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Exhibit 10.27
▇▇▇▇▇▇ FLEXIBLE 401(K) AND PROFIT SHARING PLAN
PLAN AGREEMENT #001
This is the Plan Agreement for a ▇▇▇▇▇▇ nonstandardized prototype 401(k) plan
with optional profit sharing plan provisions. Please consult a tax or legal
advisor and review the entire form before you sign it. If you fail to fill out
this ▇▇▇▇▇▇ Plan Agreement properly, the Plan may be disqualified. By executing
this Plan Agreement, the Employer establishes a 401(k) and profit sharing plan
and trust upon the terms and conditions of ▇▇▇▇▇▇ Basic Plan Document #07, as
supplemented and modified by the provisions elected by the Employer in this Plan
Agreement. THIS PLAN AGREEMENT MUST BE ACCEPTED BY ▇▇▇▇▇▇ IN ORDER FOR THE
EMPLOYER TO RECEIVE FUTURE AMENDMENTS TO THE ▇▇▇▇▇▇ FLEXIBLE 401(K) AND PROFIT
SHARING PLAN.
* * * * *
1. EMPLOYER INFORMATION. The Employer adopting this Plan is:
A. EMPLOYER NAME: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ASSOCIATES, INC.
B. EMPLOYER IDENTIFICATION NUMBER: ▇▇-▇▇▇▇▇▇▇
C. EMPLOYER ADDRESS: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
D. SIC CODE: 7370
E. EMPLOYER CONTACT: Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: CEO Phone #: (▇▇▇) ▇▇▇-▇▇▇▇
F. FISCAL YEAR: January 1 through December 31
(month/day) (month/day)
G. TYPE OF ENTITY (CHECK ONE):
[X] Corporation [ ] Partnership [ ] Subchapter S Corporation
[ ] Sole proprietorship [ ] Other _____________________
H. PLAN NAME: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ AND ASSOCIATES, INC. 401(k) PLAN
AND TRUST
I. PLAN NUMBER: 001 (complete)
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2. PLAN INFORMATION.
A. PLAN YEAR. Check one:
[X] (1) The Calendar Year
[ ] (2) The Plan Year will be the same as the Fiscal Year of
the Employer shown in 1.F. above. If the Fiscal Year
of the Employer changes, the Plan Year will change
accordingly.
[ ] (3) The Plan Year will be the period of 12 months
beginning on the first day of _____ (month) and
ending on the last day of _____ (month).
[ ] (4) A short Plan Year commencing on _____
(month/day/year) and ending on _____ (month/day/year)
and immediately thereafter the 12-consecutive month
period commencing on _____ (month/day).
The Plan Year will also be your Plan's Limitation Year for purposes
of the contribution limitation rules in Article 6 of the Plan.
B. EFFECTIVE DATE OF ADOPTION OF PLAN.
(1) Are you adopting this Plan to replace an existing plan?
[X] (a) Yes (b) No
(2) IF YOU ANSWERED YES in 2.B(1) above, the Effective
Date of your adoption of this Replacement Plan will be
the first day of the current Plan Year UNLESS you
elect a later date in (2)(b) below. Please complete
the following:
(a) JUNE 1, 1988
Original Effective Date of the Plan you are Replacing
(b) DECEMBER 2, 1996
Effective Date of this Replacement Plan
(3) IF YOU ANSWERED NO in 2B(1) above, the Effective Date
of your adoption of this Plan will be the day you
select below (not before the first day of the current
Plan Year, and not before the day your Business
began):
(a) The Effective Date is:_______
month/day/year
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C. IDENTIFYING HIGHLY COMPENSATED EMPLOYEES. Check either (1) or (2).
[X] (1) The Plan will use the regular method under Plan
Section 2.58(a) for identifying Highly Compensated
Employees.
If you selected this option AND your Plan Year is the
CALENDAR YEAR, do you wish to make the regular
method's "calendar year election" for identifying your
Highly Compensated Employees?
[X] (a) Yes (b) No
[ ] (2) The Plan will use the simplified method under Plan
Section 2.58(b) for identifying Highly Compensated
Employees.
3. ELIGIBILITY FOR PLAN PARTICIPATION (PLAN SECTION 3.1). Employees will be
eligible to participate in the Plan when they complete the requirements
you select in A, B, C and D below.
A. CLASSES OF ELIGIBLE EMPLOYEES. The Plan will cover all employees
who have met the age and service requirements with the following
exclusions:
[X] (1) No exclusions. All job classifications will be eligible.
[ ] (2) The Plan will exclude employees in a unit of Employees
covered by a collective bargaining agreement with
respect to which retirement benefits were the subject
of good faith bargaining, with the exception of the
following collective bargaining units, which will be
included: ._________________
[ ] (3) The Plan will exclude employees who are non-resident
aliens without U.S. source income.
[ ] (4) Employees of the following Affiliated Employers
(specify):
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[ ] (5) Leased Employees
[ ] (6) Employees in the following other classes (specify):
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B. AGE REQUIREMENT (check and complete (1) or (2)):
[ ] (1) No minimum age required for participation
[X] (2) Employees must reach age 21 (not over 21) to
participate
C. SERVICE REQUIREMENTS.
(1) ELECTIVE DEFERRALS. To become eligible, an employee must
complete (choose one):
[ ] (a) No minimum service required.
[X] (b) One 6-month Eligibility Period
[ ] (c) One ___ -month Eligibility Period (must be less
than 12)
[ ] (d) One 12-month Eligibility Period
(2) EMPLOYER MATCHING CONTRIBUTIONS. To become eligible, an
employee must complete (choose one):
[ ] (a) No minimum service required.
[X] (b) One 6-month Eligibility Period
[ ] (c) One __-month Eligibility Period (must be less
than 12)
[ ] (d) One 12-month Eligibility Period
[ ] (e) Two 12-month Eligibility Periods (may only
be chosen if you adopt the vesting schedule
under item 9.A(3)(a) to provide 100% full
and immediate vesting of Employer Matching
Contributions).
[ ] (f) Not applicable. The Employer will not make
Employer Matching Contributions.
(3) PROFIT SHARING CONTRIBUTIONS. To become eligible, an
employee must complete (choose one):
[ ] (a) No minimum service required.
[X] (b) One 6-month Eligibility Period
[ ] (c) One __-month Eligibility Period (must be
less than 12)
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[ ] (d) One 12-month Eligibility Period
[ ] (e) Two 12-month Eligibility Periods (may only
be chosen if you adopt the vesting schedule
under item 9.A(3)(a) to provide for 100%
full and immediate vesting of Profit
Sharing Contributions)
[ ] (f) Not applicable. The Employer will not make
Profit Sharing Contributions.
(4) If the Employer acquired a business on or before the
Effective Date of this Plan AND the Eligibility Periods
selected in (1), (2) and (3) for former employees of that
acquired business will include the former employees' periods
of employment with that business, list the business below.
Any acquired business which had a plan which the Employer
now maintains must be listed below.
N/A
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(5) If the Employer acquires a business after the Effective
Date, the Eligibility Periods for an employee of the
acquired business will be the periods selected in (1), (2)
and (3) beginning on (check (a) or (b)):
[X] (a) the date the employee began work with the
acquired business.
[ ] (b) the date of the acquisition (i.e., the date
the employee begins work for the Employer).
(6) HOURS OF SERVICE FOR ELIGIBILITY PERIODS.
(a) 6-MONTH ELIGIBILITY PERIOD. To receive credit for a
6-month Eligibility Period, an employee must complete
6 months of service, during which he completes at
least:
[X] (i) 500 Hours of Service
[ ] (ii) ___ Hours of Service
(under 500)
(b) 12-MONTH ELIGIBILITY PERIOD. To receive credit for a
12-month Eligibility Period, an employee must complete
12 months of service, during which he completes at
least:
[ ] (i) 1,000 Hours of Service
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[ ] (ii) ___ Hours of Service
(under 1,000)
(c) OTHER ELIGIBILITY PERIOD. To receive credit for the
Eligibility Period selected in 3.C(1)(c), 3.C(2)(c)
and/or 3.C(3)(c) above, an employee must complete
during it at
least:
[ ] (i) ____ Hours of Service
(under 1000)
(7) METHOD OF CREDITING HOURS OF SERVICE FOR ELIGIBILITY AND
VESTING. Hours of Service will be credited to an employee by
the following method (check one):
[X] (a) Actual hours for which an employee is paid
[ ] (b) Any employee who has one actual paid hour
in the following period will be credited
with the number of Hours of Service
indicated (check one):
[ ] (i) Day (10 Hours of Service)
[ ] (ii) Week (45 Hours of Service)
[ ] (iii) Semi-monthly payroll period (95 Hours
of Service)
[ ] (iv) Month (190 Hours of Service)
(8) ENTRY DATES. Each employee in an eligible class who
completes the age and service requirements specified above
will begin to participate in the Plan on (check one):
[ ] (a) The first day of the month in which he fulfills
the requirements.
[X] (b) The first of the following dates occurring
after he fulfills the requirements (check
one):
[ ] (i) The first day of the month following
the date he fulfills the requirements
(monthly).
[X] (ii) The first day of the first, fourth,
seventh and tenth months in a Plan
Year (quarterly).
[ ] (iii) The first day of the first month
and the seventh month in a Plan
Year (semiannually).
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[ ] (c) Other:_____ (May be no later than (i) the
first day of the Plan Year after which he
fulfills the requirements, and (ii) the date
six months after the date on which he fulfills
the requirements, which ever occurs first.)
D. (FOR NEW PLANS ONLY) Will all eligible Employees as of the
Effective Date be required to meet the age and service requirements
for participation specified in Band C above?
[ ] (a) Yes
[ ] (b) No. Eligible Employees will be eligible to become
Participants as of the Effective Date even if they
have not satisfied (check one or both):
[ ] (i) the age requirement.
[ ] (ii) the service requirement.
4. CONTRIBUTIONS.
A. ELECTIVE DEFERRALS (PLAN SECTION 5.2). Your Plan will allow
employees to elect pre-tax contributions under Section 401(k) of
the Code. You must complete this part A.
(1) A Participant may make Elective Deferrals for each year in
an amount not to exceed (check one):
[X] (a) 15% of his Earnings
[ ] (b) _____% of his Earnings not to exceed $_____
(specify a dollar amount)
[X] (c) $_____ The IRS yearly maximum (specify a
dollar amount)
(2) Will a Participant be required to make a minimum Elective
Deferral in order to make Elective Deferrals under the Plan?
(check one and complete as applicable)
[X] (a) No.
[ ] (b) Yes. The minimum Elective Deferral will be
___% of the Participant's Earnings.
(3) A Participant may begin to make Elective Deferrals, or
change the amount of his Elective Deferrals, as of the
following dates (check one):
[ ] (a) First business day of each month (monthly).
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[X ] (b) First business day of the first, fourth,
seventh and tenth months of the Plan Year
(quarterly).
[ ] (c) First business day of the first and seventh
months of the Plan Year (semiannually).
[ ] (d) First business day of the Plan Year only
(annually).
[ ] (e) Other: _______________
(4) Will Participants be permitted to make separate Elective
Deferrals of bonuses, even if bonuses have otherwise been
excluded from Compensation for the purpose of Elective
Deferrals under 7.A(1)?
[ ] (a) Yes [X] (b) No
B. EMPLOYER MATCHING CONTRIBUTIONS. (Plan Section 5.8). Complete
this part B only if you will make Employer Matching Contributions
under the Plan.
(1) The Employer will contribute and will allocate to each
Qualified Participant's Employee Matching Account an
Employer Matching Contribution on the basis set forth below:
[X ] (a) Discretionary matching contributions. (The
Employer may select this option in addition to
option (b) if the Employer wishes to have the
option to make discretionary matching
contributions in addition to fixed matching
contributions.)
[ ] (b) Fixed matching contributions.
[ ] (i) based on Elective Deferrals:
[ ] (A) ___% of Elective Deferrals
[ ] (B) ___% of Elective Deferrals
up to ___% of Earnings.
[ ] (C) ___% of Elective Deferrals
up to ___% of Earnings and
___ % of Elective Deferrals
over that percentage of
Earnings and up to ___% of
Earnings. (The third
percentage number must be
less than the first
percentage number.)
[ ] (D) ___% of Elective Deferrals
up to $_____ of
Elective Deferrals.
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[ ] (E) ___% of Elective Deferrals up to
$_____ of Elective Deferrals and ___%
of Elective Deferrals over
that dollar amount and up to
$_____ of Elective Deferrals. (The
last percentage must be less
than the first percentage).
[ ] (ii) based on after-tax Participant
Contributions:
[ ] (A) ___% of Participant Contributions
[ ] (B) ___% of Participant
Contributions up to ___% of
Earnings.
[ ] (C) ___% of Participant Contributions
up to ___% of Earnings and ___% of
Participant Contributions over
that percentage of Earnings and
up to ___% of Participant
Contributions. (The third
percentage must be less than the
first percentage)
[ ] (D) ___% of Participant
Contributions up to $___ of
Participant Contributions.
[ ] (E) ___% of Participant Contributions
up to $___ of Participant
Contributions and ___% of
Participant Contributions over
that dollar amount and up to $_____
of Participant Contributions.
(The last percentage must be less
than the first percentage).
(2) QUALIFIED PARTICIPANT. In order to receive an allocation of
Employer Matching Contributions for a Plan Year, an Employee
must be a Qualified Participant for that purpose. Select
below either (a) alone, or any combination of (b), (c) and
(d).
[ ] (a) To be a Qualified Participant eligible to
receive Employer Matching Contributions for a
Plan Year, an Employee must (check (i) or (ii)):
[ ] (i) Either be employed on the last day
of the Plan Year, complete more
than 500 Hours of Service in the
Plan Year, or retire, die or become
disabled in the Plan Year.
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[ ] (ii) Either be employed on the last day
of the Plan Year or complete more
than 500 Hours of Service in the
Plan Year.
Stop here if you checked (a). If you did not check (a),
check (b), (c) or (d), or any combination of (b), (c) and
(d).
To be a Qualified Participant eligible to receive Employer
Matching Contributions for a Plan Year, an Employee must:
[X] (b) Be credited with 1 (choose 1, 501 or 1,000)
Hours of Service in the Plan Year.
[ ] (c) Be an Employee on the last day of the Plan Year.
[ ] (d) Retire, die or become disabled during the Plan
Year.
(3) Will the Employer have the option of making all or any
portion of its Employer Matching Contributions in Employer
Stock?
[ ] (a) Yes [X] (b) No
C. PROFIT SHARING CONTRIBUTIONS. (Plan Sections 4.1 and 4.2)
(1) PROFIT LIMITATION. Will Profit Sharing Contributions to the
Plan be limited to the current and accumulated profits of
your Business? Check one:
[ ] (a) Yes [X] (b) No
(2) AMOUNT. The Employer will contribute to the Plan for each
Plan Year (check one):
[X] (a) An amount chosen by the Employer from year to
year
[ ] (b) ___% of the Earnings of all Qualified
Participants for the Plan Year
[ ] (c) $___ for each Qualified Participant per (enter
time period, e.g. payroll period, plan year)
(3) ALLOCATIONS TO PARTICIPANTS
(a) ALLOCATION TO PARTICIPANTS. Profit Sharing
Contributions will be allocated:
[ ] (i) Pro rata (percentage based on
compensation)
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[ ] (ii) Uniform Dollar amount
[X] (iii) Integrated With Social Security
(complete (b) and (c) below)
(b) INTEGRATION WITH SOCIAL SECURITY. (Complete only if
you have elected in 4.C(3)(a) to integrate your Plan
with Social Security.) Profit Sharing Contributions
will be allocated to Qualified Participants as you
check below:
[ ] (i) Profit Sharing Contributions will be
allocated according to the Top-Heavy
Integration Formula in Plan Section
4.2(c)(1) in every Plan Year, whether or
not the Plan is top-heavy.
[X] (ii) Profit Sharing Contributions will be
allocated according to the Top-Heavy
Integration Formula in Plan Section
4.2(c)(1) only in Plan Years in which the
Plan is top-heavy. In all other Plan
Years, contributions will be allocated
according to the Non-Top-Heavy
Integration Formula in Plan Section
4.2(c)(2).
(c) INTEGRATION LEVEL. (Complete only if you have elected
in 4.C(3)(a) to integrate your Plan with Social
Security.) The Integration Level will be (check one):
[X] (i) The Social Security Wage Base in effect
at the beginning of the Plan Year.
[ ] (ii) ___% (not more than 100%) of the Social
Security Wage Base in effect at the
beginning of the Plan Year.
[ ] (iii) $___ (not more than the Social Security
Wage Base).
NOTE: The Social Security Wage Base is
indexed annually to reflect increases in
the cost of living.
(4) QUALIFIED PARTICIPANTS. In order to receive an allocation of
Profit Sharing Contributions for a Plan Year, an Employee
must be a Qualified Participant for this purpose. Select
below either (a) alone, or any combination of (b), (c) and
(d).
[ ] (a) To be a Qualified Participant eligible to
receive an allocation of Profit Sharing
Contributions for a Plan Year, an Employee must
(check (i) or (ii)):
[ ] (i) Either be employed on the last day
of the Plan Year, complete more
than 500 Hours of Service in the
Plan Year, or retire, die or become
disabled in the Plan Year.
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[ ] (ii) Either be employed on the last day
of the Plan Year or complete more
than 500 Hours of Service in the
Plan Year.
Stop here if you checked (a). If you did not check (a),
check (b), (c) or (d), or any combination of (b), (c) and
(d).
To be a Qualified Participant eligible to receive an
allocation of Profit Sharing Contributions for a Plan Year,
an Employee must:
[X] (b) Be credited with 1,000 (choose 1, 501 or 1,000)
Hours of Service in the Plan Year.
[X] (c) Be an Employee on the last day of the Plan Year.
[X] (d) Retire, die or become disabled during the Plan
Year.
D. PARTICIPANT CONTRIBUTIONS (PLAN SECTION 4.6). Will your Plan allow
Participants to make after-tax contributions?
[ ] (1) Yes [X] (2) No
E. QUALIFIED MATCHING CONTRIBUTIONS (PLAN SECTION 2.61). Skip this
part E if you will not make Qualified Matching Contributions.
(1) Qualified Matching Contributions will be made with respect
to (check one):
[ ] (a) Elective Deferrals made by all Qualified
Participants (as defined in 4.B(2))
[ ] (b) Elective Deferrals made only by Qualified
Participants (as defined in 4.B(2)) who are not
Highly Compensated Participants
(2) The amount of Qualified Matching Contributions made with
respect to a Participant will be:
[ ] (a) discretionary
[ ] (b) fixed (check and complete (i), (ii) or (iii))
[ ] (i) ___% of Elective Deferrals
[ ] (ii) ___% of Elective Deferrals that
do not exceed ___% of Earnings
[ ] (iii) ___% of Elective Deferrals that
do not exceed $___.
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F. QUALIFIED NONELECTIVE CONTRIBUTIONS (PLAN SECTION 2.62): Skip this
part F if you will not make Qualified Nonelective Contributions.
(1) Qualified Nonelective Contributions will be made on behalf
of (check one):
[ ] (a) All Qualified Participants
[X] (b) Only Qualified Participants who are not Highly
Compensated Employees
(2) The amount of Qualified Nonelective Contributions for a Plan
Year will be (check one):
[ ] (a) ___% (not over 15%) of the Earnings of
Participants on whose behalf Qualified
Nonelective Contributions are made
[X] (b) An amount determined by the Employer from year
to year, to be shared in proportion to their
Earnings by Participants on whose behalf
Qualified Nonelective Contributions are made
G. Forfeitures
(1) EMPLOYER MATCHING CONTRIBUTIONS. Forfeitures of Employer
Matching Contributions will be used as follows (check and
complete (a) or (b)):
[X] (a) Applied to reduce the following contributions
required of the Employer (check (i) and/or
(ii)):
[X] (i) Employer Matching Contributions
[X] (ii) Profit Sharing Contributions
[ ] (b) Reallocated as follows (check (i) or (ii)):
[ ] (i) As additional Employer Matching
Contributions
[ ] (ii) As additional Profit Sharing
Contributions
(2) Profit Sharing Contributions. Forfeitures of Profit Sharing
Contributions will be used as follows (check (a) or (b)):
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[X] (a) Applied to reduce the following contributions
required of the Employer (check (i) and/or
(ii)):
[X] (i) Profit Sharing Contributions
[X] (ii) Employer Matching Contributions
[ ] (b) Reallocated as additional Profit Sharing
Contributions
5. TOP-HEAVY MINIMUM CONTRIBUTIONS (PLAN SECTION 14.3). Skip paragraphs A
and B below if you do not maintain any other qualified plan in addition
to this Plan.
A. For any Plan Year in which the Plan is Top-Heavy, the Top-Heavy
minimum contribution (or benefit) for Non-Key employees
participating both in this Plan and another qualified plan
maintained by the Employer will be provided in (check one):
[ ] (1) This Plan [ ] (2) The other qualified plan
B. If you maintain a defined benefit plan in addition to this Plan,
and the Top-Heavy Ratio (as defined in Plan Section 14.2(c)) for
the combined plans is between 60% and 90%, you may elect to provide
an increased minimum allocation or benefit pursuant to Plan Section
14.4. Specify your election by completing the statement below:
The Employer will provide an increased (specify contribution or
benefit) ___ in its (specify defined contribution or defined
benefit) ___ plan as permitted under Plan Section 14.4.
6. OTHER PLANS. YOU MUST COMPLETE THIS SECTION IF you maintain or ever
maintained another qualified plan in which any Participant in this Plan
is (or was) a participant or could become a participant.
The Plan and your other plan(s) combined will meet the contribution
limitation rules in Article 6 of the Plan as you specify below:
A. If a Participant in the Plan is covered under another qualified
defined contribution plan maintained by your Business, other than a
master or prototype plan (check one):
[ ] (1) The provisions of Section 6.2 of the Plan will apply
as if the other plan were a master or prototype plan.
[ ] (2) The plans will limit total annual additions to the
maximum permissible amount, and will properly reduce
any excess amounts, in the manner you describe below.
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B. If a Participant in the Plan is or has ever been a participant in a
defined benefit plan maintained by your Business, the plans will
meet the limits of Article 6 in the manner you describe below:
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If your Business has ever maintained a defined benefit plan, state
below the interest rate and mortality table to be used in
establishing the present value of any benefit under the defined
benefit plan for purposes of computing the top-heavy ratio:
Interest rate: ___%
Mortality Table:___
7. COMPENSATION (PLAN SECTION 2.8).
A. AMOUNT.
(1) ELECTIVE DEFERRALS AND EMPLOYER MATCHING CONTRIBUTIONS.
Compensation for the purposes of determining the amount and
allocation of Elective Deferrals and Employer Matching
Contributions will be determined as follows (choose either
(a) or (b), and (c) and/or (d) as applicable).
[X] (a) Compensation will include Form W-2 earnings as
defined in Section 2.8 of the Plan.
[ ] (b) Compensation will include all compensation
included in the definition of Code Section 415
Compensation in Plan Section 6.5(b) of the Plan.
[ ] (c) In addition to the amount provided in either
(a) or (b) above, Compensation will also
include any amounts withheld from the
employee under a 401(k) plan, cafeteria
plan, SARSEP, tax sheltered 403(b)
arrangement, or Code Section 457 deferred
compensation plan, and contributions
described in Code Section 414(h)(2) that
are picked up by a governmental employer.
[ ] (d) Compensation will also exclude the following
amount (choose each that applies):
[ ] (i) overtime pay.
[ ] (ii) bonuses.
[ ] (iii) commissions.
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[ ] (iv) other pay (describe):___
[ ] (v) compensation in excess of $_____
(2) PROFIT SHARING CONTRIBUTIONS. Compensation for the purposes
of determining the amount and allocation of Profit Sharing
Contributions shall be determined as follows (choose either
(a) or (b), and (c) and/or (d), as applicable).
[X] (a) Compensation will include Form W-2 earnings as
defined in Section 2.8 of the Plan.
[ ] (b) Compensation will include all compensation
included in the definition of Code Section 415
Compensation in Section 6.5(b) of the Plan.
[ ] (c) In addition to the amount provided in either
(a) or (b) above, compensation will also
include any amounts withheld from the
employee under a 401(k) plan, cafeteria
plan, SARSEP, tax sheltered 403(b)
arrangement, or Code Section 457 deferred
compensation plan, and contributions
described in Code Section 414(h)(2) that
are picked up by a governmental employer.
[ ] (d) Compensation will also exclude the following
amounts (choose each that applies):
[ ] (i) overtime pay
[ ] (ii) bonuses
[ ] (iii) commissions
[ ] (iv) other pay describe: ___
[ ] (v) compensation in excess of $___
Note: No exclusion under (d) may be selected if Profit
Sharing Contributions will be integrated with Social
Security under 4.C(3)(a)(iii). In addition, no
exclusion under (d) will apply for purposes of
determining the top-heavy minimum contribution if the
Plan is top-heavy.
B. MEASURING PERIOD. Compensation will be based on the Plan Year.
However, for an Employee's initial year of participation in the
Plan, Compensation will be recognized as of:
[ ] (1) the first day of the Plan Year.
[X] (2) the date the Participant enters the Plan.
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8. DISTRIBUTIONS AND WITHDRAWALS.
A. RETIREMENT DISTRIBUTIONS.
(1) NORMAL RETIREMENT AGE (PLAN SECTION 7.1). Normal retirement
age will be the later of 60 (not over age 65) or ___ (not
more than 5) years of participation in the Plan.
(2) EARLY RETIREMENT (PLAN SECTION 7.1). Select one:
[ ] (a) No early retirement will be permitted.
[X] (b) Early retirement will be permitted at age 55.
[ ] (c) Early retirement will be permitted at age ___
with at least ___ Years of Service.
(3) ANNUITIES (PLAN SECTION 9.3). Will your Plan permit
distributions in the form of a life annuity? YOU MUST CHECK
YES if this Plan replaces or serves as a transferee plan for
an existing Plan that permits distributions in a life
annuity form.
[X] (a) Yes [ ] (b) No
B. HARDSHIP DISTRIBUTIONS (PLAN SECTION 12.2). Will your Plan permit
hardship distributions?
[ ] (1) No
[X] (2) Yes. Indicate below from which Accounts hardship
withdrawals will be permitted (check all that apply):
[X] (a) Elective Deferral Account
[X] (b) Rollover Account
[X] (c) Employer Matching Account
[X] (d) Employer Contribution Account (i.e. Profit
Sharing Contributions)
C. WITHDRAWALS AFTER AGE 59 1/2 (PLAN SECTION 12.3). Will your Plan
permit employees over age 59 1/2 to withdraw amounts upon request?
YOU MUST CHECK YES if this Plan replaces an existing Plan that
permits withdrawals after age 59 1/2.
[X] (1) Yes [X] (2) No
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D. WITHDRAWALS FOLLOWING FIVE YEARS OF PARTICIPATION OR TWO
YEARS AFTER CONTRIBUTION (PLAN SECTION 12.4). Will your Plan permit
employees to withdraw amounts from the vested portion of their
Employer Matching Contribution Accounts and Employer Contribution
Accounts (i.e., Profit Sharing Contributions) if either (i) the
Participant has been a Participant for at least five years, or (ii)
the amount withdrawn from each of these Accounts is limited to the
amounts that were credited to that Account prior to the date two
years before the withdrawal? YOU MUST CHECK YES if this Plan
replaces a Plan which permits withdrawals in these circumstances.
[ ] (1) Yes [X] (2) No
E. LOANS (PLAN SECTION 12.5). Will your Plan permit loans to employees
from the vested portion of their Accounts?
[ ] (1) No
[X] (2) Yes. Indicate below whether loans will be permitted
for any reason or only on account of hardship:
[X] (a) Any reason.
[ ] (b) Hardship only.
F. AUTOMATIC DISTRIBUTION OF SMALL ACCOUNTS (PLAN SECTION 9.1). Will
your Plan automatically distribute vested account balances not
exceeding $3,500, within 60 days after the end of the Plan Year in
which a Participant separates from employment?
[X] (1) Yes [ ] (2) No
9. VESTING (PLAN ARTICLE 8)
A. TIME OF VESTING (SELECT (1) OR (2) BELOW AND COMPLETE VESTING
SCHEDULE).
[X] (1) Single Vesting Schedule:
The vesting schedule selected below will apply to both
Employer Matching Contributions and Profit Sharing
Contributions.
[ ] (2) Dual Vesting Schedules:
The vesting schedule marked with an "MC" below will apply to
Employer Matching Contributions and the vesting schedule
marked with a "PS" below will apply to Profit Sharing
Contributions.
(3) Vesting Schedules:
[ ] (a) 100% vesting immediately upon participation in the Plan.
[X] (b) Five-Year Graded Schedule:
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Vested Percentage 20% 40% 60% 80% 100%
Years of Service 1 2 3 4 5
[ ] (c) Seven-Year Graded Schedule:
Vested Percentage 20% 40% 60% 80% 100%
Years of Service 3 4 5 6 7
[ ] (d) Six-Year Graded Schedule:
Vested Percentage 20% 40% 60% 80% 100%
Years of Service 2 3 4 5 6
[ ]
(e) Three-Year Cliff Schedule:
Vested Percentage 0% 100%
Years of Service 0-2 3
[ ] (f) Five-Year Cliff Schedule:
Vested Percentage 0% 100%
Years of Service 0-4 5
[ ] (g) Other Schedule (must be at least as favorable as
Seven-Year Graded Schedule or Five-Year Cliff
Schedule):
(i) Vested Percentage __% __% __% __% __%
(ii) Years of Service ___ ___ ___ ___ ___
(4) Top Heavy Schedule:
(a) If you selected above an "Other Schedule," specify in
the space below the schedule that will apply in Plan
Years that the Plan is top-heavy. The schedule you
specify must be at least as favorable to employees, at
all years of service, as either the Six-Year Graded
Schedule or the Three-Year Cliff Schedule. The
top-heavy vesting schedule will be:
[ ] (i) the same "Other Schedule" selected above
[ ] (ii) the following schedule:
Vested Percentage ___% ___% ___% ___% ___%
Years of Service ___ ___ ___ ___ ___
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[ ] (iii) Six-Year Graded Schedule
[ ] (iv) Three-Year Cliff Schedule
(b) If the Plan becomes top-heavy in a Plan Year, will the
top-heavy vesting schedule apply for all subsequent
Plan Years?
[ ] (i) Yes [ ] (ii) No
B. SERVICE FOR VESTING (SELECT (1) OR (2), AND COMPLETE (3)).
[ ] (1) All of an employee's service will be used to determine
his Years of Service for purposes of vesting
[X] (2) An employee's Years of Service for vesting will
include all years except (check all that apply):
[ ] (a) (New plan) service before the effective date of
the plan
[ ] (b) (Existing plan) service before the effective
date of the existing plan
[X] (c) Service before the Plan Year in which an
employee reached age 18
(3) Will an employee's service for a business acquired by the
Employer that was performed before the acquisition be
included in determining an employee's Years of Service for
vesting?
[X] (a) Yes [ ] (b) No
List below any business acquired on or before the Effective
Date for which an employee's service will be included in
determining an employee's Years of Service for vesting.
Service of an employee for a predecessor employer (which
includes an acquired business) whose plan the Employer
maintains MUST be included as service for the Employer under
this Plan. Therefore, also list below any predecessor
employer whose plan the Employer maintains:
N/A
------
------
------
C. HOURS OF SERVICE FOR VESTING. The number of Hours of Service
required for crediting a Year of Service for vesting will be
(check one):
[X] (1) 1,000 Hours of Service
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[ ] (2) __ Hours of Service
(under 1,000)
Hours of Service for vesting will be credited according to the
method selected under 3.C(6).
D. YEAR OF SERVICE MEASURING PERIOD FOR VESTING (PLAN SECTION 2.52).
The periods of 12 months used for measuring Years of Service will
be (check one):
[X] (1) Plan Years
[ ] (2) 12-month Eligibility Periods
Note: If you are adopting this Plan to replace an existing plan,
employees will be credited under this Plan with all service credited to
them under the plan you are replacing.
10. INVESTMENTS (PLAN SECTIONS 13.2 AND 13.3).
A. AVAILABLE INVESTMENT PRODUCTS (PLAN SECTION 13.2). The investment
options available under the Plan are identified in the Service
Agreement or such other written instructions between the Employer
and ▇▇▇▇▇▇, as the case may be. All Investment Products must be
sponsored, underwritten, managed or expressly agreed to in writing
by ▇▇▇▇▇▇. If there is any amount in the Trust Fund for which no
instructions or unclear instructions are delivered, it will be
invested in the default option selected by the Employer in its
Service Agreement with ▇▇▇▇▇▇, or such other written instructions
as the case may be, until instructions are received in good order,
and the Employer will be deemed to have selected the option
indicated in its Service Agreement, or such other written
instructions as the case may be, as an available Investment Product
for that purpose.
B. INSTRUCTIONS (PLAN SECTION 13.3). Investment instructions for
amounts held under the Plan generally will be given by each
Participant for his own Accounts and delivered to ▇▇▇▇▇▇ as
indicated in the Service Agreement between ▇▇▇▇▇▇ and the Employer.
Check below only if the EMPLOYER will make investment decisions
under the Plan with respect to the following contributions made to
the Plan.
(Check all applicable options.)
[ ] (1) The Employer will make all investment decisions
with respect to all employee contributions, including
Elective Deferrals, Participant Contributions,
Deductible Employee Contributions and Rollover
Contributions.
[ ] (2) The Employer will make all investment decisions with
respect to all Employer contributions, including
Profit Sharing Contributions, Employer Matching
Contributions, Qualified Matching Contributions and
Qualified Nonelective Contributions.
[ ] (3) The Employer will make investment decisions with
respect to Employer Matching Contributions and
Qualified Matching Contributions.
21
22
[ ] (4) The Employer will make investment decisions with
respect to Qualified Nonelective Contributions.
[ ] (5) The Employer will make investment decisions with
respect to Profit Sharing Contributions.
[ ] (6) Other (Describe. An Employer may elect to make
investment decisions with respect to a specified
portion of a specific type of contribution to the
Plan.): _________
_________
_________
C. CHANGES. Investment instructions may be changed (check one):
[X] (1) on any Valuation Date (daily)
[ ] (2) on the first day of any month (monthly)
[ ] (3) on the first day of the first, fourth, seventh and
tenth months in a Plan Year (quarterly)
D. EMPLOYER STOCK. (Skip this paragraph if you did not designate
Employer Stock as an investment under the Service Agreement.)
(1) VOTING. Employer Stock will be voted as follows:
[ ] (a) In accordance with the Employer's instructions.
[ ] (b) In accordance with the Participant's
instructions. Participants are hereby appointed
named fiduciaries for the purpose of the voting
of Employer Stock in accordance with Plan
Section
13.8.
(2) TENDERING. Employer stock will be tendered as follows:
[ ] (a) In accordance with the Employer's instructions.
[ ] (b) In accordance with the Participant's
instructions. Participants are hereby appointed
named fiduciaries for the purpose of the
tendering of Employer Stock in accordance with
Plan Section
13.8.
11. ADMINISTRATION.
A. PLAN ADMINISTRATOR (PLAN SECTION 15.1). You may appoint a person or
a committee to serve as Plan Administrator. If you do not appoint a
Plan Administrator, the Plan provides that the Employer will be the
Plan Administrator.
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23
The initial Plan Administrator will be (check one):
[ ] This person:
[ ] A committee composed of these people:
--------
--------
--------
B. RECORDKEEPER (PLAN SECTION 15.4). UNLESS ▇▇▇▇▇▇ expressly permits
otherwise, you must appoint ▇▇▇▇▇▇ as Recordkeeper to perform
certain routine services determined upon execution of a written
Service Agreement between ▇▇▇▇▇▇ and the Employer.
The initial Record keeper will be:
▇▇▇▇▇▇ FIDUCIARY TRUST COMPANY
(Name)
▇▇▇▇▇▇ RETAIL 401(K) B-2-B
▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(Address)
12. DETERMINATION LETTER REQUIRED. You may not rely on an opinion letter
issued to ▇▇▇▇▇▇ by the National Office of the Internal Revenue Service
as evidence that the Plan is qualified under Section 401 of the Internal
Revenue Code. In order to obtain reliance with respect to qualification
of the Plan, you must receive a determination letter from the appropriate
Key District Office of Internal Revenue. ▇▇▇▇▇▇ will prepare an
application for such a letter upon your request at a fee agreed upon by
the parties.
▇▇▇▇▇▇ will inform you of all amendments it makes to the prototype plan.
If ▇▇▇▇▇▇ ever discontinues or abandons the prototype plan, ▇▇▇▇▇▇ will
inform you. This Plan Agreement #001 may be used only in conjunction with
▇▇▇▇▇▇'▇ Basic Plan Document #07.
* * * * *
If you have any questions regarding this Plan Agreement, contact ▇▇▇▇▇▇
at:
▇▇▇▇▇▇ Defined Contribution Plans
One ▇▇▇▇▇▇ Place B2B
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇-▇▇▇-▇▇▇-▇▇▇▇
23
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* * * * *
EMPLOYER'S ADOPTION OF ▇▇▇▇▇▇
FLEXIBLE 401(k) AND PROFIT SHARING PLAN
The Employer named below hereby adopts a ▇▇▇▇▇▇ FLEXIBLE 401(k) AND PROFIT
SHARING PLAN, and appoints ▇▇▇▇▇▇ FIDUCIARY TRUST COMPANY to serve as Trustee of
the Plan. The Employer acknowledges that it has received copies of the current
prospectus for each Investment Product available under the Plan, and represents
that it will deliver copies of the then current prospectus for each such
Investment Product to each Participant before each occasion on which the
Participant makes an investment instruction as to his Account. The Employer
further acknowledges that the Plan will be acknowledged by ▇▇▇▇▇▇ as a ▇▇▇▇▇▇
Flexible 401(k) and Profit Sharing Plan only upon ▇▇▇▇▇▇'▇ acceptance of this
Plan Agreement.
INVESTMENT OPTIONS
The Employer hereby elects the following as the investment options available
under the Plan:
▇▇▇▇▇▇ MONEY MARKET FUND ▇▇▇▇▇▇ INCOME FUND
▇▇▇▇▇▇ INTERMEDIATE GOVERNMENT THE ▇▇▇▇▇▇ FUND FOR GROWTH AND INCOME
INCOME FUND
▇▇▇▇▇▇ GLOBAL GROWTH FUND ▇▇▇▇▇▇ NEW OPPORTUNITIES FUND
▇▇▇▇▇▇ VISTA FUND ▇▇▇▇▇▇ VOYAGER FUND
The following investment option shall be the default option: ▇▇▇▇▇▇ MONEY
MARKET FUND (select the default option from among the investment options listed
above).
Employer signature(s) to adopt Plan: Date of signature:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 10/15/96
------------------------------------------------- -------------------------
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 10/15/96
------------------------------------------------- -------------------------
Please print name(s) of authorized person(s) signing above:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------------
A new Plan must be signed by the last day of the Plan Year in which the Plan is
to be effective.
24
25
* * * * *
ACCEPTANCE OF ▇▇▇▇▇▇ FIDUCIARY TRUST COMPANY AS TRUSTEE
The Trustee accepts appointment in accordance with the terms and conditions of
the Plan, effective as of the date of execution by the Employer set forth above.
▇▇▇▇▇▇ Fiduciary Trust Company, Trustee
By: ______________________________________________________________________
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* * * * *
ACCEPTANCE BY ▇▇▇▇▇▇
▇▇▇▇▇▇ hereby accepts this Employer's Plan as a prototype established under
▇▇▇▇▇▇ Basic Plan Document #07.
▇▇▇▇▇▇ Mutual Funds Corp.
By: ______________________________________
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▇▇▇▇▇▇ FLEXIBLE 401(K) AND PROFIT SHARING PLAN
PLAN AGREEMENT #001
This is the Plan Agreement for a ▇▇▇▇▇▇ nonstandardized prototype 401(k) plan
with optional profit sharing plan provisions. Please consult a tax or legal
advisor and review the entire form before you sign it. If you fail to fill out
this ▇▇▇▇▇▇ Plan Agreement properly, the Plan may be disqualified. By executing
this Plan Agreement, the Employer establishes a 401(k) and profit sharing plan
and trust upon the terms and conditions of ▇▇▇▇▇▇ Basic Plan Document #07, as
supplemented and modified by the provisions elected by the Employer in this Plan
Agreement. THIS PLAN AGREEMENT MUST BE ACCEPTED BY ▇▇▇▇▇▇ IN ORDER FOR THE
EMPLOYER TO RECEIVE FUTURE AMENDMENTS TO THE ▇▇▇▇▇▇ FLEXIBLE 401(K) AND PROFIT
SHARING PLAN.
* * * * *
1. EMPLOYER INFORMATION. The Employer adopting this Plan is:
A. EMPLOYER NAME:
B. EMPLOYER IDENTIFICATION NUMBER:
C. EMPLOYER ADDRESS:
D. SIC CODE:
E. EMPLOYER CONTACT: Name:
Title: Phone #:
F. FISCAL YEAR: through
(month/day) (month/day)
G. TYPE OF ENTITY (CHECK ONE):
[ ] Corporation [ ] Partnership [ ] Subchapter S Corporation
[ ] Sole proprietorship [ ] Other
H. PLAN NAME:
I. PLAN NUMBER: 00 (complete)
28
2. PLAN INFORMATION.
A. PLAN YEAR. Check one:
[ ] (1) The Calendar Year
[ ] (2) The Plan Year will be the same as the Fiscal Year of
the Employer shown in 1.F. above. If the Fiscal Year
of the Employer changes, the Plan Year will change
accordingly.
[ ] (3) The Plan Year will be the period of 12 months
beginning on the first day of (month) and
ending on the last day of (month) .
[ ] (4) A short Plan Year commencing on (month/day/year)
and ending on (month/day/year) and
immediately thereafter the 12-consecutive month
period commencing on (month/day).
The Plan Year will also be your Plan's Limitation Year for purposes
of the contribution limitation rules in Article 6 of the Plan.
B. Effective Date of Adoption of Plan.
(1) Are you adopting this Plan to replace an existing plan?
[ ] (a) Yes (b) No
(2) IF YOU ANSWERED YES in 2.B(1) above, the Effective
Date of your adoption of this Replacement Plan will be
the first day of the current Plan Year unless you
elect a later date in (2)(b) below. Please complete
the following:
(a)
Original Effective Date of the Plan you are Replacing
(b)
Effective Date of this Replacement Plan
(3) IF YOU ANSWERED NO in 2B(1) above, the Effective Date
of your adoption of this Plan will be the day you
select below (not before the first day of the current
Plan Year, and not before the day your Business
began):
(a) The Effective Date is:_______
month/day/year
2
29
C. IDENTIFYING HIGHLY COMPENSATED EMPLOYEES. Check either (1) or (2).
[ ] (1) The Plan will use the regular method under Plan
Section 2.58(a) for identifying Highly Compensated
Employees.
If you selected this option and your Plan Year is the
calendar year, do you wish to make the regular
method's "calendar year election" for identifying your
Highly Compensated Employees?
[ ] (a) Yes (b) No
(2) The Plan will use the simplified method under Plan
Section 2.58(b) for identifying Highly Compensated
Employees.
3. ELIGIBILITY FOR PLAN PARTICIPATION (PLAN SECTION 3.1). Employees will be
eligible to participate in the Plan when they complete the requirements
you select in A, B, C and D below.
A. CLASSES OF ELIGIBLE EMPLOYEES. The Plan will cover all employees
who have met the age and service requirements with the following
exclusions:
[ ] (1) No exclusions. All job classifications will be eligible.
[ ] (2) The Plan will exclude employees in a unit of Employees
covered by a collective bargaining agreement with
respect to which retirement benefits were the subject
of good faith bargaining, with the exception of the
following collective bargaining units, which will be
included: ________.
[ ] (3) The Plan will exclude employees who are non-resident
aliens without U.S. source income.
[ ] (4) Employees of the following Affiliated Employers
(specify):
[ ] (5) Leased Employees
[ ] (6) Employees in the following other classes (specify):
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B. AGE REQUIREMENT (check and complete (1) or (2)):
[ ] (1) No minimum age required for participation
[ ] (2) Employees must reach age ___ (not over 21) to
participate
C. SERVICE REQUIREMENTS.
(1) ELECTIVE DEFERRALS. To become eligible, an employee must
complete (choose one):
[ ] (a) No minimum service required.
[ ] (b) One 6-month Eligibility Period
[ ] (c) One __-month Eligibility Period (must be less
than 12)
[ ] (d) One 12-month Eligibility Period
(2) EMPLOYER MATCHING CONTRIBUTIONS. To become eligible, an
employee must complete (choose one):
[ ] (a) No minimum service required.
[ ] (b) One 6-month Eligibility Period
[ ] (c) One __-month Eligibility Period (must be less
than 12)
[ ] (d) One 12-month Eligibility Period
[ ] (e) Two 12-month Eligibility Periods (may only
be chosen if you adopt the vesting schedule
under item 9.A(3)(a) to provide 100% full
and immediate vesting of Employer Matching
Contributions).
[ ] (f) Not applicable. The Employer will not make
Employer Matching Contributions.
(3) PROFIT SHARING CONTRIBUTIONS. To become eligible, an
employee must complete (choose one):
[ ] (a) No minimum service required.
[ ] (b) One 6-month Eligibility Period
[ ] (c) One __-month Eligibility Period (must be
less than 12)
[ ] (d) One 12-month Eligibility Period
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[ ] (e) Two 12-month Eligibility Periods (may only
be chosen if you adopt the vesting schedule
under item 9.A(3)(a) to provide for 100%
full and immediate vesting of Profit
Sharing Contributions)
[ ] (f) Not applicable. The Employer will not make
Profit Sharing Contributions.
(4) If the Employer acquired a business on or before the
Effective Date of this Plan and the Eligibility Periods
selected in (1), (2) and (3) for former employees of that
acquired business will include the former employees' periods
of employment with that business, list the business below.
Any acquired business which had a plan which the Employer
now maintains must be listed below.
(5) If the Employer acquires a business after the Effective
Date, the Eligibility Periods for an employee of the
acquired business will be the periods selected in (1), (2)
and (3) beginning on (check (a) or (b)):
[ ] (a) the date the employee began work with the
acquired business.
[ ] (b) the date of the acquisition (i.e., the date
the employee begins work for the Employer).
(6) HOURS OF SERVICE FOR ELIGIBILITY PERIODS.
(a) 6-MONTH ELIGIBILITY PERIOD. To receive credit for a
6-month Eligibility Period, an employee must complete
6 months of service, during which he completes at
least:
[ ] (i) 500 Hours of Service
[ ] (ii) ___ Hours of Service
(under 500)
(b) 12-MONTH ELIGIBILITY PERIOD. To receive credit for a
12-month Eligibility Period, an employee must complete
12 months of service, during which he completes at
least:
(i) 1,000 Hours of Service
(ii) ___ Hours of Service
(under 1,000)
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32
(c) OTHER ELIGIBILITY PERIOD. To receive credit for the
Eligibility Period selected in 3.C(1)(c), 3.C(2)(c)
and/or 3.C(3)(c) above, an employee must complete
during it at
least:
[ ] (i) ___ Hours of Service
(under 1000)
(7) METHOD OF CREDITING HOURS OF SERVICE FOR ELIGIBILITY AND
Vesting. Hours of Service will be credited to an employee by
the following method (check one):
[ ] (a) Actual hours for which an employee is paid
[ ] (b) Any employee who has one actual paid hour
in the following period will be credited
with the number of Hours of Service
indicated (check one):
[ ] (i) Day (10 Hours of Service)
[ ] (ii) Week (45 Hours of Service)
[ ] (iii) Semi-monthly payroll period (95 Hours
of Service)
[ ] (iv) Month (190 Hours of Service)
(8) ENTRY DATES. Each employee in an eligible class who
completes the age and service requirements specified above
will begin to participate in the Plan on (check one):
[ ] (a) The first day of the month in which he fulfills
the requirements.
[ ] (b) The first of the following dates occurring
after he fulfills the requirements (check
one):
[ ] (i) The first day of the month following
the date he fulfills the requirements
(monthly).
[ ] (ii) The first day of the first, fourth,
seventh and tenth months in a Plan
Year (quarterly).
[ ] (iii) The first day of the first month
and the seventh month in a Plan
Year (semiannually).
[ ] (c) Other: ____ (May be no later than (i) the
first day of the Plan Year after which he
fulfills the requirements, and (ii) the date
six months after the date on which he
fulfills the requirements, which
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33
ever occurs first.)
D. (FOR NEW PLANS ONLY) Will all eligible Employees as of the
Effective Date be required to meet the age and service requirements
for participation specified in B and C above?
[ ] (a) Yes
[ ] (b) No. Eligible Employees will be eligible to become
Participants as of the Effective Date even if they
have not satisfied (check one or both):
[ ] (i) the age requirement.
[ ] (ii) the service requirement.
4. CONTRIBUTIONS.
A. ELECTIVE DEFERRALS (PLAN SECTION 5.2). Your Plan will allow
employees to elect pre-tax contributions under Section 401(k) of
the Code. You must complete this part A.
(1) A Participant may make Elective Deferrals for each year in
an amount not to exceed (check one):
[ ] (a) _____% of his Earnings
[ ] (b) _____% of his Earnings not to exceed $_____
(specify a dollar amount)
[ ] (c) $_____ (specify a dollar amount)
(2) Will a Participant be required to make a minimum Elective
Deferral in order to make Elective Deferrals under the Plan?
(check one and complete as applicable)
[ ] (a) No.
[ ] (b) Yes. The minimum Elective Deferral will be ___%
of the Participant's Earnings.
(3) A Participant may begin to make Elective Deferrals, or
change the amount of his Elective Deferrals, as of the
following dates (check one):
[ ] (a) First business day of each month (monthly).
[ ] (b) First business day of the first, fourth,
seventh and tenth months of the Plan Year
(quarterly).
[ ] (c) First business day of the first and seventh
months of the Plan Year (semiannually).
[ ] (d) First business day of the Plan Year only
(annually).
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34
[ ] (e) Other:____
(4) Will Participants be permitted to make separate Elective
Deferrals of bonuses, even if bonuses have otherwise been
excluded from Compensation for the purpose of Elective
Deferrals under 7.A(1)?
[ ] (a) Yes [ ] (b) No
B. EMPLOYER MATCHING CONTRIBUTIONS. (Plan Section 5.8). Complete
this part B only if you will make Employer Matching Contributions
under the Plan.
(1) The Employer will contribute and will allocate to each
Qualified Participant's Employee Matching Account an
Employer Matching Contribution on the basis set forth below:
[ ] (a) Discretionary matching contributions. (The
Employer may select this option in addition to
option (b) if the Employer wishes to have the
option to make discretionary matching
contributions in addition to fixed matching
contributions.)
[ ] (b) Fixed matching contributions.
[ ] (i) based on Elective Deferrals:
[ ] (A) ___% of Elective Deferrals
[ ] (B) ___% of Elective Deferrals up to
___% of Earnings.
[ ] (C) ___% of Elective Deferrals up to
___% of Earnings and ___% of
Elective Deferrals over that
percentage of Earnings and up
to ___% of Earnings. (The third
percentage number must be
less than the first
percentage number.)
[ ] (D) __% of Elective Deferrals up to
$___ of Elective Deferrals.
[ ] (E) ___% of Elective Deferrals up to
$___ of Elective Deferrals and
___% of Elective Deferrals over
that dollar amount and up to
$___ of Elective Deferrals. (The
last percentage must be less
than the first percentage).
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[ ] (ii) based on after-tax Participant
Contributions:
[ ] (A) ___% of Participant Contributions
[ ] (B) ___% of Participant
Contributions up to ___% of
Earnings.
[ ] (C) ___% of Participant Contributions
up to ___% of Earnings and ___% of
Participant Contributions over
that percentage of Earnings and
up to ___% of Participant
Contributions. (The third
percentage must be less than the
first percentage)
[ ] (D) ___% of Participant
Contributions up to $___ of
Participant Contributions.
[ ] (E) ___% of Participant Contributions
up to $___ of Participant
Contributions and ___% of
Participant Contributions over
that dollar amount and up to $___
of Participant Contributions.
(The last percentage must be less
than the first percentage).
(2) QUALIFIED PARTICIPANT. In order to receive an allocation of
Employer Matching Contributions for a Plan Year, an Employee
must be a Qualified Participant for that purpose. Select
below either (a) alone, or any combination of (b), (c) and
(d).
[ ] (a) To be a Qualified Participant eligible to
receive Employer Matching Contributions for a
Plan Year, an Employee must (check (i) or (ii)):
[ ] (i) Either be employed on the last day
of the Plan Year, complete more
than 500 Hours of Service in the
Plan Year, or retire, die or become
disabled in the Plan Year.
[ ] (ii) Either be employed on the last day
of the Plan Year or complete more
than 500 Hours of Service in the
Plan Year.
Stop here if you checked (a). If you did not check (a),
check (b), (c) or (d), or any combination of (b), (c) and
(d).
9
36
To be a Qualified Participant eligible to receive Employer
Matching Contributions for a Plan Year, an Employee must:
[ ] (b) Be credited with ___ (choose 1, 501 or 1,000)
Hours of Service in the Plan Year.
[ ] (c) Be an Employee on the last day of the Plan Year.
[ ] (d) Retire, die or become disabled during the Plan
Year.
(3) Will the Employer have the option of making all or any
portion of its Employer Matching Contributions in Employer
Stock?
[ ] (a) Yes [ ] (b) No
C. PROFIT SHARING CONTRIBUTIONS. (Plan Sections 4.1 and 4.2)
(1) PROFIT LIMITATION. Will Profit Sharing Contributions to the
Plan be limited to the current and accumulated profits of
your Business? Check one:
[ ] (a) Yes [ ] (b) No
(2) AMOUNT. The Employer will contribute to the Plan for each
Plan Year (check one):
[ ] (a) An amount chosen by the Employer from year to
year
[ ] (b) ___% of the Earnings of all Qualified
Participants for the Plan Year
[ ] (c) $___ for each Qualified Participant per ___
(enter time period, e.g. payroll period, plan
year)
(3) ALLOCATIONS TO PARTICIPANTS
(a) ALLOCATION TO PARTICIPANTS. Profit Sharing
Contributions will be allocated:
[ ] (i) Pro rata (percentage based on
compensation)
[ ] (ii) Uniform Dollar amount
[ ] (iii) Integrated With Social Security
(complete (b) and (c) below)
(b) INTEGRATION WITH SOCIAL SECURITY. (Complete only if
you have elected in 4.C(3)(a) to integrate your Plan
with Social Security.) Profit Sharing Contributions
will be allocated to Qualified Participants as you
check below:
10
37
[ ] (i) Profit Sharing Contributions will be
allocated according to the Top-Heavy
Integration Formula in Plan Section
4.2(c)(1) in every Plan Year, whether or
not the Plan is top-heavy.
[ ] (ii) Profit Sharing Contributions will be
allocated according to the Top-Heavy
Integration Formula in Plan Section
4.2(c)(1) only in Plan Years in which the
Plan is top-heavy. In all other Plan
Years, contributions will be allocated
according to the Non-Top-Heavy
Integration Formula in Plan Section
4.2(c)(2).
(c) INTEGRATION LEVEL. (Complete only if you have elected
in 4.C(3)(a) to integrate your Plan with Social
Security.) The Integration Level will be (check one):
[ ] (i) The Social Security Wage Base in effect
at the beginning of the Plan Year.
[ ] (ii) ___% (not more than 100%) of the Social
Security Wage Base in effect at the
beginning of the Plan Year.
[ ] (iii) $_____ (not more than the Social
Security Wage Base).
NOTE: The Social Security Wage Base is
indexed annually to reflect increases in
the cost of living.
(4) QUALIFIED PARTICIPANTS. In order to receive an allocation of
Profit Sharing Contributions for a Plan Year, an Employee
must be a Qualified Participant for this purpose. Select
below either (a) alone, or any combination of (b), (c) and
(d).
[ ] (a) To be a Qualified Participant eligible to
receive an allocation of Profit Sharing
Contributions for a Plan Year, an Employee must
(check (i) or (ii)):
[ ] (i) Either be employed on the last day
of the Plan Year, complete more
than 500 Hours of Service in the
Plan Year, or retire, die or become
disabled in the Plan Year.
[ ] (ii) Either be employed on the last day
of the Plan Year or complete more
than 500 Hours of Service in the
Plan Year.
Stop here if you checked (a). If you did not check (a),
check (b), (c) or (d), or any combination of (b), (c) and
(d).
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38
To be a Qualified Participant eligible to receive an
allocation of Profit Sharing Contributions for a Plan Year,
an Employee must:
[ ] (b) Be credited with ___ (choose 1, 501 or 1,000)
Hours of Service in the Plan Year.
[ ] (c) Be an Employee on the last day of the Plan Year.
[ ] (d) Retire, die or become disabled during the Plan
Year.
D. PARTICIPANT CONTRIBUTIONS (PLAN SECTION 4.6). Will your Plan allow
Participants to make after-tax contributions?
[ ] (1) Yes [ ] (2) No
E. QUALIFIED MATCHING CONTRIBUTIONS (PLAN SECTION 2.61). Skip this
part E if you will not make Qualified Matching Contributions.
(1) Qualified Matching Contributions will be made with respect
to (check one):
[ ] (a) Elective Deferrals made by all Qualified
Participants (as defined in 4.B(2))
[ ] (b) Elective Deferrals made only by Qualified
Participants (as defined in 4.B(2)) who are not
Highly Compensated Participants
(2) The amount of Qualified Matching Contributions made with
respect to a Participant will be:
[ ] (a) discretionary
[ ] (b) fixed (check and complete (i), (ii) or (iii))
[ ] (i) ___% of Elective Deferrals
[ ] (ii) ___% of Elective Deferrals that do not
exceed ___% of Earnings
[ ] (iii) ___% of Elective Deferrals that do not
exceed $_____
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F. QUALIFIED NONELECTIVE CONTRIBUTIONS (PLAN SECTION 2.62): Skip
this part F if you will not make Qualified Nonelective
Contributions.
(1) Qualified Nonelective Contributions will be made on behalf
of (check either (a) or (b) and either (c) or (d)):
[ ] (a) All Participants
[ ] (b) Only Participants who are not Highly Compensated
Employees who also, for the Plan Year for which
the Qualified Nonelective Contributions are
made:
[ ] (c) Are Qualified Participants (as defined in
4.C(4))
[ ] (d) Made Elective Deferrals
(2) The amount of Qualified Nonelective Contributions for a Plan
Year will be (check one):
[ ] (a) ___% (not over 15%) of the Earnings of
Participants on whose behalf Qualified
Nonelective Contributions are made
[ ] (b) An amount determined by the Employer from year
to year, to be shared in proportion to their
Earnings by Participants on whose behalf
Qualified Nonelective Contributions are made
G. Forfeitures
(1) EMPLOYER MATCHING CONTRIBUTIONS. Forfeitures of Employer
Matching Contributions will be used as follows (check and
complete (a) or (b)):
[ ] (a) Applied to reduce the following contributions
required of the Employer (check (i) and/or
(ii)):
[ ] (i) Employer Matching Contributions
[ ] (ii) Profit Sharing Contributions
[ ] (b) Reallocated as follows (check (i) or (ii)):
[ ] (i) As additional Employer Matching
Contributions
[ ] (ii) As additional Profit Sharing
Contributions
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40
(2) Profit Sharing Contributions. Forfeitures of Profit Sharing
Contributions will be used as follows (check (a) or (b)):
[ ] (a) Applied to reduce the following contributions
required of the Employer (check (i) and/or
(ii)):
[ ] (i) Profit Sharing Contributions
[ ] (ii) Employer Matching Contributions
[ ] (b) Reallocated as additional Profit Sharing
Contributions
5. TOP-HEAVY MINIMUM CONTRIBUTIONS (PLAN SECTION 14.3). Skip paragraphs A
and B below if you do not maintain any other qualified plan in addition
to this Plan.
A. For any Plan Year in which the Plan is Top-Heavy, the Top-Heavy
minimum contribution (or benefit) for Non-Key employees
participating both in this Plan and another qualified plan
maintained by the Employer will be provided in (check one):
[ ] (1) This Plan [ ] (2) The other qualified plan
B. If you maintain a defined benefit plan in addition to this Plan,
and the Top-Heavy Ratio (as defined in Plan Section 14.2(c)) for
the combined plans is between 60% and 90%, you may elect to provide
an increased minimum allocation or benefit pursuant to Plan Section
14.4. Specify your election by completing the statement below:
The Employer will provide an increased (specify contribution or
benefit) ___ in its (specify defined contribution or defined
benefit) ___ plan as permitted under Plan Section 14.4.
6. OTHER PLANS. You must complete this section if you maintain or ever
maintained another qualified plan in which any Participant in this Plan
is (or was) a participant or could become a participant. The Plan and
your other plan(s) combined will meet the contribution limitation rules
in Article 6 of the Plan as you specify below:
A. If a Participant in the Plan is covered under another qualified
defined contribution plan maintained by your Business, other than a
master or prototype plan (check one):
[ ] (1) The provisions of Section 6.2 of the Plan will apply
as if the other plan were a master or prototype plan.
[ ] (2) The plans will limit total annual additions to the
maximum permissible amount, and will properly reduce
any excess amounts, in the manner you describe below.
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41
B. If a Participant in the Plan is or has ever been a participant in a
defined benefit plan maintained by your Business, the plans will
meet the limits of Article 6 in the manner you describe below:
If your Business has ever maintained a defined benefit plan, state
below the interest rate and mortality table to be used in
establishing the present value of any benefit under the defined
benefit plan for purposes of computing the top-heavy ratio:
Interest rate: ___
Mortality Table:___
7. COMPENSATION (PLAN SECTION 2.8).
A. AMOUNT.
(1) ELECTIVE DEFERRALS AND EMPLOYER MATCHING CONTRIBUTIONS.
Compensation for the purposes of determining the amount and
allocation of Elective Deferrals and Employer Matching
Contributions will be determined as follows (choose either
(a) or (b), and (c) and/or (d) as applicable).
[ ] (a) Compensation will include Form W-2 earnings as
defined in Section 2.8 of the Plan.
[ ] (b) Compensation will include all compensation
included in the definition of Code Section 415
Compensation in Plan Section 6.5(b) of the Plan.
[ ] (c) In addition to the amount provided in either
(a) or (b) above, Compensation will also
include any amounts withheld from the
employee under a 401(k) plan, cafeteria
plan, SARSEP, tax sheltered 403(b)
arrangement, or Code Section 457 deferred
compensation plan, and contributions
described in Code Section 414(h)(2) that
are picked up by a governmental employer.
[ ] (d) Compensation will also exclude the following
amount (choose each that applies):
[ ] (i) overtime pay.
[ ] (ii) bonuses.
[ ] (iii) commissions.
[ ] (iv) other pay (describe):
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42
[ ] (v) compensation in excess of $_______
(2) PROFIT SHARING CONTRIBUTIONS. Compensation for the purposes
of determining the amount and allocation of Profit Sharing
Contributions shall be determined as follows (choose either
(a) or (b), and (c) and/or (d), as applicable).
[ ] (a) Compensation will include Form W-2 earnings as
defined in Section 2.8 of the Plan.
[ ] (b) Compensation will include all compensation
included in the definition of Code Section 415
Compensation in Section 6.5(b) of the Plan.
[ ] (c) In addition to the amount provided in either
(a) or (b) above, compensation will also
include any amounts withheld from the
employee under a 401(k) plan, cafeteria
plan, SARSEP, tax sheltered 403(b)
arrangement, or Code Section 457 deferred
compensation plan, and contributions
described in Code Section 414(h)(2) that
are picked up by a governmental employer.
[ ] (d) Compensation will also exclude the following
amounts (choose each that applies):
[ ] (i) overtime pay
[ ] (ii) bonuses
[ ] (iii) commissions
[ ] (iv) other pay describe: ___
[ ] (v) compensation in excess of $_____
Note: No exclusion under (d) may be selected if Profit
Sharing Contributions will be integrated with Social
Security under 4.C(3)(a)(iii). In addition, no
exclusion under (d) will apply for purposes of
determining the top-heavy minimum contribution if the
Plan is top-heavy.
B. MEASURING PERIOD. Compensation will be based on the Plan Year.
However, for an Employee's initial year of participation in the
Plan, Compensation will be recognized as of:
[ ] (1) the first day of the Plan Year.
[ ] (2) the date the Participant enters the Plan.
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43
8. DISTRIBUTIONS AND WITHDRAWALS.
A. RETIREMENT DISTRIBUTIONS.
(1) NORMAL RETIREMENT AGE (PLAN SECTION 7.1). Normal retirement
age will be the later of ______ (not over age 65) or ______
(not more than 5) years of participation in the Plan.
(2) EARLY RETIREMENT (PLAN SECTION 7.1). Select one:
[ ] (a) No early retirement will be permitted.
[ ] (b) Early retirement will be permitted at age ___.
[ ] (c) Early retirement will be permitted at age ___
with at least ___ Years of Service.
(3) ANNUITIES (PLAN SECTION 9.3). Will your Plan permit
distributions in the form of a life annuity? You must check
Yes if this Plan replaces or serves as a transferee plan for
an existing Plan that permits distributions in a life
annuity form.
[ ] (a) Yes [ ] (b) No
B. Hardship Distributions (Plan Section 12.2). Will your Plan permit
hardship distributions?
[ ] (1) No
[ ] (2) Yes. Indicate below from which Accounts hardship
withdrawals will be permitted (check all that apply):
[ ] (a) Elective Deferral Account
[ ] (b) Rollover Account
[ ] (c) Employer Matching Account
[ ] (d) Employer Contribution Account (i.e. Profit
Sharing Contributions)
C. WITHDRAWALS AFTER AGE 59 1/2 (PLAN SECTION 12.3). Will your Plan
permit employees over age 59 1/2 to withdraw amounts upon request?
You must check Yes if this Plan replaces an existing Plan that
permits withdrawals after age 59 1/2.
[ ] (1) Yes [ ] (2) No
17
44
D. WITHDRAWALS FOLLOWING FIVE YEARS OF PARTICIPATION OR TWO
YEARS AFTER CONTRIBUTION (PLAN SECTION 12.4). Will your Plan permit
employees to withdraw amounts from the vested portion of their
Employer Matching Contribution Accounts and Employer Contribution
Accounts (i.e., Profit Sharing Contributions) if either (i) the
Participant has been a Participant for at least five years, or (ii)
the amount withdrawn from each of these Accounts is limited to the
amounts that were credited to that Account prior to the date two
years before the withdrawal? You must check yes if this Plan
replaces a Plan which permits withdrawals in these circumstances.
[ ] (1) Yes [ ] (2) No
E. LOANS (PLAN SECTION 12.5). Will your Plan permit loans to employees
from the vested portion of their Accounts?
[ ] (1) No
[ ] (2) Yes. Indicate below whether loans will be permitted
for any reason or only on account of hardship:
[ ] (a) Any reason.
[ ] (b) Hardship only.
F. AUTOMATIC DISTRIBUTION OF SMALL ACCOUNTS (PLAN SECTION 9.1). Will
your Plan automatically distribute vested account balances not
exceeding $3,500, within 60 days after the end of the Plan Year in
which a Participant separates from employment?
[ ] (1) Yes [ ] (2) No
9. VESTING (PLAN ARTICLE 8)
A. TIME OF VESTING (SELECT (1) OR (2) BELOW AND COMPLETE VESTING
SCHEDULE).
[ ] (1) Single Vesting Schedule:
The vesting schedule selected below will apply to both
Employer Matching Contributions and Profit Sharing
Contributions.
[ ] (2) Dual Vesting Schedules:
The vesting schedule marked with an "MC" below will apply to
Employer Matching Contributions and the vesting schedule
marked with a "PS" below will apply to Profit Sharing
Contributions.
18
45
(3) Vesting Schedules:
[ ] (a) 100% vesting immediately upon participation in the Plan.
[ ] (b) Five-Year Graded Schedule:
Vested Percentage 20% 40% 60% 80% 100%
Years of Service 1 2 3 4 5
[ ] (c) Seven-Year Graded Schedule:
Vested Percentage 20% 40% 60% 80% 100%
Years of Service 3 4 5 6 7
[ ] (d) Six-Year Graded Schedule:
Vested Percentage 20% 40% 60% 80% 100%
Years of Service 2 3 4 5 6
[ ] (e) Three-Year Cliff Schedule:
Vested Percentage 0% 100%
Years of Service 0-2 3
[ ] (f) Five-Year Cliff Schedule:
Vested Percentage 0% 100%
Years of Service 0-4 5
[ ] (g) Other Schedule (must be at least as favorable as
Seven-Year Graded Schedule or Five-Year Cliff
Schedule):
(i) Vested Percentage __% __% __% __% __%
(ii) Years of Service ___ ___ ___ ___ ___
(4) Top Heavy Schedule:
(a) If you selected above an "Other Schedule," specify in
the space below the schedule that will apply in Plan
Years that the Plan is top-heavy. The schedule you
specify must be at least as favorable to employees, at
all years of service, as either the Six-Year Graded
Schedule or the Three-Year Cliff Schedule. The
top-heavy vesting schedule will be:
19
46
[ ] (i) the same "Other Schedule" selected above
[ ] (ii) the following schedule:
Vested Percentage ___% ___% ___% ___% ___%
Years of Service ___ ___ ___ ___ ___
[ ] (iii) Six-Year Graded Schedule
[ ] (iv) Three-Year Cliff Schedule
(b) If the Plan becomes top-heavy in a Plan Year, will the
top-heavy vesting schedule apply for all subsequent
Plan Years?
[ ] (i) Yes [ ] (ii) No
B. SERVICE FOR VESTING (SELECT (1) OR (2), AND COMPLETE (3)).
[ ] (1) All of an employee's service will be used to determine
his Years of Service for purposes of vesting
[ ] (2) An employee's Years of Service for vesting will
include all years except (check all that apply):
[ ] (a) (New plan) service before the effective date of
the plan
[ ] (b) (Existing plan) service before the effective
date of the existing plan
[ ] (c) Service before the Plan Year in which an
employee reached age 18
(3) Will an employee's service for a business acquired by the
Employer that was performed before the acquisition be
included in determining an employee's Years of Service for
vesting?
[ ] (a) Yes [ ] (b) No
List below any business acquired on or before the Effective
Date for which an employee's service will be included in
determining an employee's Years of Service for vesting.
Service of an employee for a predecessor employer (which
includes an acquired business) whose plan the Employer
maintains must be included as service for the Employer under
this Plan. Therefore, also list below any predecessor
employer whose plan the Employer maintains:
20
47
C. HOURS OF SERVICE FOR VESTING. The number of Hours of Service
required for crediting a Year of Service for vesting will be
(check one):
[ ] (1) 1,000 Hours of Service
[ ] (2) ___ Hours of Service
(under 1,000)
Hours of Service for vesting will be credited according to the
method selected under 3.C(6).
D. YEAR OF SERVICE MEASURING PERIOD FOR VESTING (PLAN SECTION 2.52).
The periods of 12 months used for measuring Years of Service will
be (check one):
[ ] (1) Plan Years
[ ] (2) 12-month Eligibility Periods
Note: If you are adopting this Plan to replace an existing plan,
employees will be credited under this Plan with all service credited to
them under the plan you are replacing.
10. INVESTMENTS (PLAN SECTIONS 13.2 AND 13.3).
A. AVAILABLE INVESTMENT PRODUCTS (PLAN SECTION 13.2). The investment
options available under the Plan are identified in the Service
Agreement or such other written instructions between the Employer
and ▇▇▇▇▇▇, as the case may be. All Investment Products must be
sponsored, underwritten, managed or expressly agreed to in writing
by ▇▇▇▇▇▇. If there is any amount in the Trust Fund for which no
instructions or unclear instructions are delivered, it will be
invested in the default option selected by the Employer in its
Service Agreement with ▇▇▇▇▇▇, or such other written instructions
as the case may be, until instructions are received in good order,
and the Employer will be deemed to have selected the option
indicated in its Service Agreement, or such other written
instructions as the case may be, as an available Investment Product
for that purpose.
B. INSTRUCTIONS (PLAN SECTION 13.3). Investment instructions for
amounts held under the Plan generally will be given by each
Participant for his own Accounts and delivered to ▇▇▇▇▇▇ as
indicated in the Service Agreement between ▇▇▇▇▇▇ and the Employer.
Check below only if the Employer will make investment decisions
under the Plan with respect to the following contributions made to
the Plan.
(Check all applicable options.)
C. [ ] (1) The Employer will make all investment decisions
with respect to all employee contributions, including
Elective Deferrals, Participant Contributions,
Deductible Employee Contributions and Rollover
Contributions.
21
48
[ ] (2) The Employer will make all investment decisions with
respect to all Employer contributions, including
Profit Sharing Contributions, Employer Matching
Contributions, Qualified Matching Contributions and
Qualified Nonelective Contributions.
[ ] (3) The Employer will make investment decisions with
respect to Employer Matching Contributions and
Qualified Matching Contributions.
[ ] (4) The Employer will make investment decisions with
respect to Qualified Nonelective Contributions.
[ ] (5) The Employer will make investment decisions with
respect to Profit Sharing Contributions.
[ ] (6) Other (Describe. An Employer may elect to make
investment decisions with respect to a specified
portion of a specific type of contribution to the
Plan.):
C. CHANGES. Investment instructions may be changed (check one):
[ ] (1) on any Valuation Date (daily)
[ ] (2) on the first day of any month (monthly)
[ ] (3) on the first day of the first, fourth, seventh and
tenth months in a Plan Year (quarterly)
D. EMPLOYER STOCK. (Skip this paragraph if you did not designate
Employer Stock as an investment under the Service Agreement.)
(1) VOTING. Employer Stock will be voted as follows:
[ ] (a) In accordance with the Employer's instructions.
[ ] (b) In accordance with the Participant's
instructions. Participants are hereby appointed
named fiduciaries for the purpose of the voting
of Employer Stock in accordance with Plan
Section
13.8.
(2) TENDERING. Employer stock will be tendered as follows:
[ ] (a) In accordance with the Employer's instructions.
[ ] (b) In accordance with the Participant's
instructions. Participants are hereby appointed
named fiduciaries for the purpose of the
tendering of Employer Stock in accordance with
Plan Section
13.8.
22
49
11. ADMINISTRATION.
A. PLAN ADMINISTRATOR (PLAN SECTION 15.1). You may appoint a person or
a committee to serve as Plan Administrator. If you do not appoint a
Plan Administrator, the Plan provides that the Employer will be the
Plan Administrator.
The initial Plan Administrator will be (check one):
[ ] This person: _________
[ ] A committee composed of these people:
B. RECORDKEEPER (PLAN SECTION 15.4). Unless ▇▇▇▇▇▇ expressly permits
otherwise, you must appoint ▇▇▇▇▇▇ as Recordkeeper to perform
certain routine services determined upon execution of a written
Service Agreement between ▇▇▇▇▇▇ and the Employer.
The initial Record keeper will be:
▇▇▇▇▇▇ FIDUCIARY TRUST COMPANY
▇▇▇▇▇▇ RETAIL 401(K) B-2-B
▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
12. DETERMINATION LETTER REQUIRED. You may not rely on an opinion letter
issued to ▇▇▇▇▇▇ by the National Office of the Internal Revenue Service
as evidence that the Plan is qualified under Section 401 of the Internal
Revenue Code. In order to obtain reliance with respect to qualification
of the Plan, you must receive a determination letter from the appropriate
Key District Office of Internal Revenue. ▇▇▇▇▇▇ will prepare an
application for such a letter upon your request at a fee agreed upon by
the parties.
▇▇▇▇▇▇ will inform you of all amendments it makes to the prototype plan.
If ▇▇▇▇▇▇ ever discontinues or abandons the prototype plan, ▇▇▇▇▇▇ will
inform you. This Plan Agreement #001 may be used only in conjunction with
▇▇▇▇▇▇'▇ Basic Plan Document #07.
* * * * *
If you have any questions regarding this Plan Agreement, contact ▇▇▇▇▇▇
at:
▇▇▇▇▇▇ Defined Contribution Plans
One ▇▇▇▇▇▇ Place B2B
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇-▇▇▇-▇▇▇-▇▇▇▇
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50
* * * * *
EMPLOYER'S ADOPTION OF ▇▇▇▇▇▇
FLEXIBLE 401(k) AND PROFIT SHARING PLAN
The Employer named below hereby adopts a ▇▇▇▇▇▇ FLEXIBLE 401(k) AND PROFIT
SHARING PLAN, and appoints ▇▇▇▇▇▇ FIDUCIARY TRUST COMPANY to serve as Trustee of
the Plan. The Employer acknowledges that it has received copies of the current
prospectus for each Investment Product available under the Plan, and represents
that it will deliver copies of the then current prospectus for each such
Investment Product to each Participant before each occasion on which the
Participant makes an investment instruction as to his Account. The Employer
further acknowledges that the Plan will be acknowledged by ▇▇▇▇▇▇ as a ▇▇▇▇▇▇
Flexible 401(k) and Profit Sharing Plan only upon ▇▇▇▇▇▇'▇ acceptance of this
Plan Agreement.
INVESTMENT OPTIONS
The Employer hereby elects the following as the investment options available
under the Plan:
The following investment option shall be the default option: ___ (select the
default option from among the investment options listed above).
Employer signature(s) to adopt Plan: Date of signature:
------------------------------------------------- -------------------------
------------------------------------------------- -------------------------
Please print name(s) of authorized person(s) signing above:
----------------------------------------------------
----------------------------------------------------
A new Plan must be signed by the last day of the Plan Year in which the Plan is
to be effective.
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51
* * * * *
ACCEPTANCE OF ▇▇▇▇▇▇ FIDUCIARY TRUST COMPANY AS TRUSTEE
The Trustee accepts appointment in accordance with the terms and conditions of
the Plan, effective as of the date of execution by the Employer set forth above.
▇▇▇▇▇▇ Fiduciary Trust Company, Trustee
By: ______________________________________________________________________
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52
* * * * *
ACCEPTANCE BY ▇▇▇▇▇▇
▇▇▇▇▇▇ hereby accepts this Employer's Plan as a prototype established under
▇▇▇▇▇▇ Basic Plan Document #07.
▇▇▇▇▇▇ Mutual Funds Corp.
By: ______________________________________
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▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ #▇▇
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▇▇▇▇▇▇ BASIC PLAN DOCUMENT #07
TABLE OF CONTENTS
PAGE
ARTICLE 1. INTRODUCTION....................................................................................1
ARTICLE 2. DEFINITIONS.....................................................................................2
2.1. Account..................................................................................2
2.2. Affiliated Employer......................................................................2
2.3. Authorized Leave of Absence..............................................................2
2.4. Base Contribution Percentage.............................................................2
2.5. Beneficiary..............................................................................3
2.6. CODA.....................................................................................3
2.7. Code.....................................................................................3
2.8. Compensation.............................................................................3
2.9. Date of Employment.......................................................................3
2.10. Deductible Employee Contribution Account.................................................3
2.11. Disabled.................................................................................4
2.12. Earned Income............................................................................4
2.13. Earnings.................................................................................4
2.14. Effective Date...........................................................................4
2.15. Eligibility Period.......................................................................4
2.16. Employee.................................................................................5
2.17. Employer.................................................................................5
2.18. Employer Contribution Account............................................................5
2.19. Employer Stock...........................................................................5
2.20. ERISA....................................................................................5
2.21. Excess Earnings..........................................................................5
2.22. Forfeiture...............................................................................5
2.23. Hour of Service..........................................................................5
2.24. Integration Level........................................................................7
2.25. Investment Company.......................................................................7
2.26. Investment Company Shares................................................................7
2.27. Investment Products......................................................................7
2.28. Leased Employee..........................................................................7
2.29. One-Year Eligibility Break...............................................................8
2.30. One-Year Vesting Break...................................................................8
2.31. Owner-Employee...........................................................................8
2.32. Participant..............................................................................8
2.33. Participant Contribution.................................................................8
2.34. Participant Contribution Account.........................................................8
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2.35. Plan.....................................................................................8
2.36. Plan Administrator.......................................................................9
2.37. Plan Agreement...........................................................................9
2.38. Plan Year................................................................................9
2.39. Profit Sharing Contribution..............................................................9
2.40. ▇▇▇▇▇▇...................................................................................9
2.41. Qualified Domestic Relations Order.......................................................9
2.42. Qualified Participant....................................................................9
2.43. Recordkeeper.............................................................................9
2.44. Retirement...............................................................................9
2.45. Rollover Account........................................................................10
2.46. Self-Employed Individual................................................................10
2.47. Shareholder-Employee....................................................................10
2.48. Social Security Wage Base...............................................................10
2.49. Trust and Trust Fund....................................................................10
2.50. Trustee.................................................................................10
2.51. Valuation Date..........................................................................10
2.52. Year of Service.........................................................................10
2.53. Deferral Agreement......................................................................11
2.54. Elective Deferral.......................................................................11
2.55. Elective Deferral Account...............................................................11
2.56. Employer Matching Account...............................................................11
2.57. Employer Matching Contribution..........................................................11
2.58. Highly Compensated Employee.............................................................11
2.59. Non-Highly Compensated Employee.........................................................14
2.60. Qualified Matching Account..............................................................14
2.61. Qualified Matching Contribution.........................................................14
2.62. Qualified Nonelective Contribution......................................................14
2.63. Qualified Nonelective Contribution Account..............................................14
ARTICLE 3. PARTICIPATION..................................................................................15
3.1. Initial Participation...................................................................15
3.2. Special Participation Rule..............................................................16
3.3. Resumed Participation...................................................................16
3.4. Benefits for Owner-Employees............................................................16
3.5. Changes in Classification...............................................................17
ARTICLE 4. CONTRIBUTIONS..................................................................................18
4.1. Provisions Applicable to All Plans......................................................18
4.2. Provisions Applicable Only to Profit Sharing Plans......................................19
4.3. Provisions Applicable Only to Money Purchase Pension Plans..............................22
4.4. Forfeitures.............................................................................24
4.5. Rollover Contributions..................................................................24
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4.6. Participant Contributions................................................................24
4.7. No Deductible Employee Contributions.....................................................24
ARTICLE 5. CASH OR DEFERRED ARRANGEMENT UNDER SECTION 401(k)(CODA)........................................25
5.1. Applicability; Allocations...............................................................25
5.2. CODA Participation.......................................................................25
5.3. Annual Limit on Elective Deferrals.......................................................25
5.4. Distribution of Certain Elective Deferrals...............................................26
5.5. Satisfaction of ADP and ACP Tests........................................................26
5.6. Actual Deferral Percentage Test Limit....................................................27
5.7. Distribution of Excess Contributions.....................................................29
5.8. Matching Contributions...................................................................30
5.9. Recharacterization of Excess Contributions...............................................30
5.10. Average Contribution Percentage Test Limit and Aggregate Limit...........................31
5.11. Distribution of Excess Aggregate Contributions...........................................33
5.12. Qualified Nonelective Contributions; Qualified Matching Contributions....................34
5.13. Restriction on Distributions.............................................................34
5.14. Forfeitures of Employer Matching Contributions...........................................35
5.15. Special Effective Dates..................................................................35
ARTICLE 6. LIMITATIONS ON ALLOCATIONS.....................................................................36
6.1. No Additional Plan.......................................................................36
6.2. Additional Master or Prototype Plan......................................................37
6.3. Additional Non-Master or Non-Prototype Plan..............................................38
6.4. Additional Defined Benefit Plan..........................................................38
6.5. Definitions..............................................................................39
ARTICLE 7. ELIGIBILITY FOR DISTRIBUTION OF BENEFITS.......................................................43
7.1. Retirement...............................................................................43
7.2. Death....................................................................................43
7.3. Other Termination of Employment..........................................................43
ARTICLE 8. VESTING........................................................................................45
8.1. Vested Balance...........................................................................45
8.2. Vesting of Accounts of Returned Former Employees.........................................45
8.3. Forfeiture of Non-Vested Amounts.........................................................46
8.4. Special Rule in the Event of a Withdrawal................................................47
8.5. Vesting Election.........................................................................47
ARTICLE 9. PAYMENT OF BENEFITS............................................................................49
9.1. Distribution of Accounts.................................................................49
9.2. Restriction on Immediate Distributions...................................................49
9.3. Optional Forms of Distribution...........................................................50
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9.4. Distribution Procedure..................................................................51
9.5. Lost Distributee........................................................................51
9.6. Direct Rollovers........................................................................52
9.7. Distributions Required by a Qualified Domestic Relations Order..........................53
ARTICLE 10. JOINT AND SURVIVOR ANNUITY REQUIREMENTS........................................................54
10.1. Applicability...........................................................................54
10.2. Qualified Joint and Survivor Annuity....................................................55
10.3. Qualified Preretirement Survivor Annuity................................................55
10.4. Definitions.............................................................................55
10.5. Notice Requirements.....................................................................57
10.6. Transitional Rules......................................................................57
ARTICLE 11. MINIMUM DISTRIBUTION REQUIREMENTS..............................................................60
11.1. General Rules...........................................................................60
11.2. Required Beginning Date.................................................................60
11.3. Limits on Distribution Periods..........................................................61
11.4. Determination of Amount to Be Distributed Each Year.....................................61
11.5. Death Distribution Provisions...........................................................63
11.6. Transitional Rule.......................................................................64
ARTICLE 12. WITHDRAWALS AND LOANS..........................................................................66
12.1. Withdrawals from Participant Contribution and Rollover Accounts.........................66
12.2. Withdrawals on Account of Hardship......................................................66
12.3. Withdrawals After Reaching Age 59 1/2...................................................67
12.4. Other Withdrawals.......................................................................67
12.5. Loans...................................................................................68
12.6. Procedure; Amount Available.............................................................70
12.7. Protected Benefits......................................................................70
12.8. Restrictions Concerning Transferred Assets..............................................70
ARTICLE 13. TRUST FUND AND INVESTMENTS.....................................................................72
13.1. Establishment of Trust Fund.............................................................72
13.2. Management of Trust Fund................................................................72
13.3. Investment Instructions.................................................................73
13.4. Valuation of the Trust Fund.............................................................75
13.5. Distributions on Investment Company Shares..............................................75
13.6. Registration and Voting of Investment Company Shares....................................75
13.7. Investment Manager......................................................................76
13.8. Employer Stock..........................................................................76
13.9. Insurance Contracts.....................................................................78
13.10. Registration and Voting of Non-▇▇▇▇▇▇ Investment Company Shares.........................79
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ARTICLE 14. TOP-HEAVY PLANS................................................................................80
14.1. Superseding Effect......................................................................80
14.2. Definitions.............................................................................80
14.3. Minimum Allocation......................................................................82
14.4. Adjustment of Fractions.................................................................83
14.5. Minimum Vesting Schedules...............................................................83
ARTICLE 15. ADMINISTRATION OF THE PLAN.....................................................................85
15.1. Plan Administrator......................................................................85
15.2. Claims Procedure........................................................................85
15.3. Employer's Responsibilities.............................................................86
15.4. Recordkeeper............................................................................86
15.5. Prototype Plan..........................................................................86
ARTICLE 16. TRUSTEE........................................................................................88
16.1. Powers and Duties of the Trustee........................................................88
16.2. Limitation of Responsibilities..........................................................89
16.3. Fees and Expenses.......................................................................89
16.4. Reliance on Employer....................................................................90
16.5. Action Without Instructions.............................................................90
16.6. Advice of Counsel.......................................................................90
16.7. Accounts................................................................................90
16.8. Access to Records.......................................................................91
16.9. Successors..............................................................................91
16.10. Persons Dealing with Trustee............................................................91
16.11. Resignation and Removal; Procedure......................................................91
16.12. Action of Trustee Following Resignation or Removal......................................92
16.13. Effect of Resignation or Removal........................................................92
16.14. Fiscal Year of Trust....................................................................92
16.15. Limitation of Liability.................................................................92
16.16. Indemnification.........................................................................92
ARTICLE 17. AMENDMENT......................................................................................93
17.1. General.................................................................................93
17.2. Delegation of Amendment Power...........................................................94
ARTICLE 18. TERMINATION OF THE PLAN AND TRUST..............................................................95
18.1. General.................................................................................95
18.2. Events of Termination...................................................................95
18.3. Effect of Termination...................................................................95
18.4. Approval of Plan........................................................................96
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ARTICLE 19. TRANSFERS TO OR FROM OTHER QUALIFIED PLANS; MERGERS............................................97
19.1. General.................................................................................97
19.2. Amounts Transferred.....................................................................97
19.3. Merger or Consolidation.................................................................97
ARTICLE 20. MISCELLANEOUS..................................................................................98
20.1. Notice of Plan..........................................................................98
20.2. No Employment Rights....................................................................98
20.3. Distributions Exclusively From Plan.....................................................98
20.4. No Alienation...........................................................................98
20.5. Provision of Information................................................................98
20.6. No Prohibited Transactions..............................................................98
20.7. Governing Law...........................................................................98
20.8. Gender..................................................................................98
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▇▇▇▇▇▇ BASIC PLAN DOCUMENT #07
ARTICLE 1. INTRODUCTION
By executing the Plan Agreement, the Employer has established a
retirement plan (the "Plan") according to the terms and conditions of the Plan
Agreement and this ▇▇▇▇▇▇ Basic Plan Document #07, for the purpose of providing
a retirement fund for the benefit of Participants and Beneficiaries. A Plan
established hereunder pursuant to a Plan Agreement is intended to qualify under
Section 401(a) of the Code.
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ARTICLE 2. DEFINITIONS
The terms defined in Sections 2.1 through 2.52 appear generally
throughout the document. Sections 2.53 through 2.63 and Article 5 contain
definitions of terms used only in a CODA and Section 10.4 contains additional
definitions related to distributions from the Plan. Articles 6 and 11 contain
additional definitions of terms used only in those Articles.
2.1. ACCOUNT means any of, and ACCOUNTS means all of, a
Participant's Employer Contribution Account, Participant Contribution Account,
Rollover Account, Deductible Employee Contribution Account and if the Plan
contains a CODA, the accounts maintained for the Participant pursuant to Article
5.
2.2. AFFILIATED EMPLOYER, for purposes of the Plan other than
Article 6, means the Employer and a trade or business, whether or not
incorporated, which is any of the following:
(a) A member of a group of controlled corporations (within the
meaning of Section 414(b) of the Code) which includes the Employer; or
(b) A trade or business under common control (within the
meaning of Section 414(c) of the Code) with the Employer; or
(c) A member of an affiliated service group (within the
meaning of Section 414(m) of the Code) which includes the Employer; or
(d) An entity otherwise required to be aggregated with the
Employer pursuant to Section 414(o) of the Code.
In determining an Employee's service for vesting and for eligibility to
participate in the Plan, all employment with Affiliated Employers will be
treated as employment by the Employer.
For purposes of Article 6 only, the definitions in paragraphs (a) and
(b) of this Section 2.2 shall be modified by adding at the conclusion of the
parenthetical phrase in each such paragraph the words "as modified by Section
415(h) of the Code."
2.3. AUTHORIZED LEAVE OF ABSENCE means a leave of absence from
employment granted in writing by an Affiliated Employer. Authorized Leave of
Absence shall be granted on account of military service for any period during
which an Employee's right to re-employment is guaranteed by law, and for such
other reasons and periods as an Affiliated Employer shall consider proper,
provided that Employees in similar situations shall be similarly treated.
2.4. BASE CONTRIBUTION PERCENTAGE means the percentage so specified in
the Plan
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Agreement.
2.5. BENEFICIARY means a person entitled to receive benefits under the
Plan upon the death of a Participant, in accordance with Section 7.2 and
Articles 10 and 11.
2.6. CODA means a cash or deferred arrangement that meets the
requirements of Section 401(k) of the Code, adopted as part of a profit sharing
plan.
2.7. CODE means the Internal Revenue Code of 1986, as amended.
2.8. COMPENSATION means all of an Employee's compensation determined in
accordance with the definition and for the purpose elected by the Employer in
the Plan Agreement. For purposes of that election, "Form W-2 earnings" means
"wages" within the meaning of Section 3401(a) of the Code in connection with
income tax withholding at the source, and all other compensation paid to the
Employee by the Employer in the course of its trade or business, for which the
Employer is required to furnish the Employee with a written statement under
Sections 6041(d), 6051(a)(3) and 6052 of the Code, determined without regard to
exclusions based on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in Section 3401(a)(2) of
the Code). Compensation shall include only amounts actually paid to the Employee
during the Plan Year, except that if the Employer so elects in the Plan
Agreement, in an Employee's initial year of participation in the Plan,
Compensation shall include only amounts actually paid to the Employee from the
Employee's effective date of participation pursuant to Section 3.1 to the end of
the Plan Year. In addition, if the Employer so elects in the Plan Agreement,
Compensation shall include any amount which is contributed to an employee
benefit plan for the Employee by the Employer pursuant to a salary reduction
agreement, and which is not includible in the gross income of the Employee under
Section 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code. If the Employer so
elects in the Plan Agreement, Compensation shall not include overtime pay,
bonuses, commissions or other similar types of pay, or Compensation above a
specified amount, all as designated in the Plan Agreement, PROVIDED, that such
election may not be made if the Employer elects in the Plan Agreement to
integrate the Plan with Social Security. (For a self-employed person, the
relevant term is Earned Income, as defined in Section 2.12.)
2.9. DATE OF EMPLOYMENT means the first date on which an Employee
performs an Hour of Service; or, in the case of an Employee who has incurred one
or more One-Year Eligibility Breaks and who is treated as a new Employee under
the rules of Section 3.3, the first date on which he performs an Hour of Service
after his return to employment.
2.10. DEDUCTIBLE EMPLOYEE CONTRIBUTION ACCOUNT means an account
maintained on the books of the Plan on behalf of a Participant, in which are
recorded amounts contributed by him to the Plan on a tax-deductible basis under
prior law, and the income, expenses, gains and losses thereon.
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2.11. DISABLED means unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than 12 months. The permanence and
degree of such impairment shall be supported by medical evidence.
2.12. EARNED INCOME means a Self-Employed Individual's net earnings
from self-employment in the trade or business with respect to which the Plan is
established, excluding items not included in gross income and the deductions
allocable to such items, and reduced by (i) contributions by the Employer to
qualified plans, to the extent deductible under Section 404 of the Code, and
(ii) the deduction allowed to the taxpayer under Section 164(f) of the Code for
taxable years beginning after December 31, 1989.
2.13. EARNINGS, for determining all benefits provided under the Plan,
means the first $150,000 (as adjusted periodically by the Secretary of the
Treasury for inflation) of the sum of the Compensation and Earned Income
received by an Employee during a Plan Year. To calculate an allocation to a
Participant's Account for any Plan Year shorter than 12 months, the dollar limit
on Earnings must be multiplied by a fraction of which the denominator is 12 and
the numerator is the number of months in the Plan Year. In determining the
Earnings of a Participant, the rules of Section 414(q)(6) of the Code shall
apply, except that in applying those rules the term "family" shall include only
the Participant's spouse and the Participant's lineal descendants who have not
reached age 19 by the last day of the Plan Year. If, as a result of the
application of such rules, the applicable Earnings limitation described above is
exceeded, then the limitation shall be prorated among the affected individuals
in proportion to each such individual's Earnings as determined under this
Section prior to the application of this limitation.
2.14. EFFECTIVE DATE means the date so designated in the Plan
Agreement. If the Plan Agreement indicates that the Employer is adopting the
Plan as an amendment of an existing plan, the provisions of the existing plan
apply to all events preceding the Effective Date, except as to specific
provisions of the Plan which set forth a retroactive effective date in
accordance with Section 1140 of the Tax Reform Act of 1986.
2.15. ELIGIBILITY PERIOD means a period of service with the Employer
which an Employee is required to complete in order to commence participation in
the Plan. A 12-month Eligibility Period is a period of 12 consecutive months
beginning on an Employee's most recent Date of Employment or any anniversary
thereof, in which he is credited with at least 1,000 Hours of Service or the
number of Hours of Services set forth in the Plan Agreement. A 6-month
Eligibility Period is a period of 6 consecutive months beginning on an
Employee's most recent Date of Employment or any anniversary thereof, or on the
6-month anniversary of such Date of Employment or any anniversary thereof, in
which he is credited with at least 500 Hours of Service or the number of Hours
of Service set forth in the Plan Agreement. If the Employer has selected another
period of service as the Eligibility Period under the Plan,
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Eligibility Period means the period so designated in which the Employee is
credited with the number of hours designated in the Plan Agreement.
Notwithstanding the foregoing, if an Employee is credited with 1,000 Hours of
Service during a 12-consecutive-month period following his Date of Employment or
any anniversary thereof, he shall be credited with an Eligibility Period. In the
case of an Employee in a seasonal industry (as defined under regulations
prescribed by the Secretary of Labor) in which the customary extent of
employment during a calendar year is fewer than 1,000 Hours of Service in the
case of a 12-month Eligibility Period, the number specified in any regulations
prescribed by the Secretary of Labor dealing with years of service shall be
substituted for 1,000. If the Employer so elects in the Plan Agreement, an
Employee's most recent Date of Employment for purposes of this Section 2.15
shall be the first date on which he performed services for a business acquired
by the Employer.
2.16. EMPLOYEE means a common law Employee of an Affiliated Employer;
in the case of an Affiliated Employer which is a sole proprietorship, the sole
proprietor thereof; in the case of an Affiliated Employer which is a
partnership, a partner thereof; and a Leased Employee of an Affiliated Employer.
The term "Employee" includes an individual on Authorized Leave of Absence, a
Self-Employed Individual and an Owner-Employee.
2.17. EMPLOYER means the Employer named in the Plan Agreement and any
successor to all or the major portion of its assets or business which assumes
the obligations of the Employer under the Plan Agreement.
2.18. EMPLOYER CONTRIBUTION ACCOUNT means an account maintained on the
books of the Plan on behalf of a Participant, in which are recorded the amounts
allocated for his benefit from contributions by the Employer (other than
contributions pursuant to Article 5 (i.e. the CODA provisions)), Forfeitures by
former Participants (if the Plan provides for reallocation of Forfeitures),
amounts reapplied under Section 6.1(d), and the income, expenses, gains and
losses incurred thereon.
2.19. EMPLOYER STOCK means securities constituting "qualifying employer
securities" of an Employer within the meaning of Section 407(d)(5) of ERISA.
2.20. ERISA means the Employee Retirement Income Security Act of 1974,
as amended.
2.21. EXCESS EARNINGS means a Participant's Earnings in excess of the
Integration Level of the Plan.
2.22. FORFEITURE means a nonvested amount forfeited by a former
Participant, pursuant to Section 8.3, or an amount forfeited by a former
Participant or Beneficiary who cannot be located, pursuant to Section 9.5.
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2.23. HOUR OF SERVICE means each hour described in paragraphs (a), (b),
(c), (d) or (e) below, subject to paragraphs (f) and (g) below.
2.24.
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for an Affiliated Employer.
These hours shall be credited to the Employee for the computation
period or periods in which the duties are performed.
(b) Each hour for which an Employee is paid, or entitled to
payment, by an Affiliated Employer on account of a period of time
during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty, military
duty or leave of absence. No more than 501 Hours of Service shall be
credited under this paragraph for any single continuous period of
absence (whether or not such period occurs in a single computation
period) unless the Employee's absence is not an Authorized Leave of
Absence. Hours under this paragraph shall be calculated and credited
pursuant to Section 2530.200b-2 of the Department of Labor Regulations,
which are incorporated herein by this reference.
(c) Each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by an Affiliated Employer.
The same Hours of Service shall not be credited under both paragraph
(a) or paragraph (b), as the case may be, and under this paragraph (c);
and no more than 501 Hours of Service shall be credited under this
paragraph (c) with respect to payments of back pay, to the extent that
such pay is agreed to or awarded for a period of time described in
paragraph (b) during which the Employee did not perform or would not
have performed any duties. These hours shall be credited to the
Employee for the computation period or periods to which the award or
agreement pertains rather than the computation period in which the
award, agreement or payment is made.
(d) Each hour during an Authorized Leave of Absence. Such
hours shall be credited at the rate of a customary full work week for
an Employee.
(e) Solely for purposes of determining whether a OneYear
Vesting Break or a One-Year Eligibility Break has occurred, each hour
which otherwise would have been credited to an Employee but for an
absence from work by reason of: the pregnancy of the Employee, the
birth of a child of the Employee, the placement of a child with the
Employee in connection with the adoption of the child by the Employee,
or caring for a child for a period beginning immediately after its
birth or placement. If the Plan Administrator cannot determine the
hours which would normally have been credited during such an absence,
the Employee shall be credited with eight Hours of Service for each day
of absence. No more than 501 Hours of Service shall be credited under
this paragraph by reason of any pregnancy or placement. Hours credited
under this
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paragraph shall be treated as Hours of Service only in the Plan Year or
Eligibility Period or both, as the case may be, in which the absence
from work begins, if necessary to prevent the Participant's incurring a
One-Year Vesting Break or One-Year Eligibility Break in that period,
or, if not, in the period immediately following that in which the
absence begins. The Employee must timely furnish to the Employer
information reasonably required to establish (i) that an absence from
work is for a reason specified above, and (ii) the number of days for
which the absence continued.
(f) Hours of Service shall be determined on the basis of
actual hours for which an Employee is paid or entitled to payment, or
as otherwise specified in the Plan Agreement.
(g) If the Employer maintains the plan of a predecessor
Employer, service for the predecessor Employer shall be treated as
service for the Employer. If the Employer does not maintain the plan of
a predecessor Employer, service for the predecessor Employer shall be
treated as service for the Employer only to the extent that the
Employer so elects in the Plan Agreement.
(h) Hours of Service shall be credited to a Leased Employee as
though he were an Employee.
2.25. INTEGRATION LEVEL means the Earnings amount selected by the
Employer in the Plan Agreement.
2.26. INVESTMENT COMPANY means an open-end registered investment
company for which ▇▇▇▇▇▇ Mutual Funds Corp., or its affiliate acts as principal
underwriter, or for which ▇▇▇▇▇▇ Investment Management, Inc., or its affiliate
serves as an investment adviser; provided that its prospectus offers its shares
under the Plan.
2.27. INVESTMENT COMPANY SHARES means shares issued by an Investment
Company.
2.28. INVESTMENT PRODUCTS means any of the investment products
specified by the Employer in accordance with Section 13.2, from the group of
those products sponsored, underwritten or managed by ▇▇▇▇▇▇ as shall be made
available by ▇▇▇▇▇▇ under the Plan, and such other products as shall be
expressly agreed to in writing by ▇▇▇▇▇▇ for availability under the Plan.
2.29. LEASED EMPLOYEE means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Section
414(n)(6) of the Code) on a substantially full time basis for a period of at
least one year, and such services are of a type historically performed by
Employees in the business field of the recipient Employer. The compensation of a
Leased
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Employee for purposes of the Plan means the Compensation (as defined in Section
2.8) of the Leased Employee attributable to services performed for the recipient
Employer. Contributions or benefits provided to a leased Employee by the leasing
organization which are attributable to services performed for the recipient
Employer shall be treated as provided by the recipient Employer. Provided that
leased Employees do not constitute more than 20% of the recipient's nonhighly
compensated workforce, a leased Employee shall not be considered an Employee of
the recipient if he is covered by a money purchase pension plan providing: (1) a
nonintegrated Employer contribution rate of at least 10% of compensation (as
defined in Section 415(c)(3) of the Code, but including amounts contributed
pursuant to a salary reduction agreement which are excludable from the
Employee's gross income under Section 125, Section 402(e)(3), Section
402(h)(1)(B) or Section 403(b) of the Code), (2) immediate participation, and
(3) full and immediate vesting.
2.30. ONE-YEAR ELIGIBILITY BREAK means a 12-month Eligibility Period
during which an individual is not credited with more than 500 Hours of Service;
provided, however, that in the case of an Employee in a seasonal industry, there
shall be substituted for 500 the number of Hours of Service specified in any
regulations of the Secretary of Labor dealing with breaks in service, and
provided further that if the Employer has elected in the Plan Agreement to
establish a number less than 500 as the requisite Hours of Service for crediting
a 12-month Eligibility Period, that number shall be substituted for 500.
2.31. ONE-YEAR VESTING BREAK means a Year of Service measuring period,
as elected by the Employer in the Plan Agreement, during which an individual is
not credited with more than 500 Hours of Service; provided, however, that in the
case of an Employee in a seasonal industry, there shall be substituted for 500
the number of Hours of Service specified in any regulations for the Secretary of
Labor dealing with breaks in service, and provided further that if the Employer
has elected in the Plan Agreement to establish a number less than 500 as the
requisite Hours of Service for crediting a Year of Service, that number shall be
substituted for 500.
2.32. OWNER-EMPLOYEE means the sole proprietor of an Affiliated
Employer that is a sole proprietorship, or a partner owning more than 10% of
either the capital or profits interest of an Affiliated Employer that is a
partnership. The Plan Administrator shall be responsible for identifying
Owner-Employees to the Recordkeeper.
2.33. PARTICIPANT means each Employee who has met the requirement for
participation in Article 3. An Employee is not a Participant for any period
before the entry date applicable to him.
2.34. PARTICIPANT CONTRIBUTION means an after-tax contribution made by
a Participant in accordance with Section 4.6.
2.35. PARTICIPANT CONTRIBUTION ACCOUNT means an account maintained on
the books of
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the Plan, in which are recorded Participant Contributions by a Participant and
any income, expenses, gains or losses incurred thereon.
2.36. PLAN means the form of defined contribution retirement plan and
trust agreement adopted by the Employer, consisting of the Plan Agreement and
the ▇▇▇▇▇▇ Basic Plan Document #07 as set forth herein, together with any and
all amendments and supplements thereto.
2.37. PLAN ADMINISTRATOR means the Employer or its appointee pursuant
to Section 15.1.
2.38. PLAN AGREEMENT means the separate agreement entered into between
the Employer and the Trustee and accepted by ▇▇▇▇▇▇, under which the Employer
adopts the Plan and selects among its optional provisions.
2.39. PLAN YEAR means the period of 12 consecutive months specified by
the Employer in the Plan Agreement, as well as any initial short plan year
period specified by the Employer in the Plan Agreement.
2.40. PROFIT SHARING CONTRIBUTION means a contribution made for the
benefit of a Participant by the Employer pursuant to Section 4.2(a).
2.41. ▇▇▇▇▇▇ means (i) ▇▇▇▇▇▇ Mutual Funds Corp., or a company
affiliated with it which ▇▇▇▇▇▇ Mutual Funds Corp. has designated as its agent
performing specified actions or procedures in its capacity as sponsor of this
prototype Plan, and (ii) ▇▇▇▇▇▇ Fiduciary Trust Company when performing in its
capacity as Recordkeeper or Trustee.
2.42. QUALIFIED DOMESTIC RELATIONS ORDER means any judgment, decree or
order (including approval of a property settlement agreement) which constitutes
a "qualified domestic relations order" within the meaning of Code Section
414(p). A judgment, decree or order shall not fail to be a Qualified Domestic
Relations Order merely because it requires a distribution to an alternate payee
(or the segregation of accounts pending distribution to an alternate payee)
before the Participant is otherwise entitled to a distribution under the Plan.
2.43. QUALIFIED PARTICIPANT means any Participant who satisfies the
requirements for being a Qualified Participant as elected by the Employer in the
Plan Agreement, for the purposes set forth in the Plan Agreement. If the Plan is
not adopted to replace an existing plan, this Section 2.42 is effective on the
Effective Date. If the Plan replaces an existing plan, this Section 2.42 is
effective on the Effective Date, and the provision of the existing plan that
this Section 2.42 replaces shall continue to apply until that time.
2.44. RECORDKEEPER means the person or entity designated by the
Employer in the Plan Agreement to perform the duties described in Section 15.4,
and any successor thereto. If
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▇▇▇▇▇▇ is the Recordkeeper, the terms and conditions of its service will be as
specified in a service agreement between the Employer and ▇▇▇▇▇▇.
2.45. RETIREMENT means ceasing to be an Employee in accordance with
Section 7.1.
2.46. ROLLOVER ACCOUNT means an account established for an Employee who
makes a rollover contribution to the Plan pursuant to Section 4.5.
2.47. SELF-EMPLOYED INDIVIDUAL means an individual whose personal
services are a material income-producing factor in the trade or business for
which the Plan is established, and who has Earned Income for the taxable year
from that trade or business, or would have Earned Income but for the fact that
the trade or business had no net profits for the taxable year.
2.48. SHAREHOLDER-EMPLOYEE means any officer or Employee of an electing
small business corporation, within the meaning of Section 1362 of the Code, who
on any day during a taxable year of the Employer owns (or is considered as
owning under Section 318(a)(1) of the Code) more than 5% of the outstanding
stock of the Employer. The Plan administrator shall be responsible for
identifying Shareholder-Employees to the Recordkeeper.
2.49. SOCIAL SECURITY WAGE BASE means the maximum amount considered as
wages under Section 3121(a)(1) of the Code as in effect on the first day of the
Plan Year.
2.50. TRUST AND TRUST FUND mean the trust fund established under
Section 13.1.
2.51. TRUSTEE means the person, or the entity with trustee powers,
named in the Plan Agreement as trustee, and any successor thereto.
2.52. VALUATION DATE means each day when the New York Stock Exchange is
open, or such other date or dates as the Employer may designate by written
agreement with the Recordkeeper.
2.53. YEAR OF SERVICE means a Plan Year or a 12-month Eligibility
Period, as elected by the Employer in the Plan Agreement, in which an Employee
is credited with at least 1,000 Hours of Service; provided, however, that if the
Employer has elected in the Plan Agreement to establish a number less than 1,000
as the requisite for crediting a Year of Service, that number shall be
substituted for 1,000, and provided further that in the case of an Employee in a
seasonal industry (as defined under regulations prescribed by the Secretary of
Labor) in which the customary extent of employment during a calendar year is
fewer than 1,000 Hours of Service, the number specified in any regulations
prescribed by the Secretary of Labor dealing with years of service shall be
substituted for 1,000. An Employee's Years of Service shall include service
credited prior to the Effective Date under any predecessor plan. If the initial
Plan Year is shorter than 12 months, each Employee who is credited with at least
1,000 Hours of Service in the 12-month period ending on the last day of the
initial Plan Year shall be
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credited with a Year of Service with respect to the initial Plan Year.
If the Employer has so elected in the Plan Agreement, Years of Service
for vesting shall not include:
(a) Service in any Plan Year (or comparable period prior to
the Effective Date) completed before the Employee reached age 18;
(b) Service completed during a period in which the Employer
did not maintain the Plan or any predecessor plan (as defined under
regulations prescribed by the Secretary of the Treasury).
If the Employer has so elected in the Plan Agreement, Years of Service
for vesting shall include employment by a business acquired by the Employer,
before the date of the acquisition.
The following definitions apply only to cash or deferred arrangements
under Section 401(k) (CODA):
2.54. DEFERRAL AGREEMENT means an Employee's agreement to make one or
more Elective Deferrals in accordance with Section 5.2.
2.55. ELECTIVE DEFERRAL means any contribution made to the Plan by the
Employer at the election of a Participant, in lieu of cash compensation,
including contributions made pursuant to a Deferral Agreement or other deferral
mechanism.
2.56. ELECTIVE DEFERRAL ACCOUNT means an account maintained on the
books of the Plan, in which are recorded a Participant's Elective Deferrals and
the income, expenses, gains and losses incurred thereon.
2.57. EMPLOYER MATCHING ACCOUNT means an account maintained on the
books of the Plan, in which are recorded the Employer Matching Contributions
made on behalf of a Participant and the income, expenses, gains and losses
incurred thereon.
2.58. EMPLOYER MATCHING CONTRIBUTION means a contribution made by the
Employer (i) to the Plan pursuant to Section 5.8, or (ii) to another defined
contribution plan on account of a Participant's "elective deferrals" or
"employee contributions," as those terms are used in Section 401(m)(4) of the
Code.
2.59. HIGHLY COMPENSATED EMPLOYEE means any highly compensated active
Employee or highly compensated former Employee as defined in subsection (a)
below; provided, however, that if the Employer so elects in the Plan Agreement,
Highly Compensated Employee means any highly compensated Employee under the
simplified method described in subsection (b) below.
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(a) Regular Method. A highly compensated active Employee
includes any Employee who performs service for the Employer during the
determination year and who during the look-back year: (i) received
compensation from the Employer in excess of $75,000 (as adjusted
pursuant to Section 415(d) of the Code); (ii) received compensation
from the Employer in excess of $50,000 (as adjusted pursuant to Section
415(d) of the Code) and was a member of the top-paid group for such
year; or (iii) was an officer of the Employer and received compensation
during such year that is greater than 50% of the dollar limitation in
effect under Section 415(b)(1)(A) of the Code. The term also includes
(A) Employees who are both described in the preceding sentence if the
term "determination year" is substituted for the term "look-back year,"
and among the 100 Employees who received the most compensation from the
Employer during the determination year; and (B) Employees who are 5%
owners at any time during the look-back year or determination year. If
no officer has satisfied the compensation requirement of (iii) above
during either a determination year or look-back year, the highest paid
officer for such year shall be treated as a Highly Compensated
Employee.
A highly compensated former Employee includes any Employee who
separated from service (or was deemed to have separated) before the
determination year, performed no service for the Employer during the
determination year, and was a highly compensated active Employee for
either the year of separation from service or any determination year
ending on or after the Employee's 55th birthday.
If during a determination year or look-back year an Employee
is a family member of either a 5% owner who is an active or former
Employee, or a Highly Compensated Employee who is one of the 10 most
highly paid Highly Compensated Employees ranked on the basis of
compensation paid by the Employer during the year, then the family
member and the 5% owner or top-ten Highly Compensated Employee shall be
treated as a single Employee receiving compensation and Plan
contributions or benefits equal to the sum of the compensation and
contributions or benefits of the family member and the 5% owner or
top-ten Highly Compensated Employee. For purposes of this Section
2.58(a), family members include the spouse, lineal ascendants and
descendants of the Employee or former Employee and the spouses of such
lineal ascendants and descendants.
For purposes of this subsection (a), the "determination year"
shall be the Plan Year, and the "look-back year" shall be the 12-month period
immediately preceding the determination year; provided, however, that in a Plan
for which the Plan Year is the calendar year, the current Plan Year shall be
both the "determination year" and the "look-back year" if the Employer so elects
in the Plan Agreement.
(b) Simplified Method. An Employee is a Highly Compensated
Employee under this simplified method if (i) the Employee is a 5% owner
during the Plan Year;
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(ii) the Employee's compensation for the Plan Year exceeds $75,000 (as
adjusted pursuant to Section 415(d) of the Code); (iii) the Employee's
compensation for the Plan Year exceeds $50,000 (as adjusted pursuant to
Section 415(d) of the Code) and the Employee is in the top-paid group
of Employees; or (iv) the Employee is an officer of the Employer and
received compensation during the Plan Year that is greater than 50% of
the dollar limitation under Code Section 415(b)(1)(A).
The lookback provisions of Code Section 414(q) do not apply to
determining Highly Compensated Employees under this simplified method.
An Employer that applies this simplified method for determining Highly
Compensated Employees may choose to apply this method on the basis of
the Employer's workforce as of a single day during the Plan Year
("snapshot day"). In applying this simplified method on a snapshot
basis, the Employer shall determine who is a Highly Compensated
Employee on the basis of the data as of the snapshot day. If the
determination of who is a Highly Compensated Employee is made earlier
than the last day of the Plan Year, the Employee's compensation that is
used to determine an Employee's status must be projected for the Plan
Year under a reasonable method established by the Employer.
Notwithstanding the foregoing, in addition to those Employees
who are determined to be highly compensated on the Plan's snapshot day,
as described above, where there are Employees who are not employed on
the snapshot day but who are taken into account for purposes of testing
under Section 5.6 or 5.10, the Employer must treat as a Highly
Compensated Employee any Eligible Employee for the Plan Year who:
(1) terminated prior to the snapshot day and was a
Highly Compensated Employee in the prior year;
(2) terminated prior to the snapshot day and (i) was
a 5% owner, (ii) had compensation for the Plan Year greater
than or equal to the projected compensation of any Employee
who is treated as a Highly Compensated Employee on the
snapshot day (except for Employees who are Highly Compensated
Employees solely because they are 5% owners or officers), or
(iii) was an officer and had compensation greater than or
equal to the projected compensation of any other officer who
is a Highly Compensated Employee on the snapshot day solely
because that person is an officer; or
(3) becomes employed subsequent to the snapshot day
and (i) is a 5% owner, (ii) has compensation for the Plan Year
greater than or equal to the projected compensation of any
Employee who is treated as a Highly Compensated Employee on
the snapshot day (except for Employees who are Highly
Compensated Employees solely because they are 5% owners or
officers), or (iii) is an officer and has compensation greater
than or equal to the
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projected compensation of any other officer who is a Highly
Compensated Employee on the snapshot day solely because that
person is an officer.
If during a Plan Year an Employee is a family member of either
a 5% owner who is an Employee, or a Highly Compensated Employee who is
one of the ten most highly paid Highly Compensated Employees ranked on
the basis of compensation paid by the Employees during the year, then
the family member and the 5% owner or
top-ten-Highly-Compensated-Employee shall be treated as a single
Employee receiving compensation and Plan contributions or benefits
equal to the sum of the compensation and contributions or benefits of
the family member and the 5% owner or
top-ten-Highly-Compensated-Employee. For purposes of this Section
2.58(b), family members include the spouse, lineal ascendants and
descendants of the Employee and the spouses of such lineal ascendants
and descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the top-paid
group, the top 100 Employees, the number of Employees treated as officers and
the compensation that is considered, will be made in accordance with Section
414(q) of the Code and the regulations thereunder. The Plan Administrator is
responsible for identifying the Highly Compensated Employees and reporting such
data to the Recordkeeper.
2.60. NON-HIGHLY COMPENSATED EMPLOYEE means an Employee who is not a
Highly Compensated Employee.
2.61. QUALIFIED MATCHING ACCOUNT means an account maintained on the
books of the Plan, in which are recorded the Qualified Matching Contributions on
behalf of a Participant and the income, expense, gain and loss attributable
thereto.
2.62. QUALIFIED MATCHING CONTRIBUTION means a contribution made by the
Employer that: (i) is allocated with respect to a Participant's Elective
Deferrals or Participant Contributions or both (as elected by the Employer in
the Plan Agreement), (ii) is fully vested at all times and (iii) is
distributable only in accordance with Section 5.13.
2.63. QUALIFIED NONELECTIVE CONTRIBUTION means a contribution (other
than an Employer Matching Contribution or Qualified Matching Contribution) made
by the Employer, that: (i) a Participant may not elect to receive in cash until
it is distributed from the Plan; (ii) is fully vested at all times; and (iii) is
distributable only in accordance with Section 5.13.
2.64. QUALIFIED NONELECTIVE CONTRIBUTION ACCOUNT means an account
maintained on the books of the Plan, in which are recorded the Qualified
Nonelective Contributions on behalf of a Participant and the income, expense,
gain and loss attributable thereto.
2.65.
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ARTICLE 3. PARTICIPATION
3.1. INITIAL PARTICIPATION. Upon completion of the eligibility for Plan
participation requirements specified in the Plan Agreement, an Employee shall
begin participation in the Plan as of the entry date specified in the Plan
Agreement, or as of the Effective Date, whichever is later; provided, however,
that:
(a) if the Plan is adopted as an amendment of a predecessor
plan of the Employer, every Employee who was participating under the
predecessor plan when it was so amended shall become a Participant in
the Plan as of the Effective Date, whether or not he has satisfied the
age and service requirements specified in the Plan Agreement; and
(b) if the Employer so specifies in the Plan Agreement, any
individual who is (i) a nonresident alien receiving no earned income
from an Affiliated Employer which constitutes income from sources
within the United States, (ii) included in a unit of Employees covered
by a collective bargaining agreement between the Employer and Employee
representatives (excluding from the term "Employee representatives" any
organization of which more than half of the members are Employees who
are owners, officers, or executives of an Affiliated Employer), if
retirement benefits were the subject of good faith bargaining and no
more than 2% of the Employees covered by the collective bargaining
agreement are professionals as defined in Section 1.410(b)-9 of the
Income Tax Regulations, (iii) is an Employee of an Affiliated Employer
specified by the Employer in the Plan Agreement, (iv) is a Leased
Employee, or (v) is a member of such other class of Employees specified
by the Employer in the Plan Agreement, shall not participate in the
Plan until the later of the date on which he ceases to be described in
clause (i), (ii), (iii), (iv) or (v), whichever are applicable, or the
entry date specified by the Employer in the Plan Agreement; and
(c) if the Plan is not adopted as an amendment of a
predecessor plan of the Employer, Employees on the Effective Date shall
begin participation on the Effective Date, to the extent so elected by
the Employer in the Plan Agreement; and
(d) a Participant shall cease to participate in the Plan when
he becomes a member of a class of Employees ineligible to participate
in the Plan, and shall resume participation immediately upon his return
to a class of Employees eligible to participate in the Plan.
In the case of a Plan to which the CODA provisions of Article 5 apply
and for which the Employer has elected in the Plan Agreement to apply
different minimum service requirements for purposes of participation in
Profit Sharing Contributions, for purposes of participation in the CODA
provisions and/or for purposes of participation in Employer Matching
Contributions, this Article 3 shall be applied separately with regard
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to participation under Article 4, with regard to participation under
the CODA provisions of Article 5 and/or with regard to participation in
Employer Matching Contributions under Article 5.
3.2. SPECIAL PARTICIPATION RULE. With respect to a Plan in which the
Employer has specified full and immediate vesting in the Plan Agreement, an
Employee who incurs a One-Year Eligibility Break before completing the number of
Eligibility Periods required under Section 3.1 shall not thereafter be credited
with any Eligibility Period completed before the One-Year Eligibility Break.
3.3. RESUMED PARTICIPATION. A former Employee who incurs a One-Year
Eligibility Break after having become a Participant shall participate in the
Plan as of the date on which he again becomes an Employee, if (i) his Accounts
had become partially or fully vested before he incurred a One-Year Vesting
Break, or (ii) the number of consecutive One-Year Eligibility Breaks he incurred
are fewer than the greater of five or the number of Eligibility Periods
completed before such One-Year Eligibility Breaks. In any other case, when he
again becomes an Employee he shall be treated as a new Employee under Section
3.1.
3.4. BENEFITS FOR OWNER-EMPLOYEES. If the Plan provides contributions
or benefits for one or more Owner-Employees who control both the trade or
business with respect to which the Plan is established and one or more other
trades or businesses, the Plan and plans established with respect to such other
trades or businesses must, when looked at as a single plan, satisfy Sections
401(a) and (d) of the Code with respect to the Employees of this and all such
other trades or businesses. If the Plan provides contributions or benefits for
one or more Owner-Employees who control one or more other trades or businesses,
the Employees of each such other trade or business must be included in a plan
which satisfies Sections 401(a) and (d) of the Code and which provides
contributions and benefits not less favorable than those provided for such
Owner-Employees under the Plan. If an individual is covered as an Owner-Employee
under the plans of two or more trades or businesses which he does not control
and such individual controls a trade or business, then the contributions or
benefits of the Employees under the plan of the trade or business which he does
control must be as favorable as those provided for him under the most favorable
plan of the trade or business which he does not control. For purposes of this
Section 3.4, an Owner-Employee, or two or more Owner-Employees, shall be
considered to control a trade or business if such Owner-Employee, or such two or
more Owner-Employees together:
(a) own the entire interest in an unincorporated trade or
business, or
(b) in the case of a partnership, own more than 50% of either
the capital interest or the profits interest in such partnership.
For purposes of the preceding sentence, an Owner-Employee or two or
more Owner-Employees shall be treated as owning any interest in a partnership
which is owned,
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directly or indirectly, by a partnership which such Owner-Employee or such two
or more Owner-Employees are considered to control within the meaning of the
preceding sentence.
3.5. CHANGES IN CLASSIFICATION. If a Participant ceases to be a member
of a classification of Employees eligible to participate in the Plan, but does
not incur a One-Year Eligibility Break, he will continue to be credited with
Years of Service for vesting while he remains an Employee, and he will resume
participation as of the date on which he again becomes a member of a
classification of Employees eligible to participate in the Plan. If such a
Participant incurs a One-Year Eligibility Break, Section 3.3 will apply. If a
Participant who ceases to be a member of a classification of Employees eligible
to participate in the Plan becomes a member of a classification of Employees
eligible to participate in another plan of the Employer, his Account, if any,
under the Plan shall, upon the Administrator's direction, be transferred to the
plan in which he has become eligible to participate, if such plan permits
receipt of such Account.
If an Employee who is not a member of a classification of Employees
eligible to participate in the Plan satisfies the age and service requirements
specified in the Plan Agreement, he will begin to participate immediately upon
becoming a member of an eligible classification. If such an Employee has account
balances under another plan of the Employer, such account balances shall be
transferred to the Plan upon the Employee's commencement of participation in the
Plan, if such other plan permits such transfer.
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ARTICLE 4. CONTRIBUTIONS
4.1. PROVISIONS APPLICABLE TO ALL PLANS.
(a) Payment and Crediting of Contributions. The Employer shall
pay to the order of the Trustee the aggregate contributions to the
Trust Fund for each Plan Year. Each contribution shall be accompanied
by instructions from the Employer, in the manner prescribed by ▇▇▇▇▇▇.
Neither the Trustee nor ▇▇▇▇▇▇ shall be under any duty to inquire into
the correctness of the amount or the timing of any contribution, or to
collect any amount if the Employer fails to make a contribution as
provided in the Plan.
(b) Time for Payment. Elective Deferrals will be transferred
to the Trustee as soon as such contributions can reasonably be
segregated from the general assets of the Employer, but in any event
within 90 days after the date on which the Compensation to which such
contributions relate is paid. The aggregate of all other contributions
with respect to a Plan Year shall be transferred to the Trustee no
later than the due date (including extensions) for filing the
Employer's federal income tax return for that Plan Year.
(c) Limitations on Allocations. All allocations shall be
subject to the limitations in Article 6.
(d) Establishment of Accounts. The Employer will establish and
maintain (or cause to be established and maintained) for each
Participant individual accounts adequate to disclose his interest in
the Trust Fund, including such of the following separate accounts as
shall apply to the Participant: Employer Contribution Account,
Participant Contribution Account, Deductible Employee Contribution
Account, and Rollover Account; and in a Plan with a CODA, Elective
Deferral Account, Qualified Nonelective Account, Qualified Matching
Account and Employer Matching Account. The maintenance of such accounts
shall be only for recordkeeping purposes, and the assets of separate
accounts shall not be required to be segregated for purposes of
investment. For purposes of the Plan, a Participant is treated as
benefitting under the Plan for any Plan Year during which the
Participant received or is deemed to receive an allocation to an
Account in accordance with Treasury Regulation ss. 1.410(b)-3(a).
(e) Restoration of Accounts. Notwithstanding any other
provision of the Plan, for any Plan Year in which it is necessary to
restore any portion of a Participant's Account pursuant to Section
8.3(b) or 9.5, to the extent that the amount of Forfeitures available
is insufficient to accomplish such restoration, the Employer shall
contribute the amount necessary to eliminate the insufficiency,
regardless of whether the contribution is currently deductible by the
Employer under Section 404 of the Code. Forfeitures shall be considered
available for allocation pursuant to Sections 4.4 and 5.14 in a Plan
Year only after all necessary restoration of Accounts has been
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accomplished.
4.2. PROVISIONS APPLICABLE ONLY TO PROFIT SHARING PLANS.
(a) Amount of Annual Contribution. The Employer will
contribute for each Plan Year as a Profit Sharing Contribution an
amount determined in accordance with the formula specified by the
Employer in the Plan Agreement, less any amounts reapplied for the Plan
Year under Section 6.1(d), not to exceed the amount deductible under
Section 404 of the Code.
(b) Allocation of Profit Sharing Contributions; General Rule.
As of the last day of each Plan Year, the Profit Sharing Contribution
(and any amounts reapplied under Section 6.1(d)) for the Plan Year
shall be allocated as indicated by the Employer in the Plan Agreement.
(c) Plans Integrated with Social Security. If the Employer
elects in the Plan Agreement an allocation formula integrated with
Social Security, Profit Sharing Contributions (and any amounts
reapplied under Section 6.1(d)) shall be allocated as of the last day
of the Plan Year, as follows:
(1) Top-Heavy Integration Formula. If the Plan is
required to provide a minimum allocation for the Plan Year
pursuant to the Top-Heavy Plan rules of Article 14, or if the
Employer has specified in the Plan Agreement that this
paragraph (1) will apply whether or not the Plan is Top-Heavy,
then:
(A) First, among the Employer Contribution
Accounts of all Qualified Participants, in the ratio
that each Qualified Participant's Earnings bears to
all Qualified Participants' Earnings. The total
amount allocated in this manner shall be equal to
three percent (3%) of all Qualified Participants'
Earnings (or, if less, the entire amount to be
allocated).
(B) Next, among the Employer Contribution
Accounts of all Qualified Participants who have
Excess Earnings, in the ratio that each Qualified
Participant's Excess Earnings bears to all Qualified
Participants' Excess Earnings. The total amount
allocated in this manner shall be equal to three
percent (3%) of all Qualified Participants' Excess
Earnings (or, if less, the entire amount remaining to
be allocated). In the case of any Qualified
Participant who has exceeded the cumulative permitted
disparity limit described in subparagraph (5) below,
all of such Qualified Participant's Earnings shall be
taken into account.
(C) Next, among the Employer Contribution
Accounts of all
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Qualified Participants, in the ratio that the sum of
each Qualified Participant's Earnings and Excess
Earnings bears to the sum of all Qualified
Participants' Earnings and Excess Earnings. The total
amount allocated in this manner shall not exceed the
lesser of (i) the sum of all Participants' Earnings
and Excess Earnings multiplied by the Top-Heavy
Maximum Disparity Percentage determined under
subparagraph (1)(E), or (ii) the entire amount
remaining to be allocated. In the case of any
Qualified Participant who has exceeded the cumulative
permitted disparity limit described in subparagraph
(5) below, two times such Qualifying Participant's
Earnings shall be taken into account.
(D) Finally, any amount remaining shall be
allocated among the Employer Contribution Accounts of
all Qualified Participants in the ratio that each
Qualified Participant's Earnings bears to all
Qualified Participants' Earnings.
(E) The Top-Heavy Maximum Disparity
Percentage shall be the lesser of (i) 2.7% or (ii)
the applicable percentage from the following table:
If the Plan's Integration Level
is More than: The applicable percentage is:
But not more than:
$0 The greater of $10,000 or 20% of 2.7%
the Social Security Wage Base
The greater of $10,000 or 20% of 80% of the Social Security Wage 1.3%
the Social Security Wage Base Base
80% of the Social Security Wage Less than the Social Security 2.4%
Base Wage Base
If the Plan's Integration Level is equal to the Social Security Wage
Base, the Top-Heavy Maximum Disparity Percentage is 2.7%.
(2) Non-Top-Heavy Integration Formula. If the Plan is
not required to provide a minimum allocation for the Plan Year
pursuant to the Top-Heavy Plan rules of Article 14, and the
Employer has not specified in the Plan Agreement that
paragraph (1) will apply whether or not the Plan is Top-Heavy,
then:
(A) An amount equal to (i) the Maximum
Disparity Percentage determined under subparagraph
(2)(C) multiplied by the sum of all Qualified
Participants' Earnings and Excess Earnings, or (ii)
if less, the entire amount to be allocated, shall be
allocated among the Employer
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Contribution Account of all Participants in the ratio
that the sum of each Qualified Participant's Earnings
and Excess Earnings bears to the sum of all Qualified
Participants' Earnings and Excess Earnings. In the
case of any Qualified Participant who has exceeded
the cumulative permitted disparity limit described in
subparagraph (5) below, two times such Qualified
Participant's Earnings shall be taken into account.
(B) Any amount remaining after the
allocation in paragraph (2)(A) shall be allocated
among the Employer Contribution Accounts of all
Qualified Participants in the ratio that each
Qualified Participant's Earnings bears to all
Qualified Participants' Earnings.
(C) The Maximum Disparity Percentage shall
be the lesser of (i) 5.7% or (ii) the applicable
percentage from the following table:
If the Plan's Integration Level
is more than: The applicable percentage is:
But not more than:
$0 The greater of $10,000 or 20% of 5.7%
the Social Security Wage Base
The greater of $10,000 or 20% of 80% of the Social Security Wage 4.3%
the Social Security Wage Base Base
80% of the Social Security Wage Less than the Social Security 5.4%
Base Wage Base
If the Plan's Integration Level is equal to the Social Security Wage
Base, the Maximum Disparity Percentage is 5.7%.
(3) In this Section 4.2, "Earnings" means Earnings as
defined in Section 2.13.
(4) Annual overall permitted disparity limit.
Notwithstanding subparagraphs (1) through (3) above, for any
Plan Year this Plan benefits any Participant who benefits
under another qualified plan or simplified employee pension
(as defined in Section 408(k) of the Code) maintained by the
Employer that provides for permitted disparity (or imputes
disparity), Profit Sharing Contributions and Forfeitures will
be allocated among the Employer Contribution Accounts of all
Qualified Participants in the ratio that such Qualified
Participant's Earnings bears to the Earnings of all
Participants.
(5) Cumulative Permitted Disparity Limit. Effective
for Plan years beginning on or after January 1, 1995, the
cumulative permitted disparity limit for a Participant is 35
cumulative permitted disparity years. Total cumulative
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permitted disparity years means the number of years credited
to the Participant for allocation or accrual purposes under
the Plan, any other qualified plan or simplified employee
pension plan (whether or not terminated) ever maintained by
the Employer. For purposes of determining the Participant's
cumulative permitted disparity limit, all years ending in the
same calendar year are treated as the same year. If the
Participant has not benefitted under a defined benefit or
target benefit plan for any year beginning on or after January
1, 1994, the Participant has no cumulative disparity limit.
4.3. PROVISIONS APPLICABLE ONLY TO MONEY PURCHASE PENSION PLANS.
(a) Amount of Annual Contributions. The Employer will
contribute for each Plan Year an amount described in paragraph (b) or
(c) below, whichever is applicable, less any amounts reapplied for the
Plan Year under Section 6.1(d), not to exceed the amount deductible
under Section 404(c) of the Code.
(b) Allocation of Contributions; General Rule. The Employer
shall contribute an amount equal to the product of the Earnings of all
Qualified Participants and the Base Contribution Percentage, and the
contribution shall be allocated as of the last day of the Plan Year
among the Employer Contribution Accounts of all Qualified Participants
in the ratio that the Earnings of each Qualified Participant bears to
the Earnings of all Qualified Participants. This general rule does not
apply to a Plan that is integrated with Social Security.
(c) Plans Integrated with Social Security. If the Employer has
elected in the Plan Agreement to integrate the Plan with Social
Security, the Employer shall contribute an amount equal to the sum of
the following amounts, and the contribution shall be allocated as of
the last day of the Plan Year as follows:
(1) To the Employer Contribution Account of each
Qualified Participant, an amount equal to the product of the
Base Contribution Percentage and his Earnings, and
(2) To the Employer Contribution Account of each
Qualified Participant who has Excess Earnings, the product of
his Excess Earnings and the lesser of (i) the Base
Contribution Percentage or (ii) the Money Purchase Maximum
Disparity Percentage determined under paragraph (d).
(3) The Base Contribution Percentage shall be no less
than three percent (3%) in either of the following
circumstances: (i) any Plan Year of a Plan for which the Plan
Agreement does not specify that the Employer will perform
annual Top-Heavy testing, or (ii) any Plan Year in which the
Plan is required to provide a minimum allocation for the Plan
Year pursuant to the Top-
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Heavy Plan rules of Article 14.
(4) Notwithstanding subparagraphs (1) through (3)
above, in the case of any Participant who has exceeded the
cumulative permitted disparity limit described in paragraph
(f) below, the amount shall be each Qualified Participant's
Earnings multiplied by the percentage determined in
subparagraph (2) above.
(d) The Money Purchase Maximum Disparity Percentage is equal
to the lesser of (i) 5.7% or (ii) the applicable percentage from the
following table:
If the Plan's Integration Level
is more than: The applicable percentage is:
But not more than:
$0 The greater of $10,000 or 20% of 5.7%
the Social Security Wage Base
The greater of $10,000 or 20% of 80% of the Social Security Wage 4.3%
the Social Security Wage Base Base
80% of the Social Security Wage Less than the Social Security 5.4%
Base Wage Base
If the Plan's Integration Level is equal to the Social Security Wage
Base, the Money Purchase Maximum Disparity Percentage is 5.7%.
(e) Annual overall permitted disparity limit. Notwithstanding
the preceding paragraphs, for any Plan Year this Plan benefits any
Participant who benefits under another qualified plan or simplified
employee pension (as defined in Section 408(k) of the Code) maintained
by the Employer that provides for permitted disparity (or imputes
disparity), the Employer shall contribute for each Qualified
Participant an amount equal to the Qualified Participant's Earnings
multiplied by the lesser of (i) the Base Contribution Percentage or
(ii) the Money Purchase Maximum Disparity Percentage determined under
paragraph (d). For all purposes under the Plan, a Participant is
treated as benefiting under a plan (including this Plan) for any plan
year during which the Participant receives or is deemed to receive an
allocation under a plan in accordance with Section 1.410(b)-3(a) of the
Treasury Regulations.
(f) Cumulative Permitted Disparity Limit. Effective for Plan
Years beginning on or after January 1, 1995, the cumulative permitted
disparity limit for a Participant is 35 total cumulative permitted
disparity years. Total cumulative permitted disparity years means the
number of years credited to the Participant for allocation or accrual
purposes under the Plan, any other qualified plan or simplified
employee pension (whether or not terminated) ever maintained by the
Employer. For purposes of determining the Participant's cumulative
permitted disparity limit, all years ending in
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the same calendar year are treated as the same year. If the Participant
has not benefited under a defined benefit plan or target benefit plan
for any year beginning on or after January 1, 1994, the Participant has
no cumulative disparity limit.
4.4. FORFEITURES. Forfeitures from Employer Contribution Accounts shall
be used, as elected by the Employer in the Plan Agreement, either to reduce
other contributions required of the Employer, as specified in the Plan
Agreement, or shall be reallocated as additional contributions by the Employer.
If the Employer elects to use Forfeitures from Employer Conribution Accounts to
reduce other contributions required of the Employer, the amount of such
Forfeitures in a Plan Year shall be treated as a portion of such required
contribution. If the Employer elects to reallocate Forfeitures from Employer
Contribution Accounts as additional contributions, such forfeitures shall be
allocated (i) in the case of a profit sharing plan, in accordance with Section
4.2(b) (provided that such Forfeitures may be allocated under paragraphs
(c)(1)(B), (c)(1)(C) and (c)(2)(C) of Section 4.2 only to the extent that the
limitation described therein has not been fully utilized), and (ii) in the case
of a money purchase plan, among the Employer Contribution Accounts of all
Qualified Participants in proportion to their Earnings for the Plan Year.
4.5. ROLLOVER CONTRIBUTIONS. An Employee in an eligible class may
contribute at any time cash or other property (which is not a collectible within
the meaning of Section 408(m) of the Code) acceptable to the Trustee
representing qualified rollover amounts under Sections 402, 403, or 408 of the
Code. Amounts so contributed shall be credited to a Rollover Account for the
Participant.
4.6. PARTICIPANT CONTRIBUTIONS. If so specified in the Plan Agreement,
a Participant may make Participant Contributions to the Plan in accordance with
the Plan Agreement. Such contributions, together with any matching contributions
(as defined in section 401(m)(4) of the Code) if applicable, shall be limited so
as to meet the nondiscrimination test of section 401(m) of the Code, as set
forth in Section 5.10 of the Plan. Participant Contributions will be allocated
to the Participant Contributions Account of the contributing Participant. All
Participant Contribution Accounts will be fully vested at all times.
4.7. NO DEDUCTIBLE EMPLOYEE CONTRIBUTIONS. The Plan Administrator shall
not accept deductible employee contributions, other than those held in a
Deductible Employee Contribution Account transferred from a predecessor plan of
the Employer.
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ARTICLE 5. CASH OR DEFERRED ARRANGEMENT UNDER SECTION 401(k)
(CODA)
5.1. APPLICABILITY; ALLOCATIONS. This Article 5 applies to any plan
adopted pursuant to Plan Agreement #001, which Plan Agreement by its terms
includes a CODA permitting Elective Deferrals to be made under the Plan. The
Employer may specify in the Plan Agreement that contributions will be made to
the Plan only under the CODA, or that contributions may be made under Section
4.2 as well as under the CODA. Allocations to Participants' Accounts of
contributions made pursuant to this Article 5 shall be made as soon as
administratively feasible after their receipt by the Trustee, but in any case no
later than as of the last day of the Plan Year for which the contributions were
made.
5.2. CODA PARTICIPATION. Each Employee who has met the eligibility
requirements of Article 3 may make Elective Deferrals to the Plan by completing
and returning to the Plan Administrator a Deferral Agreement form which provides
that the Participant's cash compensation from the Employer will be reduced by
the amount indicated in the Deferral Agreement, and that the Employer will
contribute an equivalent amount to the Trust on behalf of the Participant. The
following rules will govern Elective Deferrals:
(a) Subject to the limits specified in the Plan Agreement and
set forth in Section 5.3, a Deferral Agreement may apply to any amount
or percentage of the Earnings payable to a Participant in each year,
and, if so specified by the Employer in the Plan Agreement, separately
to bonuses payable to a Participant from time to time, even if such
bonuses have otherwise been excluded from Compensation under the Plan
Agreement.
(b) In accordance with such reasonable rules as the Plan
Administrator shall specify, a Deferral Agreement will become effective
as soon as is administratively feasible after the Deferral Agreement is
returned to the Plan Administrator, and will remain effective until it
is modified or terminated. No Deferral Agreement may become effective
retroactively.
(c) A Participant may modify his Deferral Agreement by
completing and returning to the Plan Administrator a new Deferral
Agreement form as of any of the dates specified in the Plan Agreement,
and any such modification will become effective as described in
paragraph (b).
(d) A Participant may terminate his Deferral Agreement at any
time upon advance written notice to the Plan Administrator, and any
such termination will become effective as described in paragraph (b).
5.3. ANNUAL LIMIT ON ELECTIVE DEFERRALS. During any taxable year of a
Participant,
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his Elective Deferrals under the Plan and any other qualified plan of an
Affiliated Employer shall not exceed the dollar limit contained in Section
402(g) of the Code in effect at the beginning of the taxable year. With respect
to any taxable year, a Participant's Elective Deferrals for purposes of this
Section 5.3 include all Employer contributions made on his behalf pursuant to an
election to defer under any qualified CODA as described in Section 401(k) of the
Code, any simplified employee pension cash or deferred arrangement (SARSEP) as
described in Section 402(h)(1)(B) of the Code, any eligible deferred
compensation plan under Section 457 of the Code, any plan described under
Section 501(c)(18) of the Code, and any Employer contributions made on behalf of
the Participant for the purchase of an annuity contract under Section 403(b) of
the Code pursuant to a salary reduction agreement. The limit under Section
402(g) of the Code on the amount of Elective Deferrals of a Participant who
receives a hardship withdrawal pursuant to Section 12.2 shall be reduced, for
the taxable year next following the withdrawal, by the amount of Elective
Deferrals made in the taxable year of the hardship withdrawal.
5.4. DISTRIBUTION OF CERTAIN ELECTIVE DEFERRALS. "Excess Elective
Deferrals" means those Elective Deferrals described in Section 5.3 that are
includible in a Participant's gross income under Section 402(g) of the Code, to
the extent that the Participant's aggregate elective deferrals for a taxable
year exceed the dollar limitation under that Code Section. Excess Elective
Deferrals shall be treated as Annual Additions under the Plan, whether or not
they are distributed under this Section 5.4. A Participant may designate to the
Plan any Excess Elective Deferrals made during his taxable year by notifying the
Employer on or before the following March 15 of the amount of the Excess
Elective Deferrals to be so designated. A Participant who has Excess Elective
Deferrals for a taxable year, taking into account only his Elective Deferrals
under the Plan and any other plans of the Affiliated Employers, shall be deemed
to have designated the entire amount of such Excess Elective Deferrals.
Notwithstanding any other provision of the Plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto, shall be
distributed no later than April 15 to any Participant to whose Account Excess
Elective Deferrals were so designated or deemed designated for the preceding
year. The income or loss allocable to Excess Elective Deferrals is the income or
loss allocable to the Participant's Elective Deferral Account for the taxable
year multiplied by a fraction, the numerator of which is the Participant's
Excess Elective Deferrals for the year and the denominator of which is the
Participant's Account balance attributable to Elective Deferrals without regard
to any income or loss occurring during the year.
To the extent that the return to a Participant of his Elective
Deferrals would reduce an Excess Amount (as defined in Section 6.5(f)), such
Excess Deferrals shall be distributed to the Participant in accordance with
Article 6.
5.5. SATISFACTION OF ADP AND ACP TESTS. In each Plan Year, the Plan
must satisfy the ADP test described in Section 5.6 and the ACP test described in
Section 5.10. The Employer may cause the Plan to satisfy the ADP or ACP test or
both tests for a Plan Year by
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any of the following methods or by any combination of them:
(a) By the distribution of Excess Contributions in accordance
with Section 5.7, or the distribution of Excess Aggregate Contributions
in accordance with Section 5.11, or both; or
(b) By recharacterization of Excess Contributions in
accordance with Section 5.9; or
(c) If the Employer has so elected in the Plan Agreement, by
making Qualified Nonelective Contributions or Qualified Matching
Contributions or both, in accordance with the Plan Agreement and
Section 5.12.
5.6. ACTUAL DEFERRAL PERCENTAGE TEST LIMIT. The Actual Deferral
Percentage (hereinafter "ADP") for Participants who are Highly Compensated
Employees for each Plan Year and the ADP for Participants who are Non-Highly
Compensated Employees for the same Plan Year must satisfy one of the following
tests:
(a) The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for Participants
who are Non-Highly Compensated Employees for the same Plan Year
multiplied by 1.25; or
(b) The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for Participants
who are Non-Highly Compensated Employees for the same Plan Year
multiplied by 2.0, provided that the ADP for Participants who are
Highly Compensated Employees does not exceed the ADP for Participants
who are Non-Highly Compensated Employees by more than two percentage
points.
The following special rules shall apply to the computation of the ADP:
(c) "Actual Deferral Percentage" means, for a specified group
of Participants for a Plan Year, the average of the ratios (calculated
separately for each Participant in the group) of (1) the amount of
Employer contributions actually paid over to the Trust on behalf of the
Participant for the Plan Year to (2) the Participant's Earnings for the
Plan Year (or, provided that the Employer applies this method to all
Employees for a Plan Year, the Participant's Earnings for that portion
of the Plan Year during which he was eligible to participate in the
Plan). Employer contributions on behalf of any Participant shall
include: (i) his Elective Deferrals, including Excess Elective
Deferrals of Highly Compensated Employees, but excluding (A) Excess
Elective Deferrals of Non-Highly Compensated Employees that arise
solely from Elective Deferrals made under the Plan or another plan
maintained by an Affiliated Employer, and (B) Elective Deferrals that
are taken into account in the Average
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Contribution Percentage test described in Section 5.10 (provided the
ADP test is satisfied both with and without exclusion of these Elective
Deferrals), and excluding Elective Deferrals returned to a Participant
to reduce an Excess Amount as defined in Section 6.5(f); and (ii) if
the Employer has elected to make Qualified Nonelective Contributions,
such amount of Qualified Nonelective Contributions, if any, as shall be
necessary to enable the Plan to satisfy the ADP test and not used to
satisfy the ACP test; and (iii) if the Employer has elected to make
Qualified Matching Contributions, such amount of Qualified Matching
Contributions, if any, as shall be necessary to enable the Plan to
satisfy the ADP test and not used to satisfy the ACP test. For purposes
of computing Actual Deferral Percentages, an Employee who would be a
Participant but for his failure to make Elective Deferrals shall be
treated as a Participant on whose behalf no Elective Deferrals are
made.
(d) In the event that the Plan satisfies the requirements of
Sections 401(k), 401(a)(4), or 410(b) of the Code only if aggregated
with one or more other plans, or if one or more other plans satisfy the
requirements of such Sections of the Code only if aggregated with the
Plan, then this Section 5.6 shall be applied by determining the ADP of
Employees as if all such plans were a single plan. For Plan Years
beginning after December 31, 1989, plans may be aggregated in order to
satisfy Section 401(k) of the Code only if they have the same Plan
Year.
(e) The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have Elective
Deferrals (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if these are treated as Elective
Deferrals for purposes of the ADP test) allocated to his Accounts under
two or more CODAs described in Section 401(k) of the Code that are
maintained by the Affiliated Employers shall be determined as if such
Elective Deferrals (and, if applicable, such Qualified Nonelective
Contributions or Qualified Matching Contributions, or both) were made
under a single CODA. If a Highly Compensated Employee participates in
two or more CODAs that have different Plan Years, all CODAs ending with
or within the same calendar year shall be treated as a single CODA,
except that CODAs to which mandatory disaggregation applies in
accordance with regulations issued under Section 401(k) of the Code
shall be treated as separate CODAs.
(f) For purposes of determining the ADP of a Participant who
is a 5% owner or one of the ten most highly-paid Highly Compensated
Employees, the Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if these
are treated as Elective Deferrals for purposes of the ADP test) and the
Earnings of such a Participant shall include the Elective Deferrals
(and, if applicable, Qualified Nonelective Contributions and Qualified
Matching Contributions, or both) and Earnings for the Plan Year of his
Family Members (as defined in Section 414(q)(6) of the Code). Family
Members of such Highly
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Compensated Employees shall be disregarded as separate employees in
determining the ADP both for Participants who are Non-Highly
Compensated Employees and for Participants who are Highly Compensated
Employees.
(g) For purposes of the ADP test, Elective Deferrals,
Qualified Nonelective Contributions and Qualified Matching
Contributions must be made before the last day of the 12-month period
immediately following the Plan Year to which those contributions
relate.
(h) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or both,
used in satisfying the test.
(i) The determination and treatment of the ADP amounts of any
Participant shall satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
5.7. DISTRIBUTION OF EXCESS CONTRIBUTIONS. "Excess Contributions"
means, with respect to any Plan Year, the excess of:
(a) The aggregate amount of Employer contributions actually
taken into account in computing the ADP of Highly Compensated Employees
for the Plan Year, over
(b) The maximum amount of Employer contributions permitted by
the ADP test, determined by reducing contributions made on behalf of
Highly Compensated Employees in order of their ADPs, beginning with the
highest of such percentages.
Notwithstanding any other provision of the Plan, Excess Contributions,
plus any income and minus any loss allocable thereto, shall be distributed no
later than the last day of each Plan Year to Participants to whose Accounts
Excess Contributions were allocated for the preceding Plan Year. The income or
loss allocable to Excess Contributions is the income or loss allocable to the
Participant's Elective Deferral Account (and, if applicable, his Qualified
Nonelective Account or Qualified Matching Account or both) for the Plan Year
multiplied by a fraction, the numerator of which is the Participant's Excess
Contributions for the year and the denominator is the Participant's account
balance attributable to Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if any of these are
included in the ADP test) without regard to any income or loss occurring during
the Plan Year. If such excess amounts are distributed more than 2 1/2 months
after the last day of the Plan Year in which the excess amounts arose, an excise
tax equal to 10% of the excess amounts will be imposed on the Employer
maintaining the Plan. Such distributions shall be made to Highly Compensated
Employees on the basis of the respective portions of the Excess Contributions
attributable to each of them. Excess Contributions shall be allocated to a
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Participant who is a family member subject to the family member aggregation
rules of Section 414(q)(6) of the Code in the proportion that the Participant's
Elective Deferrals (and other amounts treated as his Elective Deferrals) bear to
the combined Elective Deferrals (and other amounts treated as Elective
Deferrals) of all of the Participants aggregated to determine his family
members' combined ADP. Excess Contributions shall be treated as Annual Additions
under the Plan.
Excess Contributions shall be distributed from the Participant's
Elective Deferral Account and Qualified Matching Account (if applicable) in
proportion to the Participant's Elective Deferrals and Qualified Matching
Contributions (to the extent used in the ADP test) for the Plan Year. Excess
Contributions shall be distributed from the Participant's Qualified Nonelective
Account only to the extent that such Excess Contributions exceed the balance in
the Participant's Elective Deferral Account and Qualified Matching Account.
5.8. MATCHING CONTRIBUTIONS. If so specified in the Plan Agreement, the
Employer will make Matching Contributions to the Plan in accordance with the
Plan Agreement, but no Matching Contribution shall be made with respect to an
Elective Deferral or a Participant Contribution that is returned to a
Participant because it represents an Excess Elective Deferral, an Excess
Contribution, an Excess Aggregate Contribution or an Excess Amount (as defined
in Section 6.5(f)); and if a Matching Contribution has nevertheless been made
with respect to such an Elective Deferral or Participant Contribution, the
Matching Contribution shall be forfeited, notwithstanding any other provision of
the Plan. Employer Matching Contributions will be allocated among the Employer
Matching Accounts of Qualified Participants in proportion to their Elective
Deferrals or Participant Contributions, if applicable, as specified in the Plan
Agreement. Employer Matching Accounts shall become vested according to the
vesting schedule specified in the Plan Agreement, but regardless of that
schedule shall be fully vested upon the Participant's Retirement (or, if
earlier, his fulfillment of the requirements for early retirement, if any, or
attainment of the normal retirement age specified in the Plan Agreement), his
death during employment with an Affiliated Employer, and in accordance with
Section 18.3. Forfeitures of Employer Matching Contributions, other than Excess
Aggregate Contributions, shall be made in accordance with Section 8.3.
5.9. RECHARACTERIZATION OF EXCESS CONTRIBUTIONS. Provided that the Plan
Agreement permits all Participants to make Participant Contributions, the
Employer may treat a Participant's Excess Contributions as an amount distributed
to the Participant and then contributed by the Participant to the Plan as a
Participant Contribution. Recharacterized amounts will remain nonforfeitable and
subject to the same distribution requirements as Elective Deferrals. Amounts may
not be recharacterized by a Highly Compensated Employee to the extent that a
recharacterized amount in combination with other Participant Contributions made
by that Employee would exceed any stated limit under the Plan on Participant
Contributions. Recharacterization must occur no later than two and one-half
months after the last day of the Plan Year in which the Excess Contributions
arose, and is deemed to occur no earlier than the date the last Highly
Compensated Employee is informed in writing by the
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Employer of the amount recharacterized and the consequences thereof.
Recharacterized amounts will be taxable to the Participant for his tax year in
which the Participant would have received them in cash.
5.10.
5.11. AVERAGE CONTRIBUTION PERCENTAGE TEST LIMIT AND AGGREGATE LIMIT.
The Average Contribution Percentage (hereinafter "ACP") for Participants who are
Highly Compensated Employees for each Plan Year and the ACP for Participants who
are Non-Highly Compensated Employees for the same Plan Year must satisfy one of
the following tests:
(a) The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for Participants
who are Non-Highly Compensated Employees for the same Plan Year
multiplied by 1.25; or
(b) The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for Participants
who are Non-Highly Compensated Employees for the same Plan Year
multiplied by two (2), provided that the ACP for Participants who are
Highly Compensated Employees does not exceed the ACP for Participants
who are Non-Highly Compensated Employees by more than two percentage
points.
The following rules shall apply to the computation of the ACP:
(c) "Average Contribution Percentage" means the average of the
Contribution Percentages of the Eligible Participants in a group.
(d) "Contribution Percentage" means the ratio (expressed as a
percentage) of a Participant's Contribution Percentage Amounts to the
Participant's Earnings for the Plan Year (or, provided that the
Employer applies this method to all Employees for a Plan Year, the
Participant's Earnings for that portion of the Plan Year during which
he was eligible to participate in the Plan).
(e) "Contribution Percentage Amounts" means the sum of the
Participant Contributions, Employer Matching Contributions, and
Qualified Matching Contributions (to the extent not taken into account
for purposes of the ADP test) made under the Plan on behalf of the
Participant for the Plan Year. Such Contribution Percentage Amounts
shall include Forfeitures of Excess Aggregate Contributions or Employer
Matching Contributions allocated to the Participant's Account, taken
into account in the year in which the allocation is made. If the
Employer has elected in the Plan Agreement to make Qualified
Nonelective Contributions, such amount of Qualified Nonelective
Contributions, if any, as shall be necessary to enable the Plan to
satisfy the ACP test and not used to satisfy the ADP test shall be
included in the Percentage Amounts. Elective Deferrals
shall also be included in the Contribution
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Percentage Amounts to the extent, if any, needed to enable the Plan to
satisfy the ACP test, so long as the ADP test is met before the
Elective Deferrals are used in the ACP test, and continues to be met
following the exclusion of those Elective Deferrals that are used to
meet the ACP test.
(f)
(g) "Eligible Participant" means any Employee who is eligible
to make a Participant Contribution, or an Elective Deferral, if
Elective Deferrals are taken into account in the calculation of the
Contribution Percentage, or to receive an Employer Matching
Contribution (or a Forfeiture thereof) or a Qualified Matching
Contribution.
(h) "Aggregate Limit" means the sum of (i) 125% of the greater
of the ADP of the Non-Highly Compensated Employees for the Plan Year,
or the ACP of Non-Highly Compensated Employees under the Plan subject
to Code Section 401(m) for the Plan Year beginning with or within the
Plan Year of the CODA, and (ii) the lesser of 200% of, or two plus, the
lesser of the ADP or ACP. "Lesser" is substituted for "greater" in
clause (i) of the preceding sentence, and "greater" is substituted for
"lesser" after the phrase "two plus the" in clause (ii) of the
preceding sentence, if that formulation will result in a larger
Aggregate Limit.
(i) If one or more Highly Compensated Employees participate in
both a CODA and a plan subject to the ACP test maintained by an
Affiliated Employer, and the sum of the ADP and ACP of those Highly
Compensated Employees subject to either or both tests exceeds the
Aggregate Limit, then the ACP of those Highly Compensated Employees who
also participate in a CODA will be reduced (beginning with the Highly
Compensated Employee whose ACP is the highest) so that the Aggregate
Limit is not exceeded. The amount by which each Highly Compensated
Employee's Contribution Percentage Amount is reduced shall be treated
as an Excess Aggregate Contribution. In determining the Aggregate
Limit, the ADP and ACP of Highly Compensated Employees are determined
after any corrections required to meet the ADP and ACP tests. The
Aggregate Limit will be considered satisfied if both the ADP and ACP of
the Highly Compensated Employees does not exceed 1.25 multiplied by the
ADP and ACP of the Non-Highly Compensated Employees.
(j) For purposes of this section, the Contribution Percentage
for any Participant who is a Highly Compensated Employee and who is
eligible to have Contribution Percentage Amounts allocated to his
account under two or more plans described in Section 401(a) of the
Code, or CODAs described in Section 401(k) of the Code, that are
maintained by an Affiliated Employer, shall be determined as if the
total of such Contribution Percentage Amounts was made under each plan.
If a Highly Compensated Employee participates in two or more CODAs that
have different plan years, all CODAs ending with or within the same
calendar year shall be treated as a single CODA, except that CODAs to
which mandatory disaggregation applies in
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accordance with regulations issued under Section 401(k) of the Code
shall be treated as separate CODAs.
(k) In the event that the Plan satisfies the requirements of
Sections 401(m), 401(a)(4) or 410(b) of the Code only if aggregated
with one or more other plans, or if one or more other plans satisfy the
requirements of such Sections of the Code only if aggregated with the
Plan, then this Section 5.10 shall be applied by determining the
Contribution Percentage of Employees as if all such plans were a single
plan. For Plan Years beginning after December 31, 1989, plans may be
aggregated in order to satisfy Section 401(m) of the Code only if they
have the same Plan Year.
(l) For purposes of determining the Contribution Percentage of
a Participant who is a 5% owner or one of the ten most highly-paid
Highly Compensated Employers, the Contribution Percentage Amounts and
Earnings of the Participant shall include the Contribution Percentage
Amounts and Earnings for the Plan Year of Family Members (as defined in
Section 414(q)(6) of the Code). Family Members of such Highly
Compensated Employees shall be disregarded as separate employees in
determining the Contribution Percentage both for Participants who are
Non-Highly Compensated Employees and for Participants who are Highly
Compensated Employees.
(m) For purposes of the ACP test, Employer Matching
Contributions, Qualified Matching Contributions and Qualified
Nonelective Contributions will be considered made for a Plan Year if
made no later than the end of the 12-month period beginning on the day
after the close of the Plan Year.
(n) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or both,
used in the ACP test.
(o) The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
5.12. DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. Notwithstanding
any other provision of the Plan, Excess Aggregate Contributions, plus any income
and minus any loss allocable thereto, shall be forfeited if forfeitable, or if
not forfeitable, distributed no later than the last day of each Plan Year to
Participants to whose Accounts such Excess Aggregate Contributions were
allocated for the preceding Plan Year. The income or loss allocable to Excess
Aggregate Contributions is the income or loss allocable to the Participant's
Employer Matching Contribution Account, Qualified Matching Contribution Account
(if any, and if all amounts therein are not used in the ADP test), and, if
applicable, Qualified Nonelective Account, Participant Contribution Account and
Elective Deferral Account for the Plan Year, multiplied by a fraction, the
numerator of which is the Participant's Excess Aggregate
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Contributions for the year and the denominator of which is the Participant's
account balance(s) attributable to Contribution Percentage Amounts without
regard to any income or loss occurring during the Plan Year. Excess Aggregate
Contributions shall be allocated to a Participant who is subject to the family
member aggregation rules of Section 414(q)(6) of the Code in the proportion that
the Participant's Employer Matching Contributions (and other amounts treated as
his Employer Matching Contributions) bear to the combined Employer Matching
Contributions (and other amounts treated as Employer Matching Contributions) of
all of the Participants aggregated to determine its family members' combined
ACP. If excess amounts attributable to Excess Aggregate Contributions are
distributed more than 2 1/2 months after the last day of the Plan Year in which
such excess amounts arose, an excise tax equal to 10% of the excess amounts will
be imposed on the Employer maintaining the Plan. Excess Aggregate Contributions
shall be treated as Annual Additions under the Plan.
Excess Aggregate Contributions shall be forfeited if forfeitable, or
distributed on a pro-rata basis from the Participant's Participant Contribution
Account, Employer Matching Account, and Qualified Matching Account (and, if
applicable, the Participant's Qualified Nonelective Account or Elective Deferral
Account, or both).
Excess Aggregate Contributions means, with respect to any Plan Year,
the excess of:
(a) The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution Percentage and
actually made on behalf of Highly Compensated Employees for the Plan
Year, over
(b) The maximum Contribution Percentage Amounts permitted by
the ACP test and the Aggregate Limit (determined by reducing
contributions made on behalf of Highly Compensated Employees in order
of their Contribution Percentages, beginning with the highest of such
percentages).
Such determination shall be made after first determining Excess
Elective Deferrals pursuant to Section 5.4, and then determining Excess
Contributions pursuant to Section 5.7.
5.13. QUALIFIED NONELECTIVE CONTRIBUTIONS; QUALIFIED MATCHING
CONTRIBUTIONS. An Employer shall make Qualified Nonelective Contributions and/or
Qualified Matching Contributions as provided by the Employer in the Plan
Agreement. Qualified Nonelective Contributions and Qualified Matching
Contributions shall be allocated to the Qualified Nonelective Contribution
Accounts and Qualified Matching Accounts, respectively, of Participants as
provided by the Employer in the Plan Agreement.
5.14. RESTRICTION ON DISTRIBUTIONS. Except as provided in Sections 5.4,
5.7 and 5.11, no distribution may be made from a Participant's Elective Deferral
Account, Qualified Nonelective Contribution Account or Qualified Matching
Account until the occurrence of one of the following events:
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(a) The Participant's Disability, death or termination of
employment with the Affiliated Employers;
(b) Termination of the Plan without the establishment of
another defined contribution plan other than an employee stock
ownership plan as defined in Section 4975(e) or Section 409 of the
Code, or a simplified employee pension plan as defined in Section
408(k) of the Code;
(c) The Participant's attainment of age 59 1/2 (if the
Employer has elected in the Plan Agreement to permit such
distributions); or
(d) In the case of an Employer that is a corporation, the
disposition by the Employer to an unrelated entity of (i) substantially
all of the assets (within the meaning of Section 409(d)(2) of the Code)
used in a trade or business of the Employer, if the Employer continues
to maintain the Plan after the disposition, but only with respect to
Employees who continue employment with the entity acquiring such
assets; or (ii) the Employer's interest in a subsidiary (within the
meaning of Section 409(d)(3) of the Code), if the Employer continues to
maintain the Plan after the disposition, but only with respect to
Employees who continue employment with such subsidiary.
In addition, if the Employer has elected in the Plan Agreement to
permit such distributions, a distribution may be made from a Participant's
Elective Deferral Account in the event of his financial hardship as described in
Section 12.2. All distributions upon any of the events listed above are subject
to the conditions of Article 10, Joint and Survivor Annuity Requirements. In
addition, distributions made after March 31, 1988, on account of an event
described in subsection (b) or (d) above must be made in a lump sum.
5.15. FORFEITURES OF EMPLOYER MATCHING CONTRIBUTIONS. Forfeitures from
Employer Matching Accounts shall be used, as elected by the Employer in the Plan
Agreement, either to reduce other contributions required of the Employer, as
specified in the Plan Agreement, or shall be reallocated as additional Employer
Matching Contributions or Profit Sharing Contributions as specified in the Plan
Agreement. If the Employer elects to use Forfeitures from Employer Matching
Accounts to reduce other contributions required of the Employer, the amount of
such Forfeitures in a Plan Year shall be treated as a portion of such
contribution. If the Employer elects to reallocate Forfeitures from Employer
Matching Contributions as additional Employer Matching Contributions, such
Forfeitures shall be allocated in accordance with Section 5.8. If the Employer
elects to reallocate Forfeitures from Employer Matching Accounts as additional
Profit Sharing Contributions, such Forfeitures shall be allocated in accordance
with Section 4.2(b) (provided that such Forfeitures may be allocated under
paragraphs (c)(1)(B), (c)(1)(C) and (c)(2)(C) of Section 4.2 only to the extent
that the limitation described therein has not been fully utilized). Forfeitures
of Excess Aggregate Contributions determined under Section 5.10 that are
Employer Matching Contributions shall be used as
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provided above in this Section 5.14.
5.16. SPECIAL EFFECTIVE DATES. If the Plan is adopted as an amendment
of an existing plan, the provisions of Sections 5.3 and Section 5.7 through 5.10
are effective as of the first day of the first Plan Year beginning after
December 31, 1986.
5.17.
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ARTICLE 6. LIMITATIONS ON ALLOCATIONS
6.1. NO ADDITIONAL PLAN. If the Participant does not participate in and
has never participated in another qualified plan, or a welfare benefit fund (as
defined in Section 419(e) of the Code), or an individual medical account (as
defined in Section 415(l)(2) of the Code), or a simplified employee pension (as
defined in Section 408(k) of the Code), which provides an Annual Addition as
defined in Section 6.5(a), maintained by an Affiliated Employer:
(a) The amount of Annual Additions (as defined in Section
6.5(a)) which may be credited to the Participant's Accounts for any
Limitation Year will not exceed the lesser of the Maximum Annual
Additions or any other limitation contained in this Plan. If the
Employer contribution that would otherwise be contributed or allocated
to the Participant's Account would cause the Annual Additions for the
Limitation Year to exceed the Maximum Annual Additions, the amount
contributed or allocated will be reduced so that the Annual Additions
for the Limitation Year will equal the Maximum Annual Additions.
(b) Before determining a Participant's actual Section 415
Compensation for a Limitation Year, the Employer may determine the
Maximum Annual Additions for the Participant on the basis of a
reasonable estimation of the Participant's Section 415 Compensation for
the Limitation Year, uniformly determined for all Participants
similarly situated.
(c) As soon as is administratively feasible after the end of
the Limitation Year, the Maximum Annual Additions for the Limitation
Year will be determined on the basis of the Participant's actual
Section 415 Compensation for the Limitation Year.
(d) If pursuant to paragraph (c), or as a result of the
reallocation of Forfeitures, or as a result of a reasonable error in
determining the amount of Elective Deferrals that may be made by a
Participant, the Annual Additions exceed the Maximum Annual Additions,
the Excess Amount will be disposed of as follows:
(1) Any Participant Contributions and Elective
Deferrals, to the extent they would reduce the Excess Amount,
will be returned to the Participant.
(2) If after the application of (1) above an Excess
Amount still exists, and the Participant is covered by the
Plan at the end of the Limitation Year, the Excess Amount in
the Participant's Accounts will be used to reduce Employer
contributions (including any allocation of Forfeitures) for
such Participant in the next Limitation Year, and each
succeeding Limitation Year if necessary.
(3) If after the application of (1) above an Excess
Amount still exists,
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and the Participant is not covered by the Plan at the end of a
Limitation Year, the Excess Amount will be held unallocated in
a suspense account. The suspense account will be applied to
reduce future Employer contributions (including allocation of
any Forfeitures) for all remaining Participants in the next
Limitation Year, and each succeeding Limitation Year if
necessary.
(4) If a suspense account is in existence at any time
during a Limitation Year pursuant to this Section 6.1(d), it
will participate in the allocation of investment gains and
losses. If a suspense account is in existence at any time
during a particular Limitation Year, all amounts in the
suspense account must be allocated and reallocated to
Participants' Accounts before any Employer or any Employee
contributions may be made to the Plan for that Limitation
Year. Excess amounts may not be distributed to Participants or
former Participants.
6.2. ADDITIONAL MASTER OR PROTOTYPE PLAN. If in addition to this Plan a
Participant is covered under another qualified Master or Prototype defined
contribution plan or a welfare benefit fund (as defined in Section 419(e) of the
Code), or an individual medical account (as defined in Section 415(1)(2) of the
Code), or a simplified employee pension (as defined in Section 408(k) of the
Code), which provides an Annual Addition as defined in Section 6.5(a),
maintained by an Affiliated Employer during any Limitation Year:
(a) The Annual Additions which may be credited to a
Participant's Accounts under this Plan for any such Limitation Year
will not exceed the Maximum Annual Additions reduced by the Annual
Additions credited to a Participant's accounts under the other defined
contribution plans, welfare benefit funds, individual medical accounts
and simplified employee pensions for the same Limitation Year. If the
Annual Additions with respect to the Participant under other defined
contribution plans, welfare benefit funds, individual medical accounts
and simplified employee pensions maintained by an Affiliated Employer
are less than the Maximum Annual Additions, and the Employer
contribution that would otherwise be contributed or allocated to the
Participant's Accounts under this Plan would cause the Annual Additions
for the Limitation Year to exceed this limitation, the amount
contributed or allocated to this Plan will be reduced so that the
Annual Additions under all such plans and funds for the Plan Year will
equal the Maximum Annual Additions. If the Annual Additions with
respect to the Participant under such other defined contribution plans,
welfare benefit funds, individual medical accounts and simplified
employee pensions in the aggregate are equal to or greater than the
Maximum Annual Additions, no amount will be contributed or allocated to
the Participant's Accounts under this Plan for the Limitation Year.
(b) Before determining a Participant's actual Section 415
Compensation for a Limitation Year, the Employer may determine the
Maximum Annual Additions for the
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Participant in the manner described in Section 6.1(b).
(c) As soon as is administratively feasible after the end of
the Plan Year, the Maximum Annual Additions for the Plan Year will be
determined on the basis of the Participant's actual Section 415
Compensation for the Plan Year.
(d) If, pursuant to Section 6.2(c) or as a result of the
allocation of Forfeitures, or of a reasonable error in determining the
amount of Elective Deferrals that may be made by him, a Participant's
Annual Additions under this Plan and such other plans would result in
an Excess Amount for a Limitation Year, the Excess Amount will be
deemed to consist of the Annual Additions last allocated under any
qualified Master or Prototype defined contribution plan, except that
Annual Additions to any simplified employee pension will be deemed to
have been allocated first, followed by Annual Additions to a welfare
benefit fund or individual medical account, regardless of the actual
allocation date.
(e) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date of
another plan, the Excess Amount attributed to this Plan will be the
product of X and Y, where (X) is the total Excess Amount allocated as
of such date, and (Y) is the ratio of: (1) the Annual Additions
allocated to the Participant for the Limitation Year as of such date
under this Plan to (2) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date under this and all
the other qualified Master or Prototype defined contribution plans.
(f) Any Excess Amount attributed to this Plan will be disposed
of in the manner described in Section 6.1(d).
6.3. ADDITIONAL NON-MASTER OR NON-PROTOTYPE PLAN. If the Participant is
covered under another qualified defined contribution plan maintained by an
Affiliated Employer which is not a Master or Prototype plan, Annual Additions
which may be credited to the Participant's Accounts under this Plan for any
Limitation Year will be limited in accordance with Section 6.2 as though the
other plan were a Master or Prototype plan, unless the Employer provides other
limitations in the Plan Agreement.
6.4. ADDITIONAL DEFINED BENEFIT PLAN. If an Affiliated Employer
maintains, or at any time maintained, a qualified defined benefit plan covering
any Participant in this Plan, the sum of the Participant's Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction will not exceed 1.0 in any
Limitation Year. The Annual Additions which may be credited to the Participant's
Accounts under this Plan for any Limitation Year will be limited in accordance
with the Plan Agreement.
6.5.
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6.6. DEFINITIONS.
(a) Annual Additions means the sum of the following amounts
credited to a Participant's accounts hereunder or otherwise for the
Limitation Year:
(1) Employer contributions;
(2) For any Limitation Year beginning after December
31, 1986, Participant Contributions;
(3) Forfeitures;
(4) Amounts allocated after March 31, 1984, to any
individual medical account, as defined in Section 415(1)(2) of
the Code, which is part of a pension or annuity plan
maintained by an Affiliated Employer;
(5) Amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years ending after
such date, which are attributable to postretirement medical
benefits allocated to the separate account of a key Employee,
as defined in Section 419A(d)(3) of the Code, under a welfare
benefit fund as defined in Section 419(e) of the Code,
maintained by an Affiliated Employer;
(6) In a Plan that includes a CODA, Excess Elective
Deferrals, Excess Contributions (including recharacterized
Elective Deferrals) and Excess Aggregate Contributions; and
(7) Allocations under a simplified employee pension.
For this purpose, any Excess Amount applied under Sections
6.1(d) or 6.2(e) in the Limitation Year to reduce Employer
contributions will be considered Annual Additions for such Limitation
Year. Any rollover contribution will not be considered an Annual
Addition.
(b) Section 415 Compensation means, for a Self-Employed
Individual, his Earned Income; and for any other Participant, his "Form
W-2 earnings" as defined in Section 2.8, if the Employer has elected in
item 7 of the Plan Agreement a definition of Compensation based on
"Form W-2 earnings"; or if the Employer has not so elected, his wages,
salaries, and fees for professional services 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
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insurance premiums, tips, bonuses, fringe benefits and reimbursements
or other expense allowances under a nonaccountable plan as described in
Income Tax Regulations Section 1.62-2(c)), and excluding the following:
(1) Employer contributions to a plan of deferred
compensation which are not includible in the Participant's
gross income for the taxable year in which contributed, or
Employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by the
Employee, or any distributions from a plan of deferred
compensations;
(2) Amounts realized from the exercise of a
nonqualified stock option, or when restricted stock (or
property) held by the Participant either becomes freely
transferable or is no longer subject to a substantial risk of
forfeiture;
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
and
(4) Other amounts which received special tax
benefits, or contributions made by the Employer (whether or
not under a salary reduction agreement) towards the purchase
of an annuity contract described in Section 403(b) of the Code
(whether or not the contributions are actually excludable from
the gross income of the Participant).
For purposes of applying the limitations of this Article 6, Section 415
Compensation for a Limitation Year is the Section 415 Compensation
actually paid or made available during such Limitation Year.
(c) Defined Benefit Fraction means a fraction, the numerator
of which is the sum of the Participant's Projected Annual Benefits
under all the defined benefit plans (whether or not terminated)
maintained by the Affiliated Employers, and the denominator of which is
the lesser of 125% of the dollar limitation in effect for the
Limitation Year under Sections 415(b) and (d) of the Code, or 140% of
the Participant's Highest Average Compensation including any
adjustments under Section 415(b) of the Code. Notwithstanding the
foregoing, if the Participant was a Participant as of the first day of
the first Limitation Year beginning after December 31, 1986, in one or
more defined benefit plans maintained by an Affiliated Employer which
were in existence on May 6, 1986, the denominator of this fraction will
not be less than 125% of the sum of the annual benefits under such
plans which the Participant had accrued as of the close of the last
Limitation Year beginning before January 1, 1987, disregarding any
change in the terms and conditions of the Plan after May 5, 1986. The
preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Section
415 of the Code for all Limitation Years beginning
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before January 1, 1987.
(d) Defined Contribution Dollar Limitation means $30,000 or if
greater, one-fourth of the defined benefit dollar limitation set forth
in Section 415(b)(1) of the Code as in effect for the Limitation Year.
(e) Defined Contribution Fraction means a fraction, the
numerator of which is the sum of the Annual Additions to the
Participant's accounts under all the defined contribution plans
(whether or not terminated) maintained by Affiliated Employers for the
current and all prior Limitation Years (including the Annual Additions
attributable to the Participant's nondeductible Employee contributions
to all defined benefit plans, whether or not terminated, maintained by
the Affiliated Employers, and the Annual Additions attributable to all
welfare benefit funds, as defined in Section 419(e) of the Code, and
individual medical accounts, as defined in Section 415(l)(2) of the
Code), and the denominator of which is the sum of the Maximum Annual
Additions for the current and all prior Limitation Years of service
with the Affiliated Employers (regardless of whether a defined
contribution plan was maintained by any Affiliated Employer). The
Maximum Annual Additions in any Plan Year is the lesser of 125% of the
dollar limitation determined under Sections 415(b) and (d) of the Code
in effect under Section 415(c)(1)(A) of the Code, or 35% of the
Participant's Section 415 Compensation for such year. If the Employee
was a Participant as of the end of the first day of the first
Limitation Year beginning after December 31, 1986 in one or more
defined contribution plans maintained by an Affiliated Employer which
were in existence on May 6, 1986, the numerator of this fraction will
be adjusted if the sum of this fraction and the Defined Benefit
Fraction would otherwise exceed 1.0 under the terms of this Plan. Under
the adjustment, an amount equal to product of the excess of the sum of
the fractions over 1.0, multiplied by the denominator of this fraction,
will be permanently subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they would be computed
as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the
Plan after May 5, 1986, but using the Section 415 limitation applicable
to the first Limitation Year beginning on or after January 1, 1987. The
Annual Addition for any Limitation Year beginning before January 1,
1987, shall not be recomputed to treat 100% of nondeductible Employee
contributions as Annual Additions.
(f) Excess Amount means, with respect to any Participant, the
amount by which Annual Additions exceed the Maximum Annual Additions.
(g) Highest Average Compensation means the average
compensation for the three consecutive Years of Service with the
Employer that produces the highest average. For this purpose, a Year of
Service with the Employer is determined based on the Plan Year.
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(h) Limitation Year means the Plan Year. All qualified plans
maintained by the Employer must use the same Limitation Year. If the
Limitation Year is amended to a different period of 12 consecutive
months, the new Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.
(i) Master or Prototype plan means a plan the form of which is
the subject of a favorable opinion letter from the Internal Revenue
Service.
(j) Maximum Annual Additions, which is the maximum annual
addition that may be contributed or allocated to a Participant's
account under the plan for any Limitation Year, means an amount not
exceeding the lesser of (a) the Defined Contribution Dollar Limitation
or (b) 25% of the Participant's Section 415 Compensation for the
Limitation Year. The compensation limitation referred to in (b) shall
not apply to any contribution for medical benefits (within the meaning
of Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise
treated as an Annual Addition under Section 415(l)(1) or Section
419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different period of 12 consecutive
months, the Maximum Annual Additions will not exceed the Defined
Contribution Dollar Limitation multiplied by the following fraction:
number of months in the
short limitation year
---------------------
12
(k) Projected Annual Benefit means the annual retirement
benefit (adjusted to an actuarially equivalent Straight Life Annuity if
such benefit is expressed in a form other than a Straight Life Annuity
or Qualified Joint and Survivor Annuity) to which the Participant would
be entitled under the terms of the Plan assuming:
(1) The Participant will continue employment until
normal retirement age under the Plan (or current age, if
later), and
(2) The Participant's Section 415 Compensation for
the current Limitation Year and all other relevant factors
used to determine benefits under the plan will remain constant
for all future Limitation Years.
(l) Straight Life Annuity means an annuity payable in equal
installments for the life of the Participant that terminates upon the
Participant's death.
(m)
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ARTICLE 7. ELIGIBILITY FOR DISTRIBUTION OF BENEFITS
7.1. RETIREMENT. After his Retirement, the amount credited to a
Participant's Accounts will be distributed to him in accordance with Article 9.
The termination of a Participant's employment with the Affiliated Employers
after he has (i) attained the normal retirement age specified in the Plan
Agreement, (ii) fulfilled the requirements for early retirement (if any)
specified in the Plan Agreement, or (iii) become Disabled will constitute his
Retirement. Upon a Participant's Retirement (or, if earlier, his attainment of
the normal retirement age specified in the Plan Agreement or fulfillment of the
requirements for early retirement, if any, specified in the Plan Agreement) the
Participant's Accounts shall become fully vested, regardless of the vesting
schedule specified by the Employer in the Plan Agreement. A Participant who
separates from service with any vested balance in his Accounts, after satisfying
the service requirements for early retirement (if any is specified in the Plan
Agreement) but before satisfying the age requirement for early retirement (if
any is specified in the Plan Agreement), shall be entitled to a fully vested
early retirement benefit upon his satisfaction of such age requirement.
7.2. DEATH. If a Participant dies before the distribution of his
Accounts has been completed, his Beneficiary will be entitled to distribution of
benefits in accordance with Article 9. A Participant's Accounts will become
fully vested upon his death before termination of his employment with the
Affiliated Employers, regardless of the vesting schedule specified by the
Employer in the Plan Agreement.
A Participant may designate a Beneficiary by completing and returning
to the Plan Administrator a form provided for this purpose. The form most
recently completed and returned to the Plan Administrator before the
Participant's death shall supersede any earlier form. If a Participant has not
designated any Beneficiary before his death, or if no Beneficiary so designated
survives the Participant, his Beneficiary shall be his surviving spouse, or if
there is no surviving spouse, his estate. A married Participant may designate a
Beneficiary other than his spouse only if his spouse consents in writing to the
designation, and the spouse's consent acknowledges the effect of the consent and
is witnessed by a notary public or a representative of the Plan. The beneficiary
or beneficiaries named in the designation to which the spouse has so consented
may not be changed without further written spousal consent unless the terms of
the spouse's original written consent expressly permit such a change, and
acknowledge that the spouse voluntarily relinquishes the right to limit the
consent to a specific beneficiary. The marriage of a Participant shall nullify
any designation of a beneficiary previously executed by the Participant. If it
is established to the satisfaction of the Plan Administrator that the
Participant has no spouse or that the spouse cannot be located, the requirement
of spousal consent shall not apply. Any spousal consent, or establishment that
spousal consent cannot be obtained, shall apply only to the particular spouse
involved.
7.3. OTHER TERMINATION OF EMPLOYMENT. A Participant whose employment
terminates for any reason other than his Retirement or death will be entitled to
distribution, in
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accordance with Article 9, of benefits equal to the amount of the vested balance
of his Accounts as determined under Article 8.
7.4.
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ARTICLE 8. VESTING
8.1. VESTED BALANCE. The vested balance of a Participant's Accounts
will be determined as follows:
(a) General Rule. A Participant's Participant Contribution
Account and Rollover Account shall be fully vested at all times. The
vested portion of his Employer Contribution Account shall be equal to
the percentage that corresponds, in the vesting schedule specified in
the Plan Agreement, to the number of Years of Service credited to the
Participant as of the end of the Year of Service in which his
employment terminates.
(b) Special Rules for CODA. In a Plan that includes a CODA, a
Participant's Elective Deferral Account, Qualified Nonelective Account,
and Qualified Matching Account shall be fully vested at all times. The
vested portion of his Employer Matching Account shall be equal to the
percentage that corresponds, in the vesting schedule specified in the
Plan Agreement, to the number of Years of Service credited to the
Participant as of the end of the Year of Service in which his
employment terminates.
(c) Retirement. All of a Participant's Accounts shall become
fully vested upon his Retirement or his earlier attainment of early
retirement age (if any) or the normal retirement age elected by the
Employer in the Plan Agreement.
For so long as a former Employee does not receive a distribution (or a
deemed distribution) of the vested portion of his Accounts, the undistributed
portion shall be held in a separate account which shall be invested pursuant to
Section 13.3 and shall share in earnings and losses of the Trust Fund pursuant
to Section 13.4 in the same manner as the Accounts of active Participants.
8.2. VESTING OF ACCOUNTS OF RETURNED FORMER EMPLOYEES. The following
rules apply in determining the vested portion of the Accounts of a Participant
who incurs one or more consecutive One-Year Vesting Breaks and then returns to
employment with an Affiliated Employer:
(a) If the Participant incurred fewer than five consecutive
One-Year Vesting Breaks, then all of his Years of Service will be taken
into account in determining the vested portion of his Accounts, as soon
as he has completed one Year of Service following his return to
employment.
(b) If the Participant incurred five or more consecutive
One-Year Vesting Breaks, then:
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(1) no Year of Service completed after his return to
employment will be taken into account in determining the
vested portion of his Accounts as of any time before he
incurred the first One-Year Vesting Break;
(2) years of Service completed before he incurred the
first One-Year Vesting Break will not be taken into account in
determining the vested portion of his Accounts as of any time
after his return to employment (i) unless some portion of his
Employer Contribution Account or Employer Matching Account had
become vested before he incurred the first One-Year Vesting
Break, and (ii) until he has completed one Year of Service
following his return to employment; and
(3) separate sub-accounts will be maintained for the
Participant's pre-break and post-break Employer Contribution
Account and Employer Matching Account, until both sub-accounts
become fully vested. Both sub-accounts will share in the
earnings and losses of the Trust Fund.
8.3. FORFEITURE OF NON-VESTED AMOUNTS. The portion of a former
Employee's Accounts that has not become vested under Section 8.1 shall become a
Forfeiture in accordance with the following rules, and shall be reallocated in
accordance with Section 4.4 or Section 5.14 (whichever applies) no later than
the end of the Plan Year in which it becomes a Forfeiture.
(a) If Distribution Is Made. If any or all of the vested
portion of a Participant's Accounts is distributed in accordance with
Section 9.1 or 9.2 before the Participant incurs five consecutive
One-Year Vesting Breaks, the nonvested portion of his Accounts shall
become a Forfeiture in the Plan Year in which the distribution occurs.
For purposes of this Section 8.3, if the value of the vested portion of
a Participant's Accounts is zero, the Participant shall be deemed to
have received a distribution of the entire vested balance of his
Accounts on the day his employment terminates. If the Participant
elects to have distributed less than the entire vested portion of his
Employer Contribution Account or Employer Matching Accounts, the part
of the nonvested portion that will become a Forfeiture is the total
nonvested portion multiplied by a fraction, the numerator of which is
the amount of the distribution and the denominator of which is the
total value of the entire vested portion of such Accounts.
(b) Right of Repayment. If a Participant who receives a
distribution pursuant to paragraph (a) returns to employment with an
Affiliated Employer, the balance of his Employer Contribution Account
and Employer Matching Account will be restored to the amount of such
balance on the date of distribution, if he repays to the Plan the full
amount of the distribution, before the earlier of (i) the fifth
anniversary of his return to employment or (ii) the date he incurs five
consecutive One-Year Vesting
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Breaks following the date of distribution. If an Employee is deemed to
receive a distribution pursuant to this Section 8.3, and he resumes
employment covered under this Plan before the date he incurs five
consecutive One-Year Vesting Breaks, upon his reemployment the
Employer-derived account balance of the Employee will be restored to
the amount on the date of such deemed distribution. Such restoration
will be made, first, from the amount of any Forfeitures available for
reallocation as of the last day of the Plan Year in which repayment is
made, to the extent thereof; and to the extent that Forfeitures are not
available or are insufficient to restore the balance, from
contributions made by the Employer pursuant to Section 4.1(e).
(c) If No Distribution Is Made. If no distribution (nor deemed
distribution) is made to a Participant before he incurs five
consecutive One-Year Vesting Breaks, the nonvested portion of his
Accounts shall become a Forfeiture at the end of the Plan Year that
constitutes his fifth consecutive One-Year Vesting Break.
(d) Adjustment of Accounts. Before a Forfeiture is incurred, a
Participant's Accounts shall share in earnings and losses of the Trust
Fund pursuant to Section 13.4 in the same manner as the Accounts of
active Participants.
(e) Accumulated Deductible Contributions. For Plan Years
beginning before January 1, 1989, a Participant's vested Account
balance shall not include accumulated deductible contributions within
the meaning of Section 72(o)(5)(B) of the Code.
8.4. SPECIAL RULE IN THE EVENT OF A WITHDRAWAL. If a withdrawal
pursuant to Section 12.2, 12.3 or 12.4 is made from a Participant's Employer
Contribution Account or Employer Matching Account before the Account is fully
vested, and the Participant may increase the vested percentage in the Account,
then a separate account will be established at the time of the withdrawal, and
at any relevant time after the withdrawal the vested portion of the separate
account will be equal to the amount "X" determined by the following formula:
X = P(AB + D) - D
For purposes of the formula, P is the Participant's vested percentage at the
relevant time, AB is the account balance at the relevant time, and D is the
amount of the withdrawal.
8.5. VESTING ELECTION. If the Plan is amended to change any vesting
schedule, or is amended in any way that directly or indirectly affects the
computation of a Participant's vested percentage, each Participant who has
completed not less than three Years of Service may elect, within a reasonable
period after the adoption of the amendment or change, in a writing filed with
the Employer to have his vested percentage computed under the Plan without
regard to such amendment. For a Participant who is not credited with at least
one Hour of Service in a Plan Year beginning after December 31, 1988, the
preceding sentence shall be applied by
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substituting "five Years of Service" for "three Years of Service." The period
during which the election may be made shall commence with the date the amendment
is adopted, or deemed to be made, and shall end on the latest of (a) 60 days
after the amendment is adopted; (b) 60 days after the amendment becomes
effective; or (c) 60 days after the Participant is issued written notice of the
amendment by the Employer.
8.6.
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ARTICLE 9. PAYMENT OF BENEFITS
9.1. DISTRIBUTION OF ACCOUNTS. A Participant or Beneficiary who has
become eligible for a distribution of benefits pursuant to Article 7 may elect
to receive such benefits at any time, subject to the terms and conditions of
this Article 9, Article 10 and Article 11. Unless a Participant or Beneficiary
elects otherwise, distribution of benefits will begin no later than the 60th day
after the end of the Plan Year in which the latest of the following events
occurs:
(a) The Participant attains age 65 (or if earlier, the normal
retirement age specified by the Employer in the Plan Agreement); or
(b) The tenth anniversary of the year in which the Participant
commenced participation in the Plan; or
(c) The Participant's employment with the Affiliated Employers
terminates.
A Beneficiary who is the surviving spouse of a Participant may elect to have
distribution of benefits begin within the 90-day period following the
Participant's death.
For purposes of this Section 9.1, the failure of a Participant (and his
spouse, if spousal consent is required pursuant to Article 10) to consent to a
distribution while a benefit is "immediately distributable" within the meaning
of Section 9.2 shall be considered an election to defer commencement of payment.
If the Employer has so specified in the Plan Agreement, the vested portion of a
Participant's Accounts will be distributed in a lump sum in cash no later than
60 days after the end of the Plan Year in which his employment terminates, if at
the time the Participant first became entitled to a distribution the value of
such vested portion derived from Employer and Employee contributions does not
exceed $3,500. Commencement of distributions in any case shall be subject to
Section 9.4.
9.2. RESTRICTION ON IMMEDIATE DISTRIBUTIONS. A Participant's account
balance is considered "immediately distributable" if any part of the account
balance could be distributed to the Participant (or his surviving spouse) before
the Participant attains, or would have attained if not deceased, the later of
the normal retirement age specified in the Plan Agreement or age 62.
(a) If the value of a Participant's vested account balance
derived from Employer and Employee contributions exceeds (or at the
time of any prior distribution exceeded) $3,500, and the account
balance is immediately distributable, the Participant and his spouse
(or where either the Participant or the spouse has died), the survivor
must consent to any such distribution, unless an exception described in
paragraph (b) applies. The consent of the Participant and his spouse
shall be obtained in writing within the 90-day period ending on the
annuity starting date, which is the first day of the first period for
which an amount is paid as an annuity (or any other form). The
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Plan Administrator shall notify the Participant and the spouse, no less
than 30 days and no more than 90 days before the annuity starting date,
of the right to defer any distribution until the Participant's account
balance is no longer immediately distributable. Such notification shall
include a general description of the material features of the optional
forms of benefit available under the Plan and an explanation of their
relative values, in a manner that would satisfy the notice requirements
of Section 417(a)(3) of the Code. If a distribution is one to which
Sections 401(a)(11) and 417 of the Code do not apply, such distribution
may commence less than 30 days after the required notification is
given, provided that:
(1) the Plan Administrator clearly informs the
Participant that the Participant has a right to a period of at
least 30 days after receiving the notice to consider the
decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option); and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
(b) Notwithstanding paragraph (a), only the Participant need
consent to the commencement of a distribution in the form of a
Qualified Joint and Survivor Annuity while the account balance is
immediately distributable. Furthermore, if payment in the form of a
Qualified Joint and Survivor Annuity is not required with respect to
the Participant pursuant to Section 10.1(b) of the Plan, only the
Participant need consent to the distribution of an account balance that
is immediately distributable. Neither the consent of the Participant
nor the spouse shall be required to the extent that a distribution is
required to satisfy Section 401(a)(9) or Section 415 of the Code. In
addition, upon termination of the Plan, if the Plan does not offer an
annuity option purchased from a commercial provider), and no Affiliated
Employer maintains another defined contribution plan (other than an
employee stock ownership plan as defined in Section 4975(e)(7) of the
Code), a Participant's account balance shall be distributed to the
Participant without his consent. If any Affiliated Employer maintains
another defined contribution plan (other than an employee stock
ownership plan as defined in Section 4975(e)(7) of the Code), a
Participant's account balance shall be transferred to that defined
contribution plan without his consent, unless he consents to an
immediate distribution. For purposes of determining the applicability
of the foregoing consent requirements to distributions made before the
first day of the first Plan Year beginning after December 31, 1988, the
Participant's vested account balance shall not include amounts
attributable to accumulated deductible employee contributions within
the meaning of Section 72(o)(5)(B) of the Code.
9.3. OPTIONAL FORMS OF DISTRIBUTION. Provided that the Employer has so
elected in the Plan Agreement, if at the time a Participant first becomes
entitled to a distribution the value of his vested Account balance derived from
Employer and Employee contributions does not
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exceed $3,500, distribution shall be made in a lump sum in cash. Subject to the
preceding sentence and to the rules of Article 10 concerning joint and survivor
annuities, a Participant or Beneficiary may elect to receive benefits in any of
the following optional forms:
(a) A lump sum payment. If a Participant's Accounts are
invested in Employer Stock, a lump sum payment may be made in cash or
in Employer Stock or in a combination of both;
(b) A series of installments over a period certain that meets
the requirements of Article 11;
(c) A nontransferable annuity contract, purchased by the Plan
Administrator from a commercial provider, with terms complying with the
requirements of Article 11; provided, however, that an annuity for the
life of any person shall be available as an optional form of
distribution only if the Employer has so elected in the Plan Agreement;
or
(d) In the event that the Plan is adopted as an amendment to
an existing plan, any optional form of distribution available under the
existing plan. Such optional forms of distribution may be made
available where necessary through the purchase by the Plan
Administrator of an appropriate annuity contract in accordance with
paragraph (c). If the Plan is a direct or indirect transferee of a
defined benefit plan, money purchase plan, target benefit plan, stock
bonus plan, or profit sharing plan which is subject to the survivor
annuity requirements of Sections 401(a)(11) and 417 of the Code, the
provisions of Article 10 shall apply.
9.4. DISTRIBUTION PROCEDURE. The Trustee shall make or commence
distributions to or for the benefit of Participants only on receipt of an
instruction from the Employer in writing or by such other means as shall be
acceptable to the Trustee, certifying that a distribution of a Participant's
benefits is payable pursuant to the Plan, and specifying the time and manner of
payment. The amount to be distributed shall be determined as of the Valuation
Date coincident with or next following the Employer's order. The Trustee shall
be fully protected in acting upon the directions of the Employer in making
benefit distributions, and shall have no duty to determine the rights or
benefits of any person under the Plan or to inquire into the right or power of
the Employer to direct any such distribution. The Trustee shall be entitled to
assume conclusively that any determination by the Employer with respect to a
distribution meets the requirements of the Plan. The Trustee shall not be
required to make any payment hereunder in excess of the net realizable value of
the assets of the Account in question at the time of such payment, nor to make
any payment in cash unless the Employer has furnished instructions as to the
assets to be converted to cash for the purposes of making payment.
9.5. LOST DISTRIBUTEE. In the event that the Plan Administrator is
unable with reasonable effort to locate a person entitled to distribution under
the Plan, the Accounts
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distributable to such a person shall become a Forfeiture at the end of the third
Plan Year after the Plan Administrator's efforts to locate such person began;
provided, however, that the amount of the Forfeiture shall be restored in the
event that such person thereafter submits a claim for benefits under the Plan.
Such restoration will be made, first, from the amount of Forfeitures available
for reallocation as of the last day of the Plan Year in which the claim is made,
to the extent thereof; and to the extent that Forfeitures are not available or
are insufficient to restore the balance, from contributions made by the Employer
pursuant to Section 4.1(e). A Forfeiture occurring under this Section 9.5 shall
be reallocated as though it were an Employer contribution.
9.6. DIRECT ROLLOVERS. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under this Section,
a distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover. For purposes of this Section 9.6, the following definitions shall
apply:
(a) Eligible Rollover Distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or
the joint lives (or joint life expectancies) of the distributees and
the distributee's Designated Beneficiary (as defined in Section 11.3),
or for a specified period of ten years or more, any distribution to the
extent such distribution is required under section 401(a)(9) of the
Code, and the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(b) Eligible Retirement Plan. An eligible retirement plan is
an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
(c) Distributee. A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a Qualified Domestic Relations Order
are distributees with regard to the interest of the spouse or former
spouse.
(d) Direct Rollover. A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the distributee.
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(e)
9.7. DISTRIBUTIONS REQUIRED BY A QUALIFIED DOMESTIC RELATIONS ORDER. To
the extent required by a Qualified Domestic Relations Order, the Plan
Administrator shall make distributions from a Participant's Accounts to any
alternate payee named in such order in a manner consistent with the distribution
options otherwise available under the Plan, regardless of whether the
Participant is otherwise entitled to a distribution at such time under the Plan.
9.8.
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ARTICLE 10. JOINT AND SURVIVOR ANNUITY REQUIREMENTS
10.1. APPLICABILITY.
(a) Generally. The provisions of Sections 10.2 through 10.5
shall generally apply to a Participant who is credited with at least
one Hour of Service on or after August 23, 1984, and such other
Participants as provided in Section 10.6.
(b) Exception for Certain Plans. The provisions of Sections
10.2 through 10.5 shall not apply to a Participant in a profit sharing
plan if: (i) the Participant does not or cannot elect payment of
benefits in the form of a life annuity, and (ii) on the death of the
Participant, his Vested Account Balance will be paid to his surviving
spouse (unless there is no surviving spouse, or the surviving spouse
has consented to the designation of another Beneficiary in a manner
conforming to a Qualified Election) and the surviving spouse may elect
to have distribution of the Vested Account Balance (adjusted in
accordance with Section 13.4 for gains or losses occurring after the
Participant's death) commence within the 90-day period following the
date of the Participant's death. The Participant may waive the spousal
death benefit described in this paragraph (b) at any time, provided
that no such waiver shall be effective unless it satisfies the
conditions applicable under Section 10.4(c) to a Participant's waiver
of a Qualified Preretirement Survivor Annuity. The exception in this
paragraph (b) shall not be operative with respect to a Participant in a
profit sharing plan if the Plan:
(1) is a direct or indirect transferee of a defined
benefit plan, money purchase pension plan, target benefit
plan, stock bonus plan, or profit sharing plan which is
subject to the survivor annuity requirements of Sections
401(a)(11) and 417 of the Code; or
(2) is adopted as an amendment of a plan that did not
qualify for the exception in this paragraph (b) before the
amendment was adopted.
For purposes of this paragraph (b), Vested Account Balance
shall have the meaning provided in Section 10.4(f). The provisions of
Sections 10.2 through 10.6 set forth the survivor annuity requirements
of Sections 401(a)(11) and 417 of the Code.
(c) Exception for Certain Amounts. The provisions of Sections
10.2 through 10.5 shall not apply to any distribution made on or after
the first day of the first Plan Year beginning after December 31, 1988,
from or under a separate account attributable solely to accumulated
deductible employee contributions as defined in Section 72(o)(5)(B) of
the Code, and maintained on behalf of a Participant in a money purchase
pension plan or a target benefit plan, provided that the exceptions
applicable to certain profit sharing plans under paragraph (b) are
applicable with respect to the separate account (for this purpose,
Vested Account Balance means the Participant's
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separate account balance attributable solely to accumulated deductible
employee contributions within the meaning of Section 72(o)(5)(B) of the
Code).
10.2. QUALIFIED JOINT AND SURVIVOR ANNUITY. Unless an optional form of
benefit is selected pursuant to a Qualified Election within the 90-day period
ending on the Annuity Starting Date, a married Participant's Vested Account
Balance will be paid in the form of a Qualified Joint and Survivor Annuity and
an unmarried Participant's Vested Account Balance will be paid in the form of a
life annuity. In either case, the Participant may elect to have such an annuity
distributed upon his attainment of the Earliest Retirement Age under the Plan.
10.3. QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. Unless an optional form
of benefit has been selected within the Election Period pursuant to a Qualified
Election, the Vested Account Balance of a Participant who dies before the
Annuity Starting Date shall be applied toward the purchase of an annuity for the
life of his surviving spouse (a "Qualified Preretirement Survivor Annuity"). The
surviving spouse may elect to have such an annuity distributed within a
reasonable period after the Participant's death. For purposes of this Article
10, the term "spouse" means the current spouse or surviving spouse of a
Participant, except that a former spouse will be treated as the spouse or
surviving spouse (and a current spouse will not be treated as the spouse or
surviving spouse) to the extent provided under a qualified domestic relations
order as described in Section 414(p) of the Code.
10.4. DEFINITIONS. The following definitions apply:
(a) "Election Period" means the period beginning on the first
day of the Plan Year in which a Participant attains age 35 and ending
on the date of the Participant's death. If a Participant separates from
service before the first day of the Plan Year in which he reaches age
35, the Election Period with respect to his account balance as of the
date of separation shall begin on the date of separation. A Participant
who will not attain age 35 as of the end of a Plan Year may make a
special Qualified Election to waive the Qualified Preretirement
Survivor Annuity for the period beginning on the date of such election
and ending on the first day of the Plan Year in which the Participant
will attain age 35. Such an election shall not be valid unless the
Participant receives a written explanation of the Qualified
Preretirement Survivor Annuity in such terms as are comparable to the
explanation required under Section 10.5. Qualified Preretirement
Survivor Annuity coverage will be automatically reinstated as of the
first day of the Plan Year in which the Participant attains age 35. Any
new waiver on or after that date shall be subject to the full
requirements of this article.
(b) "Earliest Retirement Age" means the earliest date on which
the Participant could elect to receive Retirement benefits under the
Plan.
(c) "Qualified Election" means a waiver of a Qualified Joint
and Survivor Annuity or a Qualified Preretirement Survivor Annuity. Any
such waiver shall not be
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effective unless: (1) the Participant's spouse consents in writing to
the waiver; (2) the waiver designates a specific Beneficiary, including
any class of beneficiaries or any contingent beneficiaries, which may
not be changed without spousal consent (unless the spouse's consent
expressly permits designations by the Participant without any further
spousal consent); (3) the spouse's consent acknowledges the effect of
the waiver; and (4) the spouse's consent is witnessed by a plan
representative or notary public. Additionally, a Participant's waiver
of the Qualified Joint and Survivor Annuity shall not be effective
unless the waiver designates a form of benefit payment which may not be
changed without spousal consent (unless the spouse's consent expressly
permits designations by the Participant without any further spousal
consent). If it is established to the satisfaction of a plan
representative that there is no spouse or that the spouse cannot be
located, a waiver will be deemed a Qualified Election. Any consent by a
spouse obtained under these provisions (and any establishment that the
consent of a spouse may not be obtained) shall be effective only with
respect to the particular spouse involved. A consent that permits
designations by the Participant without any requirement of further
consent by the spouse must acknowledge that the spouse has the right to
limit the consent to a specific Beneficiary and a specific form of
benefit where applicable, and that the spouse voluntarily elects to
relinquish either or both of those rights. A revocation of a prior
waiver may be made by a Participant without the consent of the spouse
at any time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under this
provision shall be valid unless the Participant has received notice as
provided in Section 10.5.
(d) "Qualified Joint and Survivor Annuity" means an immediate
annuity for the life of a Participant, with a survivor annuity for the
life of the spouse which is not less than 50% and not more than 100% of
the amount of the annuity which is payable during the joint lives of
the Participant and the spouse, and which is the amount of benefit that
can be purchased with the Participant's Vested Account Balance. The
percentage of the survivor annuity under the Plan shall be 50%.
(e) "Annuity Starting Date" means the first day of the first
period for which an amount is paid as an annuity (or any other form).
(f) "Vested Account Balance" means the aggregate value of the
Participant's vested account balance derived from Employer and Employee
contributions (including rollovers), whether vested before or upon
death, including the proceeds of insurance contracts, if any, on the
Participant's life. The provisions of this Article 10 shall apply to a
Participant who is vested in amounts attributable to Employer
contributions, Employee contributions or both at the time of death or
distribution.
10.5. NOTICE REQUIREMENTS. In the case of a Qualified Joint and
Survivor Annuity, no less than 30 days (or such other period permitted by law)
and no more than 90 days before a Participant's Annuity Starting Date the Plan
Administrator shall provide to him a written
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explanation of (i) the terms and conditions of a Qualified Joint and Survivor
Annuity, (ii) the Participant's right to make, and the effect of, an election to
waive the Qualified Joint and Survivor Annuity form of benefit, (iii) the rights
of the Participant's spouse, and (iv) the right to make, and the effect of, a
revocation of a previous election to waive the Qualified Joint and Survivor
Annuity.
In the case of a Qualified Preretirement Survivor Annuity, within the
applicable period for a Participant the Plan Administrator shall provide to him
a written explanation of the Qualified Preretirement Survivor Annuity, in terms
and manner comparable to the requirements applicable to the explanation of a
Qualified Joint and Survivor Annuity as described in the preceding paragraph.
The applicable period for a Participant is whichever of the following periods
ends last: (i) the period beginning with the first day of the Plan Year in which
the Participant attains age 32 and ending with the close of the Plan Year
preceding the Plan Year in which the Participant attains age 35; (ii) a
reasonable period ending after an individual becomes a Participant; (iii) a
reasonable period ending after this Article 10 first applies to the Participant.
Notwithstanding the foregoing, in the case of a Participant who separates from
service before attaining age 35, notice must be provided within a reasonable
period ending after his separation from service.
For purposes of applying the preceding paragraph, a reasonable period
ending after the enumerated events described in (ii) and (iii) is the end of the
two-year period beginning one year before the date the applicable event occurs,
and ending one year after that date. In the case of a Participant who separates
from service before the Plan Year in which he reaches age 35, notice shall be
provided within the two-year period beginning one year before the separation and
ending one year after the separation. If such a Participant thereafter returns
to employment with the Employer, the applicable period for the Participant shall
be redetermined.
10.6. TRANSITIONAL RULES.
(a) Any living Participant not receiving benefits on August
23, 1984, who would otherwise not receive the benefits prescribed by
the preceding Sections of this Article 10, must be given the
opportunity to elect to have those Sections apply if the Participant is
credited with at least one Hour of Service under the Plan or a
predecessor plan in a Plan Year beginning on or after January 1, 1976,
and the Participant had at least ten years of vesting service when he
or she separated from service.
(b) Any living Participant not receiving benefits on August
23, 1984, who was credited with at least one Hour of Service under the
Plan or a predecessor plan on or after September 2, 1974, and who is
not otherwise credited with any service in a Plan Year beginning on or
after January 1, 1976, must be given the opportunity to have his
benefits paid in accordance with paragraph (d) of this Section 10.6.
(c) The respective opportunities to elect (as described in
paragraphs (a) and
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(b) above) must be afforded to the appropriate Participants during the
period commencing on August 23, 1984, and ending on the date benefits
would otherwise commence to be paid to those Participants.
(d) Any Participant who has so elected pursuant to paragraph
(b) of this Section 10.6, and any Participant who does not elect under
paragraph (a), or who meets the requirements of paragraph (a) except
that he does not have at least ten years of vesting service when he
separates from service, shall have his benefits distributed in
accordance with all of the following requirements, if his benefits
would otherwise have been payable in the form of a life annuity:
(1) Automatic joint and survivor annuity. If benefits
in the form of a life annuity become payable to a married
Participant who:
(A) begins to receive payments under the
Plan on or after normal retirement age; or
(B) dies on or after normal retirement age
while still working for the Employer; or
(C) begins to receive payments on or after
the qualified early retirement age; or
(D) separates from service on or after
attaining normal retirement age (or the qualified
early retirement age) and after satisfying the
eligibility requirements for the payment of benefits
under the Plan and thereafter dies before beginning
to receive such benefits;
then such benefits will be received under the Plan in the form
of a Qualified Joint and Survivor Annuity, unless the
Participant has elected otherwise during the election period,
which must begin at least six months before the Participant
attains qualified early retirement age and end not more than
90 days before the commencement of benefits. Any election
hereunder will be in writing and may be changed by the
Participant at any time.
(2) Election of early survivor annuity. A Participant
who is employed after attaining the qualified early retirement
age will be given the opportunity to elect during the election
period to have a survivor annuity payable on death. If the
Participant elects the survivor annuity, payments under such
annuity must not be less than the payments which would have
been made to the spouse under the Qualified Joint and Survivor
Annuity if the Participant had retired on the day before his
death. Any election under this provision will be in writing
and may be changed by the Participant at any time. The
election period
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begins on the later of (i) the 90th day before the Participant
attains the qualified early retirement age, or (ii) the date
on which participation begins, and ends on the date the
Participant terminates employment.
(3) For purposes of this Section 10.6, qualified
early retirement age is the latest of the earliest date under
the Plan on which the Participant may elect to receive
Retirement benefits, the first day of the 120th month
beginning before the Participant reaches normal retirement
age, or the date the Participant begins participation.
(4)
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ARTICLE 11. MINIMUM DISTRIBUTION REQUIREMENTS
11.1. GENERAL RULES. Subject to Article 10, Joint and Survivor Annuity
Requirements, the requirements of this Article 11 shall apply to any
distribution of a Participant's interest and will take precedence over any
inconsistent provisions of the Plan. All distributions required under this
Article 11 shall be determined and made in accordance with the Income Tax
Regulations issued under Section 401(a)(9) of the Code (including proposed
regulations, until the adoption of final regulations), including the minimum
distribution incidental benefit requirement of Section 1.401(a)(9)-2 of the
proposed regulations.
11.2. REQUIRED BEGINNING DATE. The entire interest of a Participant
must be distributed, or begin to be distributed, no later than the Participant's
required beginning date, determined as follows.
(a) General Rule. The required beginning date of a Participant
is the first day of April of the calendar year following the calendar
year in which the Participant attains age 70 1/2.
(b) Transitional Rules. The required beginning date of a
Participant who attains age 70 1/2 before January 1, 1988, shall be
determined in accordance with (1) or (2) below:
(1) Non-5% owners. The required beginning date of a
Participant who is not a 5% owner is the first day of April of
the calendar year following the calendar year in which the
later of his Retirement or his attainment of age 70 1/2
occurs.
(2) 5% owners. The required beginning date of a
Participant who is a 5% owner during any year beginning after
December 31, 1979, is the first day of April following the
later of:
(A) the calendar year in which the
Participant attains age 70 1/2, or
(B) the earlier of the calendar year with or
within which ends the Plan Year in which the
Participant becomes a 5% owner, or the calendar year
in which the Participant retires.
The required beginning date of a Participant who is not a 5%
owner, who attains age 70 1/2 during 1988 and who has not retired as of
January 1, 1989, is April 1, 1990.
(c) Rules for 5% Owners. A Participant is treated as a 5%
owner for
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purposes of this Section 11.2 if he is a 5% owner as defined in Section
416(i) of the Code (determined in accordance with Section 416 but
without regard to whether the Plan is top heavy) at any time during the
Plan Year ending with or within the calendar year in which he attains
age 66 1/2, or any subsequent Plan Year. Once distributions have begun
to a 5% owner under this Section 11.2, they must continue, even if the
Participant ceases to be a 5% owner in a subsequent year.
11.3. LIMITS ON DISTRIBUTION PERIODS. As of the first Distribution
Calendar Year, distributions not made in a single sum may be made only over one
or a combination of the following periods:
(a) the life of the Participant,
(b) the life of the Participant and his Designated
Beneficiary,
(c) a period certain not extending beyond the Life Expectancy
of the Participant, or
(d) a period certain not extending beyond the Joint and Last
Survivor Expectancy of the Participant and his Designated Beneficiary.
"Designated Beneficiary" means the individual who is designated as the
Beneficiary under the Plan in accordance with Section 401(a)(9) of the Code and
the regulations issued thereunder (including proposed regulations, until the
adoption of final regulations) and Section 7.2.
"Distribution Calendar Year" means a calendar year for which a minimum
distribution is required under Section 401(a)(9) of the Code and this Section
11.3. For distributions beginning before the Participant's death, the first
Distribution Calendar Year is the calendar year immediately preceding the
calendar year which contains the Participant's required beginning date. For
distributions beginning after the Participant's death, the first Distribution
Calendar Year is the calendar year in which distributions are required to begin
pursuant to Section 11.5.
"Life Expectancy" and "Joint and Last Survivor Expectancy" are computed
by use of the expected return multiples in Tables V and VI of Section 1.72-9 of
the Income Tax Regulations. Unless otherwise elected by the Participant (or his
spouse, in the case of distributions described in Section 11.5(b)) by the time
distributions are required to begin, Life Expectancies shall be recalculated
annually. Any such election shall be irrevocable as to the Participant (or
spouse) and shall apply to all subsequent years. The Life Expectancy of a
nonspouse beneficiary may not be recalculated.
11.4. DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR. If the
Participant's
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interest is to be distributed in other than a single sum, the following minimum
distribution rules shall apply on or after the required beginning date.
Paragraphs (a) through (d) apply to distributions in forms other than the
purchase of an annuity contract.
(a) If a Participant's Benefit (as defined below) is to be
distributed over (1) a period not extending beyond the Life Expectancy
of the Participant or the Joint Life and Last Survivor Expectancy of
the Participant and his Designated Beneficiary, or (2) a period not
extending beyond the Life Expectancy of the Designated Beneficiary, the
amount required to be distributed for each calendar year, beginning
with distributions for the first Distribution Calendar Year, must at
least equal the quotient obtained by dividing the Participant's Benefit
by the Applicable Life Expectancy (as defined below).
(b) For calendar years beginning before January 1, 1989, if
the Participant's spouse is not the Designated Beneficiary, the method
of distribution selected must assure that at least 50% of the present
value of the amount available for distribution is paid within the Life
Expectancy of the Participant.
(c) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with distributions for
the first Distribution Calendar Year, shall not be less than the
quotient obtained by dividing the Participant's Benefit by the lesser
of (1) the Applicable Life Expectancy or (2) if the Participant's
spouse is not the Designated Beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of Section 1.401(a)(9)-2
of the Proposed Income Tax Regulations. Distributions after the death
of the Participant shall be distributed using the Applicable Life
Expectancy in paragraph (a) above as the relevant divisor, without
regard to Proposed Regulations Section 1.401(a)(9)-2.
(d) The minimum distribution required for the Participant's
first Distribution Calendar Year must be made on or before the
Participant's required beginning date. The minimum distribution for
other calendar years, including the minimum distribution for the
Distribution Calendar Year in which the Employee's required beginning
date occurs, must be made on or before December 31 of that Distribution
Calendar Year.
(e) If the Participant's Benefit is distributed in the form of
an annuity contract purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements of Section
401(a)(9) of the Code and the regulations issued thereunder (including
proposed regulations, until the adoption of final regulations).
"Applicable Life Expectancy" means the Life Expectancy (or Joint and
Last Survivor Expectancy) calculated using the attained age of the Participant
(or Designated Beneficiary) as of the Participant's (or Designated
Beneficiary's) birthday in the applicable calendar year, reduced by one for each
calendar year which has elapsed since the date Life Expectancy was
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first calculated. If Life Expectancy is being recalculated, the Applicable Life
Expectancy shall be the Life Expectancy as so recalculated. The applicable
calendar year shall be the first Distribution Calendar Year, and if Life
Expectancy is being recalculated such succeeding calendar year. If annuity
payments commence in accordance with Section 11.4(e) before the required
beginning date, the applicable calendar year is the year such payments commence.
If distribution is in the form of an immediate annuity purchased after the
Participant's death with the Participant's remaining interest in the Plan, the
applicable calendar year is the year of purchase.
"Participant's Benefit" means the account balance as of the last
valuation date in the calendar year immediately preceding the Distribution
Calendar Year (valuation calendar year), increased by the amount of any
contributions or Forfeitures allocated to the account balance as of dates in the
valuation calendar year after the valuation date and decreased by distributions
made in the valuation calendar year after the valuation date. For purposes of
the preceding sentence, if any portion of the minimum distribution for the first
Distribution Calendar Year is made in the second Distribution Calendar Year on
or before the required beginning date, the amount of the minimum distribution
made in the second Distribution Calendar Year shall be treated as if it had been
made in the immediately preceding Distribution Calendar Year.
11.5. DEATH DISTRIBUTION PROVISIONS.
(a) Distribution Beginning before Death. If the Participant
dies after distribution of his interest has begun, the remaining
portion of his interest will continue to be distributed at least as
rapidly as under the method of distribution being used before the
Participant's death.
(b) Distribution Beginning after Death. If the Participant
dies before distribution of his interest begins, distribution of his
entire interest shall be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death, except to
the extent that an election is made to receive distributions in
accordance with (1) or (2) below:
(1) If any portion of the Participant's interest is
payable to a Designated Beneficiary, distributions may be made
over the Designated Beneficiary's life, or over a period
certain not greater than the Life Expectancy of the Designated
Beneficiary, commencing on or before December 31 of the
calendar year immediately following the calendar year in which
the Participant died; or
(2) If the Designated Beneficiary is the
Participant's surviving spouse, the date distributions are
required to begin in accordance with (1) above shall not be
earlier than the later of (i) December 31 of the calendar year
immediately following the calendar year in which the
Participant died, and (ii)
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December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If the Participant has not made an election pursuant to this
Section 11.5 by the time of his death, the Participant's Designated
Beneficiary must elect the method of distribution no later than the
earlier of (i) December 31 of the calendar year in which distributions
would be required to begin under this Section 11.5, or (ii) December 31
of the calendar year which contains the fifth anniversary of the date
of death of the Participant. If the Participant has no Designated
Beneficiary, or if the Designated Beneficiary does not elect a method
of distribution, distribution of the Participant's entire interest must
be completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
(c) For purposes of paragraph (b), if the surviving spouse
dies after the Participant, but before payments to the spouse begin,
the provisions of paragraph (b), with the exception of subparagraph (2)
therein, shall be applied as if the surviving spouse were the
Participant.
(d) For purposes of this Section 11.5, any amount paid to a
child of the Participant will be treated as if it had been paid to the
surviving spouse of the Participant if the amount becomes payable to
the surviving spouse when the child reaches the age of majority.
(e) For the purposes of this Section 11.5, distribution of a
Participant's interest is considered to begin on the Participant's
required beginning date (or, if paragraph (c) above is applicable, the
date distribution is required to begin to the surviving spouse pursuant
to paragraph (b) above). If distribution in the form of an annuity
contract described in Section 11.4(e) irrevocably commences to the
Participant before the required beginning date, the date distribution
is considered to begin is the date distribution actually commences.
11.6. TRANSITIONAL RULE. Notwithstanding the other requirements of this
Article 11, and subject to the requirements of Article 10, Joint and Survivor
Annuity Requirements, distribution on behalf of any Participant, including a 5%
owner, may be made in accordance with all of the following requirements
(regardless of when such distribution commences):
(a) The distribution is one which would not have disqualified
the Trust under Section 401(a)(9) of the Internal Revenue Code of 1954
as in effect before its amendment by the Deficit Reduction Act of 1984.
(b) The distribution is in accordance with a method of
distribution designated by the Employee whose interest in the Trust is
being distributed or, if the Employee is deceased, by a Beneficiary of
the Employee.
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(c) The designation specified in paragraph (b) was in writing,
was signed by the Employee or the Beneficiary, and was made before
January 1, 1984.
(d) The Employee had accrued a benefit under the Plan as of
December 31, 1983.
(e) The method of distribution designated by the Employee or
the Beneficiary specifies the time at which distribution will commence,
the period over which distributions will be made, and in the case of
any distribution upon the Employee's death, the Beneficiaries of the
Employee listed in order of priority.
A distribution upon death will not be covered by this transitional rule
unless the information in the designation contains the required information
described above with respect to the distributions to be made upon the death of
the Employee. For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Employee or the Beneficiary to whom such
distribution is being made will be presumed to have designated the method of
distribution under which the distribution is being made, if the method of
distribution was specified in writing and the distribution satisfies the
requirements in paragraphs (a) and (e).
If a designation is revoked, any subsequent distribution must satisfy
the requirements of Section 401(a)(9) of the Code and the regulations
thereunder. If a designation is revoked after the date distributions are
required to begin, the Trust must distribute by the end of the calendar year
following the calendar year in which the revocation occurs the total amount not
yet distributed which would have been required to have been distributed to
satisfy Section 401(a)(9) of the Code and the regulations thereunder, but for
the designation described in paragraphs (b) through (e). For calendar years
beginning after December 31, 1988, such distributions must meet the minimum
distribution incidental benefit requirements in Section 1.401(a)(9)-2 of the
Proposed Income Tax Regulations. Any changes in the designation generally will
be considered to be a revocation of the designation, but the mere substitution
or addition of another beneficiary (one not named in the designation) under the
designation will not be considered to be a revocation of the designation, so
long as the substitution or addition does not alter the period over which
distributions are to be made under the designation, directly or indirectly (for
example, by altering the relevant measuring life). In the case of an amount
transferred or rolled over from one plan to another plan, the rules in Q&A J-2
and Q&A J-3 of Section 1.401(a)(9)-l of the Proposed Income Tax Regulations
shall apply.
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ARTICLE 12. WITHDRAWALS AND LOANS
12.1. WITHDRAWALS FROM PARTICIPANT CONTRIBUTION AND ROLLOVER ACCOUNTS.
Subject to the requirements of Article 10, a Participant may upon written notice
(or in such other manner as shall be made available and agreed upon by the
Employer and ▇▇▇▇▇▇) to the Employer withdraw any amount from his Participant
Contribution Account or Rollover Account. A withdrawn amount may not be repaid
to the Plan. No Forfeiture will occur solely as a result of an Employee's
withdrawal from a Participant Contribution Account or Rollover Account.
12.2. WITHDRAWALS ON ACCOUNT OF HARDSHIP.
(a) If the Employer has so elected in the Plan Agreement, upon
a Participant's written request (or in such other manner as shall be
made available and agreed upon by the Employer and ▇▇▇▇▇▇), the Plan
Administrator may permit a withdrawal of funds from the vested portion
of the Participant's Accounts on account of the Participant's financial
hardship, which must be demonstrated to the satisfaction of the Plan
Administrator, provided, that no hardship withdrawal shall be made from
a Qualified Nonelective Contribution Account or Qualified Matching
Account. In considering such requests, the Plan Administrator shall
apply uniform standards that do not discriminate in favor of Highly
Compensated Employees. If hardship withdrawals are permitted from more
than one of the Elective Deferral Account, Rollover Account, Employer
Matching Account, and Employer Contribution Account, they shall be made
first from a Participant's Elective Deferral Account, then from his
Rollover Account, then from his Employer Matching Account, and finally
from his Employer Contribution Account, as applicable.
A withdrawn amount may not be repaid to the Plan.
(b) The maximum amount that may be withdrawn on account of
hardship from an Elective Deferral Account after December 31, 1988,
shall not exceed the sum of (1) the amount credited to the Account as
of December 31, 1988, and (2) the aggregate amount of the Elective
Deferrals made by the Participant after December 31, 1988, and before
the hardship withdrawal.
(c) Hardship withdrawals shall be permitted only on account of
the following financial needs:
(1) Expenses for medical care described in Section
213(d) of the Code for the Participant, his spouse, children
and dependents, or necessary for these persons to obtain such
care;
(2) Purchase of the principal residence of the
Participant (excluding regular mortgage payments);
(3) Payment of tuition and related educational fees
and room and
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board expenses for the upcoming 12 months of post-secondary
education for the Participant, his spouse, children or
dependents; or
(4) Payments necessary to prevent the Participant's
eviction from, or the foreclosure of a mortgage on, his
principal residence.
(d) Hardship withdrawals shall be subject to the spousal
consent requirements contained in Sections 411(a)(11) and 417 of the
Code, to the same extent that those requirements apply to a Participant
pursuant to Section 10.1.
(e) A hardship withdrawal will be made to a Participant only
upon satisfaction of the following conditions:
(1) The Participant has obtained all nontaxable loans
and all distributions other than hardship withdrawals
available to him from all plans maintained by the Affiliated
Employers;
(2) The hardship withdrawals does not exceed the
amount of the Participant's financial need as described in
paragraph (c) plus any amounts necessary to pay federal, state
and local income taxes and penalties reasonably anticipated to
result from the withdrawals;
(3) With respect to withdrawals from an Elective
Deferral Account, all plans maintained by the Affiliated
Employers provide that the Participant's Elective Deferrals
and voluntary after-tax contributions will be suspended for a
period of 12 months following his receipt of a hardship
withdrawal; and
(4) With respect to withdrawals from an Elective
Deferral Account, all plans maintained by the Affiliated
Employers provide that the amount of Elective Deferrals that
the Participant may make in his taxable year immediately
following the year of a hardship withdrawal will not exceed
the applicable limit under Section 402(g) of the Code for the
taxable year, reduced by the amount of Elective Deferrals made
by the Participant in the taxable year of the hardship
withdrawal.
12.3. WITHDRAWALS AFTER REACHING AGE 59 1/2. If so specified by the
Employer in the Plan Agreement, a Participant who has reached age 59 1/2 may
upon written request to the Employer (or in such other manner as shall be made
available and agreed upon by the Employer and ▇▇▇▇▇▇) withdraw during his
employment any amount not exceeding the vested balance of his Accounts. A
withdrawn amount may not be repaid to the Plan.
12.4. OTHER WITHDRAWALS. If so elected by the Employer in the Plan
Agreement, a Participant may make a withdrawal from his Employer Contribution
Account or Employer
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Matching Account for any reason upon written request to the Employer (or in such
other manner as shall be made available and agreed upon by the Employer and
▇▇▇▇▇▇), provided that (a) the Participant has been a Participant for at least
five years, or (b) the withdrawal from such Account is limited to the excess of
the balance of such Account on the date of the withdrawal over the aggregate of
the amounts credited to such Account during the two year period immediately
preceding the date of such withdrawal. No such withdrawal shall exceed the
vested portion of the Participant's Account from which the withdrawal is made. A
withdrawn amount may not be repaid to the Plan.
12.5. LOANS. If the Employer has so elected in the Plan Agreement, the
Employer may direct the Trustee to make a loan to a Participant or Beneficiary
from the vested portion of his Accounts, subject to the following terms and
conditions and to such reasonable additional rules and regulations as the Plan
Administrator may establish for the orderly operation of the program:
(a) The Plan Administrator shall administer the loan program
subject to the terms and conditions of this Section 12.5.
(b) A Participant's or Beneficiary's request for a loan shall
be submitted to the Plan Administrator by means of a written
application on a form supplied by the Plan Administrator (or in such
other manner as shall be made available and agreed upon by the Employer
and ▇▇▇▇▇▇). Applications shall be approved or denied by the Plan
Administrator on the basis of its assessment of the borrower's ability
to collateralize and repay the loan, as revealed in the loan
application.
(c) If the Employer has so elected in the Plan Agreement,
loans to a Participant or Beneficiary shall only be made in the event
of hardship of the Participant or Beneficiary. For this purpose, a loan
shall considered to be made in the event of hardship only if is made on
account of the following financial needs:
(1) Expenses for medical care described in Section
213(d) of the Code for the Participant, his spouse, children
and dependents, or necessary for these persons to obtain such
care;
(2) Purchase of the principal residence of the
Participant (excluding regular mortgage payments);
(3) Payment of tuition and related educational fees
and room and board expenses for the upcoming 12 months of
post-secondary education for the Participant, his spouse,
children or dependents; or
(4) Payments necessary to prevent the Participant's
eviction from, or the foreclosure of a mortgage on, his
principal residence.
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(d) Loans shall be made to all Participants and Beneficiaries
on a reasonably equivalent basis. Loans shall not be made available to
Highly Compensated Employees (as defined in Section 414(q) of the Code)
in amounts greater than the amounts made available to other Employees
(relative to the borrower's Account balance).
(e) Loans must be evidenced by the Participant's promissory
note for the amount of the loan payable to the order of the Trustee,
and adequately secured by assignment of not more than fifty percent
(50%) of the Participant's entire right, title and interest in and to
the Trust Fund, exclusive of any asset as to which ▇▇▇▇▇▇ is not the
Trustee.
(f) Loans must bear a reasonable interest rate comparable to
the rate charged by commercial lenders in the geographical area for
similar loans. The Plan Administrator shall not discriminate among
Participants in the matter of interest rates, but loans may bear
different interest rates if, in the opinion of the Plan Administrator,
the difference in rates is justified by conditions that would
customarily be taken into account by a commercial lender in the
Employer's geographical area.
(g) The period for repayment for any loan shall not exceed
five years, except in the case of a loan used to acquire a dwelling
unit which within a reasonable time is to be used as the principal
residence of the Participant, in which case the repayment period may
exceed five years. The terms of a loan shall require that it be repaid
in level payments of principal and interest not less frequently then
quarterly throughout the repayment period, except that alternative
arrangements for repayment may apply in the event that the borrower is
on unpaid leave of absence for a period not to exceed one year.
(h) To the extent that a Participant would be required under
Article 10 to obtain the consent of his spouse to a distribution of an
immediately distributable benefit other than a Qualified Joint and
Survivor Annuity, the consent of the Participant's spouse shall be
required for the use of his Account as security for a loan. The
spouse's consent must be obtained no earlier than the beginning of the
90-day period that ends on the date on which the loan is to be so
secured, and obtained in accordance with the requirements of Section
10.4(c) for a Qualified Election. Any such consent shall thereafter be
binding on the consenting spouse and any subsequent spouse of the
Participant. A new consent shall be required for use of the Account as
security for any extension, renewal, renegotiation or revision of the
original loan.
(i) If valid spousal consent has been obtained in accordance
with Section 12.5(h), then notwithstanding any other provision of the
Plan the portion of the Participant's account balance used as a
security interest held by the Plan by reason of a loan outstanding to
the Participant shall be taken into account for purposes of
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determining the amount of the account balance payable at the time of
death or distribution, but only if the reduction is used as repayment
of the loan. If less than 100% of the Participant's vested account
balance (determined without regard to the preceding sentence) is
payable to the surviving spouse, then the account balance shall be
adjusted by first reducing the vested account balance by the amount of
the security used as repayment of the loan, and then determining the
benefit payable to the surviving spouse.
(j) In the event of default on a loan by a Participant who is
an active Employee, foreclosure on the Participant's Account as
security will not occur until the Employer has reported to the Trustee
the occurrence of an event permitting distribution from the Plan in
accordance with Article 9 or Section 5.13.
(k) No loan shall be made to an Owner-Employee or a
Shareholder-Employee unless a prohibited transaction exemption is
obtained by the Employer.
(l) No loan to any Participant or Beneficiary can be made to
the extent that the amount of the loan, when added to the outstanding
balance of all other loans to the Participant or Beneficiary, would
exceed the lesser of (a) $50,000 reduced by the excess (if any) of the
highest outstanding balance of loans during the one year period ending
on the day before the loan is made, over the outstanding balance of
loans from the Plan on the date the loan is made, or (b) one-half the
value of the vested account balance of the Participant. For the purpose
of the above limitation, all loans from all qualified plans of the
Affiliated Employers are aggregated.
(1) Loans shall be considered investments directed by
a Participant pursuant to Section 13.3. The amount loaned
shall be charged solely against the Accounts of the
Participant, and repaid amounts and interest shall be credited
solely thereto.
12.6. PROCEDURE; AMOUNT AVAILABLE. Withdrawals and loans shall be made
subject to the terms and conditions applicable to distributions pursuant to
Section 9.4, except that the amount of any withdrawal or loan shall be
determined by reference to the vested balance of the Participant's Account as of
the most recent Valuation Date preceding the withdrawal or loan, and shall not
exceed the amount of the vested account balance.
12.7. PROTECTED BENEFITS. Notwithstanding any provision to the
contrary, if an Employer amends an existing retirement plan ("prior plan") by
adopting this Plan, to the extent any withdrawal option or form of payment
available under the prior plan is an optional form of benefit within the meaning
of Code Section 411(d)(6), such option or form of payment shall continue to be
available to the extent required by such Code Section.
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12.8. RESTRICTIONS CONCERNING TRANSFERRED ASSETS. Notwithstanding any
provision to the contrary, if an Employer amends an existing defined benefit or
money purchase pension plan ("prior pension plan") by adopting this Plan,
accrued benefits attributable to the assets and liabilities transferred from the
prior pension plan (which accrued benefits include the account balance of such
Participant in the Plan attributable to such accrued benefits as of the date of
the transfer and any earnings on such account balance subsequent to the
transfer) shall be distributable only on or after the events upon which
distributions are or were permissible under the prior pension plan.
12.9.
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ARTICLE 13. TRUST FUND AND INVESTMENTS
13.1. ESTABLISHMENT OF TRUST FUND. The Employer and the Trustee hereby
agree to the establishment of a Trust Fund consisting of all amounts as shall be
contributed or transferred from time to time to the Trustee pursuant to the
Plan, and all earnings thereon. The Trustee shall hold the assets of the Trust
Fund for the exclusive purpose of providing benefits to Participants and
Beneficiaries and defraying the reasonable expenses of administering the Plan,
and no such assets shall ever revert to the Employer, except that:
(a) contributions made by the Employer by mistake of fact, as
determined by the Employer, may be returned to the Employer within one
(1) year of the date of payment,
(b) contributions that are conditioned on their deductibility
under Section 404 of the Code may be returned to the Employer, to the
extent disallowed, within one (1) year of the disallowance of the
deduction,
(c) contributions that are conditioned on the initial
qualification of the Plan under the Code, and all investment gains
attributable to them, may be returned to the Employer within one (1)
year after such qualification is denied by determination of the
Internal Revenue Service, but only if an application for determination
of such qualification is made within the time prescribed by law for
filing the Employer's federal income tax return for its taxable year in
which the Plan is adopted, or such later date as the Secretary of the
Treasury may prescribe,
(d) amounts held in a suspense account may be returned to the
Employer on termination of the Plan, to the extent that they may not
then be allocated to any Participant's Account in accordance with
Article 6, and
(e) if the Employer has elected to use Forfeitures for either
Employer Contribution Accounts or Employer Matching Accounts to reduce
other required contributions of the Employer, Forfeitures held under
the Plan with respect to the Accounts for which such election has been
made may be returned to the Employer on termination of the Plan, to the
extent not required to reduce any contributions required of the
Employer.
All Employer contributions under the Plan other than those made
pursuant to Section 4.1(e) are hereby expressly conditioned on the initial
qualification of the Plan and their deductibility under the Code. Investment
gains attributable to contributions returned pursuant to Subsections (a) and (b)
shall not be returned to the contributing Employer, and investment losses
attributable to such contributions shall reduce the amount returned.
13.2. MANAGEMENT OF TRUST FUND. The assets of the Trust Fund shall be
held in trust
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by the Trustee and accounted for in accordance with this Article 13, and shall
be invested in accordance with Section 13.3 in the Investment Products specified
by the Employer in the Plan Agreement and from time to time thereafter in
writing (or in such other manner as shall be made available and agreed upon by
the Employer and ▇▇▇▇▇▇). The Employer shall have the exclusive authority and
discretion to select the Investment Products available under the Plan. In making
that selection, the Employer shall use the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of like character and with like aims. The Employer shall cause the
available Investment Products to be diversified sufficiently to minimize the
risk of large losses, unless under the circumstances it is clearly prudent not
to do so. It is especially intended that the Trustee shall have no discretionary
authority to determine the investment of Trust assets. Notwithstanding the
foregoing, assets of the Trust Fund shall also be invested in Employer Stock if
so elected by the Employer and agreed to by ▇▇▇▇▇▇ under the service agreement
executed by the Employer and ▇▇▇▇▇▇ pursuant to the establishment of the Plan.
13.3. INVESTMENT INSTRUCTIONS. All amounts held in the Trust Fund under
the Plan shall be invested in Investment Products. If the Employer has elected
in the Plan Agreement to make investment decisions with respect to Elective
Deferrals, Participant Contributions, Rollover Contributions, Profit Sharing and
other Employer Contributions, Employer Matching Contributions, Deductible
Employee Contributions, Qualified Matching Contributions and/or Qualified
Nonelective Contributions, investment instructions as to the Accounts for such
contributions shall be the fiduciary responsibility of the Employer, and each of
such affected Accounts shall have a pro rata interest in all assets of the Trust
to which the Employer's instructions apply. To the extent the Employer has not
elected to make investment decisions for all of the Accounts of the Plan, then
assets of the Trust over which the Employer has not elected to make investment
decisions shall be invested solely in accordance with the instructions of the
Participant to whose Accounts they are allocable, as delivered to ▇▇▇▇▇▇ in
accordance with its service agreement with the Employer. Instructions shall
apply to future contributions, past accumulations, or both, according to their
terms, and shall be communicated by the Employer to ▇▇▇▇▇▇ in accordance with
procedures prescribed in the service agreement between the Employer and ▇▇▇▇▇▇.
Instructions shall be effective prospectively, coincident with or within a
reasonable time after their receipt in good order by ▇▇▇▇▇▇. An instruction once
received shall remain in effect until it is changed by the provision of a new
instruction. New instructions shall be accepted by ▇▇▇▇▇▇ at the time and in the
manner provided in the Plan Agreement. To the extent any assets of the Trust are
to be invested solely in accordance with the instructions of the Participants,
the Plan is intended to constitute a plan described in section 404(c) of ERISA
and Title 29 of the Code of Federal Regulations section 2550.404c-1. In such
case, the Employer shall be the Plan fiduciary responsible for providing the
Participants with all information required to be given pursuant to ERISA section
404(c) and Title 29 of the Code of Federal Regulations section 2550.404c-1.
In the event that the Employer adopts a ▇▇▇▇▇▇ prototype plan as an
amendment to or
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restatement of an existing plan, the Employer shall specify one or more
Investment Products to serve as the sole investments for all Participants'
Accounts during the period in which existing records of the Plan are transferred
to the Recordkeeper. During that period, new investment instructions as to
existing assets of the Plan cannot be carried out, nor can distributions be made
from the Plan except to the extent permitted under the terms of the service
agreement between the Employer and ▇▇▇▇▇▇. The Employer and the Recordkeeper
shall use their best efforts to minimize the duration of the period to which the
preceding sentence applies.
To the extent specifically authorized and provided in the service
agreement between the Employer and ▇▇▇▇▇▇, the Employer may direct the Trustee
to establish as an Investment Product a fund all of the assets of which shall be
invested in shares of stock of the Employer that constitute "qualifying employer
securities" within the meaning of section 407(d)(5) of ERISA ("Employer Stock").
The Plan Administrator as named fiduciary shall continually monitor the
suitability of acquiring and holding Employer Stock under the fiduciary duty
rules of section 404(a)(1) of ERISA (as modified by section 404(a)(2) of ERISA)
and the requirements of section 404(c) of ERISA, and shall be responsible for
ensuring that the procedures relating to the purchase, holding and sale of
Employer Stock, and the exercise of any and all rights with respect to such
Employer Stock shall be in accordance with section 404(c) of ERISA unless the
Employer retains voting, tender or similar rights with respect to the Employer
Stock. The Trustee shall not be liable for any loss, or by reason of any breach,
which arises from the direction of the Plan Administrator with respect to the
acquisition and holding of Employer Stock. The Employer shall be responsible for
determining whether, under the circumstances prevailing at a given time, its
fiduciary duty to Plan Participants and Beneficiaries under the Plan and ERISA
requires that the Employer follow the advice of independent counsel as to the
voting and tender or retention of Employer Stock.
▇▇▇▇▇▇ shall be under no duty to question or review the directions
given by the Employer or to make suggestions to the Employer in connection
therewith. ▇▇▇▇▇▇ shall not be liable for any loss, or by reason of any breach,
that arises from the Employer's exercise or non-exercise of rights under this
Article 13, or from any direction of the Employer unless it is clear on the face
of the direction that the actions to be taken under the direction are prohibited
by the fiduciary duty rules of Section 404(a) of ERISA. All interest, dividends
and other income received with respect to, and any proceeds received from the
sale or other disposition of, securities or other property held in an investment
fund shall be credited to and reinvested in such investment fund, and all
expenses of the Trust that are properly allocated to a particular investment
fund shall be so allocated and charged. The Employer may at any time direct
▇▇▇▇▇▇ to eliminate any investment fund or funds, and ▇▇▇▇▇▇ shall thereupon
dispose of the assets of such investment fund and reinvest the proceeds thereof
in accordance with the directions of the Employer.
Neither the Employer nor the Trustee nor ▇▇▇▇▇▇ shall be responsible
for questioning any instructions of a Participant or for reviewing the
investments selected therein, or for any loss resulting from instructions of a
Participant or from the failure of a Participant to provide
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or to change instructions. Neither ▇▇▇▇▇▇ nor the Trustee shall have any duty to
question any instructions received from the Employer or a Participant or to
review the investments selected thereby, nor shall ▇▇▇▇▇▇ or the Trustee be
responsible for any loss resulting from instructions received from the Employer
or a Participant or from the failure of the Employer or a Participant to provide
or to change instructions. In the event that ▇▇▇▇▇▇ or the Trustee receives a
contribution under the Plan as to which no instructions are delivered, or such
instructions as are delivered are unclear to ▇▇▇▇▇▇ or the Trustee, such
contribution shall be invested until clear instructions are received in the
default investment option set forth in the service agreement between the
Employer and ▇▇▇▇▇▇, or if no such option is so set forth, the Employer, by
execution of the Plan Agreement, shall affirmatively elect to have such
contributions invested in the ▇▇▇▇▇▇ Money Market Fund. Neither ▇▇▇▇▇▇ nor the
Trustee shall have any discretionary authority or responsibility in the
investment of the assets of the Trust Fund.
13.4. VALUATION OF THE TRUST FUND. As of each Valuation Date, the
Trustee shall determine the fair market value of the Trust Fund, and the net
earnings or losses and expenses of the Trust Fund for the period elapsed since
the most recent previous Valuation Date shall be allocated among the Accounts of
Participants. Earnings, losses and expenses which pertain to investments which
are specifically held for a given Participant's Account shall be allocated
solely to that Account. In the event that an investment is not specifically held
for a given Participant's Account, the earnings, losses and expenses pertaining
to that investment shall be allocated among all Participants' Accounts in the
ratio that each such Account bears to the total of all Accounts of all
Participants. Each Participant's Accounts shall be adjusted pursuant to this
Section 13.4 until such time as they are either fully distributed or forfeited,
regardless of whether the Participant continues to be an Employee.
13.5. DISTRIBUTIONS ON INVESTMENT COMPANY SHARES. Subject to Section
9.3, all dividends and capital gains or other distributions received on any
Investment Company Shares credited to Participant's Account will (unless
received in additional Investment Company Shares) be reinvested in full and
fractional shares of the same Investment Company at the price determined as
provided in the then current prospectus of the Investment Company. The shares so
received or purchased upon such reinvestment will be credited to such accounts.
If any dividends or capital gain or other distributions may be received on such
Investment Company Shares at the election of the shareholder in additional
shares or in cash or other property, the Trustee will elect to receive such
dividends or distributions in additional Investment Company Shares.
13.6. REGISTRATION AND VOTING OF INVESTMENT COMPANY SHARES. All
Investment Company Shares shall be registered in the name of the Trustee or its
nominee. Subject to any requirements of applicable law, the Trustee will
transmit to the Employer copies of any notices of shareholders' meetings,
proxies and proxy-soliciting materials, prospectuses and the annual or other
reports to shareholders, with respect to Investment Company Shares held in the
Trust Fund. The Trustee shall act in accordance with directions received from
the Employer with
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respect to matters to be voted upon by the shareholders of the Investment
Company. Such directions must be in writing on a form approved by the Trustee,
signed by the Employer and delivered to the Trustee within the time prescribed
by it. The Trustee will not vote Investment Company Shares as to which it
receives no written directions.
13.7. INVESTMENT MANAGER. The Employer, with the consent of ▇▇▇▇▇▇, may
appoint an investment manager, as defined in Section 3(38) of ERISA with respect
to all or a portion of the assets of the Trust Fund. The Trustee shall have no
liability in connection with any action or nonaction pursuant to directions of
such an investment manager.
13.8. EMPLOYER STOCK.
(a) Voting Rights. Notwithstanding any other provision of the
Plan, the provisions of this Section 13.8(a) shall govern the voting of
Employer Stock held by ▇▇▇▇▇▇ as Trustee under the Plan. The Trustee
shall vote Employer Stock in accordance with the directions of the
Employer unless the Employer has elected in the Plan Agreement that
Participants shall be appointed named fiduciaries as to the voting of
Employer Stock and shall direct the Trustee as to the voting of
Employer Stock in accordance with the provisions of this Section
13.8(a). In either case, the Employer shall be responsible for
determining whether, under the circumstances prevailing at a given
time, its fiduciary duty to Participants and Beneficiaries under the
Plan and ERISA requires that the Employer follow the advice of
independent counsel as to the voting of Employer Stock. The remainder
of this Section 13.8(a) applies only if the Employer elects in the Plan
Agreement that Participants shall direct the Trustee as to the voting
of Employer Stock. For purposes of this Section 13.8(a), the term
"Participant" includes any Beneficiary with an Account in the Plan
which is invested in Employer Stock.
When the issuer of Employer Stock files preliminary proxy
solicitation materials with the Securities and Exchange Commission, the
Employer shall cause a copy of all the materials to be simultaneously
sent to the Trustee, and the Trustee shall prepare a voting instruction
form based upon these materials. At the time of mailing of notice of
each annual or special stockholders' meeting of the issuer of Employer
Stock, the Employer shall cause a copy of the notice and all proxy
solicitation materials to be sent to each Participant, together with
the foregoing voting instruction form to be returned to the Trustee or
its designee. The form shall show the number of full and fractional
shares of Employer Stock credited to the Participant's Accounts,
whether or not vested. For purposes of this Section 13.8(a), the number
of shares of Employer Stock deemed credited to a Participant's Accounts
shall be determined as of the date of record determined by the Employer
for which an allocation has been completed and Employer Stock has
actually been credited to Participant's Accounts. Procedures for the
execution of purchases and sales of Employer Stock shall be as set
forth in the service agreement between the Employer and ▇▇▇▇▇▇. The
Employer shall provide the Trustee
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with a copy of any materials provided to Participants and shall certify
to the Trustee that the materials have been mailed or otherwise sent to
Participants.
Each Participant shall have the right to direct the Trustee as
to the manner in which to vote that number of shares of Employer Stock
held under the Plan (whether or not vested) equal to a fraction, of
which the numerator is the number of shares of Employer Stock credited
to his Account and the denominator is the number of shares of Employer
Stock credited to all Participants' Accounts. Such directions shall be
communicated in writing (or in such other manner as shall be made
available and agreed upon by the Employer and ▇▇▇▇▇▇) and shall be held
in confidence by the Trustee and not divulged to the Employer, or any
officer or employee thereof, or any other persons. Upon its receipt of
directions, the Trustee shall vote the shares of Employer Stock as
directed by the Participant. The Trustee shall not vote those shares of
Employer Stock credited to the Accounts of Participants for which no
voting directions are received. With respect to shares of Employer
Stock held in the Trust which are not credited to a Participant's
Account, the Plan Administrator shall retain the status of named
fiduciary and shall direct the voting of such Employer Stock.
(b) Tendering Rights. Notwithstanding any other provision of
the Plan, the provisions of this Section 13.8(b) shall govern the
tendering of Employer Stock by ▇▇▇▇▇▇ as Trustee under the Plan. In the
event of a tender offer, the Trustee shall tender Employer Stock in
accordance with the directions of the Employer unless the Employer has
elected in the Plan Agreement that Participants shall be appointed
named fiduciaries as to the tendering of Employer Stock in accordance
with the provisions of this Section 13.8(b). The remainder of this
Section 13.8(b) applies only if the Employer elects in the Plan
Agreement that Participants shall direct the Trustee as to the
tendering of Employer Stock. For purposes of this Section 13.8(b), the
term "Participant" includes any Beneficiary with an Account in the Plan
which is invested in Employer Stock.
Upon commencement of a tender offer for any Employer Stock,
the Employer shall notify each Plan Participant, and use its best
efforts to distribute timely or cause to be distributed to Participants
the same information that is distributed to shareholders of the issuer
of Employer Stock in connection with the tender offer, and after
consulting with the Trustee shall provide at the Employer's expense a
means by which Participants may direct the Trustee whether or not to
tender the Employer Stock credited to their Accounts (whether or not
vested). The Employer shall provide to the Trustee a copy of any
material provided to Participants and shall certify to the Trustees
that the materials have been mailed or otherwise sent to Participants.
Each Participant shall have the right to direct the Trustee to
tender or not to tender some or all of the shares of Employer Stock
credited to his Accounts. Directions from a Participant to the Trustee
concerning the tender of Employer Stock
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shall be communicated in writing (or in such other manner as shall be
made available and agreed upon by the Employer and ▇▇▇▇▇▇) as is agreed
upon by the Trustees and the Employer. The Trustee shall tender or not
tender shares of Employer Stock as directed by the Participant. A
Participant who has directed the Trustee to tender some or all of the
shares of Employer Stock credited to his Accounts may, at any time
before the tender offer withdrawal date, direct the Trustee to withdraw
some or all of the tendered shares, and the Trustee shall withdraw the
directed number of shares from the tender offer before the tender offer
withdrawal deadline. A Participant shall not be limited as to the
number of directions to tender or withdraw that he may give to the
Trustee. The Trustee shall not tender shares of Employer Stock credited
to a Participant's Accounts for which it has received no directions
from the Plan Participant. The Trustee shall tender that number of
shares of Employer Stock not credited to Participants' Accounts
determined by multiplying the total number of such shares by a
fraction, the numerator of which is the number of shares of Employer
Stock credited to Participants' Accounts for which the Trustee has
received directions from Participants to tender (which directions have
not been withdrawn as of the date of this determination), and the
denominator of which is the total number of shares of Employer Stock
credited to Participants' Accounts.
A direction by a Participant to the Trustee to tender shares
of Employer Stock credited to his Accounts shall not be considered a
written election under the Plan by the Participant to withdraw or to
have distributed to him any or all of such shares. The Trustee shall
credit to each Account of the Plan Participant from which the tendered
shares were taken the proceeds received by the Trustee in exchange for
the shares of Employer Stock tendered from that Account. Pending
receipt of directions through the Administrator from the Participant as
to the investment of the proceeds of the tendered shares, the Trustee
shall invest the proceeds as the Administrator shall direct. To the
extent that any Participant gives no direction as to the tendering of
Employer stock that he has the right to direct under this Section
13.8(a), the Trustee shall not tender such Employer Stock.
(c) Other Rights. With respect to all rights in connection
with Employer Stock other than the right to vote and the right to
tender, Participants are hereby appointed named fiduciaries to the same
extent (if any) as provided in the foregoing paragraphs of this Section
13.8 with regard to the right to vote, and the Trustee shall follow the
directions of Participants and the Plan Administrator with regard to
the exercise of such rights to the same extent as with regard to the
right to vote.
13.9. INSURANCE CONTRACTS. If so provided in the Plan Agreement or
other agreement between the Employer and the Trustee, the Plan Administrator may
direct the Trustee to receive and hold or apply assets of the Trust to the
purchase of individual or group insurance or annuity contracts ("policies" or
"contracts") issued by any insurance company and in a form approved by the Plan
Administrator (including contracts under which the contract holder is
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granted options to purchase insurance or annuity benefits), or financial
agreements which are backed by group insurance or annuity contracts ("financial
agreements"). If such investments are to be made, the Plan Administrator shall
direct the Trustee to execute and deliver such applications and other documents
as are necessary to establish record ownership, to value such policies,
contracts or financial agreements under the method of valuation selected by the
Plan Administrator, and to record or report such values to the Plan
Administrator or any investment manager selected by the Plan Administrator, in
the form and manner agreed to by the Plan Administrator.
The Plan Administrator may direct the Trustee to exercise or may
exercise directly the powers of contract holder under any policy, contract or
financial agreement, and the Trustee shall exercise such powers only upon
direction of the Plan Administrator. The Trustee shall have no authority to act
in its own discretion, with respect to the terms, acquisition, valuation,
continued holding and/or disposition of any such policy, contract or financial
agreement or any asset held thereunder. The Trustee shall be under no duty to
question any direction of the Plan Administrator or to review the form of any
such policy, contract or financial agreement or the selection of the issuer
thereof, or to make recommendations to the Plan Administrator or to any issuer
with respect to the form of any such policy, contract or financial agreement.
The Trustee shall be fully protected in acting in accordance with
written directions of the Plan Administrator, and shall be under no liability
for any loss of any kind which may result by reason of any action taken or
omitted by it in accordance with any direction of the Plan Administrator, or by
reason of inaction in the absence of written directions from the Plan
Administrator. In the event that the Plan Administrator directs that any monies
or property be paid or delivered to the contract holder other than for the
benefit of specific individual beneficiaries, the Trustee agrees to accept such
monies or property as assets of the Trust subject to all the terms hereof.
13.10. REGISTRATION AND VOTING OF NON-▇▇▇▇▇▇ INVESTMENT COMPANY SHARES.
All shares of registered investment companies other than Investment Companies
shall be registered in the name of the Trustee or its nominee. Subject to any
requirements of applicable law and to the extent provided in an agreement
between ▇▇▇▇▇▇ and a third party investment provider, the Trustee shall transmit
to the Employer copies of any notices of shareholders' meetings, proxies or
proxy-soliciting materials, prospectuses or the annual or other reports to
shareholders, with respect to shares of registered investment companies other
than Investment Companies held in the Trust Fund. Notwithstanding any other
provision of the Plan, the Trustee shall vote shares of registered investment
companies other than Investment Companies in accordance with the directions of
the Employer. Directions as to voting such shares must be in writing on a form
approved by the Trustee or such other manner acceptable to the Trustee, signed
by the Employer and delivered to the Trustee within the time prescribed by it.
The Trustee shall vote those shares of registered investment companies other
than Investment Companies for which no voting directions are received in the
same proportion as it votes those shares for which it has received voting
directions.
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13.11.
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ARTICLE 14. TOP-HEAVY PLANS
14.1. SUPERSEDING EFFECT. For any Plan Year in which Plan is determined
to be a Top-Heavy Plan under Section 14.2(b), the provisions of this Article 14
will supersede any conflicting provisions in the Plan or the Plan Agreement.
14.2. DEFINITIONS. For purposes of this Article 14, the terms below
shall be defined as follows:
(a) Key Employee means any Employee or former Employee (and
the Beneficiaries of such Employee) who at any time during the
determination period was: (i) an officer of the Employer having annual
compensation greater than 50% of the amount in effect under Section
415(b)(1)(A) of the Code; (ii) an owner (or considered an owner under
Section 318 of the Code) of one of the ten largest interests in the
Employer having annual compensation exceeding the dollar limitation
under Section 415(c)(1)(A) of the Code; (iii) a 5% owner of the
Employer; or (iv) a 1% owner of the Employer having annual compensation
of more than $150,000. Annual compensation means compensation
satisfying the definition elected by the Employer in the Plan
Agreement, but including (i) amounts contributed by the Employer
pursuant to a salary reduction agreement which are excludable from the
Employee's gross income under Section 125, Section 402(a)(8), Section
402(h) or Section 403(b) of the Code, and (ii) amounts of special pay
such as overtime, bonuses and commissions which are excluded from the
definition of Compensation in the Plan Agreement. The determination
period is the Plan Year containing the Determination Date and the four
preceding Plan Years. The determination of who is a Key Employee will
be made in accordance with Section 416(i)(1) of the Code and the
Regulations thereunder.
(b) Top-Heavy: The Plan is Top-Heavy for any Plan Year if any
of the following conditions exists:
(1) If the Top-Heavy Ratio for this Plan exceeds 60%
and this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans.
(2) If this Plan is a part of a Required Aggregation
Group of plans but not part of a Permissive Aggregation Group
and the Top-Heavy Ratio for the group of plans exceeds 60%.
(3) If this plan is part of a Required Aggregation
Group and part of a Permissive Aggregation Group of Plans and
the Top-Heavy Ratio for the Permissive Aggregation group
exceeds 60%.
(c) Top-Heavy Ratio means the following:
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(1) If the Employer maintains one or more qualified
defined contribution plans (or any simplified employee pension
plan) and the Employer has not maintained any qualified
defined benefit plan which during the 5-year period ending on
the Determination Date(s) has or has had accrued benefits, the
Top-Heavy ratio for this Plan alone or for the Required or
Permissive Aggregation Group as appropriate is a fraction, the
numerator of which is the sum of the account balances of all
Key Employees as of the Determination Date(s) (including any
part of any account distributed in the 5-year period ending on
the Determination Date(s)), and the denominator of which is
the sum of all account balances (including any part of any
account balance distributed in the 5-year period ending on the
Determination Date(s)), both computed in accordance with
Section 416 of the Code and the regulations thereunder. Both
the numerator and denominator of the Top-Heavy Ratio are
increased to reflect any contribution not actually made as of
the Determination Date, but which is required to be taken into
account on that date under Section 416 of the Code and the
regulations thereunder.
(2) If the Employer maintains one or more qualified
defined contribution plans (or any simplified employee pension
plan) and the Employer maintains or has maintained one or more
qualified defined benefit plans which during the 5-year period
ending on the Determination Date(s) has or has had any accrued
benefits, the Top-Heavy Ratio for any Required or Permissive
Aggregation Group as appropriate is a fraction, the numerator
of which is the sum of account balances under the aggregated
qualified defined contribution plan or plans for all Key
Employees, determined in accordance with (1) above, and the
Present Value of accrued benefits under the aggregated
qualified defined benefit plan or plans for all Key Employees
as of the Determination Date(s), and the denominator of which
is the sum of the account balances under the aggregated
qualified defined contributions plan or plans for all
Participants, determined in accordance with (1) above, and the
Present Value of accrued benefits under the qualified defined
benefit plan or plans for all Participants as of the
Determination Date(s), all determined in accordance with
Section 416 of the Code and the regulations thereunder. The
accrued benefits under a defined benefit plan in both the
numerator and denominator of the Top-Heavy Ratio are increased
for any distribution of an accrued benefit made in the 5-year
period ending on the Determination Date.
(3) For purposes of (1) and (2) above, the value of
account balances and the Present Value of accrued benefits
will be determined as of the most recent Valuation Date that
falls within or ends with the 12-month period ending on the
Determination Date; except as provided in Section 416 of the
Code and the regulations thereunder for the first and second
Plan Years of a defined
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benefit plan. The account balances and accrued benefits of a
Participant (A) who is not a Key Employee but who was a Key
Employee in a prior Plan Year, or (B) who has not been
credited with at least one Hour of Service for the Employer
during the 5-year period ending on the Determination Date,
will be disregarded. The calculation of the Top-Heavy Ratio,
and the extent to which distributions, rollovers and transfers
are taken into account will be made in accordance with Section
416 of the Code and the regulations thereunder. Deductible
Employee contributions will not be taken into account for
purposes of computing the Top-Heavy Ratio. When aggregating
plans, the value of account balances and accrued benefits will
be calculated with reference to the Determination Dates that
fall within the same calendar year.
The accrued benefit of a Participant other than a Key
Employee shall be determined under (a) the method, if any,
that uniformly applies for accrual purposes under all defined
benefit plans maintained by the Employer, or (b) if there is
no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional
rule of Section 411(b)(1)(C) of the Code.
(d) Permissive Aggregation Group means the Required
Aggregation Group of plans plus any other qualified plan or plans (or
simplified employee pension plan) of the Employer which, when
considered as a group with the Required Aggregation Group, would
continue to satisfy the requirements of Sections 401(a)(4) and 410 of
the Code.
(e) Required Aggregation Group means (i) each qualified plan
of the Employer in which at least one Key Employee participates or
participated at any time during the determination period (regardless of
whether the Plan has terminated) and (ii) any other qualified plan of
the Employer which enables a plan described in (i) to meet the
requirements of Section 401(a)(4) or 410 of the Code.
(f) Determination Date means, for any Plan Year subsequent to
the first Plan Year, the last day of the preceding Plan Year. For the
first Plan Year of the Plan, the Determination Date is the last day of
that Plan Year.
(g) Valuation Date means the last day of the Plan Year.
(h) Present Value means present value based only on the
interest and mortality rates specified by the Employer in the Plan
Agreement.
14.3. MINIMUM ALLOCATION.
(a) Except as otherwise provided in paragraphs (c) and (d)
below, the
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Employer contributions and Forfeitures allocated on behalf of any
Participant who is not a Key Employee shall not be less than the lesser
of 3% of such Participant's Earnings, or in the case where the Employer
has no defined benefit plan which designates this Plan to satisfy
Section 401 of the Code, the largest percentage of Employer
contributions and Forfeitures, as a percentage of the Key Employee's
Earnings, allocated on behalf of any Key Employee for that year. The
minimum allocation is determined without regard to any Social Security
contribution. This minimum allocation shall be made even though, under
other Plan provisions, the Participant would not otherwise be entitled
to receive an allocation, or would have received a lesser allocation of
the Employer's contributions and Forfeitures for the Plan Year because
of (1) the Participant's failure to be credited with at least 1,000
Hours of Service, or (2) the Participant's failure to make mandatory
Employee contributions to the Plan, or (3) the Participant's receiving
Earnings less than a stated amount. Neither Elective Deferrals,
Employer Matching Contributions nor Qualified Matching Contributions
for non-Key Employees shall be taken into account for purposes of
satisfying the requirement of this Section 14.3(a).
(b) For purposes of computing the minimum allocation, Earnings
will mean Section 415 Compensation as defined in Section 6.5(b) of the
Plan.
(c) The provision in paragraph (a) above shall not apply to
any Participant who was not employed by the Employer on the last day of
the Plan Year.
(d) The provision in paragraph (a) above shall not apply to
any Participant to the extent he is covered under any other plan or
plans of the Employer, and the Employer has provided in the Plan
Agreement that the minimum allocation requirement applicable to
Top-Heavy Plans will be met in the other plan or plans. Notwithstanding
the foregoing, if the Employer has adopted ▇▇▇▇▇▇ paired plans (as
described in Section 4.6) and the Participant is eligible to
participate in both paired plans, the minimum allocation described in
paragraph (a) shall be provided by the ▇▇▇▇▇▇ Money Purchase Pension
Plan.
(e) The minimum allocation required (to the extent required to
be nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Sections 411(a)(3)(B) or (D) of the Code.
14.4. ADJUSTMENT OF FRACTIONS. For any Plan Year in which the Plan is
Top-Heavy, the Defined Benefit Fraction and the Defined Contribution Fraction
described in Article 6 shall each be computed using 100% of the dollar
limitations specified in Sections 415(b)(1)(A) and 415(c)(1)(A) instead of 125%.
The foregoing requirement shall not apply if the Top-Heavy Ratio does not exceed
90% and the Employer has elected in the Plan Agreement to provide increased
minimum allocations or benefits satisfying Section 416(h)(2) of the Code.
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14.5. MINIMUM VESTING SCHEDULES. For any Plan Year in which this Plan
is Top-Heavy (and, if the Employer so elects in the Plan Agreement, for any
subsequent Plan Year), a minimum vesting schedule will automatically apply to
the Plan, as follows:
14.6.
(a) If the Employer has selected in the Plan Agreement as the
Plan's regular vesting schedule 100% immediate vesting, the Three-Year
Cliff, Five-Year Graded or Six-Year Graded schedule, then the schedule
selected in the Plan Agreement shall continue to apply for any Plan
Year to which this Section 14.5 applies.
(b) If the Employer has selected in the Plan Agreement as the
Plan's regular vesting schedule the Five-Year Cliff schedule, then the
Three-Year Cliff schedule shall apply in any Plan Year to which this
Section 14.5 applies.
(c) If the Employer has selected in the Plan Agreement as the
Plan's regular vesting schedule the Seven-Year Graded schedule, then
the Six-Year Graded schedule shall apply in any Plan Year to which this
Section 14.5 applies.
(d) If the Employer has selected in the Plan Agreement as the
Plan's regular vesting schedule a schedule other than those described
in paragraphs (a), (b) and (c), then the Top-Heavy schedule specified
by the Employer in the Plan Agreement for this purpose shall apply in
any Plan Year to which this Section 14.5 applies.
The minimum vesting schedule applies to all benefits within the meaning
of Section 411(a)(7) of the Code except those attributable to Elective
Deferrals, rollover contributions described in Section 4.5, Qualified Matching
Contributions, Qualified Nonelective Contributions, or Participant
Contributions, but including benefits accrued before the effective date of
Section 416 of the Code and benefits accrued before the Plan became Top-Heavy.
Further, no reduction in a Participant's nonforfeitable percentage may occur in
the event the Plan's status as Top-Heavy changes for any Plan Year. However, the
vested portion of the Employer Contribution Account or Employer Matching Account
of any Employee who does not have an Hour of Service after the Plan has
initially become Top-Heavy will be determined without regard to this Section
14.5.
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ARTICLE 15. ADMINISTRATION OF THE PLAN
15.1. PLAN ADMINISTRATOR. The Plan shall be administered by the
Employer, as Plan Administrator and Named Fiduciary within the meaning of ERISA,
under rules of uniform application; provided, however, that the Plan
Administrator's duties and responsibilities may be delegated to a person
appointed by the Employer or a committee established by the Employer for that
purpose, in which case the committee shall be the Plan Administrator and Named
Fiduciary. The members of such a committee shall act by majority vote, and may
by majority vote authorize any one or ones of their number to act for the
committee. The person or committee (if any) initially appointed by the Employer
may be named in the Plan Agreement, but the Employer may remove any such person
or committee member by written notice to him, and any such person or committee
may resign by written notice to the Employer, without the necessity of amending
the Plan Agreement. To the extent permitted under applicable law, the Plan
Administrator shall have the sole authority to enforce the terms hereof on
behalf of any and all persons having or claiming any interest under the Plan,
and shall be responsible for the operation of the Plan in accordance with its
terms. The Plan Administrator shall have discretionary authority to determine
all questions arising out of the administration, interpretation and application
of the Plan, all of which determinations shall be conclusive and binding on all
persons. The Plan Administrator, in carrying out its responsibilities under the
Plan, may rely upon the written opinions of its counsel and on certificates of
physicians. Subject to the provisions of the Plan and applicable law, the Plan
Administrator shall have no liability to any person as a result of any action
taken or omitted hereunder by the Plan Administrator.
15.2. CLAIMS PROCEDURE. Claims for participation in or distribution of
benefits under the Plan shall be made in writing to the Plan Administrator, or
an agent designated by the Plan Administrator whose name shall have been
communicated to all Participants and other persons as required by law. If any
claim so made is denied in whole or in part, the claimant shall be furnished
promptly by the Plan Administrator with a written notice:
(a) setting forth the reason for the denial,
(b) making reference to pertinent Plan provisions,
(c) describing any additional material or information from the
claimant which is necessary and why, and
(d) explaining the claim review procedure set forth herein.
Within 60 days after denial of any claim for participation or
distribution under the Plan, the claimant may request in writing a review of the
denial by the Plan Administrator. Any claimant seeking review hereunder shall be
entitled to examine all pertinent documents and to submit issues and comments in
writing. The Plan Administrator shall render a decision on
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review hereunder; provided, that if the Plan Administrator determines that a
hearing would be appropriate, its decision on review shall be rendered within
120 days after receipt of the request for review. The decision on review shall
be in writing and shall state the reason for the decision, referring to the Plan
provisions upon which it is based.
15.3. EMPLOYER'S RESPONSIBILITIES. The Employer shall be
responsible for:
(a) Keeping records of employment and other matters containing
all relevant data pertaining to any person affected hereby and his
eligibility to participate, allocations to his Accounts, and his other
rights under the Plan;
(b) Periodic, timely filing of all statements, reports and
returns required to be filed by ERISA;
(c) Timely preparation and distribution of disclosure
materials required by ERISA;
(d) Providing notice to interested parties as required by
Section 7476 of the Code;
(e) Retention of records for periods required by law; and
(f) Seeing that all persons required to be bonded on account
of handling assets of the Plan are bonded.
15.4. RECORDKEEPER. The Recordkeeper is hereby designated as agent of
the Employer under the Plan to perform directly or through agents certain
ministerial duties in connection with the Plan, in particular:
(a) To keep and regularly furnish to the Employer a detailed
statement of each Participant's Accounts, showing contributions thereto
by the Employer and the Participant, Investment Products purchased
therewith, earnings thereon and Investment Products purchased
therewith, and each redemption or distribution made for any reason,
including fees or benefits; and
(b) To the extent agreed between the Employer and the
Recordkeeper, to prepare for the Employer or to assist the Employer to
prepare such returns, reports or forms as the Employer shall be
required to furnish to Participants and Beneficiaries or other
interested persons and to the Internal Revenue Service or the
Department of Labor; all as may be more fully set forth in a service
agreement executed by the Employer and the Recordkeeper. If the
Employer does not appoint another person or entity as Recordkeeper, the
Employer itself shall be the Recordkeeper.
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15.5. PROTOTYPE PLAN. ▇▇▇▇▇▇ is the sponsor of the ▇▇▇▇▇▇ Basic Plan
Document, a prototype plan approved as to form by the Internal Revenue Service.
Provided that an Employer's adoption of the Plan is made known to and accepted
by ▇▇▇▇▇▇ in accordance with the Plan Agreement, ▇▇▇▇▇▇ will inform the Employer
of amendments to the prototype plan and provide such other services in
connection with the Plan as may be agreed between ▇▇▇▇▇▇ and the Employer.
▇▇▇▇▇▇ may impose for its services as sponsor of the prototype plan such fees as
it may establish from time to time in a fee schedule addressed to the Employer.
Such fees shall, unless paid by the Employer, be paid from the Trust Fund, and
shall in that case be charged pro rata against the Accounts of all Participants.
The Trustee is expressly authorized to cause Investment Products to be sold or
redeemed for the purpose of paying such fees.
15.6.
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ARTICLE 16. TRUSTEE
16.1. POWERS AND DUTIES OF THE TRUSTEE. The Trustee shall have the
authority, in addition to any authority given by law, to exercise the following
powers in the administration of the Trust:
(a) To invest all or a part of the Trust Fund in Investment
Products in accordance with the investment instructions delivered by
the Employer pursuant to Section 13.3, without restriction to
investments authorized for fiduciaries, including without limitation
any common, collective or commingled trust fund maintained by the
Trustee (or any other such fund, acceptable to ▇▇▇▇▇▇ and the Trustee,
that qualifies for exemption from federal income tax pursuant to
Revenue Ruling 81-100). Any investment in, and any terms and conditions
of, any such common, collective or commingled trust fund available only
to employee trusts which meet the requirements of the Code, or
corresponding provisions of subsequent income tax laws of the United
States, shall constitute an integral part of this Agreement;
(b) If ▇▇▇▇▇▇ and the Trustee have consented thereto in
writing, to invest without limit in stock of the Employer or any
affiliated company;
(c) To dispose of all or part of the investments, securities
or other property which may from time to time or at any time constitute
the Trust Fund in accordance with the written directions furnished by
the Employer for the investment of Participants' separate Accounts or
the payment of benefits or expenses of the Plan, and to make, execute
and deliver to the purchasers thereof good and sufficient deeds of
conveyance therefore, and all assignments, transfers and other legal
instruments, either necessary or convenient for passing the title and
ownership thereto, free and discharged of all trusts and without
liability on the part of such purchasers to see to the application of
the purchase money;
(d) To hold cash uninvested to the extent necessary to pay
benefits or expenses of the Plan;
(e) To follow the directions of an investment manager
appointed pursuant to Section 13.7;
(f) To cause any investment of the Trust Fund to be registered
in the name of the Trustee or the name of its nominee or nominees or to
retain such investment unregistered or in a form permitting transfer by
delivery; provided that the books and records of the Trustee shall at
all times show that all such investments are part of the Trust Fund;
(g) Upon written direction of or through the Employer, to vote
in person or
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by proxy (in accordance with Sections 13.6 and 13.10 and, in the case
of stock of the Employer, at the direction of the Employer or
Participants in accordance with Section 13.8) with respect to all
securities that are part of the Trust Fund;
(h) To consult and employ any suitable agent to act on behalf
of the Trustee and to contract for legal, accounting, clerical and
other services deemed necessary by the Trustee to manage and administer
the Trust Fund according to the terms of the Plan;
(i) Upon the written direction of the Employer, to make loans
from the Trust Fund to Participants in amounts and on terms approved by
the Plan Administrator in accordance with the provisions of the Plan;
provided that the Employer shall have the sole responsibility for
computing and collecting all loan repayments required to be made under
the Plan; and
(j) To pay from the Trust Fund all taxes imposed or levied
with respect to the Trust Fund or any part thereof under existing or
future laws, and to contest the validity or amount of any tax
assessment, claim or demand respecting the Trust Fund or any part
thereof.
16.2. LIMITATION OF RESPONSIBILITIES. Except as may otherwise be
required under applicable law, neither the Trustee nor any of its agents shall
have any responsibility for:
(a) Determining the correctness of the amount of any
contribution for the sole collection or payment of contributions, which
shall be the sole responsibility of the Employer;
(b) Loss or breach caused by any Participant's exercise of
control over his Accounts, which shall be the sole responsibility of
the Participant;
(c) Loss or breach caused by the Employer's exercise of
control over Accounts pursuant to Section 13.3, which shall be the sole
responsibility of the Employer;
(d) Performance of any other responsibilities not specifically
allocated to them under the Plan.
16.3. FEES AND EXPENSES. The Trustee's fees for performing its duties
hereunder shall be such reasonable amounts as shall be established by the
Trustee from time to time in a fee schedule addressed to the Employer. Such
fees, any taxes of any kind which may be levied or assessed upon or in respect
of the Trust Fund and any and all expenses reasonably incurred by the Trustee
shall, unless paid by the Employer, be paid from the Trust Fund and shall,
unless allocable to the Accounts of specific Participants, be charged pro rata
against the Accounts of
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all Participants either pro rata, on the basis of a fixed sum per Participant,
or on the basis of a fixed sum per Account of a Participant, as shall be
provided in the Service Agreement. The Trustee is expressly authorized to cause
Investment Products to be sold or redeemed for the purpose of paying such
amounts. Charges and expenses incurred in connection with a specific Investment
Product, unless allocable to the Accounts of specific Participants, shall be
charged pro rata against the Accounts of all Participants for whose benefit
amounts have been invested in the specific Investment Product either pro rata,
on the basis of a fixed sum per Participant, or on the basis of fixed sum per
Account of a Participant, as shall be provided in the Service Agreement.
16.4. RELIANCE ON EMPLOYER. The Trustee and its agents shall rely upon
any decision of the Employer, or of any person authorized by the Employer,
purporting to be made pursuant to the terms of the Plan, and upon any
information or statements submitted by the Employer or such person (including
those relating to the entitlement of any Participant to benefits under the
Plan), and shall not inquire as to the basis of any such decision or information
or statements, and shall incur no obligation or liability for any action taken
or omitted in reliance thereon. The Trustee and its agents shall be entitled to
rely on the latest written instructions received from the Employer as to the
person or persons authorized to act for the Employer hereunder, and to sign on
behalf of the Employer any directions or instructions, until receipt from the
Employer of written notice that such authority has been revoked.
16.5. ACTION WITHOUT INSTRUCTIONS. If the Trustee receives no
instructions from the Employer in response to communications sent by registered
or certified mail to the Employer at its last known address as shown on the
books of the Trustee, then the Trustee may make such determinations with respect
to administrative matters arising under the Plan as it considers reasonable,
notwithstanding any prior instructions or directions given by or on behalf of
the Employer, but subject to any instruction or direction given by or on behalf
of the Participants. To the extent permitted by applicable law, any
determination so made will be binding on all persons having or claiming any
interest under the Plan or Trust, and the Trustee will incur no obligation or
responsibility for any such determination made in good faith or for any action
taken pursuant thereto. In making any such determination the Trustee may require
that it be furnished with such relevant documents as it reasonable considers
necessary.
16.6. ADVICE OF COUNSEL. The Trustee may consult with legal counsel
(who may, but need not be, counsel for the Employer) concerning any questions
which may arise with respect to its rights and duties under the Plan, and the
opinion of such counsel shall be full and complete protection to the extent
permitted by applicable law in the respect of any action taken or omitted by the
Trustee hereunder in accordance with the opinion of such counsel.
16.7. ACCOUNTS. The Trustee shall keep full accounts of all receipts
and disbursements which pertain to investments in Investment Products, and of
such other transactions as it is required to perform hereunder. Within a
reasonable time following the close of each Plan Year, or upon its removal or
resignation or upon termination of the Trust
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and at such other times as may be appropriate, the Trustee shall render to the
Employer and any other persons as may be required by law an account of its
administration of the Plan and Trust during the period since the last previous
such accounting, including such information as may be required by law. The
written approval of any account by the Employer and all other persons to whom an
account is rendered shall be final and binding as to all matters and
transactions stated or shown therein, upon the Employer and Participants and all
persons who then are or thereafter become interested in the Trust. The failure
of the Employer or any other person to whom an account is rendered to notify the
party rendering the account within 60 days after the receipt of any account of
his or its objection to the account shall be the equivalent of written approval.
If the Employer or any other person to whom an account is rendered files any
objections within such 60-day period with respect to any matters or transactions
stated or shown in the account and the Employer or such other person and the
party rendering the account cannot amicably settle the questions raised by such
objections, the party rendering the account and the Employer or such person
shall have the right to have such questions settled by judicial proceedings,
although the Employer or such other person to whom an account is rendered shall
have, to the extent permitted by applicable law, only 60 days from filing of
written objection to the account to commence legal proceedings. Nothing herein
contained shall be construed so as to deprive the Trustee of the right to have a
judicial settlement of its accounts. In any proceeding for a judicial
settlements of any account or for instructions, the only necessary parties shall
be the Trustee, the Employer and persons to whom an account is required by law
to be rendered.
16.8. ACCESS TO RECORDS. The Trustee shall give access to its records
with respect to the Plan at reasonable times and on reasonable notice to any
person required by law to have access to such records.
16.9. SUCCESSORS. Any corporation into which the Trustee may merge or
with which it may consolidate or any corporation resulting from any such merger
or consolidation shall be the successor of the Trustee without the execution or
filing of any additional instrument or the performance of any further act.
16.10. PERSONS DEALING WITH TRUSTEE. No person dealing with the Trustee
shall be bound to see to the application of any money or property paid or
delivered to the Trustee or to inquire into the validity or propriety of any
transactions.
16.11. RESIGNATION AND REMOVAL; PROCEDURE. The Trustee may resign at
any time by giving 60 days' written notice to the Employer and to ▇▇▇▇▇▇. The
Employer may remove the Trustee at any time by giving 60 days' written notice to
the party removed and to ▇▇▇▇▇▇. In any case of resignation or removal
hereunder, the period of notice may be reduced to such shorter period as is
satisfactory to the Trustee and the Employer. Notwithstanding anything to the
contrary herein, any resignation hereunder shall take effect at the time notice
thereof is given if the Employer may no longer participate in the prototype Plan
and is deemed to have an individually designed plan at the time notice is given.
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16.12. ACTION OF TRUSTEE FOLLOWING RESIGNATION OR REMOVAL. When the
resignation or removal of the Trustee becomes effective, the Trustee shall
perform all acts necessary to transfer the Trust Fund to its successor. However,
the Trustee may reserve such portion of the Trust Fund as it may reasonably
determine to be necessary for payment of its fees and any taxes and expenses,
and any balance of such reserve remaining after payment of such fees, taxes and
expenses shall be paid over to its successor. The Trustee shall have no
responsibility for acts or omissions occurring after its resignation becomes
effective.
16.13. EFFECT OF RESIGNATION OR REMOVAL. Resignation or removal of the
Trustee shall not terminate the Trust. In the event of any vacancy in the
position of Trustee, whether the vacancy occurs because of the resignation or
removal of the Trustee, the Employer shall appoint a successor to fill the
vacant position. If the Employer does not appoint such a successor who accepts
appointment by the later of 60 days after notice of resignation or removal is
given or by such later date as the Trustee and Employer may agree in writing to
postpone the effective date of the Trustee's resignation or removal, the Trustee
may apply to a court of competent jurisdiction for such appointment or cause the
Trust to be terminated, effective as of the date specified by the Trustee, in
writing delivered to the Employer. Each successor Trustee so appointed and
accepting a trusteeship hereunder shall have all of the rights and powers and
all of the duties and obligations of the original Trustee, under the provisions
hereof, but shall have no responsibility for acts or omissions before he becomes
a Trustee.
16.14. FISCAL YEAR OF TRUST. The fiscal year of the Trust will coincide
with the Plan Year.
16.15. LIMITATION OF LIABILITY. Except as may otherwise be required by
law and other provisions of the Plan, no fiduciary of the Plan, within the
meaning of Section 3(21) of ERISA, shall be liable for any losses incurred with
respect to the management of the Plan, nor shall he or it be liable for any acts
or omissions except those caused by his or its own negligence or bad faith in
failing to carry out his or its duties under the terms contained in the Plan.
16.16. INDEMNIFICATION. Subject to the limitations of applicable law,
the Employer agrees to indemnify and hold harmless (i) all fiduciaries, within
the meaning of ERISA Sections 3(21) and 404, and (ii) ▇▇▇▇▇▇, for all liability
occasioned by any act of such party or omission to act, in good faith and
without negligence, and for all expenses incurred by any such party in
determining its duty or liability under ERISA with respect to any question under
the Plan.
16.17.
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ARTICLE 17. AMENDMENT
17.1. GENERAL. The Employer reserves the power at any time or times to
amend the provisions of the Plan and the Plan Agreement to any extent and in any
manner that it may deem advisable. If, however, the Employer makes any amendment
(including an amendment occasioned by a waiver of the minimum funding
requirement under Section 412(d) of the Code) other than
(a) a change in an election made in the Plan Agreement,
(b) amendments stated in the Plan Agreement which allow the
Plan to satisfy Section 415 and to avoid duplication of minimums under
Section 416 of the Code because of the required aggregation of multiple
plans, or
(c) model amendments published by the Internal Revenue Service
which specifically provide that their adoption will not cause the Plan
to be treated as individually designed,
the Employer shall cease to participate in this prototype Plan and will be
considered to have an individually designed plan. In that event, ▇▇▇▇▇▇ shall
have no further responsibility to provide to the Employer any amendments or
other material incident to the prototype plan, and ▇▇▇▇▇▇ may resign immediately
as Trustee and as Recordkeeper. Any amendment shall be made by delivery to the
Trustee (and the Recordkeeper, if any) of a written instrument executed by the
Employer providing for such amendment. Upon the delivery of such instrument to
the Trustee, such instrument shall become effective in accordance with its terms
as to all Participants and all persons having or claiming any interest
hereunder, provided, that the Employer shall not have the power:
(1) to amend the Plan in such a manner as would cause
or permit any part of the assets of the Trust to be diverted
to purposes other than the exclusive benefit of Participants
or their Beneficiaries, or as would cause or permit any
portion of such assets to revert to or become the property of
the Employer.
(2) to amend the Plan retroactively in such a manner
as would have the effect of decreasing a Participant's accrued
benefit, except that a Participant's Account balance may be
reduced to the extent permitted under Section 412(c)(8) of the
Code. For purposes of this paragraph (2), an amendment shall
be treated as reducing a Participant's accrued benefit if it
has the effect of reducing his Account balance, or of
eliminating an optional form of benefit with respect to
amounts attributable to contributions made performed before
the adoption of the amendment; or
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(3) to amend the Plan so as to decrease the portion
of a Participant's Account balance that has become vested, as
compared to the portion that was vested, under the terms of
the Plan without regard to the amendment, as of the later of
the date the amendment is adopted or the date it becomes
effective.
(4) to amend the Plan in such a manner as would
increase the duties or liabilities of the Trustee or the
Recordkeeper unless the Trustee or the Recordkeeper consents
thereto in writing.
17.2. DELEGATION OF AMENDMENT POWER. The Employer and all
sponsoring organizations of the ▇▇▇▇▇▇ Basic Plan Document delegate to ▇▇▇▇▇▇
Mutual Funds Corp., the power to amend the Plan (including the power to amend
this Section 18.2 to name a successor to which such power of amendment shall be
delegated), for the purpose of adopting amendments which are certified to ▇▇▇▇▇▇
Mutual Funds Corp., by counsel satisfactory to it, as necessary or appropriate
under applicable law, including any regulation or ruling issued by the United
States Treasury Department or any other federal or state department or agency;
provided that ▇▇▇▇▇▇ Mutual Funds Corp., or such successor may amend the Plan
only if it has mailed a copy of the proposed amendment to the Employer at its
last known address as shown on its books by the date on which it delivers a
written instrument providing for such amendment, and only if the same amendment
is made on said date to all plans in this form as to which ▇▇▇▇▇▇ Mutual Funds
Corp., or such successor has a similar power of amendment. If a sponsoring
organization does not adopt any amendment made by ▇▇▇▇▇▇ Mutual Funds Corp.,
such sponsoring organization shall cease to participate in this prototype Plan
and will be considered to have an individually designed plan. If, upon the
submission of this ▇▇▇▇▇▇ Basic Plan Document #07 to the Internal Revenue
Service for a determination letter, the Internal Revenue Service determines that
changes are required to the Basic Plan Document but not to the form of Plan
Agreement, ▇▇▇▇▇▇ shall furnish a copy of the revised Basic Plan Document to the
Employer and the Employer will not be required to execute a revised Plan
Agreement.
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ARTICLE 18. TERMINATION OF THE PLAN AND TRUST
18.1. GENERAL. The Employer has established the Plan and the Trust with
the bona fide intention and expectation that contributions will be continued
indefinitely, but the Employer shall have no obligation or liability whatsoever
to maintain the Plan for any given length of time and may discontinue
contributions under the Plan or terminate the Plan at any time by written notice
delivered to the Trustee, without any liability whatsoever for any such
discontinuance or termination.
18.2. EVENTS OF TERMINATION. The Plan will terminate upon the
happening of any of the following events:
(a) Death of the Employer, if a sole proprietor, or
dissolution or termination of the Employer, unless within 60 days
thereafter provision is made by the successor to the business with
respect to which the Plan was established for the continuation of the
Plan, and such continuation is approved by the Trustee;
(b) Merger, consolidation or reorganization of the Employer
into one or more corporations or organizations, unless the surviving
corporations or organizations adopt the Plan by an instrument in
writing delivered to the Trustee within 60 days after such a merger,
consolidation and reorganization;
(c) Sale of all or substantially all of the assets of the
Employer, unless the purchaser adopts the Plan by an instrument in
writing delivered to the Trustee within 60 days after the sale;
(d) The institution of bankruptcy proceedings by or against
the Employer, or a general assignment by the Employer to or for the
benefit of its creditors; or
(e) Delivery of notice of termination as provided in Section
18.1.
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18.3. EFFECT OF TERMINATION. Notwithstanding any other provisions of
this Plan, other than Section 18.4, upon termination of the Plan or complete
discontinuance of contributions thereunder, each Participant's Accounts will
become fully vested and nonforfeitable, and upon partial termination of the
Plan, the Accounts of each Participant affected by the partial termination will
become fully vested and nonforfeitable. The Employer shall notify the Trustee in
writing of such termination, partial termination or complete discontinuance of
contributions. In the event of the complete termination of the Plan or
discontinuance of contributions, the Trustee will, after payment of all expenses
of the Trust Fund, make distribution of the Trust assets to the Participants or
other persons entitled thereto, in such form as the Employer may direct pursuant
to Article 10 or, in the absence of such direction, in a single payment in cash
or in kind. Upon completion of such distributions under this Article, the Trust
will terminate, the Trustee will be relieved from their obligations under the
Trust, and no Participant or other person will have any further claim
thereunder.
18.4. APPROVAL OF PLAN. Notwithstanding any other provision of the
Plan, if the Employer fails to obtain or to retain the approval by the Internal
Revenue Service of the Plan as a qualified plan under Section 401(a) of the
Code, then (i) the Employer shall promptly notify the Trustee, and (ii) the
Employer may no longer participate in the ▇▇▇▇▇▇ prototype plan, but will be
deemed to have an individually designed plan. If it is determined by the
Internal Revenue Service that the Plan upon its initial adoption does not
qualify under Section 401(a) of the Code, all assets then held under the Plan
will be returned within one year of the denial of initial qualification to the
Participants and the Employer to the extent attributable to their respective
contributions and any income earned thereon, but only if the application for
qualification is made by the time prescribed by law for filing the Employer's
federal income tax return for the taxable year in which the Plan is adopted, or
such later date as the Secretary of the Treasury may prescribe. Upon such
distribution, the Plan will be considered to be rescinded and to be of no force
or effect.
18.5.
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ARTICLE 19. TRANSFERS TO OR FROM OTHER QUALIFIED PLANS; MERGERS
19.1. GENERAL. Notwithstanding any other provision hereof, subject to
the approval of the Trustee there may be transferred to the Trustee all or any
of the assets held (whether by a trustee, custodian or otherwise) in respect of
any other plan which satisfies the applicable requirements of Section 401(a) of
the Code and which is maintained for the benefit of any Employee (provided,
however, that the Employee is not a member of a class of Employees excluded from
eligibility to participate in the Plan). Any such assets so transferred shall be
accompanied by written instructions from the Employer naming the persons for
whose benefit such assets have been transferred and showing separately the
respective contributions made by the Employer and by the Participants and the
current value of the assets attributable thereto. Notwithstanding the foregoing,
if a Participant's employment classification changes under Section 3.5 such that
he begins participation in another plan of the Employer, his Account, if any,
shall, upon the Administrator's direction, be transferred to the plan in which
he has become eligible to participate, if such plan permits receipt of such
Account.
19.2. AMOUNTS TRANSFERRED. The Employer shall credit any assets
transferred pursuant to Section 19.1 or Section 3.5 to the appropriate Accounts
of the persons for whose benefit such assets have been transferred. Any amounts
credited as contributions previously made by an employer or by such persons
under such other plan shall be treated as contributions previously made under
the Plan by the Employer or by such persons, as the case may be.
19.3. MERGER OR CONSOLIDATION. The Plan shall not be merged or
consolidated with any other plan, nor shall any assets or liabilities of the
Trust Fund be transferred to any other plan, unless each Participant would
receive a benefit immediately after the transaction, if the Plan then
terminated, which is equal to or greater than the benefit he would have been
entitled to receive immediately before the transaction if the Plan had then
terminated.
19.4.
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ARTICLE 20. MISCELLANEOUS
20.1. NOTICE OF PLAN. The Plan shall be communicated to all
Participants by the Employer on or before the last day on which such
communication may be made under applicable law.
20.2. NO EMPLOYMENT RIGHTS. Neither the establishment of the Plan and
the Trust, nor any amendment thereof, nor the creation of any fund or account,
nor the payment of any benefits shall be construed as giving to any Participant
or any other person any legal or equitable right against the Employer or the
Trustee, except as provided herein or by ERISA; and in no event shall the terms
of employment or service of any Participant be modified or in any way be
affected hereby.
20.3. DISTRIBUTIONS EXCLUSIVELY FROM PLAN. Participants and
Beneficiaries shall look solely to the assets held in the Trust for the payment
of any benefits under the Plan.
20.4. NO ALIENATION. The benefits provided hereunder shall not be
subject to alienation, assignment, garnishment, attachment, execution or levy of
any kind, and any attempt to cause such benefits to be so subjected shall not be
recognized, except as provided in Section 12.4 or in accordance with a Qualified
Domestic Relations Order. The Plan Administrator shall determine whether a
domestic relations order is qualified in accordance with written procedures
adopted by the Plan Administrator. Notwithstanding the foregoing, an order shall
not fail to be a Qualified Domestic Relations Order merely because it requires a
distribution to an alternate payee (or the segregation of accounts pending
distribution to an alternate payee) before the Participant is otherwise entitled
to a distribution under the Plan.
20.5. PROVISION OF INFORMATION. The Employer and the Trustee shall
furnish to each other such information relating to the Plan and Trust as may be
required under the Code or ERISA and any regulations issued or forms adopted by
the Treasury Department or the Labor Department or otherwise thereunder.
20.6. NO PROHIBITED TRANSACTIONS. The Employer and the Trustee shall,
to the extent of their respective powers and authority under the Plan, prevent
the Plan from engaging in any transaction known by that person to constitute a
transaction prohibited by Section 4975 of the Code and any rules or regulations
with respect thereto.
20.7. GOVERNING LAW. The Plan shall be construed, administered,
regulated and governed in all respects under and by the laws of the United
States, and to the extent permitted by such laws, by the laws of the
Commonwealth of Massachusetts
20.8. GENDER. Whenever used herein, a pronoun in the masculine gender
includes the feminine gender unless the context clearly indicates otherwise.
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