-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WfO8o76JJCVmEJHfwBCtgIqRS/aNU49QqvxuVEntDDyqbj8o/RISn0RtFjOkkpgW Egr/Cpq6D+GHhMzWlxMzzA== 0000110042-98-000009.txt : 19981102 0000110042-98-000009.hdr.sgml : 19981102 ACCESSION NUMBER: 0000110042-98-000009 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 19981030 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INVESCO GROWTH FUND INC /CO/ CENTRAL INDEX KEY: 0000110042 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 840202353 STATE OF INCORPORATION: MD FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 002-11236 FILM NUMBER: 98734079 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 811-00352 FILM NUMBER: 98734080 BUSINESS ADDRESS: STREET 1: 7800 E UNION AVE STREET 2: STE 800 CITY: DENVER STATE: CO ZIP: 80237 BUSINESS PHONE: 303-930-6300 MAIL ADDRESS: STREET 1: P.O. BOX 173706 CITY: DENVER STATE: CO ZIP: 80217-3706 485APOS 1 File No. 2-11236 As filed on October 30, ^ 1998 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X --- Pre-Effective Amendment No. --- Post-Effective Amendment No. ^ 73 X --- REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X --- Amendment No. ^ 21 X ------------- --- INVESCO GROWTH ^ FUNDS, INC. (formerly, INVESCO Growth Fund, Inc.) (Exact Name of Registrant as Specified in Charter) 7800 E. Union Avenue, Denver, Colorado 80237 (Address of Principal Executive Offices) P.O. Box 173706, Denver, Colorado 80217-3706 (Mailing Address) Registrant's Telephone Number, including Area Code: (303) 930-6300 Glen A. Payne, Esq. 7800 E. Union Avenue Denver, Colorado 80237 (Name and Address of Agent for Service) ------------ Copies to: Ronald M. Feiman, Esq. Gordon Altman Butowsky Weitzen Shalov & Wein 114 W. 47th St. New York, New York 10036 ------------ Approximate Date of Proposed Public Offering: As soon as practicable after this post-effective amendment becomes effective. It is proposed that this filing will become effective (check appropriate box) immediately upon filing pursuant to paragraph (b) on _______________, pursuant to paragraph (b) 60 days after filing pursuant to paragraph (a)(i) X on January 1, ^ 1999, pursuant to paragraph (a)(i) 75 days after filing pursuant to paragraph (a)(ii) on _________________, pursuant to paragraph (a)(ii) of rule 485 If appropriate, check the following box: ___ This post-effective amendment designates a new effective date for a previously filed post-effective amendment. Registrant has previously elected to register an indefinite number of shares of its common stock pursuant to Rule 24f-2 under the Investment Company Act. Registrant's Rule 24f-2 Notice for the fiscal year ended August 31, ^ 1998, will be filed on or about ^ November 24, ^ 1998. Page 1 of 449 Exhibit index is located at page 91 INVESCO BLUE CHIP GROWTH FUND, INC. ------------------------------- CROSS-REFERENCE SHEET Form N-1A Item Caption - --------- ------- Part A Prospectus 1....................... Cover Page 2....................... Annual Fund Expenses; Essential Information 3....................... Financial Highlights; Fund Price and Performance 4....................... Investment Objective and Strategy; Investment Policies and Risks; The Fund and Its Management 5....................... The Fund and Its Management 5A...................... Not Applicable 6....................... Fund Services;Taxes, Dividends and Other Distributions; Additional Information 7....................... How To Buy Shares; Fund Price ^ And Performance; Fund Services; The Fund ^ And Its Management 8....................... Fund Services; How to Sell Shares 9....................... Not Applicable Part B Statement of Additional Information 10....................... Cover Page 11....................... Table of Contents Form N-1A Item Caption - --------- ------- 12....................... The Fund ^ And Its Management 13....................... Investment Policies ^ And Restrictions 14....................... The Fund ^ And Its Management 15....................... The Fund ^ And Its Management; Additional Information 16....................... The Fund ^ And Its Management; Additional Information 17....................... Investment Practices; Investment Policies and Restrictions 18....................... Additional Information 19....................... How Shares Can Be Purchased; How Shares Are Valued; Services Provided by the Fund; Tax-Deferred Retirement Plans; How ^ To Redeem Shares 20....................... Dividends, Other Distributions, ^ And Taxes 21....................... How Shares Can Be Purchased 22....................... Performance Data 23....................... Additional Information Part C Other Information Information required to be included in Part C is set forth under the appropriate Item, so numbered, in Part C to this Registration Statement. PROSPECTUS January 1, ^ 1999 INVESCO BLUE CHIP GROWTH FUND^ INVESCO Blue Chip Growth Fund^ (the "Fund") is actively managed to seek long-term capital growth, with the secondary goal of current income. Most of its investments are in U.S. common stocks, but the Fund has the flexibility to invest in other types of securities. The Fund is a series of INVESCO Growth Funds, Inc. (the "Company"), a no-load mutual fund. The Company may offer additional funds in the future. This Prospectus provides you with the basic information you should know before investing in the Fund. You should read it and keep it for future reference. A Statement of Additional Information containing further information about the Fund, dated January 1, ^ 1999, has been filed with the Securities and Exchange Commission, and is incorporated by reference into this Prospectus. To ^ request a free copy, write to INVESCO Distributors, Inc., P.O. Box 173706, Denver, Colorado 80217-3706; call 1-800-525-8085; or visit our web site at http://www.invesco.com. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION ^, NOR HAS THE SECURITIES AND EXCHANGE ^ COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. TABLE OF CONTENTS Page ESSENTIAL INFORMATION..........................................................6 ANNUAL FUND EXPENSES...........................................................7 FINANCIAL HIGHLIGHTS...........................................................9 INVESTMENT OBJECTIVE AND STRATEGY.............................................11 INVESTMENT POLICIES AND RISKS.................................................11 THE FUND AND ITS MANAGEMENT.................................................^ 16 FUND PRICE AND PERFORMANCE..................................................^ 19 HOW TO BUY SHARES...........................................................^ 19 FUND SERVICES...............................................................^ 25 HOW TO SELL SHARES..........................................................^ 25 TAXES, DIVIDENDS AND OTHER DISTRIBUTIONS....................................^ 28 ADDITIONAL INFORMATION......................................................^ 29 ESSENTIAL INFORMATION Investment Objective And Strategy: ^ The Fund seeks long-term capital growth with a secondary goal of current income. It invests primarily in U.S. common stocks. The Fund may also invest in other securities, such as corporate bonds and preferred stocks. There is no guarantee that the Fund will meet its objective. See "Investment Objective And Strategy^" and "Investment Policies And Risks." The Fund is Designed For: Investors seeking a combination of capital growth plus current income. While not intended as a complete investment program, the Fund may be a valuable element of your investment portfolio. You also may wish to consider the Fund as part of a Uniform Gift/Transfer To Minors Act Account or systematic investing strategy. The Fund may be a suitable investment for many types of retirement programs, including various individual retirement accounts ("IRAs"), 401(k), Profit Sharing, Money Purchase Pension, and 403(b) plans. Time Horizon: Because the value of its holdings varies, the Fund's price per share will fluctuate. Investors should consider this a medium- to long-term investment. Risks: The Fund's investments in fixed-income securities are subject to credit risk and market risk. Its returns on foreign investments may be influenced by currency fluctuations and other risks of investing overseas. ^ The Fund may experience rapid portfolio turnover, which may result in higher brokerage commissions and the acceleration of taxable capital gains. These policies make the Fund unsuitable for the portion of your savings dedicated to preservation of capital or current income over the short term. See "Investment Objective And Strategy" and "Investment Policies And Risks." Organization and Management: The Fund is owned by its shareholders. It employs INVESCO Funds Group, Inc. (" ^ INVESCO"), founded in 1932, to serve as investment adviser, administrator and transfer agent. ^ INVESCO Distributors, Inc. ("IDI"), founded in 1997 as a wholly-owned subsidiary of ^ INVESCO, is the Fund's distributor. The Fund's investments are selected by two INVESCO portfolio managers: INVESCO Senior Vice President Timothy J. Miller and portfolio manager Trent E. May. ^ INVESCO ^ and IDI are indirect, wholly-owned subsidiaries of AMVESCAP PLC, an international investment management company that ^ managed approximately ^ $241 billion of assets as of September 30, 1998. AMVESCAP PLC is based in London, with money managers located in Europe, North America, South America and the Far East. This Fund offers all of the following services at no charge: Telephone purchases Telephone exchanges Telephone redemptions Automatic reinvestment of distributions Regular investment plans, such as EasiVest (the Fund's automatic monthly investment program), Direct Payroll Purchase, and Automatic Monthly Exchange Periodic withdrawal plans See "How To Buy Shares" and "How To Sell Shares." Minimum Initial Investment: $1,000, which is waived for regular investment plans, including EasiVest and Direct Payroll Purchase. Minimum Subsequent Investment: $50 (Minimums are lower for certain retirement plans.) ANNUAL FUND EXPENSES The Fund is no-load; there are no fees to purchase, exchange or redeem shares. The Fund is authorized to pay a Rule 12b-1 distribution fee of one quarter of one percent of the Fund's average net assets each year. (See "How To Buy Shares --Distribution Expenses.") Like any company, the Fund has operating expenses -- such as portfolio management, accounting, shareholder servicing, maintenance of shareholder accounts, and other expenses. We calculate annual operating expenses as a percentage of the Fund's average annual net assets. These expenses are paid from the Fund's assets. Lower expenses therefore benefit investors by increasing the Fund's total return. Annual Fund Operating Expenses (as a percentage of average net assets) Management Fee ^ 0.56% 12b-1 Fees 0.25% Other Expenses(1) ^ 0.23% Total Fund Operating Expenses(1) ^ 1.04% (1) It should be noted that the Fund's actual total operating expenses were lower than the figures shown, because the Fund's custodian, transfer agent and distribution fees were reduced under expense offset arrangements. However, as a result of an SEC requirement ^, the figures shown above do not reflect these reductions. In comparing expenses for different years, please note that the ^ Ratios of Expenses to Average Net Assets shown under "Financial Highlights" do reflect any reductions for periods including and prior to the fiscal year ended August 31, 1995. See "The Fund And Its Management." Example A shareholder would pay the following expenses on a $1,000 investment for the periods shown, assuming a hypothetical 5% annual return and redemption at the end of each time period. (Of course, actual operating expenses are paid from the Fund's assets, and are deducted from the amount of income available for distribution to shareholders; they are not charged directly to shareholder accounts.) 1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- $11 ^ $33 $58 $128 The purpose of this table is to assist you in understanding the various costs and expenses that you will bear directly or indirectly. THE ^ EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE PERFORMANCE OR EXPENSES, AND ACTUAL ANNUAL RETURNS AND EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. For more information on the Fund's expenses, see "The Fund ^ And Its Management" and "How To Buy Shares -- Distribution Expenses." Because the Fund pays a distribution fee, investors who own Fund shares for a long period of time may pay more than the economic equivalent of the maximum front-end sales charge permitted for mutual funds by the National Association of Securities Dealers, Inc. FINANCIAL HIGHLIGHTS (For a Fund Share Outstanding Throughout Each Period) The following information has been audited by ^ PricewaterhouseCoopers LLP, independent accountants. This information should be read in conjunction with the audited financial statements and the ^ Report of Independent Accountants thereon appearing in the Fund's ^ 1998 Annual Report to Shareholders which is incorporated by reference into the Statement of Additional Information, both of which are available without charge by contacting IDI at the address or telephone number on the back cover of this Prospectus. The Annual Report also contains more information about the Fund's performance.
Year Ended August 31 --------------------------------------------------------------------------------------------------- 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 ^ PER SHARE DATA Net Asset Value - Beginning of Period $6.06 $5.44 $5.33 $5.34 $5.28 $4.72 $5.26 $4.37 $4.54 $3.48 ^ ---------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS Net Investment Income 0.02 0.01 0.03 0.05 0.03 0.04 0.05 0.07 0.10 0.10 ^ Net Gains or (Losses) on Securities (Both Realized and Unrealized) 0.69 1.39 0.95 0.49 0.11 1.00 0.05 1.28 (0.14) 1.06^ --------------------------------------------------------------------------------------------------- Total from Investment Operations 0.71 1.40 0.98 0.54 0.14 1.04 0.10 1.35 (0.04) 1.16^ --------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS Dividends from Net Investment Income+ 0.02 0.01 0.03 0.05 0.03 0.04 0.05 0.08 0.11 0.10 ^ Distributions from Capital Gains 1.60 0.77 0.84 0.50 0.05 0.44 0.59 0.38 0.02 0.00 ^ --------------------------------------------------------------------------------------------------- Total Distributions 1.62 0.78 0.87 0.55 0.08 0.48 0.64 0.46 0.13 0.10 ^ --------------------------------------------------------------------------------------------------- Net Asset Value - End of Period $5.15 $6.06 $5.44 $5.33 $5.34 $5.28 $4.72 $5.26 $4.37 $4.54 ^ =================================================================================================== TOTAL RETURN 13.42% 28.14% 20.23% 12.05% 2.52% 22.17% 2.04% 31.16% (1.01%) 33.70%^ RATIOS Net Assets - End of Period ($000 Omitted) $747,739 $709,220 $596,726 $501,285 $488,411 $483,957 $408,218 $428,564 $339,927 $383,099 ^ Ratio of Expenses to Average Net Assets 1.04%@ 1.07%@ 1.05%@ 1.06% 1.03% 1.04% 1.04% 1.00% 0.78% 0.82%^ Ratio of Net Investment Income to Average Net Assets 0.37% 0.22% 0.64% 1.07% 0.47% 0.72% 0.93% 1.52% 2.17% 2.60%^ Portfolio Turnover Rate 153% 286% 207% 111% 63% 77% 77% 69% 86% 90% ^
+ Distributions in excess of net investment income for the year ended August 31, 1995, aggregated less than $0.01 on a per share basis. @ Ratio is based on Total Expenses of the Fund, which is before any expense offset arrangements. ^ INVESTMENT OBJECTIVE AND STRATEGY The Fund seeks long-term capital growth, with a secondary goal of current income. This investment objective is fundamental and may not be changed without the approval of the Fund's shareholders. Normally, the Fund seeks to achieve this objective by investing primarily in U.S. common stocks (including securities convertible into common stocks). There is no ^ assurance that the Fund's investment objective will be met. For the equity holdings, we look for companies that we believe have better-than-average earnings growth potential, as well as companies within industries we believe are well-positioned for the current and expected economic climate. In addition to common stocks, the Fund also may hold preferred stocks and investment grade corporate debt obligations. The Fund also may hold cash and cash-equivalent securities as cash reserves. The amount invested in stocks, bonds and cash securities may be varied from time to time depending upon Fund Management's assessment of business, economic and market conditions. For a description of each corporate bond rating category please refer to Appendix A to the Statement of Additional Information. The Fund's investment portfolio is actively traded. There are no limitations regarding portfolio turnover for either the equity or fixed income portions of the Fund's portfolio. Although the Fund does not trade for short-term profits, securities may be sold without regard to the time they have been held when, in the opinion of ^ INVESCO, investment considerations warrant such action. The Fund's portfolio turnover rate therefore may be higher than other mutual funds with similar objectives. Increased portfolio turnover may result in greater brokerage commissions and acceleration of capital gains which are taxable when distributed to shareholders. The Statement of Additional Information includes an expanded discussion of the Fund's portfolio turnover rate, its brokerage practices and certain federal income tax matters. When we believe market or economic conditions are unfavorable, the Fund may assume a defensive position by temporarily investing up to 100% of its assets in high-quality money market instruments, such as short-term U.S. government obligations, commercial paper or repurchase agreements, seeking to protect its assets until conditions stabilize. INVESTMENT POLICIES AND RISKS Investors generally should expect to see ^ the price per share and income levels of the Fund vary with movements in the stock and fixed-income markets, changes in economic conditions and other factors. The Fund invests in many different ^ securities and industries; this diversification ^ may help reduce the Fund's ^ exposure to particular investment and market risks, but cannot eliminate these risks. Year 2000 Computer Issue. Due to the fact that many computer systems in use today cannot recognize the Year 2000, but will, unless corrected, revert to 1900 or 1980 or cease to function at that time, the markets for securities in which the Fund invests may be detrimentally affected by computer failures affecting portfolio investments or trading of securities beginning January 1, 2000. Improperly functioning trading systems may result in settlement problems and liquidity issues. In addition, corporate and governmental data processing errors may result in production issues for individual companies and overall economic uncertainties. Earnings of individual issuers may be affected by remediation costs, which may be substantial. The Fund's investments may be adversely affected. Debt Securities. When we assess an issuer's ability to meet its interest rate obligations and repay its debt when due, we are referring to "credit risk." Debt obligations are rated based on their credit risk as estimated by independent services such as Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P") or Moody's Investors Service, Inc. ("Moody's"). "Market risk" for debt securities principally refers to sensitivity to changes in interest rates: for instance, when interest rates go up, the market value of a bond issued previously generally declines; on the other hand, when interest rates go down, ^ prices of bonds generally increase. The lower a bond's quality, the more it is subject to credit risk and market risk and the more speculative it becomes. This is also true of most unrated debt securities. The Fund seeks to reduce these risks by investing only in investment grade debt securities (those rated BBB or above by S&P and/or Baa or above by Moody's or, if unrated, are judged by Fund Management to be of equivalent quality). These bonds enjoy strong to adequate capacity to pay principal and interest. Securities rated Baa by Moody's are considered to be of medium grade and may have speculative characteristics. Securities rated BBB by S&P are considered to be in the lowest "investment grade" security rating and may have speculative characteristics as well. While ^ INVESCO continuously monitors all of the debt securities in the Fund's portfolio for the issuer's ability to make required principal and interest payments and other quality factors, it may retain a bond whose rating is changed to one below the minimum rating required for purchase of the security. Foreign Securities. Up to 25% of the Fund's total assets, measured at the time of purchase, may be invested directly in foreign equity or corporate debt securities. Securities of Canadian issuers and American Depository Receipts ("ADRs") are not subject to this 25% limitation. ADRs are receipts representing shares of a foreign corporation held by a U.S. bank that entitle the holder to all dividends and capital gains. ADRs are denominated in U.S. dollars and trade in the U.S. securities markets. For U.S. investors, the returns on foreign securities are influenced not only by the returns on the foreign investments themselves, but also by currency fluctuations. That is, when the U.S. dollar generally rises against a foreign currency, returns for a U.S. investor on foreign securities denominated in that foreign currency may decrease. By contrast, in a period when the U.S. dollar generally declines, those returns may increase. Other aspects of international investing to consider include: -less publicly available information than is generally available about U.S. issuers; -differences in accounting, auditing and financial reporting standards; -generally higher commission rates on foreign portfolio transactions and longer settlement periods; -smaller trading volumes and generally lower liquidity of foreign stock markets, which may cause greater price volatility; and -^ investment income on certain foreign securities may be subject to foreign withholding taxes, which may reduce dividend or interest income or capital gains payable to shareholders. There is also the possibility of expropriation or confiscatory taxation; adverse changes in investment or exchange control regulations; political instability; potential restrictions on the flow of international capital; and the possibility ^ that the Fund ^ may experience difficulties in pursuing legal remedies and collecting judgments. ADRs are subject to some of the same risks as direct investments in foreign securities, including the risk that material information about the issuer may not be disclosed in the United States and the risk that currency fluctuations may adversely affect the value of the ADR. Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain are presently members of the European Economic and Monetary Union (the "EMU"). The EMU has established a common European currency for EMU countries which is known as the "euro." Each participating country has adopted the euro as its currency effective January 1, 1999. The old national currencies are sub-currencies of the euro until July 1, 2002, at which time the old currencies will disappear entirely. Other European countries may adopt the euro in the future. The introduction of the euro presents some uncertainties and possible risks, including whether the payment and operational systems of banks and other financial institutions will have been ready by January 1, 1999; whether exchange rates for existing currencies and the euro will have been adequately established; and whether suitable clearing and settlement systems for the euro will have been in operation. These and other factors may cause market disruptions after January 1, 1999 and could adversely affect the value of securities held by the Fund. Rule 144A Securities. The Fund may not purchase securities that are not readily marketable. However, the Fund may purchase certain securities that are not registered for sale to the general public but that can be resold to institutional investors ("Rule 144A Securities"), if a liquid institutional trading market exists. The Fund's board of directors has delegated to ^ INVESCO the authority to determine the liquidity of Rule 144A Securities pursuant to guidelines approved by the board. In the event that a Rule 144A Security held by the Fund is subsequently determined to be illiquid, the security will be sold as soon as that can be done in an orderly fashion consistent with the best interests of the Fund's shareholders. For more information concerning Rule 144A Securities, see "Investment Policies And Restrictions" in the Statement of Additional Information. Repurchase Agreements. The Fund may invest money, for as short a time as overnight, using repurchase agreements ("repos"). With a repo, the Fund buys a debt instrument, agreeing simultaneously to sell it back to the prior owner at an agreed-upon price and ^ date. The Fund could incur costs or delays in seeking to sell the ^ security, if the prior owner defaults on its repurchase obligation. To reduce that risk, the securities that are the subject of ^ the repurchase agreement will be maintained with the Fund's custodian in an amount at least equal to the repurchase price under the agreement (including accrued interest). These agreements are entered into only with member banks of the Federal Reserve System, registered broker-dealers, and registered U.S. government securities dealers that are deemed creditworthy under standards established by the Fund's board of directors. Securities Lending. The Fund may seek to earn additional income by lending securities to qualified brokers, dealers, banks, or other financial institutions, on a fully collateralized basis. For further information on this policy, see "Investment Policies And Restrictions" in the Statement of Additional Information. Futures and Options. A futures contract is an agreement to buy or sell a specific amount of a financial instrument or commodity at a particular price on a particular date. The Fund will use futures contracts only to hedge against price changes in the value of its current or intended investments in securities. In the event that an anticipated decrease in the value of portfolio securities occurs as a result of a general decrease in prices, the adverse effects of such changes may be offset, at least in part, by gains on the sale of futures contracts. Conversely, the increased cost of portfolio securities to be acquired, caused by a general increase in prices, may be offset, at least in part, by gains on futures contracts purchased by the Fund. Brokerage fees are paid to trade futures contracts, and the Fund is required to maintain margin deposits. Put and call options on futures contracts or securities may be traded by the Fund in order to protect against declines in the value of portfolio securities or against increases in the cost of securities to be acquired. The purchaser of an option purchases the right to effect a transaction in the underlying future or security at a specified price (the "strike price") before a specified date (the "expiration date"). In exchange for the right, the purchaser pays a "premium" to the seller, which represents the price of the right to buy or to sell the underlying instrument. In exchange for the premium, the seller of the option becomes obligated to effect a transaction in the underlying future or security, at the strike price, at any time prior to the expiration date, should the buyer choose to exercise the option. A call option contract grants the purchaser the right to buy the underlying future or security, at the strike price, before the expiration date. A put option contract grants the purchaser the right to sell the underlying future or security, at the strike price, before the expiration date. Purchases of options on futures contracts may present less dollar risk in hedging the Fund's portfolio than the purchase and sale of the underlying futures contracts, since the potential loss is limited to the amount of the premium plus related transaction costs. The premium paid for such a put or call option plus any transaction costs will reduce the benefit, if any, realized by the Fund upon exercise or liquidation of the option, and, unless the price of the underlying futures contract or security changes sufficiently, the option may expire without value to the Fund. Although the Fund will enter into futures contracts and options on futures contracts and securities solely for hedging or other nonspeculative purposes, their use does involve certain risks. For example, a lack of correlation between the value of an instrument underlying an option or futures contract and the assets being hedged, or unexpected adverse price movements, could render a Fund's hedging strategy unsuccessful and could result in losses. In addition, there can be no assurance that a liquid secondary market will exist for any contract purchased or sold, and the Fund may be required to maintain a position until exercise or expiration, which could result in losses. Transactions in futures contracts and options are subject to other risks as well, which are set forth in greater detail in the Statement of Additional Information and Appendix B therein. ^ Investment Restrictions. Certain restrictions, which are identified in the Statement of Additional Information, may not be altered without the approval of the Fund's shareholders. For example, the Fund limits to 5% the portion of its total assets that may be invested in any one issuer (other than cash items and U.S. government securities). In addition, the Fund limits to 25% the portion of its total assets that may be invested in any one industry (other than U.S. government securities). Other fundamental restrictions prohibit the Fund from lending more than 33-1/3% of its total assets to other parties and from borrowing money, except that the Fund may borrow amounts up to 33-1/3% of its total assets for temporary or emergency purposes. For a further discussion of risks associated with an investment in the Fund, see "Investment Policies and Restrictions" and "Investment Practices" in the Statement of Additional Information. ^ THE FUND AND ITS MANAGEMENT The ^ Company is a no-load mutual fund, registered with the Securities and Exchange Commission as ^ an open-end, diversified, management investment company. It was incorporated on July 8, 1935, under the laws of Maryland. On September 29, 1998, the name of the Company was changed to INVESCO Growth Funds, Inc. The ^ Company's board of directors has responsibility for overall supervision of the Fund and reviews the services provided by the ^ investment adviser. Under an agreement with the ^ Company, INVESCO, 7800 E. Union Avenue, Denver, Colorado 80237, serves as the Fund's investment ^ adviser; it is primarily responsible for providing the Fund with portfolio management and various administrative services. ^ INVESCO and IDI are indirect wholly-owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC is a publicly-traded holding company that, through its subsidiaries, engages in the business of investment management on an international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3, 1997, and to AMVESCAP PLC on May 8, 1997, as part of a merger between a direct subsidiary of INVESCO PLC and A I M Management Group Inc., that created one of the largest independent investment management businesses in the world. AMVESCAP PLC had approximately $241 billion in assets under management as of September 30, 1998. INVESCO was established in 1932 and, as of August 31, 1998, managed 14 mutual funds, consisting of 49 separate portfolios, with combined assets of approximately $17.1 billion on behalf of over 899,000 shareholders. Prior to February 3, 1998, Institutional Trust Company doing business as INVESCO Trust Company ("ITC") provided sub-advisory services to the Fund; termination of its sub-advisory services in no way changed the basis upon which investment advice is provided to the Fund, the cost of those services to the Fund or the persons actually performing the investment advisory and other services previously provided by ITC. INVESCO provides such day-to-day portfolio management services as the investment adviser to the Fund. The Fund is managed by two members of the INVESCO Growth Team which is headed by Timothy J. Miller. The following individuals are primarily responsible for the day-to-day management of the Fund's portfolio holdings: Trent E. May ^, a Chartered Financial Analyst, has been the lead portfolio manager of the Fund since October 1997 ^(co-portfolio manager since 1996). Mr. May is also the lead portfolio manager of ^ INVESCO VIF-Growth Fund and co-manages INVESCO Small Company Growth Fund and INVESCO VIF-Small Company Growth Fund. Mr. May is also a vice president of INVESCO Funds Group, Inc. Mr. May began his investment career in 1991 and was most recently senior equity fund manager/equity analyst ^ with Munder Capital Management in Detroit. Mr. May received an M.B.A. from Rollins College and a B.S. in Engineering^ from the Florida Institute of Technology^. Timothy J. Miller, a Chartered Financial Analyst, has been a^ co-portfolio manager ^ of the Fund since 1996^. Mr. Miller is also the lead portfolio manager of INVESCO Dynamics Fund ^ and INVESCO VIF-Dynamics Fund and co-manages INVESCO VIF-Growth Fund, INVESCO Small Company Growth Fund ^ and INVESCO VIF-Small Company Growth Fund. Mr. Miller is also a senior vice president ^ of INVESCO Funds Group, Inc. Mr. Miller was previously an analyst and portfolio manager with Mississippi Valley Advisors^ from 1979 to 1992. Mr. Miller received an M.B.A. from the University of Missouri-^ St. Louis ^ and a B.S.B.A.^ from St. Louis University. ^ INVESCO permits investment and other personnel to purchase and sell securities for their own accounts, subject to a compliance policy governing personal investing. This policy requires ^ INVESCO's personnel to conduct their personal investment activities in a manner that ^ INVESCO believes is not detrimental to the Fund or ^ INVESCO's other advisory clients. See the Statement of Additional Information for more detailed information. The Fund pays ^ INVESCO a monthly management fee that is based upon a percentage of the Fund's average net assets determined daily. The management fee is computed at the annual rate of 0.60% on the first $350 million of the Fund's average net assets; 0.55% on the next $350 million of the Fund's average net assets; and 0.50% on the Fund's average net assets over $700 million. For the fiscal year ended August 31, ^ 1998, investment advisory fees paid by the Fund amounted to ^ 0.56% of the Fund's average net assets. ^ Under a Distribution Agreement, IDI provides services relating to the distribution and sale of the Fund's shares. IDI, established in 1997, is a regulated broker-dealer that acts as distributor for all retail funds advised by INVESCO. Prior to September 30, 1997, INVESCO served as the Fund's distributor. Under a Transfer Agency Agreement, ^ INVESCO acts as registrar, transfer agent, and dividend disbursing agent for the Fund. The Fund pays an annual fee of $20.00 per shareholder account or, where applicable, per participant in an omnibus account. Registered broker-dealers, third party administrators of tax-qualified retirement plans and other entities, including affiliates of ^ INVESCO, may provide equivalent services to the Fund. In these cases, ^ INVESCO may pay, out of the fee it receives from the Fund, an annual sub-transfer agency fee or recordkeeping fee to the third party. ^ Under an Administrative Services Agreement, ^ INVESCO handles additional administrative, recordkeeping, and internal sub-accounting services for the Fund. For ^ the fiscal year ended August 31, ^ 1998, the Fund paid INVESCO a fee equal to ^ 0.02% of the Fund's average net assets. The management and custodial services provided to the Fund by INVESCO and the Fund's custodian, and the services provided to shareholders by INVESCO and IDI, depend on the continued functioning of their computer systems. Many computer systems in use today cannot recognize the Year 2000, but will revert to 1900 or 1980 or will cease to function due to the manner in which dates were encoded and are calculated. That failure could have a negative impact on the handling of the Fund's securities trades, its share pricing and its account services. The Fund and its service providers have been actively working on necessary changes to their computer systems to deal with the Year 2000 issue and expect that their computer systems will be adapted before that date, but there can be no assurance that they will be successful. Furthermore, services may be impaired at that time as a result of the interaction of their systems with noncomplying computer systems of others. INVESCO plans to test as many such interactions as practicable prior to December 31, 1999 and to develop contingency plans for reasonably anticipated failures. The Fund's expenses, which are accrued daily, are deducted from total income before dividends are paid. Total expenses of the Fund for the fiscal year ended August 31, ^ 1998, including investment management fees (but excluding brokerage commissions, which are a cost of acquiring securities), amounted to ^ 1.04% of the Fund's average net assets. ^ INVESCO places orders for the purchase and sale of portfolio securities with brokers and dealers based upon ^ INVESCO's evaluation of ^ such brokers' and dealers' financial responsibility coupled with their ability to effect transactions at the best available prices. As discussed under "How To Buy Shares - -- Distribution Expenses," the Fund may market its shares through intermediary brokers or dealers that have entered into dealer agreements with ^ INVESCO or IDI, as the Fund's distributor. The Fund may place orders for portfolio transactions with qualified ^ brokers and dealers ^ that recommend the Fund, or sell shares of the Fund, to clients, or act as agent in the purchase of Fund shares for clients, if ^ INVESCO believes that the quality of the execution of the transaction and level of commission are comparable to those available from other qualified brokerage firms. For further information, see "Investment Practices -- Placement of Portfolio Brokerage" in the Statement of Additional Information. ^ FUND PRICE AND PERFORMANCE Determining Price. The value of your investment in the Fund ^ may vary daily. The price per share is also known as the Net Asset Value ("NAV"). ^ INVESCO prices the Fund every day that the New York Stock Exchange is open, as of the close of regular trading (generally, 4:00 p.m., New York time). NAV is calculated by adding together the current market value of all of the Fund's assets, including accrued interest and dividends; ^ subtracting liabilities, including accrued expenses; and ^ dividing that dollar amount by the total number of shares outstanding. Performance Data. To keep shareholders and potential investors informed, we will occasionally advertise the Fund's total return for one-, five-, and ten-year periods (or since inception). Total return figures show the average annual rate of return on a $1,000 investment in the Fund, assuming reinvestment of all dividends and other distributions for ^ the periods cited. Cumulative total return shows the actual rate of return on an investment over the ^ periods cited; average annual total return represents the average annual percentage change in the value of an investment. Both cumulative and average annual total returns tend to "smooth out" fluctuations in the Fund's investment results, because they do not show the interim variations in performance over the periods cited. More information about the Fund's recent and historical performance is contained in the Fund's Annual Report to Shareholders. You can get a free copy by calling or writing to IDI using the phone number or address on the back cover of this Prospectus. When we quote mutual fund rankings published by Lipper Analytical Services, Inc., we may compare the Fund to others in its category of Growth Funds, as well as the broad-based Lipper general fund groupings. These rankings allow you to compare the Fund to its peers. Other independent financial media also produce performance-or service-related comparisons, which you may see in our promotional materials. For more information see "Fund Performance" in the Statement of Additional Information. Performance figures are based on historical investment results and are not intended to suggest future performance. HOW TO BUY SHARES The following chart shows several convenient ways to invest in the Fund. Your new Fund shares will be priced at the NAV next determined after your order is received in proper form. There is no charge to invest, exchange, or redeem shares when you make transactions directly through ^ INVESCO. However, if you invest in the Fund through a securities broker, you may be charged a commission or transaction fee. INVESCO may from time to time make payments from its revenues to securities dealers and other financial institutions that provide distribution-related and/or administrative services for the Fund. For all new accounts, please send a completed application form. Please specify which fund's shares you wish to purchase. ^ INVESCO reserves the right to increase, reduce or waive the minimum investment requirements in its sole discretion, where it determines this action is in the best interests of the Fund. ^ INVESCO reserves the right in its sole discretion to reject any order for the purchase of Fund shares (including purchases by exchange) when, in its judgment, such rejection is in the Fund's best interests. HOW TO BUY SHARES ================================================================================ Method Investment Minimum Please Remember - -------------------------------------------------------------------------------- By Check Mail to: $1,000 for regular If your check does INVESCO Funds account; not clear, you will Group, Inc. $250 for an IRA; be responsible for P.O. Box 173706 $50 minimum for any related loss Denver, CO each subsequent the Fund or ^ 80217-3706. investment. INVESCO incurs. If Or you may send you are already a your check by shareholder in the overnight courier INVESCO funds, the to: 7800 E. Union Fund may seek Ave., reimbursement from Denver, CO 80237. your existing account(s) for any loss incurred. - -------------------------------------------------------------------------------- By Telephone or Wire Call 1-800-525-8085 $1,000. Payment must be to request your received within 3 purchase. Then send business days, or your check by the transaction may overnight courier be ^ canceled. If a to our street telephone purchase address: is ^ canceled due 7800 E. Union Ave., to nonpayment, you Denver, CO 80237. will be responsible Or you may transmit for any related your payment by loss the Fund or ^ bank wire (call ^ INVESCO incurs. If INVESCO for you are already a instructions). shareholder in the INVESCO funds, the Fund may seek reimbursement from your existing account(s) for any loss incurred. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- With EasiVest or Direct Payroll Purchase You may enroll on $50 per month for Like all regular the fund EasiVest; $50 per investment plans, application, or pay period for neither EasiVest call us for the Direct Payroll nor Direct Payroll correct form and Purchase. You may Purchase ensures a more details. start or stop your profit or protects Investing the same regular investment against loss in a amount on a monthly plan at any time, falling market. basis allows you to with two weeks' Because you'll buy more shares notice to ^ invest continually, when prices are low INVESCO. regardless of and fewer shares varying price when prices are levels, consider high. This your financial "dollar-cost ability to keep averaging" may help buying through low offset market price levels. And fluctuations. Over remember that you a period of time, will lose money if your average cost you redeem your per share may be shares when the less than the market value of all actual average your shares is less price per share. than their cost. - -------------------------------------------------------------------------------- By ^ PAL(R) Your "Personal $1,000; $250 for an Be sure to write Account Line" is IRA. down the available for confirmation number subsequent provided by PAL. purchases and Payment must be exchanges 24-hours received within 3 a day. Simply call business days, or 1-800-424-8085. the transaction may be ^ canceled. If a telephone purchase is ^ canceled due to nonpayment, you will be responsible for any related loss the Fund or ^ INVESCO incurs. If you are already a shareholder in the INVEESCO funds, the Fund may seek reimbursement from your existing account(s) for any loss incurred. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- By Exchange Between this and $1,000 to open a See "Exchange another of the new account; $50 Policy" below. INVESCO funds. Call for written 1-800-525-8085 for requests to prospectuses of purchase additional other INVESCO shares for an funds. You may also existing account. establish an (The exchange Automatic Monthly minimum is $250 for Exchange service purchases requested between two INVESCO by telephone.) funds; call ^ INVESCO for further details and the correct form. ================================================================================ Exchange Policy. You may exchange your shares in this Fund for those in another INVESCO fund, on the basis of their respective net asset values at the time of the exchange. Before making any exchange, be sure to review the prospectuses of the funds involved and consider their differences. Please note these policies regarding exchanges of fund shares: 1. The fund accounts must be identically registered. 2. You may make four exchanges out of each fund during each calendar year. 3. An exchange is the redemption of shares from one fund followed by the purchase of shares in another. Therefore, any gain or loss realized on the exchange is recognizable for federal income tax purposes (unless, of course, your account is tax-deferred). 4. ^ In order to prevent abuse of this policy to the disadvantage of other shareholders, the Fund reserves the right to ^ temporarily or permanently terminate the exchange ^ option of any shareholder who requests more than four exchanges in a year, or at any time the Fund determines the actions of the shareholder are detrimental to Fund performance and to other shareholders. The Fund will determine whether to do so based on a consideration of both the number of exchanges any particular shareholder, or group of shareholders, has requested and the time period over which those exchange requests have been made, together with the level of expense to the Fund which will result from effecting additional exchange requests. The Fund is intended to be a long-term investment vehicle and is not designed to provide investors the means of speculation on short-term market movements. 5. Notice of all modifications or terminations that would affect all Fund shareholders will be given at least 60 days prior to the effective date of the change in ^ policy, except ^ in unusual ^ circumstances (such as when redemptions of the exchanged shares are suspended under Section 22(e) of the Investment Company Act of 1940, or when sales of the fund into which you are exchanging are temporarily ^ suspended). Distribution Expenses. The Fund is authorized under a Plan and Agreement of Distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "Plan") to use its assets to finance certain activities relating to the distribution of its shares to investors. Under the Plan, monthly payments may be made by the Fund to IDI to permit IDI, at its discretion, to engage in certain activities^ and provide certain services approved by the board of directors of the Fund in connection with the distribution of the Fund's shares to investors. These activities and services may include the payment of compensation (including incentive compensation and/or continuing compensation based on the amount of customer assets maintained in the Fund) to securities dealers and other financial institutions and organizations, which may include INVESCO- and IDI-affiliated companies, to obtain various distribution-related and/or administrative services for the Fund. Such services may include, among other things, processing new shareholder account applications, preparing and transmitting electronically to the Fund's transfer agent computer-processable tapes of all transactions by customers, and serving as the primary source of information to customers in answering questions concerning the Fund and their transactions with the Fund. In addition, other permissible activities and services include advertising, ^ preparation, printing and distribution of sales literature, printing and distribution of prospectuses to prospective investors and such other services and promotional activities for the Fund as may from time to time be agreed upon by the Fund and its board of directors, including public relations efforts and marketing programs to communicate with investors and prospective investors. These services and activities may be conducted by the staff of INVESCO, IDI or ^ their affiliates or by third parties. Under the Plan, the Company's payments to IDI are limited to an amount computed at an annual rate of 0.25% of the Fund's average net assets. IDI is not entitled to payment for overhead expenses under the Plan, but may be paid for all or a portion of the compensation paid for salaries and other employee benefits for the personnel of INVESCO or IDI ^ whose primary responsibilities involve marketing shares of the INVESCO funds, including the Fund. Payment amounts by the Fund under the Plan, for any month, may be made to compensate IDI for permissible activities engaged in and services provided by IDI during the rolling 12-month period in which that month falls. Therefore, any obligations incurred by IDI in excess of the limitations described above will not be paid by the Fund under the Plan, and will be borne by IDI. In addition, IDI and its affiliates may from time to time make additional payments from ^ their revenues to securities dealers, financial advisers and financial institutions that provide distribution-related and/or administrative services for the Fund. No further payments will be made by the Fund under the Plan in the event of ^ the Plan's termination. Payments made by the Fund may not be used to finance directly the distribution of shares of any other mutual fund advised by ^ INVESCO and distributed by IDI. However, payments received by IDI which are not used to finance the distribution of shares of the Fund become part of IDI's revenues and may be used by IDI for ^ activities ^ that promote the distribution of any of the mutual funds advised by ^ INVESCO. Subject to review by the Fund's directors^, payments made by the Fund under the Plan for compensation of marketing personnel, as noted above, are based on an allocation formula designed to ensure that all such payments are appropriate. IDI will bear any distribution and service related expenses in excess of the amounts which are compensated pursuant to the Plan. The Plan also authorizes any financing of distribution which may result from IDI's use of its own resources, ^ provided that such fees are legitimate and not excessive. For more information see "How Shares Can Be Purchased -- Distribution Plan" in the Statement of Additional Information. FUND SERVICES Shareholder Accounts. ^ INVESCO will maintain a share account that reflects your current holdings. Share certificates will be issued only upon specific request. You will have greater flexibility to conduct transactions if you do not request certificates. Transaction Confirmations. You will receive detailed confirmations of individual purchases, exchanges, and redemptions. If you choose certain recurring transaction plans (for instance, EasiVest), your transactions will be confirmed on your quarterly Investment Summary. Investment Summaries. Each calendar quarter, shareholders receive a written statement which consolidates and summarizes account activity and value at the beginning and end of the period for each of their INVESCO funds. Reinvestment of Distributions. Dividends and other distributions are automatically ^ re-invested in additional Fund shares at the NAV on the ex-dividend or ex-distribution date, unless you choose to have dividends and/or other distributions automatically reinvested in another INVESCO fund or paid by check (minimum of $10.00). Telephone Transactions. All shareholders may exchange and redeem Fund shares by telephone, unless they expressly decline these privileges. By signing the new account Application, a Telephone Transaction Authorization Form, or otherwise using these privileges, the investor has agreed that, if the Fund has followed reasonable procedures, such as recording telephone instructions and sending written transaction confirmations, it will not be liable for following telephone instructions that it believes to be genuine. As a result of this policy, the investor may bear the risk of any loss due to unauthorized or fraudulent instructions. Retirement Plans And IRAs. Fund shares may be purchased for IRAs and many types of tax-deferred retirement plans. ^ INVESCO can supply you with information and forms to establish or transfer your existing plan or account. HOW TO SELL SHARES The following chart shows several convenient ways to redeem your Fund shares. Shares of the Fund may be redeemed at any time at their current NAV next determined after a request in proper form is received at the Fund's office. The NAV at the time of the redemption may be more or less than the price you paid to purchase your shares, depending primarily upon the Fund's investment performance. Please specify from which fund you wish to redeem shares. Shareholders have a separate account for each fund in which they invest. HOW TO SELL SHARES ================================================================================ Method Minimum Redemption Please Remember - -------------------------------------------------------------------------------- By Telephone Call us toll-free $250 (or, if less, These telephone at 1-800-525-8085. full liquidation of redemption the account) for a privileges may be redemption check; modified or $1,000 for a wire terminated in the to bank of record. future at ^ The maximum amount INVESCO's which may be discretion ^. redeemed by telephone is generally $25,000. - -------------------------------------------------------------------------------- In Writing Mail your request Any amount. The If the shares to be to INVESCO Funds redemption request redeemed are Group, Inc., P.O. must be signed by represented by Box 173706 all registered ^ stock certificates, Denver, CO account owners. the certificates 80217-3706. You may Payment will be must be sent to ^ also send your mailed to your INVESCO. request by address of record overnight courier or to a to 7800 E. Union pre-designated Ave., Denver, CO bank. 80237. - -------------------------------------------------------------------------------- By Exchange Between this and $1,000 to open a See "Exchange another of the new account; $50 Policy," page ^ 22. INVESCO funds. Call for written 1-800-525-8085 for requests to prospectuses of purchase additional other INVESCO shares for an funds. You may also existing account. establish an (The exchange Automatic Monthly minimum is $250 for Exchange service exchanges requested between two INVESCO by telephone.) funds; call ^ INVESCO for further details and the correct form. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Periodic Withdrawal Plan You may call us to $100 per payment, You must have at request the on a monthly or least $10,000 total appropriate form quarterly basis. invested with the and more The redemption INVESCO funds, with information at check may be made at least $5,000 of 1-800-525-8085. payable to any that total invested party you in the fund from designate. which withdrawals will be made. - -------------------------------------------------------------------------------- Payment To Third Party Mail your request Any amount. All registered ^ to INVESCO Funds account owners must Group, Inc., P.O. sign the request, Box 173706 with a signature Denver, CO guarantee from an 80217-3706. eligible guarantor financial institution, such as a commercial bank or recognized national or regional securities firm. ================================================================================ While the Fund will attempt to process telephone redemptions promptly, there may be times -- particularly in periods of severe economic or market disruption -- when you may experience delays in redeeming shares by phone. Payments of redemption proceeds will be mailed within seven days following receipt of the redemption request in proper form. However, payment may be postponed under unusual circumstances --for instance, if normal trading is not taking place on the New York Stock Exchange or during an emergency as defined by the Securities and Exchange Commission. If your shares were purchased by a check which has not yet cleared, payment will be made promptly upon clearance of the purchase check (which will take up to 15 days). If you participate in EasiVest, the Fund's automatic monthly investment program, and redeem all of the shares in your account, we will terminate any further EasiVest purchases unless you instruct us otherwise. Because of the high relative costs of handling small accounts, should the value of any shareholder's account fall below $250 as a result of shareholder action, the Fund reserves the right to involuntarily redeem all shares in such account, in which case the account would be liquidated and the proceeds forwarded to the shareholder. Prior to any such redemption, a shareholder will be notified and given 60 days to increase the value of the account to $250 or more. TAXES, DIVIDENDS AND OTHER DISTRIBUTIONS Taxes. The Fund intends to distribute to shareholders substantially all of its net investment income, net capital gains and net gains from certain foreign currency transactions, if any^. Distribution of substantially all net investment income to shareholders allows the Fund to maintain its tax status as a regulated investment company. ^ The Fund does not expect to pay any federal income or excise taxes because of its distribution policies and tax status as a regulated investment company. Shareholders^ must include all dividends and other distributions ^ as taxable income for federal, state and local income tax purposes unless they are exempt from income taxes. Dividends and other distributions are taxable whether they are received in cash or automatically ^ re-invested in shares of the Fund or another fund in the INVESCO group. Net realized capital gains of the Fund are classified as short-term and long-term gains depending upon how long the Fund held the security that gave rise to the gains. Short-term capital gains are included in income from dividends and interest as ordinary income and are taxed at the taxpayer's marginal tax rate. ^ During 1997, the Taxpayer Relief Act ^ established a new maximum capital gain tax rate of 20%. Depending on the holding period of the asset giving rise to the gain, a capital gain was taxable at a maximum rate of either 20% or 28%. Beginning January 1, 1998, all long-term gains realized on the sale of securities held ^ more than 12 months will be taxable at a maximum rate of 20%. In addition, legislation signed in October of 1998 provides that all capital gain distributions from a mutual fund paid to shareholders during 1998 will be taxed at a maximum rate of 20%. Accordingly, all capital gain distributions paid in 1998 will be taxable at a maximum rate of 20%. Note that the rate of capital gains tax is dependent on the shareholder's marginal tax rate and may be lower than the above rates. At the end of each year, information regarding the tax status of dividends and other distributions is provided to shareholders. Shareholders should consult their tax advisers as to the effect of ^ distributions by the Fund ^. Shareholders ^ may realize capital gains or losses when they sell their Fund shares at more or less than the price originally paid. Capital ^ gains on shares held for more than one year will be long-term capital ^ gains, in which event ^ they will be subject to federal income tax at the rates indicated above. The Fund may be subject to withholding of foreign taxes on dividends or interest it receives on foreign securities. Foreign taxes withheld ^ may be treated as an expense of the Fund. Individuals and certain other non-corporate shareholders may be subject to backup withholding of 31% on dividends, capital ^ gains and other distributions and redemption proceeds. ^ You can avoid backup withholding on your Fund account by ensuring that we have a correct, certified tax identification number unless you are subject to backup withholding for other reasons. We encourage you to consult a tax adviser with respect to these matters. For further information see "Dividends, Other Distributions ^ And Taxes" in the Statement of Additional Information. Dividends and Other Distributions. The Fund earns ordinary or net investment income in the form of dividends and interest on its investments. Dividends paid by the Fund will be based solely on the income earned by it. The Fund's policy is to distribute substantially all of this income, less ^ expenses, to shareholders on a quarterly basis, at the discretion of the Fund's board of directors. Dividends are automatically reinvested in additional shares of the Fund at the net asset value on the payable date unless otherwise requested. In addition, the Fund realizes capital gains and losses when it sells securities or derivatives for more or less than it paid. If total gains on sales exceed total losses (including losses carried forward from previous years), the Fund has a net realized capital gain. Net realized capital gains, if any, together with gains^ realized on certain foreign currency transactions, if any, are distributed to shareholders at least annually, usually in December. Capital gain distributions are automatically reinvested in shares of the Fund at the net asset value on the payable date unless otherwise requested. Dividends and other distributions are paid to holders of shares on the record date of the distribution, regardless of how long the Fund shares have been held by the shareholder. The Fund's share price will then drop by the amount of the distribution on the ex-dividend or ex-distribution date. If a shareholder purchases shares immediately prior to the distribution, the shareholder will, in effect, have "bought" the distribution by paying the full purchase price, a portion of which is then returned in the form of a taxable distribution. ADDITIONAL INFORMATION Voting Rights. All shares of the Fund have equal voting rights based on one vote for each share owned and a corresponding fractional vote for each fractional share owned.The Company is not generally required and does not expect to hold regular annual meetings of shareholders. However, when requested to do so in writing by the holders of 10% or more of the outstanding shares of the Fund or as may be required by applicable law or the Company's Articles of Incorporation, the board of directors will call special meetings of shareholders. Directors may be removed by action of the holders of a majority of the outstanding shares of the Fund. The Fund will assist shareholders in communicating with other shareholders as required by the Investment Company Act of 1940. Master/Feeder Option. As a matter of fundamental policy, the Fund may, in the future, seek to achieve the Fund's investment objective by investing all of the Fund's assets in another investment company having substantially the same fundamental investment objective, policies and limitations. It is expected that any such investment company would be managed by ^ INVESCO in substantially the same manner as the Fund. If permitted by applicable law, any such investment may be made in the sole discretion of the Fund's board of directors without a vote of the Fund's shareholders. However, shareholders will be given at least 30 days prior notice of any such investment. Such an investment would be made only if the board of directors determines it to be in the best interests of the Fund and its shareholders based on potential cost savings, operational efficiencies or other factors. No assurance can be given that costs would be materially reduced if this option were implemented. INVESCO GROWTH FUNDS, INC. INVESCO Blue Chip Growth Fund A no-load mutual fund seeking capital appreciation and current income. PROSPECTUS January 1, ^ 1999 INVESCO FUNDS INVESCO Distributors, ^ Inc.(SM) Distributor Post Office Box 173706 Denver, Colorado 80217-3706 1-800-525-8085 PAL(R): 1-800-424-8085 http://www.invesco.com In Denver, visit one of our convenient Investor Centers: Cherry Creek 155-B Fillmore Street; Denver Tech Center 7800 East Union Avenue Lobby Level In addition, all documents You should know what INVESCO filed by the Company with knows. (TM) the ^ Securities & Exchange Commission ^ can be located on a ^ web site ^ maintained INVESCO FUNDS by the Commission at http://www.sec.gov. STATEMENT OF ADDITIONAL INFORMATION January 1, ^ 1999 ^ INVESCO GROWTH FUNDS, INC. ^(formerly, INVESCO GROWTH FUND, INC.) Address: Mailing Address: 7800 East Union Avenue Post Office Box 173706 Denver, Colorado 80237 Denver, Colorado 80217-3706 Telephone: In Continental U.S., 1-800-525-8085 - -------------------------------------------------------------------------------- INVESCO ^ Growth Funds, Inc. (formerly, INVESCO Growth Fund, Inc.) (the "Company") is a no-load, open-end, diversified investment company, consisting of one separate portfolio of investments, INVESCO Blue Chip Growth Fund (the "Fund"). The Fund's investment objective is to seek long-term capital growth. The Fund also seeks, as a secondary objective, to obtain investment income through the purchase of securities of carefully selected companies representing major fields of business and industrial activity. In pursuing its objectives, the Fund invests primarily in common stocks but may also invest in other kinds of securities, including convertible and straight issues of debentures and preferred stock. A Prospectus for the Fund dated January 1, ^ 1999, which provides the basic information you should know before investing in the Fund, may be obtained without charge from INVESCO Distributors, Inc., Post Office Box 173706, Denver, Colorado 80217- 3706. This Statement of Additional Information is not a prospectus, but contains information in addition to and more detailed than that set forth in the Prospectus. It is intended to provide you with additional information regarding the activities and operations of the Fund and should be read in conjunction with the Prospectus. Investment Adviser: INVESCO FUNDS GROUP, INC. Investment Distributor: INVESCO DISTRIBUTORS, INC. - -------------------------------------------------------------------------------- TABLE OF CONTENTS Page ---- INVESTMENT POLICIES AND RESTRICTIONS..........................................34 THE FUND AND ITS MANAGEMENT...................................................42 HOW SHARES CAN BE PURCHASED...................................................53 HOW SHARES ARE VALUED.........................................................57 FUND PERFORMANCE..............................................................58 SERVICES PROVIDED BY THE FUND.................................................59 TAX-DEFERRED RETIREMENT PLANS.................................................60 HOW TO REDEEM SHARES..........................................................61 DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES......................................61 INVESTMENT PRACTICES..........................................................64 ADDITIONAL INFORMATION........................................................67 APPENDIX A....................................................................70 APPENDIX B....................................................................73 INVESTMENT POLICIES AND RESTRICTIONS Equity Securities. Equity securities include common stocks, preferred stocks and debt or equity securities that are convertible into them, including common stock purchase warrants and rights, equity interests in trusts, partnerships, joint ventures or similar enterprises and depository receipts. Common stocks, the most familiar type, represent an equity (i.e., ownership) interest in a corporation. Preferred stock has certain fixed income features, like a bond, but is actually equity in a company, like common stock. Depository receipts typically are issued by banks or trust companies and evidence ownership of underlying securities. While past performance does not guarantee future results, equity securities historically have provided the greatest long-term growth potential in a company. However, their prices generally fluctuate more than other securities, and reflect changes in a company's financial condition and overall market and economic conditions. Common stocks generally represent the riskiest investment in a company. Debt Securities. As discussed in the sections of the Fund's Prospectus entitled "Investment Objective And Strategy" and "Investment Policies And Risks," the debt securities in which the Fund invests generally are subject to two kinds of risk: credit risk and market risk. Credit risk relates to the ability of the issuer to meet interest or principal payments or both as they come due. The ratings given a debt security by Moody's Investors Service, Inc. ("Moody's") and/or Standard & Poor's ^, a division of The McGraw-Hill Companies, Inc. ("S&P") provide a generally useful guide as to such credit risk. Market risk relates to the fact that the market values of debt securities in which the Fund invests generally will be affected by changes in the level of interest rates. An increase in interest rates will tend to reduce the market values of such debt securities, whereas a decline in interest rates will tend to increase their values. Restricted/144A Securities. ^ The Fund may invest in restricted securities that can be resold to institutional investors pursuant to Rule 144A ^ and the Securities Act of 1933 ^("Rule 144A ^ Securities"). In recent years, a large institutional market has developed for Rule 144A Securities. Institutional investors generally will not seek to sell these instruments to the general public but instead will often depend on an efficient institutional market in which Rule 144A Securities can readily be resold or on an issuer's ability to honor a demand for repayment. Therefore, the fact that there are contractual or legal restrictions on resale to the general public or certain institutions is not dispositive of the liquidity of such investments. Rule 144A under the 1933 Act establishes a "safe harbor" from the registration requirements of the 1933 Act for resales of certain securities to qualified institutional buyers. Institutional markets for Rule 144A Securities may provide both readily ascertainable values for Rule 144A Securities and the ability to liquidate an investment in order to satisfy share redemption orders. An insufficient number of qualified institutional buyers interested in purchasing a Rule 144A Security held by a Fund, however, could affect adversely the marketability of such security, and the Fund might be unable to dispose of such security promptly or at reasonable prices. Repurchase Agreements. As discussed in the section of the Fund's Prospectus entitled "Investment Policies And Risks," the Fund may invest in repurchase agreements with respect to debt instruments eligible for investment by the Fund with member banks of the Federal Reserve System, registered broker-dealers and registered U.S. government securities dealers that are believed to be creditworthy under standards established by the Fund's board of directors. A repurchase agreement is an agreement under which the Fund acquires a debt instrument (generally a security issued by the U.S. government or an agency thereof, a banker's acceptance or a certificate of deposit) from a commercial bank, broker or dealer, subject to resale to the seller at an agreed-upon price and date (normally, the next business day). A repurchase agreement may be considered a loan collateralized by securities. The resale price reflects an agreed-upon interest rate effective for the period the instrument is held by the Fund and is unrelated to the interest rate on the underlying instrument. In these transactions, the securities acquired by the Fund (including accrued interest earned thereon) must have a total value at least equal to the value of the repurchase agreement and are held as collateral by the Fund's custodian bank until the repurchase agreement is completed. In addition, the Fund's board of directors monitors the Fund's repurchase agreement transactions and has established guidelines and standards for review by the investment adviser of the creditworthiness of any bank, broker or dealer that is a party to a repurchase agreement with the Fund. The use of repurchase agreements involves certain risks. For example, if the other party to the agreement defaults on its obligation to repurchase the underlying security at a time when the value of the security has declined, the Fund may incur a loss upon disposition of the security. If the other party to the agreement becomes insolvent ^, the Fund may experience costs and delays in realizing on the collateral. Finally, it is possible that the Fund may not be able to substantiate its interest in the underlying security and may be deemed an unsecured creditor of the other party to the agreement. While ^ INVESCO acknowledges these risks, it is expected that the risks can be minimized through careful monitoring procedures. ^ Securities Lending. As ^ discussed in the section of the Fund's Prospectus entitled "Investment Policies And Risks," the Fund may lend its portfolio securities to qualified brokers, dealers, banks or other financial institutions, provided that such loans are callable at any time by the Fund and are at all times secured by collateral consisting of cash, letters of credit or securities issued or guaranteed by the United States government or its agencies, or any ^ combination thereof, equal to at least the market value, determined daily, of the loaned securities. The advantage of such loans is that the Fund continues to have the benefits (and risks) of ownership of the loaned securities, while at the same time receiving income from the borrower of the securities. Loans will be made only to firms deemed by the adviser ^(under procedures established by the ^ Fund's board of directors) to be creditworthy and when the amount of interest income to be received justifies the inherent risks. A loan may be terminated by the borrower on one business day's notice, or by the Fund at any time. If at any time the borrower fails to maintain the required amount of collateral (at least 100% of the market value of the borrowed securities, plus accrued interest and dividends), the Fund will require the deposit of additional collateral not later than the business day following the day on which a collateral deficiency occurs or the collateral appears inadequate. If the deficiency is not remedied by the end of that period, the Fund will use the collateral to replace the securities while holding the borrower liable for any excess of replacement cost over collateral. Upon termination of the loan, the borrower is required to return the securities to the Fund. Any gain or loss during the loan period would inure to the Fund. Futures and Options on Futures. As described in the Fund's Prospectus, the Fund may enter into futures contracts, and purchase and sell ("write") options to buy or sell futures contracts. The Fund will comply with and adhere to all limitations in the manner and extent to which it effects transactions in futures and options on such futures currently imposed by the rules and policy guidelines of the Commodity Futures Trading Commission as conditions for exemption of a mutual fund, or the investment advisers thereto, from registration as a commodity pool operator. The Fund will not, as to any positions, whether long, short or a combination thereof, enter into futures and options thereon for which the aggregate initial margins and premiums exceed 5% of the fair market value of its assets after taking into account unrealized profits and losses on options it has entered into. In the case of an option that is "in-the-money," as defined in the Commodity Exchange Act (the "CEA"), the in-the-money amount may be excluded in computing such 5%. (In general a call option on a future is "in-the-money" if the value of the future exceeds the exercise ("strike") price of the call; a put option on a future is "in-the-money" if the value of the future which is the subject of the put is exceeded by the strike price of the put.) The Fund may use futures and options thereon solely for bona fide hedging or for other non-speculative purposes within the meaning and intent of the applicable provisions of the CEA. Unlike when the Fund purchases or sells a security, no price is paid or received by the Fund upon the purchase or sale of a futures contract. Instead, the Fund will be required to deposit in its segregated asset account an amount of cash or qualifying securities (currently U.S. Treasury bills), currently in a minimum amount of $15,000. This is called "initial margin." Such initial margin is in the nature of a performance bond or good faith deposit on the contract. However, ^ because losses on open contracts are required to be reflected in cash in the form of variation margin payments, the Fund may be required to make additional payments during the term of the contracts to its broker. Such payments would be required, for example, where, during the term of an interest rate futures contract purchased by the Fund, there was a general increase in interest rates, thereby making the Fund's portfolio securities less valuable. In all instances involving the purchase of financial futures contracts by the Fund, an amount of cash together with such other securities as permitted by applicable regulatory authorities to be utilized for such purpose, at least equal to the market value of the futures contracts, will be deposited in a segregated account with the Fund's custodian to collateralize the position. At any time prior to the expiration of a futures contract, the Fund may elect to close its position by taking an opposite position which will operate to terminate the Fund's position in the futures contract. For a more complete discussion of the risks involved in futures and options on futures and other securities, refer to Appendix B ("Description of Futures, Options and Forward Contracts"). Where futures are purchased to hedge against a possible increase in the price of a security before the Fund is able in an orderly fashion to invest in the security, it is possible that the market may decline instead. If the Fund, as a result, concluded not to make the planned investment at that time because of concern as to possible further market decline or for other reasons, the Fund would realize a loss on the futures contract that is not offset by a reduction in the price of securities purchased. In addition to the possibility that there may be an imperfect correlation or no correlation at all between movements in the futures contracts and the portion of the portfolio being hedged, the price of futures may not correlate perfectly with movements in the prices due to certain market distortions. All participants in the futures market are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors may close futures contracts through offsetting transactions which could distort the normal relationship between underlying instruments and the value of the futures contract. Moreover, the deposit requirements in the futures market are less onerous than margin requirements in the securities market and may therefore cause increased participation by speculators in the futures market. Such increased participation may also cause temporary price distortions. Due to the possibility of price distortion in the futures market and because of the imperfect correlation between movements in the underlying instrument and movements in the prices of futures contracts, the value of futures contracts as a hedging device may be reduced. In addition, if the Fund has insufficient available cash, it may at times have to sell securities to meet variation margin requirements. Such sales may have to be effected at a time when it may be disadvantageous to do so. Options on Futures Contracts. The Fund may buy and write options on futures contracts for hedging purposes; options are also included in the types of instruments sometimes known as derivatives. The purchase of a call option on a futures contract is similar in some respects to the purchase of a call option on an individual security. Depending on the pricing of the option compared to either the price of the futures contract upon which it is based or the price of the underlying instrument, ownership of the option may or may not be less risky than ownership of the futures contract or the underlying instrument. As with the purchase of futures contracts, when the Fund is not fully invested it may buy a call option on a futures contract to hedge against a market advance. The writing of a call option on a futures contract constitutes a partial hedge against declining prices of the security or foreign currency which is deliverable under, or of the index comprising, the futures contract. If the futures price at the expiration of the option is below the exercise price, the Fund will retain the full amount of the option premium which provides a partial hedge against any decline that may have occurred in the Fund's portfolio holdings. The writing of a put option on a futures contract constitutes a partial hedge against increasing prices of the security or foreign currency which is deliverable under, or of the index comprising, the futures contract. If the futures price at expiration of the option is higher than the exercise price, the Fund will retain the full amount of the option premium which provides a partial hedge against any increase in the price of securities which the Fund is considering buying. If a call or put option which the Fund has written is exercised, the Fund will incur a loss which will be reduced by the amount of the premium it received. Depending on the degree of correlation between changes in the value of its portfolio securities and changes in the value of the futures positions, the Fund's losses from existing options on futures may to some extent be reduced or increased by changes in the value of portfolio securities. The purchase of a put option on a futures contract is similar in some respects to the purchase of protective put options on portfolio securities. For example, the Fund may buy a put option on a futures contract to hedge the Fund's portfolio against the risk of falling prices. The amount of risk the Fund assumes when it buys an option on a futures contract is the premium paid for the option plus related transaction costs. In addition to the correlation risks discussed above, the purchase of an option also entails the risk that changes in the value of the underlying futures contract will not be reflected fully in the value of the options bought. Forward Foreign Currency Contracts The Fund may enter into forward currency contracts, which are included in the types of instruments sometimes known as derivatives, to purchase or sell foreign currencies (i.e., non-U.S. currencies) as a hedge against possible variations in foreign exchange rates. A forward foreign currency contract is an agreement between the contracting parties to exchange an amount of currency at some future time at an agreed upon rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. A forward contract generally has no deposit requirement, and such transactions do not involve commissions. By entering into a forward contract for the purchase or sale of the amount of foreign currency invested in a foreign security transaction, the Fund can hedge against possible variations in the value of the dollar versus the subject currency either between the date the foreign security is purchased or sold and the date on which payment is made or received or during the time the Fund holds the foreign security. Hedging against a decline in the value of a currency in the foregoing manner does not eliminate fluctuations in the prices of portfolio securities or prevent losses if the prices of such securities decline. Furthermore, such hedging transactions preclude the opportunity for gain if the value of the hedged currency should rise. The Fund will not speculate in forward currency contracts. Although the Fund has not adopted any limitations on its ability to use forward contracts as a hedge against fluctuations in foreign exchange rates, the Fund does not attempt to hedge all of its non-U.S. portfolio positions and will enter into such transactions only to the extent, if any, deemed appropriate by their investment adviser or sub-adviser. The Funds will not enter into forward contracts for a term of more than one year. Investment Restrictions. As described in the section of the Fund's Prospectus entitled "Investment Policies ^ And Risks," the Fund operates under certain investment restrictions. ^ For purposes of the Fund's investment restrictions, all percentage limitations apply immediately after a purchase or initial investment. Any subsequent change in a particular percentage resulting from fluctuations in value does not require elimination of any security from the Fund. The following restrictions are fundamental and may not be changed with respect to the Fund without the prior approval of the holders of a majority, as defined in the Investment Company Act of 1940 (the "1940 Act"), of the outstanding voting securities of the Fund. Under these restrictions, the Fund ^ may not: (1) issue preference shares or create any funded debt; (2) sell short or buy on margin, except for the Fund's purchase or sale of options or futures, or writing, purchasing or selling puts or calls options; (3)* borrow money in excess of 5% of the value of its total assets and then only from banks, and when borrowing, it is a temporary measure for emergency purposes; (4) invest in the securities of any other investment company except for a purchase or acquisition in accordance with a plan of reorganization, merger or consolidation; (5) purchase securities if the purchase would cause the Fund, at the time, to have more than 5% of the value of its total assets invested in the securities of any one company or to own more than 10% of the voting securities of any one company (except obligations issued or guaranteed by the U.S. Government); (6) make loans to any person, except through the purchase of debt securities in accordance with the Fund's investment policies, or the lending of portfolio securities to broker-dealers or other institutional investors, or the entering into repurchase agreements with member banks of the Federal Reserve System, registered broker-dealers and registered government securities dealers. The aggregate value of all portfolio securities loaned may not exceed 33-1/3% of the Fund's total assets (taken at current value). No more than 10% of the Fund's total assets may be invested in repurchase agreements maturing in more than seven days; (7) buy or sell commodities, commodity contracts or real estate (however, the Fund may purchase securities of companies investing in real estate). This restriction shall not prevent the Fund from purchasing or selling options on individual securities, security indexes, and currencies, or financial futures or options on financial futures, or undertaking forward foreign currency contracts. (8) invest in any company for the purpose of exercising control or management; (9) buy other than readily marketable securities; (10) engage in the underwriting of any securities; (11) purchase securities of any company in which any officer or director of the Fund or its investment adviser owns more than 1/2 of 1% of the outstanding securities, or in which all of the officers and directors of the Fund and its investment adviser, as a group, own more than 5% of such securities; (12) invest more than 25% of the value of the Fund's total assets in one particular industry. *The Fund has never borrowed money for other than temporary cash flow purposes and has no intention of doing so in the foreseeable future unless unexpected developments make borrowing of money by the Fund under this fundamental investment restriction desirable in order to allow the Fund to meet its obligation (e.g., processing redemptions in a timely manner). With respect to investment restriction (9) above, the board of directors has delegated to the Funds' investment adviser the authority to determine whether a liquid market exists for securities eligible for resale pursuant to Rule 144A under the Securities Act of 1933, or any successor to such rule, and whether or not such securities are subject to restriction (9) above. Under guidelines established by the board of directors, the adviser will consider the following factors, among others, in making this determination: (1) the unregistered nature of a Rule 144A security; (2) the frequency of trades and quotes for the security; (3) the number of dealers willing to purchase or sell the security and the number of other potential purchasers; (4) dealer undertakings to make a market in the security; and (5) the nature of the security and the nature of marketplace trades (e.g., the time needed to dispose of the security, the method of soliciting offers and the mechanics of transfer). In applying restriction (12) above, the Fund uses a modified S&P industry code classification schema which uses various sources to classify securities. The following non-fundamental investment restrictions have been adopted by the Fund. These investment restrictions may be changed by the directors at their discretion, without shareholder approval: (1) The Fund will not enter into any futures contracts, options on futures, puts and calls if immediately thereafter the aggregate margin deposits on all outstanding derivatives positions held by the Fund and premiums paid on outstanding positions, after taking into account unrealized profits and losses, would exceed 5% of the market value of the total assets of the Fund. (2) The Fund will not enter into any derivatives positions if the aggregate net amount of the Fund's commitments under outstanding derivatives positions of the Fund would exceed the market value of the total assets of the Fund. Under the 1940 Act, Fund directors and officers cannot be protected against liability to the Fund or its shareholders to which they would be subject because of willful misfeasance, bad faith, gross negligence or reckless disregard of duties of their office. THE FUND AND ITS MANAGEMENT The ^ Company. The ^ Company was incorporated under the laws of Maryland on January 8, 1935. On December 2, 1994, the Fund's name was changed from "Financial Industrial Fund, Inc." to "INVESCO Growth Fund, Inc." On October 29, 1998, the Company's name was changed from "INVESCO Growth Fund, Inc." to INVESCO Growth Funds, Inc. The Investment Adviser. INVESCO Funds Group, Inc^, a Delaware corporation ^("INVESCO"), is employed as the ^ Fund's investment ^ advisor. INVESCO was established in 1932 and also serves as an investment adviser to INVESCO ^ Bond Funds, Inc. (formerly, INVESCO ^ Income Funds, Inc.), INVESCO Combination Stock and Bond Funds, Inc. (formerly, INVESCO Flexible Funds, Inc.), INVESCO Diversified Funds, Inc., INVESCO Emerging Opportunity Funds, Inc., INVESCO Industrial Income Funds, Inc.^, INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc., INVESCO ^ Sector Funds, Inc. (formerly, INVESCO Strategic Portfolios, Inc.), INVESCO Specialty Funds, Inc., INVESCO ^ Stock Funds, Inc. (formerly, INVGESCO Equity Funds, Inc.), INVESCO Tax-Free Income Funds, Inc., INVESCO ^ Treasurer's Series Trust, INVESCO Value Trust and INVESCO Variable Investment Funds, Inc. ^ The Distributor. INVESCO Distributors, Inc. ("IDI") ^ is the Fund's distributor. IDI, established in 1997, is a registered broker-dealer that acts as distributor for all retail mutual funds advised by ^ INVESCO. Prior to September 30, 1997, ^ INVESCO served as the Fund's distributor. ^ INVESCO ^ and IDI are indirect wholly-owned subsidiaries of AMVESCAP PLC, a publicly traded holding company that, through its subsidiaries, engages in the business of investment management on an international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3, 1997 and to AMVESCAP PLC on May 8, 1997, as part of a merger between a direct subsidiary of INVESCO PLC and A I M Management Group, Inc. that created one of the largest investment management businesses in the world with approximately ^ $241 billion in assets under management^ as of September 30, 1998. INVESCO was established in 1932, and, as of August 31, ^ 1998, managed 14 mutual funds, consisting of ^ 49 separate portfolios, on behalf of over ^ 899,000 shareholders. AMVESCAP PLC's other North American subsidiaries include the following: --INVESCO Retirement and Benefit Services, Inc. ("IRBS") of Atlanta, Georgia, develops and provides domestic and international defined contribution retirement plan services to sponsors, institutional plan providers and foreign governments. --INVESCO Retirement Plan Services ("IRPS") of Atlanta, Georgia, a division of IRBS, provides recordkeeping and investment selection services to defined contribution plan sponsors of plans with between $2 million and $200 million in assets. Additionally, IRPS provides investment consulting services to institutions seeking to provide INVESCO products and services in their retirement plan products and services. --Institutional Trust Company doing business as INVESCO Trust Company ("ITC") of Denver, Colorado, a division of IRBS, provides retirement account custodian and/or trust services for individual retirement accounts (IRAs) and other retirement plan accounts. These include services such as recordkeeping, tax reporting and compliance. ITC acts as trustee or custodian to these plans. ITC accepts contributions and provides, through INVESCO, complete transfer agency functions: correspondence, subaccounting, telephone communications and processing of distributions. --INVESCO Capital Management,Inc. of Atlanta, Georgia manages institutional investment portfolios, consisting primarily of discretionary employee benefit plans for corporations and state and local governments, and endowment funds. INVESCO Capital Management, Inc. is the sole shareholder of INVESCO Services, Inc., a registered broker-dealer whose primary business is the distribution of shares of ^ one registered investment ^ company. --INVESCO Management & Research, Inc. of Boston, Massachusetts primarily manages pension and endowment accounts. --PRIMCO Capital Management, Inc. of Louisville, Kentucky specializes in managing stable return investments, principally on behalf of Section 401(k) retirement plans. --INVESCO Realty Advisors, Inc. of Dallas, Texas is responsible for providing advisory services in the U.S. real estate markets for pension plans and public pension funds, as well as endowment and foundation accounts. --INVESCO (NY), Inc., of New York, is an investment adviser for separately managed accounts, such as corporate and municipal pension plans, Taft-Hartley Plans, insurance companies, charitable institutions and private individuals. INVESCO NY also offers the opportunity for its clients to invest both directly and indirectly through partnerships in primarily private investments or privately negotiated transactions. INVESCO NY further serves as investment adviser to several closed-end investment companies, and as sub-adviser with respect to certain commingled employee benefit trusts. INVESCO NY specializes in the fundamental research investment approach, with the help of quantitative tools. --A I M Advisors, Inc. of Houston, Texas provides investment advisory and administrative services for retail and institutional mutual funds. --A I M Capital Management, Inc. of Houston, Texas provides investment advisory services to individuals, corporations, pension plans and other private investment advisory accounts and also serves as a sub-adviser to certain retail and institutional mutual funds, one Canadian mutual fund and one portfolio of an open-end registered investment company that is offered to separate accounts of ^ insurance companies that issue variable annuity and/or variable life contracts. --A I M Distributors, Inc. and Fund Management Company of Houston, Texas are registered broker-dealers that act as the principal underwriters for retail and institutional mutual funds. The corporate headquarters of AMVESCAP PLC are located at 11 Devonshire Square, London, EC2M 4YR, England. As indicated in the Fund's Prospectus, ^ INVESCO ^ permits investment and other personnel to purchase and sell securities for their own accounts in accordance with a compliance policy governing personal investing by directors, officers and employees of ^ INVESCO ^ and ^ its North American affiliates. The policy requires officers, inside directors, investment and other personnel of ^ INVESCO ^ and ^ its North American affiliates to pre-clear all transactions in securities not otherwise exempt under the policy. Requests for trading authority will be denied when, among other reasons, the proposed personal transaction would be contrary to the provisions of the policy or would be deemed to adversely affect any transaction then known to be under consideration for or to have been effected on behalf of any client account, including the Fund. In addition to the pre-clearance requirement described above, the policy subjects officers, inside directors, investment and other personnel of ^ INVESCO ^ and ^ its North American affiliates to various trading restrictions and reporting obligations. All reportable transactions are reviewed for compliance with the policy. The provisions of this policy are administered by and subject to exceptions authorized by ^ INVESCO. Investment Advisory Agreement. ^ INVESCO serves as investment adviser to the Fund pursuant to an investment advisory agreement dated February 28, 1997 (the "Agreement") with the Company which was approved by the board of directors on November 6, 1996, by vote cast in person by a majority of the directors of the Company, including a majority of the directors of the Company who are not "interested persons" of the Fund or ^ INVESCO at a meeting called for such purpose. The Agreement was approved by the Fund's shareholders on January 31, 1997, for an initial term expiring February 28, 1999. On May 13, 1998, this period was extended by the Company's board of directors to May 15, 1999. Thereafter, the Agreement may be continued from year to year as long as each such continuance is specifically approved at least annually by the board of directors of the Company, or by a vote of the holders of a majority, as defined in the 1940 Act, of the outstanding shares of the Fund. Any such continuance also must be approved by a majority of the Company's directors who are not parties to the Agreement or interested persons (as defined in the 1940 Act) of any such party, cast in person at a meeting called for the purpose of voting on such continuance. The Agreement may be terminated at any time without penalty by either party upon sixty (60) days' written notice and terminates automatically in the event of an assignment to the extent required by the 1940 Act and the Rules thereunder. The Agreement provides that ^ INVESCO shall manage the investment portfolio of the Fund in conformity with the Fund's investment policies (either directly or by delegation to a sub-adviser which may be a company affiliated with ^ INVESCO). Further, ^ INVESCO shall perform all administrative, internal accounting (including computation of net asset value), clerical, statistical, secretarial and all other services necessary or incidental to the administration of the affairs of the Fund excluding, however, those services that are the subject of separate agreement between the Fund and ^ INVESCO or any affiliate thereof, including the distribution and sale of Fund shares and provision of transfer agency, dividend disbursing agency and registrar services, and services furnished under an Administrative Services Agreement with ^ INVESCO discussed below. Services provided under the Agreement include but are not limited to: supplying the Fund with officers, clerical staff and other employees, if any, who are necessary in connection with the Fund's operations; furnishing office space, facilities, equipment and supplies; providing personnel and facilities required to respond to inquiries related to shareholder accounts; conducting periodic compliance reviews of the Fund's operations; preparation and review of required documents, reports and filings by ^ INVESCO's in-house legal and accounting staff (including the prospectus, statement of additional information, proxy statements, shareholder reports, tax returns, reports to the SEC and other corporate documents of the Fund), except insofar as the assistance of independent accountants or attorneys is necessary or desirable; supplying basic telephone service and other utilities; and preparing and maintaining certain of the books and records required to be prepared and maintained by the Fund under the 1940 Act. Expenses not assumed by ^ INVESCO are borne by the Fund. As full compensation for its advisory services provided to the Fund, ^ INVESCO receives a monthly fee. The fee is calculated daily at an annual rate of: 0.60% on the first $350 million of the average net assets of the Fund; reduced to 0.55% on the next $350 million of the average net assets of the Fund; and further reduced to 0.50% on the Fund's average net assets exceeding $700 million. For the fiscal years ended August 31, 1998, 1997 and 1996, the Fund incurred advisory fees of $4,561,574, $3,922,981 and $3,196,929, respectively. ^ Administrative Services Agreement. ^ INVESCO, either directly or through affiliated companies, provides certain administrative, sub-accounting and recordkeeping services to the Fund pursuant to an Administrative Services Agreement dated February 28, 1997 (the "Administrative Agreement"). The Administrative Agreement was approved by the board of directors on November 6, 1996, by a vote cast in person by all of the directors of the Company, including all of the directors who are not "interested persons" of the Company or ^ INVESCO at a meeting called for such purpose. The Administrative Agreement ^ was for an initial term expiring February 28, 1998, and has been continued by action of the board of directors until May 15, ^ 1999. The Administrative Agreement may be continued from year to year as long as each such continuance is specifically approved by the board of directors of the Company, including a majority of the directors who are not parties to the Administrative Agreement or interested persons (as defined in the 1940 Act) of any such party, cast in person at a meeting called for the purpose of voting on such continuance. The Administrative Agreement may be terminated at any time without penalty by ^ INVESCO on sixty (60) days' written notice, or by the Fund upon thirty (30) days' written notice, and terminates automatically in the event of an assignment unless the Fund's board of directors approves such assignment. The Administrative Agreement provides that ^ INVESCO shall provide the following services to the Fund: ^(a) such sub-accounting and recordkeeping services and functions as are reasonably necessary for the operation of the Fund; and ^(b) such sub-accounting, recordkeeping and administrative services and functions, which may be provided by affiliates of ^ INVESCO, as are reasonably necessary for the operation of Fund shareholder accounts maintained by certain retirement plans and employee benefit plans for the benefit of participants in such plans. As full compensation for services provided under the Administrative Agreement, the Fund pays a monthly fee to ^ INVESCO consisting of a base fee of $10,000 per year, plus an additional incremental fee computed daily and paid monthly at an annual rate of 0.015% per year of the average net assets of the Fund. For the fiscal years ended August 31, 1998, 1997^ and 1996 ^, the Fund paid ^ INVESCO administrative services fees in the amount of $131,098 $112,386^ and $92,412 ^, respectively. Transfer Agency Agreement. ^ INVESCO also performs transfer agent, dividend disbursing agent and registrar services for the Fund pursuant to a Transfer Agency Agreement dated February 28, 1997, which was approved by the board of directors of the Company, including a majority of the Company's directors who are not parties to the Transfer Agency Agreement or "interested persons" of any such party, on November 6, 1996, for an initial term expiring February 28, 1998 ^ which has been extended by action of the board of directors until May 15, ^ 1999. Thereafter, the Transfer Agency Agreement may be continued from year to year as long as such continuance is specifically approved at least annually by the board of directors of the Company, or by a vote of the holders of a majority of the outstanding shares of the Fund. Any such continuance also must be approved by a majority of the Company's directors who are not parties to the Transfer Agency Agreement or interested persons (as defined by the 1940 Act) of any such party, cast in person at a meeting called for the purpose of voting on such continuance. The Transfer Agency Agreement may be terminated at any time without penalty by either party upon sixty (60) days' written notice and terminates automatically in the event of assignment. The Transfer Agency Agreement provides that the Fund shall pay to ^ INVESCO an annual fee of $20.00 per shareholder account or, where applicable, per participant in an omnibus account. This fee is paid monthly at a rate of 1/12 of the annual fee and is based upon the number of shareholder accounts and omnibus account participants in existence during each month. ^ For the fiscal years ended August 31, 1998, 1997^ and 1996 ^, the Fund paid ^ INVESCO transfer agency fees of $1,160,513, $1,066,438^ and $751,390 ^, respectively. Officers and Directors of the ^ Company. The overall direction and supervision of the Fund is the responsibility of the board of directors, which has the primary duty of seeing that the Fund's general investment policies and programs of the Fund are carried out and that the ^ Fund is properly administered. The officers of the ^ Company, all of whom are officers and employees of^ and are paid by^ INVESCO, are responsible for the day-to-day administration of the Fund. The investment adviser for the Fund has the primary responsibility for making investment decisions on behalf of the Fund. These investment decisions are reviewed by the investment committee of ^ INVESCO. All ^ officers and directors of the ^ Company hold comparable positions with INVESCO ^ Bond Funds, Inc. (formerly, INVESCO ^ Income Funds, Inc.), INVESCO Combination Stock and Bond Funds, Inc. (formerly, INVESCO Flexible Funds, Inc.), INVESCO Diversified Funds, Inc., INVESCO Emerging Opportunity Funds, Inc., INVESCO Industrial Income Funds, Inc.^, INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc., INVESCO ^ Sector Funds, Inc. (formerly, INVESCO Strategic Portfolios, Inc.), INVESCO Specialty Funds, Inc., INVESCO ^ Stock Funds, Inc. (formerly, INVGESCO Equity Funds, Inc.), INVESCO Tax-Free Income Funds, Inc., INVESCO Treasurer's Series Trust, INVESCO Value Trust and INVESCO Variable Investment Funds, Inc. All of the directors and officers of the Fund also serve as trustees of INVESCO Value Trust^ and INVESCO Treasurer's Series Trust. ^ Set forth below is information with respect to each of the ^ Company's officers and directors. Unless otherwise indicated, the address of the directors and officers is Post Office Box 173706, Denver, Colorado 80217-3706. Their affiliations represent their principal occupations during the past five years. CHARLES W. BRADY,*+ ^ Chairman of the Board. Chief Executive Officer and Director of AMVESCAP PLC, London, England, and of various subsidiaries thereof. Chairman of the Board of INVESCO ^ Global Health Sciences Fund. Address: 1315 Peachtree Street, NE, Atlanta, Georgia. Born: May 11, 1935. FRED A. DEERING,+# Vice Chairman of the Board. ^ Trustee of INVESCO Global Health Sciences Fund. Formerly, Chairman of the Executive Committee and Chairman of the Board of Security Life of Denver Insurance Company, Denver, Colorado; Director of ING America Life Insurance Company^. Address: Security Life Center, 1290 Broadway, Denver, Colorado. Born: January 12, 1928. ^ VICTOR L. ANDREWS,**@ Director. Professor Emeritus, Chairman Emeritus and Chairman of the CFO Roundtable of the Department of Finance at Georgia State University, Atlanta, Georgia; President, Andrews Financial Associates, Inc. (consulting firm); since October 1984, Director of the Center for the Study of Regulated Industry at Georgia State University; formerly, member of the faculties of the Harvard Business School and the Sloan School of Management of MIT. Dr. Andrews is also a Director of the Southeastern Thrift and Bank Fund, Inc. and The Sheffield Funds, Inc. Address: ^ 34 Seawatch Drive, ^ Savannah, Georgia. Born: June 23, 1930. BOB R. BAKER,+** Director. President and Chief Executive Officer of AMC Cancer Research Center, Denver, Colorado, since January 1989; until mid-December 1988, Vice Chairman of the Board of First Columbia Financial Corporation (a financial institution), Englewood, Colorado. Formerly, Chairman of the Board and Chief Executive Officer of First Columbia Financial Corporation. Address: ^ 1600 Pierce Street, #1000, ^ Lakewood, Colorado. Born: August 7, 1936. LAWRENCE H. BUDNER,#@@ Director. Trust Consultant; prior to June 30, 1987, Senior Vice President and Senior Trust Officer of InterFirst Bank, Dallas, Texas. Address: 7608 Glen Albens Circle, Dallas, Texas. Born: July 25, 1930. ^ WENDY L. GRAMM, Ph.D.,**@ Director. Self-employed (since 1993); Professor of Economics and Public Administration, University of Texas at Arlington. Formerly, Chairman, Commodity Futures Trading Commission from 1988 to 1993, administrator for Information and Regulatory Affairs at the Office of Management and Budget from 1985 to 1988, Executive Director of the Presidential Task Force on Regulatory Relief and Director of the Federal Trade ^ Commission's Bureau of Economics. Dr. Gramm is also a director of the Chicago Mercantile Exchange, Enron Corporation, IBP, Inc., State Farm Insurance Company, State Farm Life Insurance Company, ^ Independant ^ Women's Forum, International Republic Institute, and the Republican ^ Women's Federal Forum. Dr. Gramm is also a member of the Board of Visitors, College of Business Administration, University of Iowa, and a member of the Board of Visitors, Center for Study of Public Choice, George Mason University. Address: 4201 Yuma Street, N.W., Washington, D.C. Born: January 10, 1945. ^ KENNETH T. KING,+#@@ Director. Formerly, Chairman of the Board of The Capitol Life Insurance Company, Providence Washington Insurance Company, and Director of numerous subsidiaries thereof in the U.S. Formerly, Chairman of the Board of The Providence Capitol Companies in the United Kingdom and Guernsey. Chairman of the Board of the Symbion Corporation (a high technology company) until 1987. Address: 4080 North Circulo Manzanillo, Tucson, Arizona. Born: November 16, 1925. JOHN W. MCINTYRE,^+#@@ Director. Retired. Formerly, Vice Chairman of the Board of Directors of ^ The Citizens and Southern Corporation and Chairman of the Board and Chief Executive Officer of ^ The Citizens and Southern Georgia Corporation and Citizens and Southern National Bank. ^ Trustee of INVESCO Global Health Sciences Fund and Gables Residential Trust. Address: 7 Piedmont Center, Suite 100, Atlanta, Georgia. Born: September 14, 1930. LARRY SOLL, Ph.D.,**@ Director. Retired. Formerly, Chairman of the Board (1987 to 1994), Chief Executive Officer (1982 to 1989 and 1993 to 1994) and President (1982 to 1989) of Synergen Corp. Director of Synergen since incorporation in 1982. Director of ^ ISI Pharmaceuticals, Inc., Trustee of INVESCO Global Health Sciences Fund. Address: 345 Poorman Road, Boulder, Colorado. Born: April 26, 1942. MARK H. WILLIAMSON,+* President, CEO and Director. President, CEO and Director of IDI; President, CEO and Director of INVESCO and President of INVESCO Global Health Sciences Fund. Formerly, Chairman and CEO of NationsBanc Advisors, Inc. (1995 to 1997) and Chairman of NationsBanc Investments, Inc. (1997 to 1998). Born: May 24, 1951. GLEN A. PAYNE, Secretary. Senior Vice President (since 1995), General Counsel ^(since 1989) and Secretary (since 1989) of INVESCO and Senior Vice President, General Counsel and Secretary of IDI (since 1997); Vice President (May 1989 to April 1995)^ of INVESCO; Senior Vice President, (since 1995), General Counsel (since 1989) and Secretary (1989 to 1998) of ITC. Formerly, employee of a U.S. regulatory agency, Washington, D.C.^ (June 1973 through May 1989). Born: September 25, 1947. RONALD L. GROOMS, Treasurer. Senior Vice President and Treasurer of INVESCO ^(since 1988). Senior Vice President and Treasurer of ^ IDI (since 1997). Senior Vice President and Treasurer of ITC (1988 to 1998) Born: October 1, 1946. WILLIAM J. GALVIN, JR., Assistant Secretary. Senior Vice President of INVESCO ^(since 1995) and of ^ IDI (since 1997) ^. Trust Officer of ^ ITC (1995 to 1998); and formerly (August 1992 to July 1995)^ Vice President of INVESCO ^. Formerly, Vice President of 440 Financial Group from June 1990 to August 1992 ^ and Assistant Vice President of Putnam Companies from November 1986 to June 1990. Born: August 21, 1956. ALAN I. WATSON, Assistant Secretary. Vice President of INVESCO Funds Group, Inc. (since 1984) ^. Formerly, Trust Officer of ^ ITC. Born: September 14, 1941. JUDY P. WIESE, Assistant Treasurer. Vice President of INVESCO Funds Group, Inc. (since 1984) ^. Formerly, Trust Officer of ^ ITC. Born: February 3, 1948. *These directors are "interested persons" of the Fund as defined in the 1940 Act. #Member of the audit committee of the ^ Company. +Member of the executive committee of the ^ Company. On occasion, the executive committee acts upon the current and ordinary business of the ^ Company between meetings of the board of directors. Except for certain powers which, under applicable law, may only be exercised by the full board of directors, the executive committee may exercise all powers and authority of the board of ^ directors in the management of the business of the ^ Company. All decisions are subsequently submitted for ratification by the board of directors. @Member of the derivatives committee of the Company. @@Member of the soft dollar brokerage committee of the Company.^ **Member of the management liaison committee of the ^ Company. As of October ^ 19, 1998, officers and directors of the Company, as a group, beneficially owned less than 1% of the Fund's outstanding shares. Director Compensation The following table sets forth, for the fiscal year ended August 31, ^ 1998:, the compensation paid by the ^ Company to its independent directors for services rendered in their capacities as directors of the ^ Company, the benefits accrued as Fund expenses with respect to the Defined Benefit Deferred Compensation Plan discussed below; and the estimated annual benefits to be received by these directors upon retirement as a result of their service to the ^ Company. In addition, the table sets forth the total compensation paid by all of the mutual funds distributed by ^ IDI and advised by INVESCO (including the ^ Company), INVESCO Treasurer's Series Trust and INVESCO Global Health Sciences Fund (collectively, the "INVESCO Complex") to these directors for services rendered in their capacities as directors or trustees during the year ended December 31, ^ 1997. As of December 31, ^ 1997, there were 49 funds in the INVESCO Complex. ^
Total Retirement Compensa- Benefits Estimated tion From Aggregate Accrued As Annual INVESCO Compensa- Part of Benefits Complex tion From Fund Upon Paid To Fund(1) Expenses(2) Retirement(3) Directors(1) Fred A.Deering, ^ $2,872 $1,808 $1,160 $113,350 Vice Chairman of the Board Victor L. Andrews ^ 2,743 1,709 1,343 92,700 Bob R. Baker ^ 2,906 1,526 1,800 96,050 Lawrence H. Budner ^ 2,654 1,709 1,343 91,000 Daniel D. Chabris(4) 2,772 1,847 1,002 89,350 Wendy L. Gramm 2,549 0 0 39,000 Kenneth T. King 2,474 1,878 1,052 94,350 John W. McIntyre 2,594 0 0 104,000 Larry Soll 2,594 0 0 78,000 ------- ------ ------ -------- Total ^ $24,158 $10,477 $7,700 $797,800 % of Net Assets ^ 0.0032%(5) 0.0014%(5) 0.0046%(6)
(1)The vice chairman of the board, the chairmen of the audit, management liaison, derivatives, soft dollar brokerage and compensation committees, and the members of the executive and valuation committees^ each receive compensation for serving in such capacities in addition to the compensation paid to all independent directors. (2)Represents benefits accrued with respect to the Defined Benefit Deferred Compensation Plan discussed below and not compensation deferred at the election of the directors. (3)These figures represent the ^ Company's share of the estimated annual benefits payable by the INVESCO Complex (excluding INVESCO Global Health Sciences Fund which does not participate in ^ this retirement plan) upon the directors' retirement, calculated using the current method of allocating director compensation among the funds in the INVESCO Complex. These estimated benefits assume retirement at age 72 and that the basic retainer payable to the directors will be adjusted periodically for inflation, for increases in the number of funds in the INVESCO Complex and for other reasons during the period in which retirement benefits are accrued on behalf of the ^ respective directors. This results in lower estimated benefits for directors who are closer to retirement and higher estimated benefits for directors who are further from retirement. With the exception of ^ Drs. Soll and Gramm, each of these directors has served as a director/trustee of one or more of the funds in the INVESCO Complex for the minimum five-year period required to be eligible to participate in the Defined Benefit Deferred Compensation Plan. ^ (4)Mr. Chabris retired as a director effective September 30, 1998. (5)Total as a percentage of the ^ Company's net assets as of August 31, ^ 1998. (6)Total as a percentage of the net assets of the INVESCO Complex as of December 31, ^ 1997. Messrs. Brady^ and Williamson, as "interested persons" of the Company and of the other funds in the INVESCO Complex, receive compensation as officers or employees of ^ INVESCO or its affiliated companies and do not receive any director's fees or other compensation from the Company or other funds in the INVESCO Complex for their service as directors. The boards of directors/trustees of the mutual funds managed by ^ INVESCO and INVESCO Treasurer's Series Trust have adopted a Defined Benefit Deferred Compensation Plan for the non-interested directors and trustees of the funds. Under this plan, each director or trustee who is not an interested person of the funds (as defined in the 1940 Act) and who has served for at least five years (a "qualified director") is entitled to receive, upon ^ termination of service as a director (normally at the retirement age of 72 ^ or the retirement age of 73 to 74, if the retirement date is extended by the boards for one or two years but less than three years) continuation of payment for one year (the "first year retirement benefit") of the annual basic retainer and annualized board meeting fees payable by the funds to the qualified director at the time of his or her retirement (the "basic retainer"). Commencing with any such director's second year of retirement, and commencing with the first year of retirement of a director whose retirement has been extended by the board for three years, a qualified director shall receive quarterly payments at an annual rate equal to ^ 50% of the basic retainer and annualized board meeting fees. These payments will continue for the remainder of the qualified director's life or ten years, whichever is longer (the "reduced retainer payments"). If a qualified director dies or becomes disabled after age 72 and before age 74 while still a director of the funds, the first year retirement benefit and the reduced retainer payments will be made to him or her or to his or her beneficiary or estate. If a qualified director becomes disabled or dies either prior to age 72 or during his or her 74th year while still a director of the funds, the director will not be entitled to receive the first year retirement benefit; however, the reduced retainer payments will be made to his beneficiary or estate. The plan is administered by a committee of three directors who are also participants in the plan and one director who is not a plan participant. The cost of the plan will be allocated among the INVESCO and INVESCO Treasurer's Series Trust Funds in a manner determined to be fair and equitable by the committee. The Company ^ began making payments to Mr. Chabris as of October 1, 1998. The Company has no stock options or other pension or retirement plans for management or other personnel and pays no salary or compensation to any of its officers. The ^ independent directors have contributed to a deferred compensation plan, pursuant to which they have deferred receipt of a portion of the compensation which they would otherwise have been paid as directors of certain of the INVESCO funds. The deferred amounts are being invested in shares of all of the INVESCO funds. Each independent director is, therefore, an indirect owner of shares of each INVESCO fund. The Company has an audit committee that is comprised of ^ four of the directors who are not interested persons of the Fund. The committee meets periodically with the ^ Company's independent accountants and officers to review accounting principles used by the ^ Company, the adequacy of internal controls, the responsibilities and fees of the independent accountants, and other matters. The ^ Company has a management liaison committee which meets quarterly with various management personnel of ^ INVESCO in order (a) to facilitate better understanding of management and operations of the ^ Company, and (b) to review legal and operational matters which have been assigned to the committee by the board of directors, in furtherance of the board of directors' overall duty of supervision. The Company has a soft dollar brokerage committee. The committee meets periodically to review soft dollar brokerage transactions by the Company, and to review policies and procedures of the Company's adviser with respect to soft dollar brokerage transactions. It reports on these matters to the Company's board of directors. The Company has a derivatives committee. The committee meets periodically to review derivatives investments made by the Company. It monitors derivatives usage by the Company and the procedures utilized by the Company's adviser to ensure that the use of such instruments follows the policies on such instruments adopted by the board of directors. It reports on these matters to the Company's board of directors. HOW SHARES CAN BE PURCHASED The ^ shares of the Fund are sold on a continuous basis at the net asset value per share of the Fund next calculated after receipt of a purchase order in good form. Net asset value per share of the Fund is computed once each day that the New York Stock Exchange is open as of the close of regular trading on that Exchange but may also be computed at other times. See "How Shares Are Valued." The Company has authorized one or more brokers to accept purchase orders on the Fund's behalf. Such brokers are authorized to designate other intermediaries to accept purchase orders on the Fund's behalf. The Fund will be deemed to have received a purchase order when an authorized broker or, if applicable, a broker's authorized designee, accepts the order. A purchase order will be priced at the Fund's net asset value next calculated after the order has been accepted by an authorized broker or the broker's authorized designee. IDI acts as the Fund's distributor under a distribution agreement with the Company ^ and bears all expenses, including the costs of printing and distributing prospectuses, incident to ^ direct sales and distribution of the Fund's shares^ on a no-load basis. Distribution Plan. As ^ discussed in the section of the Fund's Prospectus entitled "How To Buy Shares - Distribution Expenses," the ^ Company has adopted a Plan and Agreement of Distribution (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. ^ The Plan provides that the Fund may make monthly payments to IDI of amounts computed at an annual rate no greater than 0.25% of the Fund's average net assets to permit IDI, at its discretion, to engage in certain activities and provide services in connection with the distribution of the Fund's shares to investors. Payment ^ by the Fund under the Plan, for any month, may be made to compensate IDI for permissible activities engaged in and services provided by IDI during the rolling 12-month period in which that month falls. For the fiscal year ended August 31, ^ 1998 the Fund made payments to ^ INVESCO (the predecessor of IDI as distributor of shares of the Fund) and IDI under the 12b-1 Plan in the amount of ^ $2,009,378. In addition, as of August 31, ^ 1998, $168,680 of additional distribution accruals had been incurred under the Plan for the Fund and will be paid to IDI during the fiscal year ended August 31, ^ 1999. As noted in the Prospectus, one type of expenditure ^ is the payment of compensation to securities companies^ and other financial institutions and organizations, which may include ^ INVESCO-affiliated companies, in order to obtain various distribution-related and/or administrative services for the Fund. The Fund is authorized by the Plan to use its assets to finance the payments made to obtain those services. Payments will be made by IDI to broker-dealers who sell shares of the Fund and may be made to banks, savings and loan associations and other depository institutions. Although the Glass-Steagall Act limits the ability of certain banks to act as underwriters of mutual fund shares, the Fund does not believe that these limitations would affect the ability of such banks to enter into arrangements with IDI, but can give no assurance in this regard. However, to the extent it is determined otherwise in the future, arrangements with banks might have to be modified or terminated, and, in that case, the size of the Fund possibly could decrease to the extent that the banks would no longer invest customer assets in the Fund. Neither the Fund nor its investment adviser will give any preference to banks or other depository institutions which enter into such arrangements when selecting investments to be made by the Fund. For the fiscal year ended August 31, ^ 1998, allocations of 12b-1 amounts paid by the Fund for the following categories of expenses were: advertising -- ^ $1,315,305; sales literature, printing and postage -- ^ $111,363; direct mail -- ^ $70,179; public relations/promotion -- ^ $133,079; compensation to securities dealers and other organizations -- ^ $195,565; marketing personnel --^ $183,887. The nature and scope of services which are provided by securities dealers and other organizations may vary by dealer but include, among other things, processing new stockholder account applications, preparing and transmitting to the Fund's Transfer Agent computer-processable tapes of the Fund's transactions by customers, serving as the primary source of information to customers in answering questions concerning the Fund, and assisting in other customer transactions with the Fund. The initial Plan was approved on April 17, 1990, at a meeting called for such purpose by a majority of the directors of the Company, including a majority of the directors who neither are "interested persons" of the Company nor have any financial interest in the operation of the Plan ("independent directors"). The board of directors, on February 4, 1997, approved amending the Plan to a compensation type 12b-1 plan. This amendment of the Plan did not result in increasing the amount of the Fund's payments thereunder. Pursuant to authorization granted by the Company's board of directors on September 2, 1997, a new Plan became effective on September 29, 1997, under which IDI assumed all obligations related to distribution which were previously performed by INVESCO. The Plan was continued by action of the board of directors until May 15, 1999. The Plan provides that it shall continue in effect with respect to the Fund for so long as such continuance is approved at least annually by the vote of the board of directors of the ^ Company cast in person at a meeting called for the purpose of voting on such continuance. The Plan can also be terminated at any time with respect to the Fund, without penalty, if a majority of the ^ independent directors, or shareholders of the ^ Company, vote to terminate the Plan. The ^ Company may, in its absolute discretion, suspend, discontinue or limit the offering of its shares of the Fund at any time. In determining whether any such action should be taken, the board of directors intends to consider all relevant factors including, without limitation, the size of the Fund, the investment climate for the Fund, general market conditions, and the volume of sales and redemptions of the Fund's shares. The Plan may continue in effect and payments may be made under the Plan following any such temporary suspension or limitation of the offering of the Fund's shares; however, the ^ Company is not contractually obligated to continue the Plan for any particular period of time. Suspension of the offering of the Fund's shares would not, of course, affect a shareholder's ability to redeem his or her shares. So long as the Plan is in effect, the selection and nomination of persons to serve as independent directors of the ^ Company shall be committed to the independent directors then in office at the time of such selection or nomination. The Plan may not be amended to increase materially the amount of the Fund's payments thereunder without approval of the shareholders of the Fund, and all material amendments to the Plan must be approved by the board of directors of the ^ Company, including a majority of the ^ independent directors. Under the agreement implementing the Plan, IDI or the ^ Company, the latter by vote of a majority of the ^ independent directors, or of the holders of a majority of the ^ Company's outstanding voting securities, may terminate such agreement without penalty upon 30 days' written notice to the other party. No further payments will be made by the Fund under the Plan in the event of its termination. To the extent that the Plan constitutes a plan of distribution adopted pursuant to Rule 12b-1 under the 1940 Act, it shall remain in effect as such, so as to authorize the use of the Fund's assets in the amounts and for the purposes set forth therein, notwithstanding the occurrence of an assignment, as defined by the 1940 Act, and rules thereunder. To the extent it constitutes an agreement pursuant to a plan, the Fund's obligation to make payments to IDI shall terminate automatically, in the event of such "assignment," in which case the Fund may continue to make payments pursuant to the Plan to IDI or another organization only upon the approval of new arrangements, which may or may not be with IDI, regarding the use of the amounts authorized to be paid by it under the Plan, by the directors, including a majority of the ^ independent directors, by a vote cast in person at a meeting called for such purpose. Information regarding the services rendered under the Plan and the amounts paid therefor by the Fund are provided to, and reviewed by, the directors on a quarterly basis. On an annual basis, the directors consider the continued appropriateness of the Plan and the level of compensation provided therein. The only directors or interested persons, as that term is defined in Section 2(a)(19) of the 1940 Act, of the ^ Company who have a direct or indirect financial interest in the operation of the Plan are the officers and directors of the ^ Company listed herein under the section entitled "The Fund And Its Management - ^ Officers and Directors of the Fund" who are also officers either of IDI or companies affiliated with IDI. The benefits which the Fund believes will be reasonably likely to flow to it and its shareholders under the Plan include the following: (1) Enhanced marketing efforts, if successful, should result in an increase in net assets through the sale of additional shares and afford greater resources with which to pursue the investment objective of the Fund; (2) The sale of additional shares reduces the likelihood that redemption of shares will require the liquidation of securities of the Fund in amounts and at times that are disadvantageous for investment purposes; (3) The positive effect which increased Fund assets will have on its revenues could allow ^ INVESCO and its affiliated companies: (a) To have greater resources to make the financial commitments necessary to improve the quality and level of the Fund's shareholder services (in both systems and personnel), (b) To increase the number and type of mutual funds available to investors from ^ INVESCO and its affiliated companies (and support them in their infancy), and thereby expand the investment choices available to all shareholders, and (c) To acquire and retain talented employees who desire to be associated with a growing organization; and (4) Increased Fund assets may result in reducing each investor's share of certain expenses through economies of scale (e.g. exceeding established breakpoints in the advisory fee schedule and allocating fixed expenses over a larger asset base), thereby partially offsetting the costs of the Plan. HOW SHARES ARE VALUED As ^ discussed in the section of the Fund's Prospectus entitled ^"Fund Price And Performance," the net asset value of shares of the Fund is computed once each day that the New York Stock Exchange is open as of the close of regular trading on the New York Stock Exchange (generally, 4:00 p.m. New York time) and applies to purchase and redemption orders received prior to that time. Net asset value per share is also computed on any other day on which there is a sufficient degree of trading in the securities held by the Fund that the current net asset value per share might be materially affected by changes in the value of the securities held, but only if on such day the Fund receives a request to purchase or redeem shares. Net asset value per share is not calculated on days the New York Stock Exchange is closed, such as federal holidays, including New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. The net asset value per share of the Fund is calculated by dividing the value of all securities held by the Fund plus its other assets (including dividends and interest accrued but not collected), less the Fund's liabilities (including accrued expenses), by the number of outstanding shares of the Fund.^ Securities traded on national securities exchanges, the NASDAQ National Market System, the NASDAQ Small Cap Market and foreign markets are valued at their last sale prices on the exchanges or markets where such securities are primarily traded. Securities traded in the over-the-counter market for which last sale prices are not available and listed securities for which no sales are reported on a particular date, are valued at their highest closing bid prices (or, for debt securities, yield equivalents thereof) obtained from one or more dealers making markets for such securities. If market quotations are not readily available, securities or other assets will be valued at fair value as determined in good faith by the Fund's board of directors or pursuant to procedures adopted by the board of directors. The above procedures may include the use of valuations furnished by a pricing service which employs a matrix to determine valuations for normal institutional-size trading units of debt securities. Prior to utilizing a pricing service, the board of directors of the ^ Company will review the methods used by such service to assure itself that securities will be valued at their fair values. The Fund's Board of Directors also periodically monitors the methods used by such pricing services. Debt securities with remaining maturities of 60 days or less at the time of purchase are normally valued at amortized cost. The value of securities held by the Fund and other assets used in computing net asset value generally is determined as of the time regular trading in such securities or assets is completed each day. Because regular trading in most foreign securities markets is completed simultaneously with, or prior to, the close of regular trading on the New York Stock Exchange, closing prices for foreign securities usually are available for purposes of computing the Fund's net asset value. However, in the event that the closing price of a foreign security is not available in time to calculate ^ the Fund's net asset value on a particular day, the ^ Company's board of directors has authorized the use of the market price for the security obtained from an approved pricing service at an established time during the day, which may be prior to the close of regular trading in the security. The value of all assets and liabilities initially expressed in foreign currencies will be converted into U.S. dollars at the spot rates of such currencies against the U.S. dollar provided by an approved pricing service. FUND PERFORMANCE As ^ discussed in the section of the Fund's Prospectus entitled "Fund Price And Performance," the Company advertises the total return performance of the Fund. The average annual total return performance for the one-, five- and ten-year periods ended August 31, ^ 1998 was ^ 13.42%, 14.95% and ^ 15.82%, respectively. Average annual total return performance for each of the periods indicated was computed by finding the average annual compounded rates of return that would equate the initial amount invested to the ending redeemable value, according to the following formula: P(1 + ^ T) exponent n = ERV where: P = initial payment of $1000 T = average annual total return n = number of years ERV = ending redeemable value of initial payment The average annual total return performance figures shown above were determined by solving the above formula for "T" for each time period. In conjunction with performance reports, comparative data between the Fund's performance for a given period and other types of investment vehicles, including certificates of deposit, may be provided to prospective investors and shareholders. From time to time, evaluations of performance made by independent sources may also be used in advertisements, sales literature or shareholder reports, including reprints of, or selections from, editorials or articles about the Funds. Sources for Fund performance information and articles about the Funds include, but are not limited to, the following: American Association of Individual Investors' Journal Banxquote Barron's Business Week CDA Investment Technologies CNBC CNN Consumer Digest Financial Times Financial World Forbes Fortune Ibbotson Associates, Inc. Institutional Investor Investment Company Data, Inc. Investor's Business Daily Kiplinger's Personal Finance Lipper Analytical Services, Inc.'s Mutual Fund Performance Analysis Money Morningstar Mutual Fund Forecaster No-Load Analyst No-Load Fund X Personal Investor Smart Money The New York Times The No-Load Fund Investor U.S. News and World Report United Mutual Fund Selector USA Today Wall Street Journal Wiesenberger Investment Companies Services Working Woman Worth SERVICES PROVIDED BY THE FUND Periodic Withdrawal Plan. As described in the section of the Fund's Prospectus entitled "How To Sell Shares," the Fund offers a Periodic Withdrawal Plan. All dividends and other distributions on shares owned by shareholders participating in this Plan are reinvested in additional shares. Because withdrawal payments represent the proceeds from sales of shares, the amount of shareholders' investments in the Fund will be reduced to the extent that withdrawal payments exceed dividends and other distributions paid and reinvested. Any gain or loss on such redemptions must be reported for tax purposes. In each case, shares will be redeemed at the close of business on or about the 20th day of each month preceding payment and payments will be mailed within five business days thereafter. The Periodic Withdrawal Plan involves the use of principal and is not a guaranteed annuity. Payments under such a Plan do not represent income or a return on investment. Participation in the Periodic Withdrawal Plan may be terminated at any time by sending a written request to ^ INVESCO. Upon termination, all future dividends and capital gain distributions will be reinvested in additional shares unless a shareholder requests otherwise. Exchange Policy. As discussed in the section of the Prospectus entitled "How To Buy Shares - ^ Exchange Policy," the Fund offers shareholders the ability to exchange shares of the Fund for shares of certain other mutual funds advised by ^ INVESCO. Exchange requests may be made either by telephone or by written request to ^ INVESCO using the telephone number or address on the cover of this Statement of Additional Information. Exchanges made by telephone must be in an amount of at least $250, if the exchange is being made into an existing account of one of the INVESCO funds. All exchanges that establish a new account must meet the fund's applicable minimum initial investment requirements. Written exchange requests into an existing account have no minimum requirements. Any gain or loss realized on an exchange is recognized for federal income tax purposes. This ^ ability is not an option or right to purchase securities ^ and is not available in any state or other jurisdiction where the shares of the mutual fund into which transfer is to be made are not qualified for sale, or when the net asset value of the shares presented for exchange is less than the minimum dollar purchase required by the appropriate prospectus. TAX-DEFERRED RETIREMENT PLANS As described in the section of the Fund's Prospectus entitled "Fund Services," shares of the Fund may be purchased as the investment medium for various tax-deferred retirement plans. Persons who request information regarding these plans from ^ INVESCO will be provided with prototype documents and other supporting information regarding the type of plan requested. Each of these plans involves a long-term commitment of assets and is subject to possible regulatory penalties for excess contributions, premature distributions or for insufficient distributions after age 70-1/2. The legal and tax implications may vary according to the circumstances of the individual investor. Therefore, the investor is urged to consult with an attorney or tax adviser prior to the establishment of such a plan. HOW TO REDEEM SHARES Normally, payments for shares redeemed will be mailed within seven ^ days following receipt of the required documents as described in the section of the Fund's Prospectus entitled "How To Sell Shares." The right of redemption may be suspended and payment postponed when: (a) the New York Stock Exchange is closed for other than customary weekends and holidays; (b) trading on that exchange is restricted; (c) an emergency exists as a result of which disposal by the Fund of securities owned by it is not reasonably practicable or it is not reasonably practicable for the Fund fairly to determine the value of its net assets; or (d) the Securities and Exchange Commission by order so permits. The Company has authorized one or more brokers to accept redemption orders on the Fund's behalf. Such brokers are authorized to designate other intermediaries to accept redemption orders on the Fund's behalf. The Fund will be deemed to have received a redemption order when an authorized broker or, if applicable, a broker's authorized designee, accepts the order. A redemption order will be priced at the Fund's Net Asset Value next calculated after the order has been accepted by an authorized broker or the broker's authorized designee. It is possible that in the future conditions may exist which would, in the opinion of the Fund's investment adviser, make it undesirable for the Fund to pay for redeemed shares in cash. In such cases, the investment adviser may authorize payment to be made in portfolio securities or other property of the Fund. However, the Fund is obligated under the 1940 Act to redeem for cash all shares of the Fund presented for redemption by any one shareholder having a value up to $250,000 (or 1% of the Fund's net assets if that is less) in any 90-day period. Securities delivered in payment of redemptions are selected entirely by the investment adviser based on what is in the best interests of the Fund and its shareholders and are valued at the value assigned to them in computing the Fund's net asset value per share. Shareholders receiving such securities are likely to incur brokerage costs on their subsequent sales of the securities. DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES The ^ Company intends ^ to conduct its business and satisfy the applicable diversification of assets and source of income requirements to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). The ^ Company so qualified for the taxable year ended August 31, ^ 1998, and intends ^ to qualify during its current taxable year. As a result, because the ^ Company intends to distribute all of its income and recognized gains, it is anticipated that the ^ Company will pay no federal income or excise taxes and that the Company will be accorded conduit or "pass through" treatment for federal income tax purposes. Dividends paid by the Fund from net investment income as well as distributions of net realized short-term capital gains and net realized gains from certain foreign currency transactions are, for federal income tax purposes, taxable as ordinary income to shareholders. After the end of each calendar year, the Fund sends shareholders information regarding the amount and character of dividends paid in the year. Distributions by the Fund of net capital gain (the excess of net long-term capital gain over net short-term capital loss) are, for federal income tax purposes, taxable to the shareholder as long-term capital gains regardless how long a shareholder has held shares of the Fund. ^ During 1997, the Taxpayer Relief Act ^ established a new maximum capital gains tax rate of 20%. Depending on the holding period of the asset giving rise to the gain, a capital gain was taxable at a maximum rate of either 20% or 28%. Beginning January 1, 1998, all long-term gains on the sale of securities held for more than ^ 12 months will be taxable at a maximum rate of 20%. In addition, legislation signed in October of 1998 provides that all capital gain distributions from a mutual fund paid to shareholders during 1998 will be taxed at a maximum rate of 20%. Accordingly, all capital gain distributions paid in 1998 will be taxable at a maximum rate of 20%. Note that the rate of capital gains tax is dependent on the shareholder's marginal tax rate and may be lower than the above rates. At the end of each year, information regarding the tax status of dividends and other distributions is provided to shareholders. Shareholders should consult their tax ^ adviser as to the effect of ^ distributions by the Fund ^. All dividends and other distributions are regarded as taxable to the investor, regardless of whether such dividends and distributions are reinvested in additional shares of the Fund or another fund in the INVESCO group. The net asset value of Fund shares reflects accrued net investment income and undistributed realized capital and foreign currency gains; therefore, when a distribution is made, the net asset value is reduced by the amount of the distribution. If the net asset value of Fund shares were reduced below a shareholder's cost as a result of a distribution, such distribution would be taxable to the shareholder although a portion would be, in effect, a return of invested capital. If shares are purchased shortly before a distribution, the full price for the shares will be paid and some portion of the price may then be returned to the shareholder as a taxable dividend or capital gain. However, the net asset value per share will be reduced by the amount of the distribution, which would reduce any gain or increase any loss for tax purposes on any subsequent redemption of shares by the shareholder. ^ INVESCO may provide Fund shareholders with information concerning the average cost basis of their shares in order to help them prepare their tax returns. This information is intended as a convenience to shareholders, and will not be reported to the Internal Revenue Service (the "IRS"). The IRS permits the use of several methods to determine the cost basis of mutual fund shares. The cost basis information provided by ^ INVESCO will be computed using the single-category average cost method, although neither ^ INVESCO nor the Fund recommends any particular method of determining cost basis. Other methods may result in different tax consequences. If a shareholder has reported gains or losses with respect to shares of the Fund in past years, the shareholder must continue to use the cost basis method previously used unless the shareholder applies to the IRS for permission to change the method. If Fund shares are sold at a loss after being held for six months or less, the loss will be treated as a long-term, instead of short-term, capital loss to the extent of any capital gain distributions received on those shares. The Fund will be subject to a non-deductible 4% excise tax to the extent it fails to distribute by the end of any calendar year substantially all of it ordinary income for that year and net capital gains for the one-year period ending on October 31 of that year, plus certain other amounts. Dividends and interest received by the Fund may be subject to income, withholding or other taxes imposed by foreign countries and U.S. possessions that would reduce the yield on its securities. Tax conventions between certain countries and the United States may reduce or eliminate these foreign taxes, however, and many foreign countries do not imposes taxes on capital gains in respect of investments by foreign investors. Foreign taxes withheld ^ may be treated as an expense of the Fund. The Fund may invest in the stock of "passive foreign investment companies" ^("PFICs"). A PFIC is a foreign corporation (other than a controlled foreign corporation) that, in general, meets either of the following tests: (1) at least 75% of its gross income is passive or (2) an average of at least 50% of its assets produce, or are held for the production of, passive income. Under certain circumstances, the Fund will be subject to federal income tax on a portion of any "excess distribution" received on the stock of a PFIC or of any gain on disposition of the stock (collectively "PFIC income"), plus interest thereon, even if the Fund distributes the PFIC income as a taxable dividend to its shareholders. The balance of the PFIC income will be included in the Fund's investment company taxable income and, accordingly, will not be taxable to the Fund to the extent that income is distributed to its shareholders. The Fund may elect to "mark-to-market" its stock in any PFIC. Marking-to-market, in this context, means including in ordinary income for each taxable year the excess, if any, of the fair market value of the PFIC stock over the Fund's adjusted tax basis therein as of the end of that year. Once the election has been made, the Fund also will be allowed to deduct from ordinary income the excess, if any, of its adjusted basis in PFIC stock over the fair market value thereof as of the end of the year, but only to the extent of any net mark-to-market gains with respect to that PFIC stock included by the Fund for prior taxable years beginning after December 31, 1997. The Fund's adjusted tax basis in each PFIC's stock with respect to which it makes this election will be adjusted to reflect the amounts of income included and deductions taken under the election. Gains or losses (1) from the disposition of foreign currencies, (2) from the disposition of debt securities denominated in foreign currency that are attributable to fluctuations in the value of the foreign currency between the date of acquisition of each security and the date of disposition, and (3) that are attributable to fluctuations in exchange rates that occur between the time the Fund accrues interest, dividends or other receivables or accrues expenses or other liabilities denominated in a foreign currency and the time the Fund actually collects the receivables or pays the liabilities, generally will be treated as ordinary income or loss. These gains or losses may increase or decrease the amount of the Fund's investment company taxable income to be distributed to its shareholders. Shareholders should consult their own tax advisers regarding specific questions as to federal, state and local taxes. Dividends and other distributions generally will be subject to applicable state and local taxes. Qualification as a regulated investment company under the Code for federal income tax purposes does not entail government supervision of management or investment policies. INVESTMENT PRACTICES Portfolio Turnover. There are no fixed limitations regarding the Fund's portfolio turnover. The rate of portfolio turnover can fluctuate under constantly changing economic conditions and market circumstances. Securities initially satisfying basic policies and objectives of the Fund may be disposed of when they are no longer suitable. Brokerage costs to the Fund are commensurate with the rate of portfolio activity. Portfolio turnover rates for the fiscal years ended August 31, 1998, 1997^ and 1996 ^ were 153%, 286%^ and 207% ^, respectively. In computing the portfolio turnover rate, all investments with maturities or expiration dates at the time of acquisition of one year or less are excluded. Subject to this exclusion, the turnover rate is calculated by dividing ^(a) the lesser of purchases or sales of portfolio securities for the fiscal year by ^(b) the monthly average of the value of portfolio securities owned by the Fund during the fiscal year. The portfolio turnover rate increased in fiscal 1997 over 1996 and over fiscal 1995 primarily as a result of a restructuring of the Fund's portfolio that occurred during those years. Placement of Portfolio Brokerage. ^ INVESCO, as the Fund's investment adviser, ^ places orders for the purchase and sale of securities with brokers and dealers based upon ^ INVESCO's evaluation of ^ such brokers' and dealers' financial responsibility subject to their ability to effect transactions at the best available prices. ^ INVESCO ^ evaluates the overall reasonableness of brokerage commissions or underwriting discounts (the difference between the full acquisition price to acquire the new offering and the discount offered to members of the underwriitng syndicate) paid by reviewing the quality of executions obtained on the Fund's portfolio transactions, viewed in terms of the size of transactions, prevailing market conditions in the security purchased or sold, and general economic and market conditions. In seeking to ensure that any commissions or discounts charged the Fund are consistent with prevailing and reasonable commissions or discounts, ^ INVESCO ^ also endeavors to monitor brokerage industry practices with regard to the commissions or discounts charged by broker-dealers on transactions effected for other comparable institutional investors. While ^ INVESCO ^ seeks reasonably competitive rates, the Fund does not necessarily pay the lowest commission, spread or discount available. Consistent with the standard of seeking to obtain the best execution on portfolio transactions, ^ INVESCO ^ may select brokers that provide research services to effect such transactions. Research services consist of statistical and analytical reports relating to issuers, industries, securities and economic factors and trends, which may be of assistance or value to ^ INVESCO ^ in making informed investment decisions. Research services prepared and furnished by brokers through which the Fund effects securities transactions may be used by ^ INVESCO ^ in servicing all of its accounts and not all such services may be used by ^ INVESCO ^ in connection with the Fund. In recognition of the value of the above-described brokerage and research services provided by certain brokers, ^ INVESCO ^, consistent with the standard of seeking to obtain the best execution on portfolio transactions, may place orders with such brokers for the execution of Fund transactions on which the commissions or discounts are in excess of those which other brokers might have charged for effecting the same transactions. Fund transactions may be effected through qualified ^ brokers and dealers that recommend the Fund to their clients, or ^ that act as agent in the purchase of the Fund's shares for their clients. When a number of brokers and dealers can provide comparable best price and execution on a particular transaction, ^ INVESCO may consider the sale of Fund shares by a broker or dealer in selecting among qualified ^ brokers and dealers. Certain financial institutions (including brokers who may sell shares of the Fund, or affiliates of such brokers) are paid a fee (the ^"Services Fee") for recordkeeping, shareholder communications and other services provided by the brokers to investors purchasing shares of the Fund through no transaction fee programs ("NTF Programs") offered by the financial institution or its affiliated broker (an "NTF Program Sponsor"). The Services Fee is based on the average daily value of the investments in the Fund made in the name of such NTF Program Sponsor and held in omnibus accounts maintained on behalf of investors participating in the NTF Program. With respect to certain NTF Programs, the ^ directors of the Company have authorized the Fund to apply dollars generated from the Fund's Plan and Agreement of Distribution pursuant to Rule 12b-1 under the 1940 Act (the "Plan") to pay the entire Services Fee, subject to the maximum Rule 12b-1 fee permitted by the Plan. With respect to other NTF Programs, the ^ Company's directors have authorized the Fund to pay transfer agency fees to ^ INVESCO based on the number of investors who have beneficial interests in the NTF Program Sponsor's omnibus accounts in that Fund. ^ INVESCO, in turn, pays these transfer agency fees to the NTF Program Sponsor as a sub-transfer agency or recordkeeping fee in payment of all or a portion of the Services Fee. In the event that the sub-transfer agency or recordkeeping fee is insufficient to pay all of the Services Fee with respect to these NTF Programs, the directors of the Fund have authorized the Fund to apply dollars generated from the Plan to pay the remainder of the Services Fee, subject to the maximum Rule 12b-1 fee permitted by the Plan. ^ INVESCO itself pays the portion of the Fund's Services Fee, if any, that exceeds the sum of the sub-transfer agency or recordkeeping fee and Rule 12b-1 fee. The Fund's directors have further authorized ^ INVESCO to place a portion of the Fund's brokerage transactions with certain NTF Program Sponsors or their affiliated brokers, if ^ INVESCO reasonably believes that, in effecting the Fund's transactions in portfolio securities, the broker is able to provide the best execution of orders at the most favorable prices. A portion of the commissions earned by such a broker from executing portfolio transactions on behalf of the Fund may be credited by the NTF Program Sponsor against its Services Fee. Such credit shall be applied first against any sub-transfer agency or recordkeeping fee payable with respect to the Fund, and second against any Rule 12b-1 fees used to pay a portion of the Services Fee, on a basis which has resulted from negotiations between ^ INVESCO or IDI and the NTF Program Sponsor. Thus, the Fund pays sub-transfer agency or recordkeeping fees to the NTF Program Sponsor in payment of the Services Fee only to the extent that such fees are not offset by the Fund's credits. In the event that the transfer agency fee paid by the Fund to ^ INVESCO with respect to investors who have beneficial interests in a particular NTF Program Sponsor's omnibus accounts in the Fund exceeds ^ the Services Fee applicable to that Fund, after application of credits, ^ INVESCO may carry forward the excess and apply it to future Services Fees payable to that NTF Program Sponsor with respect to the Fund. The amount of excess transfer agency fees carried forward will be reviewed for possible adjustment by ^ INVESCO prior to each fiscal year-end of the Fund. The ^ Company's board of directors has also authorized the Fund to pay to IDI the full Rule 12b-1 fees contemplated by the Plan ^ as payment for expenses incurred by IDI in engaging in the activities and providing the services on behalf of the Fund contemplated by the Plan, subject to the maximum Rule 12b-1 fee permitted by the Plan, notwithstanding that credits have been applied to reduce the portion of the 12b-1 fee that would have been used to compensate IDI for payments to such NTF Program Sponsor absent such credits. The aggregate dollar amounts of brokerage commissions paid by the Fund for the fiscal years ended August 31, 1998, 1997^ and 1996 ^ were $2,574,626, $5,300,030^ and $2,703,470 ^, respectively. For the fiscal year ended August 31, ^ 1998, brokers providing research services received ^ $1,744,891 in commissions on portfolio transactions effected for the Fund. The aggregate dollar amount of such portfolio transactions was ^ $1,542,790,210. As a result of selling shares of the Fund, brokers received ^ $0.00 in commissions on portfolio transactions effected for the Fund during the fiscal year ended August 31, ^ 1998. At August 31, ^ 1998, the Fund held securities of its regular brokers or dealers, or their parents, as follows: Value of Securities Broker or Dealer at ^ 8/31/98 - ---------------- ------------ ^ General Electric Capital $28,328,000 ^ INVESCO ^ does not receive any brokerage commissions on portfolio transactions effected on behalf of the Fund, and there is no affiliation between IFG^ or any person affiliated with ^ INVESCO ^ or the Fund and any broker or dealer that executes transactions for the Fund. ADDITIONAL INFORMATION Common Stock. The Company has 200,000,000 authorized shares of common stock with a par value of $0.01 per share. These shares have been allocated to the Fund. As of August 31, ^ 1998, 145,122,757 of those shares were outstanding. All shares currently outstanding and being offered are of one class with equal rights as to voting, dividends and liquidation. All shares offered hereby, when issued, will be fully paid and nonassessable. Shares have no preemptive rights and are fully tradeable on the books of the Fund. The board of directors has the authority to designate additional series of common stock without seeking approval of shareholders, and may classify and reclassify any authorized but unissued shares. Shares of each series represent the interests of the shareholders of such series in a particular portfolio of investments of the Company. Each series of the Company's shares is preferred over all other series with respect to the assets specifically allocated to that series, and all income, earnings, profits and proceeds from such assets, subject only to the rights of creditors, are allocated to shares of that series. The assets of each series are segregated on the books of account and are charged with the liabilities of that class and with a share of the Company's general liabilities. The board of directors determines those assets and liabilities deemed to be general assets or liabilities of the Company, and those items are allocated among series in a manner deemed by the board to be fair and equitable. Generally, such allocation will be made based upon the relative total net assets of each series. In the unlikely event that a liability allocable to one series exceeds the assets belonging to the series, all or a portion of such liability may have to be borne by the holders of shares of the Company's other series. All dividends on shares of a particular series shall be paid only out of the income belonging to that series, pro rata to the holders of that series. In the event of the liquidation or dissolution of the Company or of a particular series, the shareholders of each series that is being liquidated shall be entitled to receive, as a series, when and as declared by the board of directors, the excess of the assets belonging to that series over the liabilities belonging to that series. The holders of shares of any series shall not be entitled to any distribution upon liquidation of any other series. The assets so distributable to the shareholders of any particular series shall be distributed among such shareholders in proportion to the number of shares of that series held by them and recorded on the books of the Company. All Fund shares, regardless of series, have equal voting rights. Voting with respect to certain matters, such as ratification of independent accountants or election of directors, will be by all series of the Company. When not all series are affected by a matter to be voted upon, such as approval of an investment advisory contract or changes in a Fund's investment policies, only shareholders of the series affected by the matter will be entitled to vote. Company shares have noncumulative voting rights, which means that the holders of a majority of the shares voting for the election of directors of the Company can elect 100% of the directors if they choose to do so. In such event, the holders of the remaining shares voting for the election of directors will not be able to elect any person or persons to the board of directors. After they have been elected by shareholders, the directors will continue to serve until their successors are elected and have qualified or they are removed from office, in either case by a shareholder vote, or until death, resignation or retirement. They may appoint their own successors, provided that always at least a majority of the directors have been elected by the Company's shareholders. It is the intention of the Company not to hold annual meetings of shareholders. The directors will call annual or special meetings of shareholders for action by shareholder vote as may be required by the 1940 Act or the Company's Articles of Incorporation, or at their discretion. Principal Shareholders. As of September 30, ^ 1998, no entities held more than 5% of the outstanding securities of the Fund. Independent Accountants. ^ PricewaterhouseCoopers LLP, 950 Seventeenth Street, Denver, Colorado, has been selected as the independent accountants of the ^ Company. The independent accountants are responsible for auditing the financial statements of the ^ Company. Custodian. State Street Bank and Trust Company, P.O. Box 351, Boston, Massachusetts, has been designated as custodian of the cash and investment securities of the ^ Company. The bank is also responsible for, among other things, receipt and delivery of the Fund's investment securities in accordance with procedures and conditions specified in the custody agreement. Under the contract with the ^ Company, the custodian is authorized to establish separate accounts in foreign countries and to cause foreign securities owned by the Fund to be held outside the United States in branches of U.S. banks and, to the extent permitted by applicable regulations, in certain foreign banks and foreign securities depositories. Transfer Agent. The ^ Company is provided with transfer agent services by INVESCO Funds Group, Inc., 7800 E. Union Avenue, Denver, Colorado, pursuant to the Transfer Agency Agreement described herein. Such services include the issuance, cancellation and transfer of shares of the Fund and the maintenance of records regarding the ownership of such shares. Reports to Shareholders. The ^ Company's fiscal year ends on August 31. The ^ Company distributes reports at least semiannually to its shareholders. Financial statements regarding the ^ Company, audited by the independent accountants, are sent to shareholders annually. Legal Counsel. The firm of Kirkpatrick & Lockhart LLP, Washington, D.C. is legal counsel for the ^ Company. The firm of Moye, Giles, O'Keefe, Vermeire & Gorrell, Denver, Colorado, acts as special counsel to the ^ Company. Financial Statements. The ^ Company's audited financial statements and the notes thereto for the fiscal year ended August 31, ^ 1998, and the report of ^ PricewaterhouseCoopers LLP with respect to such financial statements are incorporated herein by reference from the ^ Company's Annual Report to Shareholders for the fiscal year ended August 31, ^ 1998. Prospectus. The ^ Company will furnish, without charge, a copy of the Prospectus upon request. Such requests should be made to the ^ Company at the mailing address or telephone number set forth on the first page of this Statement of Additional Information. Registration Statement. This Statement of Additional Information and the Prospectus do not contain all of the information set forth in the Registration Statement the ^ Company has filed with the Securities and Exchange Commission. The complete Registration Statement may be obtained from the Securities and Exchange Commission upon payment of the fee prescribed by the rules and regulations of the Commission. APPENDIX A BOND RATINGS Description of Moody's corporate bond ratings: Aaa--Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt-edged." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa--Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group, they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. A--Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future. Baa--Bonds which are rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and have speculative characteristics as well. Rating Refinements: Moody's may apply the numerical modifier "1", for municipally-backed bonds, and modifiers "1", "2" and "3" for corporate-backed municipals. The modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and modifier 3 indicates that the issue ranks in the lower end of its generic rating category. Description of S&P's corporate bond ratings: AAA--This is the highest rating assigned by S&P to a debt obligation and indicates an extremely strong capacity to pay principal and interest. AA--Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay principal and interest is very strong, and in the majority of instances they differ from AAA issues only in a small degree. A--Bonds rated A have a strong capacity to pay principal and interest, although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions. BBB--Bonds rated BBB are regarded as having an adequate capacity to pay principal and interest. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay principal and interest for bonds in this category than for bonds in the A category. Plus (+) or Minus (-): The ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. Description of Moody's preferred stock ratings: "aaa"--An issue which is rated "aaa" is considered to be a top-quality preferred stock. This rating indicates good asset protection and the least risk of dividend impairment within the universe of preferred stocks. "aa"--An issue which is rated "aa" is considered a high-grade preferred stock. This rating indicates that there is a reasonable assurance that earnings and asset protection will remain relatively well maintained in the foreseeable future. "a"--An issue which is rated "a" is considered to be an upper-medium grade preferred stock. While risks are judged to be somewhat greater than in the "aaa" and "aa" classification, earnings and asset protection are, nevertheless, expected to be maintained at adequate levels. "baa"--An issue which is rated "baa" is considered to be a medium-grade preferred stock, neither highly protected nor poorly secured. Earnings and asset protection appear adequate at present but may be questionable over any great length of time. Note: Moody's applies numerical modifiers 1, 2 and 3 in each rating classification: the modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking and the modifier 3 indicates that the issue ranks in the lower end of its generic rating category. "AAA"--This is the highest rating that may be assigned by S&P to a preferred stock issue and indicates an extremely strong capacity to pay the preferred stock obligations. "AA"--A preferred stock issue rated "AA" also qualifies as a high-quality fixed income security. The capacity to pay preferred stock obligations is very strong, although not as overwhelming as for issues rated "AAA." "A"--An issue rated "A" is backed by a sound capacity to pay the preferred stock obligations, although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions. "BBB"--An issue rated "BBB" is regarded as backed by an adequate capacity to pay the preferred stock obligations. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to make payments for a preferred stock in this category than for issues in the "A" category. Plus (+) or Minus (-): To provide more detailed indications of preferred stock quality, the ratings from "AA" to "CCC" may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. APPENDIX B DESCRIPTION OF FUTURES, OPTIONS AND FORWARD CONTRACTS Options on Securities An option on a security provides the purchaser, or "holder," with the right, but not the obligation, to purchase, in the case of a "call" option, or sell, in the case of a "put" option, the security or securities underlying the option, for a fixed exercise price up to a stated expiration date. The holder pays a non-refundable purchase price for the option, known as the "premium." The maximum amount of risk the purchaser of the option assumes is equal to the premium plus related transaction costs, although the entire amount may be lost. The risk of the seller, or "writer," however, is potentially unlimited, unless the option is "covered," which is generally accomplished through the writer's ownership of the underlying security, in the case of a call option, or the writer's segregation of an amount of cash or securities equal to the exercise price, in the case of a put option. If the writer's obligation is not so covered, it is subject to the risk of the full change in value of the underlying security from the time the option is written until exercise. Upon exercise of the option, the holder is required to pay the purchase price of the underlying security, in the case of a call option, or to deliver the security in return for the purchase price, in the case of a put option. Conversely, the writer is required to deliver the security, in the case of a call option, or to purchase the security, in the case of a put option. Options on securities which have been purchased or written may be closed out prior to exercise or expiration by entering into an offsetting transaction on the exchange on which the initial position was established, subject to the availability of a liquid secondary market. Options on securities are traded on national securities exchanges, such as the Chicago Board of Options Exchange and the New York Stock Exchange, which are regulated by the Securities and Exchange Commission. The Options Clearing Corporation ("OCC") guarantees the performance of each party to an exchange-traded option, by in effect taking the opposite side of each such option. A holder or writer may engage in transactions in exchange-traded options on securities and options on indices of securities only through a registered ^ broker-dealer which is a member of the exchange on which the option is traded. An option position in an exchange-traded option may be closed out only on an exchange which provides a secondary market for an option of the same series. Although the Fund will generally purchase or write only those options for which there appears to be an active secondary market, there is no assurance that a liquid secondary market on an exchange will exist for any particular option at any particular time. In such event it might not be possible to effect closing transactions in a particular option with the result that the Fund would have to exercise the option in order to realize any profit. This would result in the Fund incurring brokerage commissions upon the disposition of underlying securities acquired through the exercise of a call option or upon the purchase of underlying securities upon the exercise of a put option. If the Fund as covered call option writer is unable to effect a closing purchase transaction in a secondary market, unless the Fund is required to deliver the securities pursuant to the assignment of an exercise notice, it will not be able to sell the underlying security until the option expires. Reasons for the potential absence of a liquid secondary market on an exchange include the following: (i) there may be insufficient trading interest in certain options; (ii) restrictions may be imposed by an exchange on opening transactions or closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options or underlying securities: (iv) unusual or unforeseen circumstances may interrupt normal operations on an exchange; (v) the facilities of an exchange or a clearing corporation may not at all times be adequate to handle current trading volume or (vi) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or particular class or series of options) in which event the secondary market on that exchange (or in the class or series of options) would cease to exist, although outstanding options on that exchange which had been issued by a clearing corporation as a result of trades on that exchange would continue to be exercisable in accordance with their terms. There is no assurance that higher than anticipated trading activity or other unforeseen events might not, at a particular time, render certain of the facilities of any of the clearing corporations inadequate and thereby result in the institution by an exchange of special procedures which may interfere with the timely execution of customers' orders. However, the ^ OCC, based on forecasts provided by the U.S. exchanges, believes that its facilities are adequate to handle the volume of reasonably anticipated options transactions, and such exchanges have advised such clearing corporation that they believe their facilities will also be adequate to handle reasonably anticipated volume. In addition, options on securities may be traded over-the-counter ("OTC") through financial institutions dealing in such options as well as the underlying instruments. OTC options are purchased from or sold (written) to dealers or financial institutions which have entered into direct agreements with the Fund. With OTC options, such variables as expiration date, exercise price and premium will be agreed upon between the Fund and the transacting dealer, without the intermediation of a third party such as the OCC. If the transacting dealer fails to make or take delivery of the securities underlying an option it has written, in accordance with the terms of that option as written, the Fund would lose the premium paid for the option as well as any anticipated benefit of the transaction. The Fund will engage in OTC option transactions only with primary U.S. Government securities dealers recognized by the Federal Reserve Bank of New York. Futures Contracts A ^ futures contract is a bilateral agreement providing for the purchase and sale of a specified type and amount of a financial instrument or foreign currency, or for the making and acceptance of a cash settlement, at a stated time in the future, for a fixed price. By its terms, a ^ futures contract provides for a specified settlement date on which, in the case of the majority of interest rate and foreign currency futures contracts, the fixed income securities or currency underlying the contract are delivered by the seller and paid for by the purchaser, or on which, in the case of stock index futures contracts and certain interest rate and foreign currency futures contracts, the difference between the price at which the contract was entered into and the contract's closing value is settled between the purchaser and seller in cash. Futures ^ contracts differ from options in that they are bilateral agreements, with both the purchaser and the seller equally obligated to complete the transaction. In addition, ^ futures contracts call for settlement only on the expiration date, and cannot be "exercised" at any other time during their term. The purchase or sale of a ^ futures contract also differs from the purchase or sale of a security or the purchase of an option in that no purchase price is paid or received. Instead, an amount of cash or cash equivalent, which varies but may be as low as 5% or less of the value of the contract, must be deposited with the broker as "initial margin." Subsequent payments to and from the broker, referred to as "variation margin," are made on a daily basis as the value of the index or instrument underlying the ^ futures contract fluctuates, making positions in the ^ futures contract more or less valuable, a process known as "marking to market." A ^ futures contract may be purchased or sold only on an exchange, known as a "contract market," designated by the Commodity Futures Trading Commission for the trading of such contract, and only through a registered futures commission merchant which is a member of such contract market. A commission must be paid on each completed purchase and sale transaction. The contract market clearing house guarantees the performance of each party to a ^ futures contract, by in effect taking the opposite side of such ^ contract. At any time prior to the expiration of a ^ futures contract, a trader may elect to close out its position by taking an opposite position on the contract market on which the position was entered into, subject to the availability of a secondary market, which will operate to terminate the initial position. At that time, a final determination of variation margin is made and any loss experienced by the trader is required to be paid to the contract market clearing house while any profit due to the trader must be delivered to it. Interest rate futures contracts currently are traded on a variety of fixed income securities, including long-term U.S. Treasury ^ bonds, Treasury ^ notes, Government National Mortgage Association modified pass-through mortgage-backed securities, U.S. Treasury ^ bills, bank certificates of deposit and commercial paper. In addition, interest rate futures contracts include contracts on indices of municipal securities. Foreign currency futures contracts currently are traded on the British pound, Canadian dollar, Japanese yen, Swiss franc, West German mark and on Eurodollar deposits. Options on Futures Contracts An ^ option on a ^ futures contract provides the holder with the right to enter into a "long" position in the underlying ^ futures contract, in the case of a call option, or a "short" position in the underlying ^ futures contract, in the case of a put option, at a fixed exercise price to a stated expiration date. Upon exercise of the option by the holder, the contract market clearing house establishes a corresponding short position for the writer of the option, in the case of a call option, or a corresponding long position, in the case of a put option. In the event that an option is exercised, the parties will be subject to all the risks associated with the trading of ^ futures contracts, such as payment of variation margin deposits. In addition, the writer of an ^ option on a ^ futures contract, unlike the holder, is subject to initial and variation margin requirements on the option position. A position in an ^ option on a ^ futures contract may be terminated by the purchaser or seller prior to expiration by effecting a closing purchase or sale transaction, subject to the availability of a liquid secondary market, which is the purchase or sale of an option of the same series (i.e., the same exercise price and expiration date) as the option previously purchased or sold. The difference between the premiums paid and received represents the trader's profit or loss on the transaction. An option, whether based on a ^ futures contract, a stock index or a security, becomes worthless to the holder when it expires. Upon exercise of an option, the exchange or contract market clearing house assigns exercise notices on a random basis to those of its members which have written options of the same series and with the same expiration date. A brokerage firm receiving such notices then assigns them on a random basis to those of its customers which have written options of the same series and expiration date. A writer therefore has no control over whether an option will be exercised against it, nor over the time of such exercise. PART C. OTHER INFORMATION Item 24. Financial Statements and Exhibits (a) Financial Statements: Page in Prospectus ---------- (1) Financial statements and schedules included in Prospectus (Part A): Financial Highlights for each 9 of the ten years in the period ended August 31, ^ 1998. Page in Statement of Addi- tional In- formation --------- (2) The following audited financial statements of INVESCO Growth Fund and the notes thereto for the fiscal year ended August 31, ^ 1998 and the report of ^ PricewaterhouseCoopers LLP with respect to such financial statements, are incorporated in the Statement of Additional Information by reference from the Company's Annual Report to Shareholders for the fiscal year ended August 31, ^ 1998; Statement of Investment Securities as of August 31, ^ 1998; Statement of Assets and Liabilities as of August 31, ^ 1998; Statement of Operations for the year ended August 31, ^ 1998; Statement of Changes in Net Assets for each of the two years ended August 31, 1998; Financial Highlights for each of the five years in the period ended August 31, ^ 1998. (3) Financial statements and schedules included in Part C: None: Schedules have been omitted as all information has been presented in the financial statements. (b) Exhibits: (1) Articles of Restatement of the Articles of Incorporation (a) Articles of Amendment to Articles of Restatement of the Articles of Incorporation dated November 17, ^ 1994.(1) (b) Articles of Amendment of Articles of Incorporation dated October 28, 1998. (2) Amended Bylaws dated July 21, ^ 1993.(1) (3) Not applicable. (4) Not required to be filed on EDGAR. (5) (a) Investment Advisory Agreement between Registrant and INVESCO Funds Group, Inc. dated February 28, 1997.(1) ^ (6) (a) Distribution Agreement between Registrant and INVESCO Funds Group, Inc. dated February 28, ^ 1997.(1) (b) General Distribution Agreement between Registrant and INVESCO Distributors, Inc. dated September 30, ^ 1997.(1) (7) (a) Defined Benefit Deferred Compensation Plan for Non-Interested Directors and Trustees. (b) Amended Defined Benefit Deferred Compensation Plan for Non-Interested Directors and Trustees. (8) Custody Agreement between Registrant and State Street Bank and Trust Company dated February 1, ^ 1980.(1) (a) Amendment dated January 13, 1988 to Custody ^ Agreement.(1) (b) Amendment date July 7, 1988 regarding delivery of securities to Custoday Agreement.(1) (c) Amendment dated July 7, 1988 regarding responsibility of Custodian to Custody ^ Agreement.(1) (d) Amendment dated October 25, 1995 to Custoday ^ Agreement.(1) (9) (a) Transfer Agency Agreement between Registrant and INVESCO Funds Group, Inc. dated February 28, ^ 1997.(1) (b) Administrative Services Agreement between Registrant and INVESCO Funds Group, Inc., dated February 28, ^ 1997.(1) (10) Opinion and consent of counsel as to the legality of the securities being registered, indicating whether they will, when sold, be legally issued, fully paid and non-^ assessable.(1) (11) Consent of Independent Accountants. (12) Not applicable. (13) Not applicable. (14) Copies of model plans used in the establishment of retirement plans as follows: (a) Non-standardized Profit Sharing Plan; (b) Non-standardized Money Purchase Pension Plan; (c) Standardized Profit Sharing Plan Adoption Agreement; (d) Standardized Money Purchase Pension Plan; (e) Non-standardized 401(k) Plan Adoption Agreement; (f) Standardized 401(k) Paired Profit Sharing Plan; (g) Standardized Simplified Profit Sharing Plan; (h) Defined Contribution Master Plan & Trust Agreement^. ^(15) (a) Plan and Agreement of Distribution dated April 16, 1990, adopted pursuant to Rule 12b-1 under the Investment Company Act of ^ 1940.(1) (b) Amendment of Plan and Agreement of Distribution dated July 19, ^ 1995.(1) (c) Amended Plan and Agreement of Distribution Pursuant to Rule 12b-1 dted January 1, 1997.(1) (d) Amended Plan and Agreement of Distribution between Applicant and INVESCO Distributors, Inc. adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 dated September 30, 1997.(1) (16) Schedule for computation of performance ^ data.(1) (17) Financial Data Schedule. (18) Not Applicable. (1)Previously filed on EDGAR with Post-Effective Amendment No. 72 to the Registration Statement on October 29, 1997 and incorporated herein by reference. Item 25. Persons Controlled by or Under Common Control with Registrant No person is presently controlled by or under common control with Registrant. Item 26. Number of Holders of Securities Title of Class Number of Record -------------- Holders as of Common Stock September 30, ^ 1998 -------------------- Common Stock ^ 40,468 Item 27. Indemnification Indemnification provisions for officers and directors and employees of Registrant are set forth in Article VII of the amended bylaws. See Item 24(b)(2) above. Under these Articles, officers and directors will be indemnified to the fullest extent permitted to directors by the Maryland General Corporation Law, subject only to such limitations as may be required by the Investment Company Act of 1940, as amended, and the rules thereunder. Under the Investment Company Act of 1940, Fund directors and officers cannot be protected against liability to the Company or its shareholders to which they would be subject because of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties of their office. The Company also intends to maintain liability insurance policies covering its directors and officers. Item 28. Business and Other Connections of Investment Adviser See "The Fund and Its Management" in the Fund's Prospectus and in the Statement of Additional Information for information regarding the business of the investment adviser^, INVESCO. Following are the names and principal occupations of each director and officer of the investment adviser, INVESCO and who, with the exception of Richard W. Healey, have during the past two fiscal years, held positions with Institutional Trust Company, doing business as INVESCO Trust Company, an affiliate of INVESCO.
Position with Principal Occupation and Name Adviser Company Affiliation ---- ------- ------------------- Dan J. Hesser Chairman Chairman and INVESCO Funds Group, Inc. Director 7800 East Union Avenue Denver, CO 80237 Mark H. Williamson Officer & President & Chief Director Executive Officer INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 William J. Galvin, Jr. Officer Senior Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Ronald L. Grooms Officer Senior Vice President & Treasurer INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Richard W. Healey Officer Senior Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Daniel B. Leonard Officer Senior Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Charles P. Mayer Officer & Senior Vice President Director INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Timothy J. Miller Officer Senior Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Donovan J. (Jerry) Paul Officer Senior Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Position with Principal Occupation and Name Adviser Company Affiliation ---- ------- ------------------- Glen A. Payne Officer Senior Vice President, Secretary & General Counsel INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 John R. Schroer, II Officer Senior Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Ingeborg S. Cosby Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Elroy E. Frye, Jr. Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Linda J. Gieger Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Mark D. Greenberg Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Gerard F. Hallaren, Jr. Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Richard R. Hinderlie Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Thomas M. Hurley Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Patricia F. Johnston Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Position with Principal Occupation and Name Adviser Company Affiliation ---- ------- ------------------- James F. Lummanick Officer Vice President & Assistant General Counsel INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Thomas A. Mantone, Jr. Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Trent E. May Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Frederick R. (Fritz) Officer Vice President Meyer INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Jeffrey G. Morris Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Laura M. Parsons Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Pamela J. Piro Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Gary L. Rulh Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 John S. Segner Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Terry B. Smith Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Position with Principal Occupation and Name Adviser Company Affiliation ---- ------- ------------------- Alan I. Watson Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Judy P. Wiese Officer Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Ronald C. Lively Officer Senior Regional Vice President INVESCO Funds Group, Inc. 17406 Brown Road Odessa, FL 33556 Scott E. Stapley Officer Senior Regional Vice President INVESCO Funds Group, Inc. 1615 Arch Bay Drive Newport Beach, CA 92660 David B. McElroy Officer Regional Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Ryland K. Pruett, Jr. Officer Regional Vice President INVESCO Funds Group, Inc. 2337 Mirow Place Charlotte, NC 28270 Thomas H. Scanlan Officer Regional Vice President INVESCO Funds Group, Inc. 12028 Edgepark Court Potomac, MD 20854 Michael D. Legoski Officer Assistant Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Stephen A. Moran Officer Assistant Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Donald R. Paddack Officer Assistant Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Position with Principal Occupation and Name Adviser Company Affiliation ---- ------- ------------------- Kent T. Schmeckpeper Office Assistant Vice President Account Relationship Manager INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Tane' T. Tyler Officer Assistant Vice President INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237 Jeraldine E. Kraus Officer Assistant Secretary INVESCO Funds Group, Inc. 7800 East Union Avenue Denver, CO 80237
Item 29. Principal Underwriters INVESCO Bond Funds, Inc. INVESCO Combination Stock & Bond Funds, Inc. INVESCO Diversified Funds, Inc. INVESCO Emerging Opportunity Funds, Inc. ^ INVESCO Industrial Income Fund, Inc. INVESCO International Funds, Inc. INVESCO Money Market Funds, Inc. INVESCO Multiple Asset Funds, Inc. INVESCO Sector Funds, Inc. INVESCO Specialty Funds, Inc. INVESCO ^ Stock Funds, Inc. INVESCO Tax-Free Income Funds, Inc. INVESCO Value Trust INVESCO Variable Investment Funds, Inc. (b)
Positions and Positions and Name and Principal Offices with Offices with Business Address Underwriter Registrant - ---------------- ----------- ---------- William J. Galvin, Jr. Senior Vice Assistant 7800 E. Union Avenue President & ^ Secretary Denver, CO 80237 Assistant Secretary Ronald L. Grooms Senior Vice Treasurer, 7800 E. Union Avenue President & Chief Fin'l Denver, CO 80237 Treasurer Officer, and Chief Acctg. Off. ^ Richard W. Healey Senior Vice 7800 E. Union Avenue ^ President Denver, CO 80237 Dan J. Hesser Chairman of the 7800 E. Union Avenue Board & Denver, CO 80237 Director ^ Charles P. Mayer Director 7800 E. Union Avenue Denver, CO 80237 Glen A. Payne Senior Vice Secretary 7800 E. Union Avenue President, Denver, CO 80237 Secretary & General Counsel Judy P. Wiese Vice President Asst. Treas. 7800 E. Union Avenue & Asst. Treasurer Denver, CO 80237 Mark H. Williamson President, President, 7800 E. Union Avenue Chief Executive CEO & Denver, CO 80237 Officer & Director Director
(c) Not applicable. Item 30. Location of Accounts and Records ^ Mark H. Williamson 7800 E. Union Avenue Denver, CO 80237 Item 31. Management Services Not applicable. Item 32. Undertakings (a) The Registrant hereby undertakes that the board of directors will call such meetings of shareholders for action by shareholder vote, including acting on the question of removal of a director or directors, as may be requested in writing by the holders of at least 10% of the outstanding shares of the Fund or as may be required by applicable law or the Fund's Articles of Incorporation, and to assist the shareholders in communicating with other shareholders as required by the Investment Company Act of 1940. (b) The Registrant shall furnish each person to whom a prospectus is delivered with a copy of the Registrant's latest annual report to shareholders, upon request and without charge. Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the registrant certifies that it has duly caused this post-effective amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, County of Denver, and State of Colorado, on the 30th day of October, ^ 1998. Attest: INVESCO Growth ^ Funds, Inc. /s/ Glen A. Payne /s/ ^ Mark H. Williamson - ----------------------- ------------------------------- Glen A. Payne, Secretary ^ Mark H. Williamson, President Pursuant to the requirements of the Securities Act of 1933, this post-effective amendment to Registrant's Registration Statement has been signed by the following persons in the capacities indicated on this 30th day of October, ^ 1998. /s/ ^ Mark H. Williamson /s/ Lawrence H. Budner - ------------------------ ------------------------------- ^ Mark H. Williamson, President & Lawrence H. Budner, Director Director, (Chief Executive Officer) /s/ Ronald L. Grooms /s/ ^ Fred A. Deering - ------------------------ ------------------------------- Ronald L. Grooms, Treasurer ^ Fred A. Deering, Director (Chief Financial and Accounting Officer) /s/ Victor L. Andrews /s/ ^ Larry Soll - ------------------------ ------------------------------- ^ Victor L. Andrews, Director Larry Soll, Director /s/ Bob R. Baker /s/ Kenneth T. King - ------------------------ ------------------------------- Bob R. Baker, Director Kenneth T. King, Director /s/ Hubert L. Harris, Jr. /s/ ^ John W. McIntyre - ------------------------ ------------------------------- Hubert L. Harris, Jr.^, Director John W. McIntyre, Director /s/ Charles W. Brady /s/ Wendy L. Gramm - ------------------------ ------------------------------- Charles W. Brady, Director Wendy L. Gramm, Director By* ____________________ By* /s/ Glen A. Payne --------------------------- Edward F. O'Keefe Glen A. Payne Attorney in Fact Attorney in Fact * Original Powers of Attorney authorizing Edward F. O'Keefe and Glen A. Payne, and each of them, to execute this post-effective amendment to the Registration Statement of the Registrant on behalf of the above-named directors and officers of the Registrant ^ have been filed with the Securities and Exchange Commission on May 22, 1992, June 9, 1992, October 13, 1992, October 27, 1993, December 20, 1995 ^, December 24, 1996 and October 29, 1997. Exhibit Index Page in Exhibit Number Registration Statement -------------- ---------------------- 1 ^(b) 92 7(b) 94 11 102 14(a) 103 14(b) 141 14(c) 177 14(d) 210 14(e) 240 14(f) 294 14(g) 337 14(h) 346 17 449 EX-99.1BARTAMEND 2 ARTICLES SUPPLEMENTARY OF ARTICLES OF RESTATEMENT OF THE ARTICLES OF INCORPORATION OF INVESCO GROWTH FUND, INC. INVESCO Growth Fund, Inc., a corporation organized and existing under the General Corporation Law of the State of Maryland (the "Company"), hereby certifies to the State Department of Assessments and Taxation of Maryland that: FIRST: Article First of the Articles of Restatement of the Articles of Incorporation of the Company is hereby amended to read as follows: The name of the corporation is "INVESCO GROWTH FUNDS, INC." and it shall have perpetual existence. SECOND: Article Fourth of the Articles of Restatement of the Articles of Incorporation of the Company is hereby amended to read as follows: Section 1. The aggregate number of shares of stock of all series which the Company shall have the authority to issue is two hundred million (200,000,000) shares of Common Stock, having a par value of one cent ($0.01) per share. The aggregate par value of all shares which the Company shall have the authority to issue is two million dollars ($2,000,000). Such stock may be issued as full shares or as fractional shares. In the exercise of the powers granted to the board of directors pursuant to this Article Fourth, the board of directors designates one series of shares of common stock of the Company to be designated as the INVESCO Blue Chip Growth Fund. Initially, two hundred million (200,000,000) shares of the Company's Common Stock are classified as and are allocated to this designated series. Unless otherwise prohibited by law, so long as the Company is registered as an open-end investment company under the Investment Company Act of 1940, as amended, the total number of shares which the Company is authorized to issue may be increased or decreased by the board of directors in accordance with the applicable provisions of the Maryland General Corporation Law. THIRD: The foregoing amendment, in accordance with the requirements of Section 2-605 of the General Corporation Law of the State of Maryland, was approved by a majority of the Board of Directors of the Company on August 5, 1998. FOURTH: The foregoing amendment was duly adopted in accordance with the requirements of Section 2-408 of the General Corporation Law of the State of Maryland. The undersigned, Secretary of the Company, who is executing on behalf of the Company the foregoing Articles of Amendment, of which this paragraph is made a part, hereby acknowledges, in the name and on behalf of the Company, the foregoing Articles of Amendment to be the corporate act of the Company and further verifies under oath that, to the best of his knowledge, information and belief, the matters and facts set forth herein are true in all material respects, under the penalties of perjury. IN WITNESS WHEREOF, INVESCO Growth Fund, Inc. has caused these Articles of Amendment to be signed in its name and on its behalf by its President and witnessed by its Secretary on the 28th day of October, 1998. These Articles Supplementary shall be effective upon acceptance by the Maryland State Department of Assessments and Taxation. INVESCO GROWTH FUND, INC. By:/s/ Glen A. Payne --------------------------------- Glen A. Payne, Secretary [SEAL] WITNESSED: By:/s/ Ronald L. Grooms ---------------------------- Ronald L. Grooms, Treasurer CERTIFICATION I, Michael T. Branstiter, a notary public in and for the City and County of Denver, and State of Colorado, do hereby certify that Glen A. Payne, personally known to me to be the person whose name is subscribed to the foregoing Articles of Amendment, appeared before me this date in person and acknowledged that he signed, sealed and delivered said instrument as his full and voluntary act and deed for the uses and purposes therein set forth. Given my hand and official seal this 28th day of October, 1998. /s/ Michael T. Branstiter --------------------------- Notary Public My Commission Expires: 03/14/2002 ---------- EX-99.7BDEFCONPLAN 3 DEFINED BENEFIT DEFERRED COMPENSATION PLAN FOR NON-INTERESTED DIRECTORS AND TRUSTEES AS AMENDED EFFECTIVE JULY 1, 1998 The registered, open-end management investment companies referred to on Schedule A as the Schedule may hereafter be revised by the addition and deletion of investment companies (the "Funds") have adopted this Defined Benefit Deferred Compensation Plan ("Plan") for the benefit of those directors and trustees of the Funds who are not interested directors or trustees thereof as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended ("Independent Directors"). 1. Eligibility Each Independent Director who has served as such ("Eligible Service") on the boards of any of the Funds and their predecessor and successor entities, if any, for an aggregate of at least five years at the time of his/her Service Termination Date (as defined in paragraph 2) will be entitled to receive benefits under the Plan. An Independent Director's period of Eligible Service commences on the date of election to the board of directors or trustees of any one or more of the Funds ("Board"). Hereafter, references in this Plan to Independent Directors shall be deemed to include only those Directors who have met the Eligible Service requirement for Plan participation. 2. Service Termination and Service Termination Date a. Service Termination. Service Termination means termination of service (other than by disability or death) of an Independent Director which results from the Director's having reached his/her Service Termination Date. b. Service Termination Date. An Independent Director's Service Termination Date is that date upon which he or she no longer serves as a director. Normally, an Independent Director's Service Termination Date will be the last day of the calendar quarter in which such Director's seventy-second birthday occurs. A majority of the Board of a Fund may annually extend a Director's Service Termination Date for a maximum period of three years, through the date not later than the last day of the calendar quarter in which such Director's seventy-fifth birthday occurs. As used in this Plan unless otherwise stipulated, Service Termination Date shall mean the date upon which the Director no longer serves as a director. 3. Defined Payments and Benefit a. Payments. If an Independent Director's Service Termination Date occurs on a date not later than the last day of the calendar quarter in which such Director's seventy-fourth birthday occurs, the Independent Director will receive four quarterly payments during the first twelve months subsequent to his/her Service Termination Date (the "First Year Retirement Payments"), with each payment to be equal to 25 percent of the sum of the annual basic retainer and annualized quarterly Board meeting fees payable by each Fund to the Independent Director on his/her Service Termination Date (excluding any fees relating to attending or chairing committee meetings or other fees payable to an Independent Director). b. Benefit. Commencing with the first anniversary of the Service Termination Date of any Independent Director who has received the First Year Retirement Payments, and commencing as of the Service Termination Date of an Independent Director whose Service Termination Date is subsequent to the date of the last day of the calendar quarter in which such Director's seventy-fourth birthday occurred, the Independent Director will receive, for the remainder of his/her life, a benefit (the "Benefit"), payable quarterly, with each quarterly payment to be equal to 12.50 percent of the sum of the annual basic retainer and annualized quarterly Board meeting fees payable by each Fund to the Independent Director on his/her Service Termination Date (excluding any fees relating to attending or chairing committee meetings or other fees payable to an Independent Director. Example: As of July 1, 1998, the annual Benefit would be $34,000 (annual basic retainer of $56,000 plus annualized quarterly Board meeting fees of $12,000 times 12.50 percent of the total each quarter: $56,000 + $12,000 = $68,000 x .125 = $8,500 x 4 = $34,000). As of July 1, 1998, the vice chairman of the Funds receives an aggregate annual retainer of $62,000. The vice chairman's annual Benefit would be $37,000. The annual Benefit may increase or decrease in the future in accordance with changes in the Independent Directors' annual basic retainer and/or Board meeting fees. c. Death Provisions. If an Independent Director's service as a Director is terminated because of his/her death subsequent to the last day of the calendar quarter in which such Director's seventy-second birthday occurred and prior to the lastday of the calendar quarter in which such Director's seventy-fourth birthday occurs, the designated beneficiary of the Independent Director shall receive the First Year Retirement Payments and shall, commencing with the quarter following the quarter in which the last First Year Retirement Payment is made, receive the Benefit for a period of ten years, with quarterly payments to be made to the designated beneficiary. If an Independent Director's service as a Director is terminated because of his/her death prior to the last day of the calendar quarter in which such Director's seventy-second birthday occurs or subsequent to the last day of the calendar quarter in which such Director's seventy-fourth birthday occurred, the designated beneficiary of the Independent Director shall receive the Benefit for a period of ten years, with quarterly payments to be made to the designated beneficiary commencing in the first quarter following the Director's death. d. Disability Provisions. If an Independent Director's service as a Director is terminated because of his/her disability subsequent to the last day of the calendar quarter in which such Director's seventy-second birthday occurred and prior to the last day of the calendar quarter in which such Director's seventy-fourth birthday occurs, the Independent Director shall receive the First Year Retirement Payments and shall, commencing with the quarter following the quarter in which the last First Year Retirement Payment is made, receive the Benefit for the remainder of his/her life, with quarterly payments to be made to the disabled Independent Director. If the disabled Independent Director should die before the First Year Retirement Payments are completed and before forty quarterly Benefit payments are made, such payments will continue to be made to the Independent Director's designated beneficiary until the aggregate of the First Year Retirement Payments and forty quarterly Benefit payments have been made to the disabled Independent Director and the Director's designated beneficiary. If an Independent Director's service as a Director is terminated because of his/her disability prior to the last day of the calendar quarter in which such Director's seventy-second birthday occurs or subsequent to the last day of the calendar quarter in which such Director's seventy-fourth birthday occurred, the Independent Director shall receive the Benefit for the remainder of his/her life, with quarterly payments to be made to the disabled Independent Director commencing in the first quarter following the Director's termination for disability. If the disabled Independent Director should die before forty quarterly payments are made, payments will continue to be made to the Independent Director's designated beneficiary until the aggregate of forty quarterly payments has been made to the disabled Independent Director and the Director's designated beneficiary. e. Death of Independent Director and Beneficiary. If, subsequent to the death of the Independent Director, his/her designated beneficiary should die before the First Year Retirement Payments and/or a total of forty quarterly Benefit payments are made, the remaining value of the Independent Director's First Year Retirement Payments and/or Benefit (which Benefit shall in no event exceed the value of forty quarterly payments minus the number of payments made) shall be determined as of the date of the death of the Independent Director's designated beneficiary and shall be paid to the estate of the designated beneficiary in one lump sum or in periodic payments, with the determinations with respect to the value of the First Year Retirement Payments and/or Benefit and the method and frequency of payment to be made by the Committee (as defined in paragraph 8.a.) in its sole discretion. 4. Designated Beneficiary The beneficiary referred to in paragraph 3 may be designated or changed by the Independent Director without the consent of any prior beneficiary on a form provided by the Committee (as defined in paragraph 8.a.) and delivered to the Committee (or its designee as described on the form) before the Independent Director's death. If no such beneficiary shall have been designated, or if no designated beneficiary shall survive the Independent Director, the value or remaining value of the Independent Director's First Year Retirement Payments and/or Benefit (which Benefit shall in no event exceed the value of forty quarterly payments minus the number of payments made) shall be determined as of the date of the death of the Independent Director by the Committee and shall be paid as promptly as possible in one lump sum to the Independent Director's estate. 5. Disability An Independent Director shall be deemed to have become disabled for the purposes of paragraph 3 if the Committee shall find on the basis of medical evidence satisfactory to it that the Independent Director is disabled, mentally or physically, as a result of an accident or illness, so as to be prevented from performing each of the duties which are incumbent upon an Independent Director in fulfilling his responsibilities as such. 6. Time of Payment The First Year Retirement Payments and/or the Benefit for each year will be paid in quarterly installments that are as nearly equal as possible. 7. Payment of First Year Retirement Payments and/or Benefit: Allocation of Costs Each Fund is responsible for the payment of the amount of the First Year Retirement Payments and/or Benefit applicable to the Fund, as well as its proportionate share of all expenses of administration of the Plan, including without limitation all accounting and legal fees and expenses and fees and expenses of any Actuary. The obligations of each Fund to pay such First Year Retirement Payments and/or Benefit and expenses will not be secured or funded in any manner, and such obligations will not have any preference over the lawful claims of each Fund's creditors and shareholders. To the extent that the First Year Retirement Payments and/or Benefit is paid by more than one Fund, such costs and expenses will be allocated among such Funds in a manner that is determined by the Committee to be fair and equitable under the circumstances. To the extent that one or more of such Funds consist of one or more separate portfolios, such costs and expenses allocated to any such Fund will thereafter be allocated among such portfolios by the Board of the Fund in a manner that is determined by such Board to be fair and equitable under the circumstances. 8. Administration a. The Committee. Any question involving entitlement to payments under or the administration of the Plan will be referred to a four-person committee (the "Committee") composed of three Independent Directors designated by all of the Independent Directors of the Funds and one director of the Funds who is not an Independent Director, designated by the non-Independent Directors. Except as otherwise provided herein, the Committee will make all interpretations and determinations necessary or desirable for the Plan's administration, and such interpretations and determinations will be final and conclusive. Committee members will be elected annually. b. Powers of the Committee. The Committee will represent and act on behalf of the Funds in respect of the Plan and, subject to the other provisions of the Plan, the Committee may adopt, amend or repeal bylaws or other regulations relating to the administration of the Plan, the conduct of the Committee's affairs, its rights or powers, or the rights or powers of its members. The Committee will report to the Independent Directors and to the Boards of the Funds from time to time on its activities in respect of the Plan. The Committee or persons designated by it will cause such records to be kept as may be necessary for the administration of the Plan. 9. Miscellaneous Provisions a. Rights Not Assignable. Other than as is specifically provided in paragraph 3, the right to receive any payment under the Plan is not transferable or assignable, and nothing in the Plan shall create any benefit, cause of action, right of sale, transfer, assignment, pledge, encumbrance, or other such right in any heirs or the estate of any Independent Director. b. Amendment, etc. The Committee, with the concurrence of the Board of any Fund, may as to the specific Fund at any time amend or terminate the Plan or waive any provision of the Plan; provided, however, that subject to the limitations imposed by paragraph 7, no amendment, termination or waiver will impair the rights of an Independent Director to receive the payments which would have been made to such Independent Director had there been no such amendment, termination, or waiver. c. No Right to Reelection. Nothing in the Plan will create any obligation on the part of the Board of any Fund to nominate any Independent Director for reelection. d. Consulting. Subsequent to his/her Service Termination Date, an Independent Director may render such services for any Fund, for such compensation, as may be agreed upon from time to time by such Independent Director and the Board of the Fund which desires to procure such services. e. Effectiveness. The Plan will be effective for all Independent Directors who have Service Termination Dates occurring on and after October 20, 1993. Periods of Eligible Service shall include periods commencing prior and subsequent to such date. Upon its adoption by the Board of a Fund, the Plan will become effective as to that Fund on the date when the Committee determines that any regulatory approval or advice that may be necessary or appropriate in connection with the Plan have been obtained. Adopted October 20, 1993. Amended October 19, 1994. Amended May 1, 1996, effective July 1, 1996. Amended May 13, 1998, effective July 1, 1998. SCHEDULE A TO DEFINED BENEFIT DEFERRED COMPENSATION PLAN FOR NON-INTERESTED DIRECTORS AND TRUSTEES INVESCO Capital Appreciation Funds, Inc. INVESCO Diversified Funds, Inc. INVESCO Emerging Opportunity Funds, Inc. INVESCO Growth Fund, Inc. INVESCO Income Funds, Inc. INVESCO Industrial Income Fund, Inc. INVESCO International Funds, Inc. INVESCO Money Market Funds, Inc. INVESCO Multiple Asset Funds, Inc. INVESCO Specialty Funds, Inc. INVESCO Strategic Portfolios, Inc. INVESCO Tax-Free Income Funds, Inc. INVESCO Value Trust INVESCO Variable Investment Funds, Inc. INVESCO Treasurer's Series Trust EX-99.11INACCNSNT 4 Consent of Independent Accountants We hereby consent to the incorporation by reference in the Prospectus and Statement of Additional Information constituting parts of this Post-Effective Amendment No. 73 to the registration statement on Form N-1A (the "Registration Statement") of our report dated September 30 1998, relating to the financial statements and financial highlights appearing in the August 31, 1998 Annual Report to Shareholders of INVESCO Growth Fund, Inc., which is also incorporated by reference into the Registration Statement. We also consent to the references to us under the heading "Financial Highlights" in the Prospectus and under the headings "Independent Accountants" and "Financial Statements" in the Statement of Additional Information. /s/ Pricewaterhouse Coopers LLP - ------------------------------------- PricewaterhouseCoopers LLP Denver, Colorado October 27, 1998 EX-99.14APLANDOC 5 Adoption Agreement #001 Letter Serial No. D346278a Nonstandardized Profit Sharing Plan Nonstandardized Profit Sharing Plan Features - - Flexible Employer Contributions - - Ability to exclude classifications of employees - - May enforce last day requirement for employer contribution - - Allows integrated contribution formula Provided by: The Financial Funds Managed & Distributed by INVESCO Funds Group, Inc. Custodian: INVESCO Trust Company A Subsidiary of INVESCO MIM PLC Your Adoption Agreement and Basic Plan Document together constitute the rules and parameters under which your retirement program will operate. Each section of the Adoption Agreement requires the employer to make a selection. Whenever possible (balancing complexity and space constraints) we have provided instructions to the left of key selections. These instructions are intended to assist you, the employer, in choosing the optional provisions for your retirement program. They are not intended to substitute or replace competent advice from your legal counsel or accountant. If further clarification is necessary, contact your advisors or INVESCO Trust Company. We recommend that you obtain the advice of your legal or tax advisor before you sign this Adoption Agreement. ADOPTION AGREEMENT #001 NONSTANDARDIZED PROFIT SHARING PLAN The undersigned, __________________________ ("Employer"), by executing this Adoption Agreement, elects to become a participating Employer in the INVESCO Trust Company Defined Contribution Master Plan (basic plan document #01) by adopting the accompanying Plan and Trust in full as if the Employer were a signatory to that Agreement. The employer makes the following elections granted under the provisions of the Master Plan. ARTICLE I DEFINITIONS 1.02 TRUSTEE. The Trustee executing this Adoption Agreement is: (Choose (a) or (b)) (a) A discretionary Trustee, See Section 10.03[A] of the Plan. (b) A nondiscretionary Trustee. See Section 10.03[B] of the Plan. [Note: The Employer may not elect Option (b) if a Custodian executes the Adoption Agreement.] 1.03 PLAN. The name of the Plan as adopted by the Employer is: _________________________________________________. 1.07 EMPLOYEE. The following Employees are not eligible to participate in the Plan: (Choose (a) or at least one of (b) through (g)) (a) No exclusions. (b) Collective bargaining employees (as defined in Section 1.07 of the Plan). [Note: If the Employer excludes union employees from the Plan, the Employer must be able to provide evidence that retirement benefits were the subject of good faith bargaining.] (c) Nonresident aliens who do not receive any earned income (as defined in Code ss.911(d)(2)) from the Employer which constitutes United States source income (as defined in Code ss.861(a)(3)). (d) Commission Salesmen. (e) Any Employee compensated on a salaried basis. (f) Any Employee compensated on an hourly basis. (g) (Specify) ____________________________________________ Leased Employees. Any Leased Employee treated as an Employee under Section 1.31 of the Plan, is: (Choose (h) or (i) (h) Not eligible to participate in the Plan. (i) Eligible to participate in the Plan, unless excluded by reason of an exclusion classification elected under this Adoption Agreement Section 1.07. Related Employers. If any member of the Employer's related group (as defined in Section 1.30 of the Plan) executes a Participation Agreement to this Adoption Agreement, such member's Employees are eligible to participate in this Plan, unless excluded by reason of an exclusion classification elected under this Adoption Agreement Section 1.07. In addition: (Choose (j) or (k)) (j) No other related group member's Employees are eligible to participate in the Plan. (k) The following nonparticipating related group member's Employees are eligible to participate in the Plan unless excluded by reason of an exclusion classification elected under this Adoption Agreement Section 1.07:___________________________________________________________________________ ________________________________________________________________________________ 1.12 COMPENSATION Treatment of elective contributions. (Choose (a) or (b) (a) "Compensation" includes elective contributions made by the Employer on the Employee's behalf. (b) "Compensation" does not include elective contributions. Modifications to Compensation definition. (Choose (c) or at least one of (d) through (j)) (c) No modifications other than as elected under Options (a) or (b). (d) The Plan excludes Compensation in excess of $___________. (e) In lieu of the definition in Section 1.12 of the Plan, Compensation means any earnings reportable as W-2 wages for Federal income tax withholding purposes subject to any other election under this Adoption Agreement Section 1.12. (f) The Plan excludes bonuses. (g) The Plan excludes overtime. (h) The Plan excludes Commissions. (i) The Plan excludes Compensation from a related employer (as defined in Section 1.30 of the Plan) that has not executed a Participation Agreement in this Plan unless, pursuant to Adoption Agreement Section 1.07, the Employees of that related employer are eligible to participate in this Plan. (j) (Specify) _____________________________________________. If, for any Plan Year, the Plan uses permitted disparity in the contribution or allocation formula elected under Article III, any election of Options (f), (g), (h) or (j) is ineffective for such Plan Year with respect to any Nonhighly Compensated Employee. 1.17 PLAN YEAR/LIMITATION YEAR. Plan Year. Plan Year means: (Choose (a) or (b)) (a) The 12 consecutive month period ending every ___________. (b) (Specify) ___________________________________________ Limitation Year. The Limitation year is: (Choose (C) or (d)) (c) The Plan Year. (d) The 12 consecutive month period ending every __________. 1.18 EFFECTIVE DATE. New Plan. The "Effective Date" of the Plan is _______________. Restated Plan. The restated Effective Date is ______________. This Plan is a substitution and amendment of an existing retirement plan(s) originally established __________________. (Note: See the Effective Date Addendum.) 1.27 HOUR OF SERVICE. The crediting method for Hours of Service is: (Choose (a) or (b)) (a) The actual method. (b) The ____________________________ equivalency method, except: (1) No exceptions. (2) The actual method applies for purposes of: (Choose at least one) (i) Participation under Article II. (ii) Vesting under Article V. (iii)Accrual of benefits under Section 3.06. [Note: On the blank line, insert "daily," "weekly," "semi-monthly payroll periods" or "monthly.") 1.29 SERVICE FOR PREDECESSOR EMPLOYER. In addition to the predecessor service the Plan must credit by reason of Section 1.29 of the Plan, the Plan credits Service with the following predecessor employer(s): _______________________________________________________ _______________________________________________________________________________. Service with the designated predecessor employer(s) applies: (Choose at least one of (a) or (b); (C) is available only in addition to (a) or (b)) (a) For purposes of participation under Article II. (b) For purposes of vesting under Article V. (c) Except the following Service: ____________________________. [Note: If the Plan does not credit any predecessor service under this provision, insert "N/A" in the first blank line. The Employer may attach a schedule to this Adoption Agreement, in the same format as this Section 1.29, designating additional predecessor employers and the applicable service crediting elections.] 1.31 LEASED EMPLOYEES. If a Leased Employee is a Participant in the Plan and also participates in a Plan maintained by the leasing organization: (Choose (a) or (b)) (a) The Advisory Committee will determine the Leased Employee's allocation of Employer contributions under Article III without taking into account the Leased Employee's allocation, if any, under the leasing organization's plan. (b) The Advisory Committee will reduce a Leased Employee's allocation of Employer contributions under this Plan by the Leased Employee's allocation under the leasing organization's plan, but only to the extent that allocation is attributable to the Leased Employee's service provided to the Employer. The leasing organization's plan: (1) Must be a money purchase plan which would satisfy the definition under Section 1.31 of a safe harbor plan, irrespective of whether the safe harbor exception applies. (2) Must satisfy the features and, if a defined benefit plan, the method of reduction described in an addendum to this Adoption Agreement, numbered 1.31. ARTICLE II EMPLOYEE PARTICIPANTS 2.01 ELIGIBILITY. Eligibility conditions. To become a Participant in the Plan, an Employee must satisfy the following eligibility conditions: (Choose (a) or (b) or both) (a) Attainment of age _____________ (Specify age, not exceeding 21). (b) Service requirement. (Choose one of (1) through (4)) (1) One Year of Service. (2) Two Years of Service, without an intervening Break in Service. See Section 2.03(A) of the Plan. (3) _____________ months (not exceeding 24) following the Employee's Employment Commencement Date. (4) One Hour of Service. Plan Entry Date. "Plan Entry Date" means the Effective Date and: (Choose (c), (d) or (e)) (c) Semi-annual Entry Dates. The first day of the Plan Year and the first day of the seventh month of the Plan Year. (d) The first day of the Plan Year. (e) (Specify entry dates) ___________________________________. Time of Participation. An Employee will become a Participant, unless excluded under Adoption Agreement Section 1.07, on the Plan Entry Date (if employed on that date): (f) immediately following (g) immediately preceding (h) nearest __________________________________________ the date the Employer completes the eligibility conditions described in Options (a) and (b) of this Adoption Agreement Section 2.01. [Note: The Employer must coordinate the selection of (f), (g) or (h) with the "Plan Entry Date" selection in (c), (d) or (e). Unless otherwise excluded under Section 1.07, the Employee must become a Participant by the earlier of: (1) the first day of the Plan Year beginning after the date the Employee completes the age and service requirements of Code ss.410(a); or (2) 6 months after the date the Employee completes those requirements.] Dual eligibility. The eligibility conditions of this Section 2.01 apply to: (Choose (I) or (j)) (i) All Employees of the Employer, except: (Choose (1) or (2)) (1) No exceptions. (2) Employees who are Participants in the Plan as of the Effective Date. (j) Solely to an Employee employed by the Employer after ____________. If If the Employee was employed by the Employer on or before the specified date, the Employee will become a Participant: (Choose (1), (2) or (3)) (1) On the latest of the Effective Date, his Employment Commencement Date or the date he attains age ___________ (not to exceed 21). (2) Under the eligibility conditions in effect under the Plan prior to the restated Effective Date. [For restated plans only] (3) (Specify) _____________________________________. 2.02 YEAR OF SERVICE - PARTICIPATION. Hours of Service. An Employee must complete: (Choose (a) or (b)) (a) 1,000 Hours of Service (b) ____________________ Hours of Service during an eligibility computation period to receive credit for a Year of Service. [Note: The Hours of Service requirement may not exceed 1,000.] Eligibility computation period. After the initial eligibility computation period described in Section 2.02 of the Plan, the Plan measures the eligibility computation period as: (Choose (c) or (d)) (c) The 12 consecutive month period beginning with each anniversary of an Employee's Employment Commencement Date. (d) The Plan Year, beginning with the Plan Year which includes the first anniversary of the Employee's Employment Commencement Date. 2.03 BREAK IN SERVICE - PARTICIPATION. The Break in Service rule described in Section 2.03(B) of the Plan: (Choose (a) or (b)) (a) Does not apply to the Employer's Plan. (b) Applies to the Employer's Plan. 2.06 ELECTION NOT TO PARTICIPATE. The Plan: (Choose (a) or (b)) (a) Does not permit an eligible Employee or a Participant to elect not to participate. (b) Does permit an eligible Employee or a Participant to elect not to participate in accordance with Section 2.06 and with the following rules: (Complete (1), (2), (3) and (4)) (1) An election is effective for Plan Year if filed no later than _________________________. (2) An election not to participate must be effective for at least ___________________ Plan Year(s). (3) Following a re-election to participate, the Employee or Participant: (i) May not again elect not to participate for any subsequent Plan Year. (ii) May again elect not to participate, but not earlier than the __________ Plan Year following the Plan Year in which the re-election first was effective. (Specify) ____________________________________________ [Insert "N/A" if no other rules apply]. ARTICLE III EMPLOYER CONTRIBUTIONS AND FORFEITURES 3.01 AMOUNT. The amount of the Employer's annual contribution to the Trust will equal: (Choose (a), (b), (c), (d) or (e)) (a) The amount (or additional amount) the Employer may from time to time deem advisable. (b) The amount (or additional amount) the Employer may from time to time deem advisable, separately determined for each of the following classifications of Participants: (Choose (1) or (2)) (1) Nonhighly Compensated Employees and Highly Compensated Employees. (2) (Specify classifications) _________________________________________ _______________________________________________________________________ Under this Option (b), the Advisory Committee will allocate the amount contributed for each Participant classification in accordance with Adoption Agreement Section 3.04, as if the Participants in that classification were the only Participants in the Plan. (c) _________% of the Compensation of all Participants under the Plan, determined for the Employer's taxable year for which it makes the contribution. [Note: The percentage selected may not exceed 15%.] (d) _________% of Net Profits but not more than $___________. (e) This Plan is a frozen Plan effective ____________________. The Employer will not contribute to the Plan with respect to any period following the stated date. Net Profits. The Employer: (Choose (f) or (g)) (f) Need not have Net Profits to make its annual contribution under this Plan. (g) Must have current or accumulated Net Profits exceeding $____________ to make the contributions described in Option _______. The term "Net Profits" means the Employer's net income or profits for any taxable year determined by the Employer upon the basis of its books of account in accordance with generally accepted accounting practices consistently applied without any deductions for Federal and state taxes upon income or for contributions made by the Employer under this Plan or under any other employee benefit plan the Employer maintains. If more than one member of a related group (as defined in Section 1.30) execute this Adoption Agreement, each participating member separately will determine Net Profits. "Net Profits" include both current and accumulated Net Profits. The term "Net Profits" specifically excludes ______ _______________________________________________________________________________. [Note: Enter "N/A" if no exclusions apply. 3.04 CONTRIBUTION ALLOCATION. Method of Allocation. Subject to any restoration allocation required under Section 5.04, the Advisory Committee will allocate and credit each annual Employer contribution (and Participant forfeitures, if any) to the Account of each Participant who satisfies the conditions of Section 3.06, in accordance with the allocation method selected under this Section 3.04. If the Employer elects Option (a)(2) or Option (d), for the first 3% of Compensation allocated to all Participants, "Compensation" does not include any exclusion of elective contributions), and the Advisory Committee must take into account the Participant's Compensation for the entire Plan Year. (Choose an allocation method under (a), (b), (c) or (d); (e) is mandatory of the Employer elects (b), (c) or (d); (f) is optional in addition to any other election.) (a) Nonintegrated Allocation Formula. (Choose (1) or (2)) (1) The Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (2) The Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. For purposes of this Option (2), "Participant" means, in addition to a participant who satisfies the requirements of Section 3.06 for the Plan Year, any other Participant entitled to a top heavy minimum allocation under Section 3.04(B), but such Participant's allocation will not exceed 3% of his Compensation for the Plan Year. (b) Two-Tiered Integrated Allocation Formula - Maximum Disparity. First, the Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation plus Excess Compensation for the Plan Year bears to the total Compensation plus Excess Compensation of all Participants for the Plan Year. The allocation under this paragraph, as a percentage of each Participant's Compensation plus Excess Compensation, must not exceed the applicable percentage (5.7%, 5.4% or 4.3%) listed under the Maximum Disparity Table following Option (e). The Advisory Committee then will allocate any remaining Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (c) Three-Tiered Integrated Allocation Formula. First, the Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation for the plan Year bears to the total Compensation of all Participants for the Plan Year. The allocation under this paragraph, as a percentage of each Participant's Compensation may not exceed the applicable percentage (5.7%, 5.4% or 4.3%) listed under the Maximum Disparity Table following Option (e). Solely for purposes of the allocation in this first paragraph, "Participant" means, in addition to a Participant who satisfies the requirements of Section 3.06 for the Plan Year. (Choose (1) or (2)) (1) No other Participant. (2) Any other Participant entitled to a top heavy minimum allocation under Section 3.04(B), but such Participant's allocation under this Option (c) will not exceed 3% of his Compensation for the Plan Year. As a second tier allocation, the Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Excess Compensation for the Plan Year bears to the total Excess Compensation of all Participants for the Plan Year. The allocation under this paragraph, as a percentage of each Participant's Excess Compensation, may not exceed the allocation percentage in the first paragraph. Finally, the Advisory Committee will allocate any remaining annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (d) Four-Tiered Integrated Allocation Formula. First, the Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year, but not exceeding 3% of each Participant's Compensation. Solely for purposes of this first tier allocation, a "Participant" means, in addition to any Participant who satisfies the requirements of Section 3.06 for the Plan Year, any other Participant entitled to a top heavy minimum allocation under Section 3.04(B) of the Plan. As a second tier allocation, the Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Excess Compensation for the Plan Year bears to the total Excess Compensation of all Participants for the Plan Year, but not exceeding 3% of each Participant's Excess Compensation. As a third tier allocation, the Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation plus Excess Compensation for the Plan Year bears to the total Compensation plus Excess Compensation of all Participants for the Plan Year. The allocation under this paragraph, as a percentage of each Participant's Compensation plus Excess Compensation, must not exceed the applicable percentage (2.7%, 2.4% or 1.3%) listed under the Maximum Disparity Table following Option (e). The Advisory Committee then will allocate any remaining Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (e) Excess Compensation. For purposes of Option (b), (c) or (d), "Excess Compensation" means Compensation in excess of the following Integration Level: (Choose (1) or (2)) (1) ______% (not exceeding 100%) of the taxable wage base, as determined under Section 230 of the Social Security Act, in effect on the first day of the Plan Year: (Choose any combination of (I) and (ii) or choose (iii)) (i) Rounded to ________ (but not exceeding the taxable wage base). (ii) But not greater than $_____________. (iii)Without any further adjustment or limitation. (2) $_______________ [Note: Not exceeding the taxable wage base for the Plan Year in which this Adoption Agreement first is effective.] Maximum Disparity Table. For purpose of Options (b), (c) and (d), the applicable percentage is: Integration Level Applicable Applicable (as percentage of Percentages for Percentages taxable wage base) Option (b) or Option (c) for Option (d) 100% 5.7% 2.7% More than 80% but less than 100% 5.4% 2.4% More than 20% (but not less than $10,001) and not more than 80% 4.3% 1.3% 20% (or $10,000, if greater) or less 5.7% 2.7% (f) Allocation offset. The Advisory Committee will reduce a Participant's allocation otherwise made under this Section 3.04 by the Participant's allocation under the following qualified plan(s) maintained by the Employer: ________________________. The Advisory Committee will determine this allocation reduction: (Choose (1) or (2)) (1) By treating the term "Employer contribution" as including all amounts paid or accrued by the Employer during the plan Year to the qualified plan(s) referenced under this Option (f). If a Participant under this Plan also participates in that other plan, the Advisory Committee will treat the amount the Employer contributes for or during a Plan Year on behalf of a particular Participant under such other plan as an amount allocated under this Plan to that Participant's Account for that Plan Year. The Advisory committee will make the computation of allocation required under the immediately preceding sentence before making any allocation required by this Section 3.04. (2) In accordance with the formula provided in an addendum to this Adoption Agreement, numbered 3.04(f). Top Heavy Minimum Allocation - Method of Compliance. If a Participant's allocation under this Section 3.04 is less than the top heavy minimum allocation to which he is entitled under Section 3.04(B): (Choose (g) or (h)) (g) The Employer will make any necessary additional contribution to the Participant's Account, as described in Section e.04(B)(7)(a) of the Plan. (h) The Employer will satisfy the top heavy minimum allocation under the following plan(s) it maintains: ___________________. However, the Employer will make any necessary additional contribution to satisfy the top heavy minimum allocation for an Employee covered only under this Plan and not under the other plan(s) designated in this Option (h). See Section 3.04(B)(7)(b) of the Plan. If the Employer maintains another plan, the Employer may provide in an addendum to this Adoption Agreement, numbered Section 3.04, any modifications to the Plan necessary to satisfy the top heavy requirements under Code 416. Related employers. If two or more related employers (as defined in Section 1.30) contribute to this Plan, the Advisory Committee must allocate all Employer contributions and forfeitures to each Participant in the Plan, in accordance with the elections in this Adoption Agreement Section 3.04: (Choose i) or (j)) (i) Without regard to which contributing related group member employs the Participant. (j) Only to the Participants directly employed by the contributing Employer. If a Participant receives Compensation from more than one contributing Employer, the Advisory Committee will determine the allocations under this Adoption Agreement Section 3.04 by prorating among the participating Employers the Participant's Compensation and, if applicable, the Participant's Integration Level under Option (e). 3.05 FORFEITURE ALLOCATION. Subject to any restoration allocation required under Sections 5.04 or 9.14, the Advisory Committee will allocate a Participant forfeiture in accordance with Section 3.04: (Choose (a) or (b); (c) and (d) are optional in addition to (a) or (b)) (a) As an Employer contribution for the Plan Year in which the forfeiture occurs, as if the Participant forfeiture were an additional Employer contribution for that Plan Year. (b) To reduce the Employer contribution for the Plan Year: (Choose (1) or (2)) (1) in which the forfeiture occurs. (2) immediately following the Plan Year in which the forfeiture occurs. (c) First to reduce the Plan's ordinary and necessary administrative expenses for the Plan Year and then will allocate any remaining forfeitures in the manner described in Option (a) or in Option (b), whichever applies. 3.06 ACCRUAL OF BENEFIT. Compensation Taken Into Account. For the Plan Year in which the Employee first becomes a Participant, the Advisory Committee will determine the allocation under Adoption Agreement Section 3.04 by taking into account: (Choose (a) or (b)) (a) The Employee's Compensation for the entire Plan Year. (b) The Employee's Compensation only for the portion of the Plan Year in which the Employee actually is a Participant in the Plan. Accrual Requirements. Subject to the suspension of accrual requirements of Section 3.06(E) of the Plan, to receive an allocation of Employer contributions and Participant forfeitures, if any, for the Plan Year, a Participant must satisfy the conditions described in the following elections: (Choose (c) or at least one of (d) through (f)) (c) Safe Harbor rule. If the Participant is employed by the Employer on the last day of the Plan Year, the Participant must complete at least one Hour of Service for that Plan Year. If the Participant is not employed by the Employer on the last day of the Plan Year, the Participant must complete at least 501 Hours of Service during the Plan Year. (d) Hours of Service condition. The Participant must complete the following minimum number of Hours of Service for the Plan Year: (Choose at least one of (1 through (4)) (1) 1,000 Hours of Service. (2) (Specify, but the number of Hours of Service may not exceed 1,000) ______________. (3) No Hour of Service requirement if the Participant terminates employment during the Plan Year on account of: (Choose (i) through (iii) (i) Death. (ii) Disability. (iii) Attainment of Normal Retirement Age in the current Plan Year or in a prior Plan Year. (4) _________ Hours of Service (not exceeding 1,000) if the Participant terminates employment with the Employer during the Plan Year, subject to any election in Option (3). (e) Employment conditions. The Participant must be employed by the Employer on the last day of the Plan year, irrespective of whether he satisfies any Hours of Service condition under Option (d), unless his employment terminates because of: (Choose (1) or at least one of (2) through (4)) (1) No exceptions. (2) Death. (3) Disability. (4) Attainment of Normal Retirement Age in the current Plan Year or in a prior Plan Year. (f) (Specify other conditions, if applicable): ________________. Suspension of Accrual Requirements. The suspension of accrual requirements of Section 3.06(E) of the Plan: (Choose (g), (h) or (i)) (g) Applies to the Employer's Plan. (h) Does not apply to the Employer's Plan. (i) Applies in modified form to the Employer's Plan, as described in an addendum to this Adoption Agreement, numbered Section 3.06(E). 3.15 MORE THAN ONE PLAN LIMITATION. If the provisions of Section 3.15 apply, the Excess Amount attributed to this Plan equals: (Choose (a), (b) or (c)) (a) The product of: (i) the total Excess Amount allocated as of such date (including any amount which the Advisory Committee would have allocated but for the limitations of Code ss.415) times (ii) the ratio of (1) the amount allocated to the Participant as of such date under this Plan divided by (2) the total amount allocated as of such date under all qualified defined contribution plans (determined without regard to the limitations of Code ss.415). (b) The total Excess Amount. (c) None of the Excess Amount. 3.18 DEFINED BENEFIT PLAN LIMITATION. Application of limitation. The limitation under Section 3.18 of the Plan: (Choose (a) or (b)) (a) Does not apply to the Employer's Plan because the Employer does not maintain and never has maintained a defined benefit plan covering any Participant in this Plan. (b) Applies to the Employer's Plan. To the extent necessary to satisfy the limitation under Section 3.18, the Employer will reduce: (Choose (1) or (2)) (1) The Participant's projected annual benefit under the defined benefit plan under which the Participant participates. (2) Its contribution or allocation on behalf of the Participant to the defined contribution plan under which the Participant participates and then, if necessary, the Participant's projected annual benefit under the defined benefit plan under which the Participant participates. [Note: If the Employer selects (a), the remaining options in this Section 3.18 do not apply to the Employer's Plan.] Coordination with top heavy minimum allocation. The Advisory Committee will apply the top heavy minimum allocation provisions of Section 3.04(B) of the Plan with the following modifications: (Choose (c) or at least one of (d) or (e)) (c) No modifications. (d) For Non-Key Employees participating only in this Plan, the top heavy minimum allocation is the minimum allocation described in Section 3.04(B) determined by substituting _____% (not less than 4%) for "3%", except: (Choose (1) or (2)) (1) No exceptions. (2) Plan Years in which the top heavy ratio exceeds 90%. (e) For Non-Key Employees also participating in the defined benefit plan, the top heavy minimum is: (Choose (1) or (2)) (1) 5% of Compensation (as determined under Section 3.04(B) of the Plan) irrespective of the contribution rate of any Key Employee, except: (Choose (i) or (ii)) (i) No exceptions. (ii) Substituting "7 1/2%" for "5%" if the top heavy ratio does not exceed 90%. (2) 0%. [Note: The employer may not select this Option (2) unless the defined benefit plan satisfies the top heavy minimum benefit requirements of Code 416 for these Non-Key Employees.] Actuarial Assumptions for Top Heavy Calculation. To determine the top heavy ratio, the Advisory Committee will use the following interest rate and mortality assumptions to value accrued benefits under a defined benefit plan: ___________________________. If the elections under this Section 3.18 are not appropriate to satisfy the limitations of Section 3.18, or the top heavy requirements under Code 416, the Employer must provide the appropriate provisions in an addendum to this Adoption Agreement. ARTICLE V TERMINATION OF SERVICE - PARTICIPANT 5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is: (Choose (a) or (b)) (a) ____________ [State age, but may not exceed age 65]. (b) The later of the date the Participant attains _______ years of age or the __________________ anniversary of the first day of the Plan Year in which the Participant commenced participation in the Plan. [The age selected may not exceed age 65 and the anniversary selected may not exceed the 5th.] 5.02 PARTICIPANT DEATH OR DISABILITY. The 100% vesting rule under Section 5.02 of the Plan: (Choose (a) or choose one or both of (b) and (c)) (a) Does not apply. (b) Applies to death. (c) Applies to disability. 5.03 VESTING SCHEDULE. The Employer elects the following vesting schedule: (Choose (a) or (b); (C) and (d) are available only in addition to (b)) (a) Immediate vesting, 100% Nonforfeitable at all times. [Note: The Employer must elect Option (a) if the eligibility conditions under Adoption Agreement Section 2.01(b) require 2 years of service or more than 12 months of employment.] (b) Graduated Vesting Schedules. Top Heavy Schedule Non Top Heavy Schedule (Mandatory) (Optional) Year of Nonforfeitable Year of Nonforfeitable Service Percentage Service Percentage Less than 1 ________ Less than 1 ________ 1 ________ 1 ________ 2 ________ 2 ________ 3 ________ 3 ________ 4 ________ 4 ________ 5 ________ 5 ________ 6 or more 100% 6 ________ 7 or more ________ (c) Minimum vesting. A Participant's Nonforfeitable Accrued Benefit will never be less than the lesser of $__________ or his entire Accrued Benefit, even if the application of the graduated vesting schedule under Option (b) would result in a smaller Nonforfeitable Accrued Benefit. [Note: Under Option (b), the Employer must complete a Top Heavy Schedule which satisfies Code ss.416. The Employer, at its option, may complete a Non Top Heavy Schedule. The Non Top Heavy Schedule must satisfy Code ss.411(a)(2). Also see Section 7.05 of the Plan.] (d) The Top Heavy Schedule under Option (b) applies: (Choose (1) or (2)) (1) Only in a Plan Year for which the Plan is top heavy. (2) In the Plan Year for which the Plan first is top heavy and then is all subsequent Plan Years. [Note: The Employer may not elect Option (d) unless it has completed a Non Top Heavy Schedule.] Life Insurance Investments. The Participant's Accrued Benefit attributable to insurance contracts purchased on his behalf under Article XI is: (Choose (e) or (f)) (e) Subject to the vesting election under Options (a), or (b). (f) 100% Nonforfeitable at all times, irrespective of the vesting election under Option (b). 5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/RESTORATION OF FORFEITED ACCRUED BENEFIT. The deemed cash-out rule described in Section 5.04(C) of the Plan: (Choose (a) or (b)) (a) Does not apply. (b) Will apply to determine the timing of forfeitures for 0% vested Participants. 5.06 YEAR OF SERVICE - VESTING. Vesting computation period. The Plan measures a Year of Service on the basis of the following 12 consecutive month periods: (Choose (a) or (b)) (a) Plan Years. (b) Employment Years. An Employment Year is the 12 consecutive month period measured from the Employee's Employment Commencement Date and each successive 12 consecutive month period measured from each anniversary of that Employment Commencement Date. Hours of Service. The minimum number of Hours of Service an Employee must complete during a vesting computation period to receive credit for a Year of Service is: (Choose (c) or (d)) (c) 1,000 Hours of Service. (d) ___________ Hours of Service. [Note: The Hours of Service requirement may not exceed 1,000.] 5.08 INCLUDED YEARS OF SERVICE - VESTING. The Employer specifically excludes the following Years of Service: (Choose (a) or at least one of (b) through (e)) (a) None other than as specified in Section 5.08(a) of the Plan. (b) Any Year of Service before the Participant attained the age of _______________. [Note: The age selected may not exceed age 18.] (c) Any Year of Service during the period the Employer did not maintain this Plan or a predecessor plan. (d) Any Year of Service before a Break in Service if the number of consecutive Breaks in Service equals or exceeds the greater of 5 or the aggregate number of the Years of Service prior to the Break. This exception applies only if the Participant is 0% vested in his Accrued Benefit derived from Employer contributions at the time he has a Bread in Service. Furthermore, the aggregate number of Years of Service before a Break in Service do not include any Years of Service no required to be taken into account under this exception by reason of any prior Break in Service. (e) Any Year of Service earned prior to the effective date of ERISA if the Plan would have disregarded that Year of Service on account of an Employee's Separation from Service under a Plan provision in effect and adopted before January 1, 1974. ARTICLE VI TIME AND METHOD OF PAYMENTS OF BENEFITS Code ss.411(d)(6) Protected Benefits. The elections under this Article VI may not eliminate Code ss.411(d)(6) protected benefits. To the extent the elections would eliminate a Code ss.411(d)(6) protected benefit, see Section 13.02 of the Plan. Furthermore, if the elections liberalize the optional forms of benefit under the Plan, the more liberal options apply on the later of the adoption date or the Effective Date of this Adoption Agreement. 6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Distribution date. A distribution date under the Plan means _______________________________________________________________________________. [Note: The Employer must specify the appropriate date(s). The specified distribution dates primarily establish annuity starting dates and the notice and consent periods prescribed by the Plan. The Plan allows the Trustee an administratively practicable period of time to make the actual distribution relating to a particular distribution date.] Nonforfeitable Accrued Benefit Not Exceeding $3,500. Subject to the limitations of Section 6.01(A)(1), the distribution date for distribution of a Nonforfeitable Accrued Benefit not exceeding $3,500 is: (Choose (a), (b), (c), (d) or (e)) (a) ______________ of the _____________ Plan Year beginning after the Participant's Separation from Service. (b) _________________ following the Participant's Separation from Service. (c) _________________ of the Plan Year after the Participant incurs ___________________ Break(s) in Service (as defined in Article V). (d) _________________ following the Participant's attainment of Normal Retirement Age, but not earlier than _________ days following his Separation from Service. (e) (Specify) _________________________________________________. Nonforfeitable Accrued Benefit Exceeds $3,500. See the elections under Section 6.03. Disability. The distribution date, subject to Section 6.01(A)(3), is: (Choose (f), (g) or (h)) (f) _________________ after the Participant terminates employment because of disability. (g) The same as if the Participant had terminated employment without disability. (h) (Specify) ________________________________________________. Hardship. (Choose (i) or (j)) (i) The Plan does not permit a hardship distribution to a Participant who has separated from Service. (j) The Plan permits a hardship distribution to a Participant who has separated from Service in accordance with the hardship distribution policy. State in: (Choose (1) or (2)) (1) Section 6.01(A)(4) of the Plan. (2) The addendum to this Adoption Agreement, numbered Section 6.01, in lieu of the policy stated in Section 6.01(A)(4) of the Plan. Default on a Loan. If a Participant or Beneficiary defaults on a loan made pursuant to a loan policy adopted by the Advisory Committee pursuant to Section 9.04, the Plan: (Choose (k), (l) or (m)) (k) Treats the default as a distributable event. The Trustee, at the time of the default, will reduce the Participant's Nonforfeitable Accrued Benefit by the lesser of the amount in default (plus accrued interest) or the Plan's security interest in that Nonforfeitable Accrued Benefit. (l) Does not treat the default as a distributable event. When an otherwise distributable event first occurs pursuant to Section 6.01 or Section 6.03 of the Plan, the Trustee will reduce the Participant's Nonforfeitable Accrued Benefit by the lesser of the amount in default (plus accrued interest) of the Plan's security interest in that Nonforfeitable Accrued Benefit. (m) (Specify) ________________________________________________. 6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. The Advisory Committee will apply Section 6.02 of the Plan with the following modifications: (Choose (a) or at least one of (b) (c), (d) and (e)) (a) No modifications. (b) Except as required under Section 6.01 of the Plan, a lump sum distribution is not available: ____________________________. (c) An installment distribution: (Choose (1) or at least one of (2) or (3)) (1) Is not available under the Plan. (2) May not exceed the lesser of _________________ years of the maximum period permitted under Section 6.02. (3) (Specify) ____________________________________________. (d) The Plan permits the following annuity options: _______________________ Any Participant who elects a life annuity option is subject to the requirements of Sections 6.04(A), (B), (C) and (D) of the Plan. See Section 6.04(E). [Note: The Employer may specify additional annuity options in an addendum to this Adoption Agreement, numbered 6.02(d).] (e) If the Plan invests in qualifying Employer securities, as described in Section 10.03(F), a Participant eligible to elect distribution under Section 6.03 may elect to receive that distribution in Employer securities only in accordance with the provision of the addendum to this Adoption Agreement, numbered 6.02(e). 6.03 BENEFIT PAYMENT ELECTIONS. Participant Elections After Separation from Service. A Participant who is eligible to make distribution elections under Section 6.03 of the Plan may elect to commence distribution of his Nonforfeitable Accrued Benefit: (Choose at least one of (a) through (c)) (a) As of any distribution date, but no earlier than __________ of the _________________________________ Plan Year beginning after the Participant's Separation from Service. (b) As of the following date(s): (Choose at least one of Options (1) through (6)) (1) Any distribution date after the close of the Plan Year in which the Participant attains Normal Retirement Age. (2) Any distribution date following his Separation from Service. (3) Any distribution date in the ________________________ Plan Year(s) beginning after his Separation from Service. (4) Any distribution date in the Plan Year after the Participant incurs ________ Break(s) in Service (as defined in Article V). (5) Any distribution date following attainment of age ___________ and completion of at least ____________ Years of Service (as defined in Article V). (6) (Specify) ___________________________________________. (c) (Specify) ________________________________________________. Participant Elections Prior to Separation from Service. Subject to the restrictions of Article VI, the following distribution options apply under the Employer's Plan prior to a Participant's Separation from Service. (Choose (d) or at least one of (e) through (h)) (d) No distribution options prior to Separation from Service. (e) Attainment of Specified Age. Until he retires, the Participant has a continuing election to receive all or any portion of his Nonforfeitable Accrued Benefit after he attains: (Choose (1) or (2)) (1) Normal Retirement Age. (2) _______________ years of age and is at least _________% vested in his Accrued Benefit. [Note: If the percentage is less than 100%, see the special vesting formula in Section 5.03.] (f) After a Participant has participated in the Plan for a period of not less than _______ years and he is 100% vested in his Accrued Benefit, until he retires, the Participant has a continuing election to receive all or any portion of his Accrued Benefit. [Note: The number in the blank space may not be less than 5.] (g) Hardship. A Participant may elect a hardship distribution prior to his Separation from Service in accordance with the hardship distribution policy: (Choose (1) or (2)) (1) Under Section 6.01(A)(4) of the Plan. In no event may a Participant receive a hardship distribution under this Option (g) before he is at least _________________$ vested in his Accrued Benefit. [Note: If the percentage in the blank is less than 100%, see the special vesting formula in Section 5.03.] (2) Provided in the addendum to this Adoption Agreement, numbered Section 6.03. (h) (Specify) _____________________________________________. [Note: The Employer may use an addendum, numbered 6.03, to provide additional language authorized by Options (b)(6), (c), (g)(2) or (h) of this Adoption Agreement Section 6.03.] 6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES. The annuity distribution requirements of Section 6.04: (Choose (a) or (b)) (a) Apply only to a Participant described in Section 6.04(E) of the Plan (relating to the profit sharing exception to the joint and survivor requirements). (b) Apply to all Participants. ARTICLE IX ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS 9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. If a distribution (other than a distribution from a segregated Account) occurs more than 90 days after the most recent valuation date, the distribution will include interest at: (Choose (a), (b) or (c)) (a) __________% per annum. [Note: The percentage may equal 0%.] (b) The 90 day Treasury bill rate in effect at the beginning of the current valuation period. (c) (Specify) ________________________________________________. ARTICLE X TRUSTEE AND CUSTODIAN, POWERS AND DUTIES 10.03 INVESTMENT POWERS. Pursuant to Section 10.03[F] of the Plan, the aggregate investments in qualifying Employer securities and in qualifying Employer real property: (Choose (a) or (b)) (a) May not exceed 10% of Plan assets. (b) May not exceed ______________% of Plan assets. [Note: the percentage may not exceed 100%.] 10.14 VALUATION OF TRUST. In addition to each Accounting Date, the Trustee must value the Trust Fund on the following valuation date(s): (Choose (a) or (b)) (a) No other mandatory valuation dates. (b) (Specify) ________________________________________________. EFFECTIVE DATE ADDENDUM (Restated Plans Only) The Employer must complete this addendum only if the restated Effective Date specified in Adoption Agreement Section 1.18 is different than the restated effective date for at least one of the provisions listed in this addendum. In lieu of the restated Effective Date in Adoption Agreement Section 1.18, the following special effective dates apply: (Choose whichever elections apply) (a) Compensation definition. The Compensation definition of Section 1.12 (other than the $200,000 limitation) is effective for Plan Years beginning after _____________________________. [Note: May not be effective later than the first day of the first Plan Year beginning after the Employer executes this Adoption Agreement to restate the Plan for the Tax Reform Act of 1986, if applicable.] (b) Eligibility conditions. The eligibility conditions specified in Adoption Agreement Section 2.01 are effective for Plan Years beginning after _______________________. (c) Suspension of Years of Service. The suspension of Years of Service rule elected under Adoption Agreement Section 2.03 is effective for Plan Years beginning after _____________________. (d) Contribution/allocation formula. The contribution formula elected under Adoption Agreement Section 3.01 and the method of allocation elected under Adoption Agreement Section 3.04 is effective for Plan Years beginning after _____________________. (e) Accrual requirements. The accrual requirements of Section 3.06 are effective for Plan Years beginning after ______________. (f) Employment condition. The employment condition of Section 3.06 is effective for Plan Years beginning after ______________. (g) Elimination of Net Profits. The requirement for the Employer not to have net profits to contribute to this Plan is effective for Plan Years beginning after ________________. [Note: The date specified may not be earlier than December 31, 1985.] (h) Vesting Schedule. The vesting schedule elected under Adoption Agreement Section 5.03 is effective for Plan Years beginning after _______________. (i) (Specify) ________________________________________________. For Plan Years prior to the special Effective Date, the terms of the Plan prior to its restatement under this Adoption Agreement will control for purposes of the designated provisions. A special Effective Date may not result in the delay of a Plan provision beyond the permissible Effective Date under any applicable law requirements. Execution Page The Trustee (and Custodian, if applicable), by executing this Adoption Agreement, accepts its position and agrees to all of the obligations, responsibilities and duties imposed upon the Trustee (or Custodian) under the Master Plan and Trust. The Employer hereby agrees to the provisions of this Plan and Trust, and in witness of its agreement, the Employer by its duly authorized officers, has executed this Adoption Agreement, and the Trustee (and Custodian, if applicable) signified its acceptance, on this ___________ day of ________________, 19________. Name and EIN of Employer: _____________________________________ Signed: _______________________________________________________ Name(s) of Trustee: ___________________________________________ _______________________________________________________________ Signed: _______________________________________________________ _______________________________________________________________ Name of Custodian: ____________________________________________ Signed: _______________________________________________________ [Note: A Trustee is mandatory, but a Custodian is optional. See Section 10.03 of the Plan.] Plan Number. The 3-digit plan number the Employer assigns to this Plan for ERISA reporting purposes (Form 5500 Series) is: ____________________. Use of Adoption Agreement. Failure to complete properly the elections in this Adoption Agreement may result in disqualification of the Employer's Plan. The 3-digit number assigned to this Adoption Agreement (see page 1) is solely for the Master Plan Sponsor's recordkeeping purposes and does not necessarily correspond to the plan number the Employer designated in the prior paragraph. Master Plan Sponsor. The Master Plan Sponsor identified on the first page of the basic plan document will notify all adopting employers of any amendment of this Master Plan or of any abandonment or discontinuance by the Master Plan Sponsor of its maintenance of this Master Plan. For inquiries regarding the adoption of the Master Plan, the Master Plan Sponsor's intended meaning of any plan provisions or the effect of the opinion letter issued to the Master Plan Sponsor, please contact the Master Plan Sponsor at the following address and telephone number: INVESCO Trust Company, 7800 E. Union Ave., Denver, Colorado, (303 779-0731). Reliance on Opinion Letter. The Employer may not rely on the Master Plan Sponsor's opinion letter covering this Adoption Agreement. For reliance on the Plan's qualification, the Employer must obtain a determination letter from the applicable IRS Key District office. PARTICIPATION AGREEMENT For Participation by Related Group Members (Plan Section 1.30) The undersigned Employer, by executing this Participation Agreement, elects to become a Participating Employer in the Plan identified in Section 1.03 of the accompanying Adoption Agreement, as if the Participating Employer were a signatory to that Agreement. The Participating Employer accepts, and agrees to be bound by, all of the elections granted under the provisions of the Master Plan as made by, the Signatory Employer to the Execution Page of the Adoption Agreement. 1. The Effective Date of the undersigned Employer's participation in the designated Plan is ___________________. 2. The undersigned Employer's adoption of this Plan constitutes: (a) The adoption of a new plan by the Participating Employer. (b) The adoption of an amendment and restatement of a plan currently maintained by the Employer, identified as _________________________, and having an original effective date of __________________________. Dated this ___________ day of ______________________, 19______. Name of Participating Employer: _______________________________ Signed: _______________________________________________________ Participating Employer's EIN: _________________________________ Acceptance by the Signatory Employer to the Execution Page of the Adoption Agreement and by the Trustee. Name of Signatory Employer: ___________________________________ Accepted: _____________________________________________________ [Date] Signed: _______________________________________________________ Name(s) of Trustee: ___________________________________________ Accepted: _____________________________________________________ [Date] Signed: _______________________________________________________ [Note: Each Participating Employer must execute a separate Participation Agreement. See the Execution Page of the Adoption Agreement for important Master Plan information.] NS PSP AA Instructions Complete the first blank in the paragraph by writing in the business' name in its entirety. 1.02 Trustee Option (a) should be chosen when the employer will be the trustee, INVESCO Trust Company would then act as Custodian. If option (b) is chosen, INVESCO Trust Company will charge an annual trust fee. Note: See Trustee Comments on page 17 for further explaination of Non-discretionary Trustee. 1.03 Plan Enter the plan name. Example: ABC Inc. Profit Sharing Plan. 1.07 Employee If you want the plan to cover all types of employees, select option (a). If you want to exclude from the plan any group(s) of employees, select any combination of (b) or (g). Leased Employees You may exclude leased employees from participation (option h). However, the plan must satisfy the coverage rules of Code Section 410(b) and 401(a)(26), consult your legal or financial counsel. Related Employers You may exclude related employers from participating in the plan (option j). However, the plan must satisfy the coverage rules of Code Section 410(b) and 401(a)(26), consult your legal or financial counsel. 1.12 Compensation Treatment of elective contributions - Choose option (a) if you prefer to "add back" employee elective contributions to compensation for purposes of allocating employer contributions, forfeitures and for non-discrimination testing. Modifications to Compensation - You must choose option (C) or any combination of (d) through (j). Any exclusion of compensation may result in unallowable discrimination. Your accountant may want to test for any discriminatory effect of excluding any type of compensation. 1.17 Plan Year You must define the "plan year." Usually it will follow the business tax year. Limitation Year - You must define the "limitation year" (12 month period for testing allocations to each employee's account). For administrative convenience it should match the plan year. 1.18 Effective Date New Plan - Enter the first day of your plan year (usually January 1) and the year. Restated Plan - Effective date - If you are amending for the Tax Reform Act of 1986 enter: January 1, 1987. If you are amending for another reason, enter the first day of your tax year, example: January 1, 1990. Original established date - - Enter the original effective date of your plan from your prior Adoption Agreement. 1.27 Hours of Service Choose which method you wish to use for counting hours worked by an employee to accrue benefits. Option (b), the equivalency method, is explained in Section 1.27 of the plan. Option (a) is usually chosen. 1.29 Service for Predecessor Employer Under this option, you may elect to count service for a predecessor employer when you are not maintaining the plan of the predecessor employer. (Used primarily in the event of a merger or acquisition.) 1.31 Leased Employees The law requires you to state how your plan would treat a leased employee who could become a participant, even if you don't intend to ever lease employees. Choose option (a) covering the employee without regard to the leasing company's plan or option (b) the reduction method. Usually Option (b)(1) is chosen. 2.01 Eligibility a. An employee must attain this age to become a participant (cannot exceed age 21). b. Pick how long (service) an employee must work to become a participant. Plan Entry - Choose when employees enter the plan for purposes of contributions and benefit accrual. Normally, option (c), semi-annual entry dates, is chosen. Time of Participation - Choose which plan entry date (before or after) an employee who meets the eligibility requirements will enter the plan. Normally, option (f) is chosen. Dual Eligibility - This section allows you to grandfather into the plan current employees who have not met the eligibility requirements and apply the eligibility requirements to newly hired employees. Restated plans usually chose (i)(2). 2.02 Year of Service Option (b) should only be chosen if you wish to require less than 1000 hours to be worked by an employee for eligibility, contributions and vesting. Usually Option (a) is chosen. Eligibility Computation Period - Choose whether to measure subsequent eligibility periods on the employee's anniversary or the plan year. Option (d) Plan Year is chosen for administrative convenience. 2.03 Break In Service This option may impose a complicated re-entry date for employees who have terminated or whose hours were severely cut back. Option (a) is chosen for administrative convenience. 2.06 Election Not to Participate This option allows employees and participants to elect out of participation. However, these employees are considered when performing all non-discrimination tests. Option (a) is chosen for administrative convenience. 3.01 Contributions and Forfeitures Option (a) provides for a discretionary formula. Option (b) allows the employer to determine the contribution separately for different catagories of participants. Options (c) and (d) allow the employer to choose a fixed contribution formula. Net Profits - An employer may require net profits to make its contribution or may disregard profits to determine the contribution. If the employer selects option (g), it must also complete the three blanks. 3.04 Contribution Allocation Allocation formula. The primary allocation formulas are in Options (a), (b), (c) and (d). Option (a) is a Nonintegrated formula and allocates the employer contribution proportionate to total compensation. Options (b), (c) and (d) are alternatives for integrated plans. Usually option (a)(2) is chosen for non integrated plans. The two-tiered formula under Option (b) maximizes the disparity permitted under the integration rules. Accordingly, the allocation in the first tier results in an equal allocation percentage based on total compensation and based on excess compensation. This equal allocation percentage may not exceed the maximum disparity percentage (5.7%, 5.4%, or 4.3%) described in he second column of the Maximum Disparity Table. After completion of the first tier allocation, the second step allocates the remaining contribution proportionate to total compensation, in the same manner as the nonintegrated formula. Under the three-tiered formula under Option (c), the plan: (i) first allocates based on total compensation, but the allocation percentage may not exceed the maximum disparity percentage determined under the second column of the Maximum Disparity Table; (ii) then allocates based on excess compensation, but the allocation percentage may not exceed the maximum disparity percentage determined under the second column of the Maximum Disparity Table; and (iii) completes the allocation on the basis of total compensation. The four-tier allocation under Option (d) is a hybrid of Options (b) and (c). The sole purpose of Option (d) is to use the first tier to satisfy the 3% top heavy minimum, then use a progression of three additional tiers to make maximum use of the permitted disparity rules. The second tier allocates solely on the basis of excess compensation, with a maximum allocation under the second tier equal to 3% of each participant's excess compensation. The third tier is the same as the first tier under Option (b). The fourth tier is a prorata allocation based on total compensation. 3.05 Forfeiture Allocation Choose the method of allocating (dividing up) forfeitures of terminated non-vested participant balances. Option (a) allocates forfeitures as an extra discretionary contribution. Option (b) allocates forfeitures to reduce employer contributions. Option (c) allows you to allocate forfeitures to reduce the plan's administrative expense. 3.06 Compensation Taken Into Account If you wish to count a participant's full year's compensation (even if he or she entered during the year), for contributions choose option (a), if not, choose option (b). Accrual Requirements - Specify the service requirements a participant must satisfy to receive an allocation. You may specify an hours of service requirement, waive the service requirement for specific contributions and/or require the participant to be employed on the last day to receive a contribution. Suspension of Accrual Requirements This section allows you to suspend some or all of the accrual requirements found in Section 3.06(E) of the plan for participants to receive allocations. This would apply in plan years when a plan may not satisfy coverage and participation requirements. For administrative convenience choose option (g). 3.15 More than One Plan This section only applies if you (the employer) maintain another defined contribution plan (e.g.: profit sharing, money purchase, 401(k) or target benefit) that covers at least one participant in this plan. 3.18 Defined Benefit Limitation Check option (a) if you have never maintained a defined benefit plan for any participants in this plan. If you have or are currently maintaining a defined benefit under option (b), choose which plan's benefit would be reduced if a participant's total allocations for a year were to exceed the allowable limit. 5.01 Normal Retirement Age Choose what age you (the employer) want the participants to be 100% vested in their benefits, if still employed (normal retirement age). 5.02 Vesting Death/Disability You may choose to allow 100% vesting to participants that terminate from service because of death option (b) or disability option (c). 5.03 Vesting Schedule Choose what vesting schedule(s) you want to apply to employer discretionary contributions and matching contributions. If you choose option (b), you must at a minimum complete the top-heavy vesting schedule. Remember, if the eligibility requirements are more than one year, option (a) must be chosen. Complete the Top Heavy Schedule based upon the following: Year of Service 1 2 (not less than 20%) 3 (not less than 40%) 4 (not less than 60%) 5 (not less than 80%) 6 (not less than 100%) Optional: Complete the Non Top Heavy Schedule based upon the following: Years of Service 1 2 3 (not less than 20%) 4 (not less than 40%) 5 (not less than 60%) 6 (not less than 80%) 7 (not less than 100%) 5.04 Cash-Out Rule If option (b) is chosen, the plan treats a 0% vested terminated participant as having received a distribution, allowing for forfeitures to be reallocated to active participants. 5.06 Years of Service Choose what measuring period the plan should use to determine years of service for vesting, employee's anniversary year or plan year. For ease of administration choose option (a). 5.08 Prior Years of Service By choosing options (b) through (e) you (the employer) may exclude some prior years of service for purposes of vesting. Article 6 The Employer must establish a specific distribution policy for the plan. Treas. Reg. 1.411(d)-4 prohibits the Employer, the advisory committee or any third party to retain discretion over when or in what form to pay the participant's benefit. Under a restated plan, the elections under Article VI, to the extent they differ from previous plan provisions regarding optional forms of benefit, may not eliminate an optional form of benefit with respect to the account balance accrued as of the date the Employer executes the restated adoption agreement (or, if later, the effective date of that restated adoption agreement). An optional form of benefits includes the form of payment (e.g., lump sum or installments), the timing of payment (e.g., immediately after separation form service, following a break in service, after attaining normal retirement age) and the medium of payment (e.g., right to elect distribution in Employer securities, right to elect distribution in the form of an annuity contract). With this in mind, if you are restating an existing plan, pay close attention to the distribution features under that document and your administrative practice of distributions. In all cases, try to mirror or liberalize those distribution features when restating onto this document. 6.01 Distribution Date A distribution date establishes a predetermined "target" date in a plan year when the plan will offer distributions. The actual distribution may occur later than a distribution date as long as the actual distribution is within an administratively reasonable period of time" from the distribution date. Typical distribution dates for 401(k) plans are semi-annual dates or quarterly dates. Nonforfeitable Accrued Benefit Not Exceeding #3500 When a separate participants vested balance does not exceed $3500, the plan allows the employer to separately establish the timing of these distributions, separate from the distribution dates. When you complete this section, you need to balance two concerns: 1) will the timing of the distribution cause the participant to consider it a "severance benefit" and therefore encourage separation from service and 2) the administrative concerns of carrying a non-active account in the plan. Disability - The plan allows you (the employer) to establish a different target payout date for disability distributions in options (f) and (h). Hardship - This option states whether or not the plan would allow a separated participant to receive a hardship distribution, prior to receiving a total distribution of his/her vested account balance. Default on a Loan - This election does not create a loan policy. You (the employer) must elect the timing of the plan's foreclosure if a participant's loan were to be defaulted upon even if you do not intend to offer loans in your plan. 6.02 Method of Payment You may choose the standard forms of payment if this is a brand new plan and not a restatement. Elect any one or combination of options (b) through (e). If no modifications are necessary, elect option (a). 6.03 Participant Elections After Separation From Service You must choose when an employee who has separated from service, with a vested benefit greater than $3500, may elect to commence distributions. This election will be tied directly to the "distribution date" definition earlier. Participant Elections Prior to Separation from Service The following distribution elections apply to employer discretionary account regardless of vested account balances, prior to employment separation. If you prefer not to allow any distribution options from these accounts prior to separation, select option (d). 6.04 Annuity Distributions the law requires distributions to certain participants to be in the form of commercial insurance annuities, unless consented to and waived by both the participant and his or her spouse. Participants that are subject to this requirement are identified in section 6.04(E) of the Plan. For administrative convenience choose option (a). If you are restating a plan that was subject to the joint and survivor annuity rules, you must select Option (b). 9.10 Value of Benefit This option allows the employer to add interest to a participant's balance, if a distribution occurs more than 90 days after the most recent plan valuation. You do not have to provide an interest addition under this section and may complete option (a) with 0%. 10.03 Investment Powers Complete this section if you (the employer) wish to allow the plan to invest in qualifying employer securities, you should consult your legal counsel. The term "qualifying employer securities" has a specific meaning under ERISA and may not include all securities. 10.14 Valuation of Trust You may use this option to specify mandatory valuation dates, in addition to the accounting date. Normally, option (a) is chosen. Instructions for Effective Date Addendum You must complete the effective date addendum only if the effective dates of any of the listed items (a) through (j) have an effective date other than your restated effective date in adoption agreement section 1.18. Since some provisions in the Tax Reform Act of 1986 were not effective until 1988 or 1989 the few provisions (if any) that have later effective dates must specify when they are effective. a. Compensation definition may not be later than the first day of your 1991 plan year. b. Eligibility conditions may not be later than the first day of your 1989 plan year. c. Suspension of years of service may not be earlier than the first day of your 1990 plan year. d. Contribution/allocation formula may not be earlier than the first day of your 1989 plan year. e. Accrual requirements may not be earlier than the first day of your 1989 plan year. f. Employment condition may not be earlier than the first day of your 1991 plan year. g. Elimination of Net Profits may not be earlier than December 31, 1985. h. Vesting schedule may not be later than the first day of your 1989 plan year. i. Allocation of Earnings may not be earlier than the first day of the 1990 plan year. Execution Page The Employer must complete the date on which it executes the adoption agreement and must execute the signature for the Employer. The execution page provides two lines above the signature line to print or type the name of the Employer and the Employer's EIN. If the Employer is a sole proprietorship, the individual sole proprietor should execute as Employer. If the Employer is a corporation or a partnership, an officer or a partner, as applicable, should execute the adoption agreement on behalf of the Employer. Trustee. If you selected option (a) of Section 1.02, then the employer will be the Trustee. An individual must sign as trustee for the employer. INVESCO Trust Company will then act as custodian. If you choose to have INVESCO Trust Company act as "Trustee" then option (b) of Section 1.02 must be chosen. INVESCO does charge an annual fee for this service. INVESCO Trust company will only serve as a non-discretionary trustee, this means that there is a person who is the "Named Fiduciary." The Named Fiduciary gives direction to a non-discretionary trustee, and the non-discretionary trustee accepts all directions from the Named Fiduciary. The Named Fiduciary is either the President of the Corporation, the managing partner of the partnership or the self-employed individual of a sole-proprietorship. The Named Fiduciary is responsible for selecting plan investment. The execution page also includes a signature line for the Custodian, if any. Leave the Custodian lines blank if INVESCO Trust Company will act as custodian. Plan number. This paragraph designates the number the Employer assigns to the plan for reporting (Form 5500) purposes. If this is the first plan the Employer ever maintained, the number must be 001. The Employer's plan number does not necessarily correspond to the 3-digit adoption agreement number specified at the top of the first page of the adoption agreement. Consult your Counsel if unsure what 3-digit plan number to use. Instructions for the Participation Agreement This adoption agreement includes a Participation Agreement under which a related group member of the signatory Employer to the execution page may participate in the same plan with that Employer. Each related group member wishing to become a participating Employer should execute a separate Participation Agreement. See Section 1.30 of the Plan for the definition of related Employers. Thus, it is possible to exclude the employees of related group members not participating in the plan. If an Employer is a member of a related group, it should consider whether the inclusion of other related group members' employees is necessary to satisfy the coverage requirements of Code ss.410(b) or the minimum participation requirement of Code ss.401(a)(26). If the Employer determines inclusion of the employees of a related group member is necessary to maintain qualification of the plan, the Employer may take one of two approaches: (1) have the related group member execute a Participation Agreement; or (2) elect in Adoption Agreement Section 1.07 to include the employees of that related group member. Under approach (1), the participation of the related group member will result in the automatic inclusion of the employees of that related group member, without having to specify their inclusion in Adoption Agreement Section 1.07. In addition, the related group member, under approach (1), has the authority to contribute tot he plan and, in the event another participating related group member makes a contribution on behalf of that related group member's employees, the Participation Agreement will ensure the deductibility of that contribution (assuming the contribution does not exceed the deduction limits of Code ss.404). The addendum instructions to the appropriate adoption agreement explain the effect on the allocation of Employer contributions when related group members maintain a single nonstandardized plan. Under approach (2), the plan will retain its qualified status, but contributions the Employer makes on behalf of a nonparticipating related group member's employees may not be deductible (even if otherwise within the limitations of Code ss.404), resulting in an excise tax to the contributing Employer. Unrelated Employers. The Master Plan does not allow the participation in a single plan of unrelated Employers (i.e., Employers that do not satisfy the related group definition in Section 1.30 of the plan). legal\adop-agr\nspspaa.001 EX-99.14BPLANDOC 6 Adoption Agreement #002 Letter Serial No. D346279a Nonstandardized Money Purchase Pension Plan Nonstandardized Money Purchase Pension Plan Features - Maximum employer contributions - Ability to exclude classifications of employees - May enforce last-day requirement for employer contribution - Allows integrated contribution formula Provided by: The Financial Funds Managed & Distributed by INVESCO Funds Group, Inc. Custodian: INVESCO Trust Company A Subsidiary of INVESCO MIM PLC Your Adoption Agreement and Basic Plan Document together constitute the rules and parameters under which your retirement program will operate. Each section of the Adoption Agreement requires the employer to make a selection. Whenever possible (balancing complexity and space constraints) we have provided instructions to the left of key selections. These instructions are intended to assist you, the employer, in choosing the optional provisions for your retirement program. They are not intended to substitute or replace competent advice from your legal counsel or accountant. If further clarification is necessary, contact your advisors or INVESCO Trust Company. We recommend that you obtain the advice of your legal or tax advisor before you sign this Adoption Agreement. ADOPTION AGREEMENT #002 NONSTANDARDIZED MONEY PURCHASE PLAN The undersigned, _______________________________________ ("Employer"), by executing this Adoption Agreement, elects to become a participating Employer in the INVESCO Trust company Defined Contribution Master Plan (basic plan document #01) by adopting the accompanying Plan and Trust in full as if the Employer were a signatory to that Agreement. The employer makes the following elections granted under the provisions of the Master Plan. ARTICLE I DEFINITIONS 1.02 TRUSTEE. The Trustee executing this Adoption Agreement is: (Choose (a) or (b)) (a) A discretionary Trustee, See Section 10.03[A] of the Plan. (b) A nondiscretionary Trustee. See Section 10.03[B] of the Plan. [Note: The Employer may not elect Option (b) if a Custodian executes the Adoption Agreement.] 1.03 PLAN. The name of the Plan as adopted by the Employer is - ---------------------------------------------------------------. 1.07 EMPLOYEE. The following Employees are not eligible to participate in the Plan: (Choose (a) or at least one of (b) through (g)) (a) No exclusions. (b) Collective bargaining employees (as defined in Section 1.07 of the Plan). [Note: If the Employer excludes union employees from the Plan, the Employer must be able to provide evidence that retirement benefits were the subject of good faith bargaining.] (c) Nonresident aliens who do not receive any earned income (as defined in Code ss.911(d)(2)) from the Employer which constitutes United States source income (as defined in Code ss.911(d)(2)) from the Employer which constitutes United States source income (as defined in Code ss.861(a)(3)). (d) Commission Salesmen. (e) Any Employee compensated on a salaried basis. (f) Any Employee compensated on an hourly basis. (g) (Specify) Leased Employees. Any Leased Employee treated as an Employee under Section 1.31 of the Plan, is: (Choose (h) or (i)) (h) Not eligible to participate in the Plan. (i) Eligible to participate in the Plan, unless excluded by reason of an exclusion classification elected under this Adoption Agreement Section 1.07. Related Employers. If any member of the Employer's related group (as defined in Section 1.30 of the Plan) executes a Participation Agreement to this Adoption Agreement, such member's Employees are eligible to participate in this Plan, unless excluded by reason of an exclusion classification elected under this Adoption Agreement Section 1.07. In addition: (Choose (j) or (k)) (j) No other related group member's Employees are eligible to participate in the Plan. (k) The following nonparticipating related group member's Employees are eligible to participate in the Plan unless excluded by reason of an exclusion classification elected under this Adoption Agreement Section 1.07: _______________________________ 1.12 COMPENSATION Treatment of elective contributions. (Choose (a) or (b)) (a) "Compensation" includes elective contributions made by the Employer on the Employee's behalf. (b) "Compensation" does not include elective contributions. Modifications to Compensation definition. (Choose (c) or at least one of (d) through (j)) (c) No modifications other than as elected under Options (a) or (b). (d) The plan excludes Compensation in excess of $_____________. (e) In lieu of the definition in Section 1.12 of the Plan, Compensation means any earnings reportable as W-2 wages for Federal income tax withholding purposes, subject to any other election under this Adoption Agreement Section 1.12. (f) The Plan excludes bonuses. (g) The Plan excludes overtime. (h) The Plan excludes Commissions. (i) The Plan excludes Compensation from a related employer (as defined in Section 1.30 of the Plan) that has not executed a Participation Agreement in this Plan unless, pursuant to Adoption Agreement section 1.07, the Employees of that related employer are eligible to participate in this Plan. (j) (Specify) _______________________________________________. If, for any Plan Year, the Plan uses permitted disparity in the contribution or allocation formula elected under Article III, any election of Options (f), (g), (h) or (j) is ineffective for such Plan Year with respect to any Nonhighly Compensated Employee. 1.17 PLAN YEAR/LIMITATION YEAR. Plan Year. Plan Year means: (Choose (a) or (b)) (a) The 12 consecutive month period ending every _____________. (b) (Specify) ________________________________________________. Limitation Year. The Limitation Year is: (Choose (c) or (d)) (c) The Plan Year. (d) The 12 consecutive month period ending every ______________. 1.18 EFFECTIVE DATE. New Plan. The "Effective Date" of the Plan is __________________. Restated Plan. The restated Effective Date is _________________. This Plan is a substitution and amendment of an existing retirement plan(s) originally established _____________________. (Note: See the Effective Date Addendum.) 1.27 HOUR OF SERVICE. The crediting method for Hours of Service is: (Choose (a) or (b)) (a) The actual method. (b) The ___________________________ equivalency method, except: (1) No exceptions. (2) The actual method applies for purposes of: (Choose at least one) (i) Participation under Article II. (ii) Vesting under Article V. (iii)Accrual of benefits under Section 3.06. [Note: On the blank line, insert "daily," "weekly," "semi-monthly payroll periods" or "monthly."] 1.29 SERVICE FOR PREDECESSOR EMPLOYER. In addition to the predecessor service the Plan must credit by reason of Section 1.29 of the Plan, the Plan credits Service with the following predecessor employer(s): _____________________________________ ______________________________________________________________. Service with the designated predecessor employer(s) applies: (Choose at least one of (a) or (b); (c) is available only in addition to (a) or (b)) (a) For purposes of participation under Article II. (b) For purposes of vesting under Article V. (c) Except the following Service: ____________________________. [Note: If the Plan does not credit any predecessor service under this provision, insert "N/A" in the first blank line. The Employer may attach a schedule to this Adoption Agreement, in the same format as this Section 1.29, designating additional predecessor employers and the applicable service crediting elections.] 1.31 LEASED EMPLOYEES. If a Leased Employee is a Participant in the Plan and also participates in a plan maintained by the leasing organization: (Choose (a) or (b)) (a) The Advisory Committee will determine the Leased Employee's allocation of Employer contributions under Article III without taking into account the Leased Employee's allocation, if any, under the leasing organization's plan. (b) The Advisory committee will reduce a Leased Employee's allocation of Employer contributions under this Plan by the Leased Employee's allocation under the leasing organization's plan, but only to the extent that allocation is attributable to the Leased Employee's service provided to the Employer. The leasing organization's plan: (1) Must be a money purchase plan which would satisfy the definition under Section 1.31 of a safe harbor plan, irrespective of whether the safe harbor exception applies. (2) Must satisfy the features and, if a defined benefit plan, the method of reduction described in an addendum to this Adoption Agreement, numbered 1.31. ARTICLE II EMPLOYEE PARTICIPANTS 2.01 ELIGIBILITY. Eligibility conditions. To become a Participant in the Plan, an Employee must satisfy the following eligibility conditions: (Choose (a) or (b) or both) (a) Attainment of age ___________________ (specify age, not exceeding 21). (b) Service requirement. (Choose one of (1) through (4)) (1) One Year of Service. (2) Two Years of Service, without an intervening Break in Service. See Section 2.03(A) of the Plan. (3) ________________ months (not exceeding 24) following the Employee's Employment Commencement Date. (4) One Hour of Service. Plan Entry Date. "Plan Entry Date" means the Effective Date and: (Choose (c), (d) or (e)) (c) Semi-annual Entry Dates. The first day of the Plan Year and the first day of the seventh month of the Plan Year. (d) The first day of the Plan Year. (e) (Specify entry dates) ____________________________________. Time of Participation. An Employee will become a Participant, unless excluded under Adoption Agreement Section 1.07, on the Plan Entry Date (if employed on that date): (Choose (f), (g) or (h)) (f) immediately following (g) immediately preceding (h) nearest __________________________________________________ the date the Employee completes the eligibility conditions described in Options (a) and (b) of this Adoption Agreement Section 2.01. [Note: The Employer must coordinate the selection of (f), (g) or (h) with the "Plan Entry Date" selection in (c), (d) or (e). Unless otherwise excluded under Section 1.07, the Employee must become a Participant by the earlier of: 91) the first day of the Plan Year beginning after the date the Employee completes the age and service requirements of Code ss.410(a); or (2) 6 months after the date the Employee completes those requirements.] Dual eligibility. The eligibility conditions of this Section 2.01 apply to: (Choose (i) or (j)) (i) All Employees of the Employer, except: (Choose (1) or (2)) (1) No exceptions. (2) Employees who are Participants in the Plan as of the Effective Date. (j) Solely to an Employee employed by the Employer after ________________. If the Employee was employed by the Employer on or before the specified date, the Employee will become a Participant: (Choose (1), (2) or (3)) (1) On the latest of the Effective Date, his Employment Commencement Date or the date he attains age ___________ (not to exceed 21). (2) Under the eligibility conditions in effect under the Plan prior to the restated Effective Date. [For restated plans only] (3) (Specify) ____________________________________________. 2.02 YEAR OF SERVICE - PARTICIPATION. Hours of Service. An Employee must complete: (Choose (a) or (b)) (a) 1,000 Hours of Service (b) ___________ Hours of Service during an eligibility computation period to receive credit for a Year of Service. [Note: The Hours of Service requirement may not exceed 1,000.] Eligibility computation period. After the initial eligibility computation period described in Section 2.02 of the Plan, the Plan measures the eligibility computation period as: (Choose (c) or (d)) (c) The 12 consecutive month period beginning with each anniversary of an Employee's Employment Commencement Date. (d) The Plan Year, beginning with the Plan Year which includes the first anniversary of the Employee's Employment Commencement Date. 2.03 BREAK IN SERVICE - PARTICIPATION. The Break in Service rule described in Section 2.03(B) of the plan: (Choose (a) or (b)) (a) Does not apply to the Employer's Plan. (b) Applies to the Employer's Plan. 2.06 ELECTION NOT TO PARTICIPATE. The Plan: (Choose (a) or (b)) (a) Does not permit an eligible Employee or a Participant to elect not to participate. (b) Does permit an eligible Employee or a Participant to elect not to participate in accordance with Section 2.06 and with the following rules: (Complete (1), (2) (3) and (4)) (1) An election is effective for Plan Year if filed no later than ________________. (2) An election not to participate must be effective for at least ___________________ Plan Year(s). (3) Following a re-election to participate, the Employee or Participant: (i) May not again elect not to participate for any subsequent Plan Year. (ii) May again elect not to participate, but not earlier than the ___________ Plan Year following the Plan Year in which the re-election first was effective. (4) (Specify) ____________________________________________ [Insert "N/A" if no other rules apply]. ARTICLE III EMPLOYER CONTRIBUTIONS AND FORFEITURES 3.01 AMOUNT. The amount of the Employer's annual contribution to the Trust will equal: (Choose (a), (b), (c), (d) or (e); (f) is mandatory if the Employer elects (b) or (c), or Adoption Agreement Section 3.04(b)(2)) (a) Nonintegrated Contribution Formula. ___________% of each Participant's Compensation for the Plan Year. (b) Integrated Contribution Formula. (Complete both percentages) _____% of each Participant's Compensation for the Plan Year in excess of the Integration Level. [Note: The second percentage may not exceed the lesser of the first percentage or the applicable percentage described in the Maximum Disparity Table.] (c) Step-rate Integrated Contribution Formula. (Complete both percentages) ___________% of each Participant's Compensation for the Plan Year which does not exceed the Integration Level, plus __________________% of each Participant's Compensation for the Plan Year in excess of the Integration Level. [Note: The difference between the second percentage and the first percentage may not exceed the lesser of the first percentage or the applicable percentage described in the Maximum Disparity Table.] (d) Flat Contribution Formula. (Choose (1), (2) or (3); (4) is optional only in addition to (2) or (3)) (1) $_____________, subject to the limitations of Part 2 of Article III of the Plan. (2) For each Participant, $_______________ for each ________________________________________________________. (3) For each Participant, _________% of Compensation for each _____________________________________________________. (4) The contribution on behalf of any Participant: (Choose (i) or (iii) (i) May not exceed _____________________________. (ii) May not be less than _______________________. (e) Frozen Plan Formula. This Plan is a frozen Plan effective ________________. The Employer will not contribute to the Plan with respect to any period following that stated date. (f) Integration Level. The Integration Level under the Plan is: (Choose (1) or (2)) (1) __________% (not exceeding 100%) of the taxable wage base, as determined under Section 230 of the Social Security Act in effect on the first day of the Plan Year. (Choose any combination of (i) and (ii) or choose (iii)) (i) Rounded to _____________ (but not exceeding the taxable wage base). (ii) But not greater than $_________________. (iii)Without any further adjustment or limitation. (2) $______________ [Note: Not exceeding the taxable wage base for the Plan Year in which this Adoption Agreement first is effective. Maximum Disparity Table. For purposes of Options (b) and (c) and Adoption Agreement Section 3.04(b)(2), the applicable percentage is: Integration Level (as Applicable percentage of taxable wage base) Percentage 100% 5.7% More than 80% but less than 100% 5.4% More than 20% (but not less than $10,001) and not more than 80% 4.3% 20% (or $10,000, if greater) or less 5.7% Application of contribution formula. The Employer will determine its contribution under Options (a), (b), (c) or (d) by taking into account only the Participants who satisfy the conditions under Section 3.06 for an allocation of Employer contributions and only the Participant's Compensation taken into account under Section 3.06. The Employer contribution on behalf of a Participant may not exceed the Participant's annual additions limitation described in Part 2 of Article III, even if the contribution formula otherwise would require a larger contribution. The Employer will reduce its contribution for a Plan Year if an allocation offset elected by the Employer under Section 3.04 requires reduction of that contribution. Coordination with defined benefit plan. If the Employer maintains a defined benefit plan under which at least one Participant in this Plan participates, the Employer will determine its contribution under Options (a), (b), (c) or (d) by reducing the total contribution, if necessary, to equal the maximum deductible amount under Code ss.404(a)(7). If the Employer must reduce its contribution, the Employer determines its contribution with respect to each Participant by adjusting each percentage under Options (a), (b), (c) or (d) by the same ratio as the reduced total Employer contribution for the Plan Year bears to the total Employer contribution determined without application of Code ss.404(a)(7). The Employer may modify this paragraph by attaching an addendum to this Adoption Agreement, numbered 3.01, setting forth the modified provision. Related Employers. Unless obligated by the joint and several liability provisions of the Code or of ERISA, a related group member, as defined in Section 1.30 of the Plan, may not contribute to this Plan unless it executes a Participation Agreement, even if its Employees are Participants in the Plan. The signatory Employer and any Participating Employer(s) will satisfy the annual contribution under this Section 3.01 as agreed upon by those Employers. A Participating Employer may attach a schedule to this Adoption Agreement, in the same format as this Section 3.01 and Section 3.04, designating separate contribution and allocation formulas. If a Participating Employer attaches a separate contribution/allocation schedule, the contributions, and attributable Participant forfeitures, made by that Participating Employer are allocable only to the Employees of that Participating Employer. If a Participant receives Compensation from more than one contributing Employer and that Participant is subject to two or more contribution/allocation formulas, the Advisory Committee will apply the contribution/allocation formulas, the Advisory Committee will apply the contribution/allocation formulas by prorating among the separate formulas the Participant's Compensation and any integration level applicable to the Participant. 3.04 CONTRIBUTION ALLOCATION Method of Allocation. (Choose (a) or (b); (c) is optional to (a) or (b)) (a) Incorporation of Contribution Formula. Subject to any restoration allocation required under Section 5.04, the Advisory Committee will allocate and credit each annual Employer contribution to the account of each Participant who satisfies the conditions of Section 3.06, in accordance with the contribution formula adopted by the Employer under Adoption Agreement Section 3.01. [Note: The Employer must elect this Option (a) if it elects Adoption Agreement Section 3.01(b), (c), (d)(2) or (d)(3). The Employer may not elect this Option (a) with Adoption Agreement Section 3.01(d)(1).] (b) Allocation Formula Different From Contribution Formula. (Choose (1) or (2)) [Note: The Employer must elect this Option (b) if it elected Adoption Agreement Section 3.01(d)(1). The Employer may not elect this Option (b) if it elected Adoption Agreement Section 3.01(b), (c), (d)(2) or (d)(3). (1) Nonintegrated Allocation Formula. The Advisory Committee will allocate the annual Employer contributions in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (2) Two-Tiered Integrated Allocation Formula - Maximum Disparity. First, the Advisory Committee will allocate the annual Employer contributions in the same ratio that each Participant's Compensation plus Excess Compensation for the Plan Year bears to the total Compensation plus Excess Compensation of all Participants for the Plan Year. The allocation under this paragraph, as a percentage of each Participant's Compensation plus Excess Compensation, must not exceed the applicable percentage (5.6% or 4.3%) listed under the Maximum Disparity Table in Adoption Agreement Section 3.01. A Participant's "Excess Compensation" is his Compensation for the Plan Year in excess of the Integration Level elected under Adoption Agreement Section 3.01(f). The Advisory Committee then will allocate any remaining Employer contributions in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (c) Allocation offset. The Advisory Committee will reduce a Participant's allocation otherwise made under this Section 3.04 by the Participant's allocation under the following qualified plan(s) maintained by the Employer: ________________________________________________________________________________ _______________________________________________________________________________. (1) By treating the term "Employer contribution" as including all amounts paid or accrued by the Employer during the Plan Year to the qualified plan(s) referenced under this Option (c). If a Participant under this Plan also participates in that other plan, the Advisory Committee will treat the amount the Employer contributes for or during a Plan Year on behalf of a Particular Participant under such other plan as an amount allocated under this Plan to that Participant's Account for that Plan Year. The Advisory Committee will make the computation of allocation required under the immediately preceding sentence before making any allocation required by this Section 3.04. (2) In accordance with the formula provided in an addendum to this Adoption Agreement, numbered 3.04(c). Top Heavy Minimum Allocation - Method of Compliance. If a Participant's allocation under this Section 3.04 is less than the top heavy minimum allocation to which he is entitled under Section 3.04(B): (Choose (d) or (e)) (d) the Employer will make any necessary additional contribution to the Participant's Account, as described in Section 3.04(B)(7)(a) of the Plan. (e) The Employer will satisfy the top heavy minimum allocation under the following plan(s) it maintains: ______________________. However, the Employer will make any necessary additional contribution to satisfy the top heavy minimum allocation for an Employee covered only under this Plan and not under the other plan(s) designated in this Option (e). See Section 3.04(B)(7)(b) of the Plan. If the Employer maintains another plan, the Employer may provide in an addendum to this Adoption Agreement, numbered Section 3.04, any modifications to the Plan necessary to satisfy the top heavy requirements under Code ss.416. 3.05 FORFEITURE ALLOCATION. Subject to any restoration allocation required under Sections 5.04 or 9.14, the Advisory Committee will allocate a Participant forfeiture: (Choose (a) or (b); (c) is optional in addition to (a) or (b)) (a) Reduction of Employer contribution. In accordance with Section 3.04, to reduce the Employer contribution for the Plan Year: (Choose (1) or (2)) (1) in which the forfeiture occurs. (2) immediately following the plan Year in which the forfeiture occurs. (b) Increased allocation. In addition to the Employer contribution for the Plan Year in which the forfeiture occurs. The Advisory Committee will allocate the Participant forfeitures for a Plan Year to the Account of each Participant who satisfies the conditions of Section 3.06: (Choose (1) or (2)) (1) in the same ratio that such Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (2) as an Employer contribution for the Plan Year, in accordance with Option (b) of Adoption Agreement Section 3.04, as if the Participant forfeiture were an additional Employer contribution for that Plan Year. (c) First to reduce the Plan's ordinary and necessary administrative expenses for the Plan Year, and then will allocate any remaining forfeitures in the manner described in Option (a) or in Option (b), whichever applies. 3.06 ACCRUAL OF BENEFIT. Compensation Taken Into Account. For the Plan Year in which the Employee first becomes a Participant, the Advisory Committee will determine the contribution/allocation under Adoption Agreement Sections 3.01 and 3.04 by taking into account: (Choose (a) or (b)) (a) The Employee's Compensation for the entire Plan Year. (b) The Employee's Compensation for the portion of the Plan Year in which the Employee actually is a Participant in the Plan. Accrual Requirements. Subject to the suspension of accrual requirements of Section 3.06(E) of the Plan, to receive an allocation of Employer contributions and Participant forfeitures, if any, for the Plan Year, a Participant must satisfy the conditions described in the following elections: (Choose (c), or at least one of (d) through (f) (c) Safe harbor rule. If the Participant is employed by the Employer on the last day of the Plan Year, the Participant must complete at least one Hour of Service for that Plan Year. If the Participant is not employed by the Employer on the last day of the Plan Year, the Participant must complete at least 501 Hours of Service during the Plan Year. (d) Hours of Service condition. The Participant must complete the following minimum number of Hours of Service for the Plan Year: (Choose at least one of (1) through (4)) (1) 1,000 Hours of Service. (2) (Specify, but the number of Hours of Service may not exceed 1,000) _____________________________________. (3) No Hour of Service requirement if the Participant terminates employment during the Plan Year on account of: (Choose at least one of (i) through iii)) (i) Death. (ii) Disability. (iii)Attainment of Normal Retirement Age in the current Plan Year or in a prior Plan Year. (4) _________________ Hours of Service (not exceeding 1,000) if the Participant terminates employment with the Employer during the Plan Year, subject to any election in Option (3). (e) Employment condition. The Participant must be employed by the Employer on the last day of the Plan Year, irrespective of whether he satisfies any Hours of Service condition under Option (c), unless his employment terminates because of: (Choose (1) or at least one of (2) through (4)) (1) No exceptions. (2) Death. (3) Disability. (4) Attainment of Normal Retiement Age in the current Plan Year or in a prior Plan Year. (f) (Specify other conditions, if applicable): _____________________________________________________. Suspension of Accrual Requirements. The suspension of accrual requirements of Section 3.06(E) of the Plan: (Choose (g), (h) or (i)) (g) Applies to the Employer's Plan. (h) Does not apply to the Employer's Plan. (i) Applies in modified form to the Employer's Plan, as described in an addendum to this Adoption Agreement, numbered Section 3.06(E). 3.15 MORE THAN ONE PLAN LIMITATION. If the provisions of Section 3.15 apply, the Excess Amount attributed to this Plan equals: (Choose (a), (b) or (c)) (a) The product of: (i) the total Excess Amount allocated as of such date (including any amount which the Advisory Committee would have allocated but for the limitations of Code ss.415, times (ii) the ratio of (1) the amount allocated to the Participant as of such date under this Plan divided by (2) the total amount allocated as of such date under all qualified defined contribution plans (determined without regard to the limitations of Code ss.415). (b) The total Excess Amount. (c) None of the Excess Amount. 3.18 DEFINED BENEFIT PLAN LIMITATION. Application of limitation. The limitation under Section 3.18 of the Plan: (Choose (a) or (b)) (a) Does not apply to the Employer's Plan because the Employer does not maintain and never has maintained a defined benefit plan covering any Participant in this Plan. (b) Applies to the Employer's Plan. To the extent necessary to satisfy the limitation under Section 3.18, the Employer will reduce: (Choose (1) or (2)) (1) The Participant's projected annual benefit under the defined benefit plan under which the Participant participates. (2) Its contribution or allocation on behalf of the Participant to the defined contribution plan under which the Participant participates and then, if necessary, the Participant's projected annual benefit under the defined benefit plan under which the Participant participates. [Note: If the Employer selects (a), the remaining options in this Section 3.18 do not apply to the Employer's Plan.] Coordination with top heavy minimum allocation. The Advisory Committee will apply the top heavy minimum allocation provisions of Section 3.04(B) of the Plan with the following modifications: (Choose (c) or at least one of (d) and (e)) (c) No modifications. (d) For Non-Key Employees participating only in this Plan, the top heavy minimum allocation is the minimum allocation described in Section 3.04(B) determined by substituting _________% (not less than 4%) for "3%", except: (Choose (i) or (ii)) (i) No exceptions. (ii) Plan Years in which the top heavy ratio exceeds 90%. (e) For Non-Key Employees also participating in the defined benefit plan, the top heavy minimum is: (Choose (1) or (2)) (1) 5% of Compensation (as determined under Section 3.04(B) of the Plan) irrespective of the contribution rate of any Key Employee, except: (Choose (i) or (ii)) (i) No exceptions. (ii) Substituting "7 1/2%" for "5%" if the top heavy ratio does not exceed 90%. (2) 0%. [Note: The employer may not select this Option (2) unless the defined benefit plan satisfies the top heavy minimum benefit requirements of Code ss.416 for these Non-Key Employees.] Actuarial Assumptions for Top Heavy Calculation. To determine the top heavy ratio, the Advisory Committee will use the following interest rate and mortality assumptions to value accrued benefits under a defined benefit plan: _______________________________________________________________________________. If the elections under this Section 3.18 are not appropriate to satisfy the limitations of Section 3.18, or the top heavy requirements under Code ss.416, the Employer must provide the appropriate provisions in an addendum to this Adoption Agreement. ARTICLE V TERMINATION OF SERVICE - PARTICIPANT VESTING 5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is: (Choose (a) or (b)) (a) ____________________ [State age, but may not exceed age 65.] (b) The later of the date the Participant attains __________ years of age or the _________ anniversary of the first day of the Plan Year in which the Participant commenced participation in the Plan. [The age selected may not exceed age 65 and the anniversary selected may not exceed the 5th.] 5.02 PARTICIPANT DEATH OR DISABILITY. The 100% vesting rule under Section 5.02 of the Plan: (Choose (a) or choose one or both of (b) and (c)) (a) Does not apply. (b) Applies to death. (c) Applies to disability. 5.03 VESTING SCHEDULE. The Employer elects the following vesting schedule: (Choose (a) or (b); (c) and (d) are available only in addition to (b)) (a) Immediate vesting. 100% Nonforfeitable at all times. [Note: The Employer must elect Option (a) if the eligibility conditions conditions under Adoption Agreement Section 2.01(b) require 2 years of service or more than 12 months of employment.] (b) Graduated Vesting Schedules. Top Heavy Schedule Non Top Heavy Schedule (Mandatory) (Optional) Years of Nonforfeitable Years of Nonforfeitable Service Percentage Service Percentage Less than 1 _______ Less than 1 _______ 1 _______ 1 _______ 2 _______ 2 _______ 3 _______ 3 _______ 4 _______ 4 _______ 5 _______ 5 _______ 6 or more _______ 6 _______ 7 or more _______ (c) Minimum vesting. A Participant's Nonforfeitable Accrued Benefit will never be less than the lesser of $__________ or his entire Accrued Benefit, even if the application of the graduated vesting schedule under Option (b) would result in a small Nonforfeitable Accrued Benefit. [Note: Under Option (b), the Employer must complete a Top Heavy Schedule which satisfies Code ss.416. The Employer, at its option, may complete a Non Top Heavy Schedule. The Non Top Heavy Schedule must satisfy Code ss.411(a)(2). Also see Section 7.05 of the Plan.] (d) The Top Heavy Schedule under Option (b) applies: (Choose (1) or (2)) (1) Only in a Plan Year for which the Plan is top heavy. (2) In the Plan Year for which the Plan first is top heavy and then in all subsequent Plan Years. [Note: The Employer may not elect Option (d) unless it has completed a Non Top Heavy Schedule.] Life Insurance Investments. The Participant's Accrued Benefit attributable to insurance contracts purchased on his behalf under Article XI is: (Choose (e) or (f)) (e) Subject to the vesting election under Options (a) or (b). (f) 100% Nonforfeitable at all times, irrespective of the vesting election under Option (b). 5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/RESTORATION OF FORFEITED ACCRUED BENEFIT. The deemed cash-out rule described in Section 5.04(C) of the Plan: (Choose (a) or (b)) (a) Does not apply. (b) Will apply to determine the timing of forfeitures for 0% vested Participants. 5.06 YEAR OF SERVICE - VESTING. Vesting computation period. The Plan measures a Year of Service on the basis of the following 12 consecutive month periods: (Choose (a) or (b)) (a) Plan Years. (b) Employment Years. An Employment Year is the 12 consecutive month period measured from the Employee's Employment Commencement Date and each successive 12 consecutive month period measured from each anniversary of that Employment Commencement Date. Hours of Service. The minimum number of Hours of Service an Employee must complete during a vesting computation period to receive credit for a Year of Service is: (Choose (c) or (d)) (c) 1,000 Hours of Service. (d) __________ Hours of Service. [Note: The Hours of Service requirement may not exceed 1,000.] 5.08 INCLUDED YEARS OF SERVICE - VESTING. The Employer specifically excludes the following Years of Service: (Choose (a) or at least one of (b) through (e)) (a) None other than as specified in Section 5.08(a) of the Plan. (b) Any Year of Service before the Participant attained the age of _________________. [Note: The age selected may not exceed age 18.] (c) Any Year of Service during the period the Employer did not maintain this Plan or a predecessor plan. (d) Any Year of Service before a Break in Service if the number of consecutive Breaks in Service equals or exceeds the greater of 5 or the aggregate number of the Years of Service prior to the Break. This exception applies only if the Participant is 0% vested in his Accrued Benefit derived from Employer contributions at the time he has a Bread in Service. Furthermore, the aggregate number of Years of Service before a Break in Service do not include any Years of Service not required to be taken into account under this exception by reason of any prior Break in Service. (e) Any Year of Service earned prior to the effective date of ERISA if the Plan would have disregarded that Year of Service on account of an Employee's Separation from Service under a Plan provision in effect and adopted before January 1, 1974. ARTICLE VI TIME AND METHOD OF PAYMENTS OF BENEFITS Code ss.(d)(6) Protected Benefits. The elections under this Article VI may not eliminate Code ss.411(d)(6) protected benefits. To the extent the elections would eliminate a Code ss.411(d)(6) protected benefit, see Section 13.02 of the Plan. Furthermore, if the elections liberalize the optional forms of benefit under the Plan, the more liberal options apply on the later of the adoption date or the Effective Date of this Adoption Agreement. 6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Distribution date. A distribution date under the Plan means ___________________________________________________________. [Note: The Employer must specify the appropriate date(s). The specified distribution dates primarily establish annuity starting dates and the notice and consent periods prescribed by the Plan. The Plan allows the Trustee an administratively practicable period of time to make the actual distribution relating to a particular distribution date.] Nonforfeitable Accrued Benefit Not Exceeding $3,500. Subject to the limitations of Section 6.01(A)(1), the distribution date for distribution of a Nonforfeitable Accrued Benefit not exceeding $3,500 is: (Choose (a), (b), (c), (d) or (e)) (a) _________________ of the ______________ Plan Year beginning after the Participant's Separation from Service. (b) _________________ following the Participant's Separation from Service. (c) ___________________ of the Plan Year after the Participant incurs ___________________ Break(s) in Service (as defined in Article V). (d) ____________________ following the Participant's attainment of Normal Retirement Age, but not earlier than _____________ days following his Separation from Service. (e) (Specify) ______________________________________________. Nonforfeitable Accrued Benefit Exceeds $3,500. See the elections under Section 6.03. Disability. The distribution date, subject to Section 6.01(A)(3), is: (Choose (f), (g) or (h)) (f) ______________________________________ after the Participant terminates employment because of disability. (g) The same as if the Participant had terminated employment without disability. (h) (Specify) ______________________________________________. Hardship. (Choose (i) or (j) (i) The Plan does not permit a hardship distribution to a Participant who has separated from Service. (j) The Plan permits a hardship distribution to a Participant who has separated from Service in accordance with the hardship distribution policy stated in: (Choose (1) or (2)) (1) Section 6.01(A)(4) of the Plan. (2) The addendum to this Adoption Agreement, numbered Section 6.01, in lieu of the policy stated in Section 6.01(A)(4) of the Plan. Default on a Loan. If a Participant or Beneficiary defaults on a loan made pursuant to a loan policy adopted by the Advisory Committee pursuant to Section 9.04, the Plan: (Choose (k), (l) or (m)) (k) Treats the default as a distributable event only if the Participant has incurred a Separation from Service or has attained Normal Retirement Age. If either condition applies, the Trustee, at the time of the default or, if later, at the time either condition first occurs, will reduce the Participant's nonforfeitable Accrued Benefit by the lesser of the amount in default (plus accrued interest) or the Plan's security interest in that Nonforfeitable Accrued Benefit. (l) Does not treat the default as a distributable event. When an otherwise distributable event first occurs pursuant to Section 6.01 or Section 6.03 of the Plan, the Trustee will reduce the Participant's Nonforfeitable Accrued Benefit by the lesser of the amount in default (plus accrued interest) or the Plan's security interest in that Nonforfeitable Accrued Benefit. (m) (Specify) _______________________________________________. [Note: Option (m) may not treat default as a distributable event earlier than the Participant's Separation from Service unless the Participant has attained Normal Retirement Age.] 6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. The Advisory Committee will apply Section 6.02 of the Plan with the following modifications: (Choose (a) or at least one of (b), (c) and (d)) (a) No modifications. (b) Except as required under Section 6.01 of the Plan, a lump sum distribution is not available: _________________________. (c) An installment distribution: (Choose (1) or at least one of (2) or (3)) (1) Is not available under the Plan. (2) May not exceed the lesser of ________________ years or the maximum period permitted under Section 6.02. (3) (Specify) ___________________________________________. (d) The Plan permits the following annuity options: ___________. [Note: The Employer may specify additional annuity options in an addendum to this Adoption Agreement, numbered 6.02(d).] 6.03 BENEFIT PAYMENT ELECTIONS. Participant Elections After Separation from Service. A Participant who is eligible to make distribution elections under Section 6.03 of the Plan may elect to commence distribution of his Nonforfeitable Accrued Benefit: (Choose at least one of (a) through (c)) (a) As of any distribution date, but not earlier than ________________ of the ______________ Plan Year beginning after the Participant's Separation from Service. (b) As of the following date(s): (Choose at least one of Options (1) through (6)) (1) Any distribution date after the close of the Plan Year in which the Participant attains Normal Retirement Age. (2) Any distribution date following his Separation from Service. (3) Any distribution date in the _________________ Plan Year(s) beginning after his Separation from Service. (4) Any distribution date in the Plan Year after the Participant incurs __________________ Break(s) in Service (as defined in Article V). (5) Any distribution date following attainment of age ________________ and completion of at least _____________ Years of Service (as defined in Article V). (6) (Specify) _________________________________________. (c) (Specify) ______________________________________________. Participant Elections Prior to Separation from Service. Subject to the restrictions of Article VI, the following distribution options apply under the Employer's Plan prior to a Participant's Separation from Service. (Choose (d) or at least one of (e) and (f) (d) No distribution options prior to Separation from Service. (e) Attainment of Normal Retirement Age. Until he retires, the Participant has a continuing election to receive all or any portion of his Nonforfeitable Accrued Benefit after he attains Normal Retirement Age. (f) Specify) ____________________________________. [Note: Option (f) may not permit in service distributions prior to attainment of Normal Retirement Age.] ARTICLE IX ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICI- PANTS' ACCOUNTS 9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. If a distribution (other than a distribution from a segregated Account) occurs more than 90 days after the most recent valuation date, the distribution will include interest at: (Choose (a), (b) or (c)) (a) _________________% per annum. [Note: The percentage may equal 0%.) (b) The 90 day Treasury bill rate in effect at the beginning of the current valuation period. (c) (Specify) _________________________________________________. ARTICLE X TRUSTEE AND CUSTODIAN, POWERS AND DUTIES 10.14 VALUATION OF TRUST. In addition to each Accounting Date, the Trustee must value the Trust Fund on the following valuation date(s): (Choose (a) or (b)) (a) No other mandatory valuation dates. (b) (Specify) _____________________________________________. EFFECTIVE DATE ADDENDUM (Restated Plans Only) The Employer must complete this addendum only if the restated Effective Date specified in Adoption Agreement Section 1.18 is different than the restated effective date for at least one of the provisions listed in this addendum. In lieu of the restated Effective Date in Adoption Agreement Section 1.18, the following special effective dates apply: (Choose whichever elections apply) (a) Compensation definition. The Compensation definition of Section 1.12 (other than the $200,000 limitation) is effective for Plan Years beginning after ____________________________. [Note: May not be effective later than the first day of the first Plan Year beginning after the Employer executes this Adoption Agreement to restate the Plan for the Tax Reform Act of 1986, if applicable.] (b) Eligibility conditions. the eligibility conditions specified in Adoption Agreement Section 2.01 are effective for Plan Years beginning after ______________________________. (c) Suspension of Years of Service. The suspension of Years of Service rule elected under Adoption Agreement Section 2.03 is effective for Plan Years beginning ___________________________. (d) Contribution/allocation formula. The contribution formula elected under Adoption Agreement Section 3.01 and the method of allocation elected under Adoption Agreement Section 3.04 is effective for Plan Years beginning after ______________________________________. (e) Reallocation of Forfeitures. The reallocation of forfeitures under Section 3.05 applies to Plan Years beginning after ________________________________. [Note: The date specified may not be earlier than December 31, 1985.] (f) Accrual requirements. The accrual requirements of Section 3.06 are effective for Plan Years beginning after _____________________________. (g) Employment condition. The employment condition of Section 3.06 is effective for Plan Years beginning after _____________________________. (h) Vesting Schedule. The vesting schedule elected under Adoption Agreement Section 5.03 is effective for Plan Years beginning after ______________________________. (i) (Specify) ______________________________________________. For Plan Years prior to the special Effective Date, the terms of the Plan prior to its restatement under this Adoption Agreement will control for purposes of the designated provisions. A special Effective Date may not result in the delay of a Plan provision beyond the permissible Effective Date under any applicable law requirements. Execution Page The Trustee (and Custodian, if applicable), by executing this Adoption Agreement, accepts its position and agrees to all of the obligations, responsibilities and duties imposed upon the Trustee (or Custodian) under the Master Plan and Trust. The Employer hereby agrees to the provisions of this Plan and Trust, and in witness of its agreement, the Employer by its duly authorized officers, has executed this Adoption Agreement, and the Trustee (and Custodian, if applicable) signified its acceptance on this _______________ day of ______________________, 19_____. Name and EIN of Employer: ____________________________________ Signed: ______________________________________________________ Name(s) of Trustee: __________________________________________ ______________________________________________________________ Signed: ______________________________________________________ ______________________________________________________________ Name of Custodian: ___________________________________________ Signed: ______________________________________________________ [Note: A Trustee is mandatory, but a Custodian is optional. See Section 10.03 of the Plan.] Plan Number. The 3-digit plan number the Employer assigns to this Plan for ERISA reporting purposes (Form 5500 Series) is: ____________. Use of Adoption Agreement. Failure to complete properly the elections in this Adoption Agreement may result in disqualification of the Employer's Plan. The 3-digit number assigned to this Adoption Agreement (see page 1) is solely for the Master Plan Sponsor's recordkeeping purposes and does not necessarily correspond to the plan number the Employer designated in the prior paragraph. Master Plan Sponsor. The Master Plan Sponsor identified on the first page of the basic plan document will notify all adopting employees of any amendment of this Master Plan of any abandonment or discontinuance by the Master Plan Sponsor of its maintenance of this Master Plan. For inquiries regarding the adoption of the Master Plan, the Master Plan Sponsor's intended meaning of any plan provisions or the effect of the opinion letter issued to the Master Plan Sponsor, please contact the Master Plan Sponsor, please contact the Master Plan Sponsor at the following address and telephone number: INVESCO Trust Company, 7800 E. Union Ave., Denver, Colorado (303) 799-0731. Reliance on Opinion Letter. The Employer may not rely on the Master Plan Sponsor's opinion letter covering this Adoption Agreement. For reliance on the Plan's qualification, the Employer must obtain a determination letter from the applicable IRS Key District Office. PARTICIPATION AGREEMENT For Participation by Related Group Members (Plan Section 1.30) The undersigned Employer, by executing this Participation Agreement, elects to become a Participating Employer in the Plan identified in Section 1.03 of the accompanying Adoption Agreement, as if the Participating Employer were a signatory to that Agreement. The Participating Employer accepts, and agrees to be bound by, all of the elections granted under the provisions of the Adoption Agreement. 1. The Effective Date of the undersigned Employer's participation in the designated Plan is: __________________________. 2. The undersigned Employer's adoption of this Plan constitutes: (a) The adoption of a new plan by the Participating Employer. (b) The adoption of an amendment and restatement of a plan currently maintained by the Employer, identified as __________________, and having an original effective date of --------------------. Dated this ________ day of _____________________, 19_________. Name of Participating Employer: ________________________________ Signed: ________________________________________________________ Participating Employer's EIN:___________________________________ Acceptance by the Signatory Employer to the Execution Page of the Adoption Agreement and by the Trustee. Name of Signatory Employer: ____________________________________ Accepted: ______________________________________________________ [Date] Signed: ________________________________________________________ Name(s) of Trustee: ____________________________________________ Accepted: ______________________________________________________ [Date] Signed: ________________________________________________________ [note: Each Participating Employer must execute a separate Participation Agreement. See the Execution Page of the Adoption Agreement for important Master Plan information.] NS MP AA Instructions Complete the first blank in the paragraph by writing in the business' name in its entirety. 1.02 Trustee Option (a) should be chosen when the employer will be the trustee. INVESCO Trust Company would then act as Custodian. If option (b) is chosen, INVESCO Trust Company will charge an annual trust fee. Note: See Trustee Comments on page 16 for further explaination of Non-discretionary Trustee. 1.03 Plan Enter the plan name. Example: ABC Inc. Money Purchase Pension Plan. 1.07 Employee If you want the plan to cover all types of employees, select option (a). If you want to exclude from the plan any group(s) of employees, select any combination of (b) through (g). When a retirement plan excludes employees in options (d) through (g) from participation, the plan is subject to a minimum coverage test to maintain its "tax qualified" status. Your accounting firm should be notified to perform the test annually. Leased Employees You may exclude leased employees from participation (option h). However, the plan must satisfy the coverage rules of Code Section 410(b) and 401(a)(25), consult your legal or financial counsel. Related Employers You may exclude related employers from participating in the plan (option j). However, the plan must satisfy the coverage rules of Code Section 410(b) and 401(a)(26), consult your legal or financial counsel. 1.12 Compensation Treatment of elective contributions - Choose option (a) if you prefer to "add back" employee elective 401(k), contributions to compensation for purposes of allocating employer contributions, forfeitures and for non-discrimination testing. Modifications to Compensation Modifications to Compensation - You must choose option (C) or any combination of (d) through (j). Any exclusion of compensation may result in unallowable discrimination, your accountant may want to test for any discriminatory effect of excluding any type of compensation. 1.17 Plan Year You must define the "plan year," usually it will follow the business tax year. Limitation Year - You must define the "limitation year" (12 month period for testing allocations to each employee's account), for administrative convenience it should match the plan year. 1.18 Effective Date New Plan - Enter the first day of your plan year (usually January 1) and the year. Restated Plan - Effective date - if you are amending for the Tax Reform Act of 1986 enter: January 1, 1987. If you are amending for another reason, enter the first day of your tax year, example: January 1, 1990. Original established date - - Enter the original effective date of your plan from your prior Adoption Agreement. 1.27 Hours of Service Choose which method you wish to use for counting hours worked by an employee to accrue benefits. Option (b), the equivalency method, is explained in Section 1.27 of the plan. Option (a) is usually chosen. 1.29 Service for Predecessor Employer Under this option, you may elect to count service for a predecessor employer when you are not maintaining the plan of the predecessor employer. (Used primarily in the event of a merger or acquisition.) 1.31 Leased Employees The law requires you to state how your plan would treat a leased employee who could become a participant, even if you don't intend to ever lease employees. Choose option (a) covering the employee without regard to the leasing company's plan or option (b) the reduction method. Usually Option (b)(1) is chosen. 2.01 Eligibility a. An employee must attain this age to become a participant (cannot exceed age 21). b. Pick how long (service) an employee must work to become a participant. Plan Entry - Choose when employees enter the plan for purposes of contributions and benefit accrual. Normally, option (c), semi- annual entry dates, is chosen. Time of Participation - Choose which plan entry date (before or after) an employee who meets the eligibility requirements will enter the plan. Normally, option (f) is chosen. Dual Eligibility - This section allows you to include the plan current employees who have not met the eligibility requirements and apply the eligibility requirements to newly hired employees. Restated plans usually chose (i)(2). 2.02 Years of Service Option (b) should only be chosen if you wish to require less than 1000 hours to be worked by an employee for eligibility. Usually Option (a) is chosen. Eligibility Computation Period - Choose whether to measure subsequent eligibility periods on the employee's anniversary or the plan year. Option (d) is chosen for administrative convenience. 2.03 Break In Service This option may impose a complicated re-entry date for employees who have termination or whose hours were severely cut back. Option (a) is chosen for administrative convenience. 2.06 Election Not To Participate this option allows employees and participants to elect out of participation. However, these employees are considered when performing all non-discrimination tests. Option (a) is chosen for administrative convenience. 3.01 Contributions and Forfeitures Amount - The employer must select a definite contribution formula under a money purchase pension plan. Options (a) and (d) are nonintegrated formulas, options (b) and (c) are integrated formulas. Option (d) allows the employer to choose a fixed amount for the contribution regardless of compensation (options (d)(1) or (d)(2). Alternatively, the employer may choose a fixed percentage of compensation, based upon units of time, (option (d)(3)). The employer may choose optoin (d)(4) only in addition to options (d)(2) or (d)(3). Option (d)(4) allows the employer to establish both a maximum and/or a minimum contribution. Options (b) and (c) are two approaches to allowing permitted disparity in he contribution formula. Option (b) applies the first percentage to a participant's total compensation. Option (C) applies the first percentage only to compensation not exceeding an integration level. 3.04 Contribution Allocation There are two approaches for allocating (dividing up) the contribution to participants. Option (a) mirrors the contribution formula chosen in Section 3.01. Option (a) must be chosen if the employer chose either integrated contribution formula 3.01(a) or (b) of if the employer chose 3.01(d)(2) or (d)(3). Option (b) allows the employer to take a "profit sharing" approach to allocating the contribution if the employer chose a fixed percentage or amount in Section 3.01. Under option (b) the employer has the choice of pro-rate (nonintegrated) or a two-tiered integrated formula. Option (c) is available only in addition to options (a) and (b). Option (c) reduces a participant's allocation under this plan by an amount accrued under the employer's other specified plan. 3.05 Forfeiture Allocation Choose the method of allocating (dividing up) forfeitures of terminated non-vested participant balances. Option (a) allocates forfeitures to reduce employer contributions. Option (b) allocates forfeitures to increase employer allocations. 3.06 Compensation Taken Into Account If you wish to count a participant's full year's compensation (even if he or she entered during the year), for contributions choose option (a), if not, choose Option (b). Accrual Requirements - Specify the service requirements a participant must satisfy to receive an allocation. You may specify an hours of service requirement, waive the service requirement for specific contributions and/or require the participant to be employed on the last day to receive a contribution. Suspension of Accrual Requirements This section allows you to suspend some or all of the accrual requirements found in Section 3.06(E) of the plan for participants to receive allocations. This would apply in plan years when a plan may not satisfy coverage and participation requirements. For administrative convenience choose option (g). 3.15 More Than One Plan This section only applies if you (the employer) maintain another defined contribution plan (e.g.: profit sharing, money purchase, 401(k) or target benefit) that covers at least one participant in this plan. 3.18 Defined Benefit Limitation Check option (a) if you have never maintained a defined benefit plan for any participants in this plan. If you have or are currently maintaining a defined benefit under option (b), choose which plan's benefit would be reduced if a participant's total allocations for a year were to exceed the allowable limit. 5.01 Normal Retirement Age Choose what age you (the employer) want the participants to be 100% vested in their benefits, if still employed (normal retirement age). 5.02 Vesting: Death/Disability You may choose to allow 100% vesting to participants that terminate from service because of death, option (b) or disability, option (c). 5.03 Vesting Schedule Choose what vesting schedule(s) you want to apply to employer discretionary contributions and matching contributions. If you choose option (b), you must at a minimum complete the top-heavy vesting schedule. Remember, if the eligibility requirements are more than one year, option (a) must be chosen. Complete the Top Heavy Schedule based upon the following: Years of Service 1 2 (not less than 20%) 3 (not less than 40%) 4 (not less than 60%) 5 (not less than 80%) 6 (not less than 100%) Optional: Complete the Non Top Heavy Schedule based upon the following: Years of Service or 1 1 0% 2 2 0 3 (not less than 20%) 3 0 4 (not less than 40% 4 0 5 (not less than 60%) 5 100 6 (not less than 80%) 7 (not less than 100%) 5.04 Cash-Out Rule If option (b) is chosen, the plan treats a 0% vested terminated participant has having received a distribution, allowing for forfeitures to be reallocated to active participants. 5.06 Years of Service Choose what measuring period the plan should use to determine years of service for vesting, employee's anniversary year or plan year. For ease of administration choose option (a). 5.08 Prior Years of Service - Vesting By choosing options (b) through (e) you (the employer) may exclude some prior years of service for purposes of vesting. Article 6 The employer must establish a specific distribution policy for the plan. Treas. Reg. 1.411(d)-4 prohibits the Employer, the advisory committee or any third party to retain discretion over when or in what form to pay the participant's benefit (Option Forms of Benefit). Under a restated plan, the elections under Article VI, to the extent they differ from previous plan provisions regarding optional forms of benefit, may not eliminate an optional form of benefit with respect to the account balance accrued as of the date the Employer executes the restated adoption agreement (or, if later, the effective date of that restated adoption agreement). An optional form of benefit includes the form of payment (e.g., lump sum or installments), the timing of payment (e.g., immediately after separation from service, following a break in service, after attaining normal retirement age) and the medium of payment (e.g., right to elect distribution in Employer securities, right to elect distribution in the form of an annuity contract). With this in mind, if you are restating an existing plan, pay close attention to the distribution features under that document and your administrative practice of distributions. In all cases, try to mirror or liberalize those distribution features when restating onto this document. 6.01 Distribution Date A distribution date establishes a predetermined "target" date in a plan year when the plan will offer distributions. The actual distribution may occur later than a distribution date as long as the actual distribution is within an "administratively reasonable period of time" from the distribution date. A typical distribution date for money purchase plans would be 60 days after the plan year end. Nonforfeitable Accrued Benefit Not Exceeding $3500. When a separated participants vested balance does not exceed $3500, the plan allows the employer to separately establish the timing of these distributions, separate from the distribution dates. When you complete this section, you need to balance two concerns: 1) will the timing of the distribution cause the participant to consider it a "severance benefit" and therefore encourage separation from service and 2) the administrative concerns of carrying a non-active account in the plan. Usually an employer chooses Option (a) and writes in "the first distribution date" of the "first" plan year beginning after the Participant's separation from service. Disability - The plan allows you (the employer) to establish a different target payout date for disability distributions in options (f) and (h). Usually an employer chooses Option (g). Hardship - This option states whether or not the plan would allow a separated participant to receive a hardship distribution, prior to receiving a total distribution of his/her vested account balance. Default on a Loan - This election does not create a loan policy. You (the employer) must elect the timing of the plan's foreclosure if a participant's loan were to be defaulted upon even if you do not intend to offer loans in your plan. 6.02 Method of Payment Money purchase pension plans require payouts to be in the form of a commercial annuity unless properly waived. The employer may in options (b) and (c), if this is a new plan, limit the alternative method of payment. Caution: an employer cannot eliminate a prior method of payment by restating the plan onto this document. 6.03 Participant Elections after Separation from Service You must choose when an employee who has separated from service, with a vested benefit greater than $3500, may elect to commence distributions. This election will be tied directly to the "distribution date" definition earlier. Participant Elections Prior to Separation from Service The following distribution elections apply to employer discretionary account regardless of vested account balances, prior to employment separation. If you prefer not to allow any distribution options from these accounts prior to separation, select option (d). 9.10 Value of Benefit This option allows the employer to add interest to a participant's balance, if a distribution occurs more than 90 days after the most recent plan valuation. You do not have to provide an interest addition under this section and may complete option (a) with 0%. 10.14 Valuation of Trust You may use this option to specify mandatory valuation dates, in addition to the accounting date. Normally, option (a) is chosen. Instructions for Effective Date Addendum You must complete the effective date addendum only if the effective dates of any of the listed items (a) through (j) have an effective date other than your restated effective date in adoption agreement section 1.18. Since some provisions in the Tax Reform Act of 1986 were not effective until 1988 or 1989 the few provisions (if any) that have later effective dates must specify when they are effective. a. Compensation definition may not be later than the first day of your 1991 plan year. b. Eligibility conditions may not be later than the first day of your 1989 plan year. c. Suspension of years of service may not be earlier than the first day of your 1990 plan year. d. Contribution/allocation formula may not be earlier than the first day of your 1989 plan year. e. Reallocation of forfeitures may not be earlier than December 31, 1985. f. Accrual requirements may not be earlier than the first day of your 1989 plan year. g. Employment condition may not be earlier than the first day of your 1991 plan year. h. Vesting schedule may not be later than the first day of your 1989 plan year. i. Allocation of Earnings may not be earlier than the first day of the 1990 plan year. Execution Page The Employer must complete the date on which it executes the adoption agreement and must execute the signature for the Employer. The execution page provides two lines above the signature line to print or type the name of the Employer and the Employer's EIN. If the Employer is a sole proprietorship, the individual sole proprietor should execute as Employer. If the Employer is a corporation or a partnership, an officer or a partner, as applicable, should execute the adoption agreement on behalf of the Employer. Trustee If you selected option (a) of Section 1.02, then the employer will be the Trustee. An individual must sign as trustee for the employer. INVESCO Trust Company will then act as custodian. If you choose to have INVESCO Trust Company act as "Trustee" then option (b) of Section 1.02 must be chosen. INVESCO does charge an annual fee for this service. INVESCO Trust Company will only serve as a non-discretionary trustee, this means that there is a person who is the "Named Fiduciary." The Named Fiduciary gives direction to a non-discretionary trustee, and the non-discretionary trustee accepts all directions from the Named Fiduciary. The Named Fiduciary is either the President of the Corporation, the managing partner of the partnership or the self-employed individual of a sole-proprietorship. The Named Fiduciary is responsible for selecting plan investment. The execution page also includes a signature line for the Custodian, if any. Leave the Custodian lines blank if INVESCO Trust Company will act as custodian. Plan number. This paragraph designates the number the Employer assigns to the plan for reporting (Form 5500) purposes. If this is the first plan the Employer ever maintained, the number must be 001. The Employer's plan number does not correspond to the 3- digit adoption agreement number specified at the top of the first page of the adoption agreement. Consult your Counsel if unsure what 3-digit plan number to use. Instructions for the Participation Agreement This adoption agreement includes a Participation Agreement under which a related group member of the signatory Employer to the execution page may participate in the same plan with that Employer. Each related group member wishing to become a participating Employer should execute a separate Participation Agreement. See Section 1.30 of the Plan for the definition of related Employers. Thus, it is possible to exclude the employees of related group members not participating in the plan. If an Employer is a member of a related group, it should consider whether the inclusion of other related group members' employees is necessary to satisfy the coverage requirements of Code ss.410(b) or the minimum participation requirement of Code ss.401(a)(26). If the Employer determines inclusion of the employees of a related group member is necessary to maintain qualification of the plan, the Employer may take one of two approaches: (1) have the related group member execute a Participation Agreement; or (2) elect in Adoption Agreement Section 1.07 to include the employees of that related group member. Under approach (1), the participation of the related group member will result in the automatic inclusion of the employees of that related group member, without having to specify their inclusion in Adoption Agreement Section 1.07. In addition, the related group member, under approach (1), has the authority to contribute to the plan and, in the event another participating related group member makes a contribution on behalf of that related group member's employees, the Participation Agreement will ensure the deductibility of that contribution (assuming the contribution does not exceed the deduction limits of Code ss.404). Additional instructions to the appropriate adoption agreement explain the effect on the allocation of Employer contributions when related group members maintain a single nonstandardized plan. Please contact us. Under approach (2), the plan will retain its qualified status, but contributions the Employer makes on behalf of a nonparticipating related group member's employees may not be deductible (even if otherwise within the limitations of Code ss.404), resulting in an excise tax to the contributing Employer. Unrelated Employers. The Master Plan does not allow the participation in a single plan of unrelated Employers (i.e., Employers that do not satisfy the related group definition in Section 1.30 of the Plan). legal\adop-agr\nsmpaa.002 EX-99.14CPLANDOC 7 Adoption Agreement #003 Letter Serial No. D246280a Standardized Profit Sharing Plan Adoption Agreement Features of Standardized Profit Sharing Plan - - Allows for integration of contributions with Social Security - - Incorporates top-heavy vesting schedule - - May be paired with INVESCO Money Purchase Pension Plans Provided by: The Financial Funds Managed & Distributed by INVESCO Funds Group, Inc. Custodian: INVESCO Trust Company A Subsidiary of INVESCO MIM PLC Your Adoption Agreement and Basic Plan Document together constitute the rules and parameters under which your retirement program will operate. Each section of the Adoption Agreement requires the employer to make a selection. Whenever possible (balancing complexity and space constraints) we have provided instructions to the left of key selections. These instructions are intended to assist you, the employer, in choosing the optional provisions for your retirement program. They are not intended to substitute or replace competent advice from your legal counsel or accountant. If further clarification is necessary, contact your advisors or INVESCO Trust Company. We recommend that you obtain the advice of your legal or tax advisor before you sign this Adoption Agreement. ADOPTION AGREEMENT #003 STANDARDIZED PROFIT SHARING PLAN (PAIRED PROFIT SHARING PLAN) The undersigned, --------------------------------------------- ("Employer"), by executing this Adoption Agreement, elects to become a participating Employer in the INVESCO Trust Company Defined Contribution Master Plan (basic plan document #01) by adopting the accompanying Plan and Trust in full as if the Employer were a signatory to that Agreement. The employer makes the following elections granted under the provisions of the Master Plan. ARTICLE I DEFINITIONS 1.02 trustee. The Trustee executing this Adoption Agreement is: (Choose (a) or (b)) (a) A discretionary Trustee, See Section 10.03[A] of the Plan. (b) A nondiscretionary Trustee. See Section 10.03[B] of the Plan. [Note: The Employer may not elect Option (b) if a Custodian executes the Adoption Agreement.] 1.03 PLAN. The name of the Plan as adopted by the Employer is - -------------------------------------------------------------. 1.07 EMPLOYEE. The following Employees are not eligible to participate in the Plan: (Choose (a) or at least one of (b) or (c)) (a) No exclusions. (b) Collective bargaining employees (as defined in Section 1.07 of the Plan). [Note: If the Employer excludes union employees from the Plan, the Employer must be able to provide evidence that retirement benefits were the subject of good faith bargaining.] (c) Nonresident aliens who do not receive any earned income (as defined in Code ss.911(d)(2) from the Employer which constitutes United States source income (as defined in Code ss.861(a)(3)). Related Employers/Leased Employees. An Employee of any member of the Employer's related group (as defined in Section 1.30 of the Plan), and any Leased Employee treated as an Employee under Section 1.31 of the Plan, is eligible to participate in the Plan, unless excluded by reason of Options (b) or (c). [Note: A related group member may not contribute to this Plan unless it executes a Participation Agreement, even if its Employees are Participants in the Plan.] 1.12 COMPENSATION Treatment of elective contributions. (Choose (a) or (b)) (a) "Compensation" includes elective contributions made by the Employer on the Employee's behalf. (b) "Compensation" does not include elective contributions. Modifications to Compensation definition. (Choose (c) or at least one of (d) and (e)) (c) No modifications other than as elected under Options (a) or (b). (d) The Plan excludes Compensation in excess of $-----------------. (e) In lieu of the definition in Section 1.12 of the Plan, Compensation means any earnings reportable as W-2 wages for Federal income tax withholding purposes, subject to any other election under this Adoption Agreement Section 1.12. 1.17 PLAN YEAR/LIMITATION YEAR. Plan Year. Plan Year means: (Choose (a) or (b)) (a) The 12 consecutive month period ending every ---------------. (b) (Specify) --------------------------------------------------. Limitation Year. The Limitation Year is: (Choose (c) or (d)) (c) The Plan Year. (d) The 12 consecutive month period ending every ---------------. 1.18 EFFECTIVE DATE. New Plan. The "Effective Date" of the Plan is ------------------. Restated Plan. The restated Effective Date is ------------------. This Plan is a substitution and amendment of an existing retirement plan(s) originally established ----------------------. (Note: See the Effective Date Addendum.) 1.27 HOUR OF SERVICE. The crediting method for Hours of Service is: (Choose (a) or (b)) (a) The actual method. (b) The ------------------------ equivalency method, except: (1) No exceptions. (2) The actual method applies for purposes of: (Choose at least one) (i) Participation under Article II. (ii) Vesting under Article V. (iii)Accrual of benefits under Section 3.06. [Note: On the blank line, insert "daily," "weekly," "semi-monthly payroll periods" or "monthly."] 1.29 SERVICE FOR PREDECESSOR EMPLOYER. In addition tot he predecessor service the Plan must credit by reason of Section 1.29 of the Plan, the Plan credits Service with the following predecessor employer(s): - -------------------------. Service with the designated predecessor employer(s) applies: (Choose at least one of (a) or (b)) (a) For purposes of participation under Article II. (b) For purposes of vesting under Article V. [Note: If the Plan does not credit any predecessor service under this provision, insert "N/A" in the first blank line. The Employer may attach a schedule to this Adoption Agreement, in the same format as this Section 1.29, designating additional predecessor employers and the applicable service crediting elections.] 1.31 LEASED EMPLOYEES. If a Leased Employee participates in a save harbor money purchase plan (as described in Section 1.31) maintained by the leasing organization, but the Employer is not eligible for the safe harbor plan exception: (Choose (a) or (b)) (a) The Advisory Committee will determine the Leased Employee's allocation of Employer contributions under Article III without taking into account the Leased Employee's allocation under the safe harbor plan. (b) The Advisory Committee will reduce the Leased Employee's allocation of Employer contributions under this Plan by the Leased Employee's allocation under the safe harbor plan, but only to the extent that allocation is attributable to the Leased Employee's service provided to the Employer. [Note: The Employer may not elect Option (b) if a Paired Plan or any other plan of the Employer makes a similar reduction for the same plan of the leasing organization.] ARTICLE II EMPLOYEE PARTICIPANTS 2.01 ELIGIBILITY. Eligibility conditions. To become a Participant in the Plan, an Employee must satisfy the following eligibility conditions: (Choose (a) or (b) or both) (a) Attainment of age -------------------- (specify age, not exceeding 21). (b) Service requirement. (Choose one of (1) through (4)) (1) One Year of Service. (2) Two Years of Service, without an intervening Break in Service. See Section 2.03(A) of the Plan. (3) ------------months (not exceeding 24) following the Employee's Employment Commencement Date. (4) One Hour of Service. Plan Entry Date. "Plan Entry Date" means the Effective Date and: (Choose (c), (d) or (e)) (c) Semi-annual Entry Dates. The first day of the Plan year and the first day of the seventh month of the Plan Year. (d) The first day of the Plan Year. (e) (Specify entry dates) -------------------------------. Time of Participation. An Employee will become a Participant, unless excluded under Adoption Agreement Section 1.07, on the Plan Entry Date (if employed on that date): (Choose (f), (g) or (h)) (f) immediately following (g) immediately preceding (h) nearest the date the Employer completes the eligibility conditions described in Options (a) and (b) of this Adoption Agreement Section 2.01. [Note: The Employer must coordinate the selection of (f), (g) or (h) with the "Plan Entry Date" selection in (c), (d) of (e). Unless otherwise excluded under Section 1.07, the Employee must become a Participant by the earlier of: (1) the first day of the Plan Year beginning after the date the Employee completes the age and service requirements of Code ss.410(a); or (2) 6 months after the date the Employee completes those requirements.] Dual eligibility. The eligibility conditions of this Section 2.01 apply to: (Choose (i) or (j)) (I) All Employees of the Employer, except: (Choose (1) or (2)) (1) No exceptions (2) Employees who are Participants in the Plan as of the Effective Date. (j) Solely to an Employee employed by the Employer after ----------------------. If the Employee was employed by the specified date, the Employee will become a Participant: (Choose (1) or (2)) (1) On the latest of the Effective Date, his Employment Commencement Date or the date he attains age ------------------- (not to exceed 21). (2) Under the eligibility conditions in effect under the Plan prior to the restated Effective Date. [For restated plans only] 2.02 YEAR OF SERVICE - PARTICIPATION. Hours of Service. An Employee must complete: (Choose (a) or (b)) (a) 1,000 Hours of Service (b) ------------------------ Hours of Service during an eligibility computation period to receive credit for a Year of Service. [Note: The Hours of Service requirement may not exceed 1,000. Eligibility computation period. After the initial eligibility computation period described in Section 2.02 of the Plan, the Plan measures the eligibility computation period as: (Choose (c) or (d)) (c) The 12 consecutive month period beginning with each anniversary of an Employee's Employment Commencement Date. (d) The Plan year, beginning with the Plan Year which includes the first anniversary of the Employee's Employment Commencement Date. 2.03 BREAK IN SERVICE - PARTICIPATION. The Break in Service rule described in Section 2.03(B) of the Plan: (Choose (a) or (b)) (a) Does not apply to the Employer's Plan. (b) Applies to the Employer's Plan. ARTICLE III EMPLOYER CONTRIBUTIONS AND FORFEITURES 3.01 AMOUNT. The amount of the Employer's annual contribution to the Trust will equal: (Choose (a), (b), (c) or (d)) (a) The amount (or additional amount) the Employer may from time to time deem advisable. (b) -----------------% of the Compensation of all Participants under the Plan, determined for the Employer's taxable year for which it makes the contribution, [Note: The percentage selected may not exceed 15%.] (c) ----------------% of Net Profits but not more than $--------------. (d) This Plan is a frozen Plan effective ---------------. The Employer will not contribute to the Plan with respect to any period following the stated date. Net Profits. The Employer: (Choose (e) or (f)) (e) Need not have Net Profits to make its annual contribution under this Plan. (f) Must have current or accumulated Net Profits exceeding $----------------- to make the contributions described in Option - ------------------. The term "Net Profits" means the Employer's net income or profits for any taxable year determined by the Employer upon the basis of its books of account in accordance with generally accepted accounting practices consistently applied without any deductions for Federal and state taxes upon income or for contributions made by the Employer under this Plan or under any other employee benefit plan the Employer maintains. If more than one member of a related group (as defined in Section 1.30) execute this Adoption Agreement, each participating member separately will determine Net Profits. "Net Profits" includes both current and accumulated net profits. The term "net Profits" specifically excludes: - ---------------------------------------------------------------. [Note: Enter "N/A" if no exclusions apply.] 3.04 CONTRIBUTION ALLOCATION. Method of Allocation. Subject to any restoration allocation required under Section 5.04, the Advisory Committee will allocate and credit each annual Employer contribution (and Participant forfeitures, if any) to the Account of each Participant who satisfies the conditions of Section 3.06, in accordance with the allocation method selected under this Section 3.04. (Choose an allocation method under (a), (b), (c) or (d); (e) is mandatory if the Employer elects (b), (c) or (d)) (a) Nonintegrated Allocation Formula. The Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (b) Two-Tiered Integrated Allocation Formula - Maximum Disparity. First, the Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation plus Excess Compensation for the Plan Year bears to the total Compensation plus Excess Compensation of all Participants for the Plan Year. The allocation under this paragraph, as a percentage of each Participant's Compensation plus Excess Compensation, must not exceed the applicable percentage (5.7%, 5.4% or 4.3%) listed under the Maximum Disparity Table following Option (e). The Advisory Committee then will allocate any remaining Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (c) Three-Tiered Integrated Allocation Formula. First, the Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. The allocation under this paragraph, as a percentage of each Participant's Compensation must not exceed the applicable percentage (5.7%, 5.4% or 4.3%) listed under the Maximum Disparity Table following Option (e). As a second tier allocation, the Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Excess Compensation for the Plan Year bears to the total Excess Compensation of all Participants for the Plan Year. The allocation under this paragraph, as a percentage of each Participant's Excess Compensation, may not exceed the allocation percentage in the first paragraph. Finally, the advisory Committee will allocate any remaining annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (d) Four-Tiered Integrated Allocation Formula. First, the Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year, but not exceeding 3% of each Participant's Compensation. As a second tier allocation, the Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Excess Compensation for the Plan Year bears to the total Excess Compensation of all Participants for the Plan Year, but not exceeding 3% of each Participant's Excess Compensation. As a third tier allocation, the Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation plus Excess Compensation for the Plan Year bears to the total Compensation plus Excess Compensation of all Participants for the Plan year. The allocation under this paragraph, as a percentage of each Participant's Compensation plus Excess Compensation, must not exceed the applicable percentage (2.7%, 2.4% or 1.3%) listed under the Maximum Disparity Table following Option (e). The Advisory Committee then will allocate any remaining Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (e) Excess Compensation. For purposes of Option (b), (c) or (d), "Excess Compensation" means Compensation in excess of the following Integration Level: (Choose (1) or (2)) (1) -------% (not exceeding 100%) of the taxable wage base, as determined under Section 230 of the Social Security Act, in effect on the first day of the Plan Year: (Choose any combination of (i) and (ii) or choose (iii)) (i) Rounded to ------------------------- (but not exceeding the taxable wage base). (ii) But not greater than $----------------. (iii) Without any further adjustment or limitation. (2) $------------------. [Note: Not exceeding the taxable wage base for the Plan Year in which this Adoption Agreement first is effective.] Maximum Disparity Table. For purposes of Options (b), (c) and (d), the applicable percentage is: Integration Level Applicable Percentages Applicable (as percentage of for Option (b) or Percentages taxable wage base) Option (c) For Option (d) - -------------------------------------------------------------------------------- 100% 5.7% 2.7% More than 80% but less than 100% 5.4% 2.4% More than 20% (but not less than $10,001) and not more than 80% 4.3% 1.3% 20% (or $10,000, if greater) or less 5.7% 2.7% Top Heavy Minimum Allocation - Eligible Participant. A Participant is entitled to the top heavy minimum allocation in Section 3.04(B) of the Plan if he is employed by the Employer on the last day of the Plan Year, unless: (Choose (f) or (g)) (f) No exceptions. (g) The Participant is a Key Employee for the Plan Year. [Note: If the Employer selects this Option (g), it will have to determine for each Plan Year who are the Key Employees under the Plan.] Top Heavy Minimum Allocation - Method of Compliance. If a Participant's allocation under this Section 3.04 is less than the top heavy minimum allocation to which he is entitled under Section 3.04(B): (Choose (h) or (i)) (h) The Employer will make any necessary additional contribution to the Participant's Account, as described in Section 3.04(B)(7)(a) of the Plan. (i) The Employer will satisfy the top heavy minimum allocation under the Paired Pension Plan the Employer also maintains under this Master Plan. However, the Employer will make any necessary additional contribution to satisfy the top heavy minimum allocation for an Employee covered only under this Plan and not under the Paired Pension Plan. See Section 3.04(B)(7)(b) of the Plan. If the Employer maintains another plan which is not a Paired Pension Plan offered under this Master Plan, the Employer may provide in an addendum to this Adoption Agreement, numbered Section 3.04, any modifications to the Plan necessary to satisfy the top heavy requirements under Code ss.416. Related employers. If two or more related employers (as defined in Section 1.30) contribute to this Plan, the Advisory Committee must allocate all Employer contributions and forfeitures to each Participant in the Plan, in accordance with the elections in this Adoption Agreement Section 3.04, without regard to which contributing related group member employs the Participant. A Participant's Compensation includes Compensation from all related employers, irrespective of which related employers are contributing to the Plan. 3.05 FORFEITURE ALLOCATION. Subject to any restoration allocation required under Sections 5.04 or 9.14, the Advisory Committee will allocate a Participant forfeiture in accordance with Section 3.04: (Choose (a) or (b); (c) is optional in addition to (a) or (b)) (a) As an Employer contribution for the Plan Year in which the forfeiture occurs, as if the Participant forfeiture were an additional Employer contribution for that Plan Year. (b) To reduce the Employer contribution for the Plan Year: (Choose (1) or (2)) (1) in which the forfeiture occurs. (2) immediately following the Plan Year in which the forfeiture occurs. (c) First to reduce the Plan's ordinary and necessary administrative expenses for the Plan Year and then will allocate any remaining forfeitures in the manner described in Option (a) or in Option (b), whichever applies. 3.06 ACCRUAL OF BENEFIT. Compensation Taken Into Account. For the Plan Year in which the Employee first becomes a Participant, the Advisory Committee will determine the allocation under Adoption Agreement Section 3.04 by taking into account: (Choose (a) or (b)) (a) The Employee's Compensation for the entire Plan Year. (b) The Employee's Compensation only for the portion of the Plan Year in which the Employee actually is a Participant in the Plan, except (Choose (1) or (2)) (1) No exceptions. (2) For purposes of the first 3% of Compensation allocated to all Participants under Options (a), (c) or (d) of Adoption Agreement Section 3.04, whichever applies, the Advisory Committee will take into account the Employee's Compensation for the entire Plan Year. Accrual Requirements. To receive an allocation of Employer contributions and Participant forfeitures, if any, for the Plan year, a Participant must satisfy the accrual requirements of this paragraph. If the Participant is employed by the Employer on the last day of the Plan Year, the Participant must complete at least one hour of Service for that Plan Year. If the Participant terminates employment with the Employer during the Plan year, the Participant must complete at least ------------- Hours of Service (not exceeding 501) during the Plan Year, except: (Choose (C) or (d)) (c) No exceptions. (d) No Hour of Service requirement if the Participant terminates employment during the Plan Year on account of: (Choose at least one of (1), (2) and (3)) (1) Death. (2) Disability. (3) Attainment of Normal Retirement Age in the current Plan Year or in a prior Plan Year. 3.15 MORE THAN ONE PLAN LIMITATION. If the provisions of Section 3.15 apply, the Excess Amount attributed to this Plan equals: (Choose (a), (b) or (c)) (a) The product of: (i) the total Excess Amount allocated as of such date (including any amount which the Advisory Committee would have allocated but for the limitations of Code ss.415), times (ii) the ratio of (1) the amount allocated to the Participant as of such date under this Plan divided by (2) the total amount allocated as of such date under all qualified defined contribution plans (determined without regard to the limitations of Code ss.415). (b) The total Excess Amount. (c) None of the Excess Amount. [Note: If the Employer adopts Paired Plans available under this Master Plan, the Employer must coordinate its elections under Section 3.15 of each Adoption Agreement.] 3.18 DEFINED BENEFIT PLAN LIMITATION. Application of limitation. The limitation under Section 3.18 of the Plan: (Choose (a) or (b)) (a) Does not apply to the Employer's Plan because the Employer does not maintain and never has maintained a defined benefit plan covering any Participant in this Plan. (b) Applies to the Employer's Plan. To the extent necessary to satisfy the limitation under Section 3.18, the Employer will reduce: (Choose (1) or (2)) (1) The Participant's projected annual benefit under the defined benefit plan under which the Participant participates. (2) Its contribution or allocation on behalf of the Participant to the defined contribution plan under which the Participant participates and then, if necessary, the Participant's projected annual benefit under the defined benefit plan under which the Participant participates. [Note: If the Employer selects (a), the remaining options in this Section 3.18 do not apply to the Employer's Plan.] Override of 100% Limitation. The Employer elects: (Choose (c) or 9d)) (c) To apply the 100% limitation described in Section 3.19(1) of the Plan in all Limitation Years. [Note: This election will avoid having to calculate the Plan's top heavy ratio for any year.] (d) Not to apply the 100% limitation for Limitation Years in which the Plan's top heavy ratio (as determined under Section 1.33 of the Plan) does not exceed 90%, but only if the defined benefit plan satisfies the extra minimum benefit requirements of Code ss.415(h)(2) (and the applicable Treasury regulations) after taking into account the Employer's election under Options (e), (f), (g) or (h) of this Section 3.18. To determine the top heavy ratio, the Advisory Committee will use the following interest rate and mortality assumptions to value accrued benefits under a defined benefit plan: - ---------------------------------------. [Note: This election will require the Advisory Committee to calculate the Plan's top heavy ratio.] Coordination with top heavy minimum allocation. The Advisory Committee will apply the top heavy minimum allocation provisions of Section 3.04(B) of the Plan with the following modifications: (Choose (e), (f), (g) or (h)) (e) No modifications. (f) By substituting 4% for 3% in Paragraph 9b) of Section 3.04(B)(1) of the Plan, but only for any Plan Year in which Option (d) applies to override the 100% limitation. (g) By increasing the top heavy minimum allocation to 5% for any Plan Year in which the 100% limitation applies, and to 7 1/2% for any Plan Year in which Option (d) applies to override the 100% limitation. The increased percentage under this Option (g) applies irrespective of whether the highest Participant contribution rate for the Plan Year is less than that increased percentage. (h) By eliminating the top heavy minimum allocation. [Note: The Employer may not select this Option (h) if the defined benefit plan does not guarantee the top heavy minimum benefit under Code ss.416 for every Participant in this Plan who is a Non-Key Employee.] If the elections under this Section 3.18 are not appropriate to satisfy the limitations of Section 3.18, or the top heavy requirements under Code ss.416, the Employer must provide the appropriate provisions in an addendum to this Adoption Agreement. ARTICLE V TERMINATION OF SERVICE - PARTICIPANT VESTING 5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is: (Choose (a) or (b)) (a) ---------------------------------- [State age, but may not exceed age 65]. (b) The later of the date the Participant attains -------- years of age or the - -----------nniversary of the first day of the Plan Year in which the Participant commenced participation in the Plan. [The age selected may not exceed age 65 and the anniversary selected may not exceed the 5th.] 5.02 PARTICIPANT DEATH OR DISABILITY. The 100% vesting rule under Section 5.02 of the Plan: (Choose (a) or choose one or both of (b) and (c)) (a) Does not apply. (b) Applies to death. (c) Applies to disability. 5.03 VESTING SCHEDULE. The Employer elects the following vesting schedule: (Choose (a) or (b); (c) is available only in addition to (b)) (a) Immediate vesting. 100% Nonforfeitable at all times. [Note: The Employer must elect Option (a) if the eligibility conditions under Adoption Agreement Section 2.01(b) require 2 years of service or more than 12 months of employment.] (b) Graduated Vesting Schedules. (Choose (1), (2) or (3)) (1) 6-year graded (2) 3-year cliff (3) Modified Top Year of Nonforfeitable Year of Nonforfeitable Year of Nonforfeitable Service Percentage Service Percentage Service Percentage - -------------------------------------------------------------------------------- Less Less Less than 2 0% than 3 0% than 1 ------ 2 20% 3 or more 100% 1 ------ 3 40% 2 ------ 4 60% 3 ------ 5 80% 4 ------ 6 or more 100% 5 ------ 6 or more 100% [Note: Under Option (b)(3), the vesting schedule must satisfy the top heavy requirements of Code ss.416.] (c) Minimum vesting. A Participant's Nonforfeitable Accrued Benefit will never be less than the lesser of $------------- or his entire Accrued Benefit, even if the application of the graduated vesting schedule under Option (b) would result in a smaller Nonforfeitable Accrued Benefit. 5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/RESTORATION OF FORFEITED ACCRUED BENEFIT. The deemed cash-out rule described in Section 4.04(C) of the Plan: (Choose (a) or (b)) (a) Does not apply. (b) Will apply to determine the timing of forfeitures for 0% vested Participants. 5.06 YEAR OF SERVICE - VESTING. Vesting computation period. The Plan measures a Year of Service on the basis of the following 12 consecutive month periods: (Choose (a) or (b)) (a) Plan Years. (b) Employment Years. An Employment Year is the 12 consecutive month period measured from the Employee's Employment Commencement Date and each successive 12 consecutive month period measured from each anniversary of that Employment Commencement Date. Hours of Service. The minimum number of Hours of Service an Employee must complete during a vesting computation period to receive credit for a Year of Service is: (choose (c) or (d)) (c) 1,000 Hours of Service. (d) ----------- Hours of Service. [Note: The Hours of Service requirement may not exceed 1,000.] 5.08 INCLUDED YEARS OF SERVICE - VESTING. The Employer specifically excludes the following Years of Service: (Choose (a) or at least one of (b), (c) and (d)) (a) None other than as specified in Section 5.08(a) of the Plan. (b) Any Year of Service before the Participant attained the age of - --------------------. [Note: The age selected may not exceed age 18.] (c) Any Year of Service during the period the Employer did not maintain this Plan or a predecessor plan. ( d) Any Year of Service before a Break in Service if the number of consecutive Breaks in Service equals or exceeds the greater of 5 or the aggregate number of the Years of Service prior to the Break. This exception applies only if the Participant is 0% vested in his Accrued Benefit derived from Employer contributions at the time he has a Break in Service. Furthermore, the aggregate number of Years of Service before a Break in Service do not include any Years of Service not required to be taken into account under this exception by reason of any prior Break in Service. ARTICLE VI TIME AND METHOD OF PAYMENTS OF BENEFITS Code ss.411(d)(6) Protected Benefits. The elections under this Article VI may not eliminate Code ss.411(d)(6) protected benefit, see Section 13.02 of the Plan. Furthermore, if the elections liberalize the optional forms of benefit under the Plan, the more liberal options apply on the later of the adoption ate or the Effective Date of this Adoption Agreement. 6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Distribution date. A distribution date under the Plan means - --------------------------------------------------------------. [Note: The Employer must specify the appropriate date(s). The specified distribution dates primarily establish annuity starting dates and the notice and consent periods prescribed by the Plan. The Plan allows the Trustee an administratively practicable period of time to make the actual distribution relating to a particular distribution date.] Nonforfeitable Accrued Benefit Not Exceeding $3,500. Subject to the limitations of Section 6.01(A)(1), the distribution date for distribution of a Nonforfeitable Accrued Benefit not exceeding $3,500 is: (Choose (a), (b), (c) or (d)) (a) ---------- of the ---------------- Plan Year beginning after the Participant's Separation from Service. (b) ------------------ following the Participant's Separation from Service. (c) ------------------------ of the Plan Year after the Participant incurs - ---------------------------- Break(s) in Service (as defined in Article V). (d) following the Participant's attainment of Normal Retirement Age, but not earlier than --------------- days following his Separation from Service. Nonforfeitable Accrued Benefit Exceeds $3,500. See the elections under Section 6.03. Disability. The distribution date, subject to the limitations of Section 6.01(A)(3), is: (Choose (e) or (f)) (e) ------------------ after the Participant terminates employment because of disability. (f) The same as if the Participant had terminated employment without disability. Hardship. (Choose (g) or (h)) (g) The Plan does not permit a hardship distribution to a Participant who has separated from Service. (h) The Plan permits a hardship distribution to a Participant who has separated from Service in accordance with the hardship distribution policy stated in Section 6.01(A)(4) of the Plan. Default on a Loan. If a Participant or Beneficiary defaults on a loan made pursuant to a loan policy adopted by the Advisory Committee pursuant to Section 9.04, the Plan: (Choose (i) or (j)) (i) Treats the default as a distributable event. The Trustee, at the time of the default, will reduce the Participant's Nonforfeitable Accrued Benefit by the lesser of the amount in default (plus accrued interest) or the Plan's security interest in that Nonforfeitable Accrued Benefit. (j) Does not treat the default as a distributable event. When an otherwise distributable event first occurs pursuant to Section 6.01 or Section 6.03 of the Plan, the Trustee will reduce the Participant's Nonforfeitable Accrued Benefit by the lesser of the amount in default (plus accrued interest) or the Plan's security interest in that Nonforfeitable Accrued Benefit. 6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. The Advisory Committee will apply Section 6.02 of the Plan with the following modifications: (Choose (a) or (b)) (a) No modifications. (b) The Plan permits the following annuity options: - ----------------------------------------------------------------. Any Participant who elects a life annuity option is subject to the requirements of Sections 6.04(A), (B), (C) and (D) of the Plan. See Section 6.04(E). [Note: The Employer may specify additional annuity options in an addendum to this Adoption Agreement, numbered 6.02(b).] 6.03 BENEFIT PAYMENT ELECTIONS. Participant Elections After Separation from Service. A Participant who is eligible to make distribution elections under Section 6.03 of the Plan may elect to commence distribution of his Nonforfeitable Accrued Benefit: (Choose (a) or (b)) (a) As of any distribution date, but not earlier than -------------- of the - -------- Plan Year beginning after the Participant's Separation from Service. (b) As of the following date(s): (Choose at least one of Options (1) and (5)) (1) As of any distribution date after the close of the Plan Year in which the Participant attains Normal Retirement Age. (2) Any distribution date following his Separation from Service. (3) Any distribution date in the -------------- Plan Year(s) beginning after his Separation from Service. (4) Any distribution date in the Plan Year after the Participant incurs ------------ Break(s) in Service (as defined in Article V). (5) Any distribution date following attainment of age --------- and completion of at least --------- Years of Service (as defined in Article V). Participant Elections Prior to Separation from Service. Subject to the restrictions of Article VI, the following distribution options apply under the Employer's Plan prior to a Participant's Separation from Service. (Choose (c) or at least one of (d) through (f)) (c) No distribution options prior to Separation from Service. (d) Attainment of Specified Age. Until he retires, the Participant has a continuing election to receive all or any portion of his Nonforfeitable Accrued Benefit after he attains: (Choose (1) or (2)) (1) Normal Retirement Age. (2) ------------------- years of age and is at least ----------% vested in his Accrued Benefit. [Note: If the percentage is less than 100%, see the special vesting formula in Section 5.03.] (e) After a Participant has participated in the Plan for a period of not less than ------------ years and he is 100% vested in his Accrued Benefit, until he retires, the Participant has a continuing election to receive all or any portion of his Accrued Benefit. [Note: The number in the blank space may not be less than 5.] (f) Hardship. A Participant may elect a hardship distribution prior to his Separation from Service in accordance with the hardship distribution policy under Section 6.01(A)(4) of the Plan. In no event may a Participant receive a hardship distribution under this Option (f) before he is at least - ---------% vested in his Accrued Benefit. [Note: If the percentage in the blank space is less than 100%, see the special vesting formula in Section 5.03.] 6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES. The annuity distribution requirements of Section 6.04: (Choose (a) or (b)) (a) Apply only to a Participant described in Section 6.04(E) of the Plan (relating to the profit sharing exception to the joint and survivor requirements). (b) Apply to all Participants. ARTICLE IX ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS 9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. If a distribution (other than a distribution from a segregated Account) occurs more than 90 days after the most recent valuation date, the distribution will include interest at: (Choose (a) or (b)) (a) --------------% per annum. [Note: The percentage may equal 0%.] (b) The 90 day Treasury bill rate in effect at the beginning of the current valuation period. ARTICLE X TRUSTEE AND CUSTODIAN, POWERS AND DUTIES 10.14 VALUATION OF TRUST. In addition to each Accounting Date, the trustee must value the Trust Fund on the following valuation date(s): (Choose (a) or (b)) (a) No other mandatory valuation dates. (b) (Specify) -------------------------------------------. EFFECTIVE DATE ADDENDUM (Restated Plans Only) The Employer must complete this addendum only if the restated Effective Date specified in Adoption Agreement Section 1.18 is different than the restated effective date for at least one of the provisions listed in this addendum. In lieu of the restated Effective Date in Adoption Agreement Section 1.18, the following special effective dates apply: (Choose whichever elections apply) (a) Compensation definition. The Compensation definition of Section 1.12 (other than the $200,000 limitation) is effective for Plan Years beginning after - ----------. [Note: May not be effective later than the first day of the first Plan Year beginning after the Employer executes this Adoption Agreement to restate the Plan for the Tax Reform Act of 1986, if applicable.] (b) Eligibility conditions. The eligibility conditions specified in Adoption Agreement Section 2.01 are effective for Plan Years beginning after - -------------. (c) Suspension of Years of Service. The suspension of Years of Service rule elected under Adoption Agreement Section 2.03 is effective for Plan Years beginning after -------------------. (d) Contribution/allocation formula. The contribution formula elected under Adoption Agreement Section 3.01 and the method of allocation elected under Adoption Agreement Section 3.04 is effective for Plan Years beginning after - -------------------. (e) Accrual requirements. The accrual requirements of Section 3.06 are effective for Plan Years beginning after ----------. [Note: If the effective date is later than Plan Years beginning after December 31, 1989, the accrual requirements in the Plan prior to its restatement may not be more restrictive for post-1989 Plan Years than the requirements permitted under Adoption Agreement Section 3.06.] (f) Elimination of Net Profits. The requirement for the Employer not to have net profits to contribute to this Plan is effective for Plan Years beginning after ---------------------------. [Note: The date specified may not be earlier than December 31, 1985.] (g) Vesting Schedule. The vesting schedule elected under Adoption Agreement Section 5.03 is effective for Plan Years beginning after ---------------------. For Plan Years prior to the special Effective Date, the terms of the Plan prior to its restatement under this Adoption Agreement will control for purposes of the designated provisions. A special Effective Date may not result in the delay of a Plan provision beyond the permissible Effective Date under any applicable law requirements. Execution Page The Trustee (and custodian, if applicable), by executing this Adoption Agreement, accepts its position and agrees to all of the obligations, responsibilities and duties imposed upon the Trustee (or Custodian) under the Master Plan and Trust. The Employer hereby agrees to the provisions of this Plan and Trust, and in witness of its agreement, the Employer by its duly authorized officers, has executed this Adoption Agreement, and the Trustee (and Custodian, if applicable) signified its acceptance, on this ---------- day of - -----------------, 19----. Name and EIN of Employer: -------------------------------------- Signed: -------------------------------------------------------- Name(s) of Trustee: -------------------------------------------- - ----------------------------------------------------------------- - ----------------------------------------------------------------- - ----------------------------------------------------------------- Signed: --------------------------------------------------------- - ----------------------------------------------------------------- Name of Custodian: ---------------------------------------------- Signed: --------------------------------------------------------- [Note: A Trustee is mandatory, but a Custodian is optional. See Section 10.03 of the Plan.] Use of Adoption Agreement. Failure to complete properly the elections in this Adoption Agreement may result in disqualification of the Employer's Plan. The 3-digit number assigned to this Adoption Agreement (see page 1) is solely for the Master Plan Sponsor's recordkeeping purposes and does not necessarily correspond to the plan number the Employer designated in the prior paragraph. The Master Plan Sponsor offers the following Paired Pension Plan(s) with this Paired Profit Sharing Plan, identified by 3-digit adoption agreement number: - ----------------------------------------------------------------- Master Plan Sponsor. The Master Plan Sponsor identified on the first page of the basic plan document will notify all adopting employers of an amendment of this Master Plan or of any abandonment or discontinuance by the Master Plan Sponsor of its maintenance of this Master Plan. For inquiries regarding the adoption of the Master Plan, the Master Plan Sponsor's intended meaning of any plan provisions or the effect of the opinion letter issued to the Master Plan Sponsor, please contact the Master Plan Sponsor at the following address and telephone number: 7800 E. Union Ave., Denver, Colorado 80201, (303) 779- 0731. Reliance on Opinion Letter. If the Employer does not maintain (and has never maintained) any other plan other than this Plan and a Paired Pension Plan, it may rely on the Master Plan Sponsor's opinion letter covering this Plan for purposes of plan qualification. For this purpose, the Employer has not maintained another plan if this Plan, or the Paired Pension Plan, amended and restated that prior plan and the prior plan was the same type of plan as the restated plan. If the Employer maintains or has maintained another plan other than a Paired Pension Plan, including a welfare benefit fund, as defined in Code ss.419(e), which provides post-retirement medical benefits for key employees (as defined in Code ss.419A(d)(3)), or an individual medical account (as defined in Code ss.415(1)(2)), the Employer may not rely on this Plan's qualified status unless it obtains a determination letter from the applicable IRS Key District office. PARTICIPATION AGREEMENT For Participation by Related Group Members (Plan Section 1.30) The undersigned Employer, by executing this Participation Agreement, elects to become a Participating Employer in the Plan identified in Section 1.03 of the accompanying Adoption Agreement, as if the Participating Employer were a signatory to that Agreement. The Participating Employer accepts, and agrees to be bound by, all of the elections granted under the provisions of the Master Plan as made by, -------------------------------------------- - --------------------------------------------------- the Signatory Employer to the Execution Page of the Adoption Agreement. 1. The Effective Date of the undersigned Employer's participation in the designated Plan is -------------------------------. 2. The undersigned Employer's adoption of this Plan constitutes: (a) The adoption of a new plan by the Participating Employer. (b) The adoption of an amendment and restatement of a plan currently maintained by the Employer, identified as ------------------------------------- and having an original effective date of ---------------------------------------. Dated this ---------------- day of ------------------, 19------. Name of Participating Employer: ---------------------------------- Signed: ---------------------------------------------------------- Participating Employer's EIN: ------------------------------------- Acceptance by the Signatory Employer to the Execution Page of the Adoption Agreement and by the Trustee. Name of Signatory Employer: ------------------------------------- Signed: -------------------------------------------------- Accepted:-------------------------------------------------- [Date] Name(s) of Trustee: -------------------------------------------- Signed: -------------------------------------------------- Accepted: ------------------------------------------------ [Date] [Note: Each Participating Employer must execute a separate Participation Agreement. See the Execution Page of the Adoption Agreement for important Master Plan information.] STN PSP AA Instructions Complete the first blank in the paragraph by writing in the business' name in its entirety. 1.02 Trustee Option (a) should be chosen when the employer will be the trustee, INVESCO Trust Company would then act as Custodian. If option (b) is chosen, INVESCO Trust Company will be the Trustee and will charge an annual trust fee. Note: See Trustee Comments on page 14 for further explaination of Non-discretionary Trustee. 1.03 Plan Enter the plan name. Example: ABC Inc. Profit Sharing Plan. 1.07 Employee If you want the plan to cover all employees, select option (a). If you want to exclude from the plan any group(s) of employees, select any combination of (b) or (c). Related Employers/Leased Employers You may not exclude leased employees or related employers from participation unless they are excluded under options (b) or (c) of Section 1.07. 1.12 Compensation Treatment of elective contributions Choose option (a) if you prefer to "add back" employee elective 401(k) contributions to compensation for purposes of allocating employer contributions, forfeitures and for non-discrimination testing. Modifications to Compensation - You must choose option (c) or any combination of (d) or (e). Any exclusion of compensation may result in unallowable discrimination. 1.17 Plan Year You must define the "plan year," usually it will follow the business tax year. Limitation Year - You must define the "limitation year" (12 month period for testing allocations to each employee's account), for administrative convenience it should match the plan year. 1.18 Effective Date New Plan - Enter the first day of your plan year (usually January 1) and the year. Restated Plan 0 Effective date - If you are amending for the Tax Reform Act of 1986 enter: January 1, 1987. If you are amending for another reason, enter the first day of your tax year, example: January 1, 1990. Originally established date - Enter the original effective date of your plan from your prior Adoption Agreement. 1.27 Hours of Service Choose which method you wish to use for counting hours worked by an employee to accrue benefits. Option (b), the equivalency method, is explained in Section 1.27 of the plan. Usually Option (a) is chosen. 1.29 Service for Predecessor Employer Under this option, you may elect to count service for a predecessor employer when you are not maintaining the plan of the predecessor employer. (Used primarily in the event of a merger or acquisition.) 1.31 Leased Employees The law requires you to state how your plan would treat a leased employee who could become a participant, even if you don't intend to ever lease employees. Choose option (a) covering the employee without regard to the leasing company's plan or option (b) the reduction method. Usually Option (b) is chosen. 2.01 Eligibility a. An employee must attain this age to become a participant (cannot exceed age 21). b. Pick how long (service) an employee must work to become a participant. Plan Entry - Choose when employees enter the plan for purposes of contributions and benefit accrual. Normally, option (c), semi-annual entry dates, is chosen. Time of Participation - Choose which plan entry date (before or after) an employee who meets the eligibility requirements will enter the plan. Normally, option (f) is chosen. Dual Eligibility - This section allows you to include in the plan current employees who have not met the eligibility requirements and apply the eligibility requirements to newly hired employees. Restated plans usually choose (i)(2). 2.02 Years of Service Option (b) should only be chosen if you wish to require less than 1000 hours to be worked by an employee for eligibility. Usually Option (a) is chosen. Eligibility Computation Period - Choose whether to measure subsequent eligibility periods on the employee's anniversary (Option (c) or the plan year (Option (d)). Option (d) is chosen for administrative convenience. 2.03 Break in Service This option may impose a complicated re-entry date for employees who have terminated or whose hours were severely cut back. Option (a) is chosen for administrative convenience. Article III 3.01 Amount Option (a) provides for a discreationary formula. Option (b) allows the employer to determine the contribution separately for different catagoaries of participants. Options (c) and (d) allow the employer to choose a fixed contribution formula. Net Profits - An employer may require net profits to make it's contribution or may disregard profits to determine the contribution. If the employer selects Option (f) it must also complete the two blanks. 3.04 Contribution Allocation Allocation formula. The primary allocation formulas are in Options (a), (b), (c) and (d). Option (a) is a nonintegrated formula and allocates the employer contribution proportionate to total compensation. Options (b), (c) and (d) are alternatives for integrated plans. Usually option (a) is chosen for non-integrated plans. The two-tiered formula under Option (b) maximizes the disparity permitted under the integration rules. Accordingly, the allocation in the first tier results in an equal allocation percentage based on total compensation and based on excess compensation. This equal allocation percentage may not exceed the maximum disparity percentage (5.7%, 5.4% or 4.3%) described in the second column of the Maximum Disparity Table. After completion of the first tier allocation, the second step allocates the remaining contribution proportionate to total compensation, in the same manner as the nonintegrated formula. Under the three-tiered formula of Option (c), the plan: (i) first allocates based on total compensation, but the allocation percentage may not exceed the maximum disparity percentage determined under the second column of the Maximum Disparity Table; (ii) then allocates based on excess compensation, but the allocation percentage may not exceed the maximum disparity percentage determined under the second column of the Maximum Disparity Table; and (iii) completes the allocation on the basis of total compensation. The four-tiered allocation under Option (d) is a hybrid of Options (b) and (c). The sole purpose of Option (d) is to use the first tier to satisfy the 3% top heavy minimum, then use a progression of three additional tiers to make maximum use of the permitted disparity rules. The second tier allocates solely on the basis of excess compensation, with a maximum allocation under the second tier equal to 3% of each participant's excess compensation. The third tier is the same as the first tier under Option (c). The fourth tier is a prorata allocation based on total compensation. 3.05 Forfeiture Allocation Choose the method of allocating (dividing up) forfeitures of terminated non-vested participant balances. Option (a) allocates forfeitures as an extra discretionary contribution. Option (b) allocates forfeitures to reduce employer contributions. Option (c) allows you to allocate separately forfeitures after taking into account the plan's administrative expenses. 3.06 Compensation Taken Into Account If you wish to count a participant's full year's compensation (even if he or she entered during the year), for contributions choose option (a), if not, choose option (b). Accrual Requirements - Specify the service requirements a participant must satisfy to receive an allocation. You may specify an hours of service requirement, no greater than 501 hours. Standardized plans have relaxed contribution requirements. A participant will receive an employer contribution and forfeitures if they meet either of the two requirements below. Requirement #1 If the Participant was employed on the last day of the plan year and worked for at least one hour during the plan year, or Requirement #2 If the Participant terminates employment during the plan year after working at least 501 hours for the employer. 3.15 More Than One Plan This section only applies if you (the employer) maintain another defined contribution plan (e.g.: profit sharing, money purchase, 401(k) or target benefit) that covers at least one participant in this plan. 3.18 Defined Benefit Limitation Check option (a) if you have never maintained a defined benefit plan for any participants in this plan. If you have or are currently maintaining a defined benefit plan. Choose under option (b), which plan's benefit would be reduced if a participant's total allocations for a year were to exceed the allowable limit. 5.01 Normal Retirement Age Choose what age you (the employer) want the participants to be 100% vested in their benefits, if still employed (normal retirement age). 5.02 Vesting Death/Disability You may choose to allow 100% vesting for participants that terminate from service because of death option (b) or disability option (c). 5.03 Vesting Schedule Choose what vesting schedule(s) you want to apply to employer discretionary contributions and matching contributions. If you choose option (b), you must at a minimum complete the top-heavy vesting schedule. Remember, if the eligibility requirements are more than one year, option (a) must be chosen. Complete the Modified Top Heavy schedule based upon the following: Years of Service 1 2 (not less than 20%) 3 (not less than 40%) 4 (not less than 60%) 5 (not less than 80%) 6 (not less than 100%) 5.04 Cash-Out Rule If option (b) is chosen, the plan treats a 0% vested terminated participant as having received a distribution, allowing for forfeitures to be reallocated to active participants. 5.06 Years of Service Choose what measuring period the plan should use to determine years of service for vesting, employee's anniversary year or plan year. For ease of administration choose option (a). 5.08 Prior Years of Service By choosing options (b) through (d) you (the employer) may exclude some prior years of service for purposes of vesting. Article VI The Employer must establish a specific distribution policy for the plan. Treas. Reg. 1.411(d)-4 prohibits the Employer, the advisory committee or any third party to retain discretion over when or in what form to pay the participant's benefit (Optional Forms of Benefit). Under a restated plan, the elections under Article VI, to the extent they differ from previous plan provisions regarding optional forms of benefit, may not eliminate an optional form of benefit with respect to the account balance accrued as of the date the Employer executes the restated adoption agreement (or, if later, the effective date of that restated adoption agreement). An option form of benefit includes the form of payment (e.g., lump sum or installments), the timing of payment (e.g., immediately after separation form service, following a break in service, after attaining normal retirement age) and the medium of payment (e.g. right to elect distribution in Employer securities, right to elect distribution in the form of an annuity contract). With this in mind, if you are restating an existing plan, pay close attention to the distribution features under that document and your administrative practice of distributions. In all cases, try to mirror or liberalize those distribution features when restating onto this document. 6.01 Distribution Date A distribution date establishes a predetermined "target" date in a plan year when the plan will offer distributions. The actual distribution may occur later than a distribution date as long as the actual distribution is within an "administratively reasonable period of time" from the distribution date. A typical distribution date for a Profit Sharing plan is 90 days after the plan year end. Nonforfeitable Accrued Benefit Not Exceeding $3,500 When a separated participant's vested balance does not exceed $3,500, the plan allows the employer to separately establish the timing of these distributions, separate from the distribution dates. When you complete this section, you need to balance two concerns: 1) will the timing of the distribution cause the participant to consider it a "severance benefit" an therefore encourage separation from service and 2) the administrative concerns of carrying a non-active account in the plan. Disability - The plan allows you (the employer) to establish a different target payout date for disability distributions in options (e) and (f). Hardship - This option states whether or not the plan would allow a separated participant to receive a hardship distribution, prior to receiving a total distribution of his/her vested account balance. Default on a Loan - This election does not create a loan policy. You (the employer) must elect the timing of the plan's foreclosure if a participant's loan were to be defaulted upon even if you do not intend to offer loans in your plan. 6.02 Method of Payment You may choose the standard forms of payment if this is a brand new plan and not a restatment. If the plan is not subject to the annuity requirements of Section 6.04, usually option (a) is chosen. If you choose to allow annuities, option (b) special waivers and consent rules apply to all distributions. 6.03 Participant Elections After Separation from Service You must choose when an employee who has separated from service, with a vested benefit greater than $3,500, may elect to commence distributions. This election will be tied directly tot he "distribution date" defined earlier. Participant Elections Prior to Separation from Service The following distribution elections apply to employer contributions regardless of vested account balances, prior to employment separation. If you prefer not to allow any distribution options from these accounts prior to separation, select option (c). 6.04 Annuity Distributions The law requires distributions to certain participants to be in the form of commercial insurance annuities, unless consented to and waived by both the participant and his or her spouse. Participants subject to this requirement are identified in section 6.04(E) of the Plan. For administrative convenience, choose option (a). If you are restating a plan that was subject to the joint and survivor annuity rules you must select Option (b). 9.10 Value of Benefit This option allows the employer to add interest to a participant's balance, if a distribution occurs more than 90 days after the most recent plan valuation. You do not have to provide an interest addition under this section and may complete option (a) with 0%. 10.14 Valuation of Trust You may use this option to specify mandatory valuation dates, in addition to the accounting date. Normally option (a) is chosen. Instructions for Effective Date Addendum You must complete the effective date addendum only if the effective dates of any of the listed items (a) through (g) have an effective date other than your restated effective date in Adoption Agreement Section 1.18. Some provisions in the Tax Reform Act of 1986 were not effective until 1988 or 1989. The few provisions, if any, that have later effective dates must specify when they are effective. a. Compensation definition may not be later than the first day of your 1991 plan year. b. Eligibility conditions may not be later than the first day of your 1989 plan year. c. Suspension of years of service may not be earlier than the first day of your 1990 plan year. d. Contribution/allocation formula may not be earlier than the first day of your 1989 plan year. e. Accrual requirements may not be earlier than the first day of your 1989 plan year. f. Elimination of Net Profits may not be earlier than December 31, 1985. g. Vesting schedule may not be later than the first day of your 1989 plan year. Execution Page The Employer must complete the date on which it executes the adoption agreement and must execute the signature for the Employer. The execution page provides one line above the signature line to print or type the name of the Employer and the Employer's EIN. If the Employer is a sole proprietorship, he or she should execute as Employer. If the Employer is a corporation or a partnership, an officer or a partner, as applicable, should execute the adoption agreement on behalf of the Employer. Trustee If you selected option (a) of Section 1.02 then the employer will be the Trustee. An individual must sign as trustee for the employer. INVESCO Trust Company will then act as Custodian. If you choose to have INVESCO Trust Company act as "Trustee" then option (b) of Section 1.02 must be chosen. INVESCO does charge an annual fee for this service. INVESCO Trust Company will only serve as a non-discretionary trustee, this means that there is a person who is the "Named Fiduciary." The Named Fiduciary gives direction to a non-discretionary trustee, and the non- discretionary trustee accepts all directions from the Named Fiduciary. The Named Fiduciary is either the President of the Corporation, the managing partner of the partnership or the self-employed individual of a sole proprietorship. The Named Fiduciary is responsible for selecting plan investments. The execution page also includes a signature line for the Custodian, if any. Leave the Custodian lines blank if INVESCO Trust Company will act as custodian. Plan number. This paragraph designates the number the Employer assigns to the plan for reporting (Form 5500) purposes. If this is the first plan the Employer ever maintained, the number must be 001. The Employer's plan number does not correspond to the 3- digit adoption agreement number specified at the top of the first page of the adoption agreement. Consult your Counsel if you are unsure what 3-digit plan number to use. Instructions for the Participation Agreement This adoption agreement includes a Participation Agreement under which a related group member of the signatory Employer to the execution page may participate in the same plan with that Employer. Each related group member wishing to become a participating Employer should execute a separate Participation Agreement. See Section 1.30 of the Plan for the definition of related Employers. Thus, it is possible to exclude the employees of related group members not participating in the plan. If an Employer is a member of a related group, it should consider whether the inclusion of other related group members' employees is necessary to satisfy the coverage requirements of Code ss.410(b) or the minimum participation requirement of Code ss.401(a)(26). If the Employer determines inclusion of the employees of a related group member is necessary to maintain qualification of the plan, he Employer may take one or two approaches: (1) have the related group member execute a Participation Agreement; or (2) elect in Adoption Agreement Section 1.07 to include the employees of that related group member. Under approach (1), the participation of the related group member will result in the automatic inclusion of the employees of that related group member, without having to specify their inclusion in Adoption Agreement Section 1.07. In addition, the related group member, under approach (1), has the authority to contribute to the plan and, in the event another participating related group member makes a contribution on behalf of that related group member's employees, the Participation Agreement will ensure the deductibility of that contribution (assuming the contribution does not exceed the deduction limits of Code ss.404). Additional instructions to the appropriate adoption agreement explain the effect on the allocation of Employer contributions when related group members maintain a single nonstandardized plan. Please contact us. Under approach (2), the plan will retain its qualified status, but contributions the Employer makes on behalf of a nonparticipating related group member's employees may not be deductible (even if otherwise within the limitations of Code ss.404), resulting in an excise tax to the contributing Employer. Unrelated Employers. The Master Plan does not allow the participation in a single plan of unrelated Employers (i.e., Employers that do not satisfy the related group definition in Section 1.30 of the Plan). legal\adop-agr\stnpspaa.003 EX-99.14DPLANDOC 8 Adoption Agreement #004 Letter Serial No. D246281a Standardized Money Purchase Pension Plan Standardized Money Purchase Pension Features - - Allows for integration of contributions with Social Security - - Allows for top-heavy vesting schedule - - May be paired with INVESCO Profit Sharing Plans Provided by: The Financial Funds Managed & Distributed by INVESCO Funds Group, Inc. Custodian: INVESCO Trust Company A Subsidiary of INVESCO MIM PLC Your Adoption Agreement and Basic Plan Document together constitute the rules and parameters under which your retirement progrma will operate. Each section of the Adoption Agreemetn requires the employer to make a selection. Whenever possible (balancing complexity and space constraints) we have provided instructions to the left of key selections. These instructions are intended to assist you, the employer, in choosing the optional provisions for your retirement program. They are not intended to substitute or replace completent advice from your legal counsel or accountant. If further clarification is necessary, contact your advisors or INVESCO Trust Company. We recommend that you obtain the advice of your legal or tax advisor before you sign this Adoption Agreement. ADOPTION AGREEMENT #004 STANDARDIZED MONEY PURCHASE PLAN (PAIRED PENSION PLAN) The undersigned, -------------------------------------------- ("Employer"), by executing this Adoption Agreement, elects to become a participating Employer in the INVESCO Trust Company Defined Contribution Master Plan (basic plan document #01) by adopting the accompanying Plan and Trust in full as if the Employer were a signatory to that Agreement. The employer makes the following elections granted under the provisions of the Master Plan. ARTICLE I DEFINITIONS 1.02 Trustee. The Trustee executing this Adoption Agreement is: (Choose (a) or (b)) (a) A discretionary Trustee, See Section 10.03[A] of the Plan. (b) A nondiscretionary Trustee. See Section 10.03[B] of the Plan. [Note: The Employer may not elect Option (b) if a Custodian executes the Adoption Agreement.] 1.03 PLAN. The name of the Plan as adopted by the Employer is - -------------------------------------------------------------. 1.07 EMPLOYEE. The following Employees are not eligible to participate in the Plan: (Choose (a) or at least one of (b) or (c)) (a) No exclusions. (b) Collective bargaining employees (as defined in Section 1.07 of the Plan). [Note: If the Employer excludes union employees from the Plan, the Employer must be able to provide evidence that retirement benefits were the subject of good faith bargaining.] (c) Nonresident aliens who do not receive any earned income (as defined in Code ss.911(d)(2) from the Employer which constitutes United States source income (as defined in Code ss.861(a)(3)). Related Employers/Leased Employees. An Employee of any member of the Employer's related group (as defined in Section 1.30 of the Plan), and any Leased Employee treated as an Employee under Section 1.31 of the Plan, is eligible to participate in the Plan, unless excluded by reason of Options (b) or (c). [Note: A related group member may not contribute to this Plan unless it executes a Participation Agreement, even if its Employees are Participants in the Plan.] 1.12 COMPENSATION Treatment of elective contributions. (Choose (a) or (b)) (a) "Compensation" includes elective contributions made by the Employer on the Employee's behalf. (b) "Compensation" does not include elective contributions. Modifications to Compensation definition. (Choose (c) or at least one of (d) and (e)) (c) No modifications other than as elected under Options (a) or (b). (d) The Plan excludes Compensation in excess of $--------------. (e) In lieu of the definition in Section 1.12 of the Plan, Compensation means any earnings reportable as W-2 wages for Federal income tax withholding purposes, subject to any other election under this Adoption Agreement Section 1.12. 1.17 PLAN YEAR/LIMITATION YEAR. Plan Year. Plan Year means: (Choose (a) or (b)) (a) The 12 consecutive month period ending every --------------. (b) (Specify) -------------------------------------------------. Limitation Year. The Limitation Year is: (Choose (c) or (d)) (c) The Plan Year. (d) The 12 consecutive month period ending every --------------. 1.18 EFFECTIVE DATE. New Plan. The "Effective Date" of the Plan is -------------------. Restated Plan. The restated Effective Date is -------------------. This Plan is a substitution and amendment of an existing retirement plan(s) originally established -----------------------. (Note: See the Effective Date Addendum.) 1.27 HOUR OF SERVICE. The crediting method for Hours of Service is: (Choose (a) or (b)) (a) The actual method. (b) The ----------------------- equivalency method, except: (1) No exceptions. (2) The actual method applies for purposes of: (Choose at least one) (i) Participation under Article II. (ii) Vesting under Article V. (iii) Accrual of benefits under Section 3.06. [Note: On the blank line, insert "daily," "weekly," "semi-monthly payroll periods" or "monthly."] 1.29 SERVICE FOR PREDECESSOR EMPLOYER. In addition to the predecessor service the Plan must credit by reason of Section 1.29 of the Plan, the Plan credits Service with the following predecessor employer(s): --------------------------. Service with the designated predecessor employer(s) applies: (Choose at least one of (a) or (b)) (a) For purposes of participation under Article II. (b) For purposes of vesting under Article V. [Note: If the Plan does not credit any predecessor service under this provision, insert "N/A" in the first blank line. The Employer may attach a schedule to this Adoption Agreement, in the same format as this Section 1.29, designating additional predecessor employers and the applicable service crediting elections.] 1.31 LEASED EMPLOYEES. If a Leased Employee participates in a save harbor money purchase plan (as described in Section 1.31) maintained by the leasing organization, but the Employer is not eligible for the safe harbor plan exception: (Choose (a) or (b)) (a) The Advisory Committee will determine the Leased Employee's allocation of Employer contributions under Article III without taking into account the Leased Employee's allocation under the safe harbor plan. (b) The Advisory Committee will reduce the Leased Employee's allocation of Employer contributions under this Plan by the Leased Employee's allocation under the safe harbor plan, but only to the extent that allocation is attributable to the Leased Employee's service provided to the Employer. [Note: The Employer may not elect Option (b) if a Paired Plan or any other plan of the Employer makes a similar reduction for the same plan of the leasing organization.] ARTICLE II EMPLOYEE PARTICIPANTS 2.01 ELIGIBILITY. Eligibility conditions. To become a Participant in the Plan, an Employee must satisfy the following eligibility conditions: (Choose (a) or (b) or both) (a) Attainment of age -------------------- (specify age, not exceeding 21). (b) Service requirement. (Choose one of (1) through (4)) (1) One Year of Service. (2) Two Years of Service, without an intervening Break in Service. See Section 2.03(A) of the Plan. (3) --------- months (not exceeding 24) following the Employee's Employment Commencement Date. (4) One Hour of Service. Plan Entry Date. "Plan Entry Date" means the Effective Date and: (Choose (c), (d) or (e)) (c) Semi-annual Entry Dates. The first day of the Plan year and the first day of the seventh month of the Plan Year. (d) The first day of the Plan Year. (e) (Specify entry dates) --------------------------------. Time of Participation. An Employee will become a Participant, unless excluded under Adoption Agreement Section 1.07, on the Plan Entry Date (if employed on that date): (Choose (f), (g) or (h)) (f) immediately following (g) immediately preceding (h) nearest the date the Employer completes the eligibility conditions described in Options (a) and (b) of this Adoption Agreement Section 2.01. [Note: The Employer must coordinate the selection of (f), (g) or (h) with the "Plan Entry Date" selection in (c), (d) of (e). Unless otherwise excluded under Section 1.07, the Employee must become a Participant by the earlier of: (1) the first day of the Plan Year beginning after the date the Employee completes the age and service requirements of Code ss.410(a); or (2) 6 months after the date the Employee completes those requirements.] Dual eligibility. The eligibility conditions of this Section 2.01 apply to: (Choose (i) or (j)) (i) All Employees of the Employer, except: (Choose (1) or (2)) (1) No exceptions (2) Employees who are Participants in the Plan as of the Effective Date. (j) Solely to an Employee employed by the Employer after ---------------------. If the Employee was employed by the specified date, the Employee will become a Participant: (Choose (1) or (2)) (1) On the latest of the Effective Date, his Employment Commencement Date or the date he attains age --------------------- (not to exceed 21). (2) Under the eligibility conditions in effect under the Plan prior to the restated Effective Date. [For restated plans only] 2.02 YEAR OF SERVICE - PARTICIPATION. Hours of Service. An Employee must complete: (Choose (a) or (b)) (a) 1,000 Hours of Service (b) ------------------------ Hours of Service during an eligibility computation period to receive credit for a Year of Service. [Note: The Hours of Service requirement may not exceed 1,000. Eligibility computation period. After the initial eligibility computation period described in Section 2.02 of the Plan, the Plan measures the eligibility computation period as: (Choose (c) or (d)) (c) The 12 consecutive month period beginning with each anniversary of an Employee's Employment Commencement Date. (d) The Plan year, beginning with the Plan Year which includes the first anniversary of the Employee's Employment Commencement Date. 2.03 BREAK IN SERVICE - PARTICIPATION. The Break in Service rule described in Section 2.03(B) of the Plan: (Choose (a) or (b)) (a) Does not apply to the Employer's Plan. (b) Applies to the Employer's Plan. ARTICLE III EMPLOYER CONTRIBUTIONS AND FORFEITURES 3.01 AMOUNT. The amount of the Employer's annual contribution to the Trust will equal: (Choose (a), (b), (c) or (d); (e) is mandatory if the Employer elects (b) or (c)) (a) Nonintegrated Contribution Formula. ---------------% of each Participant's Compensation for the Plan Year. (b) Integrated Contribution Formula. (Complete both percentages) - ---------% of each Participant's Compensation for the Plan Year plus - ---------% of each Participant's Compensation for the Plan Year in excess of the Integration Level. [Note: The second percentage may not exceed the lesser of the first percentage or the applicable percentage described in the Maximum Disparity Table.] (c) Step-rate Integrated Contribution Formula. (Complete both percentages) - --------% of each Participant's Compensation for the Plan Year which does not exceed the Integration Level, plus ---------% of each Participant's Compensation for the Plan Year in excess of the Integration Level. [Note: The difference between the second percentage and the first percentage may not exceed the lesser of the first percentage or the applicable percentage described in the Maximum Disparity Table.] [Note: If the Employer maintains Paired Plans, the Employer may not elect Option (b) or Option (c) if the Paired Plan uses an integrated formula.] (d) Frozen Plan Formula. This Plan is a frozen Plan effective - -----------------------------. The Employer will not contribute to the Plan with respet to any period following that stated date. (e) Integration Level. The Integration Level under the Plan is: (Choose (1) or (2)) (1) ------% (not exceeding 100%) of the taxable wage base, as determined under Section 230 of the Social Security Act, in effect on the first day of the Plan Year: (Choose any combination of (i) and (ii) or choose (iii)) (i) Rounded to -------------------- (but not exceeding the taxable wage base). (ii) But not greater than $----------------------. (iii)Without any further adjustment or limitation. (2) $------------- [Note: Not esceeding the taxable wage base for the Plan Year in which this Adoption Agreement first is effective.] Maximum Disparity Table. For purposes of Options (b) and (c), the applicable percentage is: Inegration Level (as Applicable percentage of taxable wage base) Percentage ----------------------------------------------------------- 100% 5.7% More than 80% but less than 100% 5.4% More than 20% (but not less than $10,001) and not more than 80% 4.3% 20% (or $10,000, if greater) or less 5.7% Application of contribution formula. The Employer will determine its contribution under Options (a), (b) or (c) by taking into account only the Participants who satisfy the conditions under Section 3.06 for an allocation of Employer contributions and only the Participant's Compensation taken into account under Section 3.06. The Empoyer contribution on behalf of a Participant may not exceed the Participant's annual additions limitation described in Part 2 of Article III, even if the contribution formula otherwise would require a larger contribution. Coordination with defined benefit plan. If the Employer maintains a defined benefit plan under which at least one Participant in this Plan participates, the Employer will determine its contribuion under Options (a), (b) or (c) by reducign the total contibution, if necessary to equal the maximum deductible amount under Code ss.404(a)(7). If the Employer must reduce its contribution, the Employer determines its contibution with respect to each Participant by adjusting each percentage under Options (a), (b) or (c) by the same ratio as the reduced total Employer contribution for the Plan Year bears to the total Employer contribution determined without applciation of Code ss.404(a)(7). Related Employers. Unless obligated by the joint and several liability provisions of the code or of ERISA, a related group member, as defined in Section 1.30 of the Plan, may not contribute tot his Plan unless it executes a Participation Agreement, even if its Employees are Participants in the Plan. The signatory Employer and any Participaing Employer(s) will satisfy the annual contribution under this Section 3.01 as agreed upon by those Employers. 3.04 CONTRIBUTION ALLOCATION. Method of Allocation. Subject to any restoration allocation required under Section .04, the Advisory Committee will allocate and credit each annual Employer contribution to the Account of each Participant who satisfies the conditions of Section 3.06, in accordance with the contribution formula adopted by the Employer under Adoption Agreement Section 3.01. Top Heavy Minimum Allocation - Eligible Participant. A Participant is entitled to the top heavy minimum allocation in Section 3.04(B) of the Plan if he is employed by the Employer on the last day of the Plan Year, unless: (Choose (a) or (b)) (a) No exceptions. (b) The Participant is a Key Employee for the Plan Year. [Note: If the Employer selects this Option (b), it will need to identify the Key Employees under the Plan.] Top Heavy Minimum Allocation - Method of Compliance. If a Participant's allocation under thsi Section 3.04 is less than the top heavy minimum allocation to which he is entitled under Section 3.04(B): (Choose (c) or (d)) (c) The employer will make any necessary additional contribution to the Participant's Account, as described in Section 3.04(B)(7)(a) of the Plan. (d) The Employer will satisfy the top heavy minimum allocation under the Paired Profit Sharing Plan the Employer also maintains under this Master Plan. However, the Employer will make any necessary additional contribution to satisfy the top heavy minimum allocation for an Employee covered only under this Plan and not under the Paired Profit Sharing Plan. See Section 3.04(B)(7)(b) of the Plan. If the Employer maintains another plan which is not a Paired Profit Sharing Plan offered under thsi Master Plan, the Employer may provide in an addendum to this Adoption Agreement, numbered Section 3.04, any modifications to the Plan necessary to satisfy the top heavy requirements under Code ss.416. 3.05 FORFEITURE ALLOCATION. Subject to any restoration allocation required under Sections 5.04 or 9.14, the Advisory Committee will allocate a Participant forfeiture: (Choose (a) or (b); (c) is optional in addition to (a) or (b)) (a) Reduction of Employer contribution. In accordance with Section 3.04, to reduce the Employer contribution for the Plan Year: (Choose (1) or (2)) (1) in which the forfeiture occurs. (2) immediately following the Plan Year in which the forfeiture occurs. (b) Increased allocation. In addition to the Employer contribution for the Plan Year in which the forfeiure occurs. The Advisory Committee will allocate the Participant forfeitures for a Plan Year to the Account of each Participant who satisfies the conditions of Section 3.06, in the same ratio that such Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (c) First to reduce the Plan's ordinary and necessary administrative expenses for the Plan Year and then will allocate any remaining forfeitures in the manner described in Option (a) or in Option (b), whichever applies. 3.06 ACCRUAL OF BENEFIT. Compensation taken into account. For the Plan Year in which the Employee first becomes a Participant, the Advisory committee will detemine the contribution under Section 3.01, and, if applicable, the allocation under Option (b) of Section 3.05, by taking into account: (Choose (a) or (b)) (a) The Employee's Compensation for the entire Plan Year. (b) The Employee's Compensation only for the portion of the Plan Year in which the Employee actually is a Participant in the Plan. Accrual Requirements. To receive an allocation of Employer contributions and Participant forfeitures, if any, for the Plan year, a Participant must satisfy the accrual requirements of this paragraph. If the Participant is employed by the Employer on the last day of the Plan Year, the Participant must complete at least one hour of Service for that Plan Year. If the Participant terminates employment with the Employer during the Plan year, the Participant must complete at least ------------- Hours of Service (not exceeding 501) during the Plan Year, except: (Choose (c) or (d)) (c) No exceptions. (d) No Hour of Service requirement if the Participant terminates employment during the Plan Year on account of: (Choose at least one of (1), (2) and (3)) (1) Death. (2) Disability. (3) Attainment of Normal Retirement Age in the current Plan Year or in a prior Plan Year. 3.15 MORE THAN ONE PLAN LIMITATION. If the provisions of Section 3.15 apply, the Excess Amount attributed to this Plan equals: (Choose (a), (b) or (c)) (a) The product of: (i) the total Excess Amount allocated as of such date (including any amount which the Advisory Committee would have allocated but for the limitations of Code ss.415), times (ii) the ratio of (1) the amount allocated to the Participant as of such date under this Plan divided by (2) the total amount allocated as of such date under all qualified defined contribution plans (determined without regard to the limitations of Code ss.415). (b) The total Excess Amount. (c) None of the Excess Amount. [Note: If the Employer adopts Paired Plans available under this Master Plan, the Employer must coordinate its elections under Section 3.15 of each Adoption Agreement.] 3.18 DEFINED BENEFIT PLAN LIMITATION. Application of limitation. The limitation under Section 3.18 of the Plan: (Choose (a) or (b)) (a) Does not apply to the Employer's Plan because the Employer does not maintain and never has maintained a defined benefit plan covering any Participant in this Plan. (b) Applies to the Employer's Plan. To the extent necessary to satisfy the limitation under Section 3.18, the Employer will reduce: (Choose (1) or (2)) (1) The Participant's projected annual benefit under the defined benefit plan under which the Participant participates. (2) Its contribution or allocation on behalf of the Participant to the defined contribution plan under which the Participant participates and then, if necessary, the Participant's projected annual benefit under the defined benefit plan under which the Participant participates. [Note: If the Employer selects (a), the remaining options in this Section 3.18 do not apply to the Employer's Plan.] Override of 100% Limitation. The Employer elects: (Choose (c) or 9d)) c) To apply the 100% limitation described in Section 3.19(1) of the Plan in all Limitation Years. [Note: This election will avoid having to calculate the Plan's top heavy ratio for any year.] (d) Not to apply the 100% limitation for Limitation Years in which the Plan's top heavy ratio (as determined under Section 1.33 of the Plan) does not exceed 90%, but only if the defined benefit plan satisfies the extra minimum benefit requirements of Code ss.416(h)(2) (and the applicable Treasury regulations) after taking into account the Employer's election under Options (e), (f), (g) or (h) of this Section 3.18. To determine the top heavy ratio, the Advisory Committee will use the following interest rate and mortality assumptions to value accrued benefits under a defined benefit plan: - -------------------------. [Note: This election will require the Advisory Committee to calculate the Plan's top heavy ratio.] Coordination with top heavy minimum allocation. The Advisory Committee will apply the top heavy minimum allocation provisions of Section 3.04(B) of the Plan with the following modifications: (Choose (e), (f), (g) or (h)) (e) No modifications. (f) By substituting 4% for 3% in Paragraph 9b) of Section 3.04(B)(1) of the Plan, but only for any Plan Year in which Option (d) applies to override the 100% limitation. (g) By increasing the top heavy minimum allocation to 5% for any Plan Year in which the 100% limitation applies, and to 7 1/2% for any Plan Year in which Option (d) applies to override the 100% limitation. The increased percentage under this Option (g) applies irrespective of whether the highest Participant contribution rate for the Plan Year is less than that increased percentage. (h) By eliminating the top heavy minimum allocation. [Note: The Employer may not select this Option (h) if the defined benefit plan does not guarantee the top heavy minimum benefit under Code ss.416 for every Participant in this Plan who is a Non-Key Employee.] If the elections under this Section 3.18 are not appropriate to satisfy the limitations of Section 3.18, or the top heavy requirements under Code ss.416, the Employer must provide the appropriate provisions in an addendum to this Adoption Agreement. ARTICLE V TERMINATION OF SERVICE - PARTICIPANT VESTING 5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is: (Choose (a) or (b)) (a) ------------------------------- [State age, but may not exceed age 65]. (b) The later of the date the Participant attains ---------(------) years of age or the --------(---------) anniversary of the first day of the Plan Year in which the Participant commenced participation in the Plan. [The age selected may not exceed age 65 and the anniversary selected may not exceed the 5th.] 5.02 PARTICIPANT DEATH OR DISABILITY. The 100% vesting rule under Section 5.02 of the Plan: (Choose (a) or choose one or both of (b) and (c)) (a) Does not apply. (b) Applies to death. (c) Applies to disability. 5.03 VESTING SCHEDULE. The Employer elects the following vesting schedule: (Choose (a) or (b); (c) is available only in addition to (b)) (a) Immediate vesting. 100% Nonforfeitable at all times. [Note: The Employer must elect Option (a) if the eligibility conditions under Adoption Agreement Section 2.01(b) require 2 years of service or more than 12 months of employment.] (b) Graduated Vesting Schedules. (Choose (1), (2) or (3)) (1) 6-year graded (2) 3-year cliff (3) Modified Top Heavy Schedule Year of Nonforfeitable Year of Nonforfeitable Year of Nonforfeitable Service Percentage Service Percentage Service Percentage - -------------------------------------------------------------------------------- Less Less Less than 2 0% than 3 0% than 1 ------ 2 20% 3 or more 100% 1 ------ 3 40% 2 ------ 4 60% 3 ------ 5 80% 4 ------ 6 or more 100% 5 ------ 6 or more 100% [Note: Under Option (b)(3), the vesting schedule must satisfy the top heavy requirements of Code ss.416.] (c) Minimum vesting. A Participant's Nonforfeitable Accrued Benefit will never be less than the lesser of $------------- or his entire Accrued Benefit, even if the application of the graduated vesting schedule under Option (b) would result in a smaller Nonforfeitable Accrued Benefit. 5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/RESTORATION OF FORFEITED ACCRUED BENEFIT. The deemed cash-out rule described in Section 4.04(C) of the Plan: (Choose (a) or (b)) (a) Does not apply. (b) Will apply to determine the timing of forfeitures for 0% vested Participants. 5.06 YEAR OF SERVICE - VESTING. Vesting computation period. The Plan measures a Year of Service on the basis of the following 12 consecutive month periods: (Choose (a) or (b)) (a) Plan Years. (b) Employment Years. An Employment Year is the 12 consecutive month period measured from the Employee's Employment Commencement Date and each successive 12 consecutive month period measured from each anniversary of that Employment Commencement Date. Hours of Service. The minimum number of Hours of Service an Employee must complete during a vesting computation period to receive credit for a Year of Service is: (choose (c) or (d)) (c) 1,000 Hours of Service. (d) ---------------- Hours of Service. [Note: The Hours of Service requirement may not exceed 1,000.] 5.08 INCLUDED YEARS OF SERVICE - VESTING. The Employer specifically excludes the following Years of Service: (Choose (a) or at least one of (b), (c) and (d)) (a) None other than as specified in Section 5.08(a) of the Plan. (b) Any Year of Service before the Participant attained the age of - --------------------. [Note: The age selected may not exceed age 18.] (c) Any Year of Service during the period the Employer did not maintain this Plan or a predecessor plan. (d) Any Year of Service before a Break in Service if the number of consecutive Breaks in Service equals or exceeds the greater of 5 or the aggregate number of the Years of Service prior to the Break. This exception applies only if the Participant is 0% vested in his Accrued Benefit derived from Employer contributions at the time he has a Break in Service. Furthermore, the aggregate number of Years of Service before a Break in Service do not include any Years of Service not required to be taken into account under this exception by reason of any prior Break in Service. ARTICLE VI TIME AND METHOD OF PAYMENTS OF BENEFITS Code ss.411(d)(6) Protected Benefits. The election under this Article VI may not eliminate Code ss.411(d)(6) protected benefits. To the extent the elections would eliminate a Code ss.(d)(6) protected benefit, see Section 13.02 of the Plan. Furthermore, if the elections liberalize the optional forms of benefit under the Plan, the more liberal options apply on the later of the adoption date or the Effective Date of this Adoption Agreement. 6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Distribution date. A distribution date under the Plan means - --------------------------------------------------------------. [Note: The Employer must specify the appropriate date(s). The specified distribution dates primarily establish annuity starting dates and the notice and consent periods prescribed by the Plan. The Plan allows the Trustee an administratively practicable period of time to make the actual distribution relating to a particular distribution date.] Nonforfeitable Accrued Benefit Not Exceeding $3,500. Subject to the limitations of Section 6.01(A)(1), the distribution date for distribution of a Nonforfeitable Accrued Benefit not exceeding $3,500 is: (Choose (a), (b), (c) or (d)) (a) ----------- of the -------------- Plan Year beginning after the Participant's Separation from Service. (b) ---------------------- following the Participant's Separation from Service. (c) ------------------------- of the Plan Year after the Participant incurs - -------------------- Break(s) in Service (as defined in Article V). (d) ------------- following the Participant's attainment of Normal Retirement Age, but not earlier than -------------- days following his Separation from Service. Nonforfeitable Accrued Benefit Exceeds $3,500. See the elections under Section 6.03. Disability. The distribution date, subject to the limitations of Section 6.01(A)(3), is: (Choose (e) or (f)) (e) ----------------- after the Participant terminates employment because of disability. (f) The same as if the Participant had terminated employment without disability. Hardship. (Choose (g) or (h)) (g) The Plan does not permit a hardship distribution to a Participant who has separated from Service. (h) The Plan permits a hardship distribution to a Participant who has separated from Service in accordance with the hardship distribution policy stated in Section 6.01(A)(4) of the Plan. Default on a Loan. If a Participant or Beneficiary defaults on a loan made pursuant to a loan policy adopted by the Advisory Committee pursuant to Section 9.04, the Plan: (Choose (i) or (j)) (i) Treats the default as a distributable event only if the Participant has incurred a Separation from Service or has attained Normal Retirement Age. If either conditions applies, the Trustee, at the time of the default or, if later, at the time either conditions first occurs, will reduce the Participant's Nonforfeitable Accrued Benefit by the lesser of the amount in default (plus accrued interest) or the Plan's security interest in that Nonforfeitable Accrued Benefit. (j) Does not treat the default as a distributable event. When an otherwise distributable event first occurs pursuant to Section 6.01 or Setion 6.03 of the Plan, the Trustee will reduce the Participant's Nonforfeitable Accrued Benefit by the lesser of the amount in default (plus accrued interest) or the Plan's security interest in that Nonforfeitable Accrued Benefit. 6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. The Advisory Committee will apply Section 6.02 of the Plan with the following modifications: (Choose (a) or (b)) (a) No modifications. (b) The Plan permits the following annuity options: - ----------------------------------------------------------------. [Note: The Employer may specify additional annuity options in an addendum to this Adoption Agreement, numbered 6.02(b).] 6.03 BENEFIT PAYMENT ELECTIONS. Participant Elections After Separation from Service. A Participant who is eligible to make distribution elections under Section 6.03 of the Plan may elect to commence distribution of his Nonforfeitable Accrued Benefit: (Choose (a) or (b)) (a) As of any distribution date, but not earlier than -------- of the -------- Plan Year beginning after the Participant's Separation from Service. (b) As of the following date(s): (Choose at least one of Options (1) through (5)) (1) Any distribution date after the close of the Plan Year in which the Participant attains Normal Retirement Age. (2) Any distribution date following his Separation from Service. (3) Any distribution date in the ----------------- Plan Year(s) beginning after his Separation from Service. (4) Any distribution date in the Plan Year after the Participant incurs --------------------- Break(s) in Service (as defined in Article V). (5) Any distribution date following attainment of age ----------- and completion of at least -------- Years of Service (as defined in Article V). Participant Elections Prior to Separation from Service. Subject to the restrictions of Article VI, the following distribution options apply under the Employer's Plan prior to a Participant's Separation from Service. (Choose (c) or (d)) (c) No distribution options prior to Separation from Service. (d) Attainment of Normal Retirement Age. Until he retires, the Participant has a continuing election to receive all or any portion of his Nonforfeitable Accrued Benefit after he attains Normal Retirement Age. ARTICLE IX ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS 9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. If a distribution (other than a distribution from a segregated Account) occurs more than 90 days after the most recent valuation date, the distribution will include interest at: (Choose (a) or (b)) (a) --------------% per annum. [Note: The percentage may equal 0%.] (b) The 90 day Treasury bill rate in effect at the beginning of the current valuation period. ARTICLE X TRUSTEE AND CUSTODIAN, POWERS AND DUTIES 10.14 VALUATION OF TRUST. In addition to each Accounting Date, the Trustee must value the Trust Fund on the following valuation date(s): (Choose (a) or (b)) (a) No other mandatory valuation dates. (b) (Specify) --------------------------------------. EFFECTIVE DATE ADDENDUM (Restated Plans Only) The Employer must complete this addendum only if the restated Effective Date specified in Adoption Agreement Section 1.18 is different than the restated effective date for at least one of the provisions listed in this addendum. In lieu of the restated Effective Date in Adoption Agreement Section 1.18, the following special effective dates apply: (Choose whichever elections apply) (a) Compensation definition. The Compensation definition of Section 1.12 (other than the $200,000 limitation) is effective for Plan Years beginning after - -----------------. [Note: May not be effective later than the first day of the first Plan Year beginning after the Employer executes this Adoption Agreement to restate the Plan for the Tax Reform Act of 1986, if applicable.] (b) Eligibility conditions. The eligibility conditions specified in Adoption Agreement Section 2.01 are effective for Plan Years beginning after - -------------------. (c) Suspension of Years of Service. The suspension of Years of Service rule elected under Adoption Agreement Section 2.03 is effective for Plan Years beginning after --------------------. (d) Contribution/allocation formula. The contribution formula elected under Adoption Agreement Section 3.01 and the method of allocation elected under Adoption Agreement Section 3.04 is effective for Plan Years beginning after - ---------------------. (e) Reallocation of Forfeitures. The reallocation of forfeitures under Section 3.05 applies to Plan Years beginning after ------------------. [Note: The date specified may not be earlier than December 31, 1985.] (f) Accrual requirements. The accrual requirements of Section 3.06 are effective for Plan Years beginning after -----------------. [Note: If the effective date is later than Plan Years beignning after December 31, 1989, the accrual requirements in the Plan prior to its restatement may not be more restrictive for post- 1989 Plan Years than the requirements permitted under Adoption Agreement Section 3.06.] (g) Vesting schedule. The vesting schedule elected under Adoption Agreement Section 5.03 is effective for Plan Years beginning after --------------------. For Plan Years prior to the special Effective Date, the terms of the Plan prior to its restatement under this Adoption Agreement will control for purposes of the designated povisions. A special Effective Date may not result in the delay of a Plan provisionbeyond the permissible Effective Date under any applicable law requirements. Execution Page The Trustee (and custodian, if applicable), by executing this Adoption Agreement, accepts its position and agrees to all of the obligations, responsibilities and duties imposed upon the Trustee (or Custodian) under the Master Plan and Trust. The Employer hereby agrees to the provisions of this Plan and Trust, and in witness of its agreement, the Employer by its duly authorized officers, has executed this Adoption Agreement, and the Trustee (and Custodian, if applicable) signified its acceptance, on this --------- day of - -------------, 19---. Name and EIN of Employer: --------------------------------------- Signed: --------------------------------------------------------- Name(s) of Trustee: --------------------------------------------- - ----------------------------------------------------------------- Signed: --------------------------------------------------------- - ----------------------------------------------------------------- Name of Custodian: ---------------------------------------------- Signed: --------------------------------------------------------- [Note: A Trustee is mandatory, but a Custodian is optional. See Section 10.03 of the Plan.] Plan Number: The 3-digit plan number the Employer assigns to this Plan for ERISA reporting purposes (Form 5500 Series) is: - ------------------------. Use of Adoption Agreement. Failure to complete properly the elections in this Adoption Agreement may result in disqualification of the Employer's Plan. The 3-digit number assigned to this Adoption Agreement (see page 1) is solely for the Master Plan Sponsor's recordkeeping purposes and does not necessarily correspond to the plan number the Employer designated in the prior paragraph. The Master Plan Sponsor offers the following Paired Pension Plan(s) with this Paired Profit Sharing Plan, identified by 3-digit adoption agreement number: 003 and 009. Master Plan Sponsor. The Master Plan Sponsor identified on the first page of the basic plan document will notify all adopting employers of an amendment of this Master Plan or of any abandonment or discontinuance by the Master Plan Sponsor of its maintenance of this Master Plan. For inquiries regarding the adoption of the Master Plan, the Master Plan Sponsor's intended meaning of any plan provisions or the effect of the opinion letter issued to the Master Plan Sponsor, please contact the Master Plan Sponsor at the following address and telephone number: INVESCO Trust Company, 7800 E. Union Ave., Denver, Colorado 80201, (303) 779-0731. Reliance on Opinion Letter. If the Employer does not maintain (and has never maintained) any other plan other than this Plan and a Paired Profit Sharing Plan, it may rely on the Master Plan Sponsor's opinion letter covering this Plan for purposes of plan qualification. For this purpose, the Employer has not maintained another plan if this Plan, or the Paired Profit Sharing Plan, amended and restated that prior plan and the prior plan was the same type of plan as the restated plan. If the Employer maintains or has maintained another plan other than a Paired Profit Sharing Plan, including a welfare benefit fund, as defined in Code ss.419(e), which provides post-retirement medical benefits for key employees (as defined in Code ss.419A(d)(3)), or an individual medical account (as defined in Code ss.415(1)(2)), the Employer may not rely on this Plan's qualified status unless it obtains a determination letter from the applicable IRS Key District office. PARTICIPATION AGREEMENT For Participation by Related Group Members (Plan Section 1.30) The undersigned Employer, by executing this Participation Agreement, elects to become a Participating Employer in the Plan identified in Section 1.03 of the accompanying Adoption Agreement, as if the Participating Employer were a signatory to that Agreement. The Participating Employer accepts, and agrees to be bound by, all of the elections granted under the provisions of the Master Plan as made by, ----------------------------------, the Signatory Employer to the Execution Page of the Adoption Agreement. 1. The Effective Date of the undersigned Employer's participation in the designated Plan is ---------------------------. 2. The undersigned Employer's adoption of this Plan constitutes: (a) The adoption of a new plan by the Participating Employer. (b) The adoption of an amendment and restatement of a plan currently maintained by the Employer, identified as ------------------------------------ and having an original effective date of --------------------------------------. Dated this ----------------- day of --------------, 19----. Name of Participating Employer: ------------------------------------ Signed: ------------------------------------------------------------ Participating Employer's EIN: -------------------------------------- Acceptance by the Signatory Employer to the Execution Page of the Adoption Agreement and by the Trustee. Name of Signatory Employer: ---------------------------------------- Accepted: ------------------------------------------------- [Date] Signed: --------------------------------------------------- Name(s) of Trustee: --------------------------------------- Accepted: ------------------------------------------------- [Date] Signed: --------------------------------------------------- [Note: Each Participating Employer must execute a separate Participation Agreement. See the Execution Page of the Adoption Agreement for important Master Plan information.] STD MP AA Instructions Complete the first blank in the paragraph by writing in the business' name in its entirety. 1.02 Trustee Option (a) should be chosen when the employer will be the trustee, INVESCO Trust Company would then act as Custodian. If option (b) is chosen, INVESCO Trust Company will be the Trustee and will charge an annual trust fee. Note: See Trustee Comments on page 14 for further explaination of Non-discretionary Trustee. 1.03 Plan Enter the plan name. Example: ABC Inc. Money Purchase Pension Plan. 1.07 Employee If you want the plan to cover all types of employees, select option (a). If you want to exclude from the plan any group(s) of employees, select any combination of (b) or (c). Leased Employees You may not exclude leased employees from participation unless they are excluded under options (b) or (c) of Section 1.07. Related Employers You may not exclude related employers from participating in the plan unless they are excluded under options (b) or (c) of Section 1.07. 1.12 Compensation Treatment of elective contributions - Choose option (a) if you prefer to "add back" employee elective 401(k) contributions to compensation for purposes of allocating employer contributions, and forfeitures. Modification to Compensation Modifications to Compensation - You must choose option (c) or any combination of (d) or (e). Any exclusion of compensation may result in unallowable discrimination. 1.17 Plan Year You must define the "plan year," usually it will follow the business tax year. Limitation Year - You must define the "limitation year" (12 month period for testing allocations to each employee's account), for administrative convenience it should match the plan year. 1.18 Effective Date New Plan - Enter the first day of your plan year (usually January 1) and the year. Restated Plan - Effective date - If you are amending for the Tax Reform Act of 1986 enter: January 1, 1987. If you are amending for another reason, enter the first day of your tax year, example: January 1, 1990. Originally established date - Enter the original effective date of your plan from your prior Adoption Agreement. 1.27 Hours of Service Choose which method you wish to use for counting hours worked by an employee to accrue benefits. Option (b), the equivalency method, is explained in Section 1.27 of the plan. Option (a) is usually chosen. 1.29 Service for Predecessor Employer Under this option, you may elect to count service for a predecessor employer when you are not maintaining the plan of the predecessor employer. (Used primarily in the event of a merger or acquisition.) 1.31 Leased Employees The law requires you to state how your plan would treat a leased employee who could become a participant, even if you don't intend to ever lease employees. Choose option (a) covering the employee without regard to the leasing company's plan or option (b) the reduction method. Usually Option (b) is chosen. 2.01 Eligibility a. An employee must attain this age to become a participant (cannot exceed age 21). b. Pick how long (service) an employee must work to become a participant. Plan Entry - Choose when employees enter the plan for purposes of contributions and benefit accrual. Normally, option (c), semi-annual entry dates, is chosen. Time of Participation - Choose which plan entry date (before or after) an employee who meets the eligibility requirements will enter the plan. Normally, option (f) is chosen. Dual Eligibility - This section allows you to include in the plan current employees who have not met the eligibility requirements and apply the eligibility requirements to newly hired employees. Restated plans usually chose (i)(2). 2.02 Years of Service Option (b) should only be chosen if you wish to require less than 1000 hours to be worked by an employee for eligibility. Usually Option (a) is chosen. Eligibility Computation Period - Choose whether to measure subsequent eligibility periods on the employee's anniversary or the plan year. Option (d) is chosen for administrative convenience. 2.03 Break in Service This option may impose a complicated re-entry date for employees who have terminated or whose hours were severely cut back. Option (a) is chosen for administrative convenience. 3.01 Employer Contributions and Forfeitures Amount - The employer must select a definite contribution formula under a money purchase pension plan. Option (a) is a nonintegrated formula, options (b) and (c) are integrated formulas. Option (a) allows the employer to choose a fixed amount for the contribution regardless of compensation. Options (b) and (c) are two approaches to allowing permitted disparity in the contribution formula. Option (b) applies the first percentage to a participant's total compensation. 3.04 Contribution Allocation Contribution will be allocated (split up to participants) in the manner elected to computate the contribution selected under Section 3.01. 3.05 Forfeiture Allocation Choose the method of allocating (dividing up) forfeitures of terminated non-vested participant balances. Option (a) allocates forfeitures as a reduction in contributions. Option (b) allocates forfeitures as an additional employer contribution. 3.06 Compensation Taken Into Account If you wish to count a participant's full year's compensation (even if he or she entered the plan during the year), for contributions choose option (a), if not, choose option (b). Accrual Requirements - Specify the service requirements a participant must satisfy to receive an allocation. You may specify an hours of service requirement, no greater than 501 hours. Standardized plans have relaxed contribution requirements. A participant will receive an employer contribution and forfeitures if they meet either of the two requirements below. Requirement #1 If the Participant was employed on the last day of the plan year and worked for at least one hour during the plan year, or Requirement #2 If the Participant terminates employment during the plan year after working at least 501 hours for the employer. 3.15 More Than One Plan This section only applies if you (the employer) maintain another defined contribution plan (e.g.: profit sharing, money purchase, 401(k) or target benefit) that covers at least one participant in this plan. 3.18 Defined Benefit Plan Limitation Check option (a) if you have never maintained a defined benefit plan for any participants in this plan. If you have or are currently maintaining a defined benefit under option (b), choose which plan's benefit would be reduced if a participant's total allocations for a year were to exceed the allowable limit. 5.01 Normal Retirement Age Choose what age you (the employer) want the participants to be 100% vested in their benefits, if still employed (normal retirement age). 5.02 Vesting Death/Disability You may choose to allow 100% vesting for participants that terminate from service because of death, option (b) or disability, option (c). 5.03 Vesting Schedule Choose what vesting schedule(s) you want to apply to employer contributions. If you choose option (b), you must at a minimum complete the top-heavy vesting schedule. Remember, if the eligibility requirements are more than one year, option (a) must be chosen. Complete the Modified Top Heavy Schedule based upon the following: Nonforfeitable Percentage Years of Service 1 2 (not less than 20%) 3 (not less than 40%) 4 (not less than 60%) 5 (not less than 80%) 6 (not less than 100%) 5.04 Cash-Out Rule If option (b) is chosen, the plan treats a 0% vested terminated participant as having received a distribution, allowing for forfeitures to be reallocated to active participants. 5.06 Years of Service Choose what measuring period the plan should use to determine years of service for vesting, employee's anniversary year or plan year. For ease of administration choose Option (a). 5.08 Prior Years of Service By choosing options (b) through (d) you (the employer) may exclude some prior years of service for purposes of vesting. Article 6 The Employer must establish a specific distribution policy for the plan. Treas. Reg. 1.411(d)-4 prohibits the Employer, the advisory committee or any third party to retain discretion over when or in what form to pay the participant's benefit (Optional Forms of Benefit). Under a restated plan, the elections under Article VI, to the extent they differ from previous plan provisions regarding optional forms of benefit, may not eliminate an optional form of benefit with respect to the account balance accrued as of the date the Employer executes the restated adoption agreement (or, if later, the effective date of that restated adoption agreement). An option form of benefit includes the form of payment (e.g., lump sum or installments), the timing of payment (e.g., immediately after separation form service, following a break in service, after attaining normal retirement age) and the medium of payment (e.g. right to elect distribution in Employer securities, right to elect distribution in the form of an annuity contract). With this in mind, if you are restating an existing plan, pay close attention to the distribution features under that document and your administrative practice of distributions. In all cases, try to mirror or liberalize those distribution features when restating onto this document. 6.01 Distribution Date A distribution date establishes a predetermined "target" date in a plan year when the plan will offer distributions. The actual distribution may occur later than a distribution date as long as the actual distribution is within an administratively reasonable period of time from the distribution date. Typical distribution dates are annual dates such as March 1. Nonforfeitable Accrued Benefit Not Exceeding $3,500 When a separated participant's vested balance does not exceed $3,500, the plan allows the employer to separately establish the timing of these distributions, separate from the distribution dates. When you complete this section, you need to balance two concerns: 1) will the timing of the distribution cause the participant to consider it a "severance benefit" and therefore encourage separation from service and 2) the administrative concerns of carrying a non-active account in the plan. Disability - The plan allows you (the employer) to establish a different target payout date for disability distributions in options (e) and (f). Hardship - This option states whether or not the plan would allow a separated participant to receive a hardship distribution, prior to receiving a total distribution of his/her vested account balance. Default on a Loan - This election does not create a loan policy. You (the employer) must elect the timing of the plan's foreclosure if a participant's loan were to be defaulted upon even if you do not intend to offer loans in your plan. 6.02 Method of Payment Money purchase pension plans require payouts to be in the form of a commercial annuity unless properly waived. The employer may in options (b) and (c), (if this is a new plan), limit the alternative method of payment. Caution: an employer cannot eliminate a prior method of payment by restating the plan onto this document. 6.03 Participant Elections After Separation form Service You must choose when an employee who has separated from service, with a vested benefit greater than $3,500, may elect to commence distributions. This election will be tied directly to the "distribution date" defined earlier. 9.10 Value of Benefit This option allows the employer to add interest to a participant's balance, if a distribution occurs more than 90 days after the most recent plan valuation. You do not have to provide an interest addition under this section and may complete option (a) with 0%. 10.14 Valuation of Trust You may use this option to specify mandatory valuation dates, in addition to the accounting date. Normally, option (a) is chosen. Instructions for Effective Date Addendum You must complete the effective date addendum only if the effective dates of any of the listed items (a) through (g) have an effective date other than your restated effective date in adoption agreement section 1.18. Some provisions in the Tax Reform Act of 1986 were not effective until 1988 or 1989 the few provisions (if any) that have later effective dates must specify when they are effective. a. Compensation definition may not be later than the first day of your 1991 plan year. b. Eligibility conditions may not be later than the first day of your 1989 plan year. c. Suspension of years of service may not be earlier than the first day of your 1990 plan year. d. Contribution/allocation formula may not be earlier than the first day of your 1989 plan year. e. Reallocation of Forfeitures may not be earlier than December 31, 1989. f. Accrual requirements may not be earlier than the first day of your 1989 plan year. g. Vesting schedule may not be later than the first day of your 1989 plan year. Execution Page The Employer must complete the date on which it executes the adoption agreement and must execute the signature for the Employer. The execution page provides two lines above the signature line to print or type the name of the Employer and the Employer's EIN. If the Employer is a sole proprietorship, the individual sole proprietor should execute as Employer. If the Employer is a corporation or a partnership, an officer or a partner, as applicable, should execute the adoption agreement on behalf of the Employer. Trustee If you selected option (a) of Section 1.02, then the employer will be the Trustee. An individual must sign as trustee for the employer. INVESCO Trust Company will then act as Custodian. If you choose to have INVESCO Trust Company act as "Trustee" then option (b) of Section 1.02 must be chosen. INVESCO does charge an annual fee for this service. INVESCO Trust Company will only serve as a non-discretionary trustee, this means that there is a person who is the "Named Fiduciary." The Named Fiduciary gives direction to a non-discretionary trustee, and the non- discretionary trustee accepts all directions from the Named Fiduciary. The Named Fiduciary is either the President of the Corporation, the managing partner of the partnership or the self-employed individual of a sole proprietorship. The Named Fiduciary is responsible for selecting plan investments. The execution page also includes a signature line for the Custodian, if any. Leave the Custodian lines blank if INVESCO Trust Company will act as custodian. Plan number. This paragraph designates the number the Employer assigns to the plan for reporting (Form 5500) purposes. If this is the first plan the Employer ever maintained, the number must be 001. The Employer's plan number does not correspond to the 3- digit adoption agreement number specified at the top of the first page of the adoption agreement. Consult your Counsel if you are unsure what 3-digit plan number to use. Instructions for the Participation Agreement This adoption agreement includes a Participation Agreement under which a related group member of the signatory Employer to the execution page may participate in the same plan with that Employer. Each related group member wishing to become a participating Employer should execute a separate Participation Agreement. See Section 1.30 of the Plan for the definition of related Employers. Thus, it is possible to exclude the employees of related group members not participating in the plan. If an Employer is a member of a related group, it should consider whether the inclusion of other related group members' employees is necessary to satisfy the coverage requirements of Code ss.410(b) or the minimum participation requirement of Code ss.401(a)(26). If the Employer determines inclusion of the employees of a related group member is necessary to maintain qualification of the plan, the Employer may take one or two approaches: (1) have the related group member execute a Participation Agreement; or (2) elect in Adoption Agreement Section 1.07 to include the employees of that related group member. Under approach (1), the participation of the related group member will result in the automatic inclusion of the employees of that related group member, without having to specify their inclusion in Adoption Agreement Section 1.07. In addition, the related group member, under approach (1), has the authority to contribute to the plan and, in the event another participating related group member makes a contribution on behalf of that related group member's employees, the Participation Agreement will ensure the deductibility of that contribution (assuming the contribution does not exceed the deduction limits of Code ss.404). Additional instructions to the appropriate adoption agreement explain the effect on the allocation of Employer contributions when related group members maintain a single nonstandardized plan. Please contact us. Under approach (2), the plan will retain its qualified status, but contributions the Employer makes on behalf of a nonparticipating related group member's employees may not be deductible (even if otherwise within the limitations of Code ss.404), resulting in an excise tax to the contributing Employer. Unrelated Employers. The Master Plan does not allow the participation in a single plan of unrelated Employers (i.e., Employers that do not satisfy the related group definition in Section 1.30 of the Plan). legal\adop-agr\stdmpaa.004 EX-99.14EPLANDOC 9 Adoption Agreement #005 D346282a Nonstandardized 401(k) Plan Adoption Agreement Nonstandardized 401(k) Plan Considerations For: Businesses that want the ability of employee pre-tax contributions. Compensation: The employer may exclude certain types of compensation. Eligibility for Contributions: May require employees to work up to 1,000 hours and be employed on the last day. Investment Direction: May allow the employee to direct where funds are invested. Eligibility: The employer may exclude certain classifications or groups of employees. Provided by: The Financial Funds Custodian: INVESCO Trust Company A Subsidiary of INVESCO MIM PLC Your Adoption Agreement and Basic Plan Document together constitute the rules and parameters under which your retirement program will operate. Each section of the Adoption Agreement requires the employer to make a selection. Whenever possible (balancing complexity and space constraints) we have provided instructions to the left of key selections. These instructions are intended to assist you, the employer, in choosing the optional provisions for your retirement program. They are not intended to substitute or replace competent advice from your legal counsel or accountant. If further clarification is necessary, contact your advisors or INVESCO Trust Company. We recommend that you obtain the advice of your legal or tax advisor before you sign this Adoption Agreement. ADOPTION AGREEMENT #005 NONSTANDARDIZED CODE 401(k) PROFIT SHARING PLAN The undersigned, -------------------------------------------- ("Employer"), by executing this Adoption Agreement, elects to become a participating Employer in the INVESCO Trust Company Defined Contribution Master Plan (basic plan document #01) by adopting the accompanying Plan and Trust in full as if the Employer were a signatory to that Agreement. The employer makes the following elections granted under the provisions of the Master Plan. ARTICLE I DEFINITIONS 1.02 TRUSTEE. The Trustee executing this Adoption Agreement is: (Choose (a) or (b)) (a) A discretionary Trustee, See Section 10.03[A] of the Plan. (b) A nondiscretionary Trustee. See Section 10.03[B] of the Plan. [Note: The Employer may not elect Option (b) if a Custodian executes the Adoption Agreement.] 1.03 PLAN. The name of the Plan as adopted by the Employer is - -------------------------------------------------------------. 1.07 EMPLOYEE. The following Employees are not eligible to participate in the Plan: (Choose (a) or at least one of (b) through (G)) (a) No exclusions. (b) Collective bargaining employees (as defined in Section 1.07 of the Plan). [Note: If the Employer excludes union employees from the Plan, the Employer must be able to provide evidence that retirement benefits were the subject of good faith bargaining.] (c) Nonresident aliens who do not receive any earned income (as defined in Code ss.911(d)(2) from the Employer which constitutes United States source income (as defined in Code ss.861(a)(3)). (d) Commission Salesmen. (e) Any Employee compensated on a salaried basis. (f) Any Employee compensated on an hourly basis. (g) (Specify) ------------------------------------------------- - ----------------------------------------------------------------- Leased Employees. Any Leased Employee treated as an Employee under Section 1.31 of the Plan, is: (Choose (h) or (i)) (h) Not eligible to participate in the Plan. (i) Eligible to participate in the Plan, unless excluded by reason of an exclusion classification elected under this Adoption Agreement Section 1.07. Related Employers. If any member of the Employer's related group (as defined in Section 1.30 of the Plan) executes a Participation Agreement to this Adoption Agreement, such member's Employees are eligible to participate in this Plan, unless excluded by reason of an exclusion classification elected uner this Adoption Agreement Section 1.07. In addition: (Choose (j) or (k)) (j) No other related group member's Employees are eligible to participate in the Plan. (k) The following nonparticipating related group member's Employees are eligible to participate in the Plan unless excluded by reason of an exclusion classification elected under this Adoption Agreement Section 1.07: - --------------------------------------- 1.12 COMPENSATION Treatment of elective contributions. (Choose (a) or (b)) (a) "Compensation" includes elective contributions made by the Employer on the Employee's behalf. (b) "Compensation" does not include elective contributions. Modifications to Compensation definition. (Choose (c) or at least one of (d) through (j)) (c) No modifications other than as elected under Options (a) or (b). (d) The Plan excludes Compensation in excess of $---------------. (e) In lieu of the definition in Section 1.12 of the Plan, Compensation means any earnings reportable as W-2 wages for Federal income tax withholding purposes, subject to any other election under this Adoption Agreement Section 1.12. (f) The Plan excludes bonuses. (g) The Plan excludes overtime. (h) The Plan excludes Commissions. (i) Compensation will not include Compensation from a related employer (as defined in Section 1.30 of the Plan) that has not executed a Participation Agreement in this Plan unless, pursuant to Adoption Agreement Section 1.07, the Employees of that related employer are eligible to participate in this Plan. (j) (Specify) ---------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- If, for any Plan Year, the Plan uses permitted disparity in the contribution or allocation formula elected under Article III, any election of Options (f), (g), (h) or (j) is ineffective for such Plan Year with respect to any Nonhighly Compensated Employee. Special definition for matching contributions. "Compensation" for purposes of any matching contribution formula under Article III means: (Choose (k) or (l) only if applicable) (k) Compensation as defined in this Adoption Agreement Section 1.12. (l) (Specify) ---------------------------------------------------------------- - -------------------------------------------------------------------------------- Special definition for salary reduction contributions. An Employee's salary reduction agreement applies to his Compensation determined prior to the reduction authorized by that salary reduction agreement, with the following exceptions: (Choose (m) or at least one of (n) or (o), if applicable) (m) No exceptions. (n) If the Employee makes elective contributions to another plan maintained by the Employer, the Advisory Committee will determine the amount of the Employee's salary reduction contribution for the withholding period: (Choose (1) or (2)) (1) After the reduction for such period of elective contributions to the other plan(s). (2) Prior to the reduction for such period of elective contributions to the other plan(s). (o) (Specify) ---------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1.17 PLAN YEAR/LIMITATION YEAR. Plan Year. Plan Year means: (Choose (a) or (b)) (a) The 12 consecutive month period ending every ---------------. (b) (Specify) ---------------------------------------------------------------- - -------------------------------------------------------------------------------- Limitation Year. The Limitation Year is: (Choose (c) or (d)) (c) The Plan Year. (d) The 12 consecutive month period ending every ---------------. 1.18 EFFECTIVE DATE. New Plan. The "Effective Date" of the Plan is -----------------. Restated Plan. The restated Effective Date is -----------------. This Plan is a substitution and amendment of an existing retirement plan(s) originally established ---------------------. (Note: See the Effective Date Addendum.) 1.27 HOUR OF SERVICE. The crediting method for Hours of Service is: (Choose (a) or (b)) (a) The actual method. (b) The ---------------------------- equivalency method, except: (1) No exceptions. (2) The actual method applies for purposes of: (Choose at least one) (i) Participation under Article II. (ii) Vesting under Article V. (iii)Accrual of benefits under Section 3.06. [Note: On the blank line, insert "daily," "weekly," "semi-monthly payroll periods" or "monthly."] 1.29 SERVICE FOR PREDECESSOR EMPLOYER. In addition to the predecessor service the Plan must credit by reason of Section 1.29 of the Plan, the Plan credits Service with the following predecessor employer(s):--------------------- - -------------------------------------------------------------------------------- Service with the designated predecessor employer(s) applies: (Choose at least one of (a) or (b); (c) is available only in addition to (a) or (b)) (a) For purposes of participation under Article II. (b) For purposes of vesting under Article V. (c) Except the following Service: --------------------------/ [Note: If the Plan does not credit any predecessor service under this provision, insert "N/A" in the first blank line. The Employer may attach a schedule to this Adoption Agreement, in the same format as this Section 1.29, designating additional predecessor employers and the applicable service crediting elections.] 1.31 LEASED EMPLOYEES. If a Leased Employee is a Participant in the Plan and also participates in a plan maintained by the leasing organization: (Choose (a) or (b)) (a) The Advisory Committee will determine the Leased Employee's allocation of Employer contributions under Article III without taking into account the Leased Employee's allocation, if any, under the leasing organization's plan. (b) The Advisory Committee will reduce the Leased Employee's allocation of Employer nonelective contributions (other than designated qualified nonelective contributions) under this Plan by the Leased Employee's allocation under the leasing organization's plan, but only to the extent that allocation is attributable to the Leased Employee's service provided to the Employer. The leasing organizationn's plan: (1) Must be a money purchase plan which would satisfy the definition under Section 1.31 of a safe harbor plan, irrespective of whether the safe harbor exception applies. (2) Must satisfy the features and, if a defined benefit plan, the method of reduction described in an addendum to this Adoption Agreement, numbered 1.31. ARTICLE II EMPLOYEE PARTICIPANTS 2.01 ELIGIBILITY. Eligibility conditions. To become a Participant in the Plan, an Employee must satisfy the following eligibility conditions: (Choose (a) or (b) or both; (c) is optional as an additional election) (a) Attainment of age ------------------ (specify age, not exceeding 21). (b) Service requirement. (Choose one of (1) through (3)) (1) One Year of Service. (2) ---------- months (not exceeding 12) following the Employee's Employment Commencement Date. (3) One Hour of Service. (c) Special requirements for non-401(k) portion of plan. (Make elections under (1) and under (2)) (1) The requirements of this Option (c) apply to participation in: (Choose at least one of (i) through (iii)) (i) The allocation of Employer nonelective contributions and Participant forfeitures. (ii) The allocation of Employer matching contributions (including forfeitures allocated as matching contributions). (iii)The allocation of Employer qualified nonelective contributions. (2) For participation in the allocations described in (1), the eligibility conditions are: (Choose at least one of (i) through (iv)) (i) --------- (one or two) Year(s) of Service, without an intervening Break in Service (as described in Section 2.03(A) of the Plan) if the requirement is two Years of Service. (ii) --------- months (not exceeding 24) following the Employee's Employment Commencement Date. (iii)One Hour of Service. (iv) Attainment of age ----------------- (Specify age, not exceeding 21). Plan Entry Date. "Plan Entry Date" means the Effective Date and: (Choose (d), (e) or (f)) (d) Semi-annual Entry Dates. The first day of the Plan Year and the first day of the seventh month of the Plan Year. (e) The first day of the Plan Year. (f) (Specify entry dates) ----------------------------/ Time of Participation. An Employee will become a Participant (and, if applicable, will participate int he allocations described in Option (c)(1)), unless excluded under Adoption Agreement Section 1.07, on the Plan Entry Date (if employed on that date): (Choose (g), (h) or (I)) (g) immediately following (h) immediately preceding (i) nearest --------------------------------------------- the date the Employer completes the eligibility conditions described in Options (a) and (b) (or in Option (c)(2) if applicable) of this Adoption Agreement Section 2.01. [Note: The Employer must coordinate the selection of (g), (h) or (i) with the "Plan Entry Date" selection in (d), (e) or (f). Unless otherwise excluded under Section 1.07, the Employee must become a Participant by the earlier of: (1) the first day of the Plan Year beginning after the date the Employee completes the age and service requirements of Code ss.410(a); or (2) 6 months after the date the Employee completes those requirements.] Dual eligibility. The eligibility conditions of this Section 2.01 apply to: (Choose (j) or (k)) (j) All Employees of the Employer, except: (Choose (1) or (2)) (1) No exceptions (2) Employees who are Participants in the Plan as of the Effective Date. (k) Solely to an Employee employed by the Employer after ----------------. If the Employee was employed by the Employer on or before the specified date, the Employee will become a Participant: (Choose (1), (2) or (3)) (1) On the latest of the Effective Date, his Employment Commencement Date or the date he attains age ----------------- (not to exceed 21). (2) Under the eligibility conditions in effect under the Plan prior to the restated Effective Date. If the restated Plan required more than one Year of Service to participate, the eligibility conditions under this Option (2) for participation in the Code 401(k) arrangement under this Plan is one Year of Service for Plan Years beginning after December 31, 1988. [For restated plans only] (3) (Specify) ---------------------------------------------------------- ----------------------------------------------------------/ 2.02 YEAR OF SERVICE - PARTICIPATION. Hours of Service. An Employee must complete: (Choose (a) or (b)) (a) 1,000 Hours of Service (b) -------------- Hours of Service during an eligibility computation period to receive credit for a Year of Service. [Note: The Hours of Service requirement may not exceed 1,000.] Eligibility computation period. After the initial eligibility computation period described in Section 2.02 of the Plan, the Plan measures the eligibility computation period as: (Choose (c) or (d)) (c) The 12 consecutive month period beginning with each anniversary of an Employee's Employment Commencement Date. (d) The Plan Year, beginning with the Plan Year which includes the first anniversary of the Employee's Employment Commencement Date. 2.03 BREAK IN SERVICE - PARTICIPATION. The Break in Service rule described in Section 2.03(B) of the Plan: (Choose (a) or (b)) (a) Does not apply to the Employer's Plan. (b) Applies to the Employer's Plan. 2.06 ELECTION NOT TO PARTICIPATE. The Plan: (Choose (a) or (b)) (a) Does not permit an eligible Employee or a Participant to elect not to participate. (b) Does permit an eligible Employee or a Participant to elect not to participate in accordance with Section 2.06 and with the following rules: (Complete (1), (2), (3) and (4)) (1) An election is effective for Plan Year if filed no later than ---------------------. (2) An election not to participate must be effective for at least ------------- Plan Year(s). (3) Following a re-election to participate, the Employee or Participant: (i) May not again elect not to participate for any subsequent Plan Year. (ii) May again elect not to participate, but not earlier than the --------------------- Plan Year following the Plan Year in which the re-election first was effective. (4) (Specify) -------------------------------------------------------- [Insert "N/A" if no other rules apply]. ARTICLE III EMPLOYER CONTRIBUTIONS AND FORFEITURES 3.01 AMOUNT. Part I. [Options (a) through (g)] Amount of Employer's contribution. The Employer's annual contribution to the Trust will equal the total amount of deferral contributions, matching contributions, qualified nonelective contributions and nonelective contributions, as determined under this Section 3.01. (Choose any combination of (a), (b), (c) and (d), or choose (e)) (a) Deferral contributions (Code 401(k) arrangement). (Choose (1) or (2) or both) (1) Salary reduction arrangement. The Employer must contribute the amount by which the Participants have reduced their Compensation for the Plan Year, pursuant to their salary reduction agreements on file with the Advisory Committee. A reference in the Plan to salary reduction contributions is a reference to these amounts. (2) Cash or deferred arrangement. The Employer will contribute on behalf of each Participant the portion of the Participant's proportionate share of the cash or deferred contribution which he has not elected to receive in cash. See Section 14.02 of the Plan. The Employer's cash or deferred contribution is the amount the Employer may from time to time deem advisable which the Employer designates as a cash or deferred contribution prior to making that contribution to the Trust. (b) Matching contributions. The Employer will make matching contributions in accordance with the formula(s) elected in Part II of this Adoption Agreement Section 3.01. (c) Designated qualified nonelective contributions. The Employer, in its sole discretion, may contribute an amount which it designates as a qualified nonelective contribution. (d) Nonelective contributions. (Choose any combination of (1) through (4)) (1) Discretionary contribution. The amount (or additional amount) the Employer may from time to time deem advisable. (2) The amount (or additional amount) the Employer may from time to time deem advisable, separately determined for each of the following classifications of Participants: (Choose (i) of (ii)) (i) Nonhighly Compensated Employees and Highly Compensated Employees. (ii) (Specify classifications) ------------------------------------ ------------------------------------------------------. Under this Option (2), the Advisory Committee will allocate the amount contributed for each Participant classification in accordance with Part II of Adoption Agreement Section 3.04, as if the Participants in that classification were the only Participants in the Plan. (3) ----------------% of the Compensation of all Participants under the Plan, determined for the Employer's taxable year for which it makes the contribution. [Note: The percentage selected may not exceed 15%.] (4) -----------% of Net Profits but not more than $--------------. (e) Frozen Plan. This Plan is a frozen Plan effective - ----------------------. The Employer will not contribute to the Plan with respect to any period following the stated date. Net Profits. The Employer: (Choose (f) or (g)) (f) Need not have Net Profits to make its annual contribution under this Plan. (g) Must have current or accumulated Net Profits exceeding $------------ to make the following contributions: (Choose at least one) (1) Cash or deferred contributions described in Option (a)(2). (2) Matching contributions described in Option (b), except: -----------------------------------------------------------. (3) Qualified nonelective contributions described in Option (c). (4) Nonelective contributions described in Option (d). The term "Net Profits" means the Employer's net income or profits for any taxable year determined by the Employer upon the basis of its books of account in accordance with generally accepted accounting practices consistently applied without any deductions for Federal and state taxes upon income or for contributions made by the Employer under this Plan or under any other employee benefit plan the Employer maintains. The term "net Profits" specifically excludes: - ---------------------------------------------------------------. [Note: Enter "N/A" if no exclusions apply.] If the Employer requires Net Profits for matching contributions and the Employer does not have sufficient Net Profits uner Option (g), it will reduce the matching contribution under a fixed formula on a prorata basis for all Participants. A Participant's share of the reduced contribution will bear the same ratio as the matching contribution the Participant would have received if Net Profits were sufficient bears to the total matching contribution all Participants would have received if Net Profits were sufficient. If more than one member of a related group (as defined in Section 1.30) execute this Adoption Agreement, each participating member will determine net Profits separately but will not apply this reduction unless, after combining the separately determined Net Profits, the aggregate Net Profits are insufficient to satisfy the matching contribution liability. "Net Profits" includes both current and accumulated Net Profits. Part II. [Options (h) through (j)] Matching contribution formula. [Note: If the Employer elected Option (b), complete Options (h), (i) and (j).] (h) Amount of matching contributions. For each Plan Year, the Employer's matching contribution is: (Choose any combination of (1), (2), (3), (4) and (5)) (1) An amount equal to -----------% of each Participant's eligible contributions for the Plan Year. (2) An amount equal to -----------% of each Participant's first tier of eligible contributions for the Plan Year, plus the following matching percentage(s) for the following subsequent tiers of eligible contributions for the Plan Year: --------------------------------------. (3) Discretionary formula. (i) An amount (or additional amount) equal to a matching percentage the Employer from time to time may deem advisable of the Participant's eligible contributions for the Plan Year. (ii) An amount (or additional amount) equal to a matching percentage the Employer from time to time may deem advisable of each tier of the Participant's eligible contributions for the Plan Year. (4) An amount equal to the following percentage of each Participant's eligible contributions for the Plan Year, based on the Participant's Years of Service: Number of Years of Service Matching Percentage ----------- ------------ ----------- ------------ ----------- ------------ ----------- ------------ The Advisory Committee will apply this formula by determining Years of Service as follows: -------------------------------------------------. (5) A Participant's matching contribuitons may not: (Choose (i) or (ii)) (i) Exceed -------------------------------------------. (ii) Be less than -------------------------------------. Related Employers. If two or more related employers (as defined in Section 1.30) contribute to this Plan, the related employers may elect different matching contribution formulas by attaching to the Adoption Agreement a separately completd copy of this Part II. [Note: Separate matching contribution formulas create separate current benefit structures that must satisfy the minimum participation test of Code 401(a)(26).] (i) Definition of eligible contributions. Subject to he requirements of Option (j), the term "eligible contributions" means: (Choose any combination of (1) through (3)) (1) Salary reduction contributions. (2) Cash or deferred contributions (including any part of the Participant's proportionate share of the cash or deferred contribution which the Employer defers without the Participant's election). (3) Participant mandatory contributions, as designated in Adoption Agreement Section 4.01. See Section 14.04 of the Plan. (j) Amount of eligible contributions taken into account. When determining a Participant's eligible contributions taken into account under the matching contributions formula(s), the following rules apply: (Choose any combination of (1) through (4)) (1) The Advisory Committee will take into account all eligible contributions credited for the Plan Year. (2) The Advisory Committee will disregard eligible contributions exceeding (3) The Advisory Committee will treat as the first tier of eligible contributions, an amount not exceeding: -----------------------------. The subsequent tiers of eligible contributions are: - ---------------------------. (4) (Specify)------------------------------------. Part III. [Options (k) and (l). Special rules for Code ss.401(k) Arrangement. (Choose (k) or (l), or both, as applicable) (k) Salary Reduction Agreements. The following rules and restrictions apply to an Employee's salary reduction agreement: (Make a selection under (1), (2), (3) and (4)) (1) Limitation on amount. The Employee's salary reduction contributions: (Choose (i) or at least one of (ii or (iii)) (i) No maximum limitation other than as provided in the Plan. (ii) May not exceed ------------% of Compensation for the Plan Year, subject to the annual additions limitation described in Part 2 of Article III and the 402(g) limitation described in Section 14.07 of the Plan. (iii)Based on percentages of Compensation must equal at least --------------------. (2) An Employee may revoke, on a prospective basis, a salary reduction agreement: (Choose (i), (ii), (iii) or (iv)) (i) Once during any Plan Year but not later than --------------------- of the Plan Year. (ii) As of any Plan Entry Date. (iii)As of the first day of any month. (iv) (Specify, but must be at least once per Plan Year -------------------------. (3) an Employee who revokes his salary reduction agreemetn may file a new salary reduction agreemetn with an effective date: (Choose (i), (ii), (iii) or (iv)) (i) No earlier than the first day of the next Plan Year. (ii) As of any subsequent Plan Entry Date. (iii)As of the first day of any month subsequent to the month in which he revoked an Agreement. (iv) (Specify, but must be at least once per Plan Year following the Plan Year of revocation) ----------------------. (4) A Participant may increase or may decrease, on a prospective basis, his salary reduction percentage or dollar amount: (Choose (i), (ii), (iii) or (iv)) (i) As of the beginning of each payroll period. (ii) As of the first day of each month. (iii)As of any Plan Entry Date. (iv) (Specify, but must permit an increase or a decrease at least once per Plan Year -----------------------------------. (l) Cash or deferred contributions. For each Plan Year for which the Employer makes a designated cash or deferred contribution, a Participant may elect to receive directly in cash not more than the following portion (or, if less, the 402(g) limitation described in Section 14.07 of the Plan) of his proportionate share of that cash or deferred contribution: (Choose (1) or (2)) (1) All or any portion. (2) ----------------%. 3.04 CONTRIBUTION ALLOCATION. the Advisory Committee will allocate deferral contributions, matching contributions, qualified nonelective contributions and nonelective contributions in accordance with Section 14.06 and the elections under this Adoption Agreement Section 3.04. Part I. [Options (a) through (d)]. Special Accounting Elections. (Choose whichever elections are applicable to the Employer's Plan) (a) Matching Contribuitons Account. The Advisory Committee will allocate matching contributions to a Participant's: (Choose (1) or (20; (3) is available only in addition to (1)) (1) Regular Matching Contribution Account. (2) Qualified Matching Contributions Account. (3) Except, matching contributions under Option(s) --------------------- of Adoption Agreement Section 3.01 are allocable to the Qualified Matching Contributions Account. (b) Special Allocation Dates for Salary Reduction Contributions. The advisory Committee will allocate salary reduction contributions as of the Accounting Date and as of the following additional allocation dates: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (c) Special Allocation Dates for Matching Contributions. The Advisory Committee will allocate matching contributions as of the Accounting Date and as of the following additional allocation dates: - ----------------------------------------------------------. (d) Designated Qualified Nonelective Contributions - Definition of Participant. For purposes of allocating the designated qualified nonelective contribution, "Participant" means: (Choose (1), (2) or (3)) (1) All Participants. (2) Participants who are Nonhighly Compensated Employees for the Plan Year. (3) (Specify) ---------------------------------------------------------- -------------------------------------------------------------------------- Part II. Method of Allocation - Nonelective Contribution. Subject to any restoration allocation required under Section 5.04, the Advisory Committee will allocate and credit each annual nonelective contribution (and Participant forfeitures treated as nonelective contributions) to the Employer Contributions Account of each Participant who satisfies the conditions of Section 3.06, in accordance with the allocation method selected under this Section 3.04. If the Employer elects Option (e)(2), Optoin (g)(2) or Option (h), for the first 3% of Compensation allocated to all Participants, "Compensation" does not include an exclusions elected under Adoptoin Agreement Section 1.12 (other than the exclusion of elective contributions), and the Advisory Committee must take into account the Participant's Compensation for the entire Plan Year. (Choose an allocation method under (e), (f), (g) or (h); (I) is mandatory if the Employer elects (f), (g) or (h); (j) is optional in addition to any other election.) (e) Nonintegrated Allocation Formula. (Choose (1) or (2)) (1) The Advisory Committee will allocate the annual nonelective contributions in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (2) The Advisory Committee will allocate the annual nonelective contributions in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. For purposes of this Option (2), "Participant" means, in addition to a Participant who satisfies the requirements of Section 3.06 for the Plan Year, any other Participant entitled to a top heavy minimum allocation under Section 3.04(b), but such Participant's allocation will not exceed 3% of his Compensation for the Plan Year. (f) Two-Tiered Integrated Allocation Formula - Maximum Disparity. First, the Advisory Committee will allocate the annual Employer nonelective contributions in the same ratio that each Participant's Compensation plus Excess Compensation of all Participants for the Plan Year bears to the total Compensation plus Excess Compensation of all Participants for the Plan Year. The allocation under this paragraph, as a percentage of each Participant's Compensation plus Excess Compensation, must not exceed the applicable percentage (5.7%, 5.4% or 4.3%) listed under the Maximum Disparity Table following Option (i). The Advisory Committee then will allocate any remaining nonelective contributions in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (c) Three-Tiered Integrated Allocation Formula. First, the Advisory Committee will allocate the annual Employer nonelective contributions in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. The allocation under this paragraph, as a percentage of each Participant's Compensation may not exceed the applicable percentage (5.7%, 5.4% or 4.3%) listed under the Maximum Disparity Table following Option (I). Solely for purposes of the allocation in this first paragraph, "Participant" means, in addition to a Participant who satisfies the requirements of Section 3.06 for the Plan Year: (Choose (1) or (2)) (1) No other Participant. (2) any other Participant entitled to a top heavy minimum allocation under Section 3.04(B), but such Participant's allocation under this Option (g) will not exceed 3% of his Compensation for the Plan Year. As a second tier allocation, the Advisory Committee will allocate the nonelective contributions in the same ratio that each Participant's Excess Compensation for the Plan Year bears to the total Excess Compensation of all Participants for the Plan Year. The allocation under this paragraph, as a percentage of each Participant's Excess Compensation, may not exceed the allocation percentage in the first paragraph. Finally, the Advisory Committee will allocate any remaining nonelective contributions in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (h) Four-Tiered Integrated Allocation Formula. First, the Advisory Committee will allocate the annual Employer nonelective contributions in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year, but not exceeding 3% of each Participant's Compensation. Solely for purposes of this first tier allocation, a "Participant" means, in addition to any Participant who satisfies the requirements of Section 3.06 for the Plan Year, any other Participant entitled to a top heavy minimum allocation under Sectoin 3.04(B) of the Plan. As a second tier allocation, the Advisory Committee will allocate the nonelective contributions in the same ratio that each Participant's Excess Compensation for the Plan Year bears to the total Excess Compensation of all Participants for the Plan Year, but not exceeding 3% of each Participant's Excess Compensation. As a third tier allocation, the Advisory Committee will allocate the annual Employer contributions in the same ratio that each Participant's Compensation plus Excess Compensation for the Plan Year bears to the total Compensation plus Excess Compensation of all Participants for the Plan year. The allocation under this paragraph, as a percentage of each Participant's Compensation plus Excess Compensation, must not exceed the applicable percentage (2.7%, 2.4% or 1.3%) listed under the Maximum Disparity Table following Option (i). The Advisory Committee then will allocate any remaining nonelective contributions in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (i) Excess Compensation. For purposes of Option (f), (g) or (h), "Excess Compensation" means Compensation in excess of the following Integration Level: (Choose (1) or (2)) (1) --------% (not exceeding 100%) of the taxable wage base, as determined under Section 230 of the Social Security Act, in effect on the first day of the Plan Year: (Choose any combination of (i) and (ii) or choose (iii)) (i) Rounded to ----------------------- (but not exceeding the taxable wage base). (ii) But not greater than $--------------------. (iii)Without any further adjustment or limitation. (2) $------------------. [Note: Not exceeding the taxable wage base for the Plan Year in which this Adoption Agreement first is effective.] Maximum Disparity Table. For purposes of Options (f), (g) and (h), the applicable percentage is: Integration Level Applicable Percentages Applicable (as percentage of for Option (f) or Percentages taxable wage base) Option (g) For Option (h) - -------------------------------------------------------------------------------- 100% 5.7% 2.7% More than 80% but less than 100% 5.4% 2.4% More than 20% (but not less than $10,001) and not more than 80% 4.3% 1.3% 20% (or $10,000, if greater) or less 5.7% 2.7% (j) Allocation offset. The Advisory Committee will reduce a Participant's allocation otherwise made under Part II of this Section 3.04 by the Participant's allocation under the following qualified plan(s) maintained by the Employer: ----------------. The Advisory Committee will determine this allocation reduction: (Choose (1) or (2)) (1) By treating the term "nonelective contribution" as including all amounts paid or accrued by the Employer during the Plan Year to the qualified plan(s) referenced under this Option (j). If a Participant under this Plan also participates in that other plan, the Advisory Committee will treat the amount the Employer contributes for or during a Plan Year on behalf of a particular Participant under such other plan as an amount allocated under this Plan to that Participant's Account for that Plan Year. The Advisory Committee will make the computation of allocation required under the immediately preceding sentence before making any allocation of nonelecive contributions under this Section 3.04. (2) In accordance with the formula provided in an addendum to this Adoption Agreement, numbered 3.04(j). Top Heavy Minimum Allocation - Method of Compliance. If a Participant's allocation under this Section 3.04 is less than the top heavy minimum allocation to which he is entitled under Section 3.04(B): (Choose (k) or (l)) (k) The Employer will make any necessary additional contribution to the Participant's Account, as described in Section 3.04(B)(7)(a) of the Plan. (l) The Employer will satisfy the top heavy minimum allocation under the following plan(s) it maintains: ---------------------. However, the Employer will make any necessary additional contribution to satisfy the top heavy minimum allocation for an Employee covered only under this Plan and not under the other plan(s) designated in this Option (l). See Section 3.04(B)(7)(b) of the Plan. If the Employer maintains another plan, the Employer may provide in an addendum to this Adoption Agreement, numbered Section 3.04, any modifications to the Plan necessary to satisfy the top heavy requirements under Code ss.416. Related employers. If two or more related employers (as defined in Section 1.30) contribute to this Plan, the Advisory Committee must allocate all Employer nonelective contributions (and forfeitures treated as nonelective contributions) to each Participant in the Plan, in accordance with the elections in this Adoption Agreement Section 3.04: (Choose (m) or (n)) (m) Without regard to which contributing related group member employes the Participant. (n) Only to the Participants directly employed by the contributing Employer. If a Participant receives Compensation from more than one contributing Employer, the Advisory Committee will determine the allocations under this Adoption Agreement Section 3.04 by prorating among the participating Employers the Participant's Compensation and, if applicable, the Participant's Integration Level under Option (i). 3.05 FORFEITURE ALLOCATION. Subject to any restoration allocation required under Sections 5.04 or 9.14, the Advisory Committee will allocate a Participant forfeiture in accordance with Section 3.04: (Choose (a) or (b); (c) and (d) are optional in addition to (a) or (b)) (a) As an Employer nonelective contribution for the Plan Year in which the forfeiture occurs, as if the Participant forfeiture were an additional nonelective contribution for that Plan Year. (b) To reduce the Employer matching contributions and nonelective contributions for the Plan Year: (Choose (1) or (2)) (1) in which the forfeiture occurs. (2) immediately following the Plan Year in which the forfeiture occurs. (c) To the extent attributable to matching contributions: (Choose (1), (2) or (3)) (1) In the manner elected under Options (a) or (b). (2) First to reduce Employer matching contributions for the Plan Year: (Choose (i) or (ii)) (i) in which the forfeiture occurs, (ii) immediately following the Plan Year in which the forfeiture occurs, then as elected in Options (a) or (b). (3) As a discretionary matching contribution for the Plan Year in which the forfeiture occurs, in lieu of the manner elected under Options (a) or (b). (d) First to reduce the Plan's ordinary and necessary administrative expenses for the Plan Year and then will allocate any remaining forfeitures in the manner described in Option (a), (b) or (c), whichever applies. If the Employer elects Option (c), the forfeitures used to reduce Plan expenses: (Choose (1) or (2)) (1) relate proportionately to forfeitures described in Option (c) and to forfeitures described in Options (a) or (b). (2) relate first to forfeitures described in Option --------------. Allocation of forfeited excess aggregate contributions. The Advisory Committee will allocate any forfeited excess aggregate contributions (as described in Section 14.09): (Choose (e), (f) or (g)) (e) To reduce Employer matching contributions for the Plan Year: (Choose (1) or (2)) (1) in which the forfeiture occurs. (2) immediately following the Plan Year in which the forfeiture occurs. (f) As Employer discretionary matching contributions for the Plan Year in which forfeited, except the Advisory Committee will not allocate these forfeitures to the Highly Compensated Employees who incurred the forfeitures. (g) In accordance with Options (a) through (d), whichever applies, except the Advisory Committee will not allocate these forfeitures under Option (a) or under Option (c)(3) to the Highly Compensated Emplyees who incurred the forfeitures. 3.06 ACCRUAL OF BENEFIT. Compensation taken into account. For the Plan Year in which the Employee first becomes a Participant, the Advisory Committee will determine the allocation of any cash or deferred contribution, designated qualified nonelective contribution or nonelective contribution by taking into account: (Choose (a) or (b)) (a) The Employee's Compensation for the entire Plan Year. (b) The Employee's Compensation only for the portion of the Plan Year in which the Employee actually is a Participant in the Plan. Accrual Requirements. Subject to the suspension of accrual requirements of Section 3.06(E) of the Plan, to receive an allocation of cash or deferred contributions, matching contributions, designated qualified nonelective contributions, nonelective contributions and Participant forfeitures, if any, for the Plan Year, a Participant must satisfy the conditions described in the folloiwng elections: (Choose (c) or at least one of (d) through (f)) (c) Safe harbor rule. If the Participant is employed by the Employer on the last day of the Plan Year, the Participant must complete at least one Hour of Service for that Plan Year. If the Participant is not employed by the Employer on the last day of the Plan Year, the Participant must complete at least 501 Hours of Service during the Plan Year. (d) Hours of Service condition. The Participant must complete the following minimum number of Hours of Service during the Plan Year: (Choose at least one of (1) through (5)) (1) 1,000 Hours of Service. (2) (Specify, but the number of Hours of Service may not exceed 1,000) --------------------------------------------. (3) No Hour of Service requirement if the Participant terminates employment during the Plan Year on account of: (Choose (i), (ii) or (iii)) (i) Death. (ii) Disability. (iii)Attainment of Normal Retirement Age in the current Plan Year or in a prior Plan Year. (4) ------------ Hours of Service (not exceeding 1,000) if the Participant terminates employment with the Employer during the Plan Year, subjet to any election in Option (3). (5) No Hour of Service requirement for an allocation of the following contributions: ------------------------------------------------- -------------------------------------------------------------------------- (e) Employment conditions. The Participant must be employed by the Employer on the last day of the Plan Year, irrespective of whether he satisfies any Hours of Service condition under Option (d), with the following exceptions: (Choose (1) or at least one of (2) through (5)) (1) No exceptions. (2) Termination of employment because of death. (3) Termination of employment because of disability. (4) Termination of employment following attainment of Normal Retirement Age. (5) No employment conditions for the following contributions: ---------------------------------. (f) (Specify other conditions, if applicable): ------------------------------- - -------------------------------------------------------------------------------- Suspension of Accrual Requirements. The suspension of accrual requirements of Section 3.06(E) of the Plan: (g), (h) or (I)) (g) Applies to the Employer's Plan. (h) Does not apply to the Employer's Plan. (i) Applies in modified form to the Employer's Plan, as described in an addendum to this Adoption Agreement, numbered Section 3.06(E). Special accrual requirements for matching contributions. If the Plan allocates matching contributions on two or more allocation dates for a Plan Year, the Advisory Committee, unless otherwise specified in Option (1), will apply any Hours of Service condition by dividing the required Hours of Service on a prorata basis to the allocation periods included in that Plan Year. Furthermore, a Participant who satisfies the conditions described in this Adoption Agreement Section 3.06 will receive an allocation of matching contributions (and forfeitures treated as matching contributions) only if the Participant satisfies the following additional condition(s): (Choose (j) or at least one of (k) or (l)) (j) No additional conditions. (k) The Participant is not a Highly Compensated Employee for the Plan Year. This Option (k) applies to: (Choose (1) or (2)) (1) All matching contributions. (2) Matching contributions described in Option(s) --------- of Adoption Agreement Section 3.01. (l) (Specify) ---------------------------------------------------------------- - -------------------------------------------------------------------------------. 3.15 MORE THAN ONE PLAN LIMITATION. If the provisions of Section 3.15 apply, the Excess Amount attributed to this Plan equals: (Choose (a), (b) or (c)) (a) The product of: (i) the total Excess Amount allocated as of such date (including any amount which the Advisory Committee would have allocated but for the limitations of Code ss.415), times (ii) the ratio of (1) the amount allocated to the Participant as of such date under this Plan divided by (2) the total amount allocated as of such date under all qualified defined contribution plans (determined without regard to the limitations of Code ss.415). (b) The total Excess Amount. (c) None of the Excess Amount. 3.18 DEFINED BENEFIT PLAN LIMITATION. Application of limitation. The limitation under Section 3.18 of the Plan: (Choose (a) or (b)) (a) Does not apply to the Employer's Plan because the Employer does not maintain and never has maintained a defined benefit plan covering any Participant in this Plan. (b) Applies to the Employer's Plan. To the extent necessary to satisfy the limitation under Section 3.18, the Employer will reduce: (Choose (1) or (2)) (1) The Participant's projected annual benefit under the defined benefit plan under which the Participant participates. (2) Its contribution or allocation on behalf of the Participant to the defined contribution plan under which the Participant participates and then, if necessary, the Participant's projected annual benefit under the defined benefit plan under which the Participant participates. [Note: If the Employer selects (a), the remaining options in this Section 3.18 do not apply to the Employer's Plan.] Coordination with top heavy minimum allocation. The Advisory Committee will apply the top heavy minimum allocation provisions of Section 3.04(B) of the Plan with the following modifications: (Choose (c), or at least one of (d) or (e)) (c) No modifications. (d) For Non-Key Employees participating only in this Plan, the top heavy minimum allocation is the minimum allocation described in Section 3.04(B) determined by substituting ---------% (not less than 4%) for "3%", except: (Choose (i or (ii)) (i No exceptions. (ii) Plan Years in which the top heavy ratio exceeds 90%. (e) For Non-Key Employees also participating in the defined benefit plan, the top heavy minimum is: (Choose (1) or (2)) (1) 5% of Compensation (as determined under Section 3.04(B) of the Plan) irrespective of the contribution rate of any Key Employee, except: (Choose (i) or (ii)) (i) No exceptions. (ii) Substituting "7 1/2%" for "5%" if the top heavy ratio does not exceed 90%. (2) 0%. [Note: The employer may not select this Option (2) unless the defined benefit plan satisfies the top heavy minimum benefit requirements of Code ss.416 for these Non-Key Employees.] Actuarial Assumptions for Top Heavy Calculation. To determine the top heavy ratio, the Advisory Committee will use the following interest rate and mortality assumptions to value accured benefits under a defined benefit plan:------------- - -------------------------------------------------------------------------------. If the elections under this Section 3.18 are not appropriate to satisfy the limitations of Section 3.18, or the top heavy requirements under Code ss.416, the Employer must provide the appropriate provisions in an addendum to this Adoption Agreement. ARTICLE IV PARTICIPANT CONTRIBUTIONS 4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. The Plan: (Choose (a) or (b); (c) is available only with (b)) (a) Does not permit Participant nondeductible contributions. (b) Permits Participant nondeductible contributions, pursuant to Section 14.04 of the Plan. (c) The following portion of the Participant's nondeductible contributions for the Plan Year are mandatory contributions under Option (i)(3) of Adoption Agreement Section 3.01: (Choose (1) or (2)) (1) The amount which is not less than: -------------------. (2) The amount which is not greater than: ----------------. Allocation dates: The Advisory Committee will allocate nondeductible contributions for each Plan Year as of the Accounting Date and the following additional allocation dates: (Choose (d) or (e)) (d) No other allocation dates. (e) (Specify) ---------------------------------------------------------------- - -------------------------------------------------------------------------------. As of an allocation date, the Advisory Committee will credit all nondeductible contributions made for the relevant allocation period. Unless otherwise specified in (e), a nondeductible contribution relates to an allocation period only if actually made to the Trust no later than 30 days after that allocation period ends. 4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. Subject to the restrictions of Article VI, the following distribution options apply to a Participant's Mandatory Contributions Account, if any, prior to his Separation from Service: (Choose (a) or at least one of (b) through (d)) (a) No distribution optoins prior to Separation from Service. (b) The same distribution options applicable to the Deferral Contributions Account prior to the Participant's Separation from Service, as elected in Adoption Agreement Section 6.03. (c) Until he retires, the Participant has a continuing election to receive all or any portion of his Mandatory Contributions Account if: (Choose (1) or at least one of (2) through (4)) (1) No conditions. (2) The mandatory contributions have accumulated for at least --------------- Plan Years since the Plan Year for which contributed. (3) The Participant suspends making nondeductible contributions for a period of months. (4) (Specify)----------------------------------------------------------- -------------------------------------------------------------------------. (d) (Specify) ---------------------------------------------------------------- -------------------------------------------------------------------------. ARTICLE V TERMINATION OF SERVICE - PARTICIPANT VESTING 5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is: (Choose (a) or (b)) (a) ----------------------- [State age, but may not exceed age 65]. (b) The later of the date the Participant attains --------- years of age or the - --------- anniversary of the first day of the Plan Year in which the Participant commenced participation in the Plan. [The age selected may not exceed age 65 and the anniversary selected may not exceed the 5th.] 5.02 PARTICIPANT DEATH OR DISABILITY. The 100% vesting rule under Section 5.02 of the Plan: (Choose (a) or choose one or both of (b) and (c)) (a) Does not apply. (b) Applies to death. (c) Applies to disability. 5.03 VESTING SCHEDULE. Deferral Contributions Account/Qualified Matching Contributions Account/Qualified Nonelective Contributions Account/Mandatory Contributions Account. A Participant has a 100% Nonforfeitable interest at all times in his Deferral Contributions account, his Qualified Matching Contributions Account, his Qualified Nonelective Contributions Account and in his Mandatory Contributions Account. Regular Matching Contributions Account/Employer contributions Account. With respect to a Participant's Regular Matching Contributions Account and Employer Contributions Account, the Employer elects the following vesting schedule: (Choose (a) or (b); (c) and (d) are available only as additional options) (a) Immediate vesting. 100% Nonforfeitable at all times. [Note: The Employer must election Option (a) if the eligibility conditions under Adoption Agreement Section 2.01(c) require 2 year of service or more than 12 months of employment.] (b) Graduated Vesting Schedules. Top Heavy Schedule Non Top Heavy Schedule (Mandatory) (Optional) Years of Nonforfeitable Years of Nonforfeitable Service Percengage Service Percentage - -------------------------------------------------------------------------------- Less than 1 ----- Less than 1 ----- 1 ----- 1 ----- 2 ----- 2 ----- 3 ----- 3 ----- 4 ----- 4 ----- 5 ----- 5 ----- 6 or more 100% 6 ----- 7 or more ----- (c) Special vesting election for Regular Matching Contributions Account. In lieu of the election under Options (a) or (b), the Employer elects the following vesting schedule for a Participant's Regular Matching Contributions Account: (Choose (1) or (2)) (1) 100% Nonforfeitable at all times. (2) In accordance with the vesting schedule described in the addendum to this Adoption Agreement, numbered 5.03(c). [Note: If the Employer elects this Option (c)(2), the addendum must designate the applicable vesting schedule(s) using the same format as used in Option (b).] [Note: Under Options (b) and (c)(2), the Employer must complete a Top Heavy Schedule which satisfies Code ss.411(a)(2). Also see Section 7.05 of the Plan.] (d) The Top Heavy Schedule under Option (b) (and, if applicable, under Option (c)(2)) applies: (Choose (1) or (2)) (1) Only in a Plan Year for which the Plan is top heavy. (2) In the Plan Year for which the Plan first is top heavy and then in all subsequent Plan Years. [Note: The Employer may not elect Option (d) unless it has completed a Non Top Heavy Schedule.] Minimum Vesting. (Choose (e) or (f)) (e) The Plan does not apply a minimum vesting rule. (f) A Participant's Nonforfeitable Accrued Benefit will never be less than the lesser of $--------------- or his entire Accrued Benefit, even if the application of a graduated vesting schedule under Options (b) or (c) would result in a smaller Nonforfeitable Accrued Benefit. Life Insurance Investments. The Participant's Accrued Benefit attributable to insurance contracts purchased on his behalf under Article XI is: (Choose (g) or (h)) (g) Subject to the vesting election under Options (a), (b), or (c). (h) 100% Nonforfeitable at all times, irrespective of the vesting election under Options (b) or (c)(2). 5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/RESTORATION OF FORFEITED ACCRUED BENEFIT. The deemed cash-out rule described in Section 5.04(C) of the Plan: (Choose (a) or (b)) (a) Does not apply. (b) Will apply to determine the timing of forfeitures for 0% vested Participants. A Participant is not a 0% vested Participant if he has a Deferral Contributions Account. 5.06 YEAR OF SERVICE - VESTING. Vesting computation period. The Plan measures a Year of Service on the basis of the following 12 consecutive month periods: (Choose (a) or (b)) (a) Plan Years. (b) Employment Years. An Employment Year is the 12 consecutive month period measured from the Employee's Employment Commencement Date and each successive 12 consecutive month period measured from each anniversary of that Employment Commencement Date. Hours of Service. The minimum number of Hours of Service an Employee must complete during a vesting computation period to receive credit for a Year of Service is: (choose (c) or (d)) (c) 1,000 Hours of Service. (d) ------- Hours of Service. [Note: The Hours of Service requirement may not exceed 1,000.] 5.08 INCLUDED YEARS OF SERVICE - VESTING. The Employer specifically excludes the following Years of Service: (Choose (a) or at least one of (b) through (e)) (a) None other than as specified in Section 5.08(a) of the Plan. (b) Any Year of Service before the Participant attained the age of - ------------------. [Note: The age selected may not exceed age 18.] (c) Any Year of Service during the period the Employer did not maintain this Plan or a predecessor plan. (d) Any Year of Service before a Break in Service if the number of consecutive Breaks in Service equals or exceeds the greater of 5 or the aggregate number of the Years of Service prior to the Break. This exception applies only if the Participant is 0% vested in his Accrued Benefit derived from Employer contributions at the time he has a Break in Service. Furthermore, the aggregate number of Years of Service before a Break in Service do not include any Years of Service not required to be taken into account under this exception by reason of any prior Break in Service. (e) Any Year of Service earned prior to the effective date of ERISA if the Plan would have disregarded that Year of Service on account of an Employee's Separation from Service under a Plan provision in effect and adopted before January 1, 1974. ARTICLE VI TIME AND METHOD OF PAYMENTS OF BENEFITS Code ss.411(d)(6) Protected Benefits. The elections under this Article VI may not eliminate Code ss.411(d)(6) protected benefit. To the extent the elections would eliminate a Code ss.411(d)(6) protected benefit, see Section 13.02 of the Plan. Furthermore, if the elections liberalize the optional forms of benefit under the Plan, the more liberal options apply on the later of the adoption date or the Effective Date of this Adoption Agreement. 6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Distribution date. A distribution date under the Plan means - --------------------------------------------------------------. [Note: The Employer must specify the appropriate date(s). The specified distribution dates primarily establish annuity starting dates and the notice and consent periods prescribed by the Plan. The Plan allows the Trustee an administratively practicable period of time to make the actual distribution relating to a particular distribution date.] Nonforfeitable Accrued Benefit Not Exceeding $3,500. Subject to the limitations of Section 6.01(A)(1), the distribution date for distribution of a Nonforfeitable Accrued Benefit not exceeding $3,500 is: (Choose (a), (b), (c) or (d)or (e)) (a) ----------- of the -------------- Plan Year beginning after the Participant's Separation from Service. (b) ------------------------ following the Participant's Separation from Service. (c) --------------------------------- of the Plan Year after the Participant incurs ---------------------- Break(s) in Service (as defined in Article V). (d) -------------- following the Participant's attainment of Normal Retirement Age, but not earlier than --------------- days following his Separation from Service. (e) (Specify) ---------------------------------------------------------------- - -------------------------------------------------------------------------------. Nonforfeitable Accrued Benefit Exceeds $3,500. See the elections under Section 6.03. Disability. The distribution date, subject to the limitations of Section 6.01(A)(3), is: (Choose (f), (g) or (h)) (e) -------------------- after the Participant terminates employment because of disability. (f) The same as if the Participant had terminated employment without disability. (h) (Specify)---------------------------------------------------------------- - -------------------------------------------------------------------------------. Hardship. (Choose (i) or (j)) (i) The Plan does not permit a hardship distribution to a Participant who has separated from Service. (h) The Plan permits a hardship distribution to a Participant who has separated from Service in accordance with the hardship distribution policy stated in (Choose (1), (2) or (3)) (1) Section 6.01(A)(4) of the Plan. (2) Section 14.11 of the Plan. (3) The addendum to this Adoption Agreement, numbered Section 6.01. Default on a Loan. If a Participant or Beneficiary defaults on a loan made pursuant to a loan policy adopted by the Advisory Committee pursuant to Section 9.04, the Plan: (Choose (k), (l) or (m)) (k) Treats the default as a distributable event. the Trustee, at the time of the default, will reduce the Participant's Nonforfeitable Accrued Benefit by the lesser of the amount in default (plus accrued interest) or the Plan's security interest in that Nonforfeitable Accrued Benefit. To the extent the loan is attributable to the Participant's Deferral Contributions Account, Qualified Matching Contributions Account or Qualified Nonelective Contributions Account, the Trustee will not reduce the Participant's Nonforfeitable Accrued Benefit unless the participant has separated from Service or unless the Participant has attained age 59 1/2. (l) Does not treat the default as a distributable event. When an otherwise distributable event first occurs pursuant to Section 6.01 or Section 6.03 of the Plan, the Trustee will reduce the Participant's Nonforfeitable Accrued Benefit by the lesser of the amount in default (plus accrued interest) or the Plan's security interest in that Nonforfeitable Accrued Benefit. (m) (Specify) ---------------------------------------------------------------- - -------------------------------------------------------------------------------. 6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. The Advisory Committee will apply Section 6.02 of the Plan with the following modifications: (Choose (a) or at least one of (b), (c), (d) and (e)) (a) No modifications. (b) Except as required under Section 6.01 of the Plan, a lump sum distribution is not available: ------------------------------------------------- - -------------------------------------------------------------------------------. (c) An installment distribution: (Choose (1) or at least one of (2) or (3)) (1) Is not available under the Plan. (2) May not exceed the lesser of ------------- years of the maximum period permitted under Section 6.02. (3) (Specify) --------------------------------------------------------- -------------------------------------------------------------------------. (d) The Plan permits the following annuity options: ------------------------- - ----------------------------------------------------------------. Any Participant who elects a life annuity option is subject to the requirements of Sections 6.04(A), (B), (C) and (D) of the Plan. See Section 6.04(E). [Note: The Employer may specify additional annuity options in an addendum to this Adoption Agreement, numbered 6.02(d).] 6.03 BENEFIT PAYMENT ELECTIONS. Participant Elections After Separation from Service. A Participant who is eligible to make distribution elections under Section 6.03 of the Plan may elect to commence distribution of his Nonforfeitable Accrued Benefit: (Choose at least one of (a) through (c)) (a) As of any distribution date, but not earlier than ---------of the --------- Plan Year beginning after the Participant's Separation from Service. (b) As of the following date(s): (Choose at least one of Options (1) through (6)) (1) Any distribution date after the close of the Plan Year in which the Participant attains Normal Retirement Age. (2) Any distribution date following his Separation from Service. (3) Any distribution date in the --------------- Plan Year(s) beginning after his Separation from Service. (4) Any distribution date in the Plan Year after the Participant incurs ------------ Break(s) in Service (as defined in Article V). (5) Any distribution date following attainment of age ---------- and completion of at least -------- Years of Service (as defined in Article V). (6) (Specify) ---------------------------------------------------------- -------------------------------------------------------------------------. (c) (Specify) ---------------------------------------------------------------- -------------------------------------------------------------------------. The distribution events described in the election(s) made under Options (a), (b) or (c) apply equally to all Accounts maintained for the Participant unless otherwise specified in Option (c). Participant Elections Prior to Separation from Service - Regular Matching Contributions Account and Employer Contributions Account. Subject to the restrictions of Article VI, the following distribution options apply to a Participant's Regular Matching Contributions Account and Employer Contributions Account prior to his Separation from Service: (Choose (d) or at least one of (e) through (h)) (d) No distribution options prior to Separation from Service. (e) Attainment of Specified Age. Until he retires, the Participant has a continuing election to receive all or any portion of his Nonforfeitable interest in these Accounts after he attains: (Choose (1) or (2)) (1) Normal Retirement Age. (2) ----------- years of age and is at least -----------% vested in these Accounts. [Note: If the percentage is less than 100%, see the special vesting formula in Section 5.03.] (f) After a Participant has participated in the Plan for a period of not less than ---------- years and he is 100% vested in these Accounts, until he retires, the Participant has a continuing election to receive all or any portion of his Accounts. [Note: The number in the blank space may not be less than 5.] (g) Hardship. A Participant may elect a hardship distribution prior to his Separation from Service in accordance with the hardship distribution policy: Choose (1), () or (3); (4) is available only as an additional option) (1) Under Section 6.01(A)(4) of the Plan. (2) Under Section 14.11 of the Plan. (3) Provided in the addendum to this Adoption Agreement, numbered Setion 6.03. (4) In no event may a Participant receive a hardship distribution before he is at least ---------% vested in these Accounts. [Note: If the percentage in the blank is less than 100%, see the special vesting formula in Section 5.03.] (h) (Specify) --------------------------------------------------------------- - -------------------------------------------------------------------------------. [Note: The Employer may use an addendum, numbered 6.03, to provide additional language authorized by Options (b)(6), (g)(3) or (h) of this Adoption Agreement Section 6.03.] Participant Elections Prior to Separation from Service - Deferral Contributions Account, Qualified Matching Contributions Account and Qualified Nonelective Contributions Account. Subject to the restrictions of Article VI, the following distribution options apply to a Participant's Deferral Contributions Account, Qualified Matching Contributions Account and Qualified Nonelective Contributions Account prior to his Separation from Service: (Choose (i) or at least one of (j) through (l)) (i) No distribution options prior to Separation from Service. (j) Until he retires, the Participant has a continuing election to receive all or any portion of these Accounts after he attains: (Choose (1) or (2)) (1) The later of Normal Retirement Age or age 59 1/2. (2) Age --------------------- (at least 59 1/2). (k) Hardship. A participant, prior to his separation from service, may elect a hardship distribution from his Deferral Contributions Account in accordance with the hardship distribution policy under Section 14.11 of the Plan. (l) (Specify) ---------------------------------------------------. [Note: Option (m) may not permit in service distributions prior to age 59 1/2, (other than hardship) and may not modify the hardship policy described in Section 14.11.] Sale of trade of business/subsidiary. If the employer sells substantially all of the assets (within the meaning of Code 409(d)(2) used in a trade or business or sells a subsidiary (within the meaning of Code 409(d)(3)), a Participant who continues employment with he acquiring corporation is eligible for distribution from his Deferral Contributions Account, Qualified Matching Contributions Account and Qualified Nonelective Contributions Account: (Choose (m) or (n)) (m) Only as described in this Adoption Agreement Section 6.03 for distributions prior to Separation from Service. (n) As if he has a Separation from Service. After March 31, 1988, a distribution authorized solely by reason of this Option (n) must constitute a lump sum distribution, determined in a manner consistent with Code (k)(10) and the applicable Treasury regulations. 6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES. The annuity distribution requirements of Section 6.04: (Choose (a) or (b)) (a) Apply only to a Participant described in Section 6.04(E) of the Plan (relating to the profit sharing exception to the joint and survivor requirements). (b) Apply to all Participants. ARTICLE IX ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS 9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. If a distribution (other than a distribution from a segregated Account and other than a corrective distribution described in Sections 14.07, 14.08, 14.09 or 14.10 of the Plan) occurs more than 90 days after the most recent valuation date, the distribution will include interest at: (Choose (a) or (b) (c)) (a) ---------------% per annum. [Note: The percentage may equal 0%.] (b) The 90 day Treasury bill rate in effect at the beginning of the current valuation period. (c) (Specify) ---------------------------------------------------------------- - -------------------------------------------------------------------------------. 9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. Pursuant to Section 14.12, to determine the allocation of net income, gain or loss: (complete only those items, if any, which are applicable to the Employer's Plan) (a) For salary reduction contributions, the Advisory Committee will: (Choose (1), (2), (3), (4) or (5)) (1) Apply Section 9.11 without modification. (2) Use the segregated account approach described in Section 14.12. (3) Use the weighted average method described in Section 14.12, based on a -------------------------- weighting period. (4) Treat as part of the relevant Account at the beginning of the valuation period -----% of the salary reduction contributions: (Choose (i) or (ii)) (i) made during that valuation period. (ii) made by the following specified time: ---------- ----------------------------------------------------. (5) Apply the allocation method described in the addendum to this Adoption Agreement numbered 9.11(a). (b) For matching contributions, the Advisory Committee will: (Choose (1), (2), (3) or (4)) (1) Apply Section 9.11 without modification. (2) Use the weighted average method described in Section 14.12, based on a -------------------- weighting period. (3) Treat as part of the relevant Account at the beginning of the valuation period ---------% of the Matching contributions allocated during the valuation period. (4) Apply the allocation method described in the addendum to this Adoption Agreement numbered 9.11(b). (c) For Participant nondeductible contributions, the Advisory Committee will: (Choose (1), (2), (3), (4) or (5)) (1) Apply Section 9.11 without modification. (2) Use the segregated account approach described in Section 14.12. (3) Use the weighted average method described in Section 14.12, based on a -------------------- weighting period. (4) Treat as part of the relevant Account at the beginning of the valuation period -------------% of the Participant nondeductible contributions: (Choose (i) or (ii)) (i) made during that valuation period. (ii) made by the following specified time: ---------------. (5) Apply the allocation method described in the addendum to this Adoption Agreement numbered 9.11(c). ARTICLE X TRUSTEE AND CUSTODIAN, POWERS AND DUTIES 10.03 INVESTMENT POWERS. Pursuant to Section 10.03(F) of the Plan, the aggregate investments in qualifying Employer securities and in qualifying Employer real property: (Choose (a) or (b)) (a) May not exceed 10% of Plan assets. (b) May not exceed --------------% of Plan assets. [Note: The percentage may not exceed 100%.] 10.14 VALUATION OF TRUST. In addition to each Accounting Date, the Trustee must value the Trust Fund on the following valuation date(s): (Choose (a) or (b)) (a) No other mandatory valuation dates. (b) (Specify) -------------------------------------------------------------- - -------------------------------------------------------------------------------. EFFECTIVE DATE ADDENDUM (Restated Plans Only) The Employer must complete this addendum only if the restated Effective Date specified in Adoption Agreement Section 1.18 is different than the restated effective date for at least one of the provisions listed in this addendum. In lieu of the restated Effective Date in Adoption Agreement Section 1.18, the following special effective dates apply: (Choose whichever elections apply) (a) Compensation definition. The Compensation definition of Section 1.12 (other than the $200,000 limitation) is effective for Plan Years beginning after - -----------. [Note: May not be effective later than the first day of the first Plan Year beginning after the Employer executes this Adoption Agreement to restate the Plan for the Tax Reform Act of 1986, if applicable.] (b) Eligibility conditions. the eligibility conditions specified in Adoption Agreement Section 2.01 are effective for Plan Years beginning after - -----------------. (c) Suspension of Years of Service. The suspension of Years of Service rule elected under Adoption Agreement Section 2.03 is effective for Plan Years beginning after ------------------. (d) Contribution/allocation formula. The contribution formula elected under Adoption Agreement Section 3.01 and the method of allocation elected under Adoption Agreement Section 3.04 is effective for Plan Years beginning after - ------------------. (e) Accrual requirements. The accrual requirements of Section 3.06 are effective for Plan Years beginning after ----------------. (f) Employment condition. The employment condition of Section 3.06 is effective for Plan Years beginning after --------------. (g) Elimination of Net Profits. The requirement for the Employer not to have net profits to contribute to this Plan is effective for Plan Years beginning after ------------------------------. [Note: The date specified may not be earlier than December 31, 1985.] (h) Vesting Schedule. The vesting schedule elected under Adoption Agreement Section 5.03 is effective for Plan Years beginning after ----------------------. (i) Allocation of Earnings. The special allocation provisions elected under Adoption Agreement Section 9.11 are effective for Plan Years beginning after - -------------------------------. (j) (Specify)----------------------------------------------------------------- - -------------------------------------------------------------------------------. For Plan Years prior to the special Effective Date, the terms of the Plan prior to its restatement under this Adoption Agreement will control for purposes of the designated provisions. A special Effective Date may not result in the delay of a Plan provision beyond the permissible Effective Date under any applicable law requirements. Execution Page The Trustee (and Custodian, if applicable), by executing this Adoption Agreement, accepts its position and agrees to all of the obligations, responsibilities and duties imposed upon the Trustee (or Custodian) under the Master Plan and Trust. The Employer hereby agrees to the provisions of this Plan and Trust, and in witness of its agreement, the Employer by its duly authorized officers, has executed this Adoption Agreement, and the Trustee (and Custodian, if applicable) signified its acceptance, on this ----------- day of - ----------------, 19---. Name and EIN of Employer: -------------------------------------------- Signed: -------------------------------------------------------------- Name(s) of Trustee: -------------------------------------------------- Signed: ------------------------------------------------------------- - ---------------------------------------------------------------------- Name of Custodian: --------------------------------------------------- Signed: -------------------------------------------------------------- [Note: A Trustee is mandatory, but a Custodian is optional. See Section 10.03 of the Plan.] Plan Number. The 3-digit plan number the Employer assigns to this Plan for ERISA reporting purposes (Form 5500 Series) is: - ------------------------------------------------. Use of Adoption Agreement. Failure to complete properly the elections in this Adoption Agreement may result in disqualification of the Employer's Plan. The 3-digit number assigned to this Adoption Agreement (see page 1) is solely for the Master Plan Sponsor's recordkeeping purposes and does not necessarily correspond to the plan number the Employer designated in the prior paragraph. Master Plan Sponsor. The Master Plan Sponsor identified on the first page of the basic plan document will notify all adopting employers of an amendment of this Master Plan or of any abandonment or discontinuance by the Master Plan Sponsor of its maintenance of this Master Plan. For inquiries regarding the adoption of the Master Plan, the Master Plan Sponsor's intended meaning of any plan provisions or the effect of the opinion letter issued to the Master Plan Sponsor at the following address and telephone number: INVESCO Trust Company, 7800 E. Union Ave., Suite 900, Denver, Colorado (303) 779-0731. Reliance on Opinion Letter. The Employer may not rely on the Master Plan Sponsor's opinion letter covreing this Adoption Agreement. For reliance on the Plan's qualification, the Employer must obtain a determination letter from the applicable IRS Key District office. PARTICIPATION AGREEMENT For Participation by Related Group Members (Plan Section 1.30) The undersigned Employer, by executing this Participation Agreement, elects to become a Participating Employer in the Plan identified in Section 1.03 of the accompanying Adoption Agreement, as if the Participating Employer were a signatory to that Agreement. The Participating Employer accepts, and agrees to be bound by, all of the elections granted under the provisions of the Master Plan as made by, -----------------------------------, the Signatory Employer to the Execution Page of the Adoption Agreement. 1. The Effective Date of the undersigned Employer's participation in the designated Plan is ------------------------------. 2. The undersigned Employer's adoption of this Plan constitutes: (a) The adoption of a new plan by the Participating Employer. (b) The adoption of an amendment and restatement of a plan currently maintained by the Employer, identified as ------------------------------------ and having an original effective date of --------------------------------------. Dated this -------------- day of ---------------------, 19-----. Name of Participating Employer: ------------------------------------- Signed: ------------------------------------------------------------- Participating Employer's EIN: --------------------------------------- Acceptance by the Signatory Employer to the Execution Page of the Adoption Agreement and by the Trustee. Name of Signatory Employer: ------------------------------------- Accepted: ------------------------------------------------------- [Date] Signed: --------------------------------------------------------- Name(s) of Trustee: --------------------------------------------- Accepted: ------------------------------------------------------- [Date] Signed: --------------------------------------------------------- [Note: Each Participating Employer must execute a separate Participation Agreement. See the Execution Page of the Adoption Agreement for important Master Plan information.] STN PSP AA Instructions Complete the first blank in the paragraph by writing in the business' name in its entirety. 1.02 Trustee Option (a) should be chosen when the employer will be the trustee, INVESCO Trust Company would then act as Custodian. If option (b) is chosen, INVESCO Trust Company will be the Trustee and will charge an annual trust fee. Note: See Trustee Comments on page 26 for further explaination of Non-discretionary Trustee. 1.03 Plan Enter the plan name. Example: ABC Inc. Employees 401(k) Plan. 1.07 Employee If you want the plan to cover all employees, select option (a). If you want to exclude from the plan any group(s) of employees, select any combination of (b) through (g). When a retirement plan excludes employees in options (d) through (g) from participation, the plan is subjet to a minimum coverage test to maintain its "tax qualified" status. Your accounting firm should be notified to perform the test annually. Leased Employers You may exclude leased employees from participation (option h). However, the plan must satisfy the coverage rules of Code Section 401(b) and 401(a)(26), consult your legal or financial counsel. Related Employers You may exclude related employers from participating in the plan (option j). However, the plan must satisfy the coverage rules of Code Section 410(b) and 401(a)(26), consult your legal or financial counsel. 1.12 Compensation Treatment of elective contributions - Choose option (a) if you prefer to "add back" employee elective 401(k) contributions to compensation for purposes of allocating employer contributions, forfeitures and for non-discrimination testing. Modifications to Compensation Modifications to Compensation - You must choose option (c) or any combination of (d) through (j). Any exclusion of compensation may result in unallowable discrimination, your accountant may want to test for any discriminatory effect of excluding any type of compensation. 1.17 Plan Year You must define the "plan year," usually it will follow the business tax year. Limitation Year - You must define the "limitation year" (12 month period for testing allocations to each employee's account), for administrative convenience it should match the plan year. 1.18 Effective Date New Plan - Enter the first day of your plan year (usually January 1) and the year. Restated Plan - Effective date - If you are amending for the Tax Reform Act of 1986 enter: January 1, 1987. If you are amending for another reason, enter the first day of your tax year, example: January 1, 1990. Originally established date - Enter the original effective date of your plan from your prior Adoption Agreement. 1.27 Hours of Service Choose which method you wish to use for counting hours worked by an employee to accrue benefits. Option (b), the equivalency method, is explained in Section 1.27 of the plan. Option (a) is usually chosen. 1.29 Service for Predecessor Employer Under this option, you may elect to count service for a predecessor employer when you are not maintaining the plan of the predecessor employer. (Used primarily in the event of a merger or acquisition.) 1.31 Leased Employees The law requires you to state how your plan would treat a leased employee who could become a participant, even if you don't intend to ever lease employees. Choose option (a) covering the employee without regard to the leasing company's plan or option (b) the reduction method. Usually Option (b)(1) is chosen. 2.01 Eligibility a. An employee must attain this age to become a participant (cannot exceed age 21). b. Pick how long (service) an employee must work to become a participant. c. You may choose to have more restrictive eligibility requirements apply to the employer contributions under the plan. Choose the employer contribution affected and the conditions which apply to those contributions. Choosing separate eligibility conditions may cause your plan to be discriminatory, consult your counsel. Plan Entry - Choose when employees enter the plan for purposes of contributions and benefit accrual. Normally, option (d), semi-annual entry dates, is chosen. Time of Participation - Choose which plan entry date (before or after) an employee who meets the eligibility requirements will enter the plan. Normally, option (g) is chosen. Dual Eligibility - This section allows you to grandfather into the plan current employees who have not met the eligibility requirements and apply the eligibility requirements to newly hired employees. Restated plans usually choose (j)(1). 2.02 Years of Service Option (b) should only be chosen if you wish to require less than 1000 hours to be worked by an employee for eligibility. Usually Option (a) is chosen. Eligibility Computation Period - Choose whether to measure subsequent eligibility periods on the employee's anniversary or the plan year. Option (d) is chosen for administrative convenience. 2.03 Break in Service This option may impose a complicated re-entry date for employees who have terminated or whose hours were severely cut back. Option (a) is chosen for administrative convenience. 2.06 This option allows employees and participants to elect out of participation. However, these employees are considered when performing all non-discrimination tests. Option (a) is chosen for administrative convenience. 3.01 Contributions allowed Section 3.01 of this Adoption Agreement consists of three parts. Part I defines the types of contributions you authorize under the plan. Part II explains the matching contribution formula, if any. Part III allows you to put limits on the employee 401(k) contributions. You must complete Part I, but only complete Parts II and III, if necessary. Option (a) permits the election of either a salary reduction arrangement (Option (a)(1), or a cash or deferred arrangement Option (a)(2). The Employer also may elect both arrangements. Option (b) authorizes matching contributions. If the Employer elects Option (b), it must complete Part II to establish the matching contribution formula. Option (c) authorizes the Employer to make qualified nonelective contributions (QNCs"). The Employer will designate to the Trustee the amount of its contributions consisting of QNCs. The amount of QNCs is solely within the Employer's discretion. Any contribution designated as QNCs is includible in the ADP test (see Section 14.08 of the Plan) or in the ACP test (see Section 14.09 of the Plan). The advisory committee may divide the QNCs between these two tests in any fashion it deems appropriate, but may not use the same contributions in both tests. As a general rule, the Employer will make a level of QNCs necessary to satisfy the applicable tests, unless the Employer wishes to have excess contributions or excess aggregate contributions distributed to the appropriate highly compensated employees, in accordance with Sections 14.08 and 14.09. Option (d) authorizes the Employer to make nonelective contributions in the same manner it would under a regular profit sharing plan. The choices under Option (d) are the same as the contribution formula options under the profit sharing adoption agreements. Part II Matching Contribution Formula If the Employer elects Option (b), it must complete Part II, making a selection under each option provided under Part II. The Plan permits matching contributions for salary reduction contributions, cash or deferred contributions or participant mandatory contributions. Therefore, the formulas offered under Option (h) refer to "eligible contributions." The Employer will define eligible contributions under Options (i) and (j). Option (h) provides the formulas for determining the matching contribution. The primary purpose of Option (h) is to establish the level of the matching contribution (a fixed percentage or discretionary with the Employer) and to permit the Employer to define a maximum or a minimum matching contribution. The formula alone will not be sufficient to determine the Employer's actual matching contribution on a participant's behalf. The characterization of eligible contributions under Option (i) and any limitations on the amount of eligible contributions taken into account, as provided under Option (j), are necessary factors in computing the Employer's matching contribution. Option (i) designates the character of the matching contributions. If the Employer elects (i)(3), it also must elect Adoption Agreement Section 4.01(c). If eligible contribuitons include salary reduction contributions or cash or deferred contributions, the matching contribution formulas will not apply to amounts characterized as excess deferrals under Section 14.07 of the Plan. Option (j) establishes any limitations on the amount of eligible contributions taken into account under Option (h). Part III Salary Reduction Agreements Under Option (k), the Employer must make selections from (1), 92), (3) and (4). Under (1), Option (ii) prescribes a maximum deferral percentage, Option (iii) prescribes a minimum deferral percentage and Option (i) prescribes no special maximum limitation. The Employer may select both Options (ii) and (iii), or both Options (i) and (iii), but Options (i) and (ii) are mutually exclusive. The Employer may wish to consider a maximum percentage deferral under Option (ii) to minimize the potential for Code 415 violations. Under paragraphs (2) and (3), the Employer elects which restrictions apply to the participant's right to revoke his/her salary reduction agreement. Under paragraph (4), the Employer elects which restrictions apply to the participant's right to increase or decrease his/her salary reduction percentage. The Employer should consider the effect its elections have on plan administration. 3.04 Contribution Allocation Part I - Matching Contributions. Select which account you want the matching contributions to be allocated to. The Regular Matching Account is subject to a vesting schedule. The Qualified Matching Account is always 100% vested and contributions may be used to satisfy the deferral non-discrimination test. Qualified Non-elective Contributions. Choose which participants would receive an extra contribution to help satisfy the non-discrimination test for deferrals (QNEC). For administrative convenience opton (2) is chosen. Part II - Method of Allocation. Choose the option for allocating the discretionary employer contribution between all plan participants. You have choices of non-integrated (pro-rata) or one of four integrated formulas. Allocation formula. The primary allocation formulas are in Options (e), (f), (g) and (h). Option (e) is a nonintegrated formula and allocates the employer contribution proportionate to total compensation. Options (f), (g) and (h) are alternatives for integrated plans. Usually option (e)(2) is chosen for non- integrated plans. The two-tiered formula under Option (f) maximizes the disparity permitted under the integration rules. Accordingly, the allocation in the first tier results in an equal allocation percentage based on total compensation and based on excess compensation. This equal allocation percentage may not exceed the maximum disparity percentage (5.7%, 5.4% or 4.3%) described in the second column of the Maximum Disparity Table. After completion of the first tier allocation, the second step allocates the remaining contribution proportionate to total compensation, in the same manner as the nonintegrated formula. Under the three-tiered formula under Option (g), the plan: (i) first allocates based on total compensation, but the allocation percentage may not exceed the maximum disparity percentage determined under the second column of the Maximum Disparity Table; (ii) then allocates based on excess compensation, but the allocation percentage may not exceed the maximum disparity percentage determined under the second column of the Maximum Disparity Table; and (iii) completes the allocation on the basis of total compensation. The four-tiered allocation under Option (h) is a hybrid of Options (g) and (f). The sole purpose of Option (h) is to use the first tier to satisfy the 3% top heavy minimum, then use a progression of three additional tiers to make maximum use of the permitted disparity rules. The second tier allocates solely on the basis of excess compensation, with a maximum allocation under the second tier equal to 3% of each participant's excess compensation. The third tier is the same as the first tier under Option (g). The fourth tier is a prorata allocation based on total compensation. 3.05 Forfeiture Allocation Choose the method of allocating (dividing up) forfeitures of terminated non-vested participant balances. Option (a) allocates forfeitures as an extra discretionary contribution. Option (b) allocates forfeitures to reduce employer contributions. Options (c) and (d) allow you to allocate separately forfeitures from matching contributions. Select from options (e), (f) and (g) to determine how to allocate forfeitures from high paid employee's matching account when the matching non-discrimination test is not satisfied. 3.06 Compensation Taken Into Account If you wish to count a participant's full year's compensation (even if he or she entered during the year), for contributions choose option (a), if not, choose option (b). Accrual Requirements - Specify the service requirements a participant must satisfy to receive an allocation. You may specify an hours of service requirement, waive the service requirement for specific contributions and/or require the participant to be employed on the last day to receive a contribution. Suspension of Accrual Requirements - This section allows you to suspend some or all of the accrual requirements found in Section 3.06(E) of the plan for participants to receive allocations. This would apply in plan years when a plan may not satisfy coverage and participation requirements. For administrative convenience choose option (g). 3.15 More Than One Plan This section only applies if you (the employer) maintain another defined contribution plan (e.g.: profit sharing, money purchase, 401(k) or target benefit) that covers at least one participant in this plan. 3.18 Defined Benefit Limitation Check option (a) if you have never maintained a defined benefit plan for any participants in this plan. If you have or are currently maintaining a defined benefit plan under option (b), choose which plan's benefit would be reduced if a participant's total allocations for a year were to exceed the allowable limit. 4.01 Participant Nondeductible Contributions This section allows participants to contribute after-tax employee contributions. These contributions are subject to a special nondiscrimination test. By checking option (a) these contributions are not allowed. 4.05 Withdrawal Restriction This section only applies if you checked option (c) of section 4.01. It states whether or not there are restrictions on participants receiving their after-tax contributions prior to separation from service. 5.01 Normal Retirement Age Choose what age you (the employer) want the participants to be 100% vested in their benefits, if still employed (normal retirement age). 5.02 Vesting Death/Disability You may choose to allow 100% vesting for participants that terminate from service because of death option (b) or disability option (c). 5.03 Vesting Schedule Choose what vesting schedule(s) you want to apply to employer discretionary contributions and matching contributions. If you choose option (b), you must at a minimum complete the top-heavy vesting schedule. Remember, if the eligibility requirements are more than one year, option (a) must be chosen. Complete the Top Heavy Schedule based upon the following: Years of Service 1 2 (not less than 20%) 3 (not less than 40%) 4 (not less than 60%) 5 (not less than 80%) 6 (not less than 100%) Optional: Complete the Non Top Heavy Schedule based upon the following: Years of Service 1 2 3 (not less than 20%) 4 (not less than 40% 5 (not less than 60%) 6 (not less than 80%) 7 (not less than 100%) 5.04 Cash-Out Rule If option (b) is chosen, the plan treats a 0% vested terminated participant as having received a distribution, allowing for forfeitures to be reallocated to active participants. 5.06 Years of Service Choose what measuring period the plan should use to determine years of service for vesting, employee's anniversary year or plan year. For ease of administration choose option (a). 5.08 Prior Years of Service By choosing options (b) through (e) you (the employer) may exclude some prior years of service for purposes of vesting. Article 6 The Employer must establish a specific distribution policy for the plan. Treas. Reg. 1.411(d)-4 prohibits the Employer, the advisory committee or any third party to retain discretion over when or in what form to pay the participant's benefit (Optional Forms of Benefit). Under a restated plan, the elections under Article VI, to the extent they differ from previous plan provisions regarding optional forms of benefit, may not eliminate an optional form of benefit with respect to the account balance accrued as of the date the Employer executes the restated adoption agreement (or, if later, the effective date of that restated adoption agreement). An optional form of benefit includes the form of payment (e.g., lump sum or installments), the timing of payment (e.g., immediately after separation form service, following a break in service, after attaining normal retirement age) and the medium of payment (e.g. right to elect distribution in Employer securities, right to elect distribution in the form of an annuity contract). With this in mind, if you are restating an existing plan, pay close attention to the distribution features under that document and your administrative practice of distributions. In all cases, try to mirror or liberalize those distribution features when restating onto this document. 6.01 Distribution Date A distribution date establishes a predetermined "target" date in a plan year when the plan will offer distributions. The actual distribution may occur later than a distribution date as long as the actual distribution is within an "administratively reasonable period of time" from the distribution date. Typical distribution dates for 401(k)plans are semi-annual dates or quarterly dates. Nonforfeitable Accrued Benefit Not Exceeding $3,500 When a separated participants vested balance does not exceed $3,500, the plan allows the employer to separately establish the timing of these distributions, separate from the distribution dates. When you complete this section, you need to balance two concerns: 1) will the timing of the distribution cause the participant to consider it a "severance benefit" and therefore encourage separation from service, and 2) the administrative concerns of carrying a non-active account in the plan. Disability - The plan allows you (the employer) to establish a different target payout date for disability distributions in options (f) and (h). Hardship - This option states whether or not the plan would allow a separated participant to receive a hardship distribution, prior to receiving a total distribution of his/her vested account balance. Default on a Loan - This election does not create a loan policy. You (the employer) must elect the timing of the plan's foreclosure if a participant's loan were to be defaulted upon even if you do not intend to offer loans in you plan. 6.02 Method of Payment You may choose the standard forms of payment if this is a brand new plan and not a restatment. Elect any one or combineation of options (b) through (e). If no modifications are necessary, elect option (a). 6.03 Participant Elections After Separation from Service You must choose when an employee who has separated from service, with a vested benefit greater than $3,500, may elect to commence distributions. This election will be tied directly to the "distribution date" defined earlier. Participant Elections Prior to Separation from Service - Employer Contributions The following distribution elections apply to all participant's matching and employer discretionary accounts regardless of vested account balances, prior to employment separation. If you prefer not to allow any distribution options from these accounts prior to separation, select option (d). Participant Elections Prior Separation from Service Deferrals, QMAC's and QNEC's - The following distribution elections apply to all participant's deferral, qualified matching, and qualified non-elective contributions accounts, prior to employment separation. If you prefer not to allow any distribution options from these accounts prior to employment separation, select option (I). 6.04 Annuity Distributions The law requires distributions to certain participants to be in the form of commercial insurance annuities, unless consented to and waived by both the participant and his or her spouse. Participants subject to this requirement are identified in section 6.04(E) of the Plan. For administrative convenience, choose option (a). If you are restating a plan that was subject to the joint and survivor annuity rules you must select Option (b). 9.10 Value of Benefit This option allows the employer to add interest to a participant's balance, if a distribution occurs more than 90 days after the most recent plan valuation. You do not have to provide an interest addition under this section and may complete option (a) with 0%. 9.11 Allocation of Net Income/Loss The following elections will state how current year contributions will share, if at all, in net income, gains or losses of the trust. You must election option (a) if your plan allows employee deferrals, option (b) if your plan includes a matching contribution, or option (c) if the plan allows employee after tax contributions. Only make the elections applicable to your plan. Option (1) would not include contributions made since the last valuation date in any earnings or loss calculation. The other choices are based upon a segregated account approach or a weighted average approach, both are described in section 14.12 of the plan. Usually option (3) daily weighting is chosen if INVESCO is your recordkeeper, for 9.11(a)(b) and (c). 10.03 Investment Powers Complete this section if you (the employer) wish to allow the plan to invest in qualifying employer securities, you should consult your legal counsel. The term "qualifying employer securities: has a specific meaning under ERISA and may not include all securities. 10.14 Valuation of Trust You may use this option to specify mandatory valuation dates, in addition to the accounting date. Normally Option (a) is chosen. Instructions for Effective Date Addendum You must complete the effective date addendum only if the effective dates of any of the listed items (a) through (j) have an effective date other than your restated effective date in adoption agreement Section 1.18. Some some provisions in the Tax Reform Act of 1986 were not effective until 1988 or 1989. The few provisions (if any) that have later effective dates must specify when they are effective. a. Compensation definition may not be later than the first day of your 1991 plan year. b. Eligibility conditions may not be later than the first day of your 1989 plan year. c. Suspension of years of service may not be earlier than the first day of your 1990 plan year. d. Contribution/allocation formula may not be earlier than the first day of your 1989 plan year. e. Accrual requirements may not be earlier than the first day of your 1989 plan year. f. Employment condition may not be earlier than the first day of your 1991 plan year. g. Elimination of Net Profits may not be earlier than December 31, 1985. h. Vesting schedule may not be later than the first day of your 1989 plan year. i. Allocation of Earnings may not be earlier than the first day of the 1990 plan year. Execution Page The Employer must complete the date on which it executes the adoption agreement and must execute the signature for the Employer. The execution page provides two lines above the signature line to print or type the name of the Employer and the Employer's EIN. If the Employer is a sole proprietorship, the individual sole proprietor should execute as Employer. If the Employer is a corporation or a partnership, an officer or a partner, as applicable, should execute the adoption agreement on behalf of the Employer. Trustee If you selected option (a) of Section 1.02 then the employer will be the Trustee. An individual must sign as trustee for the employer. INVESCO Trust Company will then act as Custodian. If you choose to have INVESCO Trust Company act as "Trustee" then option (b) of Section 1.02 must be chosen. INVESCO does charge an annual fee for this service. INVESCO Trust Company will only serve as a non-discretionary trustee, this means that there is a person who is the "Named Fiduciary." The Named Fiduciary gives direction to a non-discretionary trustee, and the non- discretionary trustee accepts all directions from the Named Fiduciary. The Named Fiduciary is either the President of the Corporation, the managing partner of the partnership or the self-employed individual of a sole proprietorship. The Named Fiduciary is responsible for selecting plan investments. The execution page also includes a signature line for the Custodian, if any. Leave the Custodian lines blank if INVESCO Trust Company will act as custodian. Plan number. This paragraph designates the number the Employer assigns to the plan for reporting (Form 5500) purposes. If this is the first plan the Employer ever maintained, the number must be 001. The Employer's plan number does not correspond to the 3- digit adoption agreement number specified at the top of the first page of the adoption agreement. Consult your Counsel if unsure what 3-digit plan number to use. Instructions for the Participation Agreement This adoption agreement includes a Participation Agreement under which a related group member of the signatory Employer to the execution page may participate in the same plan with that Employer. Each related group member wishing to become a participating Employer should execute a separate Participation Agreement. See Section 1.30 of the Plan for the definition of related Employers. Thus, it is possible to exclude the employees of related group members not participating in the plan. If an Employer is a member of a related group, it should consider whether the inclusion of other related group members' employees is necessary to satisfy the coverage requirements of Code ss.410(b) or the minimum participation requirement of Code ss.401(a)(26). If the Employer determines inclusion of the employees of a related group member is necessary to maintain qualification of the plan, the Employer may take one of two approaches: (1) have the related group member execute a Participation Agreement; or (2) elect in Adoption Agreement Section 1.07 to include the employees of that related group member. Under approach (1), the participation of the related group member will result in the automatic inclusion of the employees of that related group member, without having to specify their inclusion in Adoption Agreement Section 1.07. In addition, the related group member, under approach (1), has the authority to contribute to the plan and, in the event another participating related group member makes a contribution on behalf of that related group member's employees, the Participation Agreement will ensure the deductibility of that contribution (assuming the contribution does not exceed the deduction limits of Code ss.404). Additional instructions to the appropriate adoption agreement explain the effect on the allocation of Employer contributions when related group members maintain a single nonstandardized plan. Please contact us. Under approach (2), the plan will retain its qualified status, but contributions the Employer makes on behalf of a nonparticipating related group member's employees may not be deductible (even if otherwise within the limitations of Code ss.404), resulting in an excise tax to the contributing Employer. Unrelated Employers. The Master Plan does not allow the participation in a single plan of unrelated Employers (i.e., Employers that do not satisfy the related group definition in Section 1.30 of the Plan). legal\adop-agr\ns401kaa.005 EX-99.14FPLANDOC 10 ADOPTION AGREEMENT #006 STANDARDIZED CODE ss.401(k) PLAN (PAIRED PROFIT SHARING PLAN) The undersigned, -------------------------------------------- ("Employer"), by executing this Adoption Agreement, elects to become a participating Employer in the INVESCO Trust Company Defined Contribution Master Plan (basic plan document #01) by adopting the accompanying Plan and Trust in full as if the Employer were a signatory to that Agreement. The employer makes the following elections granted under the provisions of the Master Plan. ARTICLE I DEFINITIONS 1.02 TRUSTEE. The Trustee executing this Adoption Agreement is: (Choose (a) or (b)) (a) A discretionary Trustee, See Section 10.03[A] of the Plan. (b) A nondiscretionary Trustee. See Section 10.03[B] of the Plan. [Note: The Employer may not elect Option (b) if a Custodian executes the Adoption Agreement.] 1.03 PLAN. The name of the Plan as adopted by the Employer is - -------------------------------------------------------------. 1.07 EMPLOYEE. The following Employees are not eligible to participate in the Plan: (Choose (a) or at least one of (b) or (c)) (a) No exclusions. (b) Collective bargaining employees (as defined in Section 1.07 of the Plan). [Note: If the Employer excludes union employees from the Plan, the Employer must be able to provide evidence that retirement benefits were the subject of good faith bargaining.] (c) Nonresident aliens who do not receive any earned income (as defined in Code ss.911(d)(2) from the Employer which constitutes United States source income (as defined in Code ss.861(a)(3)). Related Employers/Leased Employees. An Employee of any member of the Employer's related group (as defined in Section 1.30 of the Plan), and any Leased Employee treated as an Employee under Section 1.31 of the Plan, is eligible to participate in the Plan, unless excluded by reason of Options (b) or (c). [Note: A related group member may not contribute to this Plan unless it executes a Participation Agreement, even if its Employees are Participants in the Plan.] 1.12 COMPENSATION Treatment of elective contributions. (Choose (a) or (b)) (a) "Compensation" includes elective contributions made by the Employer on the Employee's behalf. (b) "Compensation" does not include elective contributions. Modifications to Compensation definition. (Choose (c) or at least one of (d) and (e)) (c) No modifications other than as elected under Options (a) or (b). (d) The Plan excludes Compensation in excess of $---------------. (e) In lieu of the definition in Section 1.12 of the Plan, Compensation means any earnings reportable as W-2 wages for Federal income tax withholding purposes, subject to any other election under this Adoption Agreement Section 1.12. Special definition for salary reduction contributions. An Employee's salary reduction agreement applies to his Compensation determined prior to the reduction authorized by that salary reduction agreement, with the following exceptions: (Choose (f) or any combination of (g) and (h), if applicable) (f) No exceptions. (g) The dollar limitation described in Option (d) does not apply. (h) If the Employee makes elective contributions to another plan maintained by the Employer, the Advisory Committee will determine the amount of the Employee's salary reduction contribution for the withholding period: (Choose (1) or (2)) (1) After the reduction for such period of elective contributions to the other plan(s). (2) Prior to the reduction for such period of elective contributions to the other plan(s). 1.17 PLAN YEAR/LIMITATION YEAR. Plan Year. Plan Year means: (Choose (a) or (b)) (a) The 12 consecutive month period ending every --------------. (b) (Specify) ------------------------------------------------- - ----------------------------------------------------------------- Limitation Year. The Limitation Year is: (Choose (c) or (d)) (c) The Plan Year. (d) The 12 consecutive month period ending every ---------------. 1.18 EFFECTIVE DATE. New Plan. The "Effective Date" of the Plan is ---------------. Restated Plan. The restated Effective Date is ---------------. This Plan is a substitution and amendment of an existing retirement plan(s) originally established -------------------. (Note: See the Effective Date Addendum.) 1.27 HOUR OF SERVICE. The crediting method for Hours of Service is: (Choose (a) or (b)) (a) The actual method. (b) The ------------------------- equivalency method, except: (1) No exceptions. (2) The actual method applies for purposes of: (Choose at least one) (i) Participation under Article II. (ii) Vesting under Article V. (iii)Accrual of benefits under Section 3.06. [Note: On the blank line, insert "daily," "weekly," "semi-monthly payroll periods" or "monthly."] 1.29 SERVICE FOR PREDECESSOR EMPLOYER. In addition to the predecessor service the Plan must credit by reason of Section 1.29 of the Plan, the Plan credits Service with the following predecessor employer(s): ---------------------------. Service with the designated predecessor employer(s) applies: (Choose at least one of (a) or (b)) (a) For purposes of participation under Article II. (b) For purposes of vesting under Article V. [Note: If the Plan does not credit any predecessor service under this provision, insert "N/A" in the first blank line. The Employer may attach a schedule to this Adoption Agreement, in the same format as this Section 1.29, designating additional predecessor employers and the applicable service crediting elections.] 1.31 LEASED EMPLOYEES. If a Leased Employee is a Participant in a safe harbor money purchase plan (as described in Section 1.31) maintained by the leasing organization, but the Employer is not eligible for the safe harbor plan exception: (Choose (a) or (b)) (a) The Advisory Committee will determine the Leased Employee's allocation of Employer contributions under Article III without taking into account the Leased Employee's allocation, under the safe harbor plan. (b) The Advisory Committee will reduce the Leased Employee's allocation of Employer nonelective contributions (other than designated qualified nonelective contributions) under this Plan by the Leased Employee's allocation under the safe harbor plan, but only to the extent that allocation is attributable to the Leased Employee's service provided to the Employer. [Note: The Employer may not elect Option (b) if a Paired Plan or any other plan of the Employer makes a similar reduction for the same plan of the leasing organization.] ARTICLE II EMPLOYEE PARTICIPANTS 2.01 ELIGIBILITY. Eligibility conditions. To become a Participant in the Plan, an Employee must satisfy the following eligibility conditions: (Choose (a) or (b) or both) (a) Attainment of age -------------------- (specify age, not exceeding 21). (b) Service requirement. (Choose one of (1), (2) or (3)) (1) One Year of Service. (2) ----------------- months (not exceeding 12) following the Employee's Employment Commencement Date. (3) One Hour of Service. Plan Entry Date. "Plan Entry Date" means the Effective Date and: (Choose (c), (d) or (e)) (c) Semi-annual Entry Dates. The first day of the Plan Year and the first day of the seventh month of the Plan Year. (d) The first day of the Plan Year. (e) (Specify entry dates) ----------------------------------. Time of Participation. An Employee will become a Participant, unless exclued under Adoption Agreement Section 1.07, on the Plan Entry Date (if employed on that date): (Choose (f), (g) or (h)) (f) immediately following (g) immediately preceding (h) nearest the date the Employer completes the eligibility conditions described in Options (a) and (b) of this Adoption Agreement Section 2.01. [Note: The Employer must coordinate the selection of (f), (g) or (h) with the "Plan Entry Date" selection in (c), (d) or (e). Unless otherwise excluded under Section 1.07, the Employee must become a Participant by the earlier of: (1) the first day of the Plan Year beginning after the date the Employee completes the age and service requirements of Code ss.410(a); or (2) 6 months after the date the Employee completes those requirements.] Dual eligibility. The eligibility conditions of this Section 2.01 apply to: (Choose (i) or (j)) (i) All Employees of the Employer, except: (Choose (1) or (2)) (1) No exceptions (2) Employees who are Participants in the Plan as of the Effective Date. (j) Solely to an Employee employed by the Employer after ----------------------. If the Employee was employed by the Employer on or before the specified date, the Employee will become a Participant: (Choose (1) or (2)) (1) On the latest of the Effective Date, his Employment Commencement Date or the date he attains age --------------------- (not to exceed 21). (2) Under the eligibility conditions in effect under the Plan prior to the restated Effective Date. If the restated Plan required more than one Year of Service to participate, the eligibility conditions under this Option (2) for participation in the Code ss.401(k) arrangement under this Plan is one Year of Service for Plan Years beginning after December 31, 1988. [For restated plans only] 2.02 YEAR OF SERVICE - PARTICIPATION. Hours of Service. An Employee must complete: (Choose (a) or (b)) (a) 1,000 Hours of Service (b) ---------------------- Hours of Service during an eligibility computation period to receive credit for a Year of Service. [Note: The Hours of Service requirement may not exceed 1,000.] Eligibility computation period. After the initial eligibility computation period described in Section 2.02 of the Plan, the Plan measures the eligibility computation period as: (Choose (c) or (d)) (c) The 12 consecutive month period beginning with each anniversary of an Employee's Employment Commencement Date. (d) The Plan Year, beginning with the Plan Year which includes the first anniversary of the Employee's Employment Commencement Date. 2.03 BREAK IN SERVICE - PARTICIPATION. The Break in Service rule described in Section 2.03(B) of the Plan: (Choose (a) or (b)) (a) Does not apply to the Employer's Plan. (b) Applies to the Employer's Plan. ARTICLE III EMPLOYER CONTRIBUTIONS AND FORFEITURES 3.01 AMOUNT. Part I. [Options (a) through (g)] Amount of Employer's contribution. The Employer's annual contribution to the Trust will equal the total amount of deferral contributions, matching contributions, qualified nonelective contributions and nonelective contributions, as determined under this Section 3.01. (Choose any combination of (a), (b), (c) and (d), or choose (e)) (a) Deferral contributions (Code ss.401(k) arrangement). The Employer must contribute the amount by which the Participants have reduced their Compensation for the Plan Year, pursuant to their salary reduction agreements on file with the Advisory Committee. A reference in the Plan to salary reduction contributions is a reference to these amounts. (b) Matching contributions. The Employer will make matching contributions in accordance with the formula(s) elected in Part II of this Adoption Agreement Section 3.01. (c) Designated qualified nonelective contributions. The Employer, in its sole discretion, may contribute an amount which it designates as a qualified nonelective contribution. (d) Nonelective contributions. (1) Discretionary contribution. The amount (or additional amount) the Employer may from time to time deem advisable. (2) ----------% of the Compensation of all Participants under the Plan, determined for the Employer's taxable year for which it makes the contribution. [Note: The percentage selected may not exceed 15%.] (3) --------% of Net Profits but not more than $----------. (e) Frozen Plan. This Plan is a frozen Plan effective------------------------. The Employer will not contribute to the Plan with respect to any period following the stated date. Net Profits. The Employer: (Choose (f) or (g)) (f) Need not have Net Profits to make its annual contribution under this Plan. (g) Must have current or accumulated Net Profits exceeding $----------- to make the following contributions: (Choose at least one of (1), (2) and (3)) (1) Matching contributions described in Option (b), except: -----------------------------------------------------------. (2) Qualified nonelective contributions described in Option (c). (3) Nonelective contributions described in Option --------. The term "Net Profits" means the Employer's net income or profits for any taxable year determined by the Employer upon the basis of its books of account in accordance with generally accepted accounting practices consistently applied without any deductions for Federal and state taxes upon income or for contributions made by the Employer under this Plan or under any other employee benefit plan the Employer maintains. The term "Net Profits" specifically excludes: - -------------------------------------------------------------------------------. [Note: Enter "N/A" if no exclusions apply.] If the Employer requires Net Profits for matching contributions and the Employer does not have sufficient Net Profits uner Option (g), it will reduce the matching contribution under a fixed formula on a pro rata basis for all Participants. A Participant's share of the reduced contribution will bear the same ratio as the matching contribution the Participant would have received if Net Profits were sufficient bears to the total matching contribution all Participants would have received if Net Profits were sufficient. If more than one member of a related group (as defined in Section 1.30) execute this Adoption Agreement, each participating member will determine net Profits separately but will not apply this reduction unless, after combining the separately determined Net Profits, the aggregate Net Profits are insufficient to satisfy the matching contribution liability. "Net Profits" includes both current and accumulated Net Profits. Part II. [Options (h) and (i)] Matching contribution formula. [Note: If the Employer elected Option (b), complete Options (h) and (i).] (h) Amount of matching contributions. Subject to Option (i), for each Plan Year, the Employer's matching contribution is: (Choose any combination of (1), (2), (3) and (4)) (1) An amount equal to ----------% of each Participant's Salary Recuction contributions for the Plan Year. (2) An amount equal to ----------% of each Participant's first tier of Salary Reduction contributions for the Plan Year, plus the following matching percentage(s) for the following subsequent tiers of Salary Reduction contributions for the Plan Year: -------------------------------------------------. (3) Discretionary formula. (i) An amount (or additional amount) equal to a matching percentage the Employer from time to time may deem advisable of the Participant's salary reduction contributions for the Plan Year. (ii) An amount (or additional amount) equal to a matching percentage the Employer from time to time may deem advisable of each tier of the Participant's Salary Reduction contributions for the Plan Year. [Note: Under Options (2) and (3)(ii), the matching percentage for any subsequent tier of salary reduction contributions may not exceed the matching percentage for any prior tier.] (4) A Participant's matching contributions may not: (i) Exceed ---------------------------------------. (ii) Be less than ---------------------------------. (i) Amount of salary reduction contributions taken into account. When determining a Participant's salry reduction contributions taken into account under the matching contributions formula(s), the following rules apply: (Choose any combination of (1) through (3)) (1) The Advisory Committee will take into account all eligible contributions credited for the Plan Year. (2) The Advisory Committee will disregard eligible contributions exceeding ------------------------------------. (3) The Advisory Committee will treat as the first tier of Salary Recuction contributions, an amount not exceeding:----------------------. The subsequent tiers of eligible contributions are: -------------------. Part III. [Option (j). Special rules for Code ss.401(k) Arrangement. (Choose (j), if applicable) (j) Salary Reduction Agreements. The following rules and restrictions apply to an Employee's salary reduction agreement: (Make a selection under (1), (2), (3) and (4)) (1) Limitation on amount. The Employee's salary reduction contributions: (Choose (i) or at least one of (ii) or (iii)) (i) No maximum limitation other than as provided in the Plan. (ii) May not exceed -----------% of Compensation for the Plan Year, subject to the annual additions limitation described in Part 2 of Article III and the 402(g) limitation described in Section 14.07 of the Plan. (iii)Based on percentages of Compensation must equal at least -----------------. (2) An Employee may revoke, on a prospective basis, a salary reduction agreement: (Choose (i), (ii), (iii) or (iv)) (i) Once during any Plan Year but not later than --------------- of the Plan Year. (ii) As of any Plan Entry Date. (iii)As of the first day of any month. (iv) (Specify, but must be at least once per Plan Year -------------------------. (3) An Employee who revokes his salary reduction agreement may file a new salary reduction agreement with an effective date: (Choose (i), (ii), (iii) or (iv)) (i) No earlier than the first day of the next Plan Year. (ii) As of any subsequent Plan Entry Date. (iii)As of the first day of any month subsequent to the month in which he revoked an Agreement. (iv) (Specify, but must be at least once per Plan Year following the Plan Year of revocation) ---------------------. (4) A Participant may increase or may decrease, on a prospective basis, his salary reduction percentage or dollar amount: (Choose (i), (ii), (iii) or (iv)) (i) As of the beginning of each payroll period. (ii) As of the first day of each month. (iii)As of any Plan Entry Date. (iv) (Specify, but must permit an increase or a decrease at least once per Plan Year -----------------------------------. 3.04 CONTRIBUTION ALLOCATION. the Advisory Committee will allocate deferral contributions, matching contributions, qualified nonelective contributions and nonelective contributions in accordance with Section 14.06 of the Plan and the elections under this Adoption Agreement Section 3.04. Part I. [Options (a) through (d)]. Special Accounting Elections. (Choose whichever elections are applicable to the Employer's Plan) (a) Matching Contribuitons Account. The Advisory Committee will allocate matching contributions to a Participant's: (Choose (1) or (2); (3) is available only in addition to (1)) (1) Regular Matching Contribution Account. (2) Qualified Matching Contributions Account. (3) Except, matching contributions under Option(s) -------------------- of Adoption Agreement Section 3.01 are allocable to the Qualified Matching Contributions Account. (b) Special Allocation Dates for Salary Reduction Contributions. The Advisory Committee will allocate salary reduction contributions as of the Accounting Date and as of the following additional allocation dates: - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (c) Special Allocation Dates for Matching Contributions. The Advisory Committee will allocate matching contributions as of the Accounting Date and as of the following additional allocation dates: - ---------------------------------------------------------. (d) Designated Qualified Nonelective Contributions - Definition of Participant. For purposes of allocating the designated qualified nonelective contribution, "Participant" means: (Choose (1) or (2)) (1) All Participants. (2) Participants who are Nonhighly Compensated Employees. Part II. Method of Allocation - Nonelective Contribution. Subject to any restoration allocation required under Section 5.04, the Advisory Committee will allocate and credit each annual nonelective contribution (and Participant forfeitures treated as nonelective contributions) to the Employer Contributions Account of each Participant who satisfies the conditions of Section 3.06, in accordance with the allocation method selected under this Part II. (Choose an allocation method under (e), (f), (g) or (h); (i) is mandatory if the Employer elects (f), (g) or (h)) (e) Nonintegrated Allocation Formula. The Advisory Committee will allocate the annual nonelective contributions in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (f) Two-Tiered Integrated Allocation Formula - Maximum Disparity. First, the Advisory Committee will allocate the annual nonelective contributions in the same ratio that each Participant's Compensation plus Excess Compensation for the Plan Year bears to the total Compensation plus Excess Compensation of all Participants for the Plan Year. The allocation under this paragraph, as a percentage of each Participant's Compensation plus Excess Compensation, must not exceed the applicable percentage (5.7%, 5.4% or 4.3%) listed under the Maximum Disparity Table following Option (i). The Advisory Committee then will allocate any remaining nonelective contributions in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (g) Three-Tiered Integrated Allocation Formula. First, the Advisory Committee will allocate the annual Employer nonelective contributions in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. The allocation under this paragraph, as a percentage of each Participant's Compensation may not exceed the applicable percentage (5.7%, 5.4% or 4.3%) listed under the Maximum Disparity Table following Option (I). As a second tier allocation, the Advisory Committee will allocate the nonelective contributions in the same ratio that each Participant's Excess Compensation for the Plan Year bears to the total Excess Compensation of all Participants for the Plan Year. The allocation under this paragraph, as a percentage of each Participant's Excess Compensation, may not exceed the allocation percentage in the first paragraph. Finally, the Advisory Committee will allocate any remaining nonelective contributions in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (h) Fourth Tier Integrated Allocation Formula. First, the Advisory Committee will allocate the annual nonelective contributions in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year, but not exceeding 3% of each Participant's Compensation. As a second tier allocation, the Advisory Committee will allocate the nonelective contributions in the same ratio that each Participant's Excess Compensation for the Plan Year bears to the total Excess Compensation of all Participants for the Plan Year, but not exceeding 3% of each Participant's Excess Compensation. As a third tier allocation, the Advisory Committee will allocate the annual contributions in the same ratio that each Participant's Compensation plus Excess Compensation for the Plan Year bears to the total Compensation plus Excess Compensation of all Participants for the Plan Year. The allocation under this paragraph, as a percentage of each Participant's Compensation plus Excess Compensation, must not exceed the applicable percentage (2.7%, 2.4% or 1.3%) listed under the Maximum Disparity Table following Option (i). The Advisory Committee then will allocate any remaining nonelective contributions in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. (i) Excess Compensation. For purposes of Option (f), (g) or (h), "Excess Compensation" means Compensation in excess of the following Integration Level: (Choose (1) or (2)) (1) -------% (not exceeding 100%) of the taxable wage base, as determined under Section 230 of the Social Security Act, in effect on the first day of the Plan Year: (Choose any combination of (i) and (ii) or choose (iii)) (i) Rounded to --------------------- (but not exceeding the taxable wage base). (ii) But not greater than $-------------. (iii)Without any further adjustment or limitation. (2) $---------------------. [Note: Not exceeding the taxable wage base for the Plan Year in which this Adoption Agreement first is effective.] Maximum Disparity Table. For purposes of Options (f), (g) and (h), the applicable percentage is: Integration Level Applicable Percentages Applicable (as percentage of for Option (f) or Percentages taxable wage base) Option (g) For Option (h) - -------------------------------------------------------------------------------- 100% 5.7% 2.7% More than 80% but less than 100% 5.4% 2.4% More than 20% (but not less than $10,001) and not more than 80% 4.3% 1.3% 20% (or $10,000, if greater) or less 5.7% 2.7% Top Heavy Minimum Allocation - Application of Requirement. The Plan applies the top heavy minimum allocation requirements of Section 3.04(B)(1): (Choose (j) or (k)) (j) In all Plan years. A Participant is entitled to the top heavy minimum allocation if he is employed by the Employer on the last day of the Plan Year, unless: (Choose (1) or (2)) (1) No exceptions. (2) The Participant is a Key Employee for the Plan Year. [Note: If the Employer selects this Option (2), it will have to determine for each Plan Year who are the Key Employees under the Plan.] (k) Only in Plan Years for which the Plan is top heavy. A Participant is entitled to the top heavy minimum allocation if he is employed by the Employer on the last day of the Plan Year, unless he is a Key Employee. [Note: Option (k) will require the Advisory Committee to determine whether the Plan is top heavy for a Plan Year.] Top Heavy Minimum Allocation - Method of Compliance. If a Participant's allocation under this Section 3.04 is less than the top heavy minimum allocation to which he is entitled under Section 3.04(B): (Choose (l) or (m)) (l) The Employer will make any necessary additional contribution to the Participant's Account, as described in Section 3.04(B)(7)(a) of the Plan. (m) The Employer will satisfy the top heavy minimum allocation under the Paired Pension Plan the Employer also maintains under this Master Plan. However, the Employer will make any necessary additional contribution to satisfy the top heavy minimum allocation for an Employee covered only under this Plan and not under the Paired Pension Plan. See Section 3.04(B)(7)(b) of the Plan. If the Employer maintains another plan which is not a Paired Pension Plan offered under this Master Plan, the Employer may provide in an addendum to this Adoption Agreement, numbered Section 3.04, any modifications to the Plan necessary to satisfy the top heavy requirements under Code ss.416. Related employers. If two or more related employers (as defined in Section 1.30) contribute to this Plan, the Advisory Committee must allocate all Employer contributions and forfeitures to each Participant in the Plan, in accordance with the elections in this Adoption Agreement Section 3.04, without regard to which contributing relating group member employs the Participant. A Participant's Compensation includes Compensatin from all related employers, irrespective of which related employers are contributing to the Plan. The signatory Employer and any Participating Employer(s) will satisfy any fixed matching contribution formula under Adoption Agreement Section 3.01 as agreed by those Employers. 3.05 FORFEITURE ALLOCATION. Subject to any restoration allocation required under Sections 5.04 or 9.14, the Advisory Committee will allocate a Participant forfeiture in accordance with Section 3.04: (Choose (a) or (b); (c) and (d) are optional in addition to (a) or (b)) (a) As an Employer nonelective contribution for the Plan Year in which the forfeiture occurs, as if the Participant forfeiture were an additional nonelective contribution for that Plan Year. (b) To reduce the Employer matching contributions and nonelective contributions for the Plan Year: (Choose (1) or (2)) (1) in which the forfeiture occurs. (2) immediately following the Plan Year in which the forfeiture occurs. (c) To the extent attributable to matching contributions: (Choose (1), (2) or (3)) (1) In the manner elected under Options (a) or (b). (2) First to reduce Employer matching contributions for the Plan Year: (Choose (i) or (ii)) (i) in which the forfeiture occurs, (ii) immediately following the Plan Year in which the forfeiture occurs, then as elected in Options (a) or (b). (3) As a discretionary matching contribution for the Plan Year in which the forfeiture occurs, in lieu of the manner elected under Options (a) or (b). (d) First to reduce the Plan's ordinary and necessary administrative expenses for the Plan Year and then will allocate any remaining forfeitures in the manner described in Options (a), (b) or (c), whichever applies. If the Employer elects Option (c), the forfeitures used to reduce Plan expenses: (Choose (1) or (2)) (1) relate proportionately to forfeitures described in Option (c) and to forfeitures described in Options (a) or (b). (2) relate first to forfeitures described in Option --------------. Allocation of forfeited excess aggregate contributions. The Advisory Committee will allocate any forfeited excess aggregate contributions (as described in Section 14.09): (Choose (e), (f) or (g)) (e) To reduce Employer matching contributions for the Plan Year: (Choose (1) or (2)) (1) in which the forfeiture occurs. (2) immediately following the Plan Year in which the forfeiture occurs. (f) As Employer discretionary matching contributions for the Plan Year in which forfeited, except the Advisory Committee will not allocate these forfeitures to the Highly Compensated Employees who incurred the forfeitures. (g) In accordance with Options (a) through (d), whichever applies, except the Advisory Committee will not allocate these forfeitures under Option (a) or under Option (c)(3) to the Highly Compensated Emplyees who incurred the forfeitures. 3.06 ACCRUAL OF BENEFIT. Compensation taken into account. For the Plan Year in which the Employee first becomes a Participant, the Advisory Committee will determine the allocation of any designated qualified nonelective contribution or nonelective contribution by taking into account: (Choose (a) or (b)) (a) The Employee's Compensation for the entire Plan Year. (b) The Employee's Compensation for the portion of the Plan Year in which the Employee actually is a Participant in the Plan, except: (Choose (2) or (2)) (1) No exceptions. (2) For purposes of the first 3% of Compensation allocated under Option (e), (g) or (h) of Adoption Agreement Section 3.04, whichever applies, the Advisory Committee will take into account the Employee's Compensation for the entire Plan Year. Accrual Requirements. To receive an allocation of designated qualified nonelective contributions, nonelective contributiosn and Participant forfeitures treated as nonelective contributions for the Plan Year, a Participant must satisfy the accrual requirements of this paragraph. If the Participant is employed by the Employer on the last day of the Plan Year, the Participant must complete at least one Hour of Service for that Plan Year. If the Participant terminates employment with the Employer during the Plan Year, the Participant must complete at least --------- Hours of Service (not exceeding 501) during the Plan Year, except: )Choose (c) or (d)) (c) No exceptions. (d) No Hour of Service requirement if the Participant terminates employment during the Plan Year on account of: (Choose at least one of (1), (2) and (3)) (1) Death. (2) Disability. (3) Attainment of Normal Retirement Age in the current Plan Year or in a prior Plan Year. Special accrual requirements for matching contributions. To receive an allocation of matching contributions (for forfeitures applied to reduce matching contributions) a Participant must satisfy the following condition(s): (Choose (e) or any combination of (f), (g) and (h)) (e) No conditions other than making salary reduction contributions. (f) The accrual requirements prescribed for an allocation of nonelective contributions. (g) The Participant does not revoke his salary reduction agreement effective during the Plan Year. (h) The Participant is not a Highly Compensated Employee for the Plan Year. This Option (h) applies to: (Choose (1) or (2)) (1) All matching contributions. (2) Matching contributions described in Option(s) ------------- of Adoption Agreement Section 3.01. 3.15 MORE THAN ONE PLAN LIMITATION. If the provisions of Section 3.15 apply, the Excess Amount attributed to this Plan equals: (Choose (a), (b) or (c)) (a) The product of: (i) the total Excess Amount allocated as of such date (including any amount which the Advisory Committee would have allocated but for the limitations of Code ss.415), times (ii) the ratio of (1) the amount allocated to the Participant as of such date under this Plan divided by (2) the total amount allocated as of such date under all qualified defined contribution plans (determined without regard to the limitations of Code ss.415). (b) The total Excess Amount. (c) None of the Excess Amount. [Note: If the Employer adopts Paired Plans available under this Master Plan, the Employer must coordinate its elections under Section 3.15 of each Adoption Agreement.] 3.18 DEFINED BENEFIT PLAN LIMITATION. Application of limitation. The limitation under Section 3.18 of the Plan: (Choose (a) or (b)) (a) Does not apply to the Employer's Plan because the Employer does not maintain and never has maintained a defined benefit plan covering any Participant in this Plan. (b) Applies to the Employer's Plan. To the extent necessary to satisfy the limitation under Section 3.18, the Employer will reduce: (Choose (1) or (2)) (1) The Participant's projected annual benefit under the defined benefit plan under which the Participant participates. (2) Its contribution or allocation on behalf of the Participant to the defined contribution plan under which the Participant participates and then, if necessary, the Participant's projected annual benefit under the defined benefit plan under which the Participant participates. [Note: If the Employer selects (a), the remaining options in this Section 3.18 do not apply to the Employer's Plan.] Override of 100% Limitation. The Employers elects: (Choose (c) or (d)) (c) To apply the 100% limitation described in Section 3.19(1) fo the Plan in all Limitation Years. [Note: This election will avoid having to calculate the Plan's top heavy ratio for any year, unless the Employer has elected Adoption Agreement Section 3.04(k).] (d) Not to apply the 100% limitation for Limitation years in which the Plan's top heavy ratio (as determined under Section 1.33 of the Plan) does not exceed 90%, but only if the defined benefit plan satisfies the extra minimum benefit requirements of Code ss.416(h)(2) (and the applicable Treasury regulations) after taking into account the Employer's election under Options (e), (f), (g) or (h) of this Section 3.18. To determine the top heavy ratio, the Advisory Committee will use the following interest rate and mortality assumptions to value accrued benefits under a defined benefit plan. [Note: This election will require the Advisory Committee to calculate the Plan's top heavy ratio.] Coordination with top heavy minimum allocation. The Advisory Committee will apply the top heavy minimum allocation provisions of Section 3.04(B) of the Plan with the following modifications: (Choose (e), (f), (g) or (h)) (e) No modifications. (f) By substituting 4% for 3% in Paragraph (b) of Section 3.04(B)(1) or of Section 3.04(B)(2) of the Plan, whichever applies, but only for any Plan Year in which Option (d) applies to override the 100% limitation. (g) By increasing the top heavy minimum allocation to 5% for any Plan Year in which the 100% limitation applies, and to 7 1/2% for any Plan Year in which Option (d) applies to override the 100% limitation. The increased percentage under this Option (g) applies irrespective of whether the highest contribution rate for the Plan Year is less than that increased percentage. (h) By eliminating the top heavy minimum allocation. [Note: The Employer may not select this Option (h) if the defined benefit plan does not guarantee the top heavy minimum benefit under Code ss.416 for every Participant in this Plan who is a Non-Key Employee.] If the elections under this Section 3.18 are not appropriate to satisfy the limitations of Section 3.18, or the top heavy requirements under Code ss.416, the Employer must provide the appropriate provisions in an addendum to this Adoption Agreement. ARTICLE IV PARTICIPANT CONTRIBUTIONS 4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. The Plan: (Choose (a) or (b) (a) Does not permit Participant nondeductible contributions. (b) Permits Participant nondeductible contributions, pursuant to Section 14.04 of the Plan. Allocation dates: The Advisory Committee will allocate nondeductible contributions for each Plan Year as of the Accounting Date and the following additional allocation dates: (Choose (c) or (d)) (c) No other allocation dates. (d) (Specify) ---------------------------------------------------------------- - ----------------------------------------------------------------. As of an allocation date, the Advisory Committee will credit all nondeductible contributions made for the relevant allocation period. Unless otherwise specified in (d), a nondeductible contribution relates to an allocation period only if actually made to the Trust no later than 30 days after that allocation period ends. ARTICLE V TERMINATION OF SERVICE - PARTICIPANT VESTING 5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is: (Choose (a) or (b)) (a) --------------------------- [State age, but may not exceed age 65]. (b) The later of the date the Participant attains --------(-------) years of age or the ---------(--------) anniversary of the first day of the Plan Year in which the Participant commenced participation in the Plan. [The age selected may not exceed age 65 and the anniversary selected may not exceed the 5th.] 5.02 PARTICIPANT DEATH OR DISABILITY. The 100% vesting rule under Section 5.02 of the Plan: (Choose (a) or choose one or both of (b) and (c)) (a) Does not apply. (b) Applies to death. (c) Applies to disability. 5.03 VESTING SCHEDULE. Deferral Contributions Account/Qualified Matching Contributions Account/Qualified Nonelective Contributions Account. A Participant has a 100% Nonforfeitable interest at all times in his Deferral Contributions account, his Qualified Matching Contributions Account and in his Qualified Nonelective Contributions Account. Regular Matching Contributions Account/Employer Contributions Account. With respect to a Participant's Regular Matching Contributions Account and Employer Contributions Account, the Employer elects the following vesting schedule: (Choose (a) or (b); (c) and (d) are available only as additional options) (a) Immediate vesting. 100% Nonforfeitable at all times. (b) Graduated Vesting Schedules. Top Heavy Schedule Non Top Heavy Schedule (Mandatory) (Optional) Years of Nonforfeitable Years of Nonforfeitable Service Percengage Service Percentage - -------------------------------------------------------------------------------- Less than 1 ----- Less than 1 ----- 1 ----- 1 ----- 2 ----- 2 ----- 3 ----- 3 ----- 4 ----- 4 ----- 5 ----- 5 ----- 6 or more 100% 6 ----- 7 or more 100% (c) Special vesting election for Regular Matching Contributions Account. In lieu of the election under Options (a) or (b), the Employer elects the following vesting schedule for a Participant's Regular Matching Contributions Account: (Choose (1) or (2)) (1) 100% Nonforfeitable at all times. (2) In accordance with the vesting schedule described in the addendum to this Adoption Agreement, numbered 5.03(c). [Note: If the Employer elects this Option (c)(2), the addendum must designate the applicable vesting schedule(s) using the same format as used in Option (b).] [Note: Under Options (b) and (c)(2), the Employer must complete a Top Heavy Schedule which satisfies Code ss.416. The Employer, at its option, may complete a Non Top Heavy Schedule only if the Employer elected Adoption Agreement Section 3.04(k). The Non Top Heavy Schedule must satisfy Code 411(a)(2). Also see Section 7.05 of the Plan.] (d) The Top Heavy Schedule under Option (b) (and, if applicable, under Option (c)(2)) applies: (Choose (1) or (2)) (1) Only in a Plan Year for which the Plan is top heavy. (2) In the Plan Year for which the Plan first is top heavy and then in all subsequent Plan Years. [Note: The Employer may not elect Option (d) unless it has completed a Non Top Heavy Schedule.] Minimum Vesting. (Choose (e) or (f)) (e) The Plan does not apply a minimum vesting rule. (f) A Participant's Nonforfeitable Accrued Benefit will never be less than the lesser of $-------------- or his entire Accrued Benefit, even if the application of a graduated vesting schedule under Options (b) or (c) would result in a smaller Nonforfeitable Accrued Benefit. 5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/RESTORATION OF FORFEITED ACCRUED BENEFIT. The deemed cash-out rule described in Section 5.04(C) of the Plan: (Choose (a) or (b)) (a) Does not apply. (b) Will apply to determine the timing of forfeitures for 0% vested Participants. A Participant is not a 0% vested Participant if he has a Deferral Contributions Account. 5.06 YEAR OF SERVICE - VESTING. Vesting computation period. The Plan measures a Year of Service on the basis of the following 12 consecutive month periods: (Choose (a) or (b)) (a) Plan Years. (b) Employment Years. An Employment Year is the 12 consecutive month period measured from the Employee's Employment Commencement Date and each successive 12 consecutive month period measured from each anniversary of that Employment Commencement Date. Hours of Service. The minimum number of Hours of Service an Employee must complete during a vesting computation period to receive credit for a Year of Service is: (choose (c) or (d)) (c) 1,000 Hours of Service. (d) -------------- Hours of Service. [Note: The Hours of Service requirement may not exceed 1,000.] 5.08 INCLUDED YEARS OF SERVICE - VESTING. The Employer specifically excludes the following Years of Service: (Choose (a) or at least one of (b), (c) and (d)) (a) None other than as specified in Section 5.08(a) of the Plan. (b) Any Year of Service before the Participant attained the age of - --------------------. [Note: The age selected may not exceed age 18.] (c) Any Year of Service during the period the Employer did not maintain this Plan or a predecessor plan. (d) Any Year of Service before a Break in Service if the number of consecutive Breaks in Service equals or exceeds the greater of 5 or the aggregate number of the Years of Service prior to the Break. This exception applies only if the Participant is 0% vested in his Accrued Benefit derived from Employer contributions at the time he has a Break in Service. Furthermore, the aggregate number of Years of Service before a Break in Service do not include any Years of Service not required to be taken into account under this exception by reason of any prior Break in Service. ARTICLE VI TIME AND METHOD OF PAYMENTS OF BENEFITS Code ss.411(d)(6) Protected Benefits. The elections under this Article VI may not eliminate Code ss.411(d)(6) protected benefit. To the extent the elections would eliminate a Code ss.411(d)(6) protected benefit, see Section 13.02 of the Plan. Furthermore, if the elections liberalize the optional forms of benefit under the Plan, the more liberal options apply on the later of the adoption date or the Effective Date of this Adoption Agreement. 6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Distribution date. A distribution date under the Plan means - --------------------------------------------------------------. [Note: The [Employer must specify the appropriate date(s). The specified distribution dates primarily establish annuity starting dates and the notice and consent periods prescribed by the Plan. The Plan allows the Trustee an administratively practicable period of time to make the actual distribution relating to a particular distribution date.] Nonforfeitable Accrued Benefit Not Exceeding $3,500. Subject to the limitations of Section 6.01(A)(1), the distribution date for distribution of a Nonforfeitable Accrued Benefit not exceeding $3,500 is: (Choose (a), (b), (c) or (d)) (a) ---------- of the -------------- Plan Year beginning after the Participant's Separation from Service. (b) --------------------- following the Participant's Separation from Service. (c) --------------------- of the Plan Year after the Participant incurs - ------------------------- Break(s) in Service (as defined in Article V). (d) ----------------- following the Participant's attainment of Normal Retirement Age, but not earlier than --------------- days following his Separation from Service. Nonforfeitable Accrued Benefit Exceeds $3,500. See the elections under Section 6.03. Disability. The distribution date, subject to the limitations of Section 6.01(A)(3), is: (Choose (e) or (f)) (e) ----------------- after the Participant terminates employment because of disability. (f) The same as if the Participant had terminated employment without disability. Hardship. (Choose (g) or (h)) (g) The Plan does not permit a hardship distribution to a Participant who has separated from Service. (h) The Plan permits a hardship distribution to a Participant who has separated from Service in accordance with the hardship distribution policy stated in (Choose (1) or (2)) (1) Section 6.01(A)(4) of the Plan. (2) Section 14.11 of the Plan. Default on a Loan. If a Participant or Beneficiary defaults on a loan made pursuant to a loan policy adopted by the Advisory Committee pursuant to Section 9.04, the Plan: (Choose (i), (j)) (i) Treats the default as a distributable event. the Trustee, at the time of the default, will reduce the Participant's Nonforfeitable Accrued Benefit by the lesser of the amount in default (plus accrued interest) or the Plan's security interest in that Nonforfeitable Accrued Benefit. To the extent the loan is attributable to the Participant's Deferral Contributions Account, Qualified Matching Contributions Account or Qualified Nonelective Contributions Account, the Trustee will not reduce the Participant's Nonforfeitable Accrued Benefit unless the Participant has separated from Service or unless the Participant has attained age 59 1/2. (j) Does not treat the default as a distributable event. When an otherwise distributable event first occurs pursuant to Section 6.01 or Section 6.03 of the Plan, the Trustee will reduce the Participant's Nonforfeitable Accrued Benefit by the lesser of the amount in default (plus accrued interest) or the Plan's security interest in that Nonforfeitable Accrued Benefit. 6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. The Advisory Committee will apply Section 6.02 of the Plan with the following modifications: (Choose (a) or (b)) (a) No modifications. (b) The Plan permits the following annuity options: ------------------------- - ------------------------------------------------------------------. Any Participant who elects a life annuity option is subject to the requirements of Sections 6.04(A), (B), (C) and (D) of the Plan. See Section 6.04(E). [Note: The Employer may specify additional annuity options in an addendum to this Adoption Agreement, numbered 6.02(b).] 6.03 BENEFIT PAYMENT ELECTIONS. Participant Elections After Separation from Service. A Participant who is eligible to make distribution elections under Section 6.03 of the Plan may elect to commence distribution of his Nonforfeitable Accrued Benefit: (Choose (a) or (b)) (a) As of any distribution date, but not earlier than -------- of the Plan Year beginning after the Participant's Separation from Service. (b) As of the following date(s): (Choose at least one of Options (1) through (5)) (1) As of any distribution date after the close of the Plan Year in which the Participant attains Normal Retirement Age. (2) Any distribution date following his Separation from Service. (3) Any distribution date in the -------------- Plan Year(s) beginning after his Separation from Service. (4) Any distribution date in the Plan Year after the Participant incurs ---------------- Break(s) in Service (as defined in Article V). (5) Any distribution date following attainment of age -------- and completion of at least --------- Years of Service (as defined in Article V). The distribution events described in the election(s) made under Options (a) or (b) apply equally to all Accounts maintained for the Participant. Participant Elections Prior to Separation from Service - Regular Matching Contributions Account and Employer Contributions Account. Subject to the restrictions of Article VI, the following distribution options apply to a Participant's Regular Matching Contributions Account and Employer Contributions Account prior to his Separation from Service: (Choose (c) or at least one of (d) through (f)) (c) No distribution options prior to Separation from Service. (d) Attainment of Specified Age. Until he retires, the Participant has a continuing election to receive all or any portion of his Nonforfeitable interest in these Accounts after he attains: (Choose (1) or (2)) (1) Normal Retirement Age. (2) ----------- years of age and is at least --------------% vested in these Accounts. [Note: If the percentage is less than 100%, see the special vesting formula in Section 5.03.] (e) After a Participant has participated in the Plan for a period of not less than --------- years and he is 100% vested in these Accounts, until he retires, the Participant has a continuing election to receive all or any portion of the Accounts. [Note: The number in the blank space may not be less than 5.] (f) Hardship. A Participant may elect a hardship distribution prior to his Separation from Service in accordance with the hardship distribution policy: Choose (1), or (2); (3) is available only as in addition to (1) or (2)) (1) Under Section 6.01(A)(4) of the Plan. (2) Under Section 14.11 of the Plan. (3) In no event may a Participant receive a hardship distribution before he is at least -----------% vested in these Accounts. [Note: If the percentage in the blank is less than 100%, see the special vesting formula in Section 5.03.] Participant Elections Prior to Separation from Service - Deferral Contributions Account, Qualified Matching Contributions Account and Qualified Nonelective Contributions Account. Subject to the restrictions of Article VI, the following distribution options apply to a Participant's Deferral Contributions Account, Qualified Matching Contributions Account and Qualified Nonelective Contributions Account prior to his Separation from Service: (Choose (g) or at least one of (h) or (i)) (g) No distribution options prior to Separation from Service. (h) Until he retires, the Participant has a continuing election to receive all or any portion of these Accounts after he attains: (Choose (1) or (2)) (1) The later of Normal Retirement Age or age 59 1/2. (2) Age --------------- (at least 59 1/2). (i) Hardship. A participant, prior to his separation from service, may elect a hardship distribution in accordance with the hardship distribution policy under Section 14.11 of the Plan. Sale of trade of business/subsidiary. If the employer sells substantially all of the assets (within the meaning of Code ss.409(d)(2) used in a trade or business or sells a subsidiary (within the meaning of Code ss.409(d)(3)), a Participant who continues employment with he acquiring corporation is eligible for distribution from his Deferral Contributions Account, Qualified Matching Contributions Account and Qualified Nonelective Contributions Account: (Choose (j) or (k)) (j) Only as described in this Adoption Agreement Section 6.03 for distributions prior to Separation from Service. (k) As if he has a Separation from Service. After March 31, 1988, a distribution authorized solely by reason of this Option (k) must constitute a lump sum distribution, determined in a manner consistent with Code ss.(k)(10) and the applicable Treasury regulations. 6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES. The annuity distribution requirements of Section 6.04: (Choose (a) or (b)) (a) Apply only to a Participant described in Section 6.04(E) of the Plan (relating to the profit sharing exception to the joint and survivor requirements). (b) Apply to all Participants. ARTICLE IX ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS 9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. If a distribution (other than a distribution from a segregated Account and other than a corrective distribution described in Sections 14.07, 14.08, 14.09 or 14.10 of the Plan) occurs more than 90 days after the most recent valuation date, the distribution will include interest at: (Choose (a) or (b)) (a) -----------------% per annum. [Note: The percentage may equal 0%.] (b) The 90 day Treasury bill rate in effect at the beginning of the current valuation period. 9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. Pursuant to Section 14.12, to determine the allocation of net income, gain or loss: (complete only those items, if any, which are applicable to the Employer's Plan) (a) For salary reduction contributions, the Advisory Committee will: (Choose (1), (2), (3) or (4)) (1) Apply Section 9.11 without modification. (2) Use the segregated account approach described in Section 14.12. (3) Use the weighted average method described in Section 14.12, based on a ------------------------ weighting period. (4) Treat as part of the relevant Account at the beginning of the valuation period -----% of the salary reduction contributions: (Choose (i) or (ii)) (i) made during that valuation period. (ii) made by the following specified time: --------. (b) For matching contributions, the Advisory Committee will: (Choose (1), (2) or (3)) (1) Apply Section 9.11 without modification. (2) Use the weighted average method described in Section 14.12, based on a ----------------- weighting period. (3) Treat as part of the relevant Account at the beginning of the valuation period --------% of the Matching contributions allocated during the valuation period. (c) For Participant nondeductible contributions, the Advisory Committee will: (Choose (1), (2), (3) or (4)) (1) Apply Section 9.11 without modification. (2) Use the segregated account approach described in Section 14.12. (3) Use the weighted average method described in Section 14.12, based on a --------------------- weighting period. (4) Treat as part of the relevant Account at the beginning of the valuation period ----------% of the Participant nondeductible contributions: (Choose (i) or (ii)) (i) made during that valuation period. (ii) made by the following specified time: ---------. ARTICLE X TRUSTEE AND CUSTODIAN, POWERS AND DUTIES 10.14 VALUATION OF TRUST. In addition to each Accounting Date, the Trustee must value the Trust Fund on the following valuation date(s): (Choose (a) or (b)) (a) No other mandatory valuation dates. (b) (Specify) --------------------------------------------------------------- - --------------------------------------------------------------. EFFECTIVE DATE ADDENDUM (Restated Plans Only) The Employer must complete this addendum only if the restated Effective Date specified in Adoption Agreement Section 1.18 is different than the restated effective date for at least one of the provisions listed in this addendum. In lieu of the restated Effective Date in Adoption Agreement Section 1.18, the following special effective dates apply: (Choose whichever elections apply) (a) Compensation definition. The Compensation definition of Section 1.12 (other than the $200,000 limitation) is effective for Plan Years beginning after - -------------------------------. [Note: May not be effective later than the first day of the first Plan Year beginning after the Employer executes this Adoption Agreement to restate the Plan for the Tax Reform Act of 1986, if applicable.] (b) Eligibility conditions. The eligibility conditions specified in Adoption Agreement Section 2.01 are effective for Plan Years beginning after - -------------------------. (c) Suspension of Years of Service. The suspension of Years of Service rule elected under Adoption Agreement Section 2.03 is effective for Plan Years beginning after --------------------. (d) Contribution/allocation formula. The contribution formula elected under Adoption Agreement Section 3.01 and the method of allocation elected under Adoption Agreement Section 3.04 is effective for Plan Years beginning after - ----------------------. (e) Accrual requirements. The accrual requirements of Section 3.06 are effective for Plan Years beginning after ---------. [Note: If the effective date is later than Plan Years beginning after December 31, 1989, the accrual requirements in the Plan prior to its restatement may not be more restrictive for post- 1989 Plan Years than the requirements permitted under Adoption Agreement Section 3.06.] (f) Elimination of Net Profits. The requirement for the Employer not to have net profits to contribute to this Plan is effective for Plan Years beginning after ------------------------------. [Note: The date specified may not be earlier than December 31, 1985.] (g) Vesting Schedule. The vesting schedule elected under Adoption Agreement Section 5.03 is effective for Plan Years beginning after ---------------------. (h) Allocation of Earnings. The special allocation provisions elected under Adoption Agreement Section 9.11 are effective for Plan Years beginning after - ------------------------------. For Plan Years prior to the special Effective Date, the terms of the Plan prior to its restatement under this Adoption Agreement will control for purposes of the designated provisions. A special Effective Date may not result in the delay of a Plan provision beyond the permissible Effective Date under any applicable law requirements. Execution Page The Trustee (and Custodian, if applicable), by executing this Adoption Agreement, accepts its position and agrees to all of the obligations, responsibilities and duties imposed upon the Trustee (or Custodian) under the Master Plan and Trust. The Employer hereby agrees to the provisions of this Plan and Trust, and in witness of its agreement, the Employer by its duly authorized officers, has executed this Adoption Agreement, and the Trustee (and Custodian, if applicable) signified its acceptance, on this -------- day of - ---------------, 19---. Name and EIN of Employer: ---------------------------------------------------- - -----------------------------------------------------------------. Signed: ------------------------------------------------- Name(s) of Trustee: --------------------------------------------- - ----------------------------------------------------------------- Signed: --------------------------------------------------------- - ----------------------------------------------------------------- Name of Custodian: ---------------------------------------------- Signed: --------------------------------------------------------- [Note: A Trustee is mandatory, but a Custodian is optional. See Section 10.03 of the Plan.] Plan Number. The 3-digit plan number the Employer assigns to this Plan for ERISA reporting purposes (Form 5500 Series) is: - ------------------------------------------------. Use of Adoption Agreement. Failure to complete properly the elections in this Adoption Agreement may result in disqualification of the Employer's Plan. The 3-digit number assigned to this Adoption Agreement (see page 1) is solely for the Master Plan Sponsor's recordkeeping purposes and does not necessarily correspond to the plan number the Employer designated in the prior paragraph. The Master Plan Sponsor offers the following Paired Pension Plan(s) with this Paired Profit Sharing Plan, identified by 3-digit adoption agreement number: 004 and 010. Master Plan Sponsor. The Master Plan Sponsor identified on the first page of the basic plan document will notify all adopting employers of an amendment of this Master Plan or of any abandonment or discontinuance by the Master Plan Sponsor of its maintenance of this Master Plan. For inquiries regarding the adoption of the Master Plan, the Master Plan Sponsor's intended meaning of any plan provisions or the effect of the opinion letter issued to the Master Plan Sponsor at the following address and telephone number: INVESCO Trust Company, 7800 E. Union Ave., Denver, Colorado (303) 779-0731. Reliance on Opinion Letter. If the Employer does not maintain (and has never maintained) any other plan other than this Plan and a Paired Pensnion Plan, it may rely on the Master Plan Sponsor's opinion letter covering this Plan for purposes of plan qualification. For this purpose, the Employer has not maintained another plan if this Plan, or the Paired Pension Plan, amended and restated that prior plan and the prior plan was the same type of plan as the restated plan. If the Employer maintains or has maintained another plan other than a Paired Pension Plan, including a welfare benefit fund, as defined in Code ss.491(e), which provides post-retirement medical benefits for key employees (as defined in Code ss.419A(d)(3)), or an individual medical account (as defined in Code ss.415(l)(2)), the Employer may not rely on this Plan's qualified status unless it obtains a determination letter from the applicable IRS Key District office. PARTICIPATION AGREEMENT For Participation by Related Group Members (Plan Section 1.30) The undersigned Employer, by executing this Participation Agreement, elects to become a Participating Employer in the Plan identified in Section 1.03 of the accompanying Adoption Agreement, as if the Participating Employer were a signatory to that Agreement. The Participating Employer accepts, and agrees to be bound by, all of the elections granted under the provisions of the Master Plan as made by ------------------------------------, the Signatory Employer to the Execution Page of the Adoption Agreement. 1. The Effective Date of the undersigned Employer's participation in the designated Plan is --------------------------. 2. The undersigned Employer's adoption of this Plan constitutes: (a) The adoption of a new plan by the Participating Employer. (b) The adoption of an amendment and restatement of a plan currently maintained by the Employer, identified as ------------------------------ and having an original effective date of ------------------------------------------. Dated this --------------- day of --------------------, 19----- Name of Participating Employer: ------------------------------- Signed: ----------------------------------------------- Participating Employer's EIN: --------------------------------- Acceptance by the Signatory Employer to the Execution Page of the Adoption Agreement and by the Trustee. Name of Signatory Employer: ------------------------------------- Accepted: ------------------------------------------ [Date] Signed: -------------------------------------------- Name(s) of Trustee: -------------------------------- Accepted: ------------------------------------------ [Date] Signed: -------------------------------------------- [Note: Each Participating Employer must execute a separate Participation Agreement. See the Execution Page of the Adoption Agreement for important Master Plan information.] Std 401(k) AA Instructions Complete the first blank in the paragraph by writing in the business' name in its entirety. 1.02 Trustee Option (a) should be chosen when the employer will be the trustee, INVESCO Trust Company would then act as Custodian. If option (b) is chosen, INVESCO Trust Company will charge an annual trust fee. Note: See Trustee Comments on page 20 for further explaination of Non-discretionary Trustee. 1.03 Plan Enter the plan name. Example: ABC Inc. Employees 401(k) Plan. 1.07 Employee If you want the plan to cover all employees, select option (a). If you want to exclude from the plan any group(s) of employees, select any combination of (b) or (c). Leased Employers/Related Employers You may not exclude leased employees or related employers from participation unless they are excluded under options (b) or (c) of Section 1.07. 1.12 Compensation Treatment of elective contributions - Choose option (a) if you prefer to "add back" employee elective contributions to compensation for purposes of allocating employer contributions, forfeitures and for non-discrimination testing. Modifications to Compensation Modifications to Compensation - You must choose option (c) or any combination of (d) or (e). 1.17 Plan Year You must define the "plan year," usually it will follow the business tax year. Limitation Year - You must define the "limitation year" (12 month period for testing allocations to each employee's account), for administrative convenience it should match the plan year. 1.18 Effective Date New Plan - Enter the first day of your plan year (usually January 1) and the year. Restated Plan - Effective date - If you are amending for the Tax Reform Act of 1986 enter: January 1, 1987. If you are amending for another reason, enter the first day of your tax year, example: January 1, 1990. Originally established date - Enter the original effective date of your plan from your prior Adoption Agreement. 1.27 Hours of Service Choose which method you wish to use for counting hours worked by an employee to accrue benefits. Option (b), the equivalency method, is explained in Section 1.27 of the plan. Usually Option (a) is chosen. 1.29 Service for Predecessor Employer Under this option, you may elect to count service for a predecessor employer when you are not maintaining the plan of the predecessor employer. (Used primarily in the event of a merger or acquisition.) 1.31 Leased Employees The law requires you to state how your plan would treat a leased employee who could become a participant, even if you don't intend to ever lease employees. Choose option (a) covering the employee without regard to the leasing company's plan or option (b) the reduction method. Usually Option (b) is chosen. 2.01 Eligibility a. An employee must attain this age to become a participant (cannot exceed age 21). b. Pick how long (service) an employee must work to become a participant. Plan Entry - Choose when employees enter the plan for purposes of contributions and benefit accrual. Normally, option (c), semi-annual entry dates, is chosen. Time of Participation - Choose which plan entry date (before or after) an employee who meets the eligibility requirements will enter the plan. Normally, option (f) is chosen. Dual Eligibility - This section allows you to include into the plan current employees who have not met the eligibility requirements and apply the eligibility requirements to newly hired employees. Restated plans usually choose (i)(2). 2.02 Years of Service Option (b) should only be chosen if you wish to require less than 1000 hours to be worked by an employee for eligibility. Usually Option (a) is chosen. Eligibility Computation Period - Choose whether to measure subsequent eligibility periods on the employee's anniversary or the plan year. Option (d) is chosen for administrative convenience. 2.03 Break-in Service This option may impose a complicated re-entry date for employees who have terminated or whose hours were severely cut back. Option (a) is chosen for administrative convenience. 3.01 Contributions allowed PART I - Employer Contributions Section 3.01 of this Adoption Agreement consists of three parts. Part I defines the types of contributions you authorize under the plan. Part II explains the matching contribution formula, if any. Part III allows you to put limits on the employee 401(k) contributions. You must complete Part I, but only complete Parts II and III, if necessary. Option (a) authorizes salary reduction contributions. Option (b) authorizes matching contributions. If the Employer elects Option (b), it must complete Part II to establish the matching contribution formula. Option (c) authorizes the Employer to make qualified nonelective contributions (QNECs"). The Employer will designate to the Trustee the amount of its contributions consisting of QNECs. The amount of QNECs is solely within the Employer's discretion. Any contribution designated as QNECs is includible in the ADP test (see Section 14.08 of the Plan) or in the ACP test (see Section 14.09 of the Plan). The advisory committee may divide the QNECs between these two tests in any fashion it deems appropriate, but may not use the same contributions in both tests. As a general rule, the Employer will make a level of QNECs necessary to satisfy the applicable tests, unless the Employer wishes to have excess contributions or excess aggregate contributions distributed to the appropriate highly compensated employees, in accordance with Sections 14.08 and 14.09. Option (d) authorizes the Employer to make nonelective contributions in the same manner it would under a regular profit sharing plan. the choices under Option (d) are the same as the contribution formula options under the profit sharing adoption agreements. Part II Matching Contribution Formula If the Employer elects Option (b), it must complete Part II, making a selection under each option provided under Part II. The Plan permits matching contributions for salary reduction contributions. The formulas offered under Option (h) refer to "salary reduction contributions." The Employer will define salary reduction contributions under Option (i). Option (h) provides the formulas for determining the matching contribution. The primary purpose of Option (h) is to establish the level of the matching contribution (a fixed percentage or discretionary with the Employer). The formula alone will not be sufficient to determine the Employer's actual matching contribution on a participant's behalf. Any limitations on the amount of salary reduction contributions taken into account, as provided under Option (i), are necessary factors in computing the Employer's matching contribution. Option (i) establishes any limitation on the amount of eligible contributions taken into account under Option (h). Part III Salary Reduction Agreements Under Option (j), the Employer must make selections from (1), (2), (3) and (4). Under (1), Option (ii) prescribes a maximum deferral percentage, Option (iii) prescribes a minimum deferral percentage and Option (i) prescribes no special maximum limitation. The Employer may select both Options (ii) and (iii), or both Options (i) and (iii), but Options (i) and (ii) are mutually exclusive. The Employer may wish to consider a maximum percentage deferral under Option (ii) to minimize the potential for Code 415 violations. Under paragraphs (2) and (3), the Employer elects which restrictions apply to the participant's right to revoke his/her salary reduction agreement. Under paragraph (4), the Employer elects which restrictions apply to the participant's right to increase or decrease his/her salary reduction percentage. The Employer should consider the effect its elections have on plan administration. 3.04 Contribution Allocation Part I - Matching Contributions. Select which account you want the matching contributions to be allocated to, the Regular Matching Account is subject to a vesting schedule. The Qualified Matching Account is always 100% vested and contributions may be used to satisfy the deferral non-discrimination test. Qualified Non-elective Contributions. Choose which participants would receive an extra contribution to help satisfy the non-discrimination test for deferrals (QNEC). For administrative convenience opton (2) is chosen. Part II - Method of Allocation. Choose the option for allocating the discretionary employer contribution between all plan participants. You have choices of non-integrated (pro-rata) or one of four integrated formulas. Allocation formula. The primary allocation formulas are in Options (e), (f), (g) and (h). Option (e) is a nonintegrated formula and allocates the employer contribution proportionate to total compensation. Options (f), (g) and (h) are alternatives for integrated plans. Usually option (e) is chosen for proportionate allocation plans. The two-tiered formula under Option (f) maximizes the disparity permitted under the integration rules. Accordingly, the allocation in the first tier results in an equal allocation percentage based on total compensation and based on excess compensation. This equal allocation percentage may not exceed the maximum disparity percentage (5.7%, 5.4% or 4.3%) described in the second column of the Maximum Disparity Table. After completion of the first tier allocation, the second step allocates the remaining contribution proportionate to total compensation, in the same manner as the nonintegrated formula. Under the three-tiered formula under Option (g), the plan: (i) first allocates based on total compensation, but the allocation percentage may not exceed the maximum disparity percentage determined under the second column of the Maximum Disparity Table; (ii) then allocates based on excess compensation, but the allocation percentage may not exceed the maximum disparity percentage determined under the second column of the Maximum Disparity Table; and (iii) completes the allocation on the basis of total compensation. The four-tiered allocation under Option (h) is a hybrid of Options (g) and (f). The sole purpose of Option (h) is to use the first tier to satisfy the 3% top heavy minimum, then use a progression of three additional tiers to make maximum use of the permitted disparity rules. The second tier allocates solely on the basis of excess compensation, with a maximum allocation under the second tier equal to 3% of each participant's excess compensation. The third tier is the same as the first tier under Option (g). The fourth tier is a prorata allocation based on total compensation. 3.05 Forfeiture Allocation Choose the method of allocating (dividing up) forfeitures of terminated non-vested participant balances. Option (a) allocates forfeitures as an extra discretionary contribution. Option (b) allocates forfeitures to reduce employer contributions. Options (c) and (d) allow you to allocate separately forfeitures from matching contributions. Select from options (e), (f) and (g) to determine how to allocate forfeitures from highly compensated employee's matching account when the matching non-discrimination test is not satisfied. 3.06 Compensation Taken Into Account If you wish to count a participant's full year's compensation (even if he or she entered during the year), for contributions choose option (a), if not, choose option (b). Accrual Requirements - Specify the service requirements a participant must satisfy to receive an allocation. You may specify an hours of service requirement, no greater than 501 hours. Standardized plans have relaxed contribution requirements. A participant will receive a contribution of QNECs, forfeitures or profit sharing contributions if they meet either of the two requirements below: Requirement #1 If the Participant was employed on the last day of the plan year the participant must have worked at least one hour for the employer. Requirement #2 If the Participant terminates employment during the year and the participant terminated after earning at leats 501 hours of work with the employer that plan year. 3.15 More Than One Plan This section only applies if you (the employer) maintain another defined contribution plan (e.g.: profit sharing, money purchase, 401(k) or target benefit) that covers at least one participant in this plan. 3.18 Defined Benefit Limitation Check option (a) if you have never maintained a defined benefit plan for any participants in this plan. If you have or are currently maintaining a defined benefit under option (b), choose which plan's benefit would be reduced if a participant's total allocations for a year were to exceed the allowable limit. 4.01 Participant Nondeductible Contributions This section allows participants to contribute after-tax employee contributions. These contributions are subject to a special nondiscrimination test. By checking option (a) these contributions are not allowed. 5.01 Normal Retirement Age Choose what age you (the employer) want the participants to be 100% vested in their benefits, if still employed (normal retirement age). 5.02 Vesting Death/Disability You may choose to allow 100% vesting for participants that terminate from service because of death option (b) or disability option (c). 5.03 Vesting Schedule Choose what vesting schedule(s) you want to apply to employer discretionary contributions and matching contributions. If you choose option (b), you must at a minimum complete the top-heavy vesting schedule. Complete the Top Heavy Schedule based upon the following: Years of Service 1 2 (not less than 20%) 3 (not less than 40%) 4 (not less than 60%) 5 (not less than 80%) 6 (not less than 100%) Optional: Complete the Non Top Heavy Schedule based upon the following: Years of Service or 1 1 - 0% 2 2 - 0% 3 (not less than 20%) 3 - 0% 4 (not less than 40% 4 - 0% 5 (not less than 60%) 5 - 100% 6 (not less than 80%) 6 - 100% 7 (not less than 100%) 5.04 Cash-Out Rule If option (b) is chosen, the plan treats a 0% vested terminated participant as having received a distribution, allowing for forfeitures to be reallocated to active participants. 5.06 Years of Service Choose what measuring period the plan should use to determine years of service for vesting, employee's anniversary year or plan year. For ease of administration choose option (a). 5.08 Prior Years of Service By choosing options (b) through (d) you (the employer) may exclude some prior years of service for purposes of vesting. Article 6 The Employer must establish a specific distribution policy for the plan. Treas. Reg. 1.411(d)-4 prohibits the Employer, the advisory committee or any third party to retain discretion over when or in what form to pay the participant's benefit. Under a restated plan, the elections under Article VI, to the extent they differ from previous plan provisions regarding optional forms of benefit, may not eliminate an optional form of benefit with respect to the account balance accrued as of the date the Employer executes the restated adoption agreement (or, if later, the effective date of that restated adoption agreement). An optional form of benefit includes the form of payment (e.g., lump sum or installments), the timing of payment (e.g., immediately after separation form service, following a break in service, after attaining normal retirement age) and the medium of payment (e.g. right to elect distribution in Employer securities, right to elect distribution in the form of an annuity contract). With this in mind, if you are restating an existing plan, pay close attention to the distribution features under that document and your administrative practice of distributions. In all cases, try to mirror or liberalize those distribution features when restating onto this document. 6.01 Distribution Date A distribution date establishes a predetermined "target" date in a plan year when the plan will offer distributions. The actual distribution may occur later than a distribution date as long as the actual distribution is within an "administratively reasonable period of time" from the distribution date. Typical distribution dates for 401(k)plans are semi-annual dates or quarterly dates. Nonforfeitable Accrued Benefit Not Exceeding $3,500 When a separated participants vested balance does not exceed $3,500, the plan allows the employer to separately establish the timing of these distributions, separate from the distribution dates. When you complete this section, you need to balance two concerns: 1) will the timing of the distribution cause the participant to consider it a "severance benefit" and therefore encourage separation from service and 2) the administrative concerns of carrying a non-active account in the plan. Disability - The plan allows you (the employer) to establish a different target payout date for disability distributions in options (e) and (f). Hardship - This option states whether or not the plan would allow a separated participant to receive a hardship distribution, prior to receiving a total distribution of his/her vested account balance. Default on a Loan - This election does not create a loan policy. You (the employer) must elect the timing of the plan's foreclosure if a participant's loan were to be defaulted upon even if you do not intend to offer loans in you plan. 6.02 Method of Payment You may choose the standard forms of payment if this is a brand new plan and not a restatment. If the plan is not subject to the annuity requirements of Section 6.04, usually option (a) is chosen. If you choose to allow annuities, special waivers and consent rules apply to all distributions. 6.03 Participant Elections After Separation from Service You must choose when an employee who has separated from service, with a vested benefit greater than $3,500, may elect to commence distributions. This election will be tied directly to the "distribution date" definition earlier. Participant Elections Prior to Separation from Service The following distribution elections apply to all participant's matching and employer discretionary account regardless of vested account balances, prior to employment separation. If you prefer not to allow any distribution options from these accounts prior to separation, select option (c). Deferrals, QMAC's and QNEC's - The following distribution elections apply to all participant's deferral qualified matching, and qualified non-elective contributions accounts, prior to employment separation. If you prefer not to allow any distribution options from these accounts prior to employment separation, select option (g). 6.04 Annuity Distributions The law requires distributions to certain participants to be in the form of commercial insurance annuities, unless consented to and waived by both the participant and his or her spouse. Participants subject to this requirement are identified in section 6.04(E) of the Plan. For administrative convenience, choose option (a). If you are restating a plan that was subject to the joint and survivor annuity rules you must select Option (b). 9.10 Value of Benefit This option allows the employer to add interest to a participant's balance, if a distribution occurs more than 90 days after the most recent plan valuation. You do not have to provide an interest addition under this section and may complete option (a) with 0%. 9.11 Allocation of Net Income/Loss The following elections will state how current year contributions will share, if at all, in net income, gains or losses of the trust. You must election option (a) if your plan allows employee deferrals, option (b) if your plan includes a matching contribution, or option (c) if the plan allows employee after tax contributions. Only make the elections applicable to your plan. Option (1) would not include contributions made since the last valuation date in any earnings or loss calculation. The other choices are based upon a segregated account approach or a weighted average approach, both are described in section 14.12 of the plan. Usually daily weighting is chosen if INVESCO Trust Company is your recordkeeper, for 9.11(a)(3), (b)(2) and (c)(3). 10.14 Valuation of Trust You may use this option to specify mandatory valuation dates, in addition to the accounting date. Normally Option (a) is chosen. Instructions for Effective Date Addendum You must complete the effective date addendum only if the effective dates of any of the listed items (a) through (j) have an effective date other than your restated effective date in adoption agreement Section 1.18. Since some provisions in the Tax Reform Act of 1986 were not effective until 1988 or 1989 The few provisions (if any) that have later effective dates must specify when they are effective. a. Compensation definition may not be later than the first day of your 1991 plan year. b. Eligibility conditions may not be later than the first day of your 1989 plan year. c. Suspension of years of service may not be earlier than the first day of your 1990 plan year. d. Contribution/allocation formula may not be earlier than the first day of your 1989 plan year. e. Accrual requirements may not be earlier than the first day of your 1989 plan year. f. Elimination of Net Profits may not be earlier than December 31, 1985. g. Vesting schedule may not be later than the first day of your 1989 plan year. h. Allocation of Earnings may not be earlier than the first day of the 1990 plan year. Execution Page The Employer must complete the date on which it executes the adoption agreement and must execute the signature for the Employer. The execution page provides two lines above the signature line to print or type the name of the Employer and the Employer's EIN. If the Employer is a sole proprietorship, the individual sole proprietor should execute as Employer. If the Employer is a corporation or a partnership, an officer or a partner, as applicable, should execute the adoption agreement on behalf of the Employer. Trustee If you selected option (a) of Section 1.02, then the employer will be the Trustee. An individual must sign as trustee for the employer. INVESCO Trust Company will then act as Custodian. If you choose to have INVESCO Trust Company act as "Trustee" then option (b) of Section 1.02 must be chosen. INVESCO does charge an annual fee for this service. INVESCO Trust Company will only serve as a non-discretionary trustee, this means that there is a person who is the "Named Fiduciary." The Named Fiduciary gives direction to a non-discretionary trustee, and the non- discretionary trustee accepts all directions from the Named Fiduciary. The Named Fiduciary is either the President of the Corporation, the managing partner of the partnership or the self-employed individual of a sole-proprietorship. The Named Fiduciary is responsible for selecting plan investments. The execution page also includes a signature line for the Custodian, if any. Leave the Custodian lines blank if INVESCO Trust Company will act as custodian. Plan number. This paragraph designates the number the Employer assigns to the plan for reporting (Form 5500) purposes. If this is the first plan the Employer ever maintained, the number must be 001. The Employer's plan number does not correspond to the 3- digit adoption agreement number specified at the top of the first page of the adoption agreement. Consult your Counsel if unsure what 3-digit plan number to use. Instructions for the Participation Agreement This adoption agreement includes a Participation Agreement under which a related group member of the signatory Employer to the execution page may participate in the same plan with that Employer. Each related group member wishing to become a participating Employer should execute a separate Participation Agreement. See Section 1.30 of the Plan for the definition of related Employers. Thus, it is possible to exclude the employees of related group members not participating in the plan. If an Employer is a member of a related group, it should consider whether the inclusion of other related group members' employees is necessary to satisfy the coverage requirements of Code 410(b) or the minimum participation requirement of Code 401(a)(26). If the Employer determines inclusion of the employees of a related group member is necessary to maintain qualification of the plan, the Employer may take one of two approaches: (1) have the related group member execute a Participation Agreement; or (2) elect in Adoption Agreement Section 1.07 to include the employees of that related group member. Under approach (1), the participation of the related group member will result in the automatic inclusion of the employees of that related group member, without having to specify their inclusion in Adoption Agreement Section 1.07. In addition, the related group member, under approach (1), has the authority to contribute to the plan and, in the event another participating related group member makes a contribution on behalf of that related group member's employees, the Participation Agreement will ensure the deductibility of that contribution (assuming the contribution does not exceed the deduction limits of Code 404). The addendum instructions to the appropriate adoption agreement explain the effect on the allocation of Employer contributions when related group members maintain a single non-standardized plan. Under approach (2), the plan will retain its qualified status, but contributions the Employer makes on behalf of a nonparticipating related group member's employees may not be deductible (even if otherwise within the limitations of Code 404), resulting in an excise tax to the contributing Employer. Unrelated Employers. The Master Plan does not allow the participation in a single plan of unrelated Employers (i.e., Employers that do not satisfy the related group definition in Section 1.30 of the Plan). legal\adop-agr\st401kaa.006 EX-99.14GPLANDOC 11 Adoption Agreement #009 D246284a Standardized Simplified Profit Sharing Plan Paired Profit Sharing Plan Basic Profit Sharing Plan Considerations For: Corporate or self-employed employers who want the flexibility of optional contributions. Maximum Annual Contribution: 15% of compensation up to $30,000. Eligibility: All employees age 21 or older who have worked for the employer for 2 years. Contribution: Optional. Establishment Deadline: December 31, or the end of the employer's fiscal year. Contribution Deadline: April 15, or date for filing tax return. Benefits: Contribution is tax-deductible; earnings are tax- deferred. Financial Programs Investment Professionals Since 1932 Provided by: Financial Programs, Inc. And the Financial Group of No-Load Mutual Funds Custodian: INVESCO Trust Company A Subsidiary of INVESCO MIM PLC [Your Adoption Agreement and Plan document constitute the rules and parameters under which your retirement program will operate.] These instructions are intended to assist you, the employer, in choosing the option provisions for your retirement plan. They are not intended to substitute or replace competent legal advice from your attorney or accountant. If further clarification is necessary, contact your counsel or INVESCO Trust Company. The Standardized Simplified Profit Sharing Plan is designed to make administration of your retirement plan as simple as possible. If you feel your situation requires a more complex retirement plan offering additional options, please call our toll-free number, 800/525-8085, and ask for "Retirement Services." Employer's Name ------------------------------------------------------------- Employer ID# ---------------------------------------------------------------- Address --------------------------------------------------------------------- City, State -------------------------------- Zip ----------------- Telephone Number (----------)------------------------------ One Person Plan: ---- Yes ---- No Date of Birth --------------------------------------------- Contribution Frequency ------------------------------------ Instructions for Standardized Simplified Profit Sharing Plan This Adoption Agreement is an important part of your retirement plan. Please carefully read the instructions for each option. You may need to refer to the Plan Document for definitions in the text. Completes the first blank by putting in the business' name, or, if self-employed, the owner's name. 1.03 Enter the plan name. Examples, ABC Profit Sharing Plan or John Smith Profit Sharing Plan. 1.17 Enter the last day of your tax year (usually December 31). 1.18 New Plan - Enter the first day of your tax year, (usually January 1) and the year. Restated Plan - effective date - If you are amending for the Tax Reform Act of 1986, enter: January 1, 1987. If you are amending for another reason, enter the first day of your tax year, example: January 1, 1990. Original established date - Enter the original effective date of your plan from your prior adoption agreement. 2.01 Eligibility Restated Plan - Complete the eligibility requirements you originally choose on your prior Adoption Agreement. New Plan - Choose an age and/or service requirement applicable to the owner and all employees. 6.01 Distribution Date Select a "target date" for payouts from the plan due to separation from service, death, disability or attainment of age 59 1/2. Usually this date is after the plan has been valued (e.g.: March 1). 10.0 Provide your Federal tax identification number. Date and sign the Adoption Agreement. Type the name(s) of trustees, (usually the owner and/or managers) and sign the document as trustee. Plan Number If this is the first retirement plan for your business, enter 001; if the second, enter 002. Return your completed Adoption Agreement to INVESCO Trust Company for review and processing. It will be examined for completeness. We will then sign as custodian, and return the original document. INVESCO TRUST COMPANY USE ONLY: Account Number --------------------- Adoption Agreement #009 Standardized Simplified Profit Sharing Plan (Paired Profit Sharing Plan) The undersigned, - -------------------------------------------------------------------------------- ("Employer"), by executing this Adoption Agreement, elects to become a participating Employer in the INVESCO Trust Company Defined Contribution Master Plan (basic plan document #01) by adopting the accompanying Plan and Trust in full as if the Employer were a signatory to that Agreement. The Employer makes the following elections granted under the provisions of the Plan. 1.02 TRUSTEE. The Trustee executing this Adoption Agreement is: (Choose (a) or (b)) (a) A discretionary Trustee. (b) A nondiscretionary Trustee. See Section 10.03. 1.03 PLAN. The name of the Plan as adopted by the Employer is - --------------------------------------------------------------------- - --------------------------------------------------------------------- 1.07 EMPLOYEE. The term "Employee" specifically includes all employees of the Employer. 1.12 COMPENSATION. "Compensation" includes elective contributions and does not exclude any items other than as specified in Section 1.12 of the Plan. 1.17 PLAN YEAR. Plan Year means the 12 consecutive month period ending every---------------------------------------------------------. The Limitation Year is the Plan Year. 1.18 EFFECTIVE DATE. New Plan. The "Effective Date" of the Plan is ---------------------. Restated Plan. The restated Effective Date is ---------------------------------------. This Plan is a substitution and amendment of an existing retirement plan(s) originally established ---------------------------------------. 1.27 HOUR OF SERVICE. The crediting method for Hours of Service is the monthly equivalency method. 1.31 LEASED EMPLOYEES. The Advisory Committee will determine the Leased Employee's allocation of Employer contributions under Article III without taking into account the Leased Employee's allocation, if any, under the leasing organization's plan. 2.01 ELIGIBILITY. To become a Participant in the Plan, an Employee must satisfy the following eligibility conditions: (Choose (a) or (b)) (a) Age ------ (not exceeding 21). (b) ------ (0, 1 or 2) Year(s) of Service without, in the case of 2 Years, an intervening break in Service. Plan Entry Date/Time of Participation. "Plan Entry Date" means the effective date and the first day of the Plan Year. An Employee will become a Participant on the Plan Entry Date (if employed on that date) nearest the date the Employee completes the above eligibility conditions. Dual Eligibility. The above eligibility conditions apply to: (Choose (c) or (d)) (c) all Employees of the Employer without exception. (d) Employees who are not Participants in the Plan as of the Effective Date. 2.02 YEAR OF SERVICE - PARTICIPATION. An Employee must complete 1,000 Hours of Service during an eligibility computation period to receive credit for a Year of Service. After the initial eligibility computation period described in Section 2.02 of the Plan, the Plan measures the eligibility computation period as the 12 consecutive month period beginning with each anniversary of an Employee's Employment Commencement Date. 2.03 BREAK IN SERVICE - PARTICIPATION. The Break in Service rule described in Section 2.03(B) of the Plan applies to the Employer's Plan. 3.01 AMOUNT. The amount of the Employer's annual contribution to the Trust will equal the amount the Employer may from time to time deem advisable, irrespective of whether the Employer has Net Profits. If the Employer is a member of a related group (as defined in Section 1.30), it may not execute this Adoption Agreement. 3.04 CONTRIBUTION ALLOCATION. The Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) in the same ratio that each Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. Top Heavy Minimum Allocation. The plan will satisfy the top heavy minimum allocation requirement of Section 3.04(B) as follows: (1) if the Employer does not maintain a Paired Pension Plan, the Employer will make any necessary additional contribution to the Participant's Account, as described in Section 3.04(B)(7)(a) of the Plan; and (2) if the Employer maintains a Paired Pension Plan, that Paired Pension Plan will guarantee the top heavy minimum allocation and this Plan does not guarantee that minimum. 3.05 FORFEITURE ALLOCATION. Subject to any restoration allocation required under Section 9.14, the Advisory Committee will allocate a Participant forfeiture, as an Employer contribution for the Plan Year in which the forfeiture occurs, as if the Participant forfeiture were an additional Employer contribution for that Plan Year. 3.06 ACCRUAL OF BENEFIT. For any Plan Year, the Advisory Committee will determine the allocation under Section 3.04 by taking into account a Participant's Compensation for the entire Plan Year. To receive an allocation of Employer contributions (and Participant forfeitures), the Participant: (a) if he is employed by the Employer on the last day after the Plan Year, must complete at least one Hour of Service for that Plan Year, and (b) if he is not employed by the Employer on the last day of the Plan Year, the Participant must complete at least 501 Hours of Service during the Plan year, except there is no Hour of Service requirement if the Participant terminates employment during the Plan year on account of death, disability or attainment of Normal Retirement Age. 3.15 MORE THAN ONE PLAN LIMITATION. If the provisions of Section 3.15 apply, the Excess Amount attributed to this Plan equals the produce of: (i) the total Excess Amount allocated as of such date (including any amount which the Advisory Committee would have allocated but for the limitations of Code Section 415); times (ii) the ratio of (1) the amount allocated to the Participant as of such date under this Plan, divided by (2) the total amount allocated as of such date under all qualified defined contribution plans (determined without regard to the limitations of Code Section 415). 3.18 DEFINED BENEFIT PLAN LIMITATION. The limitation under Section 3.18 of the Plan does not apply to the Employer's Plan if the Employer does not maintain and never has maintained a defined benefit plan covering any Participant in this Plan. If the limitation under Section 3.18 does apply, the Employer will reduce the Participant's projected annual benefit under the defined benefit plan under which the Participant participates and will apply the 100% limitation described in Section 3.19(1), unless the Employer provides an alternative compliance method in an addendum to this Section 3.18. 5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is age 59 1/2. 5.02 PARTICIPANT DEATH OR DISABILITY. The 100% vesting rule of Section 5.02 applies to death and to disability. 5.03 VESTING SCHEDULE. Subject to Section 9.14 of the Plan, a Participant's Accrued Benefit is 100% Nonforfeitable at all times. The deemed cash-out rule does not apply. 5.06 YEARS OF SERVICE - VESTING. An Employee receives credit for a Year of Service for vesting purposes if he completes at least 1,000 Hours of Service during a Plan Year. 5.08 INCLUDED YEARS OF SERVICE - VESTING. The Employer specifically includes all Years of Service. [Note: If Section 6.01 or Section 6.03 liberalizes the optional forms of benefit under the Plan, the more liberal options apply on the later of the adoption date or the Effective Date of this Adoption Agreement.] 6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. A distribution date under the Plan means - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- If a Participant's Nonforfeitable Accrued Benefit does not exceed $3,500, or if the Participant separates from Service because of disability, the distribution date, subject to the limitations of Section 6.01(A), is the first distribution date following the Participant's Separation from Service. The Plan does not permit a hardship distribution. If a Participant or Beneficiary defaults on a loan made pursuant to a loan policy adopted by the Advisory Committee pursuant to Section 9.04, the Plan treats the default as a distributable event. The Trustee, at the time of the default, will reduce the Participant's Nonforfeitable Accrued Benefit by the lesser of the amount in default (plus accrued interest) of the Plan's security interest in that Nonforfeitable Accrued Benefits. 6.03 BENEFIT PAYMENT ELECTIONS. A Participant who is eligible to make distribution elections under Section 6.03 of the Plan may elect to commence distribution of his Nonforfeitable Accrued Benefit as of any distribution date following his Separation from Service. Furthermore, subject to the restrictions of Article VI, until he retires, the Participant has a continuing election to receive all or any portion of his Nonforfeitable Accrued Benefit after he attains Normal Retirement Age. 6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES. The annuity distribution requirements of Section 6.04 apply only to a Participant described in Section 6.04(E) of the Plan (relating to the profit sharing plan exception). 9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. If a distribution (other than a distribution from a segregated Account) occurs more than 90 days after the most recent valuation date, the distribution will include interest at 0% per annum. 10.0 The Trustee (and Custodian, if applicable), by executing this Adoption Agreement, accepts its position and agrees to all of the obligations, responsibilities and duties imposed upon the Trustee (or Custodian) under the Master Plan and Trust. The Employer hereby agrees to the provisions of this Plan and Trust, and in witness of its agreement, the Employer by its duly authorized officers has executed this Adoption Agreement, and the Trustee (and Custodian, if applicable) signified its acceptance, on this ----- day of---------------, 19-----. Name and EIN of Employer: --------------------------------------------------- Signed: --------------------------------------------------------------------- Name(s) of Trustee: --------------------------------------------------------- Signed: --------------------------------------------------------------------- Signed: --------------------------------------------------------------------- Name of Custodian: INVESCO Trust Company Signed:---------------------------------------------------------------------- [Note: A Trustee is mandatory, but a Custodian is optional. See Section 10.03 of the Plan.] Plan Number. The plan's 3-digit number assigned for ERISA reporting purposes (Form 5500 Series) is: ------------------------------. Use of Adoption Agreement. Failure to complete properly the elections in this Adoption Agreement may result in disqualification of the Employer's Plan. The 3-digit number assigned to this Adoption Agreement (see page 1) is solely for the Master Plan Sponsor's recordkeeping purposes and does not necessarily correspond to the plan number the Employer designated in the prior paragraph. The Master Plan Sponsor offers the following Paired Pension Plan(s) with this Paired Profit Sharing Plan, identified by 3-digit adoption agreement number: 004 and 010. Master Plan Sponsor. The Master Plan Sponsor identified on the first page of the basic plan document will notify all adopting employers of any amendment of this Master Plan or of any abandonment or discontinuance by the Master Plan Sponsor of its maintenance of this Master Plan. For inquiries regarding the adoption of the Master Plan, the Master Plan Sponsor's intended meaning of any plan provisions or the effect of the opinion letter issued to the Master Plan Sponsor, please contact the Master Plan Sponsor at the following address and telephone number: INVESCO Trust Company, 7800 East Union Ave., Suite 800, Denver, Colorado 80237, (303) 779-0731. Reliance on Opinion Letter. If the Employer does not maintain (and has never maintained) any other plan other than this Plan and a Paired Pension Plan, it may rely on the Master Plan Sponsor's opinion letter covering this Plan for purposes of plan qualification. For this purpose, the Employer has not maintained another plan if this Plan, or the Paired Pension Plan , amended and restated that prior plan and the prior plan was the same type of plan as the restated plan. If the Employer maintains or has maintained another plan other than a Paired Pension Plan, including a welfare benefit fund, as defined in Code Section 419(e), which provides post-retirement medical benefits for key employees (as defined in Code Section 419A(d)(3)), or an individual medical account (as defined in Code Section 415(1)(2)), the Employer may not rely on this Plan's qualified status unless it obtains a determination letter from the applicable IRS Key District office. adop-agr\sspsp.009 EX-99.14HPLANDOC 12 THE FINANCIAL FUNDS Defined Contribution Master Plan and Trust Agreement Basic Plan Document #01 Provided by: The Financial Funds Managed & Distributed by INVESCO Funds Group, Inc. Custodian: INVESCO Trust Company A Subsidiary of INVESCO MIM PLC INVESCO TRUST COMPANY DEFINED CONTRIBUTION MASTER PLAN AND TRUST AGREEMENT BASIC PLAN DOCUMENT #01 INVESCO Trust Company, Denver, Colorado, in its capacity as Master Plan Sponsor, establishes this Master Plan intended to conform to and qualify under ss.401 and ss.501 of the Internal Revenue Code of 1986, as amended. An Employer establishes a Plan and Trust under this Master Plan by executing an Adoption Agreement. If the Employer adopts this Plan as a restated Plan in substitution for, and in amendment of, an existing plan, the provisions of this Plan, as a restated Plan, apply solely to an Employee whose employment with the Employer terminates on or after the restated Effective Date of the Employer's Plan. If an Employee's employment with the Employer terminates prior to the restated Effective Date, that Employee is entitled to benefits under the Plan as the Plan existed on the date of the Employee's termination of employment. ARTICLE I DEFINITIONS 1.01 "Employer" means each employer who adopts this Plan by executing an Adoption Agreement. 1.02 "Trustee" means the person or persons who as Trustee execute the Employer's Adoption Agreement, or any successor in office who in writing accepts the position of Trustee. The Employer must designate in its Adoption Agreement whether the Trustee will administer the Trust as a discretionary Trustee or as a nondiscretionary Trustee. If a person acts as a discretionary Trustee, the Employer also may appoint a Custodian. See Article X. If the Master Plan Sponsor is a bank, savings and loan, credit union or similar financial institution, a person other than the Master Plan Sponsor (or its affiliate) may not serve as Trustee or as Custodian of the Employer's Plan without the written consent of the Master Plan Sponsor. 1.03 "Plan" means the retirement plan established or continued by the Employer in the form of this Agreement, including the Adoption Agreement under which the Employer has elected to participate in this Master Plan. The Employer must designate the name of the Plan in its Adoption Agreement. An Employer may execute more than one Adoption Agreement offered under this Master Plan, each of which will constitute a separate Plan and Trust established or continued by that Employer. The Plan and the Trust created by each adopting Employer is a separate Plan and a separate Trust, independent from the plan and the trust of any other employer adopting this Master Plan. All section references within the Plan are Plan section references unless the context clearly indicates otherwise. 1.04 "Adoption Agreement" means the document executed by each Employer adopting this Master Plan. The terms of this Master Plan as modified by the terms of an adopting Employer's Adoption Agreement constitute a separate Plan and Trust to be construed as a single Agreement. Each elective provision of the Adoption Agreement corresponds by section reference to the section of the Plan which grants the election. Each Adoption Agreement offered under this Master Plan is either a Nonstandardized Plan or a Standardized Plan, as identified in the preamble to that Adoption Agreement. The provisions of this Master Plan apply equally to Nonstandardized Plans and to Standardized Plans unless otherwise specified. 1.05 "Plan Administrator" is the Employer unless the Employer designates another person to hold the position of Plan Administrator. In addition to his other duties, the Plan Administrator has full responsibility for compliance with the reporting and disclosure rules under ERISA as respects this Agreement. 1.06 "Advisory Committee" means the Employer's Advisory Committee as from time to time constituted. 1.07 "Employee" means any employee (including a Self-Employed Individual) of the Employer. The Employer must specify in its Adoption Agreement any Employee, or class of Employees, not eligible to participate in the Plan. If the Employer elects to exclude collective bargaining employees, the exclusion applies to any employee of the Employer included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and one or more employers unless the collective bargaining agreement requires the employee to be included within the Plan. The term "employee representatives" does not include any organization more than half the members of which are owners, officers, or executives of the Employer. 1.08 "Self-Employed Individual/Owner-Employee." "Self-Employed Individual" means an individual who has Earned Income (or who would have had Earned Income but for the fact that the trade or business did not have net earnings) for the taxable year from the trade or business for which the Plan is established. "Owner-Employee" means a Self-Employed Individual who is the sole proprietor in the case of a sole proprietorship. If the Employer is a partnership, "Owner-Employee" means a Self-Employed Individual who 3 is a partner and owns more than 10% of either the capital or profits interest of the partnership. 1.09 "Highly Compensated Employee" means an Employee who, during the Plan Year or during the preceding 12-month period: (a) is a more than 5% owner of the Employer (applying the constructive ownership rules of Code ss.318, and applying the principles of Code ss.318, for an unincorporated entity); (b) has Compensation in excess of $75,000 (as adjusted by the Commissioner of Internal Revenue for the relevant year); (c) has Compensation in excess of $50,000 (as adjusted by the Commissioner of Internal Revenue for the relevant year) and is part of the top-paid 20% group of employees (based on Compensation for the relevant year); or (d) has Compensation in excess of 50% of the dollar amount prescribed in Code ss.415(b)(1)(A) (relating to defined benefit plans) and is an officer of the employer. If the Employee satisfies the definition in clause (b), (c) or (d) in the Plan Year but does not satisfy clause (b), (c) or (d) during the preceding 12-month period and does not satisfy clause (a) in either period, the Employee is a Highly Compensated Employee only if he is one of the 100 most highly compensated Employees for the Plan Year. The number of officers taken into account under clause (d) will not exceed the greater of 3 or 10% of the total number (after application of the Code ss.414(q) exclusions) of Employees, but no more than 50 officers. If no Employee satisfies the Compensation requirement in clause (d) for the relevant year, the Advisory Committee will treat the highest paid officer as satisfying clause (d) for that year. For purposes of this Section 1.09, "Compensation" means Compensation as defined in Section 1.12, except any exclusions from Compensation elected in the Employer's Adoption Agreement Section 1.12 do not apply, and Compensation must include "elective contributions" (as defined in Section 1.12). The Advisory Committee must make the determination of who is a Highly Compensated Employee, including the determinations of the number and identity of the top paid 20% group, the top 100 paid Employees, the number of officers includible in clause (d) and the relevant Compensation, consistent with Code ss.414(q) and regulations issued under that Code section. The Employer may make a calendar year election to determine the Highly Compensated Employees for the Plan Year, as prescribed by Treasury regulations. A calendar year election must apply to all plans and arrangements of the Employer. For purposes of applying any nondiscrimination test required under the Plan or under the Code, in a manner consistent with applicable Treasury regulations, the Advisory Committee will treat a Highly Compensated Employee and all family members (a spouse, a lineal ascendant or descendant, or a spouse of a lineal ascendant or descendant) as a single Highly Compensated Employee, but only if the Highly Compensated Employee is a more than 5% owner or is one of the 10 Highly Compensated Employees with the greatest Compensation for the Plan Year. This aggregation rule applies to a family member even if that family member is a Highly Compensated Employee without family aggregation. The term "Highly Compensated Employee" also includes an former Employee who separated from Service (or has a deemed Separation from Service, as determined under Treasury regulations) prior to the Plan Year, performs no Service for the Employer during the Plan Year, and was a Highly Compensated Employee either for the separation year or any Plan Year ending on or after his 55th birthday. If the former Employee's Separation from Service occurred prior to January 1, 1987, he is a Highly Compensated Employee only if he satisfied clause (a) of this Section 1.09 or received Compensation in excess of $50,000 during: (1) the year of his Separation from Service (or the prior year); or (2) any year ending after his 54th birthday. 1.10 "Participant" is an Employee who is eligible to be and becomes a Participant in accordance with the provisions of Section 2.01. 1.11 "Beneficiary" is a person designated by a Participant who is or may become entitled to a benefit under the Plan. A Beneficiary who becomes entitled to a benefit under the Plan remains a Beneficiary under the Plan until the Trustee has fully distributed his benefit to him. A Beneficiary's right to (and the Plan Administrator's, the Advisory Committee's or a Trustee's duty to provide to the Beneficiary) information or data concerning the Plan does not arise until he first becomes entitled to receive a benefit under the Plan. 1.12 "Compensation" means, except a provided in the Employer's Adoption Agreement, the Participant's Earned Income, wages, salaries, fees for professional service and other amounts received for personal services actually rendered in the course of employment with the Employer maintaining the plan (including, but not limited to, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips and bonuses). The Employer must elect in its Adoption Agreement whether to include elective contributions in the definition of Compensation. "Elective contributions" are amounts excludible from the Employee's gross income under Code ss.125,402(a)(8), 402(h) or 403(b), and contributed by the Employer, at the Employee's election, to a Code ss.401(k) arrangement, a Simplified Employee Pension, cafeteria plan or tax-sheltered annuity. The term "Compensation" does not include: (a) Employer contributions (other than "elective contributions," if includible in the definition of Compensation under Section 1.12 of the Employer's Adoption Agreement) to a plan of deferred compensation to the extent the contributions are not included in the gross income of the Employee for the taxable year in which contributed, on behalf of an Employee to a Simplified Employee Pension Plan to the extent such contributions are excludible from the Employee's gross income, and any distributions from a plan of deferred compensation, regardless of whether such amounts are includible in the gross income of the Employee when distributed. (b) Amounts realized from the exercise of a non-qualified stock option, or when estricted stock (or property) held by an Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture (c) Amounts realized from the sale, exchange or other disposition of stock acquired under a stock option described in Part II, Subchapter D, Chapter 1 of the Code. (d) Other amounts which receive special tax benefits, such as premiums for group term life insurance (but only to the extent that the premiums are not includible in the gross income of the Employee), or contributions made by an Employer (whether or not under a salary reduction agreement) towards the purchase of an annuity contract described in Code 403(b) (whether or not the contributions are excludible from the gross income of the Employee), other than "elective contributions," if elected in the Employer's Adoption Agreement. Any reference in this Plan to Compensation is a reference to the definition in this Section 1.12, unless the Plan reference specifies a modification to this definition. The Advisory Committee will take into account only Compensation actually paid for the relevant period. A Compensation payment includes Compensation by the Employer through another person under the common paymaster provisions in Code ss.3121 and 3306. (A) Limitations on Compensation. (1) Compensatio dollar limitation. For any Plan Year beginning after December 31, 1988, the Advisory Committee must take into account only the first $200,000 (or beginning January 1, 1990, such larger amount as the Commissioner of Internal Revenue may prescribe) of any Participant's Compensation. For any Plan Year beginning prior to January 1, 1989, this $200,000 limitation (but not the family aggregation requirement described in the next paragraph) applies only if the Plan is top heavy for such Plan Year or operates as a deemed top heavy plan for such Plan Year. (2) Application of compensation limitation to certain family members. The $200,000 Compensation limitation applies to the combined Compensation of the Employee and of any family member aggregated with the Employee under Section 1.09 who is either (I) the Employee's spouse; or (ii) the Employee's lineal descendant under the age of 19. If, for a Plan Year, the combined Compensation of the Employee and such family members who are Participants entitled to an allocation for that Plan Year exceeds the $200,000 (or adjusted) limitation. "Compensation" for each such Participant, for purposes of the contribution and allocation provisions of Article III, means his Adjusted Compensation. Adjusted Compensation is the amount which bears the same ratio to the $200,000 (or adjusted) limitation as the affected Participant's Compensation (without regard to the $200,000 Compensation limitation) bears to the combined Compensation of all the affected Participants in the family unit. If the Plan uses permitted disparity, the Advisory Committee must determine the integration level of each affected family member Participant prior to the proration of the $200,000 Compensation limitation, but the combined integration level of the affected Participants may not exceed $200,000 (or the adjusted limitation). The combined Excess Compensation of the affected Participants in the family unit may not exceed $200,000 (or the adjusted limitation) minus the affected Participants' combined integration level (as determined under the preceding sentence). If the combined Excess Compensation exceeds this limitation, the Advisory Committee will prorate the Excess Compensation limitation among the affected Participants in the family unit in proportion to each such individual's Adjusted Compensation minus his integration level. If the Employer's Plan is a Nonstandardized Plan, the Employer may elect to use a different method in determining the Adjusted Compensation of the affected Participants by specifying that method in an addendum to the Adoption Agreement, numbered Section 1.12. (B) Nondiscrimination. For purposes of determining whether the plan discriminates in favor of Highly Compensated Employees, Compensation means Compensation as defined in this Section 1.12, except: (1) the Employer may elect to include or to exclude elective contributions, irrespective of the Employer's election in its Adoption Agreement regarding elective contributions; and (2) the Employer will not give effect to any elections made in the "modifications to Compensation definition" section of Adoption Agreement Section 1.12. The Employer's election described in clause (1) must be consistent and uniform with respect to all Employees and all plans of the Employer for any particular Plan Year. If the Employer's Plan is a Nonstandardized Plan, the Employer, irrespective of clause (2), may elect to exclude from this nondiscrimination definition of Compensation any items of Compensation excludible under Code ss.414(s) and the applicable Treasury regulations, provided such adjusted definition conforms to the nondiscrimination requirements of those regulations. 1.13 "Earned Income" means net earnings from self-employment in the trade or business with respect to which the Employer has established the Plan, provided personal services of the individual are a material income producing factor. The Advisory Committee will determine net earnings without regard to items excluded from gross income and the deductions allocable to those items. The Advisory Committee will determine net earnings after the deduction allowed to the Self-Employed Individual for all contributions made by the Employer to a qualified plan and, for Plan Years beginning after December 31, 1989, the deduction allowed to the Self-Employed under Code ss.164(f) for self-employment taxes. 1.14 "Account" means the separate account(s) which the Advisory Committee or the Trustee maintains for a participant under the Employer's Plan. 1.15 "Accrued Benefit" means the amount standing in a Participant's Account(s) as of any date derived from both Employer contributions and Employee contributions, if any. 1.16 "Nonforfeitable" means a Participant's or Beneficiary's unconditional claim, legally enforceable against the Plan, to be Participant's Accrued Benefit. 1.17 "Plan Year" means the fiscal year of the Plan, the consecutive month period specified in the Employer's Adoption Agreement. The Employer's Adoption Agreement also must specify the "Limitation Year" applicable to the limitations on allocations described in Article III. If the Employer maintains Paired Plans, each Plan must have the same Plan Year. 1.18 "Effective Date" of this Plan is the date specified in the Employer's Adoption Agreement. 1.19 "Plan Entry Date" means the date(s) specified in Section 2.01 of the Employer's Adoption Agreement. 1.20 "Accounting Date" is the last day of an Employer's Plan Year. Unless otherwise specified in the Plan, the Advisory Committee will make all Plan allocations for a particular Plan Year as of the Accounting Date of that Plan Year. 1.21 "Trust" means the separate Trust created under the Employer's Plan. 1.22 "Trust Fund" means all property of every kind held or acquired by the Employer's Plan, other than incidental benefit insurance contracts. 1.23 "Nontransferable Annuity" means an annuity which by its terms provides that it may not be sold, assigned, discounted, pledged as collateral for a loan or security for the performance of an obligation or for any purpose to any person other than the insurance company. If the Plan distributes an annuity contract, the contract must be a Nontransferable Annuity. 1.24 "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. 1.25 "Code" means the Internal Revenue Code of 1986, as amended. 1.26 "Service" means any period of time the Employee is in the employ of the Employer, including any period the Employee is on an unpaid leave of absence authorized by the Employer under a uniform, nondiscriminatory policy applicable to all Employees. "Separation from Service" means the Employee no longer has an employment relationship with the Employer maintaining this Plan. 1.27 "Hour of Service" means: (a) Each Hour of Service for which the Employer, either directly or indirectly, pays an Employee, or for which the Employee is entitled to payment, for the performance of duties. The Advisory Committee credits Hours of Service under this paragraph (a) to the Employee for the computation period in which the Employee performs the duties, irrespective of when paid; (b) Each Hour of Service for back pay, irrespective of mitigation of damages, to which the Employer has agreed or for which the Employee has received an award. The Advisory Committee credits Hours of Service under this paragraph (b) to the Employee for the computation period(s) to which the award or the agreement pertains rather than for the computation period in which the award, agreement or payment is made; and (c) Each Hour of Service for which the Employer, either directly or indirectly, pays an Employee, or for which the Employee is entitled to payment (irrespective of whether the employment relationship is terminated), for reasons other than for the performance of duties during a computation period, such as leave of absence, vacation, holiday, sick leave, illness, incapacity (including disability), layoff, jury duty or military duty. The Advisory Committee will credit no more than 501 Hours of Service under this paragraph (c) to an Employee on account of any single continuous period during which the Employee does not perform any duties (whether or not such period occurs during a single computation period). The Advisory Committee credits Hours of Service under this paragraph (c) in accordance with the rules of paragraphs (b) and (c) of Labor Reg. ss.530.200b-2, which the Plan, by this reference, specifically incorporates in full within this paragraph (c). The Advisory Committee will not credit an Hour of Service under more than one of the above paragraphs. A computation period for purposes of this Section 1.27 is the Plan Year, Year of Service period, Break in Service period or other period, as determined under the Plan provision for which the Advisory Committee is measuring an Employee's Hours of Service. The Advisory Committee will resolve any ambiguity with respect to the crediting of an Hour of Service in favor of the Employee. (A) Method of crediting Hours of Service. The Employer must elect in its Adoption Agreement the method the Advisory Committee will use in crediting an Employee with Hours of Service. For purposes of the Plan, "actual" method means the determination of Hours of Service from records of hours worked and hours for which the employer makes payment or for which payment is due from the Employer. If the employer elects to apply an "equivalency" method for each equivalency period for which the Advisory Committee would credit the Employee with at least one Hour of Service, the Advisory Committee will credit the Employee with: (I) 10 Hours of Service for a daily equivalency; (ii) 45 Hours of Service for a weekly equivalency; (iii) 95 Hours of Service for a semimonthly payroll period equivalency; and (iv) 190 Hours of Service for a monthly equivalency. (B) Maternity/paternity leave. Solely for purposes of determining whether the Employee incurs a Break in Service under any provision of this Plan, the Advisory Committee must credit Hours of Service during an Employee's unpaid absence period due to maternity or paternity leave. The Advisory Committee considers an Employee on maternity or paternity leave if the Employee's absence is due to he Employee's pregnancy, the birth of the Employee's child, the placement with the Employee of an adopted child, or the care of the Employee's child immediately following the child's birth or placement. The Advisory Committee credits Hours of Service under this paragraph on the basis of the number of Hours of Service the employee would receive if he were paid during the absence period or, if the Advisory Committee cannot determine the number of Hours of Service the Employee would receive, on the basis of 9 hours per day during the absence period. The Advisory Committee will credit only the number (not exceeding 501) of Hours of Service necessary to prevent an Employee's Break in Service. The Advisory Committee credits all Hours of Service described in this paragraph to the computation period in which the absence period begins or, if the Employee does not need these Hours of Service to prevent a Break in Service in the computation period in which his absence period begins, the Advisory Committee credits these Hours of Service to the immediately following computation period. 1.28 "Disability" means the Participant, because of a physical or mental disability, will be unable to perform the duties of his customary position of employment (or is unable to engage in any substantial gainful activity) for an indefinite period which the Advisory Committee considers will be of long continued duration. A Participant also is disabled if he incurs the permanent loss or loss of use of a member or function of the body, or is permanently disfigures, and incurs a Separation from Service. The Plan considers a Participant disabled on the date the Advisory Committee determines the Participant satisfies the definition of disability. The Advisory Committee may require a Participant to submit to a physical examination in order to confirm disability. The Advisory Committee will apply the provisions of this Section 1.28 in a nondiscriminatory, consistent and uniform manner. If the Employer's Plan is a Nonstandardized Plan, the Employer may provide an alternative definition of disability in an addendum to its Adoption Agreement, numbered Section 1.28. 1.29 SERVICE FOR PREDECESSOR EMPLOYER. If the Employer maintains the plan of a predecessor employer, the Plan treats service of the employee with the predecessor employer as service with the Employer. If the Employer does not maintain the plan of a predecessor employer, the Plan does not credit service with the predecessor employer, unless the Employer identifies the predecessor in its Adoption Agreement and specifies the purposes for which the Plan will credit service with that predecessor employer. 1.30 RELATED EMPLOYERS. A related group is a controlled group of corporations (as defined in Code ss.414(b)), trades or businesses (whether or not incorporated) which are under common control (as defined in Code ss.414(c)) or an affiliated service group (as defined in Code ss.414(m) or in Code ss.414(o)). If the Employer is a member of a related group, the term "Employer" includes the related group members for purposes of crediting Hours of Service, determining Years of Service and Breaks in Service under Articles II and V, applying the Participation Test and the Coverage Test under Section 3.06(E), applying the limitations on allocations in Part 2 of Article III, applying the top heavy rules and the minimum allocation requirements of Article III, the definitions of Employee, Highly Compensated Employee, Compensation and Leased Employee, and for any other purpose required by the applicable Code section or by a Plan provision. However, an Employer may contribute to the Plan only by being a signatory to the Execution Page of the Adoption Agreement or to a Participation Agreement to the Employer's Adoption Agreement. If one or more of the Employer's related group members become Participating Employers by executing a Participation Agreement to the Employer's Adoption Agreement, the term "Employer" includes the participating related group members for all purposes of the Plan, and "Plan Administrator" means the Employer that is the signatory to the Execution Page of the Adoption Agreement. If the Employer's Plan is a Standardized Plan, all Employees of the Employer or of any member of the Employer's related group, are eligible to participate in the Plan, irrespective of whether the related group member directly employing the Employee is a Participating Employer. If the Employer's Plan is a Nonstandardized Plan, the Employer must specify in Section 1.07 of its Adoption Agreement, whether the Employees of related group members that are not Participating Employers are eligible to participate in the Plan. Under a Nonstandardized Plan, the Employer may elect to exclude from the definition of "Compensation" for allocation purposes any Compensation received from a related employer that has not executed a Participation Agreement and whose Employees are not eligible to participate in the Plan. 1.31 LEASED EMPLOYEES. The Plan treats a Leased Employee as an Employee of the Employer. A Leased Employee is an individual (who otherwise is not an Employee of the Employer) who, pursuant to a leasing agreement between the Employer (or for the Employer and any persons related to the Employer within the meaning of Code ss.144(a)(3)) on a substantially full time basis for at least one year and who performs services historically performed by employees in the Employer's business field. If a Leased Employee is treated as an Employee by reason of this Section 1.31 of the Plan, "Compensation" includes Compensation from the leasing organization which is attributable to services performed for the Employer. (A) Safe harbor plan exception. The Plan does not treat a Leased Employee as an Employee if the leasing organization covers the employee is a safe harbor plan and, prior to application of this safe harbor plan exception, 20% or less of the Employer's Employees (other than Highly Compensated Employees) are Leased Employees. A safe harbor plan is a money purchase pension plan providing immediate participation, full and immediate vesting, and a nonintegrated contribution formula equal to at least 10% of the employee's compensation without regard to employment by the leasing organization on a specified date. The safe harbor plan must determine the 10% contribution on the basis of compensation as defined in Code ss.415(c)(3) plus elective contributions (as defined in Section 1.12). (B) Other requirements. The Advisory Committee must apply this Section 1.31 in a manner consistent with Code ss.414(n) and 414(o) and the regulations issued under those Code sections. The Employer must specify in the Adoption Agreement the manner in which the Plan will determine the allocation of Employer contributions and Participant forfeitures on behalf of a Participant if the Participant is a Leased Employee covered by a plan maintained by the leasing organization. 1.32 SPECIAL RULES FOR OWNER-EMPLOYEES. The following special provisions and restrictions apply to Owner-Employees: (a) If the Plan provides contributions or benefits for an Owner- Employee or for a group of Owner-Employees who controls the trade or business with respect to which this Plan is established and the Owner-Employee or Owner-Employees also control as Owner-Employees one or more other trades or businesses, plans must exist or be established with respect to all the controlled trades or businesses so that when the plans are combined they form a single plan which atisfies the requirements of Code ss.401(a) and Code ss.401(d) with respect to the employees of the controlled trades or businesses. (b) The Plan excludes an Owner-employee or group of Owner-Employees if the Owner-Employee or group of Owner-Employees controls any other trade or business, unless the employees of the other controlled trade or business participate in a plan which satisfies the requirements of Code ss.401(a) and Code ss.401(d). The other qualified plan must provide contributions and benefits which are not less favorable than the contributions and benefits provided for the Owner-Employee or group of Owner-Employees under this Plan, or if an Owner-Employee is covered under another qualified plan as an Owner-Employee, then the plan established with respect to the trade or business he does control must provide contributions or benefits as favorable as those provided under the most favorable plan of the trade or business he does not control. If the exclusion of this paragraph (b) applies and the Employer's Plan is a Standardized Plan, the Employer may not participate or continue to participate in this Master Plan and the Employer's Plan becomes an individually-designed plan for purposes of qualification reliance. (c) For purposes of paragraphs (a) and (b) of this Section 1.32, an Owner-Employee or group of Owner-Employees controls a trade or business if the Owner-Employee or Owner-Employees together (1) own the entire interest in an unincorporated trade or business, or (2) in the case of a partnership, own more than 50% of either the capital interest or the profits interest in the partnership. 1.33 DETERMINATION OF TOP HEAVY STATUS. If this Plan is the only qualified plan maintained by the Employer, the Plan is top heavy for a Plan Year if the top heavy ratio as of the Determination Date exceeds 60%. The top heavy ratio is a fraction, the numerator of which is the sum of the present value of Accrued Benefits of all Key Employees as of the Determination Date and the denominator of which is a similar sum determined for all Employees. The Advisory Committee must include in the top heavy ratio, as part of the present value of Accrued Benefits, any contribution not made as of the Determination Date but includible under Code ss.416 and the applicable Treasury regulations, and distributions made within the Determination Period. The Advisory Committee must calculate the top heavy ratio by disregarding the Accrued Benefit (and distributions, if any, of the Accrued Benefit) of any Non-Key Employee who was formerly a Key Employee, and by disregarding the Accrued Benefit (including distributions, if any, of the Accrued Benefit) of an individual who has not received credit for at least one Hour of Service with the Employer during the Determination Period. The Advisory Committee must calculate the top heavy ratio, including the extent to which it must take into account distributions, rollovers and transfers, in accordance with Code ss.416 and the regulations under that Code section. If the Employer maintains other qualified plans (including a simplified employee pension plan), or maintained another such plan which now is terminated, this Plan is top heavy only if it is part of the Required Aggregation Group, and the top heavy ratio for the Required Aggregation Group and for the Permissive Aggregation Group, if any, each exceeds 60%. The Advisory Committee will calculate the top heavy ratio in the same manner as required by the first paragraph of this Section 1.33, taking into account all plans within the Aggregation Group. To the extent the Advisory Committee must take into account distributions to a Participant, the Advisory Committee must include distributions from a terminated plan which would have been part of the Required Aggregation Group if it were in existence on the Determination Date. The Advisory Committee will calculate the present value of accrued benefits under defined benefit plans or simplified employee pension plans included within the group in accordance with the terms of those plans. Code ss.416 and the regulations under that Code section. If a Participant in a defined benefit plan is a Non-Key Employee, the Advisory Committee will determine his accrued benefit under the accrual method, if any, which is applicable uniformly to all defined benefit plans maintained by the Employer or, if there is no uniform method, in accordance with the slowest accrual rate permitted under the fractional rule accrual method described in Code ss.411(b)(1)(C). If the Employer maintains a defined benefit plan, the Employer must specify in Adoption Agreement Section 3.18 the actuarial assumptions (interest and mortality only) the Advisory Committee will use to calculate the present value of benefits from a defined benefit plan. If an aggregated plan does not have a valuation date coinciding with the Determination Date, the Advisory Committee must value the Accrued Benefits in the aggregated plan as of the most recent valuation date falling within the twelve-month period ending on the Determination Date, except as Code ss.416 and applicable Treasury regulations require for the first and second plan year of a defined benefit plan. The Advisory Committee will calculate the top heavy ratio with reference to the Determination Dates that fall within the same calendar year. (A) Standardized Plan. If the Employer's Plan is a Standardized Plan, the Plan operates as a deemed top heavy plan in all Plan Years, except, if the Standardized Plan includes a Code ss.401(k) arrangement, the Employer may elect to apply the top heavy requirements only in Plan Years for which the Plan actually is top heavy. Under a deemed top heavy plan, the Advisory Committee need not determine whether the Plan actually is top heavy. However, if the Employer, in Adoption Agreement Section 3.18, elects to override the 100% limitation, the Advisory Committee will need to determine whether a deemed top heavy Plan's top heavy ratio for a Plan Year exceeds 90%. (B) Definitions. For purposes of applying the provisions of this Section 1.33: (1) "Key Employee" means, as of any Determination Date, any Employee or former Employee (or Beneficiary of such Employee) who, for any Plan Year in the Determination Period: (I) has Compensation in excess of 50% of the dollar amount prescribed in Code ss.415(b)(1)(A) (relating to defined benefit plans) and is an officer of the Employer; (ii) has Compensation in excess of the dollar amount prescribed in Code ss.415(c)(1)(A) (relating to defined contribution plans) and is one of the Employees owning the ten largest interests in the Employer; (iii) is a more than 5% owner of the Employer; or (iv) is a more than 1% owner of the employer and has Compensation of more than $150,000. The constructive ownership rules of Code ss.318 (or the principles of that section in the case of an unincorporated Employer,) will apply to determine ownership in the Employer. The number of officers taken into account under clause (I) will not exceed the greater of 3 or 10% of the total number (after application of the Code ss.414(q) exclusions) of Employees, but no more than 50 officers. The Advisory Committee will make the determination of who is a Key Employee in accordance with Code ss.416(I)(1) and the regulations under that Code section. (2) "Non-Key Employee" is an employee who does not meet the definition of Key Employee. (3) "Compensation" means Compensation as determined under Section 1.09 for purposes of identifying Highly Compensated Employees. (4) "Required Aggregation Group" means: (I) each qualified plan of the Employer in which at least one Key Employee participates at any time during the Determination Period; and (ii) any other qualified plan of the employer which enables a plan described in clause (I) to meet the requirements of Code ss.401(a)(4) or of Code ss.410. (5) "Permissive Aggregation Group" is the Required Aggregation Group plus any other qualified plans maintained by the employer, but only if such group would satisfy in the aggregate the requirements of Code ss.401 (a)(4) and of Code ss.410. The Advisory Committee will determine the Permissive Aggregation Group. (6) "Employer" means the Employer that adopts this Plan and any related employers described in Section 1.30. (7) "Determination Date" for any Plan Year is the Accounting Date of the preceding Plan Year or, in the case of the first Plan Year of the Plan, the Accounting Date of that Plan Year. The "Determination Period" is the 5 year period ending on the Determination Date. 1.34 "Paired Plans" means the Employer has adopted two Standardized Plan Adoption Agreements offered with this Master Plan, one Adoption Agreement being a Paired Profit Sharing Plan and one Adoption Agreement being a Paired Pension Plan. A Paired Profit Sharing Plan may include a Code ss.401(k) arrangement. A Paired Pension Plan must be a money purchase pension plan or a target benefit pension plan. Paired Plans must be the subject of a favorable opinion letter issued by the National Office of the Internal Revenue Service. This Master Plan does not pair any of its Standardized Plan Adoption Agreements with Standardized Plan Adoption Agreements under a defined benefit master plan. ARTICLE II EMPLOYEE PARTICIPANTS 2.01 ELIGIBILITY. Each Employee becomes a Participant in the Plan in accordance with the participation option selected by the Employer in its Adoption Agreement. If this Plan is a restated Plan, each Employee who was a Participant in the Plan on the day before the Effective Date continues as a Participant in the Plan, irrespective of whether he satisfies the participation conditions in the restated Plan, unless otherwise provided in the Employer's Adoption Agreement. 2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an Employee's participation in the Plan under Adoption Agreement Section 2.01, the Plan takes into account all of his Years of Service with the Employer, except as provided in Section 2.03. "Year of Service" means an eligibility computation period during which the Employee completes not less than the number of Hours of Service specified in the Employer's Adoption Agreement. The initial eligibility computation period is the first 12 consecutive month period measured from the Employment Commencement Date. The Plan measures succeeding eligibility computation periods in accordance with the option selected by the Employee in its Adoption Agreement. If the Employer elects to measure subsequent periods on a Plan Year basis, an Employee who receives credit for the required number of Hours of Service during the initial eligibility computation period and during the first applicable Plan Year will receive credit for two Years of Service under Article II. "Employment Commencement Date" means the date on which the Employee first performs an Hour of Service for the Employer. If the Employer elects a service condition under Adoption Agreement Section 2.01 based on months, the Plan does not apply any Hour of Service requirement after the completion of the first Hour of Service. 2.03 BREAK IN SERVICE - PARTICIPATION. An Employee incurs a "Break in Service" if during any consecutive month period he does not complete more than 500 Hours of Service with the Employer. The "12 consecutive month period" under this Section 2.03 is the same 12 consecutive month period for which the Plan measures "Years of Service" under Section 2.02. (A) 2-year Eligibility. If the Employer elects a 2 years of service condition for eligibility purposes under Adoption Agreement Section 2.01, the Plan treats an Employee who incurs a one year Break in Service and who has never become a Participant as a new Employee on the date he first performs an Hour of Service for the Employer after the Break in Service. (B) Suspension of Years of Service. The Employer must elect in its Adoption Agreement whether a Participant will incur a suspension of Years of Service after incurring a one year Break in Service. If this rule applies under the Employer's Plan, the Plan disregards a Participant's Years of Service (as defined in Section 2.02) earned prior to a Break in Service until the Participant completes another Year of Service and the Plan suspends the Participant's participation in the Plan. If the Participant completes a Year of Service following his Break in Service, the Plan restores that Participant's pre-Break Years of Service (and the Participant resumes active participation in the Plan) retroactively to the first day of the computation period in which the Participant earns the first post-Break Year of Service. The initial computation period under this Section 2.03(B) is the 12 consecutive month period measured from the date the Participant first receives credit for an Hour of Service following the one year Break in Service period. The Plan measures any subsequent periods, if necessary, in a manner consistent with the computation period selection in Adoption Agreement Section 2.02. This Section 2.03(B) does not affect a Participant's vesting credit under Article V and, during a suspension period, the Participant's Account continues to share fully in Trust Fund allocations under Section 9.11. Furthermore, this Section 2.03(B) will not result in the restoration of any Year of Service disregarded under the Break in Service rule of Section 2.03(A). 2.04 PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose employment with the Employer terminates will re-enter the Plan as a Participant on the date of his re-employment, subject to the Break in Service rule, if applicable, under Section 2.03(B). An Employee who satisfies the Plan's eligibility conditions but who terminates employment with the Employer prior to becoming a Participant will become a Participant on the later of the Plan Entry Date on which he would have entered the Plan had he not terminated employment or the date of his re-employment, subject to the Break in Service rule, if applicable, under Section 2.03(B). Any Employee who terminates employment prior to satisfying the Plan's eligibility conditions becomes a Participant in accordance with Adoption Agreement Section 2.01. 2.05 CHANGE IN EMPLOYEE STATUS. If a Participant has not ncurred a Separation from Service but ceases to be eligible to participate in the Plan, by reason of employment within an employment classification excluded by the Employer under Adoption Agreement Section 1.07, the Advisory Committee must treat the Participant as an Excluded Employee during the period such a Participant is subject to the Adoption Agreement exclusion. The Advisory Committee determines a Participant's sharing in the allocation of Employer contributions and Participant forfeitures, if applicable, by disregarding his Compensation paid by the Employer for services rendered in his capacity as an Excluded Employee. However, during such period of exclusion, the Participant, without regard to employment classification, continues to receive credit for vesting under Article V for each included Year of Service and the Participant's Account continues to share fully in Trust Fund allocations under Section 9.11. If an Excluded Employee who is not a Participant becomes eligible to participate in the Plan by reason of a change in employment classification, he will participate in the Plan immediately if he has satisfied the eligibility conditions of Section 2.01 and would have been a Participant had he not been an Excluded Employee during his period of Service. Furthermore, the Plan takes into account all of the Participant's included Years of Service with the Employer as an Excluded Employee for purposes of vesting credit under Article V. 2.06 ELECTION NOT TO PARTICIPATE. If the Employer's Plan is a Standardized Plan, the Plan does not permit an otherwise eligible Employee nor any Participant to elect not to participate in the Plan. If the Employer's Plan is a Nonstandardized Plan, the Employer must specify in its Adoption Agreement whether an Employee eligible to participate, or any present Participant, may elect not to participate in the Plan. For an election to be effective for a particular Plan Year, the Employee or Participant must file the election in writing with the Plan Administrator not later than the time specified in the Employer's Adoption Agreement. The employer may not make a contribution under the Plan for the Employee or for the Participant for the Plan Year for which the election is effective, nor for any succeeding Plan Year, unless the Employee or Participant re-elects to participate in the Plan. After an Employee's or Participant's election not to participate has been effective for at least the minimum period prescribed by the Employer's Adoption Agreement, the Employee or Participant may re-elect to participate in the Plan for any Plan Year and subsequent Plan Years. An Employee or Participant may re-elect to participate in the Plan by filing his election in writing with the Plan Administrator not later than the time specified in the Employer's Adoption Agreement. An Employee or Participant who re-elects to participate may again elect not to participate only as permitted in the Employer's Adoption Agreement. If an Employee is a Self- Employed Individual, the Employee's election (except as permitted by Treasury regulations without creating a Code ss.401(k) arrangement with respect to that Self-Employed Individual) must be effective no later than the date the Employee first would become a Participant in the Plan and the election is irrevocable. The Plan Administrator must furnish an Employee or a Participant any form required for purposes of an election under this Section 2.06. An election timely filed is effective for the entire Plan Year. A Participant who elects not to participate may not receive a distribution of his Accrued Benefit attributable either to Employer or to Participant contributions except as provided under Article IV or under Article VI. However, for each Plan year for which a Participant's election not to participate is effective, the Participant's Account, if any, continues to share in Trust Fund allocations under Article IX. Furthermore, the Employee or the Participant receives vesting credit under Article V for each included Year of Service during the period the election not to participate is effective. ARTICLE III EMPLOYER CONTRIBUTIONS AND FORFEITURES Part 1. Amount of Employer Contributions and Plan Allocations: Sections 3.01 through 3.06. 3.01 AMOUNT. For each Plan Year, the Employer contributes to the trust the amount determined by application of the contribution option selected by the Employer in its Adoption Agreement. The Employer may not make a contribution to the Trust for any Plan Year to the extent the contribution would exceed the Participants' Maximum Permissible Amounts. The Employee contributes to this Plan on the condition its contribution is not due to a mistake of fact and the Revenue Service will not disallow the deduction for its contribution. The Trustee, upon written request from the employer, must return to the Employer the amount of the Employer's contribution made by the Employer by mistake of fact or the amount of the Employer's contribution disallowed as a deduction under Code ss.404. The Trustee will not return any portion of the Employer's contribution under the provisions of this paragraph more than one year after: (a) The Employer made the contribution by mistake of fact; or (b) The disallowance of the contribution as a deduction, and then, only to the extent of the disallowance. The Trustee will not increase the amount of the Employer contribution returnable under this Section 3.01 for any earnings attributable to the contribution, but the Trustee will decrease the Employer contribution returnable for any losses attributable to it. The Trustee may require the Employer to furnish it whatever evidence the Trustee deems necessary to enable the Trustee to confirm the amount the Employer has requested be returned is properly returnable under ERISA. 3.02 DETERMINATION OF CONTRIBUTION. The Employer, from its records, determines the amount of any contributions to be made by it to the Trust under the terms of the Plan. 3.03 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its contribution for each Plan Year in one or more installments without interest. The Employer must make its contribution to the Plan within the time prescribed by the Code or applicable Treasury regulations. Subject to the consent of the Trustee, the Employer may make its contribution in property rather than in cash, provided the contribution of property is not a prohibited transaction under the Code of under ERISA. 3.04 CONTRIBUTION ALLOCATION. (A) Method of Allocation. The Employer must specify in its Adoption Agreement the manner of allocating each annual Employer contribution to this Trust. (B) Top Heavy Minimum Allocation. The Plan must comply with the provisions of this Section 3.04(B), subject to the elections in the Employer's Adoption Agreement. (1) Top Heavy Minimum Allocation Under Standardized Plan. Subject to the Employer's election under Section 3.04(B)(3), the top heavy minimum allocation requirement applies to a Standardized Plan for each Plan Year, irrespective of whether the Plan is top heavy. (a) Each Participant employed by the Employer on the last day of the Plan Year will receive a top heavy minimum allocation for that Plan Year. The Employer may elect in Section 3.04 of its Adoption Agreement to apply this paragraph (a) only to a Participant who is a Non-Key Employee. (b) Subject to any overriding elections in section 3.18 of the Employer's Adoption Agreement, the top heavy minimum allocation is the lesser of 3% of the Participant's Compensation for the Plan Year or the highest contribution rate for the Plan Year made on behalf of any Participant for the Plan Year. However, if the Employee participates in Paired Plans, the top heavy minimum allocation is 3% of his Compensation. If, under Adoption Agreement Section 3.04, the Employer elects to apply paragraph (a) only to a Participant who is a Non-Key Employee, the Advisory Committee will determine the "highest contribution rate" described in the first sentence of this paragraph (b) by reference only to the contribution rates of Participants who are Key Employees for the Plan Year. (2) Top Heavy Minimum Allocation Under Nonstandardized Plan. The top heavy minimum allocation requirement applies to a Nonstandardized Plan only in Plan Years for which the Plan is top heavy. Except as provided in the Employer's Adoption Agreement, if the Plan is top heavy in any Plan Year: (a) Each Non-Key Employee who is a Participant and is employed by the Employer on the last day of the Plan Year will receive a top heavy minimum allocation for that Plan Year, irrespective of whether he satisfies the Hours of Service condition under Section 3.06 of the Employer's Adoption Agreement; and (b) The top heavy minimum allocation is the lesser of 3% of the Non-Key Employee's Compensation for the Plan Year or the highest contribution rate for the Plan Year made on behalf of any Key Employee. However, if a defined benefit plan maintained by the Employer which benefits a Key Employee depends on this Plan to satisfy the antidiscrimination rules of Code ss.401(a)(4) or the coverage rules of Code ss.410 (or another plan benefiting the Key Employee so depends on such defined benefit plan), the top heavy minimum allocation is 3% of the Non-Key Employee's Compensation regardless of the contribution rate for the Key Employees. (3) Special Election for Standardized Code ss.401(k) Plan. If the Employer's Plan is a Standardized Code ss.401(k) Plan, the Employer may elect in Adoption Agreement Section 3.04 to apply the top heavy minimum allocation requirements of Section 3.04(B)(1) only for Plan Years in which the Plan actually is a top heavy plan. (4) Special Definitions. For purposes of this Section 3.04(B), the term "Participant" includes any Employee otherwise eligible to participate in the Plan but who is not a Participant because of his Compensation level or because of his failure to make elective deferrals under a Code ss.401(k) arrangement or because of his failure to make mandatory contributions. For purposes of sub- paragraph (1)(b) or (2)(b), "Compensation" means Compensation as defined in Section 1.12, except Compensation does not include elective contributions, irrespective of whether the Employer has elected to include these amount sin Section 1.12 of its Adoption Agreement, any exclusion selected in Section 1.12 of the Adoption Agreement (other than the exclusion of elective contributions) does not apply and any modification to the definition of Compensation in Section 3.06 does not apply. (5) Determining Contribution Rates. For purposes of this Section 3.04(B), a Participant's contribution rate is the sum of all Employer contributions (not including Employer contributions to Social security) and forfeitures allocated to the Participant's Account for the Plan Year divided by his Compensation for the entire Plan Year. However, for purposes of satisfying a Participant's top heavy minimum allocation in Plan Years beginning after December 31, 1998, the Participant's contribution rate does not include an elective contributions under a Code ss.401(k) arrangement nor any Employer matching contributions allocated on the basis of those elective contributions or on the basis of employee contributions, except a Nonstandardized Plan may include in the contribution rate any matching contributions not necessary to satisfy the nondiscrimination requirements of Code ss.401(k) or of Code ss.401(m). If the Employee is a Participant in Paired Plans, the Advisory Committee will consider the Paired Plans as a single Plan to determine a Participant's contribution rate and to determine whether the Plans satisfy this top heavy minimum allocation requirement. To determine a Participant's contribution rate under a Nonstandardized Plan, the Advisory Committee must treat all qualified top heavy defined contribution plans maintained by the Employer (or by any related Employers described in Section 1.30) as a single plan. (b) No Allocations. If, for a Plan Year, there are no allocations of Employer contributions or forfeitures for any Participant (for purposes of Section 3.04(B)(1)(b)) or for any Key Employee (for purposes of Section 3.04(B)(2)(b)), the Plan does not require any top heavy minimum allocation for the Plan Year, unless a top heavy minimum allocation applies because of the maintenance by the Employer of more than one plan. (7) Election of Method. The Employer must specify in its Adoption Agreement the manner in which the Plan will satisfy the top heavy minimum allocation requirement. (a) If the Employer elects to make any necessary additional contribution to this Plan, the Advisory Committee first will allocate the Employer contributions (and Participant forfeitures, if any) for the Plan Year in accordance with the provisions of Adoption Agreement Section 3.04. The Employer then will contribute an additional amount for the Account of any Participant entitled under this Section 3.04(B) to a top heavy minimum allocation and whose contribution rate for the Plan Year, under this Plan and any other plan aggregated under paragraph (5), is less than the top heavy minimum allocation. The additional amount is the amount necessary to increase the Participant's contribution rate to the top heavy minimum allocation. The Advisory Committee will allocate the additional contribution to the Account of the Participant on whose behalf the Employer makes the contribution. (b) If the Employer elects to guarantee the top heavy minimum allocation under another plan, this Plan does not provide the top heavy minimum allocation and the Advisory Committee will allocate the annual Employer contributions (and Participant forfeitures) under the plan solely in accordance with the allocation method selected under Adoption Agreement Section 3.04. 3.05 FORFEITURE ALLOCATION. The amount of a Participant's Accrued Benefit forfeited under the Plan is a Participant forfeiture. The Advisory Committee will allocate Participant forfeitures in the manner specified by the Employer in its Adoption Agreement. The Advisory Committee will continue to hold the undistributed, non-vested portion of a terminated Participant's Accrued Benefit in his Account solely for his benefit until a forfeiture occurs at the time specified in Section 5.09 or if applicable, until the time specified in Section 9.14. Except as provided under Section 5.04, a Participant will not share in the allocation of a forfeiture of any portion of his Accrued Benefit. 3.06 ACCRUAL OF BENEFIT. The Advisory Committee will determine the accrualof benefit (Employer contributions and Participant forfeitures) on the basis of the Plan Year in accordance with the Employer's elections in its Adoption Agreement. (A) Compensation Taken Into Account. The Employer must specify in its Adoption Agreement the Compensation the Advisory Committee is to take into account in allocating an Employer contribution to a Participant's Account for the Plan Year in which the Employee first becomes a Participant. For all other Plan Years, the Advisory Committee will take into account only the Compensation determined for the portion of the Plan Year in which the Employee actually is a Participant. The Advisory Committee must take into account the Employee's entire Compensation for the Plan Year to determine whether the Plan satisfies the top heavy minimum allocation requirement of Section 3.04(B). The Employer, in an addendum to its Adoption Agreement numbered 3.06(A), may elect to measure Compensation for the Plan Year for allocation purposes on the basis of a specified period other than the Plan Year. (B) Hours of Service Requirement. Subject to the applicable minimum allocation requirement of Section 3.04, the Advisory Committee will not allocate any portion of an Employer contribution for a Plan Year to any Participant's Account if the Participant does not complete the applicable minimum Hours of Service requirement specified in the Employer's Adoption Agreement. (C) Employment Requirement. If the Employer's Plan is a Standardized Plan, a Participant who, during a particular Plan Year, completes the accrual requirements of Adoption Agreement Section 3.06 will share in the allocation of Employer contributions for that Plan Year without regard to whether he is employed by the Employer on the Accounting Date of that Plan Year. If the Employer's Plan is a Nonstandardized Plan, the Employer must specify in its Adoption Agreement whether the Participant will accrue a benefit if he is not employed by the Employer on the Accounting Date of the Plan Year. If the Employer's Plan is a money purchase plan or a target benefit plan, whether nonstandardized or Standardized, the Plan conditions benefit accrual on employment with the Employer on the 1st day of the Plan Year for the Plan Year in which the Employer terminates the Plan. (D) Other Requirements. If the Employer's Adoption Agreement includes options for other requirements affecting the Participant's accrual of benefits under the Plan, the Advisory Committee will apply this Section 3.06 in accordance with the Employer's Adoption Agreement selections. (E) Suspension of Accrual Requirements Under Nonstandardized Plan. If the Employer's Plan is a Nonstandardized Plan, the Employer may elect in its Adoption Agreement to suspend the accrual requirements elected under Adoption Agreement Section 3.06 if, for any Plan Year beginning after December 31, 1989, the Plan fails to satisfy the Participation Test or the Coverage Test. A Plan satisfies the Participation Test if, on each day of the Plan Year, the number of Employees who benefit under the Plan is at least equal to the lesser of 50 or 40% of the total number of Includible Employees as of such day. A Plan satisfies the Coverage Test if, on the last day of each quarter of the Plan Year, the number of Nonhighly Compensated Employees who benefit under the Plan si at least equal to 70% of the total number of Includible Nonhighly Compensated Employees as of such day. "Includible" Employees are all Employees other than: (1) those Employees excluded from participating in the Plan for the entire Plan Year by reason of the collective bargaining unit exclusion or the nonresident alien exclusion under Adoption Agreement Section 1.07 or by reason of the participation requirements of Sections 2.01 and 2.03; and (2) any Employee who incurs a Separation from Service during the Plan Year and fails to complete at least 401 Hours of Service for the Plan Year. A "Nonhighly Compensated Employee" is an Employee who is not a Highly Compensated Employee and who is not a family member aggregated with a Highly Compensated Employee pursuant to Section 1.09 of the Plan. For purposes of the Participation Test and the Coverage Test, an Employee is benefiting under the Plan on a particular date if, under Adoption Agreement Section 3.04, he is entitled to an allocation for the Plan Year. Under the Participation Test, when determining whether an Employee is entitled to an allocation under Adoption Agreement Section 3.04, the Advisory Committee will disregard any allocation required solely by reason of the top heavy minimum allocation, unless the top heavy minimum allocation is the only allocation made under the Plan for the Plan Year. If this Section 3.06(E) applies for a Plan Year, the Advisory Committee will suspend the accrual requirements for the Includible Employees who are Participants, beginning first with the Includible Employee(s) employed with the Employer on the last day of the Plan Year, then the Includible Employee(s) who have the latest Separation from Service during the Plan Year, and continuing to suspend in descending order the accrual requirements for each Includible Employee who incurred an earlier Separation from Service date, until the Plan satisfies both the Participation Test and the Coverage Test for the plan Year. If two or more Includible Employees have a Separation from Service on the same day, the Advisory Committee will suspend the accrual requirements for all such Includible Employees irrespective of whether the Plan can satisfy the Participation Test and the Coverage Test by accruing benefits for fewer than all such Includible Employees. If the Plan suspends the accrual requirements for an Includible Employee, that Employee will share in the allocation of Employer contributions and Participant forfeitures, if any, without regard to the number of Hours of Service he has earned for the Plan Year and without regard to whether he is employed by the Employer on the last day of the Plan Year. If the Employer's Plan includes Employer matching contributions subject to Code ss.401(m), this suspension of accrual requirements applies separately to the Code ss.401(m) portion of the Plan, and the Advisory Committee will treat an Employee as benefiting under that portion of the Plan if he is an Eligible Employee for purposes of the Code ss.401(m) nondiscrimination test. The Employer may modify the operation of this Section 3.06(E)k by electing appropriate modifications in Section 3.06 of its Adoption Agreement. Part 2. Limitations On Allocations: sections 3.07 through 3.19 [Note: Sections 3.07 through 3.10 apply only to Participants in this Plan who do not participate, and who have never participated, in another qualified plan or in a welfare benefit fund (as defined in Code ss.419(3)) maintained by the Employer.] 3.07 The amount of Annual Additions which the Advisory Committee may allocate under this Plan on a Participant's behalf for a Limitation Year may not exceed the Maximum Permissible Amount. If the amount the Employer otherwise would contribute to the Participant's Account would cause the Annual Additions for the Limitation Year to exceed the Maximum Permissible Amount, the Employer will reduce the amount of its contribution so the Annual Additions for the Limitation Year will equal the Maximum Permissible Amount. If an allocation of Employer contributions, pursuant to Section 3.04, would result in an Excess Amount (other than an Excess Amount resulting from the circumstances described in Section 3.10) to the Participant's Account, the Advisory Committee will reallocate the Excess Amount to the remaining Participants who are eligible for an allocation of Employer contributions for the Plan Year in which the Limitation Year ends. The Advisory Committee will make this reallocation on the basis of the allocation method under the Plan as if the Participant whose Account otherwise would receive the Excess Amount is not eligible for an allocation of Employer contributions. 3.08 Prior to the determination of the Participant's actual Compensation for a Limitation Year, the Advisory Committee may determine the Maximum Permissible Amount on the basis of the Participant's estimated annual Compensation for such Limitation Year. The Advisory Committee must make this determination on a reasonable and uniform basis for all Participants similarly situated. The Advisory Committee must reduce any Employer contributions (including any allocation of forfeitures) based on estimated annual Compensation by any Excess Amounts carried over from prior years. 3.09 As soon as is administratively feasible after the end of the Limitation Year, the Advisory Committee will determine the Maximum Permissible Amount for such Limitation Year on the basis of the Participant's actual Compensation for such Limitation Year. 3.10 If, pursuant to Section 3.09, or because of the allocation of forfeitures, there is an Excess Amount with respect to a Participant for a Limitation Year, the Advisory Committee will dispose of such Excess Amount as follows: (a) The Advisory Committee will return any nondeductible voluntary Employee contributions to the Participant to the extent the return would reduce the Excess Amount. (b) If, after the application of paragraph (a), an Excess Amount still exists, and the Plan covers the Participant at the end of the Limitation Year, then the Advisory Committee will use the Excess Amount(s) to reduce future Employer contributions (including any allocation of forfeitures) under the plan for the next Limitation Year and for each succeeding Limitation Year, as is necessary, for the Participant. If the Employer's Plan is a profit sharing plan, the Participant may elect to limit his Compensation for allocation purposes to the extent necessary to reduce his allocation for the Limitation Year to the Maximum Permissible Amount and eliminate the Excess Amount. (c) If, after the application of paragraph (a), an Excess Amount still exists, and the Plan does not cover the Participant at the end of the Limitation Year, then the Advisory Committee will hold the Excess Amount unallocated in a suspense account. The Advisory Committee will apply the suspense account to reduce Employer Contributions (including allocation of forfeitures) for all remaining Participants in the next Limitation Year, and in each succeeding Limitation Year if necessary. Neither the Employer nor any Employee may contribute to the Plan for any Limitation Year in which the Plan is unable to allocate fully a suspense account maintained pursuant to this paragraph (c). (d) The Advisory Committee will not distribute any Excess Amount(s) to Participants or to former Participants. [Note: Sections 3.11 through 3.16 apply only to Participants who, in addition to this Plan, participate in one or more plans (including Paired Plans), all of which are qualified Master or Prototype defined contribution plans or welfare benefit funds (as defined in Code ss.419(e)) maintained by the Employer during the Limitation Year.] 3.11 The amount of Annual Additions which the Advisory Committee may allocate under this Plan on a Participant's behalf for a Limitation Year may not exceed the Maximum Permissible Amount, reduced by the sum of any Annual Additions allocated to the Participant's Accounts for the same Limitation Year under this Plan and such other defined contribution plan. If the amount the Employer otherwise would contribute to the Participant's Account under this Plan would cause the Annual Additions for the Limitation Year to exceed this limitation, the Employer will reduce the amount of its contribution so the Annual Additions under all such plans for the Limitation Year will equal the Maximum Permissible Amount. If an allocation of Employer contributions, pursuant to Section 3.04, would result in an Excess Amount (other than an Excess Amount resulting from the circumstances described in Section 3.10) to the Participant's Account, the Advisory Committee will reallocate the Excess Amount to the remaining Participants who are eligible for an allocation of Employer contributions for the Plan Year in which the Limitation Year ends. The Advisory Committee will make this reallocation on the basis of the allocation method under the Plan as if the Participant whose Account otherwise would receive the Excess Amount is not eligible for an allocation of Employer contributions. 3.12 Prior to the determination of the Participant's actual Compensation for the Limitation Year, the Advisory Committee may determine the amounts referred to in 3.11 above on the basis of the Participant's estimated annual Compensation for such Limitation year. The Advisory Committee will make this determination on a reasonable and uniform basis for all Participants similarly situated. The Advisory Committee must reduce any Employer contribution (including allocation of forfeitures) based on estimated annual Compensation by any Excess Amounts carried over from prior years. 3.13 As soon as is administratively feasible after the end of the Limitation Year, the Advisory Committee will determine the amounts referred to in 3.11 on the basis of the Participant's actual Compensation for such Limitation Year. 3.14 If pursuant to Section 3.13, or because of the allocation of forfeitures, a Participant's Annual Additions under this Plan and all such other plans result in an Excess Amount, such Excess amount will consist of the Amounts last allocated. The Advisory Committee will determine the Amounts last allocated by treating the Annual Additions attributable to a welfare benefit fund as allocated first, irrespective of the actual allocation date under the welfare benefit fund. 3.15 The Employer must specify in its Adoption Agreement the Excess amount attributed to this Plan, if the Advisory Committee allocates an Excess Amount to a Participant on an allocation date of this Plan which coincides with an allocation date of another plan. 3.16 The Advisory Committee will dispose of an Excess Amounts attributed to this Plan as provided in Section 3.10. [Note: Section 3.17 applies only to Participants who, in addition to this Plan, participate in one or more qualified plans which are qualified defined contribution plans other than a Master or Prototype plan maintained by the Employer during the Limitation Year.] 3.17 SPECIAL ALLOCATION LIMITATION. The amount of Annual Additions which the Advisory Committee may allocate under this Plan on behalf of any Participant are limited in accordance with the provisions of Section 3.11 through 3.16, as though the other plan were a Master or Prototype plan, unless the Employer provides other limitations in an addendum to the Adoption Agreement, numbered Section 3.17. 3.18 DEFINED BENEFIT PLAN LIMITATION. If the Employer maintains a defined benefit plan, or has ever maintained a defined benefit plan which the Employer has terminated, then the sum of the defined benefit plan fraction and the defined contribution plan fraction for any Participant for any Limitation Year must not exceed 1.0. The Employer must provide in Adoption Agreement Section 3.18 the manner in which the plan will satisfy this limitation. The Employer also must provide in its Adoption Agreement Section 3.18 the manner in which the plan will satisfy the top heavy requirements of Code ss.416 after taking into account the existence (or prior maintenance) of the defined benefit plan. 3.19 DEFINITIONS - ARTICLE III. For purposes of Article III, the following terms mean: (a) "Annual Addition" - The sum of the following amounts allocated on behalf of a Participant for a Limitation Year, of (I) all Employer contributions; (ii) all forfeitures; and (iii) all Employee contributions. Except to the extent provided in Treasury regulations, Annual Additions include excess contributions described in Code ss.401(k), excess contributions described in Code ss.401(m) and excess deferrals described in Code ss.402(g), irrespective of whether the plan distributes or forfeits such excess amounts. Annual Additions also include Excess Amounts reapplied to reduce Employer contributions under Section 3.10. Amounts allocated after March 31, 1984, to an individual medical account (as defined in Code 415(l)(2)) included as part of a defined benefit plan maintained by the Employer are Annual Additions. Furthermore, Annual Additions include contributions paid or accrued after December 31, 1985, for taxable years ending after December 31, 1985, attributable to post-retirement medical benefits allocated to the separate account of a key employee (as defined in Code ss.419(d)(3)) under a welfare benefit fun (as defined in Code ss.419(e)) maintained by the Employer. (b) "Compensation" - For purposes of applying the limitations of Part 2 of this Article III, "Compensation" means Compensation as defined in Section 1.12, except Compensation does not include elective contributions, irrespective of whether the Employer has elected to include these amounts as Compensation under Section 1.12 of its Adoption Agreement, and any exclusion selected in Section 1.12 of the Adoption Agreement (other than the exclusion of elective contributions) does not apply. (c) "Employer" - the Employer that adopts this Plan and any related employers described in Section 1.30. Solely for purposes of applying the limitations of Part 2 of this Article III, the advisory Committee will determine related employers described in Section 1.30 by modifying Code ss.414(b) and (c) in accordance with Code ss.415(h). (d) "Excess Amount" - The excess of the Participant's Annual Additions for the Limitation Year over the Maximum Permissible Amount. (e) "Limitation Year" - The period selected by the Employer under Adoption Agreement Section 1.17. All qualified plans of the Employer must use the same Limitation Year. If the Employer amends the Limitation Year to a different 12 consecutive month period, the new Limitation Year must begin on a date within the Limitation Year for which the Employer makes the amendment, creating a short Limitation year. (f) "Master or Prototype Plan" - A plan the form of which is the subject of a favorable notification letter or a favorable opinion letter from the Internal Revenue Service. (g) "Maximum Permissible Amount" - The lesser of (I) $30,000 (or, if greater, one-fourth of the defined benefit dollar limitation under Code ss.415(b)(1)(A)), or (ii) 25% of the Participant's Compensation for the Limitation Year. If there is a short Limitation Year because of a change in Limitation Year, the Advisory Committee will multiply the $30,000 (or adjusted) limitation by the following fraction: Number of months in the short Limitation Year --------------------------------------------- 12 (h) "Defined contribution plan" - A retirement plan which provides for an individual account for each participant and for benefits based solely on the amount contributed to the participant's account, and any income, expenses, gains and losses, and any forfeitures of accounts of other participants which the plan may allocate to such participant's account. The Advisory Committee must treat all defined contribution plans (whether or not terminated) maintained by the Employer as a single plan. Solely for purposes of the limitations of Part 2 of this Article III, the Advisory Committee will treat employee contributions made to a defined benefit plan maintained by the Employer as a separate defined contribution plan. The Advisory Committee also will treat as a defined contribution plan an individual medical account (as defined in Code ss.415(l)(2)) included as part of a defined benefit plan maintained by the Employer and, for taxable years ending after December 31, 1985, a welfare benefit fund under Code ss.419(e) maintained by the Employer to the extent there are post-retirement medical benefits allocated to the separate account of a key employee (as defined in Code ss.419A(d)(3)). (I) "Defined benefit plan" - A retirement plan which does not provide for individual accounts for Employer contributions. The Advisory Committee must treat all defined benefit plans (whether or not terminated) maintained by the Employer as a single plan. [Note: The definitions in paragraphs (j), (k) and (l) apply only if the limitation described in Section 3.18 applies to the Employer's Plan.] (j) "Defined benefit plan fraction" - Projected annual benefit of the Participant under the defined benefit plan(s) -------------------------------------------------------------------------- The lesser of (I) 125% (subject to the "100% limitation" in paragraph (l)) of the dollar limitation in effect under Code ss.415(b)(l)(A) for the Limitation Year, or (ii) 140% of the Participant's average Compensation for his high three (3) consecutive Years of Service To determine the denominator of this fraction, the Advisory Committee will make any adjustment required under Code ss.415(b) and will determine a Year of Service, unless otherwise provided in an addendum to Adoption Agreement Section 3.18, as a Plan Year in which the Employee completed at least 1,000 Hours of Service. The "projected annual benefit" is the annual retirement benefit (adjusted to an actuarially equivalent straight life annuity if the plan expresses such benefit in a form other than a straight life annuity or qualified joint and survivor annuity) of the Participant under the terms of the defined benefit plan on the assumptions he continues employment until his normal retirement age (or current age, if later) as stated in the defined benefit plan, his compensation continues at the same rate as in effect in the Limitation Year under consideration until the date of his normal retirement age and all other relevant factors used to determine benefits under the defined benefit plan remain constant as of the current Limitation Year for all future Limitation Years. Current Accrued Benefit. If the Participant accrued benefits in one or more defined benefit plans maintained by the Employer which were in existence on May 6, 1986, the dollar limitation used in the denominator of this fraction will not be less than the Participant's Current Accrued Benefit. A Participant's Current Accrued Benefit is the sum of the annual benefits under such defined benefit plans which the Participant had accrued as of the end of the 1986 Limitation year (the last Limitation Year beginning before January 1, 1987), determined without regard to any change in the terms or conditions of the Plan made after May 5, 1986, and without regard to any cost of living adjustment occurring after May 5, 1986. This Current Accrued Benefit rule applies only if the defined benefit plans individually and in the aggregate satisfied the requirements of Code ss.415 as in effect at the end of the 1986 Limitation Year. (k) "Defined contribution plan fraction" - The sum, as of the close of the Limitation Year, of the Annual Additions to the Participant's Account under the defined contribution plan(s) -------------------------------------------------------------------------- The sum of the lesser of the following amounts determined for the Limitation Year and for each prior Year of Service with the Employer: (I) 125% (subject to the "100% limitation" in paragraph (l) of the dollar limitation in effect under Code ss.415(c)(l)(A) for the Limitation year (determined without regard to the special dollar limitations for employee stock ownership plans), or (ii) 35% of the Participant's Compensation for the Limitation Year. For purposes of determining the defined contribution plan fraction, the Advisory Committee will not recompute Annual Additions in Limitation Years beginning prior to January 1, 1987, to treat all Employee contributions as Annual Additions. If the Plan satisfied Code ss.415 for Limitation Years beginning prior to January 1, 1987, the Advisory Committee will redetermine the defined contribution plan fraction and the defined benefit plan fraction as of the end of the 1986 Limitation Year, in accordance with this Section 3.19. If the sum of the redetermined fractions exceeds 1.0, the Advisory Committee will subtract permanently from the numerator of the defined contribution plan fraction an amount equal to the produce of (l) the excess of the sum of the fractions over 1.0, times (2) the denominator of the defined contribution plan fraction. In making the adjustment, the Advisory Committee must disregard any accrued benefit under the defined benefit plan which is in excess of the Current Accrued Benefit. This Plan continues any transitional rules applicable to the determination of the defined contribution plan fraction under the Employer's Plan as of the end of the 1986 Limitation Year. (l) "100% limitation."If the 100% limitation applies, the Advisory Committee must determine the denominator of the defined benefit plan fraction and the denominator of the defined contribution plan fraction by substituting 100% for 125%. If the Employer's Plan is a Standardized Plan, the 100% limitation applies in all Limitation Years, subject to any override provisions under Section 3.18 of the Employer's Adoption Agreement. If the Employer overrides the 100% limitation under a Standardized Plan, the Employer must specify in its Adoption Agreement the manner in which the Plan satisfies the extra minimum benefit requirement of Code ss.416(h) and the 100% limitation must continue to apply if the Plan's top heavy ratio exceeds 90%. If the Employer's Plan is a Nonstandardized Plan, the 100% limitation applies only if: (I) the Plan's top heavy ratio exceeds 90%; or (ii) the plan's top heavy ratio is greater than 60%, and the Employer does not elect in its Adoption Agreement Section 3.18 to provide extra minimum benefits which satisfy Code ss.416(h)(2). ARTICLE IV PARTICIPANT CONTRIBUTIONS 4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. This Plan does not permit Participant nondeductible contributions unless the Employer maintains its Plan under a Code ss.401(k) Adoption Agreement. If the Employer does not maintain its Plan under a Code ss.401(k) Adoption Agreement and, prior to the adoption of this Master Plan, the Plan accepted Participant nondeductible contributions for a Plan Year beginning after December 31, 1986, those contributions must satisfy the requirements of Code ss.401(m). This Section 4.01 does not prohibit the Plan's acceptance of Participant nondeductible contributions prior to the first Plan Year commencing after the Plan Year in which the Employer adopts this Master Plan. 4.02 PARTICIPANT DEDUCTIBLE CONTRIBUTIONS, A qualified Plan may not accept Participant deductible contributions after April 15, 1987. If the Employer's Plan includes Participant deductible contributions ("DECs") made prior to April 16, 1987, the Advisory Committee must maintain a separate accounting for the Participant's Accrued Benefit attributable to DECs, including DECs as part of the Participant's accrued Benefit for all purposes of the Plan, except for purposes of determining the top heavy ratio under Section 1.33. The Advisory Committee may not use DECs to purchase life insurance on the Participant's behalf. 4.03 PARTICIPANT ROLLOVER CONTRIBUTIONS. Any Participant, with the Employer's written consent and after filing with the Trustee the form prescribed by the Advisory Committee, may contribute cash or other property to the Trust other than as a voluntary contribution if the contribution is a "rollover contribution" which the Code permits an employee to transfer either directly or indirectly from one qualified plan to another qualified plan. Before accepting a rollover contribution, the Trustee may require an Employee to furnish satisfactory evidence that the proposed transfer is in fact a "rollover contribution" which the Code permits an employee to make to a qualified plan. A rollover contribution is not an Annual Addition under Part 2 of Article III. The Trustee will invest the rollover contribution in a segregated investment Account for the Participant's sole benefit unless the Trustee (or the Named Fiduciary, in the case of a nondiscretionary Trustee designation), in its sole discretion, agrees to invest the rollover contribution as part of the Trust Fund. The Trustee will not have any investment responsibility with respect to a Participant's segregated rollover Account. The Participant, however, from time to time, may direct the Trustee in writing as to the investment of his segregated rollover Account in property, or property interest, of any kind, real, personal or mixed; provided however, the Participant may not direct the Trustee to make loans to his Employer. A Participant's segregated rollover Account alone will bear any extraordinary expenses resulting from investments made at the direction of the Participant. As of the Accounting Date (or other valuation date) for each Plan Year, the Advisory Committee will allocate and credit the net income (or net loss) from a Participant's segregated rollover Account and the increase or decrease in the fair market value of the assets of a segregated rollover Account solely to that Account. The Trustee is not liable nor responsible for any loss resulting to any Beneficiary, nor to any Participant, by reason of any sale or investment made or other action taken pursuant to and in accordance with the direction of the Participant. In all other respects, the Trustee will hold, administer and distribute a rollover contribution in the same manner as any Employer contribution made to the Trust. An eligible Employee, prior to satisfying the Plan's eligibility conditions, may make a rollover contribution to the Trust to the same extent and in the same manner as a Participant If an Employee makes a rollover contribution to the Trust prior to satisfying the plan's eligibility conditions, the Advisory Committee and Trustee must treat the Employee as a Participant for all purposes of the plan except the Employee is not a participant for purposes of sharing in Employer contributions or Participant forfeitures under the Plan until he actually becomes a Participant in the Plan. If the Employee has a Separation from Service prior to becoming a Participant, the Trustee will distribute his rollover contribution Account to him as if it were an Employer contribution Account. 4.04 PARTICIPANT CONTRIBUTION - FORFEITABILITY. A Participant's Accrued Benefit is, at all times, 100% Nonforfeitable to the extent the value of his Accrued Benefit is derived from his Participant contributions described in this Article IV. 4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. A Participant, by giving prior written notice to the Trustee, may withdraw all or any part of the value of his Accrued Benefit derived from his Participant contributions described in this Article IV. A distribution of Participant contributions must comply with the joint and survivor requirements described in Article VI, if those requirements apply to the Participant. A Participant my not exercise his right to withdraw the value of his Accrued Benefit derived from his Participant contributions more than once during any Plan Year. The Trustee, in accordance with the direction of the advisory Committee, will distribute a Participant's unwithdrawn Accrued Benefit attributable to his Participant contributions in accordance with the provisions of Article VI applicable to the distribution of the Participant's Nonforfeitable Accrued Benefit. 4.06 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT. The Advisory Committee must maintain a separate Account(s) in the name of each Participant to reflect the Participant's Accrued Benefit under the Plan derived from his Participant contributions. A Participant's Accrued Benefit derived from his Participant contributions as of any applicable date is the balance of his separate Participant contribution Account(s). ARTICLE V TERMINATION OF SERVICE - PARTICIPANT VESTING 5.01 NORMAL RETIREMENT AGE. The Employer must define Normal Retirement Age in its Adoption Agreement. A Participant's Accrued Benefit derived from Employer contribution is 100% Nonforfeitable upon and after his attaining Normal Retirement Age (if employed by the Employer on or after that date). 5.02 PARTICIPANT DISABILITY OR DEATH. The Employer may elect in its Adoption Agreement to provide a Participant's Accrued Benefit derived from Employer contributions will be 100% Nonforfeitable if the Participant's Separation from Service is a result of his death or his disability. 5.03 VESTING SCHEDULE. Except as provided in Sections 5.01 and 5.02, for each Year of Service, a Participant's Nonforfeitable percentage of his Accrued Benefit derived from Employer contributions equals the percentage in the vesting schedule completed by the Employer in its Adoption Agreement. (A) Election of Special Vesting Formula. If the Trustee makes a distribution (other than a cash-out distribution described in Section 5.04) to a partially-vested Participant, and the Participant has not incurred a Forfeiture Break in Service at the relevant time, the Advisory Committee will establish a separate Account for the Participant's Accrued Benefit. At any relevant time following the distribution, the Advisory Committee will determine the Participant's Nonforfeitable Accrued Benefit derived from Employer contributions in accordance with the following formula: P(AB+(RxD))-(RxD). To apply this formula, "P" is the Participant's current vesting percentage at the relevant time, "AB" is the Participant's Employer- derived Accrued Benefit at the relevant time, "R" is the ratio of "AB" to the Participant's Employer-derived Accrued Benefit immediately following the earlier distribution and "D" is the amount of the earlier distribution. If, under a restated Plan, the Plan has made distribution to a partially-vested Participant prior to its restated Effective date and is unable to apply the cash-out provisions of Section 5.04 to that prior distribution, this special vesting formula also applies to that Participant's remaining Account. The Employer, in an addendum to its Adoption Agreement, numbered Section 5.03, may elect to modify this formula to read as follows: P(AB+D)-D. 5.04 CASH-0UT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANT/ RESTORATION OF FORFEITED ACCRUED BENEFIT. If, pursuant to Article VI, a partially-vested Participant receives a cash-out distribution before he incurs a Forfeiture Break in Service (as defined in Section 5.08), the cash-out distribution will result in an immediate forfeiture of the nonvested portion of the Participant's Accrued Benefit derived from Employer contributions. See Section 5.09. A partially-vested Participant is a Participant whose Nonforfeitable Percentage determined under Section 5.03 is less than 100%. A cash-out distribution is a distribution of the entire present value of the Participant's Nonforfeitable Accrued Benefit. (A) Restoration and Conditions upon Restoration. A partially- vested Participant who is re-employed by the Employer after receiving a cash-out distribution of the Nonforfeitable percentage of his Accrued Benefit may repay the Trustee the amount of the cash-out distribution attributable to Employer contributions, unless the Participant no longer has a right to restoration by reason of the conditions of this Section 5.04(A). If a partially-vested Participant makes the cash-out distribution repayment, the Advisory Committee, subject to the conditions of this Section 5.04(A), must restore his Accrued Benefit attributable to Employer contributions to the same dollar amount as the dollar amount of his Accrued Benefit on the accounting Date, or other valuation date, immediately preceding the date of the cash-our distribution, unadjusted for any gains or losses occurring subsequent to that Accounting Date, or other valuation date. Restoration of the Participant's Accrued Benefit includes restoration of all Code ss.411(d)(6) protected benefits with respect to that restored Accrued Benefit, in accordance with applicable Treasury regulations. The Advisory Committee will not restore a reemployed Participant's Accrued Benefit under this paragraph if: (1) 5 years have elapsed since the Participant's first re- employment date with the Employer following the cash-out distribution; or (2) The Participant incurred a Forfeiture Break in Service (as defined in Section 5.08). This condition also applies if the Participant makes repayment within the Plan Year in which he incurs the Forfeiture Break in Service and that Forfeiture Break in Service would result in a complete forfeiture of the amount the Advisory Committee otherwise would restore. (B) Time and Method of Restoration. If neither of the two conditions preventing restoration of the Participant's Accrued Benefit applies, the Advisory Committee will restore the Participant's Accrued Benefit as of the Plan Year Accounting Date coincident with or immediately following the repayment. To restore the Participant's Accrued Benefit, the advisory Committee, to the extent necessary, will allocate to the Participant's Account: (1) First, the amount, if any, of Participant forfeitures the Advisory Committee would otherwise allocate under Section 3.05; (2) Second, the amount, if any, of the Trust Fund net income or gain for the Plan Year; and (3) Third, the Employer contribution for the Plan Year to the extent made under a discretionary formula. In an addendum to its Adoption Agreement numbered 5.04(B), the Employer may eliminate as a means of restoration any of the amounts described in clauses (1), (2) and (3) or may change the order or priority of these amounts. To the extent the amounts described in clauses (1), (2) and (3) are insufficient to enable the Advisory Committee to make the required restoration, the Employer must contribute, without regard to any requirement or condition of Section 3.01, the additional amount necessary to enable the Advisory Committee to make the required restoration. If, for a particular Plan Year, the Advisory Committee must restore the Accrued Benefit of more than one re-employed Participant, then the Advisory Committee will make the restoration allocations to each such Participant's Account in the same proportion that a Participant's restored amount for the Plan Year bears to the restored amount for the Plan Year of all re-employed Participants. The Advisory Committee will not take into account any allocation under this Section 5.04 in applying the limitation on allocations under Part 2 of Article III. (C) 0% Vested Participant. The Employer must specify in its Adoption Agreement whether the deemed cash-out rule applies to a 0% vested Participant. A 0% vested Participant is a Participant whose Accrued Benefit derived from Employer contributions is entirely forfeitable at the time of his Separation from Service. If the Participant's Account is not entitled to an allocation of Employer contributions for the Plan Year in which he has a Separation from Service, the Advisory Committee will apply the deemed cash-out rule as if the 0% vested Participant received a cash-out distribution on the date of the Participant's Separation from Service. If the Participant's Account is entitled to an allocation of Employer contributions or Participant forfeitures for the Plan Year in which he has a Separation from Service, the Advisory Committee will apply the deemed cash-out rule as if the 0% vested Participant received a cash-out distribution on the first day of the first Plan Year beginning after his Separation from Service. For purposes of applying the restoration provisions of this Section 5.04, the Advisory Committee will treat the 0% vested Participant as repaying his cash-out "distribution" on the first date of his re-employment with the Employer. If the deemed cash-out rule does not apply to the Employer's Plan a 0% vested Participant will not incur a forfeiture until he incurs a Forfeiture Break in Service. 5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT. Until the Advisory Committee restores the Participant's Accrued Benefit, as described in Section 5.04, the Trustee will invest the cash-out amount the Participant has repaid in a segregated Account maintained solely for that Participant. The Trustee must invest the amount in the Participant's segregated Account in Federally insured interest bearing savings account(s) or time deposit(s) (or a combination of both), or in other fixed income investments. Until commingled with the balance of the Trust Fund on the date the Advisory Committee restores the Participant's Accrued Benefit, the Participant's segregated Account remains a part of the Trust, but it alone shares in any income it earns and it alone bears any expense or loss it incurs. Unless the repayment qualifies as a rollover contribution, the Advisory Committee will direct the Trustee to repay to the Participant as soon as is administratively practicable the full amount of the Participant's segregated Account if the Advisory Committee determines either of the conditions of Section 5.04(A) prevents restoration as of the applicable Accounting Date, notwithstanding the Participant's repayment. 5.06 YEAR OF SERVICE - VESTING. For purposes of vesting under Section 5.03, Year of Service means any 12-consecutive month period designated in the Employer's Adoption Agreement during which an Employee completes not less than the number of Hours of Service (not exceeding 1,000) specified in the Employer's Adoption Agreement. A Year of Service includes any Year of Service earned prior to the Effective Date of the Plan, except as provided in Section 5.08. 5.07 BREAK IN SERVICE - VESTING. For purposes of this Article V, a Participant incurs a "Break in Service" if during any vesting computation period he does not complete more than 500 Hours of Service. If, pursuant to Section 5.06, the Plan does not require more than 500 Hours of Service to receive credit for a Year of Service, a Participant incurs a Break in Service in a vesting computation period in which he fails to complete a Year of Service. 5.08 INCLUDED YEARS OF SERVICE - VESTING. For purposes of determining "Years of Service" under Section 5.06, the Plan takes into account all Years of Service an Employee completes with the Employer except: (a) For the sole purpose of determining a Participant's Non- forfeitable percentage of his Accrued Benefit derived from Employer contributions which accrued for his benefit prior to a Forfeiture Break in Service, the Plan disregards any Year of Service after the Participant first incurs a Forfeiture Break in Service. the Participant incurs a Forfeiture Break in Service when he incurs 5 consecutive Breaks in Service. (b) The Plan disregards any Year of Service excluded under the Employer's Adoption Agreement. The Plan does not apply the Break in Service rule under Code ss.411(a)(6)(B). Therefore, an Employee need not complete a Year of Service after a Break in Service before the Plan takes into account the Employee's otherwise includible Years of Service under this Article V. 5.09 FORFEITURE OCCURS. A Participant's forfeiture, if any, of his Accrued Benefit derived from Employer contributions occurs under the Plan on the earlier of: (a) The last day of the vesting computation period in which the Participant first incurs a Forfeiture Break in Service; or (b) The date the Participant receives a cash-out distribution. The Advisory Committee determines the percentage of a Participant's Accrued Benefit forfeiture, if any, under this Section 5.09 solely by reference to the vesting schedule of Section 5.03. A Participant does not forfeit any portion of his Accrued Benefit for any other reason or cause except as expressly provided by this Section 5.09 or as provided under Section 9.14. ARTICLE VI TIME AND METHOD OF PAYMENT OF BENEFITS 6.01 TIME AND METHOD OF PAYMENT OF BENEFITS Unless, pursuant to Section 6.03, the Participant or the Beneficiary elects in writing to a different time or method of payment, the Advisory Committee will direct the Trustee to commence distribution of a Participant's Nonforfeitable Accrued Benefit in accordance with this Section 6.01. A Participant must consent, in writing, to any distribution required under this Section 6.01 if the present value of the Participant's Nonforfeitable Accrued Benefit, at the time of the distribution to the Participant, exceeds $3,500 and the Participant has not attained the later of Normal Retirement Age or age 62. Furthermore, the Participant's spouse also must consent, in writing, to any distribution, for which Section 6.04 requires the spouse's consent. For all purposes of this Article VI, the term "annuity starting date" means the first day of the first period for which the Plan pays an amount as an annuity or in any other form. A distribution date under this Article VI, unless otherwise specified within the Plan, is the date or dates the Employer specifies in the Adoption Agreement, or as soon as administratively practicable following that distribution date. For purposes of the consent requirements under this Article VI, if the present value of the Participant's Nonforfeitable Accrued Benefit, at the time of any distribution, exceeds $3,500, the Advisory Committee must treat that present value as exceeding $3,500 for purposes of all subsequent Plan distributions to the Participant. (A) Separation from Service For a Reason Other Than Death. (1) Participant's Nonforfeitable Accrued Benefit Not Exceeding $3,500. If the Participant's Separation from Service is for nay reason other than death, the Advisory Committee will direct the Trustee to distribute the Participant's Nonforfeitable Accrued Benefit in a lump sum, on the distribution date the Employer specifies in the Adoption Agreement, but in no event later than the 60th day following the close of the Plan Year in which the Participant attains Normal Retirement Age. If the Participant has attained Normal Retirement Age at the time of his Separation from Service, the distribution under this paragraph will occur no later than the 60th day following the close of the Plan Year in which the Participant's Separation from Service occurs. (2) Participant's Nonforfeitable Accrued Benefit Exceeds $3,500. If the Participant's Separation from Service is for any reason other than death, the Advisory Committee will direct the Trustee to commence distribution of the Participant's Nonforfeitable Accrued Benefit in a form and at the time elected by the Participant, pursuant to Section 6.03. In the absence of an election by the Participant, the Advisory Committee will direct the Trustee to distribute the Participant's Nonforfeitable Accrued Benefit in a lump sum (or, if applicable, the normal annuity form of distribution required under Section 6.04), on the 60th day following the close of the Plan Year in which the latest of the following events occurs: (a) the Participant attains Normal Retirement Age; (b) the Participant attains age 62; or (c) the Participant's Separation from Service. (3) Disability. If the Participant's Separation from Service is because of his disability, the Advisory Committee will direct the Trustee to pay the Participant's Nonforfeitable Accrued Benefit in lump sum, on the distribution date the Employer specifies in the Adoption Agreement, subject to the notice and consent requirements of this Article VI and subject to the applicable mandatory commencement dates described in Paragraphs (1) and (2). (4) Hardship. Prior to the time at which the Participant may receive distribution under Paragraphs (1), (2) or (3), the Participant may request a distribution from his Nonforfeitable Accrued Benefit in an amount necessary to satisfy a hardship, if the Employer elects in the Adoption Agreement to permit hardship distributions. Unless the Employer elects otherwise in the Adoption Agreement, a hardship distribution must be on account of any of the following: (a) medical expenses; (b) the purchase (excluding mortgage payments) of the Participant's principal residence; (c) post-secondary education tuition, for the next semester or quarter, for the Participant or for the Participant's spouse, children or dependents; (d) to prevent the eviction of the Participant from his principal residence or the foreclosure on the mortgage of the Participant's principal residence; (e) funeral expenses of the Participant's family member; or (f) the Participant's disability. A partially-vested Participant may not receive a hardship distribution described in this Paragraph (A)(4) prior to incurring a Forfeiture Break in Service, unless the hardship distribution is a cash-out distribution (as defined in Article V). The Advisory Committee will direct the Trustee to make the hardship distribution as soon as administratively practicable after the Participant makes a valid request for the hardship distribution. (B) Required Beginning Date. If any distribution commencement date described under Paragraph (A) of this Section 6.01, either by Plan provision or by Participant election (or nonelection), is later than the Participant's Required Beginning Date, the Advisory Committee instead must direct the Trustee to make distribution on the Participant's Required Beginning Date, subject to the transitional election, if applicable, under Section 6.03(D). A Participant's Required Beginning Date is the April 1 following the close of the calendar year in which the Participant attains age 70 1/2. However, if the Participant, prior to incurring a Separation from Service, attained age 70 1/2 by January 1, 1988, and, for the five Plan Year period ending in the calendar year in which he attained age 70 1/2 and for all subsequent years, the Participant was not a more than 5% owner, the Required Beginning Date is the April 1 following the close of the calendar year in which the Participant separates from Service or, if earlier, the April 1 following the close of the calendar year in which the Participant becomes a more than 5% owner. Furthermore, if a Participant who was not a more than 5% owner attained age 70 1/2 during 1988 and did not incur a Separation from Service prior to January 1, 1989, his Required Beginning Date is April 1, 1990. A mandatory distribution at the Participant's Required Beginning Date will be in lump sum (or, if applicable, the normal annuity form of distribution required under Section 6.04) unless the Participant, pursuant to the provisions of this Article VI, makes a valid election to receive an alternative form of payment. (C) Death of the Participant. The Advisory Committee will direct the Trustee, in accordance with this Section 6.01(C), to distribute to the Participant's Beneficiary the Participant's Non- forfeitable Accrued Benefit remaining in the Trust at the time of the Participant's death. Subject tot he requirements of Section 6.04, the Advisory Committee will determine the death benefit by reducing the Participant's Nonforfeitable Accrued Benefit by any security interest the Plan has against that Nonforfeitable Accrued Benefit by reason of an outstanding Participant loan. (1) Deceased Participant's Nonforfeitable Accrued Benefit Does Not Exceed $3,500. The Advisory Committee, subject to the requirements of Section 6.04, must direct the Trustee to distribute the deceased Participant's Nonforfeitable Accrued Benefit in a single sum, as soon as administratively practicable following the Participant's death or, if later, the date on which the Advisory Committee receives notification of or otherwise confirms the Participant's death. (2) Deceased Participant's nonforfeitable Accrued Benefit Exceeds $3,500. The Advisory Committee will direct the Trustee to distribute the deceased Participant's Nonforfeitable Accrued Benefit at the time and in the form elected by the Participant or, if applicable by the Beneficiary, as permitted under this Article VI. In the absence of an election, subject to the requirements of Section 6.04, the Advisory Committee will direct the Trustee to distribute the Participant's undistributed Nonforfeitable Accrued Benefit in a lump sum on the first distribution date following the close of the Plan Year in which the Participant's death occurs or, if later, the first distribution date following the date the Advisory Committee receives notification of or otherwise confirms the Participant's death. If the death benefit is payable in full to the Participant's surviving spouse, the surviving spouse, in addition to the distribution options provided in this Section 6.01(C), may elect distribution at any time or in any form (other than a joint and survivor annuity) this Article VI would permit for a Participant. 6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to the annuity distribution requirements, if any, prescribed by Section 6.04, and any restrictions prescribed by Section 6.03, a Participant or Beneficiary may elect distribution under one, or any combination, of the following methods: (a) by payment in a lump sum; or (b) by payment in monthly, quarterly or annual installments over a fixed reasonable period of time, not exceeding the life expectancy of the Participant, or the joint life and last survivor expectancy of the Participant and his Beneficiary. The Employer may elect in its Adoption Agreement to modify the methods of payment available under this Section 6.02. The distribution options permitted under this Section 6.02 are available only if the present value of the Participant Nonforfeitable Accrued Benefit, at the time of the distribution to the Participant, exceeds $3,500. To facilitate installment payments under this Article VI, the Advisory Committee may direct the Trustee to segregate all or any part of the Participant's Accrued Benefit in a separate Account. The Trustee will invest the Participant's segregated Account in Federally insured interest bearing savings account(s) or time deposit(s) (or a combination of both), or in other fixed income investments. A segregated Account remains a part of the Trust, but it alone shares in any income it earns, and it alone bears any expense or loss it incurs. A Participant or Beneficiary may elect to receive an installment distribution in the form of a Nontransferable Annuity Contract. Under an installment distribution, the Participant or beneficiary, at any time, may elect to accelerate the payment of all, or any portion, of the Participant's unpaid Nonforfeitable Accrued Benefit, subject to the requirements of Section 6.04. (A) Minimum Distribution Requirements for Participants. The Advisory Committee may not direct the Trustee to distribute the Participant's Nonforfeitable Accrued Benefit, nor may the Participant elect to have the Trustee distribute his Nonforfeitable Accrued Benefit, under a method of payment which, as of the Required Beginning Date, does not satisfy the minimum distribution requirements under Code ss.401(a)(9) and the applicable Treasury regulations. The minimum distribution for a calendar year equals the Participant's Nonforfeitable Accrued Benefit as of the latest valuation date preceding the beginning of the calendar year divided by the Participant's life expectancy or, if applicable, the joint and last survivor expectancy of the Participant and his designated Beneficiary (as determined under Article VIII, subject to the requirements of the Code ss.(a)(9) regulations). The Advisory Committee will increase the Participant's Nonforfeitable Accrued Benefit, as determined on the relevant valuation date, for contributions or forfeitures allocated after the valuation date and by December 31 of the valuation calendar year, and will decrease the valuation by distributions made after the valuation date and by December 31 of the valuation calendar year. For purposes of this valuation, the Advisory Committee will treat any portion of the minimum distribution for the first distribution calendar year made after the close of that year as a distribution occurring in that first distribution calendar year. In computing a minimum distribution, the Advisory Committee must use the unisex life expectancy multiples under Treas. Reg. ss.1.72-0. The Advisory Committee, only upon the Participant's written request, will compute the minimum distribution for a calendar year subsequent to the first calendar year for which the Plan requires a minimum distribution by redetermining the applicable life expectancy. However, the Advisory Committee may not redetermine the joint life and last survivor expectancy of the Participant and a nonspouse designated Beneficiary in a manner which takes into account any adjustment to a life expectancy other than the Participant's life expectancy. If the Participant's spouse is not his designated Beneficiary, a method of payment to the Participant (whether by Participant election or by Advisory Committee direction) may not provide more than incidental benefits to the Beneficiary. For Plan Years beginning after December 31, 1988, the Plan must satisfy the minimum distribution incidental benefit ("MDIB") requirement in the treasury regulations issued under Code ss.401(a)(9) for distributions made on or after the Participant's Required Beginning Date and before the Participant's death. To satisfy the MDIB requirement, the Advisory Committee will compute the minimum distribution required by this Section 6.02(A) by substituting the applicable MDIB divisor for the applicable life expectancy factor, if the MDIB divisor is a lesser number. Following the Participant's death, the Advisory Committee will compute the minimum distribution required by this Section 6.02(A) solely on the basis of the applicable life expectancy factor and will disregard the MDIB factor. For Plan Years beginning prior to January 1, 1989, the Plan satisfies the incidental benefits requirement if the distributions to the Participant satisfied the MDIB requirement or if the present value of the retirement benefits payable solely to the Participant is greater than 50% of the present value of the total benefits payable to the Participant and his Beneficiaries. The Advisory Committee must determine whether benefits to the Beneficiary are incidental as of the date the Trustee is to commence payment of the retirement benefits to the Participant, or as of any date the Trustee redetermines the payment period to the Participant. The minimum distribution for the first distribution calendar year is due by the Participant's Required Beginning Date. The minimum distribution for each subsequent distribution calendar year, including the calendar year in which the Participant's Required Beginning Date occurs, is due to by December 31 of that year. If the Participant receives distribution in the form of a Nontransferable Annuity Contract, the distribution satisfies this Section 6.01(A) if the contract complies with the requirements of Code ss.401(a)(9) and the applicable Treasury regulations. (B) Minimum Distribution Requirements for Beneficiaries. The method of distribution to the Participant's Beneficiary must satisfy Code ss.401(a)(9) and the applicable Treasury regulations. If the Participant's death occurs after his Required Beginning Date of, if earlier, the date the Participant commences an irrevocable annuity pursuant to Section 6.04, the method of payment to the Beneficiary must provide for completion of payment over a period which does not exceed the payment period which had commenced for the Participant. If the Participant's death occurs prior to his Required Beginning Date, and the Participant had not commenced an irrevocable annuity pursuant to Section 6.04, the method of payment to the Beneficiary, subject to Section 6.04, must provide for completion of payment to the Beneficiary over a period not exceeding: (I) 5 years after the date of the Participant's death; or (ii) if the Beneficiary is a designated Beneficiary, the designated Beneficiary's life expectancy. The Advisory Committee may not direct payment of the Participant's Nonforfeitable Accrued Benefit over a period described in clause (ii) unless the Trustee will commence payment to the designated Beneficiary no later than the December 31 following the close of the calendar year in which the Participant's death occurred or, if later, and the designated Beneficiary is the Participant's surviving spouse, December 31 of the calendar year in which the Participant would have attained age 70 1/2. If the Trustee will make distribution in accordance with clause (ii), the minimum distribution for a calendar year equals the Participant's Nonforfeitable Accrued Benefit as of the latest valuation date preceding the beginning of the calendar year divided by the designated Beneficiary's life expectancy. The Advisory Committee must use the unisex life expectancy multiples under Treas. Reg. ss.1.72-9 for purposes of applying this paragraph. The Advisory Committee, only upon the written request of the Participant or of the Participant's surviving spouse, will recalculate the life expectancy of the Participant's surviving spouse not more frequently than annually, but may not recalculate the life expectancy of a nonspouse designated Beneficiary after the Trustee commences payment to the designated Beneficiary. The Advisory Committee will apply this paragraph by treating any amount paid to the Participant's child, which becomes payable to the Participant's surviving spouse upon the child's attaining the age of majority, as paid to the Participant's surviving spouse. Upon the beneficiary's written request, the Advisory Committee must direct the Trustee to accelerate payment of all, or any portion, of the Participant's unpaid Accrued Benefit, as soon as administratively practical following the effective date of that request. 6.03 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days, but not later than 30 days, before the Participant's annuity starting date, the advisory Committee must provide a benefit notice to a Participant who is eligible to make an election under this Section 6.03. The benefit notice must explain the optional forms of benefit in the Plan, including the material features and relative values of those options, and the Participant's right to defer distribution until he attains the later of Normal Retirement Age or age 62. If a Participant or Beneficiary makes an election prescribed by this Section 6.03, the Advisory Committee will direct the Trustee to distribute the Participant's Nonforfeitable Accrued Benefit in accordance with that election. Any election under this Section 6.03 is subject to the requirements of Section 6.02 and of Section 6.04. The Participant or Beneficiary must make an election under this Section 6.03 by filing his election with the advisory Committee at any time before the Trustee otherwise would commence to pay a Participant's Accrued Benefit in accordance with the requirements of Article VI. (A) Participant Elections After Separation from Service. If the present value of a Participant's Nonforfeitable Accrued Benefit exceeds $3,500, he may elect to have the Trustee commence distribution as of any distribution date permitted under the Employer's Adoption Agreement Section 6.03. The Participant may reconsider an election at any time prior to the annuity starting date and elect to commence distribution as of any other distribution date permitted under the Employer's Adoption Agreement Section 6.03. If the Participant is partially-vested in his Accrued Benefit, an election under this Paragraph (A) to distribute prior to the Participant's incurring a Forfeiture Break in Service (as defined in Section 5.08), must be in the form of a cash-out distribution (as defined in Article V). A Participant may not receive a cash-out distribution if, prior to the time the Trustee actually makes the cash-out distribution, the Participant returns to employment with the Employer. Following his attainment of Normal Retirement Age, a Participant who has separated from Service may elect distribution as of any distribution date, irrespective of the elections under Adoption Agreement Section 6.03. (B) Participant Elections Prior to Separation from Service. The Employer must specify in its Adoption Agreement the distribution election rights, if any, a Participant has prior to his Separation from Service. A Participant must make an election under this Section 6.03(B) on a form prescribed by the Advisory Committee at any time during the Plan Year for which his election is to be effective. In his written election, the Participant must specify the percentage or dollar amount he wishes the Trustee to distribute to him. The Participant's election relates solely to the percentage or dollar amount specified in his election form and his right to elect to receive an amount, if any, for a particular Plan Year greater than the dollar amount or percentage specified in his election form terminates on the Accounting Date. The Trustee must make a distribution to a Participant in accordance with his election under this Section 6.03(B) within the 90 day period (or as soon as administratively practicable) after the Participant files his written election with the Trustee. The Trustee will distribute the balance of the Participant's Accrued Benefit not distributed pursuant to his election(s) in accordance with the other distribution provisions of this Plan. (C) Death Benefit Elections. If the present value of the deceased Participant's Nonforfeiture Accrued Benefit exceeds $3,500, the Participant's Beneficiary may elect to have the Trustee distribute the Participant's Nonforfeitable Accrued Benefit in a form and within a period permitted under Section 6.02. The Beneficiary's election is subject to any restrictions designated in writing by the Participant and not revoked as of his date of death. (D) Transitional Elections. Notwithstanding the provisions of Sections 6.01 and 6.02, if the Participant (or Beneficiary) signed a written distribution designation prior to January 1, 1984, the Advisory Committee must distribute the Participant's Nonforfeitable Accrued Benefit in accordance with that designation, subject however, to the survivor requirements, if applicable, of Sections 6.04, 6.05 and 6.06. This Section 6.03(D) does not apply to a pre-1984 distribution designation, and the Advisory Committee will not comply with that designation, if any of the following applies: (1) the method of distribution would have disqualified the Plan under Code ss.401(a)(9) as in effect on December 31, 1983; (2) the Participant did not have an Accrued Benefit as of December 31, 1983; (3) the distribution designation does not specify the timing and form of the distribution and the death Beneficiaries (in order of priority); (4) the substitution of a Beneficiary modifies the payment period of the distribution; or, (5) the Participant (or Beneficiary) modifies or revokes the distribution designation. In the event of a revocation, the Plan must distribute, no later than December 31 of the calendar year following the year of revocation, the amount which the Participant would have received under Section 6.02(A) if the distribution designation had not been in effect or, if the Beneficiary revokes the distribution designation, the amount which the Beneficiary would have received under Section 6.02(B) if the distribution designation had not been in effect. The Advisory Committee will apply this Section 6.03(D) to rollovers and transfers in accordance with Part J of the Code ss.401(a)(9) Treasury regulations. 6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES. (a) Joint and Survivor Annuity. The Advisory Committee must direct the Trustee to distribute a married or unmarried Participant's Nonforfeitable Accrued Benefit in the form of a qualified joint and survivor annuity, unless the Participant makes a valid waiver election (described in Section 6.05) within the 90 day period ending on the annuity starting date. If, as of the annuity starting date, the Participant is married, a qualified joint and survivor annuity is an immediate annuity which is purchasable with the Participant's Nonforfeitable Accrued Benefit and which provides a life annuity for the Participant and a survivor annuity payable for the remaining life of the Participant's surviving spouse equal to 50% of the amount of the annuity payable during the life of the Participant. If, as of the annuity starting date, the Participant is not married, a qualified joint and survivor annuity is an immediate life annuity for the Participant which is purchasable with the Participant's Nonforfeitable Accrued Benefit. On or before the annuity starting date, the Advisory Committee, without Participant or spousal consent, must direct the Trustee to pay the Participant's Nonforfeitable Accrued Benefit in a lump sum, in lieu of a qualified joint and survivor annuity, in accordance with Section 6.01, if the Participant's Nonforfeitable Accrued Benefit is not grater than $3,500. This Section 6.04(A) applies only to a Participant who has completed at least one Hour of Service with the Employer after August 22, 1984. (B) Preretirement Survivor Annuity. If a married Participant dies prior to his annuity starting date, the Advisory Committee will direct the Trustee to distribute a portion of the Participant's Nonforfeitable Accrued Benefit to the Participant's surviving spouse in the form of a preretirement survivor annuity, unless the Participant has a valid waiver election (as described in Section 6.06) in effect, or unless the Participant and his spouse were not married throughout the one year period ending on the date of his death. A preretirement survivor annuity is an annuity which is purchasable with 50% of the Participant's Nonforfeitable Accrued Benefit (determined as of the date of the Participant's death) and which is payable for the life of the Participant's surviving spouse. The value of the preretirement survivor annuity is attributable to Employer contributions and to Employee contributions in the same proportion as the Participant's Nonforfeitable Accrued Benefit is attributable to those contributions. The portion of the Participant's Nonforfeitable Accrued Benefit not payable under this paragraph is payable to the Participant's Beneficiary, in accordance with the other provisions of this Article VI. If the present value of the preretirement survivor annuity does not exceed $3,500, the Advisory Committee, on or before the annuity starting date, must direct the Trustee to make a lump sum distribution to the Participant's surviving spouse, in lieu of a preretirement survivor annuity. This Section 6.04(B) applies only to a Participant who dies after August 22, 1984, and either (I) completes at least one Hour of Service with the Employer after August 22, 1984, or (ii) separated from Service with at least 10 Years of Service (as defined in Section 5.06) and completed at least one Hour of Service with the Employer in a Plan Year beginning after December 31, 1975. (C) Surviving Spouse Elections. If the present value of the preretirement survivor annuity exceeds $3,500, the Participant's surviving spouse may elect to have the Trustee commence payment of the preretirement survivor annuity at any time following the date of the Participant's death, but not later than the mandatory distribution periods described in Section 6.02, and may elect any of the forms of payment described in Section 6.02, in lieu of the preretirement survivor annuity. In the absence of an election by the surviving spouse, the Advisory Committee must direct the Trustee to distribute the preretirement survivor annuity on the first distribution date following the close of the Plan Year in which the latest of the following events occurs: (I) the Participant's death; (ii) the date the Advisory Committee receives notification of or otherwise confirms the Participant's death; (iii) the date the Participant would have attained Normal Retirement Age; or (iv) the date the Participant would have attained age 62. (D) Special Rules. If the Participant has in effect a valid waiver election regarding the qualified joint and survivor annuity or the preretirement survivor annuity, the Advisory Committee must direct the Trustee to distribute the Participant's Nonforfeitable Accrued Benefit in accordance with Sections 6.01, 6.02 and 6.03. The Advisory Committee will reduce the Participant's Nonforfeitable Accrued Benefit by any security interest (pursuant to any offset rights authorized by Section 10.03[E]) held by the Plan by reason of a Participant loan to determine the value of the Participant's Nonforfeitable Accrued Benefit distributable in the form of a qualified joint and survivor annuity or preretirement survivor annuity, provided any post-August 18, 1985, loan satisfied the spousal consent requirement described in Section 10.03[E] of the Plan. For purposes of applying this Article VI, the Advisory Committee treats a former spouse as the Participant's spouse or surviving spouse to the extent provided under a qualified domestic relations order described in Section 6.07. The provisions of this Section 6.04, and of Sections 6.05 and 6.06, apply separately to the portion of the Participant's Nonforfeitable Accrued Benefit subject to the qualified domestic relations order and to the portion of the Participant's Nonforfeitable Accrued Benefit not subject to that order. (E) Profit Sharing Plan Election. If this Plan is a profit sharing plan, the Employer must elect the extent to which the preceding provisions of Section 6.04 apply. If the Employer elects to apply this Section 6.04 only to a Participant described in this Section 6.04(E), the preceding provisions of this Section 6.04 apply only to the following Participants: (1) a Participant as respects whom the Plan is a direct or indirect transferee from a plan subject to the Code ss.417 requirements and the Plan received the transfer after December 31, 1984, unless the transfer is an elective transfer described in Section 13.06; (2) a Participant who elects a life annuity distribution (if Section 6.02 or Section 13.02 of the plan requires the Plan to provide a life annuity distribution option); and (3) a Participant whose benefits under a defined benefit plan maintained by the Employer are offset by benefits provided under this Plan. If the Employer elects to apply this Section 6.04 to all Participants, the preceding provisions of this Section 6.04 apply to all Participants described in the first two paragraphs of this Section 6.04, without regard to the limitations of this Section 6.04(E). Sections 6.05 and 6.06 only apply to Participants to whom the preceding provisions of this Section 6.04 apply. 6.05 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY. Not earlier than 90 days, but not later than 30 days, before the Participant's annuity starting date, the Advisory Committee must provide the Participant a written explanation of the terms and conditions of the qualified joint and survivor annuity, the Participant's right to make, and the effect of, an election to waive the joint and survivor form of benefit, the rights of the Participant's spouse regarding the waiver election and the Participant's right to make, and the effect of, a revocation of a waiver election. The Plan does not limit the number of times the Participant may revoke a waiver of the qualified joint and survivor annuity or make a new waiver during the election period. A married Participant's waiver election is not valid unless (a) the Participant's spouse (to whom the survivor annuity is payable under the qualified joint and survivor annuity), after the Participant has received the written explanation described in this Section 6.05, has consented in writing to the waiver election, the spouse's consent acknowledges the effect of the election, and a notary public or the Plan Administrator (or his representative) witnesses the spouse's consent, (b)the spouse consents to the alternate form of payment designated by the Participant or to any change in that designated form of payment, and (c) unless the spouse is the Participant's sole primary Beneficiary, the spouse consents to the Participant's Beneficiary designation or to any change in the Participant's Beneficiary designation. The spouse's consent to a waiver of the qualified joint and survivor annuity is irrevocable, unless the Participant revokes the waiver election. The spouse may execute a blanket consent to any form of payment designation or to any Beneficiary designation made by the Participant, if the spouse acknowledges the right to limit that consent to a specific designation but, in writing, waives that right. The consent requirements of this Section 6.05 apply to a former spouse of the Participant, to the extent required under a qualified domestic relations order described in Section 6.07. The Advisory Committee will accept as valid a waiver election which does not satisfy the spousal consent requirements if the Advisory Committee establishes the Participant does not have a spouse, the Advisory Committee is not able to locate the Participant's spouse, the Participant is legally separated or has been abandoned (within the meaning of State law) and the Participant has a court order to that effect, or other circumstances exist under which the Secretary of the Treasury will excuse the consent requirement. If the Participant's spouse is legally incompetent to give consent, the spouse's legal guardian (even if the guardian is the Participant) may give consent. 6.06 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. The Advisory Committee must provide a written explanation of the preretirement survivor annuity to each married Participant, within the following period which ends last: (1) the period beginning on the first day of the Plan Year in which the Participant attains age 32 and ending on the last day of the Plan Year in which the Participant attains age 34; (2) a reasonable period after an Employee becomes a Participant; (3) a reasonable period after the joint and survivor rules become applicable to the Participant; or (4) a reasonable period after a fully subsidized preretirement survivor annuity no longer satisfies the requirements for a fully subsidized benefit. A reasonable period described in clauses (2), (3) and (4) is the period beginning one year before and ending one year after the applicable event. If the Participant separates from Service before attaining age 35, clauses (1), (2), (3) and (4) do not apply and the Advisory Committee must provide the written explanation within the period beginning one year before and ending one year after the Separation from Service. The written explanation must describe, in a manner consistent with Treasury regulations, the terms and conditions of the preretirement survivor annuity required under Section 6.05. The Plan does not limit the number of times the Participant may revoke a waiver of the preretirement survivor annuity or make a new waiver during the election period. A Participant's waiver election of the preretirement survivor annuity is not valid unless (a) the Participant makes the waiver election no earlier than the first day of the Plan Year in which he attains age 35 and (b) the Participant's spouse (to whom the preretirement survivor annuity is payable) satisfies the consent requirements described in Section 6.05, except the spouse need not consent to the form of benefit payable to the designated Beneficiary. The spouse's consent to the waiver of the preretirement survivor annuity is irrevocable, unless the Participant revokes the waiver election. Irrespective of the time of election requirement described in clause (a), if the Participant separates from Service prior to the first day of the Plan Year in which he attains age 35, the Advisory Committee will accept a waiver election as respects the Participant's Accrued Benefit attributable to his Service prior to his Separation from Service. Furthermore, if a Participant who has not separated from Service makes a valid waiver election, except for the timing requirement of clause (a), the Advisory Committee will accept that election as valid, but only until the first day of the Plan Year in which the Participant attains age 35. A waiver election described in this paragraph is not valid unless made after the Participant has received the written explanation described in this Section 6.06. 6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing contained in this Plan prevents the Trustee, in accordance with the direction of the Advisory Committee, from complying with the provisions of a qualified domestic relations order (as defined in Code ss.414(0)). This Plan specifically permits distribution to an alternate payee under a qualified domestic relations order at any time, irrespective of whether the Participant has attained his earliest retirement age (as defined under Code ss.414(p)) under the Plan. A distribution to an alternate payee prior to the Participant's attainment of earliest retirement age is available only if: (1) the order specifies distribution at that time or permits an agreement between the Plan and the alternate payee to authorize an earlier distribution; and (2) if the present value of the alternate payee's benefits under the Plan exceeds $3,5000, and the order requires, the alternate payee consents to any distribution occurring prior to the Participant's attainment of earliest retirement age. The Employer, in an addendum to its Adoption Agreement numbered 6.07, may elect to limit distribution to an alternate payee only when the Participant has attained his earliest retirement age under the Plan. Nothing in this Section 6.07 gives a Participant a right to receive distribution at a time otherwise not permitted under the Plan nor does it permit the alternate payee to receive a form of payment not otherwise permitted under the Plan. The Advisory Committee must establish reasonable procedures to determine the qualified status of a domestic relations order. Upon receiving a domestic relations order, the Advisory Committee promptly will notify the Participant and any alternate payee named in the order, in writing, of the receipt of the order and the plan's procedures for determining the qualified status of the order. Within a reasonable period of time after receiving the domestic relations order, the Advisory Committee must determine the qualified status of the order and must notify the Participant and each alternate payee, in writing, of its determination. The Advisory Committee must provide notice under this paragraph by mailing to the individual's address specified in the domestic relations order, or in a manner consistent with Department of Labor regulations. If any portion of the Participant's Nonforfeitable Accrued Benefit is payable during he period the Advisory Committee is making its determination of the qualified status of the domestic relations order, the Advisory Committee must make a separate accounting of the amounts payable. If the Advisory Committee determines the order is a qualified domestic relations order within 18 months of the date amounts first are payable following receipt of the order, the Advisory Committee will direct the Trustee to distribute the payable amounts in accordance with the order. If the Advisory Committee does not make its determination of the qualified status of the order within the 18-month determination period, the Advisory Committee will direct the Trustee to distribute the payable amounts in the manner the Plan would distribute if the order did not exist and will apply the order prospectively if the Advisory Committee later determines the order is a qualified domestic relations order. To the extent it is not inconsistent with the provisions of the qualified domestic relations order, the advisory Committee may direct the Trustee to invest any partitioned amount in a segregated subaccount or separate account and to invest the account in Federally insured, interest-bearing savings account(s) or time deposit(s) (or a combination of both), or in other fixed income investments. A segregated subaccount remains a part of the Trust, but it alone shares in any income it earns, and it alone bears any expense or loss it incurs. The Trustee will make any payments or distributions required under this Section 6.07 by separate benefit checks or other separate distribution to the alternate payee(s). ARTICLE VII EMPLOYER ADMINISTRATIVE PROVISIONS 7.01 INFORMATION TO COMMITTEE. The Employer must supply current information to the Advisory Committee a to the name, date of birth, date of employment, annual compensation, leaves of absence, Years of Service and date of termination of employment of each Employee who is, or who will be eligible to become, a Participant under the Plan, together with any other information which the Advisory Committee considers necessary. The Employer's records as to the current information the Employer furnishes to the Advisory Committee are conclusive as to all persons. 7.02 NO LIABILITY. The Employer assumes no obligation or responsibility to any of its Employees, Participants or Beneficiaries for any act of, or failure to act, on the part of its Advisory Committee (unless the Employer is the Advisory Committee), the Trustee, the Custodian, if any, or the Plan Administrator (unless the Employer is the Plan Administrator). 7.03 INDEMNITY OF CERTAIN FIDUCIARIES. The Employer indemnifies and saves harmless the Plan Administrator and the members of the Advisory Committee, and each of them, from and against any and all loss resulting from liability to which the Plan Administrator and the Advisory Committee, or the members of the Advisory Committee, may be subjected by reason of any act or conduct (except willful misconduct or gross negligence) in their official capacities in the administration of this Trust or Plan or both, including all expenses reasonably incurred in their defense, in case the Employer fails to provide such defense. The indemnification provisions of this Section 7.03 do not relieve the Plan Administrator or any Advisory committee member from any liability he may have under ERISA for breach of a fiduciary duty. Furthermore, the Plan Administrator and the Advisory Committee members and the Employer may execute a letter agreement further delineating the indemnification agreement of this Section 7.03, provided the letter agreement must be consistent with and does not violate ERISA. The indemnification provisions of this Section 7.03 extend to the Trustee (or to a Custodian, if any) solely to the extent provided by a letter agreement executed by the Trustee (or Custodian) and the Employer. 7.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer has the right to direct the Trustee with respect to the investment and re- investment of assets comprising the Trust Fund only if the Trustee consents in writing to permit such direction. If the Trustee consents to Employer direction of investment, the Trustee and the Employer must execute a letter agreement as a part of this Plan containing such conditions, limitations and other provisions they deem appropriate before the Trustee will follow any Employer direction as respects the investment or re-investment of any part of the Trust Fund. 7.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves the right to amend the vesting schedule at any time, the Advisory Committee will not apply the amended vesting schedule to reduce the Nonforfeitable percentage of any Participant's Accrued Benefit derived from Employer contributions (determined as of the later of the date the Employer adopts the amendment, or the date the amendment becomes effective) to a percentage less than the Nonforfeitable percentage computed under the plan without regard to the amendment. An amended vesting schedule will apply to a Participant only if the Participant receives credit for at least one Hour of Service after the new schedule becomes effective. If the Employer makes a permissible amendment to the vesting schedule, each Participant having at least 3 Years of Service with the Employer may elect to have the percentage of his Nonforfeitable Accrued Benefit computed under the Plan without regard to the amendment. For Plan Years beginning prior to January 1, 1989, the election described in the preceding sentence applies only to Participants having at least 5 Years of Service with the Employer. The Participant must file his election with the Advisory Committee within 60 days of the latest of (a) the Employer's adoption of the amendment; (b) the effective date of the amendment; or (c) his receipt of a copy of the amendment. The Advisory Committee, as soon as practicable, must forward a true copy of any amendment to the vesting schedule to each affected Participant, together with an explanation of the effect of the amendment, the appropriate form upon which the Participant may make an election to remain under the vesting schedule provided under the Plan prior to the amendment and notice of the time within which the Participant must make an election to remain under the prior vesting schedule. The election described in this Section 7.05 does not apply to a Participant if the amended vesting schedule provides for vesting at least as rapid at all times as the vesting schedule in effect prior to the amendment. For purposes of this Section 7.05, an amendment to the vesting schedule includes any Plan amendment which directly or indirectly affects the computation of the Nonforfeitable percentage of an Employee's rights to his Employer derived Accrued Benefit. Furthermore, the Advisory Committee must treat any shift in the vesting schedule, due to a change in the Plan's top heavy status, as an amendment to the vesting schedule for purposes of this Section 7.05. ARTICLE VIII PARTICIPANT ADMINISTRATIVE PROVISIONS 8.01 BENEFICIARY DESIGNATION. Any Participant may from time to time designate, in writing, any person or persons, contingently or successively, to whom the Trustee will pay his Nonforfeitable Accrued Benefit (including any life insurance proceeds payable to the Participant's Account) in the event of his death and the Participant may designate the form and method of payment. The Advisory Committee will prescribe the form for the written designation of Beneficiary and, upon the Participant's filing the form with the Advisory Committee, the form effectively revokes all designations filed prior to that date by the same Participant. (A) Coordination with survivor requirements. If the joint and survivor requirements of Article VI apply to the Participant, this Section 8.01 does not impose any special spousal consent requirements on the Participant's Beneficiary designation. However, in the absence of spousal consent (as required by Article VI) to the Participant's Beneficiary designation: (1) any waiver of the joint and survivor annuity or of the preretirement survivor annuity is not valid; and (2) if the Participant dies prior to his annuity starting date, the Participant's Beneficiary designation will apply only to the portion of the death benefit which is not payable as a preretirement survivor annuity. Regarding clause (2), if the Participant's surviving spouse is a primary Beneficiary under the Participant's Beneficiary designation, the Trustee will satisfy the spouse's interest in the Participant's death benefit first from the portion which is payable as a preretirement survivor annuity. (B) Profit sharing plan exception. If the Plan is a profit sharing plan, the Beneficiary designation of a married Exempt Participant is not valid unless the Participant's spouse consents (in a manner described in Section 6.05) to the Beneficiary designation. An "Exempt Participant" is a Participant who is not subject to the joint and survivor requirements of Article VI. The spousal consent requirement in this paragraph does not apply if the Exempt Participant and his spouse are not married throughout the one year period ending on the date of the Participant's death, or if the Participant's spouse is the Participant's sole primary Beneficiary. 8.02 NO BENEFICIARY DESIGNATION/DEATH OF BENEFICIARY. If a Participant fails to name a Beneficiary in accordance with Section 8.01, or if the Beneficiary named by a Participant predeceases him, then the Trustee will pay the Participant's Nonforfeitable Accrued Benefit in accordance with Section 6.02 in the following order of priority, unless the Employer specifies a different order to priority in an addendum to its Adoption Agreement, to: (a) The Participant's surviving spouse; (b) The Participant's surviving children, including adopted children, in equal shares; (c) The Participant's surviving parents, in equal shares; or (d) The Participant's estate. If the Beneficiary does not predecease the Participant, but dies prior to distribution of the Participant's entire Nonforfeitable Accrued Benefit, the Trustee will pay the remaining Nonforfeitable Accrued Benefit to the Beneficiary's estate unless the Participant's Beneficiary designation provides otherwise or unless the Employer provides otherwise in its Adoption Agreement. If the Plan is a profit sharing plan, an the Plan includes Exempt Participants, the Employer may not specify a different order of priority in the Adoption Agreement unless the Participant's surviving spouse will be first in the different order of priority. The Advisory Committee will direct the Trustee as to the method and to whom the trustee will make payment under this Section 8.02. 8.03 PERSONAL DATA TO COMMITTEE. Each Participant and each Beneficiary of a deceased Participant must furnish to the Advisory Committee such evidence, data or information as the Advisory Committee considers necessary or desirable for the purpose of administering the Plan. The provisions of this Plan are effective for the benefit of each Participant upon the condition precedent that each Participant will furnish promptly full, true and complete evidence, data and information when requested by the Advisory Committee, provided the Advisory Committee advises each Participant of the effect of his failure to comply with its request. 8.04 ADDRESS FOR NOTIFICATION. Each Participant and each Beneficiary of a deceased Participant must file with the Advisory Committee from time to time, in writing, his post office address and any change of post office address. Any communication, statement or notice addressed to a Participant, or Beneficiary, at his last post office address filed with the Advisory Committee, or as shown on the records of the Employer, binds the Participant, or Beneficiary, for all purposes of this Plan. 8.05 ASSIGNMENT OR ALIENATION. Subject to Code ss.414(p) relating to qualified domestic relations orders, neither a Participant nor a Beneficiary may anticipate, assign or alienate (either at law or in equity) any benefit provided under the Plan, and the Trustee will not recognize any such anticipation, assignment or alienation. Furthermore, a benefit under the Plan is not subject to attachment, garnishment, levy, execution or other legal or equitable process. 8.06 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within the time prescribed by ERISA and the applicable regulations, must furnish all Participants and Beneficiaries a summary description of any material amendment to the Plan or notice of discontinuance of the Plan and all other information required by ERISA to be furnished without charge. 8.07 LITIGATION AGAINST THE TRUST. A court of competent jurisdiction may authorize any appropriate equitable relief to redress violations of ERISA or to enforce any provisions of ERISA or the terms of the Plan. A fiduciary may receive reimbursement of expenses properly and actually incurred in the performance of his duties with the Plan. 8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any Beneficiary may examine copies of the Plan description, latest annual report, any bargaining agreement, this Plan and Trust, contract or any other instrument under which the Plan was established or is operated. The Plan Administrator will maintain all of the items listed in this Section 8.08 in his office, or in such other place or places as he may designate from time to time in order to comply with the regulations issued under ERISA, for examination during reasonable business hours. Upon the written request of a Participant or Beneficiary the Plan Administrator must furnish him with a copy of any item listed in this Section 8.08. The Plan Administrator may make a reasonable charge to the requesting person for the copy so furnished. 8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. A Participant or a Beneficiary ("Claimant") may file with the Advisory Committee a written claim for benefits, if the Participant or Beneficiary determines the distribution procedures of the Plan have not provided him his proper Nonforfeitable Accrued Benefit. The Advisory Committee must render a decision on the claim within 60 days of the Claimant's written claim for benefits. The Plan Administrator must provide adequate notice in writing to the Claimant whose claim for benefits under the Plan the advisory Committee has denied. The Plan Administrator's notice to the Claimant must set forth: (a) The specific reason for the denial; (b) Specific references to pertinent Plan provision on which the Advisory Committee based its denial; (c) A description of any additional material and information needed for the Claimant to perfect his claim and an explanation of why the material or information is needed; and (d) That any appeal the Claimant wishes to make of the adverse determination must be in writing to the Advisory Committee within 75 days after receipt of the Plan Administrator's notice of denial of benefits, The Plan Administrator's notice must further advise the Claimant that his failure to appeal the action to the Advisory Committee in writing within the 75-day period will render the Advisory Committee's determination final, binding and conclusive. If the Claimant should appeal to the Advisory Committee, he, or his duly authorized representative, may submit, in writing, whatever issues and comments he, or his duly authorized representative, feels are pertinent. The Claimant, or his duly authorized representative, may review pertinent Plan documents. The Advisory Committee will re-examine all facts related to the appeal and make a final determination as to whether the denial of benefits is justified under the circumstances. The Advisory Committee must advise the claimant of its decision within 60 days of the Claimant's written request for review, unless special circumstances (such as a hearing) would make the rendering of a decision within the 60-day limit unfeasible, but in no event may the Advisory Committee render a decision respecting a denial for a claim for benefits later than 120 days after its receipt of a request for review. The Plan Administrator's notice of denial of benefits must identify the name of each member of the Advisory Committee and the name and address of the Advisory Committee member to whom the Claimant may forward his appeal. 8.10 PARTICIPANT DIRECTION OF INVESTMENT. A Participant has the right to direct the Trustee with respect to the investment or re-investment of the assets comprising the Participant's individual Account only if the Trustee consents in writing to permit such direction. If the Trustee consents to Participant direction of investment, the Trustee will accept direction from each Participant on a written election form (or other written agreement), as a part of this Plan, containing such conditions, limitations and other provisions the parties deem appropriate. The Trustee or, with the Trustee's consent, the Advisory Committee, may establish written procedures, incorporated specifically as part of this Plan, relating to Participant direction of investment under this Section 8.10. The Trustee will maintain a segregated investment Account to the extent a Participant's Account is subject to Participant self- direction. The Trustee is not liable for any loss, nor is the Trustee liable for any breach, resulting from a Participant's direction of the investment of any part of his directed Account. The Advisory Committee, to the extent provided in a written loan policy adopted under Section 9.04, will treat a loan made to a Participant as a Participant direction of investment under this Section 8.10. To the extent of the loan outstanding at any time, the borrowing Participant's Account alone shares in any interest paid on the loan, and it alone bears any expense or loss it incurs in connection with the loan. The Trustee may retain any principal or interest paid on the borrowing Participant's loan in an interest bearing segregated Account on behalf of the borrowing Participant until the Trustee (or the Named Fiduciary, in the case of a nondiscretionary Trustee) deems it appropriate to add the amount paid to the Participant's separate Account under the Plan. If the Trustee consents to Participant direction of investment of his Account, the Plan treats any post-December 31, 1981, investment by a Participant's directed Account in collectibles (as defined by Code ss.408(m)) as a deemed distribution to the Participant for Federal income tax purposes. ARTICLE IX ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS 9.01 MEMBERS' COMPENSATION, EXPENSES. The Employer must appoint an Advisory Committee to administer the Plan, the members of which may or may not be Participants in the Plan, or which may be the Plan Administrator acting alone. In the absence of an Advisory Committee appointment, the Plan Administrator assumes the powers, duties and responsibilities of the Advisory Committee. The members of the Advisory Committee will serve without compensation for services as such, but the Employer will pay all expenses of the Advisory Committee, except to the extent the Trust properly pays for such expenses, pursuant to Article X. 9.02 TERM. Each member of the Advisory Committee serves until the appointment of his successor. 9.03 POWERS. In case of a vacancy in the membership of the Advisory Committee, the remaining members of the Advisory Committee may exercise any and all of the powers, authority, duties and discretion conferred upon the Advisory Committee pending the filling of the vacancy. 9.04 GENERAL. The Advisory Committee has the following powers and duties: (a) To select a Secretary, who need not be a member of the Advisory Committee; (b) To determine the rights of eligibility of an Employee to participate in the Plan, the value of a Participant's Accrued Benefit and the Nonforfeitable percentage of each Participant's Accrued Benefit; (c) To adopt rules of procedure and regulations necessary for the proper and efficient administration of the Plan provided the rules are not inconsistent with the terms of this Agreement; (d) To construe and enforce the terms of the Plan and the rules and regulations it adopts, including interpretation of the Plan documents and documents related to the Plan's operation; (e) To direct the trustee as respects the crediting and distribution of the Trust; (f) To review and render decisions respecting a claim for (or denial of a claim for) a benefit under the Plan; (g) To furnish the Employer with information which the Employer may require for tax or other purposes; (h) To engage the service of agents whom it may deem advisable to assist it with the performance of its duties; (i) To engage the services of an Investment Manager or Managers (as defined in ERISA ss.3(38)), each of whom will have full power and authority to manage, acquire or dispose (or direct the Trustee with respect to acquisition or disposition) of any Plan asset under its control; (j) To establish, in its sole discretion, a nondiscriminatory policy (see Section 9.04(A)) which the Trustee must observe in making loans if any, to Participants and Beneficiaries; and (k) To establish and maintain a funding standard account and to make credits and charges to the account to the extent required by and in accordance with the provisions of the Code. The Advisory Committee must exercise all of its powers, duties and discretion under the Plan in a uniform and nondiscriminatory manner. (A) Loan policy. If the Advisory Committee adopts a loan policy, pursuant to paragraph (j), the loan policy must be a written document and must include: (1) the identity of the person or positions authorized to administer the participant loan program; (2) a procedure for applying for the loan; (3) the criteria for approving or denying a loan; (4) the limitations, if any, on the types and amounts of loans available; (5) the procedure for determining a reasonable rate of interest; (6) the types of collateral which may secure the loan; and (7) the events constituting default and the steps the Plan will take to preserve plan assets in the event of default. This Section 9.04 specifically incorporates a written loan policy as part of the Employer's Plan. 9.05 FUNDING POLICY. The Advisory Committee will review, not less often than annually, all pertinent Employee information and Plan data in order to establish the funding policy of the Plan and to determine the appropriate methods of carrying out the Plan's objectives. The Advisory Committee must communicate periodically, as it deems appropriate, to the Trustee and to any Plan Investment Manager the Plan's short-term and long-term financial needs so investment policy can be coordinated with Plan financial requirements. 9.06 MANNER OF ACTION. The decision of a majority of the members appointed and qualified controls. 9.07 AUTHORIZED REPRESENTATIVE. The Advisory Committee may authorize any one of its members, or its Secretary, to sign on its behalf any notices, directions, applications, certificates, consents, approvals, waivers, letters or other documents. The Advisory Committee must evidence this authority by an instrument signed by all members and filed with the Trustee. 9.08 INTERESTED MEMBER. No member of the Advisory Committee may decide or determine any matter concerning the distribution, nature or method of settlement of his own benefits under the Plan, except in exercising an election available to that member in his capacity as a Participant, unless the Plan Administrator is acting alone in the capacity of the Advisory Committee. 9.09 INDIVIDUAL ACCOUNTS. The Advisory Committee will maintain, or direct the Trustee to maintain, a separate Account, or multiple Accounts, in the name of each Participant to reflect the Participant's Accrued Benefit under the Plan. If a Participant reenters the Plan subsequent to his having a Forfeiture Break in Service, the Advisory Committee, or the Trustee, must maintain a separate Account for the Participant's pre-Forfeiture Break in Serve Accrued Benefit and a separate Account for his post- Forfeiture Break in Service Accrued Benefit, unless the Participant's entire Accrued Benefit under the Plan is 100% Nonforfeitable. The Advisory Committee will make its allocations, or request the Trustee to make its allocations, to the Accounts of the Participants in accordance with the provisions of Section 9.11. The Advisory Committee may direct the Trustee to maintain a temporary segregated investment Account in the name of a Participant to prevent a distortion of income, gain or loss allocations under Section 9.11. The Advisory Committee must maintain records of its activities. 9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. The value of each Participant's Accrued Benefit consists of that proportion of the net worth (at fair market value) of the Employer's Trust Fund which the net credit balance in his Account (exclusive of the cash value of incidental benefit insurance contracts) bears to the total net credit balance in the accounts (exclusive of the cash value of the incidental benefit insurance contracts) of all Participants plus the cash surrender value of any incidental benefit insurance contracts held by the Trustee on the Participant's life. For purposes of a distribution under the Plan, the value of a Participant's Accrued Benefit is its value as of the valuation date immediately preceding the date of the distribution. Any distribution (other than a distribution from a segregated Account) made to a Participant (or to his Beneficiary) more than 90 days after the most recent valuation date may include interest on the amount of the distribution as an expense of the Trust Fund. The interest, if any, accrues from such valuation date to the date of the distribution at the rate established in the Employer's Adoption Agreement. 9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. A "valuation date" under this Plan is each Accounting Date and each interim valuation date determined under Section 10.14. As of each valuation date the Advisory Committee must adjust Accounts to reflect net income, gain or loss since the last valuation date. The valuation period is the period beginning the day after the lat valuation date and ending on the current valuation date. (A) Trust Fund Accounts. The allocation provisions of this paragraph apply to all Participant Accounts other than segregated investment Accounts. The Advisory Committee first will adjust the Participant Accounts, as those Accounts stood at the beginning of the current valuation period, by reducing the Accounts for any forfeitures arising under Section 5.09 or under Section 9.14, for amounts charged during the valuation period to the Accounts in accordance with Section 9.13 (relating to distributions) and Section 11.01 (relating to insurance premiums), and for the cash value of incidental benefit insurance contracts. The Advisory Committee then, subject to the restoration allocation requirements of Section 5.04 or of Section 9.14, will allocate the net income, gain or loss pro rate to the adjusted Participant Accounts. The allocable net income, gain or loss is the net income (or net loss), including the increase or decrease in the fair market value of assets, since the last valuation date. (B) Segregated investment Accounts. A segregated investment Account receives all income it earns and bears all expense or loss it incurs. The Advisory Committee will adopt uniform and nondiscriminatory procedures for determining income or loss of a segregated investment Account in a manner which reasonably reflects investment directions relating to pooled investments and investment directions occurring during a valuation period. As of the valuation date, the Advisory Committee must reduce a segregated Account for any forfeiture arising under Section 5.09 after the Advisory Committee has made all other allocations, changes or adjustments to the account for the Plan Year. (C) Additional rules. An Excess Amount or suspense account described in Part 2 of the Article III does not share in the allocation of net income, gain or loss described in this Section 9.11. If the Employer maintains its Plan under a Code ss.401(k) Adoption Agreement, the Employer may specify in its Adoption Agreement alternate valuation provisions authorized by that Adoption Agreement. This Section 9.11 applies solely to the allocation of net income, gain or loss of the Trust. The Advisory Committee will allocate the Employer contributions and Participant forfeitures, if any, in accordance with Article III. 9.12 INDIVIDUAL STATEMENT. As soon as practicable after the Accounting Date of each Plan Year, but within the time prescribed by ERISA and the regulations under ERISA, the Plan Administrator will deliver to each Participant (and to each Beneficiary) a statement reflecting the condition of his Accrued Benefit in the Trust as of that date and such other information ERISA requires be furnished the Participant or Beneficiary. No Participant, except a member of the Advisory Committee, has the right to inspect the records reflecting the Account of any other Participant. 9.13 ACCOUNT CHARGED. The Advisory Committee will charge a Participant's Account for all distributions made from that Account to the Participant, to his Beneficiary or to an alternate payee. The Advisory Committee also will charge a Participant's Account for any administrative expenses incurred by the Plan directly related to that Account. 9.14 UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require either the Trustee or the Advisory Committee to search for, or to ascertain the whereabouts of, any Participant or Beneficiary. At the time the Participant's or Beneficiary's benefit becomes distributable under Article VI, the Advisory Committee, by certified or registered mail addressed to his last known address or record with the Advisory Committee or the Employer, must notify any Participant, or Beneficiary, that he is entitled to a distribution under this Plan. The notice must quote the provisions of this Section 9.14 and otherwise must comply with the notice requirements of Article VI. If the Participant, or Beneficiary, fails to claim his distributive share or make his whereabouts known in writing to the Advisory Committee within 6 months from the date of mailing of the notice, the Advisory Committee will treat the Participant's or Beneficiary's unclaimed payable Accrued Benefit as forfeited and will reallocate the unclaimed payable Accrued Benefit in accordance with Section 3.05. A forfeiture under this paragraph will occur at the end of the notice period or, if later, the earliest date applicable Treasury regulations would permit the forfeiture. Pending forfeiture, the Advisory Committee, following the expiration of the notice period, may direct the Trustee to segregate the Nonforfeitable Accrued Benefit in a segregated Account and to invest that segregated Account in Federally insured interest bearing savings accounts or time deposits (or in a combination of both), or in other fixed income investments. If a Participant or Beneficiary who has incurred a forfeiture of his Accrued Benefit under the provisions of the first paragraph of this Section 9.14 makes a claim, at any time, for his forfeited Accrued Benefit, the advisory Committee must restore the Participant's or Beneficiary's forfeited Accrued Benefit to the same dollar amount as the dollar amount of the Accrued Benefit forfeited, unadjusted for any gains or losses occurring subsequent to the date of the forfeiture. The Advisory Committee will make the restoration during the Plan Year in which the Participant or Beneficiary makes the claim, first from the amount, if any, of Participant forfeitures the advisory Committee otherwise would allocate for the Plan Year, then from the amount, if any, of Participant forfeitures the Advisory Committee otherwise would allocate for the Plan Year, then from the amount, if any, of the Trust Fund net income or gain fro the Plan Year and then from the amount, or additional amount, the Employer contributes to enable the Advisory Committee to make the required restoration. The Advisory Committee must direct the Trustee to distribute the Participant's or Beneficiary's restored Accrued Benefit to him not later than 60 days after the close of the Plan Year in which the Advisory Committee restores the forfeited Accrued Benefit. The forfeiture provisions of this Section 9.14 apply solely to the Participant's or to the Beneficiary's Accrued Benefit derived from Employer contributions. ARTICLE X TRUSTEE AND CUSTODIAN, POWERS AND DUTIES 10.01 ACCEPTANCE. The Trustee accepts the Trust created under he Plan and agrees to perform the obligations imposed. The Trustee must provide bond for the faithful performance of its duties under the Trust to the extent required by ERISA. 10.02 RECEIPT OF CONTRIBUTIONS. The trustee is accountable to the Employer for the funds contributed to it by the Employer, but does not have any duty to see that the contributions received comply with the provisions of the Plan. The Trustee is not obliged to collect any contributions from the Employer, nor is obliged to see that funds deposited with it are deposited according to the provisions of the Plan. 10.03 INVESTMENT POWERS. (A) Discretionary Trustee Designation. If the Employer, in Adoption Agreement Section 1.02, designates the Trustee to administer the Trust as a discretionary Trustee, then the Trustee has full discretion and authority with regard to the investment of the Trust Fund, except with respect to a Plan assets under the control or direction of a properly appointed Investment Manager or with respect to a Plan asset properly subject to Employer, Participant or Advisory Committee direction of investment. The Trustee must coordinate its investment policy with Plan financial needs as communicated to it by the Advisory Committee. The Trustee is authorized and empowered, but not by way of limitation, with the following powers, rights and duties: (a) To invest any part or all of the trust Fund in any common or preferred stocks, open-end or closed-end mutual funds, put and call options traded on a national exchange, United States retirement plan bonds, corporate bonds, debentures, convertible debentures, commercial paper, U.S. Treasury bills, U.S. Treasury notes and other direct or indirect obligations of the United States Government or its agencies, improved or unimproved real estate situated in the United States, limited partnerships, insurance contracts of any type, mortgages, notes or other property of any kind, real or personal, to buy or sell options on common stock on a nationally recognized exchange with or without holding the underlying common stock, to buy and sell commodities, commodity options and contracts for the future delivery of commodities, and to make any other investments the Trustee deems appropriate, as a prudent man would do under like circumstances with due regard for the purposes of this Plan. Any investment made or retained by the Trustee in good faith is proper but must be of a kind constituting a diversification considered by law suitable for trust investments. (b) To retain in cash so much of the Trust Fund as it may deem advisable to satisfy liquidity needs of the Plan and to deposit any cash held in the trust Fund in a bank account at reasonable interest. (c) To invest, if the Trustee is a bank or similar financial institution supervised by the United States or by a State, in any type of deposit of the Trustee (or of a bank related to the Trustee within the meaning of Code ss.414(b)) at a reasonable rate of interest or in a common trust fund, as described in Code ss.584, or in a collective investment fund, the provisions of which govern the investment of such assets and which the Plan incorporates by this reference, which the Trustee (or its affiliate, as defined in Code ss.1504) maintains exclusively for the collective investment of money contributed by the bank (or the affiliate) in its capacity as trustee and which conforms to the rules of the Comptroller of the Currency. (d) To manage, sell, contract to sell, grant options to purchase, convey, exchange, transfer, abandon, improve, repair, insure, lease for any term even though commencing in the future or extending beyond the term of the trust, and otherwise deal with all property, real or personal, in such manner, for such considerations and on such terms and conditions as the Trustee decides. (e) To credit and distribute the Trust as directed by the Advisory Committee. The Trustee is not obliged to inquire as to whether any payee or distributee is entitled to any payment or whether the distribution is proper or within the terms of the Plan, or as to the manner of making any payment or distribution. The Trustee is accountable only to the Advisory Committee for any payment or distribution made by it in good faith on the order or direction of the Advisory Committee. (f) To borrow money, to assume indebtedness, extend mortgages and encumber by mortgage or pledge. (g) To compromise, contest, arbitrate or abandon claims and demands in its discretion. (h) To have with respect to the Trust all of the rights of an individual owner, including the power to give proxies, to participate in any voting trusts, mergers, consolidations or liquidations, and to exercise or sell stock subscriptions or conversion rights. (i) To lease for oil, gas and other mineral purposes and to create mineral severances by grant or reservation; to pool or unitize interest in oil, gas and other minerals; and to enter into operating agreements and to execute division and transfer orders. (j) To hold any securities or other property in the name of the Trustee or its nominee, with depositories or agent depositories or in another form as it may deem best, with or without disclosing the trust relationship. (k) To perform any and all other acts in its judgment necessary or appropriate for the proper and advantageous management, investment and distribution of the Trust. (l) To retain any funds or property subject to any dispute without liability for the payment of interest, and to decline to make payment or delivery of the funds or property until final adjudication is made by a court of competent jurisdiction. (m) To file all tax returns required of the Trustee. (n) To furnish to the Employer, the Plan Administrator and the Advisory Committee an annual statement of account showing the condition of the Trust Fund and all investments, receipts, disbursements and other transactions effected by the Trustee during the Plan Year covered by the statement and also stating the assets of the Trust held at the end of the Plan Year, which accounts are conclusive on all persons, including the Employer, the Plan Administrator and the Advisory Committee, except as to any act or transaction concerning which the Employer, the Plan Administrator or the Advisory Committee files with the Trustee written exceptions or objections within 90 days after the receipt of the accounts or for which ERISA authorizes a longer period within which to object. (o) To begin, maintain or defend any litigation necessary in connection with the administration of the Plan, except that the Trustee is not obliged or required to do so unless indemnified to its satisfaction. (B) Nondiscretionary Trustee Designation/Appointment of Custodian. If the Employer, in its Adoption Agreement Section 1.02, designates the Trustee to administer the Trust as a nondiscretionary Trustee, then the Trustee will not have any discretion or authority with regard to the investment of the Trust Fund, but must act solely as a directed trustee of the funds contributed to it. A nondiscretionary Trustee, as directed trustee of the funds held by it under the Employer's Plan, is authorized and empowered, by way of limitation, with the following powers, rights and duties, each of which the nondiscretionary Trustee exercises solely as directed trustee in accordance with the written direction of the Named Fiduciary (except to the extent a Plan asset is subject to the control and management of a properly appointed Investment Manager or subject to Advisory Committee or Participant direction of investment): (a) To invest any part or all of the trust Fund in any common or preferred stocks, open-end or closed-end mutual funds, put and call options traded on a national exchange, United States retirement plan bonds, corporate bonds, debentures, convertible debentures, commercial paper, U.S. Treasury bills, U.S. Treasury notes and other direct or indirect obligations of the United States Government or its agencies, improved or unimproved real estate situated in the United States, limited partnerships, insurance contracts of any type, mortgages, notes or other property of any kind, real or personal, to buy or sell options on common stock on a nationally recognized options exchange with or without holding the underlying common stock, to buy and sell commodities, commodity options and contracts for the future delivery of commodities, and to make any other investments the Named Fiduciary deems appropriate. (b) To retain in cash so much of the Trust Fund as the Named Fiduciary may direct in writing to satisfy liquidity needs of the Plan and to deposit any cash held in the trust Fund in a bank account at reasonable interest, including, specific authority to invest in any type of deposit of the trustee (or of a bank related to the Trustee within the meaning of Code ss.414(b)) at a reasonable rate of interest. (c) To sell, contract to sell, grant options to purchase, convey, exchange, transfer, abandon, improve, repair, insure, lease for any term even though commencing in the future or extending beyond the term of the Trust, and otherwise deal with all property, real or personal, in such manner, for such considerations and on such terms and conditions as the Named Fiduciary directs in writing. (d) To credit and distribute the Trust as directed by the Advisory Committee. The Trustee is not obliged to inquire as to whether any payee or distributee is entitled to any payment or whether the distribution is proper or within the terms of the Plan, or as to the manner of making any payment of distribution. The Trustee is accountable only to the Advisory Committee for any payment or distribution made by it in good faith on the order or direction of the Advisory Committee. (e) To borrow money, to assume indebtedness, extend mortgages and encumber by mortgage or pledge. (f) To have with respect to the Trust all of the rights of an individual owner, including the power to give proxies, to participate in any voting trusts, mergers, consolidations or liquidations, and to exercise or sell stock subscriptions or conversion rights, provided the exercise of any such powers is in accordance with and at the written direction of the Named Fiduciary. (g) To lease for oil, gas and other mineral purposes and to create mineral severances by grant or reservation; to pool or unitize interests in oil, gas and other minerals; and to enter into operating agreements and to execute division and transfer orders, provided the exercise of any such powers is in accordance with and at the written direction of the Named Fiduciary. (h) To hold any securities or other property in the name of the nondiscretionary Trustee or its nominee, with depositories or agent depositories or in another form as the Name Fiduciary may deem best, with or without disclosing the custodial relationship. (i) To retain any funds or property subject to any dispute without liability for the payment of interest, and to decline to make payment or delivery of the funds or property until a court of competent jurisdiction makes final adjudication. (j) To file all tax returns required of the trustee. (k) To furnish to the Named Fiduciary, the Employer, the Plan Administrator and the Advisory Committee an annual statement of account showing the condition of the Trust Fund and all investments, receipts, disbursements and other transactions effected by he nondiscretionary Trustee during the Plan Year covered by the statement and also stating the assets of the Trust held at the end of the Plan Year, which accounts are conclusive on all persons, including the Named Fiduciary, the Employer, the Plan Administrator and the Advisory Committee, except as to any act or transaction concerning which the Named Fiduciary, the Employer, the Plan Administrator or the Advisory Committee files with the nondiscretionary Trustee written exceptions or objections within 90 days after the receipt of the accounts or for which ERISA authorizes a longer period within which to object. (l) To begin, maintain or defend any litigation necessary in connection with the administration of the Plan, except that the Trustee is not obliged or required to do so unless indemnified to its satisfaction. Appointment of Custodian. The Employer may appoint a Custodian under the Plan, the acceptance by the Custodian indicated on the execution page of the Employer's Adoption Agreement. If the employer appoints a Custodian, the Employer's Plan must have a discretionary Trustee, as described in Section 10.03(A). A Custodian has the same powers, rights and duties as a nondiscretionary Trustee, as described in this Section 10.03(B). The Custodian accepts the terms of the Plan and Trust by executing the Employer's Adoption Agreement. Any reference in the Plan to a Trustee also is a reference to a Custodian where the context of the Plan dictates. A limitation of the Trustee's liability by Plan provision also acts as a limitation of the Custodian's liability. Any action taken by the Custodian at the discretionary Trustee's direction satisfies any provision in the Plan referring to the Trustee's taking that action. Modification of Powers/Limited Responsibility. The Employer and the Custodian or nondiscretionary Trustee, by letter agreement, may limit the powers of the custodian or nondiscretionary Trustee to any combination of powers listed within this Section 10.03(B). If there is a Custodian or a nondiscretionary Trustee under the Employer's Plan, then the Employer, in adopting this Plan acknowledges the Custodian or nondiscretionary Trustee has no discretion with respect to the investment or re-investment of the Trust Fund and that the Custodian or nondiscretionary Trustee is acting solely as custodian or as directed trustee with respect to the assets comprising the Trust Fund. (C) Limitation of Powers of Certain Custodians. If a Custodian is a bank which, under its governing state law, does not possess trust powers, then paragraphs (a), (c), (e), (f), (g) of Section 10.03(B), Section 10.16 and Article XI do not apply to that bank and that bank only has the power and authority to exercise the remaining powers, rights and duties under Section 10.03(B). (D) Named Fiduciary/Limitation of Liability of Nondiscretionary Trustee or Custodian. Under a nondiscretionary Trustee designation, the Named Fiduciary under the Employer's Plan has the sole responsibility for the management and control of the Employer's Trust Fund, except with respect to a Plan asset under the control or direction of a properly appointed Investment Manager or with respect to a Plan asset properly subject to Participant or Advisory Committee direction of investment. If the Employer appoints a Custodian, the Named Fiduciary is the discretionary Trustee. Under a nondiscretionary Trustee designation, unless the Employer designates in writing another person or persons to serve as Named Fiduciary, the Named Fiduciary under the Plan is the president of a corporate Employer, the managing partner of a partnership Employer or the sole proprietor, as appropriate. The Named Fiduciary will exercise its management and control of the Trust Fund through its written direction to the nondiscretionary Trustee or to the Custodian, whichever applies to the Employer's Plan. The nondiscretionary Trustee or Custodian has no duty to review or to make recommendations regarding investments made at the written direction of the Named Fiduciary. The nondiscretionary Trustee or Custodian must retain any investment obtained at the written direction of the Named Fiduciary to dispose of such investment. The nondiscretionary Trustee or Custodian is not liable in any manner or for any reason for making, retaining or disposing of any investment pursuant to any written direction described in this paragraph. Furthermore, the Employer agrees to indemnify and to hold the nondiscretionary Trustee or Custodian harmless from any damages, costs or expenses, including reasonable counsel fees, which the nondiscretionary Trustee or Custodian may incur as a result of any claim asserted against the nondiscretionary Trustee, the custodian or the Trust arising out of the nondiscretionary Trustee's or Custodian's compliance with any written direction described in this paragraph. (E) Participant Loans. This Section 10.03(E) specifically authorizes the Trustee to make loans on a nondiscriminatory basis to a Participant or to a Beneficiary in accordance with the loan policy established by the Advisory Committee, provided: (1) the loan policy satisfies the requirements of Section 9.04; (2) loans are available to all Participants and Beneficiaries on a reasonably equivalent basis and are not available in a greater amount for Highly Compensated Employees than for other Employees; (3) any loan is adequately secured and bears a reasonable rate of interest; (4) the loan provides for repayment within a specified time; (5) the default provisions of the note prohibit offset of the Participant's Nonforfeitable Accrued Benefit prior to the time the Trustee otherwise would distribute the Participant's Nonforfeitable Accrued Benefit; and (7) the loan otherwise conforms to the exemption provided by Code ss.4975(d)(1). If the joint and survivor requirements of Article VI apply to the Participant, the Participant may not pledge any portion of his Accrued Benefit as security for a loan made after August 18, 1985, unless, within the 90 day period ending on the date the pledge becomes effective, the Participant's spouse, if any, consents (in a manner described in Section 6.05 other than the requirement relating to the consent of a subsequent spouse) to the security or, by separate consent, to an increase in the amount of security. If the employer is an unincorporated trade or business, a Participant who is an Owner- Employee may not receive a loan from the Plan, unless he has obtained a prohibited transaction exemption from the Department of Labor. If the Employer is an "S Corporation," a Participant who is a shareholder-employee (an employee or an officer) who, at any time during the Employer's taxable year, owns more than 5%, either directly or by attribution under Code ss.318(a)(1), of the Employer's outstanding stock may not receive a loan from the Plan, unless he has obtained a prohibited transaction exemption from the Department of Labor. If the Employer is not an unincorporated trade or business nor an "S Corporation," this Section 10.03(E) does not impose any restrictions on the class of Participants eligible for a loan from the Plan. (F) Investment in qualifying Employer securities and qualifying Employer real property. The investment options in this Section 10.03(F) include the ability to invest in qualifying Employer securities or qualifying Employer real property, as defined in and as limited by ERISA. If the Employer's Plan is a Nonstandardized profit sharing plan, it may elect in its Adoption Agreement to permit the aggregate investments in qualifying Employer securities and in qualifying Employer real property to exceed 10% of the value of Plan assets. 10.04 RECORDS AND STATEMENTS. The records of the Trustee pertaining to the Plan must be open to the inspection of the Plan Administrator, the Advisory Committee and the Employer at all reasonable times and may be audited from time to time by any person or persons as the Employer, Plan Administrator or Advisory Committee may specify in writing. The Trustee must furnish the Plan Administrator or Advisory Committee with whatever information relating to the trust Fund the Plan Administrator or Advisory Committee considers necessary. 10.05 FEES AND EXPENSES FROM FUND. A Trustee or Custodian will receive reasonable annual compensation as may be agreed upon from time to time between the Employer and the Trustee or Custodian. No person who is receiving full pay from the Employer may receive compensation for services as Trustee or as Custodian. The Trustee will pay from the trust fund all fees and expenses reasonably incurred by the Plan, to the extent such fees and expenses are for the ordinary and necessary administration and operation of the Plan, unless the Employer pays such fees and expenses. Any fee or expense paid, directly or indirectly, by the Employer is not an Employer contribution to the Plan, provided the fee or expense relates to the ordinary and necessary administration of the Fund. 10.06 PARTIES TO LITIGATION. Except as otherwise provided by ERISA, no Participant or Beneficiary is a necessary party or is required to receive notice of process in any court proceeding involving the Plan, the Trust Fund or any fiduciary of the Plan. Any final judgment entered in any proceeding will be conclusive upon the employer, the Plan Administrator, the Advisory Committee, the Trustee, Custodian, Participants and Beneficiaries. 10.07 PROFESSIONAL AGENTS. The Trustee may employ and pay from the Trust Fund reasonable compensation to agents, attorneys, accountants and other persons to advise the Trustee as in its opinion may be necessary. The Trustee may delegate to any agent, attorney, accountant or other person selected by it any non-trustee power or duty vested in it by the Plan, and the Trustee may act or refrain from acting on the advice or opinion of any agent, attorney, accountant or other person so selected. 10.08 DISTRIBUTION OF CASH OR PROPERTY. The Trustee may make distribution under the Plan in cash or property, or partly in each, at its fair market value as determined by the Trustee. For purposes of a distribution to a Participant or to a Participant's designated Beneficiary or surviving spouse, "property" includes a Nontransferable Annuity Contract, provided the contract satisfies the requirements of this Plan. 10.09 DISTRIBUTION DIRECTIONS. If no one claims a payment or distribution made from the Trust, the Trustee must promptly notify the Advisory Committee and then dispose of the payment in accordance with the subsequent direction of the Advisory Committee. 10.10 THIRD PARTY/MULTIPLE TRUSTEES. No person dealing with the Trustee is obligated to see to the proper application of any money paid or property delivered to the Trustee, or to inquire whether the Trustee has acted pursuant to any of the terms of the Plan. Each person dealing with the Trustee may act upon any notice, request or representation in writing by the Trustee, or by the Trustee's duly authorized agent, and is not liable to any person in so acting. The certificate of the Trustee that it is acting in accordance with the Plan will be conclusive in favor of any person relying on the certificate. If more than two persons controls with respect to any decision regarding the administration or investment of the Trust Fund or of any portion of the Trust Fund with respect to which such persons act as Trustee. However, the signature of only one Trustee is necessary to effect any transaction on behalf of the Trust. 10.11 RESIGNATION. The Trustee or Custodian may resign its position at any time by giving 30 days' written notice in advance to the Employer and to the Advisory Committee. If the Employer fails to appoint a successor Trustee within 60 days of its receipt of the trustee's written notice of resignation, the Trustee will treat the employer as having appointed itself as Trustee and as having filed its acceptance of appointment with the former Trustee. The employer, in its sole discretion, may replace a Custodian. If the Employer does not replace a Custodian, the discretionary Trustee will assume possession of Plan assets held by the former Custodian. 10.12 REMOVAL. The employer, by giving 30 days' written notice in advance to the trustee, may remove any Trustee or Custodian. In the event of the resignation or removal of a Trustee, the employer must appoint a successor Trustee if it intends to continue the Plan. If two or more persons hold the position of Trustee, in the event of the removal of one such person, during any period the selection of a replacement is pending, or during any period such person is unable to serve for any reason, the remaining person or persons will act as the Trustee. 10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE. Each successor Trustee succeeds to the title to the Trust vested in his predecessor by accepting in writing his appointment as successor Trustee and by filing the acceptance with the former Trustee and the advisory Committee without the signing or filing of any further statement. The resigning or removed Trustee, upon receipt of acceptance in writing of the Trust by the successor Trustee, must execute all documents and do all acts necessary to vest the title of record in any successor Trustee. Each successor Trustee has and enjoys all of the powers, both discretionary and ministerial, conferred under this Agreement upon his predecessor. A successor Trustee is not personally liable for any act or failure to act of any predecessor Trustee, except as required under ERISA. With the approval of the Employer and the Advisory Committee, a successor Trustee, with respect to the Plan, may accept the account rendered and the property delivered to it by a predecessor Trustee without incurring any liability or responsibility for so doing. 10.14 VALUATION OF TRUST. The Trustee must value the Trust Fund as of each Accounting Date to determine the fair market value of each Participant's Accrued Benefit in the Trust. The Trustee also must value the Trust Fund on such other valuation dates as directed in writing by the Advisory Committee or as required by the Employer's Adoption Agreement. 10.15 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER, ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY APPOINTED. The Trustee is not liable for the acts or omissions of any Investment Manager the Advisory Committee may appoint, nor is the Trustee under any obligation to invest or otherwise manage any asset of the Plan which is subject tot he management of a properly appointed Investment Manager. The Advisory Committee, the Trustee and any properly appointed Investment Manager may execute a letter agreement as a part of this Plan delineating the duties, responsibilities and liabilities of the Investment Manager with respect to any part of the trust Fund under the control of the Investment Manager. The limitation on liability described in this Section 10.15 also applies to the acts or omissions of any ancillary trustee or independent fiduciary properly appointed under Section 10.17 of the Plan. However, if a discretionary Trustee, pursuant to the delegation described in Section 10.17 of the Plan, appoints an ancillary trustee, the discretionary Trustee is responsible for the periodic review of the ancillary trustee's actions and must exercise its delegated authority in accordance with the terms of the Plan and in a manner consistent with ERISA. The Employer, the discretionary Trustee and an ancillary trustee may execute a letter agreement as a part of this Plan delineating any indemnification agreement between the parties. 10.16 INVESTMENT IN GROUP TRUST FUND. The Employer, by adopting this Plan, specifically authorizes the Trustee to invest all or any portion of the assets comprising the Trust Fund in any group trust fund which at the time of the investment provides for the pooling of the assets of plans qualified under Code ss.401(a). This authorization applies solely to a group trust fund exempt from taxation under Code ss.501(a) and the trust agreement of which satisfies the requirements of Revenue Rule 81-100. The provisions of the group trust fund agreement, as amended from time to time, are by this reference incorporated within this Plan and Trust. The provisions of the group trust fund will govern any investment of Plan assets in that fund. The Employer must specify in an attachment to its adoption agreement the group trust fund(s) to which this authorization applies. If the Trustee is acting as a nondiscretionary Trustee, the investment in the group trust fund is available only in accordance with a proper direction, by the Named Fiduciary, in accordance with Section 10.03(B). Pursuant to paragraph (c) of Section 10.03(A) of the Plan, a Trustee has the authority to invest in certain common trust funds and collective investment funds without the need for the authorizing addendum described in this Section 10.16. Furthermore, at the Employer's direction, the Trustee, for collective investment purposes, may combine into one trust fund the Trust created under this Plan with the Trust created under any other qualified retirement plan the Employer maintains. However, the Trustee must maintain separate records of account for the assets of each Trust in order to reflect properly each Participant's Accrued Benefit under the plan(s) in which he is a Participant. 10.17 APPOINTMENT OF ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY. The employer, in writing, may appoint a person in any State to act as ancillary trustee with respect to a designated portion of the Trust Fund, subject to the consent required under Section 1.02 if the Master Plan Sponsor is a financial institution. An ancillary trustee must acknowledge in writing its acceptance of the terms and conditions of its appointment as ancillary trustee and its fiduciary status under ERISA. The ancillary trustee has the rights, powers, duties and discretion as the Employer may delegate, subject to any limitations or directions specified in the instrument evidencing appointment of the ancillary trustee and to the terms of the Plan or of ERISA. The investment powers delegated to the ancillary trustee may include any investment powers delegated to the ancillary trustee may include any investment powers available under Section 10.03 of the Plan including the right to invest any portion of the assets of the Trust Fund in a common trust fund, as described in Code ss.584, or in any collective investment fund, the provisions of which govern the investment of such assets and which the Plan incorporates by this reference, but only if the ancillary trustee is a bank or similar financial institution supervised by the United States or by a State and the ancillary trustee (or its affiliate, as defined in Code ss.1504) maintains the common trust fund or collective investment fund exclusively for the collective investment of money contributed by the ancillary trustee (or its affiliate) in a trustee capacity and which conforms to the rules of the Comptroller of the currency. The Employer also may appoint as an ancillary trustee, the trustee of any group trust fund designated for investment pursuant to the provisions of Section 10.16 of the plan. The ancillary trustee may resign its position at any time by providing at least 30 days' advance written notice to the Employer, unless the Employer waives this notice requirement. The employer, in writing, may remove an ancillary trustee at any time. In the event of resignation or removal, the Employer may appoint another ancillary trustee, return the assets to the control and management of the Trustee or receive such assets in the capacity of ancillary trustee. The Employer may delegate its responsibilities under this Section 10.17 to a discretionary Trustee under the Plan, but not to a nondiscretionary Trustee or to a Custodian, subject to the acceptance by the discretionary Trustee of that delegation. If the U.S. Department of Labor ("the Department") requires engagement of an independent fiduciary to have control or management of all or a portion of the Trust Fund, the Employer will appoint such independent fiduciary, as directed by the Department. The independent fiduciary will have the duties, responsibilities and powers prescribed by the Department and will exercise those duties, responsibilities and powers in accordance with the terms, restrictions and conditions established by the Department and, to the extent not inconsistent with ERISA, the terms of the Plan. The independent fiduciary must accept its appointment in writing and must acknowledge its status as a fiduciary of the Plan. ARTICLE XI PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY 11.01 INSURANCE BENEFIT. The Employer may elect to provide incidental life insurance benefits for insurable Participants who consent to life insurance benefits by signing the appropriate insurance company application form. The Trustee will not purchase any incidental life insurance benefit for any Participant prior to an allocation to the Participant's Account. At an insured Participant's written direction, the Trustee will use all or any portion of the Participant's nondeductible voluntary contributions, if any, to pay insurance premiums covering the Participant's life. This Section 11.01 also authorizes the purchase of life insurance, for the benefit of the Participant, on the life of a family member of the Participant or on any person in whom the Participant has an insurable interest. However, if the policy is on the joint lives of the Participant and another person, the Trustee may not maintain that policy if that other person predeceases the Participant. The Employer will direct the Trustee as to the insurance company and insurance agent through which the Trustee is to purchase the insurance contracts, the amount of the coverage and the applicable dividend plan. Each application for a policy, and the policies themselves, must designate the Trustee as sole owner, with the right reserved to the Trustee to exercise any right or option contained in the policies, subject to the terms and provisions of this Agreement. The Trustee must be the named beneficiary for the Account of the insured Participant. Proceeds of insurance contracts paid to the Participant's Account under this Article XI are subject to the distribution requirements of Article V and of Article VI. The Trustee will not retain any such proceeds for the benefit of the Trust. The Trustee will charge the premiums on any incidental benefit insurance contract covering the life of a Participant against the Account of that Participant. The Trustee will hold all incidental benefit insurance contracts issued under the Plan as assets of the Trust created under the Plan. (A) Incidental insurance benefits. The aggregate of life insurance premiums paid for the benefit of a Participant, at all times, may not exceed the following percentages of the aggregate of the Employer's contributions allocated to any Participant's Account: (i) 49% in the case of the purchase of ordinary life insurance contracts; or (ii) 25% in the case of the purchase of term life insurance or universal life insurance contracts. If the Trustee purchases a combination of ordinary life insurance contract(s) and term life insurance or universal life insurance contract(s), then the sum of one-half of the premiums paid for the ordinary life insurance contract(s) and the premiums paid for the term life insurance or universal life insurance contract(s) may not exceed 25% of the Employer contributions allocated to any Participant's Account. (B) Exception for certain profit sharing plans. If the Employer's Plan is a profit sharing plan, the incidental insurance benefits requirement does not apply to the Plan if the Plan purchases life insurance benefits only from Employer contributions accumulated in the Participant's Account for at least two years (measured from the allocation date). 11.02 LIMITATION ON LIFE INSURANCE PROTECTION. The Trustee will not continue any life insurance protection for any Participant beyond his annuity starting date (as defined in Article VI). If the trustee holds any incidental benefit insurance contract(s) for the benefit of a Participant when he terminates his employment (other than by reason of death), the Trustee must proceed as follows: (a) If the entire cash value of the contract(s) is vested in the terminating Participant, or if the contract(s) will have no cash value at the end of the policy year in which termination of employment occurs, the Trustee will transfer the contract(s) to the Participant endorsed so as to vest in the transferee all right, title and interest to the contract(s), free and clear of the Trust; subject however, to restrictions as to surrender or payment of benefits as the issuing insurance company may permit and as the Advisory Committee directs; (b) If only part of the cash value of the contract(s) is vested in the terminating Participant, the Trustee, to the extent the Participant's interest in the cash value of the contract(s) is not vested, may adjust the Participant's interest in the value of his Account attributable to Trust assets other than incidental benefit insurance contracts and proceed as in (a), or the Trustee must effect a loan from the issuing insurance company on the sole security of the contract(s) for an amount equal to the difference between the cash value of the contract(s) at the end of the policy year in which termination of employment occurs and the amount of the cash value that is vested in the terminating Participant, and the Trustee must transfer the contract(s) endorsed so as to vest in the transferee all right, title and interest to the contract(s), free and clear of the Trust; subject however, to the restrictions as to surrender or payment of benefits as the issuing insurance company may permit and the Advisory Committee directs; (c) If no part of the cash value of the contract(s) is vested in the terminating Participant, the Trustee must surrender the contract(s) for cash proceeds as may be available. In accordance with the written direction of the Advisory Committee, the Trustee will make any transfer of contract(s) under this Section 11.02 on the Participant's annuity starting date (or as soon as administratively practicable after that date). The Trustee may not transfer any contract under this Section 11.02 which contains a method of payment not specifically authorized by Article VI or which fails to comply with the joint and survivor annuity requirements, if applicable, of Article VI. In this regard, the Trustee either must convert such a contract to cash and distribute the cash instead of the contract, of before making the transfer, require the issuing company to delete the unauthorized method of payment option from the contract. 11.03 DEFINITIONS. For purposes of this Article XI: (a) "Policy" means an ordinary life insurance contract or a term life insurance contract issued by an insurer on the life of a Participant. (b) "Issuing insurance company" is any life insurance company which has issued a policy upon application by the Trustee under the terms of this Agreement. (c) "Contract" or "Contracts" means a policy of insurance. In the event of any conflict between the provisions of this Plan and the terms of any contract or policy of insurance issued in accordance with this Article XI, the provisions of the Plan control. (d) "Insurable Participant" means a Participant to whom an insurance company, upon an application being submitted in accordance with the Plan, will issue insurance coverage, either as a standard risk or as a risk in an extra mortality classification. 11.04 DIVIDEND PLAN. The dividend plan is premium reduction nless the Advisory Committee directs the Trustee to the contrary. The Trustee must use all dividends for a contract to purchase insurance benefits or additional insurance benefits for the Participant on whose life the insurance company has issued the contract. Furthermore, the Trustee must arrange, where possible, for all policies issued on the lives of Participants under the Plan to have the same premium due date and all ordinary life insurance contracts to contain guaranteed cash values with as uniform basic options as are possible to obtain. The term "dividends" includes policy dividends, refunds of premiums and other credits. 11.05 INSURANCE COMPANY NOT A PARTY TO AGREEMENT. No insurance company, solely in its capacity as an issuing insurance company, is a party to this Agreement nor is the company responsible for its validity. 11.06 INSURANCE COMPANY NOT RESPONSIBLE FOR TRUSTEE'S ACTIONS. No insurance company, solely in its capacity as an issuing insurance company, need examine the terms of this Agreement nor is responsible for any action taken by the Trustee. 11.07 INSURANCE COMPANY RELIANCE ON TRUSTEE'S SIGNATURE. For the purpose of making application to an insurance company and in the exercise of any right or option contained in any policy, the insurance company may rely upon the signature of the trustee and is saved harmless and completely discharged in acting at the direction and authorization of the Trustee. 11.08 ACQUITTANCE. An insurance company is discharged from all liability for any amount paid to the Trustee or paid in accordance with the direction of the Trustee, and is not obliged to see to the distribution or further application of any moneys it so pays. 11.09 DUTIES OF INSURANCE COMPANY. Each insurance company must keep such records, make such identification of contracts, funds and accounts within funds, and supply such information as may be necessary for the proper administration of the Plan under which it is carrying insurance benefits. Note: The provisions of this Article XI are not applicable, and the Plan may not invest in insurance contracts, if a Custodian signatory to the Adoption Agreement is a bank which has not acquired trust powers from its governing state banking authority. ARTICLE XII MISCELLANEOUS 12.01 EVIDENCE. Anyone required to give evidence under the terms of the Plan may do so by certificate, affidavit, document or other information which the person to act in reliance may consider pertinent, reliable and genuine, and to have been signed, made or presented by the proper party or parties. The Advisory Committee and the Trustee are fully protected in acting and relying upon any evidence described under the immediately preceding sentence. 12.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the trustee nor the advisory Committee has any obligation or responsibility with respect to any action required by the Plan to be taken by the Employer, any Participant or eligible Employee, or for the failure of any of the above persons to act or make any payment or contribution, or to otherwise provide any benefit contemplated under this Plan. Furthermore, the Plan does not require the Trustee or the Advisory Committee to collect any contribution required under the Plan, or to determine the correctness of the amount of any Employer contribution. Neither the Trustee nor the advisory Committee need inquire into or be responsible for any action or failure to act on the part of the others, or on the part of any other person who has any responsibility regarding the management, administration or operation of the Plan, whether by the express terms of the Plan or by a separate agreement authorized by the Plan or by the applicable provisions of ERISA. Any action required of a corporate Employer must be by its Board of Directors or its designate. 12.03 FIDUCIARIES NOT INSURERS. The Trustee, the Advisory Committee, the Plan Administrator and the Employer in no way guarantee the Trust Fund from loss or depreciation. The Employer does not guarantee the payment of any money which may be or becomes due to any person from the Trust Fund. The liability of the Advisory Committee and the Trustee to make any payment from the Trust Fund at any time and all times is limited to the then available assets of the Trust. 12.04 WAIVER OF NOTICE. Any person entitled to notice under the Plan may waiver the notice, unless the Code or Treasury regulations prescribe the notice or ERISA specifically or impliedly prohibits such a waiver. 12.05 SUCCESSORS. The Plan is binding upon all persons entitled to benefits under the plan, their respective heirs and legal representatives, upon the Employer, its successors and assigns, and upon the Trustee, the Advisory Committee, the Plan Administrator and their successors. 12.06 WORD USAGE. Words used in the masculine also apply to the feminine where applicable, and wherever the context of the Employer's Plan dictates, the plural includes the singular and the singular includes the plural. 12.07 STATE LAW. The law of the state of the Employer's principal place of business (unless otherwise designated in an addendum to the Employer's Adoption Agreement) will determine all questions arising with respect to the provisions of this Agreement except to the extent superseded by Federal law. 12.08 EMPLOYER'S RIGHT TO PARTICIPATE. If the Employer's Plan fails to qualify or to maintain qualification or if the Employer makes any amendment or modification to a provision of this Plan (other than a proper completion of an elective provision under the Adoption Agreement or the attachment of an addendum authorized by the Plan or by the Adoption Agreement), the Employer may no longer participate under this Master Plan. The Employer also may not participate (or continue to participate) in this Master Plan if the Trustee or Custodian (or a change in the trustee or Custodian) does not satisfy the requirements of Section 1.02 of the Plan. If the Employer is not entitled to participate under this Master Plan, the Employer's Plan is an individually-designed plan and the reliance procedures specified in the applicable Adoption Agreement no longer will apply. 12.09 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or with respect to the establishment of the Trust, or any modification or amendment to the Plan or Trust, or in the creation of any Account, or the payment of any benefit, gives any Employee, Employee-Participant or any Beneficiary any right to continue employment, any legal or equitable right against the Employer, or Employee of the Employer, or against the Trustee, or its agents or employees, or against the Plan Administrator, except as expressly provided by the Plan, the Trust, ERISA or by a separate agreement. ARTICLE XIII EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION 13.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the Employer has no beneficial interest in any asset of the Trust and no part of any asset in the Trust may ever revert to or be repaid to an Employer, either directly or indirectly; nor, prior to the satisfaction of all liabilities with respect to the Participants and their Beneficiaries under the Plan, may any part of the corpus or income of the Trust Fund, or any asset of the Trust, be (at any time) used for, or diverted to, purposes other than the exclusive benefit of the Participants or their Beneficiaries. However, if the Commissioner of Internal Revenue, upon the Employer's request for initial approval of this Plan, determines the Trust created under the Plan is not a qualified trust exempt from Federal income tax, then (and only then) the Trustee, upon written notice from the Employer, will return the Employer's contributions (and increment attributable to the contributions) to the Employer. The Trustee must make the return of the Employer contribution under this Section 13.01 within one year of a final disposition of the Employer's request for initial approval of the Plan. The Employer's Plan and Trust will terminate upon the trustee's return of the Employer's contributions. 13.02 AMENDMENT BY EMPLOYER. The employer has the right at any time and from time to time: (a) To amend the elective provisions of the Adoption Agreement in any manner it deems necessary or advisable in order to qualify (or maintain qualification of) this Plan and the Trust created under it under the provisions of Code ss.401(a); (b) To amend the Plan to allow the Plan to operate under a waiver of the minimum funding requirement; and (c) To amend this Agreement in any other manner. No amendment may authorize or permit any of the trust Fund (other than the part which is required to pay taxes and administration expenses) to be used for or diverted to purposes other than for the exclusive benefit of the Participants or their Beneficiaries or estates. No amendment may cause or permit any portion of the Trust Fund to revert to or become a property of the Employer. The Employer also may not make any amendment which affects the rights, duties or responsibilities of the Trustee, the Plan Administrator or the Advisory committee without the written consent of the affected Trustee, the Plan Administrator or the affected member of the Advisory Committee. The employer must make all amendments in writing. Each amendment must state the date to which it is either retroactively or prospectively effective. See Section 12.08 for the effect of certain amendments adopted by the Employer. (A) Code ss.411(d)(6) protected benefits. An amendment (including the adoption of this Plan as a restatement of an existing plan) may not decrease a Participant's Accrued Benefit, except to the extent permitted under Code ss.412(c)(8), and may not reduce or eliminate Code ss.411(d)(6) protected benefits determined immediately prior to the adoption date (or, if later, the effective date) of the amendment. An amendment reduces or eliminates Code ss.411(d)(6) protected benefits if the amendment has the effect of either (1) eliminating or reducing an early retirement benefit or a retirement type subsidy (as defined in Treasury regulations, eliminating an optional form of benefit. The Advisory Committee must disregard an amendment to the extent application of the amendment would fail to satisfy this paragraph. If the Advisory Committee must disregard an amendment because the amendment would violate clause (1) or clause (2), the Advisory Committee must maintain a schedule of the early retirement option or other optional forms of benefit the Plan must continue for the affected Participants. 13.03 AMENDMENT BY MASTER PLAN SPONSOR. The Master Plan Sponsor (or PPD, as agent of the Master Plan Sponsor), without the Employer's consent, may amend the Plan and Trust, from time to time, in order to conform the Plan and Trust to any requirement for qualification of the Plan and Trust under the Internal Revenue Code. The Master Plan Sponsor may not amend the Plan in any manner which would modify any election made by the Employer under the Plan without the Employer's written consent. Furthermore, the Master Plan Sponsor may not amend the Plan in any manner which would violate the proscription of Section 13.02. A Trustee does not have the power to amend the Plan or Trust. 13.04 DISCONTINUANCE. The Employer has the right, at any time, to \ suspend or discontinue its contributions under the Plan, and to terminate, at any time, this Plan and the Trust created under this Agreement. The Plan will terminate upon the first to occur of the following: (a) The date terminated by action of the Employer; (b) The dissolution or merger of the Employer, unless the successor makes provision to continue the Plan, in which event the successor must substitute itself as the Employer under this Plan. Any termination of the Plan resulting from this paragraph (b) is not effective until compliance with any applicable notice requirements under ERISA. 13.05 FULL VESTING ON TERMINATION. Upon either full or partial termination of the Plan, or, if applicable, upon complete discontinuance of profit sharing plan contributions to the Plan, an affected Participant's right to his Accrued Benefit is 100% Nonforfeitable, irrespective of the Nonforfeitable percentage which otherwise would apply under Article V. 13.06 MERGER/DIRECT TRANSFER. The trustee may not consent to, or by a party to, any merger or consolidation with another plan, or to a transfer of assets or liabilities to another plan, unless immediately after the merger, consolidation or transfer, the surviving Plan provides each Participant a benefit equal to or greater than the benefit each Participant would have received had the Plan terminated immediately before the merger or consolidation or transfer. The trustee possesses the specific authority to enter into merger agreements or direct transfer of assets agreements with the trustees of other retirement plans described in Code ss.401(a), including an elective transfer, and to accept the direct transfer of plan assets, or to transfer plan assets, as a party to any such agreement. The Trustee may accept a direct transfer of plan assets on behalf of an Employee prior to the date the Employee satisfies the Plan's eligibility conditions. If the Trustee accepts such a direct transfer of plan assets, the Advisory Committee and Trustee must treat the Employee as a Participant for all purposes of the Plan except the Employee is not a Participant for purposes of sharing in Employer contributions or Participant forfeitures under the Plan until he actually becomes a Participant in the Plan. (A) Elective transfers. The Trustee, after August 9, 1988, may not consent to, or be a party to a merger, consolidation or transfer of assets with a defined benefit plan, except with respect to an elective transfer, or unless the transferred benefits are in the form of paid-up individual annuity contracts guaranteeing the payment of the transferred benefits in accordance with the terms of the transferor plan and in a manner consistent with the Code and with ERISA. The Trustee will hold, administer and distribute the transferred assets as a part of the trust Fund and the Trustee must maintain a separate Employer contribution Account for the benefit of the Employee on whose behalf the Trustee accepted the transfer in order to reflect the value of the transferred assets. Unless a transfer of assets to this Plan is an elective transfer, the Plan will preserve all Code ss.411(d)(6) protected benefits with respect to those transferred assets, in the manner described in Section 13.02. A transfer is an elective transfer if: (1) the transfer satisfies the first paragraph of this Section 13.06; (2) the transfer is voluntary, under a fully informed election by the Participant; (3) the Participant has an alternative that retains his Code ss.411(d)(6) protected benefits (including an option to leave his benefit in the transferor plan, if that plan is not terminating); (4) the transfer satisfies the applicable spousal consent requirements of the Code; (5) the transferor plan satisfies the joint and survivor notice requirements of the Code, if the Participant's transferred benefit is subject to those requirements; (6) the Participant has a right to immediate distribution rom the transferor plan, in lieu of the elective transfer; (7) the transferred benefit is at least the greater of the single sum distribution provided by the transferor plan for which the Participant is eligible or the present value of the Participant's accrued benefit under the transferor plan payable at that plan"s normal retirement age; (8) the Participant has a 100% Nonforfeitable interest in the transferred benefit; and (9) the transfer otherwise satisfies applicable Treasury regulations. An elective transfer may occur between qualified plans of any type. Any direct transfer of assets from a defined benefit plan after August 9, 1988, which does not satisfy the requirements of this paragraph will render the Employer's Plan individually-designed. See Section 12.08. (B) Distribution restrictions under Code ss.401(k). If the Plan receives a direct transfer (by merger otherwise) of elective contributions (or amounts treated as elective contributions) under a Plan with a Code ss.401(k) arrangement, the distribution restrictions of Code ss.401(k)(2) and (10) continue to apply to those transferred elective contributions. 13.07 TERMINATION. (a) Procedure. Upon termination of the Plan, the distribution provisions of Article VI remain operative, with the following exceptions: (1) If the present value of the Participant's Nonforfeitable Accrued Benefit does not exceed $3,500, the Advisory Committee will direct the Trustee to distribute the Participant's Nonforfeitable Accrued Benefit to him in lump sum as soon as administratively practicable after the Plan terminates; and (2) If the present value of the Participant's Nonforfeitable Accrued Benefit exceeds $3,500, the Participant or the Beneficiary, in addition to the distribution events permitted under Article VI, may elect to have the Trustee commence distribution of his Nonforfeitable Accrued Benefit as soon as administratively practicable after the Plan terminates. To liquidate the Trust, the Advisory committee will purchase a deferred annuity contract for each Participant which protects the Participant's distribution rights under the plan, if the Participant's Nonforfeitable Accrued Benefit exceeds $3,500 and the Participant does not elect an immediate distribution pursuant to Paragraph (2). If the Employer's Plan is a profit sharing plan, in lieu of the preceding provisions of this Section 13.07 and the distribution provisions of Article VI, the Advisory Committee will direct the Trustee to distribute each Participant's Nonforfeitable Accrued Benefit, in lump sum, as soon as administratively practicable after the termination of the Plan, irrespective of the present value of the Participant's Nonforfeitable Accrued Benefit and whether the Participant consents to that distribution. This paragraph does not apply if: (1) the Plan provides an annuity option; or (2) as of the period between the Plan termination date and the final distribution of assets, the Employer maintains any other defined contribution plan (other than an ESOP). The Employer, in an addendum to its Adoption Agreement numbered 13.07, may elect not to have this paragraph apply. The Trust will continue until the trustee in accordance with the direction of the Advisory Committee has distributed all of the benefits under the Plan. On each valuation date, the Advisory Committee will credit any part of a Participant's Accrued Benefit retained in the trust with its proportionate share of the Trust's income, expenses, gains and losses, both realized and unrealized. Upon termination of the Plan, the amount, if any, in a suspense account under Article III will revert to the Employer, subject to the conditions of the treasury regulations permitting such a reversion. A resolution or amendment to freeze all future benefit accrual but otherwise to continue maintenance of this Plan, is not a termination for purposes of this Section 13.07. (B) Distribution restrictions under Code ss.401(k). If the Employer's Plan includes a Code ss.401(k) arrangement or if transferred assets described in Section 13.06 are subject to the distribution restrictions of Code ss.401(k)(2) and (10), the special distribution provisions of this Section 13.07 are subject to the restrictions of this paragraph. The portion of the Participant's Nonforfeitable Accrued Benefit attributable to elective contributions (or to amounts treated under the Code ss.401(k) arrangement as elective contributions) is not distributable on account of Plan termination, as described in this Section 13.07, unless: (a) the Participant otherwise is entitled under the Plan to a distribution of that portion of his Nonforfeitable Accrued Benefit; or (b) the Plan termination occurs without the establishment of a successor plan. A successor plan under clause (b) is a defined contribution plan (other than an ESOP) maintained by the Employer (or by a related employer) at the time of the termination of the Plan or within the period ending twelve months after the final distribution of assets. A distribution made after March 31, 1988, pursuant to clause (b), must be part of a lump sum distribution to the Participant of his Nonforfeitable Accrued Benefit. ARTICLE XIV CODE ss.401(k) AND CODE ss.401(m) ARRANGEMENTS 14.01 APPLICATION. This Article XIV applies to an Employer's Plan only if the Employer is maintaining the terms of the Code ss.401(k) arrangement, if any, under the Plan. If the Employer's Plan is a Standardized Plan, the Code ss.401(k) arrangement must be a salary reduction arrangement. If the Employer's Plan is a Nonstandardized Plan, the Code ss.401(k) arrangement may be a salary reduction arrangement or a cash or deferred arrangement. (A) Salary Reduction Arrangement. If the Employer elects a salary reduction arrangement, any Employee eligible to participate in the Plan may file a salary reduction agreement with the Advisory Committee. The salary reduction agreement may not be effective earlier than the following date which occurs last: (i) the Employee's Plan Entry Date (or, in the case of a reemployed Employee, his participation date under Article II); (ii) the execution date of the employee's salary reduction agreement; (iii) the date the Employer adopts the Code ss.401(k) arrangement by executing the Adoption Agreement; or (iv) the effective date of the Code ss.401(k) arrangement, as specified in the Employer's Adoption Agreement. Regarding clause (i), an Employee subject to the Break in Service rule of Section 2.03(B) of the Plan may not enter into a salary reduction agreement until the Employee has completed a sufficient number of Hours of Service to receive credit for a Year of Service (as defined in Section 2.02) following his reemployment commencement date. A salary reduction agreement will apply only to Compensation which becomes currently available to the Employee after the effective date of the salary reduction agreement. The Employer will apply a reduction election to all Compensation (and to increases in such Compensation) unless the Employee specifies in his salary reduction agreement to limit the election to certain Compensation. The Employer will specify in Adoption Agreement Section 3.01 the rules and restrictions applicable to the Employees salary reduction agreements. (B) Cash or deferred arrangement. If the Employer elects a cash or deferred arrangement, a Participant may elect to make a cash election against his proportionate share of the Employer's Cash or Deferred Contribution, in accordance with the Employer's elections in Adoption Agreement Section 3.01. A Participant's proportionate share of the Employer's Cash or Deferred Contribution is the percentage of the total Cash or Deferred Contribution which bears the same ratio that the Participant's Compensation for the Plan Year bears to the total Compensation of all Participants for the Plan Year. For purposes of determining each Participant's proportionate share of the Cash or Deferred Contribution, a Participant's Compensation is his Compensation as determined under Section 1.12 of the Plan (as modified by Section 3.06 for allocation purposes), excluding any effect the proportionate share may have on the Participant's Compensation for the Plan Year. The Advisory Committee will determine the proportionate share prior to the Employer's actual contribution to the Trust, to provide the Participants the opportunity to file cash elections. The Employer will pay directly to the Participant the portion of his proportionate share the Participant has elected to receive in cash. (C) Election not to participate. A Participant's or Employee's election not to participate, pursuant to Section 2.06, includes his right to enter into a salary reduction agreement or to share in the allocation of a Cash or Deferred Contribution, unless the Participant or Employee limits the effect of the election to the non-401(k) portions of the Plan. 14.03 DEFINITIONS. For purposes of this Article XIV: (a) "Highly Compensated Employee" means an Eligible Employee who satisfies the definition in Section 1.09 of the Plan. Family members aggregated as a single Employee under Section 1.09 constitute a single Highly Compensated Employee, whether a particular family member is a Highly Compensated Employee or a Nonhighly Compensated Employee without the application of family aggregation. (b) "Nonhighly Compensated Employee" means an Eligible Employee who is not a Highly Compensated Employee and who is not a family member treated as a Highly Compensated Employee. (c) "Eligible Employee" means, for purposes of the ADP test described in Section 14.08, an Employee who is eligible to enter into a salary reduction agreement for the Plan Year, irrespective of whether he actually enters into such an agreement, and a Participant who is eligible for an allocation of the Employer's Cash or Deferred Contribution for the Plan Year. For purposes of the ACP test described in Section 14.09, an "Eligible Employee" means a Participant who is eligible to receive an allocation of matching contributions (or would be eligible if he made the type of contributions necessary to receive an allocation of matching contributions) and a Participant who is eligible to make nondeductible contributions, irrespective of whether he actually makes nondeductible contributions. An Employee continues to be an Eligible Employee during a period the Plan suspends the Employee's right to make elective deferrals or nondeductible contributions following a hardship distribution. (d) "Highly Compensated Group" means the group of Eligible Employees who are Highly Compensated Employees for the Plan Year. (f) "Compensation" means, except as specifically provided in this Article XIV, Compensation as defined for nondiscrimination purposes in Section 1.12(B) of the Plan. For Plan Years beginning prior to the later of January 1, 1992, or 60 days after the Treasury issues final regulations under Code ss.401(k) and ss.401(m), the Plan may limit Compensation taken into account to Compensation received only for the portion of the Plan Year in which the Employee was an Eligible Employee and only for the portion of the Plan Year in which the Plan or the Code ss.401(k) arrangement was in effect. For subsequent Plan Years, Compensation must include Compensation for the entire Plan Year, irrespective of whether the Plan or the Code ss.401(k) arrangement was in effect for the entire Plan Year or whether the Employee begins, resumes or ceases to be an Eligible Employee during the Plan Year. (g) "Deferral contributions" are Salary Reduction Contributions and Cash or Deferred Contributions the Employer contributes to the Trust on behalf of an Eligible Employee, irrespective of whether, in the case of Cash or Deferred Contributions, the contribution is at the election of the Employee. (h) "Elective deferrals" are all Salary Reduction Contributions and that portion of any Cash or Deferred Contribution which the Employer contributes to the Trust at the election of an Eligible Employee. Any portion of a Cash or Deferred Contribution contributed to the Trust because of the Employee's failure to make a cash election is an elective deferral. However, any portion of a Cash or Deferred Contribution over which the Employee does not have a cash election is not an elective deferral. Elective deferrals do not include amounts which have become currently available to the Employee prior to the election nor amounts designated as nondeductible contributions at the time of deferral or contribution. (i) "Matching contributions" are contributions made by the Employer on account of elective deferrals under a Code ss.401(k) arrangement or on account of employee contributions. Matching contributions also include Participant forfeitures allocated on account of such elective deferrals or employee contributions. (j) "Nonelective contributions" are contributions made by the Employer which are not subject to a deferral election by an Employee and which are not matching contributions. (k) "Qualified matching contributions" are matching contributions which are 100% Nonforfeitable at all times and which are subject to the distribution restrictions described in paragraph (m). Matching contributions are not 100% Nonforfeitable at all times if the Employee has a 100% Nonforfeitable interest because of his Years of Service taken into account under a vesting schedule. Any matching contributions allocated to a Participant's Qualified Matching Contributions Account under the Plan automatically satisfy the definition of qualified matching contributions. (l) "Qualified nonelective contributions" are nonelective contributions which are 100% Nonforfeitable at all times and which are subject to the distribution restrictions described in paragraph (m). Nonelective contributions are not 100% Nonforfeitable at all times if the Employee has a 100% Nonforfeitable interest because of his Years of Service taken into account under a vesting schedule. Any nonelective contributions allocated to a Participant's Qualified Nonelective Contributions Account under the Plan automatically satisfy the definition of qualified nonelective contributions. (m) "Distribution restrictions" means the Employee may not receive a distribution of the specified contributions (nor earnings on those contributions) except in the event of (l) the Participant's death, disability, termination of employment or attainment of age 59 1/2, (2) financial hardship satisfying the requirements of Code ss.401(k) and the applicable Treasury regulations, (3) a plan termination, without establishment of a successor defined contribution plan (other than an ESOP), (4) a sale of substantially all of the assets (within the meaning of Code ss.409(d)(2)) used in a trade or business, but only to an employee who continues employment with the corporation acquiring those assets, or (5) a sale by a corporation of its interest in a subsidiary (within the meaning of Code ss.409(d)(3)), but only to an employee who continues employment with the subsidiary. For Plan Years beginning after December 31, 1988, a distribution on account of financial hardship, as described in clause (2), may not include earnings on elective deferrals credited as of a date later than December 31, 1988, and may not include qualified matching contributions and qualified nonelective contributions, nor any earnings on such contributions, irrespective of when credited. A distribution described in clauses (3), (4) or (5), if made after March 31, 1988, must be a lump sum distribution, as required under Code ss.401(k)(10). (n) "Employee contributions" are contributions made by a Participant on an after-tax basis, whether voluntary or mandatory, and designated, at the time of contribution, as an employee (or nondeductible) contribution. Elective deferrals and deferral contributions are not employee contributions. Participant nondeductible contributions, made pursuant to Section 4.01 of the Plan, are employee contributions. 14.04 MATCHING CONTRIBUTIONS/EMPLOYEE CONTRIBUTIONS. The Employer may elect in Adoption Agreement Section 3.01 to provide matching contributions. The Employer also may elect in Adoption Agreement Section 4.01 to permit or to require a Participant to make nondeductible contributions. (A) Mandatory contributions. Any Participant nondeductible contributions eligible for matching contributions are mandatory contributions. The Advisory Committee will maintain a separate accounting, pursuant to Section 4.06 of the Plan, to reflect the Participant's Accrued Benefit derived from his mandatory contributions. The Employer, under Adoption Agreement Section 4.05, may prescribe special distribution restrictions which will apply to the Mandatory Contributions Account prior to the Participant's Separation from Service. Following his Separation from Service, the general distribution provisions of Article VI apply to the distribution of the Participant's Mandatory Contributions Account. 14.05 TIME OF PAYMENT OF CONTRIBUTIONS. The Employer must make Salary Reduction Contributions to the Trust within an administratively reasonable period of time after withholding the corresponding Compensation from the Participant. Furthermore, the Employer must make Salary Reduction Contributions, Cash or Deferred Contributions, Employer matching contributions (including qualified Employer matching contributions) and qualified Employer nonelective contributions no later than the time prescribed by the Code or by applicable Treasury regulations. Salary Reduction Contributions and Cash or Deferred Contributions are Employer contributions for all purposes under this Plan, except to the extent the Code or Treasury regulations prohibit the use of these contributions to satisfy the qualification requirements of the Code. 14.06 SPECIAL LOCATION PROVISIONS--DEFERRAL CONTRIBUTIONS, MATCHING CONTRIBUTIONS AND QUALIFIED NONELECTIVE CONTRIBUTIONS. To make allocations under the Plan, the Advisory Committee must establish a Deferral Contributions Account, a Qualified Matching Contributions Account, a Regular Matching Contributions Account, a Qualified Nonelective Contributions Account and an Employer Contributions Account for each Participant. (A) Deferral contributions. The Advisory Committee will allocate to each Participant's Deferral Contributions Account the amount of Deferral Contributions the Employer makes to the Trust on behalf of the Participant. The Advisory Committee will make this allocation as of the last day of each Plan Year unless, in Adoption Agreement Section 3.04, the Employer elects more frequent allocation dates for salary reduction contributions. (B) Matching contributions. The employer must specify in its Adoption Agreement whether the Advisory Committee will allocate matching contributions to the Qualified Matching Contributions Account or to the Regular Matching Contributions Account of each Participant. The Advisory Committee will make this allocation as of the last day of each Plan Year unless, in Adoption Agreement Section 3.04, the Employer elects more frequent allocation dates for matching contributions. (1) To the extent the Employer makes matching contributions under a fixed matching contribution formula, the Advisory Committee will allocate the matching contribution to the Account of the Participant on whose behalf the Employer makes that contribution. A fixed matching contribution formula is a formula under which the Employer contributes a certain percentage or dollar amount on behalf of a Participant based on that Participant's deferral contributions or nondeductible contributions eligible for a match, as specified in Section 3.01 of the Employer's Adoption Agreement. The employer may contribute on a Participant's behalf under a specific matching contribution formula only if the Participant satisfies the accrual requirements for matching contributions specified in Section 3.06 of the Employer's Adoption Agreement and only to the extent the matching contribution does not exceed the Participant's annual additions limitation in Part 2 of Article III. (2) To the extent the Employer makes matching contributions under a discretionary formula, the Advisory Committee will allocate the discretionary matching contributions to the Account of each Participant who satisfies the accrual requirements for matching contributions specified in Section 3.06 of the Employer's Adoption Agreement. The allocation of discretionary matching contributions to a Participant's Account is in the same proportion that each Participant's eligible contributions bear to the total eligible contributions of all Participants. If the discretionary formula is a tiered formula, the Advisory Committee will make this allocation separately with respect to each tier of eligible contributions, allocating in such manner the amount of the matching contributions made with respect to that tier. "Eligible contributions" are the Participant's deferral contributions or nondeductible contributions eligible for an allocation of matching contributions, as specified in Section 3.01 of the Employer's Adoption Agreement. If the matching contribution formula applies both to deferral contributions and to Participant nondeductible contributions, the matching contributions apply first to deferral contributions. Furthermore, the matching contribution formula does not apply to deferral contributions that are excess deferrals under Section 14.07. For this purpose: (a) excess deferrals relate first to deferral contributions for the Plan Year not otherwise eligible for a matching contribution; and (2) if the Plan Year is not a calendar year, the excess deferrals for a Plan Year are the last elective deferrals made for a calendar year. (C) Qualified nonelective contributions. If the employer, at the time of contribution, designates a contribution to be a qualified nonelective contribution for the Plan Year, the Advisory Committee will allocate that qualified nonelective contribution to the Qualified Nonelective Contributions Account of each Participant eligible for an allocation of that designated contribution, as specified in Section 3.04 of the Employer's Adoption Agreement. The Advisory Committee will make the allocation to each eligible Participant's Account in the same ratio that the Participant's Compensation for the Plan Year bears to the total Compensation of all eligible Participants for the Plan Year. The Advisory Committee will determine a Participant's Compensation in accordance with the general definition of Compensation under Section 1.12 of the Plan, as modified by the Employer in Sections 1.12 and 3.06 of its Adoption Agreement. (D) Nonelective contributions. To the extent the Employer makes nonelective contributions for the Plan Year which, at the time of contribution, it does not designate as qualified nonelective contributions, the Advisory Committee will allocate those contributions in accordance with the elections under Section 3.04 of the Employer's Adoption Agreement. For purposes of the special nondiscrimination tests described in Sections 14.08 and 14.09, the Advisory Committee may treat nonelective contributions allocated under this paragraph as qualified nonelective contributions, if the contributions otherwise satisfy the definition of qualified nonelective contributions. 14.07 ANNUAL ELECTIVE DEFERRAL LIMITATION. (A) Annual Elective Deferral Limitation. An Employee's elective deferrals for a calendar year beginning after December 31, 1986, may not exceed the 402(g) limitation. The 402(g) limitation is the greater of $7,000 or the adjusted amount determined by the Secretary of the Treasury. If, pursuant to a salary reduction agreement or pursuant to a cash or deferral election, the Employer determines the Employee's elective deferrals to the Plan for a calendar year would exceed the 402(g) limitation, the Employer will suspend the Employee's salary reduction agreement, if any, until the following January 1 and pay in cash the portion of a cash or deferral election which would result in the Employee's elective deferrals for the calendar year exceeding the 402(g) limitation. If the Advisory Committee determines an Employee's elective deferrals already contributed to the Plan for a calendar year exceed the 402(g) limitation, the Advisory Committee will distribute the amount in excess of the 402(g) limitation (the "excess deferral"), as adjusted for allocable income, no later than April 15 of the following calendar year. If the Advisory Committee distributes the excess deferral by the appropriate April 15, it may make the distribution irrespective of any other provision under this Plan or under the Code. The Advisory Committee will reduce the amount of excess deferrals for a calendar year distributable to the Employee by the amount of excess contributions (as determined in Section 14.08), if any, previously distributed to the Employee for the Plan Year beginning in that calendar year. If an Employee participates in another plan under which he makes elective deferrals pursuant to a Code ss.401(k) arrangement, elective deferrals under a Simplified Employee Pension, or salary reduction contributions to a tax-sheltered annuity, irrespective of whether the Employer maintains the other plan, he may provide the Advisory Committee a written claim for excess deferrals made for a calendar year. The Employee must submit the claim no later than the March 1 following the close of the particular calendar year and the claim must specify the amount of the Employee's elective deferrals under this Plan which are excess deferrals. If the Advisory Committee receives a timely claim, it will distribute the excess deferral (as adjusted for allocable income) the Employee has assigned to this Plan, in accordance with the distribution procedure described in the immediately preceding paragraph. (B) Allocable income. For purposes of making a distribution of excess deferrals pursuant to this Section 14.07, allocable income means net income or net loss allocable to the excess deferrals for the calendar year in which the Employee made the excess deferral and for the "gap period" measured from the beginning of the next calendar year to the date of the distribution. If the distribution of the excess deferral occurs during the calendar year in which the Employee made the excess deferral, the Advisory Committee will treat as a "gap period" the period from the first day of that calendar year to the date of the distribution. The Advisory Committee will determine allocable income in the same manner as described in Section 14.08(F) for excess contributions, except the numerator of the allocation fraction will be the amount of the Employee's excess deferrals and the denominator of the allocation fraction will be the Employee's Accrued Benefit attributable to his elective deferrals. 14.08 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST. For each Plan Year, the Advisory Committee must determine whether the Plan's Code ss.401(k) arrangement satisfies either of the following ADP tests: (i) The average ADP for the Highly Compensated Group does not exceed 1.25 times the average ADP of the Nonhighly Compensated Group; or (ii) The average ADP for the Highly Compensated Group does not exceed the average ADP for the Nonhighly Compensated Group by more than two percentage points (or the lesser percentage permitted by the multiple use limitation in Section 14.10) and the average ADP for the Highly Compensated Group is not more than twice the average ADP for the Non-highly Compensated Group. (A) Calculation of ADP. The average ADP for a group is the average of the separate ADPs calculated for each Eligible Employee who is a member of that group. An Eligible Employee's ADP for a Plan Year is the ratio of the Eligible Employee's deferral contributions for the Plan Year to the Employee's Compensation for the Plan Year. For aggregated family members treated as a single Highly Compensated Employee, the ADP of the family unit is the greater of: (i) the ADP determined by combining the deferral contributions and Compensation of the family members who are Highly Compensated Employees without family aggregation; or (ii) the ADP determined by combining the deferral contributions and Compensation of all aggregated family members. A Nonhighly Compensated Employee's ADP doesn't include elective deferrals made to this Plan or to any other Plan maintained by the Employer to the extent such elective deferrals exceed the 402(g) limitation described in Section 14.07(A). The Advisory Committee may determine (in a manner consistent with Treasury regulations) the ADPs of the Eligible Employees by taking into account qualified nonelective contributions or qualified matching contributions, or both, made to this Plan or to any other qualified Plan maintained by the employer. The Advisory Committee may not include qualified nonelective contributions in the ADP test unless the allocation of nonelective contributions is nondiscriminatory when the Advisory Committee takes into account all nonelective contributions (including the qualified nonelective contributions) and also when the Advisory Committee takes into account only the nonelective contributions not used in either the ADP test described in this Section 14.09. For Plan Years beginning after December 31, 1989, the Advisory Committee may not include in the ADP test any qualified nonelective contributions or qualified matching contributions under another qualified plan unless that plan has the same plan year as this Plan. The Advisory Committee must maintain records to demonstrate compliance with the ADP test, including the extent to which the Plan used qualified nonelective contributions or qualified matching contributions to satisfy the test. (B) Special aggregation rule for Highly Compensated Employees. To determine the ADP of any Highly Compensated Employee, the deferral contributions taken into account must include any elective deferrals made by the Highly Compensated Employee under any other Code ss.401(k) arrangement maintained by the Employer, unless the elective deferrals are to an ESOP. If the plans containing the Code ss.401(k) arrangements have different plan years, the Advisory Committee will determine the combined deferral contributions on the basis of the plan years ending in the same calendar year. (C) Aggregation of certain Code ss.401(k) arrangements. If the Employer treats two plans as a unit for coverage or nondiscrimination purposes, the Employer must combine the Code ss.401(k) arrangements under such plans to determine whether either plan satisfies the ADP test. This aggregation rule applies to the ADP determination for all Eligible Employees, irrespective of whether an Eligible Employee is a Highly Compensated Employee or a nonhighly Compensated Employee. The Advisory Committee also may elect to aggregate the Code ss.401(k) arrangements under plans which the Employer does not treat as a unit for coverage or nondiscrimination purposes. For Plan Years beginning after December 31, 1989, an aggregation of Code ss.401(k) arrangements under this paragraph does not apply to plans which have different plan years and, for Plan Years beginning after December 31, 1988, the Advisory Committee may not aggregate an ESOP )(or the ESOP portion of a plan) with a non-ESOP plan (or non-ESOP portion of a plan). (D) Characterization of excess contributions. If, pursuant to this Section 14.08, the Advisory Committee has elected to include qualified matching contributions in the average ADP, the Advisory Committee will treat excess contributions as attributable proportionately to deferral contributions and to qualified matching contributions allocated on the basis of those deferral contributions. If the total amount of a Highly Compensated Employee's excess contributions for the Plan Year exceeds his deferral contributions or qualified matching contributions for the Plan Year, the Advisory Committee will treat the remaining portion of his excess contributions as attributable to qualified nonelective contributions. The Advisory Committee will reduce the amount of excess contributions for a Plan Year distributable to a Highly Compensated Employee by the amount of excess deferrals (as determined in Section 14.07), if any, previously distributed to that Employee for the Employee's taxable year ending in that Plan Year. (E) Distribution of excess contributions. If the Advisory Committee determines the Plan fails to satisfy the ADO test for a plan Year, it must distribute the excess contributions, as adjusted for allocable income, during the next Plan Year. However, the Employer will incur an excise tax equal to 10% of the amount of excess contributions for a Plan Year not distributed tot he appropriate Highly Compensated Employees during the first 2 1/2 months of that next Plan Year. The excess contributions are the amount of deferral contributions made by the Highly compensated Employees with causes the Plan to fail to satisfy the ADP test. The Advisory Committee will distribute to each Highly Compensated Employee his respective share of the excess contributions. The Advisory Committee will determine the respective shares of excess contributions by starting with the Highly Compensated Employee(s) who has the greatest ADP of the Highly Compensated Employee(s) whose ADP the Advisory Committee already has reduced), and continuing in this manner until the average ADP for the Highly Compensated Group satisfies the ADP test. If the Highly Compensated Employee si part of an aggregated family group, the Advisory Committee, in accordance with the applicable Treasury regulations, will determine each aggregated family member's allocable share of the excess contributions assigned to the family unit. (F) Allocable income. To determine the amount of the corrective distribution required under this Section 14.08, the Advisory Committee must calculate the allocable income for the Plan Year in which the excess contributions arose and for the "gap period" measured from the beginning of the next Plan Year to the date of the distribution. "Allocable income" means net income or net loss. To calculate allocable income for the Plan Year, the Advisory Committee: (1) first will determine the net income or net loss for the Plan Year on the Highly Compensated Employee's Accrued Benefit attributable to deferral contributions; and (2) then will multiply this net income or net loss by the following fraction: Amount of the Highly Compensated Employee's excess contributions -------------------------------------------------------- Accrued Benefit attributable to deferral contributions The Accrued Benefit attributable to deferral contributions includes the Accrued Benefit attributable to qualified matching contributions and qualified nonelective contributions taken into account in the ADP test for the Plan Year or for any prior Plan Year. For purposes of the denominator of the fraction, the Advisory Committee will calculate the Accrued Benefit attributable to deferral contributions as of the last day of the Plan Year (without regard to the net income or net loss for the Plan Year on that Accrued Benefit). To calculate allocable income for the "gap period," the Advisory Committee will perform the same calculation as described in the preceding paragraph, except in clause (1) the Advisory Committee will determine, as of the last day of the month preceding the date of distribution, the net income or net loss for the "gap period" and in clause (2) will calculate the Accrued Benefit attributable to deferral contributions as of the day before the distribution. If the Plan does not perform a valuation on the last day of the month preceding the date of distribution, the Advisory Committee, in lieu of the calculation described in this paragraph, will calculate allocable income for each month in the "gap period" as equal to 10% of the allocable income for the Plan Year. Under this alternate calculation, the Advisory Committee will disregard the month in which the distribution occurs, if the Plan makes the distribution no later than the 15th day of that month. 14.09 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING CONTRIBUTIONS/PARTICIPANT NON-DEDUCTIBLE CONTRIBUTIONS. For Plan Years beginning after December 31, 1986, the Advisory Committee must determine whether the annual Employer matching contributions (other than qualified matching contributions used in the ADP under Section 14.08), if any, and the Employee contributions, if any, satisfy either of the following average contribution percentage ("ACP") tests: (i) The ACP for the Highly Compensated Group doe snot exceed 1.25 times the ACP of the Nonhighly Compensated Group; or (ii) The ACP for the Highly Compensated Group does not exceed the ACP for the Nonhighly Compensated Group by more than two percentage points (or the lesser percentage permitted by the multiple use limitation in Section 14.10) and the ACP for the Highly Compensated Group is not more than twice the ACP for the Nonhighly Compensated Group. (A) Calculation of ACP. The average contribution percentage for a group is the average of the separate contribution percentages calculated for each Eligible Employee who is a member of that group. An Eligible Employee's contribution percentage for a Plan Year is the ratio of the Eligible Employee's aggregate contributions for the Plan Year to the Employee's Compensation for the Plan Year. "Aggregate contributions" are Employer matching contributions (other than qualified matching contributions used in the ADP test under Section 14.08) and employee contributions (as defined in Section 14.03). For aggregated family members treated as a single Highly Compensated Employee, the contribution percentage of the family unit is the greater of: (i) the contribution percentage determined by combining the aggregate contributions and Compensation of the family members who are Highly Compensated Employees without family aggregation; or (ii) the contribution percentage determined by combining the aggregate contributions and Compensation of all aggregated family members. The Advisory Committee, in a manner consistent with Treasury regulations, may determine the contribution percentages of the Eligible Employees by taking into account qualified nonelective contributions (other than qualified nonelective contributions used in the ADP test under Section 14.08) or elective deferrals, or both, made to this Plan or to any other qualified Plan maintained by the Employer. The Advisory Committee may not include qualified nonelective contributions in the ACP test unless the allocation of nonelective contributions is nondiscriminatory when the Advisory Committee takes into account all nonelective contributions (including the qualified nonelective contributions) and also when the advisory Committee takes into account only the nonelective contributions not used in either the ADP test described in Section 14.08 or the ACP test described in this Section 14.09. The Advisory Committee may not include elective deferrals in the ACP test, unless the Plan which includes the elective deferrals satisfies the ADP test both with and without the elective deferrals included in this ACP test. For Plan Years beginning after December 31, 1989, the Advisory Committee may not include in the ACP test any qualified nonelective contributions or elective deferrals under another qualified plan unless that plan has the same plan year as this Plan. The Advisory Committee must maintain records to demonstrate compliance with the ACP test, including the extent to which the Plan used qualified nonelective contributions or elective deferrals to satisfy the test. (B) Special aggregation rule for Highly Compensated Employees. To determine the contribution percentage of any Highly Compensated Employee, the aggregate contributions taken into account must include any matching contributions (other than qualified matching contributions used in the ADP test) and any Employee contributions made on his behalf to any other plan maintained by the Employer, unless the other plan is an ESOP. If the plans have different plan years, the Advisory Committee will determine the combined aggregate contributions on the basis of the plan years ending in the same calendar year. (C) Aggregation of certain plans. If the Employer treats two plans as a unit for coverage or nondiscrimination purposes, the Employer must combine the plans to determine whether either plan satisfies the ACP test. This aggregation rule applies to the contribution percentage determination for all Eligible Employees, irrespective of whether an Eligible Employee is a Highly Compensated Employee or a Nonhighly Compensated Employee. The Advisory Committee also may elect to aggregate plans which the employer does not treat as a unit for coverage or nondiscrimination purposes. For Plan Years beginning after December 31, 1989, in aggregation of plans under this paragraph does not apply to plans which have different plan years and, for Plan Years beginning after December 31, 1988, the Advisory Committee may not aggregate an ESOP (or the ESOP portion of a plan) with a non-ESOP plan (or non-ESOP portion of a plan). (D) Distribution of excess aggregate contributions. The Advisory Committee will determine excess aggregate contributions after determining excess deferrals under Section 14.07 and excess contributions under Section 14.08. If the advisory Committee determines the Plan fails to satisfy the ACP test for a plan Year, it must distribute the excess aggregate contributions, as adjusted for allocable income, during the next Plan Year. However, the Employer will incur an excise tax equal to 10% of the amount of excess aggregate contributions for a Plan Year not distributed to the appropriate Highly Compensated Employees during the first 2 1/2 months of that next Plan Year. The excess aggregate contributions are the amount of aggregate contributions allocated on behalf of the Highly Compensated Employees which causes the Plan to fail to satisfy the ACP test. The Advisory Committee will distribute to each Highly Compensated Employee his respective share of the excess aggregate contributions. The Advisory Committee will determine the respective shares of excess aggregate contributions by starting with the Highly Compensated Employee(s) who has the greatest contribution percentage, reducing his contribution percentage to the next highest contribution percentage, then, if necessary, reducing the contribution percentage of the Highly Compensated Employee(s) at the next highest contribution percentage level (including the contribution percentage of the Highly Compensated Employee(s) whose contribution percentage the Advisory Committee already has reduced), and continuing in this manner until the ACP for the Highly Compensated Group satisfies the ACP test. if the Highly Compensated Employee is part of an aggregated family group, the Advisory Committee, in accordance with the applicable Treasury regulations, will determine each aggregated family member's allocable share of the excess aggregate contributions assigned to the family unit. (E) Allocable income. To determine the amount of the corrective distribution required under this Section 14.09, the Advisory Committee must calculate the allocable income for the Plan Year in which the excess aggregate contributions arose and for the "gap period" measured from the beginning of the next Plan Year to the date of the distribution. "Allocable income" means net income or net loss. The Advisory Committee will determine allocable income in the same manner as described in Section 14.08(F) for excess contributions, except the numerator of the allocation fraction will be the Highly Compensated Employee's excess aggregate contributions and the denominator of the allocation fraction will be the Employee's Accrued Benefit attributable to aggregate contributions and, if applicable, to qualified nonelective contributions and elective deferrals included in the ACP test for the Plan Year or for any prior Plan Year. (F) Characterization of excess aggregate contributions. The Advisory Committee will treat a Highly Compensated Employee's allocable share of excess aggregate contributions in the following priority: (1) first as attributable to his Employee contributions which are voluntary contributions, if any; (2) then as matching contributions allocable with respect to excess contributions determined under the ADP test described in Section 14.08; (3) then on a pro rata basis to matching contributions and to the deferral contributions relating to those matching contributions which the Advisory Committee has included in the ACP test; (4) then on a pro rata basis to Employee contributions which are mandatory contributions, if any and to the matching contributions allocated on the basis of those mandatory contributions; and (5) last to qualified nonelective contributions used int he ACP test. To the extent the Highly Compensated Employee's excess aggregate contributions are attributable to matching contributions, and he is not 100% vested in his Accrued Benefit attributable to matching contributions, the Advisory Committee will distribute only the vested portion and forfeit the nonvested portion. The vested portion of the Highly Compensated Employee's excess aggregate contributions attributable to Employer matching contributions is the total amount of such excess aggregate contributions (as adjusted for allocable income) multiplied by his vested percentage (determined as of the last day of the Plan Year for which the Employer made the matching contribution). The Employer will specify in Adoption Agreement Section 3.05 the manner in which the Plan will allocate forfeited excess aggregate contributions. 14.10 MULTIPLE USE LIMITATION. For Plan Years beginning after December 31, 1988, if at least one Highly Compensated Employee is includible in the ADP test under Section 14.08 and in the ACP test under Section 14.09, the sum of the Highly Compensated Group's ADP and ACP may not exceed the multiple use limitation. The multiple use limitation is the sum of (i) and (ii): (i) 125% of the greater of: (a) the ADP of the Nonhighly Compensated Group under the Code ss.401(k) arrangement; or (b) the ACP of the Nonhighly Compensated Group for the Plan Year beginning with or within the Plan Year of the Code ss.401(k) arrangement. (ii) 2% plus the lesser of (i)(a) or (i)(b), but no more than twice the lesser of (i)(a) or (i)(b). For Plan Years beginning prior to the later of January 1, 1992, or 60 days after the Treasury issues final regulations under Code ss.401(m), the Advisory Committee, in lieu of determining the multiple use limitation as the sum of (i) and (ii), may elect to determine the multiple use limitation as the sum of (iii) and (iv): (iii) 125% of the lesser of: (a) the ADP of the Nonhighly Compensated Group under the Code ss.401(k) arrangement; or (b) the ACP of the Nonhighly Compensated Group for the Plan Year beginning with or within the Plan Year of the Code ss.401(k) arrangement. (iv) 2% plus the greater of (iii)(a) or (iii)(b), but no more than twice the greater of (iii)(a) or (iii)(b). The Advisory Committee will determine whether the Plan satisfies the multiple use limitation after applying the ADP test under Section 14.08 and the ACP test under Section 14.09 and after making any corrective distributions required by those Sections. If, after applying this Section 14.10, the Advisory Committee determines the Plan has failed to satisfy the multiple use limitation, the Advisory Committee will correct the failure by treating the excess amount as excess aggregate contributions under Section 14.09. This Section 14.10 does not apply unless, prior to application of the multiple use limitation, the ADP and the ACP of the Highly Compensated Group each exceeds 125% of the respective percentages for the Nonhighly Compensated Group. 14.11 DISTRIBUTION RESTRICTIONS. The Employer must elect in Section 6.03 of the Adoption Agreement the distribution events permitted under the Plan. The distribution events applicable to the Participant's Deferral Contributions Account, Qualified Nonelective Contributions Account and Qualified Matching Contributions Account must satisfy the distribution restrictions described in paragraph (m) of Section 14.03. (A) Hardship distributions from Deferral Contributions Account. The Employer must elect in Adoption Agreement Section 6.03 whether a Participant may receive hardship distributions from his Deferral Contributions Account prior to the Participant's Separation from Service. Hardship distributions from the Deferral Contributions Account must satisfy the requirements of this Section 14.11. A hardship distribution option may not apply to the Participant's Qualified Nonelective Contributions Account or Qualified Matching Contributions Account. (l) Definition of hardship. A hardship distribution under this Section 14.11 must be on account of one or more of the following immediate and heavy financial needs: (1) medical expenses described in Code ss.213(d) incurred by the Participant, by the Participant's spouse, or by any of the Participant's dependents; (2) the purchase (excluding mortgage payments) of a principal residence for the Participant; (3) the payment of post-secondary education tuition, for the next semester or for the next quarter, for the Participant, for the Participant's spouse, or for any of the Participant's dependents; or (4) to prevent the eviction of the Participant from his principal residence or the foreclosure on the mortgage of the Participant's principal residence. (2) Restrictions. The following restrictions apply to a Participant who receives a hardship distribution: (a) the Participant may not make elective deferrals or employee contributions to the Plan for the 12-month period following the date of his hardship distribution; (b) the distribution is not in excess of the amount of the immediate and heavy financial need; (c) the Participant must have obtained all distributions, other than hardship distributions, and all nontaxable loans currently available under this Plan and all other qualified plans maintained by the Employer; and (d) the Participant agrees to limit elective deferrals under this Plan and under any other qualified Plan maintained by the Employer, for the Participant's taxable year immediately following the taxable year of the hardship distribution, to the 402(g) limitation (as described in Section 14.07), reduced by the amount of the Participant's elective deferrals made in the taxable year of the hardship distribution. The suspension of elective deferrals and employee contributions described in clause (a) also must apply to all other qualified plans and to all nonqualified plans of deferred compensation maintained by the Employer, other than any mandatory employee contribution portion of a defined benefit plan, including stock option, stock purchase and other similar plans, but not including health or welfare benefit plans (other than the cash or deferred arrangement portion of a cafeteria plan). (3) Earnings. For Plan Years beginning after December 31, 1988, a hardship distribution under this Section 14.11 may not include earnings on an Employee's elective deferrals credited after December 31, 1988, and may not include qualified matching contributions and qualified nonelective contributions, nor any earnings on such contributions, irrespective of when credited. (B) Distributions after Separation from Service. Following the Participant's Separation from Service, the distribution events applicable to the Participant apply equally to all of the Participant's Accounts, except as elected in Section 6.03 of the Employer's Adoption Agreement. 14.12 SPECIAL ALLOCATION RULES. If the Code ss.401(k) arrangement provides for salary reduction contributions, if the Plan accepts Employee contributions, pursuant to Adoption Agreement Section 4.01, or if the Plan allocates matching contributions as of any date other than the last day of the Plan Year, the Employer must elect in Adoption Agreement 9.11 whether any special allocation provisions will apply under Section 9.11 of the Plan. For purposes of the elections: (a) A "segregated Account" direction means the Advisory Committee will establish a segregated Account for the applicable contributions made on the Participant's behalf during the Plan Year. The Trustee must invest the segregated Account in Federally insured interest bearing savings account(s) or time deposits, or a combination of both, or in any other fixed income investments, unless otherwise specified in the Employer's Adoption Agreement. As of the last day of each Plan Year (or, if earlier, an allocation date coinciding with a valuation date described in Section 9.11), the Advisory Committee will reallocate the segregate Account to the Participant's appropriate Account in accordance with Section 3.04 or Section 4.06, whichever applies to the contributions. (b) A "weighted average allocation" method will treat a weighted portion of the applicable contributions as if includible in the Participant's Account as of the beginning of the valuation period. The weighted portion is a fraction, the numerator of which is the number of months in the valuation period, excluding each month in the valuation period which begins prior to the contribution date of the applicable contributions, and the denominator of which is the number of months in the valuation period. The Employer may elect in its Adoption Agreement to substitute a weighting period other than months for purposes of this weighted average allocation. Call toll-free: 800-525-8085 303/779-1233 in metro Denver Ask for Retirement Services The Financial Funds Post Office Box 2040 Denver, Colorado 80201 adop-agr\mp&ta.01 EX-27.FDSGRO 13
6 0000110042 INVESCO GROWTH FUND, INC. YEAR AUG-31-1998 AUG-31-1998 719962054 747848466 13437685 82306 0 761368457 5004015 0 8625798 13629813 0 637615246 145122757 117112178 34771 0 82202215 0 27886412 747738644 11263873 148388 (108534) 8335489 2968238 104101420 (9504119) 94597301 0 2912112 187061864 0 94746511 101276736 34540804 38518189 0 165163500 24778 0 4561574 0 8428619 795314391 6.06 0.02 0.69 0.02 1.60 0.00 5.15 .01 0 0
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