401(k) Plus Savings Plan and Trust - Jacobs Engineering Group Inc.
Jacobs Engineering Group Inc. 401(k) Plus Savings Plan and Trust
As Amended and Restated August 1, 2000
Table of Contents
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1 DEFINITIONS ........................................................... 1
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2 ELIGIBILITY ........................................................... 11
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2.1 Eligibility ....................................................... 11
2.2 Ineligible Employees .............................................. 11
2.3 Ineligible, Terminated or Former Participants ..................... 11
3 PARTICIPANT CONTRIBUTIONS ............................................. 12
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3.1 Pre-Tax Contribution Election ..................................... 12
3.2 Changing a Contribution Election .................................. 12
3.3 Revoking and Resuming a Contribution Election ..................... 12
3.4 Contribution Percentage Limits .................................... 12
3.5 Refunds When Contribution Dollar Limit Exceeded ................... 13
3.6 Timing, Posting and Tax Considerations ............................ 13
4 ROLLOVER CONTRIBUTIONS AND TRANSFERS FROM AND TO OTHER
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QUALIFIED PLANS ....................................................... 15
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4.1 Rollover Contributions ............................................ 15
4.2 Transfers From and To Other Qualified Plans ....................... 15
5 EMPLOYER CONTRIBUTIONS ................................................ 17
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5.1 Matching Contributions ............................................ 17
6 ACCOUNTING ............................................................ 18
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6.1 Individual Participant Accounting ................................. 18
6.2 Valuation Date and Investment Cycle ............................... 18
6.3 Accounting for Investment Funds ................................... 18
6.4 Payment of Fees and Expenses18
6.5 Accounting for Participant Loans .................................. 19
6.6 Error Correction .................................................. 19
6.7 Participant Statements ............................................ 19
6.8 Special Accounting During Conversion Period........................ 20
6.9 Accounts for Alternate Payees ..................................... 20
7 INVESTMENT FUNDS AND ELECTIONS ........................................ 21
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7.1 Investment Funds .................................................. 21
7.2 Responsibility for Investment Choice .............................. 21
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7.3 Investment Fund Elections ................................................................ 21
7.4 Default if No Valid Investment Election .................................................. 22
7.5 Investment Fund Election Change Fees ..................................................... 22
8 VESTING .......................................................................................... 23
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8.1 Fully Vested Accounts .................................................................... 23
9 PARTICIPANT LOANS ................................................................................ 24
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9.1 Participant Loans Permitted............................................................... 24
9.2 Loan Application, Note and Security....................................................... 24
9.3 Spousal Consent .......................................................................... 24
9.4 Loan Approval ............................................................................ 24
9.5 Loan Funding Limits, Account Sources and Funding Order ................................... 24
9.6 Maximum Number of Loans .................................................................. 25
9.7 Source and Timing of Loan Funding ........................................................ 25
9.8 Interest Rate ............................................................................ 25
9.9 Loan Payment ............................................................................. 25
9.10 Loan Payment Hierarchy ................................................................... 26
9.11 Repayment Suspension ..................................................................... 26
9.12 Loan Default ............................................................................. 26
9.13 Call Feature ............................................................................. 26
10 IN-SERVICE WITHDRAWALS ............................................................................ 27
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10.1 In-Service Withdrawals Permitted ......................................................... 27
10.2 In-Service Withdrawal Application and Notice ............................................. 27
10.3 Spousal Consent .......................................................................... 27
10.4 In-Service Withdrawal Approval ........................................................... 27
10.5 Payment Form and Medium .................................................................. 28
10.6 Source and Timing of In-Service Withdrawal Funding ....................................... 28
10.7 Hardship Withdrawals ..................................................................... 28
10.8 After-Tax Account Withdrawals ............................................................ 30
10.9 Rollover Account Withdrawals.............................................................. 30
10.10 Over Age 59 1/2 Withdrawals .............................................................. 31
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR BY REASON OF A PARTICIPANT'S REQUIRED BEGINNING DATE ........ 32
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11.1 Benefit Information, Notices and Election ................................................ 32
11.2 Spousal Consent .......................................................................... 32
11.3 Payment Form and Medium .................................................................. 32
11.4 Source and Timing of Distribution Funding ................................................ 33
11.5 Latest Commencement Permitted ............................................................ 33
11.6 Payment Within Life Expectancy ........................................................... 34
11.7 Incidental Benefit Rule .................................................................. 34
11.8 Payment to Beneficiary ................................................................... 35
11.9 Beneficiary Designation .................................................................. 35
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12 ADP AND ACP TESTS .......................................................... 36
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12.1 Contribution Limitation Definitions ................................ 36
12.2 ADP and ACP Tests .................................................. 38
12.3 Correction of ADP and ACP Tests .................................... 39
12.4 Multiple Use Test .................................................. 41
12.5 Correction of Multiple Use Test .................................... 41
12.6 Adjustment for Investment Gain or Loss ............................. 41
12.7 Testing Responsibilities and Required Records ...................... 41
12.8 Separate Testing ................................................... 41
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS ............................... 43
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13.1 "Annual Addition" Defined .......................................... 43
13.2 Maximum Annual Addition ............................................ 43
13.3 Avoiding an Excess Annual Addition ................................. 43
13.4 Correcting an Excess Annual Addition ............................... 43
13.5 Correcting a Multiple Plan Excess .................................. 44
13.6 "Defined Benefit Fraction" Defined ................................. 44
13.7 "Defined Contribution Fraction" Defined ............................ 44
13.8 Combined Plan Limits and Correction ................................ 44
14 TOP HEAVY RULES ............................................................ 46
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14.1 Top Heavy Definitions .............................................. 46
14.2 Special Contributions .............................................. 47
14.3 Adjustment to Combined Limits for Different Plans .................. 48
15 PLAN ADMINISTRATION ........................................................ 49
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15.1 Plan Delineates Authority and Responsibility ....................... 49
15.2 Fiduciary Standards ................................................ 49
15.3 Company is ERISA Plan Administrator................................. 49
15.4 Administrator Duties ............................................... 50
15.5 Advisors May be Retained ........................................... 50
15.6 Delegation of Administrator Duties.................................. 51
15.7 Committee Operating Rules .......................................... 51
16 MANAGEMENT OF INVESTMENTS .................................................. 52
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16.1 Trust Agreement .................................................... 52
16.2 Investment Funds ................................................... 52
16.3 Authority to Hold Cash ............................................. 53
16.4 Trustee to Act Upon Instructions ................................... 53
16.5 Administrator Has Right to Vote Registered Investment Company
Shares ............................................................. 53
16.6 Custom Fund Investment Management .................................. 53
16.7 Master Custom Fund.................................................. 54
16.8 Authority to Segregate Assets ...................................... 54
17 TRUST ADMINISTRATION ....................................................... 55
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17.1 Trustee to Construe Trust ........................................ 55
17.2 Trustee To Act As Owner of Trust Assets .......................... 55
17.3 United States Indicia of Ownership ............................... 55
17.4 Tax Withholding and Payment ...................................... 56
17.5 Trust Accounting ................................................. 56
17.6 Valuation of Certain Assets ...................................... 56
17.7 Legal Counsel .................................................... 57
17.8 Fees and Expenses ................................................ 57
17.9 Trustee Duties and Limitations ................................... 57
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION ........................ 58
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18.1 Plan Does Not Affect Employment Rights ........................... 58
18.2 Compliance With USERRA ........................................... 58
18.3 Limited Return of Contributions .................................. 58
18.4 Assignment and Alienation ........................................ 59
18.5 Facility of Payment .............................................. 59
18.6 Reallocation of Lost Participant's Accounts ...................... 59
18.7 Suspension of Certain Plan Provisions During Conversion Period ... 59
18.8 Suspension of Certain Plan Provisions During Other Periods ....... 60
18.9 Claims Procedure ................................................. 60
18.10 Construction ..................................................... 61
18.11 Jurisdiction and Severability .................................... 61
18.12 Indemnification by Employer....................................... 61
19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION .......................... 62
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19.1 Amendment ........................................................ 62
19.2 Merger ........................................................... 62
19.3 Divestitures ..................................................... 62
19.4 Plan Termination and Complete Discontinuance of Contributions .... 63
19.5 Amendment and Termination Procedures ............................. 63
19.6 Termination of Employer's Participation .......................... 64
19.7 Replacement of the Trustee ....................................... 64
19.8 Final Settlement and Accounting of Trustee ....................... 64
APPENDIX A - INVESTMENT FUNDS ................................................. 66
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES ................................ 67
APPENDIX C - LOAN INTEREST RATE ............................................... 68
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1 DEFINITIONS
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When capitalized, the words and phrases below have the following
meanings unless different meanings are clearly required by the context:
1.1 "Account". The records maintained by the Administrator for
purposes of accounting for a Participant's interest in the Plan.
"Account" may refer to one or all of the following accounts which
have been created on behalf of a Participant to hold amounts
attributable to specific types of Contributions under the Plan or
to hold Contributions made under the plan of a Related Company in
which a Participant formerly participated and which have been
transferred to this Plan, contributions previously permitted
under the Plan and amounts transferred from the Plan
in accordance with Section 4.2:
(a) "Pre-Tax Account". An account created to hold amounts
attributable to Pre-Tax Contributions.
(b) "After-Tax Account". An account created to hold amounts
attributable to amounts previously contributed by an
eligible Participant on an after-tax basis under former Plan
provisions.
(c) "Rollover Account". An account created to hold amounts
attributable to Rollover Contributions.
(d) "Matching Account". An account created to hold amounts
attributable to Matching Contributions.
(e) "Prior Plan Account". An account created to hold amounts
attributable to amounts previously contributed by the
Employer on an eligible Participant's behalf and allocated
on a pay based formula under former Plan provisions
1.2 "ACP" or "Average Contribution Percentage". The percentage
calculated in accordance with Section 12.1.
1.3 "Administrator". The Company, which may delegate all or a portion
of the duties of the Administrator under the Plan to a Committee
in accordance with Section 15.6.
1.4 "ADP" or "Average Deferral Percentage". The percentage calculated
in accordance with Section 12.1.
1.5 "Alternate Payee". Any spouse, former spouse, child or other
dependent (as defined in Code section 152) of a Participant who
is recognized by a domestic relations order as having a right to
receive all, or a portion, of the Participant's Account under the
Plan.
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1.6 "Beneficiary". The person or persons who is to receive
benefits under the Plan after the death of the Participant
pursuant to the "Beneficiary Designation" paragraph in
Section 11.
1.7 "Code". The Internal Revenue Code of 1986, as amended.
Reference to any specific Code section shall include such
section, any valid regulation promulgated thereunder, and any
comparable provision of any future legislation amending,
supplementing or superseding such section.
1.8 "Committee". If applicable, the committee which has been
appointed by the Administrator to administer the Plan in
accordance with Section 15.6.
1.9 "Company". Jacobs Engineering Group Inc. or any successor by
merger, purchase or otherwise.
1.10 "Compensation". The sum of a Participant's Taxable Income and
salary reductions, if any, pursuant to Code section 125,
402(e)(3), 402(h)(1)(B), 403(b), 408(p)(2)(A)(i) or 457.
For purposes of determining benefits under the Plan,
Compensation is limited to $170,000 per Plan Year (as
adjusted for cost of living increases pursuant to Code
sections 401(a)(17) and 415(d)). For Plan Years commencing
before January 1, 1997, for purposes of the preceding
sentence, in the case of an HCE who is a 5% Owner or one of
the 10 most highly compensated Employees, (i) such HCE and
such HCE's family group (as defined below) shall be treated
as a single employee and the Compensation of each family
group member shall be aggregated with the Compensation of
such HCE, and (ii) the limitation on Compensation shall be
allocated among such HCE and his or her family group members
in proportion to each individual's Compensation before the
application of this sentence. For purposes of this Section,
the term "family group" shall mean an Employee's spouse and
lineal descendants who have not attained age 19 before the
close of the year in question.
For purposes of determining HCEs and key employees and for
purposes of Sections 13.2 and 14.2, Compensation for the
entire Plan Year shall be used. For purposes of determining
ADP and ACP, Compensation shall be limited to amounts paid to
an Eligible Employee while a Participant.
1.11 "Contribution". An amount contributed to the Plan by the
Employer or an Eligible Employee, and allocated by
contribution type to Participants' Accounts, as described in
Section 1.1. Specific types of contribution include:
(a) "Pre-Tax Contribution". An amount contributed by an
eligible Participant in conjunction with his or her
Code section 401(k) salary deferral election which
shall be treated as made by the Employer on the
eligible
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Participant's behalf.
(b) "Rollover Contribution". An amount cont ibuted by an
Eligible Employee which originated from another
employer's or an Employer's qualified plan.
(c) "Matching Contribution". An amount contributed by the
Employer on an eligible Participant's behalf based upon
the amount contributed by the eligible Participant.
1.12 "Contribution Dollar Limit". The annual limit placed on each
Participant's Pre-Tax Contributions, which shall be $10,500
per calendar year (as adjusted for cost of living increases
pursuant to Code sections 402(g)(5) and 415(d)). For
purposes of this Section, a Participant's Pre-Tax
Contributions shall include (i) any employer contribution
under a qualified cash or deferred arrangement (as defined
in Code section 401(k)) to the extent not includible in
gross income for the taxable year under Code section
402(e)(3) (determined without regard to Code section
402(g)), (ii) any employer contribution to the extent not
includible in gross income for the taxable year under Code
section 402(h)(1)(B) (determined without regard to Code
section 402(g)), (iii) any employer contribution to purchase
an annuity contract under Code section 403(b) under a salary
reduction agreement (within the meaning of Code section
3121(a)(5)(D)) and (iv) any elective employer contribution
under Code section 408(p)(2)(A)(i).
1.13 "Conversion Period". The period of converting the prior
accounting system of the Plan and Trust or the prior
accounting system of any plan and trust which is merged, in
whole or in part, into the Plan and Trust, to the accounting
system described in Section 6.
1.14 "Direct Rollover". An Eligible Rollover Distribution that is
paid by the Plan directly to an Eligible Retirement Plan for
the benefit of a Distributee.
1.15 "Disability". A Participant's total and permanent, mental or
physical disability resulting in termination of employment
as evidenced by (a) receipt of disability payments under the
Employer's long-term disability program or (b) presentation
of medical evidence satisfactory to the Administrator.
1.16 "Distributee". A Participant, a Beneficiary (if he or she is
the surviving spouse of a Participant) or an Alternate Payee
under a QDRO (if he or she is the spouse or former spouse of
a Participant).
1.17 "Effective Date". The date upon which the provisions of this
document become effective. This date is, August 1, 2000
unless stated otherwise. In general, the provisions of this
document only apply to Participants who are Employees on or
after the Effective Date. However, investment and
distribution provisions apply
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to all Participants with Account balances to be invested or
distributed after the Effective Date. The effective date of
the original Plan document is October 1, 1974.
1.18 "Eligible Employee". An Employee of an Employer, except any
Employee:
(a) whose compensation and conditions of employment are
covered by a collective bargaining agreement to which
the Employer is a party unless the agreement calls for
the Employee's participation in the Plan;
(b) who is treated as an Employee because he or she is a
Leased Employee; or
(c) who is a nonresident alien and who (i) receives no
earned income (within the meaning of Code section
911(d)(2)), from sources within the United States under
Code section 861(a)(3); or (ii) receives such earned
income from such sources within the United States but
such income is exempt from United States income tax
under an applicable income tax convention.
1.19 "Eligible Retirement Plan". An individual retirement account
described in Code section 408(a), an individual retirement
annuity described in Code section 408(b), an annuity plan
described in Code section 403(a), or a qualified trust
described in Code section 401(a), that accepts a
Distributee's Eligible Rollover Distribution, except that,
if the Distributee is the surviving spouse of a Participant,
an Eligible Retirement Plan is an individual retirement
account or individual retirement annuity.
1.20 "Eligible Rollover Distribution". A distribution, (excluding
hardship withdrawals of elective deferrals) of all or any
portion of the balance to the credit of a Distributee,
excluding (i) a 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;
(ii) a distribution to the extent such distribution is
required under Code section 401(a)(9); and (iii) the portion
of a distribution that is not includible in gross income
(determined without regard to the exclusion for net
unrealized appreciation with respect to Employer
securities).
1.21 "Employee". An individual who is:
(a) directly employed by any Related Company and for whom
any income for such employment is subject to
withholding of income or social security taxes, or
(b) a Leased Employee.
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1.22 "Employer". The Company and any other Related Company which
adopts the Plan with the approval of the Company.
1.23 "ERISA". The Employee Retirement Income Security Act of 1974, as
amended. Reference to any specific ERISA section shall include
such section, any valid regulation promulgated thereunder, and
any comparable provision of any future legislation amending,
supplementing or superseding such section.
1.24 "Former Participant". The Plan status of an individual after he
or she is determined to be a Terminated Participant and his or
her Account is distributed or forfeited.
1.25 "HCE" or "Highly Compensated Employee". An Employee described as
a Highly Compensated Employee in Section 12.
1.26 "Hour of Service". Each hour for which an Employee is entitled
to:
(a) payment for the performance of duties for any Related
Company;
(b) payment from any Related Company 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;
(c) back pay, irrespective of mitigation of damages, by award or
agreement with any Related Company (and these hours shall be
credited to the period to which the award or agreement
pertains); or
(d) no payment, but is on a Leave of Absence (and these hours
shall be based upon his or her normally scheduled hours per
week or a 40 hour week if there is no regular schedule).
The crediting of Hours of Service for which no duties are
performed shall be in accordance with the U.S. Department of
Labor regulation sections 2530.200b-2(b) and (c). Actual hours
shall be used whenever an accurate record of hours are maintained
for an Employee. Otherwise, an equivalent number of hours shall
be credited for each payroll period in which the Employee would
be credited with at least 1 Hour of Service. The payroll period
equivalencies are 45 hours weekly, 90 hours biweekly, 95 hours
semimonthly and 190 hours monthly.
An Employee's service with a predecessor or acquired company
shall only be counted in the determination of his or her Hours of
Service for eligibility and/or vesting purposes if (1) the
Company directs that credit for such service be
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granted, or (2) a qualified plan of the predecessor or acquired
company is subsequently maintained by any Related Company.
1.27 "Ineligible". The Plan status of an individual who is (1) an
Employee of a Related Company which is not then an Employer, (2)
an Employee of an Employer, but not an Eligible Employee, or (3)
not an Employee.
1.28 "Investment Fund". An investment fund as described in Section
16.2. The Investment Funds authorized by the Administrator to be
offered under the Plan as of the Effective Date are set forth in
Appendix A.
1.29 "Leased Employee". An individual, not otherwise an Employee, who,
pursuant to an agreement between a Related Company and a leasing
organization, has performed, on a substantially full-time basis,
for a period of at least 12 months, services under the primary
direction or control of the Related Company, unless:
(a) the individual is covered by a money purchase pension plan
maintained by the leasing organization and meeting the
requirements of Code section 414(n)(5)(B), and
(b) such individuals do not constitute more than 20% of all
Non-Highly Compensated Employees of all Related Companies
(within the meaning of Code section 414(n)(5)(C)(ii)).
1.30 "Leave of Absence". A period during which an individual is deemed
to be an Employee, but is absent from active employment, provided
that the absence:
(a) was authorized by a Related Company; or
(b) was due to military service in the United States armed
forces and the individual returns to active employment
within the period during which he or she retains employment
rights under federal law.
1.31 "Loan Account". The record maintained for purposes of accounting
for a Participant's loan and payments of principal and interest
thereon.
1.32 "NHCE" or "Non-Highly Compensated Employee". An Employee
described as a Non-Highly Compensated Employee in Section 12.
1.33 "Normal Retirement Date". The date of a Participant's 65th
birthday.
1.34 "Owner". A person with an ownership interest in the capital,
profits, outstanding stock or voting power of a Related Company
within the meaning of Code section 318 or 416 (which exclude
indirect ownership through a qualified plan).
1.35 "Parental Leave". The period of absence from work by reason of
the pregnancy of an Employee, the birth of the Employee's child,
the placement of a child with
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the Employee in connection with the child's adoption, or the
caring for such child immediately after birth or placement
as described in Code section 410(a)(5)(E).
1.36 "Participant". The Plan status of an Eligible Employee after
he or she completes the eligibility requirements and enters
the Plan as described in Section 2.1 and any individual for
whom assets have been transferred from a predecessor plan
merged, in whole or in part, with the Plan. An Eligible
Employee who makes a Rollover Contribution prior to
completing the eligibility requirements as described in
Section 2.1 shall also be considered a Participant, except
that he or she shall not be considered a Participant for
purposes of Plan provisions related to Contributions, other
than a Rollover Contribution, until he or she completes the
eligibility requirements and enters the Plan as described in
Section 2.1. A Participant's participation continues until
his or her employment with all Related Companies ends and his
or her Account is distributed or forfeited.
1.37 "Pay". The base pay paid to an Eligible Employee by an
Employer while he or she is a Participant during the current
period.
Pay is neither increased by any salary credit or decreased by
any salary reduction pursuant to Code sections 125 or
402(e)(3). Pay is limited to $170,000 per Plan Year (as
adjusted for cost of living increases pursuant to Code
sections 401(a)(17) and 415(d)).
1.38 "Plan". The Jacobs Engineering Group Inc. 401(k) Plus Savings
Plan set forth in this document, as from time to time
amended.
1.39 "Plan Year". The annual accounting period of the Plan and
Trust which ends on each December 31.
1.40 "QDRO". A domestic relations order which the Administrator
has determined to be a qualified domestic relations order
within the meaning of Code section 414(p).
1.41 "Related Company". With respect to any Employer, that
Employer and any corporation, trade or business which is,
together with that Employer, a member of the same controlled
group of corporations, a trade or business under common
control, or an affiliated service group within the meaning of
Code sections 414(b), (c), (m) or (o), except that for
purposes of Section 13 "within the meaning of Code sections
414(b), (c), (m) or (o), as modified by Code section 415(h)"
shall be substituted for the preceding reference to "within
the meaning of Code sections 414(b), (c), (m) or (o)".
1.42 "Required Beginning Date". The latest date benefit payments
shall commence to a Participant.
(a) For calendar years commencing before January 1, 1997,
such date shall
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mean:
(1) with regard to a Participant who attained age 70
1/2 in 1996, did not terminate employment with all
Related Companies before January 1, 1997, and is
not or was not a 5% Owner, the April 1 that next
follows (i) the calendar year in which the
Participant attained age 70 1/2, or (ii) if the
Participant elects to apply this clause (ii), the
calendar year in which the Participant terminates
employment with all Related Companies (and any
such election must be made prior to January 1,
1998);and
(2) with regard to a Participant who attained age 70
1/2 after December 31, 1987 and before January 1,
1996 or, in 1996 if he or she terminated
employment with all Related Companies before
January 1, 1997 or is or was a 5% Owner, the April
1 that next follows the calendar year in which the
Participant attains age 70 1/2; and
(3) with regard to a Participant who attained age 70
1/2 before January 1, 1988 and who is not 5%
Owner, the April 1 that next follows the later of
(i) the calendar year in which the Participant
attained age 70 1/2, or (ii) the calendar year in
which the Participant terminates employment with
all Related Companies; and
(4) with regard to a Participant who attained age 70
1/2 before January 1, 1988 and who is a 5% Owner,
the April 1 that next follows the later of (i) the
calendar year in which the Participant attained
age 70 1/2, or (ii) the earlier of the calendar
year in which or within which ends the Plan Year
in which the Participant becomes a 5% Owner or the
calendar year in which he or she terminates
employment with all Related Companies.
A Participant shall be considered a 5% Owner for this
purpose if such Participant is a 5% Owner as defined in
Code section 416(i) (determined in accordance with Code
section 416 but without regard to whether the Plan is
top-heavy) at any time during the Plan Year ending with
or within the calendar year in which the Participant
attains age 66 1/2 or in any subsequent Plan Year.
(b) For calendar years commencing after December 31, 1996
and before January 1, 1999, such date shall mean:
(1) with regard to a Participant who attained age 70
1/2 in 1997 or 1998, the April 1 that next follows
the calendar year in which he or she attained age
70 1/2, except that if the Participant (i) did not
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terminate employment with all Related Companies
before January 1 of the calendar year following
the calendar year in which he or she attained age
70 1/2, (ii) is not a 5% Owner, such date shall
instead mean the April 1 that next follows (i) the
calendar year in which the Participant attained
age 70 1/2, or (ii) if the Participant elects to
apply this clause (ii), the calendar year in which
the Participant terminates employment with all
Related Companies (and any such election must be
made prior to the April 1 of the calendar year
following the calendar year in which he or she
attained age 70 1/2); and
(2) with regard to a Participant who is a 5% Owner,
the April 1 that next follows the calendar year in
which the Participant attains age 70 1/2.
A Participant shall be considered a 5% Owner for this
purpose if such Participant is a 5% Owner with respect
to the Plan Year ending in the calendar year in which
the Participant attains age 70 1/2.
(c) For calendar years commencing after December 31, 1998,
such date shall mean:
(1) with regard to a Participant who is not a 5%
Owner, the April 1 that next follows the later of
(i) the calendar year in which the Participant
attained age 70 1/2, or (ii) the calendar year in
which the Participant terminates employment with
all Related Companies; and
(2) with regard to a Participant who is a 5% Owner,
the April 1 that next follows the calendar year in
which the Participant attains age 70 1/2.
A Participant shall be considered a 5% Owner for this
purpose if such Participant is a 5% Owner with respect
to the Plan Year ending in the calendar year in which
the Participant attains age 70 1/2.
1.43 "Spousal Consent". The written consent given by a spouse to
a Participant's election or waiver of Beneficiary
designation. The spouse's consent must acknowledge the
effect on the spouse of the Participant's election, waiver
or designation, and be duly witnessed by a notary public.
Spousal Consent shall be valid only with respect to the
spouse who signs the Spousal Consent and only for the
particular choice made by the Participant which requires
Spousal Consent. A Participant may revoke (without Spousal
Consent) a prior election, waiver or designation that
required Spousal Consent at any time before payments begin.
Spousal Consent also means a determination by the
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9
<PAGE>
Administrator that there is no spouse, the spouse cannot be located,
or such other circumstances as may be established under Code section
417(a)(2)(B).
1.44 "Taxable Income". Compensation in the amount reported by the Employer
or a Related Company as "Wages, tips, other compensation" on Form W-2,
or any successor method of reporting under Code section 6041(d).
1.45 "Terminated Participant". The Plan status of a Participant who is not
an Employee and with respect to whom the Administrator has reported to
the Trustee that the Participant's employment has terminated with all
Related Companies.
1.46 "Trust". The legal entity created by those provisions of this document
which relate to the Trustee. The Trust is part of the Plan and holds
the Plan assets which are comprised of the aggregate of Participants'
Accounts, and any unallocated funds invested in interest bearing
deposits (which may include interest bearing deposits of the Trustee)
and/or money market type assets or funds, pending allocation to
Participants' Accounts or disbursement to pay Plan fees and expenses.
1.47 "Trustee". Vanguard Fiduciary Trust Company
1.48 "USERRA". The Uniformed Services Employment and Reemployment Rights
Act of 1994, as amended.
1.49 "Valuation Date". Each business day the New York Stock Exchange is
open for business.
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10
<PAGE>
2 ELIGIBILITY
-----------
2.1 Eligibility
All Participants as of January 1, 1998 shall continue their
eligibility to participate.
For purposes of Pre-Tax Contributions, each other individual who is an
Eligible Employee on January 1, 1998 shall become a Participant on
that date. Each other Eligible Employee shall become a Participant as
soon as administratively feasible after date of hire but not more than
30 days.
For purposes of Matching Contributions, each Eligible Employee shall
become a Participant on the first day of the next month after the date
he or she completes a 12-month eligibility period in which he or she
is credited with at least 1,000 Hours of Service. The initial
eligibility period begins on the date an Employee first performs an
Hour of Service. Subsequent eligibility periods begin with the start
of each Plan Year beginning after the first Hour of Service is
performed.
2.2 Ineligible Employees
If an Employee completes the above eligibility requirements, but is
Ineligible at the time participation would otherwise begin (if he or
she were not Ineligible), he or she shall become a Participant on the
first subsequent date on which he or she is an Eligible Employee.
2.3 Ineligible, Terminated or Former Participants
An Ineligible, Terminated or Former Participant may not make or share
in any Contributions, other than such Contributions due to be made on
his or her behalf after the date he or she became an Ineligible,
Terminated or Former Participant for periods prior to such date, nor
may an Ineligible or Terminated Participant be eligible for a new Plan
loan (except as described in Section 9.1), during the period he or she
is an Ineligible or Terminated Participant, but he or she shall
continue to participate for all other purposes. An Ineligible,
Terminated or Former Participant shall automatically become an active
Participant on the date he or she again becomes an Eligible Employee.
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11
<PAGE>
3 PARTICIPANT CONTRIBUTIONS
-------------------------
3.1 Pre-Tax Contribution Election
Upon becoming a Participant, an Eligible Employee may elect to reduce
his or her Pay by an amount which does not exceed the Contribution
Dollar Limit or the limits described in the Contribution Percentage
Limits paragraph of this Section 3, and have such amount contributed
to the Plan by the Employer as a Pre-Tax Contribution. The election
shall be made in such manner and with such advance notice as
prescribed by the Administrator and may be limited to a whole
percentage of Pay. In no event shall an Employee's Pre-Tax
Contributions under the Plan and comparable contributions to all other
plans, contracts or arrangements of all Related Companies exceed the
Contribution Dollar Limit for the Employee's taxable year beginning in
the Plan Year.
3.2 Changing a Contribution Election
A Participant who is an Eligible Employee may change his or her
Pre-Tax Contribution election at any time in such manner and with such
advance notice as prescribed by the Administrator, and such election
change shall be effective as soon as administratively feasible after
such date. A Participant's Contribution election made as a percentage
of Pay shall automatically apply to Pay increases or decreases.
3.3 Revoking and Resuming a Contribution Election
A Participant may revoke his or her Pre-Tax Contribution election at
any time in such manner and with such advance notice as prescribed by
the Administrator, and such revocation shall be effective as soon as
administratively feasible after such date.
A Participant who is an Eligible Employee may resume Pre-Tax
Contributions by making a new election at the same time in which a
Participant may change his or her election and such election shall be
effective as soon as administratively feasible after such date.
3.4 Contribution Percentage Limits
The Administrator may establish and change from time to time, in
writing, without the necessity of amending the Plan and Trust, the
minimum, if applicable, and maximum Pre-Tax Contribution percentages,
prospectively or retrospectively (for the current Plan Year), for all
Participants. In addition, the Administrator may establish any lower
percentage limits for Highly Compensated Employees as it deems
necessary to satisfy the tests described in Section 12. As of the
Effective Date, the maximum Contribution percentages are:
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12
<PAGE>
Highly
Contribution Compensated All Other
Type Employees Participants
--------- ------------
Pre-Tax 10% 18%
Irrespective of the limits that may be established by the
Administrator in accordance with the paragraph above, in no
event shall the Contributions made by or on behalf of a
Participant for a Plan Year exceed the maximum allowable
under Code section 415.
3.5 Refunds When Contribution Dollar Limit Exceeded
A Participant who makes Pre-Tax Contributions for a calendar
year to the Plan and comparable contributions to any other
qualified defined contribution plan in excess of the
Contribution Dollar Limit may notify the Administrator in
writing by the following March 1 (or as late as April 14 if
allowed by the Administrator) that an excess has occurred. In
this event, the amount of the excess specified by the
Participant, adjusted for investment gain or loss, shall be
refunded to him or her by the April 15 following the year of
deferral and shall not be included as an Annual Addition (as
defined in Section 13.1) under Code section 415 for the year
contributed. The excess amounts shall first be taken from
unmatched Pre-Tax Contributions and then from matched Pre-Tax
Contributions. Any Matching Contributions attributable to
refunded excess Pre-Tax Contributions as described in this
Section, adjusted for investment gain or loss, shall be
forfeited and used to reduce future Contributions to be made
by an Employer as soon as administratively feasible. Refunds
and forfeitures shall not include investment gain or loss for
the period between the end of the applicable calendar year
and the date of distribution or forfeiture.
3.6 Timing, Posting and Tax Considerations
Participants' Contributions, other than Rollover
Contributions, may only be made through payroll deduction.
Such amounts shall be paid to the Trustee in cash and posted
to each Participant's Account(s) as soon as such amounts can
reasonably be separated from the Employer's general assets
and balanced against the specific amount made on behalf of
each Participant. In no event, however, shall such amounts be
paid to the Trustee more than 15 business days following the
end of the month that includes the date amounts are deducted
from a Participant's Pay (or as that maximum period may be
otherwise extended by ERISA). Pre-Tax Contributions shall be
treated as Contributions made by an Employer in determining
tax deductions under Code section 404(a).
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13
<PAGE>
4 ROLLOVER CONTRIBUTIONS AND TRANSFERS FROM AND TO OTHER QUALIFIED PLANS
----------------------------------------------------------------------
4.1 Rollover Contributions
The Administrator may authorize the Trustee to accept a
Rollover Contribution in cash, directly from an Eligible
Employee or as a Direct Rollover from another qualified plan
on behalf of the Eligible Employee, even if he or she is not
yet a Participant. The Employee shall be responsible for
providing satisfactory evidence, in such manner as prescribed
by the Administrator, that such Rollover Contribution
qualifies as a rollover contribution, within the meaning of
Code section 402(c) or 408(d)(3)(A)(ii). Such amounts
received directly from an Eligible Employee must be paid to
the Trustee in cash within 60 days after the date received by
the Eligible Employee from a qualified plan or conduit
individual retirement account. Rollover Contributions shall
be posted to the Eligible Employee's Rollover Account as of
the date received by the Trustee.
If the Administrator later determines that an amount
contributed pursuant to the above paragraph did not in fact
qualify as a rollover contribution, within the meaning of
Code section 402(c) or 408(d)(3)(A)(ii), the balance credited
to the Participant's Rollover Account shall immediately be
(1) segregated from all other Plan assets, (2) treated as a
nonqualified trust established by and for the benefit of the
Participant, and (3) distributed to the Participant. Any such
amount shall be deemed never to have been a part of the Plan.
4.2 Transfers From and To Other Qualified Plans
The Administrator may instruct the Trustee to receive assets
in cash or in kind directly from another qualified plan or to
transfer assets in cash or in kind directly to another
qualified plan; provided that receipt of a transfer shall not
be directed if:
(a) any amounts are not exempted by Code section
401(a)(11)(B) from the annuity requirements of Code
section 417 unless the Plan complies with such
requirements; or
(b) any amounts include benefits protected by Code
section 411(d)(6) which would not be preserved under
applicable Plan provisions.
The Trustee may refuse to receive any such transfer if:
(a) the Trustee finds the in kind assets unacceptable;
or
(b) instructions for posting amounts to Participants'
Accounts are incomplete.
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14
<PAGE>
Such amounts shall be posted to the appropriate Accounts of
Participants as of the date received by the Trustee. To the
extent a receipt of a transfer includes Participant loans,
such loans shall continue in effect subject to the terms and
conditions in effect as of the date of the transfer or as
otherwise agreed to by the Administrator.
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15
<PAGE>
5 EMPLOYER CONTRIBUTIONS
----------------------
5.1 Matching Contributions
(a) Frequency and Eligibility. For each period for which
Participants' Contributions are made, the Employer
shall make Matching Contributions, as described in
the following Allocation Method paragraph, on behalf
of each Participant who contributed during the
period and who has met the eligibility requirements
of Section 2.1.
(b) Allocation Method. The Matching Contributions for
each period shall total 50% of each eligible
Participant's Pre-Tax Contributions for the period,
provided that no Matching Contributions shall be
made based upon a Participant's Contributions in
excess of 6% of his or her Pay. The Employer may
change the 50% matching rate or the 6% of considered
Pay to any other percentages, including 0%,
generally by notifying eligible Participants in
sufficient time to adjust their Contribution
elections prior to the start of the period for which
the new percentages apply.
(c) Timing, Medium and Posting. The Employer shall make
each period's Matching Contribution in cash as soon
as administratively feasible, and for purposes of
deducting such Contribution, not later than the
Employer's federal tax filing date, including
extensions, for the Employer's taxable year that
ends with or within the Plan Year for which the
Matching Contribution is made. Such amounts shall be
paid to the Trustee and posted to each Participant's
Matching Account once the total Matching
Contribution received has been balanced against the
specific amount to be credited to each Participant's
Matching Account.
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16
<PAGE>
6 ACCOUNTING
----------
6.1 Individual Participant Accounting
The Administrator shall maintain an individual set of
Accounts for each Participant in order to reflect
transactions both by type of Account and investment medium.
Financial transactions shall be accounted for at the
individual Account level by posting each transaction to the
appropriate Account of each affected Participant. Participant
Account values shall be maintained in shares for the
Investment Funds and in dollars for the Loan Account. At any
point in time, the Account value shall be determined using
the most recent Valuation Date values provided by the
Trustee.
6.2 Valuation Date Accounting and Investment Cycle
Participant Account values shall be determined as of each
Valuation Date. For any transaction to be processed as of a
Valuation Date, the Trustee must receive instructions for the
transaction by the Valuation Date. Such instructions shall
apply to amounts held in the Account on that Valuation Date.
Financial transactions of the Investment Funds shall be
posted to Participants' Accounts as of the Valuation Date,
based upon the Valuation Date values provided by the Trustee,
and settled on the Valuation Date.
6.3 Accounting for Investment Funds
Investments in each Investment Fund shall be maintained in
shares. The Trustee is responsible for determining the share
values of each Investment Fund as of each Valuation Date. To
the extent an Investment Fund is comprised of collective
investment funds offered by the Trustee or any other entity
authorized to offer collective investment funds, the share
values shall be determined in accordance with the rules
governing such collective investment funds, which are
incorporated herein by reference. All other share values
shall be determined by the Trustee. The share value of each
Investment Fund shall be based on the fair market value of
its underlying assets.
6.4 Payment of Fees and Expenses
Except to the extent Plan fees and expenses related to
Account maintenance, transaction and Investment Fund
management and maintenance, set forth below, are paid by the
Employer directly, such fees and expenses shall be paid as
set forth below.
(a) Account Maintenance: Account maintenance fees and
expenses, may include but are not limited to,
administrative, Trustee, government annual report
preparation, audit, legal, nondiscrimination testing
and fees for
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17
<PAGE>
any other special services. Account maintenance fees
shall be charged to Participants on a per
Participant basis provided that no fee shall reduce
a Participant's Account balance below zero.
(b) Investment Fund Management and Maintenance:
Management and maintenance fees and expenses related
to the Investment Funds shall be charged at the
Investment Fund level and reflected in the net gain
or loss of each Investment Fund.
The Company may determine that the Employers pay a lower
portion of the fees and expenses allocable to the Accounts of
Participants who are no longer Employees or who are not
Beneficiaries, unless doing so would result in discrimination
prohibited under Code section 401(a)(4) or a significant
detriment prohibited by Code section 411(a)(11). As of the
Effective Date, a breakdown of which Plan fees and expenses
shall generally be borne by the Trust (and charged to
individual Participants' Accounts or charged at the
Investment Fund level and reflected in the net gain or loss
of each Investment Fund) and those that shall be paid by the
Employer is set forth in Appendix B, which may be changed
from time to time by the Company, in writing, without the
necessity of amending the Plan and Trust.
The Trustee shall have the authority to pay any such fees and
expenses, which remain unpaid by the Employer for 60 days,
from the Trust.
6.5 Accounting for Participant Loans
Participant loans shall be held in a separate Loan Account of
the Participant and accounted for in dollars as an earmarked
asset of the borrowing Participant's Account.
6.6 Error Correction
The Administrator may correct any errors or omissions in the
administration of the Plan by restoring any Participant's
Account balance with the amount that would be credited to the
Account had no error or omission been made. Funds necessary
for any such restoration shall be provided through payment
made by the Employer, or by the Trustee to the extent the
error or omission is attributable to actions or inactions of
the Trustee.
6.7 Participant Statements
The Administrator shall provide Participants with statements
of their Accounts as soon after the end of each quarter of
the Plan Year as administratively feasible.
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18
<PAGE>
6.8 Special Accounting During Conversion Period
The Administrator and Trustee may use any reasonable
accounting methods in performing their respective duties
during any Conversion Period. This includes, but is not
limited to, the method for allocating net investment gains or
losses and the extent, if any, to which contributions
received by and distributions paid from the Trust during this
period share in such allocation.
6.9 Accounts for Alternate Payees
A separate Account shall be established for an Alternate
Payee entitled to any portion of a Participant's Account
under a QDRO as of the date and in accordance with the
directions specified in the QDRO. In addition, a separate
Account may be established during the period of time the
Administrator, a court of competent jurisdiction or other
appropriate person is determining whether a domestic
relations order qualifies as a QDRO. Such a separate Account
shall be valued and accounted for in the same manner as any
other Account.
(a) Distributions Pursuant to QDROs. If a QDRO so
provides, the portion of a Participant's Account
payable to an Alternate Payee may be distributed, in
a form permissible under Section 11 and Code section
414(p), to the Alternate Payee at any time beginning
as soon as practicable after the QDRO determination
is made, regardless of whether the Participant is
entitled to a distribution from the Plan at such
time. The Alternate Payee shall be provided the
notice prescribed by Code section 402(f).
(b) Participant Loans. Except to the extent required by
law, an Alternate Payee, on whose behalf a separate
Account has been established, shall not be entitled
to borrow from such Account. If a QDRO specifies
that the Alternate Payee is entitled to any portion
of the Account of a Participant who has an
outstanding loan balance, all outstanding loans
shall generally continue to be held in the
Participant's Account and shall not be divided
between the Participant's and Alternate Payee's
Accounts.
(c) Investment Direction. Where a separate Account has
been established on behalf of an Alternate Payee and
has not yet been distributed, the Alternate Payee
may direct the investment of such Account in the
same manner as if he or she were a Participant.
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19
<PAGE>
7 INVESTMENT FUNDS AND ELECTIONS
------------------------------
7.1 Investment Funds
Except for Participants' Loan Account and any unallocated
funds invested in interest bearing deposits (which may
include interest bearing deposits of the Trustee) and/or
money market type assets or funds, pending allocation to
Participants' Accounts, or disbursement to pay Plan fees and
expenses, the Trust shall be maintained in various Investment
Funds. The Administrator shall select the Investment Funds
offered to Participants and may change the number or
composition of the Investment Funds, subject to the terms and
conditions agreed to with the Trustee. As of the Effective
Date, a list of the Investment Funds offered under the Plan
is set forth in Appendix A, which may be changed from time to
time by the Administrator, in writing, and as agreed to by
the Trustee, without the necessity of amending the Plan and
Trust.
The Administrator may set a maximum percentage of the total
election that a Participant may direct into any specific
Investment Fund, which maximum, if any, as of the Effective
Date is set forth in Appendix A, which may be changed from
time to time by the Administrator, in writing, without the
necessity of amending the Plan and Trust.
7.2 Responsibility for Investment Choice
Each Participant shall be solely responsible for the
selection of his or her Investment Fund choices. No fiduciary
with respect to the Plan is empowered to advise a Participant
as to the manner in which his or her Accounts are to be
invested, and the fact that an Investment Fund is offered
shall not be construed to be a recommendation for investment.
During any Conversion Period, Trust assets may be held in any
investment vehicle permitted by the Plan, as directed by the
Administrator, irrespective of prior Participant investment
elections.
7.3 Investment Fund Elections
A Participant shall provide his or her initial investment
election upon becoming a Participant and may change his or
her investment election at any time in accordance with
procedures established by the Administrator and the Trustee.
A Participant shall make his or her investment election in
any combination of one or any number of the Investment Funds
offered in accordance with the procedures established by the
Administrator and Trustee. Investment elections received by
the Trustee shall be effective on the Valuation Date.
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20
<PAGE>
7.4 Default if No Valid Investment Election
The Administrator shall specify an Investment Fund for the
investment of that portion of a Participant's Account which
is not yet held in an Investment Fund and for which no valid
investment election is on file. The Investment Fund specified
as of the Effective Date is set forth in Appendix A, which
may be changed from time to time by the Administrator, in
writing, without the necessity of amending the Plan and
Trust.
7.5 Investment Fund Election Change Fees
A reasonable processing fee may be charged directly to a
Participant's Account for Investment Fund election changes in
excess of a specified number per year as determined by the
Administrator.
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21
<PAGE>
8 VESTING
-------
8.1 Fully Vested Accounts
A Participant shall be fully vested in all Accounts at all times.
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22
<PAGE>
9 PARTICIPANT LOANS
-----------------
9.1 Participant Loans Permitted
Loans to Participants and Beneficiaries are permitted
pursuant to the terms and conditions set forth in this
Section, except that a loan shall not be permitted to a
Participant who is no longer an Employee or to a Beneficiary,
unless such Participant or Beneficiary is otherwise a party
in interest (as defined in ERISA section 3(14)).
9.2 Loan Application, Note and Security
A Participant shall apply for any loan in such manner and
with such advance notice as prescribed by the Administrator.
Each loan shall be evidenced by a promissory note, secured
only by the portion of the Participant's Account from which
the loan is made, and the Plan shall have a lien on this
portion of his or her Account.
9.3 Spousal Consent
A Participant is not required to obtain Spousal Consent in
order to borrow from his or her Account under the Plan,
unless they have transferred into this plan with a
grandfathered benefit that allows a joint and survivor
option.
9.4 Loan Approval
The Administrator, or the Trustee, if otherwise authorized by
the Administrator and agreed to by the Trustee, is
responsible for determining that a loan request conforms to
the requirements described in this Section and granting such
request.
9.5 Loan Funding Limits, Account Sources and Funding Order
The loan amount must meet all of the following limits as
determined as of the Valuation Date then the loan is
processed and shall be funded from the Participant's Accounts
as follows:
(a) Plan Minimum Limit. The minimum amount for any loan
is $500.
(b) Plan Maximum Limit, Account Sources and Funding
Order. Subject to the legal limit described in (c)
below, the maximum a Participant may borrow,
including the aggregate outstanding balances of
existing Plan loans, is 100% of the Participant's
Accounts.
(c) Legal Maximum Limit. The maximum a Participant may
borrow,
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23
<PAGE>
including the aggregate outstanding balances of
existing Plan loans, is 50% of his or her vested
Account balance, not to exceed $50,000. However, the
$50,000 maximum is reduced by the Participant's
highest aggregate outstanding Plan loan balance
during the 12-month period ending on the day before
the Valuation Date as of which the loan is made. For
purposes of this paragraph, the qualified plans of
all Related Companies shall be treated as though
they are part of the Plan to the extent it would
decrease the maximum loan amount.
9.6 Maximum Number of Loans
A Participant may have only one loan outstanding at any given
time.
9.7 Source and Timing of Loan Funding
A loan to a Participant shall be made solely from the assets
of his or her own Account. The available assets shall be
determined first by Account and then within each Account used
for funding a loan, amounts shall be taken from the
Investment Fund in direct proportion to the market value of
the Participant's interest in each Investment Fund. as of the
Valuation Date on which the loan is processed.
The loan shall be funded on the Valuation Date as of which
the loan is processed. The Trustee shall make payment to the
Participant as soon thereafter as administratively feasible.
9.8 Interest Rate
The interest rate charged on Participant loans shall be a
fixed reasonable rate of interest, determined from time to
time by the Administrator, which provides the Plan with a
return commensurate with the prevailing interest rate charged
by persons in the business of lending money for loans which
would be made under similar circumstances. As of the
Effective Date, the interest rate is determined as set forth
in Appendix C, which may be changed from time to time by the
Administrator, in writing, without the necessity of amending
the Plan and Trust.
9.9 Loan Payment
Substantially level amortization shall be required of each
loan with payments made at least monthly, generally through
payroll deduction. Loans may be prepaid in full or in part at
any time. The Participant may choose the loan repayment
period, not to exceed 5 years.
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24
<PAGE>
9.10 Loan Payment Hierarchy
Loan principal payments shall be credited to the
Participant's Accounts in the inverse of the order used to
fund the loan. Loan interest shall be credited to the
Participant's Accounts in direct proportion to the principal
payment. Loan payments are credited to the Investment Funds
based upon the Participant's current investment election for
new Contributions.
9.11 Repayment Suspension
The Administrator may agree to a suspension of loan payments
for up to 12 months for a Participant who is on a Leave of
Absence without pay. During the suspension period, interest
shall continue to accrue on the outstanding loan balance. At
the expiration of the suspension period all outstanding loan
payments and accrued interest thereon shall be due unless
otherwise agreed upon by the Administrator.
9.12 Loan Default
A loan is treated as in default if a scheduled loan payment
is not made at the time required. A Participant shall then
have a grace period to cure the default before it becomes
final. Such grace period shall be for a period that does not
extend beyond the last day of the calendar quarter following
the calendar quarter in which the scheduled loan payment was
due or such lesser or greater maximum period as may later be
authorized by Code section 72(p).
In the event a default is not cured within the grace period,
the Administrator may direct the Trustee to report the
outstanding principal balance of the loan and accrued
interest thereon as a taxable distribution to the
Participant. As soon as a Plan withdrawal or distribution to
such Participant would otherwise be permitted, the
Administrator may instruct the Trustee to execute upon its
security interest in the Participant's Account by
distributing the note to the Participant.
9.13 Call Feature
The Administrator shall have the right to call any
Participant loan once a Participant's employment with all
Related Companies has terminated, unless he or she is
otherwise a party in interest (as defined in ERISA section
3(14)), or if the Plan is terminated.
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25
<PAGE>
10 IN-SERVICE WITHDRAWALS
----------------------
10.1 In-Service Withdrawals Permitted
In-service withdrawals to a Participant who is an Employee
are permitted pursuant to the terms and conditions set forth
in this Section and pursuant to the terms and conditions set
forth in Section 11 with regard to an in-service withdrawal
made in accordance with a Participant's Required Beginning
Date.
10.2 In-Service Withdrawal Application and Notice
A Participant shall apply for any in-service withdrawal in
such manner and with such advance notice as prescribed by the
Administrator. The Participant shall be provided the notice
prescribed by Code section 402(f).
Code sections 401(a)(11) and 417 do not apply to in-service
withdrawals under the Plan. An in-service withdrawal may
commence less than 30 days after the aforementioned notice is
provided, if:
(a) the Participant is clearly informed that he or she has
the right to a period of at least 30 days after receipt
of such notice to consider his or her option to elect
or not elect a Direct Rollover for all or a portion, if
any, of his or her in-service withdrawal which
constitutes an Eligible Rollover Distribution; and
(b) the Participant after receiving such notice,
affirmatively elects a Direct Rollover for all or a
portion, if any, of his or her in-service withdrawal
which constitutes an Eligible Rollover Distribution or
alternatively elects to have all or a portion made
payable directly to him or her, thereby not electing a
Direct Rollover for all or a portion thereof.
Notwithstanding the foregoing, Hardship Withdrawal amounts
withdrawn from a Participant's Pre-Tax Account shall not
constitute an Eligible Rollover Distribution.
10.3 Spousal Consent
A Participant is not required to obtain Spousal Consent in
order to receive an in-service withdrawal under the Plan.
10.4 In-Service Withdrawal Approval
The Administrator, or the Trustee, if otherwise authorized by
the Administrator and agreed to by the Trustee, is
responsible for determining whether an in-service withdrawal
request conforms to the requirements described in this
Section and granting such request.
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26
<PAGE>
10.5 Payment Form and Medium
The form of payment for an in-service withdrawal shall be a
single lump sum and payment shall be made in cash. With
regard to the portion of an in-service withdrawal
representing an Eligible Rollover Distribution, a Participant
may elect a Direct Rollover for all or a portion of such
amount.
10.6 Source and Timing of In-Service Withdrawal Funding
An in-service withdrawal to a Participant shall be made
solely from the assets of his or her own Account and shall be
based on the Account values as of the Trade Date the
in-service withdrawal is processed. The available assets
shall be determined first by Account and then within each
Account used for funding an in-service withdrawal, amounts
shall be taken by Investment Fund in direct proportion to the
market value of the Participant's interest in each Investment
Fund (which excludes his or her Loan Account balance) as of
the Valuation Date on which the in-service withdrawal is
processed.
10.7 Hardship Withdrawals
(a) Requirements. A Participant who is an Employee may
request the withdrawal of up to the amount necessary
to satisfy a financial need including amounts
necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result
from the withdrawal. Only requests for withdrawals
(1) on account of a Participant's "Deemed Financial
Need" and (2) which are "Deemed Necessary" to
satisfy the financial need shall be approved.
(b) "Deemed Financial Need". An immediate and heavy
financial need relating to:
(1) the payment of unreimbursed medical care
expenses (described under Code section
213(d)) incurred (or to be incurred) by the
Employee, his or her spouse or dependents
(as defined in Code section 152);
(2) the purchase (excluding mortgage payments)
of the Employee's principal residence;
(3) the payment of unreimbursed tuition,
related educational fees and room and board
for up to the next 12 months of
post-secondary education for the Employee,
his or her spouse or dependents (as defined
in Code section 152);
(4) the payment of amounts necessary for the
Employee to prevent
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27
<PAGE>
losing his or her principal residence through eviction or
foreclosure on the mortgage; or
(5) any other circumstance specifically permitted under Code
section 401(k)(2)(B)(i)(IV).
(c) "Deemed Necessary". A withdrawal is "Deemed Necessary" to satisfy
the financial need only if the withdrawal amount does not exceed
the financial need and all of these conditions are met:
(1) the Employee has obtained all possible withdrawals (other
than hardship withdrawals) and nontaxable loans available
from the Plan and all other plans maintained by Related
Companies, unless repayment of this loan would create an
additional financial hardship.
(2) the Administrator shall suspend the Employee from making any
contributions to the Plan and all other qualified and
nonqualified plans of deferred compensation and all stock
option or stock purchase plans maintained by Related
Companies for 12 months from the date the withdrawal
payment; and
(3) the Administrator shall reduce the Contribution Dollar Limit
for the Employee with regard to the Plan and all other plans
maintained by Related Companies, for the calendar year next
following the calendar year of the withdrawal by the amount
of the Employee's Pre-Tax Contributions for the calendar
year of the withdrawal.
(c) Account Sources and Funding Order. All available amounts must
first be withdrawn from a Participant's After-Tax Account. The
remaining withdrawal shall come from the following of the
Participant's Accounts, in the priority order as follows:
Rollover Account
Matching Account
Prior Plan Account
Pre-Tax Account
The amount that may be withdrawn from a Participant's Pre-Tax
Account shall not include any amounts attributable to earnings
after December 31, 1988.
The amount that may be withdrawn from a Participant's Matching
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<PAGE>
Account shall not include any amounts attributable to
contributions or earnings after the start of the first Plan
Year beginning after December 31, 1988.
(d) Minimum Amount. There is no minimum amount for a hardship
withdrawal.
(e) Permitted Frequency. There is no restriction on the number
of hardship withdrawals permitted to a Participant.
(f) Suspension from Further Contributions. Upon making a
hardship withdrawal, a Participant may not make additional
Pre-Tax Contributions (or additional contributions to all
other qualified and nonqualified plans of deferred
compensation and all stock option or stock purchase plans
maintained by Related Companies), if his or her hardship
withdrawal was "Deemed Necessary", and shall not be eligible
to receive Match Contributions, for a period of 12 months
from the date the withdrawal payment is made.
10.8 After-Tax Account Withdrawals
(a) Requirements. A Participant who is an Employee may make an
After-Tax Account withdrawal.
(b) Account Sources and Funding Order. The withdrawal shall come
from a Participant's After-Tax Account.
(c) Minimum Amount. There is no minimum amount for an After-Tax
Account withdrawal.
(c) Permitted Frequency. There is no restriction on the number
of After-Tax Account withdrawals permitted to a Participant.
(d) Suspension from Further Contributions. An After-Tax Account
withdrawal shall not affect a Participant's ability to make
further Contributions.
10.9 Rollover Account Withdrawals
(a) Requirements. A Participant who is an Employee may make a
Rollover Account withdrawal.
(b) Account Sources and Funding Order. The withdrawal shall come
from a Participant's Rollover Account.
(c) Minimum Amount. There is no minimum amount for a Rollover
Account withdrawal.
(c) Permitted Frequency. There is no restriction on the number
of Rollover Account
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<PAGE>
withdrawal.
(c) Permitted Frequency. There is no restriction on the
number of Rollover Account withdrawals permitted to a
Participant.
(d) Suspension from Further Contributions. A Rollover
Account withdrawal shall not affect a Participant's
ability to make further Contributions.
10.10 Over Age 59 1/2 Withdrawals
(a) Requirements. A Participant who is an Employee and over
age 59 1/2 may make an Over Age 59 1/2 withdrawal.
(b) Minimum Amount. There is no minimum amount for an Over
Age 59 1/2 withdrawal.
(c) Permitted Frequency. The maximum number of Over Age 59
1/2 withdrawals permitted to a Participant in any
12-month period is not to exceed one per month.
(d) Suspension from Further Contributions. An Over Age 59
1/2 withdrawal shall not affect a Participant's ability
to make or be eligible to receive further
Contributions.
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<PAGE>
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR BY REASON OF A PARTICIPANT'S REQUIRED
---------------------------------------------------------------------------
BEGINNING DATE
--------------
11.1 Benefit Information, Notices and Election
A Participant, or his or her Beneficiary in the case of his or her
death, shall be provided with information regarding all optional times
and forms of distribution available under the Plan, including the
notices prescribed by Code sections 402(f) and 411(a)(11). Subject to
the other requirements of this Section, a Participant, or his or her
Beneficiary in the case of his or her death, may elect, in such manner
and with such advance notice as prescribed by the Administrator, to
have his or her vested Account balance distributed beginning upon any
Valuation Date following the Participant's termination of employment
with all Related Companies and a reasonable period of time during
which the Administrator shall process, and inform the Trustee of, the
Participant's termination or, if earlier, at the time of the
Participant's Required Beginning Date.
Notwithstanding, if a Participant's termination of employment with all
Related Companies does not constitute a separation from service for
purposes of Code section 401(k)(2)(B)(i)(I) or otherwise constitute an
event set forth under Code section 401(k)(10)(A)(ii) or (iii) as
described in Section 19.3, the portion of a Participant's Account
subject to the distribution rules of Code section 401(k) may not be
distributed until such time as he or she separates from service for
purposes of Code section 401(k)(2)(B)(i)(I) or, if earlier, upon such
other event as described in Code section 401(k)(2)(B) and as provided
for in the Plan.
Code sections 401(a)(11) and 417 do not apply to distributions under
the Plan. A distribution may commence less than 30 days after the
aforementioned notices are provided, if:
(a) the Participant is clearly informed that he or she has the right
to a period of at least 30 days after receipt of such notices to
consider the decision as to whether to elect a distribution and
if so to elect a particular form of distribution and to elect or
not elect a Direct Rollover for all or a portion, if any, of his
or her distribution which constitutes an Eligible Rollover
Distribution; and
(b) the Participant after receiving such notices, affirmatively
elects a distribution and a Direct Rollover for all or a portion,
if any, of his or her distribution which constitutes an Eligible
Rollover Distribution or alternatively elects to have all or a
portion made payable directly to him or her, thereby not electing
a Direct Rollover for all or a portion thereof.
11.2 Spousal Consent
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<PAGE>
A Participant is not required to obtain Spousal Consent in order
to receive a distribution under the Plan.
11.3 Payment Form and Medium
Except to the extent otherwise provided by Section 11.4, a
Participant may elect to be paid in any of these forms:
(a) a single lump sum; or
(b) a portion paid in a lump sum, and the remainder paid later
(partial payment); or
(c) periodic installments over a period not to exceed the life
expectancy of the Participant and his or her Beneficiary.
Distributions shall be made in cash, except to the extent a
distribution consists of a loan call as described in Section 9.
With regard to the portion of a distribution representing an
Eligible Rollover Distribution, a Distributee may elect a Direct
Rollover for all or a portion of such amount.
11.4 Source and Timing of Distribution Funding
A distribution to a Participant shall be made solely from the
assets of his or her own Account and shall be based on the
Account values as of the Valuation Date the distribution is
processed. The available assets shall be determined first by
Account and then within each Account used for funding a
distribution, amounts shall be taken from the Investment Fund in
direct proportion to the market value of the Participant's
interest in each Investment Fund as of the Valuation Date on
which the distribution is processed.
The distribution shall be funded on the Valuation Date as of
which the distribution is processed. The Trustee shall make
payment to the Participant or on behalf of the Participant as
soon thereafter as administratively feasible.
11.5 Latest Commencement Permitted
In addition to any other Plan requirements and unless a
Participant elects otherwise, his or her benefit payments shall
begin not later than 60 days after the end of the Plan Year in
which he or she attains his or her Normal Retirement Date or
retires, whichever is later. However, if the amount of the
payment or the location of the Participant (after a reasonable
search) cannot be ascertained by that deadline, payment shall be
made no later than 60 days after the earliest date on which such
amount or location is ascertained but in no event later than the
Participant's Required Beginning Date. A Participant's failure to
elect in such
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32
<PAGE>
manner as prescribed by the Administrator to have his or her
vested Account balance distributed, shall be deemed an election
by the Participant to defer his or her distribution but in no
event shall his or her benefit payments commence later than his
or her Required Beginning Date.
With regard to a Participant who is an Employee and who commenced
benefit payments in accordance with Code section 401(a)(9) as in
effect prior to January 1, 1997, and who is not a 5% Owner, he or
she may, but is not required to, discontinue such benefit
payments until he or she is otherwise required to again commence
benefit payments in accordance with Code section 401(a)(9) as in
effect for calendar years commencing after December 31, 1996.
Notwithstanding any provision of the Plan to the contrary,
distributions may be made pursuant to the terms of any method of
distribution elected by an Employee who was a Participant prior
to January 1, 1984, in accordance with the terms of the Plan as
in effect immediately prior to that date, provided that the
election shall remain in effect only until revoked and (if
revoked) may not later be reinstated.
If benefit payments cannot begin at the time required because the
location of the Participant cannot be ascertained (after a
reasonable search), the Administrator may, at any time
thereafter, treat such person's Account as forfeited subject to
the provisions of Section 18.6.
11.6 Payment Within Life Expectancy
The Participant's payment election must be consistent with the
requirement of Code section 401(a)(9) that all payments are to be
completed within a period not to exceed the lives or the joint
and last survivor life expectancy of the Participant and his or
her Beneficiary. The life expectancies of a Participant and his
or her Beneficiary, if such Beneficiary is his or her spouse, may
be recomputed annually.
11.7 Incidental Benefit Rule
The Participant's payment election must be consistent with the
requirement that, if the Participant's spouse is not his or her
sole primary Beneficiary, the minimum annual distribution for
each calendar year, beginning with the calendar year preceding
the calendar year that includes the Participant's Required
Beginning Date, shall not be less than the quotient obtained by
dividing (a) the Participant's vested Account balance as of the
last Valuation Date of the preceding year by (b) the applicable
divisor as determined under the incidental benefit requirements
of Code section 401(a)(9).
11.8 Payment to Beneficiary
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<PAGE>
Payment to a Beneficiary must either (i) be completed by the end
of the calendar year that contains the fifth anniversary of the
Participant's death or (ii) begin by the end of the calendar year
that contains the first anniversary of the Participant's death
and be completed within the period of the Beneficiary's life or
life expectancy, except that:
(a) If the Participant dies after his or her Required Beginning
Date, payment to his or her Beneficiary must be made at
least as rapidly as provided in the Participant's
distribution election;
(b) If the surviving spouse is the Beneficiary, payments need
not begin until the later of (i) the end of the calendar
year that includes the first anniversary of the
Participant's death, or (ii) the end of the calendar year in
which the Participant would have attained age 70 1/2 and
must be completed within the spouse's life or life
expectancy; and
(c) If the Participant and the surviving spouse who is the
Beneficiary die (i) before the Participant's Required
Beginning Date and (ii) before payments have begun to the
spouse, the spouse shall be treated as the Participant in
applying these rules.
11.9 Beneficiary Designation
Each Participant may complete a beneficiary designation form
indicating the Beneficiary who is to receive the Participant's
remaining Plan interest at the time of his or her death and such
designation may be changed at any time. However, a Participant's
spouse shall be the sole primary Beneficiary unless the
designation includes Spousal Consent for another Beneficiary. If
no proper designation is in effect at the time of a Participant's
death or if the Beneficiary does not survive the Participant, the
Beneficiary shall be, in the order listed, the:
(a) Participant's surviving spouse,
(b) Participant's children, in equal shares, (or if a child does
not survive the Participant, and that child leaves issue,
the issue shall be entitled to that child's share, by right
of representation) or
(c) Participant's estate.
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<PAGE>
12 ADP AND ACP TESTS
-----------------
12.1 Contribution Limitation Definitions
The following definitions are applicable to this Section 12 (where a
definition is contained in both Sections 1 and 12, for purposes of
Section 12 the Section 12 definition shall be controlling):
(a) "ACP" or "Average Contribution Percentage". The Average
Percentage calculated using Contributions allocated to
Participants as of a date within the Plan Year.
(b) "ACP Test". The determination of whether the ACP is in compliance
with the Basic or Alternative Limitation for a Plan Year (as
defined in Section 12.2).
(c) "ADP" or "Average Deferral Percentage". The Average Percentage
calculated using Deferrals allocated to Participants as of a date
within the Plan Year.
(c) "ADP Test". The determination of whether the ADP is in compliance
with the Basic or Alternative Limitation for a Plan Year (as
defined in Section 12.2).
(d) "Average Percentage". The average of the calculated percentages
for Participants within the specified group. The calculated
percentage refers to either the "Deferrals" or "Contributions"
(as defined in this Section) made on each Participant's behalf
for the Plan Year, divided by his or her Compensation. (Pre-Tax
Contributions to the Plan or comparable contributions to plans of
Related Companies which must be refunded solely because they
exceed the Contribution Dollar Limit are included in the
percentage for the HCE Group but not for the NHCE Group.)
(e) "Contributions" shall include Matching and may include Pre-Tax,
but with regard to Pre-Tax, only to the extent that (1) the
Administrator elects to use them, (2) they are not used or
counted in the ADP Test and (3) they otherwise satisfy the
requirements as prescribed under Code section 401(m) permitting
treatment as Contributions for purposes of the ACP Test.
(f) "Current Year Testing Method". The use of the Plan Year's ADP for
the Plan Year's NHCE Group for purposes of performing the Plan
Year's ADP Test and/or the use of the Plan Year's ACP for the
Plan Year's NHCE Group for purposes of performing the Plan Year's
ACP Test.
(g) "Deferrals" shall include Pre-Tax Contributions.
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35
<PAGE>
(h) "HCE" or "Highly Compensated Employee". For Plan Years
commencing after December 31, 1996, with respect to all
Related Companies, an Employee who (in accordance with Code
section 414(q)):
(1) Was a more than 5% Owner (within the meaning of Code
section 414(q)(2)) at any time during the Plan Year or
the preceding Plan Year; or
(2) Received Compensation during the preceding Plan Year in
excess of $80,000 (as adjusted for such Year pursuant
to Code sections 414(q)(1) and 415(d)) or, if the
Company elects for such preceding Plan Year, "in excess
of $80,000 (as adjusted for such Year pursuant to Code
sections 414(q)(1) and 415(d)) and was a member of the
"top-paid group" (within the meaning of Code section
414(q)(3)) for such preceding Plan Year" shall be
substituted for the preceding reference to "in excess
of $80,000 (as adjusted for such Year pursuant to Code
sections 414(q)(1) and 415(d))".
A former Employee shall be treated as an HCE if (1)
such former Employee was an HCE when he or she
separated from service, or (2) such former Employee was
an HCE in service at any time after attaining age 55.
The determination of who is an HCE and the
determination of the number and identity of Employees
in the top-paid group shall be made in accordance with
Code section 414(q).
(i) "HCE Group" and "NHCE Group". With respect to all Related
Companies, the respective group of HCEs and NHCEs who are
eligible to have amounts contributed on their behalf for the
respective Plan Year, including Employees who would be
eligible but for their election not to participate or to
contribute, or because their Pay is greater than zero but
does not exceed a stated minimum. For Plan Years commencing
after December 31, 1998, with respect to all Related
Companies, if the Plan permits participation prior to an
Eligible Employee's satisfaction of the minimum age and
service requirements of Code section 410(a)(1)(A), Eligible
Employees who have not met the minimum age and service
requirements of Code section 410(a)(1)(A) may be excluded in
the determination of the NHCE Group, but not in the
determination of the HCE Group, for purposes of (i) the ADP
Test, if Code section 410(b)(4)(B) is applied in determining
whether the 401(k) portion of the Plan meets the
requirements of Code section 410(b), or (ii) the ACP Test,
if Code section 410(b)(4)(B) is applied in determining
whether the 401(m) portion of the Plan meets the
requirements of Code section
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36
<PAGE>
410(b).
(3) If the Related Companies maintain two or
more plans which are subject to the ADP or
ACP Test and are considered as one plan for
purposes of Code sections 401(a)(4) or
410(b), all such plans shall be aggregated
and treated as one plan for purposes of
meeting the ADP and ACP Tests, provided
that the plans may only be aggregated if
they have the same plan year.
(4) If an HCE is covered by more than one cash
or deferred arrangement, or more than one
arrangement permitting employee or matching
contributions, maintained by the Related
Companies, all such plans shall be
aggregated and treated as one plan (other
than those plans that may not be
permissively aggregated) for purposes of
calculating the separate percentage for the
HCE which is used in the determination of
the Average Percentage. For purposes of the
preceding sentence, if such plans have
different plan years, the plans are
aggregated with respect to the plan years
ending with or within the same calendar
year.
(j) "Multiple Use Test". The test described in Section
12.4 which a Plan must meet where the Alternative
Limitation (described in Section 12.2) is used to
meet both the ADP and ACP Tests.
(k) "NHCE" or "Non-Highly Compensated Employee". An
Employee who is not an HCE.
(l) "Prior Year Testing Method". The use of the
preceding Plan Year's ADP for the preceding Plan
Year's NHCE Group for purposes of performing the
Plan Year's ADP Test and/or the use of the preceding
Plan Year's ACP for the preceding Plan Year's NHCE
Group for purposes of performing the Plan Year's ACP
Test.
12.2 ADP and ACP Tests
For Plan Years commencing before January 1, 1997, for each
Plan Year, the Current Year Testing Method shall be used and
the ADP and ACP for the HCE Group must meet either the Basic
or Alternative Limitation when compared to the respective ADP
and ACP for the NHCE Group, defined below:
For Plan Years commencing after December 31, 1996, for each
Plan Year, the Prior Year Testing Method shall be used and
the ADP and ACP for the HCE Group must meet either the Basic
or Alternative Limitation when compared to the respective
preceding Plan Year's ADP and ACP for the preceding Plan
Year's NHCE Group, defined as follows:
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<PAGE>
(a) Basic Limitation. The HCE Group Average Percentage
may not exceed 1.25 times the NHCE Group Average
Percentage.
(b) Alternative Limitation. The HCE Group Average
Percentage is limited by reference to the NHCE Group
Average Percentage as follows:
If the NHCE Group Then the Maximum HCE
Average Percentage is: Group Average Percentage is:
---------------------- ----------------------------
Less than 2% 2 times NHCE Group Average %
2% to 8% NHCE Group Average % plus 2%
More than 8% NA - Basic Limitation applies
Alternatively, the Company may elect to use the Current Year
Testing Method and the ADP and/or ACP for the HCE Group must
meet either the Basic or Alternative Limitation as defined
above when compared to the respective Plan Year's ADP and/or
ACP for the Plan Year's NHCE Group. If a Current Year Testing
Method election is made, such election may not be changed
except as provided by the Code.
In the case of the first Plan Year in which the Plan is
subject to the requirements of Code section 401(k), the
amount taken into account as the "preceding Plan Year's ADP
for the preceding Plan Year's NHCE Group", shall be (i) 3%,
or (ii) if the Company elects, the Plan Year's ADP. The
preceding sentence shall not apply with regard to a Plan that
is a successor plan or, if for such first Plan Year, the Plan
is aggregated with another plan that was subject to the
requirements of Code section 401(k) in the preceding year and
treated as one plan for purposes of meeting the ADP Test.
12.3 Correction of ADP and ACP Tests
For Plan Years commencing after December 31, 1996, for each
Plan Year, if the ADP or ACP Tests are not met, the
Administrator shall determine, no later than the end of the
next Plan Year, a maximum percentage to be used in place of
the calculated percentage for all HCEs that would reduce the
ADP and/or ACP for the HCE Group by a sufficient amount to
meet the ADP and ACP Tests.
With regard to each HCE whose Deferral percentage and/or
Contribution percentage is in excess of the maximum
percentage, a dollar amount of excess Deferrals and/or excess
Contributions shall then be determined by (i) subtracting the
product of such maximum percentage for the ADP and the HCE's
Compensation from the HCE's actual Deferrals and (ii)
subtracting the product of such maximum percentage for the
ACP and the HCE's Compensation from the HCE's actual
Contributions. Such amounts shall then be aggregated to
determine the total dollar amount of excess Deferrals and/or
excess
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<PAGE>
Contributions. ADP and/or ACP corrections shall be made in
accordance with the leveling method as described below.
(a) ADP Correction. The HCE with the highest Deferral
dollar amount shall have his or her Deferral dollar
amount reduced in an amount equal to the lesser of
the dollar amount of excess Deferrals for all HCEs
or the dollar amount that would cause his or her
Deferral dollar amount to equal that of the HCE with
the next highest Deferral dollar amount. The process
shall be repeated until the total of the Deferral
dollar amount reductions equals the dollar amount of
excess Deferrals for all HCEs.
To the extent an HCE's Deferrals were determined to
be reduced as described in the paragraph above,
Pre-Tax Contributions shall, by the end of the next
Plan Year, be refunded to the HCE, except that such
amount to be refunded shall be reduced by Pre-Tax
Contributions previously refunded because they
exceeded the Contribution Dollar Limit. The excess
amounts shall first be taken from unmatched Pre-Tax
Contributions and then from matched Pre-Tax
Contributions. Any Matching Contributions
attributable to refunded excess Pre-Tax
Contributions as described in this Section, adjusted
for investment gain or loss for the Plan Year to
which the excess Pre-Tax Contributions relate, shall
be forfeited and used to reduce future Contributions
to be made by an Employer as soon as
administratively feasible.
(b) ACP Correction. The HCE with the highest
Contribution dollar amount shall have his or her
Contribution dollar amount reduced in an amount
equal to the lesser of the dollar amount of excess
Contributions for all HCEs or the dollar amount that
would cause his or her Contribution dollar amount to
equal that of the HCE with the next highest
Contribution dollar amount. The process shall be
repeated until the total of the Contribution dollar
amount reductions equals the dollar amount of excess
Contributions for all HCEs.
To the extent an HCE's Contributions were determined
to be reduced as described in the paragraph above,
Matching Contributions shall, by the end of the next
Plan Year, be refunded to the HCE.
(c) Investment Fund Sources. Once the amount of excess
Deferrals and/or Contributions is determined, and
with regard to excess Contributions, allocated by
type of Contribution, within each Account from which
amounts are refunded amounts shall be taken from the
Investment Fund in direct proportion to the market
value of the Participant's interest in each
Investment Fund (which excludes his or her Loan
Account balance) as of the Valuation Date on which
the correction is processed.
12.4 Multiple Use Test
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<PAGE>
If the Alternative Limitation (defined in Section 12.2) is
used to meet both the ADP and ACP Tests, the ADP and ACP for
the HCE Group must also comply with the requirements of Code
section 401(m)(9). Such Code section requires that the sum of
the ADP and ACP for the HCE Group (as determined after any
corrections needed to meet the ADP and ACP Tests have been
made) not exceed the sum (which produces the most favorable
result) of:
(a) the Basic Limitation (defined in Section 12.2)
applied to either the ADP or ACP for the NHCE Group,
and
(b) the Alternative Limitation applied to the other NHCE
Group percentage.
12.5 Correction of Multiple Use Test
If the multiple use limit is exceeded, the Administrator
shall determine a maximum percentage to be used in place of
the calculated percentage for all HCEs that would reduce
either or both the ADP or ACP for the HCE Group by a
sufficient amount to meet the multiple use limit. Any excess
shall be corrected in the same manner that excess Deferrals
or Contributions are corrected.
12.6 Adjustment for Investment Gain or Loss
Any excess Deferrals or Contributions to be refunded to a
Participant in accordance with this Section 12 shall be
adjusted for investment gain or loss. Refunds shall not
include investment gain or loss for the period between the
end of the applicable Plan Year and the date of distribution.
12.7 Testing Responsibilities and Required Records
The Administrator shall be responsible for ensuring that the
Plan meets the ADP Test, and if applicable, the ACP Test and
the Multiple Use Test, and that the Contribution Dollar Limit
is not exceeded. The Administrator shall maintain records
which are sufficient to demonstrate that the ADP Test, and if
applicable, the ACP Test and the Multiple Use Test, have been
met for each Plan Year for at least as long as the Employer's
corresponding tax year is open to audit.
12.8 Separate Testing
(a) Multiple Employers: The determination of HCEs,
NHCEs, and the performance of the ADP Test, and if
applicable, the ACP Test and the Multiple Use Test,
and any corrective action resulting therefrom, shall
be conducted separately with regard to the Employees
of each Employer (and its Related Companies) that is
not a Related Company with respect to the other
Employer(s).
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<PAGE>
(b) Collective Bargaining Units: The performance of the
ADP Test, and if applicable, the ACP Test and the
Multiple Use Test, and any corrective action
resulting therefrom, shall be conducted separately
with regard to Employees who are eligible to
participate in the Plan as a result of a collective
bargaining agreement.
In addition, testing may be conducted separately, at the
discretion of the Administrator and to the extent permitted
under Treasury regulations, with regard to any group of
Employees for whom separate testing is permissible under such
regulations.
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<PAGE>
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS
--------------------------------------------
13.1 "Annual Addition" Defined
The sum for a Plan Year of all (i) contributions (excluding
rollover contributions) and forfeitures allocated to the
Participant's Account and his or her account in all other
defined contribution plans maintained by any Related Company,
(ii) amounts allocated to the Participant's individual
medical account (within the meaning of Code section
415(l)(2)) which is part of a defined benefit plan maintained
by any Related Company, and (iii) if the Participant is a key
employee (within the meaning of Code section 419A(d)(3)) for
the applicable or any prior Plan Year, amounts attributable
to post-retirement medical benefits allocated to his or her
separate account under a welfare benefit fund (within the
meaning of Code section 419(e)) maintained by any Related
Company. The Plan Year refers to the year to which the
allocation pertains, regardless of when it was allocated. The
Plan Year shall be the Code section 415 limitation year.
13.2 Maximum Annual Addition
A Participant's Annual Addition for any Plan Year shall not
exceed the lesser of (i) 25% of his or her Compensation or
(ii) $30,000 (as adjusted for cost of living increases
pursuant to Code section 415(d)); provided, however, that
clause (i) shall not apply to Annual Additions described in
clauses (ii) and (iii) of Section 13.1.
13.3 Avoiding an Excess Annual Addition
If, at any time during a Plan Year, the allocation of any
additional Contributions would produce an excess Annual
Addition for such year, Contributions to be made for the
remainder of the Plan Year shall be limited to the amount
needed for each affected Participant to receive the maximum
Annual Addition.
13.4 Correcting an Excess Annual Addition
Upon the discovery of an excess Annual Addition to a
Participant's Account (resulting from a reasonable error in
determining a Participant's compensation or the maximum
permissible amount of his or her elective deferrals (within
the meaning of Code section 402(g)(3)), or other facts and
circumstances acceptable to the Internal Revenue Service),
the excess amount (adjusted to reflect investment gains)
shall first be returned to the Participant to the extent of
his or her Pre-Tax Contributions (however to the extent Pre
Tax Contributions were matched, the applicable Matching
Contributions shall be forfeited in proportion to the
returned matched Pre-Tax Contributions) and the remaining
excess, if any, shall be forfeited by the Participant and
used to reduce future Contributions to be made by an Employer
as soon as administratively feasible.
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<PAGE>
13.5 Correcting a Multiple Plan Excess
If a Participant, whose Account is credited with an excess Annual
Addition, received allocations to more than one defined contribution
plan, the excess shall be corrected by reducing the Annual Addition
to the Plan only after all possible reductions have been made to the
other defined contribution plans.
13.6 "Defined Benefit Fraction" Defined
The fraction, for any Plan Year, where the numerator is the
"projected annual benefit" and the denominator is the greater of 125%
of the "protected current accrued benefit" or the normal limit which
is the lesser of (i) 125% of the dollar limitation in effect under
Code section 415(b)(1)(A) for the Plan Year or (ii) 140% of the
amount which may be taken into account under Code section
415(b)(1)(B) for the Plan Year, where a Participant's:
(a) "projected annual benefit" is the annual benefit provided by the
plan determined pursuant to Code section 415(e)(2)(A), and
(b) "protected current accrued benefit" in a defined benefit plan in
existence (1) on July 1, 1982, shall be the accrued annual
benefit provided for under Public Law 97-248, section 235(g)(4),
as amended, or (2) on May 6, 1986, shall be the accrued annual
benefit provided for under Public Law 99-514, section
1106(i)(3).
13.7 "Defined Contribution Fraction" Defined
The fraction where the numerator is the sum of the Participant's
Annual Addition for each Plan Year to date and the denominator is the
sum of the "annual amounts" for each year in which the Participant
has performed service with a Related Company. The "annual amount" for
any Plan Year is the lesser of (i) 125% of the dollar limitation in
effect under Code section 415(c)(1)(A) (determined without regard to
subsection (c)(6)) for the Plan Year or (ii) 140% of the amount which
may be taken into account under Code section 415(c)(1)(B) for the
Plan Year, where:
(a) each Annual Addition is determined pursuant to the Code section
415(c) rules in effect for such Plan Year, and
(b) the numerator is adjusted pursuant to Public Law 97-248, section
235(g)(3), as amended, or Public Law 99-514, section 1106(i)(4).
13.8 Combined Plan Limits and Correction
The sum of a Participant's Defined Benefit Fraction and Defined
Contribution Fraction for any Plan Year may not exceed 1.0. If the
combined fraction
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exceeds 1.0 for any Plan Year, the Participant's benefit under any
defined benefit plan (to the extent it has not been distributed or
used to purchase an annuity contract) shall be limited so that the
combined fraction does not exceed 1.0 before any defined contribution
limits shall be enforced.
For Plan Years commencing after December 31, 1999, the provisions of
the preceding paragraph shall no longer be effective.
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<PAGE>
14 TOP HEAVY RULES
---------------
14.1 Top Heavy Definitions
When capitalized, the following words and phrases have the following
meanings when used in this Section:
(a) "Aggregation Group". The group consisting of each qualified plan
of the Related Companies (1) in which a Key Employee is a
participant or was a participant during the determination period
(regardless of whether such plan has terminated), or (2) which
enables another plan in the group to meet the requirements of
Code sections 401(a)(4) or 410(b). The Administrator may also
treat any other qualified plan of the Related Companies as part
of the group if the resulting group would continue to meet the
requirements of Code sections 401(a)(4) and 410(b) with such
plan being taken into account.
(b) "Determination Date". For any Plan Year, the last Valuation Date
of the preceding Plan Year or, in the case of the Plan's first
Plan Year, the last Valuation Date of that Plan Year.
(c) "Key Employee". A current or former Employee (or his or her
Beneficiary) who at any time during the five year period ending
on the Determination Date was:
(5) an officer of a Related Company whose Compensation (i)
exceeds 50% of the amount in effect under Code section
415(b)(1)(A) and (ii) places him or her within the
following highest paid group of officers:
Number of Employees
not Excluded Under Number of
Code Highest Paid
Section 414(q)(5) Officers Included
----------------- -----------------
Less than 30 3
30 to 500 10% of the number of
Employees not excluded
under Code section
414(q)(5)
More than 500 50
(6) a more than 5% Owner,
(7) a more than 1% Owner whose Compensation exceeds $150,000,
or
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45
<PAGE>
(8) a more than 0.5% Owner who is among the 10 Employees owning
the largest interest in a Related Company and whose
Compensation exceeds the amount in effect under Code
section 415(c)(1)(A).
(d) "Plan Benefit". The sum as of the Determination Date of (1) an
Employee's Account, (2) the present value of his or her other
accrued benefits provided by all qualified plans within the
Aggregation Group, and (3) the aggregate distributions made
within the five year period ending on such Date. For this
purpose, the present value of the Employee's accrued benefit in
a defined benefit plan shall be determined by the method that
is used for benefit accrual purposes under all such plans
maintained by the Related Companies or, if there is no such
single method used under all such plans, as if the benefit
accrues no more rapidly than the slowest rate permitted by the
fractional accrual rule in Code section 411(b)(1)(C). Plan
Benefits shall exclude rollover contributions and similar
transfers made after December 31, 1983 as provided in Code
section 416(g)(4)(A).
(e) "Top Heavy". The Plan's status when the Plan Benefits of Key
Employees account for more than 60% of the Plan Benefits of all
Employees who have performed services at any time during the
five year period ending on the Determination Date. The Plan
Benefits of Employees who were, but are no longer, Key
Employees (because they have not been an officer or Owner
during the five year period), are excluded in the
determination.
14.2 Special Contributions
(a) Minimum Contribution Requirement. For each Plan Year in which
the Plan is Top Heavy, the Employer shall not allow any
contributions (other than a Rollover Contribution from a plan
maintained by a non Related Company) to be made by or on behalf
of any Key Employee unless the Employer makes a contribution
(other than contributions made by an Employer in accordance
with a Participant's salary deferral election or contributions
made by an Employer based upon the amount contributed by a
Participant) on behalf of all Participants who were Eligible
Employees as of the last day of the Plan Year in an amount
equal to at least 3% of each such Participant's Compensation.
(b) Overriding Minimum Benefit. Notwithstanding, contributions
shall be permitted on behalf of Key Employees if the Employer
also maintains a defined benefit plan which automatically
provides a benefit which satisfies the Code section 416(c)(1)
minimum benefit requirements, including the adjustment provided
in Code section 416(h)(2)(A), if
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<PAGE>
applicable. If the Plan is part of an Aggregation Group under which a
Key Employee is receiving a benefit and no minimum contribution is
provided under any other plan, a minimum contribution of at least 3%
of Compensation shall be provided to the Participants specified in
the preceding paragraph. In addition, the Employer may offset a
defined benefit minimum by contributions (other than contributions
made by an Employer in accordance with a Participant's salary
deferral election or contributions made by an Employer based upon the
amount contributed by a Participant) made to the Plan.
14.3 Adjustment to Combined Limits for Different Plans
For each Plan Year in which the Plan is Top Heavy, 100% shall be
substituted for 125% in determining the Defined Benefit Fraction and
the Defined Contribution Fraction. For Plan Years commencing after
December 31, 1999, the provisions of the preceding sentence shall no
longer be effective.
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<PAGE>
15 PLAN ADMINISTRATION
-------------------
15.1 Plan Delineates Authority and Responsibility
Plan fiduciaries include the Company, the Administrator, the
Committee and/or the Trustee, as applicable, whose specific duties
are delineated in the Plan and Trust. In addition, Plan fiduciaries
also include any other person to whom fiduciary duties or
responsibilities are delegated with respect to the Plan. Any person
or group may serve in more than one fiduciary capacity with respect
to the Plan. To the extent permitted under ERISA section 405, no
fiduciary shall be liable for a breach by another fiduciary.
15.2 Fiduciary Standards
Each fiduciary shall:
(a) discharge his or her duties in accordance with the Plan and
Trust to the extent they are consistent with ERISA;
(b) use that degree of care, skill, prudence and diligence that a
prudent person acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims;
(c) act with the exclusive purpose of providing benefits to
Participants and their Beneficiaries, and defraying reasonable
expenses of administering the Plan;
(d) diversify Plan investments, to the extent such fiduciary is
responsible for directing the investment of Plan assets, so as
to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so; and
(e) treat similarly situated Participants and Beneficiaries in a
uniform and nondiscriminatory manner.
15.3 Company is ERISA Plan Administrator
The Company is the administrator of the Plan (within the meaning of
ERISA section 3(16)) and is responsible for compliance with all
reporting and disclosure requirements, except those that are
explicitly the responsibility of the Trustee under applicable law.
The Administrator and/or Committee shall have any necessary authority
to carry out such functions through the actions of the Administrator,
duly appointed officers of the Company and/or the Committee.
15.4 Administrator Duties
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<PAGE>
The Administrator shall have the discretionary authority to construe
the Plan and Trust, other than the provisions which relate to the
Trustee, and to do all things necessary or convenient to effect the
intent and purposes thereof, whether or not such powers are
specifically set forth in the Plan and Trust. Actions taken in good
faith by the Administrator shall be conclusive and binding on all
interested parties, and shall be given the maximum possible deference
allowed by law. In addition to the duties listed elsewhere in the
Plan and Trust, the Administrator's authority shall include, but not
be limited to, the discretionary authority to:
(a) determine who is eligible to participate, if a contribution
qualifies as a rollover contribution, the allocation of
Contributions, and the eligibility for loans, in-service
withdrawals and distributions;
(b) provide each Participant with a summary plan description no
later than 90 days after he or she has become a Participant (or
such other period permitted under ERISA section 104(b)(1)), as
well as informing each Participant of any material modification
to the Plan in a timely manner;
(c) make a copy of the following documents available to Participants
during normal work hours: the Plan and Trust (including
subsequent amendments), all annual and interim reports of the
Trustee related to the entire Plan, the latest annual report and
the summary plan description;
(d) determine the fact of a Participant's death and of any
Beneficiary's right to receive the deceased Participant's
interest based upon such proof and evidence as it deems
necessary;
(e) establish and review at least annually a funding policy bearing
in mind both the short-run and long-run needs and goals of the
Plan and to the extent Participants may direct their own
investments, the funding policy shall focus on which Investment
Funds are available for Participants to use; and
(f) adjudicate claims pursuant to the claims procedure described in
Section 18.
15.5 Advisors May be Retained
The Administrator may retain such agents and advisors (including
attorneys, accountants, actuaries, consultants, record keepers,
investment counsel and administrative assistants) as it considers
necessary to assist it in the performance of its duties. The
Administrator shall also comply with the bonding requirements of
ERISA section 412.
15.6 Delegation of Administrator Duties
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<PAGE>
The Company, as Administrator of the Plan, has appointed a Committee
to administer the Plan on its behalf. The Company shall provide the
Trustee with the names and specimen signatures of any persons
authorized to serve as Committee members and act as or on its behalf.
Any Committee member appointed by the Company shall serve at the
pleasure of the Company, but may resign by written notice to the
Company. Committee members shall serve without compensation from the
Plan for such services. Except to the extent that the Company
otherwise provides, any delegation of duties to the Committee shall
carry with it the full discretionary authority of the Administrator
to complete such duties.
15.7 Committee Operating Rules
(a) Actions of Majority. Any act delegated by the Company to the
Committee may be done by a majority of its members. The majority
may be expressed by a vote at a meeting or in writing without a
meeting, and a majority action shall be equivalent to an action
of all Committee members.
(b) Meetings. The Committee shall hold meetings upon such notice,
place and times as it determines necessary to conduct its
functions properly.
(c) Reliance by Trustee. The Committee may authorize one or more of
its members to execute documents on its behalf and may authorize
one or more of its members or other individuals who are not
members to give written direction to the Trustee in the
performance of its duties. The Committee shall provide such
authorization in writing to the Trustee with the name and
specimen signatures of any person authorized to act on its
behalf. The Trustee shall accept such direction and rely upon it
until notified in writing that the Committee has revoked the
authorization to give such direction. The Trustee shall not be
deemed to be on notice of any change in the membership of the
Committee, parties authorized to direct the Trustee in the
performance of its duties, or the duties delegated to and by the
Committee until notified in writing.
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<PAGE>
16 MANAGEMENT OF INVESTMENTS
-------------------------
16.1 Trust Agreement
All Plan assets shall be held by the Trustee in trust, in accordance
with those provisions of the Plan and Trust which relate to the
Trustee, for use in providing Plan benefits and paying Plan fees and
expenses not paid directly by the Employer. Plan benefits shall be
drawn solely from the Trust and paid by the Trustee as directed by
the Administrator. Notwithstanding, the Company may appoint, with the
approval of the Trustee, another trustee to hold and administer Plan
assets which do not meet the requirements of Section 16.2.
16.2 Investment Funds
The Administrator is hereby granted authority to direct the Trustee
to invest Trust assets in one or more Investment Funds. The number
and composition of Investment Funds may be changed from time to time,
without the necessity of amending the Plan and Trust. The Trustee may
establish reasonable limits on the number of Investment Funds as well
as the acceptable assets for any such Investment Fund. Each of the
Investment Funds may be comprised of any of the following:
(a) shares of a registered investment company, whether or not the
Trustee or any of its affiliates is an advisor to, or other
service provider to, such company;
(b) collective investment funds maintained by the Trustee, or any
other fiduciary to the Plan, which are available for investment
by trusts which are qualified under Code sections 401(a) and
501(a);
(c) individual equity and fixed income securities which are readily
tradable on the open market;
(d) synthetic guaranteed investment contracts and guaranteed
investment contracts issued by an insurance company and/or
synthetic guaranteed investment contracts and bank investment
contracts issued by a bank; and
(e) interest bearing deposits (which may include interest bearing
deposits of the Trustee).
Any Investment Fund assets invested in a collective investment fund,
shall be subject to all the provisions of the instruments
establishing and governing such fund. These instruments, including
any subsequent amendments, are incorporated herein by reference.
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<PAGE>
16.3 Authority to Hold Cash
The Trustee shall have the authority to cause the investment manager
of each Investment Fund to maintain sufficient deposit or money
market type assets in each Investment Fund to handle the Investment
Fund's liquidity and disbursement needs.
16.4 Trustee to Act Upon Instructions
The Trustee shall carry out instructions to invest assets in the
Investment Funds as soon as practicable after such instructions are
received from the Administrator, Participants or Beneficiaries. Such
instructions shall remain in effect until changed by the
Administrator, Participants or Beneficiaries.
16.5 Administrator Has Right to Vote Registered Investment Company Shares
The Administrator shall be entitled to vote proxies or exercise any
shareholder rights relating to shares held on behalf of the Plan in a
registered investment company. Notwithstanding, the authority to vote
proxies and exercise shareholder rights related to such shares held
in a Custom Fund is vested as provided otherwise in Section 16.
16.6 Custom Fund Investment Management
The Administrator may designate, with the consent of the Trustee, an
investment manager for any Investment Fund established by the Trustee
solely for Participants of the Plan and, subject to Section 16.7, any
other qualified plan of the Company or a Related Company (a "Custom
Fund"). The investment manager may be the Administrator, Trustee or
an investment manager pursuant to ERISA section 3(38). The
Administrator shall advise the Trustee in writing of the appointment
of an investment manager and shall cause the investment manager to
acknowledge to the Trustee in writing that the investment manager is
a fiduciary to the Plan.
A Custom Fund shall be subject to the following:
(a) Guidelines. Written guidelines, acceptable to the Trustee, shall
be established for a Custom Fund. If a Custom Fund consists
solely of collective investment funds or shares of a registered
investment company (and sufficient deposit or money market type
assets to handle the Custom Fund's liquidity and disbursement
needs), its underlying instruments shall constitute the
guidelines.
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<PAGE>
(b) Authority of Investment Manager. The investment manager of a
Custom Fund shall have the authority to vote or execute proxies,
exercise shareholder rights, manage, acquire, and dispose of
Trust assets.
(c) Custody and Trade Settlement. Unless otherwise agreed to by the
Trustee, the Trustee shall maintain custody of all Custom Fund
assets and be responsible for the settlement of all Custom Fund
trades. For purposes of this Section, shares of a collective
investment fund, shares of a registered investment company and
synthetic guaranteed investment contracts and guaranteed
investment contracts issued by an insurance company and/or
synthetic guaranteed investment contracts and bank investment
contracts issued by a bank, shall be regarded as the Custom Fund
assets instead of the underlying assets of such instruments.
(d) Limited Liability of Co-Fiduciaries. Neither the Administrator
nor the Trustee shall be obligated to invest or otherwise manage
any Custom Fund assets for which the Trustee or Administrator is
not the investment manager nor shall the Administrator or
Trustee be liable for acts or omissions with regard to the
investment of such assets except to the extent required by
ERISA.
16.7 Master Custom Fund
The Trustee may establish, at the direction of the Administrator, a
single Custom Fund (the "Master Custom Fund"), for the benefit of the
Plan and any other qualified plan of the Company or a Related Company
for which the Trustee acts as trustee pursuant to a plan and trust
document that contains a provision substantially identical to this
provision. The assets of the Plan, to the extent invested in the
Master Custom Fund, shall consist only of that percentage of the
assets of the Master Custom Fund represented by the shares held by
the Plan.
16.8 Authority to Segregate Assets
The Administrator may direct the Trustee to split an Investment Fund
into two or more funds in the event any assets in the Investment Fund
are illiquid or the value is not readily determinable. In the event
of such segregation, the Administrator shall give instructions to the
Trustee on what value to use for the split-off assets, and the
Trustee shall not be responsible for confirming such value.
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<PAGE>
17 TRUST ADMINISTRATION
--------------------
17.1 Trustee to Construe Trust
The Trustee shall have the discretionary authority to construe those
provisions of the Plan and Trust which relate to the Trustee and to
do all things necessary or convenient to the administration of the
Trust, whether or not such powers are specifically set forth in the
Plan and Trust. Actions taken in good faith by the Trustee shall be
conclusive and binding on all interested parties, and shall be given
the maximum possible deference allowed by law.
17.2 Trustee To Act As Owner of Trust Assets
Subject to the specific conditions and limitations set forth in the
Plan and Trust, the Trustee shall have all the power, authority,
rights and privileges of an absolute owner of the Trust assets and,
not in limitation but in amplification of the foregoing, may:
(a) receive, hold, manage, invest and reinvest, sell, tender,
exchange, dispose of, encumber, hypothecate, pledge, mortgage,
lease, grant options respecting, repair, alter, insure, or
distribute any and all property in the Trust;
(b) borrow money, participate in reorganizations, pay calls and
assessments, vote or execute proxies, exercise subscription or
conversion privileges, exercise options and register any
securities in the Trust in the name of the nominee, in federal
book entry form or in any other form as shall permit title
thereto to pass by delivery;
(c) renew, extend the due date, compromise, arbitrate, adjust,
settle, enforce or foreclose, by judicial proceedings or
otherwise, or defend against the same, any obligations or claims
in favor of or against the Trust; and
(d) lend, through a collective investment fund, any securities held
in such collective investment fund to brokers, dealers or other
borrowers and to permit such securities to be transferred into
the name and custody and be voted by the borrower or others.
17.3 United States Indicia of Ownership
The Trustee shall not maintain the indicia of ownership of any Trust
assets outside the jurisdiction of the United States, except as
authorized under ERISA section 404(b).
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<PAGE>
17.4 Tax Withholding and Payment
(a) Withholding. The Trustee shall calculate and withhold
federal (and, if applicable, state) income taxes as required
by law if no election is made or the election is less than
the amount required by law. With regard to any taxable
distribution that is not an Eligible Rollover Distribution,
the Trustee shall calculate and withhold federal (and, if
applicable, state) income taxes in accordance with the
Participant's withholding election or as required by law if
no election is made.
(b) Taxes Due From Investment Funds. The Trustee shall pay from
the Investment Fund any taxes or assessments imposed by any
taxing or governmental authority on such Investment Fund or
its income, including related interest and penalties.
17.5 Trust Accounting
(a) Annual Report. Within 90 days (or other reasonable period)
following the close of the Plan Year, the Trustee shall
provide the Administrator with an annual accounting of Trust
assets and information to assist the Administrator in
meeting ERISA's annual reporting and audit requirements.
(b) Periodic Reports. The Trustee shall maintain records and
provide sufficient reporting to allow the Administrator to
properly monitor the Trust's assets and activity.
(c) Administrator Approval. Approval of any Trustee accounting
shall automatically occur 90 days after such accounting has
been received by the Administrator, unless the Administrator
files a written objection with the Trustee within such time
period. Such approval shall be final as to all matters and
transactions stated or shown therein and binding upon the
Administrator.
17.6 Valuation of Certain Assets
If the Trustee determines the Trust holds any asset which is not
readily tradable and listed on a national securities exchange
registered under the Securities Exchange Act of 1934, as amended,
the Trustee may engage a qualified independent appraiser to
determine the fair market value of such property, and the
appraisal fees shall be paid from the Investment Fund containing
the asset.
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<PAGE>
17.7 Legal Counsel
The Trustee may consult with legal counsel of its choice,
including counsel for the Employer or counsel of the Trustee,
upon any question or matter arising under the Plan and Trust.
When relied upon by the Trustee, the opinion of such counsel
shall be evidence that the Trustee has acted in good faith.
17.8 Fees and Expenses
The Trustee's fees for its services as Trustee shall be such as
may be mutually agreed upon by the Company and the Trustee.
Trustee fees and all reasonable expenses of counsel and advisors
retained by the Trustee shall be paid in accordance with Section
6.
17.9 Trustee Duties and Limitations
The Trustee's duties, unless otherwise agreed to by the Trustee,
shall be confined to construing the terms of the Plan and Trust
as they relate to the Trustee, receiving funds on behalf of and
making payments from the Trust, safeguarding and valuing Trust
assets, investing and reinvesting Trust assets in the Investment
Funds as directed by the Administrator, Participants or
Beneficiaries, and those duties as described in this Section 17.
The Trustee shall have no duty or authority to ascertain whether
Contributions are in compliance with the Plan, to enforce
collection or to compute or verify the accuracy or adequacy of
any amount to be paid to it by the Employer. The Trustee shall
not be liable for the proper application of any part of the Trust
with respect to any disbursement made at the direction of the
Administrator.
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<PAGE>
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION
-------------------------------------------------
18.1 Plan Does Not Affect Employment Rights
The Plan does not provide any employment rights to any Employee.
The Employer expressly reserves the right to discharge an
Employee at any time, with or without cause, without regard to
the effect such discharge would have upon the Employee's interest
in the Plan.
18.2 Compliance With USERRA
Notwithstanding any provision of the Plan to the contrary,
effective October 13, 1996, with regard to an Employee who after
serving in the uniformed services is reemployed on or after
December 12, 1994, within the time required by USERRA,
contributions shall be made and benefits and service credit shall
be provided under the Plan with respect to his or her qualified
military service (as defined in Code section 414(u)(5)) in
accordance with Code section 414(u). Furthermore, notwithstanding
any provision of the Plan to the contrary, Participant loan
payments may be suspended during a period of qualified military
service.
18.3 Limited Return of Contributions
Except as provided in this Section 18.3, (i) Plan assets shall
not revert to the Employer nor be diverted for any purpose other
than the exclusive benefit of Participants and Beneficiaries and
defraying reasonable expenses of administering the Plan; and (ii)
a Participant's vested interest shall not be subject to
divestment. As provided in ERISA section 403(c)(2), the actual
amount of a Contribution or portion thereof made by the Employer
(or the current value of such if a net loss has occurred) may
revert to the Employer if:
(a) such Contribution or portion thereof is made by reason of a
mistake of fact;
(b) a determination with respect to the initial qualification of
the Plan under Code section 401(a) is not received and a
request for such determination is made within the time
prescribed under Code section 401(b) (the existence of and
Contributions under the Plan are hereby conditioned upon
such initial qualification); or
(c) such Contribution or portion thereof is not deductible under
Code section 404 (such Contributions are hereby conditioned
upon such deductibility) in the taxable year of the Employer
for which the Contribution is made.
The reversion to the Employer must be made (if at all) within one
year of the mistaken payment, the date of denial of
qualification, or the date of disallowance
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<PAGE>
of deduction, as the case may be. A Participant shall have no
rights under the Plan with respect to any such reversion.
18.4 Assignment and Alienation
As provided by Code section 401(a)(13) and to the extent not
otherwise required by law, no benefit provided by the Plan may be
anticipated, assigned or alienated, except:
(a) to create, assign or recognize a right to any benefit with
respect to a Participant pursuant to a QDRO; or
(b) to use a Participant's vested Account balance as security
for a loan from the Plan which is permitted pursuant to Code
section 4975.
18.5 Facility of Payment
If a Plan benefit is due to be paid to a minor or if the
Administrator reasonably believes that any payee is legally
incapable of giving a valid receipt and discharge for any payment
due him or her, the Administrator shall have the payment of the
benefit, or any part thereof, made to the person (or persons or
institution) whom it reasonably believes is caring for or
supporting the payee, unless it has received due notice of claim
therefor from a duly appointed guardian or conservator of the
payee. Any payment shall to the extent thereof, be a complete
discharge of any liability under the Plan to the payee.
18.6 Reallocation of Lost Participant's Accounts
If the Administrator cannot locate a person entitled to payment
of a Plan benefit after a reasonable search, the Administrator
may at any time thereafter treat such person's Account as
forfeited and use such amount to reduce future Contributions to
be made by an Employer as soon as administratively feasible. If
such person subsequently presents the Administrator with a valid
claim for the benefit, such person shall be paid the amount
treated as forfeited. The Administrator shall pay the amount
through an additional amount contributed by the Employer.
18.7 Suspension of Certain Plan Provisions During Conversion Period
Notwithstanding any provision of the Plan to the contrary, during
any Conversion Period, in accordance with procedures established
by the Administrator and the Trustee, the Administrator may
temporarily suspend, in whole or in part, certain provisions
under the Plan, which may include, but are not limited to, a
Participant's right to change his or her Contribution election, a
Participant's right to change his or her investment election and
a Participant's right to borrow or withdraw from his or her
Account or obtain a distribution from his or her Account.
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<PAGE>
18.8 Suspension of Certain Plan Provisions During Other Periods
Notwithstanding any provision of the Plan to the contrary, in
accordance with procedures established by the Administrator and
the Trustee, the Administrator may temporarily suspend a
Participant's right to borrow or withdraw from his or her Account
or obtain a distribution from his or her Account, if (i) the
Administrator receives a domestic relations order and the
Participant's Account is a source of the payment for such
domestic relations order, or (ii) if the Administrator receives
notice that a domestic relations order is being sought by the
Participant, his or her spouse, former spouse, child or other
dependent (as defined in Code section 152) and the Participant's
Account is a source of the payment for such domestic relations
order. Such suspension may continue for a reasonable period of
time (as determined by the Administrator) which may include the
period of time the Administrator, a court of competent
jurisdiction or other appropriate person is determining whether
the domestic relations order qualifies as a QDRO.
18.9 Claims Procedure
(a) Right to Make Claim. An interested party who disagrees with
the Administrator's determination of his or her right to
Plan benefits must submit a written claim and exhaust this
claim procedure before legal recourse of any type is sought.
The claim must include the important issues the interested
party believes support the claim. The Administrator,
pursuant to the authority provided in the Plan, shall either
approve or deny the claim.
(b) Process for Denying a Claim. The Administrator's partial or
complete denial of an initial claim must include an
understandable, written response covering (1) the specific
reasons why the claim is being denied (with reference to the
pertinent Plan provisions) and (2) the steps necessary to
perfect the claim and obtain a final review.
(c) Appeal of Denial and Final Review. The interested party may
make a written appeal of the Administrator's initial
decision, and the Administrator shall respond in the same
manner and form as prescribed for denying a claim initially.
(d) Time Frame. The initial claim, its review, appeal and final
review shall be made in a timely fashion, subject to the
following time table:
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<PAGE>
Days to Respond
Action From Last Action
------ ----------------
Administrator determines benefit NA
Interested party files initial request 60 days
Administrator's initial decision 90 days
Interested party requests final review 60 days
Administrator's final decision 60 days
However, the Administrator may take up to twice the maximum
response time for its initial and final review if it
provides an explanation within the normal period of why an
extension is needed and when its decision shall be
forthcoming.
18.10 Construction
Headings are included for reading convenience. The text shall
control if any ambiguity or inconsistency exists between the
headings and the text. The singular and plural shall be
interchanged wherever appropriate. References to Participant
shall include Alternate Payee and/or Beneficiary when appropriate
and even if not otherwise already expressly stated.
18.11 Jurisdiction and Severability
The Plan and Trust shall be construed, regulated and administered
under ERISA and other applicable federal laws and, where not
otherwise preempted, by the laws of the State of Pennsylvania. If
any provision of the Plan and Trust is or becomes invalid or
otherwise unenforceable, that fact shall not affect the validity
or enforceability of any other provision of the Plan and Trust.
All provisions of the Plan and Trust shall be so construed as to
render them valid and enforceable in accordance with their
intent.
18.12 Indemnification by Employer
The Employers hereby agree to indemnify all Plan fiduciaries
against any and all liabilities resulting from any action or
inaction, (including a Plan termination in which the Company
fails to apply for a favorable determination
from the Internal Revenue Service with respect to the
qualification of the Plan upon its termination), in relation to
the Plan or Trust (i) including (without limitation) expenses
reasonably incurred in the defense of any claim relating to the
Plan or its assets, and amounts paid in any settlement relating
to the Plan or its assets, but (ii) excluding liability resulting
from actions or inactions made in bad faith, or resulting from
the negligence or willful misconduct of the Trustee. The Company
shall have the right, but not the obligation, to conduct the
defense of any action to which this Section applies. The Plan
fiduciaries are not entitled to indemnity from the Plan assets
relating to any such action.
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19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION
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19.1 Amendment
The Company reserves the right to amend the Plan and Trust at any
time, to any extent and in any manner it may deem necessary or
appropriate. The Company (and not the Trustee) shall be responsible
for adopting any amendments necessary to maintain the qualified status
of the Plan and Trust under Code sections 401(a) and 501(a). If the
Committee is acting as the Administrator in accordance with Section
15.6, it shall have the authority to adopt Plan and Trust amendments
which have no substantial adverse financial impact upon any Employer
or the Plan. All interested parties shall be bound by any amendment,
provided that no amendment shall:
(a) become effective unless it has been adopted in accordance with
the procedures set forth in Section 19.5;
(b) except to the extent permissible under ERISA and the Code, make
it possible for any portion of the Trust assets to revert to an
Employer or to be used for, or diverted to, any purpose other
than for the exclusive benefit of Participants and Beneficiaries
entitled to Plan benefits and to defray reasonable expenses of
administering the Plan;
(c) decrease the rights of any Participant to benefits accrued
(including the elimination of optional forms of benefits) to the
date on which the amendment is adopted, or if later, the date
upon which the amendment becomes effective, except to the extent
permitted under ERISA and the Code; nor
(d) permit a Participant to be paid any portion of his or her Account
subject to the distribution rules of Code section 401(k) unless
the payment would otherwise be permitted under Code section
401(k).
19.2 Merger
The Plan and Trust may not be merged or consolidated with, nor may its
assets or liabilities be transferred to, another plan unless each
Participant and Beneficiary would, if the resulting plan were then
terminated, receive a benefit just after the merger, consolidation or
transfer which is at least equal to the benefit which would be
received if either plan had terminated just before such event.
19.3 Divestitures
In the event of a sale by an Employer which is a corporation of: (i)
substantially all of the Employer's assets used in a trade or business
to an unrelated
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corporation, or (ii) a sale of such Employer's interest in a
subsidiary to an unrelated entity or individual, lump sum
distributions shall be permitted from the Plan, except as provided
below, to Participants with respect to Employees who continue
employment with the corporation acquiring such assets or who continue
employment with such subsidiary, as applicable.
Notwithstanding, distributions shall not be permitted if the purchaser
agrees, in connection with the sale, to be substituted as the Company
as the sponsor of the Plan or to accept a transfer in a transaction
subject to Code section 414(l)(1) of the assets and liabilities
representing the Participants' benefits into a plan of the purchaser
or a plan to be established by the purchaser.
19.4 Plan Termination and Complete Discontinuance of Contributions
The Company may, at any time and for any reason, terminate the Plan in
accordance with the procedures set forth in Section 19.5, or
completely discontinue contributions. Upon either of these events, or
in the event of a partial termination of the Plan within the meaning
of Code section 411(d)(3), the Accounts of each affected Participant
shall be fully vested.
In the event of the Plan's termination, if no successor plan is
established or maintained, lump sum distributions shall be made in
accordance with the terms of the Plan as in effect at the time of the
Plan's termination or as thereafter amended, provided that a
post-termination amendment shall not be effective to the extent that
it violates Section 19.1 unless it is required in order to maintain
the qualified status of the Plan upon its termination. The Trustee's
and Employer's authority shall continue beyond the Plan's termination
date until all Trust assets have been liquidated and distributed.
19.5 Amendment and Termination Procedures
The following procedural requirements shall govern the adoption of any
amendment or termination (a "Change") of the Plan and Trust:
(a) The Company may adopt any Change by action of its board of
directors in accordance with its normal procedures.
(b) The Committee, if acting as Administrator in accordance with
Section 15.6, may adopt any Change within the scope of its
authority provided under Section 19.1 and in the manner specified
in Section 15.7(a).
(c) Any Change must be (1) set forth in writing, and (2) signed and
dated by an executive officer of the Company or, in the case of a
Change adopted by the Committee, at least one of its members.
(d) If the effective date of any Change is not specified in the
document
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setting forth the Change, it shall be effective as of the date it
is signed by the last person whose signature is required under
clause (2) above, except to the extent that another effective
date is necessary to maintain the qualified status of the Plan
and Trust under Code sections 401(a) and 501(a).
(e) No Change shall become effective until it is accepted and signed
by the Trustee (which acceptance shall not unreasonably be
withheld).
19.6 Termination of Employer's Participation
Any Employer may, at any time and for any reason, terminate its Plan
participation by action of its board of directors in accordance with
its normal procedures. Written notice of such action shall be signed
and dated by an executive officer of the Employer and delivered to the
Company. If the effective date of such action is not specified, it
shall be effective on, or as soon as reasonably practicable after, the
date of delivery. Upon the Employer's request, the Company may
instruct the Trustee and Administrator to spin off all affected
Accounts and underlying assets into a separate qualified plan under
which the Employer shall assume the powers and duties of the Company.
Alternatively, the Company may continue to maintain the Accounts under
the Plan.
19.7 Replacement of the Trustee
The Trustee may resign as Trustee under the Plan and Trust or may be
removed by the Company at any time upon at least 90 days written
notice (or less if agreed to by both parties). In such event, the
Company shall appoint a successor trustee by the end of the notice
period. The successor trustee shall then succeed to all the powers and
duties of the Trustee under the Plan and Trust. If no successor
trustee has been named by the end of the notice period, the Company's
chief executive officer shall become the trustee, or if he or she
declines, the Trustee may petition the court for the appointment of a
successor trustee.
19.8 Final Settlement and Accounting of Trustee
(a) Final Settlement. As soon as administratively feasible after its
resignation or removal as Trustee, the Trustee shall transfer to
the successor trustee all property currently held by the Trust.
However, the Trustee is authorized to reserve such sum of money
as it may deem advisable for payment of its accounts and expenses
in connectionwith the settlement of its accounts or other fees or
expenses payable by the Trust. Any balance remaining after
payment of such fees and expenses shall be paid to the successor
trustee.
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(b) Final Accounting. The Trustee shall provide a final accounting to
the Administrator within 90 days of the date Trust assets are
transferred to the successor trustee.
(c) Administrator Approval. Approval of the final accounting shall
automatically occur 90 days after such accounting has been
received by the Administrator, unless the Administrator files a
written objection with the Trustee within such time period. Such
approval shall be final as to all matters and transactions stated
or shown therein and binding upon the Administrator.
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APPENDIX A - INVESTMENT FUNDS
I. Investment Funds Available
The Investment Funds offered under the Plan as of the Effective Date
include this set of daily valued funds:
Funds
-----
Vanguard Prime Money Market Fund
Vanguard Retirement Savings Trust
Vanguard Total Bond Market Index Fund
Vanguard Asset Allocation Fund
Vanguard 500 Index fund
Vanguard PRIMECAP Fund
Vanguard Growth and Income Fund
Vanguard Mid-Cap Index Fund
Vanguard Windsor Fund
VanKampen Emerging Growth Fund
RS Emerging Growth Fund
Janus Overseas Fund
Janus Twenty Fund
II. Default Investment Fund
The default Investment Fund as of the Effective Date is the Vanguard Prime
Money Market Fund.
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APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES
As of the Effective Date, payment of Plan fees and expenses shall be as follows:
I. Investment Management Fees: These are paid by Participants in that
management fees reduce the investment return reported and credited to
Participants.
II. Recordkeeping Fees: These are paid by Participants and are assessed monthly
and billed/collected from Accounts quarterly.
III. Additional Fees Paid by Participants: Audit Fees, periodic RFI expenses,
Plan related legal and consulting fees, and other expenses necessary for
plan administration shall be added to the recordkeeping fees and assessed
against Participants' Accounts, per 2) above. Estimates of the fees shall
be determined and reconciled, at least annually.
IV. Additional Fees Paid by Employer: All other Plan related fees and expenses
shall be paid by the Employer. To the extent that the Administrator later
elects that any such fees shall be borne by Participants, the fees shall be
added to the recordkeeping fees and assessed against Participants'
Accounts, per 2) above and estimates of the fees shall be determined and
reconciled, at least annually.
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APPENDIX C - LOAN INTEREST RATE
Effective January 1, 1998, the interest rate charged on Participant loans shall
be equal to the U.S. Treasury rate for a note of the same maturity, plus 1%.
Effective January 1, 1999, the interest rate charged on Participant loans shall
be equal to the prime rate published in The Wall Street Journal at the time the
loan is processed, plus 1%. If multiple prime rates are published in The Wall
Street Journal, the prime rate selected shall be the rate closest to the last
prime rate used for this purpose.
The rate may be determined once for all loans made in a month, and the maturity
may be determined to the nearest year.
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Amendment No.
to the
Jacobs Engineering Group Inc. 401(k) Plus Savings Plan and Trust
WHEREAS, Jacobs Engineering Group Inc. (the "Company"){, (formerly
known as PRIOR CO NAME)}, approved and adopted the {PRIOR NAME as renamed
effective CUT OVER DATE the} Jacobs Engineering Group Inc. 401(k) Plus Savings
Plan (the "Plan") and Trust Agreement (the "Trust") which were originally
effective January 1, 1998 {and most recently restated effective CUT OVER DATE}{,
most recently restated effective CUT OVER DATE, and subsequently amended};
WHEREAS, Section 19.1 of the Plan and Trust provides that the Company
reserves the right to amend the Plan and Trust;
NOW THEREFORE RESOLVED, {that Section{s} {#s} {is} {are }amended
effective {date}{,} {and} Section{s} {#s} {is} {are }amended effective {date}
and Section{s} {is} {are }amended effective {date}}{ that the Plan is amended
effective {date}} as follows:
[insert amended provision(s)]
Date: ____________________ ,20__ Jacobs Engineering Group Inc.
By:
Title:
The provisions of the above amendment which relate to the Trustee are hereby
approved and executed.
Date: ____________________ ,20__ Vanguard Fiduciary Trust Company
By:
Title: