Highly Compensated Employee means an Employee who is neither a
Highly Compensated Employee nor a Family Member.
(j) Non-Highly Compensated Group
Non-Highly Compensated Group means all Non-Highly Compensated
Employees.
(k) Top-Paid Group
Top-Paid Group means those individuals who are among the top 20
percent of Employees of the Employer and all Related Employers when
ranked on the basis of Compensation received during the year. In
determining the number of individuals in the Top-Paid Group (but not
the identity of those individuals), the following individuals may be
excluded:
(1) Employees who have not completed 6 months of Service by the end
of the year. For this purpose, an Employee who has completed One
Hour of Service in any calendar month will be credited with one
month of Service;
(2) Employees who normally work fewer than 17 1/2 hours per week;
(3) Employees who normally work fewer than 6 months during any year.
For this purpose, an Employee who has worked on one day of a
month is treated as having worked for the whole month;
(4) Employees who have not reached age 21 by the end of the year;
(5) Nonresident aliens who received no earned income (which
constitutes income from sources within the United States) within
the year from the Employer or any Related Employer; and
(6) Employees covered by a collective bargaining agreement negotiated
in good faith between the employee representatives and the
Employer or a group of employers of which the Employer is a
member if (i) 90% or more of all employees of the Employer and
all
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Related Employers are covered by collective bargaining
agreements, and (ii) this Plan covers only Employees who are not
covered under a collective bargaining agreement.
1.19 Hour of Service
An Hour of Service means:
(a) Each hour for which an Employee is paid, or entitled to payment, for
the performance of duties for the Employer. These hours will be
credited to the Employee for the computation period in which the
duties are performed;
(b) Each hour for which an Employee is paid, or entitled to payment, by
the Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No
more than 501 Hours of Service will be credited under this paragraph
for any 12-month period. Hours under this paragraph will be calculated
and credited pursuant to Section 2530.200b-2 of the Department of
Labor Regulations which are incorporated herein by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer. The same Hours of
Service will not be credited both under paragraphs (a) or (b), as the
case may be, and under this paragraph (c). 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.
Hours of Service for all Employees will be determined on the basis of
actual hours for which an Employee is paid or is entitled to payment. Hours
of Service will be credited for employment with any Related Employer or any
Predecessor Employer. Hours of Service will be credited for any individual
considered an employee under Code Section 414(n) or 414(o) and the
regulations thereunder.
Solely for purposes of determining whether a One Year Break-in-Service has
occurred, a Participant who is absent from work on an authorized Leave of
Absence or by reason of the Participant's pregnancy, birth of the
Participant's child, placement of a child with the Participant in
connection with the adoption of such child, or for the purpose of caring
for such child for a period immediately following such birth or placement,
will receive credit for the Hours of Service which otherwise would have
been credited to the Participant but for such absence. The Hours of Service
credited under this paragraph will be credited in the Plan Year in which
the absence begins if such crediting is necessary to prevent a One Year
Break-in-Service in such Plan Year; otherwise, such Hours of Service will
be credited in the following Plan Year. The Hours of Service credited under
this paragraph are those which would normally have been credited but for
such absence; in any case in which the Plan Administrator is unable to
determine such hours normally credited, 8 Hours of Service per day will be
credited. No more than 501 Hours of Service will be credited under this
paragraph for any 12-month period. The Date of Severance is the second
anniversary of the date on which the absence begins. The period between the
initial date of absence and the first anniversary of the initial date of
absence is deemed to be a period of Service. The period between the first
and second anniversaries of the initial date of absence is neither a period
of service nor a period of severance.
1.20 Investment Fund
An Investment Fund means any portion of the assets of the Trust Fund which
the Plan Administrator designates as an Investment Fund and for which the
Plan Administrator maintains
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a set of accounts separate from the remaining assets of the Trust Fund.
(a) Specific Investment Fund means an Investment Fund which is designated
as a Specific Investment Fund by the Plan Administrator in a manner
and form acceptable to the Trustee.
(b) General Investment Fund means all assets of the Trust Fund excluding
the assets of any Specific Investment Funds.
1.21 Leave of Absence
An authorized Leave of Absence means a period of time of one year or less
granted to an Employee by the Employer due to illness, injury, temporary
reduction in work force, or other appropriate cause or due to military
service during which the Employee's reemployment rights are protected by
law, provided the Employee returns to the service of the Employer on or
before the expiration of such leave, or in the case of military service,
within the time his reemployment rights are so protected or within 60 days
of his discharge from military service if no federal law is applicable. All
authorized Leaves of Absence are granted or denied by the Employer in a
uniform and nondiscriminatory manner, treating Employees in similar
circumstances in a like manner.
If the Participant does not return to active service with the Employer on
or prior to the expiration of his authorized Leave of Absence he will be
considered to have had a Date of Severance as of the earlier of the date on
which his authorized Leave of Absence expired, the first anniversary of the
last date he worked at least one hour as an Active Participant, or the date
on which he resigned or was discharged.
1.22 Reserved
1.23 Normal Retirement Age
A Participant's Normal Retirement Age is age 65.
1.24 Normal Retirement Date
A Participant's Normal Retirement Date is the first day of the month which
coincides with or immediately precedes the date on which the Participant
attains Normal Retirement Age.
1.25 One Year Break-in-Service
A One Year Break-in-Service means any Plan Year during which the Employee
completes 500 or fewer Hours of Service.
1.26 Participant
The term Participant means an Employee or former Employee who is eligible
to participate in this Plan and who is or who may become eligible to
receive a benefit of any type from this Plan or whose Beneficiary may be
eligible to receive any such benefit.
(a) Active Participant means a Participant who is currently an Employee in
an Eligible Employee Classification.
(b) Disabled Participant means a Participant who has terminated his
employment with the Employer due to his Disability and who is
receiving or is entitled to receive benefits from the Plan.
(c) Retired Participant means a Participant who has terminated his
employment with the Employer after meeting the requirements for his
Normal Retirement Date and who is receiving or is entitled to receive
benefits from the Plan.
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(d) Vested Terminated Participant means a Participant who has terminated
his employment with the Employer and who has a nonforfeitable right to
all or a portion of his or her Accrued Benefit and who has not
received a distribution of the value of his or her Vested Accrued
Benefit.
(e) Inactive Participant means a Participant who has (i) interrupted his
status as an Active Participant without becoming a Disabled, Retired
or Vested Terminated Participant and (ii) has a non-forfeitable right
to all or a portion of his Accrued Benefit and has not received a
complete distribution of his benefit.
(f) Former Participant means a Participant who has terminated his
employment with the Employer and who currently has no nonforfeitable
right to any portion of his or her Accrued Benefit.
1.27 Payroll Withholding Agreement
If a written Payroll Withholding Agreement is required pursuant to the
provisions of Article 3, then each Participant who elects to participate in
the Plan will file such agreement on or before the first day of the payroll
period for which the agreement is applicable (or at some other time as
specified by the Plan Administrator). Such agreement will be effective for
each payroll period thereafter until modified or amended.
The terms of such agreement will provide that the Participant agrees to
have the Employer withhold, each payroll period, any whole percentage of
his Compensation (or such other amount as allowed by the Plan Administrator
under rules applied on a uniform and nondiscriminatory basis), not to
exceed the limitations of Article 7. In consideration of such agreement,
the Employer periodically will make a contribution to the Participant's
proper Account(s) in an amount equal to the total amount by which the
Participant's Compensation from the Employer was reduced during applicable
payroll periods pursuant to the Payroll Withholding Agreement.
Notwithstanding the above, Payroll Withholding Agreements will be governed
by the following general guidelines:
(a) A Payroll Withholding Agreement will apply to each payroll period
during which an effective agreement is on file with the Employer. Upon
termination of employment, such agreement will become void.
(b) The Plan Administrator will establish and apply guidelines concerning
the frequency and timing of amendments or changes to Payroll
Withholding Agreements. Notwithstanding the foregoing, a Participant
may revoke his Payroll Withholding Agreement at any time and
discontinue all future withholding.
(c) The Plan Administrator may amend or revoke its Payroll Withholding
Agreement with any Participant at any time, if the Employer determines
that such revocation or amendment is necessary to insure that a
Participant's Annual Additions for any Plan Year will not exceed the
limitations of Article 7 or to insure that the requirements of
Sections 401(k) and 401(m) of the Code have been satisfied with
respect to the amount which may be withheld and contributed on behalf
of the Highly Compensated Group.
(d) Except as provided above, a Payroll Withholding Agreement may not be
revoked or amended by the Participant or the Employer.
1.28 Plan, Plan and Trust, Trust
The terms Plan, Plan and Trust and Trust mean Gaylord Entertainment Company
401(k) Savings Plan. The Plan Identification Number is 002. The Plan is a
profit sharing plan.
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The term Predecessor Plan means any qualified plan previously established
and maintained by the Employer and to which this Plan is the successor.
1.29 Plan Administrator
The Plan Administrator is Gaylord Entertainment Company.
1.30 Plan Year
The Plan Year is the 12 month period beginning January 1 and ending
December 31. The Limitation Year coincides with the Plan Year.
1.31 Reserved
1.32 Qualified Annuity Definitions
(a) Annuity Starting Date
Annuity Starting Date means (i) the first day of the first period for
which an amount is payable as an annuity, or (ii) in the case of a
benefit not payable in the form of an annuity, the first day on which
all events have occurred which entitled the Participant to such
benefit.
(b) Qualified Election
(1) In General
Qualified Election means a written waiver of a Qualified Joint
and Survivor Annuity or a Qualified Survivor Annuity. The waiver
must be consented to by the Participant's spouse with such
written consent witnessed by a representative of the Plan
Administrator or a notary public. The spouse's consent must
include the designation of a specific Beneficiary and the form of
payment which cannot be changed without the consent of the
spouse. Such consent will not be required if the Participant
establishes to the satisfaction of the Plan Administrator that
such written consent may not be obtained because there is no
spouse, the spouse cannot be located or other circumstances that
may be prescribed by Treasury Regulations. Any consent which is
required under this Section will be valid only with respect to
the spouse who signs the consent (or in the event of a deemed
Qualified Election, the designated spouse). Additionally, any
revocation of a prior waiver may be made by a Participant without
the consent of the spouse at any time before the Annuity Starting
Date; however, any waiver of a Qualified Joint and Survivor
Annuity or a Qualified Survivor Annuity which follows such
revocation must be in writing and must be consented to by the
Participant's spouse. The number of waivers or revocations of
such waivers will not be limited.
(2) Qualified Joint and Survivor Annuity Notices
Not more than 90 days nor less than 30 days before the
Participant's Annuity Starting Date, the Plan Administrator will
provide the Participant a written explanation of:
- the terms and conditions of a Qualified Joint and Survivor
Annuity;
- the Participant's right to make and the effect of a
Qualified Election to waive the Qualified Joint and Survivor
Annuity form of benefit;
- a general description of the eligibility conditions and
other material features of the optional forms of benefit and
sufficient additional information to explain the relative
values of the optional forms of benefit available;
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- the rights of the Participant's spouse; and
- the right to make, and the effect of, a revocation of a
previous Qualified Election to waive the Qualified Joint and
Survivor Annuity.
(3) Qualified Survivor Annuity Notices
The election period to waive the Qualified Survivor Annuity
begins on the first day of the Plan Year in which the Participant
attains age 35 and ends on the date of the Participant's death.
If a Vested Terminated Participant separates from service before
the beginning of the election period, the election period begins
on the date of separation from service.
The Plan Administrator will, within the applicable notice period,
provide each Participant a written explanation of the Qualified
Survivor Annuity containing comparable information to that
required under the provisions of Section 1.32(b)(2). For purposes
of this paragraph, the term "applicable notice period" means
whichever of the following periods ends last:
- 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;
- the period beginning two years before and ending 12 months
after the individual becomes a Participant;
- the period beginning two years before and ending 12 months
after the joint and survivor rules become effective for the
Participant; or
- the period beginning one year before and ending 12 months
after the Participant separates from service before
attaining age 35.
A Participant who will not have attained age 35 as of the end of
any current Plan Year may make a special Qualified Election to
waive the Qualified Survivor Annuity for the period beginning on
the date of the election and ending on the first day of the Plan
Year in which the Participant attains age 35. The Election will
not be valid unless the Participant receives a written
explanation of the Qualified Survivor Annuity in terms comparable
to the explanation required above. Qualified Survivor Annuity
coverage will automatically resume as of the first day of the
Plan Year in which the Participant attains age 35. Any new waiver
on or after that date will be subject to the full requirements of
this Section 1.32(b).
(c) Qualified Joint and Survivor Annuity
A Qualified Joint and Survivor Annuity means an annuity which is
purchased from an Insurer and which is payable for the life of
the Participant with a survivor annuity for the life of his
Surviving Spouse in an amount which is 50% of the amount payable
during the joint lives of the Participant and his spouse. The
amount of the Qualified Joint and Survivor Annuity will be the
amount of benefit which can be purchased from an Insurer with the
Participant's Vested Accrued Benefit.
(d) Qualified Life Annuity
A Qualified Life Annuity means an annuity which is purchased from
an Insurer and which is payable for the lifetime of the
Participant with payments terminating upon the death of the
Participant. The amount of the Qualified Life Annuity will be the
amount of benefit
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which can be purchased from an Insurer with the Participant's
Vested Accrued Benefit.
(e) Qualified Survivor Annuity
A Qualified Survivor Annuity which a Surviving Spouse will be
eligible to receive under the provisions of Section 6.02 means a
monthly benefit payable for the remaining lifetime of the
Surviving Spouse. The amount of the Qualified Survivor Annuity
benefit will be the amount of benefit which can be purchased from
an Insurer with the Participant's Vested Accrued Benefit.
If the Participant's Vested Accrued Benefit is $3,500 or less,
the Plan Administrator will direct the immediate distribution of
the Participant's Vested Accrued Benefit to the Surviving Spouse.
If the Participant's Vested Accrued Benefit at the time of any
distribution exceeds $3,500, the Vested Accrued Benefit at any
later time will be deemed to exceed $3,500. The Surviving Spouse
may elect to receive the Qualified Survivor Annuity as a lump
sum.
1.33 Related Employer
The terms Related Employer and Affiliated Employer are used interchangeably
and mean any other corporation, association, company or entity on or after
the Effective Date which is, along with the Employer, a member of a
controlled group of corporations (as defined in Code Section 414(b)), a
group of trades or businesses which are under common control (as defined in
Code Section 414(c)), an affiliated service group (as defined in Code
Section 414(m)), or any organization or arrangement required to be
aggregated with the Employer by Treasury Regulations issued under Code
Section 414(o).
1.34 Required Beginning Date
A Participant's Required Beginning Date for the commencement of benefit
payments from the Plan is the April 1 immediately following:
- the later of 1989 or the calendar year in which he attained age
70-1/2 if he attained age 70-1/2 after December 31, 1987;
- the calendar year in which he attains age 70-1/2 if he is or was
a Five Percent Owner at any time during the Plan Year ending with
or within the calendar year in which he attains age 66-1/2 or any
later Plan Year; or
- the later of the calendar year in which he attains age 70-1/2 or
the calendar year in which he retires for any other Participant.
1.35 Surviving Spouse
Surviving Spouse means a deceased Participant's spouse who was married to
the Participant on the Participant's date of death. The Plan Administrator
and the Trustee may rely conclusively on a Participant's written statement
of his marital status. Neither the Plan Administrator nor the Trustee is
required at any time to inquire into the validity of any marriage, the
effectiveness of a common-law relationship or the claim of any alleged
spouse which is inconsistent with the Participant's report of his marital
status and the identity of his spouse.
1.36 Top-Heavy Definitions
(a) Aggregate Account
Aggregate Account means, with respect to each Participant, the value
of all accounts maintained on behalf of the Participant, whether
attributable to Employer or Employee contributions, used to determine
Top-Heavy Plan status under the provisions of a defined
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contribution plan. A Participant's Aggregate Account as of the
Determination Date will be the sum of:
- the balance of his Account(s) as of the most recent valuation
date occurring within a 12-month period ending on the
Determination Date (excluding any amounts attributable to
deductible voluntary employee contributions); plus
- contributions that would be allocated as of a date not later than
the Determination Date, even though those amounts are not yet
made or required to be made; plus
- any Plan Distributions made within the Plan Year that includes
the Determination Date or within the four preceding Plan Years.
(b) Aggregation Group
Aggregation Group means either a Required Aggregation Group or a
Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group
Each plan of the Employer in which a Key Employee is a
Participant, and each other plan of the Employer which enables
any plan in which a Key Employee participates to meet the
requirements of Code Section 401(a)(4) or 410, will be aggregated
and the resulting group will be known as a Required Aggregation
Group.
Each plan in the Required Aggregation 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 (to be known as a Permissive Aggregation Group),
taken as a whole, would continue to satisfy the provisions of
Code Sections 401(a)(4) and 410.
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.
Only those plans of the Employer in which the Determination Dates
fall within the same calendar year will be aggregated in order to
determine whether the plans are Top-Heavy Plans.
(c) Determination Date
Determination Date means the last day of the preceding Plan Year, or,
in the case of the first Plan Year, the last day of the first Plan
Year.
(d) Key Employee
Key Employee means any Employee or former Employee (and his
Beneficiary) who, at any time during the Plan Year or any of the
preceding four Plan Years, was:
(1) 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 5% of the value of the
outstanding stock of the Employer or stock possessing more than
5%
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of the total combined voting power of all stock of the Employer.
If the Employer is not a corporation, Five Percent Owner means
any person who owns more than 5% of the capital or profits
interest in the Employer. In determining percentage ownership
hereunder, Related Employers will be treated as separate
Employers; or
(2) A "One Percent Owner" of the Employer having 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 1% of the value of the outstanding
stock of the Employer or stock possessing more than 1% of the
total combined voting power of all stock of the Employer. If the
Employer is not a corporation, One Percent Owner means any person
who owns more than 1% of the capital or profits interest in the
Employer. In determining percentage ownership hereunder, Related
Employers will be treated as separate Employers. However, in
determining whether an individual has Compensation of more than
$150,000, Compensation from each Related Employer will be taken
into account.
(3) One of the 10 Employees having Compensation not less than the
Defined Contribution Dollar Limit (as defined in Section 7.03(j)
for the Plan Year) who owns (or is considered as owning within
the meaning of Code Section 318) both greater than 1/2% interest
and the largest interests in all Employers required to be
aggregated under Code Sections 414(b), (c), (m) and (o);
(4) An officer (within the meaning of the regulations under Code
Section 416) of the Employer having Compensation greater than 50%
of the Defined Benefit Dollar Limit as defined in Section 7.03(f)
for the Plan Year;
For purposes of this Section, Compensation means Aggregate
Compensation as defined in Section 7.03(a) plus any amounts
contributed by the Employer pursuant to a salary reduction agreement
which are excludable from the gross income of the Employee under Code
Section 125, 402(e)(3), 402(h) or 403(b). Compensation in excess of
the Statutory Compensation Limit is disregarded.
(e) Non-Key Employee
Non-Key Employee means any Employee (and his Beneficiaries) who is not
a Key Employee.
(f) Plan Distributions
Plan distributions include distributions made before 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. However, distributions made after the valuation date and before
the Determination Date are not included to the extent that they are
already included in the Participant's Single Sum Benefit as of the
valuation date.
With respect to "unrelated" rollovers and plan-to-plan transfers
(those which are both initiated by an employee and made from a plan
maintained by one employer to a plan maintained by another employer),
if such a rollover or plan-to-plan transfer is made from this Plan, it
will be considered as a distribution for purposes of this Section. If
such a rollover or plan-to-plan transfer is made to this Plan, it will
not be considered as part of the Participant's Single Sum Benefit.
However, an unrelated rollover or plan-to-plan transfer accepted
before January 1, 1984, will be considered as part of the
Participant's Single Sum Benefit.
With respect to "related" rollovers and plan-to-plan transfers (those
which are either not initiated by an employee or are made from one
plan to another plan maintained by the same employer), if such a
rollover or plan-to-plan transfer is made from this Plan, it will not
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be considered as a distribution for purposes of this Section. If such
a rollover or plan-to-plan transfer is made to this Plan, it will be
considered as part of the Participant's Single Sum Benefit.
(g) Present Value of Accrued Benefit
In the case of the defined benefit plan, a Participant's Present Value
of Accrued Benefit, for Top-Heavy determination purposes, will be
determined using the following rules:
(1) The Present Value of Accrued Benefit will be determined as of the
most recent "valuation date" within a 12-month period ending on
the Determination Date.
(2) For the first Plan Year, the Present Value of Accrued Benefit
will be determined as if (A) the Participant terminated service
as of the Determination Date; or (B) the Participant terminated
service as of the valuation date, but taking into account the
estimated Present Value of Accrued Benefits as of the
Determination Date.
(3) For any other Plan Year, the Present Value of Accrued Benefit
will be determined as if the Participant terminated service as of
the valuation date.
(4) The valuation date must be the same date used for computing the
defined benefit plan minimum funding costs, regardless of whether
a calculation is performed that plan year.
(5) A Participant's Present Value of Accrued Benefit as of a
Determination Date will be the sum of:
- the present value of his Accrued Benefit determined using
the actuarial assumptions which are specified below; plus
- any Plan Distributions made within the Plan Year that
includes the Determination Date or within the four preceding
Plan Years; plus
- any employee contributions, whether voluntary or mandatory.
However, amounts attributable to qualified voluntary
employee contributions, as defined in Code Section 219(e)(2)
will not be considered to be a part of the Participant's
Present Value of Accrued Benefit.
For purposes of this Section, the present value of a
Participant's Accrued Benefit will be equal to the greater of the
present value determined using the actuarial assumptions which
are specified for Actuarial Equivalent purposes or the present
value determined using the "Applicable Interest Rate." The
Applicable Interest Rate is the rate or rates that would be used
by the Pension Benefit Guaranty Corporation for a trusteed
single-employer plan to value a Participant's or Beneficiary's
benefit on the date of distribution (the "PBGC Rate"). If the
present value using the PBGC Rate exceeds $25,000, the Applicable
Interest Rate is 120% of the PBGC Rate. However, the use of 120%
of the PBGC Rate will never result in a present value less than
$25,000.
(6) Solely for the purpose of determining if this Plan (or any other
plan included in a Required Aggregation Group of which this Plan
is a part) is Top- Heavy, the Accrued Benefit of any Employee
other than a Key Employee will be determined under
(A) the method, if any, that uniformly applies for accrual
purposes under all plans maintained by the Employer or any
Related Employer, or
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(B) if there is no such method, as if the benefit accrued no
more rapidly than the slowest accrual rate permitted under
the fractional accrual rate of Code Section 411(b)(1)(C).
(h) Single Sum Benefit
The Single Sum Benefit for any Participant in a defined benefit
pension plan will be equal to his Present Value of Accrued Benefit.
The Single Sum Benefit for any Participant in a defined contribution
plan will be equal to his Aggregate Account.
(i) Top-Heavy Group
Top-Heavy Group means an Aggregation Group in which, as of the
Determination Date, the Single Sum Benefits of all Key Employees under
all plans included in the group exceeds 60% of a similar sum
determined for all Participants.
Super Top-Heavy Group means an Aggregation Group in which, as of the
Determination Date, the sum of (1) the Single Sum Benefits of all Key
Employees under all defined benefit plans included in the group, plus
(2) the Single Sum Benefit of all Key Employees under all defined
contribution plans included in the group exceeds 90% of a similar sum
determined for all Participants.
(j) Top-Heavy Plan
This Plan will be a Top-Heavy Plan for any Plan Year beginning after
December 31, 1983, in which, as of the Determination Date, the Single
Sum Benefits of all Key Employees exceed 60% of the Single Sum
Benefits of all Participants under this Plan.
This Plan will be a Super Top-Heavy Plan for any Plan Year beginning
after December 31, 1983, in which, as of the Determination Date, the
Single Sum Benefits of all Key Employees exceed 90% of the Single Sum
Benefits of all Participants under this Plan.
If any Participant is a Non-Key Employee for a given Plan Year, but
was a Key Employee for any prior Plan Year, the Participant's Single
Sum Benefit will 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 or Super
Top-Heavy Group).
If an individual has performed no services for the Employer at any
time during the 5-year period ending on the Determination Date, any
Single Sum Benefit of such individual will 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 or Super Top-Heavy Group).
1.37 Trust Fund, Trust
These terms mean the total cash, securities, real property, insurance
contracts and any other property held by the Trustee.
1.38 Trustee
The Trustee with respect to assets not held by NationsBank of Texas, NA is
Charles Schwab Trust Company or any successor Trustee.
NationsBank of Texas, NA is Trustee solely with respect to certain
Guaranteed Investment Contracts held by NationsBank of Texas, NA under a
separate trust agreement executed by the Plan Sponsor and by NationsBank of
Texas, NA.
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1.39 Vested Percentage
A Participant's Vested Percentage as of a given date will be that
percentage determined in accordance with the Vesting Schedule.
Notwithstanding the preceding, a Participant will be 100% vested upon
reaching the earlier of (a) his Normal Retirement Age or (b) the later of
the date upon which the Participant attains age 65 or reaches the 5th
anniversary of the date he commenced participation in the Plan.
1.40 Vesting Schedule
A Participant's Vested Percentage will be determined in accordance with the
following table:
Years of Vesting Service Vested Percentage
------------------------ -----------------
Less than 2 Years 0%
2 Years 40%
3 Years 60%
4 Years 80%
5 Years or more 100%
1.41 Written Resolution
The terms Written Resolution and Written Consent are used interchangeably
and reflect decisions, authorizations, etc. by the Employer. A Written
Resolution will be evidenced by a resolution of the Board of Directors of
the Employer.
1.42 Year of Service
(a) Crediting Years of Service
Years of Service are determined under the Hours of Service Method.
Under the Hours of Service Method, a Year of Service will be credited
for each 12 consecutive month Computation Period during which an
Employee is credited with a specified number of Hours of Service.
Under the Hours of Service Method, a One Year Break-in-Service means
any Computation Period during which an Employee completes 500 or fewer
Hours of Service.
Years of Eligibility Service for purposes of determining eligibility
to participate in the Plan and Years of Vesting Service for purposes
of determining a Participant's Vested Percentage include service with
any organization which is a Related Employer with respect to the
Employer.
(b) For Eligibility Purposes
Years of Service for purposes of eligibility to participate in the
Plan are referred to as Years of Eligibility Service and are
determined using the Hours of Service Method.
A Year of Eligibility Service is credited for each Computation Period
during which an Employee is credited with at least 1,000 Hours of
Service. The initial Computation Period is the 12 consecutive month
period beginning with the Employee's Employment Commencement Date.
Thereafter, the Computation Period is the Plan Year beginning with the
Plan Year in which the initial Computation Period ends.
All of an Employee's Years of Eligibility Service are taken into
account in determining his eligibility to participate.
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(c) For Vesting Purposes
Years of Service for purposes of computing a Participant's Vested
Percentage are referred to as Years of Vesting Service and are
determined using the Hours of Service Method.
A Year of Vesting Service is credited for each Plan Year in which an
Employee is credited with at least 1,000 Hours of Service. Only full
Years of Service are credited.
All of a Participant's Years of Vesting Service are taken into account
in determining his Vested Percentage.
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ARTICLE 2
PARTICIPATION
2.01 Participation
An Employee who is a member of an Eligible Employee Classification will
become eligible to participate in the Plan on the Entry Date which
coincides with or next follows the attainment of age 21 and the completion
of one Year of Eligibility Service.
An Employee who is eligible to participate as of the Effective Date or as
of a given Entry Date will automatically become a Participant as of such
date. An Employee who is otherwise eligible to participate may irrevocably
elect not to participate in the Plan. Any election under this paragraph
must be in writing and according to guidelines established by the Plan
Administrator.
2.02 Participation After Reemployment
An Employee who has satisfied all of the eligibility requirements but
terminates employment prior to his Entry Date will participate in the Plan
immediately upon returning to the employ of the Employer.
A Participant or Former Participant who has terminated employment will
participate as an Active Participant in the Plan immediately upon returning
to the employ of the Employer.
2.03 Change in Employment Classification
In the event a Participant becomes ineligible to participate because he is
no longer a member of an Eligible Employee Classification, the Participant
will participate immediately upon his return to an Eligible Employee
Classification.
In the event an Employee who is not a member of an Eligible Employee
Classification becomes a member of such a classification, such Employee
will begin to participate immediately if he has satisfied the eligibility
requirements which are specified in Section 2.01.
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ARTICLE 3
PARTICIPANT ACCOUNTS
3.01 Tax-Deferred Account
Tax-Deferred Account means the Account of a Participant reflecting
applicable contributions, investment income or loss allocated thereto and
distributions. A Participant's Tax-Deferred Account is 100% vested at all
times.
(a) Tax-Deferred Contributions
(1) Amount of Contribution
Each Participant may elect to make a Tax-Deferred Contribution
each Accounting Period not to exceed 16% of the Participant's
Compensation. Such contribution will be designated as a
percentage of Compensation and will be equal to an even multiple
of 1% or such other amount as allowed by the Plan Administrator.
(2) Payroll Withholding
All Tax-Deferred Contributions will be made pursuant to a Payroll
Withholding Agreement in accordance with Section 1.27.
(3) Nondiscrimination Requirements
All Tax-Deferred Contributions are Elective Contributions within
the meaning of Section 4.05(a) and must satisfy the
Nondiscrimination Requirements of Section 4.05.
(4) Excess Deferrals
The maximum amount of Tax-Deferred Contribution which can be made
under the Plan on behalf of any Participant during any calendar
year will be limited to that amount which would not constitute an
Excess Deferral as defined in Section 4.05. The Plan
Administrator will distribute any Excess Deferral, together with
the income allocable to it, to the Participant no later than
April 15 of the calendar year immediately following the year of
the Excess Deferral. If a Participant notifies the Plan
Administrator before March 1 of any calendar year that Excess
Deferrals have been made on his account for the previous calendar
year by reason of participation in a Cash or Deferred Arrangement
maintained by another employer or employers, and if the
Participant requests that the Plan Administrator distribute a
specific amount to him on account of Excess Deferrals and
certifies that the requested amount is an Excess Deferral, the
Plan Administrator will designate the amount requested together
with the income allocable to it as a distribution of Excess
deferrals and distribute such amount no later than April 15 of
that calendar year. The amount of Excess Deferrals to be
distributed will be reduced by any Excess Contributions
previously distributed or recharacterized with respect to the
Plan Year beginning with or within the calendar year. The amount
of income allocable to the Excess Deferral will be determined as
described in Section 4.05.
(5) Timing of Deposits
The Employer will deposit all Tax-Deferred Contributions on the
earliest date on which such contributions can reasonably be
segregated from the Employer's general assets, but in no event
later than 90 days after the date on which the amounts withheld
would otherwise have been paid to the Participant in cash.
Effective February 3, 1997, the Employer will deposit all
Tax-Deferred Contributions on the earliest date on which
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such contributions can reasonably be segregated from the
Employer's general assets, but in no event later than 15 business
days following the end of the month in which the amounts withheld
would otherwise have been paid to the Participant in cash.
(b) Financial Hardship Withdrawals
A Participant may file with the Plan Administrator a written
request to withdraw, in order to avoid or alleviate a Financial
Hardship, any amount not to exceed that portion of his
Tax-Deferred Account which represents the sum of
- his total Tax-Deferred Contributions made after 1988, and
- his total Tax-Deferred Contributions made before 1989
together with the income earned before 1989 which is
allocable to those Contributions.
The Plan Administrator will allow Financial Hardship withdrawals
only if (i) such withdrawal is necessary to satisfy a
Participant's immediate and heavy financial need, and (ii) the
Participant has applied for and received the maximum number of
loans to which he or she is entitled pursuant to Section 11.16(g)
of the Plan.
(1) Immediate and Heavy Financial Need
A withdrawal will be deemed to be made due to an immediate
and heavy financial need of the Participant if it is made
because of:
- 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 described in Code Section 213(d);
- Costs directly related to the purchase (excluding
mortgage payments) of a principal residence for the
Participant;
- Payment of tuition or educational fees for the next 12
months of post-secondary education for the Participant,
his spouse, children or dependents (as defined in Code
Section 152);
- Prevention of the eviction of the Participant from his
principal residence or foreclosure on the mortgage of
the Participant's principal residence;
- Destruction of or substantial damage to the
Participant's principal residence; or
- Any other expense which, in the Plan Administrator's
judgment exercised in a uniform and nondiscriminatory
manner, if not paid would substantially impair the
Participant's ability to provide for the support,
maintenance, education or health (within the meaning of
the Treasury Regulations under Code Section 2041) of
the Participant and his spouse and dependents. For this
purpose, the Plan Administrator will consider only
basic needs and will not consider the standard of
living to which the Participant or his spouse or
dependents have become accustomed.
(2) Necessary To Satisfy Financial Need
No withdrawal may exceed the amount necessary to satisfy the
Participant's immediate and heavy financial need. However,
the amount of an 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. The Plan Administrator will
allow the withdrawal if it determines, after a full review
of the Participant's written request and evidence presented
by the Participant showing immediate and heavy financial
need as well as the Participant's lack of other
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24
reasonably available resources, that the withdrawal is
necessary to satisfy the need. No withdrawal will be treated
as necessary to the extent it can be satisfied from other
resources which are reasonably available to the Participant,
including those of the Participant's spouse and minor
children. A withdrawal will be treated as necessary to the
extent the Participant demonstrates to the satisfaction of
the Plan Administrator that the need cannot be relieved by
any of the following:
- Reimbursement or compensation by insurance or
otherwise;
- Reasonable liquidation of assets to the extent the
liquidation would not itself cause an immediate and
heavy financial need;
- Cessation of Tax-Deferred Contributions or Employee
After-tax Contributions (as defined in Section 4.05(a))
or both under any plan maintained by any employer;
- Other distributions or nontaxable (at the time of the
loan) loans from plans maintained by any employer;
- Borrowing from commercial sources on reasonable
commercial terms.
Unless the Plan Administrator has evidence to the contrary,
it may rely upon the Participant's written representation
that the need cannot be relieved by any of the foregoing.
(c) Distributions
No distribution may be made from the Participant's
Tax-Deferred Account or any account comprised of Matching
Contributions or Nonelective Contributions which are treated
as Elective Contributions in accordance with the provisions
of Section 4.05(h) except under one of the following
circumstances:
- the Participant's retirement, death, disability or
termination of employment;
- the Participant's attaining of age 59 1/2;
- the avoidance or alleviation of a Financial Hardship;
- the termination of this Plan without the establishment
of a successor plan within the meaning of Treasury
Regulation Section 1.401(k)-1(d)(3);
- the sale or other disposition by the Employer of at
least 85 percent of the assets used by the Employer in
a trade or business to an unrelated corporation which
does not maintain the plan, but only if the Participant
continues employment with the corporation acquiring the
assets and only if the Employer continues to maintain
this Plan; or
- the sale or other disposition by the Employer of its
interest in a subsidiary to an unrelated entity which
does not maintain the plan, but only if the Participant
continues employment with the subsidiary and only if
the Employer continues to maintain this Plan.
This paragraph does not apply to distributions of Excess
Deferrals, Excess Contributions, or excess Annual Additions.
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3.02 Employee After-Tax Account
Employee After-Tax Account means the Account of a Participant reflecting
applicable contributions, investment income or loss allocated thereto and
distributions. A Participant's Employee After-Tax Account is 100% vested at
all times.
(a) Employee After-Tax Contributions
Participants are no longer permitted to make Employee After-Tax
Contributions to the Plan.
(b) Withdrawals
A Participant may withdraw all or any portion of his Employee
After-Tax Account subject to the limitations of this Section.
3.03 Employer Matching Account
Employer Matching Account means the Account of a Participant reflecting
applicable contributions, forfeitures, investment income or loss allocated
thereto and distributions. A Participant's Employer Matching Account will
vest in accordance with the Vesting Schedule.
(a) Employer Matching Contributions
Each Contribution Period, the Employer will, within the time
prescribed by law for making a deductible contribution, make an
Employer Matching Contribution to each Eligible Participant's Employer
Matching Account in an amount which is determined in accordance with
this Section subject to the limitations of Article 7.
The amount of Employer Matching Contribution to be made to an Eligible
Participant's Employer Matching Account is equal to 50% of the
Participant's Tax-Deferred Contribution which is not in excess of 6%
of the Participant's Compensation.
All Employer Matching Contributions are Matching Contributions within
the meaning of Section 4.05(a) and must satisfy the Nondiscrimination
Requirements of Section 4.05.
(b) Contribution Period
The Contribution Period for Employer Matching Contributions is each
month.
(c) Application of Forfeitures
Forfeitures from a Participant's Employer Matching Account will be
used to reduce Employer Matching Contributions in the Plan Year in
which the Forfeitures are determined to occur.
(d) Withdrawals
A Participant may not withdraw any portion of his Employer Matching
Account prior to the time when benefits otherwise become payable in
accordance with the provisions of Article 5.
3.04 Rollover Account
Rollover Account means the Account of a Participant reflecting applicable
contributions, investment income or loss allocated thereto and
distributions. A Participant's Rollover Account is 100% vested at all
times.
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(a) Rollover Contributions
Rollover Contribution means a contribution to the Plan by a
Participant where such contribution is the result of a prior
distribution from another qualified plan. Such prior distribution must
be a rollover amount described in Section 402(c)(4) of the Code.
Each Employee who is a member of an Eligible Employee Classification,
regardless of whether he is a Participant in the Plan, will have the
right to make a Rollover Contribution of cash (or other property of a
form acceptable to the Plan Administrator and the Trustee) into the
Plan from another qualified plan. If the Employee is not a Participant
hereunder, his Rollover Account will constitute his entire interest in
the Plan. In no event will the existence of a Rollover Account entitle
the Employee to participate in any other benefit provided by the Plan.
If specifically provided for in a Written Resolution, Rollover
Contribution will also mean the amount of assets transferred, pursuant
to Section 10.05, to this Plan from another plan which is qualified
under Code Sections 401(a) and 501(a).
(b) Withdrawals
A Participant may withdraw all or any portion of his Rollover Account
at any time. However, if a Participant makes such a withdrawal, he may
not make another withdrawal from his Rollover Account until twelve
months have elapsed.
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ARTICLE 4
ACCOUNTING AND VALUATION
4.01 General Powers of the Plan Administrator
The Plan Administrator will have the power to establish rules and
guidelines, which will be applied on a uniform and non-discriminatory
basis, as it deems necessary, desirable or appropriate with regard to
accounting procedures and to the timing and method of contributions to
and/or withdrawals from the Plan.
4.02 Valuation Procedure
As of each Valuation Date, the Plan Administrator will determine from the
Trustee the fair market value of Trust assets and will, subject to the
provisions of this Article, determine the allocation of such value among
the Accounts of the Participants; in doing so, the Plan Administrator will
in the following order:
(a) Credit or charge, as appropriate, to the proper Accounts all
contributions, payments, transfers, forfeitures, withdrawals or other
distributions made to or from such Accounts since the last preceding
Valuation Date and that have not been previously credited or charged.
(b) Credit or charge, as applicable, each Account with its pro rata
portion of the appreciation or depreciation in the fair market value
of the Trust Fund since the prior Valuation Date. Such appreciation or
depreciation will reflect investment income, realized and unrealized
gains and losses, other investment transactions and expenses paid from
the Trust Fund.
4.03 Reserved
4.04 Participant Direction of Investment
(a) Application of this Section
Subject to the provisions of this Section, each Participant will have
the right to direct the investment of all of his Accounts among the
Specific Investment Funds which are made available by the Plan
Administrator.
(b) General Powers of the Trustee
The Trustee will have the power to establish rules and guidelines as
it deems necessary, desirable or appropriate with regard to the
directed investment of contributions in accordance with this Section.
Such rules and guidelines are intended to comply with Section 404(c)
of ERISA and the regulations thereunder. Included in such powers, but
not by way of limitation, are the following powers and rights.
(1) To temporarily invest those contributions which are pending
directed investment in a Specific Investment Fund, in the General
Investment Fund or in some other manner as determined by the
Trustee.
(2) To establish rules with regard to the transfer of all or any part
of the balance of an Account or Accounts of a given Participant
from one Investment Fund to another.
(3) To maintain any part of the assets of any Investment Fund in
cash, or in demand or short-term time deposits bearing a
reasonable rate of interest, or in a short-term investment fund
that provides for the collective investment of cash balances or
in
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other cash equivalents having ready marketability, including, but
not limited to, U.S. Treasury Bills, commercial paper,
certificates of deposit, and similar types of short-term
securities, as may be deemed necessary by the Trustee in its sole
discretion.
The Trustee will not be liable for any loss that results from a
Participant's exercise of control over the investment of the
Participant's Accounts. If the Participant fails to provide adequate
directions, the Plan Administrator will direct the investment of the
Participant's Account. The Trustee will have no duty to review or make
recommendations regarding a Participant's investment directions.
(c) Accounting
The Plan Administrator will maintain a set of accounts for each
Investment Fund. The accounts of the Plan Administrator for each
Investment Fund will indicate separately the dollar amounts of all
contributions made to such Investment Fund by or on behalf of each
Participant from time to time. The Plan Administrator will compute the
net income from investments; net profits or losses arising from the
sale, exchange, redemption, or other disposition of assets, and the
prorata share attributable to each Investment Fund of the expenses of
the administration of the Plan and Trust and will debit or credit, as
the case may be, such income, profits or losses, and expenses to the
unsegregated balance in each Investment Fund from time to time. To the
extent that the expenses of the administration of the Plan and Trust
are not directly attributable to a given Investment Fund, such
expenses, as of a given Valuation Date, will be prorated among each
Investment Fund; such allocation of expenses will, in general, be
performed in accordance with the guidelines which are specified in
this Article.
(d) Future Contributions
Each Participant who chooses to participate in the Plan will elect the
percentage of those contributions (which are subject to Participant
direction of investment) which is to be deposited to each available
Investment Fund. Such election will be in effect until modified. If
any Participant fails to make an election by the appropriate date, he
will be deemed to have elected an Investment Fund(s) as determined by
the Plan Administrator. Elections will be limited to multiples of one
percent (or such other reasonable increments as determined by the Plan
Administrator).
(e) Change in Investment of Past Contributions
A Participant may file an election with the Plan Administrator to
shift the aggregate amount or reasonable increments (as determined by
the Plan Administrator) of the balance of his existing Account or
Accounts which are subject to Participant direction of investment
among the various Investment Funds as of the first day of each
Accounting Period (or such other time or times as determined by the
Plan Administrator). Elections will be limited to multiples of one
percent (or such other reasonable increments as determined by the Plan
Administrator).
(f) Changes in Investment Elections
Elections with respect to future contributions and/or with respect to
changes in the investment of past contributions will be in writing on
a form provided by the Plan Administrator, except that each
Participant may authorize the Plan Administrator in writing on an
authorization form provided by the Plan Administrator to accept such
directions as may be made by the Participant by use of a telephone
voice response system maintained for such purpose.
The Plan Administrator may establish additional rules and procedures
with respect to investment election changes including, for example,
the number of allowed changes per
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29
specified period, the amount of reasonable fee, if any, which will be
charged to the Participant for making a change, specified dates or
cutoff dates for making a change, etc.
(g) Addition and Deletion of Specific Investment Funds
Specific Investment Funds may be made available from time to time by
the Trustee. Specific Investment Funds, as are from time to time made
available by the Trustee, may be deleted or added from time to time by
the Plan Administrator in the Plan Administrator's sole and absolute
discretion. The Plan Administrator will establish guidelines for the
proper administration of affected Accounts when a Specific Investment
Fund is added or deleted.
4.05 Nondiscrimination Requirements
(a) Definitions Applicable to the Nondiscrimination Requirements The
following definitions apply to this Section:
(1) Aggregate Limit
With respect to a given Plan Year, Aggregate Limit means the
greater of the sum of [(A) + (B)] or the sum of [(C) + (D)]
where:
(A) is equal to 125% of the greater of DP or CP;
(B) is equal to 2 percentage points plus the lesser of DP or CP,
not to exceed 2 times the lesser of DP or CP;
(C) is equal to 125% of the lesser of DP or CP;
(D) is equal to 2 percentage points plus the greater of DP or
CP, not to exceed 2 times the greater of DP or CP;
DP represents the Deferral Percentage for the Non-highly
Compensated Group eligible under the Cash or Deferred
Arrangement for the Plan Year; and
CP represents the Contribution Percentage for the Non-highly
Compensated Group eligible under the plan providing for the
Employee After-tax Contributions or Employer Matching
Contributions for the Plan Year beginning with or within the
Plan Year of the Cash or Deferred Arrangement.
(2) Cash or Deferred Arrangement (CODA)
A Cash or Deferred Election is any election (or modification of
an earlier election) by an Employee to have the Employer either:
- provide an amount to the Employee in the form of cash or
some other taxable benefit that is not currently available,
or
- contribute an amount to the Plan (or provide an accrual or
other benefit) thereby deferring receipt of Compensation.
A Cash or Deferred Election will only be made with respect to an
amount that is not currently available to the Employee on the
date of election. Further, a Cash or Deferred Election will only
be made with respect to amounts that would have (but for the Cash
or Deferred Election) become currently available after the later
of the date on which the Employer adopts the Cash or Deferred
Arrangement or the date on which the
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arrangement first becomes effective.
A Cash or Deferred Election does not include a one-time
irrevocable election upon the Employee's commencement of
employment or first becoming an Eligible Employee.
(3) Compensation
For purposes of this Section, Compensation means Aggregate
Compensation as defined in Section 7.03(a) plus amounts
contributed by the Employer pursuant to a salary reduction
agreement which are excludable from the gross income of the
Employee under Code Section 125, 402(e)(3), 402(h) or 403(b).
Compensation in excess of the Statutory Compensation Limit is
disregarded.
The period used to determine an Employee's Compensation for a
Plan Year may be limited to that portion of the Plan Year in
which the Employee was an Eligible Employee, provided that this
method is applied uniformly to all Eligible Employees under the
Plan for the Plan Year.
(4) Contribution Percentage
Contribution Percentage means, for any specified group, the
average of the ratios calculated (to the nearest one-hundredth of
one percent) separately for each Participant in the group, of the
amount of Employee After-tax Contributions and Matching
Contributions which are made by or on behalf of each Participant
for a Plan Year to each Participant's Compensation for the Plan
Year.
For purposes of determining the Contribution Percentage, each
Employee who is eligible under the terms of the Plan to make or
to have contributions made on his behalf is treated as a
Participant. The Contribution Percentage of an eligible Employee
who makes no Employee After-tax Contribution and receives no
Matching Contribution is zero.
For purposes of determining the Contribution Percentage of a
Participant who is a Highly Compensated Employee, the
Compensation of and all Employee Contributions and Matching
Contributions for the Participant include, in accordance with the
provisions of Section 4.05(d), the Compensation of and all
Employee After-tax Contributions and Matching Contributions for
any Family Member of the Participant.
The Contribution Percentage of a Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to
make Employee After-tax Contributions or receive an allocation of
Matching Contributions (including Elective Contributions and
Nonelective Contributions which are treated as Employee or
Matching Contributions for purposes of the Contribution
Percentage Test) allocated to his accounts under two or more
plans which are sponsored by the Employer will be determined as
if the Employee After-tax and Matching Contributions were made
under a single plan. For purposes of this paragraph, if a Highly
Compensated Employee participates in two or more such plans which
have different Plan Years, all plans ending with or within the
same calendar year will be treated as a single plan.
(5) Contribution Percentage Test
The Contribution Percentage Test is a test applied on a Plan Year
basis to determine whether a plan meets the requirements of Code
Section 401(m). The Contribution Percentage Test may be met by
either satisfying the General Contribution Percentage Test or the
Alternative Contribution Percentage Test.
The General Contribution Percentage Test is satisfied if the
Contribution Percentage
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31
for the Highly Compensated Group does not exceed 125% of the
Contribution Percentage for the Non-highly Compensated Group.
The Alternative Contribution Percentage Test is satisfied if the
Contribution Percentage for the Highly Compensated Group does not
exceed the lesser of:
- the Contribution Percentage for the Non-highly
Compensated Group plus 2 percentage points, or
- the Contribution Percentage for the Non-highly
Compensated Group multiplied by 2.0.
If (i) one or more Highly Compensated Employees of the Employer
or any Related Employer are eligible to participate in both a
Cash or Deferred Arrangement and a plan which provides for
Employee After-tax Contributions or Matching Contributions, (ii)
the Deferral Percentage for the Highly Compensated Group does not
satisfy the General Deferral Percentage Test, and (iii) the
Contribution Percentage for the Highly Compensated Group does not
satisfy the General Contribution Percentage Test, then the
Contribution Percentage Test will be deemed to be satisfied only
if the sum of the Deferral Percentage and the Contribution
Percentage for the Highly Compensated Group does not exceed the
Aggregate Limit.
The Plan will not fail to satisfy the Contribution Percentage
test merely because all of the Eligible Employees under the Plan
for a Plan Year are Highly Compensated Employees.
(6) Deferral Percentage
Deferral Percentage means, for any specified group, the average
of the ratios calculated (to the nearest one-hundredth of one
percent) separately for each Participant in the group, of the
amount of Elective Contributions which are made on behalf of each
Participant for a Plan Year to each Participant's Compensation
for the Plan Year.
For purposes of determining the Deferral Percentage, each
Employee who is eligible under the terms of the Plan to have
contributions made on his behalf is treated as a Participant. The
Deferral Percentage of an eligible Employee who makes no Elective
Contribution is zero.
For purposes of determining the Deferral Percentage of a
Participant who is a Highly Compensated Employee, the
Compensation of and Elective Contributions for the Participant
include, in accordance with the provisions of Section 4.05(d),
the Compensation and all Elective Contributions for any Family
Member of the Participant.
The Deferral Percentage of a Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to
have Elective Contributions (including Nonelective Contributions
or Matching Contributions which are treated as Elective
Contributions for purposes of the Deferral Percentage Test)
allocated to his accounts under two or more Cash or Deferred
Arrangements which are maintained by the Employer will be
determined as if the Elective Contributions were made under a
single Arrangement. For purposes of this paragraph, if a Highly
Compensated Employee participates in two or more Cash or Deferred
Arrangements which have different Plan Years, all Cash or
Deferred Arrangements ending with or within the same calendar
year will be treated as a single Arrangement.
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32
(7) Deferral Percentage Test
The Deferral Percentage Test is a test applied on a Plan Year basis to
determine whether a plan meets the requirements of Code Section
401(k). The Deferral Percentage Test may be met by either satisfying
the General Deferral Percentage Test or the Alternative Deferral
Percentage Test.
The General Deferral Percentage Test is satisfied if the Deferral
Percentage for the Highly Compensated Group does not exceed 125% of
the Deferral Percentage for the Non-highly Compensated Group.
The Alternative Deferral Percentage Test is satisfied if the Deferral
Percentage for the Highly Compensated Group does not exceed the lesser
of:
- the Deferral Percentage for the Non-highly Compensated Group
plus 2 percentage points, or
- the Deferral Percentage for the Non-highly Compensated Group
multiplied by 2.0.
If (i) one or more Highly Compensated Employees of the Employer or any
Related Employer are eligible to participate in both a Cash or
Deferred Arrangement and a plan which provides for Employee After-tax
Contributions or Matching Contributions, (ii) the Deferral Percentage
for the Highly Compensated Group does not satisfy the General Deferral
Percentage Test, and (iii) the Contribution Percentage for the Highly
Compensated Group does not satisfy the General Contribution Percentage
Test, then the Deferral Percentage Test will be deemed to be satisfied
only if the sum of the Deferral Percentage and the Contribution
Percentage for the Highly Compensated Group does not exceed the
Aggregate Limit.
The Plan will not fail to satisfy the Deferral Percentage test merely
because all of the Eligible Employees under the Plan for a Plan Year
are Highly Compensated Employees.
(8) Elective Contribution
Elective Contribution means any contribution made by the Employer to a
Cash or Deferred Arrangement on behalf of and at the election of an
Employee. An Elective Contribution will be taken into account for a
given Plan Year only if:
- The Elective Contribution is allocated to the Participant's
Account as of a date within the Plan Year to which it
relates;
- The allocation is not contingent upon the Employee's
participation in the Plan or performance of services on any
date after the allocation date;
- The Elective Contribution is actually paid to the trust no
later than 12 months after the end of the Plan Year to which
the Elective Contribution relates; and
- The Elective Contribution relates to Compensation which
either (i) but for the Participant's election to defer,
would have been received by the Participant in the Plan Year
or (ii) is attributable to services performed by the
Participant in the Plan Year and, but for the Participant's
election to defer,
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33
would have been received by the Participant within two and
one-half months after the close of the Plan Year.
Elective Contributions will be treated as Employer Contributions
for purposes of Code Sections 401(a), 401(k), 402(a), 404, 409,
411, 412, 415, 416, and 417.
(9) Elective Deferral
Elective Deferral means the sum of the following:
- Any Elective Contribution to any Cash or Deferred
Arrangement to the extent it is not includable in the
Participant's gross income for the taxable year of
contribution;
- Any employer contribution to a simplified employee
pension as defined in Code Section 408(k) to the extent
not includable in the Participant's gross income for
the taxable year of contribution;
- Any employer contribution to an annuity contract under
Code Section 403(b) under a salary reduction agreement
to the extent not includable in the Participant's gross
income for the taxable year of contribution; plus
- Any employee contribution designated as deductible
under a trust described in Code Section 501(c)(18) for
the taxable year of contribution.
(10) Eligible Employee
Eligible Employee means an Employee who is directly or indirectly
eligible to make a Cash or Deferred Election under the Plan for
all or a portion of the Plan Year. An Employee who is unable to
make a Cash or Deferred Election because the Employee has not
contributed to another plan is also an Eligible Employee. An
Employee who would be eligible to make Elective Contributions but
for a suspension due to a distribution, a loan, or an election
not to participate in the Plan, is treated as an Eligible
Employee for purposes of Code Section 401(k)(3) and 401(m) for a
Plan Year even though the Employee may not make a Cash or
Deferred Election due to the suspension. Also, an Employee will
not fail to be treated as an Eligible Employee merely because the
employee may receive no additional Annual Additions because of
Code Section 415(c)(1) or 415(e).
(11) Employee After-tax Contribution
Employee After-tax Contribution means any contribution made by an
Employee to any plan maintained by the Employer or any Related
Employer which is other than an Elective Contribution and which
is designated or treated at the time of contribution as an
after-tax contribution. Employee After-tax Contributions include
amounts attributable to Excess Contributions which are
recharacterized as Employee After-tax Contributions.
(12) Excess Contribution
Excess Contribution means, for each member of the Highly
Compensated Group, the amount of Elective Contribution (including
any Qualified Nonelective Contributions and Qualified Matching
Contributions which are treated as Elective Contributions) which
exceeds the maximum contribution which could be made if the
Deferral Percentage Test were to be satisfied.
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(13) Excess Aggregate Contribution
Excess Aggregate Contribution means, for each member of the
Highly Compensated Group, the amount of Employee After-tax and
Matching Contributions (including any Qualified Nonelective
Contributions and Elective Contributions which are treated as
Matching Contributions) which exceeds the maximum contribution
which could be made if the Contribution Percentage Test were to
be satisfied.
(14) Excess Deferral
Excess Deferral means, for a given calendar year, that amount by
which each Participant's total Elective Deferrals under all plans
of all employers exceed the dollar limit in effect under Code
Section 402(g) for the calendar year.
(15) Matching Contribution
Matching Contribution means any contribution made by the Employer
to any plan maintained by the Employer or any Related Employer
which is based on an Elective Contribution or an Employee
After-tax Contribution together with any forfeiture allocated to
the Participant's Account on the basis of Elective Contributions,
Employee After-tax Contributions or Matching Contributions. A
Matching Contribution will be taken into account for a given Plan
Year only if:
- The Matching Contribution is allocated to a
Participant's Account as of a date within the Plan Year
to which it relates;
- The allocation is not contingent upon the Employee's
participation in the Plan or performance of services on
any date after the allocation date;
- The Matching Contribution is actually paid to the Trust
no later than 12 months after the end of the Plan Year
to which the Matching Contribution relates; and
- The Matching Contribution is based on an Elective or
Employee After-tax Contribution for the Plan Year.
Any contribution or allocation, other than a Qualified
Nonelective Contribution, which is used to meet the minimum
contribution or benefit requirement of Code Section 416 is not
treated as being based on Elective Contributions or Employee
After-tax Contributions and therefore is not treated as a
Matching Contribution.
Qualified Matching Contribution means a Matching Contribution
which is 100% vested and may be withdrawn or distributed only
under the conditions described in Treasury Regulation
1.401(k)-1(d).
(16) Nonelective Contribution
Nonelective Contribution means any Employer Contribution, other
than a Matching Contribution, which meets all of the following
requirements:
- The Nonelective Contribution is allocated to a
Participant's Account as of a date within the Plan Year
to which it relates;
- The allocation is not contingent upon the Employee's
participation in the Plan or performance of services on
any date after the allocation date;
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35
- The Nonelective Contribution is actually paid to the
Trust no later than 12 months after the end of the Plan
Year to which the Nonelective Contribution relates; and
- The Employee may not elect to have the Nonelective
Contribution paid in cash in lieu of being contributed
to the Plan.
Qualified Nonelective Contribution means a Nonelective
Contribution which is 100% vested and may be withdrawn or
distributed only under the conditions described in Treasury
Regulation 1.401(k)-1(d).
(b) Application of Deferral Percentage Test
All Elective Contributions, including any Elective Contributions
which are treated as Employee After-tax or Matching Contributions
with respect to the Contribution Percentage Test, must satisfy
the Deferral Percentage Test. Furthermore, any Elective
Contributions which are not treated as Employee After-tax or
Matching Contributions with respect to the Contribution
Percentage Test must satisfy the Deferral Percentage Test. The
Plan Administrator will determine as soon as administratively
feasible after the end of the Plan Year whether the Deferral
Percentage Test has been satisfied. If the Deferral Percentage
Test is not satisfied, the Employer may elect to make an
additional contribution to the Plan on account of the Non-highly
Compensated Group. The additional contribution will be treated as
a Nonelective Contribution.
If the Deferral Percentage Test is not satisfied after any
Nonelective Contributions, the Plan Administrator may, in its
sole discretion, recharacterize all or any portion of the Excess
Contribution of each Highly Compensated Employee as an Employee
After-tax Contribution if Employee After-tax Contributions are
otherwise allowed by the Plan. If so, the Plan Administrator will
notify all affected Participants and the Internal Revenue Service
of the amount recharacterized no later than the 15th day of the
third month following the end of the Plan Year in which the
Excess Contribution was made. Excess Contributions will be
includable in the Participant's gross income on the earliest date
any Elective Contribution made on behalf of the Participant
during the Plan Year would have been received by the Participant
had the Participant elected to receive the amount in cash.
Recharacterized Excess Contributions will continue to be treated
as Employer Contributions that are Elective Contributions for all
other purposes under the Code, including Code Sections 401(a)
(other than 401(a)(4) and 401(m)), 404, 409, 411, 412, 415, 416,
417 and 401(k)(2). With respect to the Plan Year for which the
Excess Contribution was made, the Plan Administrator will treat
the recharacterized amount as an Employee After-tax Contribution
for purposes of the Deferral Percentage Test and the Contribution
Percentage Test and for purposes of determining whether the Plan
meets the requirements of Code Section 401(a)(4), but not for any
other purposes under this Plan. Therefore, recharacterized
amounts will remain subject to the nonforfeiture requirements and
distribution limitations which apply to Elective Contributions.
If the Deferral Percentage Test is still not satisfied, then
after the close of the Plan Year in which the Excess Contribution
arose but within 12 months after the close of that Plan Year, the
Plan Administrator will distribute the Excess Contributions,
together with allocable income, to the affected Participants of
the Highly Compensated Group to the extent necessary to satisfy
the Deferral Percentage Test. Failure to do so will cause the
Plan to not satisfy the requirements of Code Section 401(a)(4)
for the Plan Year for which the Excess Contribution was made and
for all subsequent Plan Years for which the Excess Contribution
remains uncorrected.
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36
The amount of Excess Contribution to be distributed to a Highly
Compensated Employee for a Plan Year will be reduced by any
Excess Deferrals previously distributed to the Participant for
the calendar year ending with or within the Plan Year in
accordance with Code Section 402(g)(2).
Excess Contributions will be treated as Employer Contributions
for purposes of Code Sections 404 and 415 even if distributed
from the Plan.
(c) Application of Contribution Percentage Test
Employee After-tax Contributions and Matching Contributions,
disregarding any Matching Contributions which are treated as
Elective Contributions with respect to the Deferral Percentage
Test, must satisfy the Contribution Percentage Test. The Plan
Administrator will determine as soon as administratively feasible
after the end of the Plan Year whether the Contribution Test has
been satisfied. If the Contribution Percentage Test is not
satisfied, the Employer may elect to make an additional
contribution to the Plan for the benefit of the Non-Highly
Compensated Group. The additional contribution will be treated as
a Nonelective Contribution.
If the Contribution Percentage Test is still not satisfied, then
after the close of the Plan Year in which the Excess Aggregate
Contribution arose but within 12 months after the close of that
Plan Year, the Plan Administrator will distribute (or forfeit, to
the extent not vested) the Excess Aggregate Contributions,
together with allocable income, to the affected Participants of
the Highly Compensated Group to the extent necessary to satisfy
the Contribution Percentage Test. Failure to do so will cause the
Plan to not satisfy the requirements of Code Section 401(a)(4)
for the Plan Year for which the Excess Aggregate Contribution was
made and for all subsequent Plan Years for which the Excess
Aggregate Contribution remains uncorrected.
The determination of any Excess Aggregate Contributions will be
made after the recharacterization of any Excess Contributions as
Employee After-tax Contributions.
Excess Aggregate Contributions, including forfeited Matching
Contributions, will be treated as Employer Contributions for
purposes of Code Sections 404 and 415 even if they are
distributed from the Plan.
Forfeited Matching Contributions that are reallocated to the
Accounts of other Participants are treated as Annual Additions
under Code Section 415 for the Participant whose Accounts they
are reallocated to and for the Participants from whose Accounts
they are forfeited.
(d) Family Aggregation
The Deferral Percentage or the Contribution Percentage (the
"Relevant Percentage") for any Highly Compensated Employee who is
subject to the family aggregation rules of Section 1.18(c) will
be determined by combining the Elective Contributions, Employee
After-tax Contributions, Matching Contribution, amounts treated
as Elective or Matching Contributions and Compensation of all the
eligible Family Members.
The determination and correction of Excess Contributions and
Excess Aggregate Contributions of a Highly Compensated Employee
whose Relevant Percentage is determined under the family
aggregation rules is accomplished by reducing the Relevant
Percentage as provided for in Sections 4.05(b) and 4.05(c) and
Excess Contributions or Excess Aggregate Contributions for the
family group are allocated among the Family Members whose
contributions were combined to determine the Relevant Percentage
in proportion to the Elective Contributions or Nonelective and
Matching Contributions of each Family Member.
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For all purposes under this Section, the contributions and
compensation of eligible Family Members who are not Highly
Compensated Employees without regard to family aggregation are
disregarded when determining the Relevant Percentage for the
Non-highly Compensated Group.
(e) Reduction of Excess Amounts
The total Excess Contribution or total Excess Aggregate
Contribution will be reduced in a manner so that the Deferral
Percentage or the Contribution Percentage (Relevant Percentage)
of the affected Participant(s) with the highest Relevant
Percentage will first be lowered to a point not less than the
level of the affected Participant(s) with the next highest
Relevant Percentage. If further overall reductions are required
to satisfy the relevant test, each of the above Participants' (or
groups of Participants') Relevant Percentage will be lowered to a
point not less than the level of the affected Participant(s) with
the next highest Relevant Percentage, and so on continuing until
sufficient total reductions have occurred to achieve satisfaction
of the relevant test.
(f) Priority of Reductions
The Plan Administrator will determine the method and order of
correcting Excess Contributions and Excess Aggregate
Contributions. The method of correcting Excess Contributions and
Excess Aggregate Contributions must meet the requirements of Code
Section 401(a)(4). The determination of whether a rate of
Matching Contribution discriminates under Code Section 401(a)(4)
will be made after making any corrective distributions of Excess
Deferrals, Excess Contributions and Excess Aggregate
Contributions.
Excess Aggregate Contributions (and any attributable income) will
be corrected first, by distributing any excess Employee After-tax
Contributions (and any attributable income); then by distributing
vested excess Matching Contributions (and any attributable
income); and finally, by forfeiting or distributing non-vested
Matching Contributions (and any attributable income). The Plan
will not distribute Employee After-tax Contributions while the
Matching Contributions based upon those Employee After-tax
Contributions remain allocated.
(g) Income
The income allocable to any Excess Contribution made to a given
Account for a given Plan Year will be equal to the total income
allocated to the Account for the Plan Year, multiplied by a
fraction, the numerator of which is the amount of the Excess
Contribution and the denominator of which is equal to the sum of
the balance of the Account at the beginning of the Plan Year plus
the Participant's Elective Contributions and amounts treated as
Elective Contributions for the Plan Year.
The income allocable to any Excess Aggregate Contribution made to
a given Account for a given Plan Year will be equal to the total
income allocated to the Account for the Plan Year, multiplied by
a fraction, the numerator of which is the amount of the Excess
Aggregate Contribution and the denominator of which is equal to
the sum of the balance of the Account at the beginning of the
Plan Year plus the Participant's Employee After-tax and Matching
Contributions and amounts treated as Employee After-tax and
Matching Contributions for the Plan Year.
Notwithstanding the foregoing, the Plan may use any reasonable
method for computing the income allocable to any Excess
Contribution or Excess Aggregate Contribution provided the method
does not violate Code Section 401(a)(4), is used consistently for
all corrective distributions under the Plan for the Plan Year,
and is used by the Plan for allocating
4-11
38
income to the Participants' Accounts.
Income includes all earnings and appreciation, including
interest, dividends, rents, royalties, gains from the sale of
property, and appreciation in the value of stocks, bonds, annuity
and life insurance contracts and other property, regardless of
whether the appreciation has been realized.
(h) Treatment as Elective Contributions
The Plan Administrator may, in its discretion, treat all or any
portion of Qualified Nonelective Contributions or Qualified
Matching Contributions or both, whether to this Plan or to any
other qualified plan which has the same Plan Year and is
maintained by the Employer or a Related Employer, as Elective
Contributions for purposes of satisfying the Deferral Percentage
Test if they meet all of the following requirements:
- All Nonelective Contributions, including the Qualified
Nonelective Contributions treated as Elective
Contributions for purposes of the Deferral Percentage
Test, satisfy the requirements of Code Section
401(a)(4);
- Any Nonelective Contributions which are not treated as
Elective Contributions for purposes of the Deferral
Percentage Test or as Matching Contributions for
purposes of the Contribution Percentage Test satisfy
the requirements of Code Section 401(a)(4);
- The Qualified Matching Contributions which are treated
as Elective Contributions for purposes of the Deferral
Percentage Test are not taken into account in
determining whether any Employee After-tax
Contributions or other Matching Contributions satisfy
the Contribution Percentage Test;
- Any Matching Contributions which are not treated as
Elective Contributions for purposes of the Deferral
Percentage Test satisfy the requirements of Code
Section 401(m); and
- The plan which includes the Cash or Deferred
Arrangement and the plan or plans to which the
Qualified Nonelective Contributions and Qualified
Matching Contributions are made could be aggregated for
purposes of Code Section 410(b).
(i) Treatment as Matching Contributions
The Plan Administrator may, in its discretion, treat all or
any portion of Qualified Nonelective Contributions or
Elective Contributions or both, whether to this Plan or to
any other qualified plan which has the same Plan Year and is
maintained by the Employer or a Related Employer, as
Matching Contributions for purposes of satisfying the
Contribution Percentage Test if they meet all of the
following requirements:
- All Nonelective Contributions, including the Qualified
Nonelective Contributions treated as Matching
Contributions for purposes of the Contribution
Percentage Test, satisfy the requirements of Code
Section 401(a)(4);
- Any Nonelective Contributions which are not treated as
Elective Contributions for purposes of the Deferral
Percentage Test or as Matching Contributions for
purposes of the Contribution Percentage Test satisfy
the requirements of Code Section 401(a)(4);
- The Elective Contributions which are treated as
Matching Contributions for purposes of the Contribution
Percentage Test are not taken into account in
determining
4-12
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whether any other Elective Contributions satisfy the
Deferral Percentage Test;
- The Qualified Nonelective Contributions and Elective
Contributions which are treated as Matching
Contributions for purposes of the Contribution
Percentage Test are not taken into account in
determining whether any other contributions or benefits
satisfy Code Section 401(a); and
- All Elective Contributions, including those treated as
Matching Contributions for purposes of the Contribution
Percentage Test, satisfy the requirements of Code
Section 401(k)(3); and
- The plan that takes Qualified Nonelective Contributions
and Elective Contributions into account in determining
whether Employee After-tax and Matching Contributions
satisfy the requirements of Code Section 401(m)(2)(A)
and the plan or plans to which the Qualified
Nonelective Contributions and Elective Contributions
are made could be aggregated for purposes of Code
Section 410(b).
(j) Aggregation of Plans
If the Employer or a Related Employer sponsors one or more
other plans which include a Cash or Deferred Arrangement,
the Employer may elect to treat any two or more of such
plans as an aggregated single plan for purposes of
satisfying Code Sections 401(a)(4), 401(k) and 410(b). The
Cash of Deferred Arrangements included in such aggregated
plans will be treated as a single Arrangement for purposes
of this Section. However, only those plans that have the
same plan year may be so aggregated.
If the Employer or a Related Employer sponsors one or more
other plans to which Employee After-tax Contributions or
Matching Contributions are made, the Employer may elect to
treat any two or more of such plans as an aggregated single
plan for purposes of satisfying Code Sections 401(a)(4),
401(m) and 410(b). However, only those plans that have the
same plan year may be so aggregated.
Any such aggregation must be made in accordance with
Treasury Regulation 1.401(k)-1(b)(3). For example,
contributions and allocations under the portion of a plan
described in Code Section 4975(e)(7) (an ESOP) may not be
aggregated with the portion of a plan not described in Code
Section 4975(e)(7) (a non-ESOP) for purposes of determining
whether the ESOP or non-ESOP satisfies the requirements of
Code Sections 401(a)(4), 401(k), 401(m) and 410(b).
Plans that could be aggregated under Code Section 410(b) but
that are not actually aggregated for a Plan Year for
purposes of Code Section 410(b) may not be aggregated for
purposes of Code Sections 401(k) and 401(m).
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ARTICLE 5
RETIREMENT BENEFITS
5.01 Valuation of Accounts
For purposes of this Article, the value of a Participant's Accrued Benefit
will be determined as of the Valuation Date immediately preceding the date
that benefits are to be distributed.
5.02 Normal Retirement
After an Active Participant reaches his Normal Retirement Date, he may
elect to retire. Upon such retirement he will become a Retired Participant
and his Accrued Benefit will become distributable to him. A Participant's
Accrued Benefit will become nonforfeitable no later than the date upon
which he attains his Normal Retirement Age. The form and timing of benefit
payment will be governed by the provisions of Section 5.05.
5.03 Disability Retirement
In the event of a Participant's termination due to Disability, he will be
entitled to begin to receive a distribution of his Accrued Benefit which
will become nonforfeitable as of his date of termination. The form and
timing of benefit payment will be governed by the provisions of Section
5.05.
Disability means the determination by the Plan Administrator that a
Participant is unable by reason of any medically determinable physical or
mental impairment to perform, either permanently or for an indefinite
period of time, the usual duties of his employment or of any other
employment for which he is reasonably qualified based upon his education,
training and experience.
5.04 Termination of Employment
(a) In General
If a Participant's employment terminates for any reason other than
retirement, death, or disability, his Accrued Benefit will become
distributable to him as of the last day of the month which coincides
with or next follows the last date upon which any contributions on the
Participant's behalf are made to the Trust following the Participant's
date of termination of employment (or as of such earlier date as
determined by the Plan Administrator in a uniform and
nondiscriminatory manner). The form and timing of benefit payment will
be governed by the provisions of Section 5.05.
(b) Cash-Out Distribution
If a Participant terminates employment and receives a distribution
equal to the Vested Percentage of his Employer Matching Account, a
Cash-Out Distribution will be deemed to have occurred if the following
conditions are met:
(1) The Participant was less than 100% vested in his Employer
Matching Account; and
(2) The entire distribution is made before the last day of the second
Plan Year following the Plan Year in which the Participant
terminated employment.
(c) Restoration of Employer Matching Account
If, following the date of a Cash-Out Distribution, a Participant
returns to an Eligible Employee Classification prior to incurring 5
consecutive One Year Breaks-in-Service, then the Participant will have
the right to repay to the Trustee, within 5 years after his return
date, the portion of the Cash-Out Distribution which was attributable
to his
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41
Employer Matching Account in order to restore such Account to its
value as of the date of the Cash-Out Distribution.
The Plan Administrator will restore an eligible Participant's Employer
Matching Account as of the Accounting Date coincident with or
immediately following the complete repayment of the Cash-Out
Distribution. To restore the Participant's Employer Matching Account,
the Plan Administrator, to the extent necessary, will, under rules and
guidelines applied in a uniform and nondiscriminatory manner, first
allocate to the Participant's Employer Matching Account the amount, if
any, of Forfeitures which would otherwise be allocated under Article
3. To the extent such forfeitures for a particular Accounting Period
are insufficient to enable the Plan Administrator to make the required
restoration, the Employer will contribute such additional amount as is
necessary to enable the Plan Administrator to make the required
restoration. The Plan Administrator will not take into account the
allocation under this Section in applying the limitation on
allocations under Article 7.
(d) Non-Vested Participant
If a Participant who is zero percent vested in his Employer Matching
Account terminates employment, a Cash-Out Distribution will be deemed
to have occurred as of the Participant's date of termination of
employment.
If the Participant subsequently returns to an Eligible Employee
Classification prior to incurring five consecutive One Year
Breaks-in-Service, then the Participant will immediately become
entitled to a complete restoration of his Employer Matching Account as
of the Accounting Date coincident with or next following his date of
re-employment. Such restoration will be made in accordance with the
provisions of Section 5.04(c).
5.05 Form of Benefit Payment
(a) In General
Subject to the provisions of Section 5.06, the Plan Administrator will
direct the Trustee to make the payment of any benefit provided under
this Plan upon the event giving rise to such benefit within 60 days
following the receipt of a Participant's written request for the
payment of benefits on a form provided by the Plan Administrator. The
Plan Administrator may temporarily suspend such processing in the
event of unusual or extraordinary circumstances such as the conversion
of Plan records from one recordkeeper to another.
The form of benefit will be in accordance with the Qualified Annuity
provisions of Section 5.05(b) for any Participant who first performed
an Hour of Service with the Employer before January 1, 1992.
The form of benefit for any other Participant will be a lump sum
payment, unless the Participant elects a direct transfer pursuant to
Section 5.07.
(b) Qualified Annuity Rules
If required to be paid under the Qualified Annuity rules, the form of
benefit will be determined as follows:
(1) a Participant who is not married on the date benefits are to
commence will be provided a Qualified Life Annuity, unless a lump
sum payment is elected, under a Qualified Election, by the
Participant within the 90-day period which ends on his benefit
commencement date.
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42
(2) a Participant who is married on the date benefits commence will
be provided a Qualified Joint and Survivor Annuity unless a lump
sum payment is elected, under a Qualified Election, by the
Participant within the 90-day period which ends on his benefit
commencement date.
Within the 90-day period which ends on a married Participant's
expected benefit commencement date, the Plan Administrator will
provide each such Participant a written explanation of:
(1) the terms and conditions of a Qualified Joint and Survivor
Annuity;
(2) the Participant's right to make and the effect of a Qualified
Election to waive the Qualified Joint and Survivor Annuity form
of benefit;
(3) the rights of a Participant's spouse; and
(4) the right to make, and the effect of, a revocation of a previous
Qualified Election to waive the Qualified Joint and Survivor
Annuity.
Notwithstanding the above, if a terminated Participant's Vested
Accrued Benefit is $3,500 or less, the Plan Administrator may, without
the request or approval of the Participant, direct the immediate
distribution in a lump sum of the entire amount of his Vested Accrued
Benefit. If the value of his Vested Accrued Benefit at the time of any
distribution exceeds $3,500, the value of his Vested Accrued Benefit
at any later time will be deemed to also exceed $3,500. This paragraph
will not apply after the Annuity Starting Date.
5.06 Commencement of Benefit
Subject to the provisions of this Article, commencement of a benefit will,
unless the Participant elects otherwise in writing, begin not later than
the 60th day after the later of the close of the Plan Year in which the
Participant attains Normal Retirement Age or the close of the Plan Year
which contains the date the Participant terminates his service with the
Employer.
Payment of a Participant's benefits must begin no later than his Required
Beginning Date.
All distributions required under this Section will be determined and made
in accordance with the regulations issued under Code Section 401(a)(9),
including those dealing with minimum distribution requirements.
Notwithstanding the provisions of Section 5.05, an Active Participant who
has reached his Required Beginning Date will receive an annual distribution
of his Accrued Benefit equal to the minimun required distribution
determined under Code Section 401(a)(9).
For purposes of this Section, life expectancy and joint and last survivor
expectancy are to be computed by the use of the return multiples contained
in Section 1.72-9 of the Income Tax Regulations.
If the Participant dies after distribution of his interest has begun, the
remaining portion of the interest will continue to be distributed at least
as rapidly as under the method of distribution being used before the
Participant's death.
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5.07 Directed Transfer of Eligible Rollover Distributions
(a) General
This Section applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Distributee's election under this Section, a
Distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover.
(b) Eligible Rollover Distribution
An Eligible Rollover Distribution is any distribution of all or any
portion of the balance to the credit of the Distributee, except that
an Eligible Rollover Distribution does not include: any distribution
that is one of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life expectancy)
of the Distributee or the joint lives (or joint life expectancies) of
the Distributee and the Distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under section 401(a)(9) of the Code; and
the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(c) Eligible Retirement Plan
An Eligible Retirement Plan is an individual retirement account
described in section 408(a) of the Code, an individual retirement
annuity described in section 408(b) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the
Distributee's Eligible Rollover Distribution. However, in the case of
an Eligible Rollover Distribution to the surviving spouse, an Eligible
Retirement Plan is an individual retirement account or individual
retirement annuity.
(d) Distributee
A Distributee includes an Employee or Former Employee. In addition,
the Employee's or Former Employee's surviving spouse and the
Employee's or Former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined
in section 414(p) of the Code, are Distributees with regard to the
interest of the spouse or former spouse.
(e) Direct Rollover
A Direct Rollover is a payment by the Plan to the Eligible Retirement
Plan specified by the Distributee.
(f) Waiver of 30-Day Notice
If a distribution is one to which Code Sections 401(a)(11) and 417 do
not apply, such distribution may commence less than 30 days after the
notice required under Section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
- the Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not
to elect a distribution (and, if applicable, a particular
distribution option); and
- the Participant, after receiving the notice, affirmatively elects
to receive a distribution.
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ARTICLE 6
DEATH BENEFIT
6.01 Valuation of Accounts
For purposes of this Article, the value of a Participant's Accrued Benefit
will be determined as of the Valuation Date immediately preceding the date
that benefits are to be distributed.
6.02 Death Benefit
(a) Pre-Retirement Death Benefit
In the event of the death of a Participant prior to the date that he
begins to receive a retirement benefit under the Plan, either the
Participant's Surviving Spouse or his or her Beneficiary designated
pursuant to a Qualified Election, will be entitled to receive the
value of the Participant's Accrued Benefit.
In the case of a Participant who first performed an Hour of Service
with the Employer before January 1, 1992, if a Beneficiary other than
the Participant's Surviving Spouse has not been designated pursuant to
a Qualified Election, the Participant's Surviving Spouse will be
entitled to receive the value of the Participant's Accrued Benefit in
the form of a Qualified Survivor Annuity.
(b) Post-Retirement Death Benefit
In the event of the death of a Retired Participant or a Disabled
Participant receiving a benefit, a benefit will be paid to the
Participant's Beneficiary or Surviving Spouse in accordance with the
form of benefit payment elected under the Plan.
6.03 Designation of Beneficiary
Each Participant will be given the opportunity to designate a Beneficiary
or Beneficiaries, and from time to time the Participant may file with the
Plan Administrator a new or revised designation on the form provided by the
Plan Administrator. If a Participant is married, any designation of a
Beneficiary other than the Participant's spouse must be consented to by the
Participant's spouse pursuant to a Qualified Election.
If a Participant dies without designating a Beneficiary, or if the
Participant is predeceased by all designated Beneficiaries and contingent
Beneficiaries, the Plan Administrator will distribute all benefits which
are payable in the event of the Participant's death in the following manner
and to the first of the following (who are listed in order of priority) who
survive the Participant by at least 30 days:
- All to the Participant's Surviving Spouse;
- Equally among the then living children of the Participant (by
birth or adoption);
- Among the Participant's then living lineal descendants, by right
of representation; or
- The Participant's estate.
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ARTICLE 7
LIMITATIONS ON BENEFITS
7.01 Limitation on Annual Additions
The amount of the Annual Addition which may be allocated under this Plan to
any Participant's Account as of any Allocation Date will not exceed the
Defined Contribution Limit (based upon his Aggregate Compensation up to
such Valuation Date) reduced by the sum of any allocations of annual
additions made to Participant's Accounts under this Plan as of any
preceding Allocation Date within the Limitation Year.
If the Annual Addition under this Plan on behalf of a Participant is to be
reduced as of any Allocation Date as a result of the next preceding
paragraph, the reduction will be, to the extent required, effected by first
reducing Participant contributions (which increase the annual addition),
then Forfeitures (if any), and then Employer contributions to be allocated
under this Plan on behalf of the Participant as of the Allocation Date.
Any necessary reduction will be made as follows:
(a) The amount of the reduction consisting of nondeductible Participant
contributions will be paid to the Participant as soon as
administratively feasible.
(b) The amount of the reduction consisting of any other Participant
contributions will be paid to the Participant as soon as
administratively feasible.
(c) The amount of the reduction consisting of Forfeitures will be
allocated and reallocated to other Accounts in accordance with the
Plan formula for allocating Forfeitures to the extent that such
allocations do not cause the additions to any other Participant's
Accounts to exceed the lesser of the Defined Contribution Limit or any
other limitation provided in the Plan.
(d) The amount of the reduction consisting of Employer contributions will
be allocated and reallocated to other Accounts in accordance with the
Plan formula for Employer Contributions to the extent that such
allocations do not cause the additions to any other Participant's
Accounts to exceed the lesser of the Defined Contribution Limit or any
other limitation provided in the Plan.
(e) To the extent that the reductions described in paragraph (d) cannot be
allocated to other Participant's Accounts, the reductions will be
allocated to a suspense account as Forfeitures and held therein until
the next succeeding Allocation Date on which Forfeitures could be
applied under the provisions of the Plan. All amounts held in a
suspense account must be applied as Forfeitures before any additional
contributions, which would constitute annual additions, may be made to
the Plan. If the Plan terminates, the suspense account will revert to
the Employer to the extent it may not be allocated to any
Participant's Accounts.
(f) If a suspense account is in existence at any time during a Limitation
Year pursuant to this Section, it will not participate in the
allocation of the Trust Fund's investment gains and losses.
7-1
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7.02 Where Employer Maintains Another Qualified Plan
(a) Where Employer Maintains Another Qualified Defined Contribution Plan
If the Employer maintains this Plan and one or more other qualified
defined contribution plans, one or more welfare benefit funds (as
defined in Code Section 419(e)), or one or more individual medical
accounts (as defined in Code Section 415(l)(2)), all of which are
referred to in this Article 7 as "qualified defined contribution
plans", the annual additions allocated under this Plan to any
Participant's Accounts will be limited in accordance with the
allocation provisions of this Section 7.02(a).
The amount of the Annual Additions which may be allocated under this
Plan to any Participant's Accounts as of any Allocation Date will not
exceed the Defined Contribution Limit (based upon Aggregate
Compensation up to the allocation date) reduced by the sum of any
allocations of Annual Additions made to the Participant's Accounts
under this Plan and any other qualified defined contribution plans
maintained by the Employer as of any earlier Allocation Date within
the Limitation Year.
If a Allocation Date of this Plan coincides with a Allocation Date of
any other plan described in the above paragraph, the amount of Annual
Additions to be allocated on behalf of a Participant under this Plan
as of such date will be an amount equal to the product of the amount
described in the next preceding paragraph multiplied by a fraction
(not to exceed 1.0), the numerator of which is the amount to be
allocated under this Plan without regard to this Article during the
Limitation Year and the denominator of which is the amount that would
otherwise be allocated on this Allocation Date under all plans without
regard to this Article 7.
If the Annual Addition under this Plan on behalf of a Participant is
to be reduced as of any Allocation Date as a result of the next
preceding two paragraphs, the reduction will be, to the extent
required, effected by first reducing Participant contributions (which
increase the annual addition), then Forfeitures (if any), and then any
Employer contributions, to be allocated under this Plan on behalf of
the Participant as of the Allocation Date.
If as a result of the first four paragraphs of this Section 7.02 the
allocation of additions is reduced, the reduction will be treated in
the manner described in the third paragraph of Section 7.01.
(b) Where Employer Maintains a Qualified Defined Benefit Plan
(1) In General
If the Employer maintains (or has ever maintained), in addition
to this Plan, one or more qualified defined benefit plans, then
for any Limitation Year, the sum of the Defined Benefit Plan
Fraction and the Defined Contribution Plan Fraction will not
exceed 1.0. If, in any Limitation Year, the sum of the Defined
Benefit Plan Fraction and the Defined Contribution Plan Fraction
for a Participant would exceed 1.0 without adjustment to the
amount of the annual benefit that can be paid to the Participant
under the defined benefit plan, then the amount of annual benefit
that would otherwise be paid to the Participant under the defined
benefit plan will be reduced to the extent necessary to reduce
the sum of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction for the Participant to 1.0.
(2) Transition Rule under TRA '86
If a plan was in existence on May 6, 1986, the numerator of the
Defined Contribution Plan Fraction will be reduced (to not less
than zero) as prescribed by the Secretary
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of the Treasury by subtracting the amount required to decrease
the sum of the Defined Contribution Plan Fraction plus the
Defined Benefit Plan Fraction to 1.0. Such amount is determined
(as of the first day of the first Limitation Year beginning on or
after January 1, 1987) as the product of:
(A) The amount by which, without this adjustment, the sum of the
Defined Contribution Plan Fraction plus the Defined Benefit
Plan Fraction exceeds 1.0, multiplied by
(B) The denominator of the Defined Contribution Plan Fraction,
as computed through the last Limitation Year beginning
before January 1, 1987, disregarding any changes in the
terms and conditions of the plan after May 5, 1986.
This subparagraph 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.
(3) Transition Rule under TEFRA
In the case of a plan which met the limitation of Section 415 of
the Code for the last Limitation Year beginning before January 1,
1983, the numerator of the Defined Contribution Plan Fraction
will be reduced (to not less than zero) as prescribed by the
Secretary of the Treasury by subtracting the amount required to
decrease the sum of the Defined Contribution Plan Fraction plus
the Defined Benefit Plan Fraction to 1.0. Such amount is
determined (as of the first day of the first Limitation Year
beginning on or after January 1, 1983) as the product of:
(A) The amount by which, without this adjustment, the sum of the
Defined Contribution Plan Fraction plus the Defined Benefit
Plan Fraction exceeds 1.0, multiplied by
(B) The denominator of the Defined Contribution Plan Fraction,
as computed through the last Limitation Year beginning
before January 1, 1983.
7.03 Definitions Applicable to Article 7
(a) Aggregate Compensation
Aggregate Compensation means a Participant's earned income, wages,
salaries, and fees for professional services, and other amounts
received for personal services actually rendered in the course of
employment with the employer maintaining the plan (including, but not
limited to, commissions paid to salesmen, compensation for services on
the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses), and excluding the following:
- Employer contributions to a plan of deferred compensation
which are not included in the employee's gross income for
the taxable year in which contributed or employer
contributions under a simplified employee pension plan to
the extent the contributions are deductible by the employee,
or any distributions from a plan of deferred compensation;
- Amounts realized from the exercise of a nonqualified stock
option, or when restricted stock (or property) held by the
employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
- Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
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- Other amounts which received special tax benefits, and
contributions made by the employer (whether or not under a
salary reduction agreement) toward the purchase of an
annuity described in Code Section 403(b) (whether or not the
amounts are actually excludable from the gross income of the
employee).
Aggregate Compensation excludes any amounts contributed by the
Employer or any Related Employer on behalf of any Employee
pursuant to a salary reduction agreement which are not includable
in the gross income of the Employee due to Code Section 125,
402(e)(3), 402(h) or 403(b).
Aggregate Compensation in excess of the Statutory Compensation
Limit is disregarded.
Aggregate Compensation for any Limitation Year is the Aggregate
Compensation actually paid or includable in gross income in such
year.
(b) Allocation Date
Allocation Date means the date with respect to which all or a
portion of employer contributions, employee contributions or
forfeitures or both are allocated to participant accounts under a
defined contribution plan.
(c) Annual Additions
For Plan Years beginning after December 31, 1986, Annual
Additions are the sum of the following amounts allocated to any
defined contribution plan maintained by the Employer (including
voluntary contributions to any defined benefit plan maintained by
the Employer) on behalf of a Participant for a Limitation Year:
- All Employee and Employer contributions;
- All reallocated forfeitures;
- 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 amounts derived from
contributions paid or accrued after December 31, 1985,
in taxable years ending after that date, which are
attributable to post-retirement medical benefits
required by Code Section 401(h)(6) to be allocated to
the separate account of a Key Employee under a welfare
benefit plan (as defined in Code Section 419(e))
maintained by the Employer.
Contributions or forfeitures will be treated as Annual Additions
regardless of whether they constitute Excess Deferrals, Excess
Contributions or Excess Aggregate Contributions within the
meaning of the regulations under Code Section 401(k) or 401(m)
and regardless of whether they are corrected through distribution
or recharacterization. Excess deferrals distributed in accordance
with Treasury Regulation 1.402(g)-1(e)(2) or (3) are not Annual
Additions. The Annual Addition for any Limitation Year beginning
before January 1, 1987, will not be recomputed to treat all
Employee After-tax Contributions as Annual Additions.
(d) Annual Benefit
Annual Benefit means a benefit payable annually in the form of a
straight life annuity (with no ancillary benefits) under a plan
to which employees do not contribute and under which no rollover
contributions are made.
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49
(e) Defined Benefit Compensation Limit
The Defined Benefit Compensation Limit is equal to 100% of the
Participant's average Aggregate Compensation for the three
consecutive calendar years (or other twelve consecutive month
periods adopted by the Employer pursuant to a Written Resolution
and applied on a uniform and consistent basis) of service during
which the Participant had the greatest Aggregate Compensation.
Where the annual benefit is payable to a Participant in a form
other than a straight life annuity or a Qualified Joint and
Survivor Annuity, the Defined Benefit Compensation Limit will be
the Actuarial Equivalent of a straight life annuity beginning at
the same age. No adjustment is required for the following:
pre-retirement disability benefits, pre-retirement death benefits
and post-retirement medical benefits. For purposes of this
paragraph, the interest rate used in adjusting the Defined
Benefit Compensation Limit will be the greater of (1) 5%, or (2)
the post-retirement interest rate specified in the plan for
Actuarial Equivalent purposes.
Where the annual benefit is payable to a Participant who has
fewer than 10 years of service with the Employer or any Related
or Predecessor Employer, the Defined Benefit Compensation Limit
will be multiplied by a fraction, the numerator of which is the
Participant's number of years of service with the Employer or
Related or Predecessor Employer, and the denominator of which is
10.
With regard to a Participant who has separated from service with
a nonforfeitable right to an Accrued Benefit, the Defined Benefit
Compensation Limit will be adjusted effective January 1 of each
Calendar year. For any Limitation Year beginning after the
separation occurs, the Defined Benefit Compensation Limit will be
equal to the Defined Benefit Compensation Limit which was
applicable to the Participant in the Limitation Year in which he
separated from service multiplied by a fraction, the numerator of
which is the Defined Benefit Dollar Limit for the Limitation Year
in which the Defined Benefit Compensation Limit is being adjusted
and the denominator of which is the Defined Benefit Dollar Limit
for the Limitation Year in which the Participant separated from
service.
(f) Defined Benefit Dollar Limit
The Defined Benefit Dollar Limit is equal to $90,000 for calendar
years 1984 through 1987. As of January 1, 1988 and as of January
1 of each subsequent calendar year, the dollar limitation
(described in Code Section 415(b)(1)(A)) as determined by the
Secretary of the Treasury for that calendar year will become
effective as the Defined Benefit Dollar Limit for the calendar
year. For calendar years between 1976 and 1983, the Defined
Benefit Dollar Limit is $75,000 as adjusted by the Secretary of
the Treasury under Code Section 415(d) for that calendar year.
The Defined Benefit Dollar Limit for a calendar year applies to
Limitation Years ending with or within that calendar year.
Where the annual benefit is payable to a Participant in a form
other than a straight life annuity or a Qualified Joint and
Survivor Annuity, the Defined Benefit Dollar Limit will be the
Actuarial Equivalent of a straight life annuity beginning at the
same age. No adjustment is required for the following:
pre-retirement disability benefits, pre-retirement death
benefits, and post-retirement medical benefits. For purposes of
this paragraph, the interest rate used for adjusting the Defined
Benefit Dollar Limit will be the greater of (1) 5%, or (2) the
post-retirement interest rate specified for Actuarial Equivalent
purposes.
Where the annual benefit is payable to a Participant who has
fewer than 10 years of participation in the Plan, the Defined
Benefit Dollar Limit will be multiplied by a fraction, the
numerator of which is the Participant's number of years (or part
thereof) of
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participation in the Plan, and the denominator of which is 10. To
the extent provided by the Secretary of the Treasury, this
paragraph will be applied to each change in the benefit structure
of the Plan.
For a benefit commencing before a Participant's Social Security
Retirement Age but at or after age 62, the Defined Benefit Dollar
Limit will be adjusted in a manner which is consistent with the
reduction for old-age insurance benefits commencing before Social
Security Retirement Age under the Social Security Act. The
reduction will be 5/9 of 1% for each of the first 36 months and
5/12 of 1% for each additional month (up to 24 months) by which
benefits commence before the month of the Participant's Social
Security Retirement Age. The Defined Benefit Dollar Limit for a
benefit commencing before age 62 will be adjusted to the
Actuarial Equivalent of the Defined Benefit Dollar Limit for a
benefit commencing at age 62 based on an interest rate equal to
the greater of (1) 5%, or (2) the interest rate specified in the
plan for determining actuarial equivalence for early retirement.
For a benefit commencing after a Participant's Social Security
Retirement Age, the Defined Benefit Dollar Limit will be adjusted
to the actuarial equivalent of the Defined Benefit Dollar Limit
for a benefit commencing at the Participant's Social Security
Retirement Age. For purposes of this paragraph, the interest rate
used for adjusting the Defined Benefit Dollar Limit will be the
lesser of (1) 5%, or (2) the interest rate specified in the plan
for determining actuarial equivalence for early retirement.
(g) Defined Benefit Limit
The Defined Benefit Limit is the lesser of the Defined Benefit
Dollar Limit or the Defined Benefit Compensation Limit.
(h) Defined Benefit Plan Fraction Denominator
The Defined Benefit Plan Fraction Denominator with respect to any
Participant is the lesser of (1) the product of the Defined
Benefit Dollar Limit multiplied by 1.25, or (2) the product of
the Defined Benefit Compensation Limit multiplied by 1.4.
However, for purposes of determining the Defined Benefit Plan
Fraction Denominator, "years of service with the Employer or any
Related or Predecessor Employer" will be substituted for "years
of participation in the Plan" wherever it appears in Section
7.03(f).
(i) Defined Benefit Plan Fraction
The Defined Benefit Plan Fraction is a fraction determined as of
the close of a Limitation Year, the numerator of which is the
Projected Annual Benefit payable to a Participant under this Plan
and the denominator of which is the Defined Benefit Fraction
Denominator. If a Participant has participated in more than one
defined benefit plan maintained by the Employer, the numerator of
the Defined Benefit Plan Fraction is the sum of the projected
annual benefits payable to the Participant under all of the
defined benefit plans, whether or not terminated.
(j) Defined Contribution Limit
The Defined Contribution Limit for a given Limitation Year is
equal to the lesser of (1) the Defined Contribution Compensation
Limit, which is 25% of Aggregate Compensation applicable to the
Limitation Year, or (2) the Defined Contribution Dollar Limit,
which, for calendar years after 1983 is the greater of $30,000 or
one-fourth of the Defined Benefit Dollar Limit for the Limitation
Year, and for calendar years between 1976 and 1983 is one-third
of the Defined Benefit Dollar Limit. If a short Limitation Year
is created because of an amendment changing the Limitation Year
to a different 12 consecutive month period, the Defined
Contribution Dollar Limit is multiplied by a fraction, the
numerator of which is equal to the number of months in the short
Limitation Year and the denominator
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of which is 12.
(k) Defined Contribution Plan Fraction
The Defined Contribution Plan Fraction is a fraction determined
as of the close of a Limitation Year, the numerator of which is
the sum of the Annual Additions to the Participant's Accounts
under all defined contribution plans of the Employer for the
current and all prior Limitation Years and the denominator of
which is the sum of the Annual Additions which would have been
made for the Participant for the current and all prior Limitation
Years (for all prior years of service with the Employer or any
predecessor Employer) if in each Limitation year the Annual
Additions equaled the lesser of (1) the product of the Defined
Contribution Compensation Limit for the Limitation Year
multiplied by 1.4, or (2) the product of the Defined Contribution
Dollar Limit for the Limitation Year multiplied by 1.25. The
aggregate amount in the numerator of this fraction due to years
beginning before January 1, 1976 may not exceed the aggregate
amount in the denominator of this fraction for all such years.
For purposes of this Section 7.03(k), the Annual Addition for any
Limitation Year beginning before January 1, 1987 will not be
recomputed to treat all Employee After-tax Contributions as
Annual Additions.
(l) Employer
The Employer is the Employer that adopts this Plan together with
all Related Employers. For this purpose, the definition of
Related Employer in Section 1.33 of this Plan is modified by Code
Section 415(h).
(m) Limitation Year
The Limitation Year will be the 12 consecutive month period which
is specified in Article 1 of this Plan and which is adopted for
all qualified plans maintained by the Employer pursuant to a
Written Resolution adopted by the Employer. In the event of a
change in the Limitation Year, the additional limitations of
Treasury Regulation Section 1.415-2(b)(4)(iii) will also apply.
(n) Projected Annual Benefit
For purposes of this Section, a Participant's Projected Annual
Benefit is equal to the annual benefit to which a Participant in
a defined benefit Plan would be entitled under the terms of the
plan based on the following assumptions:
- The Participant will continue employment until reaching
normal retirement age as determined under the terms of
the plan (or current age, if that is later);
- The Participant's compensation for the Limitation Year
under consideration will remain the same for all future
years;
- All other relevant factors used to determine benefits
under the plan for the Limitation Year under
consideration will remain constant for all future
Limitation Years; and
- The benefits resulting from any Participant
Contributions or Rollover Contributions are
disregarded.
(o) Social Security Retirement Age
Social Security Retirement Age means age 65 for a Participant
born before January 1, 1938; age 66 for a Participant born after
December 31, 1937, but before January 1, 1955; and age 67 for a
Participant born after December 31, 1954.
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(p) Transition Rule Under TRA '86
If at the beginning of the first Limitation Year beginning after
December 31, 1986, an Employee was a Participant in a defined
benefit plan of the Employer or any Related Employer that was in
existence on May 6, 1986, the Defined Benefit Dollar Limit for
that Participant is the greater of the Defined Benefit Dollar
Limit described above or the Participant's Current Accrued
Benefit on that date determined without regard to changes in the
terms and conditions of the Plan or cost-of-living increases
occurring after May 5, 1986. This Section 7.03(p) applies only if
all defined benefit plans maintained by the Employer and all
Related Employers, individually and in the aggregate, satisfied
the requirements of Code Section 415 for all Limitation Years
beginning before January 1, 1987.
(q) Transition Rule Under TEFRA
The Defined Benefit Dollar Limit for a Participant in a defined
benefit plan of the Employer or any Related Employer that was in
existence on July 1, 1982, will not be less than the protected
current accrued benefit, payable annually, provided under
question T-3 of Internal Revenue Service Notice 83-10.
7.04 Effect of Top-Heavy Status
Notwithstanding the provisions of Section 7.03, "1.0" will be substituted
for "1.25" wherever it appears in Sections 7.03(h) and 7.03(k) for any
Limitation Year in which the Plan is found to be Top-Heavy for the Plan
Year which coincides with or ends within such Limitation Year.
7-8
53
ARTICLE 8
MISCELLANEOUS
8.01 Employment Rights of Parties Not Restricted
The adoption and maintenance of this Plan will not be deemed a contract
between the Employer and any Employee. Nothing in this Plan will give any
Employee or Participant the right to be retained in the employ of the
Employer or to interfere with the right of the Employer to discharge any
Employee or Participant at any time, nor will it give the Employer the
right to require any Employee or Participant to remain in its employ, or to
interfere with any Employee's or Participant's right to terminate his
employment at any time.
8.02 Alienation
(a) General
No person entitled to any benefit under this Plan will have any right
to sell, assign, transfer, hypothecate, encumber, commute, pledge,
anticipate or otherwise dispose of his interest in the benefit, and
any attempt to do so will be void. No benefit under this Plan will be
subject to any legal process, levy, execution, attachment or
garnishment for the payment of any claim against such person.
(b) Exceptions
Section 8.02(a) will not apply to the extent a Participant or
Beneficiary is indebted to the Plan under the provisions of the Plan.
At the time a distribution is to be made to or for a Participant's or
Beneficiary's benefit, the portion of the amount distributed which
equals the indebtedness will be withheld by the Trustee to apply
against or discharge the indebtedness. Before making a payment,
however, the Participant or Beneficiary must be given written notice
by the Plan Administrator that the indebtedness is to be so paid in
whole or part from his Participant's Accrued Benefit. If the
Participant or Beneficiary does not agree that the indebtedness is a
valid claim against his Vested Accrued Benefit, he will be entitled to
a review of the validity of the claim in accordance with procedures
established by the Plan Administrator.
Section 8.02(a) will not apply to a qualified domestic relations order
(QDRO) as defined in Code Section 414(p), and those other domestic
relations orders permitted to be so treated by the Plan Administrator
under the provisions of the Retirement Equity Act of 1984. The Plan
Administrator will 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 QDRO, a former spouse of a Participant will be
treated as the spouse or Surviving Spouse for all purposes under the
Plan. Where, however, because of a QDRO, more than one individual is
to be treated as a Surviving Spouse, the total amount to be paid in
the form of a Qualified Survivor Annuity or the survivor portion of a
Qualified Joint and Survivor Annuity may not exceed the amount that
would be paid if there were only one Surviving Spouse. All rights and
benefits, including elections, provided to a Participant under this
Plan will be subject to the rights afforded to any alternate payee as
such term is defined in Code Section 414(p).
This Plan specifically permits distribution to an alternate payee
under a QDRO (without regard to whether the Participant has attained
his or her earliest retirement age as that term is defined under Code
Section 414(p)) in the same manner that is provided for a Vested
Terminated Participant.
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8.03 Qualification of Plan
The Employer will have the sole responsibility for obtaining and retaining
qualification of the Plan under the Code with respect to the Employer's
individual circumstances.
8.04 Construction
To the extent not preempted by ERISA, this Plan will be construed according
to the laws of the state of Tennessee. Words used in the singular will
include the plural, the masculine gender will include the feminine, and
vice versa, whenever appropriate.
8.05 Named Fiduciaries
(a) Allocation of Functions
The authority to control and manage the operation and administration
of the Plan and Trust created by this instrument will be allocated
between the Plan Sponsor, the Trustee, and the Plan Administrator, all
of whom are designated as Named Fiduciaries with respect to the Plan
and Trust as provided for by Section 402(a)(2) of ERISA. The Plan
Sponsor reserves the right to allocate the various responsibilities
for the present execution of the functions of the Plan, other than the
Trustee's responsibilities, among its Named Fiduciaries. Any person or
group of persons may serve in more than one fiduciary capacity with
regard to the Plan.
(b) Responsibilities of the Plan Sponsor
The Plan Sponsor, in its capacity as a Named Fiduciary, will have only
the following authority and responsibility:
- To appoint or remove the Plan Administrator and furnish the
Trustee with certified copies of any resolutions of the Plan
Sponsor with regard thereto;
- To appoint and remove the Trustee;
- To appoint a successor Trustee or additional Trustees;
- To communicate information to the Plan Administrator and the
Trustee as needed for the proper performance of the duties of
each;
- To appoint an investment manager (or to refrain from such
appointment), to monitor the performance of the investment
manager so appointed, and to terminate such appointment (more
than one investment manger may be appointed and in office at any
time); and
- To establish and communicate to the Trustee a funding policy for
the Plan.
(c) Limitation on Obligations of Named Fiduciaries
No Named Fiduciary will have authority or responsibility to deal with
matters other than as delegated to it under this Plan or by operation
of law. A Named Fiduciary will not in any event be liable for breach
of fiduciary responsibility or obligation by another fiduciary
(including Named Fiduciaries) if the responsibility or authority of
the act or omission deemed to be a breach was not within the scope of
the Named Fiduciary's authority or delegated responsibility.
(d) Standard of Care and Skill
The duties of each fiduciary will be performed with the care, skill,
prudence and diligence under the circumstances then prevailing that a
prudent person acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of like character
and with like objectives.
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8.06 Reserved
8.07 Adoption and Withdrawal by Other Organizations
(a) Procedure for Adoption
Subject to the provisions of this Section 8.07, any organization now
in existence or hereafter formed or acquired, which is not already a
Participating Employer under this Plan and which is otherwise legally
eligible may, in the future, with the consent and approval of the Plan
Sponsor, by formal Written Resolution (referred to in this Section as
an Adoption Resolution), adopt the Plan and Trust hereby created for
all or any classification of persons in its employment and thereby,
from and after the specified effective date, become a Participating
Employer under this Plan. Such consent will be effected by and
evidenced by a formal Written Resolution of the Plan Sponsor. The
Adoption Resolution may contain such specific changes and variations
in Plan terms and provisions applicable to the adopting Participating
Employer and its Employees as may be acceptable to the Plan Sponsor
and the Trustee. However, the sole, exclusive right of any other
amendment of whatever kind or extent to the Plan is reserved to the
Plan Sponsor. The Adoption Resolution will become, as to the adopting
organization and its Employees, a part of this Plan as then amended or
thereafter amended. It will not be necessary for the adopting
organization to sign or execute the original or then amended Plan and
Trust Agreement or any future amendment to the Plan and Trust
Agreement. The effective date of the Plan for the adopting
organization will be that stated in the Adoption Resolution and from
and after such effective date the adopting organization will assume
all the rights, obligations and liabilities as a Participating
Employer under this Plan. The administrative powers of and control by
the Plan Sponsor as provided in the Plan, including the sole right of
amendment or termination of the Plan, of appointment and removal of
the Plan Administrator and the Trustee, and of appointment and removal
of an investment manager will not be diminished by reason of the
participation of the adopting organization in the Plan.
(b) Withdrawal
Any Participating Employer may withdraw from the Plan at any time,
without affecting the Plan Sponsor or other Participating Employers
not withdrawing, by complying with the provisions of the Plan. A
withdrawing Participating Employer may arrange for the continuation by
itself or its successor of this Plan in separate forms for its own
employees, with such amendments, if any, as it may deem proper, and
may arrange for continuation of the Plan by merger with an existing
plan and transfer of plan assets. The Plan Sponsor may, it its
absolute discretion, terminate a Participating Employer's
participation at any time when in its judgment the Participating
Employer fails or refuses to discharge its obligations under the Plan.
(c) Adoption Contingent Upon Initial and Continued Qualifications
The adoption of this Plan by an organization as provided is hereby
made contingent and subject to the condition precedent that said
adopting organization meets all the statutory requirements for
qualified plans, including, but not limited to, Sections 401(a) and
501(a) of the Internal Revenue Code for its Employees. If the Plan or
the Trust, in its operation, becomes disqualified, for any reason, as
to the adopting organization and its Employees, the portion of the
Plan assets allocable to them will be segregated as soon as is
administratively feasible, pending either the prompt (1)
requalification of the Plan as to the organization and its employees
to the satisfaction of the Internal Revenue Service so as not to
affect the continued qualified status thereof as to other Employers,
(2) withdrawal of the organization from this Plan and a continuation
by itself or its successor of its plan separately from this Plan, or
by merger with another existing plan,
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with a transfer of its said segregated portion of Plan assets, or (3)
termination of the Plan as to itself and its Employees.
8.08 Employer Contributions
Employer contributions made to the Plan and Trust are made and will be held
for the sole purpose of providing benefits to Participants and their
Beneficiaries.
In no event will any contribution made by the Employer to the Plan and
Trust or income therefrom revert to the Employer except as provided in
Section 7.01(e) or as provided below.
(a) Any contribution made to the Plan and Trust by the Employer because of
a mistake of fact may be returned to the Employer within one year of
such contribution.
(b) Notwithstanding any other provision of the Plan and Trust, if the
Internal Revenue Service determines initially that the Plan, as
adopted by the Employer, does not qualify under applicable sections of
the Code and applicable Treasury Department Regulations, and the
Employer does not wish to amend this Plan and Trust so that it does
qualify, the value of all assets will be distributed by the Trustee to
the Employer within one year after the date such initial qualification
is denied. Thereafter, the Employer's participation in this Plan and
Trust will be considered rescinded and of no force or effect.
(c) Any contribution made by the Employer will be conditioned on the
deductibility of such contribution and may be refunded to the
Employer, to the extent the contribution is determined not to be
deductible, within one year after such determination is made.
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ARTICLE 9
ADMINISTRATION
9.01 Plan Administrator
The Plan Administrator will have the responsibility for the general
supervision and administration of the Plan and will be a fiduciary of the
Plan. The Employer may, by Written Resolution, appoint one or more
individuals to serve as Plan Administrator. If the Employer does not
appoint an individual or individuals as Plan Administrator, the Employer
will function as Plan Administrator. The Employer may at any time, with or
without cause, remove an individual as Plan Administrator or substitute
another individual therefor.
9.02 Powers and Duties of the Plan Administrator
The Plan Administrator will be charged with and will have delegated to it
the power, duty, authority and discretion to interpret and construe the
provisions of this Plan and specifically, without limitation, to: determine
its meaning and intent and to make application thereof to the facts of any
individual case; determine in its discretion the rights and benefits of
Participants or the eligibility of Employees; give necessary instructions
and directions to the Trustee as herein provided or as may be requested by
the Trustee from time to time; resolve all questions of fact relating to
any of the foregoing; supply omissions from, correct deficiencies in, and
resolve inconsistencies or ambiguities in the language of the Plan; and
generally direct the administration of the Plan according to its terms. All
decisions of the Plan Administrator in matters properly coming before it
according to the terms of this Plan, and all actions taken by the Plan
Administrator in the proper exercise of its administrative powers, duties
and responsibilities, will be final and binding upon all Employees,
Participants and Beneficiaries and upon any person having or claiming any
rights or interest in this Plan. The Employer and the Plan Administrator
will make and receive any reports and information, and retain any records
necessary or appropriate to the administration of this Plan or to the
performance of duties hereunder or to satisfy any requirements imposed by
law. In the performance of its duties, the Plan Administrator will be
entitled to rely on information duly furnished by any Employee, Participant
or Beneficiary or by the Employer or Trustee.
9.03 Actions of the Plan Administrator
The Plan Administrator may adopt such rules as it deems necessary,
desirable or appropriate with respect to the conduct of its affairs and the
administration of the Plan. Whenever any action to be taken in accordance
with the terms of the Plan requires the consent or approval of the Plan
Administrator, or whenever an interpretation is to be made of the terms of
the Plan, the Plan Administrator will act in a uniform and
non-discriminatory manner, treating all Employees and Participants in
similar circumstances in a like manner. If the Plan Administrator is a
group of individuals, all of its decisions will be made by a majority vote.
The Plan Administrator will have the authority to employ one or more
persons to render advice or services with regard to the responsibilities of
the Plan Administrator, including but not limited to attorneys, actuaries,
and accountants. Any persons employed to render advice or services will
have no fiduciary responsibility for any ministerial functions performed
with respect to this Plan.
9.04 Reliance on Plan Administrator and Employer
Until the Employer gives notice to the contrary, the Trustee and any
persons employed to render advice or services will be entitled to
reasonably rely on the designation of Plan Administrator that has been
furnished to them. In addition, the Trustee and any persons employed to
render advice or services will be fully protected in reasonably acting upon
the written directions and instructions of the Plan Administrator made in
accordance with the terms of this Plan. In appropriate circumstances,
however, the Trustee shall have a duty to
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inquire about and to investigate designations, directions and instructions
received from the Plan Administrator if the Trustee has reason to believe
that such designation, direction or instruction is, for any reason,
incorrect or in error. If the Plan Administrator is a group of individuals,
unless otherwise specified, any one of such individuals will be authorized
to sign documents on behalf of the Plan Administrator and such authorized
signatures will be recognized by all persons dealing with the Plan
Administrator. The Trustee and any persons employed to render advice or
services may take cognizance of any rules established by the Plan
Administrator and reasonably rely upon them until notified to the contrary.
The Trustee and any persons employed to render advice or services will be
fully protected in taking any action upon any paper or document believed to
be genuine and to have been properly signed and presented by the Plan
Administrator, Employer or any agent of the Plan Administrator acting on
behalf of the Plan Administrator.
9.05 Reports to Participants
The Plan Administrator will report in writing to a Participant his Accrued
Benefit under the Plan and the Vested Percentage of such benefit when the
Participant terminates his employment or requests such a report in writing
from the Plan Administrator. To the extent required by law or regulation,
the Plan Administrator will annually furnish to each Participant, and to
each Beneficiary receiving benefits, a report which fairly summarizes the
Plan's most recent report.
9.06 Bond
The Plan Administrator and other fiduciaries of the Plan will be bonded to
the extent required by ERISA or other applicable law. No additional bond or
other security for the faithful performance of any duties under this Plan
will be required.
9.07 Compensation of Plan Administrator
The Compensation of the Plan Administrator will be left to the discretion
of the Plan Sponsor; no person who is receiving full pay from the Employer
will receive compensation for services as Plan Administrator. All
reasonable and necessary expenses incurred by the Plan Administrator in
supervising and administering the Plan will be paid from the Plan assets by
the Trustee at the direction of the Plan Administrator to the extent not
paid by the Plan Sponsor.
9.08 Claims Procedure
The Plan Administrator will make all determinations as to the rights of any
Employee, Participant, Beneficiary or other person under the terms of this
Plan. Any Employee, Participant or Beneficiary, or person claiming under
them, may make claim for benefit under this Plan by filing written notice
with the Plan Administrator setting forth the substance of the claim. If a
claim is wholly or partially denied, the claimant will have the opportunity
to appeal the denial upon filing with the Plan Administrator a written
request for review within 60 days after receipt of notice of denial. In
making an appeal the claimant may examine pertinent Plan documents and may
submit issues and comments in writing. Denial of a claim or a decision on
review will be made in writing by the Plan Administrator delivered to the
claimant within 60 days after receipt of the claim or request for review,
unless special circumstances require an extension of time for processing
the claim or review, in which event the Plan Administrator's decision must
be made as soon as possible thereafter but not beyond an additional 60
days. If no action on an initial claim is taken within 120 days, the claims
will be deemed denied for purposes of permitting the claimant to proceed to
the review stage. The denial of a claim or the decision on review will
specify the reasons for the denial or decision and will make reference to
the pertinent Plan provisions upon which the denial or decision is based.
The denial of a claim will also include a description of any additional
material or information necessary for the claimant to perfect the claim and
an explanation of the claim review procedure herein described. The Plan
Administrator will serve as an agent
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for service of legal process with respect to the Plan unless the Employer,
through written resolution, appoints another agent.
If a Participant or Beneficiary is entitled to a distribution from the
Plan, the Participant or Beneficiary will be responsible for providing the
Plan Administrator with his current address. If the Plan Administrator
notifies the Participant or Beneficiary by registered mail (return receipt
requested) at his last known address that he is entitled to a distribution
and also notifies him of the provisions of this paragraph, and the
Participant or Beneficiary fails to claim his benefits under the Plan or
provide his current address to the Plan Administrator within one year after
such notification, the distributable amount will be forfeited and used to
reduce the cost of the Plan. If the Participant or Beneficiary is
subsequently located, such benefit will be restored.
9.09 Liability of Fiduciaries
Except for a breach of fiduciary responsibility due to gross negligence or
willful misconduct, the Plan Administrator will not incur any individual
liability for any decision, act, or failure to act hereunder. The Plan
Administrator may engage agents to assist it and may engage legal counsel
who may be counsel for the Employer. The Plan Administrator will not be
responsible for any action taken or omitted to be taken on the advice of
counsel.
If there is more than one person serving as a fiduciary in any capacity
(for example, co-Trustees), each will use reasonable care to prevent the
other or others from committing a breach of fiduciary duty with respect to
this Plan. Nothing contained in this Section will preclude any agreement
allocating specific responsibilities or obligations among the
co-fiduciaries provided that the agreement does not violate any of the
terms and provisions of this Plan. In those instances where any duties have
been allocated between co-fiduciaries, a fiduciary will not be liable for
any loss resulting to the Plan arising from any act or omission on the part
of another co-fiduciary to whom responsibilities or obligations have been
allocated except under the following circumstances:
- If he participates knowingly in, or knowingly undertakes to
conceal, an act or omission of a co-fiduciary knowing the act or
omission is a breach; or
- If by his failure to comply with his specific responsibilities
which give rise to his status as a fiduciary, he has enabled the
other fiduciary to commit a breach; or
- If he has knowledge of a breach by a co-fiduciary, unless he
makes reasonable efforts under the circumstances to remedy the
breach.
9.10 Expenses of Administration
The Employer does not and will not guarantee the Plan assets against loss.
The Employer may in its sole discretion, but will not be obligated to, pay
the ordinary expenses of establishing the Plan, including the fees of
consultants, accountants and attorneys in connection therewith. The
Employer may, in its sole discretion (but will not be obligated to), pay
other costs and expenses of administering the Plan, the taxes imposed upon
the Plan, if any, and the fees, charges or commissions with respect to the
purchase and sale of Plan assets. Unless paid by the Employer, such costs
and expenses, taxes (if any), and fees, charges and commissions will be a
charge upon Plan assets and deducted by the Trustee.
9.11 Distribution Authority
If any person entitled to receive payment under this Plan is a minor,
declared incompetent or is under other legal disability, the Plan
Administrator may, in its sole discretion, direct the Trustee to:
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- Distribute directly to the person entitled to the payment;
- Distribute to the legal guardian or, if none, to a parent of the
person entitled to payment or to a responsible adult with whom
the person entitled to payment maintains his residence;
- Distribute to a custodian for the person entitled to payment
under the Uniform Gifts to Minors Act if permitted by the laws of
the state in which the person entitled to payment resides; or
- Withhold distribution of the amount payable until a court of
competent jurisdiction determines the rights of the parties
thereto or appoints a guardian of the estate of the person
entitled to payment.
If there is any dispute, controversy or disagreement between any
Beneficiary or person and any other person as to who is entitled to receive
the benefits payable under this Plan, or if the Plan Administrator is
uncertain as to who is entitled to receive benefits, or if the Plan
Administrator is unable to locate the person who is entitled to benefits,
the Plan Administrator may with acquittance interplead the funds into a
court of competent jurisdiction in the judicial district in which the
Employer maintains its principal place of business and, upon depositing the
funds with the clerk of the court, be released from any further
responsibility for the payment of the benefits. If it is necessary for the
Plan Administrator to retain legal counsel or incur any expense in
determining who is entitled to receive the benefits, whether or not it is
necessary to institute court action, the Plan Administrator will be
entitled to reimbursement from the benefits for the amount of its
reasonable costs, expenses and attorneys' fees incurred.
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ARTICLE 10
AMENDMENT OR TERMINATION OF PLAN
10.01 Right of Plan Sponsor to Amend or Terminate
The Plan Sponsor reserves the right to alter, amend, revoke or terminate
this Plan. No amendment will deprive any Participant or Beneficiary of any
vested right nor will it reduce the present value (determined upon an
actuarial equivalent basis) of any Accrued Benefit to which he is then
entitled with respect to Employer contributions previously made, except as
may be required to maintain the Plan as a qualified plan under the Code.
No amendment will change the duties or responsibilities of the Trustee
without its express written consent thereto.
A plan amendment which has the effect of (a) eliminating or reducing an
early retirement benefit or a retirement-type subsidy, or (b) eliminating
an optional benefit form, will, with respect to benefits attributable to
service before the amendment be treated as reducing Accrued Benefits. In
the case of a retirement-type subsidy, the preceding sentence will apply
only with respect to a Participant who satisfies (either before or after
the amendment) the preamendment conditions for the subsidy. In general, a
retirement-type subsidy is a subsidy that continues after retirement but
does not include a disability retirement benefit, a medical benefit, a
social security supplement, a pre-retirement death benefit, or a plant
shutdown benefit (that does not continue after retirement).
A minimum Accrued Benefit value will apply if this Plan is or becomes a
successor to a profit sharing plan, a defined contribution pension plan, a
target benefit plan, or a defined benefit pension plan which was fully
insured, or any plan under which the accrued benefit of a Participant was
determined as a lump sum or account balance. The actuarial equivalent
value of a Participant's Accrued Benefit will not be less than the
actuarial equivalent value of his Accrued Benefit on the Effective Date of
the Plan.
Any alteration, amendment, revocation or termination of this Plan shall be
executed and performed by the adoption of such amendment (i) by action of
the Board of Directors of the Plan Sponsor at a duly called meeting of the
Board, or (ii) by written consent of the Board of Directors of the Plan
Sponsor. Any such alteration, amendment, revocation or termination of the
Plan may include, without limitation, one or more written instruments
amending and restating in their entirety the Plan.
10.02 Allocation of Assets Upon Termination of Plan
If this Plan is revoked or terminated (in whole or in part) or if
contributions are completely discontinued the Accounts of all affected
Participants will become non-forfeitable. The Employer will then arrange
for allocation of all assets among Participants so affected by the total
or partial termination in accordance with the requirements of all
applicable law and the regulations and requirements of the Internal
Revenue Service. All allocated amounts will be retained in the Plan to the
credit of the individual Participants until distribution as directed by
the Employer. Distribution to Participants may be in the form of cash or
other Plan assets or partly in each.
10.03 Exclusive Benefit
At no time will any part of the principal or income of the Plan assets be
used or diverted for purposes other than the exclusive benefit of
Participants in the Plan and their Beneficiaries, nor may any portion of
the Plan assets revert to the Employer except as provided in Sections
7.01(e) and 8.08.
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10.04 Failure to Qualify
Notwithstanding any of the foregoing provisions, if this Plan, upon
adoption by the Employer, is submitted to the Internal Revenue Service
which then determines that the Plan as initially adopted by the Employer
is not a qualified plan under the Code, the Employer may elect to
terminate this Plan by giving written notice thereof. Such termination
will have the same effect as if the Plan were never adopted, all policies
and contracts will be cancelled, and all contributions, to the extent
recoverable from the Trustee, will be returned to their source. If any
amendment to this Plan is submitted to the Internal Revenue Service within
the period allowed under Code Section 401(b) which then determines that
the Plan as amended is not a qualified plan under the Code, the Employer
may cancel or modify any or all provisions of the amendment retroactive to
the effective date of the amendment in order to maintain the qualified
status of the Plan, whereupon written notice thereof will be furnished to
all affected Employees, Participants and Beneficiaries.
10.05 Mergers, Consolidations or Transfers of Plan Assets
In the event this Plan is merged or consolidated with another plan which
is qualified under Code Sections 401(a) (and 501(a) if applicable), or in
the event of a transfer of the assets or liabilities of this Plan to
another plan which is qualified under Code Sections 401(a) (and 501(a) if
applicable), the benefit which each Participant would be entitled to
receive under the successor plan or other plan if it were terminated
immediately after the merger, consolidation or transfer will be equal to
or greater than the benefit which the Participant would have received
immediately before the merger, consolidation or transfer if this Plan had
then terminated.
Any transfer of assets and/or liabilities to (or from) this Plan from (or
to) another plan qualified under Code Sections 401(a) (and 501(a) if
applicable) will be evidenced by a Written Resolution by the Plan Sponsor
of each affected plan which specifically authorizes such transfer of
assets and/or liabilities.
10.06 Effect of Plan Amendment on Vesting Schedule
No amendment to the Vesting Schedule will deprive a Participant of his
nonforfeitable right to his Vested Accrued Benefit as of the date of the
amendment. Further, if the Vesting Schedule of the Plan is amended, or if
the Plan is amended in any way that directly or indirectly affects the
computation of a Participant's non-forfeitable percentage, each
Participant with at least 3 Years of Vesting Service as of the last day of
the election period described below may elect, within a reasonable period
after the adoption of the amendment, to have his Vested Percentage
computed under the Plan without regard to such amendment. The period
during which such election may be made will commence with the date the
amendment is adopted and will end 60 days after the latest of:
(a) the date the amendment is adopted;
(b) the date the amendment becomes effective; or
(c) the date the Participant is issued written notice of the amendment by
the Employer.
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ARTICLE 11
TRUSTEE AND TRUST FUND
11.01 Acceptance of Trust
The Trustee, by signing this Agreement, accepts this Trust and agrees to
perform the duties of the Trustee in accordance with the terms and
conditions set forth herein.
11.02 Trust Fund
(a) Purpose and Nature
The Trustee will establish and maintain a Trust Fund for purposes of
providing a means of accumulating the assets necessary to provide the
benefits which become payable under the Plan. The Trustee will
receive, hold and invest all contributions made by the Employer, any
Participating Employers, and the Participants, including the
investment earnings thereon. The Trust Fund arising from such
contributions and earnings will consist of all assets held by the
Trustee under the Plan and Trust. All benefits payable under the Plan
will be paid by the Trustee from the Trust Fund.
Any person having any claim under the Plan will look solely to the
assets of the Trust Fund for satisfaction. In no event will the Plan
Administrator, the Employer, any Employees, any officer of the
Employer or any agents of the Employer or the Plan Administrator be
liable in their individual capacities to any person whomsoever, under
the provisions of this Plan and Trust, except as provided by law.
The Trust Fund will be used and applied only in accordance with the
provisions of the Plan and Trust, to provide the benefits thereof, and
no part of the corpus or income of the Trust Fund will be used for, or
diverted to, purposes other than for the exclusive benefit of the
Participants or their Beneficiaries entitled to benefits under the
Plan, except to the extent specifically provided elsewhere herein.
(b) Investments
The Trustee will invest the Trust Fund in accordance with the
investment policy for the Trust Fund considering the fiduciary
requirements of law, the objectives of the Plan, and the liquidity
needs of the Plan.
(c) Reserved
(d) Operation of Trust Fund
The Trust Fund will be maintained in accordance with the accounting
requirements of the Plan. No Participant will have any right to any
specific asset or any specific portion of the Trust Fund prior to
distribution of benefits. Withdrawals from the Trust Fund will be made
to provide benefits to Participants and Beneficiaries in the amounts
specified by the Plan, and to pay expenses authorized by the Plan
Administrator.
(e) Plan Sponsor Direction of Investment
The Plan Sponsor will have the right to direct the Trustee with
respect to the investment and reinvestment of assets comprising the
Trust Fund. The Trustee and the Plan Sponsor (or the Plan
Administrator or an Investment Committee appointed by the Plan
Sponsor) will execute a letter of agreement as a part of this Plan
containing such conditions, limitations and other provisions they deem
appropriate before the Trustee will follow any Plan Sponsor direction
with respect to the investment or reinvestment of any part of the
Trust Fund.
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11.03 Receipt of Contributions
The Trustee will be accountable to the Employer for the funds contributed
to it, but will have no duty to see that the contributions received comply
with the provisions of the Plan. The Trustee will not be obligated to
collect any contributions from the Employer or the Participants.
11.04 Powers of the Trustee
Subject to the provisions and limitations contained elsewhere in this
Plan, the Trustee will have full discretion and authority with regard to
the investment of the Trust Fund. The Trustee is authorized and empowered,
but not by way of limitation, with the following powers, rights and
duties:
(a) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds, United States
retirement plan bonds, corporate bonds, debentures, convertible
debentures, commercial paper, U.S. Treasury bills, book entry
deposits with the United States Federal Reserve Bank or System,
Master Notes or similar arrangements sponsored by the Trustee or any
other financial institution as permitted by law, improved or
unimproved real estate situated in the United States, mortgages,
notes or other property of any kind, real or personal, as a prudent
man would so invest under like circumstances with due regard for the
purposes of this Plan;
(b) To maintain any part of the assets of the Trust Fund in cash, or in
demand or short-term time deposits bearing a reasonable rate of
interest (including demand or short-term time deposits of or with
the Trustee), or in a short-term investment fund or in other cash
equivalents having ready marketability, including, but not limited
to, U.S. Treasury Bills, commercial paper, certificates of deposit
(including such certificates of deposit of or with the Trustee), and
similar types of short-term securities, as may be deemed necessary
by the Trustee in its sole discretion;
(c) To manage, sell, contract to sell, grant options to purchase,
convey, exchange, transfer, abandon, improve, repair, insure, lease
for any term even though commencing in the future or extending
beyond the term of the Trust, and otherwise deal with all property,
real or personal, in such manner, for such considerations and on
such terms and conditions as the Trustee will decide;
(d) To credit and distribute the Trust as directed by the Plan
Administrator or any agent of the Plan Administrator. The Trustee
will not be obliged to inquire as to whether any payee or
distributee is entitled to any payment or whether the distribution
is proper or within the terms of the Plan, or as to the manner of
making any payment or distribution. The Trustee will be accountable
only to the Plan Administrator for any payment or distribution made
by it in good faith on the order or direction of the Plan
Administrator or any agent of the Plan Administrator;
(e) To borrow money, assume indebtedness, extend mortgages and encumber
by mortgage or pledge;
(f) To compromise, contest, arbitrate, or abandon claims and demands, in
its discretion;
(g) To have with respect to the Trust all of the rights of an individual
owner, including the power to give proxies, to participate in any
voting trusts, mergers, consolidations or liquidations, and to
exercise or sell stock subscriptions or conversion rights;
(h) To hold any securities or other property in the name of the Trustee
or its nominee, or in
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another form as it may deem best, with or without disclosing the
trust relationship;
(i) To perform any and all other acts in its judgment necessary or
appropriate for the proper and advantageous management, investment
and distribution of the Trust;
(j) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make
payment or delivery of the funds or property until final
adjudication is made by a court of competent jurisdiction;
(k) To file all tax forms or returns required of the Trustee;
(l) To begin, maintain or defend any litigation necessary in connection
with the administration of the Plan, except that the Trustee will
not be obligated to or required to do so unless indemnified to its
satisfaction; and
(m) To keep any or all of the Trust property at any place or places
within the United States or abroad, or with a depository or
custodian at such place or places; provided, however, that the
Trustee may not maintain the indicia of ownership of any assets of
the Plan outside the jurisdiction of the District Courts of the
United States, except as may be expressly authorized in U.S.
Treasury or U.S. Department of Labor regulations.
11.05 Investment in Common or Collective Trust Funds
Notwithstanding the provisions of Section 11.04, the Plan Sponsor
specifically authorizes the Trustee to invest all or any portion of the
assets comprising the Trust Fund in any common or collective trust fund
which at the time of the investment provides for the pooling of the assets
of plans qualified under Code Section 401(a). The authorization applies
only if such common or collective trust fund: (a) is exempt from taxation
under Code Section 584 or 501(a); (b) if exempt under Code Section 501(a),
expressly limits participation to pension and profit sharing trusts which
are exempt under Code Section 501(a) by reason of qualifying under Code
Section 401(a); (c) prohibits that part of its corpus or income which
equitably belongs to any participating trust from being used for or
diverted to any purposes other than for the exclusive benefit of the
Employees or their Beneficiaries who are entitled to benefits under such
participating trust; (d) prohibits assignment by participating trust of
any part of its equity or interest in the group trust; and (e) the sponsor
of the group trust created or organized the group trust in the United
States and maintains the group trust at all times as a domestic trust in
the United States. The provisions of the common or collective trust fund
agreement, as amended by the Trustee from time to time, are by this
reference incorporated within this Plan and Trust. The provisions of the
common or collective trust fund will govern any investment of Plan assets
in that fund. This provision constitutes the express permission required
by Section 408(b)(8) of ERISA.
11.06 Investment in Insurance Company Contracts
The Trustee may invest any portion of the Trust Fund in a deposit
administration, guaranteed investment or similar type of investment
contract (hereinafter referred to as Contract); provided, however, that no
such Contract may provide for an optional form of benefit which would not
be provided for under the provisions hereof. The Trustee will be the
complete and absolute owner of Contracts held in the Trust Fund.
The Trustee may convert from one form to another any Contract held in the
Trust Fund; designate any mode of settlement; sell or assign any Contract
held in the Trust Fund; surrender for cash any Contract held in the Trust
Fund; agree with the insurance company issuing any Contract to any
release, reduction, modification or amendment thereof; and, without
limitation of any of the foregoing, exercise any and all of the rights,
options and privileges that belong to the absolute owner of any Contract
held in the Trust Fund that are
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granted by the terms of any such Contract or by the terms of this
Agreement.
The Trustee will hold in the Trust Fund the proceeds of any sale,
assignment or surrender of any Contract held in the Trust Fund and any and
all dividends and other payments of any kind received in respect to any
Contract held in the Trust Fund.
No insurance company which may issue any Contract based upon the
application of the Trustee will be responsible for the validity of this
Plan, be required to look into the terms of this Plan, be required to
question any act of the Plan Administrator or the Trustee hereunder or be
required to verify that any action of the Trustee is authorized by this
Plan. If a conflict should arise between the terms of the Plan and any
such Contract, the terms of the Plan will govern.
11.07 Fees and Expenses from Fund
The Trustee will be entitled to receive reasonable annual compensation as
may be mutually agreed upon from time to time between the Plan Sponsor and
the Trustee. All reasonable and necessary expenses incurred by the Trustee
will be paid from the Plan assets by the Trustee at the direction of the
Plan Administrator to the extent not paid by the Plan Sponsor.
11.08 Records and Accounting
The Trustee will keep full and complete records of the administration of
the Trust Fund which the Employer and the Plan Administrator may examine
at any reasonable time. As soon as practical after the end of each Plan
Year and at such other reasonable times as the Employer may direct, the
Trustee will prepare and deliver to the Employer and the Plan
Administrator an accounting of the administration of the Trust, including
a report on the fair market value of all assets of the Trust Fund.
11.09 Distribution Directions
If no one claims a payment or distribution made from the Trust, the
Trustee will notify the Plan Administrator and will dispose of the payment
in accordance with the subsequent direction of the Plan Administrator.
11.10 Reserved
11.11 Professional Agents, Affiliates and Arbitration
(a) Professional Agents
The Trustee may employ and pay from the Trust Fund reasonable
compensation to agents, attorneys, accountants and other persons to
advise the Trustee as in its opinion may be necessary. The Trustee may
delegate to any agent, attorney, accountant or other person selected
by it any non-Trustee power or duty vested in it by the Plan.
(b) Use of Affiliates
(1) Charles Schwab Trust Company (CSTC) is authorized to contract or
make other arrangements with The Charles Schwab Corporation,
Charles Schwab & Co., Inc., their affiliates and subsidiaries,
successors and assigns (collectively referred to as Schwab), and
any other organizations affiliated with or subsidiaries of CSTC
or related entities, for the provision of services to the Trust
Fund or Plan, except where such arrangements are prohibited by
law or regulation. As used below, authorized person means any
person whose authorization is required pursuant to the provision
of any prohibited transaction exemption otherwise applicable.
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(2) CSTC is authorized to place securities orders, settle securities
trades, hold securities in custody and other related activities
on behalf of the Trust Fund through or by Schwab whenever
possible unless the authorized person specifically instructs the
use of another Broker. Trades and related activities conducted
through the Broker will be subject to fees and commissions
established by the Broker, which may be paid from the Trust Fund
or netted from the proceeds of trades.
(3) Trades will not be executed through Schwab unless the Plan
Administrator and the authorized person have received disclosure
concerning the relationship of Schwab to CSTC, and the fees and
commissions which may be paid to Schwab, CSTC and any affiliate
or subsidiary of any of them as a result of using Schwab to
execute trades or for other services.
(4) CSTC is authorized to disclose such information as is necessary
to the operation and administration of the Trust Fund to Schwab
and to such other persons or organizations that CSTC determines
have a legitimate business purpose for obtaining such
information.
(5) At the direction of the authorized person, CSTC may purchase
shares of regulated investment companies (or other investment
vehicles) advised by Schwab or CSTC ("Schwab Funds"), except to
the extent that such investment is prohibited by law or
regulation. Schwab Fund shares may not be purchased for or held
by the Trust Fund unless the Plan Administrator has received
disclosure concerning the relationship of Schwab or CSTC to the
Schwab Funds, and any fees which may be paid to such entities.
(6) To the extent permitted under applicable laws, CSTC may invest in
deposits, long and short term debt instruments, stocks and other
securities, including those of CSTC or Schwab.
(7) CSTC and Schwab are authorized to tape record conversations
between CSTC or Schwab and persons acting on behalf of the Plan
or a Participant in order to verify data on transactions.
(c) Arbitration
Any dispute under this agreement may, by the mutual agreement of the
parties, be resolved by submission of the issue to a member of the
American Arbitration Association who is chosen by the Employer and the
Trustee. If the Employer and the Trustee cannot agree on such a
choice, each will nominate a member of the American Arbitration
Association, and the two nominees will then select an arbitrator.
Expenses of the arbitration will be paid as decided by the arbitrator.
11.12 Valuation of Trust
The Trustee will value the Trust Fund as of the last day of each Plan Year
to determine the fair market value of the Trust, and the Trustee will
value the Trust Fund on such other date(s) as may be necessary to carry
out the provisions of the Plan.
11.13 Liability of Trustee
The Trustee will be liable for the safeguarding and administration of the
assets of this Trust Fund in accordance with the provisions hereof and any
amendments hereto. The Trustee will not be required to pay any interest on
funds paid to or deposited with it or to its credit under the provisions
of this Trust, unless pursuant to a written agreement between the Employer
and the Trustee. The Trustee will not be responsible for the adequacy of
the Trust Fund to meet and discharge any liabilities under the Plan and
will not be required to make any payment of any nature except from funds
actually received as Trustee. The Trustee may
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consult with legal counsel (who may be legal counsel for the Employer)
selected by the Trustee. It will not be the duty of the Trustee to
determine the identity or mailing address of any Participant or any other
person entitled to benefits hereunder, such identity and mailing addresses
to be furnished by the Employer, the Plan Administrator or an agent of the
Plan Administrator. The Trustee will be under no liability in making
payments in accordance with the terms of this Plan and the certification
of the Plan Administrator or an agent of the Plan Administrator who has
been granted such powers by the Plan Administrator.
Except to the extent required by any applicable law, no bond or other
security for the faithful performance of duty hereunder will be required
of the Trustee.
11.14 Removal or Resignation and Successor Trustee
A Trustee may resign at any time upon giving 120 days prior written notice
to the Plan Sponsor or, with the consent of the Plan Sponsor, a Trustee
may resign with less than 120 days prior written notice.
The Plan Sponsor may remove a Trustee by giving at least 30 days prior
written notice to the Trustee.
Upon the removal or resignation of a Trustee, the Plan Sponsor will
appoint and designate a successor Trustee which will be one or more
individual successor Trustees or a corporate Trustee organized under the
laws of the United Sates or of any state thereof with authority to accept
and execute trusts. Any successor Trustee must accept and acknowledge in
writing its appointment as a successor Trustee before it can act in such
capacity.
Title to all property and records or true copies of such records necessary
to the current operation of the Trust Fund held by the Trustee hereunder
will vest in any successor Trustee acting pursuant to the provisions
hereof, without the execution or filing of any further instrument. Any
resigning or removed Trustee will execute all instruments and do all acts
necessary to vest such title in any successor Trustee of record. Each
successor Trustee will have, exercise and enjoy all the powers, both
discretionary and ministerial, herein conferred upon his predecessor.
Charles Schwab Trust Company will not be obligated to examine the
accounts, records and acts of any previous trustee or trustees, and
Charles Schwab Trust Company will, in no way or manner, be responsible for
any action or omission to act on the part of any previous trustee.
Any corporation which results from any merger, consolidation or purchase
to which the Trustee may be a party, or which succeeds to the trust
business of the Trustee, or to which substantially all the trust assets of
the Trustee may be transferred, will be the successor to the Trustee
hereunder without any further act or formality with like effect as if the
successor Trustee had originally been named Trustee herein; and in any
such event it will not be necessary for the Trustee or any successor
Trustee to give notice thereof to any person, and any requirement,
statutory or otherwise, that notice will be given is hereby waived.
11.15 Appointment of Investment Manager
One or more Investment Managers may be appointed by the Plan Sponsor (or
the Plan Administrator) to exercise full investment management authority
with respect to all or a portion of the Trust assets. Authorized payment
of the fees and expenses of the Investment Manager(s) may be made from the
Trust assets. For purposes of this agreement, any Investment Manager so
appointed will, during the period of his appointment, possess fully and
absolutely those powers, rights and duties of the Trustee (to the extent
delegated by the Plan Sponsor or the Plan Administrator) with respect to
the investment or reinvestment of that portion of the Trust assets over
which the Investment Manager has investment management authority. The
Investment Manager must be one of the following:
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(a) Registered as an investment advisor under the Investment Advisors
Act of 1940;
(b) A bank, as defined in the Investment Advisors Act of 1940; or
(c) An insurance company qualified to manage, acquire, or dispose of
such Plan assets under the laws of more than one state.
Any Investment Manager will acknowledge in writing to the Plan Sponsor or
the Plan Administrator and to the Trustee that he or it is a fiduciary
with respect to the Plan. During any period of time when the Investment
Manager is so appointed and serving, and with respect to those assets in
the Plan over which the Investment Manager exercises investment management
authority, the Trustee's responsibility will be limited to holding such
assets as a custodian, providing accounting services, disbursing benefits
as authorized, and executing such investment instructions only as directed
by the Investment Manager. The Trustee will not be responsible for any
acts or omissions of the Investment Manager. Any certificates or other
instruments duly signed by the Investment Manager (or the authorized
representative of the Investment Manager), purporting to evidence any
instruction, direction or order of the Investment Manager with respect to
the investment of those assets of the Plan over which the Investment
Manager has investment management authority, will be accepted by the
Trustee as conclusive proof thereof. The Trustee will also be fully
protected in acting in good faith upon any notice, instruction, direction,
order, certificate, opinion, letter, telegram or other document believed
by the Trustee to be genuine and from the Investment Manager (or the
authorized representative of the Investment Manager). The Trustee will not
be liable for any action taken or omitted by the Investment Manager or for
any mistakes of judgment or other action made, taken or omitted by the
Trustee in good faith upon direction of the Investment Manager.
11.16 Loans to Participants
The Plan Administrator may authorize the Trustee to lend on a
nondiscriminatory basis to a Participant an amount from the Plan as
specified herein; provided, a reasonable rate of interest will be charged
on the loan, the loan will be secured by 50% of the Participant's Vested
Accrued Benefit in the Plan, and provision for repayment will be made. All
loans will be subject to the approval of the Plan Administrator which will
investigate each application for a loan. The Plan Administrator will
prescribe such rules as may be necessary to provide guidelines as to under
which circumstances and for what purpose loans will be permitted.
The Plan Administrator will prescribe guidelines as to which Account or
Accounts loans may be made from. Each loan made to a Participant will be
made from the Participant's allowable Account or Accounts. All interest
and principal repayments will be credited to the Participant's Account
from which the loan was made.
In addition to any additional rules and regulations as the Plan
Administrator may adopt all loans will comply with the following terms and
conditions:
(a) Only Active Participants will be eligible to apply for a loan. Each
application for a loan will be made in writing to the Plan
Administrator, whose action thereon will be final.
(b) Each loan will be made against collateral being the assignment of
50% of the borrower's entire right, title and interest in and to the
Trust Fund, supported by the borrower's promissory note for the
amount of the loan, including interest payable to the order to the
Trustee, and any additional security deemed necessary to adequately
secure the Loan. If a person fails to make a required payment within
90 days of the due date set forth in
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the loan agreement, the loan will be in default. There will be no
foreclosure against a Participant's Accrued Benefit prior to his
becoming entitled to a distribution of benefits in accordance with
the terms of this Plan. All loans will become due and payable in
full upon the termination of a Participant's employment. If a
Participant with an outstanding loan terminates employment and
becomes entitled to a distribution of benefits from the Plan, then
the outstanding balance of the unpaid loan plus any accrued interest
thereon will be deducted from the amount of otherwise distributable
benefits and the Participant's promissory note will be distributed
to the Participant.
(c) The principal repayment will be amortized over the fixed life of a
loan with installments of principal and interest to be paid not less
often than quarterly. The period of repayment for each loan will be
arrived at by mutual agreement between the Plan Administrator and
the borrower, but in no event will such period exceed a reasonable
period of time. The period of repayment will in no event exceed 5
years unless the loan is to be used to acquire, construct,
reconstruct or substantially rehabilitate any dwelling unit which,
within a reasonable period of time, is to be used as a principal
residence of the Participant or a member of the family (spouse,
brother, sister, ancestor, or lineal descendants) of the
Participant.
(d) The minimum amount of any loan is equal to $1,000.
(e) The maximum amount of any loan is such that when the amount of the
loan is added to the outstanding balance of all other loans made to
the Participant from the Plan (and any other plans maintained by the
Employer or any Related Employer) the total does not exceed the
lesser of:
(1) 50% of the Participant's Vested Accrued Benefit; or
(2) $50,000, reduced by the amount, if any, of the highest balance
of all outstanding loans to the Participant during the
one-year period ending on the day prior to the day on which
the loan in question is made.
(f) Each loan will bear interest at a rate equal to the prime rate which
is published in the Wall Street Journal as being representative of
the base rate on corporate loans at large U.S. money center
commercial banks on the first day of the month in which the loan is
made, plus 2 percentage points.
(g) A Participant may make a new loan no more frequently than once each
quarter and may have no more than three loans outstanding at any
time.
(h) Each loan will require the Participant (and, if the Participant is
married, the Participant's spouse) to consent to the loan and the
possible reduction in the Participant's Accrued Benefit. Such
consent must be made in writing within the 90-day period before the
making of the loan.
The spousal consent must meet requirements which are comparable to
the requirements described in Code Section 417(a)(2). Any security
interest held by the Plan by reason of an outstanding loan is taken
into account in determining the value of a Qualified Survivor
Annuity. However, in the event a Participant defaults on a loan, the
security interest in the loan will be deducted from the Qualified
Survivor Annuity.
(i) No loan will be permitted to a Participant in a year in which he is
either an Owner-Employee or Shareholder-Employee as defined in Code
Section 4975(d).
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(j) Any reasonable loan application fees or loan administration fees
charged to the trust will be charged exclusively to the accounts of
the participant making the loan.
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ARTICLE 12
PROVISIONS RELATING TO EMPLOYER STOCK
12.01 Type of Employer Stock
The Trustee will, to the extent practical based on the Participant's
election, invest that portion of the Trust fund so elected by
Participant's, in Class A Common Stock of the Employer (Employer Stock).
Employer Stock may include treasury stock which has been purchased by the
Employer.
12.02 Voting Rights
(a) In General
Voting of the Employer Stock held in the Trust Fund will be carried
out by the Trustee. Each Participant (or, in the event of death, his
beneficiary) will be entitled to direct the Trustee as to the manner
in which the Participant's shares of Employer Stock held in the Trust
Fund and allocated to such Participant's Accounts are voted with
respect to all matters requiring shareholder approval.
With respect to shares of Employer Stock in the Trust Fund which are
allocated to Participants who fail to give directions to the Trustee,
such shares shall be voted by the Trustee based on the voting
directions of those Participants who issued directions with respect to
Employer Stock allocated to their Accounts. The number of non-voted
shares to be voted in a particular manner shall be determined by
multiplying the total number of such shares by a fraction, the
numerator of which is the number of allocated shares directed to be
voted in such manner, and the denominator of which is the total number
of allocated shares directed to be voted in any manner with respect to
the matter at issue.
The Plan Administrator may establish such rules and guidelines as it
deems necessary to properly effect the provision of this section.
(b) Tender Offers
Each Participant, or, in the event of his death, his Beneficiary,
shall have the right, to the extent of the number of full shares of
Employer Stock in his account, to direct the Trustee in writing as to
the manner in which to respond to a tender or exchange offer with
respect to shares of such Employer Stock. The Benefits Trust Committee
shall utilize its best efforts to timely distribute or cause to be
distributed to each Participant (or Beneficiary) such information as
will be distributed to shareholders of the Employer in connection with
any such tender or exchange offer. If the Trustee shall not receive
timely direction from a Participant (or Beneficiary) as to the manner
in which to respond to such a tender or exchange offer, the Trustee
shall not tender or exchange any shares of Employer Stock with respect
to which such Participant (or Beneficiary) has the right of direction.
The sum of fractional shares allocated to Particpants' Accounts and
unallocated shares of Employer Stock shall be tendered or exchanged in
the same manner and proportion as shares with respect to which
Participants have the right of direction are tendered or exchanged,
and the Trustee shall have no discretion in such matter.
12.03 Special Provisions Applicable to Employer Securities
In accordance with Rule 16(b)-3 adopted by the Securities and Exchange
Commission, the following provisions shall apply with respect to
purchases, sales and allocations to
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participant accounts of Employer Securities, notwithstanding anything else
to the contrary in this Plan or in any rules adopted hereunder:
(a) The Plan shall not acquire or award to Participants in any fiscal
year of the plan more than 2% of the outstanding shares of Common
Stock of the Company based on the number of such shares outstanding
as of the beginning of each such fiscal year; and
(b) The Trustee and other Plan Fiduciaries shall act in accordance with
their fiduciary duties in determining the prices at which the
Trustee shall purchase Employer securities and in determining the
value used in allocating such securities to Participant Accounts.
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IN WITNESS WHEREOF, this instrument has been executed by the duly authorized and
empowered officers of the Employer, this 18th day of November, 1996.
Gaylord Entertainment Company
By:_____________________________________
,
The Trustee agrees to continue to serve as Trustee under the terms of this
instrument.
Charles Schwab Trust Company
By:_____________________________________
75
FIRST AMENDMENT
TO THE
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
WHEREAS, the Gaylord Entertainment Company 401(k) Savings Plan (the
"Plan"), formerly known as the Retirement Savings Plan and Trust for Employees
of Gaylord Entertainment Company and Affiliated and Adopting Corporations, was
amended and restated in its entirety effective as of April 1, 1996; and
WHEREAS, the Executive Life Insurance Company, from whom a predecessor
of the Plan purchased a guaranteed investment contract ("GIC") in 1989, was
placed in receivership in 1991, its assets were frozen, and was unable to pay
the principal and interest as it became due under the GIC; and
WHEREAS, the Plan recovered $567,156 in settlement of all claims by the
Plan against Executive Life in September 1996, such proceeds being $219,194.73
less than the $786,350.73 the Plan had accrued on behalf of Participants; and
WHEREAS, pursuant to Section 10.01 of the Plan, the Board of Directors
of Gaylord Entertainment Company ("Board") is authorized to amend the Plan, on
its behalf and on behalf of each Affiliated Company that has adopted the Plan;
and
WHEREAS, the Board, at a duly called meeting of its Compensation
Committee on February 17, 1997, determined it to be in the best interests of
Plan participants that the Plan be amended as provided below.
NOW, THEREFORE, effective on the date hereof, the following new Section
3.05 is hereby added to the Plan:
3.05 Special Employer Contribution
The Employer shall make a special Employer Contribution to the Plan in
the amount of $219,194.73 ("Special Contribution") as soon as
practicable after the execution hereof. The Special Contribution shall
be allocated to Participant Accounts which were allocated to the
Investment Fund that acquired a guaranteed investment contract from
Executive Life Insurance Company ("GIC") to the extent that such
Accounts have not been paid in full from the GIC ("GIC Receivable"),
as such GIC Receivables are carried on and reflected in the books and
records of the Plan. The Special Contribution shall not be treated as
an "annual addition" to Participant
1
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Accounts pursuant to Section 415(c)(2) of the Code nor shall any part
of the Special Contribution shall be allocated to the Account of any
Participant if such allocation would cause the Plan to fail testing
pursuant to section 401(a)(4) of the Code or applicable regulations.
IN WITNESS WHEREOF, Gaylord Entertainment Company, on its behalf and on
behalf of each Affiliated Company which has adopted this Plan and authorized the
Board of Directors of Gaylord Entertainment Company to act on its behalf, has
executed this Amendment on the ______ day of April, 1997.
GAYLORD ENTERTAINMENT COMPANY
By:
----------------------------------
Title: Executive Vice President
and Chief Operating Officer
2
77
(Excerpt from August 14, 1997 Minutes of the
Gaylord Entertainment Company Board of Directors)
- --------------------------------------------------------------------------------
Savings Plan and Savings Plan Trust
FURTHER RESOLVED, that, subject to and conditioned upon the consummation of the
Company Distribution and the Merger, New Gaylord is hereby substituted for the
Company in the Gaylord Entertainment Company 401(k) Savings Plan (the "Savings
Plan"). Any reference to the Employer, the Plan Sponsor or the Plan
Administrator contained in the Savings Plan shall thereafter be deemed a
reference to New Gaylord. New Gaylord shall be the "plan sponsor" with respect
to the Savings Plan, and, to the extent permitted by applica ble law, neither
the Company nor any of its subsidiaries shall be the sponsor or employer with
respect to the Savings Plan. Subject to and conditioned upon the consummation of
the Company Distribution and the Merger, New Gaylord is also hereby substituted
as sponsor of the Gaylord Savings Plan Trust (the "Savings Trust"). In
accordance with this resolution, all of the assets and rights held by the
Company and its subsidiaries with respect to the Savings Plan and the Savings
Trust, subject to all of the liabilities and obligations of the Company and its
sub sidiaries with respect to the Savings Plan and the Savings Trust, are,
subject to and conditioned upon the consummation of the Company Distribution and
the Merger, hereby transferred to New Gaylord; and
FURTHER RESOLVED, that, subject to and conditioned upon the consummation of the
Company Distribution and the Merger, the Savings Plan is hereby amended by
adding to Article 5 a new Section 5.08 which shall read in its entirety as
follows:
"5.08 Certain Transactions
Notwithstanding any provision to the contrary contained in this Plan,
in the event of the occurrence of either of the events set forth
below, the Participant will be entitled to begin to receive a
distribution of his Accrued Benefit. The form and timing of benefit
payments will be governed by the provisions of Section 5.05.
(a) The disposition by the Employer to an unrelated corporation
of substantially all of the assets (within the meaning of
section 409(d)(2) of the Code) used in a trade or business
of the Employer if the Employer continues to maintain this
Plan after the disposition, but only with respect to
78
employees who continue employment with the corporation
acquiring such assets.
(b) The disposition by the Employer to an unrelated entity of the
Employer's interest in a subsidiary (within the meaning of
section 409(d)(3) of the Code) if the Employer continues to
maintain this Plan, but only with respect to employees who
continue employment with such subsidiary."
79
THIRD AMENDMENT
TO THE
GAYLORD ENTERTAINMENT COMPANY
401(K) SAVINGS PLAN
WHEREAS, Gaylord Entertainment Company ("Company") previously adopted
and established the Gaylord Entertainment Company 401(k) Savings Plan ("Plan")
for the benefit of eligible employees and their beneficiaries; and
WHEREAS, pursuant to Section 10.01 of the Plan, the Board of Directors
of the Company is authorized to amend the Plan, on its behalf and on behalf of
each Participating Employer that has adopted the Plan and authorized the Board
of Directors to act on its behalf; and
WHEREAS, the Board of Directors has determined that is in the best
interests of participants and their beneficiaries to adopt this amendment to the
Plan as provided below;
NOW, THEREFORE, effective August 1, 1997, Section 11.16(b) of the Plan
is hereby amended to read in it entirety as follows:
"(b) Each loan will be made against collateral being the assignment of
50% of the borrower's entire right, title and interest in and to
the Trust Fund, supported by the borrower's promissory note for
the amount of the loan, including interest payable to the order
to the Trustee, and any additional security deemed necessary to
adequately secure the Loan. If a person fails to make a required
payment within 90 days of the due date set forth in the loan
agreement, the loan will be in default. There will be no
foreclosure against a Participant's Accrued Benefit prior to his
becoming entitled to a distribution of benefits in accordance
with the terms of this Plan.
All loans to a Participant will become due and payable in full
upon the termination of a Participant's employment unless the
loan is accepted by another qualified plan, pursuant to an
agreement between the Employer and the plan sponsor of such other
qualified plan, in the form of an Eligible Rollover Distribution,
in accordance with Section 5.07, or a Transfer of Plan Assets, in
accordance with Section 10.05.
If a Participant with an outstanding loan terminates employment
and becomes entitled to a distribution of benefits from the Plan,
then the
80
outstanding balance of the unpaid loan plus any accrued interest
thereon will be deducted from the amount of otherwise
distributable benefits and the Participant's promissory note will
be distributed to the Participant."
IN WITNESS WHEREOF, the Company, on its behalf and on behalf of each
Participating Employer which has adopted this amendment to the Plan and
authorized the Board of Directors of the Company to act on its behalf, has
caused this instrument to be executed as of the ____ day of September, 1997.
GAYLORD ENTERTAINMENT COMPANY
By:
--------------------------------------
Terry E. London
President and Chief Executive Officer
2
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Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8 of Gaylord Entertainment
Company of our reports dated April 4, 1997 relating to the consolidated
financial statements of Gaylord Entertainment Company (formerly known as New
Gaylord Entertainment Company) included in its information statement on Form
10, as amended by Amendment No. 3, and to all references to our Firm included
in this registration statement.
ARTHUR ANDERSEN LLP
Nashville, Tennessee
September 26, 1997
