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EXHIBIT 10.25
NORWEST BANK NEBRASKA, NA.
DEFINED CONTRIBUTION MASTER PLAN
AND
TRUST AGREEMENT
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Defined Contribution Master Plan
TABLE OF CONTENTS
ALPHABETICAL LISTING OF DEFINITIONS. . . . . . . . . . . . . . . iii
ARTICLE I, DEFINITIONS
1.01 Employer . . . . . . . . . . . . . . . . . . 1.01
1.02 Trustee . . . . . . . . . . . . . . . . . . 1.01
1.03 Plan . . . . . . . . . . . . . . . . . . . . 1.01
1.04 Adoption Agreement . . . . . . . . . . . . . 1.01
1.05 Plan Administrator . . . . . . . . . . . . . 1.01
1.06 Advisory Committee . . . . . . . . . . . . . 1.02
1.07 Employee . . . . . . . . . . . . . . . . . . 1.02
1.08 Self-Employed Individual/
Owner-Employee . . . . . . . . . . . . . . . 1.02
1.09 Highly Compensated Employee . . . . . . . . 1.02
1.10 Participant . . . . . . . . . . . . . . . . 1.03
1.11 Beneficiary . . . . . . . . . . . . . . . . 1.03
1.12 Compensation . . . . . . . . . . . . . . . . 1.03
1.13 Earned Income . . . . . . . . . . . . . . . 1.05
1.14 Account . . . . . . . . . . . . . . . . . . 1.05
1.15 Accrued Benefit . . . . . . . . . . . . . . 1.05
1.16 Nonforfeitable . . . . . . . . . . . . . . . 1.05
1.17 Plan Year/Limitation. Year . . . . . . . . . 1.05
1.18 Effective Date . . . . . . . . . . . . . . . 1.05
1.19 Plan Entry Date . . . . . . . . . . . . . . 1.05
1.20 Accounting Date . . . . . . . . . . . . . . 1.05
1.21 Trust . . . . . . . . . . . . . . . . . . . 1.05
1.22 Trust Fund . . . . . . . . . . . . . . . . . 1.05
1.23 Nontransferable Annuity . . . . . . . . . . 1.05
1.24 ERISA . . . . . . . . . . . . . . . . . . . 1.05
1.25 Code . . . . . . . . . . . . . . . . . . . . 1.05
1.26 Service . . . . . . . . . . . . . . . . . . 1.05
1.27 Hour of Service . . . . . . . . . . . . . . 1.05
1.28 Disability . . . . . . . . . . . . . . . . . 1.07
1.29 Service for Predecessor Employer . . . . . . 1.07
1.30 Related Employers . . . . . . . . . . . . . 1.07
1.31 Leased Employees . . . . . . . . . . . . . . 1.08
1.32 Special Rules for Owner-Employees . . . . . 1.08
1.33 Determination of Top Heavy Status . . . . . 1.09
1.34 Paired Plans . . . . . . . . . . . . . . . . 1.10
ARTICLE II, EMPLOYEE PARTICIPANTS
2.01 Eligibility . . . . . . . . . . . . . . . . 2.01
2.02 Year of Service - Participation . . . . . . 2.01
2.03 Break in Service - Participation . . . . . . 2.01
2.04 Participation upon Re-emplment . . . . . . . 2.01
2.05 Change in Employee Status . . . . . . . . . 2.02
2.06 Election Not to Participate . . . . . . . . 2.02
ARTICLE III, EMPLOYER CONTRIBUTIONS AND
FORFEITURES
3.01 Amount . . . . . . . . . . . . . . . . . . . 3.01
3.02 Determination of Contribution . . . . . . . 3.01
3.03 Time of Payment of Contribution . . . . . . 3.01
3.04 Contribution Allocation. . . . . . . . . . . 3.01
3.05 Forfeiture Allocation . . . . . . . . . . . 3.03
3.06 Accrual of Benefit . . . . . . . . . . . . . 3.03
3.07 - 3.16 Limitations on Allocations . . . . . 3.05
3.17 Special Allocation Limitation . . . . . . . 3.07
3.18 Defined Benefit Plan Limitation . . . . . . 3.07
3.19 Definitions - Article III . . . . . . . . . 3.07
ARTICLE IV, PARTICIPANT CONTRIBUTIONS
4.01 Participant Nondeductible Contributions. . . 4.01
4.02 Participant Deductible Contributions . . . . 4.01
4.03 Participant Rollover Contributions . . . . 4.01
4.04 Participant Contribution - Forfeitability . 4.02
4.05 Participant Contribution
-Withdrawal/Distribution . . . . . . . . . . 4.02
4.06 Participant Contribution
-Accrued Benefit . . . . . . . . . . . . . . 4.02
ARTICLE V, TERMINATION OF SERVICE
PARTICIPANT VESTING
5.01 Normal Retirement Age . . . . . . . . . . . 5.01
5.02 Participant Disability or Death . . . . . . 5.01
5.03 Vesting Schedule . . . . . . . . . . . . . . 5.01
5.04 Cash-out Distributions to Partially-
Vested Participants/Restoration of
Forfeited Accrued Benefit . . . . . . . . . 5.01
5.05 Segregated Account for Repaid Amount . . . . 5.02
5.06 Year of Service - Vesting . . . . . . . . . 5.03
5.07 Break in Service - Vesting . . . . . . . . . 5.03
5.08 Included Years of Service - Vesting . . . . 5.03
5.09 Forfeiture Occurs . . . . . . . . . . . . . 5.03
ARTICLE VI, TIME AND METHOD OF PAYMENT
OF BENEFITS
6.01 Time of Payment of Accrued Benefit . . . . . 6.01
6.02 Method of Payment of Accrued Benefit . . . . 6.02
6.03 Benefit Payment Elections . . . . . . . . . 6.04
6.04 Annuity Distributions to Participants
and Surviving Spouses . . . . . . . . . . . 6.06
6.05 Waiver Election - Qualified Joint and
Survivor Annuity . . . . . . . . . . . . . . 6.07
6.06 Waiver Election - Preretirement Survivor
Annuity . . . . . . . . . . . . . . . . . . 6.08
6.07 Distributions Under Domestic
Relations Orders . . . . . . . . . . . . . . 6.08
ARTICLE VII, EMPLOYER ADMINISTRATIVE
PROVISIONS
7.01 Information to Committee . . . . . . . . . . 7.01
7.02 No Liability . . . . . . . . . . . . . . . . 7.01
7.03 Indemnity of Certain Fiduciaries . . . . . . 7.01
7.04 Employer Direction of Investment . . . . . . 7.01
7.05 Amendment to Vesting Schedule . . . . . . . 7.01
ARTICLE VIII, PARTICIPANT ADMINISTRATIVE
PROVISIONS
8.01 Beneficiary Designation . . . . . . . . . . 8.01
8.02 No Beneficiary Designation/Death
of Beneficiary . . . . . . . . . . . . . . . 8.01
8.03 Personal Data to Committee . . . . . . . . . 8.02
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Defined Contribution Master Plan
8.04 Address for Notification . . . . . . . . . . 8.02
8.05 Assignment or Alienation . . . . . . . . . . 8.02
8.06 Notice of Change in Terms . . . . . . . . . 8.02
8.07 Litigation Against the Trust . . . . . . . . 8.02
8.08 Information Available . . . . . . . . . . . 8.02
8.09 Appeal Procedure for Denial of Benefits . . 8.02
8.10 Participant Direction of Investment . . . . 8.03
ARTICLE IX, ADVISORY COMMITTEE - DUTIES
WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.01 Members' Compensation, Expenses . . . . . . 9.01
9.02 Term . . . . . . . . . . . . . . . . . . . . 9.01
9.03 Powers . . . . . . . . . . . . . . . . . . . 9.01
9.04 General . . . . . . . . . . . . . . . . . . 9.01
9.05 Funding Policy . . . . . . . . . . . . . . . 9.02
9.06 Manner of Action . . . . . . . . . . . . . . 9.02
9.07 Authorized Representative . . . . . . . . . 9.02
9.08 Interested Member . . . . . . . . . . . . . 9.02
9.09 Individual Accounts . . . . . . . . . . . . 9.02
9.10 Value of Participant's Accrued Benefit . . . 9.02
9.11 Allocation and Distribution of
Net Income Gain or Loss . . . . . . . . . . 9.03
9.12 Individual Statement . . . . . . . . . . . . 9.03
9.13 Account Charged . . . . . . . . . . . . . . 9.04
9.14 Unclaimed Account Procedure . . . . . . . . 9.04
ARTICLE X, TRUSTEE AND CUSTODIAN, POWERS
AND DUTIES
10.01 Acceptance . . . . . . . . . . . . . . . . . 10.01
10.02 Receipt of Contributions . . . . . . . . . . 10.01
10.03 Investment Powers . . . . . . . . . . . . . 10.01
10.04 Records and Statements . . . . . . . . . . . 10.06
10.05 Fees and Expenses from Fund . . . . . . . . 10.06
10.06 Parties to Litigation . . . . . . . . . . . 10.06
10.07 Professional Agents . . . . . . . . . . . . 10.06
10.08 Distribution of Cash or Property . . . . . . 10.06
10.09 Distribution Directions . . . . . . . . . . 10.06
10.10 Third Party/Multiple Trustees . . . . . . . 10.06
10.11 Resignation . . . . . . . . . . . . . . . . 10.07
10.12 Removal . . . . . . . . . . . . . . . . . . 10.07
10.13 Interim Duties and Successor Trustee . . . . 10.07
10.14 Valuation of Trust . . . . . . . . . . . . . 10.07
10.15 Limitation on Liability -
If Investment Manager, Ancillary Trustee
or Independent Fiduciary Appointed . . . . . 10.07
10.16 Investment in Group Trust Fund . . . . . . . 10.07
10.17 Appointment of Ancillary Trustee or
Independent Fiduciary . . . . . . . . . . . 10.08
ARTICLE XI, PROVISIONS RELATING TO INSURANCE
AND INSURANCE COMPANY
11.01 Insurance Benefit . . . . . . . . . . . . . 11.01
11.02 Limitation on Life Insurance
Protection . . . . . . . . . . . . . . . . . 11.01
11.03 Definitions . . . . . . . . . . . . . . . . 11.02
11.04 Dividend Plan . . . . . . . . . . . . . . . 11.02
11.05 Insurance Company Not a Party
to Agreement . . . . . . . . . . . . . . . . 11.03
11.0.6 Insurance Company Not Responsible
for Trustee's Actions . . . . . . . . . . . 11.03
11.07 Insurance Company Reliance on
Trustee's Signature . . . . . . . . . . . . 11.03
11.08 Acquittance . . . . . . . . . . . . . . . . 11.03
11.09 Duties of Insurance Company . . . . . . . . 11.03
ARTICLE XII, MISCELLANEOUS
12.01 Evidence . . . . . . . . . . . . . . . . . . 12.01
12.02 No Responsibility for Employer
Action . . . . . . . . . . . . . . . . . . . 12.01
12.03 Fiduciaries Not Insurers . . . . . . . . . . 12.01
12.04 Waiver of Notice . . . . . . . . . . . . . . 12.01
12.05 Successors . . . . . . . . . . . . . . . . . 12.01
12.06 Word Usage . . . . . . . . . . . . . . . . . 12.01
12.07 State Law . . . . . . . . . . . . . . . . . 12.01
12.08 Employer's Right to Participate . . . . . . 12.01
12.09 Employment Not Guaranteed . . . . . . . . . 12.02
ARTICLE XIII, EXCLUSIVE BENEFIT, AMENDMENT,
TERMINATION
13.01 Exclusive Benefit . . . . . . . . . . . . . 13.01
13.02 Amendment by Employer . . . . . . . . . . . 13.01
13.03 Amendment by Master Plan Sponsor . . . . . . 13.02
13.04 Discontinuance . . . . . . . . . . . . . . . 13.02
13.05 Full Vesting on Termination . . . . . . . . 13.02
13.06 Merger/Direct Transfer . . . . . . . . . . . 13.02
13.07 Termination . . . . . . . . . . . . . . . . 13.03
ARTICLE XIV, CODE SECTION 401(k) AND CODE SECTION 401(m)
ARRANGEMENT'S
14.01 Application . . . . . . . . . . . . . . . . 14.01
14.02 Code Section 401(k) Arrangement . . . . . . 14.01
14.03 Definitions . . . . . . . . . . . . . . . . 14.01
14.04 Matching Contributions/
Employee Contributions . . . . . . . . . . . 14.03
14.05 Time of Payment of
Contributions . . . . . . . . . . . . . . . 14.03
14.06 Special Allocation Provisions-
Deferral Contributions, Matching
Contributions and Qualified
Nonelective Contributions . . . . . . . . . 14.04
14.07 Annual Elective Deferral
Limitation . . . . . . . . . . . . . . . . . 14.05
14.08 Actual Deferral Percentage
("ADP")Test . . . . . . . . . . . . . . . . 14.06
14.09 Nondiscrimination Rules for Employer
Matching Contributions/Participant
Nondeductible Contributions . . . . . . . . 14.08
14.10 Multiple Use Limitation . . . . . . . . . . 14.10
14.11 Distribution Restrictions . . . . . . . . . 14.10
14.12 Special Allocation Rules . . . . . . . . . . 14.11
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ALPHABETICAL LISTING OF DEFINITIONS
Plan Definition Section Reference
(Page Number)
100% Limitation . . . . . . . . . . . . . . . . . . . . 3.19(1) (3.10)
Account . . . . . . . . . . . . . . . . . . . . . . . . . 1.14 (1.05)
Accounting Date . . . . . . . . . . . . . . . . . . . . . 1.20 (1.05)
Accrued Benefit . . . . . . . . . . . . . . . . . . . . . 1.15 (1.05)
Actual Deferral Percentage ("ADP") Test. . . . . . . . . 14.08 (14.06)
Adoption Agreement . . . . . . . . . . . . . . . . . . . 1.04 (1.01)
Advisory Committee . . . . . . . . . . . . . . . . . . . 1.06 (1.02)
Annual Addition . . . . . . . . . . . . . . . . . . . 3.19(a) (3.07)
Average Contribution Percentage Test . . . . . . . . . 14.09 (14.08)
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . 1.11 (1.03)
Break in Service for Eligibility Purposes . . . . . . . . 2.03 (2.01)
Break in Service for Vesting Purposes . . . . . . . . . . 5.07 (5.03)
Cash-out Distribution . . . . . . . . . . . . . . . . . . 5.04 (5.01)
Code . . . . . . . . . . . . . . . . . . . . . . . . . . 1.25 (1.06)
Code Section 411(d)(6) Protected Benefits . . . . . . . 13.02 (13.01)
Compensation . . . . . . . . . . . . . . . . . . . . . . 1.12 (1.03)
Compensation for Code Section 401(k) Purposes . . . . 14.03(f) (14.02)
Compensation for Code Section 415 Purposes . . . . . 3.19(b) (3.08)
Compensation for Top Heavy Purposes. . . . . . . . 1-33(B)(3) (1.09)
Contract(s) . . . . . . . . . . . . . . . . . . . . . 11.03(c) (11.02)
Custodian Designation . . . . . . . . . . . . . . . . 10.03[B] (10.03)
Deemed Cash-out Rule . . . . . . . . . . . . . . . . . 5.04(C) (5.02)
Deferral Contributions . . . . . . . . . . . . . . . 14.03(g) (14.02)
Deferral Contributions Account . . . . . . . . . . . 14.06(A) (14.04)
Defined Benefit Plan . . . . . . . . . . . . . . . . . 3.19(i) (3.09)
Defined Benefit Plan Fraction . . . . . . . . . . . . . 3.19(j) (3.09)
Defined Contribution Plan . . . . . . . . . . . . . . . 3.19(h) (3.08)
Defined Contribution Plan Fraction . . . . . . . . . 3.19(k) (3.09)
Determination Date . . . . . . . . . . . . . . . . 1-33(B)(7) (1.10)
Disability . . . . . . . . . . . . . . . . . . . . . . . 1.28 (1.07)
Distribution Date . . . . . . . . . . . . . . . . . . . . 6.01 (6.01)
Distribution Restrictions . . . . . . . . . . . . . . 14.03(m) (14.03)
Earned Income . . . . . . . . . . . . . . . . . . . . . . 1.13 (1.05)
Effective Date . . . . . . . . . . . . . . . . . . . . . 1.18 (1.05)
Elective Deferrals . . . . . . . . . . . . . . . . . 14.03(h) (14.02)
Elective Transfer . . . . . . . . . . . . . . . . . 13.06.(A) (13.03)
Eligible Employee . . . . . . . . . . . . . . . . . . 14.03(c) (14.02)
Employee . . . . . . . . . . . . . . . . . . . . . . . . 1.07 (1.02)
Employee Contributions . . . . . . . . . . . . . . . 14.03(n) (14.03)
Employer . . . . . . . . . . . . . . . . . . . . . . . . 1.01 (1.01)
Employer Contribution Account . . . . . . . . . . . . . 14.06 (14.04)
Employer for Code Section 415 Purposes . . . . . . . . 3.19(c) (3.08)
Employer for Top Heavy Purposes . . . . . . . . . . 1-33(B)(6) (1.10)
Employment Commencement Date . . . . . . . . . . . . . . 2.02 (2.01)
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 1.24 (1.06)
Excess Aggregate Contributions . . . . . . . . . . . 14.09(D) (14.09)
Excess Amount . . . . . . . . . . . . . . . . . . . . . 3.19(d) (3.08)
Excess Contributions . . . . . . . . . . . . . . . . . 14.08 (14.07)
Exempt Participant . . . . . . . . . . . . . . . . . . . 8.01 (8.01)
Forfeiture Break in Service . . . . . . . . . . . . . . . 5.08 (5.03)
Group Trust Fund . . . . . . . . . . . . . . . . . . . 10.16 (10.07)
Hardship . . . . . . . . . . . . . . . . . . . . . 6.01(A)(4) (6.01)
Hardship for Code Section 401(k) Purposes . . . . . . 14.11(A) (14.11)
Highly Compensated Employee . . . . . . . . . . . . . . . 1.09 (1.02)
Highly Compensated Group . . . . . . . . . . . . . . 14.03(d) (14.02)
Hour of Service . . . . . . . . . . . . . . . . . . . . . 1.27 (1.06)
Incidental Insurance Benefits . . . . . . . . . . . . 11.01(A) (11.01)
Insurable Participant . . . . . . . . . . . . . . . . 11.03(d) (11.02)
Investment Manager . . . . . . . . . . . . . . . . . . 9.04(i) (9.01)
Issuing Insurance Company . . . . . . . . . . . . . . 11.03(b) (11.02)
Joint and Survivor Annuuity . . . . . . . . . . . . . 6.04 (A) (6.06)
Key Employee . . . . . . . . . . . . . . . . . . . 1.33(B)(1) (1.09)
Leased Employees . . . . . . . . . . . . . . . . . . . . . 1.31(1.08)
Limitation Year . . . . . . . . . . . 1.17 and 3.19(e) (1.05 and 3.08)
Loan Policy . . . . . . . . . . . . . . . . . . . . . 9.04 (A) (9.02)
Mandatory Contributions . . . . . . . . . . . . . . 14.04 (A) (14.03)
Mandatory Contributions Account . . . . . . . . . . . 14.04(A) (14.03)
Master or Prototype Plan . . . . . . . . . . . . . . . 3.19(f) (3.08)
Matching Contributions . . . . . . . . . . . . . . . 1.03(i) (14.02)
Maximum Permissible Amount . . . . . . . . . . . . . . 3.19(g) (3.08)
Minimum Distribution Incidental Benefit . . . . . . . 6.02(A) (6.03)
Multiple Use Limitation . . . . . . . . . . . . . . . . 14.10 (14.10)
Named Fiduciary . . . . . . . . . . . . . . . . . . . 10.03[D] (10.05)
Nonelective Contributions . . . . . . . . . . . . . . 14.03(j) (14.02)
Nonforfeitable . . . . . . . . . . . . . . . . . . . . . 1.16 (1.05)
Nonhighly Compensated Employee . . . . . . . . . . . 14.03(b) (14.02)
Nonhighly Compensated Group . . . . . . . . . . . . . 14.03(e) (14.02)
Non-Key Employee . . . . . . . . . . . . . . . . . 1.33(B)(2) (1.09)
Nontransferable Annuity . . . . . . . . . . . . . . . . . 1.23 (1.05)
Normal Retirement Age . . . . . . . . . . . . . . . . . . 5.01 (5.01)
Owner-Employee . . . . . . . . . . . . . . . . . . . . . 1.08 (1.02)
Paired Plans . . . . . . . . . . . . . . . . . . . . . . 1.34 (1.10)
Participant . . . . . . . . . . . . . . . . . . . . . . . 1.10 (1.03)
Participant Deductible Contributions . . . . . . . . . . 4.02 (4.01)
Participant Forfeiture . . . . . . . . . . . . . . . . . 3.05 (3.03)
Participant Loans . . . . . . . . . . . . . . . . . . 10.03[E] (10.04)
Participant Nondeductible Contributions . . . . . . . . . 4.01 (4.01)
Permissive Aggregation Group . . . . . . . . . . . 1-33(B)(5) (1.10)
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 1.03 (1.01)
Plan Administrator . . . . . . . . . . . . . . . . . . . 1.05 (1.01)
Plan Entry Date . . . . . . . . . . . . . . . . . . . . . 1.19 (1.05)
Plan Year . . . . . . . . . . . . . . . . . . . . . . . . 1.17 (1.05)
Policy . . . . . . . . . . . . . . . . . . . . . . . 11.03(a) (11.02)
Predecessor Employer . . . . . . . . . . . . . . . . . . 1.29 (1.07)
Preretirement Survivor Annuity . . . . . . . . . . . 6.04 (B) (6.06)
Qualified Domestic Relations Order . . . . . . . . . . . 6.07 (6.08)
Qualified Matching Contributions . . . . . . . . . . 14.03(k) (14.02)
Qualified Nonelective Contributions . . . . . . . . . 14.03(l) (14.03)
Qualifying Employer Real Property . . . . . . . . . . 10.03[F] (10.05)
Qualifying Employer Securities . . . . . . . . . . . 10.03[F] (10.05)
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Plan Definition Section Reference
(Page Number)
Related Employers . . . . . . . . . . . . . . . . . . . . . 130 (1.07)
Required Aggregation Group . . . . . . . . . . . . . 133(B)(4) (1.09)
Required Beginning Date . . . . . . . . . . . . . . . . 6.01(B) (6.02)
Rollover Contributions . . . . . . . . . . . . . . . . . 4.03 (4.01)
Self-Employed Individual . . . . . . . . . . . . . . . . 1.08 (1.02)
Service . . . . . . . . . . . . . . . . . . . . . . . . . 1.26 (1.06)
Term Life Insurance Contract . . . . . . . . . . . . . 11.03 (11.02)
Top Heavy Minimum Allocation . . . . . . . . . . . . 3.04(B) (3.01)
Top Heavy Ratio . . . . . . . . . . . . . . . . . . . . . 1.33 (1.09)
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 1.21 (1-05)
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 1.02 (1.01)
Trustee Designation . . . . . . . . . . . . . . . . . 10.03[A] (10.01)
Trust Fund . . . . . . . . . . . . . . . . . . . . . . . 1.22 (1.05)
Weighted Average Allocation Method . . . . . . . . . . 14.12 (14.11)
Year of Service for Eligibility Purposes . . . . . . . . 2.02 (2.01)
Year of Service for Vesting Purposes . . . . . . . . . . 5.06 (5.03)
* * * * * * * * * * * * * * *
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NORWEST BANK NEBRASKA, NA.
DEFINED CONTRIBUTION MASTER PLAN AND TRUST AGREEMENT
BASIC PLAN DOCUMENT #01
Norwest Bank Nebraska, N.A., in its capacity as Master Plan Sponsor,
establishes this Master Plan intended to conform to and qualify under Section
401 and Section 501 of the Internal Revenue Code of 1986, as amended. An
Employer establishes a Plan and Trust under this Master Plan by executing an
Adoption Agreement. If the Employer adopts this Plan as a restated Plan in
substitution for, and in amendment of, an existing plan, the provisions of this
Plan, as a restated Plan, apply solely to an Employee whose employment with the
Employer terminates on or after the restated Effective Date of the Employer's
Plan. If an Employee's employment with the Employer terminates prior to the
restated Effective Date, that Employee is entitled to benefits under the Plan
as the Plan existed on the date of the Employee's termination of employment.
ARTICLE I
DEFINITIONS
1.01 "Employer" means each employer who adopts this Plan by
executing an Adoption Agreement.
1.02 "Trustee" means the person or persons who as Trustee execute
the Employer's Adoption Agreement, or any successor in office who in writing
accepts the position of Trustee. The Employer must designate in its Adoption
Agreement whether the Trustee will administer the Trust as a discretionary
Trustee or as a nondiscretionary Trustee. If a person acts as a discretionary
Trustee, the Employer also may appoint a Custodian. See Article X. If the
Master Plan Sponsor is a bank, savings and loan, credit union or similar
financial institution, a person other than the Master Plan Sponsor (or its
affiliate) may not serve as Trustee or as Custodian of the Employer's Plan
without the written consent of the Master Plan Sponsor.
1.03 "Plan" means the retirement plan established or continued by
the Employer in the form of this Agreement, including the Adoption Agreement
under which the Employer has elected to participate in this Master Plan. The
Employer must designate the name of the Plan in its Adoption Agreement. An
Employer may execute more than one Adoption Agreement offered under this Master
Plan, each of which will constitute a separate Plan and Trust established or
continued by that Employer. The Plan and the Trust created by each adopting
Employer is a separate Plan and a separate Trust, independent from the plan and
the trust of any other employer adopting this Master Plan. All section
references within the Plan are Plan section references unless the context
clearly indicates otherwise.
1.04 "Adoption Agreement" means the document executed by each
Employer adopting this Master Plan. The terms of this Master Plan as modified
by the terms of an adopting Employer's Adoption Agreement constitute a separate
Plan and Trust to be construed as a single Agreement. Each elective provision
of the Adoption Agreement corresponds by section reference to the section of
the Plan which grants the election. Each Adoption Agreement offered under this
Master Plan is either a Nonstandardized Plan or a Standardized Plan, as
identified in the preamble to that Adoption Agreement. The provisions of this
Master Plan apply equally to Nonstandardized Plans and to Standardized Plans
unless otherwise specified.
1.05 "Plan Administrator" is the Employer unless the Employer
designates another person to hold the position of Plan Administrator. In
addition to his other duties, the Plan Administrator has full responsibility
for compliance with the reporting and disclosure rules under ERISA as respects
this Agreement.
1.06 "Advisory Committee" means the Employer's Advisory Committee
as from time to time constituted.
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Defined Contribution Master Plan
1.07 "Employee" means any employee (including a Self-Employed
Individual) of the Employer. The Employer must specify in its Adoption
Agreement any Employee, or class of Employees, not eligible to participate in
the Plan. If the Employer elects to exclude collective bargaining employees,
the exclusion applies to any employee of the Employer included in a unit of
employees covered by an agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or
more employers unless the collective bargaining agreement requires the employee
to be included within the Plan. The term "employee representatives" does not
include any organization more than half the members of which are owners,
officers, or executives of the Employer.
1.08 "Self-Employed Individual/Owner-Employee." "Self-Employed
Individual" means an individual who has Earned Income (or who would have had
Earned Income but for the fact that the trade or business did not have net
earnings) for the taxable year from the trade or business for which the Plan is
established. "Owner-Employee" means a Self-Employed Individual who is the sole
proprietor in the case of a sole proprietorship. If the Employer is a
partnership, "Owner-Employee" means a Self-Employed Individual who is a partner
and owns more than 10% of either the capital or profits interest of the
partnership.
1.09 "Highly Compensated Employee" means an Employee who, during
the Plan Year or during the preceding 12-month period:
(a) is a more than 5% owner of the Employer (applying the
constructive ownership rules of Code Section 318, and applying the
principles of Code Section 318, for an unincorporated entity);
(b) has Compensation in excess of $75,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year);
(c) has Compensation in excess of $50,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year) and is part of
the top-paid 20% group of employees (based on Compensation for the
relevant year); or
(d) has Compensation in excess of 50% of the dollar amount
prescribed in Code Section 415(b)(1)(A) (relating to defined benefit
plans) and is an officer of the Employer.
If the Employee satisfies the definition in clause (b), (c) or (d) in
the Plan Year but does not satisfy clause (b), (c) or (d) during the preceding
12-month period and does not satisfy clause (a) in either period, the Employee
is a Highly Compensated Employee only if he is one of the 100 most highly
compensated Employees for the Plan Year. The number of officers taken into
account under clause (d) will not exceed the greater of 3 or 10% of the total
number (after application of the Code Section 414(q) exclusions) of Employees,
but no more than 50 officers. If no Employee satisfies the Compensation
requirement in clause (d) for the relevant year, the Advisory Committee will
treat the highest paid officer as satisfying clause (d) for that year.
For purposes of this Section 1.09, "Compensation" means Compensation
as defined in Section 1.12, except any exclusions from Compensation elected in
the Employer's Adoption Agreement Section 1.12 do not apply, and Compensation
must include "elective contributions" (as defined in Section 1.12). The
Advisory Committee must make the determination of who is a Highly Compensated
Employee, including the determinations of the number and identity of the top
paid 20% group, the top 100 paid Employees, the number of officers includible
in clause (d) and the relevant Compensation, consistent with Code Section
414(q) and regulations issued under that Code section. The Employer may make a
calendar year election to determine the Highly Compensated Employees for the
Plan Year, as prescribed by Treasury regulations. A calendar year election
must apply to all
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Defined Contribution Master Plan
plans and arrangements of the Employer. For purposes of applying any
nondiscrimination test required under the Plan or under the Code, in a manner
consistent with applicable Treasury regulations, the Advisory Committee will
treat a Highly Compensated Employee and all family members (a spouse, a lineal
ascendant or descendant, or a spouse of a lineal ascendant or descendant) as a
single Highly Compensated Employee, but only if the Highly Compensated Employee
is a more than 5% owner or is one of the 10 Highly Compensated Employees with
the greatest Compensation for the Plan Year. This aggregation rule applies to
a family member even if that family member is a Highly Compensated Employee
without family aggregation.
The term "Highly Compensated Employee" also includes any former
Employee who separated from Service (or has a deemed Separation from Service,
as determined under Treasury regulations) prior to the Plan Year, performs no
Service for the Employer during the Plan Year, and was a Highly Compensated
Employee either for the separation year or any Plan Year ending on or after his
55th birthday. If the former Employee's Separation from Service occurred prior
to January 1, 1987, he is a Highly Compensated Employee only if he satisfied
clause (a) of this Section 1.09 or received Compensation in excess of $50,000
during: (1) the year of his Separation from Service (or the prior year); or (2)
any year ending after his 54th birthday.
1.10 "Participant" is an Employee who is eligible to be and becomes
a Participant in accordance with the provisions of Section 2.01.
1.11 "Beneficiary" is a person designated by a Participant who is
or may become entitled to a benefit under the Plan. A Beneficiary who becomes
entitled to a benefit under the Plan remains a Beneficiary under the Plan until
the Trustee has fully distributed his benefit to him. A Beneficiary's right to
(and the Plan Administrator's, the Advisory Committee's or a Trustee's duty to
provide to the Beneficiary) information or data concerning the Plan does not
arise until he first becomes entitled to receive a benefit under the Plan.
1.12 "Compensation" means, except as provided in the Employer's
Adoption Agreement, the Participant's Earned Income, wages, salaries, fees for
professional service and other amounts received for personal services actually
rendered in the course of employment with the Employer maintaining the plan
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses). The Employer must elect in its Adoption Agreement
whether to include elective contributions in the definition of Compensation.
"Elective contributions" are amounts excludible from the Employee's gross income
under Code Sections 125, 402(a)(8), 402(h) or 403(b), and contributed by the
Employer, at the Employee's election, to a Code Section 401(k) arrangement, a
Simplified Employee Pension, cafeteria plan or tax-sheltered annuity. The term
"Compensation" does not include:
(a) Employer contributions (other than "elective contributions,"
if includible in the definition of Compensation under Section 1.12 of
the Employer's Adoption Agreement) to a plan of deferred compensation
to the extent the contributions are not included in the gross income
of the Employee for the taxable year in which contributed, on behalf
of an Employee to a Simplified Employee Pension Plan to the extent
such contributions are excludible from the Employee's gross income,
and any distributions from a plan of deferred compensation, regardless
of whether such amounts are includible in the gross income of the
Employee when distributed.
(b) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by an Employee
either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture.
(c) Amounts realized from the sale, exchange or other disposition
of stock acquired under a stock option described in Part 11,
Subchapter 6, Chapter 1 of the Code.
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Defined Contribution Master Plan
(d) Other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the extent that
the premiums are not includible in the gross income of the Employee),
or contributions made by an Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Code Section 403(b) (whether or not the contributions are
excludible from the gross income of the Employee), other than
"elective contributions," if elected in the Employer's Adoption
Agreement.
Any reference in this Plan to Compensation is a reference to the
definition in this Section 1.12, unless the Plan reference specifies a
modification to this definition. The Advisory Committee will take into account
only Compensation actually paid for the relevant period. A Compensation
payment includes Compensation by the Employer through another person under the
common paymaster provisions in Code Sections 3121 and 3306.
(A) LIMITATIONS ON COMPENSATION.
(1) COMPENSATION DOLLAR LIMITATION. For any Plan Year beginning
after December 31, 1988, the Advisory Committee must take into account only the
first $200,000 (or beginning January 1, 1990, such larger amount as the
Commissioner of Internal Revenue may prescribe) of any Participant's
Compensation. For any Plan Year beginning prior to January 1, 1989, this
$200,000 limitation (but not the family aggregation requirement described in
the next paragraph) applies only if the Plan is top heavy for such Plan Year or
operates as a deemed top heavy plan for such Plan Year.
(2) APPLICATION OF COMPENSATION LIMITATION TO CERTAIN FAMILY
MEMBERS. The $200,000 Compensation limitation applies to the combined
Compensation of the Employee and of any family member aggregated with the
Employee under Section 1.09 who is either (i) the Employee's spouse; or (ii)
the Employee's lineal descendant under the age of 19. If, for a Plan Year, the
combined Compensation of the Employee and such family members who are
Participants entitled to an allocation for that Plan Year exceeds the $200,000
(or adjusted) limitation, "Compensation" for each such Participant, for
purposes of the contribution and allocation provisions of Article III, means
his Adjusted Compensation. Adjusted Compensation is the amount which bears the
same ratio to the $200,000 (or adjusted) limitation as the affected
Participant's Compensation (without regard to the $200,000 Compensation
limitation) bears to the combined Compensation of all the affected Participants
in the family unit. If the Plan uses permitted disparity, the Advisory
Committee must determine the integration level of each affected family member
Participant prior to the proration of the $200,000 Compensation limitation, but
the combined integration level of the affected Participants may not exceed
$200,000 (or the adjusted limitation). The combined Excess Compensation of the
affected Participants in the family unit may not exceed $200,000 (or the
adjusted limitation) minus the affected Participants' combined integration
level (as determined under the preceding sentence). If the combined Excess
Compensation exceeds this limitation, the Advisory Committee will prorate the
Excess Compensation limitation among the affected Participants in the family
unit in proportion to each such individual's Adjusted Compensation minus his
integration level. If the Employer's Plan is a Nonstandardized Plan, the
Employer may elect to use a different method in determining the Adjusted
Compensation of the affected Participants by specifying that method in an
addendum to the Adoption Agreement, numbered Section 1.12.
(B) NONDISCRIMINATION. For purposes of determining whether the Plan
discriminates in favor of Highly Compensated Employees, Compensation means
Compensation as defined in this Section 1.12, except: (1) the Employer may
elect to include or to exclude elective contributions, irrespective of the
Employer's election in its Adoption Agreement regarding elective contributions;
and (2) the
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Defined Contribution Master Plan
Employer will not give effect to any elections made in the "modifications to
Compensation definition" section of Adoption Agreement Section 1.12. The
Employer's election described in clause (1) must be consistent and uniform with
respect to all Employees and all plans of the Employer for any particular Plan
Year. If the Employer's Plan is a Nonstandardized Plan, the Employer,
irrespective of clause (2), may elect to exclude from this nondiscrimination
definition of Compensation any items of Compensation excludible under Code
Section 414(s) and the applicable Treasury regulations, provided such adjusted
definition conforms to the nondiscrimination requirements of those regulations.
1.13 "Earned Income" means net earnings from self-employment in the
trade or business with respect to which the Employer has established the Plan,
provided personal services of the individual are a material income producing
factor. The Advisory Committee will determine net earnings without regard to
items excluded from gross income and the deductions allocable to those items.
The Advisory Committee will determine net earnings after the deduction allowed
to the Self-Employed Individual for all contributions made by the Employer to a
qualified plan and, for Plan Years beginning after December 31, 1989, the
deduction allowed to the Self-Employed under Code Section 164(f) for
self-employment taxes.
1.14 "Account" means the separate account(s) which the Advisory
Committee or the Trustee maintains for a Participant under the Employer's Plan.
1.15 "Accrued Benefit" means the amount standing in a Participant's
Account(s) as of any date derived from both Employer contributions and Employee
contributions, if any.
1.16 "Nonforfeitable" means a Participant's or Beneficiary's
unconditional claim, legally enforceable against the Plan, to the Participant's
Accrued Benefit.
1.17 "Plan Year" means the fiscal year of the Plan, the consecutive
month period specified in the Employer's Adoption Agreement. The Employer's
Adoption Agreement also must specify the "Limitation Year" applicable to the
Limitations on allocations described in Article III. If the Employer maintains
Paired Plans, each Plan must have the same Plan Year.
1.18 "Effective Date" of this Plan is the date specified in the
Employer's Adoption Agreement.
1.19 "Plan Entry Date" means the date(s) specified in Section 2.01
of the Employer's Adoption Agreement.
1.20 "Accounting Date" is the last day of an Employer's Plan Year.
Unless otherwise specified in the Plan, the Advisory Committee will make all
Plan allocations for a particular Plan Year as of the Accounting Date of that
Plan Year.
1.21 "Trust" means the separate Trust created under the Employer's
Plan.
1.22 "Trust Fund" means all property of every kind held or acquired
by the Employer's Plan, other than incidental benefit insurance contracts.
1.23 "Nontransferable Annuity" means an annuity which by its terms
provides that it may not be sold, assigned, discounted, pledged as collateral
for a loan or security for the performance of an obligation or for any purpose
to any person other than the insurance company. If the Plan distributes an
annuity contract, the contract must be a Nontransferable Annuity.
1.24 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
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Defined Contribution Master Plan
1.25 "Code" means the Internal Revenue Code of 1986, as amended.
1.26 "Service" means any period of time the Employee is in the
employ of the Employer, including any period the Employee is on an unpaid leave
of absence authorized by the Employer under a uniform, nondiscriminatory policy
applicable to all Employees. "Separation from Service" means the Employee no
longer has an employment relationship with the Employer maintaining this Plan.
1.27 "Hour of Service" means:
(a) Each Hour of Service for which the Employer, either directly
or indirectly, pays an Employee, or for which the Employee is entitled
to payment, for the performance of duties. The Advisory Committee
credits Hours of Service under this paragraph (a) to the Employee for
the computation period in which the Employee performs the duties,
irrespective of when paid;
(b) Each Hour of Service for back pay, irrespective of mitigation
of damages, to which the Employer has agreed or for which the Employee
has received an award. The Advisory Committee credits Hours of
Service under this paragraph (b) to the Employee for the computation
period(s) to which the award or the agreement pertains rather than for
the computation period in which the award, agreement or payment is
made; and
(c) Each Hour of Service for which the Employer, either directly
or indirectly, pays an Employee, or for which the Employee is entitled
to payment (irrespective of whether the employment relationship is
terminated), for reasons other than for the performance of duties
during a computation period, such as leave of absence, vacation,
holiday, sick leave, illness, incapacity (including disability),
layoff, jury duty or military duty. The Advisory Committee will
credit no more than 501 Hours of Service under this paragraph (c) to
an Employee on account of any single continuous period during which
the Employee does not perform any duties (whether or not such period
occurs during a single computation period). The Advisory Committee
credits Hours of Service under this paragraph (c) in accordance with
the rules of paragraphs (b) and (c) of Labor Reg. Section 2530.200b-2,
which the Plan, by this reference, specifically incorporates in full
within this paragraph (c).
The Advisory Committee will not credit an Hour of Service under more
than one of the above paragraphs. A computation period for purposes of this
Section 1.27 is the Plan Year, Year of Service period, Break in Service period
or other period, as determined under the Plan provision for which the Advisory
Committee is measuring an Employee's Hours of Service. The Advisory Committee
will resolve any ambiguity with respect to the crediting of an Hour of Service
in favor of the Employee.
(A) METHOD OF CREDITING HOURS OF SERVICE. The Employer must elect in its
Adoption Agreement the method the Advisory Committee will use in crediting an
Employee with Hours of Service. For purposes of the Plan, "actual" method
means the determination of Hours of Service from records of hours worked and
hours for which the Employer makes payment or for which payment is due from the
Employer. If the Employer elects to apply an "equivalency" method, for each
equivalency period for which the Advisory Committee would credit the Employee
with at least one Hour of Service, the Advisory Committee will credit the
Employee with: (i) 10 Hours of Service for a daily equivalency; (ii) 45 Hours
of Service for a weekly equivalency; (iii) 95 Hours of Service for a
semimonthly payroll period equivalency; and (iv) 190 Hours of Service for a
monthly equivalency.
(B) MATERNITY/PATERNITY LEAVE. Solely for purposes of determining whether
the Employee incurs a Break in Service under any provision of this Plan, the
Advisory Committee must credit Hours of Service during an Employee's unpaid
absence period due to maternity or paternity leave. The Advisory Committee
considers an Employee on maternity or paternity leave if the Employee's absence
is due to the Employee's pregnancy, the birth of the Employee's child, the
placement with
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Defined Contribution Master Plan
the Employee of an adopted child, or the care of the Employee's child
immediately following the child's birth or placement. The Advisory Committee
credits Hours of Service under this paragraph on the basis of the number of
Hours of Service the Employee would receive if he were paid during the absence
period or, if the Advisory Committee cannot determine the number of Hours of
Service the Employee would receive, on the basis of 8 hours per day during the
absence period. The Advisory Committee will credit only the number (not
exceeding 501) of Hours of Service necessary to prevent an Employee's Break in
Service. The Advisory Committee credits all Hours of Service described in this
paragraph to the computation period in which the absence period begins or, if
the Employee does not need these Hours of Service to prevent a Break in Service
in the computation period in which his absence period begins, the Advisory
Committee credits these Hours of Service to the immediately following
computation period.
1.28 "Disability" means the Participant, because of a physical or
mental disability, will be unable to perform the duties of his customary
position of employment (or is unable to engage in any substantial gainful
activity) for an indefinite period which the Advisory Committee considers will
be of long continued duration. A Participant also is disabled if he incurs the
permanent loss or loss of use of a member or function of the body, or is
permanently disfigured, and incurs a Separation from Service. The Plan
considers a Participant disabled on the date the Advisory Committee determines
the Participant satisfies the definition of disability. The Advisory Committee
may require a Participant to submit to a physical examination in order to
confirm disability. The Advisory Committee will apply the provisions of this
Section 1.28 in a nondiscriminatory, consistent and uniform manner. If the
Employer's Plan is a Nonstandardized Plan, the Employer may provide an
alternate definition of disability in an addendum to its Adoption Agreement,
numbered Section 1.28.
1.29 SERVICE FOR PREDECESSOR EMPLOYER. If the Employer maintains
the plan of a predecessor employer, the Plan treats service of the Employee
with the predecessor employer as service with the Employer. If the Employer
does not maintain the plan of a predecessor employer, the Plan does not credit
service with the predecessor employer, unless the Employer identifies the
predecessor in its Adoption Agreement and specifies the purposes for which the
Plan will credit service with that predecessor employer.
1.30 RELATED EMPLOYERS. A related group is a controlled group of
corporations (as defined in Code Section 414(b)), trades or businesses (whether
or not incorporated) which are under common control (as defined in Code Section
414(c)) or an affiliated service group (as defined in Code Section 414(m) or in
Code Section 414(o)). If the Employer is a member of a related group, the term
"Employer" includes the related group members for purposes of crediting Hours
of Service, determining Years of Service and Breaks in Service under Articles
II and V, applying the Participation Test and the Coverage Test under Section
3.06(E), applying the limitations on allocations in Part 2 of Article III,
applying the top heavy rules and the minimum allocation requirements of Article
III, the definitions of Employee, Highly Compensated Employee, Compensation and
Leased Employee, and for any other purpose required by the applicable Code
section or by a Plan provision. However, an Employer may contribute to the
Plan only by being a signatory to the Execution Page of the Adoption Agreement
or to a Participation Agreement to the Employer's Adoption Agreement. If one
or more of the Employer's related group members become Participating Employers
by executing a Participation Agreement to the Employer's Adoption Agreement,
the term "Employer" includes the participating related group members for all
purposes of the Plan, and "Plan Administrator" means the Employer that is the
signatory to the Execution Page of the Adoption Agreement.
If the Employer's Plan is a Standardized Plan, all Employees of the
Employer or of any member of the Employer's related group, are eligible to
participate in the Plan, irrespective of whether the related group member
directly employing the Employee is a Participating Employer. If the Employer's
Plan is a Nonstandardized Plan, the Employer must specify in Section 1.07 of
its Adoption Agreement, whether the Employees of related group members that are
not Participating
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Defined Contribution Master Plan
Employers are eligible to participate in the Plan. Under a Nonstandardized
Plan, the Employer may elect to exclude from the definition of "Compensation"
for allocation purposes any Compensation received from a related employer that
has not executed a Participation Agreement and whose Employees are not eligible
to participate in the Plan.
1.31 LEASED EMPLOYEES. The Plan treats a Leased Employee as an
Employee of the Employer. A Leased Employee is an individual (who otherwise is
not an Employee of the Employer) who, pursuant to a leasing agreement between
the Employer and any other person, has performed services for the Employer (or
for the Employer and any persons related to the Employer within the meaning of
Code Section 144(a)(3)) on a substantially full time basis for at least one
year and who performs services historically performed by employees in the
Employer's business field. If a Leased Employee is treated as an Employee by
reason of this Section 1.31 of the Plan, "Compensation" includes Compensation
from the leasing organization which is attributable to services performed for
the Employer.
(A) SAFE HARBOR PLAN EXCEPTION. The Plan does not treat a Leased Employee
as an Employee if the leasing organization covers the employee in a safe harbor
plan and, prior to application of this safe harbor plan exception, 20% or less
of the Employer's Employees (other than Highly Compensated Employees) are
Leased Employees. A safe harbor plan is a money purchase pension plan
providing immediate participation, full and immediate vesting, and a
nonintegrated contribution formula equal to at least 10% of the employee's
compensation without regard to employment by the leasing organization on a
specified date. The safe harbor plan must determine the 10% contribution on
the basis of compensation as defined in Code Section 415(c)(3) plus elective
contributions (as defined in Section 1.12).
(B) OTHER REQUIREMENTS. The Advisory Committee must apply this Section
1.31 in a manner consistent with Code Sections 414(n) and 414(o) and the
regulations issued under those Code sections. The Employer must specify in the
Adoption Agreement the manner in which the Plan will determine the allocation
of Employer contributions and Participant forfeitures an behalf of a
Participant if the Participant is a Leased Employee covered by a plan
maintained by the leasing organization.
1.32 SPECIAL RULES FOR OWNER-EMPLOYEES. The following special
provisions and restrictions apply to Owner-Employees:
(a) If the Plan provides contributions or benefits for an
Owner-Employee or for a group of Owner-Employees who controls the trade or
business with respect to which this Plan is established and the
Owner-Employee or Owner-Employees also control as Owner-Employees one or
more other trades or businesses, plans must exist or be established with
respect to all the controlled trades or businesses so that when the plans
are combined they form a single plan which satisfies the requirements of
Code Section 401(a) and Code Section 401(d) with respect to the employees
of the controlled trades or businesses.
(b) The Plan excludes an Owner-Employee or group of
Owner-Employees if the Owner-Employee or group of Owner-Employees controls
any other trade or business, unless the employees of the other controlled
trade or business participate in a plan which satisfies the requirements
of Code Section 401(a) and Code Section 401(d). The other qualified plan
must provide contributions and benefits which are not less favorable than
the contributions and benefits provided for the Owner-Employee or group of
Owner-Employees under this Plan, or if an Owner-Employee is covered under
another qualified plan as an Owner-Employee, then the plan established
with respect to the trade or business he does control must provide
contributions or benefits as favorable as those provided under the most
favorable plan of the trade or business he does not control. If the
exclusion of this paragraph (b) applies and the Employer's Plan is a
Standardized Plan, the Employer may not participate or continue to
participate in this Master Plan and the Employer's Plan becomes an
individually-designed plan for purposes of qualification reliance.
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Defined Contribution Master Plan
(c) For purposes of paragraphs (a) and (b) of this Section 1.32,
an Owner-Employee or group of Owner-Employees controls a trade or
business if the Owner-Employee or Owner-Employees together (1) own the
entire interest in an unincorporated trade or business, or (2) in the
case of a partnership, own more than 50% of either the capital
interest or the profits interest in the partnership.
1.33 DETERMINATION OF TOP HEAVY STATUS. If this Plan is the only
qualified plan maintained by the Employer, the Plan is top heavy for a Plan
Year if the top heavy ratio as of the Determination Date exceeds 60%. The top
heavy ratio is a fraction, the numerator of which is the sum of the present
value of Accrued Benefits of all Key Employees as of the Determination Date and
the denominator of which is a similar sum determined for all Employees. The
Advisory Committee must include in the top heavy ratio, as part of the present
value of Accrued Benefits, any contribution not made as of the Determination
Date but includible under Code Section 416 and the applicable Treasury
regulations, and distributions made within the Determination Period. The
Advisory Committee must calculate the top heavy ratio by disregarding the
Accrued Benefit (and distributions, if any, of the Accrued Benefit) of any
Non-Key Employee who was formerly a Key Employee, and by disregarding the
Accrued Benefit (including distributions, if any, of the Accrued Benefit) of an
individual who has not received credit for at least one Hour of Service with
the Employer during the Determination Period. The Advisory Committee must
calculate the top heavy ratio, including the extent to which it must take into
account distributions, rollovers and transfers, in accordance with Code Section
416 and the regulations under that Code section.
If the Employer maintains other qualified plans (including a simplified
employee pension plan), or maintained another such plan which now is
terminated, this Plan is top heavy only if it is part of the Required
Aggregation Group, and the top heavy ratio for the Required Aggregation Group
and for the Permissive Aggregation Group, if any, each exceeds 60%. The
Advisory Committee will calculate the top heavy ratio in the same manner as
required by the first paragraph of this Section 1.33, taking into account all
plans within the Aggregation Group. To the extent the Advisory Committee must
take into account distributions to a Participant, the Advisory Committee must
include distributions from a terminated plan which would have been part of the
Required Aggregation Group if it were in existence on the Determination Date.
The Advisory Committee will calculate the present value of accrued benefits
under defined benefit plans or simplified employee pension plans included
within the group in accordance with the terms of those plans, Code Section 416
and the regulations under that Code section. If a Participant in a defined
benefit plan is a Non-Key Employee, the Advisory Committee will determine his
accrued benefit under the accrual method, if any, which is applicable uniformly
to all defined benefit plans maintained by the Employer or, if there is no
uniform method, in accordance with the slowest accrual rate permitted under the
fractional rule accrual method described in Code Section 411(b)(1)(C). If the
Employer maintains a defined benefit plan, the Employer must specify in
Adoption Agreement Section 3.18 the actuarial assumptions (interest and
mortality only) the Advisory Committee will use to calculate the present value
of benefits from a defined benefit plan. If an aggregated plan does not have a
valuation date coinciding with the Determination Date, the Advisory Committee
must value the Accrued Benefits in the aggregated plan as of the most recent
valuation date falling within the twelve-month period ending on the
Determination Date, except as Code Section 416 and applicable Treasury
regulations require for the first and second plan year of a defined benefit
plan. The Advisory Committee will calculate the top heavy ratio with reference
to the Determination Dates that fall within the same calendar year.
(A) STANDARDIZED PLAN. If the Employer's Plan is a Standardized Plan, the
Plan operates as a deemed top heavy plan in all Plan Years, except, if the
Standardized Plan includes a Code Section 401(k) arrangement, the Employer may
elect to apply the top heavy requirements only in Plan Years for which the Plan
actually is top heavy. Under a deemed top heavy plan, the Advisory Committee
need not determine whether the Plan actually is top heavy. However, if the
Employer, in Adoption
1.09
15
Defined Contribution Master Plan
Agreement Section 3.18, elects to override the 100% limitation, the Advisory
Committee will need to determine whether a deemed top heavy Plan's top heavy
ratio for a Plan Year exceeds 90%.
(B) DEFINITIONS. For purposes of applying the provisions of this Section
1.33:
(1) "Key Employee" means, as of any Determination Date, any
Employee or former Employee (or Beneficiary of such Employee) who, for
any Plan Year in the Determination Period: (i) has Compensation in
excess of 50% of the dollar amount prescribed in Code Section
415(b)(1)(A) (relating to defined benefit plans) and is an officer of
the Employer; (ii) has Compensation in excess of the dollar amount
prescribed in Code Section 415(c)(1)(A) (relating to defined
contribution plans) and is one of the Employees owning the ten largest
interests in the Employer; (iii) is a more than 5% owner of the
Employer; or (iv) is a more than 1% owner of the Employer and has
Compensation of more than $150,000. The constructive ownership rules
of Code Section 318 (or the principles of that section, in the case of
an unincorporated Employer,) will apply to determine ownership in the
Employer. The number of officers taken into account under clause (i)
will not exceed the greater of 3 or 10% of the total number (after
application of the Code Section 414(q) exclusions) of Employees, but
no more than 50 officers. The Advisory Committee will make the
determination of who is a Key Employee in accordance with Code Section
416(i)(1) and the regulations under that Code section.
(2) "Non-Key Employee" is an employee who does not meet the
definition of Key Employee.
(3) "Compensation" means Compensation as determined under Section
1.09 for purposes of identifying Highly Compensated Employees.
(4) "Required Aggregation Group" means: (i) each qualified plan of
the Employer in which at least one Key Employee participates at any
time during the Determination Period; and (ii) any other qualified
plan of the Employer which enables a plan described in clause (i) to
meet the requirements of Code Section 401(a)(4) or of Code Section
410.
(5) "Permissive Aggregation Group" is the Required Aggregation
Group plus any other qualified plans maintained by the Employer, but
only if such group would satisfy in the aggregate the requirements of
Code Section 401(a)(4) and of Code Section 410. The Advisory
Committee will determine the Permissive Aggregation Group.
(6) "Employer" means the Employer that adopts this Plan and any
related employers described in Section 1.30.
(7) "Determination Date" for any Plan Year is the Accounting Date
of the preceding Plan Year or, in the case of the first Plan Year of
the Plan, the Accounting Date of that Plan Year. The "Determination
Period" is the 5 year period ending on the Determination Date.
1.34 "Paired Plans" means the Employer has adopted two Standardized
Plan Adoption Agreements offered with this Master Plan, one Adoption Agreement
being a Paired Profit Sharing Plan and one Adoption Agreement being a Paired
Pension Plan. A Paired Profit Sharing Plan may include a Code Section 401(k)
arrangement. A Paired Pension Plan must be a money purchase pension plan or a
target benefit pension plan. Paired Plans must be the subject of a favorable
opinion letter issued by the National Office of the Internal Revenue Service.
This Master Plan does not pair any of its Standardized Plan Adoption Agreements
with Standardized Plan Adoption Agreements under a defined benefit master plan.
* * * * * * * * * * * * * * * *
1.10
16
Defined Contribution Master Plan
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY. Each Employee becomes a Participant in the Plan
in accordance with the participation option selected by the Employer in its
Adoption Agreement. If this Plan is a restated Plan, each Employee who was a
Participant in the Plan on the day before the Effective Date continues as a
Participant in the Plan, irrespective of whether he satisfies the participation
conditions in the restated Plan, unless otherwise provided in the Employer's
Adoption Agreement.
2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an
Employee's participation in the Plan under Adoption Agreement Section 2.01, the
Plan takes into account all of his Years of Service with the Employer, except
as provided in Section 2.03. "Year of Service" means an eligibility computation
period during which the Employee completes not less than the number of Hours of
Service specified in the Employer's Adoption Agreement. The initial
eligibility computation period is the first 12 consecutive month period
measured from the Employment Commencement Date. The Plan measures succeeding
eligibility computation periods in accordance with the option selected by the
Employer in its Adoption Agreement. If the Employer elects to measure
subsequent periods on a Plan Year basis, an Employee who receives credit for
the required number of Hours of Service during the initial eligibility
computation period and during the first applicable Plan Year will receive
credit for two Years of Service under Article II. "Employment Commencement
Date" means the date on which the Employee first performs an Hour of Service
for the Employer. If the Employer elects a service condition under Adoption
Agreement Section 2.01 based on months, the Plan does not apply any Hour of
Service requirement after the completion of the first Hour of Service.
2.03 BREAK IN SERVICE - PARTICIPATION. An Employee incurs a "Break
in Service" if during any 12 consecutive month period he does not complete more
than 500 Hours of Service with the Employer. The "12 consecutive month period"
under this Section 2.03 is the same 12 consecutive month period for which the
Plan measures "Years of Service" under Section 2.02.
(A) 2-YEAR ELIGIBILITY. If the Employer elects a 2 years of service
condition for eligibility purposes under Adoption Agreement Section 2.01, the
Plan treats an Employee who incurs a one year Break in Service and who has
never become a Participant as a new Employee on the date he first performs an
Hour of Service for the Employer after the Break in Service.
(B) SUSPENSION OF YEARS OF SERVICE. The Employer must elect in its
Adoption Agreement whether a Participant will incur a suspension of Years of
Service after incurring a one year Break in Service. If this rule applies
under the Employer's Plan, the Plan disregards a Participant's Years of Service
(as defined in Section 2.02) earned prior to a Break in Service until the
Participant completes another Year of Service and the Plan suspends the
Participant's participation in the Plan. If the Participant completes a Year
of Service following his Break in Service, the Plan restores that Participant's
pre-Break Years of Service (and the Participant resumes active participation in
the Plan) retroactively to the first day of the computation period in which the
Participant earns the first post-Break Year of Service. The initial
computation period under this Section 2.03(B) is the 12 consecutive month
period measured from the date the Participant first receives credit for an Hour
of Service following the one year Break in Service period. The Plan measures
any subsequent periods, if necessary, in a manner consistent with the
computation period selection in Adoption Agreement Section 2.02. This Section
2.03(B) does not affect a Participant's vesting credit under Article V and,
during a suspension period, the Participant's Account continues to share fully
in Trust Fund allocations under Section 9.11. Furthermore, this Section 2.03(B)
will not result in the restoration of any Year of Service disregarded under the
Break in Service rule of Section 2.03(A).
2.04 PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose
employment with the Employer terminates will re-enter the Plan as a Participant
on the date of his re-employment, subject to the Break in Service rule, if
applicable, under Section 2.03(B). An Employee who satisfies the Plan's
eligibility conditions but who terminates employment with the
2.01
17
Defined Contribution Master Plan
Employer prior to becoming a Participant will become a Participant on the later
of the Plan Entry Date on which he would have entered the Plan had he not
terminated employment or the date of his re-employment, subject to the Break in
Service rule, if applicable, under Section 2.03(B). Any Employee who
terminates employment prior to satisfying the Plan's eligibility conditions
becomes a Participant in accordance with Adoption Agreement Section 2.01.
2.05 CHANGE IN EMPLOYEE STATUS. If a Participant has not incurred
a Separation from Service but ceases to be eligible to participate in the Plan,
by reason of employment within an employment classification excluded by the
Employer under Adoption Agreement Section 1.07, the Advisory Committee must
treat the Participant as an Excluded Employee during the period such a
Participant is subject to the Adoption Agreement exclusion. The Advisory
Committee determines a Participant's sharing in the allocation of Employer
contributions and Participant forfeitures, if applicable, by disregarding his
Compensation paid by the Employer for services rendered in his capacity as an
Excluded Employee. However, during such period of exclusion, the Participant,
without regard to employment classification, continues to receive credit for
vesting under Article V for each included Year of Service and the Participant's
Account continues to share fully in Trust Fund allocations under Section 9.11.
If an Excluded Employee who is not a Participant becomes eligible to
participate in the Plan by reason of a change in employment classification, he
will participate in the Plan immediately if he has satisfied the eligibility
conditions of Section 2.01 and would have been a Participant had he not been an
Excluded Employee during his period of Service. Furthermore, the Plan takes
into account all of the Participant's included Years of Service with the
Employer as an Excluded Employee for purposes of vesting credit under Article
V.
2.06 ELECTION NOT TO PARTICIPATE. If the Employer's Plan is a
Standardized Plan, the Plan does not permit an otherwise eligible Employee nor
any Participant to elect not to participate in the Plan. If the Employer's
Plan is a Nonstandardized Plan, the Employer must specify in its Adoption
Agreement whether an Employee eligible to participate, or any present
Participant, may elect not to participate in the Plan. For an election to be
effective for a particular Plan Year, the Employee or Participant must file the
election in writing with the Plan Administrator not later than the time
specified in the Employer's Adoption Agreement. The Employer may not make a
contribution under the Plan for the Employee or for the Participant for the
Plan Year for which the election is effective, nor for any succeeding Plan
Year, unless the Employee or Participant re-elects to participate in the Plan.
After an Employee's or Participant's election not to participate has been
effective for at least the minimum period prescribed by the Employer's Adoption
Agreement, the Employee or Participant may re-elect to participate in the Plan
for any Plan Year and subsequent Plan Years. An Employee or Participant may
re-elect to participate in the Plan by filing his election in writing with the
Plan Administrator not later than the time specified in the Employer's Adoption
Agreement. An Employee or Participant who re-elects to participate may again
elect not to participate only as permitted in the Employer's Adoption
Agreement. If an Employee is a Self-Employed Individual, the Employee's
election (except as permitted by Treasury regulations without creating a Code
Section 401(k) arrangement with respect to that Self-Employed Individual) must
be effective no later than the date the Employee first would become a
Participant in the Plan and the election is irrevocable. The Plan
Administrator must furnish an Employee or a Participant any form required for
purposes of an election under this Section 2.06. An election timely filed is
effective for the entire Plan Year.
A Participant who elects not to participate may not receive a
distribution of his Accrued Benefit attributable either to Employer or to
Participant contributions except as provided under Article IV or under Article
VI. However, for each Plan Year for which a Participant's election not to
participate is effective, the Participant's Account, if any, continues to share
in Trust Fund allocations under Article IX Furthermore, the Employee or the
Participant receives vesting credit under Article V for each included Year of
Service during the period the election not to participate is effective.
* * * * * * * * * * * * * * * *
2.02
18
Defined Contribution Master Plan
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
PART 1. AMOUNT OF EMPLOYER CONTRIBUTIONS AND PLAN ALLOCATIONS: SECTIONS 3.01
THROUGH 3.06
3.01 AMOUNT. For each Plan Year, the Employer contributes to the
Trust the amount determined by application of the contribution option selected
by the Employer in its Adoption Agreement. The Employer may not make a
contribution to the Trust for any Plan Year to the extent the contribution
would exceed the Participants' Maximum Permissible Amounts.
The Employer contributes to this Plan on the condition its
contribution is not due to a mistake of fact and the Revenue Service will not
disallow the deduction for its contribution. The Trustee, upon written request
from the Employer, must return to the Employer the amount of the Employer's
contribution made by the Employer by mistake of fact or the amount of the
Employer's contribution disallowed as a deduction under Code Section 404. The
Trustee will not return any portion of the Employer's contribution under the
provisions of this paragraph more than one year after:
(a) The Employer made the contribution by mistake of fact; or
(b) The disallowance of the contribution as a deduction, and
then, only to the extent of the disallowance.
The Trustee will not increase the amount of the Employer contribution
returnable under this Section 3.01 for any earnings attributable to the
contribution, but the Trustee will decrease the Employer contribution
returnable for any losses attributable to it. The Trustee may require the
Employer to furnish it whatever evidence the Trustee deems necessary to enable
the Trustee to confirm the amount the Employer has requested be returned is
properly returnable under ERISA.
3.02 DETERMINATION OF CONTRIBUTION. The Employer, from its records,
determines the amount of any contributions to be made by it to the Trust under
the terms of the Plan.
3.03 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its
contribution for each Plan Year in one or more installments without interest.
The Employer must make its contribution to the Plan within the time prescribed
by the Code or applicable Treasury regulations. Subject to the consent of the
Trustee, the Employer may make its contribution in property rather than in
cash, provided the contribution of property is not a prohibited transaction
under the Code or under ERISA.
3.04 CONTRIBUTION ALLOCATION.
(A) METHOD OF ALLOCATION. The Employer must specify in its Adoption
Agreement the manner of allocating each annual Employer contribution to this
Trust.
(B) TOP HEAVY MINIMUM ALLOCATION. The Plan must comply with the
provisions of this Section 3.04(B), subject to the elections in the Employer's
Adoption Agreement.
(1) TOP HEAVY MINIMUM ALLOCATION UNDER STANDARDIZED PLAN. Subject
to the Employer's election under Section 3.04(B)(3), the top heavy minimum
allocation requirement applies to a Standardized Plan for each Plan Year,
irrespective of whether the Plan is top heavy.
(a) Each Participant employed by the Employer on the last
day of the Plan Year will receive a top heavy minimum
allocation for that Plan Year. The Employer may elect in
Section 3.04 of its Adoption Agreement to apply this paragraph
(a) only to a Participant who is a Non-Key Employee.
3.01
19
Defined Contribution Master Plan
(b) Subject to any overriding elections in Section 3.18
of the Employer's Adoption Agreement, the top heavy minimum
allocation is the lesser of 3% of the Participant's
Compensation for the Plan Year or the highest contribution
rate for the Plan Year made on behalf of any Participant for
the Plan Year. However, if the Employee participates in
Paired Plans, the top heavy minimum allocation is 3% of his
Compensation. If, under Adoption Agreement Section 3.04, the
Employer elects to apply paragraph (a) only to a Participant
who is a Non-Key Employee, the Advisory Committee will
determine the "highest contribution rate" described in the
first sentence of this paragraph (b) by reference only to the
contribution rates of Participants who are Key Employees for
the Plan Year.
(2) TOP HEAVY MINIMUM ALLOCATION UNDER NONSTANDARDIZED PLAN. The
top heavy minimum allocation requirement applies to a Nonstandardized Plan only
in Plan Years for which the Plan is top heavy. Except as provided in the
Employer's Adoption Agreement, if the Plan is top heavy in any Plan Year:
(a) Each Non-Key Employee who is a Participant and is
employed by the Employer on the last day of the Plan Year will
receive a top heavy minimum allocation for that Plan Year,
irrespective of whether he satisfies the Hours of Service
condition under Section 3.06 of the Employer's Adoption
Agreement; and
(b) The top heavy minimum allocation is the lesser of 3%
of the Non-Key Employee's Compensation for the Plan Year or
the highest contribution rate for the Plan Year made on behalf
of any Key Employee. However, if a defined benefit plan
maintained by the Employer which benefits a Key Employee
depends on this Plan to satisfy the antidiscrimination rules
of Code Section 401(a)(4) or the coverage rule's of Code
Section 410 (or another plan benefiting the Key Employee so
depends on such defined benefit plan), the top heavy minimum
allocation is 3% of the Non-Key Employee's Compensation
regardless of the contribution rate for the Key Employees.
(3) SPECIAL ELECTION FOR STANDARDIZED CODE SECTION 401(k) PLAN.
If the Employer's Plan is a Standardized Code Section 401(k) Plan, the Employer
may elect in Adoption Agreement Section 3.04 to apply the top heavy minimum
allocation requirements of Section 3.04(B)(1) only for Plan Years in which the
Plan actually is a top heavy plan.
(4) SPECIAL DEFINITIONS. For purposes of this Section 3.04(B),
the term "Participant" includes any Employee otherwise eligible to participate
in the Plan but who is not a Participant because of his Compensation level or
because of his failure to make elective deferrals under a Code Section 401(k)
arrangement or because of his failure to make mandatory contributions. For
purposes of subparagraph (1)(b) or (2)(b), "Compensation" means Compensation as
defined in Section 1.12, except Compensation does not include elective
contributions, irrespective of whether the Employer has elected to include
these amounts in Section 1.12 of its Adoption Agreement, any exclusion selected
in Section 1.12 of the Adoption Agreement (other than the exclusion of elective
contributions) does not apply, and any modification to the definition of
Compensation in Section 3.06 does not apply.
(5) DETERMINING CONTRIBUTION RATES. For purposes of this Section
3.04(B), a Participant's contribution rate is the sum of all Employer
contributions (not including Employer contributions to Social Security) and
forfeitures allocated to the Participant's Account for the Plan Year divided by
his Compensation for the entire Plan Year. However, for purposes of satisfying
a Participant's top heavy minimum allocation in Plan Years beginning after
December 31, 1988, the Participant's contribution rate does not include any
elective contributions under a Code Section 401(k) arrangement nor any Employer
matching contributions allocated on the basis of those elective contributions
or on
3.02
20
Defined Contribution Master Plan
the basis of employee contributions, except a Nonstandardized Plan may include
in the contribution rate any matching contributions not necessary to satisfy
the nondiscrimination requirements of Code Section 401(k) or of Code Section
401(m).
If the Employee is a Participant in Paired Plans, the Advisory
Committee will consider the Paired Plans as a single Plan to determine a
Participant's contribution rate and to determine whether the Plans satisfy this
top heavy minimum allocation requirement. To determine a Participant's
contribution rate under a Nonstandardized Plan, the Advisory Committee must
treat all qualified top heavy defined contribution plans maintained by the
Employer (or by any related Employers described in Section 1.30) as a single
plan.
(6) NO ALLOCATIONS. If, for a Plan Year, there are no allocations
of Employer contributions or forfeitures for any Participant (for purposes of
Section 3.04(B)(l)(b)) or for any Key Employee (for purposes of Section
3.04(B)(2)(b)), the Plan does not require any top heavy minimum allocation for
the Plan Year, unless a top heavy minimum allocation applies because of the
maintenance by the Employer of more than one plan.
(7) ELECTION OF METHOD. The Employer must specify in its Adoption
Agreement the manner in which the Plan will satisfy the top heavy minimum
allocation requirement.
(a) If the Employer elects to make any necessary additional
contribution to this Plan, the Advisory Committee first will allocate
the Employer contributions (and Participant forfeitures, if any) for
the Plan Year in accordance with the provisions of Adoption Agreement
Section 3.04. The Employer then will contribute an additional amount
for the Account of any Participant entitled under this Section 3.04(B)
to a top heavy minimum allocation and whose contribution rate for the
Plan Year, under this Plan and any other plan aggregated under
paragraph (5), is less than the top heavy minimum allocation. The
additional amount is the amount necessary to increase the
Participant's contribution rate to the top heavy minimum allocation.
The Advisory Committee will allocate the additional contribution to
the Account of the Participant on whose behalf the Employer makes the
contribution.
(b) If the Employer elects to guarantee the top heavy minimum
allocation under another plan, this Plan does not provide the top
heavy minimum allocation and the Advisory Committee will allocate the
annual Employer contributions (and Participant forfeitures) under the
Plan solely in accordance with the allocation method selected under
Adoption Agreement Section 3.04.
3.05 FORFEITURE ALLOCATION. The amount of a Participant's Accrued
Benefit forfeited under the Plan is a Participant forfeiture. The Advisory
Committee will allocate Participant forfeitures in the manner specified by the
Employer in its Adoption Agreement. The Advisory Committee will continue to
hold the undistributed, non-vested portion of a terminated Participant's
Accrued Benefit in his Account solely for his benefit until a forfeiture occurs
at the time specified in Section 5.09 or if applicable, until the time
specified in Section 9.14. Except as provided. under Section 5.04, a
Participant will not share in the allocation of a forfeiture of any portion of
his Accrued Benefit.
3.06 ACCRUAL OF BENEFIT. The Advisory Committee will determine the
accrual of benefit (Employer contributions and Participant forfeitures) on the
basis of the Plan Year in accordance with the Employer's elections in its
Adoption Agreement.
(A) COMPENSATION TAKEN INTO ACCOUNT. The Employer must specify in its
Adoption Agreement the Compensation the Advisory Committee is to take into
account in allocating an Employer contribution to a Participant's Account for
the Plan Year in which the Employee first becomes a Participant. For all other
Plan Years, the Advisory Committee will take into account only the
3.03
21
Defined Contribution Master Plan
Compensation determined for the portion of the Plan Year in which the Employee
actually is a Participant. The Advisory Committee must take into account the
Employee's entire Compensation for the Plan Year to determine whether the Plan
satisfies the top heavy minimum allocation requirement of Section 3.04(B). The
Employer, in an addendum to its Adoption Agreement numbered 3.06(A), may elect
to measure Compensation for the Plan Year for allocation purposes on the basis
of a specified period other than the Plan Year.
(B) HOURS OF SERVICE REQUIREMENT. Subject to the applicable minimum
allocation requirement of Section 3.04, the Advisory Committee will not
allocate any portion of an Employer contribution for a Plan Year to any
Participant's Account if the Participant does not complete the applicable
minimum Hours of Service requirement specified in the Employer's Adoption
Agreement.
(C) EMPLOYMENT REQUIREMENT. If the Employer's Plan is a Standardized
Plan, a Participant who, during a particular Plan Year, completes the accrual
requirements of Adoption Agreement Section 3.06 will share in the allocation of
Employer contributions for that Plan Year without regard to whether he is
employed by the Employer on the Accounting Date of that Plan Year. If the
Employer's Plan is a Nonstandardized Plan, the Employer must specify in its
Adoption Agreement whether the Participant will accrue a benefit if he is not
employed by the Employer on the Accounting Date of the Plan Year. If the
Employer's Plan is a money purchase plan or a target benefit plan, whether
Nonstandardized or Standardized, the Plan conditions benefit accrual on
employment with the Employer on the last day of the Plan Year for the Plan Year
in which the Employer terminates the Plan.
(D) OTHER REQUIREMENTS. If the Employer's Adoption Agreement includes
options for other requirements affecting the Participant's accrual of benefits
under the Plan, the Advisory Committee will apply this Section 3.06 in
accordance with the Employer's Adoption Agreement selections.
(E) SUSPENSION OF ACCRUAL REQUIREMENTS UNDER NONSTANDARDIZED PLAN. If the
Employer's Plan is a Nonstandardized Plan, the Employer may elect in its
Adoption Agreement to suspend the accrual requirements elected under Adoption
Agreement Section 3.06 if, for any Plan Year beginning after December 31, 1989,
the Plan fails to satisfy the Participation Test or the Coverage Test. A Plan
satisfies the Participation Test if, on each day of the Plan Year, the number
of Employees who benefit under the Plan is at least equal to the lesser of 50
or 40% of the total number of Includible Employees as of such day. A Plan
satisfies the Coverage Test if, on the last day of each quarter of the Plan
Year, the number of Nonhighly Compensated Employees who benefit under the Plan
is at least equal to 70% of the total number of Includible Nonhighly
Compensated Employees as of such day. "Includible" Employees are all Employees
other than: (1) those Employees excluded from participating in the Plan for the
entire Plan Year by reason of the collective bargaining unit exclusion or the
nonresident alien exclusion under Adoption Agreement Section 1.07 or by reason
of the participation requirements of Sections 2.01 and 2.03; and (2) any
Employee who incurs a Separation from Service during the Plan Year and fails to
complete at least 501 Hours of Service for the Plan Year. A "Nonhighly
Compensated Employee" is an Employee who is not a Highly Compensated Employee
and who is not a family member aggregated with a Highly Compensated Employee
pursuant to Section 1.09 of the Plan.
For purposes of the Participation Test and the Coverage Test, an
Employee is benefiting under the Plan on a particular date if, under Adoption
Agreement Section 3.04, he is entitled to an allocation for the Plan Year.
Under the Participation Test, when determining whether an Employee is entitled
to an allocation under Adoption Agreement Section 3.04, the Advisory Committee
will disregard any allocation required solely by reason of the top heavy
minimum allocation, unless the top heavy minimum allocation is the only
allocation made under the Plan for the Plan Year.
3.04
22
Defined Contribution Master Plan
If this Section 3.06(E) applies for a Plan Year, the Advisory
Committee will suspend the accrual requirements for the Includible Employees
who are Participants, beginning first with the Includible Employee(s) employed
with the Employer on the last day of the Plan Year, then the Includible
Employee(s) who have the latest Separation from Service during the Plan Year,
and continuing to suspend in descending order the accrual requirements for each
Includible Employee who incurred an earlier Separation from Service, from the
latest to the earliest Separation from Service date, until the Plan satisfies
both the Participation Test and the Coverage Test for the Plan Year. If two or
more Includible Employees have a Separation from Service on the same day, the
Advisory Committee will suspend the accrual requirements for all such Includible
Employees, irrespective of whether the Plan can satisfy the Participation Test
and the Coverage Test by accruing benefits for fewer than all such Includible
Employees. If the Plan suspends the accrual requirements for an Includible
Employee, that Employee will share in the allocation of Employer contributions
and Participant forfeitures, if any, without regard to the number of Hours of
Service he has earned for the Plan Year and without regard to whether he is
employed by the Employer on the last day of the Plan Year. If the Employer's
Plan includes Employer matching contributions subject to Code Section 401(m),
this suspension of accrual requirements applies separately to the Code Section
401(m) portion of the Plan, and the Advisory Committee will treat an Employee
as benefiting under that portion of the Plan if he is an Eligible Employee for
purposes of the Code Section 401(m) nondiscrimination test. The Employer may
modify the operation of this Section 3.06(E) by electing appropriate
modifications in Section 3.06 of its Adoption Agreement.
PART 2. LIMITATIONS ON ALLOCATIONS: SECTIONS 3.07 THROUGH 3.19
[Note: Sections 3.07 through 3.10 apply only to Participants in this
Plan who do not participate, and who have never participated, in another
qualified plan or in a welfare benefit fund (as defined in Code Section 419(e))
maintained by the Employer.]
3.07 The amount of Annual Additions which the Advisory Committee
may allocate under this Plan on a Participant's behalf for a Limitation Year
may not exceed the Maximum Permissible Amount. If the amount the Employer
otherwise would contribute to the Participant's Account would cause the Annual
Additions for the Limitation Year to exceed the Maximum Permissible Amount, the
Employer will reduce the amount of its contribution so the Annual Additions for
the Limitation Year will equal the Maximum Permissible Amount. If an
allocation of Employer contributions, pursuant to Section 3.04, would result in
an Excess Amount (other than an Excess Amount resulting from the circumstances
described in Section 3.10) to the Participant's Account, the Advisory Committee
will reallocate the Excess Amount to the remaining Participants who are
eligible for an allocation of Employer contributions for the Plan Year in which
the Limitation Year ends. The Advisory Committee will make this reallocation
on the basis of the allocation method under the Plan as if the Participant
whose Account otherwise would receive the Excess Amount is not eligible for an
allocation of Employer contributions.
3.08 Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Advisory Committee may determine the
Maximum Permissible Amount on the basis of the Participant's estimated annual
Compensation for such Limitation Year. The Advisory Committee must make this
determination on a reasonable and uniform basis for all Participants similarly
situated. The Advisory Committee must reduce any Employer contributions
(including any allocation of forfeitures) based on estimated annual
Compensation by any Excess Amounts carried over from prior years.
3.09 As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the Maximum Permissible
Amount for such Limitation Year on the basis of the Participant's actual
Compensation for such Limitation Year.
3.05
23
Defined Contribution Master Plan
3.10 If, pursuant to Section 3.09, or because of the allocation of
forfeitures, there is an Excess Amount with respect to a Participant for a
Limitation Year, the Advisory Committee will dispose of such Excess Amount as
follows:
(a) The Advisory Committee will return any nondeductible voluntary
Employee contributions to the Participant to the extent the return
would reduce the Excess Amount.
(b) If, after the application of paragraph (a), an Excess Amount
still exists, and the Plan covers the Participant at the end of the
Limitation Year, then the Advisory Committee will use the Excess
Amount(s) to reduce future Employer contributions (including any
allocation of forfeitures) under the Plan for the next Limitation Year
and for each succeeding Limitation Year, as is necessary, for the
Participant. If the Employer's Plan is a profit sharing plan, the
Participant may elect to limit his Compensation for allocation
purposes to the extent necessary to reduce his allocation for the
Limitation Year to the Maximum Permissible Amount and eliminate the
Excess Amount.
(c) If, after the application of paragraph (a), an Excess Amount
still exists, and the Plan does not cover the Participant at the end
of the Limitation Year, then the Advisory Committee will hold the
Excess Amount unallocated in a suspense account. The Advisory
Committee will apply the suspense account to reduce Employer
Contributions (including allocation of forfeitures) for all remaining
Participants in the next Limitation Year, and in each succeeding
Limitation Year if necessary. Neither the Employer nor any Employee
may contribute to the Plan for any Limitation Year in which the Plan
is unable to allocate fully a suspense account maintained pursuant to
this paragraph (c).
(d) The Advisory Committee will not distribute any Excess
Amount(s) to Participants or to former Participants.
[Note: Sections 3.11 through 3.16 apply only to Participants who, in
addition to this Plan, participate in one or more plans (including Paired
Plans), all of which are qualified Master or Prototype defined contribution
plans or welfare benefit funds (as defined in Code Section 419(e)) maintained
by the Employer during the Limitation Year.]
3.11 The amount of Annual Additions which the Advisory Committee
may allocate under this Plan on a Participant's behalf for a Limitation Year
may not exceed the Maximum Permissible Amount, reduced by the sum of any Annual
Additions allocated to the Participant's Accounts for the same Limitation Year
under this Plan and such other defined contribution plan. If the amount the
Employer otherwise would contribute to the Participant's Account under this
Plan would cause the Annual Additions for the Limitation Year to exceed this
limitation, the Employer will reduce the amount of its contribution so the
Annual Additions under all such plans for the Limitation Year will equal the
Maximum Permissible Amount. If an allocation of Employer contributions,
pursuant to Section 3.04, would result in an Excess Amount (other than an
Excess Amount resulting from the circumstances described in Section 3.10) to
the Participant's Account, the Advisory Committee will reallocate the Excess
Amount to the remaining Participants who are eligible for an allocation of
Employer contributions for the Plan Year in which the Limitation Year ends.
The Advisory Committee will make this reallocation on the basis of the
allocation method under the Plan as if the Participant whose Account otherwise
would receive the Excess Amount is not eligible for an allocation of Employer
contributions.
3.12 Prior to the determination of the Participant's actual
Compensation for the Limitation Year, the Advisory Committee may determine the
amounts referred to in 3.11 above on the basis of the Participant's estimated
annual Compensation for such Limitation Year. The Advisory Committee will make
this determination on a reasonable and uniform basis for all Participants
similarly
3.06
24
Defined Contribution Master Plan
situated. The Advisory Committee must reduce any Employer contribution
(including allocation of forfeitures) based on estimated annual Compensation by
any Excess Amounts carried over from prior years.
3.13 As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the amounts referred to
in 3.11 on the basis of the Participant's actual Compensation for such
Limitation Year.
3.14 If pursuant to Section 3.13, or because of the allocation of
forfeitures, a Participant's Annual Additions under this Plan and all such
other plans result in an Excess Amount, such Excess Amount will consist of the
Amounts last allocated. The Advisory Committee will determine the Amounts last
allocated by treating the Annual Additions attributable to a welfare benefit
fund as allocated first, irrespective of the actual allocation date under the
welfare benefit fund.
3.15 The Employer must specify in its Adoption Agreement the Excess
Amount attributed to this Plan, if the Advisory Committee allocates an Excess
Amount to a Participant on an allocation date of this Plan which coincides with
an allocation date of another plan.
3.16 The Advisory Committee will dispose of any Excess Amounts
attributed to this Plan as provided in Section 3.10.
[Note: Section 3.17 applies only to Participants who, in addition to
this Plan, participate in one or more qualified plans which are qualified
defined contribution plans other than a Master or Prototype plan maintained by
the Employer during the Limitation Year.]
3.17 SPECIAL ALLOCATION LIMITATION. The amount of Annual Additions
which the Advisory Committee may allocate under this Plan on behalf of any
Participant are limited in accordance with the provisions of Section 3.11
through 3.16, as though the other plan were a Master or Prototype plan, unless
the Employer provides other limitations in an addendum to the Adoption
Agreement, numbered Section 3.17.
3.18 DEFINED BENEFIT PLAN LIMITATION. If the Employer maintains a
defined benefit plan, or has ever maintained a defined benefit plan which the
Employer has terminated, then the sum of the defined benefit plan fraction and
the defined contribution plan fraction for any Participant for any Limitation
Year must not exceed 1.0. The Employer must provide in Adoption Agreement
Section 3.18 the manner in which the Plan will satisfy this limitation. The
Employer also must provide in its Adoption Agreement Section 3.18 the manner in
which the Plan will satisfy the top heavy requirements of Code Section 416
after taking into account the existence (or prior maintenance) of the defined
benefit plan.
3.19 DEFINITIONS - ARTICLE M. For purposes of Article III, the
following terms mean:
(a) "Annual Addition" - The sum of the following amounts allocated
on behalf of a Participant for a Limitation Year, of (i) all Employer
contributions; (ii) all forfeitures; and (iii) all Employee
contributions. Except to the extent provided in Treasury regulations,
Annual Additions include excess contributions described in Code
Section 401(k), excess aggregate contributions, described in Code
Section 401(m) and excess deferrals described in Code Section 402(g),
irrespective of whether the plan distributes or forfeits such excess
amounts. Annual Additions also include Excess Amounts reapplied to
reduce Employer contributions under Section 3.10. Amounts allocated
after March 31, 1984, to an individual medical account (as defined in
Code Section 415(l)(2)) included as part of a defined benefit plan
maintained by the Employer are Annual
3.07
25
Defined Contribution Master Plan
Additions. Furthermore, Annual Additions include contributions paid
or accrued after December 31, 1985, for taxable years ending after
December 31, 1985, attributable to postretirement medical benefits
allocated to the separate account of a key employee (as defined in
Code Section 419A(d)(3)) under a welfare benefit fund (as defined in
Code Section 419(e)) maintained by the Employer.
(b) "Compensation" - For purposes of applying the limitations of
Part 2 of this Article III, "Compensation" means Compensation as
defined in Section 1.12, except Compensation does not include elective
contributions, irrespective of whether the Employer has elected to
include these amounts as Compensation under Section 1.12 of its
Adoption Agreement, and any exclusion selected in Section 1.12 of the
Adoption Agreement (other than the exclusion of elective
contributions) does not apply.
(c) "Employer" - The Employer that adopts this Plan and any
related employers described in Section 1.30. Solely for purposes of
applying the limitations of Part 2 of this Article III, the Advisory
Committee will determine related employers described in Section 1.30
by modifying Code Sections 414(b) and (c) in accordance with Code
Section 415(h).
(d) "Excess Amount" - The excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
(e) "Limitation Year" - The period selected by the Employer under
Adoption Agreement Section 1.17. All qualified plans of the Employer
must use the same Limitation Year. If the Employer amends the
Limitation Year to a different 12 consecutive month period, the new
Limitation Year must begin on a date within the Limitation Year for
which the Employer makes the amendment, creating a short Limitation
Year.
(f) "Master or Prototype Plan" - A plan the form of which is the
subject of a favorable notification letter or a favorable opinion
letter from the Internal Revenue Service.
(g) "Maximum Permissible Amount" - The lesser of (i) $30,000 (or,
if greater, one-fourth of the defined benefit dollar limitation under
Code Section 415(b)(1)(A)), or (ii) 25% of the Participant's
Compensation for the Limitation Year. If there is a short Limitation
Year because of a change in Limitation Year, the Advisory Committee
will multiply the $30,000 (or adjusted) limitation by the following
fraction:
Number of months in the short Limitation Year
---------------------------------------------------
12
(h) "Defined contribution plan" - A retirement plan which provides
for an individual account for each participant and for benefits based
solely on the amount contributed to the participant's account, and any
income, expenses, gains and losses, and any forfeitures of accounts of
other participants which the plan may allocate to such participant's
account. The Advisory Committee must treat all defined contribution
plans (whether or not terminated) maintained by the Employer as a
single plan. Solely for purposes of the limitations of Part 2 of this
Article III, the Advisory Committee will treat employee contributions
made to a defined benefit plan maintained by the Employer as a
separate defined contribution plan. The Advisory Committee also will
treat as a defined contribution plan an individual medical account (as
defined in Code Section 415(l)(2)) included as part of a defined
benefit plan maintained by the Employer and, for taxable years ending
after December 31, 1985, a welfare benefit fund under Code Section
419(e) maintained by the Employer to the extent there are
post-retirement medical benefits allocated to the separate account of
a key employee (as defined in Code Section 419A(d)(3)).
3.08
26
Defined Contribution Master Plan
(i) "Defined benefit plan" - A retirement plan which does not
provide for individual accounts for Employer contributions. The
Advisory Committee must treat all defined benefit plans (whether or
not terminated) maintained by the Employer as a single plan.
[Note: The definitions in paragraphs (j), (k) and (1) apply only if the
limitation described in Section 3.18 applies to the Employer's Plan.]
(j) "Defined benefit plan fraction"
Projected annual benefit of the Participant under the defined benefit plan(s)
-----------------------------------------------------------------------------
The lesser of (i) 125% (subject to the "100% limitation" in paragraph (l)) of
the dollar limitation in effect under Code Section 415(b)(1)(A) for the
Limitation Year, or (ii) 140% of the Participant's average
Compensation for his high three (3) consecutive Years of Service
To determine the denominator of this fraction, the Advisory Committee
will make any adjustment required under Code Section 415(b) and will determine
a Year of Service, unless otherwise provided in an addendum to Adoption
Agreement Section 3.18, as a Plan Year in which the Employee completed at least
1,000 Hours of Service. The "projected annual benefit" is the annual
retirement benefit (adjusted to an actuarially equivalent straight life annuity
if the plan expresses such benefit in a form other than a straight life annuity
or qualified joint and survivor annuity) of the Participant under the terms of
the defined benefit plan on the assumptions he continues employment until his
normal retirement age (or current age, if later) as stated in the defined
benefit plan, his compensation continues at the same rate as in effect in the
Limitation Year under consideration until the date of his normal retirement age
and au other relevant factors used to determine benefits under the defined
benefit plan remain constant as of the current Limitation Year for all future
Limitation Years.
CURRENT ACCRUED BENEFIT. If the Participant accrued benefits in one
or more defined benefit plans maintained by the Employer which were in
existence on May 6, 1986, the dollar limitation used in the denominator of this
fraction will not be less than the Participant's Current Accrued Benefit. A
Participant's Current Accrued Benefit is the sum of the annual benefits under
such defined benefit plans which the Participant had accrued as of the end of
the 1986 Limitation Year (the last Limitation Year beginning before January 1,
1987), determined without regard to any change in the terms or conditions of
the Plan made after May 5, 1986, and without regard to any cost of living
adjustment occurring after May 5, 1986. This Current Accrued Benefit rule
applies only if the defined benefit plans individually and in the aggregate
satisfied the requirements of Code Section 415 as in effect at the end of the
1986 Limitation Year.
(k) "Defined contribution plan fraction" -
The sum, as of the close of the Limitation Year, of the Annual Additions
to the Participant's Account under the defined contribution plan(s)
---------------------------------------------------------------------------
The sum of the lesser of the following amounts determined
for the Limitation Year and for each prior Year of Service with the Employer:
(i) 125% (subject to the "100% limitation" in paragraph
(1)) of the dollar limitation in effect under Code Section 415(c)(1)(A) for the
Limitation Year (determined without regard to the special
dollar limitations for employee stock ownership plans), or (ii) 35% of the
Participant's Compensation for the Limitation Year
For purposes of determining the defined contribution plan fraction,
the Advisory Committee will not recompute Annual Additions in Limitation Years
beginning prior to
3.09
27
Defined Contribution Master Plan
January 1, 1987, to treat all Employee contributions as Annual Additions. If
the Plan satisfied Code Section 415 for Limitation Years beginning prior to
January 1, 1987, the Advisory Committee will redetermine the defined
contribution plan fraction and the defined benefit plan fraction as of the end
of the 1986 Limitation Year, in accordance with this Section 3.19. If the sum
of the redetermined fractions exceeds 1.0, the Advisory Committee will subtract
permanently from the numerator of the defined contribution plan fraction an
amount equal to the product of (1) the excess of the sum of the fractions over
1.0, times (2) the denominator of the defined contribution plan fraction. In
making the adjustment, the Advisory Committee must disregard any accrued
benefit under the defined benefit plan which is in excess of the Current
Accrued Benefit. This Plan continues any transitional rules applicable to the
determination of the defined contribution plan fraction under the Employer's
Plan as of the end of the 1986 Limitation Year.
(1) "100% Limitation." If the 100% limitation applies, the Advisory
Committee must determine the denominator of the defined benefit plan fraction
and the denominator of the defined contribution plan fraction by substituting
100% for 125%. If the Employer's Plan is a Standardized Plan, the 100%
limitation applies in all Limitation Years, subject to any override provisions
under Section 3.18 of the Employer's Adoption Agreement. If the Employer
overrides the 100% limitation under a Standardized Plan, the Employer must
specify in its Adoption Agreement the manner in which the Plan satisfies the
extra minimum benefit requirement of Code Section 416(h) and the 10O%
limitation must continue to apply if the Plan's top heavy ratio exceeds 90%.
If the Employer's Plan is a Nonstandardized Plan, the 100% Limitation applies
only if: (i) the Plan's top heavy ratio exceeds 90%; or (ii) the Plan's top
heavy ratio is greater than 60%, and the Employer does not elect in its
Adoption Agreement Section 3.18 to provide extra minimum benefits which satisfy
Code Section 416(h)(2).
* * * * * * * * * *
3.10
28
Defined Contribution Master Plan
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. This Plan does not
permit Participant nondeductible contributions unless the Employer maintains
its Plan under a Code Section 401(k) Adoption Agreement. If the Employer does
not maintain its Plan under a Code Section 401(k) Adoption Agreement and, prior
to the adoption of this Master Plan, the Plan accepted Participant
nondeductible contributions for a Plan Year beginning after December 31, 1986,
those contributions must satisfy the requirements of Code Section 401(m). This
Section 4.01 does not prohibit the Plan's acceptance of Participant
nondeductible contributions prior to the first Plan Year commencing after the
Plan Year in which the Employer adopts this Master Plan.
4.02 PARTICIPANT DEDUCTIBLE CONTRIBUTIONS. A qualified Plan may
not accept Participant deductible contributions after April 15, 1987. If the
Employer's Plan includes Participant deductible contributions ("DECs") made
prior to April 16, 1987, the Advisory Committee must maintain a separate
accounting for the Participant's Accrued Benefit attributable to DECs,
including DECs which are part of a rollover contribution described in Section
4.03. The Advisory Committee will treat the accumulated DECs as part of the
Participant's Accrued Benefit for all purposes of the Plan, except for purposes
of determining the top heavy ratio under Section 1.33. The Advisory Committee
may not use DECs to purchase life insurance on the Participant's behalf.
4.03 PARTICIPANT ROLLOVER CONTRIBUTIONS. Any Participant, with the
Employer's written consent and after filing with the Trustee the form
prescribed by the Advisory Committee, may contribute cash or other property to
the Trust other than as a voluntary contribution if the contribution is a
"rollover contribution" which the Code permits an employee to transfer either
directly or indirectly from one qualified plan to another qualified plan.
Before accepting a rollover contribution, the Trustee may require an Employee
to furnish satisfactory evidence that the proposed transfer is in fact a
"rollover contribution" which the Code permits an employee to make to a
qualified plan. A rollover contribution is not an Annual Addition under Part 2
of Article Ill.
The Trustee will invest the rollover contribution in a segregated
investment Account for the Participant's sole benefit unless the Trustee (or
the Named Fiduciary, in the case of a nondiscretionary Trustee designation), in
its sole discretion, agrees to invest the rollover contribution as part of the
Trust Fund. The Trustee will not have any investment responsibility with
respect to a Participant's segregated rollover Account. The Participant,
however, from time to time, may direct the Trustee in writing as to the
investment of his segregated rollover Account in property, or property
interests, of any kind, real, personal or mixed; provided however, the
Participant may not direct the Trustee to make loans to his Employer. A
Participant's segregated rollover Account alone will bear any extraordinary
expenses resulting from investments made at the direction of the Participant.
As of the Accounting Date (or other valuation date) for each Plan Year, the
Advisory Committee will allocate and credit the net income (or net loss) from a
Participant's segregated rollover Account and the increase or decrease in the
fair market value of the assets of a segregated rollover Account solely to that
Account. The Trustee is not liable nor responsible for any loss resulting to
any Beneficiary, nor to any Participant, by reason of any sale or investment
made or other action taken pursuant to and in accordance with the direction of
the Participant. In all other respects, the Trustee will hold, administer and
distribute a rollover contribution in the same manner as any Employer
contribution made to the Trust.
An elibible Employee, prior to satisfying the Plan's eligibility
conditions, may make a rollover contribution to the Trust to the same extent
and in the same manner as a Participant. If an Employee makes a rollover
contribution to the Trust prior to satisfying the Plan's eligibility
conditions, the Advisory Committee and Trustee must treat the Employee as a
Participant for all
4.01
29
Defined Contribution Master Plan
purposes of the Plan except the Employee is not a Participant for purposes of
sharing in Employer contributions or Participant forfeitures under the Plan
until he actually becomes a Participant in the Plan. If the Employee has a
Separation from Service prior to becoming a Participant, the Trustee will
distribute his rollover contribution Account to him as if it were an Employer
contribution Account.
4.04 PARTICIPANT CONTRIBUTION - FORFEITABILITY. A Participant's
Accrued Benefit is, at all times, 100% Nonforfeitable to the extent the value
of his Accrued Benefit is derived from his Participant contributions described
in this Article IV.
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. A
Participant, by giving prior written notice to the Trustee, may withdraw all or
any part of the value of his Accrued Benefit derived from his Participant
contributions described in this Article IV. A distribution of Participant
contributions must comply with the joint and survivor requirements described in
Article VI, if those requirements apply to the Participant. A Participant may
not exercise his right to withdraw the value of his Accrued Benefit derived
from his Participant contributions more than once during any Plan Year. The
Trustee, in accordance with the direction of the Advisory Committee, will
distribute a Participant's unwithdrawn Accrued Benefit attributable to his
Participant contributions in accordance with the provisions of Article VI
applicable to the distribution of the Participant's Nonforfeitable Accrued
Benefit.
4.06 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT. The Advisory
Committee must maintain a separate Account(s) in the name of each Participant
to reflect the Participant's Accrued Benefit under the Plan derived from his
Participant contributions. A Participant's Accrued Benefit derived from his
Participant contributions as of any applicable date is the balance of his
separate Participant contribution Account(s).
* * * * * * * * * *
4.02
30
Defined Contribution Master Plan
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT AGE. The Employer must define Normal
Retirement Age in its Adoption Agreement. A Participant's Accrued Benefit
derived from Employer contributions is 100% Nonforfeitable upon and after his
attaining Normal Retirement Age (if employed by the Employer on or after that
date).
5.02 PARTICIPANT DISABILITY OR DEATH. The Employer may elect in
its Adoption Agreement to provide a Participant's Accrued Benefit derived from
Employer contributions will be 100% Nonforfeitable if the Participant's
Separation from Service is a result of his death or his disability.
5.03 VESTING SCHEDULE. Except as provided in Sections 5.01 and
5.02, for each Year of Service, a Participant's Nonforfeitable percentage of
his Accrued Benefit derived from Employer contributions equals the percentage
in the vesting schedule completed by the Employer in its Adoption Agreement.
(A) ELECTION OF SPECIAL VESTING FORMULA. If the Trustee makes a
distribution (other than a cash-out distribution described in Section 5.04) to
a partially-vested Participant, and the Participant has not incurred a
Forfeiture Break in Service at the relevant time, the Advisory Committee will
establish a separate Account for the Participant's Accrued Benefit. At any
relevant time following the distribution, the Advisory Committee will determine
the Participant's Nonforfeitable Accrued Benefit derived from Employer
contributions in accordance with the following formula: P(A.B + (R x D)) - (R.
x D).
To apply this formula, "P" is the Participant's current vesting
percentage at the relevant time, "AB" is the Participant's Employer-derived
Accrued Benefit at the relevant time, "R." is the ratio of "A-B" to the
Participant's Employer-derived Accrued Benefit immediately following the
earlier distribution and "D" is the amount of the earlier distribution. If,
under a restated Plan, the Plan has made distribution to a partially-vested
Participant prior to its restated Effective Date and is unable to apply the
cash-out provisions of Section 5.04 to that prior distribution, this special
vesting formula also applies to that Participant's remaining Account. The
Employer, in an addendum to its Adoption Agreement, numbered Section 5.03, may
elect to modify this formula to read as follows: P(AB + D) - D.
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/
RESTORATION OF FORFEITED ACCRUED BENEFIT. If, pursuant to Article VI, a
partially-vested Participant receives a cash-out distribution before he incurs a
Forfeiture Break in Service (as defined in Section 5.08), the cash-out
distribution will result in an immediate forfeiture of the nonvested portion of
the Participant's Accrued Benefit derived from Employer contributions. See
Section 5.09. A partially-vested Participant is a Participant whose
Nonforfeitable Percentage determined under Section 5.03 is less than 100%. A
cash-out distribution is a distribution of the entire present value of the
Participant's Nonforfeitable Accrued Benefit.
(A) RESTORATION AND CONDITIONS UPON RESTORATION. A partially-vested
Participant who is re-employed by the Employer after receiving a cash-out
distribution of the Nonforfeitable percentage of his Accrued Benefit may repay
the Trustee the amount of the cash-out distribution attributable to Employer
contributions, unless the Participant no longer has a right to restoration by
reason of the conditions of this Section 5.04(A). If a partially-vested
Participant makes the cash-out distribution repayment, the Advisory Committee,
subject to the conditions of this Section 5.04(A), must restore his Accrued
Benefit attributable to Employer contributions to the same dollar amount as the
dollar amount of his Accrued Benefit on the Accounting Date, or other valuation
date, immediately preceding the date of the cash-out distribution, unadjusted
for any gains or losses occurring subsequent to that Accounting Date, or other
valuation date. Restoration of the Participant's
5.01
31
Defined Contribution Master Plan
Accrued Benefit includes restoration of all Code Section 411(d)(6) protected
benefits with respect to that restored Accrued Benefit, in accordance with
applicable Treasury regulations. The Advisory Committee will not restore a
re-employed Participant's Accrued Benefit under this paragraph if:
(1) 5 years have elapsed since the Participant's first
re-employment date with the Employer following the cash-out
distribution; or
(2) The Participant incurred a Forfeiture Break in Service (as
defined in Section 5.08). This condition also applies if the
Participant makes repayment within the Plan Year in which he incurs
the Forfeiture Break in Service and that Forfeiture Break in Service
would result in a complete forfeiture of the amount the Advisory
Committee otherwise would restore.
(B) TIME AND METHOD OF RESTORATION. If neither of the two conditions
preventing restoration of the Participant's Accrued Benefit applies, the
Advisory Committee will restore the Participant's Accrued Benefit as of the
Plan Year Accounting Date coincident with or immediately following the
repayment. To restore the Participant's Accrued Benefit, the Advisory
Committee, to the extent necessary, will allocate to the Participant's Account:
(1) First, the amount, if any, of Participant forfeitures the
Advisory Committee would otherwise allocate under Section 3.05;
(2) Second, the amount, if any, of the Trust Fund net income or
gain for the Plan Year; and
(3) Third, the Employer contribution for the Plan Year to the
extent made under a discretionary formula.
In an addendum to its Adoption Agreement numbered 5.04(B), the
Employer may eliminate as a means of restoration any of the amounts described
in clauses (1), (2) and (3) or may change the order of priority of these
amounts. To the extent the amounts described in clauses (1), (2) and (3) are
insufficient to enable the Advisory Committee to make the required restoration,
the Employer must contribute, without regard to any requirement or condition of
Section 3.01, the additional amount necessary to enable the Advisory Committee
to make the required restoration. If, for a particular Plan Year, the Advisory
Committee must restore the Accrued Benefit of more than one re-employed
Participant, then the Advisory Committee will make the restoration allocations
to each such Participant's Account in the same proportion that a Participant's
restored amount for the Plan Year bears to the restored amount for the Plan
Year of all re-employed Participants. The Advisory Committee will not take
into account any allocation under this Section 5.04 in applying the limitation
on allocations under Part 2 of Article III.
(C) 0% VESTED PARTICIPANT. The Employer must specify in its Adoption
Agreement whether the deemed cash-out rule applies to a 0% vested Participant.
A 0% vested Participant is a Participant whose Accrued Benefit derived from
Employer contributions is entirely forfeitable at the time of his Separation
from Service. If the Participant's Account is not entitled to an allocation of
Employer contributions for the Plan Year in which he has a Separation from
Service, the Advisory Committee will apply the deemed cash-out rule as if the
0% vested Participant received a cash-out distribution on the date of the
Participant's Separation from Service. If the Participant's Account is
entitled to an allocation of Employer contributions or Participant forfeitures
for the Plan Year in which he has a Separation from Service, the Advisory
Committee will apply the deemed cash-out rule as if the 0% vested Participant
received a cash-out distribution on the first day of the first Plan Year
beginning after his Separation from Service. For purposes of applying the
restoration provisions of this Section 5.04, the Advisory Committee will treat
the 0% vested Participant as repaying his cash-out "distribution" on the first
date of his re-employment with the Employer. If the deemed cash-out rule does
not apply to the Employer's Plan, a 0% vested Participant will not incur a
forfeiture until he incurs a Forfeiture Break in Service.
5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT. Until the Advisory
Committee restores the Participant's Accrued Benefit, as described in Section
5.04, the Trustee will invest the cash-out amount the Participant has repaid in
a segregated Account maintained solely for that
5.02
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Defined Contribution Master Plan
Participant. The Trustee must invest the amount in the Participant's
segregated Account in Federally insured interest bearing savings account(s) or
time deposit(s) (or a combination of both), or in other fixed income
investments. Until commingled with the balance of the Trust Fund on the date
the Advisory Committee restores the Participant's Accrued Benefit, the
Participant's segregated Account remains a part of the Trust, but it alone
shares in any income it earns and it alone bears any expense or loss it incurs.
Unless the repayment qualifies as a rollover contribution, the Advisory
Committee will direct the Trustee to repay to the Participant as soon as is
administratively practicable the full amount of the Participant's segregated
Account if the Advisory Committee determines either of the conditions of
Section 5.04(A) prevents restoration as of the applicable Accounting Date,
notwithstanding the Participant's repayment.
5.06 YEAR OF SERVICE - VESTING. For purposes of vesting under
Section 5.03, Year of Service means any 12-consecutive month period designated
in the Employer's Adoption Agreement during which an Employee completes not
less than the number of Hours of Service (not exceeding 1,000) specified in the
Employer's Adoption Agreement. A Year of Service includes any Year of Service
earned prior to the Effective Date of the Plan, except as provided in Section
5.08.
5.07 BREAK IN SERVICE - VESTING. For purposes of this Article V, a
Participant incurs a "Break in Service" if during any vesting computation
period he does not complete more than 500 Hours of Service. If, pursuant to
Section 5.06, the Plan does not require more than 500 Hours of Service to
receive credit for a Year of Service, a Participant incurs a Break in Service
in a vesting computation period in which he fails to complete a Year of
Service.
5.08 INCLUDED YEARS OF SERVICE-VESTING. For purposes of
determining "Years of Service" under Section 5.06, the Plan takes into account
all Years of Service an Employee completes with the Employer except:
(a) For the sole purpose of determining a Participant's
Nonforfeitable percentage of his Accrued Benefit derived from Employer
contributions which accrued for his benefit prior to a Forfeiture
Break in Service, the Plan disregards any Year of Service after the
Participant first incurs a Forfeiture Break in Service. The
Participant incurs a Forfeiture Break in Service when he incurs 5
consecutive Breaks in Service.
(b) The Plan disregards any Year of Service excluded under the
Employer's Adoption Agreement.
The Plan does not apply the Break in Service rule under Code Section
411(a)(6)(B). Therefore, an Employee need not complete a Year of Service after
a Break in Service before the Plan takes into account the Employee's otherwise
includible Years of Service under this Article V.
5.09 FORFEITURE OCCURS . A Participant's forfeiture, if any, of his
Accrued Benefit derived from Employer contributions occurs under the Plan on
the earlier of:
(a) The last day of the vesting computation period in which the
Participant first incurs a Forfeiture Break in Service; or
(b) The date the Participant receives a cash-out distribution.
The Advisory Committee determines the percentage of a Participant's
Accrued Benefit forfeiture, if any, under this Section 5.09 solely by reference
to the vesting schedule of Section 5.03. A Participant does not forfeit any
portion of his Accrued Benefit for any other reason or cause except as
expressly provided by this Section 5.09 or as provided under Section 9.14.
* * * * * * * * * *
5.03
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Defined Contribution Master Plan
ARTICLE VI
TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Unless, pursuant to
Section 6.03, the Participant or the Beneficiary elects in writing to a
different time or method of payment, the Advisory Committee will direct the
Trustee to commence distribution of a Participant's Nonforfeitable Accrued
Benefit in accordance with this Section 6.01. A Participant must consent, in
writing, to any distribution required under this Section 6.01 if the present
value of the Participant's Nonforfeitable Accrued Benefit, at the time of the
distribution to the Participant, exceeds $3,500 and the Participant has not
attained the later of Normal Retirement Age or age 62. Furthermore, the
Participant's spouse also must consent, in writing, to any distribution, for
which Section 6.04 requires the spouse's consent. For all purposes of this
Article VI, the term "annuity starting date" means the first day of the first
period for which the Plan pays an amount as an annuity or in any other form. A
distribution date under this Article VI, unless otherwise specified within the
Plan, is the date or dates the Employer specifies in the Adoption Agreement, or
as soon as administratively practicable following that distribution date. For
purposes of the consent requirements under this Article VI, if the present
value of the Participant's Nonforfeitable Accrued Benefit, at the time of any
distribution, exceeds $3,500, the Advisory Committee must treat that present
value as exceeding $3,500 for purposes of all subsequent Plan distributions to
the Participant.
(A) SEPARATION FROM SERVICE FOR A REASON OTHER THAN DEATH.
(1) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT NOT EXCEEDING
$3,500. If the Participant's Separation from Service is for any reason other
than death, the Advisory Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in a lump sum, on the distribution
date the Employer specifies in the Adoption Agreement, but in no event later
than the 60th day following the close of the Plan Year in which the Participant
attains Normal Retirement Age. If the Participant has attained Normal
Retirement Age at the time of his Separation from Service, the distribution
under this paragraph will occur no later than the 60th day following the close
of the Plan Year in which the Participant's Separation from Service occurs.
(2) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $3,500.
If the Participant's Separation from Service is for any reason other than
death, the Advisory Committee will direct the Trustee to commence distribution
of the Participant's Nonforfeitable Accrued Benefit in a form and at the time
elected by the Participant, pursuant to Section 6.03. In the absence of an
election by the Participant, the Advisory Committee will direct the Trustee to
distribute the Participant's Nonforfeitable Accrued Benefit in a lump sum (or,
if applicable, the normal annuity form of distribution required under Section
6.04), on the 60th day following the close of the Plan Year in which the latest
of the following events occurs: (a) the Participant attains Normal Retirement
Age; (b) the Participant attains age 62; or (c) the Participant's Separation
from Service.
(3) DISABILITY. If the Participant's Separation from Service is
because of his disability, the Advisory Committee will direct the Trustee to
pay the Participant's Nonforfeitable Accrued Benefit in lump sum, on the
distribution date the Employer specifies in the Adoption Agreement, subject to
the notice and consent requirements of this Article VI and subject to the
applicable mandatory commencement dates described in Paragraphs (1) and (2).
(4) HARDSHIP. Prior to the time at which the Participant may
receive distribution under Paragraphs (1), (2) or (3), the Participant may
request a distribution from his Nonforfeitable Accrued Benefit in an amount
necessary to satisfy a hardship, if the Employer elects in the Adoption
Agreement to permit hardship distributions. Unless the Employer elects
otherwise in the Adoption Agreement, a hardship distribution must be on account
of any of the following: (a) medical expenses; (b) the purchase (excluding
mortgage payments) of the Participant's principal residence; (c) post-secondary
education tuition, for the next semester or quarter, for the Participant or for
the Participant's spouse, children or dependents; (d) to prevent the eviction
of the Participant from his principal residence or the foreclosure on the
mortgage of the Participant's
6.01
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Defined Contribution Master Plan
principal residence; (e) funeral expenses of the Participant's family member;
or (f) the Participant's disability. A partially-vested Participant may not
receive a hardship distribution described in this Paragraph (A)(4) prior to
incurring a Forfeiture Break in Service, unless the hardship distribution is a
cash-out distribution (as defined in Article V). The Advisory Committee will
direct the Trustee to make the hardship distribution as soon as
administratively practicable after the Participant makes a valid request for
the hardship distribution.
(B) REQUIRED BEGINNING DATE. If any distribution commencement date
described under Paragraph (A) of this Section 6.01, either by Plan provision or
by Participant election (or nonelection), is later than the Participant's
Required Beginning Date, the Advisory Committee instead must direct the Trustee
to make distribution on the Participant's Required Beginning Date, subject to
the transitional election, if applicable, under Section 6.03(D). A
Participant's Required Beginning Date is the April 1 following the close of the
calendar year in which the Participant attains age 70 1/2. However, if the
Participant, prior to incurring a Separation from Service, attained age 70 1/2
by January 1, 1988, and, for the five Plan Year period ending in the calendar
year in which he attained age 70 1/2 and for all subsequent years, the
Participant was not a more than 5% owner, the Required Beginning Date is the
April 1 following the close of the calendar year in which the Participant
separates from Service or, if earlier, the April 1 following the close of the
calendar year in which the Participant becomes a more than 5% owner.
Further-more, if a Participant who was not a more than 5% owner attained age 70
1/2 during 1988 and did not incur a Separation from Service prior to January 1,
1989, his Required Beginning Date is April 1, 1990. A mandatory distribution
at the Participant's Required Beginning Date will be in lump sum (or, if
applicable, the normal annuity form of distribution required under Section
6.04) unless the Participant, pursuant to the provisions of this Article VI,
makes a valid election to receive an alternative form of payment.
(C) DEATH OF THE PARTICIPANT. The Advisory Committee will direct the
Trustee, in accordance with this Section 6.01(C), to distribute to the
Participant's Beneficiary the Participant's Nonforfeitable Accrued Benefit
remaining in the Trust at the time of the Participant's death. Subject to the
requirements of Section 6.04, the Advisory Committee will determine the death
benefit by reducing the Participant's Nonforfeitable Accrued Benefit by any
security interest the Plan has against that Nonforfeitable Accrued Benefit by
reason of an outstanding Participant loan.
(1) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT DOES NOT
EXCEED $3,500. The Advisory Committee, subject to the requirements of Section
6.04, must direct the Trustee to distribute the deceased Participant's
Nonforfeitable Accrued Benefit in a single sum, as soon as administratively
practicable following the Participant's death or, if later, the date on which
the Advisory Committee receives notification of or otherwise confirms the
Participant's death.
(2) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS
$3,500. The Advisory Committee will direct the Trustee to distribute the
deceased Participant's Nonforfeitable Accrued Benefit at the time and in the
form elected by the Participant or, if applicable by the Beneficiary, as
permitted under this Article VI. In the absence of an election, subject to the
requirements of Section 6.04, the Advisory Committee will direct the Trustee to
distribute the Participant's undistributed Nonforfeitable Accrued Benefit in a
lump sum on the first distribution date following the close of the Plan Year in
which the Participant's death occurs or, if later, the first distribution date
following the date the Advisory Committee receives notification of or otherwise
confirms the Participant's death.
If the death benefit is payable in full to the Participant's surviving
spouse, the surviving spouse, in addition to the distribution options provided
in this Section 6.01(C), may elect distribution at any time or in any form
(other than a joint and survivor annuity) this Article VI would permit for a
Participant.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to the annuity
distribution requirements, if any, prescribed by Section 6.04, and any
restrictions prescribed by Section 6.03, a
6.02
35
Defined Contribution Master Plan
Participant or Beneficiary may elect distribution under one, or any
combination, of the following methods: (a) by payment in a lump sum; or (b) by
payment in monthly, quarterly or annual installments over a fixed reasonable
period of time, not exceeding the Life expectancy of the Participant, or the
joint life and last survivor expectancy of the Participant and his Beneficiary.
The Employer may elect in its Adoption Agreement to modify the methods of
payment available under this Section 6.02.
The distribution options permitted under this Section 6.02 are
available only if the present value of the Participant Nonforfeitable Accrued
Benefit, at the time of the distribution to the Participant, exceeds $3,500.
To facilitate installment payments under this Article VI, the Advisory
Committee may direct the Trustee to segregate all or any part of the
Participant's Accrued Benefit in a separate Account. The Trustee will invest
the Participant's segregated Account in Federally insured interest bearing
savings account(s) or time deposit(s) (or a combination of both), or in other
fixed income investments. A segregated Account remains a part of the Trust,
but it alone shares in any income it earns, and it alone bears any expense or
loss it incurs. A Participant or Beneficiary may elect to receive an
installment distribution in the form of a Nontransferable Annuity Contract.
Under an installment distribution, the Participant or Beneficiary, at any time,
may elect to accelerate the payment of all, or any portion, of the
Participant's unpaid Nonforfeitable Accrued Benefit, subject to the
requirements of Section 6.04.
(A) MINIMUM DISTRIBUTION REQUIREMENTS FOR PARTICIPANTS. The Advisory
Committee may not direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit, nor may the Participant elect to have the
Trustee distribute his Nonforfeitable Accrued Benefit, under a method of
payment which, as of the Required Beginning Date, does not satisfy the minimum
distribution requirements under Code Section 401(a)(9) and the applicable
Treasury regulations. The minimum distribution for a calendar year equals the
Participant's Nonforfeitable Accrued Benefit as of the latest valuation date
preceding the beginning of the calendar year divided by the Participant's life
expectancy or, if applicable, the joint and last survivor expectancy of the
Participant and his designated Beneficiary (as determined under Article VIII,
subject to the requirements of the Code Section 401(a)(9) regulations). The
Advisory Committee will increase the Participant's Nonforfeitable Accrued
Benefit, as determined on the relevant valuation date, for contributions or
forfeitures allocated after the valuation date and by December 31 of the
valuation calendar year, and will decrease the valuation by distributions made
after the valuation date and by December 31 of the valuation calendar year.
For purposes of this valuation, the Advisory Committee will treat any portion
of the minimum distribution for the first distribution calendar year made after
the close of that year as a distribution occurring in that first distribution
calendar year. In computing a minimum distribution, the Advisory Committee
must use the unisex life expectancy multiples under Treas. Reg. Section
1.72-9. The Advisory Committee, only upon the Participant's written request,
will compute the minimum distribution for a calendar year subsequent to the
first calendar year for which the Plan requires a minimum distribution by
redetermining the applicable life expectancy. However, the Advisory Committee
may not redetermine the joint Life and last survivor expectancy of the
Participant and a nonspouse designated Beneficiary in a manner which takes into
account any adjustment to a Life expectancy other than the Participant's life
expectancy.
If the Participant's spouse is not his designated Beneficiary, a method of
payment to the Participant (whether by Participant election or by Advisory
Committee direction) may not provide more than incidental benefits to the
Beneficiary. For Plan Years beginning after December 31, 1988, the Plan must
satisfy the minimum distribution incidental benefit ("MDIB") requirement in the
Treasury regulations issued under Code Section 401(a)(9) for distributions made
on or after the Participant's Required Beginning Date and before the
Participant's death. To satisfy the MDIB requirement, the Advisory Committee
will compute the minimum distribution required by this Section 6.02(A) by
substituting the applicable MDIB divisor for the applicable life expectancy
factor, if the MDIB divisor is a lesser number. Following the Participant's
death, the Advisory Committee will compute the minimum distribution required by
this Section 6.02(A) solely on the basis of the applicable Life expectancy
factor and will disregard the MD1B factor. For Plan Years beginning prior to
January 1, 1989, the Plan satisfies the incidental benefits requirement if the
distributions to the Participant satisfied the MDIB requirement or if the
present value of the retirement benefits
6.03
36
Defined Contribution Master Plan
payable solely to the Participant is greater than 50% of the present value of
the total benefits payable to the Participant and his Beneficiaries. The
Advisory Committee must determine whether benefits to the Beneficiary are
incidental as of the date the Trustee is to commence payment of the retirement
benefits to the Participant, or as of any date the Trustee redetermines the
payment period to the Participant.
The minimum distribution for the first distribution calendar year is
due by the Participant's Required Beginning Date. The minimum distribution for
each subsequent distribution calendar year, including the calendar year in
which the Participant's Required Beginning Date occurs, is due by December 31
of that year. If the Participant receives distribution in the form of a
Nontransferable Annuity Contract, the distribution satisfies this Section
6.02(A) if the contract complies with the requirements of Code Section
401(a)(9) and the applicable Treasury regulations.
(B) MINIMUM DISTRIBUTION REQUIREMENTS FOR BENEFICIARIES. The method of
distribution to the Participant's Beneficiary must satisfy Code Section
401(a)(9) and the applicable Treasury regulations. If the Participant's death
occurs after his Required Beginning Date or, if earlier, the date the
Participant commences an irrevocable annuity pursuant to Section 6.04, the
method of payment to the Beneficiary must provide for completion of payment
over a period which does not exceed the payment period which had commenced for
the Participant. If the Participant's death occurs prior to his Required
Beginning Date, and the Participant had not commenced an irrevocable annuity
pursuant to Section 6.04, the method of payment to the Beneficiary, subject to
Section 6.04, must provide for completion of payment to the Beneficiary over a
period not exceeding: (i) 5 years after the date of the Participant's death; or
(ii) if the Beneficiary is a designated Beneficiary, the designated
Beneficiary's life expectancy. The Advisory Committee may not direct payment
of the Participant's Nonforfeitable Accrued Benefit over a period described in
clause (ii) unless the Trustee will commence payment to the designated
Beneficiary no later than the December 31 following the close of the calendar
year in which the Participant's death occurred or, if later, and the designated
Beneficiary is the Participant's surviving spouse, December 31 of the calendar
year in which the Participant would have attained age 70 1/2. If the Trustee
will make distribution in accordance with clause (ii), the minimum.
distribution for a calendar year equals the Participant's Nonforfeitable
Accrued Benefit as of the latest valuation date preceding the beginning of the
calendar year divided by the designated Beneficiary's life expectancy. The
Advisory Committee must use the unisex life expectancy multiples under Treas.
Reg. Section 1.72-9 for purposes of applying this paragraph. The Advisory
Committee, only upon the written request of the Participant or of the
Participant's surviving spouse, will recalculate the Life expectancy of the
Participant's surviving spouse not more frequently than annually, but may not
recalculate the life expectancy of a nonspouse designated Beneficiary after the
Trustee commences payment to the designated Beneficiary. The Advisory
Committee will apply this paragraph by treating any amount paid to the
Participant's child, which becomes payable to the Participant's surviving
spouse upon the child's attaining the age of majority, as paid to the
Participant's surviving spouse. Upon the Beneficiary's written request, the
Advisory Committee must direct the Trustee to accelerate payment of au, or any
portion, of the Participant's unpaid Accrued Benefit, as soon as
administratively practicable following the effective date of that request.
6.03 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days, but not
later than 30 days, before the Participant's annuity starting date, the
Advisory Committee must provide a benefit notice to a Participant who is
eligible to make an election under this Section 6.03. The benefit notice must
explain the optional forms of benefit in the Plan, including the material
features and relative values of those options, and the Participant's right to
defer distribution until he attains the later of Normal Retirement Age or age
62.
If a Participant or Beneficiary makes an election prescribed by this
Section 6.03, the Advisory Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in accordance with that election.
Any election under this Section 6.03 is subject to the requirements of Section
6.02 and of Section 6.04. The Participant or Beneficiary must make an election
under this Section 6.03 by filing his election with the Advisory Committee at
any time before the
6.04
37
Defined Contribution Master Plan
Trustee otherwise would commence to pay a Participant's Accrued Benefit in
accordance with the requirements of Article VI.
(A) PARTICIPANT ELECTIONS AFTER SEPARATION FROM SERVICE. If the present
value of a Participant's Nonforfeitable Accrued Benefit exceeds $3,500, he may
elect to have the Trustee commence distribution as of any distribution date
permitted under the Employer's Adoption Agreement Section 6.03. The Participant
may reconsider an election at any time prior to the annuity starting date and
elect to commence distribution as of any other distribution date permitted
under the Employer's Adoption Agreement Section 6.03. If the Participant is
partially-vested in his Accrued Benefit, an election under this Paragraph (A)
to distribute prior to the Participant's incurring a Forfeiture Break in
Service (as defined in Section 5.08), must be in the form of a cash-out
distribution (as defined in Article V). A Participant may not receive a
cash-out distribution if, prior to the time the Trustee actually makes the
cash-out distribution, the Participant returns to employment with the Employer.
Following his attainment of Normal Retirement Age, a Participant who has
separated from Service may elect distribution as of any distribution date,
irrespective of the elections under Adoption Agreement Section 6.03.
(B) PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE. The Employer
must specify in its Adoption Agreement the distribution election rights, if
any, a Participant has prior to his Separation from Service. A Participant
must make an election under this Section 6.03(B) on a form prescribed by the
Advisory Committee at any time during the Plan Year for which his election is
to be effective. In his written election, the Participant must specify the
percentage or dollar amount he wishes the Trustee to distribute to him. The
Participant's election relates solely to the percentage or dollar amount
specified in his election form and his right to elect to receive an amount, if
any, for a particular Plan Year greater than the dollar amount or percentage
specified in his election form terminates on the Accounting Date. The Trustee
must make a distribution to a Participant in accordance with his election under
this Section 6.03(B) within the 90 day period (or as soon as administratively
practicable) after the Participant files his written election with the Trustee.
The Trustee will distribute the balance of the Participant's Accrued Benefit
not distributed pursuant to his election(s) in accordance with the other
distribution provisions of this Plan.
(C) DEATH BENEFIT ELECTIONS. If the present value of the deceased
Participant's Nonforfeitable Accrued Benefit exceeds $3,500, the Participant's
Beneficiary may elect to have the Trustee distribute the Participant's
Nonforfeitable Accrued Benefit in a form and within a period permitted under
Section 6.02. The Beneficiary's election is subject to any restrictions
designated in writing by the Participant and not revoked as of his date of
death.
(D) TRANSITIONAL ELECTIONS. Notwithstanding the provisions of Sections
6.01 and 6.02, if the Participant (or Beneficiary) signed a written
distribution designation prior to January 1, 1984, the Advisory Committee must
distribute the Participant's Nonforfeitable Accrued Benefit in accordance with
that designation, subject however, to the survivor requirements, if applicable,
of Sections 6.04, 6.05 and 6.06. This Section 6.03(D) does not apply to a
pre-1984 distribution designation, and the Advisory Committee will not comply
with that designation, if any of the following applies: (1) the method of
distribution would have disqualified the Plan under Code Section 401(a)(9) as
in effect on December 31, 1983; (2) the Participant did not have an Accrued
Benefit as of December 31, 1983; (3) the distribution designation does not
specify the timing and form of the distribution and the death Beneficiaries (in
order of priority); (4) the substitution of a Beneficiary modifies the payment
period of the distribution; or, (5) the Participant (or Beneficiary) modifies
or revokes the distribution designation. In the event of a revocation, the
Plan must distribute, no later than December 31 of the calendar year following
the year of revocation, the amount which the Participant would have received
under Section 6.02(A) if the distribution designation had not been in effect
or, if the Beneficiary revokes the distribution designation, the amount which
the Beneficiary would have received under Section 6.02(B) if the distribution
designation had not been in effect. The Advisory Committee will apply this
Section 6.03(D) to rollovers and transfers in accordance with Part J of the
Code Section 401(a)(9) Treasury regulations.
6.05
38
Defined Contribution Master Plan
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES.
(A) JOINT AND SURVIVOR ANNUITY. The Advisory Committee must direct the
Trustee to distribute a married or unmarried Participant's Nonforfeitable
Accrued Benefit in the form of a qualified joint and survivor annuity, unless
the Participant makes a valid waiver election (described in Section 6.05)
within the 90 day period ending on the annuity starting date. If, as of the
annuity starting date, the Participant is married, a qualified joint and
survivor annuity is an immediate annuity which is purchasable with the
Participant's Nonforfeitable Accrued Benefit and which provides a life annuity
for the Participant and a survivor annuity payable for the remaining life of
the Participant's surviving spouse equal to 50% of the amount of the annuity
payable during the life of the Participant. If, as of the annuity starting
date, the Participant is not married, a qualified joint and survivor annuity is
an immediate life annuity for the Participant which is purchasable with the
Participant's Nonforfeitable Accrued Benefit. On or before the annuity
starting date, the Advisory Committee, without Participant or spousal consent,
must direct the Trustee to pay the Participant's Nonforfeitable Accrued Benefit
in a lump sum, in lieu of a qualified joint and survivor annuity, in accordance
with Section 6.01, if the Participant's Nonforfeitable Accrued Benefit is not
greater than $3,500. This Section 6.04(A) applies only to a Participant who
has completed at least one Hour of Service with the Employer after August 22,
1984.
(B) PRERETIREMENT SURVIVOR ANNUITY. If a married Participant dies prior
to his annuity starting date, the Advisory Committee will direct the Trustee to
distribute a portion of the Participant's Nonforfeitable Accrued Benefit to the
Participant's surviving spouse in the form of a preretirement survivor annuity,
unless the Participant has a valid waiver election (as described in Section
6.06) in effect, or unless the Participant and his spouse were not married
throughout the one year period ending on the date of his death. A
preretirement survivor annuity is an annuity which is purchasable with 50% of
the Participant's Nonforfeitable Accrued Benefit (determined as of the date of
the Participant's death) and which is payable for the life of the Participant's
surviving spouse. The value of the preretirement survivor annuity is
attributable to Employer contributions and to Employee contributions in the
same proportion as the Participant's Nonforfeitable Accrued Benefit is
attributable to those contributions. The portion of the Participant's
Nonforfeitable Accrued Benefit not payable under this paragraph is payable to
the Participant's Beneficiary, in accordance with the other provisions of this
Article VI. If the present value of the preretirement survivor annuity does
not exceed $3,500, the Advisory Committee, on or before the annuity starting
date, must direct the Trustee to make a lump sum distribution to the
Participant's surviving spouse, in lieu of a preretirement survivor annuity.
This Section 6.04(B) applies only to a Participant who dies after August 22,
1984, and either (i) completes at least one Hour of Service with the Employer
after August 22, 1984, or (ii) separated from Service with at least 10 Years of
Service (as defined in Section 5.06) and completed at least one Hour of Service
with the Employer in a Plan Year beginning after December 31, 1975.
(C) SURVIVING SPOUSE ELECTIONS. If the present value of the preretirement
survivor annuity exceeds $3,500, the Participant's surviving spouse may elect
to have the Trustee commence payment of the preretirement survivor annuity at
any time following the date of the Participant's death, but not later than the
mandatory distribution periods described in Section 6.02, and may elect any of
the forms of payment described in Section 6.02, in lieu of the preretirement
survivor annuity. In the absence of an election by the surviving spouse, the
Advisory Committee must direct the Trustee to distribute the preretirement
survivor annuity on the first distribution date following the close of the Plan
Year in which the latest of the following events occurs: (i) the Participant's
death; (ii) the date the Advisory Committee receives notification of or
otherwise confirms the Participant's death; (iii) the date the Participant would
have attained Normal Retirement Age; or (iv) the date the Participant would
have attained age 62.
(D) SPECIAL RULES. If the Participant has in effect a valid waiver
election regarding the qualified joint and survivor annuity or the
preretirement survivor annuity, the Advisory Committee must direct the Trustee
to distribute the Participant's Nonforfeitable Accrued Benefit in accordance
with Sections 6.01, 6.02 and 6.03. The Advisory Committee will reduce the
Participant's Nonforfeitable Accrued Benefit by any security interest (pursuant
to any offset rights authorized by Section
6.06
39
Defined Contribution Master Plan
10.03[E]) held by the Plan by reason of a Participant loan to determine the
value of the Participant's Nonforfeitable Accrued Benefit distributable in the
form of a qualified joint and survivor annuity or preretirement survivor
annuity, provided any post-August 18, 1985, loan satisfied the spousal consent
requirement described in Section 10.03[E] of the Plan. For purposes of
applying this Article VI, the Advisory Committee treats a former spouse as the
Participant's spouse or surviving spouse to the extent provided under a
qualified domestic relations order described in Section 6.07. The provisions of
this Section 6.04, and of Sections 6.05 and 6.06, apply separately to the
portion of the Participant's Nonforfeitable Accrued Benefit subject to the
qualified domestic relations order and to the portion of the Participant's
Nonforfeitable Accrued Benefit not subject to that order.
(E) PROFIT SHARING PLAN ELECTION. If this Plan is a profit sharing plan,
the Employer must elect the extent to which the preceding provisions of Section
6.04 apply. If the Employer elects to apply this Section 6.04 only to a
Participant described in this Section 6.04(E), the preceding provisions of this
Section 6.04 apply only to the following Participants: (1) a Participant as
respects whom the Plan is a direct or indirect transferee from a plan subject
to the Code Section 417 requirements and the Plan received the transfer after
December 31, 1984, unless the transfer is an elective transfer described in
Section 13.06; (2) a Participant who elects a life annuity distribution (if
Section 6.02 or Section 13.02 of the Plan requires the Plan to provide a life
annuity distribution option); and (3) a Participant whose benefits under a
defined benefit plan maintained by the Employer are offset by benefits provided
under this Plan. If the Employer elects to apply this Section 6.04 to all
Participants, the preceding provisions of this Section 6.04 apply to all
Participants described in the first two paragraphs of this Section 6.04,
without regard to the limitations of this Section 6.04(E). Sections 6.05 and
6.06 only apply to Participants to whom the preceding provisions of this
Section 6.04 apply.
6.05 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY. Not
earlier than 90 days, but not later than 30 days, before the Participant's
annuity starting date, the Advisory Committee must provide the Participant a
written explanation of the terms and conditions of the qualified joint and
survivor annuity, the Participant's right to make, and the effect of, an
election to waive the joint and survivor form of benefit, the rights of the
Participant's spouse regarding the waiver election and the Participant's right
to make, and the effect of, a revocation of a waiver election. The Plan does
not limit the number of times the Participant may revoke a waiver of the
qualified joint and survivor annuity or make a new waiver during the election
period.
A married Participant's waiver election is not valid unless (a) the
Participant's spouse (to whom the survivor annuity is payable under the
qualified joint and survivor annuity), after the Participant has received the
written explanation described in this Section 6.05, has consented in writing to
the waiver election, the spouse's consent acknowledges the effect of the
election, and a notary public or the Plan Administrator (or his representative)
witnesses the spouse's consent, (b) the spouse consents to the alternate form
of payment designated by the Participant or to any change in that designated
form of payment, and (c) unless the spouse is the Participant's sole primary
Beneficiary, the spouse consents to the Participant's Beneficiary designation
or to any change in the Participant's Beneficiary designation. The spouse's
consent to a waiver of the qualified joint and survivor annuity is irrevocable,
unless the Participant revokes the waiver election. The spouse may execute a
blanket consent to any form of payment designation or to any Beneficiary
designation made by the Participant, if the spouse acknowledges the right to
limit that consent to a specific designation but, in writing, waives that
right. The consent requirements of this Section 6.05 apply to a former spouse
of the Participant, to the extent required under a qualified domestic relations
order described in Section 6.07.
The Advisory Committee will accept as valid a waiver election which
does not satisfy the spousal consent requirements if the Advisory Committee
establishes the Participant does not have a spouse, the Advisory Committee is
not able to locate the Participant's spouse, the Participant is legally
separated or has been abandoned (within the meaning of State law) and the
Participant has a court order to that effect, or other circumstances exist
under which the Secretary of the
6.07
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Defined Contribution Master Plan
Treasury will excuse the consent requirement. If the Participant's spouse is
legally incompetent to give consent, the spouse's legal guardian (even if the
guardian is the Participant) may give consent.
6.06 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. The Advisory
Committee must provide a written explanation of the preretirement survivor
annuity to each married Participant, within the following period which ends
last: (1) the period beginning on the first day of the Plan Year in which the
Participant attains age 32 and ending on the last day of the Plan Year in which
the Participant attains age 34; (2) a reasonable period after an Employee
becomes a Participant; (3) a reasonable period after the joint and survivor
rules become applicable to the Participant; or (4) a reasonable period after a
fully subsidized preretirement survivor annuity no longer satisfies the
requirements for a fully subsidized benefit. A reasonable period described in
clauses (2), (3) and (4) is the period beginning one year before and ending one
year after the applicable event. If the Participant separates from Service
before attaining age 35, clauses (1), (2), (3) and (4) do not apply and the
Advisory Committee must provide the written explanation within the period
beginning one year before and ending one year after the Separation from Service.
The written explanation must describe, in a manner consistent with Treasury
regulations, the terms and conditions of the preretirement survivor annuity
comparable to the explanation of the qualified joint and survivor annuity
required under Section 6.05. The Plan does not limit the number of times the
Participant may revoke a waiver of the preretirement survivor annuity or make a
new waiver during the election period.
A Participant's waiver election of the preretirement survivor annuity
is not valid unless (a) the Participant makes the waiver election no earlier
than the first day of the Plan Year in which he attains age 35 and (b) the
Participant's spouse (to whom the preretirement survivor annuity is payable)
satisfies the consent requirements described in Section 6.05, except the spouse
need not consent to the form of benefit payable to the designated Beneficiary.
The spouse's consent to the waiver of the preretirement survivor annuity is
irrevocable, unless the Participant revokes the waiver election. Irrespective
of the time of election requirement described in clause (a), if the Participant
separates from Service prior to the first day of the Plan Year in which he
attains age 35, the Advisory Committee will accept a waiver election as
respects the Participant's Accrued Benefit attributable to his Service prior to
his Separation from Service. Furthermore, if a Participant who has not
separated from Service makes a valid waiver election, except for the timing
requirement of clause (a), the Advisory Committee will accept that election as
valid, but only until the first day of the Plan Year in which the Participant
attains age 35. A waiver election described in this paragraph is not valid
unless made after the Participant has received the written explanation
described in this Section 6.06.
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing
contained in this Plan prevents the Trustee, in accordance with the direction
of the Advisory Committee, from complying with the provisions of a qualified
domestic relations order (as defined in Code Section 414(p)). This Plan
specifically permits distribution to an alternate payee under a qualified
domestic relations order at any time, irrespective of whether the Participant
has attained his earliest retirement age (as defined under Code Section 414(p))
under the Plan. A distribution to an alternate payee prior to the
Participant's attainment of earliest retirement age is available only if(1) the
order specifies distribution at that time or permits an agreement between the
Plan and the alternate payee to authorize an earlier distribution; and (2) if
the present value of the alternate payee's benefits under the Plan exceeds
$3,500, and the order requires, the alternate payee consents to any
distribution occurring prior to the Participant's attainment of earliest
retirement age. The Employer, in an addendum to its Adoption Agreement
numbered 6.07, may elect to limit distribution to an alternate payee only when
the Participant has attained his earliest retirement age under the Plan.
Nothing in this Section 6.07 gives a Participant a right to receive
distribution at a time otherwise not permitted under the Plan nor does it
permit the alternate payee to receive a form of payment not otherwise permitted
under the Plan.
6.08
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Defined Contribution Master Plan
The Advisory Committee must establish reasonable procedures to
determine the qualified status of a domestic relations order. Upon receiving a
domestic relations order, the Advisory Committee promptly will notify the
Participant and any alternate payee named in the order, in writing, of the
receipt of the order and the Plan's procedures for determining the qualified
status of the order. Within a reasonable period of time after receiving the
domestic relations order, the Advisory Committee must determine the qualified
status of the order and must notify the Participant and each alternate payee,
in writing, of its determination. The Advisory Committee must provide notice
under this paragraph by mailing to the individual's address specified in the
domestic relations order, or in a manner consistent with Department of Labor
regulations.
If any portion of the Participant's Nonforfeitable Accrued Benefit is
payable during the period the Advisory Committee is making its determination of
the qualified status of the domestic relations order, the Advisory Committee
must make a separate accounting of the amounts payable. If the Advisory
Committee determines the order is a qualified domestic relations order within
18 months of the date amounts first are payable following receipt of the order,
the Advisory Committee will direct the Trustee to distribute the payable
amounts in accordance with the order. If the Advisory Committee does not make
its determination of the qualified status of the order within the 18-month
determination period, the Advisory Committee will direct the Trustee to
distribute the payable amounts in the manner the Plan would distribute if the
order did not exist and will apply the order prospectively if the Advisory
Committee later determines the order is a qualified domestic relations order.
To the extent it is not inconsistent with the provisions of the
qualified domestic relations order, the Advisory Committee may direct the
Trustee to invest any partitioned amount in a segregated subaccount or separate
account and to invest the account in Federally insured, interest-bearing
savings account(s) or time deposit(s) (or a combination of both), or in other
fixed income investments. A segregated subaccount remains a part of the Trust,
but it alone shares in any income it earns, and it alone bears any expense or
loss it incurs. The Trustee will make any payments or distributions required
under this Section 6.07 by separate benefit checks or other separate
distribution to the alternate payee(s).
* * * * * * * * * *
6.09
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Defined Contribution Master Plan
ARTICLE VII
EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 INFORMATION TO COMMITTEE. The Employer must supply current
information to the Advisory Committee as to the name, date of birth, date of
employment, annual compensation, leaves of absence, Years of Service and date of
termination of employment of each Employee who is, or who will be eligible to
become, a Participant under the Plan, together with any other information which
the Advisory Committee considers necessary. The Employer's records as to the
current information the Employer furnishes to the Advisory Committee are
conclusive as to all persons.
7.02 NO LIABILITY. The Employer assumes no obligation or
responsibility to any of its Employees, Participants or Beneficiaries for any
act of, or failure to act, on the part of its Advisory Committee (unless the
Employer is the Advisory Committee), the Trustee, the Custodian, if any, or the
Plan Administrator (unless the Employer is the Plan Administrator).
7.03 INDEMNITY OF CERTAIN FIDUCIARIES. The Employer indemnifies and
saves harmless the Plan Administrator and the members of the Advisory Committee,
and each of them, from and against any and all loss resulting from liability to
which the Plan Administrator and the Advisory Committee, or the members of the
Advisory Committee, may be subjected by reason of any act or conduct (except
willful misconduct or gross negligence) in their official capacities in the
administration of this Trust or Plan or both, including all expenses reasonably
incurred in their defense, in case the Employer fails to provide such defense.
The indemnification provisions of this Section 7.03 do not relieve the Plan
Administrator or any Advisory Committee member from any liability he may have
under ERISA for breach of a fiduciary duty. Furthermore, the Plan Administrator
and the Advisory Committee members and the Employer may execute a letter
agreement further delineating the indemnification agreement of this Section
7.03, provided the letter agreement must be consistent with and does not violate
ERISA. The indemnification provisions of this Section 7.03 extend to the
Trustee (or to a Custodian, if any) solely to the extent provided by a letter
agreement executed by the Trustee (or Custodian) and the Employer.
7.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer has the right
to direct the Trustee with respect to the investment and reinvestment of assets
comprising the Trust Fund only if the Trustee consents in writing to permit such
direction. If the Trustee consents to Employer direction of investment, the
Trustee and the Employer must execute a letter agreement as a part of this Plan
containing such conditions, limitations and other provisions they deem
appropriate before the Trustee will follow any Employer direction as respects
the investment or re-investment of any part of the Trust Fund.
7.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves
the right to amend the vesting schedule at any time, the Advisory Committee
will not apply the amended vesting schedule to reduce the Nonforfeitable
percentage of any Participant's Accrued Benefit derived from Employer
contributions (determined as of the later of the date the Employer adopts the
amendment, or the date the amendment becomes effective) to a percentage less
than the Nonforfeitable percentage computed under the Plan without regard to
the amendment. An amended vesting schedule will apply to a Participant only if
the Participant receives credit for at least one Hour of Service after the new
schedule becomes effective.
If the Employer makes a permissible amendment to the vesting schedule,
each Participant having at least 3 Years of Service with the Employer may elect
to have the percentage of his Nonforfeitable Accrued Benefit computed under the
Plan without regard to the amendment. For Plan Years beginning prior to
January 1, 1989, the election described in the preceding sentence
7.01
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Defined Contribution Master Plan
applies only to Participants having at least 5 Years of Service with the
Employer. The Participant must file his election with the Advisory Committee
within 60 days of the latest of (a) the Employer's adoption of the amendment;
(b) the effective date of the amendment; or (c) his receipt of a copy of the
amendment. The Advisory Committee, as soon as practicable, must forward a true
copy of any amendment to the vesting schedule to each affected Participant,
together with an explanation of the effect of the amendment, the appropriate
form upon which the Participant may make an election to remain under the
vesting schedule provided under the Plan prior to the amendment and notice of
the time within which the Participant must make an election to remain under the
prior vesting schedule. The election described in this Section 7.05 does not
apply to a Participant if the amended vesting schedule provides for vesting at
least as rapid at all times as the vesting schedule in effect prior to the
amendment. For purposes of this Section 7.05, an amendment to the vesting
schedule includes any Plan amendment which directly or indirectly affects the
computation of the Nonforfeitable percentage of an Employee's rights to his
Employer derived Accrued Benefit. Furthermore, the Advisory Committee must
treat any shift in the vesting schedule, due to a change in the Plan's top
heavy status, as an amendment to the vesting schedule for purposes of this
Section 7.05.
7.02
* * * * * * * * * *
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Defined Contribution Master Plan
ARTICLE VIII
PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 BENEFICIARY DESIGNATION. Any Participant may from time to
time designate, in writing, any person or persons, contingently or
successively, to whom the Trustee will pay his Nonforfeitable Accrued Benefit
(including any life insurance proceeds payable to the Participant's Account) in
the event of his death and the Participant may designate the form and method of
payment. The Advisory Committee will prescribe the form for the written
designation of Beneficiary and, upon the Participant's filing the form with the
Advisory Committee, the form effectively revokes all designations filed prior
to that date by the same Participant.
(A) COORDINATION WITH SURVIVOR REQUIREMENTS. If the joint and survivor
requirements of Article VI apply to the Participant, this Section 8.01 does not
impose any special spousal consent requirements on the Participant's
Beneficiary designation. However, in the absence of spousal consent (as
required by Article VI) to the Participant's Beneficiary designation: (1) any
waiver of the joint and survivor annuity or of the preretirement survivor
annuity is not valid; and (2) if the Participant dies prior to his annuity
starting date, the Participant's Beneficiary designation will apply only to the
portion of the death benefit which is not payable as a preretirement survivor
annuity. Regarding clause (2), if the Participant's surviving spouse is a
primary Beneficiary under the Participant's Beneficiary designation, the
Trustee will satisfy the spouse's interest in the Participant's death benefit
first from the portion which is payable as a preretirement survivor annuity.
(B) PROFIT SHARING PLAN EXCEPTION. If the Plan is a profit sharing plan,
the Beneficiary designation of a married Exempt Participant is not valid unless
the Participant's spouse consents (in a manner described in Section 6.05) to
the Beneficiary designation. An "Exempt Participant" is a Participant who is
not subject to the joint and survivor requirements of Article VI. The spousal
consent requirement in this paragraph does not apply if the Exempt Participant
and his spouse are not married throughout the one year period ending on the
date of the Participant's death, or if the Participant's spouse is the
Participant's sole primary Beneficiary.
8.02 NO BENEFICIARY DESIGNATION/DEATH OF BENEFICIARY. If a
Participant fails to name a Beneficiary in accordance with Section 8.01, or if
the Beneficiary named by a Participant predeceases him, then the Trustee will
pay the Participant's Nonforfeitable Accrued Benefit in accordance with Section
6.02 in the following order of priority, unless the Employer specifies a
different order of priority in an addendum to its Adoption Agreement, to:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted
children, in equal shares;
(c) The Participant's surviving parents, in equal shares; or
(d) The Participant's estate.
If the Beneficiary does not predecease the Participant, but dies prior
to distribution of the Participant's entire Nonforfeitable Accrued Benefit, the
Trustee will pay the remaining Nonforfeitable Accrued Benefit to the
Beneficiary's estate unless the Participant's Beneficiary designation provides
otherwise or unless the Employer provides otherwise in its Adoption Agreement.
If the Plan is a profit sharing plan, and the Plan includes Exempt
Participants, the Employer may not specify a different order of priority in the
Adoption Agreement unless the Participant's surviving spouse will be first in
the different order of priority. The Advisory Committee will direct the
Trustee as to the method and to whom the Trustee will make payment under this
Section 8.02.
8.01
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Defined Contribution Master Plan
8.03 PERSONAL DATA TO COMMITTEE. Each Participant and each
Beneficiary of a deceased Participant must furnish to the Advisory Committee
such evidence, data or information as the Advisory Committee considers
necessary or desirable for the purpose of administering the Plan. The
provisions of this Plan are effective for the benefit of each Participant upon
the condition precedent that each Participant will furnish promptly full, true
and complete evidence, data and information when requested by the Advisory
Committee, provided the Advisory Committee advises each Participant of the
effect of his failure to comply with its request.
8.04 ADDRESS FOR NOTIFICATION. Each Participant and each
Beneficiary of a deceased Participant must file with the Advisory Committee
from time to time, in writing, his post office address and any change of post
office address. Any communication, statement or notice addressed to a
Participant, or Beneficiary, at his last post office address filed with the
Advisory Committee, or as shown on the records of the Employer, binds the
Participant, or Beneficiary, for all purposes of this Plan.
8.05 ASSIGNMENT OR ALIENATION. Subject to Code Section 414(p)
relating to qualified domestic relations orders, neither a Participant nor a
Beneficiary may anticipate, assign or alienate (either at law or in equity) any
benefit provided under the Plan, and the Trustee will not recognize any such
anticipation, assignment or alienation. Furthermore, a benefit under the Plan
is not subject to attachment, garnishment, levy, execution or other legal or
equitable process.
8.06 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within the
time prescribed by ERISA and the applicable regulations, must furnish all
Participants and Beneficiaries a summary description of any material amendment
to the Plan or notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.
8.07 LITIGATION AGAINST THE TRUST. A court of competent
jurisdiction may authorize any appropriate equitable relief to redress
violations of ERISA or to enforce any provisions of ERISA or the terms of the
Plan. A fiduciary may receive reimbursement of expenses properly and actually
incurred in the performance of his duties with the Plan.
8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any
Beneficiary may examine copies of the Plan description, latest annual report,
any bargaining agreement, this Plan and Trust, contract or any other instrument
under which the Plan was established or is operated. The Plan Administrator
will maintain all of the items listed in this Section 8.08 in his office, or in
such other place or places as he may designate from time to time in order to
comply with the regulations issued under ERISA, for examination during
reasonable business hours. Upon the written request of a Participant or
Beneficiary the Plan Administrator must furnish him with a copy of any item
listed in this Section 8.08. The Plan Administrator may make a reasonable
charge to the requesting person for the copy so furnished.
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. A Participant or a
Beneficiary ("Claimant') may file with the Advisory Committee a written claim
for benefits, if the Participant or Beneficiary determines the distribution
procedures of the Plan have not provided him his proper Nonforfeitable Accrued
Benefit. The Advisory Committee must render a decision on the claim within 60
days of the Claimant's written claim for benefits. The Plan Administrator must
provide adequate notice in writing to the Claimant whose claim for benefits
under the Plan the Advisory Committee has denied. The Plan Administrator's
notice to the Claimant must set forth:
(a) The specific reason for the denial;
8.02
46
Defined Contribution Master Plan
(b) Specific references to pertinent Plan provisions on which the
Advisory Committee based its denial;
(c) A description of any additional material and information
needed for the Claimant to perfect his claim and an explanation of why
the material or information is needed; and
(d) That any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Advisory Committee within 75
days after receipt of the Plan Administrator's notice of denial of
benefits. The Plan Administrator's notice must further advise the
Claimant that his failure to appeal the action to the Advisory
Committee in writing within the 75-day period will render the Advisory
Committee's determination final, binding and conclusive.
If the Claimant should appeal to the Advisory Committee, he, or his
duly authorized representative, may submit, in writing, whatever issues and
comments he, or his duly authorized representative, feels are pertinent. The
Claimant, or his duly authorized representative, may review pertinent Plan
documents. The Advisory Committee will re-examine all facts related to the
appeal and make a final determination as to whether the denial of benefits is
justified under the circumstances. The Advisory Committee must advise the
Claimant of its decision within 60 days of the Claimant's written request for
review, unless special circumstances (such as a hearing) would make the
rendering of a decision within the 60-day limit unfeasible, but in no event may
the Advisory Committee render a decision respecting a denial for a claim for
benefits later than 120 days after its receipt of a request for review.
The Plan Administrator's notice of denial of benefits must identify
the name of each member of the Advisory Committee and the name and address of
the Advisory Committee member to whom the Claimant may forward his appeal.
8.10 PARTICIPANT DIRECTION OF INVESTMENT. A Participant has the
right to direct the Trustee with respect to the investment or re-investment of
the assets comprising the Participant's individual Account only if the Trustee
consents in writing to permit such direction. If the Trustee consents to
Participant direction of investment, the Trustee will accept direction from
each Participant on a written election form (or other written agreement), as a
part of this Plan, containing such conditions, limitations and other provisions
the parties deem appropriate. The Trustee or, with the Trustee's consent, the
Advisory Committee, may establish written procedures, incorporated specifically
as part of this Plan, relating to Participant direction of investment under
this Section 8.10. The Trustee will maintain a segregated investment Account to
the extent a Participant's Account is subject to Participant self-direction.
The Trustee is not liable for any loss, nor is the Trustee liable for any
breach, resulting from a Participant's direction of the investment of any part
of his directed Account.
The Advisory Committee, to the extent provided in a written loan
policy adopted under Section 9.04, will treat a loan made to a Participant as a
Participant direction of investment under this Section 8.10. To the extent of
the loan outstanding at any time, the borrowing Participant's Account alone
shares in any interest paid on the loan, and it alone bears any expense or loss
it incurs in connection with the loan. The Trustee may retain any principal or
interest paid on the borrowing Participant's loan in an interest bearing
segregated Account on behalf of the borrowing Participant until the Trustee (or
the Named Fiduciary, in the case of a nondiscretionary Trustee) deems it
appropriate to add the amount paid to the Participant's separate Account under
the Plan.
If the Trustee consents to Participant direction of investment of his
Account, the Plan treats any post-December 31, 1981, investment by a
Participant's directed Account in collectibles (as defined by Code Section
408(m)) as a deemed distribution to the Participant for Federal income tax
purposes.
8.03
* * * * * * * * * *
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Defined Contribution Master Plan
ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.01 MEMBERS' COMPENSATION, EXPENSES. The Employer must appoint an
Advisory Committee to administer the Plan, the members of which may or may not
be Participants in the Plan, or which may be the Plan Administrator acting
alone. In the absence of an Advisory Committee appointment, the Plan
Administrator assumes the powers, duties and responsibilities of the Advisory
Committee. The members of the Advisory Committee will serve without
compensation for services as such, but the Employer will pay all expenses of
the Advisory Committee, except to the extent the Trust properly pays for such
expenses, pursuant to Article X.
9.02 TERM. Each member of the Advisory Committee serves until the
appointment of his successor.
9.03 POWERS. In case of a vacancy in the membership of the Advisory
Committee, the remaining members of the Advisory Committee may exercise any and
all of the powers, authority, duties and discretion conferred upon the Advisory
Committee pending the filling of the vacancy.
9.04 GENERAL. The Advisory Committee has the following powers and
duties:
(a) To select a Secretary, who need not be a member of the Advisory
Committee;
(b) To determine the rights of eligibility of an Employee to
participate in the Plan, the value of a Participant's Accrued Benefit
and the Nonforfeitable percentage of each Participant's Accrued
Benefit;
(c) To adopt rules of procedure and regulations necessary for the
proper and efficient administration of the Plan provided the rules are
not inconsistent with the terms of this Agreement;
(d) To construe and enforce the terms of the Plan and the rules
and regulations it adopts, including interpretation of the Plan
documents and documents related to the Plan's operation;
(e) To direct the Trustee as respects the crediting and
distribution of the Trust;
(f) To review and render decisions respecting a claim for (or
denial of a claim for) a benefit under the Plan;
(g) To furnish the Employer with information which the Employer
may require for tax or other purposes;
(h) To engage the service of agents whom it may deem advisable to
assist it with the performance of its duties;
(i) To engage the services of an Investment Manager or Managers
(as defined in ERISA Section 3(38)), each of whom will have full power
and authority to manage, acquire or dispose (or direct the Trustee
with respect to acquisition or disposition) of any Plan asset under
its control;
(j) To establish, in its sole discretion, a nondiscriminatory
policy (see Section 9.04(A)) which the Trustee must observe in making
loans, if any, to Participants and Beneficiaries; and
9.01
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Defined Contribution Master Plan
(k) To establish and maintain a funding standard account and to
make credits and charges to the account to the extent required by and
in accordance with the provisions of the Code.
The Advisory Committee must exercise all of its powers, duties and discretion
under the Plan in a uniform and nondiscriminatory manner.
(A) LOAN POLICY. If the Advisory Committee adopts a loan policy, pursuant
to paragraph (j), the loan policy must be a written document and must include:
(1) the identity of the person or positions authorized to administer the
participant loan program; (2) a procedure for applying for the loan; (3) the
criteria for approving or denying a loan; (4) the limitations, if any, on the
types and amounts of loans available; (5) the procedure for determining a
reasonable rate of interest; (6) the types of collateral which may secure the
loan; and (7) the events constituting default and the steps the Plan will take
to preserve plan assets in the event of default. This Section 9.04
specifically incorporates a written loan policy as part of the Employer's Plan.
9.05 FUNDING POLICY. The Advisory Committee will review, not less
often than annually, all pertinent Employee information and Plan data in order
to establish the funding policy of the Plan and to determine the appropriate
methods of carrying out the Plan's objectives. The Advisory Committee must
communicate periodically, as it deems appropriate, to the Trustee and to any
Plan Investment Manager the Plan's short-term and long-term financial needs so
investment policy can be coordinated with Plan financial requirements.
9.06 MANNER OF ACTION. The decision of a majority of the members
appointed and qualified controls.
9.07 AUTHORIZED REPRESENTATIVE. The Advisory Committee may
authorize any one of its members, or its Secretary, to sign on its behalf any
notices, directions, applications, certificates, consents, approvals, waivers,
letters or other documents. The Advisory Committee must evidence this
authority by an instrument signed by all members and filed with the Trustee.
9.08 INTERESTED MEMBER. No member of the Advisory Committee may
decide or determine any matter concerning the distribution, nature or method of
settlement of his own benefits under the Plan, except in exercising an election
available to that member in his capacity as a Participant, unless the Plan
Administrator is acting alone in the capacity of the Advisory Committee.
9.09 INDIVIDUAL ACCOUNTS. The Advisory Committee will maintain, or
direct the Trustee to maintain, a separate Account, or multiple Accounts, in
the name of each Participant to reflect the Participant's Accrued Benefit under
the Plan. If a Participant re-enters the Plan subsequent to his having a
Forfeiture Break in Service, the Advisory Committee, or the Trustee, must
maintain a separate Account for the Participant's pre-Forfeiture Break in
Service Accrued Benefit and a separate Account for his post-Forfeiture Break in
Service Accrued Benefit, unless the Participant's entire Accrued Benefit under
the Plan is 100% Nonforfeitable.
The Advisory Committee will make its allocations, or request the
Trustee to make its allocations, to the Accounts of the Participants in
accordance with the provisions of Section 9.11. The Advisory Committee may
direct the Trustee to maintain a temporary segregated investment Account in the
name of a Participant to prevent a distortion of income, gain or loss
allocations under Section 9.11. The Advisory Committee must maintain records of
its activities.
9.10 VALUE OF PARTICIPANTS ACCRUED BENEFIT. The value of each
Participant's Accrued Benefit consists of that proportion of the net worth (at
fair market value) of the Employer's Trust Fund which the net credit balance in
his Account (exclusive of the cash value of
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Defined Contribution Master Plan
Incidental benefit insurance contracts) bears to the total net credit balance
in the Accounts (exclusive of the cash value of the incidental benefit
insurance contracts) of all Participants plus the cash surrender value of any
incidental benefit insurance contracts held by the Trustee on the Participant's
life.
For purposes of a distribution under the Plan, the value of a
Participant's Accrued Benefit is its value as of the valuation date
immediately preceding the date of the distribution. Any distribution (other
than a distribution from a segregated Account) made to a Participant (or to his
Beneficiary) more than 90 days after the most recent valuation date may include
interest on the amount of the distribution as an expense of the Trust Fund.
The interest, if any, accrues from such valuation date to the date of the
distribution at the rate established in the Employer's Adoption Agreement.
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. A
"valuation date" under this Plan is each Accounting Date and each interim
valuation date determined under Section 10.14. As of each valuation date the
Advisory Committee must adjust Accounts to reflect net income, gain or loss
since the last valuation date. The valuation period is the period beginning
the day after the last valuation date and ending on the current valuation date.
(A) TRUST FUND ACCOUNTS. The allocation provisions of this paragraph
apply to all Participant Accounts other than segregated investment Accounts.
The Advisory Committee first will adjust the Participant Accounts, as those
Accounts stood at the beginning of the current valuation period, by reducing
the Accounts for any forfeitures arising under Section 5.09 or under Section
9.14, for amounts charged during the valuation period to the Accounts in
accordance with Section 9.13 (relating to distributions) and Section 11.01
(relating to insurance premiums), and for the cash value of incidental benefit
insurance contracts. The Advisory Committee then, subject to the restoration
allocation requirements of Section 5.04 or of Section 9.14, will allocate the
net income, gain or loss pro rata to the adjusted Participant Accounts. The
allocable net income, gain or loss is the net income (or net loss), including
the increase or decrease in the fair market value of assets, since the last
valuation date.
(B) SEGREGATED INVESTMENT ACCOUNTS. A segregated investment Account
receives all income it earns and bears all expense or loss it incurs. The
Advisory Committee will adopt uniform and nondiscriminatory procedures for
determining income or loss of a segregated investment Account in a manner which
reasonably reflects investment directions relating to pooled investments and
investment directions occurring during a valuation period. As of the valuation
date, the Advisory Committee must reduce a segregated Account for any
forfeiture arising under Section 5.09 after the Advisory Committee has made all
other allocations, changes or adjustments to the Account for the Plan Year.
(C) ADDITIONAL RULES. An Excess Amount or suspense account described in
Part 2 of Article III does not share in the allocation of net income, gain or
loss described in this Section 9.11. If the Employer maintains its Plan under a
Code Section 401(k) Adoption Agreement, the Employer may specify in its
Adoption Agreement alternate valuation provisions authorized by that Adoption
Agreement. This Section 9.11 applies solely to the allocation of net income,
gain or loss of the Trust. The Advisory Committee will allocate the Employer
contributions and Participant forfeitures, if any, in accordance with Article
III.
9.12 INDIVIDUAL STATEMENT. As soon as practicable after the
Accounting Date of each Plan Year, but within the time prescribed by ERISA and
the regulations under ERISA, the Plan Administrator will deliver to each
Participant (and to each Beneficiary) a statement reflecting the condition of
his Accrued Benefit in the Trust as of that date and such other information
ERISA requires be furnished the Participant or Beneficiary. No Participant,
except a member of the
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Defined Contribution Master Plan
Advisory Committee, has the right to inspect the records reflecting the Account
of any other Participant.
9.13 ACCOUNT CHARGED. The Advisory Committee will charge a
Participant's Account for all distributions made from that Account to the
Participant, to his Beneficiary or to an alternate payee. The Advisory
Committee also will charge a Participant's Account for any administrative
expenses incurred by the Plan directly related to that Account.
9.14 UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require either
the Trustee or the Advisory Committee to search for, or to ascertain the
whereabouts of, any Participant or Beneficiary. At the time the Participant's
or Beneficiary's benefit becomes distributable under Article VI, the Advisory
Committee, by certified or registered mail addressed to his last known address
of record with the Advisory Committee or the Employer, must notify any
Participant, or Beneficiary, that he is entitled to a distribution under this
Plan. The notice must quote the provisions of this Section 9.14 and otherwise
must comply with the notice requirements of Article VI. If the Participant, or
Beneficiary, fails to claim his distributive share or make his whereabouts
known in writing to the Advisory Committee within 6 months from the date of
mailing of the notice, the Advisory Committee will treat the Participant's or
Beneficiary's unclaimed payable Accrued Benefit as forfeited and will
reallocate the unclaimed payable Accrued Benefit in accordance with Section
3.05. A forfeiture under this paragraph will occur at the end of the notice
period or, if later, the earliest date applicable Treasury regulations would
permit the forfeiture. Pending forfeiture, the Advisory Committee, following
the expiration of the notice period, may direct the Trustee to segregate the
Nonforfeitable Accrued Benefit in a segregated Account and to invest that
segregated Account in Federally insured interest bearing savings accounts or
time deposits (or in a combination of both), or in other fixed income
investments.
If a Participant or Beneficiary who has incurred a forfeiture of his
Accrued Benefit under the provisions of the first paragraph of this Section
9.14 makes a claim, at any time, for his forfeited Accrued Benefit, the
Advisory Committee must restore the Participant's or Beneficiary's forfeited
Accrued Benefit to the same dollar amount as the dollar amount of the Accrued
Benefit forfeited, unadjusted for any gains or losses occurring subsequent to
the date of the forfeiture. The Advisory Committee will make the restoration
during the Plan Year in which the Participant or Beneficiary makes the claim,
first from the amount, if any, of Participant forfeitures the Advisory
Committee otherwise would allocate for the Plan Year, then from the amount, if
any, of the Trust Fund net income or gain for the Plan Year and then from the
amount, or additional amount, the Employer contributes to enable the Advisory
Committee to make the required restoration. The Advisory Committee must direct
the Trustee to distribute the Participant's or Beneficiary's restored Accrued
Benefit to him not later than 60 days after the close of the Plan Year in which
the Advisory Committee restores the forfeited Accrued Benefit. The forfeiture
provisions of this Section 9.14 apply solely to the Participant's or to the
Beneficiary's Accrued Benefit derived from Employer contributions.
* * * * * * * * * *
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ARTICLE X
TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
10.01 ACCEPTANCE. The Trustee accepts the Trust created under the
Plan and agrees to perform the obligations imposed. The Trustee must provide
bond for the faithful performance of its duties under the Trust to the extent
required by ERISA.
10.02 RECEIPT OF CONTRIBUTIONS. The Trustee is accountable to the
Employer for the funds contributed to it by the Employer, but does not have any
duty to see that the contributions received comply with the provisions of the
Plan. The Trustee is not obliged to collect any contributions from the
Employer, nor is obliged to see that funds deposited with it are deposited
according to the provisions of the Plan.
10.03 INVESTMENT POWERS.
[A] DISCRETIONARY TRUSTEE DESIGNATION. If the Employer, in Adoption Agreement
Section 1.02, designates the Trustee to administer the Trust as a discretionary
Trustee, then the Trustee has full discretion and authority with regard to the
investment of the Trust Fund, except with respect to a Plan asset under the
control or direction of a properly appointed Investment Manager or with respect
to a Plan asset properly subject to Employer, Participant or Advisory Committee
direction of investment. The Trustee must coordinate its investment policy
with Plan financial needs as communicated to it by the Advisory Committee. The
Trustee is authorized and empowered, but not by way of limitation, with the
following powers, rights and duties:
(a) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds, put and call
options traded on a national exchange, United States retirement plan
bonds, corporate bonds, debentures, convertible debentures, commercial
paper, U.S. Treasury bills, U.S. Treasury notes and other direct or
indirect obligations of the United States Government or its agencies,
improved or unimproved real estate situated in the United States,
limited partnerships, insurance contracts of any type, mortgages,
notes or other property of any kind, real or personal, to buy or sell
options on common stock on a nationally recognized exchange with or
without holding the underlying common stock, to buy and sell
commodities, commodity options and contracts for the future delivery
of commodities, and to make any other investments the Trustee deems
appropriate, as a prudent man would do under like circumstances with
due regard for the purposes of this Plan. Any investment made or
retained by the Trustee in good faith is proper but must be of a kind
constituting a diversification considered by law suitable for trust
investments.
(b) To retain in cash so much of the Trust Fund as it may deem
advisable to satisfy liquidity needs of the Plan and to deposit any
cash held in the Trust Fund in a bank account at reasonable interest.
(c) To invest, if the Trustee is a bank or similar financial
institution supervised by the United States or by a State, in any type
of deposit of the Trustee (or of a bank related to the Trustee within
the meaning of Code Section 414(b)) at a reasonable rate of interest
or in a common trust fund, as described in Code Section 584, or in a
collective investment fund, the provisions of which govern the
investment of such assets and which the Plan incorporates by this
reference, which the Trustee (or its affiliate, as defined in Code
Section 1504) maintains exclusively for the collective investment of
money contributed by the bank (or the affiliate) in its capacity as
trustee and which conforms to the rules of the Comptroller of the
Currency.
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(d) To manage, sell, contract to sell, grant options to purchase,
convey, exchange, transfer, abandon, improve, repair, insure, lease
for any term even though commencing in the future or extending beyond
the term of the Trust, and otherwise deal with au property, real or
personal, in such manner, for such considerations and on such terms
and conditions as the Trustee decides.
(e) To credit and distribute the Trust as directed by the Advisory
Committee. The Trustee is not obliged to inquire as to whether any
payee or distributee is entitled to any payment or whether the
distribution is proper or within the terms of the Plan, or as to the
manner of making any payment or distribution. The Trustee is
accountable only to the Advisory Committee for any payment or
distribution made by it in good faith on the order or direction of the
Advisory Committee.
(f) To borrow money, to assume indebtedness, extend mortgages and
encumber by mortgage or pledge.
(g) To compromise, contest, arbitrate or abandon claims and
demands, in its discretion.
(h) To have with respect to the Trust all of the rights of an
individual owner, including the power to give proxies, to participate
in any voting trusts, mergers, consolidations or liquidations, and to
exercise or sell stock subscriptions or conversion rights.
(i) To lease for oil, gas and other mineral purposes and to create
mineral severances by grant or reservation; to pool or unitize
interests in oil, gas and other minerals; and to enter into operating
agreements and to execute division and transfer orders.
(j) To hold any securities or other property in the name of the
Trustee or its nominee, with depositories or agent depositories or in
another form as it may deem best, with or without disclosing the trust
relationship.
(k) To perform any and all other acts in its judgment necessary or
appropriate for the proper and advantageous management, investment and
distribution of the Trust.
(l) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make payment
or delivery of the funds or property until final adjudication is made
by a court of competent jurisdiction.
(m) To file all tax returns required of the Trustee.
(n) To furnish to the Employer, the Plan Administrator and the
Advisory Committee an annual statement of account showing the
condition of the Trust Fund and all investments, receipts,
disbursements and other transactions effected by the Trustee during
the Plan Year covered by the statement and also stating the assets of
the Trust held at the end of the Plan Year, which accounts are
conclusive on all persons, including the Employer, the Plan
Administrator and the Advisory Committee, except as to any act or
transaction concerning which the Employer, the Plan Administrator or
the Advisory Committee files with the Trustee written exceptions or
objections within 90 days after the receipt of the accounts or for
which ERISA authorizes a longer period within which to object.
(o) To begin, maintain or defend any litigation necessary in
connection with the administration of the Plan, except that the
Trustee is not obliged or required to do so unless indemnified to its
satisfaction.
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Defined Contribution Master Plan
[B] Nondiscretionary Trustee Designation/Appointment of Custodian. If the
Employer, in its Adoption Agreement Section 1.02, designates the Trustee to
administer the Trust as a nondiscretionary Trustee, then the Trustee will not
have any discretion or authority with regard to the investment of the Trust
Fund, but must act solely as a directed trustee of the funds contributed to it.
A nondiscretionary Trustee, as directed trustee of the funds held by it under
the Employer's Plan, is authorized and empowered, by way of limitation, with
the following powers, rights and duties, each of which the nondiscretionary
Trustee exercises solely as directed trustee in accordance with the written
direction of the Named Fiduciary (except to the extent a Plan asset is subject
to the control and management of a properly appointed Investment Manager or
subject to Advisory Committee or Participant direction of investment):
(a) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds, put and call
options traded on a national exchange, United States retirement plan
bonds, corporate bonds, debentures, convertible debentures, commercial
paper, U.S. Treasury bills, U.S. Treasury notes and other direct or
indirect obligations of the United States Government or its agencies,
improved or unimproved real estate situated in the United States,
limited partnerships, insurance contracts of any type, mortgages,
notes or other property of any kind, real or personal, to buy or sell
options on common stock on a nationally recognized options exchange
with or without holding the underlying common stock, to buy and sell
commodities, commodity options and contracts for the future delivery
of commodities, and to make any other investments the Named Fiduciary
deems appropriate.
(b) To retain in cash so much of the Trust Fund as the Named
Fiduciary may direct in writing to satisfy liquidity needs of the Plan
and to deposit any cash held in the Trust Fund in a bank account at
reasonable interest, including, specific authority to invest in any
type of deposit of the Trustee (or of a bank related to the Trustee
within the meaning of Code Section 414(b)) at a reasonable rate of
interest.
(c) To sell, contract to sell, grant options to purchase, convey,
exchange, transfer, abandon, improve, repair, insure, lease for any
term even though commencing in the future or extending beyond the term
of the Trust, and otherwise deal with all property, real or personal,
in such manner, for such considerations and on such terms and
conditions as the Named Fiduciary directs in writing.
(d) To credit and distribute the Trust as directed by the Advisory
Committee. The Trustee is not obliged to inquire as to whether any
payee or distributee is entitled to any payment or whether the
distribution is proper or within the terms of the Plan, or as to the
manner of making any payment or distribution. The Trustee is
accountable only to the Advisory Committee for any payment or
distribution made by it in good faith on the order or direction of the
Advisory Committee.
(e) To borrow money, to assume indebtedness, extend mortgages and
encumber by mortgage or pledge.
(f) To have with respect to the Trust all of the rights of an
individual owner, including the power to give proxies, to participate
in any voting trusts, mergers, consolidations or Liquidations, and to
exercise or sell stock subscriptions or conversion rights, provided
the exercise of any such powers is in accordance with and at the
written direction of the Named Fiduciary.
(g) To lease for oil, gas and other mineral purposes and to create
mineral severances by grant or reservation; to pool or unitize
interests in oil, gas and other minerals; and to enter into operating
agreements and to execute division and transfer orders, provided the
exercise
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Defined Contribution Master Plan
of any such powers is in accordance with and at the written direction
of the Named Fiduciary.
(h) To hold any securities or other property in the name of the
nondiscretionary Trustee or its nominee, with depositories or agent
depositories or in another form as the Named Fiduciary may deem best,
with or without disclosing the custodial relationship.
(i) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make payment
or delivery of the funds or property until a court of competent
jurisdiction makes final adjudication.
(j) To file all tax returns required of the Trustee.
(k) To furnish to the Named Fiduciary, the Employer, the Plan
Administrator and the Advisory Committee an annual statement of
account showing the condition of the Trust Fund and all investments,
receipts, disbursements and other transactions effected by the
nondiscretionary Trustee during the Plan Year covered by the statement
and also stating the assets of the Trust held at the end of the Plan
Year, which accounts are conclusive on all persons, including the
Named Fiduciary, the Employer, the Plan Administrator and the Advisory
Committee, except as to any act or transaction concerning which the
Named Fiduciary, the Employer, the Plan Administrator or the Advisory
Committee files with the nondiscretionary Trustee written exceptions
or objections within 90 days after the receipt of the accounts or for
which ERISA authorizes a longer period within which to object.
(l) To begin, maintain or defend any litigation necessary in
connection with the administration of the Plan, except that the
Trustee is not obliged or required to do so unless indemnified to its
satisfaction.
APPOINTMENT OF CUSTODIAN. The Employer may appoint a Custodian under
the Plan, the acceptance by the Custodian indicated on the execution page of
the Employer's Adoption Agreement. If the Employer appoints a Custodian, the
Employer's Plan must have a discretionary Trustee, as described in Section
10.03[A]. A Custodian has the same powers, rights and duties as a
nondiscretionary Trustee, as described in this Section 10.03[B]. The Custodian
accepts the terms of the Plan and Trust by executing the Employer's Adoption
Agreement. Any reference in the Plan to a Trustee also is a reference to a
Custodian where the context of the Plan dictates. A limitation of the
Trustee's liability by Plan provision also acts as a limitation of the
Custodian's liability. Any action taken by the Custodian at the discretionary
Trustee's direction satisfies any provision in the Plan referring to the
Trustee's taking that action.
MODIFICATION OF POWERS/LIMITED RESPONSIBILITY. The Employer and the
Custodian or nondiscretionary Trustee, by letter agreement, may limit the
powers of the Custodian or nondiscretionary Trustee to any combination of
powers listed within this Section 10.03[B]. If there is a Custodian or a
nondiscretionary Trustee under the Employer's Plan, then the Employer, in
adopting this Plan acknowledges the Custodian or nondiscretionary Trustee has
no discretion with respect to the investment or re-investment of the Trust Fund
and that the Custodian or nondiscretionary Trustee is acting solely as
custodian or as directed trustee with respect to the assets comprising the
Trust Fund.
[C] LIMITATION OF POWERS OF CERTAIN CUSTODIANS. If a Custodian is a bank
which, under its governing state law, does not possess trust powers, then
paragraphs (a), (c), (e), (f), (g) of Section 10.03[B], Section 10.16 and
Article XI do not apply to that bank and that bank only has the power and
authority to exercise the remaining powers, rights and duties under Section
10.03[B].
10.04
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Defined Contribution Master Plan
[D] NAMED FIDUCIARY/LIMITATION OF LIABILITY OF NONDISCRETIONARY TRUSTEE OR
CUSTODIAN. Under a nondiscretionary Trustee designation, the Named Fiduciary
under the Employer's Plan has the sole responsibility for the management and
control of the Employer's Trust Fund, except with respect to a Plan asset under
the control or direction of a properly appointed Investment Manager or with
respect to a Plan asset properly subject to Participant or Advisory Committee
direction of investment. If the Employer appoints a Custodian, the Named
Fiduciary is the discretionary Trustee. Under a nondiscretionary Trustee
designation, unless the Employer designates in writing another person or
persons to serve as Named Fiduciary, the Named Fiduciary under the Plan is the
president of a corporate Employer, the managing partner of a partnership
Employer or the sole proprietor, as appropriate. The Named Fiduciary will
exercise its management and control of the Trust Fund through its written
direction to the nondiscretionary Trustee or to the Custodian, whichever
applies to the Employer's Plan.
The nondiscretionary Trustee or Custodian has no duty to review or to
make recommendations regarding investments made at the written direction of the
Named Fiduciary. The nondiscretionary Trustee or Custodian must retain any
investment obtained at the written direction of the Named Fiduciary until
further directed in writing by the Named Fiduciary to dispose of such
investment. The nondiscretionary Trustee or Custodian is not liable in any
manner or for any reason for making, retaining or disposing of any investment
pursuant to any written direction described in this paragraph. Furthermore,
the Employer agrees to indemnify and to hold the nondiscretionary Trustee or
Custodian harmless from any damages, costs or expenses, including reasonable
counsel fees, which the nondiscretionary Trustee or Custodian may incur as a
result of any claim asserted against the nondiscretionary Trustee, the
Custodian or the Trust arising out of the nondiscretionary Trustee's or
Custodian's compliance with any written direction described in this paragraph.
[E] PARTICIPANT LOANS. This Section 10.03[E] specifically authorizes the
Trustee to make loans on a nondiscriminatory basis to a Participant or to a
Beneficiary in accordance with the loan policy established by the Advisory
Committee, provided: (1) the loan policy satisfies the requirements of Section
9.04; (2) loans are available to all Participants and Beneficiaries on a
reasonably equivalent basis and are not available in a greater amount for
Highly Compensated Employees than for other Employees; (3) any loan is
adequately secured and bears a reasonable rate of interest; (4) the loan
provides for repayment within a specified time; (5) the default provisions of
the note prohibit offset of the Participant's Nonforfeitable Accrued Benefit
prior to the time the Trustee otherwise would distribute the Participant's
Nonforfeitable Accrued Benefit; (6) the amount of the loan does not exceed (at
the time the Plan extends the loan) the present value of the Participant's
Nonforfeitable Accrued Benefit; and (7) the loan otherwise conforms to the
exemption provided by Code Section 4975(d)(1). If the joint and survivor
requirements of Article VI apply to the Participant, the Participant may not
pledge any portion of his Accrued Benefit as security for a loan made after
August 18, 1985, unless, within the 90 day period ending on the date the pledge
becomes effective, the Participant's spouse, if any, consents (in a manner
described in Section 6.05 other than the requirement relating to the consent of
a subsequent spouse) to the security or, by separate consent, to an increase in
the amount of security. If the Employer is an unincorporated trade or
business, a Participant who is an Owner-Employee may not receive a loan from
the Plan, unless he has obtained a prohibited transaction exemption from the
Department of Labor. If the Employer is an "S Corporation," a Participant who
is a shareholder-employee (an employee or an officer) who, at any time during
the Employer's taxable year, owns more than 5%, either directly or by
attribution under Code Section 318(a)(1), of the Employer's outstanding stock
may not receive a loan from the Plan, unless he has obtained a prohibited
transaction exemption from the Department of Labor. If the Employer is not an
unincorporated trade or business nor an "S Corporation," this Section 10.03[E]
does not impose any restrictions on the class of Participants eligible for a
loan from the Plan.
[F] INVESTMENT IN QUALIFYING EMPLOYER SECURITIES AND QUALIFYING EMPLOYER REAL
PROPERTY. The investment options in this Section 10.03[F] include the ability
to invest in qualifying Employer securities or qualifying Employer real
property, as defined in and as limited by ERISA. If the Employer's Plan is a
Nonstandardized profit sharing plan, it may elect in its Adoption Agreement to
10.05
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Defined Contribution Master Plan
permit the aggregate investments in qualifying Employer securities and in
qualifying Employer real property to exceed 10% of the value of Plan assets.
10.04 RECORDS AND STATEMENTS. The records of the Trustee pertaining
to the Plan must be open to the inspection of the Plan Administrator, the
Advisory Committee and the Employer at all reasonable times and may be audited
from time to time by any person or persons as the Employer, Plan Administrator
or Advisory Committee may specify in writing. The Trustee must furnish the
Plan Administrator or Advisory Committee with whatever information relating to
the Trust Fund the Plan Administrator or Advisory Committee considers
necessary.
10.05 FEES AND EXPENSES FROM FUND. A Trustee or Custodian will
receive reasonable annual compensation as may be agreed upon from time to time
between the Employer and the Trustee or Custodian. No person who is receiving
full pay from the Employer may receive compensation for services as Trustee or
as Custodian. The Trustee will pay from the Trust Fund all fees and expenses
reasonably incurred by the Plan, to the extent such fees and expenses are for
the ordinary and necessary administration and operation of the Plan, unless the
Employer pays such fees and expenses. Any fee or expense paid, directly or
indirectly, by the Employer is not an Employer contribution to the Plan,
provided the fee or expense relates to the ordinary and necessary
administration of the Fund.
10.06 PARTIES TO LITIGATION. Except as otherwise provided by ERISA,
no Participant or Beneficiary is a necessary party or is required to receive
notice of process in any court proceeding involving the Plan, the Trust Fund or
any fiduciary of the Plan. Any final judgment entered in any proceeding will
be conclusive upon the Employer, the Plan Administrator, the Advisory
Committee, the Trustee, Custodian, Participants and Beneficiaries.
10.07 PROFESSIONAL AGENTS. The Trustee may employ and pay from the
Trust Fund reasonable compensation to agents, attorneys, accountants and other
persons to advise the Trustee as in its opinion may be necessary. The Trustee
may delegate to any agent, attorney, accountant or other person selected by it
any non-Trustee power or duty vested in it by the Plan, and the Trustee may act
or refrain from acting on the advice or opinion of any agent, attorney,
accountant or other person so selected.
10.08 DISTRIBUTION OF CASH OR PROPERTY. The Trustee may make
distribution under the Plan in cash or property, or partly in each, at its fair
market value as determined by the Trustee. For purposes of a distribution to a
Participant or to a Participant's designated Beneficiary or surviving spouse,
"property" includes a Nontransferable Annuity Contract, provided the contract
satisfies the requirements of this Plan.
10.09 DISTRIBUTION DIRECTIONS. If no one claims a payment or
distribution made from the Trust, the Trustee must promptly notify the Advisory
Committee and then dispose of the payment in accordance with the subsequent
direction of the Advisory Committee.
10.10 THIRD PARTY/MULTIPLE TRUSTEES. No person dealing with the
Trustee is obligated to see to the proper application of any money paid or
property delivered to the Trustee, or to inquire whether the Trustee has acted
pursuant to any of the terms of the Plan. Each person dealing with the Trustee
may act upon any notice, request or representation in writing by the Trustee,
or by the Trustee's duly authorized agent, and is not liable to any person in
so acting. The certificate of the Trustee that it is acting in accordance with
the Plan will be conclusive in favor of any person relying on the certificate.
If more than two persons act as Trustee, a decision of the majority of such
persons controls with respect to any decision regarding the administration or
investment of the Trust Fund or of any portion of the Trust Fund with respect
to which such persons act as Trustee. However, the signature of only one
Trustee is necessary to effect any transaction on behalf of the Trust.
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Defined Contribution Master Plan
10.11 RESIGNATION. The Trustee or Custodian may resign its position
at any time by giving 30 days' written notice in advance to the Employer and to
the Advisory Committee. if the Employer fails to appoint a successor Trustee
within 60 days of its receipt of the Trustee's written notice of resignation,
the Trustee will treat the Employer as having appointed itself as Trustee and
as having filed its acceptance of appointment with the former Trustee. The
Employer, in its sole discretion, may replace a Custodian. If the Employer
does not replace a Custodian, the discretionary Trustee will assume possession
of Plan assets held by the former Custodian.
10.12 REMOVAL. The Employer, by giving 30 days' written notice in
advance to the Trustee, may remove any Trustee or Custodian. In the event of
the resignation or removal of a Trustee, the Employer must appoint a successor
Trustee if it intends to continue the Plan. If two or more persons hold the
position of Trustee, in the event of the removal of one such person, during any
period the selection of a replacement is pending, or during any period such
person is unable to serve for any reason, the remaining person or persons will
act as the Trustee.
10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE. Each successor Trustee
succeeds to the title to the Trust vested in his predecessor by accepting in
writing his appointment as successor Trustee and by filing the acceptance with
the former Trustee and the Advisory Committee without the signing or filing of
any further statement. The resigning or removed Trustee, upon receipt of
acceptance in writing of the Trust by the successor Trustee, must execute all
documents and do all acts necessary to vest the title of record in any
successor Trustee. Each successor Trustee has and enjoys all of the powers,
both discretionary and ministerial, conferred under this Agreement upon his
predecessor. A successor Trustee is not personally liable for any act or
failure to act of any predecessor Trustee, except as required under ERISA.
With the approval of the Employer and the Advisory Committee, a successor
Trustee, with respect to the Plan, may accept the account rendered and the
property delivered to it by a predecessor Trustee without incurring any
liability or responsibility for so doing.
10.14 VALUATION OF TRUST. The Trustee must value the Trust Fund as
of each Accounting Date to determine the fair market value of each
Participant's Accrued Benefit in the Trust. The Trustee also must value the
Trust Fund on such other valuation dates as directed in writing by the Advisory
Committee or as required by the Employer's Adoption Agreement.
10.15 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER, ANCILLARY
TRUSTEE OR INDEPENDENT FIDUCIARY APPOINTED. The Trustee is not liable for the
acts or omissions of any Investment Manager the Advisory Committee may appoint,
nor is the Trustee under any obligation to invest or otherwise manage any asset
of the Plan which is subject to the management of a properly appointed
Investment Manager. The Advisory Committee, the Trustee and any properly
appointed Investment Manager may execute a letter agreement as a part of this
Plan delineating the duties, responsibilities and liabilities of the Investment
Manager with respect to any part of the Trust Fund under the control of the
Investment Manager.
The limitation on liability described in this Section 10.15 also
applies to the acts or omissions of any ancillary trustee or independent
fiduciary properly appointed under Section 10.17 of the Plan. However, if a
discretionary Trustee, pursuant to the delegation described in Section 10.17 of
the Plan, appoints an ancillary trustee, the discretionary Trustee is
responsible for the periodic review of the ancillary trustee's actions and must
exercise its delegated authority in accordance with the terms of the Plan and
in a manner consistent with ERISA. The Employer, the discretionary Trustee and
an ancillary trustee may execute a letter agreement as a part of this Plan
delineating any indemnification agreement between the parties.
10.16 INVESTMENT IN GROUP TRUST FUND. The Employer, by adopting
this Plan, specifically authorizes the Trustee to invest all or any portion of
the assets comprising the Trust Fund in any group trust fund which at the time
of the investment provides for the pooling of the assets of plans qualified
under Code Section 401(a). This authorization applies solely to a group trust
fund
10.06
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Defined Contribution Master Plan
exempt from taxation under Code Section 501(a) and the trust agreement of which
satisfies the requirements of Revenue Ruling 81-100. The provisions of the
group trust fund agreement, as amended from time to time, are by this reference
incorporated within this Plan and Trust. The provisions of the group trust fund
will govern any investment of Plan assets in that fund. The Employer must
specify in an attachment to its adoption agreement the group trust fund(s) to
which this authorization applies. If the Trustee is acting as a
nondiscretionary Trustee, the investment in the group trust fund is available
only in accordance with a proper direction, by the Named Fiduciary, in
accordance with Section 10.03[B]. Pursuant to paragraph (c) of Section 10.03[A]
of the Plan, a Trustee has the authority to invest in certain common trust funds
and collective investment funds without the need for the authorizing addendum
described in this Section 10.16.
Furthermore, at the Employer's direction, the Trustee, for collective
investment purposes, may combine into one trust fund the Trust created under
this Plan with the Trust created under any other qualified retirement plan the
Employer maintains. However, the Trustee must maintain separate records of
account for the assets of each Trust in order to reflect properly each
Participant's Accrued Benefit under the plan(s) in which he is a Participant.
10.17 APPOINTMENT OF ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY. The
Employer, in writing, may appoint any person in any State to act as ancillary
trustee with respect to a designated portion of the Trust Fund, subject to the
consent required under Section 1.02 if the Master Plan Sponsor is a financial
institution. An ancillary trustee must acknowledge in writing its acceptance of
the terms and conditions of its appointment as ancillary trustee and its
fiduciary status under ERISA. The ancillary trustee has the rights, powers,
duties and discretion as the Employer may delegate, subject to any limitations
or directions specified in the instrument evidencing appointment of the
ancillary trustee and to the terms of the Plan or of ERISA. The investment
powers delegated to the ancillary trustee may include any investment powers
available under Section 10.03 of the Plan including the right to invest any
portion of the assets of the Trust Fund in a common trust fund, as described in
Code Section 584, or in any collective investment fund, the provisions of which
govern the investment of such assets and which the Plan incorporates by this
reference, but only if the ancillary trustee is a bank or similar financial
institution supervised by the United States or by a State and the ancillary
trustee (or its affiliate, as defined in Code Section 1504) maintains the common
trust fund or collective investment fund exclusively for the collective
investment of money contributed by the ancillary trustee (or its affiliate) in a
trustee capacity and which conforms to the rules of the Comptroller of the
Currency. The Employer also may appoint as an ancillary trustee, the trustee of
any group trust fund designated for investment pursuant to the provisions of
Section 10.16 of the Plan.
The ancillary trustee may resign its position at any time by providing
at least 30 days' advance written notice to the Employer, unless the Employer
waives this notice requirement. The Employer, in writing, may remove an
ancillary trustee at any time. In the event of resignation or removal, the
Employer may appoint another ancillary trustee, return the assets to the control
and management of the Trustee or receive such assets in the capacity of
ancillary trustee. The Employer may delegate its responsibilities under this
Section 10.17 to a discretionary Trustee under the Plan, but not to a
nondiscretionary Trustee or to a Custodian, subject to the acceptance by the
discretionary Trustee of that delegation.
If the U.S. Department of Labor ("the Department") requires engagement
of an independent fiduciary to have control or management of all or a portion of
the Trust Fund, the Employer will appoint such independent fiduciary, as
directed by the Department. The independent fiduciary will have the duties,
responsibilities and powers prescribed by the Department and will exercise those
duties, responsibilities and powers in accordance with the terms, restrictions
and conditions established by the Department and, to the extent not inconsistent
with ERISA, the terms of the Plan. The independent fiduciary must accept its
appointment in writing and must acknowledge its status as a fiduciary of the
Plan.
* * * * * * * * * *
10.08
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Defined Contribution Master Plan
ARTICLE XI
PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
11.01 INSURANCE BENEFIT. The Employer may elect to provide
incidental life insurance benefits for insurable Participants who consent to
Life insurance benefits by signing the appropriate insurance company
application form. The Trustee will not purchase any incidental life insurance
benefit for any Participant prior to an allocation to the Participant's
Account. At an insured Participant's written direction, the Trustee will use
all or any portion of the Participant's nondeductible voluntary contributions,
if any, to pay insurance premiums covering the Participant's life. This
Section 11.01 also authorizes the purchase of life insurance, for the benefit
of the Participant, on the life of a family member of the Participant or on any
person in whom the Participant has an insurable interest. However, if the
policy is on the joint lives of the Participant and another person, the Trustee
may not maintain that policy if that other person predeceases the Participant.
The Employer will direct the Trustee as to the insurance company and
insurance agent through which the Trustee is to purchase the insurance
contracts, the amount of the coverage and the applicable dividend plan. Each
application for a policy, and the policies themselves, must designate the
Trustee as sole owner, with the right reserved to the Trustee to exercise any
right or option contained in the policies, subject to the terms and provisions
of this Agreement. The Trustee must be the named beneficiary for the Account
of the insured Participant. Proceeds of insurance contracts paid to the
Participant's Account under this Article XI are subject to the distribution
requirements of Article V and of Article VI. The Trustee will not retain any
such proceeds for the benefit of the Trust.
The Trustee will charge the premiums on any incidental benefit
insurance contract covering the life of a Participant against the Account of
that Participant. The Trustee will hold all incidental benefit insurance
contracts issued under the Plan as assets of the Trust created under the Plan.
(A) INCIDENTAL INSURANCE BENEFITS. The aggregate of life insurance
premiums paid for the benefit of a Participant, at all times, may not exceed
the following percentages of the aggregate of the Employer's contributions
allocated to any Participant's Account: (i) 49% in the case of the purchase of
ordinary life insurance contracts; or (ii) 25% in the case of the purchase of
term life insurance or universal life insurance contracts. If the Trustee
purchases a combination of ordinary life insurance contract(s) and term life
insurance or universal life insurance contract(s), then the sum of one-half of
the premiums paid for the ordinary life insurance contract(s) and the premiums
paid for the term life insurance or universal life insurance contract(s) may
not exceed 25% of the Employer contributions allocated to any Participant's
Account.
(B) EXCEPTION FOR CERTAIN PROFIT SHARING PLANS. If the Employer's Plan is
a profit sharing plan, the incidental insurance benefits requirement does not
apply to the Plan if the Plan purchases life insurance benefits only from
Employer contributions accumulated in the Participant's Account for at least
two years (measured from the allocation date).
11.02 LIMITATION ON LIFE INSURANCE PROTECTION. The Trustee will not
continue any life insurance protection for any Participant beyond his annuity
starting date (as defined in Article VI). If the Trustee holds any incidental
benefit insurance contract(s) for the benefit of a Participant when he
terminates his employment (other than by reason of death), the Trustee must
proceed as follows:
11.01
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Defined Contribution Master Plan
(a) If the entire cash value of the contract(s) is vested in the
terminating Participant, or if the contract(s) will have no cash value
at the end of the policy year in which termination of employment
occurs, the Trustee will transfer the contract(s) to the Participant
endorsed so as to vest in the transferee all right, title and interest
to the contract(s), free and clear of the Trust; subject however, to
restrictions as to surrender or payment of benefits as the issuing
insurance company may permit and as the Advisory Committee directs;
(b) If only part of the cash value of the contract(s) is vested in
the terminating Participant, the Trustee, to the extent the
Participant's interest in the cash value of the contract(s) is not
vested, may adjust the Participant's interest in the value of his
Account attributable to Trust assets other than incidental benefit
insurance contracts and proceed as in (a), or the Trustee must effect
a loan from the issuing insurance company on the sole security of the
contract(s) for an amount equal to the difference between the cash
value of the contract(s) at the end of the policy year in which
termination of employment occurs and the amount of the cash value that
is vested in the terminating Participant, and the Trustee must
transfer the contract(s) endorsed so as to vest in the transferee all
right, title and interest to the contract(s), free and clear of the
Trust; subject however, to the restrictions as to surrender or payment
of benefits as the issuing insurance company may permit and the
Advisory Committee directs;
(c) If no part of the cash value of the contract(s) is vested in
the terminating Participant, the Trustee must surrender the
contract(s) for cash proceeds as may be available.
In accordance with the written direction of the Advisory Committee,
the Trustee will make any transfer of contract(s) under this Section 11.02 on
the Participant's annuity starting date (or as soon as administratively
practicable after that date). The Trustee may not transfer any contract under
this Section 11.02 which contains a method of payment not specifically
authorized by Article VI or which fails to comply with the joint and survivor
annuity requirements, if applicable, of Article VI. In this regard, the
Trustee either must convert such a contract to cash and distribute the cash
instead of the contract, or before making the transfer, require the issuing
company to delete the unauthorized method of payment option from the contract.
11.03 DEFINITIONS. For purposes of this Article XI:
(a) "Policy" means an ordinary life insurance contract or a term
life insurance contract issued by an insurer on the life of a
Participant.
(b) "Issuing insurance company" is any Life insurance company
which has issued a policy upon application by the Trustee under the
terms of this Agreement.
(c) "Contract" or "Contracts" means a policy of insurance. In the
event of any conflict between the provisions of this Plan and the
terms of any contract or policy of insurance issued in accordance with
this Article XI, the provisions of the Plan control.
(d) "Insurable Participant" means a Participant to whom an
insurance company, upon an application being submitted in accordance
with the Plan, will issue insurance coverage, either as a standard
risk or as a risk in an extra mortality classification.
11.04 DIVIDEND PLAN. The dividend plan is premium reduction unless
the Advisory Committee directs the Trustee to the contrary. The Trustee must
use all dividends for a contract to purchase insurance benefits or additional
insurance benefits for the Participant on whose Life the insurance company has
issued the contract. Furthermore, the Trustee must arrange, where possible,
for all policies issued on the lives of Participants under the Plan to have the
same premium due
11.02
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Defined Contribution Master Plan
date and all ordinary life insurance contracts to contain guaranteed cash
values with as uniform basic options as are possible to obtain. The term
"dividends" includes policy dividends, refunds of premiums and other credits.
11.05 INSURANCE COMPANY NOT A PARTY TO AGREEMENT. No insurance
company, solely in its capacity as an issuing insurance company, is a party to
this Agreement nor is the company responsible for its validity.
11.06 INSURANCE COMPANY NOT RESPONSIBLE FOR TRUSTEE'S ACTIONS. No
insurance company, solely in its capacity as an issuing insurance company,
need examine the terms of this Agreement nor is responsible for any action
taken by the Trustee.
11.07 INSURANCE COMPANY RELIANCE ON TRUSTEE'S SIGNATURE. For the
purpose of making application to an insurance company and in the exercise of
any right or option contained in any policy, the insurance company may rely
upon the signature of the Trustee and is saved harmless and completely
discharged in acting at the direction and authorization of the Trustee.
11.08 ACQUITTANCE. An insurance company is discharged from all
liability for any amount paid to the Trustee or paid in accordance with the
direction of the Trustee, and is not obliged to see to the distribution or
further application of any moneys it so pays.
11.09 DUTIES OF INSURANCE COMPANY. Each insurance company must keep
such records, make such identification of contracts, funds and accounts within
funds, and supply such information as may be necessary for the proper
administration of the Plan under which it is carrying insurance benefits.
NOTE: The provisions of this Article XI are not applicable, and the
Plan may not invest in insurance contracts, if a Custodian signatory to the
Adoption Agreement is a bank which has not acquired trust powers from its
governing state banking authority.
* * * * * * * * * *
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Defined Contribution Master Plan
ARTICLE XII
MISCELLANEOUS
12.01 EVIDENCE. Anyone required to give evidence under the terms of
the Plan may do so by certificate, affidavit, document or other information
which the person to act in reliance may consider pertinent, reliable and
genuine, and to have been signed, made or presented by the proper party or
parties. The Advisory Committee and the Trustee are fully protected in acting
and relying upon any evidence described under the immediately preceding
sentence.
12.02 NO RESPONSIBILITY FOR EMPLOYER ACTI0N. Neither the Trustee
nor the Advisory Committee has any obligation or responsibility with respect to
any action required by the Plan to be taken by the Employer, any Participant or
eligible Employee, or for the failure of any of the above persons to act or
make any payment or contribution, or to otherwise provide any benefit
contemplated under this Plan. Furthermore, the Plan does not require the
Trustee or the Advisory Committee to collect any contribution required under
the Plan, or to determine the correctness of the amount of any Employer
contribution. Neither the Trustee nor the Advisory Committee need inquire into
or be responsible for any action or failure to act on the part of the others,
or on the part of any other person who has any responsibility regarding the
management, administration or operation of the Plan, whether by the express
terms of the Plan or by a separate agreement authorized by the Plan or by the
applicable provisions of ERISA. Any action required of a corporate Employer
must be by its Board of Directors or its designate.
12.03 FIDUCIARIES NOT INSURERS. The Trustee, the Advisory
Committee, the Plan Administrator and the Employer in no way guarantee the
Trust Fund from loss or depreciation. The Employer does not guarantee the
payment of any money which may be or becomes due to any person from the Trust
Fund. The Liability of the Advisory Committee and the Trustee to make any
payment from the Trust Fund at any time and all times is limited to the then
available assets of the Trust.
12.04 WAIVER OF NOTICE. Any person entitled to notice under the
Plan may waive the notice, unless the Code or Treasury regulations prescribe
the notice or ERISA specifically or impliedly prohibits such a waiver.
12.05 SUCCESSORS. The Plan is binding upon all persons entitled to
benefits under the Plan, their respective heirs and legal representatives, upon
the Employer, its successors and assigns, and upon the Trustee, the Advisory
Committee, the Plan Administrator and their successors.
12.06 WORD USAGE. Words used in the masculine also apply to the
feminine where applicable, and wherever the context of the Employer's Plan
dictates, the plural includes the singular and the singular includes the
plural.
12.07 STATE LAW. The law of the state of the Employer's principal
place of business (unless otherwise designated in an addendum to the Employer's
Adoption Agreement) will determine all questions arising with respect to the
provisions of this Agreement except to the extent superseded by Federal law.
12.08 EMPLOYER'S RIGHT TO PARTICIPATE. If the Employer's Plan fails
to qualify or to maintain qualification or if the Employer makes any amendment
or modification to a provision of this Plan (other than a proper completion of
an elective provision under the Adoption Agreement or the attachment of an
addendum authorized by the Plan or by the Adoption Agreement), the Employer may
no longer participate under this Master Plan. The Employer also may not
participate (or continue to participate) in this Master Plan if the Trustee or
Custodian (or a change in the Trustee or Custodian) does not satisfy the
requirements of Section 1.02 of the Plan. If the
12.01
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Defined Contribution Master Plan
Employer is not entitled to participate under this Master Plan, the Employer's
Plan is an individually-designed plan and the reliance procedures specified in
the applicable Adoption Agreement no longer will apply.
12.09 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or
with respect to the establishment of the Trust, or any modification or
amendment to the Plan or Trust, or in the creation of any Account, or the
payment of any benefit, gives any Employee, Employee-Participant or any
Beneficiary any right to continue employment, any legal or equitable right
against the Employer, or Employee of the Employer, or against the Trustee, or
its agents or employees, or against the Plan Administrator, except as expressly
provided by the Plan, the Trust, ERISA or by a separate agreement.
* * * * * * * * * *
12.02
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Defined Contribution Master Plan
ARTICLE XIII
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the
Employer has no beneficial interest in any asset of the Trust and no part of
any asset in the Trust may ever revert to or be repaid to an Employer, either
directly or indirectly; nor, prior to the satisfaction of all liabilities with
respect to the Participants and their Beneficiaries under the Plan, may any
part of the corpus or income of the Trust Fund, or any asset of the Trust, be
(at any time) used for, or diverted to, purposes other than the exclusive
benefit of the Participants or their Beneficiaries. However, if the
Commissioner of Internal Revenue, upon the Employer's request for initial
approval of this Plan, determines the Trust created under the Plan is not a
qualified trust exempt from Federal income tax, then (and only then) the
Trustee, upon written notice from the Employer, will return the Employer's
contributions (and increment attributable to the contributions) to the
Employer. The Trustee must make the return of the Employer contribution under
this Section 13.01 within one year of a final disposition of the Employer's
request for initial approval of the Plan. The Employer's Plan and Trust will
terminate upon the Trustee's return of the Employer's contributions.
13.02 AMENDMENT BY EMPLOYER. The Employer has the right at any time
and from time to time:
(a) To amend the elective provisions of the Adoption Agreement in
any manner it deems necessary or advisable in order to qualify (or
maintain qualification of) this Plan and the Trust created under it
under the provisions of Code Section 401(a);
(b) To amend the Plan to allow the Plan to operate under a waiver
of the minimum funding requirement; and
(c) To amend this Agreement in any other manner.
No amendment may authorize or permit any of the Trust Fund (other than
the part which is required to pay taxes and administration expenses) to be used
for or diverted to purposes other than for the exclusive benefit of the
Participants or their Beneficiaries or estates. No amendment may cause or
permit any portion of the Trust Fund to revert to or become a property of the
Employer. The Employer also may not make any amendment which affects the
rights, duties or responsibilities of the Trustee, the Plan Administrator or
the Advisory Committee without the written consent of the affected Trustee, the
Plan Administrator or the affected member of the Advisory Committee. The
Employer must make all amendments in writing. Each amendment must state the
date to which it is either retroactively or prospectively effective. See
Section 12.08 for the effect of certain amendments adopted by the Employer.
(A) CODE SECTION 411(d)(6) PROTECTED BENEFITS. An amendment (including
the adoption of this Plan as a restatement of an existing plan) may not
decrease a Participant's Accrued Benefit, except to the extent permitted under
Code Section 412(c)(8), and may not reduce or eliminate Code Section 411(d)(6)
protected benefits determined immediately prior to the adoption date (or, if
later, the effective date) of the amendment. An amendment reduces or
eliminates Code Section 411(d)(6) protected benefits if the amendment has the
effect of either (1) eliminating or reducing an early retirement benefit or a
retirement-type subsidy (as defined in Treasury regulations), or (2) except as
provided by Treasury regulations, eliminating an optional form of benefit. The
Advisory Committee must disregard an amendment to the extent application of the
amendment would fail to satisfy this paragraph. If the Advisory Committee must
disregard an amendment because the amendment would violate clause (1)
13.01
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Defined Contribution Master Plan
or clause (2), the Advisory Committee must maintain a schedule of the early
retirement option or other optional forms of benefit the Plan must continue for
the affected Participants.
13.03 AMENDMENT BY MASTER PLAN SPONSOR. The Master Plan Sponsor (or
PPD, as agent of the Master Plan Sponsor), without the Employer's consent, may
amend the Plan and Trust, from time to time, in order to conform the Plan and
Trust to any requirement for qualification of the Plan and Trust under the
Internal Revenue Code. The Master Plan Sponsor may not amend the Plan in any
manner which would modify any election made by the Employer under the Plan
without the Employer's written consent. Furthermore, the Master Plan Sponsor
may not amend the Plan in any manner which would violate the proscription of
Section 13.02. A Trustee does not have the power to amend the Plan or Trust.
13.04 DISCONTINUANCE. The Employer has the right, at any time, to
suspend or discontinue its contributions under the Plan, and to terminate, at
any time, this Plan and the Trust created under this Agreement. The Plan will
terminate upon the first to occur of the following:
(a) The date terminated by action of the Employer;
(b) The dissolution or merger of the Employer, unless the
successor makes provision to continue the Plan, in which event the
successor must substitute itself as the Employer under this Plan. Any
termination of the Plan resulting from this paragraph (b) is not
effective until compliance with any applicable notice requirements
under ERISA.
13.05 FULL VESTING ON TERMINATION. Upon either full or partial
termination of the Plan, or, if applicable, upon complete discontinuance of
profit sharing plan contributions to the Plan, an affected Participant's right
to his Accrued Benefit is 100% Nonforfeitable, irrespective of the
Nonforfeitable percentage which otherwise would apply under Article V.
13.06 MERGER/DIRECT TRANSFER. The Trustee may not consent to, or be
a party to, any merger or consolidation with another plan, or to a transfer of
assets or liabilities to another plan, unless immediately after the merger,
consolidation or transfer, the surviving Plan provides each Participant a
benefit equal to or greater than the benefit each Participant would have
received had the Plan terminated immediately before the merger or consolidation
or transfer. The Trustee possesses the specific authority to enter into merger
agreements or direct transfer of assets agreements with the trustees of other
retirement plans described in Code Section 401(a), including an elective
transfer, and to accept the direct transfer of plan assets, or to transfer plan
assets, as a party to any such agreement.
The Trustee may accept a direct transfer of plan assets on behalf of
an Employee prior to the date the Employee satisfies the Plan's eligibility
conditions. If the Trustee accepts such a direct transfer of plan assets, the
Advisory Committee and Trustee must treat the Employee as a Participant for all
purposes of the Plan except the Employee is not a Participant for purposes of
sharing in Employer contributions or Participant forfeitures under the Plan
until he actually becomes a Participant in the Plan.
(A) ELECTIVE TRANSFERS. The Trustee, after August 9, 1988, may not
consent to, or be a party to a merger, consolidation or transfer of assets with
a defined benefit plan, except with respect to an elective transfer, or unless
the transferred benefits are in the form of paid-up individual annuity
contracts guaranteeing the payment of the transferred benefits in accordance
with the terms of the transferor plan and in a manner consistent with the Code
and with ERISA. The Trustee will hold, administer and distribute the
transferred assets as a part of the Trust Fund and the Trustee must maintain a
separate Employer contribution Account for the benefit of the Employee on whose
behalf the Trustee accepted the transfer in order to reflect the value of the
transferred assets. Unless a transfer of assets to this Plan is an elective
transfer, the Plan will preserve all Code Section 411(d)(6)
13.02
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Defined Contribution Master Plan
protected benefits with respect to those transferred assets, in the manner
described in Section 13.02. A transfer is an elective transfer if: (1) the
transfer satisfies the first paragraph of this Section 13.06; (2) the transfer
is voluntary, under a fully informed election by the Participant; (3) the
Participant has an alternative that retains his Code Section 411(d)(6) protected
benefits (including an option to leave his benefit in the transferor plan, if
that plan is not terminating); (4) the transfer satisfies the applicable spousal
consent requirements of the Code; (5) the transferor plan satisfies the joint
and survivor notice requirements of the Code, if the Participant's transferred
benefit is subject to those requirements; (6) the Participant has a right to
immediate distribution from the transferor plan, in lieu of the elective
transfer; (7) the transferred benefit is at least the greater of the single sum
distribution provided by the transferor plan for which the Participant is
eligible or the present value of the Participant's accrued benefit under the
transferor plan payable at that plan's normal retirement age; (8) the
Participant has a 100% Nonforfeitable interest in the transferred benefit; and
(9) the transfer otherwise satisfies applicable Treasury regulations. An
elective transfer may occur between qualified plans of any type. Any direct
transfer of assets from a defined benefit plan after August 9, 1988, which does
not satisfy the requirements of this paragraph will render the Employer's Plan
individually-designed. See Section 12.08.
(B) DISTRIBUTION RESTRICTIONS UNDER CODE SECTION 401(k). If the Plan
receives a direct transfer (by merger or otherwise) of elective contributions
(or amounts treated as elective contributions) under a Plan with a Code Section
401(k) arrangement, the distribution restrictions of Code Sections 401(k)(2) and
(10) continue to apply to those transferred elective contributions.
13.07 TERMINATION.
(A) PROCEDURE. Upon termination of the Plan, the distribution provisions
of Article VI remain operative, with the following exceptions:
(1) if the present value of the Participant's Nonforfeitable
Accrued Benefit does not exceed $3,500, the Advisory Committee will
direct the Trustee to distribute the Participant's Nonforfeitable
Accrued Benefit to him in lump sum as soon as administratively
practicable after the Plan terminates; and
(2) if the present value of the Participant's Nonforfeitable
Accrued Benefit exceeds $3,500, the Participant or the Beneficiary, in
addition to the distribution events permitted under Article VI, may
elect to have the Trustee commence distribution of his Nonforfeitable
Accrued Benefit as soon as administratively practicable after the Plan
terminates.
To liquidate the Trust, the Advisory Committee will purchase a
deferred annuity contract for each Participant which protects the Participant's
distribution rights under the Plan, if the Participant's Nonforfeitable Accrued
Benefit exceeds $3,500 and the Participant does not elect an immediate
distribution pursuant to Paragraph (2).
If the Employer's Plan is a profit sharing plan, in lieu of the
preceding provisions of this Section 13.07 and the distribution provisions of
Article VI, the Advisory Committee will direct the Trustee to distribute each
Participant's Nonforfeitable Accrued Benefit, in lump sum, as soon as
administratively practicable after the termination of the Plan, irrespective of
the present value of the Participant's Nonforfeitable Accrued Benefit and
whether the Participant consents to that distribution. This paragraph does not
apply if: (1) the Plan provides an annuity option; or (2) as of the period
between the Plan termination date and the final distribution of assets, the
Employer maintains any other defined contribution plan (other than an ESOP).
The Employer, in an addendum to its Adoption Agreement numbered 13.07, may
elect not to have this paragraph apply.
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The Trust will continue until the Trustee in accordance with the
direction of the Advisory Committee has distributed all of the benefits under
the Plan. On each valuation date, the Advisory Committee will credit any part
of a Participant's Accrued Benefit retained in the Trust with its proportionate
share of the Trust's income, expenses, gains and losses, both realized and
unrealized. upon termination of the Plan, the amount, if any, in a suspense
account under Article III will revert to the Employer, subject to the conditions
of the Treasury regulations permitting such a reversion. A resolution or
amendment to freeze all future benefit accrual but otherwise to continue
maintenance of this Plan, is not a termination for purposes of this Section
13.07.
(B) DISTRIBUTION RESTRICTIONS UNDER CODE SECTION 401(k). If the Employer's
Plan includes a Code Section 401(k) arrangement or if transferred assets
described in Section 13.06 are subject to the distribution restrictions of Code
Sections 401(k)(2) and (10), the special distribution provisions of this Section
13.07 are subject to the restrictions of this paragraph. The portion of the
Participant's Nonforfeitable Accrued Benefit attributable to elective
contributions (or to amounts treated under the Code Section 401(k) arrangement
as elective contributions) is not distributable on account of Plan termination,
as described in this Section 13.07, unless: (a) the Participant otherwise is
entitled under the Plan to a distribution of that portion of his Nonforfeitable
Accrued Benefit; or (b) the Plan termination occurs without the establishment of
a successor plan. A successor plan under clause (b) is a defined contribution
plan (other than an ESOP) maintained by the Employer (or by a related employer)
at the time of the termination of the Plan or within the period ending twelve
months after the final distribution of assets. A distribution made after March
31, 1988, pursuant to clause (b), must be part of a lump sum distribution to the
Participant of his Nonforfeitable Accrued Benefit.
* * * * * * * * * *
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ARTICLE XIV
CODE Section 401(k) AND CODE Section 401(m) ARRANGEMENTS
14.01 APPLICATION. This Article XIV applies to an Employer's Plan
only if the Employer is maintaining its Plan under a Code Section 401(k)
Adoption Agreement.
14.02 CODE SECTION 401(k) ARRANGEMENT. The Employer will elect in
Section 3.01 of its Adoption Agreement the terms of the Code Section 401(k)
arrangement, if any, under the Plan. If the Employer's Plan is a Standardized
Plan, the Code Section 401(k) arrangement must be a salary reduction
arrangement. If the Employer's Plan is a Nonstandardized Plan, the Code
Section 401(k) arrangement may be a salary reduction arrangement or a cash or
deferred arrangement.
(A) SALARY REDUCTION ARRANGEMENT. If the Employer elects a salary
reduction arrangement, any Employee eligible to participate in the Plan may
file a salary reduction agreement with the Advisory Committee. The salary
reduction agreement may not be effective earlier than the following date which
occurs last: (i) the Employee's Plan Entry Date (or, in the case of a
reemployed Employee, his reparticipation date under Article II); (ii) the
execution date of the Employee's salary reduction agreement; (iii) the date the
Employer adopts the Code Section 401(k) arrangement by executing the Adoption
Agreement; or (iv) the effective date of the Code Section 401(k) arrangement,
as specified in the Employer's Adoption Agreement. Regarding clause (i), an
Employee subject to the Break in Service rule of Section 2.03(b) of the Plan
may not enter into a salary reduction agreement until the Employee has
completed a sufficient number of Hours of Service to receive credit for a Year
of Service (as defined in Section 2.02) following his reemployment commencement
date. A salary reduction agreement must specify the amount of Compensation (as
defined in Section 1.12) or percentage of Compensation the Employee wishes to
defer. The salary reduction agreement will apply only to Compensation which
becomes currently available to the Employee after the effective date of the
salary reduction agreement. The Employer will apply a reduction election to
all Compensation (and to increases in such Compensation) unless the Employee
specifies in his salary reduction agreement to limit the election to certain
Compensation. The Employer will specify in Adoption Agreement Section 3.01 the
rules and restrictions applicable to the Employees salary reduction agreements.
(B) CASH OR DEFERRED ARRANGEMENT. If the Employer elects a cash or
deferred arrangement, a Participant may elect to make a cash election against
his proportionate share of the Employer's Cash or Deferred Contribution, in
accordance with the Employer's elections in Adoption Agreement Section 3.01. A
Participant's proportionate share of the Employer's Cash or Deferred
Contribution is the percentage of the total Cash or Deferred Contribution which
bears the same ratio that the Participant's Compensation for the Plan Year
bears to the total Compensation of all Participants for the Plan Year. For
purposes of determining each Participant's proportionate share of the Cash or
Deferred Contribution, a Participant's Compensation is his Compensation as
determined under Section 1.12 of the Plan (as modified by Section 3.06 for
allocation purposes), excluding any effect the proportionate share may have on
the Participant's Compensation for the Plan Year. The Advisory Committee will
determine the proportionate share prior to the Employer's actual contribution
to the Trust, to provide the Participants the opportunity to file cash
elections. The Employer will pay directly to the Participant the portion of
his proportionate share the Participant has elected to receive in cash.
(C) ELECTION NOT TO PARTICIPATE. A Participant's or Employee's election
not to participate, pursuant to Section 2.06, includes his right to enter into
a salary reduction agreement or to share in the allocation of a Cash or
Deferred Contribution, unless the Participant or Employee limits the effect of
the election to the non-401(k) portions of the Plan.
14.03 DEFINITIONS. For purposes of this Article XIV:
(a) "Highly Compensated Employee" means an Eligible Employee who
satisfies the definition in Section 1.09 of the Plan. Family members
aggregated as a single Employee under Section 1.09 constitute a single
Highly Compensated Employee, whether a particular family member is a
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Defined Contribution Master Plan
Highly Compensated Employee or a Nonhighly Compensated Employee
without the application of family aggregation.
(b) "Nonhighly Compensated Employee" means an Eligible Employee
who is not a Highly Compensated Employee and who is not a family
member treated as a Highly Compensated Employee.
(c) "Eligible Employee" means, for purposes of the ADP test
described in Section 14.08, an Employee who is eligible to enter into
a salary reduction agreement for the Plan Year, irrespective of
whether he actually enters into such an agreement, and a Participant
who is eligible for an allocation of the Employer's Cash or Deferred
Contribution for the Plan Year. For purposes of the ACP test
described in Section 14.09, an "Eligible Employee" means a
Participant who is eligible to receive an allocation of matching
contributions (or would be eligible if he made the type of
contributions necessary to receive an allocation of matching
contributions) and a Participant who is eligible to make nondeductible
contributions, irrespective of whether he actually makes nondeductible
contributions. An Employee continues to be an Eligible Employee
during a period the Plan suspends the Employee's right to make
elective deferrals or nondeductible contributions following a hardship
distribution.
(d) "Highly Compensated Group" means the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year.
(e) "Nonhighly Compensated Group" means the group of Eligible
Employees who are Nonhighly Compensated Employees for the Plan Year.
(f) "Compensation" means, except as specifically provided in this
Article XIV, Compensation as defined for nondiscrimination purposes in
Section 1.12(B) of the Plan. To compute an Employee's ADP or ACP, the
Advisory Committee may limit Compensation taken into account to
Compensation received only for the portion of the Plan Year in which
the Employee was an Eligible Employee and only for the portion of the
Plan Year in which the Plan or the Code Section 401(k) arrangement was
in effect.
(g) "Deferral contributions" are Salary Reduction Contributions
and Cash or Deferred Contributions the Employer contributes to the
Trust on behalf of an Eligible Employee, irrespective of whether, in
the case of Cash or Deferred Contributions, the contribution is at the
election of the Employee. For Salary Reduction Contributions, the
terms "deferral contributions" and "elective deferrals" have the same
meaning.
(h) "Elective deferrals" are all Salary Reduction Contributions
and that portion of any Cash or Deferred Contribution which the
Employer contributes to the Trust at the election of an Eligible
Employee. Any portion of a Cash or Deferred Contribution contributed
to the Trust because of the Employee's failure to make a cash election
is an elective deferral. However, any portion of a Cash or Deferred
Contribution over which the Employee does not have a cash election is
not an elective deferral. Elective deferrals do not include amounts
which have become currently available to the Employee prior to the
election nor amounts designated as nondeductible contributions at the
time of deferral or contribution.
(i) "Matching contributions" are contributions made by the
Employer on account of elective deferrals under a Code Section 401(k)
arrangement or on account of employee contributions. Matching
contributions also include Participant forfeitures allocated on
account of such elective deferrals or employee contributions.
(j) "Nonelective contributions" are contributions made by the
Employer which are not subject to a deferral election by an Employee
and which are not matching contributions.
(k) "Qualified matching contributions" are matching contributions
which are 100% Nonforfeitable at all times and which are subject to
the distribution restrictions described in paragaph (m). Matching
contributions are not 100% Nonforfeitable at all times if the Employee
has a 100% Nonforfeitable interest because of his Years of Service
taken into account under a vesting schedule. Any matching
contributions allocated to a Participant's
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Defined Contribution Master Plan
Qualified Matching Contributions Account under the Plan automatically,
satisfy the definition of qualified matching contributions.
(l) "Qualified nonelective contributions" are nonelective
contributions which are 100% Nonforfeitable at all times and which are
subject to the distribution restrictions described in paragraph (m).
Nonelective contributions are not 100% Nonforfeitable at all times if
the Employee has a 100% Nonforfeitable interest because of his Years
of Service taken into account under a vesting schedule. Any
nonelective contributions allocated to a Participant's Qualified
Nonelective Contributions Account under the Plan automatically satisfy
the definition of qualified nonelective contributions.
(m) "Distribution restrictions" means the Employee may not receive
a distribution of the specified contributions (nor earnings on those
contributions) except in the event of (1) the Participant's death,
disability, termination of employment or attainment of age 59 1/2, (2)
financial hardship satisfying the requirements of Code Section 401(k)
and the applicable Treasury regulations, (3) a plan termination,
without establishment of a successor defined contribution plan (other
than an ESOP), (4) a sale of substantially all of the assets (within
the meaning of Code Section 409(d)(2)) used in a trade or business,
but only to an employee who continues employment with the corporation
acquiring those assets, or (5) a sale by a corporation of its interest
in a subsidiary (within the meaning of Code Section 409(d)(3)), but
only to an employee who continues employment with the subsidiary. For
Plan Years beginning after December 31, 1988, a distribution on
account of financial hardship, as described in clause (2), may not
include earnings on elective deferrals credited as of a date later
than December 31, 1988, and may not include qualified matching
contributions and qualified nonelective contributions, nor any
earnings on such contributions, credited after December 31, 1988. A
plan does not violate the distribution restrictions if, instead of the
December 31, 1988, date in the preceding sentence the plan specifies a
date not later than the end of the last Plan Year ending before July
1, 1989. A distribution described in clauses (3), (4) or (5), if made
after March 31, 1988, must be a lump sum distribution, as required
under Code Section 401(k)(10).
(n) "Employee contributions" are contributions made by a
Participant on an after-tax basis, whether voluntary or mandatory, and
designated, at the time of contribution as an employee (or
nondeductible) contribution. Elective deferrals and deferral
contributions are not employee contributions. Participant
nondeductible contributions, made pursuant to Section 4.01 of the
Plan, are employee contributions.
14.04 MATCHING CONTRIBUTIONS/EMPLOYEE CONTRIBUTIONS. The Employer
may elect in Adoption Agreement Section 3.01 to provide matching contributions.
The Employer also may elect in Adoption Agreement Section 4.01 to permit or to
require a Participant to make nondeductible contributions.
(A) MANDATORY CONTRIBUTIONS. Any Participant nondeductible contributions
eligible for matching contributions are mandatory contributions. The Advisory
Committee will maintain a separate accounting, pursuant to Section 4.06 of the
Plan, to reflect the Participant's Accrued Benefit derived from his mandatory
contributions. The Employer, under Adoption Agreement Section 4.05, may
prescribe special distribution restrictions which will apply to the Mandatory
Contributions Account prior to the Participant's Separation from Service.
Following his Separation from Service, the general distribution provisions of
Article VI apply to the distribution of the Participant's Mandatory
Contributions Account.
14.05 TIME OF PAYMENT OF CONTRRIBUTIONS. The Employer must make
Salary Reduction Contributions to the Trust within an administratively
reasonable period of time after withholding the corresponding Compensation from
the Participant. Furthermore, the Employer must make Salary Reduction
Contributions, Cash or Deferred Contributions, Employer matching contributions
(including qualified Employer matching contributions) and qualified Employer
nonelective contributions no later than the time prescribed by the Code or by
applicable Treasury regulations. Salary Reduction Contributions and Cash or
Deferred Contributions are Employer contributions for all purposes under this
Plan, except to the extent the Code or Treasury
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Defined Contribution Master Plan
regulations prohibit the use of these contributions to satisfy the
qualification requirements of the Code.
14.06 SPECIAL ALLOCATION PROVISIONS - DEFERRAL CONTRIBUTIONS.
MATCHING CONTRIBUTIONS AND QUALIFIED NONELECTIVE CONTRIBUTIONS. To make
allocations under the Plan, the Advisory Committee must establish a Deferral
Contributions Account, a Qualified Matching Contributions Account, a Regular
Matching Contributions Account, a Qualified Nonelective, Contributions Account
and an Employer Contributions Account for each Participant.
(A) DEFERRAL CONTRIBUTIONS. The Advisory Committee will allocate to each
Participant's Deferral Contributions Account the amount of Deferral
Contributions the Employer makes to the Trust on behalf of the Participant.
The Advisory Committee will make this allocation as of the last day of each
Plan Year unless, in Adoption Agreement Section 3.04, the Employer elects more
frequent allocation dates for salary reduction contributions.
(B) MATCHING CONTRIBUTIONS. The Employer must specify in its Adoption
Agreement whether the Advisory Committee will allocate matching contributions
to the Qualified Matching Contributions Account or to the Regular Matching
Contributions Account of each Participant. The Advisory Committee will make
this allocation as of the last day of each Plan Year unless, in Adoption
Agreement Section 3.04, the Employer elects more frequent allocation dates for
matching contributions.
(1) To the extent the Employer makes matching contributions under
a fixed matching contribution formula, the Advisory Committee will
allocate the matching contribution to the Account of the Participant
on whose behalf the Employer makes that contribution. A fixed
matching contribution formula is a formula under which the Employer
contributes a certain percentage or dollar amount on behalf of a
Participant based on that Participant's deferral contributions or
nondeductible contributions eligible for a match, as specified in
Section 3.01 of the Employer's Adoption Agreement. The Employer may
contribute on a Participant's behalf under a specific matching
contribution formula only if the Participant satisfies the accrual
requirements for matching contributions specified in Section 3.06 of
the Employer's Adoption Agreement and only to the extent the matching
contribution does not exceed the Participant's annual additions
limitation in Part 2 of Article III.
(2) To the extent the Employer makes matching contributions under
a discretionary formula, the Advisory Committee will allocate the
discretionary matching contributions to the Account of each
Participant who satisfies the accrual requirements for matching
contributions specified in Section 3.06 of the Employer's Adoption
Agreement. The allocation of discretionary matching contributions to
a Participant's Account is in the same proportion that each
Participant's eligible contributions bear to the total eligible
contributions of all Participants. If the discretionary formula is a
tiered formula, the Advisory Committee will make this allocation
separately with respect to each tier of eligible contributions,
allocating in such manner the amount of the matching contributions
made with respect to that tier. "Eligible contributions" are the
Participant's deferral contributions or nondeductible contributions
eligible for an allocation of matching contributions, as specified in
Section 3.01 of the Employer's Adoption Agreement.
If the matching contribution formula applies both to deferral
contributions and to Participant nondeductible contributions, the matching
contributions apply first to deferral contributions. Furthermore, the matching
contribution formula does not apply to deferral contributions that are excess
deferrals under Section 14.07. For this purpose: (a) excess deferrals relate
first to deferral contributions for the Plan Year not otherwise eligible for a
matching contribution; and (2) if the Plan Year is not a calendar year, the
excess deferrals for a Plan Year are the last elective deferrals made for a
calendar year. Under a Standardized Plan, an Employee forfeits any matching
contribution attributable to an excess contribution or to an excess aggregate
contribution, unless distributed pursuant to Sections 14.08 or 14.09. Under a
Nonstandardized Plan, this forfeiture rule applies only if specified in
Adoption Agreement Section 3.06. The provisions of Section 3.05 govern
14.04
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Defined Contribution Master Plan
the treatment of any forfeiture described in this paragraph, and the Advisory
Committee will compute a Participant's ACP under 14.09 by disregarding the
forfeiture.
(C) QUALIFIED NONELECTIVE CONTRIBUTIONS. If the Employer, at the time of
contribution, designates a contribution to be a qualified nonelective
contribution for the Plan Year, the Advisory Committee will allocate that
qualified nonelective contribution to the Qualified Nonelective Contributions
Account of each Participant eligible for an allocation of that designated
contribution, as specified in Section 3.04 of the Employer's Adoption
Agreement. The Advisory Committee will make the allocation to each eligible
Participant's Account in the same ratio that the Participant's Compensation for
the Plan Year bears to the total Compensation of all eligible Participants for
the Plan Year. The Advisory Committee will determine a Participant's
Compensation in accordance with the general definition of Compensation under
Section 1.12 of the Plan, as modified by the Employer in Sections 1.12 and 3.06
of its Adoption Agreement.
(D) NONELECTIVE CONTRIBUTIONS. To the extent the Employer makes
nonelective contributions for the Plan Year which, at the time of contribution,
it does not designate as qualified nonelective contributions, the Advisory
Committee will allocate those contributions in accordance with the elections
under Section 3.04 of the Employer's Adoption Agreement. For purposes of the
special nondiscrimination tests described in Sections 14.08 and 14.09, the
Advisory Committee may treat nonelective contributions allocated under this
paragraph as qualified nonelective contributions, if the contributions otherwise
satisfy the definition of qualified nonelective contributions.
14.07 ANNUAL ELECTIVE DEFERRAL LIMITATION.
(A) ANNUAL ELECTIVE DEFERRAL LIMITATION. An Employee's elective deferrals
for a calendar year beginning after December 31, 1986, may not exceed the
402(g) limitation. The 402(g) limitation is the greater of $7,000 or the
adjusted amount determined by the Secretary of the Treasury. If, pursuant to a
salary reduction agreement or pursuant to a cash or deferral election, the
Employer determines the Employee's elective deferrals to the Plan for a
calendar year would exceed the 402(g) limitation, the Employer will suspend the
Employee's salary reduction agreement, if any, until the following January 1
and pay in cash the portion of a cash or deferral election which would result
in the Employee's elective deferrals for the calendar year exceeding the 402(g)
limitation. If the Advisory Committee determines an Employee's elective
deferrals already contributed to the Plan for a calendar year exceed the 402(g)
limitation, the Advisory Committee will distribute the amount in excess of the
402(g) limitation (the "excess deferral"), as adjusted for allocable income, no
later than April 15 of the following calendar year. If the Advisory Committee
distributes the excess deferral by the appropriate April 15, it may make the
distribution irrespective of any other provision under this Plan or under the
Code. The Advisory Committee will reduce the amount of excess deferrals for a
calendar year distributable to the Employee by the amount of excess
contributions (as determined in Section 14.08), if any, previously distributed
to the Employee for the Plan Year beginning in that calendar year.
If an Employee participates in another plan under which he makes
elective deferrals pursuant to a Code Section 401(k) arrangement, elective
deferrals under a Simplified Employee Pension, or salary reduction
contributions to a tax-sheltered annuity, irrespective of whether the Employer
maintains the other plan, he may provide the Advisory Committee a written claim
for excess deferrals made for a calendar year. The Employee must submit the
claim no later than the March 1 following the close of the particular calendar
year and the claim must specify the amount of the Employee's elective
deferrals under this Plan which are excess deferrals. If the Advisory
Committee receives a timely claim, it will distribute the excess deferral (as
adjusted for allocable income) the Employee has assigned to this Plan, in
accordance with the distribution procedure described in the immediately
preceding paragraph.
(B) ALLOCABLE INCOME. For purposes of making a distribution of excess
deferrals pursuant to this Section 14.07, allocable income means net income or
net loss allocable to the excess deferrals for the calendar year in which the
Employee made the excess deferral, determined in a manner which is uniform,
nondiscriminatory and reasonably reflective of the manner used by the Plan to
allocate income to Participants' Accounts.
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Defined Contribution Master Plan
14.08 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST. For each Plan Year,
the Advisory Committee must determine whether the Plan's Code Section 401(k)
arrangement satisfies either of the following ADP tests:
(i) The average ADP for the Highly Compensated Group does not
exceed 1.25 times the average ADP of the Nonhighly Compensated Group;
or
(ii) The average ADP for the Highly Compensated Group does not
exceed the average ADP for the Nonhighly Compensated Group by more
than two percentage points (or the lesser percentage permitted by the
multiple use limitation in Section 14.10) and the average ADP for the
Highly Compensated Group is not more than twice the average ADP for
the Nonhighly Compensated Group.
(A) CALCULATION OF ADP. The average ADP for a group is the average of the
separate ADPs calculated for each Eligible Employee who is a member of that
group. An Eligible Employee's ADP for a Plan Year is the ratio of the Eligible
Employee's deferral contributions for the Plan Year to the Employee's
Compensation for the Plan Year. For aggregated family members treated as a
single Highly Compensated Employee, the ADP of the family unit is the ADP
determined by combining the deferral contributions and Compensation of all
aggregated family members. A Nonhighly Compensated Employee's ADP does not
include elective deferrals made to this Plan or to any other Plan maintained by
the Employer, to the extent such elective deferrals exceed the 402(g)
limitation described in Section 14.07(A).
The Advisory Committee, in a manner consistent with Treasury
regulations, may determine the ADPs of the Eligible Employees by taking into
account qualified nonelective contributions or qualified matching
contributions, or both, made to this Plan or to any other qualified Plan
maintained by the Employer. The Advisory Committee may not include qualified
nonelective contributions in the ADP test unless the allocation of nonelective
contributions is nondiscriminatory when the Advisory Committee takes into
account all nonelective contributions (including the qualified nonelective
contributions) and also when the Advisory Committee takes into account only the
nonelective contributions not used in either the ADP test described in this
Section 14.08 or the ACP test described in Section 14.09. For Plan Years
beginning after December 31, 1989, the Advisory Committee may not include in
the ADP test any qualified nonelective contributions or qualified matching
contributions under another qualified plan unless that plan has the same plan
year as this Plan. The Advisory Committee must maintain records to demonstrate
compliance with the ADP test, including the extent to which the Plan used
qualified nonelective contributions or qualified matching contributions to
satisfy the test.
For Plan Years beginning prior to January 1, 1992, the Advisory
Committee may elect to apply a separate ADP test to each component group under
the Plan. Each component group separately must satisfy the commonality
requirement of the Code Section 401(k) regulations and the minimum coverage
requirements of Code Section 410(b). A component group consists of all the
allocations and other benefits, rights and features provided that group of
Employees. An Employee may not be part of more than one component group. The
correction rules described in this Section 14.08 apply separately to each
component group.
(B) SPECIAL AGGREGATION - RULE FOR HIGHLY COMPENSATED EMPLOYEES. To
determine the ADP of any Highly Compensated Employee, the deferral contributions
taken into account must include any elective deferrals made by the Highly
Compensated Employee under any other Code Section 401(k) arrangement maintained
by the Employer, unless the elective deferrals are to an ESOP. If the plans
containing the Code Section 401(k) arrangements have different plan years, the
Advisory Committee win determine the combined deferral contributions on the
basis of the plan years ending in the same calendar year.
(C) AGGREGATION OF CERTAIN CODE SECTION 401(k) ARRANGEMENTS. If the
Employer treats two plans as a unit for coverage or nondiscrimination purposes,
the Employer must combine the Code Section 401(k) arrangements under such plans
to determine whether either plan satisfies the ADP test. This
14.06
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Defined Contribution Master Plan
aggregation rule applies to the ADP determination for all Eligible Employees,
irrespective of whether an Eligible Employee is a Highly Compensated Employee or
a Nonhighly Compensated Employee. For Plan Years beginning after December 31,
1989, an aggregation of Code Section 401(k) arrangements under this paragraph
does not apply to plans which have different plan years and, for Plan Years
beginning after December 31, 1988, the Advisory Committee may not aggregate an
ESOP (or the ESOP portion of a plan) with a non-ESOP plan (or non-ESOP portion
of a plan).
(D) CHARACTERIZATION OF EXCESS CONTRIBUTIONS. If, pursuant to this Section
14.08, the Advisory Committee has elected to include qualified matching
contributions in the average ADP, the Advisory Committee will treat excess
contributions as attributable proportionately to deferral contributions and to
qualified matching contributions allocated on the basis of those deferral
contributions. If the total amount of a Highly Compensated Employee's excess
contributions for the Plan Year exceeds his deferral contributions or qualified
matching contributions for the Plan Year, the Advisory Committee will treat the
remaining portion of his excess contributions as attributable to qualified
nonelective contributions. The Advisory Committee will reduce the amount of
excess contributions for a Plan Year distributable to a Highly Compensated
Employee by the amount of excess deferrals (as determined in Section 14.07), if
any, previously distributed to that Employee for the Employee's taxable year
ending in that Plan Year.
(E) DISTRIBUTION OF EXCESS CONTRIBUTIONS. If the Advisory Committee
determines the Plan fails to satisfy the ADP test for a Plan Year, it must
distribute the excess contributions, as adjusted for allocable income, during
the next Plan Year. However, the Employer will incur an excise tax equal to 10%
of the amount of excess contributions for a Plan Year not distributed to the
appropriate Highly Compensated Employees during the first 2-1/2 months of that
next Plan Year. The excess contributions are the amount of deferral
contributions made by the Highly Compensated Employees which causes the Plan to
fail to satisfy the ADP test. The Advisory Committee will distribute to each
Highly Compensated Employee his respective share of the excess contributions.
The Advisory Committee will determine the respective shares of excess
contributions by starting with the Highly Compensated Employee(s) who has the
greatest ADP, reducing his ADP (but not below the next highest ADP), then, if
necessary, reducing the ADP of the Highly Compensated Employee(s) at the next
highest ADP level (including the ADP of the Highly Compensated Employee(s) whose
ADP the Advisory Committee already has reduced), and continuing in this manner
until the average ADP for the Highly Compensated Group satisfies the ADP test.
If the Highly Compensated Employee is part of an aggregated family group, the
Advisory Committee, in accordance with the applicable Treasury regulations, will
determine each aggregated family member's allocable share of the excess
contributions assigned to the family unit.
(F) ALLOCABLE INCOME. To determine the amount of the corrective
distribution required under this Section 14.08, the Advisory Committee must
calculate the allocable income for the Plan Year in which the excess
contributions arose. "Allocable income" means net income or net loss. To
calculate allocable income for the Plan Year, the Advisory Committee will use a
uniform and nondiscriminatory method which reasonably reflects the manner used
by the Plan to allocate income to Participants' Accounts.
14.09 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING
CONTRIBUTIONS/PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. For Plan Years beginning
after December 31, 1986, the Advisory Committee must determine whether the
annual Employer matching contributions (other than qualified matching
contributions used in the ADP under Section 14.08), if any, and the Employee
contributions, if any, satisfy either of the following average contribution
percentage ("ACP") tests:
(i) The ACP for the Highly Compensated Group does not exceed 1.25
times the ACP of the Nonhighly Compensated Group; or
(ii) The ACP for the Highly Compensated Group does not exceed the
ACP for the Nonhighly Compensated Group by more than two percentage
points (or the lesser percentage permitted by the multiple use
limitation in Section 14.10) and the ACP for the Highly Compensated
Group is not more than twice the ACP for the Nonhighly Compensated
Group.
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Defined Contribution Master Plan
(A) CALCULATION OF ACP. The average contribution percentage for a group
is the average of the separate contribution percentages calculated for each
Eligible Employee who is a member of that group. An Eligible Employee's
contribution percentage for a Plan Year is the ratio of the Eligible Employee's
aggregate contributions for the Plan Year to the Employee's Compensation for
the Plan Year. "Aggregate contributions" are Employer matching contributions
(other than qualified matching contributions used in the ADP test under Section
14.08) and employee contributions (as defined in Section 14.03). For aggregated
family members treated as a single Highly Compensated Employee, the
contribution percentage of the family unit is the contribution percentage
determined by combining the aggregate contributions and Compensation of all
aggregated family members.
The Advisory Committee, in a manner consistent with Treasury
regulations, may determine the contribution percentages of the Eligible
Employees by taking into account qualified nonelective contributions (other
than qualified nonelective contributions used in the ADP test under Section
14.08) or elective deferrals, or both, made to this Plan or to any other
qualified Plan maintained by the Employer. The Advisory Committee may not
include qualified nonelective contributions in the ACP test unless the
allocation of nonelective contributions is nondiscriminatory when the Advisory
Committee takes into account all nonelective contributions (including the
qualified nonelective contributions) and also when the Advisory Committee takes
into account only the nonelective contributions not used in either the ADP test
described in Section 14.08 or the ACP test described in this Section 14.09. The
Advisory Committee may not include elective deferrals in the ACP test, unless
the Plan which includes the elective deferrals satisfies the ADP test both with
and without the elective deferrals included in this ACP test. For Plan Years
beginning after December 31, 1989, the Advisory Committee may not include in
the ACP test any qualified nonelective contributions or elective deferrals
under another qualified plan unless that plan has the same plan year as this
Plan. The Advisory Committee must maintain records to demonstrate compliance
with the ACP test, including the extent to which the Plan used qualified
nonelective contributions or elective deferrals to satisfy the test. For Plan
Years beginning prior to January 1, 1992, the component group testing rule
permitted under Section 14.08(A) also applies to the ACP test under this
Section 14.09.
(B) SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES. To
determine the contribution percentage of any Highly Compensated Employee, the
aggregate contributions taken into account must include any matching
contributions (other than qualified matching contributions used in the ADP
test) and any Employee contributions made on his behalf to any other plan
maintained by the Employer, unless the other plan is an ESOP. If the plans
have different plan years, the Advisory Committee will determine the combined
aggregate contributions on the basis of the plan years ending in the same
calendar year.
(C) AGGREGATION OF CERTAIN PLANS. If the Employer treats two plans as a
unit for coverage or nondiscrimination purposes, the Employer must combine the
plans to determine whether either plan satisfies the ACP test. This
aggregation rule applies to the contribution percentage determination for all
Eligible Employees, irrespective of whether an Eligible Employee is a Highly
Compensated Employee or a Nonhighly Compensated Employee. For Plan Years
beginning after December 31, 1989, an aggregation of plans under this paragraph
does not apply to plans which have different plan years and, for Plan Years
beginning after December 31, 1988, the Advisory Committee may not aggregate an
ESOP (or the ESOP portion of a plan) with a non-ESOP plan (or non-ESOP portion
of a plan).
(D) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. The Advisory
Committee will determine excess aggregate contributions after determining
excess deferrals under Section 14.07 and excess contributions under Section
14.08. If the Advisory Committee determines the Plan fails to satisfy the ACP
test for a Plan Year, it must distribute the excess aggregate contributions,
as adjusted for allocable income, during the next Plan Year. However, the
Employer will incur an excise tax equal to 10% of the amount of excess
aggregate contributions for a Plan Year not distributed to the appropriate
Highly Compensated Employees during the first 2-1/2 months of that next Plan
Year. The excess aggregate contributions are the amount of aggregate
contributions allocated on behalf of the Highly Compensated Employees which
causes the Plan to fail to satisfy the ACP test. The Advisory
14.08
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Defined Contribution Master Plan
Committee will distribute to each Highly Compensated Employee his respective
share of the excess aggregate contributions. The Advisory Committee will
determine the respective shares of excess aggregate contributions by starting
with the Highly Compensated Employee(s) who has the greatest contribution
percentage, reducing his contribution percentage (but not below the next
highest contribution percentage), then, if necessary, reducing the contribution
percentage of the Highly Compensated Employee(s) at the next highest
contribution percentage level (including the contribution percentage of the
Highly Compensated Employee(s) whose contribution percentage the Advisory
Committee already has reduced), and continuing in this manner until the ACP for
the Highly Compensated Group satisfies the ACP test. If the Highly Compensated
Employee is part of an aggregated family group, the Advisory Committee, in
accordance with the applicable Treasury regulations, will determine each
aggregated family member's allocable share of the excess aggregate
contributions assigned to the family unit.
(E) ALLOCABLE INCOME. To determine the amount of the corrective
distribution required under this Section 14.09, the Advisory Committee must
calculate the allocable income for the Plan Year in which the excess aggregate
contributions arose. "Allocable income" means net income or net loss. The
Advisory Committee will determine allocable income in the same manner as
described in Section 14.08(F) for excess contributions.
(F) CHARACTERIZATION OF EXCESS AGGREGATE CONTRIBUTIONS. The Advisory
Committee will treat a Highly Compensated Employee's allocable share of excess
aggregate contributions in the following priority: (1) first as attributable to
his Employee contributions which are voluntary contributions, if any; (2) then
as matching contributions allocable with respect to excess contributions
determined under the ADP test described in Section 14.08; (3) then on a pro
rata basis to matching contributions and to the deferral contributions relating
to those matching contributions which the Advisory Committee has included in
the ACP test; (4) then on a pro rata basis to Employee contributions which are
mandatory, contributions, if any, and to the matching contributions allocated
on the basis of those mandatory contributions; and (5) last to qualified
nonelective contributions used in the ACP test. To the extent the Highly
Compensated Employee's excess aggregate contributions are attributable to
matching contributions, and he is not 100% vested in his Accrued Benefit
attributable to matching contributions, the Advisory Committee will distribute
only the vested portion and forfeit the nonvested portion. The vested portion
of the Highly Compensated Employee's excess aggregate contributions
attributable to Employer matching contributions is the total amount of such
excess aggregate contributions (as adjusted for allocable income) multiplied by
his vested percentage (determined as of the last day of the Plan Year for which
the Employer made the matching contribution). The Employer will specify in
Adoption Agreement Section 3.05 the manner in which the Plan wi1l allocate
forfeited excess aggregate contributions.
14.10 MULTIPLE USE LIMITATION. For Plan Years beginning after
December 31, 1988, if at least one Highly Compensated Employee is includible in
the ADP test under Section 14.08 and in the ACP test under Section 14.09, the
sum of the Highly Compensated Group's ADP and ACP may not exceed the multiple
use limitation.
The multiple use limitation is the sum of (i) and (ii):
(i) 125% of the greater of: (a) the ADP of the Nonhighly
Compensated Group under the Code Section 401(k) arrangement; or (b)
the ACP of the Nonhighly Compensated Group for the Plan Year beginning
with or within the Plan Year of the Code Section 401(k) arrangement.
(ii) 2% plus the lesser of (i)(a) or (i)(b), but no more than twice
the lesser of (i)(a) or (i) (b).
The Advisory Committee, in lieu of determining the multiple use
limitation as the sum of (i) and (ii), may elect to determine the multiple use
limitation as the sum of (iii) and (iv):
(iii) 125% of the lesser of: (a) the ADP of the Nonhighly
Compensated Group under the Code Section 401(k) arrangement; or (b)
the ACP of the Nonhighly Compensated Group for the Plan Year beginning
with or within the Plan Year of the Code Section 401(k) arrangement.
14.09
77
Defined Contribution Master Plan
(iv) 2% plus the greater of (iii)(a) or (iii)(b), but no more than
twice the greater of (iii)(a) or (iii)(b).
The Advisory Committee will determine whether the Plan satisfies the
multiple use limitation after applying the ADP test under Section 14.08 and the
ACP test under Section 14.09 and after making any corrective distributions
required by those Sections. If, after applying this Section 14.10, the Advisory
Committee determines the Plan has failed to satisfy the multiple use limitation,
the Advisory Committee will correct the failure by treating the excess amount as
excess contributions under Section 14.08 or as excess aggregate contributions
under Section 14.09, as it determines in its sole discretion. This Section
14.10 does not apply unless, prior to application of the multiple use
limitation, the ADP and the ACP of the Highly Compensated Group each exceeds
125% of the respective percentages for the Nonhighly Compensated Group.
14.11 DISTRIBUTION RESTRICTIONS. The Employer must elect in Section
6.03 the Adoption Agreement the distribution events permitted under the Plan.
The distribution events applicable to the Participant's Deferral Contributions
Account, Qualified Nonelective Contributions Account and Qualified Matching
Contributions Account must satisfy the distribution restrictions described in
paragraph (m) of Section 14.03.
(A) HARDSHIP DISTRIBUTIONS FROM DEFERRAL CONTRIBUTIONS ACCOUNT. The
Employer must elect in Adoption Agreement Section 6.03 whether a Participant may
receive hardship distributions from his Deferral Contributions Account prior to
the Participant's Separation from Service. Hardship distributions from the
Deferral Contributions Account must satisfy the requirements of this Section
14.11. A hardship distribution option may not apply to the Participant's
Qualified Nonelective Contributions Account or Qualified Matching Contributions
Account, except as provided in paragraph (3).
(1) DEFINITION OF HARDSHIP. A hardship distribution under this
Section 14.11 must be on account of one or more of the following immediate and
heavy financial needs: (1) medical care described in Code Section 213(d)
incurred by the Participant, by the Participant's spouse, or by any of the
Participant's dependents, or necessary to obtain such medical care; (2) the
purchase (excluding mortgage payments) of a principal residence for the
Participant; (3) the payment of post-secondary education tuition and related
educational fees, for the next 12-month period, for the Participant, for the
Participant's spouse, or for any of the Participant's dependents (as defined in
Code Section 152); (4) to prevent the eviction of the Participant from his
principal residence or the foreclosure on the mortgage of the Participant's
principal residence; or (5) any need prescribed by the Revenue Service in a
revenue ruling, notice or other document of general applicability which
satisfies the safe harbor definition of hardship.
(2) RESTRICTIONS. The following restrictions apply to a
Participant who receives a hardship distribution: (a) the Participant may not
make elective deferrals or employee contributions to the Plan for the 12-month
period following the date of his hardship distribution; (b) the distribution is
not in excess of the amount of the immediate and heavy financial need (including
any amounts necessary to pay any federal, state or local income taxes or
penalties reasonably anticipated to result from the distribution); (c) the
Participant must have obtained all distributions, other than hardship
distributions, and all nontaxable loans (determined at the time of the loan)
currently available under this Plan and all other qualified plans maintained by
the Employer; and (d) the Participant agrees to limit elective deferrals under
this Plan and under any other qualified Plan maintained by the Employer, for the
Participant's taxable year immediately following the taxable year of the
hardship distribution, to the 402(g) limitation (as described in Section 14.07),
reduced by the amount of the Participant's elective deferrals made in the
taxable year of the hardship distribution. The suspension of elective deferrals
and employee contributions described in clause (a) also must apply to all other
qualified plans and to all nonqualified plans of deferred compensation
maintained by the Employer, other than any mandatory employee contribution
portion of a defined benefit plan, including stock option, stock purchase and
other similar plans, but not including health or welfare benefit plans (other
than the cash or deferred arrangement portion of a cafeteria plan).
14.10
78
Defined Contribution Master Plan
(3) EARNINGS. For Plan Years beginning after December 31, 1988, a
hardship distribution under this Section 14.11 may not include earnings on an
Employee's elective deferrals credited after December 31, 1988. Qualified
matching contributions and qualified nonelective contributions, and any
earnings on such contributions, credited as of December 31, 1988, are subject
to the hardship withdrawal only if the Employer specifies in an addendum to
this Section 14.11. The addendum may modify the December 31, 1988, date for
purposes of determining credited amounts provided the date is not later than
the end of the last Plan Year ending before July 1, 1989.
(B) DISTRIBUTIONS AFTER SEPARATION FROM SERVICE. Following the
Participant's Separation from Service, the distribution events applicable to
the Participant apply equally to all of the Participant's Accounts, except as
elected in Section 6.03 of the Employer's Adoption Agreement.
(C) CORRECTION OF ANNUAL ADDITIONS LIMITATION. If, as a result of a
reasonable error in determining the amount of elective deferrals an Employee
may make without violating the Limitations of Part 2 of Article III, an Excess
Amount results, the Advisory Committee wi1l return the Excess Amount (as
adjusted for allocable income) attributable to the elective deferrals. The
Advisory Committee will make this distribution before taking any corrective
steps pursuant to Section 3.10 or to Section 3.16. The Advisory Committee will
disregard any elective deferrals returned under this Section 14.11(C) for
purposes of Sections 14.07, 14.08 and 14.09.
14.12 SPECIAL ALLOCATION RULES. If the Code Section 401(k)
arrangement provides for salary reduction contributions, if the Plan accepts
Employee contributions, pursuant to Adoption Agreement Section 4.01, or if the
Plan allocates matching contributions as of any date other than the last day of
the Plan Year, the Employer must elect in Adoption Agreement 9.11 whether any
special allocation provisions will apply under Section 9.11 of the Plan. For
purposes of the elections:
(a) A "segregated Account" direction means the Advisory Committee
will establish a segregated Account for the applicable contributions
made on the Participant's behalf during the Plan Year. The Trustee
must invest the segregated Account in Federally insured interest
bearing savings account(s) or time deposits, or a combination of both,
or in any other fixed income investments, unless otherwise specified
in the Employer's Adoption Agreement. As of the last day of each Plan
Year (or, if earlier, an allocation date coinciding with a valuation
date described in Section 9.11), the Advisory Committee will
reallocate the segregated Account to the Participant's appropriate
Account, in accordance with Section 3.04 or Section 4.06, whichever
applies to the contributions.
(b) A "weighted average allocation" method will treat a weighted
portion of the applicable contributions as if includible in the
Participant's Account as of the beginning of the valuation period. The
weighted portion is a fraction, the numerator of which is the number
of months in the valuation period, excluding each month in the
valuation period which begins prior to the contribution date of the
applicable contributions, and the denominator of which is the number
of months in the valuation period. Toe Employer may elect in its
Adoption Agreement to substitute a weighting period other than months
for purposes of this weighted average allocation.
* * * * * * * * * *
99