EXHIBIT 10.2
401(k) Salary Reduction
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Non-Standardized
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Adoption Agreement
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IRS Serial #D359971a
Approved April 30, 1992
LINCOLN NATIONAL
LIFE INSURANCE CO.
A part of LINCOLN NATIONAL CORPORATION
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Internal Revenue Service Department of the Treasury
Plan Description: Prototype Non-standardized profit
Sharing Plan with CODA
FFN 50337590001-007 Case: 9100610 EIN: ▇▇-▇▇▇▇▇▇▇
BFD 01 Plan: 007 Letter Serial No: D359971a ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Person to Contact: ▇▇. ▇▇▇▇
LINCOLN NATIONAL LIFE INSURANCE CO.
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 2340 Refer Report to E:EP:Q:I
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Date: 4/30/92
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). Therefore, an employer adopting the form of the plan should apply for a
determination letter by filing an application with the Key District Director of
Internal Revenue Service on Form 5307, Short Form Application for Determination
for Employee Benefit Plan.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ ▇▇▇▇ Siveca
Chief, Employee Plans Qualifications Branch
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
NON-STANDARDIZED
401(K)SALARY REDUCTION PLAN AND TRUST PROTOTYPE PLAN
ADOPTION AGREEMENT
PLAN #007
IRS SERIAL # D359971A DATE APRIL 30, 1992
The PEOPLES BUILDING AND LOAN ASSOCIATION, INC.
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(exact legal name of Employer)
(hereinafter referred to as the Employer), having its principal place of
business in Tell City Indiana
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(City) (State)
hereby adopts The Lincoln National Insurance Company Non-Standardized 401(k)
Salary Reduction Plan and Trust Prototype Plan, and further appoints as:
Trustee(s), ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
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__________________________________________________________________
Named Fiduciary*, Same ;
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Plan Administrator*, Same ; and
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Agent for Legal Service of Process*, Same .
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*If same as Employer, write 'Same'.
The Employer's Tax Year begins January 1 and ends December 31 .
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Employer Telephone Number (▇▇▇) ▇▇▇-▇▇▇▇ .
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Business Code Number (same as shown on 1120) 6120 .
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Date Business Commenced April, 1914 .
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In connection herewith, the Employer makes the following statements and
selections:
This Plan shall be known as Peoples Building and Loan Association, Inc.
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(name of Employer)
____________________________________ 401(k) Salary Reduction Plan and
Trust which shall be identified by Employer I.D. # ▇▇-▇▇▇▇▇▇▇
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and Plan Serial # 002 (001, 002, etc. - assign sequentially).
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The employer maintains, or has maintained, the following qualified plans: (List
all plans, including this Plan, ever maintained by the Employer starting with
Plan Serial #001.)
Plan Status
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Serial # Type of Plan In Force Terminated
--------- ------------ -------- ----------
The Peoples Building & Loan Association
001 Defined Benefit Pension Trust [_] [X]
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002 Peoples Building and Loan Assn., Inc. [X] [_]
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003 401K Salary Reduction Plan [_] [_]
--------- ------------------------------------
004 [_] [_]
--------- ____________________________________
005 [_] [_]
--------- ____________________________________
This Employer is _____ Sole Proprietor
_____ Partnership
X Corporation
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_____ S Corporation
_____ Professional Corporation
_____ Non Profit Corporation
[_] Yes [X] No Is the Employer a member of a Controlled Group of
Corporations, a group of businesses under common control, or
an Affiliated Service Group as defined below. THIS QUESTION
MUST BE ANSWERED "YES" OR "NO". If yes, complete the rest of
this section.
In the case of a group of employers which constitutes a Controlled Group of
Corporations, or an Affiliated Service Group [as defined in Section 414(b) and
414(m), respectively, of the Internal Revenue Code], or which constitutes one or
more trades or businesses whether or not incorporated which are under common
control [as defined in Section 414(c)], all such employers shall be considered a
single employer for purposes of determining plan qualification, minimum
participation, benefit accrual, vesting standards, and limitations on benefits
and contributions. The employers listed below are required to be aggregated with
the adopting employer under Code Sections 414(b), (c), (m) or (o), and shall
participate in this Plan to the extent indicated as evidenced by written
resolution adopting this Plan. (If there are no affiliated employers, indicate
None.)
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Employer Employer Participating Participation
Name I.D. # Employer Effective Date
-------- -------- ------------- --------------
___________________________ --------- [_] Yes [_] No _______________
___________________________ --------- [_] Yes [_] No _______________
___________________________ --------- [_] Yes [_] No _______________
___________________________ --------- [_] Yes [_] No _______________
___________________________ --------- [_] Yes [_] No _______________
If this Plan and Trust is adopted by more than one member of the aggregation
group, this Plan
[_] (a) shall be administered as one plan (i.e., contributions, and
forfeitures shall not be separated for each participating Employer).
[_] (b) shall be administered as a single employer plan for each
participating Employer [i.e., contributions shall be made by each
Employer only for those Participants employed by such Employer and
forfeitures shall be used to reduce the contribution made by the
applicable Employer - each asset pool shall be considered a separate
plan which must independently satisfy Code Section 401(a)(26)].
[X] (c) N/A
2
Any Employee of a participating Employer must receive credit for service while
employed by any member of the aggregation group (including non-participating
employers) for purposes of vesting and eligibility under this Plan from the date
such Employer became a member of the aggregation group.
A-1.22 The adoption of this Plan constitutes: (check appropriate statement
and provide information)
[_] (a) The initial adoption of this Plan and Trust by the
Employer. The Effective Date of this Plan is __________________
___________________________________.
(month/day/year)
[X] (b) An [X] amendment and restatement, or [_] merger of the
following Plan(s) known as Peoples Building and Loan Association,
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Inc., 401(k) Salary Reduction and Trust.
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(name of Plans and Trusts)
with the original effective date(s) of September 31, 1986
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(month/day/year)
The effective date of this amendment and restatement is
September 01, 1989
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(month/day/year)
I. DEFINITIONS
A-1.38 Hours of Service: Hours of Service shall be determined on the basis
of the method selected below. The method selected shall be applied
to all Employees. If the Elapsed Time Method is selected in A-1.74,
Hours of Service as designated below shall be applicable for
eligibility purposes only. (Select one)
[X] (a) On the basis of actual hours for which an Employee is paid
or entitled to payment.
[_] (b) On the basis of days worked. An Employee shall be credited
with ten (10) Hours of Service if, under Section 1.38 of the
Plan, such Employee would be credited with at least one (1)
Hour of Service during such day.
[_] (c) On the basis of weeks worked. An Employee shall be credited
with 45 Hours of Service if, under Section 1.38 of the Plan,
such Employee would be credited with at least one (1) Hour
of Service during such week.
3
[_] (d) On the basis of semi-monthly payroll periods. An Employee
shall be credited with 35 Hours of Service if, under Section
1.38 of the Plan, such Employee would be credited with at
least one (1) Hour of Service during such semi-monthly
period.
[_] (e) On the basis of months worked. An Employee shall be credited
with 190 Hours of Service if under Section 1.38 of the plan
such Employee would be credited with at least one (1) Hour
of Service during such month.
A-1.54 Plan Year: (select one and complete)
[X] (a) Shall be the consecutive 12 month period for which records
for this Plan shall be maintained beginning each September
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01 and ending each August 31.
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[_] (b) There shall be a short Plan Year beginning ______________
and ending ______________. (The Plan must retain its
qualified status during this period.)
All subsequent Plan Years shall begin each ______________
and end each ______________.
The previous Plan Year prior to this amendment began
_________ and ended each ______________.
Adjustments for eligibility and vesting shall be made as
required by Section 11.04 if the Plan Year is changed.
A-1.55 For purposes of establishing Present Value to compute the Top-Heavy
Ratio, any benefit (under a Defined Benefit plan) shall be discounted
for mortality and interest based on the following: (If the Employer
maintains a Defined Benefit plan, this section must be completed.)
Interest Rate 7% Mortality Table 1983 Group Annuity Table
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[_] N/A The Employer has no Defined Benefit plan.
A-1.64 Years of Service with a predecessor employer:
Years of Service with _____________________________________, for whom
this Employer does not maintain a predecessor plan shall be considered
under the Plan for purposes of: (select as desired)
[_] (a) Vesting
[_] (b) Eligibility
[X] (c) None of the above
*A-1.71 For purposes of computing the Top-Heavy Ratio, the Valuation Date
shall be August 31 of each year.
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4
A-1.73 Vesting Years of Service: Years of Service credited for vesting shall
exclude the years checked below subject to Section 11.01: (select as
desired)
[X] (a) Years of Service before the Employee's 18 (cannot exceed 18)
birthday. (If Regular Method is used, the Plan Year in which
the Employee attains age 18 shall not be excluded.)
[_] (b) Years of Service prior to the original Effective Date of
this Plan or a predecessor plan.
[_] (c) Years of Service prior to ____________________ (Date
selected may not be later than the original effective date
of this Plan or a predecessor plan.)
[_] (d) Years of Service during a period for which the Employee
declined(d) Years of Service during a period for which the
Employee declined(d) Years of Service during a period for
which the Employee declined to contribute to a plan
requiring Employee Contributions. In the case of a plan
using the elapsed time method, the Service which shall be
disregarded is the period with respect to which the
mandatory contribution is not made.
[_] (e) No exclusions.
Note: In general, a predecessor plan is a plan which terminates
within the five (5) year period immediately preceding or
following the establishment of this Plan.
A-1.74 Years of Service shall be computed under the following method:
(select one)
[X] (a) Regular Method--based on Hours of Service credited under the
method selected in A-1.38.
[_] (b) Elapsed Time Method--based on total time an Employee is
employed without regard to actual hours credited as
explained in Section 1.74 of this Plan.
II. ELIGIBILITY
A-2.01 (a) For purposes of plan coverage and benefits, employees of
affiliated employers required to be aggregated with the Employer
under Section 414(b), (c), (m) or (o) of the Code shall not be
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treated as Employees of the Employer unless such affiliated
employers are identified as Participating Employers on page 2 of
this Adoption Agreement.
For purposes of plan coverage and benefits, the term "Employee"
[_] (1) shall include
[_] (2) shall not include
[X] (3) N/A (Employer has no "leased employees.")
"leased employees" who are required to be considered employees of
the Employer under Code Section 414(n) or (o).
5
(b) The following classes of Employees of the Employer shall be
eligible to participate in the Plan:
[X] (1) All Employees
[_] (2) Hourly paid Employees
[_] (3) Salaried Employees
[_] (4) All Employees except Employees included in a unit of
Employees covered by a collective bargaining agreement
between the Employer and Employee representatives, if
retirement benefits were the subject of good faith
bargaining and if two percent or less of the Employees
of the Employer who are covered pursuant to that
agreement are professionals as defined in Section
1.410(b)-9(g) of the Regulations. For this purpose, the
term "employee representatives" does not include any
organization more than half of whose members are
Employees who are owners, officers, or executives of
the Employer.
[_] (5) Other __________________________________________
__________________________________________
The above classes of Employees
[_] (6) shall
[X] (7) shall not
include Employees who are non-resident aliens [within the meaning
of Section 7701(b)(1)(B)] and who receive no earned income
[within the meaning of Section 911(d)(2)] from the Employer which
constitutes income from sources within the United States [within
the meaning of Section 861(a)(3)].
(c) Minimum age and service requirements: (select one)
[X] (1) An Employee shall become a Participant on the Entry
Date coincident with or next following Age 21 (cannot
--
exceed 21) and the completion of 1 (cannot exceed 1
-
year) Eligibility Year of Service. MUST HAVE AT LEAST 2
ENTRY DATES, I.E., CANNOT ELECT (e)(1) BELOW.
If the Eligibility Year of Service includes a
fractional year, an Employee shall not be required to
complete any specified number of Hours of Service to
receive credit for such fractional year.
[_] (2) An Employee shall become a Participant on the Entry
Date coincident with or next following Age _____
(cannot exceed 20 1/2) and the completion of _____
(cannot exceed 1/2 year (6 months)] Eligibility Year of
Service. USE THIS PROVISION ONLY WHEN (e)(1) (ONE ENTRY
DATE) IS ELECTED BELOW.
6
If the Eligibility Year of Service includes a
fractional year, an Employee shall not be required to
complete any specified number of Hours of Service to
receive credit for such fractional year.
(d) The preceding election in A-2.01(c) notwithstanding, Employees
who are actively employed on ___________________ shall be deemed
to have satisfied the
[_] (1) Age requirement as of the Effective Date.
[_] (2) Service requirement as of the Effective Date.
[_] (3) Age and service requirements as of the Effective
Date.
[X] (4) N/A (Age and Service requirements in A-2.01(c)
apply to all Employees.)
(e) Entry Date: Shall mean: (select one)
[_] (1) First day of Plan Year.
[X] (2) First day of Plan Year and the date 6 months after the
first day of the Plan Year.
[_] (3) The first date of the Plan Year and the dates which are
3, 6 and 9 months after the first day of the Plan Year.
(Not recommended.)
[_] (4) First day of each month. (Not recommended.)
III. PROFIT SHARING CONTRIBUTIONS AND ALLOCATIONS
A-3.01 Contributions
(a) The Employer shall contribute [select (1), (2) or (3)]
[X] (1) out of current or accumulated profits.
[_] (2) without regard to current or accumulated profits.
[_] (3) N/A [A-3.01(a)(6) is elected]
The amount of such contribution shall be: [select (4), (5) or
(6)]
[X] (4) As determined by the Board of Directors each year.
[_] (5) Other ________________________________________________
________________________________________________
[_] (6) The Employer will make no contribution under this
Section A-3.01(a). [Do not complete Sections A-3.01(b),
(d) and (e). Section A-3.01(c) must still be
completed.]
7
(b) Allocation of contributions under A-3.01(a), above, shall be made
for all Participants who are credited with at least [select (1),
(2), or (3)]
[X] (1) 1,000 Hours of Service
[_] (2) 500 Hours of Service
[_] (3) one Hour of Service
during the Plan Year and [select (4 or (5)]
[X] (4) regardless of employment on the last day of the Plan
Year.
[_] (5) who is employed with the Employer on the last day of
the Plan Year.
The preceding notwithstanding , for Plan Years beginning after
December 31, 1989, if the Plan would otherwise fail to satisfy
the requirements of Code Section 401(a)(26) or 410(b) because the
Employer contributions have not been allocated to a sufficient
number or percentage of Participants for a Plan Year, then the
following rules shall apply:
(6) The group of Participants eligible to share in the
Employer's contribution shall be expanded to include
all Participants who are employed on the last day of
the Plan Year and who are credited with at least 500
Hours of Service.
(7) If after the application of paragraph (6) above, the
applicable test is still not satisfied, then the group
of Participants eligible to share in the Employer's
contribution shall be further expanded to include all
Participants who are credited with at least 500 Hours
of Service regardless of employment on the last day of
the Plan Year.
Note: Employer includes all employers which are required to
be aggregated with the Employer under Code Section
414(b), (c), (m) or (o).
(c) If a Participant dies, retires, or becomes disabled during the
Plan Year and does not complete the hours requirements for a
contribution, an allocation
[_] (1) shall not be made on such Participant's behalf for
such Plan Year.
[X] (2) shall be made on such Participant's behalf for such
plan Year regardless of any last day requirement
elected under A-3.01(b)(5).
Note: The above election applies to Profit Sharing
Contribution under Section A-3.01(a), Matching
Contributions under Section A-4.02 and Qualified Non-
elective Contributions under A-4.03.
8
(d) Employer contributions under this Section and forfeitures, if
applicable, shall be allocated to Participant's Accounts as
follows:
[X] (1) NON-INTEGRATED FORMULA
On a pro-rata basis to all Participants in the
proportion that a Participant's Compensation bears to
the total of all Participant's Compensation.
[_] (2) INTEGRATED FORMULA (INTEGRATED WITH SOCIAL SECURITY)
Note: This Plan may not provide for permitted disparity
(integration with Social Security) if the Employer
maintains any other plan that provides for permitted
disparity and benefits any of the same Participants.
STEP ONE: In any Plan Year the Plan is Top-Heavy
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contributions and forfeitures (if applicable) shall be
allocated to all Participants in the ratio that each
Participant's Compensation bears to all Participant's
Compensation, but not in excess of 3% of such
Compensation.
(If the Plan is not top-heavy, proceed to step two.)
STEP TWO: Any contributions and forfeitures not
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allocated in STEP ONE shall be allocated to each
Participant's Account in the ratio that the sum of each
Participant's total Compensation plus Compensation in
excess of the integration level bears to the sum of all
Participants total Compensation plus Compensation in
excess of the integration level, but not in excess of
the maximum disparity rate.
STEP THREE: Any remaining Employer contributions or
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forfeitures shall be allocated to each Participant's
Account in the ratio that each Participant's total
Compensation for the Plan Year bears to all
Participant's total Compensation for that year.
For the purpose of this Section, Compensation shall
mean Compensation as defined in Section 1.13 of the
Plan.
The integration level shall be:
[_] (i) The Taxable Wage Base [The maximum amount of
earnings which may be considered wages for a
year under Section 3121(a)(1) of the Code in
effect as of the first day of the Plan Year.]
[_] (ii) $__________ (Must be less than the Taxable
Wage Base.)
9
The maximum profit sharing disparity rate is equal to
the lesser of :
(a) 5.7%, or
(b) The applicable percentage determined in accordance
with the table below:
If the integration level:
Is more But note more The applicable
than than percentage is
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$0.00 $X* 5.7%
X* 80% of TWB*** 4.3%
80% of TWB*** Y** 5.4%
* X = the greater of $10,000 or 20% of the TWB.
** Y = any amount more than 80% of the TWB but
less than 100% of the TWB.
***TWB = Taxable Wage Base at the beginning of the
Plan Year. The TWB for 1989 is $48,000.
The TWB for 1990 is $51,300.
(e) Is any Employee who is eligible to participate under this Plan
covered by any other plan [including plans of non-participating
employers required to be aggregated under Section 414(b), (c),
(m) or (o) of the Code] which is integrated with Social Security?
[X] (1) No
[_] (2) Yes [may not elect A-3.01(a)(2)]
A-3.03 (a) Rollover contributions:
[_] (1) shall not be permitted under this Plan.
[X] (2) shall be permitted under this Plan.
(b) Rollover contributions shall be accepted from:
[_] (1) Participants only.
[X] (2) Participants and non-Participants (otherwise eligible
Employees who have not yet satisfied the age and/or service
requirements for participation).
A-3.07 ALLOCATION OF EARNINGS shall be based on the Account balance as of the
beginning of the allocation period plus 1/2 of the contribution
allocated at the end of the allocation period, less all withdrawals,
plus investment transfers in, and less investment transfers out,
unless otherwise specified.
Allocation of Earnings shall be in accordance with each individual
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certificate.
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10
A-3.08 ALL FORFEITURES occurring at the end of Plan Year: (select one)
[_] (a) shall be used to reduce the Employer's contribution for
the current Plan Year. If the Employer does not make a
contribution for a Plan Year, any available forfeitures
shall be treated as Employer Contributions.
[X] (b) shall be allocated in the same manner as Employer
contributions under Section 3.01 for the current Plan Year.
However, forfeitures shall not be allocated to Participants
who are not employed on the last day of the Plan Year unless
such allocation is required to satisfy the requirements of
Code Section 401(a)(26) and/or 410(b). (Do not elect if no
Profit Sharing contribution is specified in A-3.01).
IV. CASH OR DEFERRED ARRANGEMENT (CODA)
A-4.01 ELECTIVE DEFERRALS
(a) An eligible Employee may elect to have his or her annual
Compensation reduced by
[_] (1) from __________% to __________%
[X] (2) No less than 3% and no more than the maximum
percentage allowable not to exceed the allocation
--------------------------------------
limits of IRS Section 415, 401K, and 404.
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Such election shall be in writing and in a form and manner
specified by the Plan Administrator.
(b) A Participant may elect to commence, or to modify the amount of,
Elective Deferrals as of:
[_] (1) the first day of each Plan Year.
[X] (2) the first day of each Plan Year and the date 6 months
after the first day of each Plan Year.
[_] (3) the first day of each Plan Year quarter.
The Plan Administrator may permit an additional election in the
event an Actual Deferral Percentage Test, performed during the
Plan Year, permits or requires an adjustment in the deferral
percentages.
A-4.02 MATCHING CONTRIBUTIONS
(a) The Employer [select (1) or (2)]
[X] (1) shall
[_] (2) shall not
make Matching Contributions to the Plan on behalf of all
Participants who elect to have Elective Deferrals made under the
Plan and who are credited with at least [select (3), (4) or (5)]
[X] (3) 1,000 Hours of Service
11
[_] (4) 500 Hours of Service
[_] (5) one Hour of Service
during the Plan Year and [select (6) or (7)]
[X] (6) regardless of employment on the last day of the Plan
Year.
[_] (7) who is employed with the Employer on the last day of
the Plan Year.
The preceding notwithstanding, for Plan Years beginning after
December 31, 1989, if the Plan would otherwise fail to satisfy
the requirements of Code Section 401(a)(26) or 410(b) because the
Employer contributions have not been allocated to a sufficient
number or percentage of Participants for a Plan Year, then the
following rules shall apply:
(1) The group of participants eligible to share in the
Employer's contribution shall be expanded to include
all Participants who are employed on the last day of
the Plan Year and who are credited with at least 500
Hours of Service.
(2) If after the application of paragraph (1) above, the
applicable test is still not satisfied, then the group
of Participants eligible to share in the Employer's
contribution shall be further expanded to include all
Participants who are credited with at least 500 Hours
of Service regardless of employment on the last day of
the Plan year.
Note: Employer includes all employers which are required to
be aggregated with the Employer under Code Sections
414(b), (c), (m) or (o).
(b) The Employer shall contribute and allocate to each Participant's
Matching Contribution Account:
[X] (1) an amount equal to 200 percent of the Participant's
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Elective Deferrals.
[_] (2) a discretionary matching contribution equal to a
percentage (to be determined each year by the
Employer) of each Participant's Elective Deferrals.
(c) The Employer shall not match Elective Deferrals in excess of 3
-
percent of a Participant's
[X] (1) compensation per pay period.
[_] (2) annual compensation.
(d) The Matching Contribution allocated to any Participant's account
for the Plan Year shall not exceed
[_] (1) $________________
[X] (2) N/A
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(e) Matching Contributions shall be vested in accordance with the
following schedule:
[_] (1) 100% vested at all times.
[X] (2) The vesting schedule as elected in A-11.02 of the
Adoption Agreement.
(f) Matching contributions shall be made
[X] (1) only from current or accumulated profits.
[_] (2) without regard to current or accumulated profits.
A-4.03 (a) Qualified Non-elective Contributions shall be allocated to the
accounts of Non-highly Compensated Participants who are credited
with at least [select (1), (2) or (3)]
[X] (1) 1,000 Hours of Service
[_] (2) 500 Hours of Service
[_] (3) one Hour of Service
during the Plan Year [select (4) or (5)]
[X] (4) regardless of employment on the last day of the Plan
Year.
[_] (5) who is employed with the Employer on the last day of
the Plan Year.
The preceding notwithstanding, for Plan Years beginning after
December 31, 1989, if the Plan would otherwise fail to satisfy
the requirements of Code Sections 401(a)(26) or 410(b) because
the Employer contributions have not been allocated to a
sufficient number or percentage of Participants for a Plan Year,
then the following rules shall apply:
(1) The group of Participants eligible to share in the
Employer's contribution shall be expanded to include
all Participants who are employed on the last day of
the Plan Year and who are credited with at least 500
Hours of Service.
(2) If after the application of paragraph (1) above, the
applicable test is still not satisfied, then the group
of Participants eligible to share in the Employer's
contribution shall be further expanded to include all
Participants who are credited with at least 500 Hours
of Service regardless of employment on the last day of
the Plan Year.
Note: Employer includes all employers required to be
aggregated with the Employer under Code Section
414(b), (c), (m) or (o).
13
A-4.13 Pre-retirement distributions of a Participant's entire Account
balance, including Elective Deferrals and Qualified Non-elective
Contributions, upon attainment of age 59 1/2 (may not be less than 59
------
1/2)
[X] (a) shall
[_] (b) shall not
be permitted provided the Participant is 100% vested, and the balance
in the Participant's Account has accumulated for at least two (2)
years or the Participant has completed five (5) years of participation
in the Plan.
A-4.14 Distributions on account of financial hardship
[X] (a) shall
[_] (b) shall not
be permitted to the extent provided in Section 4.14, and subject to
applicable regulations.
Distributions on account of financial hardship shall be made only
from:
[_] (c) Elective Deferrals (and any earnings credited to a
Participant's Elective Deferral account as of the end of the
last Plan Year ending before July 1, 1989.) The amount
available for distribution shall include the amount credited
to the Participant's Qualified Matching Contribution and
Qualified Non-elective Contribution accounts as of the end
of the last Plan Year ending before July 1, 1989.
[X] (d) Account balances which are not subject to the withdrawal
restrictions of Section 4.13 provided the Participant is
100% vested, and the funds have accumulated for at least two
(2) years or the Participant has completed five (5) years of
participation in the Plan.
Note: Hardship withdrawal provisions for funds described in (d)
above, are protected benefits under Code Section 411(d)(6).
If the conditions described in Section 4.14 are more
restrictive than those in effect immediately prior to the
adoption of this Plan, the prior conditions shall continue
to apply to all such funds including those which have
accrued after the date this Plan is adopted, and the
Employer should attach to this Adoption Agreement a hardship
withdrawal policy statement fully describing the objective
and nondiscriminatory conditions applicable to such
withdrawals.
14
V. LIMITATIONS ON ALLOCATIONS
If the Employer maintains or ever maintained another qualified plan in which any
Participant in this Plan is (or was) a Participant or could become a
Participant, the Employer must complete this Section. The Employer must also
complete this Section if it maintains a welfare benefit fund, as defined in
Section 419(e) of the Code, or an individual medical account, as defined in
Section 415(1)(2) of the Code, under which amounts are treated as Annual
Additions with respect to any Participant in this Plan.
A-5.11 If a Participant is covered under another qualified Defined
Contribution plan maintained by the Employer, other than a Master or
Prototype plan:
[_] (a) The provisions of Section 5.05 through 5.10 of Article V
shall apply as if the other plan were a Master or Prototype
plan.
[_] (b) Provide the method under which the Plans shall limit total
Annual Additions to the Maximum Permissible Amount, and
shall properly reduce any excess amounts, in a manner than
precludes Employer discretion.
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
[X] (c) N/A The Employer maintains no other plan which provides an
Annual Addition as defined under Section 5.13(a).
A-5.12 If the participant is or has ever been a participant in a Defined
Benefit plan maintained by the Employer:
[_] (a) The Annual Additions which may be credited to the
Participant's Account under this Plan shall not be limited
other than by the Maximum Permissible Amount as defined in
Section 5.13(k). If the sum of the Defined Benefit Fraction
and the Defined Contribution Fraction would otherwise exceed
1.0, such sum shall be reduced to not exceed 1.0 by
adjusting the Participant's Projected Annual Benefit under
the Defined Benefit Plan.
[X] (b) Provide language which shall satisfy the 1.0 limitation of
Section 415(e) of the Code. Such language must preclude
Employer discretion.
If the sum of the Defined Benefit Fraction and the Defined
-----------------------------------------------------------
Contribution Fraction would otherwise exceed 1.0, such sum
shall be reduced to not exceed 1.0 by adjusting the
-----------------------------------------------------------
Participant's annual additions under this plan.
-----------------------------------------------------------
___________________________________________________________
[_] (c) N/A The Employer does not and has never maintained a
Defined Benefit plan.
15
VI. INVESTMENT OF CONTRIBUTIONS
A-6.02 Life Insurance: The Trustee may, at the direction of the Participant
and subject to the requirements of Section 6.02, use a portion of each
contribution to purchase life insurance.
[X] (a) Yes, subject to the guidelines outlined below, if any.
The purchase of life insurance contracts shall be deferred
---------------------------------------------
until the first day of the first (1st ) plan year following
date of entry. At no time during the life of the plan may
----------------------------------------------------------
the percentage limitations (Incidental Rules) of Section
7.2(d) be exceeded. Life insurance shall be purchased using
------------------------------------------------------------
a portion of the Employer Elective contribution, at the
-
election of each participant.
[_] (b) No
A-6.03 Participants may direct the Trustee as to the investment of their
individual Account balances which are attributable to: (check all
which apply)
[_] (a) Elective Deferrals
[_] (b) Employer Matching Contributions
[_] (c) Rollovers
[X] (d) All contributions regardless of source
[_] (e) None of the above -- participants may not direct the
investment of their accounts
A-6.05 Participant Loans
[_] (a) shall be permitted in accordance with the Employer's written
loan policy.
[X] (b) shall not be permitted.
VIII. BENEFITS
A-8.01 Normal Retirement Date: (select one)
[X] (a) The later of the first day of the month (select one)
[X] nearest
[_] on or following
a Participant's 65 (cannot be less than 55) birthday or
--
the first day of the month on or following the N/A (1st -
----
7th or N/A) anniversary in which (select one)
[_] participation commenced
[_] the Employee first performed an Hour of Service
but in no event later than the first day of the month on or
following a Participant's _______ birthday.
16
[_] (b) The later of the first day of the Plan Year nearest a
Participant's __________ (cannot be less than 55) birthday,
or the first day of the Plan Year nearest the __________
(1st - 7th or N/A) anniversary in which (select one)
[_] participation commenced
[_] the Employee first performed an Hour of Service
but in no event later than the first day of the Plan Year
nearest a Participant's __________ birthday.
A-8.02 (a) Early Retirement Date: Shall mean: (select one)
[_] (1) None -- no Early Retirement Date.
[X] (2) First day of any [X] month [_] Plan Year on or
following a Participant's 55th (cannot be less than 55)
birthday or after 7 (1-7 or N/A) [X] Vesting Years of
Service [_] years of participation in the Plan,
whichever date is later.
(b) Early Retirement Benefit: Upon satisfaction of the age and
service requirements for Early Retirement, a Participant shall:
(select one)
[_] (1) automatically become 100% vested in the Account.
[X] (2) be entitled to the vested Account based on the vesting
schedule designated in the Adoption Agreement.
A-8.04 Disability Retirement Benefit:
(a) In the event of total and permanent disability, a Participant
shall: (select one)
[_] (1) automatically become 100% Vested in the Account.
[X] (2) be entitled to the vested Account based on the vesting
schedule designated in the Adoption Agreement.
(b) Disability shall mean a physical or mental impairment which is
expected to result in death or blindness or which can be expected
to last for a continuous period of not less than 12 months
resulting in: (select one)
[_] (1) an inability to engage in any substantial gainful
activity for which the Participant is reasonably suited
by reason of training, education and experience as
determined by the Plan Administrator. The Plan
Administrator may require that the Participant be
examined by physician(s) selected by the Plan
Administrator.
[X] (2) the Participant being entitled to Social Security
Disability Benefits. In the event a Participant has
applied for Social Security Disability Benefits, the
disability benefits provided by this Plan shall
commence upon qualifying for Social Security Disability
Benefits.
17
[_] (3) an inability to perform the normal duties for the
Employer as determined by the Plan Administrator. The
Plan Administrator may require that the Participant be
examined by physician(s) selected by the Plan
Administrator.
A-8.09 Benefits shall be distributed:
[_] (a) only in the form of a single lump-sum payment. (May not
elect if other forms were available immediately preceding
the adoption of this Plan.)
[X] (b) in accordance with the provisions of Section 8.08.
XI. TERMINATION OF SERVICE
A-11.02 The vesting schedule for benefits (derived from the Employer's
contributions pursuant to Article III) upon termination of employment
shall be determined according to the selection based on Vesting Years
of Service as credited in accordance with A-1.73: (select one)
[_] (a) 100% vested at all times
[_] (b) 100% vested after _____ (not to exceed 5) years of service.
[_] (c) 20% vested after 2 years of service
40% vested after 3 years of service
60% vested after 4 years of service
80% vested after 5 years of service
100% vested after 6 years of service
[X] (d) 20% vested after 3 years of service
40% vested after 4 years of service
60% vested after 5 years of service
80% vested after 6 years of service
100% vested after 7 years of service
[_] (e) Specify: (Must in all years be as favorable as the schedule
in (b) above, or as favorable as the schedule in (d) above.)
_____% vested after _____ years of service
_____% vested after _____ years of service
_____% vested after _____ years of service
_____% vested after _____ years of service
_____% vested after _____ years of service
_____% vested after _____ years of service
NOTE: IF THIS IS A RESTATED PLAN AND THE VESTING SCHEDULE HAS BEEN
AMENDED, ENTER THE PRE-AMENDED SCHEDULE BELOW:
[_] (f) _____% vested after _____ years of service
_____% vested after _____ years of service
_____% vested after _____ years of service
_____% vested after _____ years of service
_____% vested after _____ years of service
_____% vested after _____ years of service
_____% vested after _____ years of service
[X] (g) Vesting schedule has not been amended.
18
A-11.05 Distributions upon termination of Service shall be made as soon as
administratively feasible following:
[_] (a) Termination of employment.
[X] (b) The end of the Plan Year following termination of
employment.
[_] (c) The end of the Plan Year during which a One-Year Break in
Service occurs.
[_] (d) Early or Normal Retirement Date, Death, or Disability.
Note: May not be more restrictive than the provision in effect
immediately preceding the adoption of this Plan.
A-11.09 Benefits which are no longer immediately distributable
[X] (a) shall not be distributed without the consent of the
Participant and/or Beneficiary prior to the time required by
Article X.
[_] (b) shall, subject to the requirements of Article IX, be
distributed as soon as administratively feasible following
the date on which they cease to be immediately
distributable.
Note: An Account balance is immediately distributable if any part
of the Account balance could be distributed to the
Participant (or Surviving Spouse) before the Participant
attains (or would have attained if not deceased) the later
of Normal Retirement Age or age 62.
XV. TOP-HEAVY
Before completing this Section of the Adoption Agreement, the Employer should
carefully read Article XV of the Basic Plan Documents paying particular
attention to Section 15.03 thru 15.05.
A-15.02 Minimum Top-heavy Allocation: The purpose of this Section A-15.02 is
to coordinate Top-Heavy minimum contributions or benefits when two or
more plans of the Employer are involved. If the Employer maintains
only this plan, and has never maintained a Defined Benefit plan, the
Employer is required to complete only Section (d). If the Employer
maintains (or has maintained) a Defined Benefit plan, this Section
should be completed only with the advice of that plan's actuary. If
the Employer maintains two Defined Contribution plans, and has never
maintained a Defined Benefit plan, the Employer is required to
complete only Sections (c) or (d).
(a) If the Employer maintains a Defined Benefit plan, this Section or
---------------------------
Section (d) below must be completed.
If a non-key Employee participates in both a Defined Benefit plan
and a Defined Contribution plan which are part of a Required
Aggregation Group or a Permissive Aggregation Group and the Top-
Heavy Ratio exceeds 60% (but does not exceed 90%), Top-Heavy
minimum benefits shall be provided as follows:
19
[_] (1) In the Defined Contribution Plan, with a minimum
allocation of:
[_] (i) 5% of total compensation (Defined Benefit
and Defined Contribution Fractions
computed using 100% of the dollar
limitation)
[_] (ii) 7.5% of total compensation (Defined Benefit
and Defined Contribution Fractions
computed using 125% of the dollar
limitation)
[_] (2) In the Defined Benefit Plan, with a minimum annual
accrual of:
[_] (i) 2% of the highest 5 consecutive year
average compensation (Defined Benefit
and Defined Contribution fractions
computed using 100% of the dollar
limitation)
[_] (ii) 3% of the highest 5 consecutive year
average compensation (Defined Benefit
and Defined Contribution Fractions
computed using 125% of the dollar
limitation)
If the Top-Heavy Ratio exceeds 90%, the minimum benefit shall be
provided in:
[_] (3) the Defined Contribution plan with a minimum allocation
of 5% of total compensation
[_] (4) the Defined Benefit plan with a minimum accrual of 2%
of the highest 5 consecutive year average compensation
Note: When the Top-Heavy Ratio exceeds 90%, the Defined
Benefit and Defined Contribution Fractions shall be
computed using 100% of the dollar limitation.
(b) If the Employer maintains (or has maintained) a Defined Benefit
--------- ----------------- -----------------
plan, this Section or Section (d) below must be completed.
If the Employer maintains both a Defined Benefit plan and a
Defined Contribution plan which are part of a Required
Aggregation Group or a Permissive Aggregation Group and the Top-
Heavy Ratio exceeds 60% (but does not exceed 90%), a non-key
Employee who participates only in the Defined Contribution plan
shall receive a minimum allocation of:
[_] (1) 3% of total compensation (Defined Benefit and
Defined Contribution Fractions computed using
100% of the dollar limitation)
[X] (2) 4% of total compensation (Defined Benefit and
Defined Contribution Fractions computed using
125% of the dollar limitation)
If the Top-Heavy Ratio exceeds 90% each non-key Employee who
participates only in the Defined Contribution plan shall receive
a minimum of 3% of total compensation
20
(c) If the Employer maintains two Defined Contribution plans, this
----------------------------------
Section or Section (d) below must be completed.
If a non-key Employee participates in two Defined Contribution
plans maintained by the Employer, the Defined Contribution
minimum allocation requirement shall be met
[_] (1) in this plan
[_] (2) in the other plan. ______________________________
(Name of Plan)
(d) Complete this Section only if (a), (b) and/or (c) have not been
---------------------------------------------------------------
completed.
---------
[_] (1) Specify how the plans shall provide Top-Heavy minimum
benefits for non-key Employees precluding Employer
discretion and avoiding inadvertent omissions.
____________________________________________________
____________________________________________________
____________________________________________________
[_] (2) The Employer maintains only this Plan and has
never maintained a Defined Benefit Plan.
A-15.06 TOP HEAVY VESTING...If this Plan becomes a Top-Heavy Plan, the
following vesting schedule for such Plan Year and each succeeding Plan
Year, whether or not Top-Heavy, shall be effective and shall be
treated as a Plan amendment pursuant to this Agreement.
[_] (a) 100% vested after _____ (not to exceed 3) years of service.
[X] (b) 20% vested after 2 years of service
40% vested after 3 years of service
60% vested after 4 years of service
80% vested after 5 years of service
100% vested after 6 years of service
[_] (c) Specify: (Must in all years be as favorable as the schedule
in (a) above, or as favorable as the schedule in (b)
above.)
_____% vested after _____ years of service
_____% vested after _____ years of service
_____% vested after _____ years of service
_____% vested after _____ years of service
_____% vested after _____ years of service
_____% vested after _____ years of service
[_] (d) N/A, Vesting schedule in A-11.02 is equal to or more
favorable than (a) or (b) above.
However, this Section does not apply to the Account balance of any
Participant who does not have an Hour of Service after the Plan has
initially become Top-Heavy. Such Participant's Account balance
attributable to Employer contributions and forfeitures shall be
determined without regard to this Section.
21
The adopting Employer may not rely on an Opinion Letter issued by the National
Office of the Internal Revenue Service as evidence that the Plan is qualified
under Section 401 of the Internal Revenue Code. In order to obtain reliance
with respect to plan qualification, the Employer must apply to the appropriate
key district office for a Determination Letter.
This adoption agreement may be used only in conjunction with basic plan document
#01.
Provided the adoption of this Plan is properly registered with the Prototype
Sponsor, the Prototype Sponsor shall inform the adopting Employer of any
amendment made to the Plan or of the discontinuance or abandonment of the Plan.
The adoption of the Plan is not properly registered unless the attached
registration form along with the applicable registration fee is returned to:
Lincoln National Life Insurance Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ #▇▇▇▇
Ft. ▇▇▇▇▇, IN 46801-2248
Inquiries by adopting Employers regarding the adoption of this Plan, the
intended meaning of any Plan provisions, or the effect of the Opinion Letter may
be directed to the Prototype Sponsor at the above address or phone (219) 455-
4940.
22
USE OF THIS PLAN DOCUMENT WITHOUT PROPER REGISTRATION AND PAYMENT OF THE
APPLICABLE REGISTRATION FEE CONSTITUTES AN UNAUTHORIZED USE.
THE EMPLOYER REPRESENTS THAT IS HAS CONSULTED WITH ITS ATTORNEY WITH RESPECT TO
ITS ADOPTION OF THIS PLAN, AND AGREES TO THE PROVISIONS OF THE PLAN AND TRUST.
IN WITNESS HEREOF, the Employer has caused this Agreement to be signed by its
duly authorized Officer and the Trustee(s) have accepted the appointment and
signed this Agreement.
PEOPLES BLDG. & LOAN
-------------------------------------------
(Legal Name of Employer)
BY:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
(Signature of Officer)
▇▇▇▇ ▇▇▇▇▇
_______________________________ -------------------------------------------
(Date) (Typed or Printed Name
and Title of Officer)
Accepted By:
9-8-92 /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------- -------------------------------------------
(Date) (Signature of Trustee)
9-8-92 /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------- -------------------------------------------
(Date) (Signature of Trustee)
9-10-92 /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------- -------------------------------------------
(Date) (Signature of Trustee)
Participating Employer Authorized Signature Date
---------------------- -------------------- ----
________________________ ________________________ ___________________
________________________ ________________________ ___________________
________________________ ________________________ ___________________
________________________ ________________________ ___________________
Failure to properly complete this Adoption Agreement may result in
disqualification of the Plan.
23
AGREEMENT #1 AMENDING
Peoples Building and Loan Association, Inc.
401(k) Salary Reduction Plan and Trust
THIS AGREEMENT, made and entered in this 11th day of July, 1994, by and between
Peoples Building and Loan Association, Inc. organized under the laws of Indiana
with principal offices at Tell City, Indiana (hereinafter called the "Employer"
or the "Company") and ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇ hereinafter
referred to as Trustees):
W I T N E S S E T H:
--------------------
That at a meeting of the Board of Directors of the Company held on the 11th day
of July, 1994, certain amendments to the 401(k) Salary Reduction Plan and Trust
were authorized and directed:
Now, therefore, it is agreed by and between the parties hereto that the
aforementioned 401(k) Salary Reduction Plan and Trust Agreement be and it is
hereby amended effective September 1, 1994 as follows:
Section A-3.07 shall be amended to read as follows:
"This plan utilizes Daily Accounting."
Section A-4.02(a) shall be amended to read ad follows:
"The Employer shall make Matching Contributions to the Plan on behalf of
all Participants who elect to have Elective Deferrals made under the Plan
and who are credited with at least one Hour of Service during the Plan Year
and regardless of Employment on the last day of the Plan year.
The preceding notwithstanding, for Plan Years beginning after December 31,
1989, if the Plan would otherwise fail to satisfy the requirements of Code
Sections 401(a)(26) or 410(b) because the Employer contributions have not
been allocated to a sufficient number or percentage of Participants for a
Plan Year, then the following rules shall apply:
(1) The group of Participants eligible to share in the Employer's
contribution shall be expanded to include all Participants who
are employed on the last day of the Plan Year and who are
credited with at least 500 Hours of Service.
(2) If after the application of paragraph (1) above, the applicable
test is still not satisfied, then the group of Participants
eligible to share in the Employer's contribution shall be further
expanded to include all Participants who are credited with at
least 500 Hours of Service regardless of Employment on the last
day of the Plan Year.
Note: Employer includes all employers which are required to be
aggregated with the Employer under Code Sections 414(b), (c), (m)
or (o)."
Section 6.02 shall be amended to read as follows:
"Life Insurance shall not be purchased under the Plan."
IN WITNESS WHEREOF, the Employer has caused this agreement to be signed by its
duly authorized officer and the Trustees have also signed this amendment.
Peoples Building and Loan Association, Inc.
-------------------------------------------
Name of Employer
BY: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------------
Signature of Officer
July 11, 1994 ▇▇▇▇ ▇▇▇▇▇, President
------------- ------------------------------------------
Date Typed or Printed Name and
Title of Officer
Accepted By:
July 11, 1994 /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------- ------------------------------------------
Date Signature of Trustee
July 11, 1994 /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------- ------------------------------------------
Date Signature of Trustee
July 11, 1994 /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------- ------------------------------------------
Date Signature of Trustee
AGREEMENT #2 AMENDING
PEOPLES BUILDING AND LOAN ASSOCIATION, INC.
401(k) Salary Reduction Plan and Trust
THIS AGREEMENT, made and entered into this 7th day of October, 1996, by and
between Peoples Bldg. and Loan organized under the laws of Indiana with
principal offices at Tell City (herein after called the "Employer" or the
"Company") and ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇ (hereinafter
referred to as Trustees):
W I T N E S S E T H
-------------------
That at a meeting of the Board of Directors of the Company held in the 7th day
of October, 1996, certain amendments to the 401(k) Savings & Retirement
Prototype Plan were authorized and directed:
Now, therefore, it is agreed by and between the parties hereto that the
aforementioned 401(k) Savings & Retirement Plan and Trust Agreement be and it is
hereby amended effective September 1, 1996 as follows:
Section A-6.05 shall be amended to read as follows:
"Participant Loans shall be permitted in accordance with the Employer's
written loan policy."
IN WITNESS WHEREOF, the employer as caused this agreement to be signed by its
duly authorized officer and the Trustees have also signed this amendment.
Peoples Building and Loan Association, Inc.
-------------------------------------------
Name of Employer
BY: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
Signature of Officer
10/7/96 ▇▇▇▇ ▇▇▇▇▇, President
------- -------------------------------------------
Date Typed or Printed Name and
Title of Officer
Accepted By:
10-7-96 /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------- -------------------------------------------
Date Signature of Trustee
10/7/96 /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------- -------------------------------------------
Date Signature of Trustee
7 Oct 96 /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------- -------------------------------------------
Date Signature of Trustee
Defined Contribution
--------------------
Prototype
---------
Basic Plan Document
-------------------
Approved April 30, 1992
LINCOLN NATIONAL
LIFE INSURANCE CO.
------------------
A part of LINCOLN NATIONAL CORPORATION
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
ADOPTS
AMENDMENT NO. I
Attached to and made a part of Defined Contribution Prototype Plan Basic Plan
#01 used in conjunction with the following Adoption Agreements:
PLAN TYPE IRS SERIAL # FORM #
--------- ------------ ------
Non-Standardized Money Purchase D359967a 27365NS-MP
Standardized Money Purchase D259968a 27365S-MP
Non-Standardized Profit Sharing D359969a 27365NS-PS
Standardized Profit Sharing D259970a 27365S-PS
Non-Standardized Target Benefit D360949a 27365NS-TB
Standardized Target Benefit D260948a 27365S-TB
Non-Standardized 401(k) Salary Reduction D359971a 27365NS401K
Standardized 401(k) Salary Reduction D259972a 27365S401K
Pursuant to the authority reserved by Section 12.01 of Article XII of The
Lincoln National Life Insurance Company Defined Contribution Prototype Plan
Basic Plan #01 (the "Prototype Plan"), the Prototype Plan (and each individual
Plan maintained in the form of the Prototype Plan) is hereby amended, effective
January 1, 1993, as follows:
Article XII is amended by the addition of the following paragraph.
"12.08 This Article applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this Article, a Distributee
may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution
paid directly to an Eligible Retirement Plan specified by the Distributee
in a Direct Rollover.
DEFINITIONS:
(a) Eligible Rollover Distribution: An Eligible Rollover Distribution is
any distribution of all or any portion of the balance to the credit of
the Distributee, except that an Eligible Rollover Distribution does
not include: any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint lives
(or joint life expectancies) of the Distributee and the Distributee's
designated beneficiary, or for a specified period of ten years or
more; any distribution to the extent such distribution is required
under section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with
respect to Employer securities).
(b) Eligible Retirement Plan: An Eligible Retirement Plan is an individual
retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code,
an annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that accepts
the Distributee's Eligible Rollover distribution. However, in the case
of an Eligible Rollover Distribution to the surviving spouse, an
Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
(c) Distributee: A Distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's Surviving Spouse and the
Employee's or former Employee's Spouse or former Spouse who is the
alternate payee under a qualified domestic relations order, as defined
in section 414(p) of the Code, are Distributees with regard to the
interest of the Spouse or former Spouse.
(d) Direct Rollover: A Direct Rollover is a payment by the plan to the
Eligible Retirement plan specified by the Distributee. "
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
ADOPTS
AMENDMENT NO. II
Attached to and made a part of Defined Contribution Prototype Plan Basic Plan
#01 used in conjunction with the following Adoption Agreements:
PLAN TYPE IRS SERIAL # FORM #
--------- ------------ ------
Non-Standardized Money Purchase D359967a 27365NS-MP
Standardized Money Purchase D259968a 27365S-MP
Non-Standardized Profit Sharing D359969a 27365NS-PS
Standardized Profit Sharing D259970a 27365S-PS
Non-Standardized Target Benefit D360949a 27365NS-TB
Standardized Target Benefit D260948a 27365S-TB
Non-Standardized 401(k) Salary Reduction D359971a 27365NS401K
Standardized 401(k) Salary Reduction D259972a 27365S401K
Pursuant to the authority reserved by Section 12.01 of Article XII of The
Lincoln National Life Insurance Company Defined Contribution Prototype Plan
Basic Plan #01 (the "Prototype Plan"), the Prototype Plan (and each individual
Plan maintained in the form of the Prototype Plan) is hereby amended, effective
January 1, 1994, as follows:
Section 1.13 is amended by the addition of the following paragraphs.
"In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for plan
years beginning on or after January 1, 1994, the annual compensation of
each employee taken into account under the plan shall not exceed the OBRA
'93 annual compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with section 401(a)(17)(B) of the Internal Revenue
Code. The cost-of-living adjustment in effect for a calendar year applies
to any period, not exceeding 12 months, over which compensation is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93 annual
compensation limit will be multiplied by a fraction, the numerator of which
is the number of months in the determination period, and the denominator of
which is 12.
For plan years beginning on or after January 1, 1994, any reference in this
plan to the limitation under section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into account in
determining an employee's benefits accruing in the current plan year, the
compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period.
For this purpose, for determination periods beginning before the first day
of the first plan year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000."
Section 9.04 is amended by the addition of the following paragraph.
"(d) THIS SECTION SHALL APPLY IF SECTION 8.09 IS OPERATIVE. If a
distribution is one to which sections 401(a)(11) and 417 of the Internal
Revenue Code do not apply, such distribution may commence less than 30 days
after the notice required under section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(1) the plan administrator clearly informs the participant that the
participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
(2) the participant, after receiving the notice, affirmatively elects a
distribution.
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
ADOPTS
AMENDMENT NO. III
Attached to and made a part of Defined Contribution Prototype Plan Basic Plan
#01 used in conjunction with the following Adoption Agreements:
PLAN TYPE IRS SERIAL # FORM #
--------- ------------ ------
Non-Standardized Money Purchase D359967a 27365NS-MP
Standardized Money Purchase D259968a 27365S-MP
Non-Standardized Profit Sharing D359969a 27365NS-PS
Standardized Profit Sharing D259970a 27365S-PS
Non-Standardized 401(k) Salary Reduction D359971a 27365NS401K
Standardized 401(k) Salary Reduction D259972a 27365S401K
Pursuant to the authority reserved by Section 12.01 of Article XII of The
Lincoln National Life Insurance Company Defined Contribution Prototype Plan
Basic Plan #01 (the "Prototype Plan"), the Prototype Plan (and each individual
Plan maintained in the form of the Prototype Plan) is hereby amended, effective
January 1, 1995, unless otherwise specified, as follows:
Section 1.08 of Article I is amended to read as follows:
"1.08 "ANNUITY AND ANNUITY STARTING DATE": A straight life annuity means an
annuity payable in equal installments for the life of the participant that
terminates upon the participant's death. An Annuity Starting Date is the
first day a payment is made pursuant to Article VIII."
Section 1.15 of Article I is amended to read as follows:
"1.15 "CONTRIBUTION PERCENTAGE AMOUNTS": The sum of the Employee
Contributions and Matching Contributions under the Plan on behalf of the
Participants for the Plan Year. Such Contribution Percentage Amounts shall
not include Matching Contributions that are forfeited either to correct
Excess Aggregate Contributions or because the contributions to which they
relate are Excess Deferrals, Excess Contributions, or Excess Aggregate
Contributions. The Employer may include Elective Deferrals (to the extent
needed to satisfy the Average Contribution Percentage test described in
Section 4.08(a), and subject to such other requirements as may be
prescribed by the Secretary of the Treasury) in the Contribution Percentage
Amounts so long as the ADP test is met before the Elective Deferrals are
used in the ACP test and continues to be met following the exclusion of
those Elective Deferrals that are used to meet the ACP test."
Section 1.49 of Article I is amended by the addition of the following paragraph:
"A Participant is treated as benefiting under the plan for any Plan Year
during which the participant received or is deemed to receive an allocation
in accordance with Internal Revenue Code Section 1.410(b)-3(a)."
Section 3.01 of Article III is renumbered 3.01(a) and titled EMPLOYER
CONTRIBUTIONS.
1
A new Section 3.01(b) is added to Section 3.01 of Article III to read as
follows:
"3.01 (b) ALLOCATION FORMULAS
(1) General: The Employer Contribution and forfeitures (if applicable) for
any Plan Year will be allocated or contributed to the Participant's
Accounts of Participants eligible to receive a contribution on the
allocation date or dates in accordance with the allocation or contribution
formula specified in the Section 3.01 of the Adoption Agreement.
(2) Profit Sharing Plan Allocation Formula
(i) Non-Integrated Formula: On a pro-rata basis to all Participants
in the proportion that a Participant's Compensation bears to the total
of all Participants' Compensation.
(ii) Integrated Formula (Integrated with Social Security):
STEP ONE: In any Plan Year the Plan is Top-Heavy, contributions and
forfeitures (if applicable) shall be allocated to all Participants'
Accounts in the ratio that each Participant's Compensation bears to
all Participant's Compensation, but not in excess of 3% of such
Compensation.
(If the plan is not top-heavy, proceed to step two.)
STEP TWO: Any contributions and forfeitures not allocated in STEP ONE
shall be allocated to each Participant's Account in the ratio that the
sum of each Participant's total Compensation plus Compensation in
excess of the integration level bears to the sum of all Participants
total Compensation plus Compensation in excess of the integration
level, but not in excess of the maximum disparity rate. In the case of
any Participant who has exceeded the Cumulative Permitted Disparity
Limit defined below, two times such Participant's total Compensation
for the Plan Year will be taken into account.
STEP THREE: Any remaining Employer contributions or forfeitures shall
be allocated to each Participant's Account in the ratio that each
Participant's total Compensation for the Plan Year bears to all
Participants' total Compensation for that year.
(3) Money Purchase Plan Contribution Formula
(i) Non-Integrated Formula: The Employer shall contribute on behalf
of each eligible Participant an amount specified in Section 3.01 (b)
of the Adoption Agreement.
(ii) Integrated Formula:
A % as specified in Section 3.01 (b) (i) or (ii) of the Adoption
Agreement, of each Participant's Compensation (in Top-Heavy Plan Years
the contribution shall be the greater of the amount shown or 3% of
Compensation), plus a % as specified in Section 3.01(b) (iii) of the
Adoption Agreement (excess contribution percentage) of
2
each Participant's Compensation in excess of the integration level
[may not be greater than the lesser of the percentage in A-3.01 (b)
(i) or the maximum disparity rate]. However, in the case of any
Participant who has exceeded the Cumulative Permitted Disparity Limit,
the Employer will contribute for each such Participant an amount equal
to the excess contribution percentage multiplied by the Participant's
total Compensation.
(4) Integration Level: The integration level shall be selected in A-
3.01(b)(3), A-3.01(b)(4), or A-3.02(d)(2) of the Adoption Agreement, but
shall not exceed The Taxable Wage Base [the contribution and benefit base
in effect under Section 230 of the Social Security Act of the Code in
effect as of the first day of the Plan Year.]
The maximum disparity rate is equal to the lesser of 5.7%, or the
applicable percentage determined in accordance with the table below:
If the integration level:
Is more But not more The applicable
than than percentage is
$0.00 $X* 5.7%
X* 80% of TWB*** 4.3%
80% of TWB*** Y** 5.4%
* X = the greater of $10,000 or 20% of the TWB.
** Y = any amount more than 80% of the TWB but less than 100% of the TWB.
*** TWB = Taxable Wage Base at the beginning of the Plan Year.
(5) Annual Overall Permitted Disparity Limit: Pursuant to Section 16.03,
only one paired plan adopted by the Employer may be integrated with Social
Security. This Plan may not provide for permitted disparity (integration
with Social Security) if the Employer maintains any other plan that
provides for permitted disparity and benefits any of the same Participants.
(6) Cumulative Permitted Disparity Limit: Effective for Plan Years
beginning on or after January 1, 1995, the Cumulative Permitted Disparity
Limit for a Participant is 35 total cumulative permitted disparity years.
Total cumulative permitted years means the number of years credited to the
Participant for allocation or accrual purposes under this Plan, any other
qualified plan or simplified employee pension plan (whether or not
terminated) ever maintained by the employer. For purposes of determining
the Participant's Cumulative Permitted Disparity Limit, all years ending in
the same calendar year are treated as the same year. If the Participant has
not benefited under a defined benefit or target benefit plan for any year
beginning on or after January 1, 1994, the Participant has no Cumulative
Permitted Disparity Limit.
(7) For purpose of this Section, Compensation shall mean Compensation as
defined in Section 1.13 of the Plan."
3
The first paragraph of Section 3.03 of Article III is amended to read as
follows:
"3.03 If so designated in the Adoption Agreement, rollover contributions
may be made to the Plan. Such contributions may be in the form of cash
and/or in the form of a Participant note representing a plan loan offset
amount, and shall consist of:
(a) all or a portion of the amount received in a "Eligible Rollover
Distribution" as defined in Code Section 402(c)(4), provided that such
distribution is from a plan which is qualified under Section 401(a) of
the Code; or
(b) the amount received in a distribution described in Section
408(d)(3)(A)(ii) of the Code from an individual retirement account,
annuity, or bond, the proceeds of which are attributed solely to a
rollover contribution from a plan qualified under Section 401(a) of
the Code.
The rollover contribution must be made within 60 days following the date of
the distribution. If a rollover includes deductible voluntary
contributions, the amount of the rollover attributable to such
contributions shall be added to the deductible voluntary contribution
account under this Plan."
A new Section 3.11 is added to Article III to read as follows:
"3.11 Omission of Participant shall be corrected as follows:
(a) If the Plan is a money purchase plan or a target benefit plan and,
if in any Plan Year, any Employee who should be included as a
Participant is omitted by not following the terms of the Plan and
discovery of such omission is not made until after a contribution by
the Employer for the year has been made and allocated, the Employer
shall make a subsequent contribution to include earnings thereon, with
respect to the omitted Employee in the amount which the Employer would
have contributed with respect to that Employer had he or she not been
omitted.
(b) If the Plan is a profit sharing plan, and if in any Plan Year, any
Employee who should be included as a participant is omitted by not
following the terms of the plan and discovery of such omission is not
made until after the Employer Contribution has been made and
allocated, then the Plan Administrator must re-do the allocation (if a
correction can be made) and inform the Employee. Alternatively, the
Employer may choose to contribute for the omitted Employee the amount
to include earnings thereon, which the Employer would have contributed
for the Employee."
A new Section 3.12 is added to Article III to read as follows:
3.12 Erroneous inclusion of employee shall be corrected as follows:
(a) If the Plan is a money purchase plan or a target benefit plan and,
if in any Plan Year, any Employee who should have been omitted as a
Participant is erroneously included and discovery of such inclusion is
not made until after a contribution by the Employer and/or Employee
has been made and allocated,
4
the erroneous contribution shall be forfeited. The forfeiture shall be
held in a non-interest earning suspense account until the next
allocation date and allocated in accordance with Section 3.08.
(b) If the Plan is a profit sharing plan and if in any Plan Year, any
Employee who should have been omitted as a Participant is erroneously
included and discovery of such inclusion is not made until after a
contribution by the Employer and/or Employee has been made and
allocated, any erroneous Elective Deferral and attributable earnings
will be returned to the Employee as soon as practicable after the
discovery of the error. Any Employer Matching or Employer
Discretionary contributions shall be forfeited. The forfeiture shall
be held in a non-interest earning suspense account until the next
allocation date and allocated in accordance with Section 3.08."
Section 4.02 of Article IV is amended by the addition of the following
paragraph:
"(c) Notwithstanding any other provisions of the Plan, Matching
Contributions shall be forfeited (even if vested) if the contributions to
which they relate are Excess Elective Deferrals, Excess Contributions,
Excess Aggregate Contributions or excess annual contributions which are
distributed pursuant to Article V. Such Forfeitures shall be disposed of in
accordance with Section 3.08."
Section 4.06(b) of Article IV is amended by the addition of the following
paragraph:
"(7) In the event that the Plan Administrator determines that it is not
likely that the ADP and/or ACP test will be satisfied for a particular Plan
Year unless certain steps are taken prior to the end of such Plan Year, the
Plan Administrator may require Participants making Elective Deferrals who
are Highly Compensated Employees to reduce or eliminate their Elective
Deferrals for such Plan Year in order to satisfy such requirements. Said
reduction or elimination shall also be required by the Plan Administrator
in the event that the Plan Administrator anticipates that the Employer will
not be able to deduct all Employer Contributions from its income for
Federal income tax purposes."
Section 4.06(c)(1) of Article IV is amended to read as follows:
"(1) any Elective Deferrals made pursuant to the Participant's deferral
election, (including Excess Elective Deferrals of Highly Compensated
Employees), but excluding (a) Excess Elective Deferrals of Non-highly
Compensated Employees that arise solely from Elective Deferrals made under
the Plan or plans of this Employer and (b) Elective Deferrals that are
taken into account in the Contribution Percentage test (provided the ADP
test is satisfied both with and without exclusion of these elective
Deferrals), and"
Section 4.07(d) of Article IV is amended to read as follows:
"(d) Accounting for Excess Contributions: Excess Contributions shall be
-----------------------------------
distributed from the Participant's Elective Deferral Account. The
distribution shall be made first from unmatched Elective Deferrals and,
thereafter from Elective Deferrals
5
which were matched. Excess Contributions shall be distributed from the
Participant's Qualified Non-Elective Contribution account only to the
extent that such Excess Contributions exceed the balance in the
Participant's Elective Deferral Account."
Section 4.14(a)(3) of Article IV is amended to read as follows:
"(3) Payment of tuition, related educational fees, and room and board
expenses, for the next 12 months of post-secondary education for the
Employee, the Employee's Spouse or dependents."
The first paragraph of Section 5.04 and Section 5.04(a) of Article V are amended
to read as follows:
"5.04 If pursuant to Section 5.03 or as a result of
-- the allocation of Forfeitures, or
-- a reasonable error in determining the amount of Elective Deferrals
that may be made with respect to any individual under the limits of
Section 415 of the Internal Revenue Code, there is an Excess
Amount, the excess shall be disposed of as follows:
(a) To the extent they would reduce the Excess Amount, any
nondeductible voluntary Employee Contributions (and earnings
thereon) shall be returned to the Participant, and any Elective
Deferrals (and earnings thereon) shall be distributed to the
Participant in the same manner as described in Sec. 4.07."
The first paragraph of Section 6.05 of Article VI is amended to read as follows:
"6.05 If elected in the Adoption Agreement, the Plan Administrator shall
direct the Trustee to make loans to Participants and Beneficiaries in
accordance with a loan policy which shall be evidenced by a separate
written document. Such written document shall include, at a minimum, the
following: (i) the identity of the person or positions authorized to
administer the Participant loan program; (ii) the procedure for applying
for loans; (iii) the basis on which loans will be approved or denied; (iv)
limitations (if any) on the types and amounts of loans offered; (v) the
procedure under the program for determining a reasonable rate of interest;
(vi) the types of collateral which may secure a Participant loan; and (vii)
the events constituting default and the steps that will be taken to
preserve Plan assets in the event of such default. Loans will be subject to
the following conditions:"
Section 6.05 is amended by deleting paragraph (i).
Section 7.04 of Article VII is amended to read as follows:
"7.04 As soon as practicable after the end of each Allocation Period, the
Plan Administrator shall convey to each Participant a statement of his/her
Account balances as of the Allocation Date. The Participant must notify the
Plan Administrator within thirty (30) days of the receipt of the statement
of any errors relevant to the allocation of the Participant's Account
balances in specific investments permitted under the Plan at the
Participant's direction ("investment mix"). If such notification is not
given within the prescribed period, the statement shall be deemed correct
with respect to the Participant's
6
choice of investment mix and any subsequent adjustments to that investment
mix shall be made on a prospective basis only. Neither the maintenance of
accounts nor the allocations of credits to accounts shall operate to vest
in any Participant any right to or interest in any assets of the trust
except as the Plan specifically provides."
Section 9.03 of Article IX is amended by the addition of the following
paragraph:
"The preceding notwithstanding, if
-- the Surviving Spouse has not consented to the election of a non-spouse
Beneficiary pursuant to a Qualified Election, and
-- the Participant had agreed that the Surviving Spouse may determine the
form of payment,
the Surviving Spouse may after the death of the Participant elect to
receive the benefit in any alternate form available under the Plan."
Section 9.04 of Article IX is amended with respect to distributions which
commence on or after September 22, 1995, by the addition of the following
paragraph:
"(e) If a distribution is one to which the Joint and Survivor and spousal
consent requirements of Sections 401(a)(11) and 417 of the Internal Revenue
Code apply, such distribution may commence at any time following the first
seven days after the Participant has received the QJSA explanation required
by Section 9.04(a), provided:
-- the Plan Administrator provides information to the Participant clearly
indicating that the Participant has a right to at least 30 days to
consider whether to waive the QJSA and consent to a form of
distribution other than QJSA,
-- the distribution occurs after the Participant has made an affirmative
distribution election,
-- applicable spousal consent has been obtained,
-- the Annuity Starting Date is a date after the explanation of the QJSA
is provided to the participant, and
-- the distribution election remains revocable until the later of the
Annuity Starting Date or the expiration of the seven-day period that
begins the day after the QJSA explanation is provided."
The first paragraph of Section 13.03 of Article XIII is amended to read as
follows:
"13.03 The Plan Administrator shall have the authority to administer this
Plan pursuant to the terms and conditions of this Plan. The Plan
Administrator has the absolute discretion to determine eligibility for
benefits and to construe and interpret the terms of the Plan. Delegation of
any ministerial or discretionary duties by the Plan Administrator does not
necessarily relieve him/her of the responsibility for these duties."
Section 15.02 of Article XV is amended by the addition of the following
paragraph:
"(e) Neither Elective Deferrals nor Matching Contributions may be taken
into account for purposes of satisfying the minimum allocation requirement
applicable to Top-Heavy Plans described in (a) above."
7
Article XVII is amended by the addition of the following two paragraphs:
"17.12 All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order". A
distribution to an "alternate payee" shall be permitted if the distribution
is authorized by a "qualified domestic relations order". Furthermore, if
the written procedures established by the Plan to administer distributions
under "qualified domestic relations orders" so provide, such distributions
may be made at a time when the affected Participant has not separated from
service and has not reached the "earliest retirement age" under the Plan.
For the purposes of this Section, "alternate payee", "qualified domestic
relations order" and "earliest retirement age" shall have the meaning set
forth under Internal Revenue Code Section 414(p)."
"17.13 Reliance on opinion letter, Standardized Adoption Agreements: The
employer may not rely on the opinion letter issued by the National Office
of the Internal Revenue Service as evidence that this plan is qualified
under section 401 of the Code unless the terms of the plan, as herein
adopted or amended, that pertain to the requirements of sections 401(a)(4),
401(a)(17), 401(1), 401(a)(5), 410(b) and 414(s) of the Code, as amended by
the Tax Reform Act of 1986 or later laws, (a) are made effective
retroactively to the first day of the first plan year beginning after
December 31, 1988 (or such date on which these requirements first become
effective with respect to this plan); or (b) are made effective no later
than the first day on which the employer is no longer entitled, under
regulations, to rely on a reasonable, good faith interpretation of these
requirements, and the prior provisions of the plan constitute such an
interpretation."
A new Article XVIII is added to read as follows:
ARTICLE XVIII
APPOINTMENT OF NON-DISCRETIONARY TRUSTEE
18.01 The Employer, pursuant to a resolution of its board of directors or
pursuant to a separate written instrument, may designate Delaware Management
Trust Company to serve as a nondiscretionary trustee to this Plan (the "Non-
Discretionary Trustee"). In such case, the Employer and the Non-Discretionary
Trustee shall enter into the trust agreement which is attached to and which
forms part of this Plan. Notwithstanding any term or provision expressed or
implied to the contrary in the prior Articles of this Plan or in the Adoption
Agreement, the duties and responsibilities of the Non-Discretionary Trustee
shall be governed exclusively by the provisions of such trust agreement.
Furthermore, and notwithstanding any term or provision expressed or implied in
the prior articles of this Plan or in the Adoption Agreement, any power and
responsibility reserved to the Trustee in the prior articles of this Plan or in
the Adoption Agreement shall instead be the power and responsibility of the Plan
Administrator, except for those powers and responsibilities of the Non-
Discretionary Trustee which are set forth in the trust agreement.
8
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
ADOPTS
AMENDMENT NO. IV
Attached to and made a part of Defined Contribution Prototype Plan Basic Plan
#01 used in conjunction with the following Adoption Agreements:
PLAN TYPE IRS SERIAL # FORM #
--------- ------------ ------
Non-Standardized Money Purchase D359967b 27365NS-MP
Standardized Money Purchase D259968b 27365S-MP
Non-Standardized Profit Sharing D359969b 27365NS-PS
Standardized Profit Sharing D259970b 27365S-PS
Non-Standardized 401(k) Salary Reduction D359971b 27365NS401K
Standardized 401(k) Salary Reduction D259972b 27365S401K
Pursuant to the authority reserved by Section 12.01 of Article XII of The
Lincoln National Life Insurance Company Defined Contribution Prototype Plan
Basic Plan #01 (the "Prototype Plan"), the Prototype Plan (and each individual
Plan maintained in the form of the Prototype Plan) is hereby amended as follows:
Section 17.14 shall be added to read as follows:
"17.14 Notwithstanding any provision of this plan to the contrary, to the
extent that any optional form of benefit under this plan permits a
distribution prior to the employee's retirement, death, disability, or
severance from employment, and prior to plan termination, the optional form
of benefit is not available with respect to benefits attributable to assets
(including the post-transfer earnings thereon) and liabilities that are
transferred, within the meaning of (S) 414(1) of the Internal Revenue Code
to this plan from a money purchase pension plan qualified under (S) 401(a)
of the Internal Revenue Code (other than any portion of those assets and
liabilities attributable to voluntary employee contributions)."
Section 17.14 shall be operative only if the Plan is a Profit Sharing or
401(k) Plan. Section 17.14 is effective the first day of the plan year
commencing after December 12, 1994, for plans other than those entitled to
extended reliance. Section 17.14 is effective the first day of the plan
year that begins on or after January 1, 2000, for plans entitled to
extended reliance who have not transferred assets from a money purchase
pension plan after the later of the date of the most recent determination
letter or December 12, 1994. For plans that have transferred money purchase
assets after the later of the date of the most recent determination letter
or December 12, 1994, Section 17.14 shall be effective the first day of the
plan year during which such transfer takes place.
Section 17.15 shall be added to read as follows:
"17.15 Notwithstanding any provision of this plan to the contrary,
contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with (S) 414(u) of the
Internal Revenue Code."
Section 17.15 shall be effective December 12, 1994.
Section 17.16 shall be added to read as follows:
17.16 Loan repayments will be suspended under this plan as permitted under
(S) 414(u)(4) of the Internal Revenue Code."
Section 17.16 shall be effective December 12, 1994, and shall be operative
only if the Plan Sponsor's Loan Policy so provides.
GENERAL INFORMATION
This Plan and Trust and the Adoption Agreement have been approved as to form by
the Internal Revenue Service (IRS) for corporate and non-corporate Employers.
The Employer adopts the Plan and Trust by completing and signing the Adoption
Agreement. In order to retain prototype status, no changes in the wording of
this Plan and Trust, except the elections by the Employer in the Adoption
Agreement, can be made.
In general, the approval of this Prototype by the IRS does not constitute a
determination as to the qualification of the Plan as adopted by the Employer,
nor as to the exempt status of the related Trust. This determination is made by
the Employer's local District Director of Internal Revenue upon submission by
the Employer of an Application for Determination for Defined Contribution Plan,
IRS Form 5307, with a copy of the executed Adoption Agreement, and such
additional information and documents as the District Director may require.
There is an exception for certain standardized form plans. An Employer who
adopts a standardized form plan for which a favorable opinion letter has been
issued does not need a determination letter in order to obtain reliance provided
the Employer does not maintain, and has never maintained at any time (except in
the case of one combination of paired plans) any other qualified plan, including
a standardized form plan or after December 31, 1985, a welfare benefit fund
which provides post-retirement medical benefits allocated to separate accounts
for key-employees.
This Plan and Trust and Adoption Agreement are instruments having significant
legal and tax implications for the Employer. Each Employer must assume the
responsibility for the legal and tax aspects pertaining to its Plan. Neither The
Lincoln National Life Insurance Company (hereinafter referred to as "Lincoln")
nor its representatives can give any assurance that the Plan as adopted by a
given Employer shall be qualified by the IRS. Accordingly, the Lincoln
encourages the Employer to consult with its legal and tax advisors to the extent
considered necessary.
This basic plan document #01 may be used in conjunction with the following
adoption agreements:
Plan Type IRS Serial # Form #
--------- ------------ ----------
Non-Standardized Money Purchase D359967a 27365NS-MP
Standardized Money Purchase D259968a 27365S-MP
Non-Standardized Profit Sharing D359969a 27365NS-PS
Standardized Profit Sharing D259970a 27365S-PS
Non-Standardized Target Benefit
Standardized Target Benefit
Non-Standardized 401(k) Salary Reduction D359971a 27365NS401K
Standardized 401(k) Salary Reduction D259972a 27365S401K
PROCEDURE
a. The Employer and Trustee(s) should sign enough copies of the Adoption
Agreement for all those needing a copy. This usually includes one for the
Employer, one for the Trustee, one for the Plan Administrator if other than
the Trustee, one for Lincoln, and one for the IRS.
b. One copy should be filed with Lincoln along with other information,
applications, and other documents as required by Lincoln.
c. If appropriate, the Employer should file the Plan with the IRS (by the due
date for filing corporate tax returns for the year in which the Plan is
adopted or amended) to obtain a Letter of Determination that the Plan as
established or amended is qualified. In addition, the Employer must furnish
information, reports, and certain documents as required for the IRS, the
Department of Labor, Participants, and Beneficiaries receiving any benefits
from the Plan.
d. Retirement Plan Services (Plan Implementation, Ongoing Plan Management and
Allocation Services) are available for a fee upon request provided the Plan
meets the servicing guidelines. Such services performed by authorization of
the Plan Fiduciaries are only of the ministerial and mechanical type.
Lincoln assumes no fiduciary duties on behalf of the Plan nor offers any
legal advice. Any information given is presented as information only and
not as advice, recommended action, or policy decisions for the Plan.
2
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
DEFINED CONTRIBUTION PROTOTYPE PLAN
BASIC PLAN DOCUMENTS #01
TABLE OF CONTENTS
Article I Definitions and Construction 4
Article II Eligibility 21
Article III Contribution and Allocations 23
Article IV Cash or Deferred Arrangement (CODA) 26
Article V Limitations on Allocations To Participants' Accounts 35
Article VI Investment of Contributions 41
Article VII Valuation of Assets 45
Article VIII Benefits 46
Article IX Joint and Survivor Annuity Requirements 49
Article X Distribution Requirements 54
Article XI Termination of Service 58
Article XII Amendment or Termination of Plan 62
Article XIII Administration and Fiduciaries 64
Article XIV Insurer 67
Article XV Top Heavy 68
Article XVI Paired Plans 70
Article XVII Miscellaneous 71
3
ARTICLE I
DEFINITIONS AND CONSTRUCTION
The following words and phrases as used in this Plan and Trust (hereinafter
referred to as 'Plan') shall have the meanings set forth in this Article, unless
a different meaning is clearly required by the context. Refer to the same
Section number in the Adoption Agreement as in the Plan for cross-reference
purposes.
1.01 "ACCOUNT": The value of the Participant's share of the General Investment
Account, and/or the Participant's Designated Investment Account, and/or the
Participant's Directed Group Account, if any.
(a) The General Investment Account includes all investments which are held
as general assets of the Plan. The Trustee shall manage the investment
of this account. The account shall include the total of all deposits
credited to the account decreased by any amounts withdrawn from or
charged against the account, and less any allocations to the
Participant's Designated Investment Account and/or the Participant's
Directed Group Account. The Participant's share of the General
Investment Account shall be the value determined as of the end of the
Allocation Period prior to the event making the account payable,
adjusted to reflect advance contributions which have not accrued or
contributions which have accrued to the Participant, but have not been
credited, and any withdrawals which have not been debited.
(b) The Designated Investment Account shall consist of investments made at
the Participant's direction as permitted under Section A-6.03 of the
Adoption Agreement. The number and types of investments made available
shall be determined by the Trustee(s). Such investments may include
individual insurance or annuity policies purchased on behalf of a
Participant. The Participant's Designated Investment Account shall be
valued as of the date the account is surrendered and shall be adjusted
to reflect advance contributions which have not accrued or
contributions which have accrued to the Participant but have not been
credited and any withdrawals which have not been debited.
(c) The Directed Group Account consists of one or more investment funds
provided by the Trustee into and among which Participants may, if
permitted under Section A-6.03 of the Adoption Agreement, direct the
investment of their Account balances. The Participant's share of the
Directed Group Account shall be the value determined as of the end of
the Allocation Period prior to the event making the account payable
and shall be adjusted to reflect advance contributions which have not
accrued or contributions which have accrued to the Participant but
have not been credited and any withdrawals which have not been
debited.
1.02 "ACTUAL DEFERRAL PERCENTAGE": For a specified group of Participants for a
Plan Year, the average of the ratios (calculated separately for each Participant
in such group) of:
(a) the amount of Employer contributions (Elective Deferrals and Qualified
Non-elective Contributions) actually paid over to the trust on behalf
of such Participant for the Plan Year, to
(b) the Participant's Compensation for such Plan Year (whether or not the
Employee was a Participant for the entire Plan Year).
4
1.03 "ADOPTION AGREEMENT": The agreement executed by the Employer and the
Trustee(s) named therein adopting this Plan, a copy of which is attached and
made a part of this Plan.
1.04 "AGE": For the Plan Year during which this Plan is adopted and each
subsequent Plan Year "Age" shall mean actual attained age.
1.05 "AGGREGATE LIMIT": The greater of:
(a) the sum of 1.25 times the greater of the relevant Actual Deferral
Percentage or the relevant Average Contribution Percentage, and two
(2) percentage points plus the lesser of the relevant Actual Deferral
Percentage or the relevant Average Contribution Percentage In no
event, however, shall this last amount exceed twice the lesser of the
relevant Actual Deferral Percentage or the relevant Average
Contribution Percentage; or
(b) the sum of 1 25 times the lesser of the relevant Actual Deferral
Percentage or the relevant Average Contribution Percentage, and two
(2) percentage points plus the greater of the relevant Actual Deferral
Percentage or the relevant Average Contribution Percentage In no
event, however, shall this last amount exceed twice the greater of the
relevant Actual Deferral Percentage or the relevant Average
Contribution Percentage.
For the purposes of this Section, the term ''relevant Actual Deferral
Percentage" means the Actual Deferral Percentage of the group of non-highly
compensated employees eligible under the arrangement subject to Code Section
401(k) for the Plan Year, and the term "relevant Average Contribution
Percentage" means the Average Contribution Percentage of the group of non-highly
compensated employees eligible under the Plan subject to Code Section 401(m) for
the Plan Year beginning with or within the Plan Year of the arrangement subject
to Code Section 401(k).
1.06 "ALLOCATION PERIOD": The period of time between an allocation date and the
next following allocation date The allocation date shall be the last day of the
Plan Year and such other date or dates as may be determined by the Trustee.
1.07 "ANNUITANT": Any person to whom annuity payments are being made under the
terms of this Plan.
1.08 "ANNUITY STARTING DATE": The first day a payment is made pursuant to
Article VIII.
1.09 "APPLICABLE LIFE EXPECTANCY": The life expectancy (or joint and last
survivor expectancy) calculated using the attained age of the Participant (or
Designated Beneficiary) as of the Participant's (or Designated Beneficiary's)
birthday in the applicable calendar year reduced by one for each calendar year
which has elapsed since the date life expectancy was first calculated If life
expectancy is being recalculated, the Applicable Life Expectancy shall be the
life expectancy as so recalculated The applicable calendar year shall be the
first Distribution Calendar Year, and if life expectancy is being recalculated
such succeeding calendar year.
1.10 "AVERAGE CONTRIBUTION PERCENTAGE": The average of the Contribution
Percentages of the Eligible Participants in a group.
1.11 "BENEFICIARY": Any individual(s) or legal entity designated to receive any
benefit under this Plan upon the death of a Participant.
5
1.12 "CODE": The Internal Revenue Code of 1986, as amended.
1.13 "COMPENSATION": Compensation means all of each Participant's wages [as
defined in Section 3401(a) of the Code for purposes of income tax withholding
but determined without regard to any rules that limit remuneration included in
wages based on the nature or location of the employment or the services
performed] received from a participating Employer. For any Self-employed
Individual covered under the Plan, Compensation shall mean Earned Income.
Compensation shall include only that compensation which is actually paid to the
Participant during the Plan Year.
Notwithstanding the above, Compensation shall include any amount which is
contributed by the Employer pursuant to a salary reduction agreement and which
is not includible in the gross income of the Employee under Sections 125,
402(a)(8), 402(h) or 403(b) of the Code.
For years beginning after December 31, 1988, the annual Compensation of each
Participant taken into account for determining all benefits provided under the
Plan for any determination period shall not exceed $200,000. This limitation
shall be adjusted by the Secretary at the same time and in the same manner as
under Section 415(d) of the Code, except that the dollar increase in effect on
January 1 of any calendar year is effective for years beginning in such calendar
year and the first adjustment to the $200,000 limitation is effected on January
1, 1990. If the period for determining Compensation used in calculating an
Employee's allocation for a determination period is a short Plan Year (i.e.
shorter than 12 months), the annual Compensation limit is an amount equal to the
otherwise applicable annual Compensation limit multiplied by a fraction, the
numerator of which is the number of months in the short Plan Year, and the
denominator of which is 12.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Section 414(q)(6) of the Code shall apply, except in
applying such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not attained
age 19 before the close of the year. If, as a result of the application of such
rules the adjusted $200,000 limitation is exceeded, then (except for purposes of
determining the portion of Compensation up to the integration level if this Plan
provides for permitted disparity), the limitation shall be prorated among the
affected individuals in proportion to each such individual's Compensation as
determined under this Section prior to the application of this limitation.
If Compensation for any prior determination period is taken into account in
determining an Employee's allocations or benefits for the current determination
period, the Compensation for such prior year is subject to the applicable annual
Compensation limit in effect for that prior year. For this purpose, for years
beginning before January 1, 1990, the applicable annual Compensation limit is
$200,000.
Unless specified otherwise, the preceding definition of Compensation shall be
effective for the Plan Year during which this Plan is adopted and for each
succeeding Plan Year.
1.14 "CONTRIBUTION PERCENTAGE": The ratio (expressed as a percentage) of the
Participant's Contribution Percentage Amounts to the Participant's Compensation
for the Plan Year (whether or not the Employee was a Participant for the entire
Plan Year).
1.15 "CONTRIBUTION PERCENTAGE AMOUNTS": The sum of the Employee Contributions
and Matching Contributions under the Plan on behalf of the Participant for the
Plan Year. Such Contribution Percentage Amounts shall not include Matching
6
Contributions that are forfeited either to correct Excess Aggregate
Contributions or because the contributions to which they relate are Excess
Deferrals, Excess Contributions, or Excess Aggregate Contributions.
1.16 "DESIGNATED BENEFICIARY": The individual who is designated as the
Beneficiary under the Plan in accordance with Section 401(a)(9) and the
regulations thereunder.
1.17 "DETERMINATION DATE": For any Plan Year subsequent to the first Plan Year,
the last day of the preceding Plan Year For the first Plan Year of the Plan, the
last day of that year.
1.18 "DISTRIBUTION CALENDAR YEAR": A calendar year for which a minimum
distribution is required For distributions beginning before the Participant's
death, the first Distribution Calendar Year is the calendar year immediately
preceding the calendar year which contains the Participant's Required Beginning
Date For distributions beginning after the Participant's death, the first
Distribution Calendar Year is the calendar year in which distributions are
required to begin pursuant to Section 10.05.
1.19 "EARLIEST RETIREMENT AGE": The earliest date on which, under the Plan, the
Participant could elect to receive retirement benefits.
1.20 "EARLY RETIREMENT DATE": The date as selected in A-8 02 of the Adoption
Agreement.
1.21 "EARNED INCOME": The net earnings from self-employment in the trade or
business with respect to which the Plan is established, for which personal
services of the individual are a material income-producing factor Net earnings
shall be determined without regard to items not included in gross income and the
deductions allocable to such items Net earnings are reduced by contributions by
the Employer to a qualified plan to the extent deductible under Section 404 of
the Code.
Net earnings shall be determined with regard to the deduction allowed to the
Taxpayer by Section 164(f) of the Code for taxable years beginning after
December 31, 1989.
1.22 "EFFECTIVE DATE": The date designated by the Employer in the Adoption
Agreement.
1.23 "ELECTION PERIOD": The period which begins on the first day of the Plan
Year in which the Participant attains age 35 and ends on the date of the
Participant's death If a Participant separates from service prior to the first
day of the Plan Year in which age 35 is attained, with respect to the Account
balance as of the date of separation, the Election Period shall begin on the
date of separation.
Pre-age 35 waiver: A Participant who shall not yet attain age 35 as of the end
of any current Plan Year may make a special Qualified Election to waive the
Qualified Preretirement Survivor Annuity for the period beginning on the date of
such election and ending on the first day of the Plan Year in which the
Participant shall attain age 35 Such election shall not be valid unless the
Participant receives a written explanation of the Qualified Preretirement
Survivor Annuity in such terms as are comparable to the explanation required
under Section 9 04(a) Qualified Preretirement Survivor Annuity coverage shall be
automatically reinstated as of the first day of the Plan Year in which the
Participant attains age 35 Any new waiver on or after such date shall be subject
to the full requirements of Article IX.
7
1.24 "ELECTIVE DEFERRALS": Any Employer contributions made to the Plan at the
election of the Participant, in lieu of cash compensation, including
contributions made pursuant to a salary reduction agreement or other deferral
mechanism. With respect to any taxable year, a Participant's Elective Deferral
is the sum of all Employer contributions made on behalf of such Participant
pursuant to an election to defer under any qualified cash or deferred
arrangement (CODA) as described in Section 401(k) of the Code, any simplified
employee pension cash or deferred arrangement as described in Section
402(h)(1)(B), any eligible deferred compensation plan under Section 457, any
plan as described under Section 501(c)(18), and any Employer contributions made
on behalf of a Participant for the purchase of an annuity contract under Section
403(b) pursuant to a salary reduction agreement. Elective Deferrals shall not
include any deferrals properly distributed as excess Annual Additions.
1.25 "ELIGIBILITY YEAR OF SERVICE": A 12 consecutive month period during which
the Employee completes at least 1,000 Hours of Service (as defined in A-1.38 of
the Adoption Agreement). The initial eligibility period shall be the 12
consecutive month period commencing on the date the Employee first performs an
Hour of Service for the Employer. The succeeding 12 consecutive month period
must commence with the first Plan Year which commences prior to the first
anniversary of the Employee's initial eligibility computation period regardless
of whether the Employee is entitled to be credited with 1,000 Hours of Service
during his initial eligibility computation period. An Employee who is credited
with 1,000 Hours of Service in both the initial eligibility computation period
and the first Plan Year which commences prior to the first anniversary of the
Employee's initial eligibility computation period must be credited with two
Years of Service for purposes of eligibility.
1.26 "ELIGIBLE PARTICIPANT": For the purpose of calculating the Average
Contribution Percentage, any Employee of the Employer who is eligible under the
terms of the Plan to make an Elective Deferral and to receive a corresponding
Matching Contribution.
1.27 "EMPLOYEE": Any employee of the Employer maintaining the Plan or of any
other employer required to be aggregated with such Employer under Sections
414(b), (c), (m) or (o) of the Code.
The term Employee shall also include any Leased Employee deemed to be an
Employee of any employer described in the previous paragraph as provided in
Sections 414(n) or (o) of the Code.
1.28 "EMPLOYEE CONTRIBUTION": Any contribution made to the plan by or on behalf
of a Participant that is included in the Participant's gross income in the year
in which made and that is maintained under a separate account to which earnings
and losses are allocated.
1.29 "EMPLOYER": The Employer(s) named in the Adoption Agreement which has
(have) adopted this Plan. In the case of a group of employers which constitutes
a Controlled Group of Corporations, or an Affiliated Service Group [as defined
in Sections 414(b) and 414(m), respectively, of the Code], or which constitutes
one or more trades or businesses whether or not incorporated which are under
common control [as defined in Section 414(c)], all such employers shall be
considered a single employer for purposes of determining minimum participation,
vesting standards. and limitations on benefits and contributions.
1.30 "ENTRY DATE": The date as designated in A-2.01 of the Adoption Agreement on
which an Employee may become an active Participant in the Plan after meeting the
eligibility requirements of Article II specified in the Adoption Agreement.
8
1.31 "ERISA": Public Law No. 93-406, the Employee Retirement Income Security Act
of 1974, as amended from time to time.
1.32 "EXCESS AGGREGATE CONTRIBUTIONS": With respect to any Plan Year, the excess
of:
(a) the aggregate Contribution Percentage Amounts taken into account in
computing the numerator of the Contribution Percentage actually made
on behalf of Highly Compensated Employees for such Plan Year, over
(b) the maximum Contribution Percentage Amounts permitted by the Average
Contribution Percentage test (determined by reducing contributions
made on behalf of Highly Compensated Employees in order of their
Contribution Percentages beginning with the highest of such
percentages).
Such determination shall be made after first determining Excess Elective
Deferrals pursuant to Section 1.34 and then determining Excess Contributions
pursuant to Section 1.33.
1.33 "EXCESS CONTRIBUTIONS": With respect to any Plan Year, the excess of:
(a) the aggregate amount of Employer contributions actually taken into
account in computing the ADP of Highly Compensated Employees for such
Plan Year, over
(b) the maximum amount of such contributions permitted by the ADP test
(determined by reducing contributions made on behalf of Highly
Compensated Employees in order of the ADPs, beginning with the highest
of such percentages).
1.34 "EXCESS ELECTIVE DEFERRALS": Those Elective Deferrals that are includible
in a Participant's gross income under Section 402(g) of the Code to the extent
such Participant's Elective Deferrals for a taxable year exceed the dollar
limitation under such Code Section. Excess Elective Deferrals shall be treated
as Annual Additions under the Plan, unless such amounts are distributed no later
than the first April 15 following the close of the Participant's taxable year.
1.35 "FIDUCIARY": Any person or corporation who exercises any discretionary
authority or discretionary control with respect to the management or disposition
of plan assets, renders any investment advice for a fee or other compensation,
or exercises any discretionary authority or responsibility for plan
administration. The Employer, Plan Administrator and Trustee shall be considered
fiduciaries.
1.36 "FORFEITURE": That portion of a Participant's Account that is not Vested,
and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a Participant's
Account; or
(b) the last day of the Plan Year in which the Participant incurs five (5)
consecutive One-Year Breaks in Service.
Note: The above definition of "Forfeiture" shall be effective as of the
first day of the Plan Year during which this Plan is adopted.
1.37 "HIGHLY COMPENSATED EMPLOYEE": The term Highly Compensated Employee
includes highly compensated active employees and highly compensated former
employees.
9
A highly compensated active employee includes any Employee who performs Service
for the Employer during the determination year and who, during the look-back
year:
(a) received Compensation from the Employer in excess of $75,000 (as
adjusted pursuant to Section 415(d) of the Code); or
(b) received Compensation from the Employer in excess of $50,000 [as
adjusted pursuant to Section 415(d) of the Code] and was a member of
the top-paid group for such year; or
(c) was an officer of the Employer and received Compensation during such
year that is greater than 50 percent of the dollar limitation in
effect under Section 415(b)(1)(A) of the Code.
The term Highly Compensated Employee also includes:
-Employees who are both described in the preceding sentence if the term
"determination year" is substituted for the term "look-back year" and the
Employee is one of the 100 Employees who received the most Compensation
from the Employer during the determination year; and
-Employees who are 5 percent owners at any time during the look-back year
or the determination veer
If no officer has satisfied the Compensation requirement of (c) above during 3
either a determination year or look-back year, the highest paid officer for such
year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The look back
year shall be the twelve-month period immediately preceding the determination
year.
A highly compensated former employee includes any Employee who separated from
Service (or was deemed to have separated) prior to the determination year,
performs no Service for the Employer during the determination year, and was a -
highly compensated active employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a family
member of either a 5 percent owner who is an active or former Employee or a
Highly Compensated Employee who is one of the 10 most highly compensated
employees ranked on the basis of Compensation paid by the Employer during such
year, then the family member and the 5 percent owner or top-ten Highly
Compensated Employee shall be aggregated. In such case, the family member and
percent owner or top-ten Highly Compensated Employee shall be treated as a
single Employee receiving Compensation and plan contributions or benefits equal
to the sum of such Compensation and contributions or benefits of the family
member and 5 percent owner or top-ten Highly Compensated Employee. For purposes
of this Section, family member includes the spouse, lineal ascendants and
descendants of the Employee or former Employee and the spouses of such lineal
ascendants and descendants.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group,
the top 100 Employees, the number of Employees treated as officers and the
Compensation that is considered, shall be made in accordance with Section 414(q)
of the Code and the regulations thereunder.
10
1.38 "HOUR OF SERVICE":
(a) Hour of Service means:
(1) each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer. These hours shall
be credited to the Employee for the computation period in which
the duties are performed; and
(2) each hour for which an Employee is paid, or entitled to payment,
by the Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military
duty, or leave of absence. No more than 501 Hours of Service
shall be credited under this paragraph for any single continuous
period (whether or not such period occurs in a single computation
period). Hours under this paragraph shall be calculated and
credited pursuant to Section 2530.200b-2 of the Department of
Labor Regulations which is incorporated herein by this reference;
and
(3) each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same
Hours of Service shall not be credited both under paragraph (1)
or paragraph (2), as the case may be, and under this paragraph
(3). These hours shall be credited to the Employee for the
computation period or periods in which the award or agreement
pertains rather than the computation period in which the award,
agreement, or payment is made.
(b) Hours of Service shall be credited for employment with other members
of an Affiliated Service Group [under Section 414(m)], a Controlled
Group of Corporations [under Section 414(b)], or a group of trades or
businesses under common control [under Section 414(c)], of which the
adopting Employer is a member, and any other entity required to be
aggregated with the Employer pursuant to Section 414(o) and
regulations thereunder.
(c) Hours of Service shall also be credited for any individual (Leased
Employee) considered an Employee for purposes of this Plan under
Section 414(n) or Section 414(o) and the regulations thereunder.
(d) Solely for purposes of determining whether a Break in Service, as
defined in Section 1.47, for participation and vesting purposes has
occurred in a computation period, an individual who is absent from
work for maternity or paternity reasons shall receive credit for the
Hours of Service which would otherwise have been credited to such
individual but for such absence, or in any case in which such hours
cannot be determined, eight (8) hours of service per day of such
absence. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence:
(1) by reason of the pregnancy of the individual; or
(2) by reason of a birth of a child of the individual; or
(3) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual; or
11
(4) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
The Hours of Service credited under this paragraph shall be credited:
(i) in the computation period in which the absence begins if the
crediting is necessary to prevent a Break in Service in that
period: or
(ii) in all other cases, in the following computation period.
(e) Hours of Service shall be determined on the basis of the method
selected in the Adoption Agreement.
1.39 "INSURANCE CONTRACT": A life insurance, annuity, or variable annuity
contract or any combination thereof, including both individual and group
contracts issued by an Insurer.
1.40 "INSURER": Any legal reserve life insurance company licensed to do business
in one or more States of the United States.
1.41 "KEY EMPLOYEE": Any Employee or former Employee (and the Beneficiaries of
such Employee) who at any time during the determination period was an officer of
the Employer if such individual's annual Compensation exceeds 50 percent of the
dollar limitation under Section 415(b)(1)(A) of the Code, an owner (or
considered an owner under Section 318 of the Code) of one of the ten largest
interests in the Employer if such individual's Compensation exceeds 100 percent
of the dollar limitation under Section 415(c)(1)(A) of the Code, a 5-percent
owner of the Employer, or a 1-percent owner of the Employer who has an annual
Compensation of more than $150,000. Annual compensation means compensation as ,
defined in Section 415(c)(3) of the Code, but including amounts contributed by
the Employer pursuant to a salary reduction agreement which are excludible from
the Employee's gross income under Section 125, Section 402(a)(8), Section 402(h)
or Section 403(b) of the Code. The determination period is the Plan Year
containing the Determination Date and the 4 preceding Plan Years.
The determination of who is a Key Employee shall be made in accordance with
Section 416(i)(1) of the Code and the regulations thereunder.
1.42 "LEASED EMPLOYEE": Any person (other than an employee of the recipient) who
pursuant to an agreement between the recipient and any other person (''leasing
organization") has performed services for the recipient (or for the recipient
and related persons determined in accordance with Section 414(n)(6) on the Code)
on a substantially full time basis for a period of at least one (1) year, and
such services are of a type historically performed by employees in the business
field of the recipient employer. Contributions or benefits provided a' Leased
Employee by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by the
recipient employer.
A Leased employee shall not be considered an employee of the recipient if:
(a) such employee is covered by a money purchase pension plan providing:
(1) a nonintegrated employer contribution rate of at least 10 percent
of compensation, as defined in Section 415(c)(3) of the Code,
but including amounts contributed pursuant to a salary reduction
n agreement which are excludible from the employee's gross income
under Section 125, Section 402(a)(8), Section 402(h) or Section
403(b) of the Code, and
12
(2) immediate participation, and
(3) full and immediate vesting; and
(b) Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce.
1.43 "LIFE EXPECTANCY": Life expectancy and joint and last survivor expectancy
are computed by use of the expected return multiples in Tables V and VI of
Section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant [or Spouse, in the case of
distributions described in Section 10.05(b)(2)] by the time distributions are
required to begin, life expectancies shall be recalculated annually. Such
election shall be irrevocable as to the Participant (or Spouse) and shall apply
to all subsequent years. The life expectancy of a nonspouse Beneficiary may not
be recalculated.
1.44 "MATCHING CONTRIBUTION": An Employer contribution made to this or any other
defined contribution plan on behalf of a Participant on account of an Employee
Contribution made by such Participant, or on account of a Participant's Elective
Deferral, under a plan maintained by the Employer.
1.45 "NET PROFITS": Current and accumulated earnings of the Employer before
Federal and state taxes and contributions to this and any other Qualified Plan.
If the Employer is a nonprofit organization, for purposes of this Plan, Net
Profits means the excess of receipts over expenditures.
1.46 "NORMAL RETIREMENT AGE": The earlier of:
(a) the Normal Retirement Date as designated in A-8.01 of the Adoption
Agreement; or
(b) the ERISA Normal Retirement Age which is the later of:
(1) age 65, or
(2) the 5th anniversary of the date participation commenced.
Normal Retirement Age shall not exceed any mandatory retirement age imposed by
the adopting Employer.
1.47 "ONE-YEAR BREAK IN SERVICE": Shall be based on the Regular Method for
eligibility purposes and computed under one of the following methods as elected
in the Adoption Agreement for all other purposes under the Plan:
(a) Regular Method -- A 12 consecutive month period during which the
Employee has not completed more than 500 Hours of Service. The 12
consecutive month period shall be the same computation period as used
in computing Vesting and Eligibility Years of Service, as applicable.
For the purpose of determining the number of consecutive One-Year
Breaks in Service any Plan Year (computation period) of less than 12
months shall be disregarded.
(b) Elapsed Time Method -- A 12 month Period of Severance where an
Employee does not have one Hour of Service. For purposes of this
method, a One-Year Break in Service occurs if:
13
(1) an Employee ▇▇▇▇▇▇ Service and does not return within 12 months
from the Date of Severance (e.g., quits, is discharged, or
retires); or
(2) an Employee is absent from Service (e.g., disability, vacation,
or leave of absence) and ▇▇▇▇▇▇ employment during such absence
(e.g., quits, is discharged, or retires) and does not return to
Service on or before the first anniversary of the date on which
the Employee was first absent.
A break in service shall occur whenever an Employee has one or more consecutive
One-Year Breaks in Service.
Any leave of absence authorized by the Employer shall be granted under uniform
rules so that all Participants under similar circumstances shall be treated
alike.
1.48 "OWNER-EMPLOYEE": An individual who is a sole proprietor, or who is a
partner owning more than 10 percent of either the capital or profits interest of
the partnership.
1.49 "PARTICIPANT": An Employee becomes a Participant after meeting the
requirements of Article II and retains such status until the Employee has either
terminated employment or incurred five consecutive One-Year Breaks in Service.
Any former Participant having deferred vested rights under this Plan shall also
be considered a "Participant".
Non-Participants making rollover contributions, if permitted in A-3.03(b)(2) of
the Adoption Agreement, shall not be considered Participants for any other
purposes of the Plan.
1.50 "PARTICIPANT'S BENEFIT":
(a) The Account balance as of the last Valuation Date in the calendar year
immediately preceding the Distribution Calendar Year (valuation
calendar year) increased by the amount of any contributions or
forfeitures allocated to the Account balance as of dates in the
valuation calendar year after the Valuation Date and decreased by
distributions made in the valuation calendar year after the Valuation
Date.
(b) Exception for second Distribution Calendar Year. For purposes of
paragraph (a) above, if any portion of the minimum distribution for
the first Distribution Calendar Year is made in the second
Distribution Calendar Year on or before the Required Beginning Date,
the amount of the minimum distribution made in the second Distribution
Calendar Year shall be treated as if it had been made in the
immediately preceding Distribution Calendar Year.
1.51 "PERMISSIVE AGGREGATION GROUP": The Required Aggregation Group of plans
plus any other plan or plans of the Employer which, when considered as a group
with the Required Aggregation Group, would continue to satisfy the requirements
of Sections 401(a)(4) and 410 of the Code.
1.52 "PLAN ADMINISTRATOR": The person(s) or corporation administering this Plan
as designated in the Adoption Agreement.
1.53 "PLAN ANNIVERSARY DATE": The first day of each Plan Year.
14
1.54 "PLAN YEAR": The period as selected in A-1.54 of the Adoption Agreement.
1.55 "PRESENT VALUE": Present Value shall be based only on the interest and
mortality rates specified in A-1.55 of the Adoption Agreement.
1.56 "PROTOTYPE SPONSOR": The Lincoln National Life Insurance Company, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇.
1.57 "QUALIFIED ELECTION": A waiver of a Qualified Joint and Survivor Annuity or
a Qualified Preretirement Survivor Annuity. Any waiver of a Qualified Joint and
Survivor Annuity or a Qualified Preretirement Survivor Annuity shall not be
effective unless:
(a) the Participant's Spouse consents in writing to the election; and
(b) the election designates a specific Beneficiary, including any class of
Beneficiaries or any contingent Beneficiaries, which may not be
changed without spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal consent);
and
(c) the Spouse's consent acknowledges the effect of the election; and
(d) the Spouse's consent is witnessed by a Plan representative or notary
public.
Additionally, a Participant's waiver of the Qualified Joint and Survivor Annuity
shall not be effective unless the election designates a form of benefit payment
which may not be changed without spousal consent (or the Spouse expressly
permits designations by the Participant without any further spousal consent). If
it is established to the satisfaction of a Plan representative that there is no
Spouse or that the Spouse cannot be located, a waiver shall be deemed a
Qualified Election.
Any consent by a Spouse obtained under this provision (or establishment that the
consent of a Spouse may not be obtained) shall be effective only with respect to
such Spouse. A consent that permits designations by the Participant without any
requirement of further consent by such Spouse must acknowledge that the Spouse
has the right to limit consent to a specific Beneficiary, and a specific form of
benefit where applicable, and that the Spouse voluntarily elects to relinquish
either or both of such rights. A revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any time before the
commencement of benefits. The number of revocations shall not be limited. No
consent obtained under this provision shall be valid unless the Participant has
received notice as provided in Section 9.04.
1.58 "QUALIFIED JOINT AND SURVIVOR ANNUITY": An immediate annuity for the life
of the Participant with a survivor annuity for the life of the Spouse which is
not less than 50 percent and not more than 100 percent of the amount of the
annuity which is payable during the joint lives of the Participant and the
Spouse and which is the amount of benefit which can be purchased with the
Participant's Vested Account Balance. The percentage of the survivor annuity
under the Plan shall be 50 percent unless a greater percentage is elected by the
Participant in writing during the Election Period.
1.59 "QUALIFIED NON-ELECTIVE CONTRIBUTIONS": Contributions (other than Matching
Contributions) made by the Employer and allocated to Participants' accounts that
the Participants may not elect to receive in cash until distributed from the
Plan; that are nonforfeitable when made; and that are distributable only in
15
accordance with distribution provisions that are applicable to Elective
Deferrals.
1.60 "QUALIFIED PLAN": Any plan which meets the requirements of Section 401(a)
of the Code.
1.61 "REQUIRED AGGREGATION GROUP":
(a) Each Qualified Plan of the Employer in which at least one Key Employee
participates or participated at any time during the determination
period (regardless of whether the plan has terminated); and
(b) any other Qualified Plan of the Employer which enables a plan
described in (a) to meet the requirements of Section 401(a)(4) or 410
of the Code.
1.62 "REQUIRED BEGINNING DATE":
(a) General rule. The Required Beginning Date of a Participant is the
first day of April of the calendar year following the calendar year in
which the Participant attains age 70 1/2.
(b) Transitional rules. The Required Beginning Date of a Participant who
attains age 70 1/2 before January 1, 1988, shall be determined in
accordance with (1) or (2) below:
(1) Non-5-percent owners. The Required Beginning date of a
Participant who is not a 5-percent owner is the first day of
April of the calendar year following the calendar year in which
the later of retirement or attainment of age 70 1/2 occurs.
(2) 5-percent owners. The Required Beginning Date of a Participant
who is a 5-percent owner during any year beginning after December
31, 1979, is the first day of April following the later of:
(i) the calendar year in which the Participant attains age 70
1/2; or
(ii) the earlier of the calendar year with or within which ends
the Plan Year in which the Participant becomes a 5-percent
owner, or the calendar year in which the Participant
retires.
The Required Beginning date of a Participant who is not a 5-percent
owner who attains age 70 1/2 during 1988 and who has not retired as of
January 1, 1989, is April 1, 1990.
(c) 5-percent owner. A Participant is treated as a 5-percent owner for
purposes of this Section if such Participant is a 5-percent owner as
defined in Section 416(i) of the Code (determined in accordance with
Section 416 but without regard to whether the plan is top-heavy) at
any time during the Plan Year ending with or within the calendar year
in which such owner attains age 66 1/2 or any subsequent Plan Year.
(d) Once distributions have begun to a 5-percent owner under this Section,
they must continue to be distributed, even if the Participant ceases
to be a 5-percent owner in a subsequent year.
1.63 "SELF-EMPLOYED INDIVIDUAL": An individual who has Earned Income for the
taxable year from the trade or business for which the Plan is established; also,
16
an individual who would have had Earned Income but for the fact that the trade
or business had no Net Profits for the taxable year.
1.64 "SERVICE": Employment of an Employee with the Employer(s) maintaining this
Plan.
Where the Employer maintains the plan of a predecessor employer, service for
such predecessor employer shall be treated as service for the Employer. Service
with a predecessor employer for whom this Employer does not maintain a
predecessor plan shall not be treated as service for the Employer unless elected
in the Adoption Agreement.
1.65 "SPOUSE": (SURVIVING SPOUSE): The Spouse or Surviving Spouse of the
Participant, provided that a former Spouse shall be treated as the Spouse or
Surviving Spouse and a current spouse shall not be treated as the Spouse or
Surviving Spouse to the extent provided under a qualified domestic relations
order as described in Section 414(p) of the code.
1.66 "SUPER TOP-HEAVY PLAN": For any Plan Year a Top-heavy plan is a Super Top-
heavy Plan if the Top-heavy Ratio exceeds 90 percent.
1.67 "TAXABLE WAGE BASE": The maximum amount of earnings which may be considered
wages for such year under Section 3121(a)(1) of the Code.
1.68 "TOP-HEAVY PLAN": For any Plan Year beginning after December 31, 1983, this
Plan is Top-heavy if any of the following conditions exists:
(a) the Top-heavy Ratio for this Plan exceeds 60 percent and this Plan is
not part of any Required Aggregation Group or Permissive Aggregation
Group of plans; or
(b) this Plan is a part of a Required Aggregation Group of plans but not
part of a Permissive Aggregation Group and the Top-heavy Ratio for the
group of plans exceeds 60 percent; or
(c) this plan is a part of a Required Aggregation Group and part of a
Permissive Aggregation Group of plans and the Top-heavy Ratio for the
Permissive Aggregation Group exceeds 60 percent.
1.69 "TOP-HEAVY RATIO":
(a) If the Employer maintains one or more Defined Contribution plans
(including any Simplified Employee Pension Plan) and the Employer has
not maintained any Defined Benefit plan which during the five (5) year
period ending on the Determination Date(s) has or has had accrued
benefits, the Top-heavy Ratio for this Plan alone or for the Required
or Permissive Aggregation Group as appropriate is a fraction, the
numerator of which is the sum of the Account balances of all Key
Employees as of the Determination Date(s) (including any part of any
Account balance distributed in the five (5) year period ending on the
Determination Date(s), and the denominator of which is the sum of all
Account balances (including any part of any Account balance
distributed in the five (5) year period ending on the Determination
Date(s), both computed in accordance with Section 416 of the Code and
the regulations thereunder. Both the numerator and denominator of the
Top-heavy Ratio are increased to reflect any contribution not actually
made as of the Determination Date, but which is required to be taken
into account on that date under Section 416 of the Code and the
regulations thereunder.
17
(b) If the Employer maintains one or more Defined Contribution plans
(including any Simplified Employee Pension Plan) and the Employer
maintains or has maintained one or more Defined Benefit plans which
during the five (5) year period ending on the Determination Date(s)
has or had any accrued benefits, the Top-heavy Ratio for any Required
or Permissive Aggregation Group as appropriate is a fraction, the
numerator of which is the sum of Account balances under the aggregated
Defined Contribution plan or plans for all Key Employees, determined
in accordance with (a) above, and the Present Value of accrued
benefits under the aggregated Defined Benefit plan or plans for all
Key Employees as of the Determination Date(s), and the denominator of
which is the sum of the Account balances under the aggregated Defined
Contribution plan or plans for all Participants, determined in
accordance with (a) above, and the Present Value of accrued benefits
under the Defined Benefit plan or plans for all Participants as of the
Determination Date(s), all determined in accordance with Section 416
of the Code and the regulations thereunder. The accrued benefits under
a Defined Benefit plan in both the numerator and denominator of the
Top-heavy Ratio are increased for any distribution of an accrued
benefit made in the five (5) year period ending on the Determination
Date.
(c) For purposes of (a) and (b) above the values of Account balances and
the Present Value of accrued benefits shall be determined as of the
most recent Valuation Date that falls within or ends with the 12-month
period ending on the Determination Date, except as provided in Section
416 of the Code and the regulations thereunder for the first and
second Plan Years of a Defined Benefit plan. The Account balances and
accrued benefits of a Participant:
(1) who is not a Key Employee but who was a Key Employee in a prior
year; or
(2) who has not been credited with at least one hour of service with
any Employer maintaining the Plan at any time during the five (5)
year period ending on the Determination Date
shall be disregarded.
The calculation of the Top-heavy Ratio, and the extent to which
distributions, rollovers, and transfers are taken into account shall
be made in accordance with Section 416 of the Code and the regulations
thereunder. Deductible Employee Contributions shall not be taken into
account for purposes of computing the Top-heavy Ratio. When
aggregating plans the value of Account balances and accrued benefits
shall be calculated with reference to the Determination Dates that
fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee shall
be determined under:
-the method, if any, that uniformly applies for accrual purposes
under all Defined Benefit plans maintained by the Employer; or
-if there is no such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under the
fractional rule of Section 411(b)(1)(C) of the Code.
1.70 "TRUSTEE": The person(s) or corporation having trust powers designated as
Trustee in the Adoption Agreement and any designated successor Trustee.
18
1.71 "VALUATION DATE": The date elected by the Employer in A-1.71 of the
Adoption Agreement as of which Account balances or accrued benefits are valued
for purposes of calculating the Top-heavy Ratio.
1.72 "VESTED ACCOUNT BALANCE": The aggregate value of the Participant's Vested
Account Balances derived from Employer and Employee contributions (including
rollovers), whether vested before or upon death, including the proceeds of
insurance contracts, if any, on the Participant's life. The provisions of
Article IX, Joint and Survivor Annuity Requirements, shall apply to a
Participant who is vested in amounts attributable to Employer contributions,
Employee contributions (or both) at the time of death or distribution.
1.73 "VESTING YEAR OF SERVICE": Shall be computed under one of the following
methods as elected in A-1.74 of the Adoption Agreement:
(a) Regular Method -- any 12 consecutive month period (which may include
periods prior to the Effective Date) corresponding to the Plan Year in
which the Employee has completed at least 1,000 Hours of Service
except for Years of Service excluded under A-1.73 in the Adoption
Agreement.
If there is a change in the Plan Year and Vesting Years of Service are
based on such Plan Year, a Participant shall be credited with a
Vesting Year of Service for both the Plan Year as it was prior to the
amendment (as if there was no change) and the first Plan Year after
the amendment if the Participant has at least 1,000 Hours of Service
in each of those Plan Years.
(b) Elapsed Time Method -- any completed 12 month Period of Service (which
may include periods prior to the Effective Date) except for Periods of
Service excluded under A-1.73 in the Adoption Agreement. Any period of
Service less than 12 months shall be disregarded.
In the case of a Participant who has five or more consecutive One-Year Breaks in
Service, all Service after such Breaks in Service shall be disregarded for the
purpose of vesting the Employer-derived Account balance that accrued before such
breaks in service. Such Participant's pre-break service will count in vesting
the post-break employer-derived Account balance only if either:
(c) such Participant has any nonforfeitable interest in the Account
balance attributable to Employer contributions at the time of
separation from service; or
(d) upon returning to Service the number of consecutive One-Year Breaks in
Service is less than the number of Years of Service.
Separate accounts shall be maintained for the Participant's pre-break and post-
break Employer-derived Account balance. Both Accounts shall share in the
earnings and losses of the fund.
1.74 "YEAR OF SERVICE": Shall be computed under one of the following methods as
defined below and as selected in the Adoption Agreement; however, Year of
Service for purposes of eligibility and vesting shall be further defined in
Sections 1.25 and 1.73, respectively.
(a) Regular Method -- A Year of Service shall mean any Plan Year during
which an Employee has completed at least 1,000 Hours of Service. Any
Year of Service where an Employee has less than 1,000 Hours of Service
shall not be counted as a Year of Service. If there is a change in the
Plan Year, a Participant shall be credited with a Year of Service
19
for both the Plan Year as it was prior to the amendment (as if there
was no change) and the first Plan Year after the amendment if the
Participant has at least 1,000 Hours of Service in each of those Plan
Years.
(b) Elapsed Time Method -- A Year of Service shall mean a Period of
Service based on an Employee's actual period of employment
irrespective of the number of hours actually worked during such
period. All periods of employment, including Periods of Severance
shall be aggregated unless there is a One-Year Period of Severance as
defined below. A Year of Service shall be credited for each completed
12 months of Service (365 days), which need not be consecutive.
For purposes of determining Years of Service under the Elapsed Time
Method, the following terms shall apply:
*Date of Hire or Rehire -- shall mean the date an Employee first
performs one Hour of Service. An "adjusted" hire date may be used to
reflect Periods of Severance so that all Periods of Service can be
aggregated unless such periods can be disregarded under the One-Year
Break in Service rules.
*Date of Severance (Termination) -- shall mean the earlier of:
(1) the actual date an Employee quits, is discharged, dies, or
retires; or
(2) the first anniversary of the date an Employee is absent from
work (with or without pay) for any other reason, e.g.,
disability, vacation, leave of absence, layoff, etc.
*Elapsed Time -- shall mean the total Period of Service between a
Participant's Date of Hire and Date of Severance (Termination)
including Periods of Severance where a One-Year Period of Severance
does not occur.
*Period of Service -- shall mean the total elapsed time while an
Employee is employed regardless of the number of hours worked.
*Month of Service -- shall be credited for each 30 days of elapsed
time.
*Period of Severance -- shall mean the time between the actual date of
Severance (Termination) as defined above and the subsequent date, if
any, on which the Employee performs one Hour of Service.
*One-Year Period of Severance -- shall mean a One-Year Break in
Service as defined in Section 1.47(b) which is a 12 month period
following a Participant's Date of Severance (Termination) as defined
above in which an Employee does not have one Hour of Service.
20
ARTICLE II
ELIGIBILITY
2.01 An Employee shall participate in this Plan on the first Entry Date on or
after the date on which the Employee meets all of the requirements designated in
the Adoption Agreement and this Article unless Service terminates before such
first Entry Date.
2.02 All Years of Service with the Employer are counted toward eligibility
except the following:
(a) In the case of a Participant who does not have any nonforfeitable
right to the Account balance derived from Employer contributions,
Years of Service before a period of consecutive One-Year Breaks in
Service shall not be taken into account in computing eligibility
Service if the number of consecutive One-Year Breaks in Service in
such period equals or exceeds the greater of five (5) or the aggregate
number of Years of Service. Such aggregate number of Years of Service
shall not include any Years of Service disregarded under the preceding
sentence by reason of prior Breaks in Service.
(b) If a Participant's Years of Service are disregarded pursuant to the
preceding paragraph, such Participant shall be treated as a new
Employee for eligibility purposes. If a Participant's Years of Service
may not be disregarded pursuant to the preceding paragraph, such
Participant shall continue to participate in the Plan, or, if
terminated, shall participate immediately upon reemployment.
2.03 In the event a Participant is no longer a member of an eligible class of
Employees and becomes ineligible to participate but has not incurred a Break in
Service, such Employee shall participate immediately upon returning to an
eligible class of Employees. If such Participant incurs a Break in Service,
eligibility shall be determined under the Break in Service rules of the Plan.
2.04 In the event an Employee who is not a member of an eligible class of
Employees becomes a member of an eligible class, such Employee shall participate
immediately if such Employee has satisfied the minimum age and service
requirements and would have otherwise previously become a Participant.
2.05 If the Employer is a member of a group of employers which constitutes a
Controlled Group of Corporations, or an Affiliated Service Group (as defined in
Sections 414(b) and 414(m), respectively, of the Code), or which constitutes one
or more trades or businesses (whether or not incorporated) which are under
common control (as defined in Section 414(c), but the other members of such
group are not participating employers under this Plan, the following transfer
provisions shall apply:
(a) A Participant shall receive credit for Service with any employer which
is a member of the group, provided that all such Service is determined
in accordance with Section 1.38.
(b) If a Participant transfers employment to an employer which is a non-
participating member of the group, his participation under this Plan
shall be suspended, and during that period of ineligible employment:
21
(i) the Employer shall not make contributions on his behalf except as
may be required when the Plan is operating under a waiver of the
minimum funding standard; however, the Participant shall continue
to share in earnings; and
(ii) the provisions of Article VIII shall continue to apply with
respect to when a Participant is entitled to benefits. Such
transfer shall not be treated as a termination of Service under
Article XI.
2.06 If this Plan is a Non-Standardized Form Plan, an Employee who is eligible
--------------------------
to be an active Participant may refuse participation in the Plan during a Plan
Year. Such refusal to participate is subject to the approval of the Plan
Administrator upon receipt of a written request by the Employee. The Plan
Administrator in his sole discretion may approve or reject such request based on
a uniform and non-discriminatory policy as adopted by the Employer. The Plan
Administrator shall not approve such a request if it should cause the Plan to
fail to meet minimum participation standards. If this Plan is a Standardized
------------
Form Plan, an eligible Employee may not refuse participation in the Plan.
---------
If an Employee is granted the right not to participate in the Plan under this
Section, such Employee shall be permitted to enter this Plan on the first Entry
Date subsequent to the Plan Administrator's receipt of such Employee's written
request to participate in the Plan.
22
ARTICLE III
CONTRIBUTIONS AND ALLOCATIONS
3.01 Except as otherwise provided in Article XII, and subject to the limitations
of this Article and Article V, the Employer shall make contributions for each
Plan Year as follows:
PROFIT SHARING PLANS
The Employer shall contribute, within the time prescribed by law for making
a deductible contribution, the amount designated in the Adoption agreement.
In no event, however, shall such contributions for the Fiscal Year exceed
the maximum deductible amount. Contributions shall be allocated as of the
last day of the Plan Year and as of such other date or dates as may be
determined by the Trustee.
MONEY PURCHASE PLANS
The Employer shall contribute the amount designated in the Adoption
Agreement.
TARGET BENEFIT PLANS
The Employer shall contribute an amount determined in accordance with
Section A-3.01 of the Adoption Agreement.
All amounts contributed by the Employer shall be made for the exclusive benefit
of the Participants, Beneficiaries or their estates and in no event shall any
contribution by the Employer or income therefrom revert to the Employer except
as provided in Section 3.09.
3.02 If in any Plan Year the amounts contributed by the Employer for a Money
Purchase or Target Benefit plan are not sufficient to satisfy the minimum
funding standard as defined in ERISA Section 302, a funding deficiency shall
exist for that Plan Year. The Employer, if unable to satisfy the minimum funding
standard for a given Plan Year, may apply to the Internal Revenue Service for a
waiver of the minimum funding standard. If the waiver is granted, the Employer
must amend the Plan to enable the Plan to operate under a waiver of the minimum
funding requirement. A plan which is so amended shall be considered an
individually designed plan.
3.03 If so designated in the Adoption Agreement, cash rollover contributions may
be made, consisting of:
(a) all or a portion of the amount received in a "qualified rollover
distribution" [as defined in Section 402(a)(5)(D)(i) of the Code],
reduced by the amount, if any, treated as a distribution of employee
contributions other than accumulated deductible employee contributions
within the meaning of Section 72(o)(5); or
(b) the amount received in a distribution described in Section
408(d)(3)(A)(ii) or Section 409(b)(3)(C) of the Code from an
individual retirement account, annuity or bond, the proceeds of which
are attributed solely to a rollover contribution from a qualified plan
described in Section 402(a)(5)(D)(iv)(IV) or (V) of the Code;
within 60 days following the date of such distribution. If a rollover includes
deductible voluntary contributions, the amount of the rollover attributable to
such contributions shall be added to the deductible voluntary contribution
23
account under this Plan. The Plan shall not accept rollovers of accumulated
deductible contributions from a plan under which the Employee was covered as a
self-employed individual as described in Section 401(c)(1) of the Code.
A separate account shall be maintained for any such rollover under (a) and (b).
If such account is unallocated, each account shall share proportionately in all
earnings and losses of the separate rollover account in the ratio that each
rollover account bears to the total of all rollover accounts. Earnings and
losses shall be allocated as provided in the Adoption Agreement. Rollover monies
and the earnings and losses thereon shall be 100% Vested at all times.
A non-Participant shall not receive an allocation of Employer contributions
and/or forfeitures.
If a non-Participant terminates employment prior to meeting the minimum age and
service requirements in A-2.01, an immediate distribution of the rollover
account may be elected.
3.04 This plan shall not accept nondeductible Employee contributions for Plan
Years beginning after the Plan Year in which this Plan is adopted by the
Employer. Employee contributions for Plan Years beginning after December 31,
1986, together with any matching contributions as defined in Section 401(m) of
the Code, shall be limited so as to meet the nondiscrimination test of Section
401(m).
A separate account shall be maintained by the Trustee for the nondeductible
Employee contributions of each Participant.
Employee contributions and earnings thereon shall be nonforfeitable at all
times.
A Participant may withdraw nondeductible voluntary contributions by making a
written application to the Plan Administrator. Withdrawal of any nondeductible
mandatory contributions shall be governed by the election in A-3.04, if
applicable, of the Adoption Agreement. If a Participant withdraws mandatory
contributions, the withdrawal shall be in a single sum, and shall not exceed the
lesser of the current value of the Participant's Account which is attributable
solely to nondeductible contributions or the amount the Participant contributed
in the form of nondeductible contributions. Withdrawals may be made no more
frequently than once in any twelve month period. The preceding notwithstanding,
no withdrawal shall be made pursuant to this Section unless the Participant's
spouse, if any, consents in writing to such withdrawal. Spousal consent must be
obtained not more than 90 days before the distribution.
3.05 The Plan Administrator shall not accept deductible Employee contributions
which are made for a taxable year beginning after December 31, 1986.
Contributions made prior to that date shall be maintained in a separate account
which shall be nonforfeitable at all times. The account shall share in the gains
and losses of the trust in the same manner as described in Section 3.07 of the
plan. No part of the deductible voluntary contribution account shall be used to
purchase life insurance. Subject to Article IX, Joint and Survivor Annuity
Requirements (if applicable), the participant may withdraw any part of the
deductible voluntary contribution account by making a written application to the
Plan Administrator.
3.06 No forfeitures shall occur solely as a result of an Employee's withdrawal
of Employee contributions.
24
3.07 Allocation of earnings shall be handled as follows:
General Investment Account -- The net earnings, gains, losses and expenses as
well as appreciation and depreciation in market value shall be credited to the
General Investment Account and shall be allocated to Participants' Accounts at
the end of each Allocation Period on a pro-rata basis based on each
Participant's Account balance (exclusive of amounts invested in The Designated
Investment Accounts and/or Directed Group Accounts) as provided in Section A-
3.07 of the Adoption Agreement.
Designated Investment Account -- The Designated Investment Account shall not
share in the General Investment Account or Directed Group Account earnings, but
shall be charged or credited, as appropriate, with net earnings, gains, losses
and expenses as well as appreciations or depreciations in market value during
each Allocation Period attributable to such account. If a portion of a
Participant's Account is invested in insurance or annuity policies, the
Participant's interest in the policies shall always be equal to the vested
portion of the cash surrender value of such policies.
Directed Group Account -- The net earnings, gains, losses and expenses as well
as appreciation and depreciation in market value shall be credited to each
investment fund and shall be allocated to Participants' Accounts at the end of
each Allocation Period on a pro-rata basis based on each Participant's share of
the specific investment fund as provided in Section A-3.07 of the Adoption
Agreement.
3.08 Forfeitures shall be used as follows:
401(k) Salary Reduction Plans -- as designated in the Adoption Agreement
Profit Sharing Plans -- as designated in the Adoption Agreement
Money Purchase Plans -- as designated in the Adoption Agreement
Target Benefit Plans -- to reduce the Employer's contributions under
Section 3.01.
3.09 In no event shall any contribution by the Employer or income on such
contribution revert to the Employer except as provided below:
(a) Any contribution made because of a mistake of fact may be returned
within one year of such contribution.
(b) In the event that the Commissioner of Internal Revenue determines that
the plan is not initially qualified under the Internal Revenue Code,
any contribution made incident to that initial qualification by the
Employer must be returned to the Employer within one year after the
date the initial qualification is denied, but only if the application
for the qualification is made by the time prescribed by law for filing
the Employer's return for the taxable year in which the plan is
adopted, or such later date as the Secretary of the Treasury may
prescribe.
3.10 All contributions are conditional upon the deductibility of such
contributions, and will be refunded to the Employer to the extent the deduction
is disallowed within one (1) year after such disallowance.
25
ARTICLE IV
CASH OR DEFERRED ARRANGEMENT (CODA)
4.01 ELECTIVE DEFERRALS
(a) To the extent provided in the Adoption Agreement, a Participant may
elect to have Elective Deferrals made under this Plan. Elective
Deferrals shall be made prospectively, and shall be made pursuant to a
salary reduction agreement.
(b) A Participant shall be afforded a reasonable period at least once each
calendar year, as specified in Section A-4.01(b) of the Adoption
Agreement, to elect to commence, or to modify the amount of, Elective
Deferrals. Elections shall become effective as of the first day of the
pay period immediately following the Participant's election, or as
soon as administratively feasible thereafter. A Participant may
terminate his or her election to make Elective Deferrals at any time.
A Participant's election shall remain in effect until modified or
terminated.
(c) If a Participant receives a distribution on account of hardship
pursuant to Section 4.14:
(1) the Employee's Elective Deferrals shall be suspended for 12
months after the receipt of the hardship distribution; and
(2) the Employee may not make Elective Deferrals for the Employee's
taxable year immediately following the taxable year of the
hardship distribution in excess of the applicable limit under
Section 402(g) of the Code for such taxable year less the amount
of such Employee's Elective Deferrals for the taxable year of the
hardship distribution.
(d) Elective Deferrals shall be made without regard to current or
accumulated profits.
4.02 MATCHING CONTRIBUTIONS
If elected in A-4.02 of the Adoption Agreement, the Employer shall make
Matching Contributions.
(a) Matching Contributions shall be vested in accordance with Section A-
4.02(e) of the Adoption Agreement.
(b) Forfeitures of Matching Contributions, other than Excess Aggregate
Contributions, shall be disposed of in accordance with Section A-3.08
of the Adoption Agreement.
4.03 QUALIFIED NON-ELECTIVE CONTRIBUTIONS
(a) In lieu of distributing Excess Contributions as provided in Section
4.07 of the Plan the Employer may make Qualified Non-elective
contributions on behalf of Non-highly Compensated Employees that are
sufficient to satisfy the Actual Deferral Percentage test pursuant to
regulations under the Code.
(b) Qualified Non-elective Contributions shall be allocated to the
accounts of Non-highly Compensated Participants only as provided in
Section A-4.03 of the Adoption Agreement. The allocation shall be
26
made in the ratio in which each Non-highly Compensated Participant's
Compensation for the Plan Year bears to the Total Compensation of all
Non-highly Compensated Participants for such year.
(c) If this is a Standardized Form Plan which includes a CODA, for any
Plan Year in which the Plan is a Top-heavy Plan the Employer shall,
unless the minimum contribution requirements of Code Section 416 have
been otherwise satisfied, make a Qualified Non-elective Contribution
equal to 3` of Compensation on behalf of each Participant who is not a
Key Employee.
4.04 ELECTIVE DEFERRAL LIMITATION
No Participant shall be permitted to have Elective Deferrals made under
this Plan, or any other Qualified Plan maintained by the Employer, during
any taxable year, in excess of the dollar limitation contained in Section
402(g) of the Code in effect at the beginning of such taxable year.
4.05 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
(a) A Participant may assign to this Plan any Excess Elective Deferrals
made during a taxable year of the Participant by notifying the Plan
Administrator on or before March 15 of the amount of the Excess
Elective deferrals to be assigned to the Plan. A Participant is deemed
to notify the Plan Administrator of any Excess Elective Deferrals that
arise by taking into account only those Elective Deferrals made to
this Plan and any other plans of this Employer.
(b) Notwithstanding any other provision of the Plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto, shall
be distributed no later than April 15 to any Participant to whose
account Excess Elective Deferrals were assigned for the preceding year
and who claims Excess Elective Deferrals for such taxable year.
(c) Excess Elective deferrals shall be adjusted for any income or loss up
to the date of distribution. The income or loss allocable to Excess
Elective Deferrals is the income or loss allocable to the
Participant's Elective Deferral account for the taxable year
multiplied by a fraction, the numerator of which is such Participant's
Excess Elective Deferrals for the year and the denominator is the
Participant's account balance attributable to Elective Deferrals
without regard to any income or loss occurring during such taxable
year. For Plan Years commencing after December 31, 1990, any income or
loss allocable to the period between the end of the taxable year and
the date of distribution shall be disregarded in determining income or
loss.
4.06 ACTUAL DEFERRAL PERCENTAGE TEST
(a) The Actual Deferral Percentage (ADP) for Participants who are Highly
Compensated Employees for each Plan Year and the ADP for Participants
who are Non-highly Compensated Employees for the same Plan Year must
satisfy one of the following tests:
(1) The ADP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ADP for Participants who are
Non-highly Compensated Employees for the same Plan Year
multiplied by 1.25; or
27
(2) The ADP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ADP for Participants who are
Non-highly Compensated Employees for the same Plan Year
multiplied by 2.0, provided that the ADP for Participants who are
Highly Compensated Employees does not exceed the ADP for
Participants who are Non-highly Compensated Employees by more
than two (2) percentage points.
(b) Special Rules:
(1) The ADP for any Participant who is a Highly Compensated Employee
for the Plan Year and who is eligible to have Elective Deferrals
and/or Qualified Non-elective Contributions allocated to his or
her account under Two (2) or more arrangements described in
Section 401(k) of the Code, that are maintained by the Employer,
shall be determined as if such Elective Deferrals and Qualified
Non-elective Contributions were made under a single arrangement.
If a Highly Compensated Employee participates in two (2) or more
CODAs that have different Plan Years, all CODAs ending with or
within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall
be treated as separate if mandatorily disaggregated under
regulations under Section 401(k) of the Code.
(2) In the event that this Plan satisfies the requirements of Section
401(k), 401(a)(4), or 410(b) of the Code only is aggregated with
one (1) or more other plans, or if one (1) or more other plans
satisfy the requirements of such Sections of the Code only if
aggregated with this Plan, then this Section shall be applied by
determining the ADP of employees as if all such plans were a
single plan. For Plan Years beginning after December 31, 1989,
plans may be aggregated in order to satisfy Section 401(k) of the
Code only if they have the same Plan Year.
(3) For purposes of determining the ADP of a Participant who is a 5-
percent owner or one of the ten most highly-paid Highly-
Compensated Employees, the Elective Deferrals and/or Qualifies
Non-elective Contributions and Compensation of such Participant
shall include the Elective Deferrals and, if applicable,
Qualified Non-elective Contributions and Compensation for the
Plan Year of Family Members (as defined in Section 414(q)(6) of
the Code). Family Members, with respect to such Highly
Compensated Employees, shall be disregarded as separate employees
in determining the ADP for Participants who are Non-highly
Compensated Employees and for Participants who are Highly
Compensated Employees.
(4) For purposes of determining the ADP test, Elective Deferrals and
Qualified Non-elective Contributions must be made before the last
day of the 12 month period immediately following the Plan Year to
which contributions relate.
(5) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified
satisfaction of the ADP test and the amount of Qualified Non-
elective Contributions used in such test.
(6) The determination and treatment of the ADP amounts of any
Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
28
(c) For purposes of Calculating the Actual Deferral Percentage, Employer
contributions on behalf of any Participant shall include:
(1) an Elective Deferrals made pursuant to the Participant's deferral
election, (including Excess Elective Deferrals of Highly
Compensated Employees), but excluding Excess Elective Deferrals
of Non-highly Compensated Employees that arise solely from
Elective Deferrals made under the Plan or plans of this Employer;
and
(2) at the election of the Employer, Qualified Non-elective
contributions.
For purposes of computing Actual Deferral Percentages, an Employee who
would be a Participant but for the failure to make Elective Deferrals
shall be treated as a Participant on whose behalf no Elective
Deferrals are made.
4.07 DISTRIBUTION OF EXCESS CONTRIBUTIONS
(a) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than the last day of each Plan year to
Participants whose accounts such Excess Contributions were allocated
for the preceding Plan Year. If such excess amounts are distributed
more than 2 1/2 months after the last day of the plan year in which
such excess amount arose, a 10 percent excise tax shall be imposed on
the Employer maintaining the Plan with respect to such amounts. Such
distributions shall be made to Highly Compensated Employees on the
basis of the respective portions of the Excess Contributions
attributable to each of such Employees. Excess Contributions of
Participants who are subject to the family member aggregation rules
shall be allocated among the family members in proportion to the
Elective Deferrals (and amounts treated as Elective Deferrals) of each
family members that is combined to determine the combined ADP.
(b) Excess Contributions shall be treated as annual additions under the
plan.
(c) Determination of Income or Loss: The Excess Contributions shall be
-------------------------------
adjusted for any income or loss up to the date of distribution. The
income or loss allocable to Excess Contributions is the income or loss
allocable to the Participant's Elective Deferral account (and, if
applicable, the Qualified Non-elective Contribution account) for the
Plan Year multiplied by a fraction, the numerator of which is such
Participant's Excess Contributions for the year and the denominator is
the Participant's account balance attributable to Elective Deferrals
(and Qualified Non-elective Contributions, if any of such
contributions are included in the ADP test) without regard to any
income or loss occurring during such year. For Plan Year commencing
after December 31, 1990, any income or loss allocable to the period
between the end of the Plan Year and the date of distribution shall
disregarded in determining income or loss.
(d) Accounting for Excess Contributions: Excess Contributions shall be
-----------------------------------
distributed from the Participant's Elective Deferral account. Excess
Contributions shall be distributed from the Participant's Qualified
Non-elective Contribution account only to the extent that such Excess
29
Contributions exceed the balance in the Participant's Elective
Deferral account.
4.08 LIMITATIONS ON EMPLOYER CONTRIBUTIONS AND MATCHING CONTRIBUTIONS
(a) The Average Contribution Percentage (ACP) for Participants who are
Highly Compensated Employees for each Plan Year and the Average
Contribution Percentage for Participants who are Non-highly
Compensated Employees for the same Plan Year must satisfy one of the
following tests:
(1) The Average Contribution Percentage for Participants who are
Highly Compensated Employees for the Plan Year shall not exceed
the Average Contribution Percentage for Participants who are Non-
highly Compensated Employees for the same Plan Year multiplied by
1.25; or
(2) The Average Contribution Percentage for Participants who are
Highly Compensated Employees for the Plan Year shall not exceed
the Average Contribution Percentage for Participants who are Non-
highly Compensated Employees for the same Plan Year multiplied by
two (2), provided that the Average Contribution Percentage for
Participants who are Highly Compensated Employees does not exceed
the Average Contribution Percentage for Participants who are Non-
highly Compensated Employees by more than two (2) percentage
points.
(b) Special Rules:
(1) Multiple Use: If one or more Highly Compensated Employees
participate in both a CODA and a plan subject to the ACP test
maintained by the Employer and the sum of the ADP and ACP of
those Highly Compensated Employees subject to either or both
tests exceeds the Aggregate Limit, then the ACP of those Highly
Compensated Employees who also participate in a CODA shall be
reduced (beginning with such Highly Compensated Employee whose
ACP is the highest) so that the limit is not exceeded. The amount
by which each Highly Compensated Employee's Contribution
Percentage Amounts is reduced shall be treated as an Excess
Aggregate Contribution. The ADP and ACP of the Highly Compensated
Employees are determined after any corrections required to meet
the ADP and ACP tests. Multiple use does not occur if both the
ADP and ACP of the Highly Compensated Employees does not exceed
1.25 multiplied by the ADP and ACP of the Non-highly Compensated
Employees.
(2) For purposes of this Section, the Contribution Percentage for any
Participant who is a Highly Compensated Employee and who is
eligible to have Contribution Percentage Amounts allocated to his
or her account under two (2) or more plans described in Section
401(a) of the Code, or arrangements described in Section 401(k)
of the Code, that are maintained by the Employer, shall be
determined as if the total of such Contribution Percentage
Amounts was made under each plan. If a Highly Compensated
Employee participates in two or more CODAs that have different
Plan Years, all CODAs ending with or within the same calendar
year shall be treated as a single arrangement. Notwithstanding
the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations under Section 401(m)
of the Code.
30
(3) In the event that this Plan satisfies the requirements of
Sections 401(m), 401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of such Sections of the Code only
if aggregated with this Plan, then this Section shall be applied
by determining the Contribution Percentage of Employees as if all
such plans were a single plan. For Plan Years beginning after
December 31, 1989, plans may be aggregated in order to satisfy
Section 401(m) of the Code only if they have the same Plan Year.
(4) For purposes of determining the Contribution Percentage of a
Participant who is a 5-percent owner or one of the ten (10) most
highly-paid Highly Compensated Employees, the Contribution
Percentage Amounts and Compensation of such Participant shall
include the Contribution Percentage Amounts and Compensation for
the Plan Year of Family Members (as defined in Section 414(q)(6)
of the Code). Family Members, with respect to Highly Compensated
Employees, shall be disregarded as separate Employees in
determining the Contribution Percentage both for Participants who
are Non-highly Compensated Employees and for Participants who are
Highly Compensated Employees.
(5) For purposes of determining the Contribution Percentage, Employee
Contributions are considered to have been made in the Plan Year
in which contributed to the trust. Matching Contributions shall
be considered made for a Plan Year if made no later than the end
of the twelve-month period beginning on the day after the close
of the Plan Year.
(6) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test.
(7) The determination and treatment of the Contribution Percentage of
any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
4.09 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
(a) Notwithstanding any other provision of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if forfeitable, or if not forfeitable, distributed
no later than the last day of each Plan Year to Participants to whose
accounts such Excess Aggregate Contributions were allocated for the
preceding Plan Year. Excess Aggregate Contributions of Participants
who are subject to the family member aggregation rules shall be
allocated among the family members in proportion to the Employee and
Matching Contributions (or amounts treated as Matching Contributions)
of each family member that is combined to determine the combined ACP.
If such Excess Aggregate Contributions are distributed more than 2 1/2
months after the last day of the Plan Year in which such excess
amounts arose, a 10 percent excise tax shall be imposed on the
Employer maintaining the Plan with respect to those amounts. Excess
Aggregate Contributions shall be treated as Annual Additions under the
Plan.
(b) Determination of Income or Loss: Excess Aggregate Contributions shall
be adjusted for any income or loss up to the date of distribution. The
income or loss allocable to Excess Aggregate Contributions is the
income or loss allocable to the Participant's Employee Contribution
account and Matching Contribution account for the Plan Year multiplied
31
by a fraction, the numerator of which is such Participant's Excess
Aggregate Contributions for the year and the denominator is the
Participant's Account balance(s) attributable to Contribution Percentage
Amounts without regard to any income or loss occurring during such Plan
Year. For Plan Years commencing after December 31, 1990, income or loss
allocable to the period between the end of the Plan Year and the date of
distribution shall be disregarded in determining income and loss.
(c) Accounting for Excess Aggregate Contributions: Excess Aggregate
Contributions shall be forfeited, if forfeitable, or distributed on
pro-rata basis from the Participant's Employee Contribution account
and Matching Contribution account.
(d) Forfeitures of Excess Aggregate Contributions: Forfeitures of Excess
Aggregate Contributions shall be applied to reduce Employer
contributions.
4.10 NONFORFEITABILITY AND VESTING
The Participant's Account balance derived from Elective Deferrals,
Qualified Non-elective Contributions and Employee Contributions is
nonforfeitable. Separate accounts for Elective Deferrals, Qualified Non-
elective Contributions, Employee Contributions and Matching Contributions
shall be maintained for each Participant. Each account shall be credited
with the applicable contributions and earnings thereon.
4.11 ELIGIBILITY TO RECEIVE CONTRIBUTIONS
A Participant shall be eligible to make Elective Deferrals regardless of
the number of Hours of Service credited during the Plan Year and regardless
of whether or not employed on the last day of the Plan Year. A Participant
shall be eligible to receive Matching Contributions and Qualified
Nonelective contributions as elected in the Adoption Agreement.
4.12 ALLOCATION OF EARNINGS
Earnings attributable to Elective Deferrals, Matching Contributions and
Qualified Non-elective Contributions shall be allocated in accordance with
Section 3.07.
4.13 DISTRIBUTION REQUIREMENTS
(a) Elective Deferrals and Qualified Non-elective Contributions, and
income allocable to each, are not distributable to a Participant or
his or her Beneficiary or Beneficiaries, in accordance with such
Participant's or Beneficiary or Beneficiaries election, earlier than
upon separation from service, death, or disability.
(b) Such amounts may also be distributed, in accordance with the
Participant's election, upon:
(1) Termination of the Plan without the establishment of another
Defined Contribution plan, other than an employee stock ownership
plan [as defined in Section 4975(e) or Section 409 of the Code]
or a simplified employee pension plan as defined in Section
408(k).
(2) The disposition by a corporation to an unrelated corporation of
substantially all of the assets [within the meaning of Section
32
409(d)(2) of the Code] used in a trade or business of such
corporation if such corporation continues to maintain this Plan
after the disposition, but only with respect to Employees who
continue employment with the corporation acquiring such assets.
(3) The disposition by a corporation to an unrelated entity of such
corporations interest in a subsidiary [within the meaning of
Section 409(d)(3) of the Code], if such corporation continues to
maintain this Plan, but only with respect to Employees who
continue employment with such subsidiary.
(4) The attainment of age 59 1/2 to the extent provided for in
Section A-4.13 of the Adoption Agreement.
(5) The hardship of the Participant as described in Section 4.14 and
to the extent provided in A-4.14 of the Adoption Agreement.
(c) All distributions that may be made pursuant to one or more of the
foregoing distributable events are subject to the spousal and
Participant consent requirements (if applicable) contained in Sections
401(a)(11) and 417 of the Code. In addition, distributions after March
31, 1988, that are triggered by any of the first three events
enumerated above must be made in a lump sum.
4.14 DISTRIBUTION ON ACCOUNT OF FINANCIAL HARDSHIP
If elected (and to the extent elected) by the Employer in Section A-4.14 of
the Adoption Agreement, a distribution may be made to a Participant in the
event of hardship. For the purposes of this Section, hardship is defined as
an immediate and heavy financial need of the Employee where such Employee
lacks other available resources. Hardship distributions are subject to the
spousal consent requirements contained in Sections 401(a)(11) and 417 of
the Code. Any Participant who is eligible to receive a distribution
pursuant to Section 11.09 (e) shall not be eligible to receive a hardship
distribution under this Section 4.14.
Special Rules:
(a) The following are the only financial needs considered immediate and
heavy:
(1) Expenses incurred or necessary for medical care, described in
Section 213(d) of the Code, of the Employee, the Employee's
spouse or dependents.
(2) The purchase (excluding mortgage payments) of a principal
residence for the Employee.
(3) Payment of tuition and related educational fees for the next 12
months of post-secondary education for the Employee, the
Employee's spouse, children or dependents.
(4) The need to prevent the eviction of the Employee from, or
foreclosure on the mortgage of, the Employee's principal
residence.
33
(b) A distribution shall be considered as necessary to satisfy an
immediate and heavy financial need of the Employee only if:
(1) the Employee has obtained all distributions, other than hardship
distributions, and all nontaxable loans under all plans
maintained by the Employer; and
(2) all plans maintained by the Employer provide that the Employee's
Elective Deferrals (and Employee Contributions) shall be
suspended for twelve months after the receipt of the hardship -
distribution; and
(3) the distribution is not in excess of the amount of an immediate
and heavy financial need (including amounts necessary to pay any
federal, state or local income taxes or penalties reasonably
anticipated to result from the distribution); and
(4) all plans maintained by the Employer provide that the Employee
may not make Elective Deferrals for the Employee's taxable year
immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Section
402(g) of the Code for such taxable year less the amount of such
Employee's Elective Deferrals for the taxable year of the
hardship distribution.
4.15 EFFECTIVE DATE
Any other provision of this Plan notwithstanding, the provisions of this
Article IV shall be effective as of the first day of the first Plan Year
commencing after December 31, 1986.
34
ARTICLE V
LIMITATIONS ON ALLOCATIONS
TO PARTICIPANTS' ACCOUNTS
SECTIONS 5.01 THROUGH 5.04 APPLY TO EMPLOYERS WHO DO NOT MAINTAIN ANY QUALIFIED
PLAN IN ADDITION TO THIS PLAN.
5.01 If the Participant does not participate, and has never participated, in
another qualified Plan maintained by the Employer or a welfare benefit fund, a
defined in Section 419(e) of the Code, maintained by the Employer, or an
individual medical account, as defined in Section 415(1)(2) of the Code,
maintained by the Employer, which provides an Annual Addition as defined in
Section 5.13(a), the amount of Annual Additions which may be credited to the
Participant's Account for any Limitation Year shall not exceed the lesser of the
Maximum Permissible Amount or any other limitation contained in this Plan. If
the Employer contribution that would otherwise be contributed or allocated to
the Participant's Account would cause the Annual Additions for the Limitation
Year to exceed the Maximum Permissible Amount, the amount contributed or
allocated shall be reduced so that the Annual Additions for the Limitation Year
shall equal the Maximum Permissible Amount.
5.02 Prior to determining the Participant's actual Compensation for the
Limitation Year, the Employer may determine the Maximum Permissible Amount for a
Participant on the basis of a reasonable estimation of the Participant's
Compensation for the Limitation Year, uniformly determined for all Participants
similarly situated.
5.03 As soon as is administratively feasible after the end of the Limitation
Year, the Maximum Permissible Amount for the Limitation Year shall be determined
on the basis of the Participant's actual Compensation for the Limitation Year.
5.04 If pursuant to Section 5.03 or as a result of the allocation of
Forfeitures, there is an Excess Amount the excess shall be disposed of as
follows:
(a) Any nondeductible voluntary Employee Contributions, to the extent they
would reduce the Excess Amount, shall be returned to the Participant.
(b) If after the application of paragraph (a) an Excess Amount still
exists, and the Participant is covered by the Plan at the end of the
Limitation Year, the Excess Amount in the Participant's Account shall
be used to reduce Employer contributions (including any allocation of
forfeitures) for such Participant in the next Limitation Year, and
each succeeding Limitation Year if necessary.
(c) If after the application of paragraph (a) an Excess Amount still
exists, and the Participant is not covered by the Plan at the end of a
Limitation Year, the Excess Amount shall be held unallocated in a
suspense account. The suspense account shall be applied to reduce
future Employer contributions (including allocation of any
forfeitures) for all remaining Participants in the next Limitation
Year, and each succeeding Limitation Year if necessary.
(d) If a suspense account is in existence at any time during a Limitation
Year pursuant to this Section, it shall not participate in the
allocation of the trust's investment gains and losses. If a suspense
account is in existence at any time during a particular Limitation
Year, all amounts in the suspense account must be allocated and
35
reallocated to Participants' Accounts before any Employer
contributions or any Employee contributions may be made to the Plan
for that Limitation Year. Excess Amounts may not be distributed to
Participants or former Participants.
SECTIONS 5.05 THROUGH 5.10 APPLY TO EMPLOYERS WHO, IN ADDITION TO THIS PLAN,
MAINTAIN ONE OR MORE PLANS, ALL OF WHICH ARE QUALIFIED MASTER OR PROTOTYPE
DEFINED CONTRIBUTION PLANS, OR A WELFARE BENEFIT FUND, AS DEFINED IN SECTION
419(E) OF THE CODE.
5.05 If, in addition to this Plan, the Participant is covered under another
qualified Master or Prototype defined contribution plan maintained by the
Employer, a welfare benefit fund, as defined in Section 419(e) of the Code
maintained by the Employer, or an individual medical account, as defined in
Section 415(1)(2) of the Code, maintained by the Employer, which provides an
Annual Addition as defined in Section 5.13(a) during any Limitation Year, the
Annual Additions which may be credited to a Participant's Account under this
Plan for any such Limitation Year shall not exceed the Maximum Permissible
Amount reduced by the Annual Additions credited to a Participant's Account under
the other plans and welfare benefit funds for the same Limitation Year. If the
Annual Additions with respect to the Participant under other defined
contribution plans and welfare benefit funds maintained by the Employer are less
than the Maximum Permissible Amount and the Employer contribution that would
otherwise be contributed or allocated to the Participant's Account under this
Plan would cause the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated shall be reduced so that the
Annual Additions under all such plans and funds for the Limitation Year shall
equal the Maximum Permissible Amount. If the Annual Additions with respect to
the Participant-under such other defined contribution plans and welfare benefit
funds in the aggregate are equal to or greater than the Maximum Permissible
Amount, no amount shall be contributed or allocated to the Participant's Account
under this Plan for the Limitation Year.
5.06 Prior to determining the Participant's actual Compensation for the
Limitation Year, the Employer may determine the Maximum Permissible Amount for a
Participant in the manner described in Section 5.02.
5.07 As soon as is administratively feasible after the end of the Limitation
Year, the Maximum Permissible Amount for the Limitation Year shall be determined
on the basis of the Participant's actual Compensation for the Limitation Year.
5.08 If, pursuant to Section 5.07, or as a result of the allocation of
Forfeitures, a Participant's Annual Additions under this Plan and such other
plans would result in an Excess Amount for a Limitation Year, the Excess Amount
shall be deemed to consist of the Annual Additions last allocated, except that
Annual Additions attributable to a welfare benefit fund or individual medical
account shall be deemed to have been allocated first regardless of the actual
allocation date.
5.09 If an Excess Amount was allocated to a Participant on an allocation date of
this Plan which coincides with an allocation date of another plan, the Excess
Amount attributed to this Plan shall be the product of,
(a) the total Excess Amount allocated as of such date, times
(b) the ratio of:
(1) the Annual Additions allocated to the Participant for the
Limitation Year as of such date under this Plan, to
36
(2) the total Annual Additions allocated to the Participant for the
Limitation Year as of such date under this and all the other
qualified Master or Prototype defined contribution plans.
5.10 Any Excess Amount attributed to this Plan shall be disposed in the manner
described in Section 5.04.
5.11 If the Participant is covered under another qualified defined contribution
plan maintained by the Employer which is not a Master or Prototype Plan, Annual
Additions which may be credited to the Participant's Account under this Plan for
any Limitation Year shall be limited in accordance with Sections 5.05 through
5.10 as though the other plan were a Master or Prototype Plan unless the
Employer provides other limitations in Section A-5.11 of the Adoption Agreement.
5.12 If the Employer maintains, or at any time maintained, a qualified defined
benefit plan covering any Participant in this Plan, the sum of the Participant's
Defined Benefit Plan Fraction and Defined Contribution Plan Fraction shall not
exceed 1.0 in any Limitation Year. The Annual Additions which may be credited to
the Participant's Account under this Plan for any Limitation Year shall be
limited in accordance with Section A-5.12 of the Adoption Agreement.
5.13 For purposes of this Article, the following terms shall be defined as
follows:
(a) Annual Additions--The sum of the following amounts credited to a
Participant's Account for the Limitation Year:
(1) Employer contributions; and
(2) Employee contributions; and
(3) forfeitures; and
(4) amounts allocated, after March 31, 1984, to an individual medical
account, as defined in Section 415(1)(2) of the Code, which is
part of a pension or annuity plan maintained by the Employer, are
treated as Annual Additions to a defined contribution plan. Also,
amounts derived from contributions paid or accrued after December
31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits, allocated to
the separate account of a Key Employee, as defined in Section
419A(d)(3), of the Code, under a welfare benefit fund, as defined
in Section 419(e), of the Code, maintained by the Employer, are
treated as Annual Additions to a defined contribution plan.
(b) Compensation: All of a Participant's wages as defined in Section
3401(a) for the purposes of income tax withholding at the source but
determined without regard to any rules that limit the remuneration
included in wages based on the nature or location of the employment or
the services performed [such as the exception for agricultural labor
in Section 3401(a)(2)].
For any Self-employed Individual Compensation will mean Earned Income.
For Limitation Years beginning after December 31, 1991, for purposes
of applying the limitations of this Article, Compensation for a
Limitation Year is the Compensation actually paid or includible in
gross income during such Limitation Year.
37
Notwithstanding the preceding sentence, Compensation for a Participant
in a defined contribution plan who is permanently and totally disabled
[as defined in Section 22(e)(3) of the Code] is the Compensation such
Participant would have received for the Limitation Year if the
Participant had been paid at the rate of Compensation paid immediately
before becoming permanently and totally disabled; such imputed
Compensation for the disabled participant may be taken into account
only if the Participant is not a Highly Compensated Employee [as
defined in Section 414(q) of the Code] and contributions made on
behalf of such Participant are nonforfeitable when made.
(c) Defined Benefit Fraction: A fraction, the numerator of which is the
sum of the Participant's Projected Annual Benefits under all the
defined benefit plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser of 125 percent of
the dollar limitation determined for the Limitation Year under
Sections 415(b) and (d) of the Code or 140 percent of the Highest
Average Compensation, including any adjustments under Section 415(b)
of the Code.
Notwithstanding the above, if the Participant was a Participant as of
the first day of the first Limitation Year beginning after December
31, 1986, in one or more defined benefit plans maintained by the
Employer which were in existence on May 6, 1986, the denominator of
this fraction shall not be less than 125 percent of the sum of the
Annual Benefits under such plans which the Participant had accrued as
of the close of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the Plan
after May 5, 1986. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the
requirements of Section 415 for all Limitation Years beginning before
January 1, 1987.
(d) Defined Contribution Dollar Limitation: $30,000 or if greater, one-
fourth of the defined benefit dollar limitation set forth in Section
415(b)(1) of the Code as in effect for the Limitation Year.
(e) Defined Contribution Fraction: A fraction, the numerator of which is
the sum of the Annual Additions to the Participant's Account under all
the defined contribution plans (whether or not terminated) maintained
by the Employer for the current and all prior Limitation Years
[including the Annual Additions attributable to the Participant's
nondeductible employee contributions to all defined benefit plans,
whether or not terminated, maintained by the Employer, and the annual
additions attributable to all welfare benefit funds, as defined in
Section 419(e) of the Code, and individual medical accounts, as
defined in Section 415(1)(2) of the Code, maintained by the employer],
and the denominator of which is the sum of the maximum aggregate
amounts for the current and all prior Limitation Years of service with
the Employer (regardless of whether a defined contribution plan was
maintained by the Employer). The maximum aggregate amount in any
Limitation Year is the lesser of 125 percent of the dollar limitation
determined under Sections 415(b) and (d) of the Code in effect under
Section 415(c)(1)(A) of the Code or 35 percent of the Participant's
Compensation for such year.
If the Employee was a Participant as of the end of the first day of
the first Limitation Year beginning after December 31, 1986, in one or
more defined contribution plans maintained by the Employer which were
in existence on May 6, 1986, the numerator of this fraction shall be
38
adjusted if the sum of this fraction and the Defined Benefit Fraction
would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of:
(1) the excess of the sum of the fractions over 1.0, times
(2) the denominator of this fraction,
shall be permanently subtracted from the numerator of this fraction.
The adjustment is calculated using the fractions as they would be
computed as of the end of the last Limitation Year beginning before
January 1, 1987, and disregarding any changes in the terms and
conditions of the Plan made after May 5, 1986, but using the Section
415 limitation applicable to the first Limitation Year beginning on or
after January 1, 1987.
The annual addition for any Limitation Year beginning before January
1, 1987, shall not be recomputed to treat all Employee contributions
as Annual Additions.
(f) Employer: For purposes of this article, Employer shall mean the
Employer that adopts this Plan, and all members of a controlled group
of corporations [as defined in Section 414 (b) of the Code as modified
by Section 415 (h)], all commonly controlled trades or businesses [as
defined in Section 414 (c) as modified by Section 415 (h)] or
affiliated service groups [as defined in Section 414 (m)] of which the
adopting Employer is a part, and any other entity required to be
aggregated with the Employer pursuant to regulations under Section 414
(o) of the Code.
(g) Excess Amount: The excess of the participant's Annual Additions for
the Limitation Year over the Maximum Permissible Amount.
(h) Highest Average Compensation: The average Compensation for the three
consecutive years of service with the Employer that produces the
highest average. A year of service with the Employer is the 12
consecutive month period corresponding to the Plan Year as defined in
Section A-1. 54 of the Adoption Agreement.
(i) Limitation Year: The Plan Year (a 12 consecutive month period) as
elected by the Employer in the Adoption Agreement. All qualified plans
maintained by the Employer must use the same Limitation Year. If the
Limitation Year is amended to a different 12 consecutive month period,
the new Limitation Year must begin on a date within the Limitation
Year in which the amendment is made.
(j) Master or Prototype Plan: A plan the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
(k) Maximum Permissible Amount: The maximum Annual Addition that may be
contributed or allocated to a Participant's Account under the Plan for
any Limitation Year shall not exceed the lesser of:
(1) the Defined Contribution Dollar Limitation; or
(2) 25 percent of the Participant's Compensation for the Limitation
Year.
The compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits [within the meaning of Section
39
401(h) or Section 419A(f)(2) of the Code] which is otherwise treated
as an Annual Addition under Section 415(1)(1) or 419A(d)(2) of the
Code.
If a short Limitation Year is created because of an amendment changing
the Limitation Year to a different 12 consecutive month period, the
Maximum Permissible Amount shall not exceed the Defined Contribution
Dollar Limitation multiplied by the following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
(1) Projected Annual Benefit: The annual retirement benefit (adjusted to
an actuarially equivalent straight life annuity if such benefit is
expressed in a form other than a straight life annuity or qualified
joint and survivor annuity) to which the Participant would be entitled
under the terms of the Plan assuming:
(1) the Participant shall continue employment until Normal Retirement
Age under the Plan (or current age, if later); and
(2) the Participant's Compensation for the current Limitation Year
and all other relevant factors used to determine benefits under
the Plan shall remain constant for all future Limitation Years.
5.14 If this Plan and another plan -- both of which are integrated with Social
Security -- cover some of the same employees, such plans shall be considered one
plan and shall be properly integrated only if the sum of the ratio of actual
benefits, benefit rate, offset rate, or employer contribution rate to the
applicable integration limit under each plan does not exceed 100 percent for any
Participant. Thus, an adjustment in the actual benefits, benefit rate, offset
rate, or employer contribution rate might be necessary under this Plan if the
sum of such ratios exceeds 100 percent.
40
ARTICLE VI
INVESTMENT OF CONTRIBUTIONS
6.01 The Trustee shall receive, hold, invest, and reinvest all contributions and
monies of this trust in either the General Investment Account, the Designated
Investment Accounts, or the Directed Group Accounts or a combination thereof.
Investments shall be limited to property of a character which is consistent with
Section 503 of the Code for investments under Qualified Plans and which are not
in violation of the limitations on Employer securities or real property under
ERISA. The Trustee shall exercise the judgment and care under the circumstances
then prevailing, which individuals of prudence, discretion, and intelligence
familiar with such matters exercise in a like situation and shall diversify such
investments to minimize the risk of large losses.
6.02 If elected in A-6.02 of the Adoption Agreement, each Participant may direct
the Trustee to use a portion of each year's contribution to purchase life
insurance subject to the following:
(a) All life insurance contracts are to be as nearly alike as possible.
(b) If a portion of the Employer contributions is to be used as a premium
for life insurance, such premium shall be limited as follows:
(1) Ordinary Life--For purposes of these incidental insurance
provisions, ordinary life insurance contracts are contracts with
both nondecreasing death benefits and nonincreasing premiums. If
such contracts are purchased, less than 50 percent of the
aggregate Employer contributions allocated to any Participant
shall be used to pay the premiums attributable to them.
(2) Term and Universal Life--No more than 25 percent of the aggregate
Employer contributions allocated to any Participant shall be used
to pay the premiums on term life insurance contracts, universal
life insurance contracts, and all other life insurance contracts
which are not ordinary life.
(3) Combination--The sum of 50 percent of the ordinary life insurance
premiums and all other life insurance premiums shall not exceed
25 percent of the aggregate Employer contributions allocated to
any Participant.
(c) The minimum face amount of the life insurance contract to be purchased
on the life of a Participant shall be $5,000 or its equivalent if the
contract is issued in units of insurance.
(d) The Trustee shall convert the entire value, if any, of the life
insurance contract at or before retirement into either cash or an
annuity so that no portion of such value is used to continue life
insurance protection after retirement, or the Trustee shall, subject
to the requirements of Article IX, distribute the life insurance
contract to the Participant.
(e) Any dividend or refund payable under a life insurance contract shall
be applied for the benefit of the insured Participant.
(f) If the Participant is classified as uninsurable by the Insurer, no
insurance contract shall be purchased on the life of that Participant.
41
(g) Life insurance contracts shall be purchased only with Elective
Deferrals if the Plan contains a CODA. If the Plan does not contain a
CODA, insurance contracts shall be purchased with Employer
contributions only.
(h) The Trustee may purchase or accept the transfer of any life insurance
contract owned by a Participant provided such transfer meets the
requirements of Class Exemptions 77-7 and 77-8 or any subsequent
rulings.
(i) The Trustee shall apply for and shall be the owner of any insurance
contract purchased under the terms of this Plan. The insurance
contract(s) must provide that proceeds shall be payable to the
Trustee, however the Trustee shall be required to pay over all
proceeds of the contract(s) to the Participant's designated
Beneficiary in accordance with the distribution provisions of this
Plan. A Participant's Spouse shall be the designated Beneficiary of
the proceeds in all circumstances unless a Qualified Election has been
made in accordance with Article IX, Joint and Survivor Annuity
Requirements. Under no circumstances shall the trust retain any part
of the proceeds. In the event of any conflict between the terms of
this Plan and the terms of any insurance contract purchased hereunder,
the Plan provisions shall control.
6.03 If elected in the Adoption Agreement, Participants may direct the Trustee
as to the investment of their individual Account balances in specific
investments permitted under this agreement, subject to any restrictions on
investment options that may be made in writing by the Employer. That portion the
Account of any Participant so directing shall thereupon be considered a
Designated Investment Account and/or a Directed Group Account.
6.04 Except to the extent a Participant has directed the Trustee as to the
investment of his individual Account balance in accordance with Section 6.03,
each Participant shall have a ratable interest in all assets of the trust.
6.05 If elected in the Adoption Agreement, the Trustee shall make loans to
Participants and Beneficiaries subject to the following conditions:
(a) Loans shall be made available to all Participants and Beneficiaries on
a reasonably equivalent basis. However, former Employees maintaining
an account balance under the Plan shall not be eligible for a loan
unless they are also a party-in-interest, as that term is defined by
ERISA Section 3(14).
(b) Loans shall not be made available to Highly Compensated Employees (as
defined in Section 414(q) of the Code) in an amount greater than the
amount made available to other Employees.
(c) Loans shall not be granted for amounts less than $1,000.
(d) Any administrative expense directly related to the loan may be paid by
the Participant, or paid by the Employer in a consistent and
nondiscriminatory manner.
(e) Loans must be adequately secured and bear a reasonable interest rate.
(f) No Participant loan shall exceed the Participant's Vested Account
Balance.
42
(g) No Participant Loan shall take into account the value of the
Participant's Deductible Voluntary Contributions.
(h) No loans shall be made to any shareholder-employee or Owner-employee.
For purposes of this requirement, a shareholder-employee means an
employee or officer of an electing small business (Subchapter S)
corporation who owns [or is considered as owning within the meaning of
Section 318(a) (1) of the Code], on any day during the taxable year of
such corporation, more than 5 percent of the outstanding stock of the
corporation.
(i) Loans shall not be granted to any Participant that provide for a
repayment period extending beyond such Participant's Normal Retirement
Date.
(j) No loan to any Participant or Beneficiary can be made to the extent
that such loan when added to the outstanding balance of all other
loans to the P articipant or Beneficiary would exceed the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest outstanding
balance of loans during the one year period ending on the day
before the loan is made, over the outstanding balance of loans
from the Plan on the date the loan is made; or
(2) one-half the present value of the nonforfeitable accrued benefit
of the Participant or, if greater, the total accrued benefit up
to $10,000.
For the purpose of the above limitation, all loans from all plans of
the Employer and other members of a group of employers described in
Sections 414 (b), 414 (c), and 414 (m) of the Code are aggregated.
Furthermore, any loan shall by its terms require that repayment
(principal and interest) be amortized in level payments, not less
frequently than quarterly, over a period not extending beyond five
years from the date of the loan, unless such loan is used to acquire a
dwelling unit which within a reasonable time (determined at the time
the loan is made) shall be used as the principal residence of the
Participant. An assignment or pledge of any portion of the
Participant's interest in the Plan and a loan, pledge, or assignment
with respect to any insurance contract purchased under the Plan, shall
be treated as a loan under this paragraph.
(k) In the event of default, foreclosure on the note and attachment of
security shall not occur until a distributable event occurs in the
Plan.
(l) A Participant must obtain the consent of his or her Spouse, if any, to
use the Vested Account Balance as security for the loan. (Spousal
consent is not required if the total Accrued Benefit subject to the
security is not in excess of $3,500.) Spousal consent shall be
obtained no earlier than the beginning of the 90-day period that ends
on the date on which the loan is to be so secured. The consent must be
in writing, must acknowledge the effect of the loan, and must be
witnessed by a Plan representative or notary public. Such consent
shall thereafter be binding with respect to the consenting Spouse or
any subsequent Spouse with respect to that loan. A new consent shall
be required if the Account balance is used for renegotiation,
extension, renewal, or other revision of the loan.
43
If a valid spousal consent has been obtained in accordance with (1), then,
notwithstanding any other provision of this Plan, the portion of the
Participant's Vested Account Balance used as a security interest held by the
Plan by reason of a loan outstanding to the Participant shall be taken into
account for purposes of determining the amount of the Account balance payable at
the time of death or distribution, but only if the reduction is used as
repayment of the loan. If less than 100 percent of the Participant's Vested
Account Balance (determined without regard to the preceding sentence) is payable
to the surviving spouse, then the Account balance shall be adjusted by first
reducing the Vested Account Balance by the amount of the security used as
repayment of the loan, and then determining the benefit payable to the surviving
spouse.
6.06 The Trustee is authorized and empowered to invest and reinvest the
principal and income, in real or personal property, including, but not limited
to, any common or preferred stocks, bonds, notes, mortgages, trust certificates,
mutual funds, Insurance Contracts, and pooled accounts of a bank or trust
company maintained exclusively for Qualified Plans. In making such investments
or reinvestments, the Trustee has wide latitude in the selection of investments
and shall not be restricted to securities or other property of a character
authorized or required by applicable state law for trust investments. The
Trustee may keep whatever portion of the Investment Fund in cash or cash
equivalents as it may from time to time deem to be in the best interest of the
Participants.
44
ARTICLE VII
VALUATION OF ASSETS
7.01 The Plan Administrator shall maintain for each Participant (including any
terminated Participant who received a distribution of less than his Vested
Account Balance) as many accounts and subaccounts as may be required under the
provisions of this Plan. The total value of a Participant's account(s) shall be
determined at the end of each Allocation Period and shall include the value of
the Participant's share in the General Investment Account, the values in the
Participant's Designated Investment Account, the values in the Participant's
Directed Group Account, and contributions accrued but not yet made on behalf of
the Participant for the Allocation Period.
7.02 The Trustee shall determine as of the last day of the Allocation Period the
net value of the General Investment Account and the net value of each investment
fund available under the Directed Group Account. The Trustee shall convey this
information to the Plan Administrator. In determining the net value, the Trustee
shall value all assets at fair market value as of the last day of the Allocation
Period.
7.03 The Trustee shall determine as of the last day of the Allocation Period the
value of insurance contracts, and such other investments as may be permitted
under Section 6.03, in each Participant's Designated Investment Account and
convey this information to the Plan Administrator. All assets shall be valued at
fair market value. Life insurance contracts shall be valued as of the last day
of the month coinciding with or immediately preceding the last day of the
Allocation Period.
7.04 As soon as practical after the end of each Allocation Period, the Plan
Administrator shall convey to each Participant the total value of such
Participant's account(s). However, neither the maintenance of accounts nor the
allocations of credits to accounts shall operate to vest in any Participant any
right to or interest in any assets of the trust except as the Plan specifically
provides.
7.05 The assets of the trust shall be valued at fair market value no less
frequently than annually. Valuations shall be performed as of the last day of
the Plan Year and such other times as may be determined by the Trustee. On such
dates the earnings and losses of the trust shall be allocated to each
Participant's Account in accordance with Section 3.07.
45
ARTICLE VIII
BENEFITS
8.01 NORMAL RETIREMENT
The Account of each Participant who retires on the Normal Retirement Date
specified in A-8.01 of the Adoption Agreement shall be payable as provided
in Section 8.07. The Account of each Participant shall be fully vested upon
attainment of Normal Retirement Age.
8.02 EARLY RETIREMENT
A Participant may retire early if Early Retirement is permitted under A-
8.02 in the Adoption Agreement, and benefits shall be based on the election
made in the Adoption Agreement.
If a Participant separates from Service before satisfying the age
requirement for Early Retirement, but has satisfied the Service
requirement, the Participant shall be entitled to elect an Early Retirement
benefit upon satisfaction of such Age requirement.
8.03 LATE RETIREMENT
If a Participant continues employment beyond Normal Retirement Date, a
Participant may continue to participate in this Plan until actual
retirement. Upon attainment of Normal Retirement Age a Participant may
elect to receive a distribution of his entire Account balance prior to
actual retirement. In no event shall commencement of benefits be deferred
beyond the Required Beginning Date as defined in Section 1.62.
8.04 DISABILITY RETIREMENT
If a medical examiner selected by the Plan Administrator certifies that a
Participant is permanently disabled as defined in the Adoption Agreement,
such Participant shall then be entitled to the disability benefits in lieu
of any other benefits provided by this Plan in accordance with A-8.04 of
the Adoption Agreement. Disability shall at all times be determined on a
uniform and consistent basis for all Participants.
8.05 DEATH BENEFIT
If a Participant dies, the Participant's Account shall be fully vested and
the Beneficiary shall receive a death benefit equal to the value of such
Account.
8.06 BENEFICIARY DESIGNATION
Subject to the provisions of Article IX:
(a) Each Participant shall be given the opportunity in an original
election to designate a Beneficiary and from time to time the
Participant may file with the Plan Administrator a new or revised
designation in such form as the Plan Administrator shall provide. A
Participant may also designate any form of payment available under
Section 8.08 to such Beneficiary.
(b) Unless otherwise elected under (a) above, if a married Participant
dies, the surviving spouse shall be deemed the designated Beneficiary
46
and the payment shall be in a form elected by the Participant or
Beneficiary.
(c) In the absence of a Beneficiary under either (a) or (b) above, the
estate of the Participant shall be deemed to be the designated
Beneficiary and in the absence of a designated form of payment, the
Beneficiary shall select any form of payment available under Section
8.08.
8.07 PAYMENT OF BENEFITS
The Plan Administrator shall direct the Trustee to make payment of any
benefits provided under this Plan upon the event giving rise to such
benefit within the time prescribed by Section 8.10.
8.08 OPTIONAL FORMS OF BENEFIT
Subject to the Joint and Survivor Annuity Requirements of Article IX and
the Distribution Requirements of Article X optional forms of benefit
distribution are available subject to a written request by the Participant
and the provisions of this Section.
The optional forms for benefits attributable to Service performed on and
after the date this Plan is adopted are as follows:
-One lump-sum payment in cash or in property.
-Life Annuity.
-Life Annuity with a period certain of 10, 15 or 20 years.
-Joint and 50%, 66 2/3% or 100% Survivor Annuity.
-Any combination of the above.
For benefits attributable to Service performed before the date this Plan is
adopted the optional forms available are those listed above plus any other
forms which were available immediately prior to the adoption date.
Any annuity contract purchased and distributed by the Plan to a Participant
or Spouse shall be nontransferrable, and its terms shall comply with the
requirements of this Plan.
8.09 [FOR PROFIT SHARING/401(K) SALARY REDUCTION PLANS ONLY]
The preceding Section 8.08 notwithstanding, if elected in Section A-8.09 of
the Adoption Agreement, distributions from this Plan shall be made only in
the form of a single lump-sum payment, in cash or in property, and a
Participant may not elect to receive payments in the form of a life
annuity. If a Participant dies, the Participant's Vested Account Balance
shall be paid to the Participant's Surviving Spouse, but if there is no
Surviving Spouse, or if the Surviving Spouse has consented in a manner
conforming to a Qualified Election, the Participant's Vested Account
Balance shall be paid to the Participant's Designated Beneficiary. This
Lump-sum only'' option may be elected by the Employer only if immediately
prior to the adoption date of this Plan no other form of distribution
(other than lump-sum) was available, i.e., this option may be elected only
if this is a new plan, or if this is an amendment to an existing plan which
permitted only lump-sum distributions. If this Section 8.09 is operative,
47
Section 9.05 shall also be operative, and the spousal consent requirements
of Sections 3.04, 4.13(c), 4.14, 6.05(1) and 11.08 shall be inoperative.
8.10 COMMENCEMENT OF BENEFITS
Unless the Participant elects otherwise, distribution of benefits shall
begin no later than the 60th day after the latest of the close of the Plan
Year in which:
(a) the Participant attains age 65 (or Normal Retirement Age, if earlier);
or
(b) occurs the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or
(c) the Participant terminates Service with the Employer.
If the amount of the payment required to commence on the date determined
above cannot be ascertained by such date, the time of the payment with
respect to such date may be delayed no later than 60 days after the
earliest date on which the amount could be ascertained. If a Participant
elects to defer any benefit payment beyond the dates specified in (a), (b),
or (c), above, such election must be in writing and must describe the
benefit and the date on which such benefit shall commence. Provided,
however, no such election violates the provisions of Article X.
Notwithstanding the foregoing, the failure of a Participant and Spouse to
consent to a distribution while a benefit is immediately distributable,
within the meaning of Section 11.08 of the Plan, shall be deemed to be an
election to defer commencement of payment of any benefit sufficient to
satisfy this Section.
48
ARTICLE IX
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
9.01 The provisions of this Article shall take precedence over any conflicting
provision in this Plan.
The provisions of this Article shall apply to any Participant who is credited
with at least one Hour of Service with the Employer on or after August 23, 1984,
and such other Participants as provided in Section 9.06.
9.02 Qualified Joint and Survivor Annuity:
Unless an optional form of benefit is selected pursuant to a Qualified Election
within the 90-day period ending on the Annuity Starting Date, a married
Participant's Vested Account Balance shall be paid in the form of a Qualified
Joint and Survivor Annuity and an unmarried Participant's Vested Account Balance
shall be paid in the form of a life annuity. The Participant may elect to have
such annuity distributed upon attainment of the Earliest Retirement Age under
the Plan.
9.03 Qualified Preretirement Survivor Annuity:
Unless an optional form of benefit has been selected within the Election Period
pursuant to a Qualified Election, if a Participant dies before the Annuity
Starting Date then the Participant's Vested Account Balance shall be applied
toward the purchase of an annuity for the life of the Surviving Spouse. The
Surviving Spouse may elect to have such annuity distributed within a reasonable
period after the Participant's death.
9.04 Notice Requirements:
(a) In the case of a Qualified Joint and Survivor Annuity, the Plan
Administrator shall, no less than 30 days and no more than 90 days
prior to the Annuity Starting Date, provide each Participant a written
explanation of:
(1) the terms and conditions of a Qualified Joint and Survivor
Annuity; and
(2) the Participant's right to make, and the effect of, an election
to waive the Qualified Joint and Survivor Annuity form of
benefit; and
(3) the rights of a Participant's Spouse; and
(4) the right to make, and the effect of, a revocation of a previous
election to waive the Qualified Joint and Survivor Annuity.
(b) In the case of a Qualified Preretirement Survivor Annuity as described
in Section 9.03 of this Article, the Plan Administrator shall provide
each Participant within the applicable period for such Participant a
written explanation of the Qualified Preretirement Survivor Annuity in
such terms and in such manner as would be comparable to the
explanation provided for meeting the requirements of Section 9.04(a)
applicable to a Qualified Joint and Survivor Annuity.
49
The applicable period for a Participant is whichever of the following
periods ends last:
(1) The period beginning with the first day of the Plan Year in which
the Participant attains age 32 and ending with the close of the
Plan Year preceding the Plan Year in which the Participant
attains age 35.
(2) A reasonable period ending after the individual becomes a
Participant.
(3) A reasonable period ending after Section 9.04(c) ceases to apply
to the Participant.
(4) A reasonable period ending after this Article first applies to
the Participant.
Notwithstanding the foregoing, notice must be provided within a
reasonable period ending after separation from Service in the case of
a Participant who separates from Service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable period
ending after the enumerated events described in (2), (3) and (4) is
the end of the two (2) year period beginning one (1) year prior to the
date the applicable event occurs, and ending one (1) year after that
date. In the case of a Participant who separates from Service before
the Plan Year in which age 35 is attained, notice shall be provided
within the two (2) year period beginning one (1) year prior to
separation and ending one (1) year after separation. If such a
Participant thereafter returns to employment with the Employer, the
applicable period for such Participant shall be redetermined.
(c) Notwithstanding the other requirements of this Section 9.04, the
respective notices prescribed by this Section need not be given to a
Participant if:
(1) the Plan "fully subsidizes" the costs of a Qualified Joint and
Survivor Annuity or Qualified Preretirement Survivor Annuity; and
(2) the Plan does not allow the Participant to waive the Qualified
Joint and Survivor Annuity or Qualified Preretirement Survivor
Annuity and does not allow a married Participant to designate a
nonspouse Beneficiary.
For purposes of this Section 9.04(c), a Plan fully subsidizes the
costs of a benefit if no increase in cost, or decrease in benefits to
the Participant may result from the Participant's failure to elect
another benefit.
9.05 Safe Harbor Rules:
(a) This Section shall apply to a Participant in a profit sharing plan,
and to any distribution, made on or after the first day of the first
Plan Year beginning after December 31, 1988, from or under a separate
account attributable solely to accumulated deductible Employee
contributions, as defined in Section 72(o)(5)(B) of the Code, and
maintained on behalf of a Participant in a money purchase pension
plan, (including a target benefit plan) if the following conditions
are satisfied:
50
(1) the Participant does not or cannot elect payments in the form of
a life annuity; and
(2) on the death of a Participant, the Participant's Vested Account
Balance shall be paid to the Participant's Surviving Spouse, but
if there is no Surviving Spouse, or if the Surviving Spouse has
consented in a manner conforming to a Qualified Election, then to
the Participant's designated Beneficiary.
The Surviving Spouse may elect to have distribution of the Vested
Account Balance commence within the 90-day period following the date
of the Participant's death. The Account balance shall be adjusted for
gains or losses occurring after the Participant's death in accordance
with the provisions of the Plan governing the adjustment of Account
balances for other types of distributions. This Section 9.05 shall not
be operative with respect to a Participant in a profit sharing plan if
the Plan is a direct or indirect transferee of a defined benefit plan,
money purchase plan, a target benefit plan, stock bonus, or profit
sharing plan which is subject to the Survivor Annuity requirements of
Section 401(a)(11) and Section 417 of the Code. If this Section 9.05
is operative, then the provisions of this Article, other than Section
9.06, shall be inoperative.
(b) The Participant may waive the spousal death benefit described in this
Section at any time provided that no such waiver shall be effective
unless it satisfies the conditions of Section 1.57 (other than the
notification requirement referred to therein) that would apply to the
Participant's waiver of the Qualified Preretirement Survivor Annuity.
(c) For purposes of this Section 9.05, Vested Account Balance shall mean,
in the case of a money purchase pension plan or a target benefit plan,
the Participant's separate Account balance attributable solely to
accumulated deductible Employee contributions within the meaning of
Section 72(o)(5)(B) of the Code. In the case of a profit sharing plan,
Vested Account Balance shall have the same meaning as provided in
Section 1.72.
9.06 Transitional Rules:
(a) Any living Participant not receiving benefits on August 23, 1984, who
would otherwise not receive the benefits prescribed by the previous
Sections of this Article must be given the opportunity to elect to
have the prior Sections of this Article apply if such Participant is
credited with at least one Hour of Service under this Plan or a
predecessor Plan in a Plan Year beginning on or after January 1, 1976,
and such Participant had at least ten (10) years of Vesting Service
when he or she separated from Service.
(b) Any living Participant not receiving benefits on August 23, 1984, who
was credited with at least one Hour of Service under this Plan or a
predecessor Plan on or after September 2, 1974, and who is not
otherwise credited with any Service in a Plan Year beginning on or
after January 1, 1976, must be given the opportunity to have his or
her benefits paid in accordance with Section 9.06(d) of this Article.
(c) The respective opportunities to elect [as described in Sections
9.06(a) and (b) above] must be afforded to the appropriate
Participants during the period commencing on August 23, 1984, and
ending on the date benefits would otherwise commence to said
Participants.
51
(d) Any Participant who has elected pursuant to Section 9.06(b) of this
Article and any Participant who does not elect under Section 9.06(a)
or who meets the requirements of Section 9.06(a) except that such
participant does not have at least 10 years of Vesting Service when or
she separates from Service, shall have his or her benefits distributed
in accordance with all of the following requirements if benefits would
have been payable in the form of a life annuity:
(1) Automatic Joint and Survivor Annuity: If benefits in the form of
a life annuity become payable to a married Participant who:
(i) begins to receive payments under the Plan on or after
Normal Retirement Age; or
(ii) dies on or after Normal Retirement Age while still working
for the Employer; or
(iii) begins to receive payments on or after the Qualified Early
Retirement Age; or
(iv) separates from Service on or after attaining Normal
Retirement Age (or the Qualified Early Retirement Age) and
after satisfying the eligibility requirements for the
payment of benefits under the Plan and thereafter dies
before beginning to receive such benefits,
then such benefits shall be received under this Plan in the form
of a Qualified Joint and Survivor Annuity, unless the Participant
has elected otherwise during the election period. The election
period must begin at least six (6) months before the Participant
attains Qualified Early Retirement Age and end not more than 90
days before the commencement of benefits. Any election hereunder
shall be in writing and may be changed by the Participant at any
time.
(2) Election of Early Survivor Annuity: A Participant who is employed
after attaining the Qualified Early Retirement Age shall be given
the opportunity to elect, during the election period, to have a
survivor annuity payable on death. If the Participant elects the
survivor annuity, payments under such annuity must not be less
than the payments which would have been made to the Spouse under
the Qualified Joint and Survivor Annuity if the Participant had
retired on the day before his or her death. Any election under
this provision shall be in writing and may be changed by the
Participant at any time. The election period begins on the later
of:
(i) the 90th day before the Participant attains the Qualified
Early Retirement Age; or
(ii) the date on which participation begins, and ends on the date
the Participant terminates employment.
(3) For purposes of this Section
(i) Qualified Early Retirement Age is the latest of:
-the earliest date, under the Plan, on which the participant
may elect to receive retirement benefits; or
52
-the first day of the 120th month beginning before the
Participant reaches Normal Retirement Age; or
-the date the Participant begins Participation.
(ii) Qualified Joint and Survivor Annuity is an annuity for the
life of the Participant with a survivor annuity for the life
of the Spouse as described in Section 1.58.
53
ARTICLE X
DISTRIBUTION REQUIREMENTS
10.01 General Rules
(a) Subject to Article IX, Joint and Survivor Annuity Requirements, the
requirements of this Article shall apply to any distribution of a
Participant's interest and shall take precedence over any inconsistent
provisions of this Plan. Unless otherwise specified, the provisions of
this Article apply to calendar years beginning after December 31,
1984.
(b) All distributions required under this Article shall be determined and
made in accordance with the proposed regulations under Section 401(a)
(9), including the minimum distribution incidental benefit requirement
of Section 1.401(a)(9)-2 of the proposed regulations.
10.02 Required Beginning Date
The entire interest of a Participant must be distributed or begin to be
distributed no later than the Participant's Required Beginning Date as defined
in Section 1.62.
10.03 Limits on Distribution Periods
As of the first Distribution Calendar Year, distributions, if not made in one
lump-sum payment, may only be made over one of the following periods (or a
combination thereof):
(a) the life of the Participant; or
(b) the life of the Participant and a Designated Beneficiary; or
(c) a period certain not extending beyond the Life Expectancy of the
Participant; or
(d) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a Designated Beneficiary.
10.04 Determination of Amount to be Distributed Each Year
If the Participant's interest is to be distributed in other than one lump-sum
payment, the following minimum distribution rules shall apply on or after the
Required Beginning Date:
(a) Individual Account
(1) If a Participant's Benefit is to be distributed over:
(i) a period not extending beyond the Life Expectancy of the
Participant or the joint life and last survivor expectancy
of the Participant and the Participant's Designated
Beneficiary; or
(ii) a period not extending beyond the Life Expectancy of the
Designated Beneficiary,
the amount required to be distributed for each calendar year,
beginning with distributions for the first Distribution Calendar
54
Year, must at least equal the quotient obtained by dividing the
Participant's Benefit by the applicable Life Expectancy.
(2) For calendar years beginning before January 1, 1989, if the
Participant's Spouse is not the Designated Beneficiary, the
method of distribution selected must assure that at least 50
percent of the present value of the amount available for
distribution is paid within the Life Expectancy of the
Participant.
(3) For calendar years beginning after December 31, 1988, the amount
to be distributed each year, beginning with distributions for the
first Distribution Calendar Year shall not be less than the
quotient obtained by dividing the Participant's Benefit by the
lesser of:
(i) the applicable Life Expectancy; or
(ii) if the Participant's Spouse is not the Designated
Beneficiary, the applicable divisor determined from the
table set forth in Q&A-4 of Section 1.401(a)(9)-2 of the
proposed regulations.
Distributions after the death of the Participant shall be
distributed using the applicable Life Expectancy in Section
10.04(a)(1) above as the relevant divisor without regard to
proposed regulations Section 1.401(a)(9)-2.
(4) The minimum distribution required for the Participant's first
Distribution Calendar Year must be made on or before the
Participant's Required Beginning Date. The minimum distribution
for other calendar years, including the minimum distribution for
the Distribution Calendar Year in which the Employee's Required
Beginning Date occurs, must be made on or before December 31 of
that Distribution Calendar Year.
(b) Other Forms
If the Participant's Benefit is distributed in the form of an annuity
purchased from an insurance company, distributions thereunder shall be
made in accordance with the requirements of Section 401(a)(9) of the
Code and the proposed regulations thereunder.
10.05 Death Distribution Provisions
(a) Distribution beginning before death.
If the Participant dies after distribution of his or her interest has
begun, the remaining portion of such interest shall continue to be
distributed at least as rapidly as under the method of distribution
being used prior to the Participant's death.
(b) Distribution beginning after death.
If the Participant dies before distribution of his or her interest
begins, distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death except to the extent that an
election is made to receive distributions in accordance with (1) or
(2) below:
55
(1) If any portion of the Participant's interest is payable to a
Designated Beneficiary, distributions may be made over the life
or over a period certain not greater than the Life Expectancy of
the Designated Beneficiary commencing on or before December 31 of
the calendar year immediately following the calendar year in
which the Participant died.
(2) If the Designated Beneficiary is the Participant's surviving
Spouse, the date distributions are required to begin in
accordance with (1) above shall not be earlier than the later of:
(i) December 31 of the calendar year immediately following the
calendar year in which the Participant died; or
(ii) December 31 of the calendar year in which the Participant
would have attained age 70-1/2.
If the Participant has not made an election pursuant to this Section
10.05(b) by the time of his or her death, the Participant's Designated
Beneficiary must elect the method of distribution no later than the
earlier of:
-December 31 of the calendar year in which distributions would be
required to begin under this Section; or
-December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Participant.
If the Participant has no Designated Beneficiary, or if the Designated
Beneficiary does not elect a method of distribution, distribution of
the Participant's entire interest must be completed by December 31 of
the calendar year containing the fifth anniversary of the
Participant's death.
(c) For purposes of Section 10.05(b) above, if the Surviving Spouse dies
after the Participant, but before payments to such Spouse begin, the
provisions of Section 10.05(b), with the exception of paragraph (2)
therein, shall be applied as if the Surviving Spouse were the
Participant.
(d) For purposes of this Section 10.05, any amount paid to a child of the
Participant shall be treated as if it had been paid to the Surviving
Spouse if the amount becomes payable to the Surviving Spouse when the
child reaches the age of majority.
(e) For purposes of this Section 10.05, distribution of a Participant's
interest is considered to begin on the Participant's Required
Beginning Date [or, if Section 10.05(c) above is applicable, the date
distribution is required to begin to the Surviving Spouse pursuant to
Section 10.05(b) above]. If distribution in the form of an annuity
irrevocably commences to the Participant before the Required Beginning
Date, the date distribution is considered to begin is the date
distribution actually commences.
10.06 Transitional Rule
(a) Notwithstanding the other requirements of this Article and subject to
the requirements of Article IX, Joint and Survivor Annuity
Requirements, distribution on behalf of any Employee, including a
56
5-percent owner, may be made in accordance with all of the following
requirements (regardless of when such distribution commences):
(1) The distribution by the trust is one which would not have
disqualified such trust under Section 401(a)(9) of the Code as in
effect prior to amendment by the Deficit Reduction Act of 1984.
(2) The distribution is in accordance with a method of distribution
designated by the Employee whose interest in the trust is being
distributed or, if the Employee is deceased, by a Beneficiary of
such Employee.
(3) Such designation was in writing, was signed by the Employee or
the Beneficiary, and was made before January 1, 1984.
(4) The Employee had accrued a benefit under the Plan as of December
31, 1983.
(5) The method of distribution designated by the Employee or the
Beneficiary specifies the time at which distribution shall
commence, the period over which distributions shall be made, and
in the case of any distribution upon the Employee's death, the
Beneficiaries of the Employee listed in order of priority.
(b) A distribution upon death shall not be covered by this transitional
rule unless the information in the designation contains the required
information described above with respect to the distributions to be
made upon the death of the Employee.
(c) For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Employee, or the Beneficiary,
to whom such distribution is being made, shall be presumed to have
designated the method of distribution under which the distribution is
being made if the method of distribution was specified in writing and
the distribution satisfies the requirements in subsections 10.06(a)(1)
and (5).
(d) If a designation is revoked any subsequent distribution must satisfy
the requirements of Section 401(a)(9) of the Code and the proposed
regulations thereunder. If a designation is revoked subsequent to the
date distributions are required to begin, the trust must distribute by
the end of the calendar year following the calendar year in which the
revocation occurs the total amount not yet distributed which would
have been required to have been distributed to satisfy Section
401(a)(9) of the Code and the proposed regulations thereunder, but for
the Section 242(b)(2) election. For calendar years beginning after
December 31, 1988, such distributions must meet the minimum
distribution incidental benefit requirements in Section 1.401(a)(9)-2
of the proposed regulations. Any changes in the designation shall be
considered to be a revocation of the designation. However, the mere
substitution or addition of another Beneficiary (one not named in the
designation) under the designation shall not be considered to be a
revocation of the designation, so long as such substitution or
addition does not alter the period over which distributions are to be
made under the designation, directly or indirectly (for example, by
altering the relevant measuring life). In the case in which an amount
is transferred or rolled over from one plan to another plan, the rules
in Q&A J-2 and Q&A J-3 of Section 1.401(a)(9)-1 of the proposed
regulations shall apply.
57
ARTICLE XI
TERMINATION OF SERVICE
11.01 Termination of Service, except for death, normal or early retirement, or
disability retirement, qualifies the Participant for the vested portion of the
Account balance as of the date of termination. The portion of the Participant's
Account balance which is vested is determined by the vesting schedule and the
Vesting Years of Service with which the Participant has been credited as of the
termination date.
11.02 All Vesting Years of Service, as described in Section 1.73, of the
Participant with the Employer (or under a predecessor plan, if the obligations
of the predecessor plan have been assumed by the Employer) shall be taken into
account in determining the Participant's place on the vesting schedule
designated in the Adoption Agreement.
11.03 No amendment to the Plan shall have the effect of decreasing a
Participant's vested interest determined without regard to such amendment as of
the later of the date such amendment is adopted or the date it becomes
effective.
If the Plan's vesting schedule is amended, or the Plan is amended in any way
that directly or indirectly affects the computation of the Participant's
nonforfeitable percentage or if the Plan is deemed amended by an automatic
change to or from a Top-heavy vesting schedule, each Participant with at least
three (3) Years of Service with the Employer as of the later of the date of
adoption or the effective date of the amendment shall at all times receive a
vested interest calculated under whichever vesting schedule provides the
greatest vested interest. For Participants who do not have at least one (1) Hour
of Service in any Plan Year beginning after December 31, 1988, the preceding
sentence shall be applied by substituting "five (5) Years of Service" for "three
(3) Years of Service" where such language appears.
11.04 If there is a change in the Plan Year and Eligibility and/or Vesting Years
of Service are based on such Plan Year, a Participant shall be credited with an
Eligibility and/or a Vesting Year of Service for both the Plan Year as it was
prior to the amendment (as if there was no change) and the first Plan Year after
the amendment if the Participant has at least 1,000 Hours of Service in each of
those Plan Years.
11.05 A Participant's Vested Account Balance shall be available for distribution
in accordance with the selection in the Adoption Agreement.
(a) In the event of a deferred distribution, payment of the Vested Account
Balance shall commence no later than the time prescribed by Section
8.10. If the Participant should die after termination of employment,
but before receiving a distribution of the Vested Account Balance, the
Beneficiary shall receive the death benefit, if any, as provided in
Section 8.05. Payments shall be made under an arrangement provided for
in Article VIII and shall be subject to the requirements of Article X.
(b) In the event of an immediate distribution, the Vested Account Balance
shall be distributed under an arrangement provided for in Article VIII
and shall be subject to the requirements of Article X.
58
11.06 Any forfeitures shall be a general asset of the Plan and shall be handled
in accordance with Section 3.08. A forfeiture shall occur on the earlier of:
(a) the distribution of the entire vested portion of a Participant's
account; or
(b) the last day of the Plan Year in which the Participant incurs five (5)
consecutive One-Year Breaks in Service.
The provisions of this Section 11.06 shall be effective no earlier than the
first day of the Plan Year during which this Plan is adopted.
11.07 If an Employee terminates Service, and the value of the Employee's Vested
Account Balance derived from Employer and Employee contributions is not greater
than $3,500, the Employee shall receive a distribution of the value of the
entire vested portion of such Account balance and the nonvested portion shall be
treated as a forfeiture. For purposes of this Section, if the value of an
Employee's Vested Account Balance is zero, the Employee shall be deemed to have
received a distribution of such Vested Account Balance. A Participant's Vested
Account Balance shall not include accumulated deductible Employee contributions
within the meaning of Section 72(o)(5)(B) of the Code for Plan Years beginning
prior to January 1, 1989.
If an Employee terminates Service, and elects, in accordance with the
requirements of Article IX, to receive the value of the Employee's Vested
Account Balance, the nonvested portion shall be treated as a forfeiture. If the
Employee elects to have distributed less than the entire vested portion of the
Account balance derived from Employer contributions, the part of the nonvested
portion that shall be treated as a forfeiture is the total nonvested portion
multiplied by a fraction, the numerator of which is the amount of the
distribution attributable to Employer contributions and the denominator of which
is the total value of the vested Employer derived Account balance.
If an Employee receives a distribution pursuant to this Section and the Employee
resumes employment covered under this Plan, the Employee's Employer-derived
Account balance shall be restored to the amount on the date of distribution if
the Employee repays to the Plan the full amount of the distribution attributable
to Employer contributions before the earlier of five (5) years after the first
date on which the Participant is subsequently reemployed by the Employer, or the
date the Participant incurs five (5) consecutive One-Year Breaks in Service
following the date of the distribution. If an Employee is deemed to receive a
distribution pursuant to this Section, and the Employee resumes employment
covered under this Plan before the date the Participant incurs five (5)
consecutive One-Year Breaks in Service, upon the reemployment of such Employee,
the Employer-derived Account balance of the Employee shall be restored to the
amount on the date of such deemed distribution.
The provisions of this Section 11.07 shall be effective no earlier than the
first day of the Plan Year during which this Plan is adopted.
11.08 If the value of a Participant's Vested Account Balance derived from
Employer and Employee contributions exceeds (or at the time of any prior
distribution exceeded) $3,500, and the Account balance is immediately
distributable, the Participant and the Participant's spouse (or where either the
Participant or the Spouse has died, the survivor) must consent to any
distribution of such Account balance. The consent of the Participant and the
Participant's Spouse shall be obtained in writing within the 90-day period
ending on the Annuity Starting Date. The Annuity Starting Date is the first day
of the first period for which an amount is paid as an annuity or any other form.
The Plan Administrator shall notify the Participant and the Participant's Spouse
59
of the right to defer any distribution until the Participant's Account balance
is no longer immediately distributable. Such notification shall include a
general description of the material features, and an explanation of the relative
values of, the optional forms of benefit available under the Plan in a manner
that would satisfy the notice requirements of Section 417(a)(3), and shall be
provided no less than 30 days and no more than 90 days prior to the Annuity
Starting Date.
Notwithstanding the foregoing, only the Participant need consent to the
commencement of a distribution in the form of a Qualified Joint and Survivor
Annuity while the Account balance is immediately distributable. Furthermore, if
payment in the form of a Qualified Joint and Survivor Annuity is not required
with respect to the Participant pursuant to Section 8.09 of the Plan, only the
Participant need consent to the distribution of an Account balance that is
immediately distributable. Neither the consent of the Participant nor the
Participant's spouse shall be required to the extent that a distribution is
required to satisfy Section 401(a)(9) or Section 415 of the Code. In addition,
upon termination of this Plan if the Plan does not offer an annuity option
(purchased from a commercial provider) and if the Employer or any entity within
the same controlled group as the Employer does not maintain another defined
contribution plan [other than an employee stock ownership plan as defined in
Section 4975(e)(7) of the Code], the Participant's Account balance may, without
the Participant's consent, be distributed to the Participant. However, if any
entity within the same controlled group as the Employer maintains another
defined contribution plan [other than an employee stock ownership plan as
defined in Section 4975(e)(7) of the Code], then the Participant's Account
balance will be transferred, without the Participant's consent, to the other
plan if the Participant does not consent to an immediate distribution.
An Account balance is immediately distributable if any part of the Account
balance could be distributed to the Participant (or Surviving Spouse) before the
Participant attains (or would have attained if not deceased) the later of Normal
Retirement Age or age 62.
For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first Plan Year
beginning after December 31, 1988, the Participant's Vested Account Balance
shall not include amounts attributable to accumulated deductible Employee
contributions within the meaning of Section 72(o)(5)(B) of the Code.
11.09 If elected by the Employer in A-11.09 of the Adoption Agreement, and any
other provision of this Plan notwithstanding, no distribution of an amount in
excess of $3,500 shall be made without the expressed consent of the Participant,
or of the Beneficiary if the Participant is deceased, prior to the time required
by Article X. If a distribution is not made as soon as administratively feasible
following the event specified in A-11.05 of the Adoption Agreement, the
following provisions shall apply to the Account Balance of the terminated
Participant.
(a) Subject to the requirements of Article IX the Participant may at any
time withdraw all, or any part, of the Vested Account Balance by
making a written application to the Plan Administrator. Partial
withdrawals may be made no more frequently than once in any twelve
month period, though a Participant may withdraw 100% of the remaining
Vested Account Balance at any time. Any administrative expense
directly related to the withdrawal shall be paid by the Participant.
(b) The Account Balance of the terminated vested Participant shall be
charged with a ratable portion of any asset charge applied to Plan
assets. The asset charge to be applied to an Account Balance shall be
60
determined by multiplying the total asset charge by a fraction, the
numerator of which is the Participant's Account Balance, and the
denominator of which is the total assets of the Plan.
(c) The Account Balance of the terminated vested Participant shall be
charged with the administrative expense reasonably related to the
maintenance of that account. The charge assessed each Participant
shall be identical.
61
ARTICLE XII
AMENDMENT OR TERMINATION OF PLAN
12.01 The Prototype Sponsor may amend any part of this Prototype Plan. In such
event, the Plan adopted by the Employer shall be deemed likewise amended upon
receipt by the Employer and the Trustee of a copy of such amendment.
12.02 The Employer reserves the right to amend any provision of the Plan at any
time and to any extent that it may deem advisable without the consent of any
Participant or any Beneficiary provided, however, that no amendment shall
deprive any Participant of any vested interest. The corpus or income of the
trust may not be diverted to or used for purposes other than for the exclusive
benefit of the Participants or their Beneficiaries nor shall any amendment make
such possible.
The Employer may:
(a) change the choice of options in the Adoption Agreement; and
(b) add overriding language in the Adoption Agreement when such language
is necessary to satisfy Section 415 or Section 416 of the Code because
of the required aggregation of multiple plans; and
(c) add certain model amendments published by the Internal Revenue Service
which specifically provide that their adoption shall not cause the
plan to be treated as individually designed.
An Employer that amends the Plan for any other reason, including a waiver of the
minimum funding requirement under Section 412(d) of the Code, shall no longer
participate in this Master or Prototype plan and shall be considered to have an
individually designed plan.
12.03 Any amendment to this Plan by the Employer shall be set forth in writing
and executed by a duly authorized officer on behalf of the Employer. Any recital
in such an instrument that the action proposed was authorized by the Board of
Directors shall be accepted by the Trustee as proof of such action. After the
Trustee has signed the amendment, this Plan shall be deemed to have been amended
to the extent therein set forth.
12.04 This Plan is purely voluntary on the part of the Employer, and the
Employer reserves the right at any time and at its sole discretion, with proper
notification to the appropriate governmental agencies and Trustee, to reduce
benefits under this Plan or to terminate it, or both. However, no amendment to
the Plan shall be effective to the extent that it has the effect of decreasing a
Participant's accrued benefit. Notwithstanding the preceding sentence, a
Participant's Account balance may be reduced to the extent permitted under
Section 412(c)(8) of the Code. For purposes of this paragraph, a plan amendment
which has the effect of decreasing a Participant's Account balance or
eliminating an optional form of benefit, with respect to benefits attributable
to Service before the amendment shall be treated as reducing an accrued benefit.
Furthermore, if the vesting schedule of a Plan is amended, in the case of an
Employee who is a Participant as of the later of the date such amendment is
adopted or the date it becomes effective, the nonforfeitable percentage
(determined as of such date) of such Employee's Employer-derived accrued benefit
shall not be less than the percentage computed under the Plan without regard to
such amendment.
62
For purposes of qualification, the Employer may retroactively amend this Plan
provided such amendment is adopted (executed) within the time prescribed by law
for filing the return of the Employer for the taxable year (including
extensions) within which the Plan Year ends or coincides, or within any other
time as permitted by law.
The Employer shall give 30 days prior notice of termination of this Plan to the
Administrator, Trustee and Insurer.
12.05 This Plan shall terminate if the Employer is dissolved, deemed bankrupt or
insolvent, merged with another company, or in the event of a sale by the
Employer of all or substantially all of its assets, except that any successor in
business may continue this Plan.
In the event of a dissolution, merger, consolidation, or sale of all or
substantially all of the assets of the Employer, provisions may be made by the
successor for the continuance of this Plan, and said successor in such event
shall be substituted in the place of the present Employer by an instrument
authorizing such substitution executed by the Employer and its successor, a copy
of which shall be delivered to the Trustee.
12.06 If the Employer's Plan fails to attain or retain qualification, such Plan
shall no longer participate in this Prototype Plan and shall be considered an
individually designed plan.
12.07 Upon termination or partial termination of this Plan, (or if a Profit
Sharing Plan, upon complete discontinuance of contributions under the Plan) the
accrued benefit of each Participant as of the date of termination shall become
fully vested and shall not thereafter be subject to forfeiture. As soon as
administratively feasible following Plan termination the Vested Account Balance
of each Participant shall be distributed as follows:
(a) If the amount to be distributed is not in excess of $3,500, the
distribution shall be in the form of a single sum payment.
(b) If Section 8.09 of this Plan is operative, the distribution shall be
in the form of a single sum payment.
(c) If the amount to be distributed is greater than $3,500, and Section
8.09 is not operative, each Participant shall, subject to the
requirements of Article IX, be afforded an opportunity to elect to
receive a distribution of his/her Vested Account Balance in any
optional form available under Section 8.08. If the Participant refuses
to make such election, a married Participant shall receive an
immediate distribution in the form of a Qualified Joint and Survivor
Annuity as defined in Section 1.58, and an unmarried Participant shall
receive a distribution in the form of an immediate life annuity.
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ARTICLE XIII
ADMINISTRATION AND FIDUCIARIES
13.01 The Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are given under this Plan. Each Fiduciary
warrants that any directions given, information furnished, or action taken by it
shall be in accordance with this Plan, as the case may be, authorizing or
providing for such direction, information, or action. Furthermore, each
Fiduciary may rely upon any such direction, information, or action of another
Fiduciary as being proper under this Plan. It is intended under this Plan that
each Fiduciary shall be responsible for the proper exercise of its powers,
duties, responsibilities, and obligations. No Fiduciary guarantees the Fund in
any manner against investment loss or depreciation in asset value. Allocation of
the specific responsibilities among Fiduciaries for this Plan shall be as
indicated in the following paragraphs of this Article.
13.02 The Employer shall have the sole authority to appoint and remove any Plan
Administrator or Trustee. The Employer may remove a Plan Administrator or
Trustee by delivering to such party a written notice of the removal. A Plan
Administrator or Trustee may resign upon giving written notice to the Employer.
Such removal or resignation shall become effective upon the date specified in
the written notice, which date shall not be less than 30 days subsequent to the
delivery of such notice. In the event of such removal or resignation, a
successor Plan Administrator or Trustee shall be appointed by the Employer. Such
successor Plan Administrator or Trustee, upon accepting the appointment by an
instrument in writing delivered to the Employer, shall be vested with all
rights, powers, duties, privileges, and immunities as the Plan Administrator or
Trustee as if originally designated under this Plan.
The Employer shall have the sole responsibility to make the contributions
provided for under this Plan, to amend or terminate this Plan, and to furnish
the Plan Administrator with the information necessary to administer this Plan.
13.03 The Plan Administrator shall have the authority to administer this Plan
pursuant to the terms and conditions of this Plan. Delegation of any ministerial
or discretionary duties by the Plan Administrator does not necessarily relieve
him/her of the responsibility for these duties.
The Plan Administrator shall keep accurate and detailed records of its
administration of this Plan, which records shall be open to inspection at all
reasonable times by the Employer or its designated representatives. A
Participant shall also have the right to inspect the records of such Participant
and, in addition, shall be given any reports required by ERISA or other laws.
13.04 The Plan Administrator shall receive such reasonable compensation as may
be agreed upon by the Plan Administrator and Employer unless prohibited by law.
All expenses of administration may be paid out of the trust fund unless paid by
the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, including, but not limited to, fees of
accountants, counsel, and other specialists, and other costs of administering
the Plan. Until paid, the expenses shall constitute a liability of the trust
fund. However, the Employer may reimburse the trust for any administration
expense incurred pursuant to the above. Any administration expense paid to the
trust as a reimbursement shall not be considered as an Employer contribution.
13.05 Any Fiduciary who handles Plan contributions or assets shall be required
to give bond in accordance with the requirements of ERISA.
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13.06 If benefits under this Plan for any Participants or Beneficiaries are
denied, the Plan Administrator shall give written notice thereof to such
Participant or Beneficiary within 60 days of such denial setting forth the
specific reasons for the denial in a manner designed to be understood by such
Participant or Beneficiary. The notice shall also inform the Participant or
Beneficiary that a review of the decision is available within 60 days of receipt
of the notice.
If requested in writing by the Participant or Beneficiary, the Plan
Administrator shall make a full and fair review of the decision to deny benefits
and notify the Participant or Beneficiary of the decision within 60 days after
receipt of the request for review. Provided, however, that the Plan
Administrator may extend the time to render a decision to review and notify the
Participant or Beneficiary of the same an additional 60 days in the event of
special circumstances. In the event of such extension of time, the Plan
Administrator shall notify the Participant or Beneficiary of the extension and
the reasons therefore before such extension shall occur.
13.07 In addition to and not in limitation of other powers of the Trustee set
forth herein and in Article VI, the Trustee shall have the following specific
powers and authority in the administration of the funds of this Plan:
(a) To receive all contributions to this Plan and hold, invest, manage,
and control the whole or any part of the assets.
(b) To sell, exchange, convey, assign, or otherwise transfer any
securities or other property held in trust either by private contract
or public offering.
(c) To exercise all rights of ownership over any property held in trust,
including, but not limited to, all rights incident to stock ownership
and contracts issued by the Insurer.
(d) To register securities or other trust property in the name of the Plan
or of the Trustee and to hold instruments in bearer form and to incur
and pay all necessary custodial fees.
(e) To apply for, purchase, hold, and own any Insurance Contract(s) for
the benefit of Participants hereunder pursuant to Article VI.
(f) To retain such portion of the funds of this Plan in cash or cash
equivalents as the Trustee may deem advisable, without any liability
for interest thereon.
(g) To settle, compromise, or submit to arbitration all claims or damages
due from or to this Plan and to commence or defend any legal or
administrative proceeding brought in connection with this Plan,
provided, however, that the Trustee shall not be required to maintain
any litigation unless it has in its possession funds sufficient for
that purpose or has been indemnified to its satisfaction for counsel
fees, costs, and other liabilities to which it may, in the Trustee's
judgment, be subjected by such action on its part.
(h) To employ agents with respect to carrying out businesses and other
matters of this Plan, to employ legal counsel, and to pay reasonable
compensation and expenses for such services.
(i) To do all such acts as the Trustee may deem necessary to administer
the funds held and to carry out the purpose of this Plan.
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(j) Within 60 days following the close of each Plan Year, or such other
date as may be agreed upon, the Trustee shall file with the Employer
and Plan Administrator a written report of receipts and disbursements
and the balance on hand.
13.08 In selecting appropriate investments for assets held in trust, the Trustee
shall adhere to the following funding policy:
(a) The Plan is primarily intended to provide benefits upon the retirement
of Participants.
(b) The Plan may also provide benefits for Participants who are disabled
prior to retirement and to Beneficiaries of Participants who die while
employed by the Employer.
(c) Investment of Plan assets should be consistent with the objectives of
the Plan stated above.
13.09 To the extent that the Trustee invests Plan assets in accordance with the
written directions of either the Employer or any Participant as permitted under
the terms of the Plan, the Trustee shall be deemed to have acted in accordance
with the funding policy of the Plan described in Section 13.08.
13.10 Upon such appointment and acceptance, the replaced Trustee shall execute
any instruments necessary to transfer to the successor Trustee all assets held
under this Plan.
13.11 In the event of the death, resignation, incapacity, or removal of any
Trustee after the Employer shall have gone out of business or ceased to exist
(which for this purpose shall be deemed to include a situation where the sole
owner of an unincorporated business dies) or been dissolved, voluntarily or
involuntarily, a successor may be appointed by election by a majority in
interest of the Participants and Beneficiaries then having an interest in the
trust. Such successor Trustee, upon accepting such appointment in writing and
delivering same to the Employer, shall, without further act, become vested with
all the estate, rights, powers, discretions, and duties of his predecessor with
like respect as if he were originally named as a Trustee herein.
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ARTICLE XIV
INSURER
14.01 No Insurer, which may issue Insurance Contracts for the purpose of this
Plan, shall be required to take or permit any action contrary to the provision
of said Insurance Contracts nor shall the Insurer be required to look into the
terms of this Plan or question any action which is authorized by the Trustee or
Plan Administrator.
14.02 The Insurer is not a contracting party to this Plan for any purpose nor is
it responsible for the validity of this Plan.
14.03 All forms or other documents as required by the Insurer, may be executed
and signed by any one Trustee. When so executed, any such form or document shall
be accepted by the Insurer as conclusive evidence of any matters mentioned in
this Plan, and no such Insurer shall incur any liability or responsibility by
relying on such form or document.
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ARTICLE XV
TOP HEAVY
15.01 If the Plan is or becomes Top-heavy in any Plan Year beginning after
December 31, 1983, the provisions of this Article XV shall supersede any
conflicting provision in the Plan or Adoption Agreement.
15.02 Minimum Allocation Requirement
(a) Except as otherwise provided in (c) and (d) below, the Employer
contributions and forfeitures allocated on behalf of any Participant
who is not a Key Employee shall not be less than the lesser of: 3
percent of such Participant's Compensation; or in the case where the
Employer has no Defined Benefit plan which designates this Plan to
satisfy Section 401 of the Code, the largest percentage of Employer
contributions and forfeitures, as a percentage of the first $200,000
of the Key Employee's Compensation, allocated on behalf of any Key
Employee for that year. The minimum allocation is determined without
regard to any Social Security contribution. This minimum allocation
shall be made even though, under other Plan provisions, the
Participant would not otherwise be entitled to receive an allocation,
or would have received a lesser allocation for the year because of:
(1) the Participant's failure to complete 1,000 Hours of Service (or
any equivalent provided in the Plan); or
(2) the Participant's failure to make mandatory Employee
contributions to the Plan; or
(3) Compensation less than a stated amount.
(b) For purposes of computing the minimum allocation, Compensation shall
mean Compensation as defined in Section 1.13 of the Plan.
(c) The provision in (a) above shall not apply to any Participant who was
not employed by the Employer on the last day of the Plan Year.
(d) The provision in (a) above shall not apply to any Participant to the
extent the Participant is covered under any other plan or plans of the
Employer and the Employer has provided in A-15.02 of the Adoption
Agreement that the minimum allocation or benefit requirement
applicable to Top-heavy Plans shall be met in the other plan or plans.
15.03 For any Plan Year in which the Plan is a Top-heavy Plan, the denominators
of the Defined Benefit Fraction [as defined in Section 5.13(c) of the Plan] and
Defined Contribution Fraction [as defined in Section 5.13(e) of the Plan] shall
be computed using 100 percent of the dollar limitation instead of 125 percent.
15.04 Extra Minimum Allocation Permitted
Notwithstanding anything herein to the contrary, if a non-key Employee is a
Participant in both a defined contribution plan and a defined benefit plan that
are both part of a Permissive Aggregation Group or a Required Aggregation Group
and the Top-heavy Ratio exceeds 60 percent (but neither of such plans is a Super
Top-heavy Plan) the denominators of the Defined Benefit Fraction [as defined in
Section 5.13(c) of the Plan] and Defined Contribution Fraction [as defined in
Section 5.13(e) of the Plan] shall be computed using 125 percent of the dollar
limitation provided each non-key Employee receives an additional minimum
allocation (in addition to the minimum allocation set forth in 15.02 above)
68
equal to not less than 1 percent of such non-key Employee's Compensation. For
any Plan Year in which the Plan is a Top-heavy Plan (but not a Super Top-heavy
plan), the minimum contribution on behalf of each non-key Employee shall be
provided as elected in A-15.02 of the Adoption Agreement.
15.05 The minimum allocation required [to the extent required to be
nonforfeitable under Code Section 416(b)] may not be forfeited under Code
Section 411(a)(3)(B) or 411(a)(3)(D).
15.06 For any Plan Year in which this Plan is top-heavy, one of the minimum
vesting schedules as elected by the Employer in the Adoption Agreement shall
automatically apply to the Plan. The minimum vesting schedule applies to all
benefits within the meaning of Section 411(a)(7) of the Code except those
attributable to Employee contributions, including benefits accrued before the
effective date of Code Section 416 and benefits accrued before the plan became
Top-heavy. Further, no decrease in a Participant's nonforfeitable percentage may
occur in the event the Plan's status as Top-heavy changes for any Plan Year.
However, this Section does not apply to the Account balances of any Employee who
does not have an Hour of Service after the Plan has initially become Top-heavy
and such Employee's Account balance attributable to Employer contributions and
forfeitures shall be determined without regard to this Section.
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ARTICLE XVI
PAIRED PLANS
16.01 The Provisions of this Article XVI apply only when the Employer adopts
both of the following paired plans:
Plan Type Plan # IRS Serial #
--------- ------ ------------
Money Purchase Plan 00201 D259968a
Profit Sharing Plan 00401 D259970a
401(k) Salary Reduction Plan 00801 D259972a
The provisions of this Article XVI do not apply if the Employer maintains any
plan other than one of the paired plans.
16.02 For each Plan Year in which the paired plans are Top-heavy, the Employer
will provide a minimum contribution equal to 3 percent of Compensation for each
non-key Employee who is entitled to a minimum contribution under any two (2) or
more paired defined contribution plans (#00201, #00401 or #00801).
16.03 Only one of the paired plans that an Employer adopts may provide for
disparity in contributions or benefits as permitted under Code Section 401(1).
16.04 For Plan Years beginning after December 31, 1991, two or more standardized
form plans shall not be paired plans unless the plans benefit, without
exception, the same Participants. A plan which is subject to Section 401(k)
benefits all Employees who are eligible to make Elective Deferrals under the
plan.
70
ARTICLE XVII
MISCELLANEOUS
17.01 The headings of this Plan have been inserted for convenience of reference
only and are to be ignored in any construction of the provisions hereof.
17.02 Nothing herein contained shall be construed as giving any Participant the
right to be retained in the Service of the Employer, nor upon dismissal or upon
voluntary termination, to have any right or interest in this Plan other than as
provided herein.
17.03 Whenever under the terms of this Plan the Employer is permitted or
required to take some action, such action may be taken by any officer of the
Employer who has been duly authorized by the Board of Directors of the Employer.
17.04 No benefit or interest available hereunder shall be subject to assignment
or alienation, either voluntarily or involuntarily. The preceding sentence shall
also apply to the creation, assignment, or recognition of a right to any benefit
payable with respect to a participant pursuant to a domestic relations order,
unless such order is determined to be a qualified domestic relations order, as
defined in Section 414(p) of the Code, or any domestic relations order entered
before January 1, 1985.
17.05 The validity of this Plan or any of its provisions shall be determined
under and construed according to the law of the State in which this Plan is
executed. If any provisions of this Plan shall be held illegal or invalid for
any reason, such determination shall not affect the remaining provisions of this
Plan and it shall be construed as if said illegal or invalid provision had never
been included.
17.06 If a dispute arises as to the proper recipient of any payment or delivery
of any Insurance Contract, the appropriate Fiduciary or Fiduciaries, in its sole
discretion, may withhold or cause to be withheld such payment or delivery until
the dispute shall have been settled by the parties concerned or shall have been
determined by a court of competent jurisdiction.
17.07 If a benefit is forfeited because the Participant or Beneficiary cannot be
found, such benefit shall be reinstated if a claim is made by the Participant or
Beneficiary.
17.08 This Plan may be executed in any number of counterparts, each of which
shall be deemed to be an original and the counterparts shall constitute one and
the same instrument.
17.09 In the event of a merger or consolidation with, or transfer of assets to
any other plan, each participant shall receive a benefit immediately after such
merger, etc. (if the Plan then terminated) which is at least equal to the
benefit the participant was entitled to immediately before such merger, etc. (if
the Plan had terminated).
17.10 In the event of any conflict between provisions of this Plan and
provisions of any policies, purchases, or contracts entered into by the Trustee
or Plan Administrator, the provisions of the Plan shall control between the
contracting parties to this Plan and Participants.
17.11 If this Plan provides contributions or benefits for one or more Owner-
employees who control both the business for which this Plan is established and
one or more other trades or businesses, this Plan and the plan established
71
for other trades or businesses must, when looked at as a single plan, satisfy
Sections 401(a) and (d) for the Employees of this and all other trades or
businesses.
If the Plan provides contributions or benefits for one or more Owner-employees
who control one or more other trades or businesses, the employees of the other
trades or businesses must be included in a plan which satisfies Sections 401(a)
and (d) and which provides contributions and benefits not less favorable than
provided for Owner-employees under this Plan.
If an individual is covered as an owner-employee under the plans of two or more
trades or businesses which are not controlled and the individual controls a
trade or business, then the contributions or benefits of the employees under the
plan of the trades or businesses which are controlled must be as favorable as
those provided for him under the most favorable plan of the trade or business
which is not controlled.
For purposes of the preceding paragraphs, an Owner-employee, or two or more
Owner-employees, shall be considered to control a trade or business if the
Owner-employee, or two or more Owner-employees together:
(a) own the entire interest in an unincorporated trade or business; or
(b) in the case of a partnership, own more than 50 percent of either the
capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-employee, or two or more Owner-
employees shall be treated as owning any interest in a partnership which is
owned, directly or indirectly, by a partnership which such Owner-employee, or
such two or more Owner-employees, are considered to control within the meaning
of the preceding sentence.
72