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As filed with the Securities and Exchange Commission on September 30, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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DAVE & BUSTER'S, INC.
(Exact name of registrant as specified in its charter)
MISSOURI 45-1532756
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2481 MANANA DRIVE
DALLAS, TEXAS 75220
(Address of Principal Executive Offices)
DAVE & BUSTER'S EMPLOYEE
401(k) SAVINGS PLAN
(Full title of the plan)
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Alan L. Murray Copy to: T. Mark Edwards
Vice President, Gardere & Wynne, L.L.P.
General Counsel and Secretary 1601 Elm Street
2481 Manana Drive Suite 3000
Dallas, Texas 75220 Dallas, Texas 75201
(214) 357-9588 (214) 999-4654
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED (1) SHARE PRICE (1) REGISTRATION FEE
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Common Stock, $0.01 par value 100,000 shares(2) $11.812 $1,181,200 $328.37
================================================================================================================================
(1) Pursuant to Rule 416 under the Securities Act of 1933, this registration
statement also covers an indeterminate number of shares as may be
required to cover possible adjustments under the Plan by reason of any
stock dividend, stock split, share combination, exchange of shares,
recapitalization, merger, consolidation, separation, reorganization,
liquidation or the like, of or by the Registrant. In addition, pursuant
to Rule 416(c) under the Securities Act of 1933, this registration
statement also covers an indeterminate amount of interests to be offered
or sold pursuant to the employee benefit plan described herein.
(2) Calculated pursuant to Rule 457(h), based on the average of the high and
low prices for the Common Stock on September 24, 1999, as reported on
the New York Stock Exchange, Inc.
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PART I
INFORMATION REQUIRED IN THE SECTION 10 PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
*Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance
with Rule 428 under the Securities Act of 1933, as amended (the
"Securities Act"), and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents filed by Dave & Buster's, Inc. (the
"Registrant") with the Securities and Exchange Commission (the "Commission")
are incorporated by reference in this Registration Statement.
(1) The Registrant's Annual Report on Form 10-K for the fiscal year
ended January 31, 1999, filed pursuant to Section 13(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
(File No. 0-25858);
(2) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act since January 31, 1999; and
(3) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement on Form 8-A, as filed
with the Commission on May 14, 1999, including any amendments or
reports filed for the purpose of updating such description.
In addition, all documents subsequently filed by the Registrant pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing
of a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
a part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Generally, under Missouri law, a corporation may indemnify a director or
officer against expenses (including attorneys' fees), judgments, fines and
settlement payments actually and reasonably incurred in connection with an
action, suit or proceeding (other than by or in the right of the corporation)
to which he is made a party by virtue of his service to the corporation,
provided that he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation and, with respect
to any criminal action or proceeding, he had no reasonable cause to believe his
conduct was unlawful. With respect to an action or suit by or in the right of a
corporation, the corporation may generally indemnify a director or officer
against expenses and settlement payments actually and reasonably incurred if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, except that indemnification
is not permitted, unless a court otherwise determines it proper, to the extent
such person is found liable for negligence or misconduct. Missouri law
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further states that a corporation shall indemnify a director or officer against
expenses actually and reasonably incurred in any of the above actions, suits or
proceedings to the extent such person is successful on the merits or otherwise
in defense of the same.
Missouri law generally grants a corporation the power to adopt broad
indemnification provisions with respect to its directors and officers, but it
places certain restrictions on a corporation's ability to indemnify its
officers and directors against conduct which is finally adjudged to have been
knowingly fraudulent or deliberately dishonest or to have involved willful
misconduct.
Article Eleven of the Registrant's Articles eliminates, to the fullest
extent permissible under the corporation laws of the State of Missouri, the
liability of directors to the Registrant and the stockholders for monetary
damages for breach of fiduciary duty as a director. Such provisions further
provide that indemnification of directors and officers shall be provided to the
fullest extent permitted under Missouri law. The Registrant also maintains a
directors' and officers' liability insurance policy insuring directors and
officers of the Registrant for up to $10.0 million of covered losses as defined
in the policy. The Registrant has also entered into indemnity agreements with
its executive officers and directors which generally provide for
indemnification for such individuals to the fullest extent provided by law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Dave & Buster's Employee 401(k) Savings Plan
23.1 Consent of Ernst & Young LLP
24.1 Power of Attorney (set forth on the signature pages of this
Registration Statement)
In lieu of an opinion of counsel concerning compliance with the
requirements of the Employee Retirement Income Security Act of 1974, as
amended, or an Internal Revenue Service determination letter that the Plan as
amended and restated is qualified under Section 401 of the Internal Revenue
Code of 1986, as amended, the Registrant hereby undertakes to submit the Plan
and any amendments thereto to the Internal Revenue Service in a timely manner
and to make all changes required by the Internal Revenue Service in order to
qualify the Plan.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective amendment to
this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs (1)(i)
and (1)(ii) above do not apply if the information required to be included
in a post-effective amendment by these paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
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(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
The undersigned Registrant hereby further undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dallas, State of Texas, on September 30, 1999.
DAVE & BUSTER'S, INC.
(Registrant)
By: /s/ DAVID O. CORRIVEAU
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David O. Corriveau, Co-Chairman of the
Board, Co-Chief Executive Officer and
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
in this Registration Statement in any capacity hereby constitutes and appoints
David O. Corriveau and Alan L. Murray and each of them (with full power in each
of them to act alone), his true and lawful attorney-in-fact and agent, with
full power of substitution, for him and in his name, place and stead, in any
and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same with the
Securities and Exchange Commission, with all exhibits thereto, and other
documents in connection therewith, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite or desirable.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on September 30, 1999.
Name Title
---- -----
/s/ DAVID O. CORRIVEAU Co-Chairman of the Board, Co-Chief Executive Officer,
- ------------------------------------------ President and Director
David O. Corriveau (Principal Executive Officer)
/s/ JAMES W. CORLEY Co-Chairman of the Board, Co-Chief Executive Officer,
- ------------------------------------------ Chief Operating Officer and Director
James W. Corley
/s/ CHARLES MICHEL Vice President and Chief Financial Officer
- ------------------------------------------ (Principal Financial and Accounting Officer)
Charles Michel
/s/ ALLEN J. BERNSTEIN Director
- ------------------------------------------
Allen J. Bernstein
Director
- ------------------------------------------
Peter A. Edison
/s/ BRUCE H. HALLETT Director
- ------------------------------------------
Bruce H. Hallett
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/s/ WALTER S. HENRION Director
- ------------------------------------------
Walter S. Henrion
/s/ MARK A. LEVY Director
- ------------------------------------------
Mark A. Levy
Director
- ------------------------------------------
Christopher C. Maguire
- ------------------------------------------ Director
Mark B. Vittert
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INDEX TO EXHIBITS
Exhibit
Number Description
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4.1 Dave & Buster's Employee 401(k) Savings Plan
23.1 Consent of Ernst & Young LLP
24.1 Power of Attorney (set forth on the signature pages of this
Registration Statement)
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EXHIBIT 4.1
Revised September 29, 1999
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DAVE & BUSTER'S EMPLOYEE 401(K) SAVINGS PLAN
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TABLE OF CONTENTS
PAGE
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INTRODUCTION.....................................................................................................1
ARTICLE I - DEFINITIONS..........................................................................................2
ARTICLE II - ELIGIBILITY AND PARTICIPATION......................................................................11
Section 2.1 Eligibility Requirements.............................................................11
Section 2.2 Participation........................................................................11
Section 2.3 Years of Service for Eligibility Computation.........................................11
ARTICLE III - CONTRIBUTIONS.....................................................................................13
Section 3.1 Employer Contributions...............................................................13
Section 3.2 Employee Elective Deferrals..........................................................13
Section 3.3 After-Tax Employee Contributions.....................................................14
Section 3.4 Rollover Contributions...............................................................14
Section 3.5 Trustee-to-Trustee Transfers.........................................................15
Section 3.6 Deduction Limitation.................................................................15
ARTICLE IV - 401(k) AND 401(m)..................................................................................16
Section 4.1 Distribution of Excess Employee Elective Deferrals...................................16
Section 4.2 Actual Deferral Percentage Test......................................................17
Section 4.3 Distribution of Excess Contributions.................................................19
Section 4.4 Actual Contribution Percentage Test..................................................20
Section 4.5 Distribution of Excess Aggregate Contributions.......................................23
Section 4.6 Recharacterization...................................................................24
ARTICLE V - ALLOCATIONS, VALUATION AND VESTING..................................................................25
Section 5.1 Allocation of Contributions..........................................................25
Section 5.2 Participants Who Will Receive an Allocation..........................................25
Section 5.3 Allocation of Forfeitures............................................................26
Section 5.4 Allocation Limitations...............................................................26
Section 5.5 Valuation............................................................................33
Section 5.6 Vesting and Accrual..................................................................33
ARTICLE VI - DISTRIBUTIONS......................................................................................37
Section 6.1 Distributions of Small Account Balances..............................................37
Section 6.2 Distributions While In-Service.......................................................37
Section 6.3 Distributions Upon Separation From Service...........................................39
Section 6.4 Distributions Upon Retirement........................................................39
Section 6.5 Distributions Upon Death.............................................................39
Section 6.6 Distributions Upon Disability........................................................40
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TABLE OF CONTENTS
PAGE
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Section 6.7 Special Beneficiary Provisions.......................................................40
Section 6.8 Consent of the Participant Required for Distributions if
Account Balances Greater Than $5,000.................................................41
Section 6.9 Commencement of Benefits.............................................................42
Section 6.10 Required Distributions...............................................................42
Section 6.11 Special Distribution Rules for 401(k) Contributions, Qualified
Non-Elective Contributions and Qualified Matching Contributions......................49
Section 6.12 Form of Distribution.................................................................49
Section 6.13 Trustee-to-Trustee Transfers.........................................................50
Section 6.14 Normal Form of Benefit...............................................................50
Section 6.15 Rollovers to Other Plans or IRAs.....................................................50
Section 6.16 Installment Payments.................................................................51
ARTICLE VII - LOANS ............................................................................................52
Section 7.1 Availability of Loans................................................................52
Section 7.2 Amount of Loans......................................................................52
Section 7.3 Terms of Loans.......................................................................52
ARTICLE VIII - PLAN ADMINISTRATION..............................................................................54
Section 8.1 Duties of the Employer...............................................................54
Section 8.2 The Committee........................................................................54
Section 8.3 Appointment of Advisor...............................................................55
Section 8.4 Powers and Duties of the Committee...................................................55
Section 8.5 Organization and Operation...........................................................56
Section 8.6 Claims Procedure.....................................................................56
Section 8.7 Records and Reports..................................................................57
Section 8.8 Liability............................................................................58
Section 8.9 Reliance on Statements...............................................................58
Section 8.10 Remuneration and Bonding.............................................................59
Section 8.11 Committee Decisions Final............................................................59
Section 8.12 Participant-Directed Investments.....................................................59
ARTICLE IX - TRUST AGREEMENT....................................................................................60
Section 9.1 Establishment of Trust...............................................................60
Section 9.2 Exclusive Benefit....................................................................60
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TABLE OF CONTENTS
PAGE
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ARTICLE X - AMENDMENT, TERMINATION AND MERGER...................................................................61
Section 10.1 Amendment............................................................................61
Section 10.2 Termination..........................................................................61
Section 10.3 Merger, Consolidation or Transfer....................................................62
ARTICLE XI - TOP-HEAVY PROVISIONS...............................................................................63
Section 11.1 Applicability........................................................................63
Section 11.2 Definitions..........................................................................63
Section 11.3 Minimum Allocation...................................................................66
Section 11.4 Nonforfeitability of Minimum Allocation..............................................66
Section 11.5 Allocation Limitations...............................................................67
Section 11.6 Minimum Vesting Schedules............................................................67
ARTICLE XII - GENERAL PROVISIONS................................................................................68
Section 12.1 Governing Law........................................................................68
Section 12.2 Power to Enforce.....................................................................68
Section 12.3 Alienation of Benefits...............................................................68
Section 12.4 Not an Employment Contract...........................................................68
Section 12.5 Discretionary Acts...................................................................69
Section 12.6 Interpretation.......................................................................69
Section 12.7 Operation of the Plan; Permitted Corrections.........................................69
Section 12.8 Special Rules Relating to Transactions by Certain
Officers, Directors and Shareholders.................................................70
ARTICLE XIII - SIGNATURE PAGE...................................................................................71
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INTRODUCTION
Purpose.
The primary purpose of the Dave & Buster's Employee 401(k) Savings Plan (the
"Plan") is to provide Employees of Dave & Buster's, Inc. and Employees of its
participating Affiliates with retirement benefits in recognition of the
contribution of the Employees to the successful operation of the Employer. The
Plan is intended to be a profit sharing plan, qualified under section 401(a) of
the Internal Revenue Code (the "Code"), which permits salary deferral
contributions as provided by section 401(k) of the Code; and its affiliated
Trust is intended to be exempt from tax under section 501(a) of the Code. In
addition, it is intended that the Plan meet the applicable requirements of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
Effective Date.
The Plan was originally established effective January 1, 1996. Pursuant to the
terms of the Plan which permit its amendment by the Employer, this document is a
restatement, in its entirety, of the Plan, generally effective October 1, 1999.
Prior to October 1, 1999, the Plan was sponsored by Dave & Buster's I, L.P.
Effective as of October 1, 1999, Dave & Buster's, Inc. shall be the sponsor of
the Plan.
The terms of this document now set forth the controlling provisions of the Plan
for all persons who are Employees on or after the Effective Date; provided,
however, that to the extent required under section 411(d)(6) of the Code (and
related Treasury Regulations), the applicable provisions of the preceding Plan
documents are incorporated herein by reference.
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ARTICLE I - DEFINITIONS
The following words and phrases, wherever capitalized, shall have the meanings
set forth below, unless the context in which they appear within the Plan clearly
indicates otherwise:
Account(s) means the aggregate (or as otherwise specified) interest of a
Participant in the assets of the Trust. Each Participant's interest will be
segregated into one or more of the following Accounts, which will reflect, in
addition to contributions allocated thereto, appropriate allocations of
earnings, gains, losses and expenses of the Trust:
o Employee Deferral Account. The separate Account maintained for each
Participant to which are credited his Employee Elective Deferrals.
o Employer Regular Contribution Account. The separate Account
maintained for each Participant to which are credited any Employer
Regular Contributions allocated to him and made in accordance with
Section 3.1.
o Employer Matching Contribution Account. The separate Account
maintained for each Participant to which are credited any Employer
Matching Contributions allocated to him and made in accordance with
Section 3.1.
o Qualified Matching Contribution Account. The separate Account
maintained for each Participant to which are credited any Qualified
Matching Contributions allocated to him and made on his behalf in
accordance with Section 3.1.
o Qualified Non-Elective Contribution Account. The separate Account
maintained for each Participant to which are credited any Qualified
Non-Elective Contributions allocated to him and made on his behalf in
accordance with Section 3.1.
o Rollover Account. The separate Account maintained for each applicable
Participant to which contributions are made under Section 3.4.
o Transfer Account. The separate Account maintained for each applicable
Participant to which amounts have been transferred under Section 3.5.
The Administrator may, in its discretion, establish, or cause to be established,
subaccounts within each separate Account.
Administrative Delegate means one or more persons or institutions to whom the
Committee has delegated certain administrative functions pursuant to a written
agreement.
Administrator means the Committee designated by the Employer to administer the
Plan.
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Affiliate means a member of a controlled group of corporations, within the
meaning of section 414(b) of the Code, which includes the Employer; a trade or
business (whether or not incorporated) which is in common control with the
Employer as determined in accordance with section 414(c) of the Code; or any
organization which is a member of an affiliated service group, within the
meaning of section 414(m) of the Code, which includes the Employer; and any
other organization required to be aggregated with the Employer pursuant to
section 414(o) of the Code.
After-Tax Employee Contributions means contributions to the Plan made by an
Employee on an after-tax, nondeductible basis.
Beneficiary means the person or persons or a trust affirmatively designated by a
Participant to receive all or a portion of such Participant's benefits in the
event the Participant dies leaving benefits payable to such a Beneficiary in
accordance with the provisions of Article VI.
Code means the Internal Revenue Code of 1986, as amended from time to time.
Committee means the 401(k) Benefits Management Committee, as constituted from
time to time, or such other committee or person or persons described in Section
8.2.
Compensation means all of each Participant's wages as defined in section 3401(a)
of the Code together with all other compensatory payments to an Employee by the
Employer with respect to which the Employer must furnish to the Employee a
written statement pursuant to sections 6041(d) and 6051(a)(3) of the Code, but
determined without regard to any rules (such as the exception for agricultural
labor in section 3401(a)(2) of the Code) which limit the remuneration included
in wages based on the nature or location of the employment or services
performed.
Notwithstanding the above, Compensation shall include any amount which is
contributed by the Employer pursuant to a salary reduction agreement and which
is not includible in the gross income of the Employee under sections 125,
402(e)(3), 402(h) or 403(b) of the Code.
Notwithstanding the above, for purposes other than applying the provisions of
Article IV, the provision(s) providing for permitted disparity and/or Top-Heavy
allocations, and the determination of Highly Compensated Employees, Compensation
shall be determined by excluding the following:
o Bonuses
o Tips
o Moving expenses
o Car allowance
o Club allowance
o Gains from stock option grants
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Compensation shall include only that Compensation which is actually paid to the
Participant during the determination period. Except as provided elsewhere in
this Plan, the determination period shall be the Plan Year.
Effective for Plan Years beginning after December 31, 1988, the annual
Compensation of each Participant taken into account for purposes of determining
all benefits provided under the Plan for any determination period shall not
exceed $200,000 as adjusted by the Secretary at the same time and in the same
manner as under section 415(d) of the Code ("Compensation Limit"), except that
the dollar increase in effect on January 1 of any calendar year shall be
effective for years beginning in such calendar year. The Compensation Limit for
a determination period shall be the Compensation Limit in effect on the January
1 coinciding with or preceding such determination period. If Compensation is
determined on the basis of a 12-consecutive-month period ending within the Plan
Year, then the applicable Compensation Limit is the Compensation Limit in effect
for the calendar year in which such 12-month period begins. If Compensation is
determined on the basis of a period of less than 12 calendar months, the
Compensation Limit shall be the annual Compensation Limit which would otherwise
be applicable multiplied by the ratio obtained by dividing by 12 the number of
full months in the short period. In determining the Compensation of a
Participant for purposes of the $200,000 limitation, the rules of section
414(q)(6) of the Code shall apply except that, in applying such rules, the term
"family" shall include only the Spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19 before the close of
the Plan Year. If as a result of the application of such rules the adjusted
$200,000 limitation is exceeded, then (except for purposes of determining the
portion of Compensation up to the integration level, as defined in Section 5.1,
if applicable) the limitation shall be prorated among the affected individuals
in proportion to each such individual's Compensation as determined prior to the
application of this limitation. Notwithstanding the above, effective for Plan
Years beginning after December 31, 1993, the annual Compensation Limit shall not
exceed $150,000, adjusted for calendar years beginning after 1994 at the same
time and in the same manner as under section 415(d) of the Code, but only if and
when the aggregate of such potential adjustments totals at least $10,000, and
then only in amounts of $10,000, in the manner described in section 401(a)(17)
of the Code.
If Compensation for any prior determination period is taken into account in
determining an Employee's allocations or benefits for the current determination
period, the Compensation for such prior period is subject to the applicable
annual Compensation Limit in effect for that prior period. For this purpose, for
years beginning before January 1, 1990, the applicable annual Compensation Limit
is $200,000.
Defined Benefit Plan means a pension plan maintained by the Employer which is
qualified under section 401(a) of the Code and which is not a Defined
Contribution Plan, except to the extent that it maintains separate accounts with
respect to which it is treated as a Defined Contribution Plan.
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Defined Contribution Plan means a plan qualified under section 401(a) of the
Code and maintained by the Employer which provides for an account for each
individual who participates in the plan, from which account all benefits
attributable to amounts allocated to each such Participant's account (and any
income and expenses or gains or losses attributable to such accounts, both
realized and unrealized) are paid.
Disability means any medically determinable physical or mental impairment which
results in an inability to engage in any substantial gainful activity by reason
thereof and which may be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than 12 months. The
permanence and degree of such impairment must be supported by medical evidence.
Disability will be determined by a physician appointed by the Administrator.
Effective Date. The provisions of this amendment and restatement are generally
effective October 1, 1999, except as otherwise provided herein or required by
applicable law.
Elapsed Time. For purposes of determining an Employee's initial or continued
eligibility to participate in the Plan or the nonforfeitable interest in a
Participant's Account balance derived from Employer contributions, except for
periods of service which may be disregarded on account of the rule of parity
(Years of Service of a nonvested Participant before a period of consecutive
One-Year Breaks in Service which exceeds the greater of five or the number of
Years of Service prior to such Breaks), an Employee will receive credit for the
aggregate of all time periods commencing with the Employee's first day of
employment or reemployment and ending on the date a One-Year Break in Service
begins. The first day of employment or reemployment is the first day the
Employee performs an Hour of Service. An Employee will also receive credit for
any period of severance of less than 12 consecutive months. Fractional periods
of less than a year will be expressed in terms of days.
For purposes of this Section, "Hour of Service" means each hour for which an
Employee is paid or entitled to payment for the performance of duties for the
Employer or any Affiliate.
An Employee will also receive credit for any employment with the Employer,
regardless of whether the Employee was then an eligible Employee. Hours of
Service will also be credited for any individual considered an Employee for
purposes of this Plan under section 414(n) or section 414(o) and the regulations
promulgated thereunder.
Employee means any common law Employee of the Employer or any Affiliate. The
term Employee shall also include any Leased Employee deemed to be an Employee of
the Employer or any Affiliate as provided in section 414(n) or (o) of the Code.
Employee Elective Deferrals means contributions to the Plan from an Employee's
salary, which the Employee could have received currently in Compensation.
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Employer means Dave & Buster's, Inc.; any successor through merger,
consolidation or purchase of substantially all of the assets or business of the
entity which is the Employer immediately prior to such succession, which
successor, within 90 days after such succession, agrees to continue this Plan;
and any Affiliate which adopts the Plan by action of its board of directors.
Employer Matching Contributions means those contributions made by the Employer
as described under Section 3.1 which are allocated to Participants' Employer
Matching Contribution Accounts, and does not include Qualified Matching or
Qualified Non-Elective Contributions (if any).
Employer Regular Contributions means those contributions made by the Employer as
described under Section 3.1 which are allocated to Participants' Employer
Regular Contribution Accounts, and does not include Qualified Matching or
Qualified Non-Elective Contributions (if any).
ERISA means the Employee Retirement Income Security Act of 1974, as amended from
time to time.
Forfeitures means the nonvested portion, if any, of a Participant's Account
created as a result of termination of employment by the Participant prior to the
time he become 100 percent Vested in his Account. A Forfeiture occurs
immediately after the distribution of the entire Vested portion of a
Participant's Account or the last day of the Plan Year in which his
5th-consecutive One-Year Break in Eligibility Service occurs, whichever occurs
earlier or upon approval of the Plan Administrator.
Highly Compensated Employee means and includes active highly compensated
Employees and former highly compensated Employees.
An active highly compensated Employee includes any Employee who performed
service for the Employer during the Plan Year and who: (1) during the preceding
Plan Year received Compensation from the Employer in excess of $80,000 (as
adjusted pursuant to section 415(d) of the Code), and, if elected by the
Employer, was a member of the top-paid group for such year; or (2) during the
current or preceding Plan Year was an owner of more than 5 percent of the
Employer.
A former highly compensated Employee includes any Employee who separated (or was
deemed to have separated) from service prior to the determination year, who has
performed no service for the Employer during the determination year, and who was
a highly compensated active Employee for either the year of his separation from
service or any determination year ending on or after the Employee's 55th
birthday.
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The determination of who is a Highly Compensated Employee (including the
determination of the number and identity of Employees in the top-paid group and
the Compensation that is considered) will be made in accordance with section
414(q) of the Code and the Regulations promulgated thereunder. For purposes of
this definition, the Employer shall include any Affiliate.
Hour of Service means:
(a) Each hour for which an Employee is paid, or entitled to payment, for
the performance of duties for the Employer. These hours will be
credited to the Employee for the computation period in which the duties
are performed;
(b) Each hour for which an Employee is paid, or entitled to payment, by the
Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
Disability), layoff, jury duty, military duty or leave of absence. No
more than 501 hours of service will be credited under this paragraph
for any single continuous period (whether or not such period occurs in
a single computation period). Hours under this paragraph will be
calculated and credited pursuant to section 2530.200b-2 of the
Department of Labor regulations, which section is incorporated herein
by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Employer. The same hours of service
will not be credited both under paragraph (1) or paragraph (2), as the
case may be, and under this paragraph (3). These hours will be credited
to the Employee for the computation period or periods to which the
award or agreement pertains rather than the computation period in which
the award, agreement or payment is made.
For purposes of this definition, Employer includes any Affiliate. Hours of
Service will be credited for employment with other members of any affiliated
service group (under section 414(m) of the Code), controlled group of
corporations (under section 414(b) of the Code), or group of trades or
businesses under common control (under section 414(c) of the Code) of which the
adopting Employer is a member, and any other entity required to be aggregated
with the Employer pursuant to section 414(o) of the Code and the Regulations
promulgated thereunder.
Hours of Service will also be credited with respect to any individual considered
an Employee for purposes of this Plan under section 414(n) of the Code and the
Regulations promulgated thereunder.
Hours of Service will be credited for all employment with the Employer
regardless of whether the Employee was at the time an eligible Employee.
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Service will be determined on the basis of the actual hours for which an
Employee is paid or entitled to payment.
Late Retirement Date means the date, occurring after Normal Retirement Age, on
which an Employee actually retires from employment with the Employer.
Leased Employee means any person (other than an Employee of the Employer) who,
pursuant to an agreement between the Employer and any other person (the "leasing
organization"), has performed services for the Employer (or for the Employer and
related persons determined in accordance with section 414(n)(6) of the Code) on
a substantially full time basis for a period of at least one year, and such
services are of a type historically performed by Employees in the business field
of the Employer. Contributions or benefits provided to a Leased Employee by the
leasing organization which are attributable to services performed for the
Employer shall be treated as provided by the Employer.
A Leased Employee shall not be considered an Employee of the Employer if (i)
such Employee is covered by a money purchase pension plan maintained by the
leasing organization providing: (a) a non-integrated employer contribution rate
of at least 10 percent of Compensation, as defined in section 415(c)(3) of the
Code, but including amounts contributed pursuant to a salary reduction agreement
which are excludable from the Employee's gross income under section 125, section
402(e)(3), section 402(h) or section 403(b) of the Code, (b) immediate
participation, and (c) full and immediate vesting; and (ii) Leased Employees do
not constitute more than 20 percent of the Employer's non-highly compensated
workforce.
Non-Highly Compensated Employee means an Employee who is not a Highly
Compensated Employee.
Normal Retirement Age means age 65 provided the Employee has completed five
Years of Service.
One-Year Break in Service for vesting purposes only means a 12-consecutive-month
period during which the Participant does not complete more than 500 Hours of
Service.
Solely for purposes of determining whether a One-Year Break in Service has
occurred for vesting purposes, an individual who is absent from work for
maternity or paternity reasons shall receive credit for the Hours of Service
which would otherwise have been credited to such individual but for such
absence, or in any case in which such hours cannot be determined, eight Hours of
Service per day of such absence, to a maximum of 501 Hours of Service for any
one child-related absence. For purposes of this paragraph, an absence from work
for maternity or paternity reasons means an absence: (1) by reason of the
pregnancy of the individual; (2) by reason of a birth of a child of the
individual; (3) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual; or (4) for
purposes
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of caring for such child for a period beginning immediately following such birth
or placement. The Hours of Service credited under this paragraph shall be
credited in the computation period in which the absence begins if necessary to
prevent a One-Year Break in Service in that period or, in all other cases, in
the next following computation period.
A One-Year Break in Service for eligibility and participation purposes shall be
determined on the basis of Elapsed Time. For purposes of this definition,
Employer includes any Affiliate. A One-Year Break in Service determined on the
basis of Elapsed Time means a period of severance of at least 12 consecutive
months.
A period of severance is a continuous period of time during which the Employee
is not employed by the Employer. Such period begins on the date the Employee
retires, quits or is discharged or, if earlier, the 12-month anniversary of the
date on which the Employee was otherwise first absent from service.
In the case of an individual who is absent from work for maternity or paternity
reasons, the 12-consecutive-month period beginning on the first anniversary of
the first day of such absence shall not constitute a One-Year Break in Service.
For purposes of this paragraph, an absence from work for maternity or paternity
reasons means an absence: (1) by reason of the pregnancy of the individual; (2)
by reason of the birth of a child of the individual; (3) by reason of the
placement of a child with the individual in connection with the adoption of such
child by such individual; or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement.
Participant means an Employee of the Employer who participates in the Plan
pursuant to Article II; a former Employee who participated in the Plan under
Article II and who continues to be entitled to a Vested benefit under the Plan;
or a former Employee who participated in the Plan under Article II, and who has
not yet incurred a One-Year Break in Service. For purposes of Section 6.15,
"Participant" shall include a former Participant, as well as a former
Participant's Surviving Spouse and Participant's or former Participant's Spouse
or former Spouse who is the alternate payee under a qualified domestic relations
order as defined in section 414(p) of the Code (who shall be deemed Participants
with respect to such Spouse's interest under the Plan).
Plan means the Dave & Buster's Employee 401(k) Savings Plan, as set forth
herein.
Plan Year means the 12-consecutive-month period which begins on January 1 and on
each anniversary thereof.
Regulations means the Treasury regulations pertaining to the Internal Revenue
Code of 1986, as amended from time to time.
Required Distributions shall be as described in Section 6.10 of the Plan.
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Spouse means the Spouse or Surviving Spouse of the Participant, provided that a
former Spouse shall be treated as the Spouse or Surviving Spouse to the extent
provided under a "qualified domestic relations order" as defined in section
414(p) of the Code.
Top-Heavy shall have the meaning and effect described in Article XI of the Plan.
Trust means the Trust as established under Article IX and maintained for
purposes of the Plan which is administered by the Trustee in accordance with the
provisions of the agreement of Trust between the Employer and the Trustee. If
the Trust is governed by a separate agreement entered into between the Employer
and the Trustee (which shall be incorporated by reference herein and become part
of the Plan) to the extent the terms of such Trust agreement conflict with the
Plan, the terms of such Trust agreement will control except to the extent that
it is necessary to follow the terms of the Plan in order to maintain the
qualified status of the Plan under section 401(a) of the Code.
Trustee means the party or parties named under the Trust who shall have
exclusive authority and discretion to manage and control the assets of the Plan.
Notwithstanding the above, to the extent the Plan expressly provides, the
Trustee shall be subject to the direction of the Committee and/or Investment
Manager.
Trust Fund means all money and other property received or held by the Trustee
under the Trust, plus all income and gains and minus all losses, expenses, and
distributions chargeable to the Trust assets.
Valuation Date means any day on which the New York Stock Exchange is open for
business.
Vested means nonforfeitable.
Year of Service for vesting purposes only means a 12-consecutive-month period
during which an Employee is credited with at least 1,000 Hours of Service. If a
fractional Year of Service is used in the Plan, there will be no Hours of
Service requirement.
Year of Service for eligibility and participation purposes shall be determined
on the basis of Elapsed Time.
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ARTICLE II - ELIGIBILITY AND PARTICIPATION
Section 2.1 Eligibility Requirements.
(a) Only Employees of an Employer will be eligible to participate in the
Plan; provided, however, that the following employees shall not be
eligible to participate in the Plan:
(i) Employees who are covered by a collective bargaining agreement
unless coverage under the Plan is required by the terms of
such collective bargaining agreement;
(ii) Employees who are nonresident aliens and who receive no United
States source income from the Employer; and
(iii) Leased Employees, unless coverage is required to maintain the
tax-qualified status of the Plan under Section 401(a) of the
Code.
(b) Employees become eligible to participate in the Plan upon attainment of
age 21 and upon the completion of six months of service.
Employees become eligible to make Employee Elective Deferrals upon
attainment of age 21 and upon the completion of six months of service.
(c) Notwithstanding any other provision of this Article II, all Employees
and former Employees who are Participants in the Plan as of the date
immediately preceding the Effective Date of this amendment and
restatement and who then have an Account balance (whether or not
nonforfeitable) shall continue their participation in the Plan as
restated. A former Employee who was a Participant in the Plan and who
received a distribution of his entire nonforfeitable Account balance on
account of termination of employment may become eligible to participate
in the Plan upon reemployment either as a newly hired Employee or by
satisfaction of the eligibility provisions below.
Section 2.2 Participation.
An Employee will begin participation in the Plan on the first day of the next
payroll period applicable to the Employee following the date as of which the
eligibility requirements set forth in Section 2.1 above are satisfied.
For purposes of Employee Elective Deferrals, an eligible non-excluded Employee
will begin participation on the first day of any payroll period designated by
the Employee following satisfaction of the eligibility requirements set forth in
Section 2.1 above.
Section 2.3 Years of Service for Eligibility Computation.
(a) For purposes of determining Years of Service and One-Year Breaks in
Service for purposes of establishing eligibility to participate in the
Plan, the initial eligibility computation period shall be the
12-consecutive-month period beginning on the date on which the Employee
first performs an Hour of Service for the Employer or an Affiliate
("employment commencement date").
(b) The succeeding 12-consecutive-month eligibility computation periods
shall commence with the first Plan Year which includes the first
anniversary of the Employee's
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employment commencement date, regardless of whether the Employee
is entitled to be credited with 1,000 Hours of Service during the
initial eligibility computation period. An Employee who is credited
with service in both the initial eligibility computation period
(described above) and the first Plan Year which commences prior to the
first anniversary of the Employee's initial eligibility computation
period will be credited with two Years of Service for purposes of
eligibility to participate.
(c) Years of Service and One-Year Breaks in Service will be measured by the
same eligibility computation period.
(d) All Years of Service with the Employer or an Affiliate will be credited
for purposes of determining eligibility except the following:
(1) If an Employee has a One-Year Break in Service before
satisfying the eligibility requirements of the Plan, service
before such Break will not be taken into account.
(2) In the case of any Participant where employment with the
Employer terminates and who subsequently is reemployed by the
Employer, regardless of whether the Employee has incurred a
One-Year Break in Service, such Employee will participate
immediately upon returning to employment.
(e) In the event a Participant is no longer a member of an eligible class
of Employees and becomes ineligible to participate but has not incurred
a One-Year Break in Service, such Employee will participate immediately
upon again becoming a member of an eligible class of Employees. If such
Participant incurs a One-Year Break in Service, eligibility will be
determined according to the break in service rules of the Plan
otherwise described in this Section 2.3.
An Employee who has not been, but who becomes, a member of an eligible
class of Employees shall participate in the plan immediately upon
becoming a member of such class if such Employee has satisfied the
minimum age and service requirements necessary to become a Participant
under the Plan.
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ARTICLE III - CONTRIBUTIONS
Section 3.1 Employer Contributions.
Employer Regular Contributions:
For each Plan Year the Employer may make an Employer Regular Contribution to the
Trust based on the total Compensation of all Participants eligible to receive an
allocation. The amount of the Employer Regular Contribution shall be determined
for each Plan Year by the Employer.
Employer Matching Contributions:
For each Plan Year the Employer may make an Employer Matching Contribution to
the Trust based on Employee Elective Deferrals. The amount of the Employer
Matching Contributions shall be determined for each Plan Year by the Employer.
For purpose of making Employer Matching Contributions, the Employer shall not
consider a Participant's Employee Elective Deferrals in excess of 6 percent of
the Participant's Compensation.
Qualified Matching Contributions and Qualified Non-Elective Contributions:
At the discretion of the Employer, Qualified Matching Contributions and
Qualified Non-Elective Contributions may be made which may be used for purposes
of ensuring that the Plan complies with the nondiscrimination tests of sections
401(k) or 401(m) and the Regulations promulgated thereunder. Qualified Matching
Contributions may be made with respect to only those Participants who are
Non-Highly Compensated Employees in an amount deemed necessary by the Employer
to pass the applicable nondiscrimination test(s), determined as a percentage of
such Participant's Employee Elective Deferrals. Qualified Non-Elective
Contributions may be made on behalf of only those Participants who are
Non-Highly Compensated with such contributions allocated first to the lowest
paid Participant until his total allocation reaches the limitation of section
415, then to the next lowest paid Participant and continued in the same manner
until the nondiscrimination test(s) of sections 401(k) and 401(m) of the Code
are met.
Section 3.2 Employee Elective Deferrals.
Each Plan Year, each Participant may elect to defer up to 15 percent of
Compensation (Employee Elective Deferrals) which will be contributed by the
Employer to the Plan. New Participants may commence deferrals as specified in
Section 2.2. A Participant may change his election or make a new election as of
any business day. Notification must be given to the Plan Administrator or its
designee by a Participant prior to the first pay period affected by a
modification.
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In addition, a Participant may cease to have Employee Elective Deferrals made as
of any payroll period if notice is given to the Plan Administrator or its
designee prior to such date. The Plan Administrator may reduce or completely
prohibit Employee Elective Deferrals at any time if the Administrator determines
such action is necessary to ensure compliance with section 401(k), 402(g), or
415 of the Code.
Employee Elective Deferrals under this and all other qualified plans maintained
by the Employer may not be made on behalf of any Participant during any taxable
year to the extent such would exceed the dollar limitation of section 402(g) of
the Code in effect at the beginning of the taxable year ($7,000 as adjusted for
cost of living).
Section 3.3 After-Tax Employee Contributions.
After-Tax Employee Contributions are not permitted under the Plan.
Section 3.4 Rollover Contributions.
(a) An Employee may roll over into the Plan an eligible rollover
distribution (as defined in section 402(c) of the Code) from another
qualified plan, or from an individual retirement account in the manner
described in section 408(d)(3)(A)(ii) of the Code regardless of whether
he has satisfied the eligibility requirements of Section 2.1 or
participation requirements of Section 2.2. If such rollover is not a
direct transfer as described in section 401(a)(31) of the Code, it must
be received by the Plan within 60 days of the date it was received by
the Participant from the distributing qualified plan or individual
retirement account.
(b) The Administrator shall develop such procedures, and may require such
information from an Employee desiring to make such a rollover, as he
deems necessary or desirable to determine that the proposed rollover
will meet the requirements of this Section. Upon approval by the
Administrator, the amount rolled over shall be deposited in the Trust
and shall be credited to the Employee's Rollover Account. Such Account
shall share in allocations of earnings, losses and expenses of the
Trust Fund, but shall not share in allocations of Employer
contributions. The Employee's Rollover Account shall be distributed in
accordance with Article VI.
(c) In the event of a rollover contribution on behalf of an Employee who is
otherwise eligible to participate in the Plan but who has not yet
satisfied the participation requirements of Section 2.2, such
Employee's Rollover Account shall represent his sole interest in the
Plan until he becomes a Participant.
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Section 3.5 Trustee-to-Trustee Transfers.
(a) Subject to Plan Administrator approval, an Employee, not excluded from
participation in the Plan, regardless of whether he has satisfied any
age and service requirements for participation, may cause assets from
the qualified plan of a prior employer to be transferred directly by
the trustee of such qualified plan to the Trustee of this Plan.
(b) A direct rollover as described in Section 6.15 shall not constitute a
trustee-to-trustee transfer for purposes of the Plan.
Section 3.6 Deduction Limitation.
Employer contributions made with respect to any Plan Year under this Article III
are conditioned upon such contributions being deductible by the Employer for
such Plan Year under section 404 of the Code.
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ARTICLE IV - 401(k) AND 401(m)
Section 4.1 Distribution of Excess Employee Elective Deferrals.
(a) Excess Employee Elective Deferrals shall be distributed in accordance
with the provisions of this Section 4.1. Excess Employee Elective
Deferrals are those elective deferrals that are includible in a
Participant's gross income because they exceed the dollar limitation
($7,000 as adjusted for cost of living) imposed under Code section
402(g). Excess Employee Elective Deferrals shall be treated as Annual
Additions under the Plan, except to the extent they are distributed on
or before the April 15 first following the close of a Participant's tax
year.
(b) A Participant may attribute to this Plan any excess Employee Elective
Deferrals made during a taxable year of the Participant by notifying
the Plan Administrator, through actual or deemed notification, on or
before March 1 following the calendar year when the excess Employee
Elective Deferrals are made of the amount of the excess Employee
Elective Deferrals to be attributed to the Plan. A Participant will be
deemed to have notified the Plan Administrator of any excess Employee
Elective Deferrals which exist when only those elective deferrals made
to this Plan and any other plan(s) maintained by the Employer are taken
into account.
(c) Notwithstanding any other provision of the Plan, excess Employee
Elective Deferrals, plus any income and minus any loss allocable
thereto, shall be distributed no later than April 15 to any Participant
to whose Account excess Employee Elective Deferrals were attributed for
the preceding year and who claims excess Employee Elective Deferrals
for such taxable year. With respect to any taxable year, a
Participant's Employee Elective Deferrals are the sum of all Employer
contributions made on behalf of such Participant pursuant to an
election to defer under any qualified cash or deferred arrangement as
described in section 401(k) of the Code, any simplified employee
pension cash or deferred arrangement as described in section
402(h)(1)(B) of the Code, any eligible deferred compensation plan under
section 457 of the Code, any plan described under section 501(c)(18) of
the Code, and any Employer contributions made on the behalf of a
Participant for the purchase of an annuity contract under section
403(b) of the Code pursuant to a salary reduction agreement, but shall
not include amounts distributed pursuant to the provisions of Section
5.4(a)(3) of this Plan.
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(d) Excess Employee Elective Deferrals shall be adjusted for any income or
loss during the Plan Year. The income or loss allocable to excess
Employee Elective Deferrals is the income or loss allocable to the
Participant's Employee Deferral Account for the taxable year multiplied
by a fraction, the numerator of which is such Participant's excess
Employee Elective Deferrals for the year and the denominator is the
Participant's Account balance attributable to Employee Elective
Deferrals without regard to any income or loss occurring during such
taxable year.
Section 4.2 Actual Deferral Percentage Test.
(a) For each Plan Year, the Actual Deferral Percentage (ADP) for
Participants who are Highly Compensated Employees must bear a
relationship to the ADP for Participants who are Non-Highly Compensated
Employees which satisfies either of the following tests for
nondiscrimination:
(1) The ADP for Participants who are Highly Compensated Employees
is not more than the ADP for Participants who are Non-Highly
Compensated Employees multiplied by 1.25; or
(2) The ADP for Participants who are Highly Compensated Employees
is not more than the ADP for Participants who are Non-Highly
Compensated Employees multiplied by two, and the ADP for
Participants who are Highly Compensated Employees does not
exceed the ADP for Participants who are Non-Highly Compensated
Employees by more than two percentage points.
Actual Deferral Percentage means, for a specified group of Participants
for a Plan Year, the average of the ratios (calculated separately for
each Participant in such group) of (i) the amount of Employer
contributions actually paid over to the Trust on behalf of such
Participant for the Plan Year to (ii) the Participant's Compensation
for such Plan Year. Employer contributions on behalf of any Participant
shall include: (i) any Employee Elective Deferrals made pursuant to the
Participant's deferral election, including excess Employee Elective
Deferrals of Highly Compensated Employees, but excluding (A) Excess
Employee Elective Deferrals by Non-Highly Compensated Employees which
are attributable solely to Employee Elective Deferrals made under the
Plan or any other plan(s) of the Employer and (B) Employee Elective
Deferrals that are taken into account in the Contribution Percentage
test (provided the ADP test is satisfied both with and without
exclusion of these Employee Elective Deferrals); and (ii) at the
election of the Employer, Qualified Non-Elective Contributions and
Qualified Matching Contributions made either to the Plan or another
plan of the Employer qualified under section 401(a) of the Code. For
purposes of computing Actual Deferral Percentages, any Employee who
would be a Participant but for the failure to make Employee Elective
Deferrals shall be
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treated as a Participant on whose behalf no Employee Elective Deferrals
are made. For Plan Years beginning before the later of January 1, 1992,
or 60 days after the publication of final Regulations, Compensation may
be limited to that which is received for the period the Employee is a
Participant.
(b) The ADP for any Participant who is a Highly Compensated Employee for
the Plan Year shall be determined by aggregating his employee elective
deferrals in all plans maintained by the Employer. If a Highly
Compensated Employee participates in two or more cash or deferred
arrangements having different plan years, all cash or deferred
arrangements ending with or within the same calendar year shall be
treated as a single arrangement. Notwithstanding the above, any plans
required to be mandatorily segregated pursuant to Regulations
promulgated under section 401(k) of the Code shall not be aggregated
for purposes of this Section 4.2.
(c) In the event that this Plan satisfies the requirements of sections
401(k), 401(a)(4), or 410(b) of the Code only if aggregated with one or
more other plans, or if one or more other Plans satisfy the
requirements of such sections of the Code only if aggregated with this
Plan, then this Section shall be applied by determining the ADP of
Employees as if all such plans were a single plan. For Plan Years
beginning after December 31, 1989, plans may be aggregated in order to
satisfy section 401(k) of the Code only if they have the same Plan
Year.
(d) For purposes of determining the ADP of a Participant who is a 5-percent
owner or one of the ten most highly paid Highly Compensated Employees,
the Employee Elective Deferrals (and Qualified Non-Elective
Contributions or Qualified Matching Contributions, or both, if treated
as Employee Elective Deferrals for purposes of the ADP test) and
Compensation of such Participant shall include, respectively, the
Employee Elective Deferrals (and, if applicable, Qualified Non-Elective
Contributions and Qualified Matching Contributions, or both) and
Compensation for the Plan Year of family members (as defined in section
414(q)(6) of the Code). Such family members shall be disregarded as
separate Employees in determining the ADP both for Participants who are
Non-Highly Compensated Employees and for Participants who are Highly
Compensated Employees.
(e) In order to be considered for purposes of performing the ADP test(s),
Employee Elective Deferrals, Qualified Non-Elective Contributions and
Qualified Matching Contributions must be made before the last day of
the twelve-month period immediately following the Plan Year to which
such contributions relate.
(f) The Employer shall maintain annual records sufficient to demonstrate
satisfaction of the ADP test and identify the amount of Qualified
Non-Elective Contributions or Qualified Matching Contributions, or
both, used in such test.
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(g) The determination and treatment of the amounts considered in
determining the ADP with respect to each Participant shall satisfy such
other requirements as may be prescribed by the Secretary of the
Treasury.
Section 4.3 Distribution of Excess Contributions.
(a) Discriminatory Employee Elective Deferrals (Excess Contributions) are,
with respect to any Plan Year, the excess of:
(1) The aggregate amount of Employer contributions actually taken
into account in computing the ADP of Highly Compensated
Employees for such Plan Year, over
(2) The maximum amount of such contributions permitted pursuant to
the ADP test described under Section 4.2(a) (determined by
reducing contributions made on behalf of Highly Compensated
Employees in order, beginning with the contributions made on
behalf of the Employee with the highest ADP).
(b) Notwithstanding any other provision of this Plan, Excess Contributions,
plus any income and minus any loss allocable thereto, shall be
distributed no later than the last day of each Plan Year to
Participants to whose Accounts such Excess Contributions were allocated
for the preceding Plan Year. Such distributions shall be made to Highly
Compensated Employees on the basis of the respective portions of the
Excess Contributions attributable to each of such Employees, calculated
as described above. Excess Contributions shall be allocated to
Participants who are subject to the family member aggregation rules of
section 414(q)(6) of the Code in proportion to the Employee Elective
Deferrals (and amounts treated as Employee Elective Deferrals) of each
family member whose Employee Elective Deferrals are included in the
combined ADP. Excess Contributions (including any amounts
recharacterized as After-Tax Employee Contributions as permitted under
Section 4.6) shall be treated as Annual Additions under the Plan.
(c) Excess Contributions shall be adjusted for any income or loss during
the Plan Year. The income or loss allocable to Excess Contributions is
the income or loss allocable to the Participant's Employee Deferral
Account (and, if applicable, his Qualified Non-Elective Contribution
Account or Qualified Matching Contributions Account, or both) for the
Plan Year multiplied by a fraction, the numerator of which is such
Participant's Excess Contributions for the year and the denominator of
which is the Participant's Account balance attributable to Employee
Elective Deferrals (and Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both, if any of such contributions
are included in the ADP test) without regard to any income or loss
occurring during such Plan Year.
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(d) Excess Contributions shall be distributed from the Participant's
Employee Deferral Account and Qualified Matching Contributions Account
(if applicable) in proportion to the Participant's Employee Elective
Deferrals and Qualified Matching Contributions (to the extent used in
the ADP test) for the Plan Year. Excess Contributions shall be
distributed from the Participant's Qualified Non-Elective Contribution
Account only to the extent that such Excess Contributions exceed the
balance of the Participant's Employee Deferral Account and Qualified
Matching Contributions Account.
Section 4.4 Actual Contribution Percentage Test.
(a) For each Plan Year, the Actual Contribution Percentage (ACP) of Highly
Compensated Employees must bear a relationship to the ACP for
Non-Highly Compensated Employees which satisfies either of the
following tests for nondiscrimination:
(1) The ACP for Participants who are Highly Compensated Employees
is not more than the ACP for Participants who are Non-Highly
Compensated Employees multiplied by 1.25; or
(2) The ACP for Participants who are Highly Compensated Employees
is not more than the ACP for Participants who are Non-Highly
Compensated Employees multiplied by two, and the ACP for
participants who are Highly Compensated Employees does not
exceed the ACP for Participants who are Non-Highly Compensated
Employees by more than two percentage points.
(b) If any Highly Compensated Employees have both Employee Elective
Deferrals and Matching Contributions and/or After-Tax Employee
Contributions made on their behalf to plans maintained by the Employer,
and the sum of the ADP and ACP of such Highly Compensated Employees
subject to either or both tests exceeds the Aggregate Limit, then the
ACP of each such Highly Compensated Employee will be reduced (beginning
with that of the Highly Compensated Employee whose ACP is the highest)
so that the limit is not exceeded. The amount by which each Highly
Compensated Employee's Contribution Percentage Amount is reduced shall
be treated as an Excess Aggregate Contribution. The ADP and ACP of the
Highly Compensated Employees are determined after any corrections
required to meet the ADP and ACP tests. Multiple use does not occur if
either the ADP or ACP of the Highly Compensated Employees does not
exceed 1.25 multiplied by the ADP and ACP of the Non-Highly Compensated
Employees.
(c) For purposes of this Section, the Actual Contribution Percentage for
any Participant who is a Highly Compensated Employee and who is
eligible to have Contribution Percentage Amounts allocated to his or
her Account under two or more plans described in section 401(a) of the
Code, or arrangements described in section 401(k) of the Code that are
maintained by the Employer, shall be determined as if the total of such
Contribution Percentage Amounts was made under each plan. If a Highly
Compensated Employee
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participates in two or more cash or deferred arrangements that have
different plan years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single arrangement.
Notwithstanding the above, to the extent mandatorily disaggregated
pursuant to Treasury Regulations promulgated under section 401(m) of
the Code, applicable plans shall continue to be treated as separate.
(d) In the event that this Plan satisfies the requirements of sections
401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of such sections of the Code only if aggregated with this
Plan, then this Section shall be applied by determining the
Contribution Percentage of Employees as if all such plans were a single
plan. For plan years beginning after December 31, 1989, plans may be
aggregated in order to satisfy section 401(m) of the Code only if they
have the same plan year.
(e) For purposes of determining the Actual Contribution Percentage of a
Participant who is a five-percent owner or one of the ten most highly
paid Highly Compensated Employees, the Contribution Percentage Amounts
and Compensation of such Participant shall include the Contribution
Percentage Amounts and Compensation for the Plan Year of family members
as defined in section 414(q)(6) of the Code. Family members, with
respect to Highly Compensated Employees, shall be disregarded as
separate Employees in determining the Contribution Percentage both for
Participants who are Non-Highly Compensated Employees and for
Participants who are Highly Compensated Employees.
(f) For purposes of determining the ACP test, Employee Contributions are
considered to have been made in the Plan Year in which contributions
were made to the Trust. Matching Contributions and Qualified
Non-Elective Contributions will be considered made for a Plan Year if
made no later than the end of the twelve-month period beginning on the
day after the close of the Plan Year.
(g) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and identify the amount of Qualified
Non-Elective Contributions or Qualified Matching Contributions, or
both, used in such test.
(h) The determination and treatment of the Contribution Percentage of any
Participant shall satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
(i) Definitions:
"Average Contribution Percentage" means, for a specified group of
Participants for a Plan Year, the average of the ratios (calculated
separately for each Participant in such group) of the Participant's
Contribution Percentage Amounts to the Participant's Compensation for
the Plan Year (whether or not the Employee was a Participant for the
entire Plan Year).
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"Aggregate Limit" -- In general, for purposes of this Section, the
Aggregate Limit is the greater of:
(1) The sum of:
(A) 1.25 times the greater of the Relevant Actual
Deferral Percentage or the Relevant Actual
Contribution Percentage, and
(B) Two percentage points plus the lesser of the Relevant
Actual Deferral Percentage or the Relevant Actual
Contribution Percentage. In no event, however, shall
this amount exceed twice the lesser of the Relevant
Actual Deferral Percentage or the Relevant Actual
Contribution Percentage; or
(2) The sum of:
(A) 1.25 times the lesser of the Relevant Actual Deferral
Percentage or the Relevant Actual Contribution
Percentage, and
(B) Two percentage points plus the greater of the
Relevant Actual Deferral Percentage or the Relevant
Actual Contribution Percentage. In no event, however,
shall this amount exceed twice the greater of the
Relevant Actual Deferral Percentage or the Relevant
Actual Contribution Percentage.
"Relevant Actual Deferral Percentage" means the Actual Deferral
Percentage of the group of Non-Highly Compensated Employees eligible
under the arrangement subject to section 401(k) of the Code for the
Plan Year, and the term "Relevant Actual Contribution Percentage" means
the Actual Contribution Percentage of the group of Non-Highly
Compensated Employees eligible under the Plan subject to section 401(m)
of the Code for the Plan Year beginning with or within the Plan Year of
the arrangement subject to section 401(k) of the Code.
"Contribution Percentage" means the ratio (expressed as a percentage)
of the Participant's Contribution Percentage Amounts to the
Participant's Compensation for the Plan Year (whether or not the
Employee was a Participant for the entire Plan Year).
"Contribution Percentage Amounts" means the sum of the Employee
Contributions, Matching Contributions, and Qualified Matching
Contributions (to the extent not taken into account for purposes of the
ADP test) made under the Plan on behalf of the Participant for the Plan
Year. Such Contribution Percentage Amounts shall not include Matching
Contributions which are forfeited either in order to correct Excess
Aggregate Contributions or because the contributions to which they
relate are Excess Employee Deferrals, Excess Contributions, or Excess
Aggregate Contributions. The Employer may include Qualified
Non-Elective Contributions in the Contribution Percentage Amounts.
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The Employer also may elect to use Employee Elective Deferrals in the
Contribution Percentage Amounts so long as the ADP test is met before
the Employee Elective Deferrals are used in the ACP test and continues
to be met following the exclusion of those Employee Elective Deferrals
that are used to meet the ACP test.
"Eligible Participant" means any Employee who is eligible to make an
After-Tax Employee Contribution, or an Employee Elective Deferral (if
the Employer takes such contributions into account in the calculation
of the Contribution Percentage), or to receive a Matching Contribution
or a Qualified Matching Contribution.
"After-Tax Employee Contribution" means any contribution made to the
Plan by or on behalf of a Participant that is included in the
Participant's gross income in the year in which made and that is
maintained under a separate Account to which earnings and losses are
allocated.
"Matching Contribution" means an Employer contribution made to this or
any other Defined Contribution Plan on behalf of a Participant on
account of an Employee Contribution made by such Participant, or on
account of a Participant's Employee Elective Deferral, under a plan
maintained by the Employer.
Section 4.5 Distribution of Excess Aggregate Contributions.
(a) "Excess Aggregate Contributions" means, with respect to any Plan Year, the
excess of:
(1) The Actual Contribution Percentage (ACP) amounts taken into
account in computing the numerator of the Contribution
Percentage actually made on behalf of Highly Compensated
Employees for such Plan Year, over
(2) The maximum contribution percentage amounts permitted by the
ACP test (determined by reducing contributions made on behalf
of Highly Compensated Employees in order of such Employees'
Actual Contribution Percentages beginning with the highest of
such percentages).
(b) Notwithstanding any other provision of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss thereto, shall be
forfeited if forfeitable or, if not forfeitable, distributed no later
than the last day of each Plan Year to Participants to whose Accounts
such Excess Aggregate Contributions were allocated for the preceding
Plan Year. Excess Aggregate Contributions of Participants who are
subject to the family member aggregation rules of section 414(q)(6) of
the Code shall be allocated among applicable family members in
proportion to the After-Tax Employee and Employer Matching
Contributions (or amounts treated as Matching Contributions) of each
family member whose contributions are included in the combined ACP.
Excess Aggregate Contributions shall be treated as Annual Additions
under the Plan.
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(c) Excess Aggregate Contributions shall be adjusted for any income or loss
during the Plan Year. The income or loss allocable to Excess Aggregate
Contributions shall be the Matching Contribution Account (if any, and
if all amounts therein are not used in the ADP test) and, if
applicable, Qualified Non-Elective Contribution Account and Employee
Deferral Account for the Plan Year multiplied by a fraction, the
numerator of which is such Participant's Excess Aggregate Contributions
for the year and the denominator is the Participant's Account
balance(s) attributable to contribution percentage amounts without
regard to any income or loss occurring during such Plan Year.
(d) Forfeitures of Excess Aggregate Contributions may either be reallocated
to the Accounts of Non-Highly Compensated Employees or applied to
reduce Employer contributions.
(e) Excess Aggregate Contributions shall be forfeited, if forfeitable, or
distributed on a pro rata basis from the Participant's After-Tax
Employee Contribution Account, Matching Contribution Account, and
Qualified Matching Contribution Account (and, if applicable, the
Participant's Qualified Non-Elective Contribution Account or Employee
Deferral Account, or both).
Section 4.6 Recharacterization.
Recharacterization is inapplicable to this Plan because there are no After-Tax
Employee Contributions.
Section 4.7 Additional Adjustments of Employee Elective Deferrals
For purposes of assuring compliance with the Actual Deferral Percentage tests of
Section 4.2 hereof, the Committee may, in its sole and absolute discretion, make
such adjustments, reductions or suspensions to Employee Elective Deferral rates
of Participants who are Highly Compensated Employees at such times and in such
amounts as the Committee shall reasonably deem necessary, including prospective
reductions of Employee Elective Deferrals at any time prior to or within a Plan
Year. The Committee shall make such adjustments, reductions or suspensions based
upon periodic reviews of the Employee Elective Deferral rates of Highly
Compensated Employees during the Plan Year and may make such adjustments,
reductions or suspensions in any amount notwithstanding any other provisions
hereof.
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ARTICLE V - ALLOCATIONS, VALUATION AND VESTING
Section 5.1 Allocation of Contributions.
Subject to the limitations of Article IV and Section 5.4 hereof, contributions
made to the Plan under Article III shall be allocated to Participant's Accounts
in accordance with this Section 5.1.
(a) As of the Valuation Date, Employee Elective Deferrals, Qualified
Non-Elective Contributions, and Qualified Matching Contributions, if
any, made to the Plan since the last Valuation Date will be allocated
to Participants' appropriate Accounts in the amounts in which they were
contributed to the Plan by the Employer with respect to each
Participant pursuant to Article III.
(b) As of the Valuation Date, Employer Regular Contributions made under
Section 3.1, if any, since the last Valuation Date shall be allocated
to the Employer Regular Contribution Account of each Participant
described in Section 5.2 according to the ratio that such Participant's
Compensation for the Plan Year bears to the Compensation of all
Participants for such Plan Year.
(c) As of the Valuation Date, Employer Matching Contributions, if any, made
to the Plan since the last Valuation Date will be allocated to the
Employer Matching Contribution Account of each Participant described in
Section 5.2 according to the ratio that such Participant's Employee
Elective Deferrals for the Plan Year not in excess of 6 percent of such
Participant's Compensation for the Plan Year bears to the Employee
Elective Deferrals of all Participants for the Plan Year not in excess
of 6% of each such Participant's Compensation for the Plan Year.
Section 5.2 Participants Who Will Receive an Allocation.
(a) An allocation under Section 5.1(b) of Employer Regular Contributions
made under Section 3.1 shall only be made with respect to those
Participants who are employed on the last day of the Plan Year and have
performed at least 1,000 Hours of Service during the Plan Year.
(b) An allocation under Section 5.1(c) of Employer Matching Contributions
made under Section 3.1 shall only be made with respect to those
Participants who have performed at least one (1) Hour of Service during
the Plan Year regardless of employment status on the last day of the
Plan Year and who have made Employee Elective Deferrals for the Plan
Year.
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(c) Notwithstanding the above, a Participant shall receive an allocation of
Employer Regular Contributions, if any, for a Plan Year in certain
situation(s) as set forth below regardless of the following:
o The Participant's failure to complete 1,000 Hours of Service.
o The Participant's failure to be employed on the last day of the
Plan Year.
This special rule will apply in the following situation(s):
o The Participant dies during the Plan Year.
o The Participant becomes disabled during the Plan Year.
Section 5.3 Allocation of Forfeitures.
Forfeitures, if any, will reduce Employer Regular and Matching Contributions for
the next Plan Year.
Section 5.4 Allocation Limitations.
(a) If the Participant does not participate in, and has never participated
in another qualified plan maintained by the Employer, or a welfare
benefit fund, as defined in section 419(e) of the Code maintained by
the Employer, or an individual medical account, as defined in section
415(l)(2) of the Code, maintained by the Employer, which provides an
Annual Addition as defined in subsection (d)(1), the following
provisions shall apply:
(1) The amount of Annual Additions which may be credited to the
Participant's Account for any Limitation Year shall not exceed
the lesser of the Maximum Permissible Amount, as defined in
subsection (d)(9), or any other limitation contained in this
Plan. If contributions that would otherwise be contributed or
allocated to the Participant's Account would cause the Annual
Additions for the Limitation Year to exceed the Maximum
Permissible Amount, the amount contributed or allocated will
be reduced (Employee Elective Deferrals first) so that the
Annual Additions for the Limitation Year will equal the
Maximum Permissible Amount.
(2) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Section 415 Compensation for the
Limitation Year.
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(3) If there is an excess Annual Addition due to a reasonable
error in estimating a Participant's Compensation or in
determining permissible Employee Elective Deferrals, or due to
the allocation of Forfeitures (if any), or any other facts and
circumstances as determined by the Committee and which are
found by the Commissioner of Internal Revenue to justify the
availability of the procedures for correcting the excess as
set forth in this subsection, the excess will be corrected as
follows:
(A) Any After-Tax Employee Contributions, to the extent
their return would reduce the excess, will be
returned to the Participant;
(B) Any portion of the excess directly attributable to
and arising from Employee Elective Deferrals, to the
extent its return would reduce the excess, will be
returned to the Participant;
(C) If after the application of paragraphs (A) and (B) an
excess still exists, and the Participant is covered
by the Plan at the end of the Limitation Year, the
excess in the Participant's Account will be used to
reduce Employer contributions beginning with Employee
Elective Deferrals, if any, for the next Limitation
Year, and each succeeding Limitation Year if
necessary;
(D) If after the application of paragraphs (A) and (B) an
excess still exists, and the Participant is not
covered by the Plan at the end of a Limitation Year,
the excess will be held unallocated in a suspense
account. The suspense account will be applied to
reduce future contributions beginning with Employee
Elective Deferrals, if any, for all remaining
Participants for the next Limitation Year, and each
succeeding Limitation Year if necessary;
(E) If a suspense account is in existence at any time
during a Limitation Year pursuant to this Section, it
will not receive any allocation of the investment
gains and losses of the Trust. If a suspense account
is in existence at any time during a particular
Limitation Year, all amounts in the suspense account
must be allocated and reallocated to Participants'
Accounts before any Employer or any After-Tax
Employee Contributions may be made to the Plan for
that Limitation Year. The excess amount may not be
distributed to Participants or former Participants.
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(b) If, in addition to this Plan, a Participant is covered under another
qualified Defined Contribution Plan maintained by the Employer, a
welfare benefit fund (as defined in section 419(e) of the Code)
maintained by the Employer, or an individual medical account (as
defined in section 415(l)(2) of the Code) maintained by the Employer,
which provides an Annual Addition as defined in subsection (d)(1),
during any Limitation Year, the following provisions shall apply:
(1) The Annual Additions which may be credited to a Participant's
Account under this Plan for any such Limitation Year may not
exceed the Maximum Permissible Amount reduced by the Annual
Additions credited to such Participant's account under such
other plans and/or welfare benefit funds for the same
Limitation Year. If the Annual Additions with respect to the
Participant under other Defined Contribution Plans and welfare
benefit funds maintained by the Employer are less than the
Maximum Permissible Amount and the Employer contribution that
would otherwise be contributed or allocated to the
Participant's Account under this Plan would cause such
Participant's Annual Additions for the Limitation Year to
exceed this limitation, the amount contributed or allocated
will be reduced so that the Annual Additions under all such
plans and funds for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to
the Participant under such other Defined Contribution Plans
and welfare benefit funds in the aggregate are equal to or
greater than the Maximum Permissible Amount, no amount will be
contributed or allocated to the Participant's Account under
this Plan for the Limitation Year.
(2) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Section 415 Compensation for the
Limitation Year.
(3) If, as a result of a reasonable error in estimating
compensation, Employee contributions, the allocation of
Forfeitures or other facts and circumstances as determined by
the Committee, a Participant's Annual Additions under this
Plan and such other plans would include an amount in excess of
the Maximum Permissible Amount for a Limitation Year, the
excess will be deemed to consist of the Annual Additions last
allocated, except that Annual Additions attributable to a
welfare benefit fund or individual medical account will be
deemed to have been allocated first regardless of the actual
allocation date.
(4) If an amount in excess of the Maximum Permissible Amount was
allocated to a Participant on an allocation date of this Plan
which coincides with an allocation date of another plan, the
excess attributed to this Plan will be the product of
(A) the total excess allocated as of such date and
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(B) the ratio of (i) the Annual Additions allocated to
the Participant for the Limitation Year as of such
date under this Plan to (ii) the total Annual
Additions allocated to the Participant for the
Limitation Year as of such date under this and all
other qualified Defined Contribution Plans maintained
by the Employer.
(5) Any excess Annual Addition attributed to this Plan will be
disposed of in the manner described in subsection (a)(3).
(c) If the Employer maintains, or at any time maintained, a qualified
Defined Benefit Plan covering any Participant in this Plan, the sum of
a Participant's Defined Benefit Fraction and Defined Contribution
Fraction shall not exceed 1.0 in any Limitation Year. If the sum of the
fractions exceeds 1.0, the annual benefit provided under the Defined
Benefit Plan will be reduced until the sum of the fractions equals 1.0.
(d) Definitions:
(1) Annual Additions: The sum of the following amounts which are
credited to a Participant's Account for the Limitation Year:
(A) Employer contributions,
(B) After-Tax Employee Contributions (if any),
(C) Forfeitures, and
(D) Amounts allocated, after March 31, 1984, to an
individual medical account, as defined in section
415(1)(2) of the Code, which is part of a pension or
annuity plan maintained by the Employer, as well as
amounts derived from contributions paid or accrued
after December 31, 1985, in taxable years ending
after such date, attributable to post-retirement
medical benefits and allocated to the separate
account of a Key Employee, as defined in section
419(d)(3) of the Code, under a welfare benefit fund,
as defined in section 419(e) of the Code, maintained
by the Employer.
For this purpose, any excess applied under sections (a)(3) or
(b)(5) in the Limitation Year to reduce Employer contributions
will be considered Annual Additions for such Limitation Year.
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(2) Section 415 Compensation: For purposes of this Section, wages
as defined in section 3401(a) of the Code together with all
other compensatory payments to an Employee by the Employer
with respect to which the Employer must furnish to the
Employee a written statement pursuant to section 6041(d) and
6051(a)(3) of the Code, but determined without regard to any
rules (such as the exception for agricultural labor in section
3401(a)(2) of the Code) which limit the remuneration included
in wages based on the nature or location of the employment or
services performed.
For Limitation Years beginning after December 31, 1991, for
purposes of applying the limitations of this Article, Section
415 Compensation for a Limitation Year is the compensation
actually paid or made available during such Limitation Year.
Section 415 Compensation does not include accrued compensation
unless it is uniform and consistent and paid within two weeks.
Notwithstanding the preceding sentence, Section 415
Compensation for a Participant in a Defined Contribution Plan
who is permanently and totally disabled (as defined in section
22(e)(3) of the Code) is the compensation such Participant
would have received for the Limitation Year if the Participant
had been paid at the rate of compensation at which he was paid
immediately before becoming permanently and totally disabled;
such imputed compensation for the disabled Participant may be
taken into account only if the Participant is not a Highly
Compensated Employee (as defined in section 414(q) of the
Code) and contributions made on behalf of such Participant are
nonforfeitable when made.
(3) Defined Benefit Fraction: A fraction, the numerator of which
is the sum of the Participant's Projected Annual Benefit under
all Defined Benefit Plans (whether or not terminated)
maintained by the Employer, and the denominator of which is
the lesser of 125 percent of the dollar limitation determined
for the Limitation Year under sections 415(b) and (d) of the
Code or 140 percent of the highest average Section 415
Compensation, including any adjustments under section 415(b)
of the Code.
Notwithstanding the above, if the Participant was a
Participant, as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more Defined
Benefit Plans maintained by the Employer which were in
existence on May 6, 1986, the denominator of this fraction
will not be less than 125 percent of the sum of the annual
benefits under such plans which the Participant had accrued as
of the close of the last Limitation Year beginning before
January 1, 1987, disregarding any changes in the terms and
conditions of the plan(s) after May 5, 1986. The preceding
sentence applies only if the Defined Benefit Plans
individually and in the aggregate satisfied the requirements
of section 415 of the Code for all Limitation Years beginning
before January 1, 1987.
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(4) Defined Contribution Dollar Limitation: $30,000 or, if
greater, one-fourth of the defined benefit dollar limitation
set forth in section 415(b)(1) of the Code, as indexed, as in
effect for the applicable Limitation Year.
(5) Defined Contribution Fraction: A fraction, the numerator of
which is the sum of the Annual Additions to the Participant's
Account under this and all other Defined Contribution Plans
(whether or not terminated) maintained by the Employer for the
current and all prior Limitation Years (including the annual
additions attributable to the Participant's nondeductible
Employee contributions to all Defined Benefit Plans, whether
or not terminated, maintained by the Employer, and the annual
additions attributable to all welfare benefit funds, as
defined in section 419(e) of the Code, and individual medical
accounts, as defined in section 415(1)(2) of the Code,
maintained by the Employer), and the denominator of which is
the sum of the maximum aggregate amounts for the current and
all prior Limitation Years which also constituted Years of
Service with the Employer (regardless of whether a Defined
Contribution Plan was maintained by the Employer). The maximum
aggregate amount for any Limitation Year is the lesser of (A)
125 percent of the dollar limitation determined under sections
415(b) and (d) of the Code in effect under section
415(c)(1)(A) of the Code or (B) 35 percent of the
Participant's Section 415 Compensation for such year.
If the Employee was a Participant as of the end of the first
day of the first Limitation Year beginning after December 31,
1986 in one or more Defined Contribution Plans maintained by
the Employer which were in existence on May 6, 1986, the
numerator of this fraction will be adjusted if the sum of this
fraction and the Defined Benefit Fraction would otherwise
exceed 1.0 under the terms of this Plan. Under the adjustment,
an amount equal to the product of (1) the excess of the sum of
the fractions over 1.0, multiplied by (2) the denominator of
this fraction, will be permanently subtracted from the
numerator of this fraction. The adjustment is calculated using
the fractions as they would be computed as of the end of the
last Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the
Plan made after May 5, 1986, but using the Code section 415
limitation applicable to the first Limitation Year beginning
on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all Employee
contributions as Annual Additions.
In determining the Defined Contribution Fraction under section
415(e)(3)(B) of the Code and pursuant to this Section of the
Plan, "100 percent" shall be substituted for "125 percent"
unless the minimum allocation percentage under section
416(c)(2)(A) of the Code and Section 11.3(a) of the Plan is
increased from
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"three percent" to "four percent" and the Plan would not be a
Top-Heavy Plan if the phrase "90 percent" were substituted for
each reference to the phrase "60 percent" in Section 11.2(b)
of the Plan.
(6) Employer: For purposes of this Article, any entity that adopts
this Plan, and all members of a controlled group of
corporations (as defined in section 414(b) of the Code as
modified by section 415(h) of the Code), all commonly
controlled trades or businesses (as defined in section 414(c)
of the Code as modified by section 415(h) of the Code) or
affiliated service groups (as defined in section 414(m) of the
Code) of which the adopting Employer is part, and any other
entity required to be aggregated with the Employer pursuant to
Regulations under section 414(o) of the Code.
(7) Highest Average Compensation: The average Section 415
Compensation for the three consecutive Years of Service with
the Employer which produces the highest average.
(8) Limitation Year: The Limitation Year is the Plan Year. All
qualified plans maintained by the Employer must use the same
Limitation Year. If the Limitation Year is amended to a
different 12-consecutive-month period, the new Limitation Year
must begin on a date within the Limitation Year in which the
amendment is made.
(9) Maximum Permissible Amount: The maximum Annual Addition that
may be contributed or allocated to a Participant's Account
under the Plan for any Limitation Year shall not exceed the
lesser of:
(A) the Defined Contribution Dollar Limitation, or
(B) 25 percent of the Participant's Section 415
Compensation for the Limitation Year.
The Section 415 Compensation limitation referred to
in (B) shall not apply to any contribution for
medical benefits (within the meaning of section
401(h) or section 419A(f)(2) of the Code) which is
otherwise treated as an Annual Addition under
sections 415(1)(1) or 419A(d)(2) of the Code.
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If a short Limitation Year is created because an
amendment changes the Limitation Year to a different
12-consecutive-month period, the Maximum Permissible
Amount shall not exceed the Defined Contribution
Dollar Limitation multiplied by the following
fraction:
Number of months in the short Limitation Year
12
(10) Projected Annual Benefit: The annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity
if such benefit is expressed in a form other than a straight
life annuity or qualified joint and survivor annuity) to which
the Participant would be entitled under the terms of the Plan
assuming:
(A) The Participant will continue employment until Normal
Retirement Age under the Plan (or current age, if
later), and
(B) The Participant's Section 415 Compensation for the
current Limitation Year and all other relevant
factors used to determine benefits under the Plan
will remain constant for all future Limitation Years.
Section 5.5 Valuation.
The assets of the Trust will be valued on each Valuation Date at fair market
value. On such date, the earnings and losses of the Trust will be allocated to
each Participant's Account according to the ratio of such Account balance to all
Account balances, or by utilizing any other formula as is appropriate under the
circumstances.
Section 5.6 Vesting and Accrual.
(a) Employee Elective Deferrals, Qualified Matching Contributions and
Qualified Non-Elective Contributions are always 100 percent Vested.
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(b) The nonforfeitable percentage of a Participant's Account attributable
to Employer Regular Contributions is determined as follows:
The nonforfeitable
Year(s) of Service: percentage is:
------------------ ------------------
Less than 1 0
Less than 2 25
Less than 3 50
Less than 4 75
Less than 5 100
Less than 6 100
Less than 7 100
7 or more 100
(c) The nonforfeitable percentage of a Participant's Account attributable
to Employer Matching Contributions is determined as follows:
The nonforfeitable
Year(s) of Service: percentage is:
------------------- ------------------
Less than 1 0
Less than 2 25
Less than 3 50
Less than 4 75
Less than 5 100
Less than 6 100
Less than 7 100
7 or more 100
(d) Notwithstanding the vesting schedule(s) specified above, an Employee's
right to his Accounts will be nonforfeitable upon attainment of Normal
Retirement Age, death or Disability.
(e) For purposes of computing an Employee's nonforfeitable right to his
Account balance derived from Employer contributions, Years of Service
and One-Year Breaks in Service will be measured by the Plan Year.
(f) All of an Employee's Years of Service with the Employer or any
Affiliate will be credited for vesting purposes.
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(g) Years of Service before a One-Year Break in Service:
(1) In the case of a Participant who has incurred a One-Year Break
in Service, Years of Service before such break will not be
taken into account until the Participant has completed a Year
of Service after such One-Year Break in Service.
(2) In the case of a Participant who has 5 or more consecutive
One-Year Breaks in Service, all service after such One-Year
Breaks in Service will be disregarded for the purposes of
vesting the Employer-derived Account balance that accrued
before such One-Year Breaks in Service. Such Participant's
pre-break service will count in vesting the post-break
Employer-derived Account balance only if either:
(A) such Participant has any nonforfeitable interest in
the Account balance attributable to Employer
contributions at the time of separation from service,
or
(B) upon returning to service the number of consecutive
One-Year Breaks in Service is less than the number of
Years of Service.
Separate Accounts will be maintained for the Participant's
pre-break and post-break Employer-derived Account balance.
Both Accounts will share in the earnings and losses of the
Trust Fund.
If a Participant ceases to be employed but is then reemployed
by the Employer before a One-Year Break in Service occurs, he
shall continue to participate in the Plan in the same manner
as if such termination had not occurred.
(h) If a Participant ceases to be employed but is then reemployed by the
Employer after he has incurred a One-Year Break in Service, and such
individual had received a distribution of his entire Vested interest
(including where the Participant had no Vested amount in his Account)
prior to reemployment, his forfeited Account shall be restored only if
he repays the full amount distributed to him before the earlier of five
(5) years after the first date on which the Participant is subsequently
reemployed by the Employer or the close of the first period of five
consecutive One-Year Breaks in Service commencing after the
distribution. If a distribution occurs for any reason other than a
separation from service, the time for repayment may not end earlier
than five years after the date of the distribution. In the event the
former Participant repays the full amount distributed to him, the
undistributed portion of the Participant's Account must be restored in
full, unadjusted by gains or losses occurring after the Valuation Date
preceding the distribution.
(i) If the Plan's vesting schedule is changed or amended, or the Plan is
amended in any way that directly or indirectly affects the computation
of the Participant's nonforfeitable percentage, each Participant with
at least three Years of Service with the Employer may elect, within a
reasonable period after the adoption of the amendment or change, to
have
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the nonforfeitable percentage computed under the Plan without regard to
such amendment or change. For Participants who do not have at least one
Hour of Service in any Plan Year beginning after December 31, 1988, the
preceding sentence shall be applied by substituting "five Years of
Service" for "three Years of Service" where such language appears.
The period during which the election may be made shall commence with
the date the amendment is adopted or deemed to be made and shall end on
the latest of:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective; or
(3) 60 days after the Participant is issued written notice of the
amendment by the Employer or Plan Administrator.
Furthermore, if the vesting schedule of a Plan is amended, in the case
of an Employee who is a Participant as of the later of the date such
amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such
Employee's right to his Employer-derived accrued benefit will not be
less than the percentage computed under the Plan without regard to such
amendment.
(j) If a distribution is made at a time when a Participant has a
nonforfeitable right to less than 100 percent of the Account balance
derived from Employer contributions and the Participant may increase
his nonforfeitable percentage in the Account:
(1) A separate Account will be established for the Participant's
interest in the Plan as of the time of the distribution, and
(2) At any relevant time the Participant's nonforfeitable portion
of the separate Account will be equal to an amount ("X")
determined by the formula:
X = P(AB + (R x D)) - (R x D)
For purposes of applying the above formula: P is the nonforfeitable
percentage at the relevant time, AB is the Account balance at the
relevant time, D is the amount of the distribution, and R is the ratio
of the Account balance at the relevant time to the Account balance
after distribution. "Relevant time" means the time at which, under the
plan, the Vested percentage in the Account can not increase.
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ARTICLE VI - DISTRIBUTIONS
Section 6.1 Distributions of Small Account Balances.
If a Participant terminates service, and the value of the Participant's Vested
Account balance derived from Employer and Employee contributions is not greater
than $5,000, the Participant will receive a distribution of the value of the
entire Vested portion of such Account balance. If the value of a Participant's
Vested Account balance is zero, the Participant shall be deemed to have received
a distribution of such Vested Account balance.
Section 6.2 Distributions While In-Service.
Subject to the provisions of Section 6.11, in-service distributions shall be
made, at the election of a Participant, in the following circumstance(s):
(a) The Committee, at the election of the Participant, shall direct the
Trustee to distribute to any Participant his Vested Account balance
after he has attained age 59 1/2.
(1) Age 59 1/2 withdrawals are available from the following
accounts and will be withdrawn from the Participant's accounts
in the following hierarchy:
(A) Employee Deferral Account
(B) Rollover Account
(C) Vested Employer Matching Contribution Account
(D) Vested Employer Regular Contribution Account
(E) Qualified Non-Elective Contribution Account
(F) Qualified Matching Contribution Account
(2) Withdrawals will be taken from the investment funds on a pro
rata basis, taking into account the hierarchy withdrawal
procedures set forth above.
(b) In-service distributions shall be permitted upon a showing of hardship
to the Committee which is permitted under Code section 401(k) and
related regulations. A hardship withdrawal shall be authorized only
upon a showing of an immediate and heavy financial need. The amount of
an immediate and heavy financial need may include any amounts necessary
to pay any federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution.
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(1) The following are the only financial needs considered, for
purposes of the Plan, to be immediate and heavy:
(A) Expenses incurred or necessary for medical care
described in Code section 213(d) for the Participant,
Spouse, or any of his dependents (as defined in Code
section 152);
(B) Purchase (excluding mortgage payments) of a principal
residence for the Participant;
(C) Payment of tuition, related educational fees, and
room and board expenses, for the next 12 months of
post-secondary education for the Participant, his
Spouse, children, or dependents (as defined in
section 152 of the Code); or
(D) The need to prevent the eviction of the Participant
from his principal residence or foreclosure on the
mortgage of the Participant's principal residence.
(2) A distribution will be considered necessary to satisfy an
immediate and heavy financial need of the Employee only if:
(A) The Employee has obtained all distributions, other
than hardship distributions, and all nontaxable loans
under all Plans maintained by the Employer;
(B) All Plans maintained by the Employer provide that the
Employee's Elective Deferrals (and Employee
Contributions) will be suspended for twelve months
after the receipt of the hardship distribution;
(C) The distribution is not in excess of the amount of an
immediate and heavy financial need (including amounts
necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result
from the distribution); and
(D) All Plans maintained by the Employer provide that the
Employee may not make Employee Elective Deferrals for
the Employee's taxable year immediately following the
taxable year of the hardship distribution in excess
of the applicable limit under section 402(g) of the
Code for such taxable year less the amount of such
Employee's Elective Deferrals for the taxable year of
the hardship distribution.
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(3) Hardship withdrawals are available from the following accounts
and will be withdrawn from the Participant's accounts in the
following hierarchy:
(A) Employee Deferral Account (and earnings prior to
1/1/89)
(4) Withdrawals will be taken from the investment funds on a
pro rata basis.
Section 6.3 Distributions Upon Separation From Service.
Subject to the provisions of Sections 6.8, and 6.9, following the request of the
Participant and after approval of the Plan Administrator, the Trustee shall
distribute the value of the Participant's Vested Account balance in one lump sum
or installment payments as set forth below in Section 6.16. Such distribution
shall begin as soon as administratively feasible, following the Participant's
separation from service.
Section 6.4 Distributions Upon Retirement.
In the event that an applicable retirement date has been reached, and subject to
the terms of Sections 6.8, and 6.9, all Vested amounts credited to the
Participant's Account balance shall become distributable. The distribution will
be made in one lump sum or installment payments as set forth below in Section
6.16. The distribution will be made, as soon as administratively feasible,
following the applicable retirement date which will include the attainment of
Normal Retirement Age or the Late Retirement Date and after the Plan
Administrator has approved the request of the Participant.
Section 6.5 Distributions Upon Death.
(a) Subject to the provisions of Sections 6.8, and 6.9, upon the death of a
Participant, the Committee shall instruct the Trustee, in accordance
with this Article, to distribute the Account of a deceased Participant
to that Participant's Beneficiary. The Participant shall not name as
his Beneficiary someone other than his Spouse unless and until the
Participant and Spouse designate, in writing on a valid waiver form
provided by the Committee for such purpose, an alternate Beneficiary,
which designation shall be witnessed by a notary public. In addition,
the Participant may designate a Beneficiary other than his Spouse if:
(1) the Participant is legally separated or has been abandoned and the
Participant has a court order to such effect (and there is no
"qualified domestic relations order" as defined in section 414(p) of
the Code), or (2) the Participant has no Spouse, or (3) the Spouse
cannot be located. Where the Participant makes no designation, the
Beneficiary shall be the Spouse, and if there is no Spouse, the
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44
Beneficiary shall be the Participant's estate. The Committee may
require such proof of death and such evidence of the right of other
persons to be Beneficiaries as it shall deem proper under the
circumstances. The Committee's determination of death and of the right
of any Beneficiary to receive payments shall be conclusive.
(b) The designation of a Beneficiary shall be made on a form approved by
the Committee. A Participant may revoke or change his designation with
the Committee by filing a new designation form with the Committee. In
the event that no valid designation exists at the time of the
Participant's death, and the Participant has no Spouse, the death
benefit shall be payable to the Participant's estate.
(c) If the Participant was eligible, but had not yet received a
distribution prior to his death, the Trustee will make a lump sum
distribution or installment payments to the Beneficiary as if the
Participant had not died.
If the Participant dies before distribution of his interest has begun
or before age 70 1/2, his Account shall be distributed as a lump sum or
installments payments in accordance with the provisions of Section 6.10
(c)(2).
Section 6.6 Distributions Upon Disability.
In the event of a Participant's total and permanent Disability, the Trustee as
directed by the Plan Administrator, shall distribute, subject to the provisions
of Sections 6.8, and 6.9, the value of the Participant's Vested Account balance.
The distribution will be made, after the request of the Participant and the
approval of the Plan Administrator in one lump sum or installment payments as
set forth below in Section 6.16. The distribution will be made as soon as
administratively feasible following the determination of Disability.
Section 6.7 Special Beneficiary Provisions.
(a) Lost Beneficiary. If, after five years have expired following
reasonable efforts of the Committee to locate a Participant or his
Beneficiary, including sending a registered letter, return receipt
requested to the last known address, the Committee is unable to locate
the Participant or Beneficiary, then the amounts distributable to such
Participant or Beneficiary shall, pursuant to applicable state and
Federal laws, be treated as a Forfeiture under the Plan. Where a
Participant or Beneficiary is located subsequent to a Forfeiture, such
benefits shall be reinstated by the Committee, and shall not count as
an Annual Addition under section 415 of the Code.
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45
(b) Minor Beneficiary. The Committee may instruct the Trustee to distribute
a sum payable to a minor instead to his or her legal guardian, or if
there is no guardian, to a parent or other responsible adult who
maintains the residence of the minor. In the alternative such
distribution could be made to the appropriate custodian under the
Uniform Gifts to Minors Act or Gift to Minors Act if applicable under
the state laws of the state in which the minor resides. Any payment in
this format shall discharge all fiduciaries involved in the
distribution including the Trustee, Employer, and Plan from liability
in regard to the transaction.
(c) Alternate Payee. A Participant's rights and benefits shall be subject
to the rights afforded to an alternate payee under a qualified domestic
relations order. In connection with a proper qualified domestic
relations order under section 414(p) of the Code, a distribution shall
be permitted if such distribution is authorized by the qualified
domestic relations order even if the Participant has not achieved a
distributable event under the Plan.
Section 6.8 Consent of the Participant Required for Distributions if
Account Balances Greater Than $5,000.
If the value of a Participant's Vested Account balance derived from Employer and
Employee contributions exceeds (or at the time of any prior distribution
exceeded) $5,000, and the Account balance is immediately distributable, the
Participant (or where the Participant has died and the Surviving Spouse is the
beneficiary, the Surviving Spouse) must consent to any distribution of such
Account balance. An Account balance is immediately distributable if any part of
the Account balance could be distributed to the Participant (or Surviving
Spouse) before the Participant attains, or would have attained if not deceased,
the later of Normal Retirement Age or age 62.
The consent of the Participant shall not be required to the extent that a
distribution is required to satisfy section 401(a)(9) or section 415 of the
Code. In addition, upon termination of this Plan, if the plan does not offer an
annuity option (purchased from a commercial provider) and if the Employer or any
entity within the same controlled group as the Employer does not maintain
another Defined Contribution Plan (other than an employee stock ownership plan
as defined in section 4975(e)(7) or 409 of the Code or a simplified employee
pension plan as defined in section 408(k) of the Code), the Participant's
Account balance may, without the Participant's consent, be distributed to the
Participant. However, if any entity within the same controlled group as the
Employer maintains another Defined Contribution Plan (other than an employee
stock ownership plan as defined in section 4975(e)(7) or 409 of the Code or a
simplified employee pension plan as defined in section 408(k) of the Code) then
the Participant's Account balance will be transferred, without the Participant's
consent, to the plan if the Participant does not consent to an immediate
distribution.
If a distribution is one to which sections 401(a)(11) and 417 of the Code do not
apply, such distribution may commence less than 30 days after the notice
required under section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that:
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(a) the Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution option),
and
(b) the Participant, after receiving the notice, affirmatively elects a
distribution either in writing or by other permitted electronic medium.
Section 6.9 Commencement of Benefits.
Unless the Participant elects otherwise, distribution of benefits will begin no
later than the 60th day after the latest of the close of the Plan Year in which:
(a) the Participant attains age 65 (or Normal Retirement Age, if earlier);
(b) occurs the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or
(c) the Participant terminates service with the Employer.
Notwithstanding the foregoing, the failure of a Participant, Spouse or
Beneficiary to consent to a distribution while a benefit is immediately
distributable, within the meaning of Section 6.8 of the Plan, shall be deemed to
be an election to defer commencement of payment of any benefit sufficient to
satisfy this Section. A Participant may not elect to defer commencement of
payment of a benefit beyond the time provided for in Section 6.10.
Section 6.10 Required Distributions.
(a) The requirements of this Article shall apply to any distribution of a
Participant's interest and will take precedence over any inconsistent
provisions of this Plan. Unless otherwise specified, the provisions of
this Article apply to calendar years beginning after December 31, 1984.
All distributions shall be determined and made in accordance with the
proposed Regulations promulgated under section 401(a)(9) of the Code,
including the minimum distribution incidental benefit requirement of
section 1.401(a)(9)-2 of the proposed Regulations.
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(b) The entire interest of a Participant must be distributed or must begin
to be distributed no later than the Participant's Required Beginning
Date (defined below) which is generally the April 1st following his
attainment of age 70 1/2.
Distributions may not be made over a period which exceeds each of the
following (or a combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a Designated Beneficiary,
(3) a period certain not extending beyond the Life Expectancy of
the Participant, or
(4) a period certain not extending beyond the joint life and last
survivor expectancy of the Participant and a Designated
Beneficiary.
(c) If the Participant's interest is to be distributed in other than a
single sum, the following minimum distribution rules shall apply on or
after the Required Beginning Date:
(1) Distributions During the Participant's Life: If a
Participant's benefit is to be distributed over (1) a period
not extending beyond the Life Expectancy of the Participant or
the joint life and last survivor expectancy of the Participant
and the Participant's Designated Beneficiary or (2) a period
not extending beyond the Life Expectancy of the Designated
Beneficiary, then the amount required to be distributed for
each calendar year, beginning with distributions for the first
Distribution Calendar Year, must at least equal the quotient
obtained by dividing the Participant's benefit by the
Applicable Life Expectancy.
For calendar years beginning before January 1, 1989, if the
Participant's Spouse is not the Designated Beneficiary, the
method of distribution selected must assure that at least 50
percent of the present value of the amount available for
distribution is paid within the Life Expectancy of the
Participant.
For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with
distributions for the first Distribution Calendar Year shall
not be less than the quotient obtained by dividing the
Participant's benefit by the lesser of (1) the Applicable Life
Expectancy or (2) if the Participant's Spouse is not the
Designated Beneficiary, the applicable divisor determined from
the table set forth in Q&A-4 of section 1.401(a)(9)-2 of the
proposed Regulations. Distributions after the death of the
Participant shall be made using the Applicable Life Expectancy
above as the relevant divisor without regard to proposed
Regulations section 1.401(a)(9)-2.
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The minimum distribution required for the Participant's first
Distribution Calendar Year must be made on or before the
Participant's Required Beginning Date. The minimum
distribution for other calendar years, including the minimum
distribution for the Distribution Calendar Year in which the
Employee's Required Beginning Date occurs, must be made on or
before December 31 of that Distribution Calendar Year.
(2) Distributions After the Participant's Death: If the
Participant dies after distribution of his interest has begun
and after attaining age 70 1/2, the remaining portion of such
interest, if any, will continue to be distributed at least as
rapidly as under the method of distribution being used prior
to the Participant's death.
If the Participant dies before distribution of his interest
began or prior to attaining age 70 1/2, distribution of the
Participant's entire interest shall be completed by the later
of December 31 of the calendar year containing the fifth
anniversary of the Participant's death or, if any portion of
the Participant's interest is payable to a Designated
Beneficiary, distributions may be made over the life or over a
period certain not greater than the Life Expectancy of the
Designated Beneficiary commencing on or before December 31 of
the calendar year immediately following the calendar year in
which the Participant died notwithstanding the above, however,
but if the Designated Beneficiary is the Participant's
Surviving Spouse, distributions are required to begin not
earlier than the later of (a) December 31 of the calendar year
in which the Participant died, or (b) December 31 of the
calendar year in which the Participant would have attained age
70 1/2.
If the Participant has not made an election pursuant to this
Section by the time of his or her death, the Participant's
Designated Beneficiary must elect the method of distribution
no later than the earlier of (1) December 31 of the calendar
year in which distributions would be required to begin under
this Section, or (2) December 31 of the calendar year which
contains the fifth anniversary of the date of death of the
Participant. If the Participant has no Designated Beneficiary,
or if the Designated Beneficiary does not elect a method of
distribution, distribution of the Participant's entire
interest must be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death.
For purposes of the above paragraphs, if the Surviving Spouse
dies after the Participant, but before payments to such Spouse
begin, the provisions above, except for the spousal exception
rule, shall be applied as if the Surviving Spouse were the
Participant.
Any amount paid to a child of the Participant will be treated
as if it has been paid to the Surviving Spouse if the amount
becomes payable to the Surviving Spouse when the child reaches
the age of majority.
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Distribution of a Participant's interest is considered to
begin on the Participant's Required Beginning Date (or, if
applicable, the date distribution is required to begin to the
Surviving Spouse pursuant to the above). If distribution in
the form of an annuity irrevocably commences to the
Participant before the Required Beginning Date, the date
distribution is considered to begin is the date distribution
actually commences.
(3) Definitions:
(A) Applicable Life Expectancy: The Life Expectancy (or
joint life and last survivor expectancy) calculated
using the attained age of the Participant (or
Designated Beneficiary) as of the Participant's (or
Designated Beneficiary's) birthday in the applicable
calendar year reduced by one (1) for each calendar
year which has elapsed since the date the Life
Expectancy was first calculated. If Life Expectancy
is being recalculated, the Applicable Life Expectancy
shall be the Life Expectancy as so recalculated. The
applicable calendar year shall be the first
Distribution Calendar Year and if Life Expectancy is
being recalculated, such succeeding calendar year.
(B) Designated Beneficiary: An individual affirmatively
elected by the Participant or the Participant's
Surviving Spouse. If no Beneficiary is elected, the
Designated Beneficiary shall be the Spouse of the
Beneficiary under the Plan in accordance with section
401(a)(9) of the Code and the proposed Regulations
thereunder.
(C) Distribution Calendar Year: A calendar year for which
a minimum distribution is required. For distributions
beginning before the Participant's death, the first
Distribution Calendar Year is the calendar year
immediately preceding the calendar year which
contains the Participant's Required Beginning Date.
For distributions beginning after the Participant's
death, the first Distribution Calendar Year is the
calendar year in which distributions are required to
begin pursuant to the above.
(D) Life Expectancy: Life Expectancy and joint life and
last survivor expectancy are computed by use of the
expected return multiples in Tables V and VI of
section 1.72-9 of the Regulations.
Unless the Participant or the Surviving Spouse elects
otherwise by the time distributions are required to
begin, life expectancies shall be recalculated
annually. An election shall be irrevocable as to the
Participant or Surviving Spouse and shall apply to
all subsequent years. The Life Expectancy of a
non-Spouse Beneficiary may not be recalculated.
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(E) Participant's Benefits:
(i) The Account balance as of the last Valuation
Date in the calendar year immediately
preceding the Distribution Calendar Year
(valuation calendar year) increased by the
amount of any contributions or Forfeitures
allocated to the Account balance as of dates
in the valuation calendar year after the
Valuation Date and decreased by
distributions made in the valuation calendar
year after the Valuation Date.
(ii) For purposes of paragraph (i) above, if any
portion of the minimum distribution for the
first Distribution Calendar Year is made in
the second Distribution Calendar Year on or
before the Required Beginning Date, the
amount of the minimum distribution made in
the second Distribution Calendar Year shall
be treated as if it had been made in the
immediately preceding Distribution Calendar
Year.
(F) Required Beginning Date:
(i) General Rule. The Required Beginning Date of
a Participant is the first day of April of
the calendar year following the calendar
year in which the Participant attains age 70
1/2 subject to the transitional rules below.
(ii) Transitional rules. The Required Beginning
Date of a Participant who attains age 70 1/2
before January 1, 1988, shall be determined
in accordance with (a) or (b) below:
(a) Non-5-percent owners. The Required
Beginning Date of a Participant who
is not a 5-percent owner is the
first day of April of the calendar
year following the calendar year in
which the later of retirement or
attainment of age 70 1/2 occurs.
(b) 5-percent owners. The Required
Beginning Date of a Participant who
is a 5-percent owner during any year
beginning after December 31, 1979,
is the first day of April following
the later of:
(I) the calendar year in which
the Participant attains
age 70 1/2, or
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(II) the earlier of the calendar
year with or within which
ends the Plan Year in which
the Participant becomes a
5-percent owner, or the
calendar year in which the
Participant retires.
(III) The Required Beginning Date
of a Participant who is not
a 5-percent owner who
attains age 70 1/2 during
1988 and who has not
retired as of January 1,
1989, is April 1, 1990.
(iii) 5-percent owner. A Participant is treated as
a 5-percent owner for purposes of this
Section if such Participant is a 5-percent
owner as defined in section 416(i) of the
Code (determined in accordance with section
416 of the Code 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 such owner
attains age 66 1/2 or any subsequent Plan
Year.
(iv) Once distributions have begun to a 5-percent
owner under this Section, they must continue
to be distributed even if the Participant
ceases to be a 5-percent owner in a
subsequent year.
(d) Transitional Rules for TEFRA Elections:
Notwithstanding the other requirements of this Section and subject to
the joint and survivor annuity requirements, distribution on behalf of
any Employee, including a 5-percent owner, may be made if all of the
following requirements are satisfied (regardless of when such
distribution commences):
(1) The distribution by the Trust is one which would not have
disqualified the Trust under section 401(a)(9) of the Code as
in effect prior to amendment by the Deficit Reduction Act of
1984.
(2) The distribution is in accordance with a method of
distribution designated by the Employee whose interest in the
Trust is being distributed or, if the Employee is deceased, by
a Beneficiary of such Employee.
(3) Such designation was in writing, was signed by the Employee or
the Beneficiary, and was made before January 1, 1984.
(4) The Employee had accrued a benefit under the Plan as of
December 31, 1983.
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(5) The method of distribution designated by the Employee or the
Beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made,
and in the case of any distribution upon the Employee's death,
the Beneficiaries of the Employee listed in order of priority.
A distribution upon death will not be covered by this transitional rule
unless the information in the designation contains the required
information described above with respect to the distributions to be
made upon the death of the Employee.
For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Employee or the Beneficiary to
whom such distribution is being made, will be presumed to have
designated the method of distribution under which the distribution is
being made if the method of distribution was specified in writing and
the distribution satisfied the requirements of (1) and (5) above.
If a designation is revoked, any subsequent distribution must satisfy
the requirements of section 401(a)(9) of the Code and the proposed
Regulations thereunder. If a designation is revoked subsequent to the
date distributions are required to begin, the Trust must distribute by
the end of the calendar year following the calendar year in which the
revocation occurs the total amount not yet distributed which would have
been required to have been distributed to satisfy section 401(a)(9) of
the Code and the proposed Regulations thereunder, but for the section
242(b)(2) election. For calendar years beginning after December 31,
1988, such distributions must meet the minimum distributions incidental
benefit requirements in section 1.401(a)(9)-2 of the proposed
Regulations. Any changes in the designation will be considered to be a
revocation of the designation. However, the mere substitution or
addition of another Beneficiary (one not named in the designation)
under the designation will not be considered to be a revocation of the
designation, so long as such substitution or addition does not alter
the period over which distributions are to be made under the
designation, directly or indirectly (for example, by altering the
relevant measuring life). In the case in which an amount is transferred
or rolled over from the Plan to another plan, the rules in Q&A J-2 and
Q&A J-3 of the proposed Regulations shall apply.
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Section 6.11 Special Distribution Rules for 401(k) Contributions,
Qualified Non-Elective Contributions and Qualified
Matching Contributions.
Employee Elective Deferrals, Qualified Non-Elective Contributions, Qualified
Matching Contributions and allocable income are not distributable to a
Participant or his or her Beneficiary or Beneficiaries, in accordance with such
Participant's or Beneficiary's or Beneficiaries' election, earlier than upon
separation from service, death, or Disability other than upon the occurrence of
one or more of the following events:
(a) Termination of the Plan without the establishment of another Defined
Contribution Plan other than an employee stock ownership plan (as
defined in section 4975(e) or 409 of the Code), or a simplified
employee pension plan (as defined in section 408(k) of the Code).
(b) The transfer by the Employer, if a corporation, to an unrelated
corporation of substantially all of the assets (within the meaning of
section 409(d)(2) of the Code) used in a trade or business of such
corporation if the Employer continues to maintain this Plan after the
disposition, but only with respect to Employees who continue employment
with the corporation acquiring such assets.
(c) The transfer by the Employer, if a corporation, to an unrelated entity
of such corporation's interest in a subsidiary (within the meaning of
section 409(d)(3) of the Code) if the Employer continues to maintain
this Plan, but only with respect to Employees who continue employment
with such subsidiary.
(d) A distribution made pursuant to an event described in subsection (a),
(b), or (c) above shall be made in the form of a lump sum.
(e) The attainment of age 59 1/2.
(f) Distribution of Employee Elective Deferrals (and earnings thereon
accrued as of the end of the last Plan Year ending before July 1, 1989)
may be made to a Participant in the event of hardship pursuant to a
showing of immediate and heavy financial need, as described in Section
6.2 of the Plan.
Section 6.12 Form of Distribution.
Distributions shall be made in cash or in-kind as elected by the Participant.
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Section 6.13 Trustee-to-Trustee Transfers.
Subject to Plan Administrator approval, at the direction of a Participant, the
Trustee of this Plan will make a transfer of such Participant's applicable
Account balance to the trustee of another plan, designated by the Participant,
and qualified under section 401(a) of the Code.
Section 6.14 Normal Form of Benefit.
The Participant will receive a distribution in the form of one lump sum, unless
the Participant elects otherwise as permitted under this Article.
Section 6.15 Rollovers to Other Plans or IRAs.
Effective with respect to any distribution made on or after January 1, 1993 and
notwithstanding any provision of the Plan to the contrary that would otherwise
limit a Participant's election under this Section, a Participant may elect, at
the time and in the manner prescribed by the Administrator, to have any portion
of an eligible rollover distribution paid, in a direct rollover, to an eligible
retirement plan specified by the Participant.
Definitions:
(a) Eligible rollover distribution. An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of
the Participant, except:
(1) any distribution that is one of a series of substantially
equal periodic payments (made not less frequently than
annually) made over the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the Participant and the Participant's designated Beneficiary,
or over a specified period of ten years or more;
(2) any distribution to the extent such distribution is required
under section 401(a)(9) of the Code; and
(3) the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities).
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(b) Eligible retirement plan. An eligible retirement plan is an individual
retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code,
an annuity plan described in section 403(a) of the Code, or a qualified
trust described in section 401(a) of the Code that accepts the
distributee's eligible rollover distribution. However, in the case of
an eligible rollover distribution to the Surviving Spouse, an eligible
retirement plan is an individual retirement account or individual
retirement annuity.
(c) Direct rollover. A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the Participant.
Section 6.16 Installment Payments.
The frequency of the installment payments shall be payable over a term not to
exceed the life expectancy of the Participant, at the Participant's election as
follows:
o Monthly
o Quarterly
o Semi-annually
o Annually
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ARTICLE VII - LOANS
Section 7.1 Availability of Loans.
Loans shall be permitted under this Plan as established by the policy of the
Plan Administrator. Any such loan shall be subject to such conditions and
limitations as the Plan Administrator deems necessary for administrative
convenience and to preserve the tax-qualified status of the Plan.
Section 7.2 Amount of Loans.
No loan to any Participant or Beneficiary may be made to the extent that such
loan, when added to the outstanding balance of all other loans to the
Participant or Beneficiary, would exceed the lesser of (a) $50,000 reduced by
the excess (if any) of the highest outstanding balance of loans during the
one-year period ending on the day before the loan is made, over the outstanding
balance of loans from the Plan on the date the loan is made, or (b) one-half the
present value of the nonforfeitable accrued benefit of the Participant. For the
purpose of the above limitation, all loans from all plans of the Employer and
other members of a group of employers described in sections 414(b), 414(c),
414(m), and 414(o) of the Code are aggregated. Furthermore, any loan shall by
its terms require that repayment (principal and interest) be amortized in level
payments, not less frequently than quarterly, over a period not extending beyond
five years from the date of the loan. If such loan is used to acquire a dwelling
unit which within a reasonable time (determined at the time the loan is made)
will be used as the principal residence of the Participant, the repayment period
shall not extend ten beyond years from the date of the loan. An assignment or
pledge of any portion of the Participant's interest in the Plan and a loan,
pledge, or assignment with respect to any insurance contract purchased under the
Plan, will be treated as a loan under this paragraph.
Section 7.3 Terms of Loans.
(a) Loans shall be made available to all Participants and Beneficiaries on
a reasonably equivalent basis.
(b) Loans shall not be made available to Highly Compensated Employees (as
defined in section 414(q) of the Code) in an amount greater than the
amount made available to other Employees.
(c) Loans must be adequately secured using not more than 50 percent of the
Participant's Vested Account balance, and bear a reasonable interest
rate.
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(d) No Participant loan shall exceed the present value of the Participant's
Vested accrued benefit.
(e) In the event of default, foreclosure on the note and attachment of
security will not occur until a distributable event occurs in the Plan.
(f) No loans will be made to any shareholder-employee. For purposes of this
requirement, a shareholder-employee means an Employee or officer of an
electing small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of section 318(a)(1) of the
Code) on any day during the taxable year of such corporation, more than
5 percent of the outstanding stock of the corporation.
(g) Loans granted or renewed on or after the last day of the first Plan
Year beginning after December 31, 1988 shall be made pursuant to a
written Participant loan program incorporated herein by reference which
will include the following:
(1) the basis on which loans will be approved or denied;
(2) procedures for applying for the loans;
(3) person or positions authorized to administer the Participant
loan program;
(4) limitations, if any, on the types and amounts of loans
offered;
(5) procedures under the program for determining the rates of
interest;
(6) the types of collateral which may secure a Participant loan;
and
(7) the events constituting default and the steps that will be
taken to preserve Plan assets.
(h) Loans are available from the following accounts, and will be withdrawn
from the Participant's accounts in the following hierarchy:
(1) Employee Deferral Account
(2) Rollover Account
(3) Vested Employer Matching Contribution Account
(4) Vested Employer Regular Contribution Account
(5) Qualified Non-Elective Contribution Account
(6) Qualified Matching Contribution Account
(i) Loans will be taken from the investment funds on a pro rata basis,
taking into account the hierarchy loan withdrawal procedures set forth
above.
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ARTICLE VIII - PLAN ADMINISTRATION
Section 8.1 Duties of the Employer.
The Employer shall have overall responsibility for selecting and appointing the
Trustee, and for the establishment, amendment, termination, administration, and
operation of the Plan. The Employer shall discharge this responsibility by
appointing a Committee, to which shall be delegated overall responsibility for
administering and operating the Plan.
Upon written notice to the Trustee and the Committee, the Employer may appoint
one or more investment managers as described in ERISA section 3(38), which shall
have the power to manage, acquire, or dispose of all or part of the Trust assets
in accordance with the provisions of the Plan and Trust agreement. The Committee
and investment manager shall execute a written agreement specifying the Trust
assets to be managed and the investment manager's duties and responsibilities
with respect to such assets, and in such agreement the investment manager shall
acknowledge that it is a fiduciary with respect to the Plan and Trust. The
Committee may authorize the investment manager to give written instructions to
the Trustee with respect to acquiring, managing, and disposing of assets managed
by the investment manager, and the Trustee shall follow such instructions and
shall be under no duty to make an independent determination regarding whether
the instruction is proper. The fees and expenses of an investment manager shall
be paid by the Trust except to the extent paid by the Employer.
Section 8.2 The Committee.
(a) The Committee shall be the "named fiduciary" (as defined in section
402(a)(2) of ERISA), the "Administrator" (as defined in section 3(16)
of ERISA and section 414(g) of the Code), and an agent for service of
process of the Plan.
(b) The Committee shall consist of officers or other Employees of the
Employer, or any other person(s) who shall be appointed by the
Employer. The members of the Committee shall serve at the direction of
the Employer. In the absence of such appointment, the Employer shall
serve as the Committee. Any member of the Committee may resign by
delivering his written resignation to the Employer and to the
Committee, which shall become effective upon the date specified
therein. In the event of a vacancy on the Committee, the remaining
members shall constitute the Committee with full power to act until the
Employer appoints a new Committee member. The Employer may from time to
time remove any Committee member with or without cause and appoint a
successor thereto.
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Section 8.3 Appointment of Advisor.
The Committee may employ any such person or entity as it deems necessary to
assist in the Administration of the Plan and provide services including but not
limited to tax advice, amendment, termination and operation of the Plan, and
advice concerning reports filed with the Internal Revenue Service. Any such
advisor shall not be the Administrator of the Plan (as defined in section 3(16)
of ERISA and section 414(g) of the Code).
The Committee shall have the authority and discretion to engage an
Administrative Delegate who shall perform, without discretionary authority or
control, administrative functions within the framework of policies,
interpretations, rules, practices and procedures made by the Committee or other
Plan fiduciary. Any action made or taken by the Administrative Delegate may be
appealed by an affected Participant to the Committee in accordance with the
claims review procedures provided in Section 8.6. Any decisions which call for
interpretations of Plan provisions not previously made by the Committee shall be
made only by the Committee. The Administrative Delegate shall not be considered
a fiduciary with respect to the services it provides.
Section 8.4 Powers and Duties of the Committee.
(a) The Committee, on behalf of the Participants and Beneficiaries of the
Plan, shall enforce the Plan and Trust in accordance with the terms
thereof, and shall have all powers necessary to carry out such
provisions. The Committee shall interpret the Plan and Trust and shall
determine all questions arising in the administration and application
of the Plan and Trust. Any such interpretation or determination by the
Committee shall be conclusive and binding on all persons.
The Committee shall establish rules and regulations necessary for the
proper conduct and administration of the Plan, and from time to time
may change or amend these rules and regulations. The Committee shall
also have the power to authorize all disbursements from the Trust by
the Trustee in accordance with the Plan's terms.
(b) At the direction of the Committee, distributions to minors or persons
declared incompetent may be made by the Trustee directly to such
persons or to the legal guardians or conservators of such persons. The
Employer, the Committee, and the Trustee shall not be required to see
to the proper application of such distributions made to any of such
persons, but his or their receipt thereof shall be a full discharge of
the Employer, the Committee, and the Trustee of any obligation under
the Plan or the Trust.
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Section 8.5 Organization and Operation.
(a) The Committee shall act by a majority of its members then in office,
and such action may be taken either by a vote at a meeting or by
written consent without a meeting. The Committee may authorize any one
or more of its members to execute any document or documents on behalf
of the Committee, in which event the Committee shall notify the
Employer, in writing, of such authorization and the name or names of
its member or members so designated. The Employer thereafter shall
accept and rely on any documents executed by said member of the
Committee or members as representing action by the Committee until the
Committee shall file with the Employer a written revocation of such
designation.
(b) The Committee may adopt such bylaws and regulations as it deems
desirable for the conduct of its affairs and may employ and
appropriately compensate such accountants, counsel, specialists,
actuaries, and other persons as it deems necessary or desirable in
connection with the administration and maintenance of the Plan. The
Committee shall have the authority to control and manage the operation
and administration of the Plan.
Section 8.6 Claims Procedure.
(a) A claim for benefits under the Trust shall be filed on an application
form supplied by the Committee. Written notice of the disposition of
the claim shall be furnished to the claimant within 90 days after an
application form is received by the Committee, unless special
circumstances (as determined by the Committee) require an extension for
processing the claim. If such an extension is required, the Committee
shall render a decision as soon as possible subsequent to the 90-day
period, but such decision shall not be rendered later than 180 days
after the application form is received by the Committee. Written notice
of such extension shall be furnished to the claimant prior to the
commencement of the extension indicating the special circumstances
requiring such extension and the date by which the Committee expects to
render the decision on the claim. In the event the claim is denied, the
Committee shall set forth in writing the reasons for the denial and
shall cite pertinent provisions of the Plan and Trust upon which the
decision is based. In addition, the Committee shall provide a
description of any additional material or information necessary for the
claimant to perfect the claim, an explanation of why such information
is necessary, and appropriate information as to the steps to be taken
if the Participant or Beneficiary wish to submit such claim for review
as provided in (b) below.
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(b) A Participant or Beneficiary whose claim described in (a) above has
been denied in whole or in part shall be entitled to the following
rights if exercised within 60 days after written denial of a claim is
received:
(1) to request a review of the claim upon written application to
the Committee;
(2) to review documents associated with the claim; and
(3) to submit issues and comments in writing to the Committee.
(c) If a Participant or a Beneficiary requests a review of the claim under
(b) above, the Committee shall conduct a full review (including a
formal hearing if desired) of such request, and a decision on such
request shall be made within 60 days after the Committee has received
the written request for review from the Participant or the Beneficiary.
Special circumstances (such as a need for full hearing on request) can
allow the Committee to extend the decision on such request, but the
decision shall be rendered no later than 120 days after receipt of the
request for review. Written notice of such an extension shall be
furnished to the Participant or the Beneficiary prior to the
commencement of the extension. The decision of the Committee on review
shall be set forth in writing and shall include specific reasons for
the decision as well as specific references to the pertinent provisions
of the Plan or Trust on which the decision is based.
Section 8.7 Records and Reports.
(a) The Committee shall be entitled to rely upon certificates, reports, and
opinions provided by an accountant, tax or pension advisor, actuary or
legal counsel employed by the Employer or Committee. The Committee
shall keep a record of all its proceedings and acts, and shall keep all
such books of account, records, and other data as may be necessary for
the proper administration of the Plan. The regularly kept records of
the Committee, the Employer, and the Trustee shall be conclusive
evidence of a Participant's service, his Compensation, his age, his
marital status, his status as an Employee, and all other matters
contained therein and relevant to this Plan; provided, however, that a
Participant may request a correction in the record of his age at any
time prior to his retirement and such correction shall be made if
within 90 days after such request he furnishes a birth certificate,
baptismal certificate, or other documentary proof of age satisfactory
to the Committee in support of this correction.
(1) Each Participant and each Participant's designated Beneficiary
must notify the Committee in writing of his mailing address
and each change thereof. Any communication, statement or
notice addressed to a Participant or Beneficiary at the last
mailing address filed with the Committee, or if no address is
filed with the
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Committee, the last mailing address as shown on the Employer's
records, will be binding on the Participant and his
Beneficiary for all purposes of the Plan. Neither the
Committee nor the Trustee shall be required to search for or
locate a Participant or a Beneficiary.
Section 8.8 Liability.
(a) A member of the Committee shall not be liable for any act, or failure
to act, of any other member of the Committee, except to the extent that
such member:
(1) Knowingly participates in, or undertakes to conceal, an act or
omission of another Committee member, knowing that such act or
omission is a breach of fiduciary duty to the Plan;
(2) Fails to comply with the specific responsibilities given him
as a member of the Committee, and such failure enables another
member of the Committee to commit a breach of fiduciary duty
to the Plan; or
(3) Has knowledge of a breach of fiduciary duty to the Plan by
another member of the Committee, unless such member makes
reasonable effort under the circumstances to remedy such
breach.
(b) Each member of the Committee shall be liable with respect to his own
acts of willful misconduct or gross negligence concerning the Plan. The
Employer shall indemnify each member of the Committee for all expenses,
costs, or liabilities arising out of the performance of the Committee's
duties required by the terms of the Plan or Trust or for failure to
perform such duties, except for those expenses, costs, or liabilities
arising out of a member's willful misconduct or gross negligence.
Section 8.9 Reliance on Statements.
The Committee, in any of its dealings with Participants hereunder, may
conclusively rely on any written statement, representation, or documents made or
provided by such Participants.
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Section 8.10 Remuneration and Bonding.
(a) Unless otherwise determined by the Committee, the members of the
Committee shall serve without remuneration for services to the Plan and
Trust. However, all expenses of the Committee shall be paid by the
Trust except to the extent paid by the Employer. Such expenses shall
include any expenses incidental to the functioning of the Committee,
including but not limited to fees of accountants, legal counsel, and
other specialists, or any other costs entailed in administering the
Plan.
(b) Title I of ERISA requires certain persons with discretion over Plan
assets to be bonded. Except as required by ERISA or other federal law,
the members of the Committee shall serve without bond.
Section 8.11 Committee Decisions Final.
Any decision of the Committee with respect to matters within its jurisdiction
shall be final, binding, and conclusive upon the Employer and the Trustee and
upon each Employee, Participant, former Participant, Beneficiary, and every
other person or party interested or concerned.
Section 8.12 Participant-Directed Investments.
The Committee authorizes the Trustee to accept investment direction from
Participants. The Trustee shall invest in the Investment Funds in accordance
with investment directions given by the Participants and Beneficiaries for whose
accounts such assets are held, to the extent authorized. All such directions by
the Participants or Beneficiaries to the Trustee will be made by electronic
media or in such other manner as is acceptable to the Trustee. Participants and
Beneficiaries will be deemed responsible for purposes of such investment
selection and allocation.
Where the Committee, a Participant, a Beneficiary or an Investment Manager other
than the Trustee has the power and authority to direct the investment of assets
of the Trust Fund, the Trustee does not have any duty to question any direction,
to review any securities or other property, or to make any suggestions in
connection therewith except as provided otherwise by ERISA. The Trustee will
promptly comply with any direction given by the Committee, a Participant, a
Beneficiary or Investment Manager. The Trustee will neither be liable for
failing to invest any assets of the Trust Fund under the management and control
of the Committee, a Participant, a Beneficiary or an Investment Manager in the
absence of investment directions regarding such assets except as provided
otherwise by ERISA. The Trustee and the Committee shall be indemnified by the
Participant from and against any personal liability to which the Trust and the
Committee may be subject due to carrying out an elective investment directed by
the Participant or for failure to act in absence of restrictions from the
Participant.
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ARTICLE IX - TRUST AGREEMENT
Section 9.1 Establishment of Trust.
The Employer and the Trustee have entered into a trust agreement which is set
forth in a separate document and is incorporated herein. The trust agreement
establishes a Trust consisting of such sums of money and other property as may
from time to time be contributed or transferred to the Trustee under the terms
of the Plan, along with any property to which the Trust Fund may from time to
time be converted, and which provides for the investment of Plan assets and the
operation of the Trust. The trust agreement, as amended from time to time, shall
be deemed part of the Plan, and all rights and benefits provided to persons
under the Plan shall be subject to the terms of the trust agreement.
Section 9.2 Exclusive Benefit.
(a) The Employer shall have no beneficial interest in the assets of the
Trust, and no part of the Trust shall ever revert to or be repaid to
the Employer, directly or indirectly, except that upon written request,
the Employer shall have a right to recover:
(1) a contribution to the Plan made by mistake of fact if such
contribution (to the extent made by mistake of fact) is
returned to the Employer within one year after payment of such
contribution;
(2) any contributions to the Plan conditioned upon initial
qualification of the Plan under section 401(a) of the Code if
the Plan does not so qualify and such contributions are
returned to the Employer within one year after the denial of
qualification of the Plan and only if a determination letter
request is filed by the time prescribed by law for filing the
Employer's tax return for the taxable year in which the Plan
is adopted;
(3) a contribution to the Plan which is disallowed as a deduction
under section 404 of the Code if such contribution (to the
extent disallowed) is returned to the Employer within one year
after the deduction is disallowed; and
(4) any residual assets due to a Code section 415 excess
contribution upon termination of the Plan if all liabilities
of the Plan to Participants and their Beneficiaries have been
satisfied and the reversion does not contravene any provision
of law.
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ARTICLE X - AMENDMENT, TERMINATION AND MERGER
Section 10.1 Amendment.
(a) The Employer shall have the right to amend the Plan and Trust at any
time to the extent permitted under the Code and ERISA.
(b) No amendment affecting the rights or duties of the Trustee shall be
effective without the written consent of the Trustees.
(c) No amendment to the Plan shall be effective to the extent that it has
the effect of decreasing a Participant's accrued benefit.
Notwithstanding the preceding sentence, a Participant's Account balance
may be reduced to the extent permitted under section 412(c)(8) of the
Code. For purposes of this paragraph, a Plan amendment which has the
effect of decreasing a Participant's Account balance or eliminating an
optional form of benefit, with respect to benefits attributable to
service before the amendment, shall be treated as reducing an accrued
benefit.
Section 10.2 Termination.
(a) The Employer intends to continue the Plan indefinitely and to fund the
Plan as required by law and its terms. However, the Employer shall have
the right to terminate the Plan at any time.
(b) If the Plan is totally or partially terminated, or in the event of a
complete discontinuation of contributions under the Plan, a Participant
whose participation in the Plan is terminated as a result of such total
or partial termination or who is affected by the complete
discontinuation of contributions to the Plan shall be 100 percent
Vested with respect to his Accounts, determined as of the date of such
total or partial termination.
(c) Upon termination of the Plan, the Employer shall allocate the assets of
the Plan, after the payment of or set aside for the payment of all
expenses, among the Participants and their Beneficiaries in accordance
with the Code and ERISA.
(d) Upon termination of the Plan, and after all liabilities of the Plan to
Participants and Beneficiaries have been satisfied, any residual assets
of the Plan which are attributable to a contribution in excess of Code
section 415 limits shall be distributed to the Employer, provided such
distribution does not contravene any provision of the law or the Plan.
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(e) The allocation of benefits under this Article shall be accomplished
either through the continuance of the Trust, the creation of a new
Trust, the payment of the benefits to be provided to the Participants
or Beneficiaries, or the purchase of annuity contracts, as determined
by the Employer.
Section 10.3 Merger, Consolidation or Transfer.
The Employer shall have the right at any time to merge or consolidate the Plan
with any other plan, or transfer the assets or liabilities of the Trust to any
other plan provided each Participant would (if the Plan were then terminated)
receive a benefit immediately after such merger, consolidation or transfer which
would equal or exceed the benefit the Participant would have been entitled to
immediately before such merger, consolidation or transfer (if the Plan were then
terminated).
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ARTICLE XI - TOP-HEAVY PROVISIONS
Section 11.1 Applicability.
The provisions of this Article shall not apply to the Plan with respect to any
Plan Year in which the Plan is not Top-Heavy. If the Plan is or becomes
Top-Heavy in any Plan Year, the provisions of this Article will supersede any
conflicting provisions in the Plan.
Section 11.2 Definitions.
(a) Key Employee: Any Employee or former Employee (and the Beneficiaries of
such Employee) who at any time during the "Determination Period" was
(1) an officer of the Employer if such individual's Annual Compensation
exceeds 50 percent of the dollar limitation under section 415(b)(1)(A)
of the Code, (2) an owner (or considered an owner under section 318 of
the Code) of one of the ten largest interests in the Employer if such
individual's Annual Compensation exceeds 100 percent of the dollar
limitation under section 415(c)(1)(A) of the Code, (3) a
more-than-5-percent owner of the Employer, or (4) a more-than-1-percent
owner of the Employer who has annual Compensation of more than
$150,000. Annual Compensation means compensation as defined in section
415(c)(3) of the Code, but including amounts contributed by the
Employer pursuant to a salary reduction agreement which are excludable
from the Employee's gross income under section 125, section 402(e)(3),
section 402(h) or section 403(b) of the Code. The "Determination
Period" is the Plan Year containing the Determination Date and the four
(4) preceding Plan Years.
The determination of who is a Key Employee will be made in accordance
with section 416(i)(1) of the Code and the Regulations thereunder.
(b) Top-Heavy Plan: For any Plan Year beginning after December 31, 1983,
this Plan is Top-Heavy if any of the following conditions exists:
(1) If the Top-Heavy Ratio for this Plan exceeds 60 percent and
this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans.
(2) If this Plan is a part of a Required Aggregation Group of
plans, but not part of a Permissive Aggregation Group of plans
and the Top-Heavy Ratio for the Permissive Aggregation Group
exceeds 60 percent.
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(3) If this Plan is a part of a Required Aggregation Group and
part of a Permissive Aggregation Group of plans and the
Top-Heavy Ratio for the Permissive Aggregation Group exceeds
60 percent.
(c) Super-Top-Heavy Plan: A plan is Super-Top-Heavy if such a plan would be
Top-Heavy if "90 percent" were substituted for "60 percent" each place
it appears in (b) above.
(d) Top-Heavy Ratio:
(1) If the Employer maintains one or more Defined Contribution
Plans (including any simplified employee pension plan) and the
Employer has not maintained any Defined Benefit Plan which
during the 5-year period ending on the Determination Date(s)
has or has had accrued benefits, the Top-Heavy Ratio for this
Plan alone or for the required or Permissive Aggregation
Group, as appropriate, is a fraction, the numerator of which
is the sum of the Account balances of all Key Employees as of
Determination Date(s) (including any part of any Account
balance distributed in the 5-year period ending on the
Determination Date(s)), and the denominator of which is the
sum of all Account balances (including any part of any Account
balance distributed in the 5-year period ending on the
Determination Date(s)), both computed in accordance with
section 416 of the Code and the Regulations thereunder. Both
the numerator and denominator of the Top-Heavy Ratio are
increased to reflect any contribution not actually made as of
the Determination Date, but which is required to be taken into
account on that date under section 416 of the Code and the
Regulations thereunder.
(2) If the Employer maintains one or more Defined Contribution
Plans (including any simplified employee pension plan) and the
Employer maintains or has maintained one or more Defined
Benefit Plans which during the 5-year period ending on the
Determination Date(s) has or has had any accrued benefits, the
Top-Heavy Ratio for any required or Permissive Aggregation
Group as appropriate, is a fraction, the numerator of which is
the sum of account balances under the aggregated Defined
Contribution Plan or Plans for all Key Employees, determined
in accordance with (1) above, and the Present Value of accrued
benefits under the aggregated Defined Benefit Plan or Plans
for all Key Employees as of the Determination Date(s), and the
denominator of which is the sum of the account balances under
the aggregated Defined Contribution Plan or Plans for all
Participants, determined in accordance with (1) above, and the
Present Value of accrued benefits under the Defined Benefit
Plan or Plans for all Participants as of the Determination
Date(s), are determined in accordance with section 416 of the
Code and the Regulations thereunder. The accrued benefits
under a Defined Benefit Plan in both the numerator and
denominator of the Top-Heavy Ratio are increased for any
distribution of an accrued benefit made in the five-year
period ending on the Determination Date.
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(3) For purposes of (1) and (2) above, the value of account
balances and the Present Value of accrued benefits will be
determined as of the most recent Valuation Date that falls
within or ends with the 12-month period ending on the
Determination Date, except as provided in section 416 of the
Code and the Regulations thereunder for the first and second
plan years of a Defined Benefit Plan. The account balances and
accrued benefits of a Participant (a) who is not a Key
Employee but who was a Key Employee in a prior year, or (b)
who has not been credited with at least one Hour of Service
with any Employer maintaining the Plan at any time during the
5-year period ending on the Determination Date will be
disregarded. The calculation of the Top-Heavy Ratio, and the
extent to which distributions, rollovers and transfers are
taken into account will be made in accordance with section 416
of the Code and the Regulations thereunder. Employee
contributions previously deductible under section 219 of the
Code will not be taken into account for purposes of computing
the Top-Heavy Ratio. When aggregating plans, the value of
account balances and accrued benefits will be calculated with
reference to the Determination Dates that fall within the same
calendar year.
The accrued benefit of a Participant other than a Key Employee
shall be determined under either (a) the method, if any, that
uniformly applies for accrual purposes under all Defined
Benefit Plans maintained by the Employer, or (b) if there is
no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional
rule of section 411(b)(1)(C) of the Code.
(e) Permissive Aggregation Group: The Required Aggregation Group of plans
plus any other plan or plans of the Employer which, when considered as
a group with the Required Aggregation Group, would continue to satisfy
the requirements of sections 401(a)(4) and 410 of the Code.
(f) Required Aggregation Group: (1) Each qualified plan of the Employer in
which at least one Key Employee participates or participated at any
time during the Determination Period (regardless of whether the plan
has terminated), and (2) any other qualified plan of the Employer which
enables a plan described in (1) to meet the requirements of sections
401(a)(4) or 410 of the Code.
(g) Determination Date: For any Plan Year subsequent to the first Plan
Year, the last day of the preceding Plan Year. For the first Plan Year
of the Plan, the last day of that year.
(h) Valuation Date: The date as defined in Article I of the Plan as of
which Account balances or accrued benefits are valued for purposes of
calculating the Top-Heavy Ratio.
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(i) Present Value: Present Value shall be determined using the interest and
mortality rates specified in the applicable plans. Notwithstanding the
foregoing, all determinations shall be made in accordance with section
416 of the Code and the Regulations promulgated thereunder.
Section 11.3 Minimum Allocation.
(a) Except as otherwise provided in (c) and (d) below, Employer
contributions and Forfeitures, not including Employee Elective
Deferrals, allocated on behalf of any Participant who is not a Key
Employee shall not be less than the lesser of three percent (four
percent if the Plan is super-Top-Heavy) of such Participant's
Compensation or, in the case where the Employer has no Defined Benefit
Plan which designates this Plan to satisfy section 401 of the Code, the
largest percentage of Employer contributions and Forfeitures, as a
percentage of the first $200,000 of the Key Employee's Compensation,
allocated on behalf of any Key Employee for that year. The minimum
allocation is determined without regard to any Social Security
contribution. This minimum allocation shall be made even though, under
the Plan provisions, the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser allocation for
the year because of (1) the Participant's failure to complete 1,000
hours of service (or any equivalent provided in the Plan), or (2) the
Participant's failure to make mandatory Employee contributions to the
Plan or (3) Compensation less than a stated amount.
(b) For purposes of computing the minimum allocation, Compensation means
Compensation as defined in Article I of the Plan.
(c) The provision in (a) above shall not apply to any Participant who was
not employed by the Employer on the last day of the Plan Year.
(d) The provision in (a) above shall not apply to any Participant to the
extent the Participant is covered under any other plan or plans of the
Employer and the minimum allocation or benefit requirement applicable
to Top-Heavy Plans will be met in the other plan or plans.
Section 11.4 Nonforfeitability of Minimum Allocation.
The minimum allocation required (to the extent required to be nonforfeitable
under section 416(b) of the Code) may not be forfeited under section
411(a)(3)(D) of the Code.
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Section 11.5 Allocation Limitations.
In determining the Defined Contribution Fraction under section 415(e)(3)(B) of
the Code and pursuant to Section 5.4 of the Plan "100 percent" shall be
substituted for "125 percent" unless the minimum allocation percentage under
section 416(c)(2)(A) of the Code and Section 11.3(a) of the Plan is increased
from "three percent" to "four percent" and the Plan would not be a Top-Heavy
Plan if "90 percent" were substituted for "60 percent" each place it appears in
Section 11.2(b) of the Plan.
Section 11.6 Minimum Vesting Schedules.
For any Plan Year during which the Plan is Top-Heavy, the vesting schedule(s)
set forth in Article V of the Plan will be followed, as such schedule(s) already
satisfy the requirements of section 416 of the Code.
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ARTICLE XII - GENERAL PROVISIONS
Section 12.1 Governing Law.
(a) The Plan is established under, and its validity, construction and
effect shall be governed by, the laws of the State of Missouri.
(b) The parties to the Trust intend that the Trust be exempt from taxation
under section 501(a) of the Code, and any ambiguities in its
construction shall be resolved in favor of an interpretation which will
effect such intention.
Section 12.2 Power to Enforce.
The Committee shall have authority to enforce the Plan on behalf of any and all
persons having or claiming any interest in the Trust or Plan.
Section 12.3 Alienation of Benefits.
Benefits under the Plan shall not be subject to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the
same shall be void, nor shall any such benefits be in any way liable for or
subject to the debts, contracts, liabilities, engagements or torts of any person
entitled to such benefits. This Section shall also apply to the creation,
assignment or recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such order is
determined to be a qualified domestic relations order as defined in section
414(p) of the Code, or any domestic relations order entered before January 1,
1985.
Section 12.4 Not an Employment Contract.
The Plan is not and shall not be deemed to constitute a contract between the
Employer and any Employee, or to be a consideration for, or an inducement to, or
a condition of, the employment of any Employee. Nothing contained in the Plan
shall give or be deemed to give an Employee the right to remain in the
employment of the Employer or to interfere with the right to be retained in the
employ of the Employer, any legal or equitable right against the Employer, or to
interfere with the right of the Employer to discharge or retire any Employee at
any time.
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Section 12.5 Discretionary Acts.
Any discretionary acts to be undertaken under the Plan with respect to the
classification of Employees, contributions, or benefits shall be
nondiscriminatory and uniform in nature and applicable to all persons similarly
situated.
Section 12.6 Interpretation.
(a) Savings Clause. If any provision or provisions of the Plan shall for
any reason be invalid or unenforceable, the remaining provisions of the
Plan shall be carried into effect, unless the effect thereof would be
to materially alter or defeat the purposes of the Plan.
(b) Gender. Wherever appropriate, pronouns of either gender shall be deemed
synonymous as shall singular and plural pronouns.
(c) Headings. Headings and titles of sections and subsections within the
Plan document are inserted solely for convenience of reference. They
constitute no part of the Plan itself and shall not be considered in
the construction of the Plan.
(d) Family Aggregation. Notwithstanding anything to the contrary in the
Plan, the family aggregation rules do not apply as of December 31,
1996.
Section 12.7 Operation of the Plan; Permitted Corrections.
The Employer intends to operate and administer the Plan as a tax-qualified
retirement plan under section 401(a) of the Code. In the event that the Employer
determines that the operation of the Plan or the form of the Plan, or both fails
to comply in any respect with the applicable requirements of the Code, the
Employer may take whatever action it deems necessary and appropriate under the
circumstances to comply with its intent to maintain the Plan as a tax-qualified
retirement plan, including corrections made pursuant to, or consistent with the
purposes of, the Employee Plans Compliance Resolution System, as set forth in
Revenue Procedure 98-22 issued by the Internal Revenue Service, as clarified and
expanded by Revenue Procedure 99-31, as the principles of such Revenue
Procedures may be modified or expanded further from time to time, or any other
correction procedures available generally to the Employer with respect to the
Plan.
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Section 12.8 Special Rules Relating to Transactions By Certain
Officers, Directors and
Shareholders.
Notwithstanding any other provision of the Plan, the administration of the
Plan's provisions regarding investment elections, investment transfers,
contributions, loans and withdrawals, are subject to all restrictions of any
applicable securities laws, including restrictions on certain officers,
directors and shareholders of the Employer and its Affiliates (such individuals
hereinafter referred to as "insiders") with respect to the purchase and sale of
Employer stock or other Employer securities. The Committee may adopt procedures
establishing such rules, restrictions and limitations on insiders' transactions
in Employer stock or other Employer securities under the Plan as may be
necessary or appropriate to comply with applicable securities laws, including
Section 16 of the Securities Exchange Act of 1934 (the "Exchange Act"). Such
procedures may include reasonable delays in processing transactions under the
Plan to ensure that Section 16(b) of the Exchange Act will not be violated by a
particular discretionary transaction involving a Participant who is an insider.
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ARTICLE XIII - SIGNATURE PAGE
IN WITNESS WHEREOF, this Plan has been executed the day and year written below.
Signed, sealed, and delivered on this 30th day of September, 1999, in the
presence of:
Dave & Buster's, Inc.
By /s/ NANCY J. DURICIC
----------------------------------------
EMPLOYER
Nancy J. Duricic
----------------------------------------
EMPLOYER (Print Name)
Ava J. Dodd
- -----------------------------
WITNESS AS TO EMPLOYER
By /s/ T. MARK EDWARDS
----------------------------------------
PLAN COUNSEL
T. Mark Edwards
----------------------------------------
PLAN COUNSEL (Print Name)
Ann Davis
- -----------------------------
WITNESS AS TO PLAN COUNSEL
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1
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference of our report dated March 29, 1999,
with respect to the consolidated financial statements of Dave & Buster's Inc.
included in its Annual Report (Form 10-K) for the year ended January 31, 1999,
filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Dallas, Texas
September 30, 1999
