Exhibit 10.5
Proposed Form of Employees' Savings & Profit Sharing Plan and Trust
ADOPTION AGREEMENT
FOR RIVERVIEW SAVINGS BANK, FSB
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
PENTEGRA
Name of Employer: Riverview Savings Bank, FSB
Address: ▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Contact Person: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name of Plan: Riverview Savings Bank, FSB Employees' Savings &
Profit Sharing Plan and Trust
THIS ADOPTION AGREEMENT, upon execution by the Employer and the Trustee, and
subsequent approval by a duly authorized representative of Pentegra Services,
Inc. (the "Sponsor"), together with the Sponsor's Employees' Savings & Profit
Sharing Plan and Trust Agreement (the "Agreement"), shall constitute the
Riverview Savings Bank, FSB Employees' Savings & Profit Sharing Plan and Trust
(the "Plan"). The terms and provisions of the Agreement are hereby incorporated
herein by this reference; provided, however, that if there is any conflict
between the Adoption Agreement and the Agreement, this Adoption Agreement shall
control.
The elections hereinafter made by the Employer in this Adoption Agreement may be
changed by the Employer from time to time by written instrument executed by a
duly authorized representative thereof; but if any other provision hereof or any
provision of the Agreement is changed by the Employer other than to satisfy the
requirements of Section 415 or 416 of the Internal Revenue Code of 1986, as
amended (the "Code"), because of the required aggregation of multiple plans, or
if as a result of any change by the Employer the Plan fails to obtain or retain
its tax qualified status under Section 401(a) of the Code, the Employer shall be
deemed to have amended the Plan evidenced hereby and by the Agreement into an
individually designed plan, in which event the Sponsor shall thereafter have no
further responsibility for the tax-qualified status of the Plan. However, the
Sponsor may amend any term, provision or definition of this Adoption Agreement
or the Agreement in such manner as the Sponsor may deem necessary or advisable
from time to time and the Employer and the Trustee, by execution hereof,
acknowledge and consent thereto. Notwithstanding the foregoing, no amendment of
this Adoption Agreement or of the Agreement shall increase the duties or
responsibilities of the Trustee without the written consent thereof.
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I. EFFECT OF EXECUTION OF ADOPTION AGREEMENT
The Employer, upon execution of this Adoption Agreement by a duly
authorized representative thereof, (choose 1 or 2):
1. Establishes as a new plan the Riverview Savings Bank, FSB
Employees' Savings & Profit Sharing Plan and Trust, effective
___, 19__.
2. X Amends its existing defined contribution plan and trust
(Riverview Retirement and Employee Stock Ownership Plan) dated
July 21, 19 93 , in its entirety into the Riverview Savings
Bank, FSB Employees' Savings & Profit Sharing Plan and Trust,
effective April 19, 19 97 , except as otherwise provided
herein or in the Agreement.
II. DEFINITIONS
A. "Contribution Determination Period" for purposes of
determining and allocating Employer
profit sharing contributions means (choose 1, 2, 3 or 4):
1. X The Plan Year.
2. The Employer's Fiscal Year (defined as the Plan's
"limitation year") being the twelve (12) consecutive
month period commencing (month/day) and ending
(month/day).
3. The three (3) consecutive monthly periods that
comprise each of the Plan Year quarters.
4. The three (3) consecutive monthly periods that
comprise each of the Employer's Fiscal Year quarters.
(Employer's Fiscal Year is the twelve (12)
consecutive month period commencing (month/day) and
ending (month/day).)
B. "Effective Date" means April 1 , 19 97 .
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C. Employer
1. "Employer," for purposes of the Plan, shall mean:
Riverview Savings Bank, FSB.
2. The Employer is (choose whichever may apply):
(a) X A member of a controlled group of
corporations under Section
414(b) of the Code.
(b) A member of a group of entities under
common control under
Section 414(c) of the Code.
(c) A member of an affiliated service group
under Section 414(m) of
the Code.
(d) X A corporation.
(e) A sole proprietorship or partnership.
(f) A Subchapter S corporation.
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3. Employer's Taxable Year Ends on 3/31 .
4. Employer's Federal Taxpayer Identification Number is
▇▇-▇▇▇▇▇▇▇ .
5. Employer's Plan Number is (enter 3-digit number) 004
.
D. "Entry Date" means the first day of the (choose 1 or 2):
1. X Calendar month coinciding with or next following
the date the Employee satisfies the Eligibility
requirements described in Section III.
2. Calendar quarter coinciding with or next following
the date the Employee satisfies the Eligibility
requirements described in Section III.
E. "Member" means an Employee enrolled in the membership of the
Plan.
F. "Normal Retirement Age" means (choose 1 or 2):
1. X Attainment of age 65 (select an age not less than
----- ----
55 and not greater than 65).
2. Later of: (i) attainment of age 65 or (ii) the fifth
anniversary of the date the Member commenced
participation in the Plan.
G. "Normal Retirement Date" means the first day of the first
calendar month coincident with or next following the date upon
which a Member attains his or her Normal Retirement Age.
H. "Plan Year" means the twelve (12) consecutive month period
beginning on each January 1.
I. "Salary" for benefit purposes under the Plan means (choose 1,
2 or 3):
1. Basic Salary only.
2. X Basic Salary plus one or more of the following (if
2 is chosen, then choose (a), (b) or (c), whichever
shall apply):
(a) X Commissions not in excess of $
(b) Overtime
(c) X Overtime and bonuses
3. Total taxable compensation as reported on Form W-2
(exclusive of any compensation deferred from a prior
year).
Note: Member pre-tax elective deferrals, if any, are always
included in Plan Salary.
J. "Salary" shall not include:
Member pre tax contributions to a Code Section 125
cafeteria plan.
3
III. ELIGIBILITY REQUIREMENTS
A. All Employees shall be eligible to participate in the Plan in
accordance with the provisions of Article II of the Plan,
except the following Employees shall be excluded (choose
whichever shall apply):
1. X Employees who have not attained age 21.
2. X Employees who have not, during the 12 consecutive
month period (1- 11, 12 or 24) beginning with an
Employee's Date of Employment, Date of Reemployment
or any anniversary thereof, completed 1000 number of
Hours of Service (determined by multiplying the
number of months above by 83-1/3).
Note: Employers which permit Members to make pre-tax
elective deferrals to the Plan (see V.A.3.) may not
elect a 24 month eligibility period.
3. Employees included in a unit of Employees covered by
a collective bargaining agreement, if retirement
benefits were the subject of good faith bargaining
between the Employer and Employee representatives.
4. Employees who are nonresident aliens and who receive
no earned income from the Employer which constitutes
income from sources within the United States.
5. Employees included in the following job
classifications:
(a) Hourly Employees
(b) Salaried Employees
6. Employees of the following employers which are
aggregated under Section 414(b), 414(c) or 414(m) of
the Code:
Note: If no entries are made above, all Employees shall be
eligible to participate in the Plan on the later of:
(i) the Effective Date or (ii) the first day of the
calendar month or calendar quarter (as designated by
the Employer in Section II.D.) coinciding with or
immediately following the Employee's Date of
Employment or, as applicable, Date of Reemployment.
B. Such Eligibility Computation Period established above shall be
applicable to (choose 1 or 2):
1. X Both present and future Employees.
2. Future Employees only.
4
C. Such Eligibility requirements established above shall be (choose 1 or 2):
1. Applied to the designated Employee group on and after
the Effective Date of the Plan.
2. Waived for the consecutive monthly period
(may not exceed 12) beginning on the Effective
Date of the Plan.
IV. HOURS OF EMPLOYMENT AND PRIOR EMPLOYMENT CREDIT
A. The number of Hours of Employment with which an Employee or
Member is credited shall be (choose 1 or 2):
1. X The actual number of Hours of Employment. (Hour of
Service Method)
2. 83-1/3 Hours of Employment for every month of
Employment. (Elapsed Time Method)
B. Prior Employment Credit:
Employment with the following entity or entities
shall be included for eligibility and vesting
purposes:
Note: If this Plan is a continuation of a Predecessor Plan,
service under the Predecessor
Plan shall be counted as Employment under this Plan.
V. CONTRIBUTIONS
Note: Annual Member pre-tax elective deferrals, Employer matching
contributions, Employer basic contributions, Employer
supplemental contributions, Employer profit sharing
contributions and Employer Qualified Non-Elective
contributions, in the aggregate, may not exceed 15% of all
Members' Salary (excluding from Salary Member pre-tax elective
deferrals).
A. Employee Contributions (choose 1 or 2; 3 or 4; 5 and/or 6):
1. A Member may make after-tax contributions to the
Plan, based on multiples of 1% of monthly Salary.
2. X A Member may not make after-tax contributions to
the Plan.
3. X A Member may make pre-tax elective deferrals to the
Plan, based on multiples of 1% of monthly Salary.
4. A Member may not make pre-tax elective deferrals to
the Plan.
5. X The maximum amount of monthly contributions a
Member may make to the Plan is 15 % (1-20) of the
Member's monthly Salary.
5
6. X An Employee may allocate a rollover contribution to
the Plan prior to satisfying the Eligibility
requirements described above.
B. A Member may change his or her contribution rate (choose 1 or
2):
1. X 1 time per calendar month.
2. 1 time per calendar quarter.
C. Employer Matching Contributions (choose 1, 2, 3 or 4; and fill
in 5 if applicable):
1. No Employer matching contributions will be made to
the Plan.
2. X The Employer shall allocate to each contributing
Member's Account an amount equal to 50 % (based on 5%
increments not to exceed 200%) of the Member's
contributions for that month.
3. The Employer shall allocate to each contributing
Member's Account an amount determined in accordance
with the following schedule:
Years of Employment Matching %
Less than 3 50%
At least 3, but less than 5 75%
5 or more 100%
4. The Employer shall allocate to each contributing
Member's Account an amount determined in accordance
with the following schedule:
Years of Employment Matching %
Less than 3 100%
At least 3, but less than 5 150%
5 or more 200%
5. The Employer matching contributions under 2, 3 or 4
above shall be based on the Member's contributions
not in excess of 3% (1-20 but not in excess of the
percentage specified in A.5. above) of the Member's
Salary.
D. Employer Basic Contributions (choose 1 or 2):
1. No Employer basic contributions will be made to the
Plan.
2. The Employer shall allocate an amount equal to %
(based on 1% increments not to exceed 15%) of
Member's Salary for the month to (choose (a) or (b)):
(a) The Accounts of all Members
(b) The Accounts of all Members who were
employed with the Employer on the last
day of such month.
6
E. Employer Supplemental Contributions:
The Employer may make supplemental contributions for any Plan
Year in accordance with Section 3.7 of the Plan.
F. Employer Profit Sharing Contributions (Choose 1, 2, 3, 4, or 5):
1. No Employer Profit Sharing Contributions will be made
to the Plan.
Non-Integrated Formula
2. Profit sharing contributions shall be allocated to
each Member in the same ratio as each Member's Salary
during such Contribution Determination Period bears
to the total of such Salary of all Members.
3. Profit sharing contributions shall be allocated to
each Member in the same ratio as each Member's Salary
for the portion of the Contribution Determination
Period during which the Member satisfied the
Employer's eligibility requirement(s) bears to the
total of such Salary of all Members.
Integrated Formula
4. Profit sharing contributions shall be allocated to
each Member's Account in a uniform percentage
(specified by the Employer as
%) of each Member's Salary during the Contribution
Determination Period up to the Social Security
Taxable Wage Base as defined in Section of the Plan
("Base Salary") for the Plan Year that includes such
Contribution Determination Period, plus a uniform
percentage (specified by the Employer as
%) of each Member's Salary for the Contribution
Determination Period in excess of the Social Security
Taxable Wage Base ("Excess Salary") for the Plan Year
that includes such Contribution Determination Period,
in accordance with Article III of the Plan.
5. Profit sharing contributions shall be allocated to
each Member's Account in a uniform percentage
(specified by the Employer as
%) of each Member's Salary for the portion of the
Contribution Determination Period during which the
Member satisfied the Employer's eligibility
requirement(s), if any, up to the Base Salary for the
Plan Year that includes such Contribution
Determination Period, plus a uniform percentage
(specified by the Employer as
%) of each Member's Excess Salary for the portion of
the Contribution Determination Period during which
the Member satisfied the Employer's eligibility
requirement(s) in accordance with Article III of the
Plan.
G. Allocation of Employer Profit Sharing Contributions:
In accordance with Section V, G above, a Member shall be
eligible to share in Employer Profit Sharing Contributions, if
any, as follows (choose 1 or 2):
1. A Member shall be eligible for an allocation of
Employer Profit Sharing Contributions for a
Contribution Determination Period in all events.
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2. A Member shall be eligible for an allocation of
Employer Profit Sharing Contributions for a
Contribution Determination Period only if he or she
(choose (a), (b) or (c) whichever shall apply):
(a) is employed on the last day of the
Contribution Determination Period or
retired, died or became totally and
permanently disabled prior to the last day
of the Contribution Determination Period.
(b) completed 1,000 Hours of Employment if the
Contribution Determination Period is a
period of 12 months (250 Hours of Employment
if the Contribution Determination Period is
a period of 3 months) or retired, died or
became totally and permanently disabled
prior to the last day of the Contribution
Determination Period.
(c) is employed on the last day of the
Contribution Determination Period and, if
such period is 12 months, completed 1,000
Hours of Employment (250 Hours of Employment
if the Contribution Determination Period is
a period of 3 months) or retired, died or
became totally and permanently disabled
prior to the last day of the Contribution
Determination Period.
H. Employer Qualified Nonelective Contributions:
The Employer may make qualified nonelective contributions for
any Plan Year in accordance with Section 3.9 of the Plan.
VI. INVESTMENT FUNDS
The Employer hereby selects the following Investment Funds to be made
available under the Plan (choose whichever shall apply). The Employer
agrees and acknowledges that the selection of Investment Funds made in
this Section VI is solely its responsibility, and no other person,
including the Sponsor, has any discretionary authority or control with
respect to such selection process.
1. X 500 Stock Index Fund
2. X Stable Value Fund
3. X MidCap 400 Stock Index Fund
4. X Government Money Market Fund
5. X Bond Index Fund
6. X Employer Stock Fund - Frozen Assets. Not available for
additional contributions or deposits.
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VII. EMPLOYER SECURITIES
A. If the Employer makes available an Employer Stock Fund
pursuant to Section VI of this Adoption Agreement, then voting
and tender offer rights with respect to Employer Stock shall
be delegated and exercised as follows (choose 1 or 2):
1. The Plan Administrator shall direct the Trustee as to
the voting of all Employer Stock and as to all rights
in the event of a tender offer involving such
Employer Stock.
2. X Each Member shall be entitled to direct the Plan
Administrator as to the voting and tender offer
rights involving Employer Stock held in such Member's
Account, and the Plan Administrator shall follow or
cause the Trustee to follow such directions. If a
Member fails to provide the Plan Administrator with
directions as to voting or tender offer rights, the
Plan Administrator shall exercise those rights as it
determines in its discretion and shall direct the
Trustee accordingly.
VIII. INVESTMENT DIRECTION
A. Members shall be entitled to designate what percentage of
employee contributions and employer contributions made on
their behalf will be invested in the various Investment Funds
offered by the Employer as specified in Section VI of this
Adoption Agreement; provided, however, that the following
portions of a Member's Account must be invested in the
Employer Stock Fund (choose whichever shall apply):
1. Employer Profit Sharing Contributions
2. Employer Matching Contributions
3. Employer Basic Contributions
4. Employer Supplemental Contributions
5. Employer Qualified Nonelective Contributions
B. A Member may change his or her investment direction
(choose 1 or 2):
1. X 1 time per calendar month.
2. 1 time per calendar quarter.
C. If a Member fails to make an effective investment direction,
the Member's contributions and Employer contributions made on
the Member's behalf shall be invested in Government Money
Market Fund (insert one of the Investment Funds selected in
Section VI of this Adoption Agreement).
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IX. VESTING SCHEDULES; YEARS OF EMPLOYMENT FOR VESTING PURPOSES
A. (Choose 1, 2, 3, 4, 5, 6 or 7)
Schedule Years of Employment Vested %
1. X Immediate Upon Enrollment 100%
-----
2. 2-6 Year Graded Less than 2 0%
-----
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
3. 5-Year Cliff Less than 5 0%
------
5 or more 100%
4. 3-Year Cliff Less than 3 0%
------
3 or more 100%
5. 4-Year Graded Less than 1 0%
------
1 but less than 2 25%
2 but less than 3 50%
3 but less than 4 75%
4 or more 100%
Schedule Years of Employment Vested %
6. 3-7 Year Graded Less than 3 0%
------
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
7. Other Less than 0%
------ ----------
but less than %
----- ----- ----
but less than %
----- ----- ----
but less than %
----- ----- ----
but less than %
----- ----- ----
or more 100%
-----
B. With respect to the schedules listed above, the Employer
elects (choose 1, 2, 3 and 4; or 5):
1. Schedule X solely with respect to Employer
matching contributions.
2. Schedule solely with respect to Employer basic
contributions.
3. Schedule solely with respect to Employer
supplemental contributions.
10
4. Schedule solely with respect to Employer profit
sharing contributions.
5. Schedule with respect to all Employer
contributions.
NOTE: Notwithstanding any election by the Employer to the
contrary, each Member shall acquire a 100% vested
interest in his Account attributable to all Employer
contributions made to the Plan upon the earlier of
(i) attainment of Normal Retirement Age, (ii)
approval for disability or (iii) death. In addition,
a Member shall at all times have a 100% vested
interest in the Employer Qualified Non-Elective
Contributions, if any, and in the pre-tax elective
deferrals and nondeductible after tax Member
Contributions.
C. Years of Employment Excluded for Vesting Purposes
The following Years of Employment shall be disregarded for
vesting purposes (choose whichever shall apply):
1. Years of Employment during any period in which
neither the Plan nor any predecessor plan was
maintained by the Employer.
2. X Years of Employment of a Member prior to attaining
age 18.
X. WITHDRAWAL PROVISIONS
A. The following portions of a Member's Account will be eligible
for in-service withdrawals, subject to the provisions of
Article VII of the Plan (choose whichever shall apply):
1. Employee after tax contributions and the earnings
thereon.
2. Employee pre-tax elective deferrals and the earnings
thereon.
3. Employee rollover contributions and the earnings
thereon.
4. X Employer matching contributions and the earnings
thereon.
5. Employer basic contributions and the earnings
thereon.
6. X Employer supplemental contributions and the
earnings thereon.
7. Employer profit sharing contributions and the
earnings thereon.
8. Employer qualified nonelective contributions and
earnings thereon.
9. In-service withdrawals permitted only in the event of
(choose (a) and/or (b)):
(a) Hardship.
(b) Attainment of age 59-1/2%.
10. No in-service withdrawals shall be allowed.
11
B. Notwithstanding any elections made in Subsection A of this
Section X above, the following portions of a Member's Account
shall be excluded from eligibility for in-service withdrawals
(choose whichever shall apply):
1. Employer contributions, and the earnings thereon,
credited to the Employer Stock Fund.
2. All contributions and/or deferrals, and the earnings
thereon, credited to the Employer Stock Fund.
3. Other:
XI. DISTRIBUTION OPTION (CHOOSE 1 OR 2)
1. Lump Sum and partial lump sum payments only.
2. X Lump Sum and partial lump sum payments plus one or
more of the following (choose (a) and/or (b)):
(a) X Installment payments.
(b) Annuity payments.
XII. LOAN PROGRAM (CHOOSE 1, 2 OR 3)
1. No loans will be permitted from the Plan.
2. X Loans will be permitted from the Member's Account.
3. Loans will be permitted from the Member's Account,
EXCLUDING choose whichever shall apply):
(a) Employer Profit sharing
contributions and the earnings
thereon.
(b) Employer matching contributions and
the earnings thereon.
(c) Employer basic contributions and the
earnings thereon.
(d) Employer supplemental contributions
and the earnings thereon.
(e) Employee after-tax contributions and
the earnings thereon.
(f) Employee pre-tax elective deferrals
and the earnings thereon.
(g) Employee rollover contributions and
the earnings thereon.
(h) Employer qualified nonelective
contributions and the earnings
thereon.
(i) X Any amounts to the extent invested
in the Employer stock fund.
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XIII. ADDITIONAL INFORMATION
If additional space is needed to select or describe an elective feature
of the Plan, the Employer should attach additional pages and use the
following format:
The following is hereby made a part of Section __ of the Adoption
Agreement and is thus incorporated into and made a part of the [Plan
Name]
Signature of Employer's Authorized Representative
Signature of Trustee
Trustee Supplementary Page - of [total number of pages].
XIV. PLAN ADMINISTRATOR
The Named Plan Administrator under the Plan shall be the (choose 1, 2,
3 or 4):
Note: Pentegra Services, Inc. may not be appointed Plan Administrator.
1. X Employer
2. Employer's Board of Directors
3. Plan's Administrative Committee
4. Other (if chosen, then provide the following information)
Name:
Address:
Tel No.
Contact:
NOTE: IF NO NAMED PLAN ADMINISTRATOR IS DESIGNATED ABOVE, THE
EMPLOYER SHALL BE DEEMED THE NAMED PLAN ADMINISTRATOR.
XV. TRUSTEE
The Employer hereby appoints the following person or entity to serve as
Trustee under the Plan:
==========================================================================================================================
Name: Mellon Bank ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Address: ▇ ▇▇▇▇▇ ▇▇▇▇ c/o Riverview Savings Bank, FSB
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------------------------------
Tel No. ▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------------------------------------------------
Contact: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
==========================================================================================================================
13
EXECUTION OF ADOPTION AGREEMENT
By execution of this Adoption Agreement by a duly authorized representative of
the Employer, the Employer acknowledges that it has established or, as the case
may be, amended a tax-qualified retirement plan into the Riverview Savings Bank,
FSB Employees' Savings & Profit Sharing Plan and Trust (the "Plan"). The
Employer hereby represents and agrees that it will assume full fiduciary
responsibility for the operation of the Plan and for complying with all duties
and requirements imposed under applicable law, including, but not limited to,
the Employee Retirement Income Security Act of 1974, as amended, and the
Internal Revenue Code of 1986, as amended. In addition, the Employer represents
and agrees that it will accept full responsibility of complying with any
applicable requirements of federal or state securities law as such laws may
apply to the Plan and to any investments thereunder. The Employer further
acknowledges that any opinion letter issued with respect to the Adoption
Agreement and the Agreement by the Internal Revenue Service ("IRS") to Pentegra
Services, Inc., as sponsor of the Employees' Savings & Profit Sharing Plan, does
not constitute a ruling or a determination with respect to the tax-qualified
status of the Plan and that the appropriate application must be submitted to the
IRS in order to obtain such a ruling or determination with respect to the Plan.
THE FAILURE TO PROPERLY COMPLETE THE ADOPTION AGREEMENT MAY RESULT IN
DISQUALIFICATION OF THE PLAN AND TRUST EVIDENCED THEREBY.
The Sponsor will inform the Employer of any amendments to the Plan or Trust
Agreement or of the discontinuance or abandonment of the Plan or Trust.
Any inquiries regarding the adoption of the Plan should be directed to the
Sponsor as follows:
Pentegra Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed by its duly authorized officer this 13th day of March , 19 97 .
Riverview Savings Bank, FSB
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chairman of the Board/President/CEO
14
PENTEGRA SERVICES, INC.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
BASIC PLAN DOCUMENT
PENTEGRA
4/13/95
TABLE OF CONTENTS
ARTICLE I PURPOSE AND DEFINITIONS
ARTICLE II PARTICIPATION AND MEMBERSHIP
ARTICLE III CONTRIBUTIONS
ARTICLE IV INVESTMENT OF CONTRIBUTIONS
ARTICLE V MEMBERS' ACCOUNTS, UNITS AND VALUATION
ARTICLE VI VESTING OF UNITS
ARTICLE VII WITHDRAWALS AND DISTRIBUTIONS
ARTICLE VIII LOAN PROGRAM
ARTICLE IX ADMINISTRATION OF PLAN AND ALLOCATION OF
RESPONSIBILITIES
ARTICLE X MISCELLANEOUS PROVISIONS
ARTICLE XI AMENDMENT AND TERMINATION
TRUSTS ESTABLISHED UNDER THE PLAN
ARTICLE I
PURPOSE AND DEFINITIONS
SECTION 1.1
This Plan and Trust, as evidenced hereby, and the applicable Adoption Agreement
and Trust Agreement(s), are designed and intended to qualify in form as a
qualified profit sharing plan and trust under the applicable provisions of the
Internal Revenue Code of 1986, as now in effect or hereafter amended, or any
other applicable provisions of law including, without limitation, the Employee
Retirement Income Security Act of 1974, as amended.
SECTION 1.2
The following words and phrases as used in this Plan shall have the following
meanings:
(A) "ACCOUNT" means the Plan account established and maintained in
respect of each Member pursuant to Article V, including the
Member's after-tax amounts, 401(k) amounts, Employer matching,
basic, supplemental and qualified nonelective contribution
amounts, rollover amounts and profit sharing amounts, as
elected by the Employer.
(B) "ADOPTION AGREEMENT" means the separate document by which the
Employer has adopted the Plan and specified certain of the
terms and provisions hereof. If any term, provision or
definition contained in the Adoption Agreement is inconsistent
with any term, provision or definition contained herein, the
one set forth in the Adoption Agreement shall govern. The
Adoption Agreement shall be incorporated into and form an
integral part of the Plan.
(C) "BENEFICIARY" means the person or persons designated to
receive any amount payable under the Plan upon the death of a
Member. Such designation may be made or changed only by the
Member on a form provided by, and filed with, the TPA prior to
his death. If the Member is not survived by a Spouse and if no
Beneficiary is designated, or if the designated Beneficiary
predeceases the Member, then any such amount payable shall be
paid to such Member's estate upon his death.
(D) "BOARD" means the Board of Directors of the Employer adopting
the Plan.
(E) "BREAK IN SERVICE" means a Plan Year during which an
individual has not completed more than 500 Hours of
Employment, as determined by the Plan Administrator in
accordance with the IRS Regulations. Solely for purposes of
determining whether a Break in Service has occurred, an
individual shall be credited with the Hours of Employment
which such individual would have completed but for a maternity
or paternity absence, as determined by the Plan Administrator
in accordance with this Paragraph, the Code and the applicable
regulations issued by the DOL and the IRS; provided, however,
that the total Hours of Employment so credited shall not
exceed 501 and the individual timely provides the Plan
Administrator with such information as it may require. Hours
of Employment credited for a maternity or paternity absence
shall be credited entirely (i) in the Plan Year in which the
absence began if such Hours of Employment are necessary to
prevent a Break in Service in such year, or (ii) in the
following Plan Year. For purposes
1
of this Paragraph, maternity or paternity absence shall mean
an absence from work by reason of the individual's pregnancy,
the birth of the individual's child or the placement of a
child with the individual in connection with the adoption of
the child by such individual, or for purposes of caring for a
child for the period immediately following such birth or
placement.
(F) "CODE" means the Internal Revenue Code of 1986, as now in
effect or as hereafter amended. All citations to sections of
the Code are to such sections as they may from time to time be
amended or renumbered.
(G) "COMMENCEMENT DATE" means the date on which an Employer begins
to participate in the Plan.
(H) "CONTRIBUTION DETERMINATION PERIOD" means the Plan Year,
fiscal year, or calendar or fiscal quarter, as elected by an
Employer, upon which eligibility for and the maximum
permissible amount of any Profit Sharing contribution, as
defined in Article III, is determined. Notwithstanding the
foregoing, for purposes of Article VI, Contribution
Determination Period means the Plan Year.
(I) "DISABILITY" means a Member's disability as defined in Article
VII, Section 7.4.
(J) "DOL" means the United States Department of Labor.
(K) "EMPLOYEE" means any person in the Employment of, and who
receives compensation from, the Employer, and any leased
employee within the meaning of Section 414(n)(2) of the Code.
Notwithstanding the foregoing, if such leased employees
constitute less than twenty percent (20%) of the Employer's
nonhighly compensated work force within the meaning of Section
414(n)(5)(C)(ii) of the Code, such leased employees are not
Employees if they are covered by a plan meeting the
requirements of Section 414(n)(5)(B) of the Code.
(L) "EMPLOYER" means the proprietorship, partnership or
corporation named in the Adoption Agreement and any
corporation which, together therewith, constitutes an
affiliated service group, any corporation which, together
therewith, constitutes a controlled group of corporations as
defined in Section 1563 of the Code, and any other trade or
business (whether incorporated or not) which, together
therewith, are under common control as defined in Section
414(c) of the Code, which have adopted the Plan.
(M) "EMPLOYMENT" means service with an Employer or with any
domestic subsidiary affiliated or associated with an Employer
which is a member of the same controlled group of corporations
(within the meaning of Section 1563(a) of the Code). In
accordance with DOL Regulations (Sections 2530.200-2(b) and
(c)), service includes (a) periods of vacation, (b) periods of
layoff, (c) periods of absence authorized by an Employer for
sickness, temporary disability or personal reasons and (d) if
and to the extent required by the Military Selective Service
Act as amended, or any other federal law, service in the Armed
Forces of the United States.
2
(N) "ENROLLMENT DATE" means the date on which an Employee becomes
a Member as provided under Article II.
(O) "ERISA" means the Employee Retirement Income Security Act of
1974, as now in effect or as hereafter amended.
(P) "FIDUCIARY" means any person who (i) exercises any
discretionary authority or control with respect to the
management of the Plan or control with respect to the
management or disposition of the assets thereof, (ii) renders
any investment advice for a fee or other compensation, direct
or indirect, with respect to any moneys or other property of
the Plan, or has any discretionary authority or responsibility
to do so, or (iii) has any discretionary authority or
responsibility in the administration of the Plan, including
any other persons (other than trustees) designated by any
Named Fiduciary to carry out fiduciary responsibilities,
except to the extent otherwise provided by ERISA.
(Q) "HIGHLY COMPENSATED EMPLOYEE" or "HIGHLY COMPENSATED MEMBER"
means an Employee or Member who is employed 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 as defined in
Section 414(q) of the Code; or (iii) was an officer of the
Employer and received compensation during such year that is
greater than 50 percent of the dollar limitation in effect
under Section 415(b)(1 )(A) of the Code. The term Highly
Compensated Employee also includes: (i) employees who are both
described in the preceding sentence if the term "determination
year" is substituted for the term "look-back year" and are
among the 100 employees who received the most compensation
from the Employer during the determination year; and (ii)
employees who are 5 percent 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.
For this purpose, the determination year shall be the Plan
Year. The look-back year shall be the twelve-month period
immediately preceding the determination year.
If an Employee is, during a determination year or look-back
year, a family member of either a 5 percent owner who is an
active or former Employee or a Highly Compensated Employee who
is one of the 10 most highly compensated Employees ranked on
the basis of compensation paid by the Employer during such
year, then the family member and the 5 percent owner or
top-ten Highly Compensated Employee shall be aggregated. In
such case, the family member and 5 percent owner or top-ten
Highly Compensated Employee shall be treated as a single
Employee receiving compensation and plan contributions or
benefits equal to the sum of such compensation and
contributions or benefits of the family member and 5 percent
owner or top-ten Highly Compensated Employee. For purposes of
this Paragraph, family member includes the spouse, lineal
ascendants and descendants of
3
the Employee or former Employee and the spouses of such
lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of
Employees in the top-paid group, the top 100 Employees, the
number of Employees treated as officers and the compensation
that is considered, will be made in accordance with Section
414(q) of the Code and the IRS Regulations thereunder.
(R) "HOUR OF EMPLOYMENT" means each hour during which an Employee
performs service (or is treated as performing service as
required by law) for the Employer and, except in the case of
military service, for which he is directly or indirectly paid,
or entitled to payment, by the Employer (including any back
pay irrespective of mitigation of damages), all as determined
in accordance with applicable DOL Regulations.
(S) "INVESTMENT MANAGER" means any Fiduciary other than a Trustee
or Named Fiduciary who (i) has the power to manage, acquire or
dispose of any asset of the Plan; (ii) is (a) registered as an
investment advisor under the Investment Advisors Act of 1940;
(b) is a bank, as defined in such Act, or (c) is an insurance
company qualified to perform the services described in clause
(i) hereof under the laws of more than one state of the United
States; and (iii) has acknowledged in writing that he is a
Fiduciary with respect to the Plan.
(T) "IRS" means the United States Internal Revenue Service.
(U) "LEAVE OF ABSENCE" means an absence authorized by an
Employee's Employer and approved by the Plan Administrator, on
a uniform basis, in accordance with Article X.
(V) "MEMBER" means an Employee enrolled in the membership of the
Plan under Article II.
(W) "MONTH" means any calendar month.
(X) "NAMED FIDUCIARY" means the Fiduciary or Fiduciaries named
herein or in the Adoption Agreement who jointly or severally
have the authority to control and manage the operation and
administration of the Plan.
(Y) "NORMAL RETIREMENT AGE" means the Member's sixty-fifth (65th)
birthday unless otherwise specified in the Adoption Agreement.
(Z) "PLAN" means the Employees' Savings & Profit Sharing Plan as
evidenced by this document, the applicable Adoption Agreement
and all subsequent amendments thereto.
(AA) "PLAN ADMINISTRATOR" means the Named Fiduciary or, as
designated by such Named Fiduciary and approved by the Board
in accordance with Article IX, any officer or Employee of the
Employer.
(BB) "PLAN YEAR" means a 12-month period ending December 31.
4
(CC) "REGULATIONS" means the applicable regulations issued under
the Code, ERISA or other applicable law, by the IRS, the DOL
or any other governmental authority and any proposed or
temporary regulations or rules promulgated by such authorities
pending the issuance of such regulations.
(DD) "SALARY" means regular basic monthly salary or wages,
exclusive of special payments such as overtime, bonuses, fees,
deferred compensation (other than pre-tax elective deferrals
pursuant to a Member's election under Article III), severance
payments, and contributions by the Employer under this or any
other plan (other than before-tax contributions made on behalf
of a Member under a Code Section 125 cafeteria plan, unless
the Employer specifically elects to exclude such
contributions). Commissions shall be included at the
Employer's option within such limits, if any, as may be set by
the Employer in the Adoption Agreement and applied uniformly
to all its commissioned Employees. In addition, Salary may
also include, at the Employer's option, special payments such
as (i) overtime or (ii) overtime plus bonuses. As an
alternative to the foregoing definition, at the Employer's
option, Salary may be defined to include total taxable
compensation reported on the Member's IRS Form W-2, plus
deferrals, if any, pursuant to Section 401(k) of the Code and
pursuant to Section 125 of the Code (unless the Employer
specifically elects to exclude such Section 125 deferrals),
but excluding compensation deferred from previous years. In no
event may a Member's Salary for any Plan Year exceed for
purposes of the Plan $150,000 (adjusted for cost of living to
the extent permitted by the Code and the IRS Regulations).
(EE) "SOCIAL SECURITY TAXABLE WAGE BASE" means the contribution and
benefit base attributable to the OASDI portion of Social
Security employment taxes under Section 230 of the Social
Security Act (42 U.S.C. ss.430) in effect on the first day of
each Plan Year.
(FF) "SPOUSE" or "SURVIVING SPOUSE" means the individual to whom a
Member or former Member was married on the date such Member
withdraws his Account, or if such Member has not withdrawn his
Account, the individual to whom the Member or former Member
was married on the date of his death.
(GG) "THIRD PARTY ADMINISTRATOR" or "TPA" means Pentegra Services,
Inc., a non-fiduciary provider of administrative services
appointed and directed by the Plan Administrator or the Named
Fiduciary either jointly or severally.
(HH) "TRUST" means the Trust or Trusts established and maintained
pursuant to the terms and provisions of this document and any
separately maintained Trust Agreement or Agreements.
(II) "TRUSTEE" generally means the person, persons or other
entities designated by the Employer or its Board as the
Trustee or Trustees hereof and specified as such in the
Adoption Agreement and any separately maintained Trust
Agreement or Agreements.
(JJ) "TRUST AGREEMENT" means the separate document by which the
Employer or its Board has appointed a Trustee of the Plan,
specified the terms and conditions of such appointment and any
fees associated therewith.
5
(KK) "TRUST FUND" means the Trust Fund or Funds established by the
Trust Agreement or Agreements.
(LL) "UNIT" means the unit of measure described in Article V of a
Member's proportionate interest in the available Investment
Funds (as defined in Article IV).
(MM) "VALUATION DATE" means the last business day of any month for
the Trustee, except that in the event the underlying
portfolio(s) of any Investment Fund cannot be valued on such
date, the Valuation Date for such Investment Fund shall be the
next subsequent date on which the underlying portfolio(s) can
be valued. Valuations shall be made as of the close of
business on such Valuation Date(s).
(NN) "YEAR OF EMPLOYMENT" means a 12-month period of Employment.
(OO) "YEAR OF SERVICE" means any Plan Year during which an
individual completed at least 1,000 Hours of Employment, or
satisfied any alternative requirement, as determined by the
Plan Administrator in accordance with any applicable
Regulations issued by the DOL and the IRS.
SECTION 1.3
The masculine pronoun wherever used shall include the feminine pronoun.
6
ARTICLE II
PARTICIPATION AND MEMBERSHIP
SECTION 2.1 ELIGIBILITY REQUIREMENTS
The Employer may establish as a requirement for eligibility in the Plan (i) the
completion of any number of months not to exceed 12 consecutive months, or (ii)
the completion of one or two 12- consecutive-month periods, and/or (iii) if the
Employer so elects, it may adopt a minimum age requirement of age 21. Such
election shall be made and reflected on the Adoption Agreement. The eligibility
requirement(s) designated by the Employer shall apply uniformly to all Plan
features elected by the Employer. Notwithstanding the foregoing, in the case of
an Employer that adopts the 401(k) feature under Section 3.9, the eligibility
requirements under such feature and any other Plan feature adopted by the
Employer shall be identical and shall not exceed the period described in clause
(i) above, and, at the election of the Employer, attainment of age 21 as
described in clause (iii) above.
Where an Employer designates a one or two 1 2-consecutive-month eligibility
waiting period, an Employee must complete at least 1,000 Hours of Employment
during each 1 2-consecutive-month period (measured from his date of Employment
and each anniversary thereafter). Where an Employer designates an eligibility
waiting period of less than 12 months, an Employee must, for purposes of
eligibility, complete a required number of hours (measured from his date of
Employment and each anniversary thereafter) which is arrived at by multiplying
the number of months of the eligibility waiting period requirement by 83 1/3.
SECTION 2.2 EXCLUSION OF CERTAIN EMPLOYEES
To the extent provided in the Adoption Agreement, the following Employees may be
excluded from participation in the Plan:
(i) Employees not meeting the age and service requirements;
(ii) Employees who are included in a unit of Employees covered by a
collective bargaining agreement between the Employee
representatives and one or more Employers if there is evidence
that retirement benefits were the subject of good faith
bargaining between such Employee representatives and such
Employer(s). For this purpose, the term "Employee
representative" does not include any organization where more
than one-half of the membership is comprised of owners,
officers and executives of the Employer;
(iii) Employees who are nonresident aliens and who receive no earned
income from the Employer which constitutes income from sources
within the United States; and
(iv) Employees described in Section 2.4 or included in any other
ineligible job classifications set forth in the Adoption
Agreement.
SECTION 2.3 WAIVER OF ELIGIBILITY REQUIREMENTS
The Employer, at its election, may waive the eligibility requirement(s) for
participation specified above for (i) all Employees, or (ii) all those employed
on or up to 12 months after its Commencement Date
7
under the Plan. Subject to the requirements of the Code, the eligibility waiting
period shall be deemed to have been satisfied for an Employee who was previously
a Member of the Plan.
All Employees whose Employment commences after the expiration date of the
Employer's waiver of the eligibility requirement(s), if any, shall be enrolled
in the Plan in accordance with the eligibility requirement(s) specified in the
Adoption Agreement.
SECTION 2.4 EXCLUSION OF NON-SALARIED EMPLOYEES
The Employer, at its election, may exclude non-salaried (hourly paid) Employees
from participation in the Plan, regardless of the number of Hours of Employment
such Employees complete in any Plan Year. Notwithstanding the foregoing, for
purposes of this Section and all purposes under the Plan, a non-salaried
Employee that is hired following the adoption date of the Plan by the Employer,
but prior to the adoption of this exclusion by the Employer, shall continue to
be deemed to be an Employee and will continue to receive benefits on the same
basis as a salaried Member, despite classification as a non-salaried Employee.
SECTION 2.5 COMMENCEMENT OF PARTICIPATION
Every eligible Employee (other than non-salaried or such other Employees who, at
the election of the Employer, are excluded from participation) shall commence
participation in the Plan on the later of:
(1) The Employer's Commencement Date, or
(2) The first day of the month or calendar quarter (as designated
by the Employer in the Adoption Agreement) coinciding with or
next following his satisfaction of the eligibility
requirements as specified in the Adoption Agreement.
The date that participation commences shall be hereinafter referred to as his
Enrollment Date. Notwithstanding the above, no Employee shall under any
circumstances become a Member unless and until his enrollment application is
filed with, and accepted by, the Plan Administrator. The Plan Administrator
shall notify each Employee of his eligibility for membership in the Plan and
shall furnish him with an enrollment application in order that he may elect to
make or receive contributions on his behalf under Article III at the earliest
possible date consonant with this Article.
If an Employee fails to complete the enrollment form furnished to him, the Plan
Administrator shall do so on his behalf. In the event the Plan Administrator
processes the enrollment form on behalf of the Employee, the Employee shall be
deemed to have elected not to make any contributions and/or elective deferrals
under the Plan, if applicable.
SECTION 2.6 TERMINATION OF PARTICIPATION
Membership under all features and provisions of the Plan shall terminate upon
the earlier of (a) a Member's termination of Employment and payment to him of
his entire vested interest, or (b) his death.
8
ARTICLE III
CONTRIBUTIONS
SECTION 3.1 CONTRIBUTIONS BY MEMBERS
If the Adoption Agreement so provides, each Member may elect to make monthly
non-deductible, after-tax contributions under the Plan, based on increments of
1% of his Salary, provided the amount thereof, when aggregated with the amount
of any pre-tax effective deferrals, does not exceed the limit established by the
Employer in the Adoption Agreement. All such after-tax contributions shall be
separately accounted for, nonforfeitable and distributed with and in addition to
any other benefit to which the Member is entitled hereunder. A Member may change
his contribution rate as designated in the Adoption Agreement, but reduced or
suspended contributions may not subsequently be made up.
SECTION 3.2 ELECTIVE DEFERRALS BY MEMBERS
If the Adoption Agreement so provides, each Member may elect to make monthly
pre-tax elective deferrals (401(k) deferrals) under the Plan, based on
increments of 1% of his Salary, provided the amount thereof, when aggregated
with the amount of any after-tax contributions, does not exceed the limit
established by the Employer in the Adoption Agreement. All such 401(k) deferrals
shall be separately accounted for, nonforfeitable and distributed under the
terms and conditions described under Article VII with and in addition to any
other benefit to which the Member is entitled hereunder. A Member may change his
401(k) deferral rate or suspend his 401(k) deferrals as designated in the
Adoption Agreement, but reduced or suspended deferrals may not subsequently be
made up.
Notwithstanding any other provision of the Plan, no Member may make 401(k)
deferrals during any Plan Year in excess of $7,000 multiplied by the adjustment
factor as provided by the Secretary of the Treasury. The adjustment factor shall
mean the cost of living adjustment factor prescribed by the Secretary of the
Treasury under Section 402(g)(5) of the Code for years beginning after December
31, 1987, as applied to such items and in such manner as the Secretary shall
provide. In the event that the aggregate amount of such 401(k) deferrals for a
Member exceeds the limitation in the previous sentence, the amount of such
excess, increased by any income and decreased by any losses attributable
thereto, shall be refunded to such Member no later than the April 15 of the Plan
Year following the Plan Year for which the 401(k) deferrals were made. If Member
also participates, in any Plan Year, in any other plans subject to the
limitations set forth in Section 402(g) of the Code and has made excess 401(k)
deferrals under this Plan when combined with the other plans subject to such
limits, to the extent the Member, in writing submitted to the TPA no later than
the March 1 of the Plan Year following the Plan Year for which the 401(k)
deferrals were made, designates any 401(k) deferrals under this Plan as excess
deferrals, the amount of such designated excess, increased by any income and
decreased by any losses attributable thereto, shall be refunded to the Member no
later than the April 15 of the Plan Year following the Plan Year for which the
401(k) deferrals were made.
SECTION 3.3 TRANSFER OF FUNDS AND ROLLOVER CONTRIBUTIONS BY MEMBERS
Each Member may elect to make, directly or indirectly, a rollover contribution
to the Plan of amounts held on his behalf in (i) an employee benefit plan
qualified under Section 401(a) of the Code, or (ii) an individual retirement
account or annuity as described in Section 408(d)(3) of the Code. All such
amounts shall be certified in form and substance satisfactory to the Plan
Administrator by the Member as being all
9
or part of an "eligible rollover distribution" or a "rollover contribution"
within the meaning of Section 402(c)(4) or Section 408(d)(3), respectively, of
the Code. Such rollover amounts, along with the earnings related thereto, will
be accounted for separately from any other amounts in the Member's Account. A
Member shall have a nonforfeitable vested interest in all such rollover amounts.
The Employer may, at its option, permit Employees who have not satisfied the
eligibility requirements designated in the Adoption Agreement to make a rollover
contribution to the Plan.
The Trustee of the Plan may also accept a direct transfer of funds, which meets
the requirements of Section 1.411(d)-4 of the IRS Regulations, from a plan which
the Trustee reasonably believes to be qualified under Section 401(a) of the Code
in which an Employee was, is, or will become, as the case may be, a participant.
If the funds so directly transferred are transferred from a retirement plan
subject to Code Section 401(a)(11), then such funds shall be accounted for
separately and any subsequent distribution of those funds, and earnings thereon,
shall be subject to the provisions of Section 7.3 which are applicable when an
Employer elects to provide an annuity option under the Plan.
SECTION 3.4 EMPLOYER CONTRIBUTIONS - GENERAL
The Employer may elect to make regular or discretionary contributions under the
Plan. Such Employer contributions may be in the form of (i) matching
contributions, (ii) basic contributions, and/or (iii) profit sharing
contributions as designated by the Employer in the Adoption Agreement and/or (i)
supplemental contributions and/or (ii) qualified nonelective contributions as
permitted under the Plan. Each such contribution type shall be separately
accounted for by the TPA.
SECTION 3.5 EMPLOYER MATCHING CONTRIBUTIONS
The Employer may elect to make regular matching contributions under the Plan.
Such matching contributions on behalf of any Member shall be conditioned upon
the Member making after-tax contributions under Section 3.1 and/or 401(k)
deferrals under Sections 3.2 and 3.9.
If so adopted, the Employer shall contribute monthly under the Plan on behalf of
each of its Members an amount equal to a percentage (as specified by the
Employer in the Adoption Agreement) of the Member's after-tax contributions
and/or 401(k) deferrals not in excess of a maximum percentage as specified by
the Employer in the Adoption Agreement (in increments of 1%) of his Salary for
such month. The percentage elected by the Employer shall be based on 5%
increments not to exceed 200% or in accordance with one of the schedules of
matching contribution formulas listed below, and must be uniformly applicable to
all Members.
Years of Employment Matching %
Formula Step 1 Less than 3 50%
At least 3 but less than 5 75%
5 or more 100%
Formula Step 2 Less than 3 100%
At least 3 but less than 5 150%
5 or more 200%
10
SECTION 3.6 EMPLOYER BASIC CONTRIBUTIONS
The Employer may elect to make regular basic contributions under the Plan. Such
basic contributions on behalf of any Member shall not be conditioned upon the
Member making after-tax contributions and/or (401(k) deferrals under this
Article III. If so adopted, the Employer shall contribute monthly under the Plan
on behalf of each Member (as specified by the Employer in the Adoption
Agreement) an amount equal to a percentage not to exceed 15% (as specified by
the Employer in the Adoption Agreement) in increments of 1% of the Member's
Salary for such month. The percentage elected by the Employer shall be uniformly
applicable to all Members. The Employer may elect to restrict the allocation of
such basic contribution to those Members who were employed with the Employer on
the last day of the month for which the basic contribution is made.
SECTION 3.7 SUPPLEMENTAL CONTRIBUTIONS BY EMPLOYER
An Employer may, at its option, make a supplemental contribution under Formula
(1) or (2) below:
FORMULA (1) A uniform percentage (as specified by the Employer) of
each Member's contributions which were received by the Plan
during the Plan Year with respect to which the supplemental
contribution relates. If the Employer elects to make such a
supplemental contribution, it shall be made on or before the
last day of February in the Plan Year following the Plan Year
described in the preceding sentence on behalf of all those
Members who were employed with the Employer on the last
working day of the Plan Year with respect to which the
supplemental contribution relates.
FORMULA (2) A uniform dollar amount per Member or a uniform percentage of
each Member's Salary for the Plan Year (or, at the election of
the Employer, the Employer's fiscal year) to which the
supplemental contribution relates. If the Employer elects to
make such a supplemental contribution, it shall be made on or
before the last day of the second month in the Plan Year (or
the fiscal year) following the Plan Year (or the fiscal year)
described in the preceding sentence on behalf of all those
Members who were employed with the Employer on the last
working day of the Plan Year (or the fiscal year) to which the
supplemental contribution relates. The percentage contributed
under this Formula (2) shall be limited in accordance with the
Employer's matching formula and basic contribution rate, if
any, under this Article such that the sum of the Employer's
Formula (2) supplemental contribution plus all other Employer
contributions under this Article shall not exceed 15% of
Salary for such year.
SECTION 3.8 THE PROFIT SHARING FEATURE
An Employer may, at its option, adopt the Profit Sharing Feature as described
herein, subject to any other provisions of the Plan, where applicable. This
Feature may be adopted either in lieu of, or in addition to, any other Plan
Feature contained in this Article III. The Profit Sharing Feature is designed to
provide the Employer a means by which to provide discretionary contributions on
behalf of Employees eligible under the Plan.
If this Profit Sharing Feature is adopted, the Employer may contribute on behalf
of each of its eligible Members, on an annual (or at the election of the
Employer, quarterly) basis for any Plan Year or fiscal year of the Employer (as
the Employer shall elect), a discretionary amount not to exceed the maximum
11
amount allowable as a deduction to the Employer under the provisions of Section
404 of the Code, and further subject to the provisions of Article X.
Any such profit sharing contribution must be received by the Trustee on or
before the last business day of the second month following the close of the
Contribution Determination Period on behalf of all those Members who are
entitled to an allocation of such profit sharing contribution as set forth in
the Adoption Agreement. For purposes of making the allocations described in this
paragraph, a Member who is on a Type 1 non-military Leave of Absence (as defined
in Sections 1.2(U) and 10.8(B)(1)) or a Type 4 military Leave of Absence (as
defined in Sections 1.2(U) and 10.8(B)(4)) shall be treated as if he were a
Member who was an Employee in Employment on the last day of such Contribution
Determination Period.
Profit sharing contributions shall be allocated to each Member's Account for the
Contribution Determination Period at the election of the Employer, in accordance
with one of the following options:
Profit Sharing Formula 1 - In the same ratio as each Member's Salary
during such Contribution Determination
Period bears to the total of such Salary of
all Members.
Profit Sharing Formula 2 - In the same ratio as each Member's Salary
for the portion of the Contribution
Determination Period during which the Member
satisfied the Employer's eligibility
requirement(s) bears to the total of such
Salary of all Members.
The Employer may integrate the Profit Sharing Feature with Social Security in
accordance with the following provision. The annual (or quarterly, if
applicable) profit sharing contributions for any Contribution Determination
Period (which period shall include, for the purposes of the following maximum
integration levels provided hereunder where the Employer has elected quarterly
allocations of contributions, the four quarters of a Plan Year or fiscal year)
shall be allocated to each Member's Account at the election of the Employer, in
accordance with one of the following options:
Profit Sharing Formula 3 - In a uniform percentage (as specified by the
Employer in the Adoption Agreement) of each
Member's Salary during the Contribution
Determination Period up to the Social
Security Taxable Wage Base for such
Contribution Determination Period (the "Base
Contribution Percentage"), plus a uniform
percentage (as specified by the Employer in
the Adoption Agreement) of each Member's
Salary for the Contribution Determination
Period in excess of the Social Security
Taxable Wage Base for such Contribution
Determination Period (the "Excess
Contribution Percentage").
Profit Sharing Formula 4 - In a uniform percentage (as specified by the
Employer in the Adoption Agreement) of each
Member's Salary for the portion of the
Contribution Determination Period during
which the Member satisfied the Employer's
eligibility requirement(s), if any, up to
the Base Contribution Percentage for such
Contribution Determination Period, plus a
uniform percentage (as specified by the
Employer in the Adoption Agreement) of each
Member's Salary for the portion of the
Contribution Determination Period during
which the Member satisfied the Employer's
eligibility requirement(s), equal to the
Excess Contribution Percentage.
12
The Excess Contribution Percentage described in Profit Sharing Formulas 3 and 4
above may not exceed the lesser of (i) the Base Contribution Percentage, or (ii)
the greater of (1) 5.7% or (2) the percentage equal to the portion of the Code
Section 3111(a) tax imposed on employers under the Federal Insurance
Contributions Act (as in effect as of the beginning of the Plan Year) which is
attributable to old-age insurance. For purposes of this Subparagraph,
"compensation" as defined in Section 414(s) of the Code shall be substituted for
"Salary" in determining the Excess Contribution Percentage and the Base
Contribution Percentage.
Notwithstanding the foregoing, the Employer may not adopt the Social Security
integration options provided above if any other integrated defined contribution
or defined benefit plan is maintained by the Employer during any Contribution
Determination Period.
SECTION 3.9 THE 401(K) FEATURE
The Employer may, at its option, adopt the 401(k) Feature described hereunder
and in Section 3.2 above for the exclusive purpose of permitting its Members to
make 401(k) deferrals to the Plan.
The Employer may make, apart from any matching contributions it may elect to
make, Employer qualified nonelective contributions as defined in Section
1.401(k)-1(g)(13) of the Regulations. The amount of such contributions shall not
exceed 15% of the Salary of all Members eligible to share in the allocation when
combined with all Employer contributions (including 401(k) elective deferrals)
to the Plan for such Plan Year. Allocation of such contributions shall be made,
at the election of the Employer, to the accounts of (i) all Members, or (ii)
only Members who are not Highly Compensated Employees. Allocation of such
contributions shall be made, at the election of the Employer, in the ratio (i)
which each eligible Member's Salary for the Plan Year bears to the total Salary
of all eligible Members for such Plan Year, or (ii) which each eligible Member's
Salary not in excess of a fixed dollar amount specified by the Employer for the
Plan Year bears to the total Salary of all eligible Members taking into account
Salary for each such Member not in excess of the specified dollar amount.
Notwithstanding any provision of the Plan to the contrary, such contributions
shall be subject to the same vesting requirements and distribution restrictions
as Members' 401(k) deferrals and shall not be conditioned on any election or
contribution of the Member under the 401 (k) feature. Any such contributions
must be made on or before the last day of the February after the Plan Year to
which the contribution relates. Further, for purposes of the actual deferral
percentage or actual contribution percentage tests described below, the Employer
may apply (in accordance with applicable Regulations) all or any portion of the
Employer qualified nonelective contributions for the Plan Year toward the
satisfaction of the actual deferral percentage test. Any remaining Employer
qualified nonelective contributions not utilized to satisfy the actual deferral
percentage test may be applied (in accordance with applicable Regulations) to
satisfy the actual contribution percentage test.
Notwithstanding any other provision of this 401(k) Feature, the actual deferral
percentages for the Plan Year for Highly Compensated Employees shall not exceed
the greater of the following actual deferral percentages: (a) the actual
deferral percentage for such Plan Year of those Employees who are not Highly
Compensated Employees multiplied by 1.25; or (b) the actual deferral percentage
for the Plan Year of those Employees who are not Highly Compensated Employees
multiplied by 2.0, provided that the actual deferral percentage for the Highly
Compensated Employees does not exceed the actual deferral percentage for such
other Employees by more than 2 percentage points. This determination shall be
made in accordance with the procedure described in Section 3.10 below.
13
SECTION 3.10 DETERMINING THE ACTUAL DEFERRAL PERCENTAGES
For purposes of this 401(k) Feature, the "actual deferral percentage" for a Plan
Year means, for each specified group of Employees, the average of the ratios
(calculated separately for each Employee in such group) of (a) the amount of
401(k) deferrals (including, as provided in Section 3.9, any Employer qualified
nonelective contributions) made to the Member's account for the Plan Year, to
(b) the amount of the Member's compensation (as defined in Section 414(s) of the
Code) for the Plan Year or, alternatively, where specifically elected by the
Employer, for only that part of the Plan Year during which the Member was
eligible to participate in the Plan. An Employee's actual deferral percentage
shall be zero if no 401(k) deferral (or, as provided in Section 3.9, Employer
qualified nonelective contribution) is made on his behalf for such Plan Year. If
the Plan and one or more other plans which include cash or deferred arrangements
are considered as one plan for purposes of Sections 401(a)(4) and 410(b) of the
Code, the cash or deferred arrangements included in such plans shall be treated
as one arrangement for purposes of this 401(k) Feature.
For purposes of determining the actual deferral percentage of a Member who is a
Highly Compensated Employee subject to the family aggregation rules of Section
414(q)(6) of the Code because such Employee is either a five-percent owner or
one of the ten most Highly Compensated Employees as described in Section
414(q)(6) of the Code, the 401(k) deferrals, contributions and compensation (as
defined in Section 414(s) of the Code) of such Member shall include 401(k)
deferrals, contributions and compensation (as defined in Section 414(s) of the
Code) of "family members", within the meaning of Section 414(q)(6) of the Code,
and such "family members" shall not be considered as separate Employees in
determining actual deferral percentages.
The TPA shall determine as of the end of the Plan Year whether one of the actual
deferral percentage tests specified in Section 3.9 above is satisfied for such
Plan Year. This determination shall be made after first determining the
treatment of excess deferrals within the meaning of Section 402(g) of the Code
under Section 3.2 above. In the event that neither of such actual deferral
percentage tests is satisfied, the TPA shall, to the extent permissible under
the Code and the IRS Regulations, refund the excess contributions for the Plan
Year in the following order of priority: by (i) refunding such amounts deferred
by the Member which were not matched by his Employer (and any earnings and
losses allocable thereto), and (ii) refunding amounts deferred for such Plan
Year by the Member (and any earnings and losses allocable thereto), and, solely
to the extent permitted under the Code and applicable IRS Regulations,
distributing to the Member amounts contributed for such Plan Year by the
Employer with respect to the Member's 401(k) deferrals that are returned
pursuant to this Paragraph (and any earnings and losses allocable thereto).
The distribution of such excess contributions shall be made to Highly
Compensated Members to the extent practicable before the 15th day of the third
month immediately following the Plan Year for which such excess contributions
were made, but in no event later than the end of the Plan Year following such
Plan Year or, in the case of the termination of the Plan in accordance with
Article XI, no later than the end of the twelve-month period immediately
following the date of such termination.
For purposes of this 401(k) Feature, "excess contributions" means, with respect
to any Plan Year, the excess of the aggregate amount of 401(k) deferrals (and
any earnings and losses allocable thereto) made to the accounts of Highly
Compensated Members for such Plan Year, over the maximum amount of such
deferrals that could be made by such Members without violating the requirements
described above,
14
determined by reducing 401(k) deferrals made by or on behalf of Highly
Compensated Members in order of the actual deferral percentages beginning with
the highest of such percentages.
SECTION 3.11 DETERMINING THE ACTUAL CONTRIBUTION PERCENTAGES
Notwithstanding any other provision of this Section 3.11, the actual
contribution percentage for the Plan Year for Highly Compensated Employees shall
not exceed the greater of the following actual contribution percentages: (a) the
actual contribution percentage for such Plan Year of those Employees who are not
Highly Compensated Employees multiplied by 1.25, or (b) the actual contribution
percentage for the Plan Year of those Employees who are not Highly Compensated
Employees multiplied by 2.0, provided that the actual contribution percentage
for the Highly Compensated Employees does not exceed the actual contribution
percentage for such other Employees by more than 2 percentage points. For
purposes of this Article III, the "actual contribution percentage" for a Plan
Year means, for each specified group of Employees, the average of the ratios
(calculated separately for each Employee in such group) of (A) the sum of (i)
Member after-tax contributions credited to his Account for the Plan Year, (ii)
Employer matching contributions and/or supplemental contributions under Formula
1 credited to his Account as described in this Article for the Plan Year, and
(iii) in accordance with and to the extent permitted by the IRS Regulations,
401(k) deferrals (and, as provided in Section 3.9, any Employer qualified
nonelective contributions) credited to his Account, to (B) the amount of the
Member's compensation (as defined in Section 414(s) of the Code) for the Plan
Year or, alternatively, where specifically elected by the Employer, for only
that part of the Plan Year during which the Member was eligible to participate
in the Plan. An Employee's actual contribution percentage shall be zero if no
such contributions are made on his behalf for such Plan Year.
The actual contribution percentage taken into account for any Highly Compensated
Employee who is eligible to make Member contributions or receive Employer
matching contributions under two or more plans described in Section 401(a) of
the Code or arrangements described in Section 401(k) of the Code that are
maintained by the Employer shall be determined as if all such contributions were
made under a single plan. For purposes of determining the actual contribution
percentage of a Member who is a Highly Compensated Employee subject to the
family aggregation rules of Section 414(q)(6) of the Code because such Member is
either a five-percent owner or one of the ten most Highly Compensated Employees
as described in Section 414(q)(6) of the Code, the Employer matching
contributions and Member contributions and compensation (as defined in Section
414(s) of the Code) of such Member shall include the Employer matching and
Member contributions and compensation (as defined in Section 414(s) of the Code)
of "family members," within the meaning of Section 414(q)(6) of the Code, and
such "family members" shall not be considered as separate Employees in
determining actual contribution percentages.
The TPA shall determine as of the end of the Plan Year whether one of the actual
contribution percentage tests specified above is satisfied for such Plan Year.
This determination shall be made after first determining the treatment of excess
deferrals within the meaning of Section 402(g) of the Code under Section 3.2
above and then determining the treatment of excess contributions under Section
3.10 above. In the event that neither of the actual contribution percentage
tests is satisfied, the TPA shall refund the excess aggregate contributions in
the manner described below.
For purposes of this Article III, (excess aggregate contributions) means, with
respect to any Plan Year and with respect to any Member, the excess of the
aggregate amount of contributions (and any earnings and losses allocable
thereto) made as (i) Member after-tax contributions credited to his Account for
the Plan Year, (ii) Employer matching contributions and/or supplemental
contributions under Formula 1 credited
15
to his Account as described in this Article for the Plan Year, and (iii) in
accordance with and to the extent permitted by the IRS Regulations, 401(k)
deferrals (and, as provided in Section 3.9, any Employer qualified nonelective
contributions) credited to his Account (if the Plan Administrator elects to take
into account such deferrals and contributions when calculating the actual
contribution percentage) of Highly Compensated Members for such Plan Year, over
the maximum amount of such contributions that could be made as Employer
contributions, Member contributions and 401(k) deferrals of such Members without
violating the requirements of any Subparagraph of this Section 3.11.
If the TPA is required to refund excess aggregate contributions for any Highly
Compensated Member for a Plan Year in order to satisfy the requirements of any
Subparagraph above, then the refund of such excess aggregate contributions shall
be made with respect to such Highly Compensated Members to the extent
practicable before the 15th day of the third month immediately following the
Plan Year for which such excess aggregate contributions were made, but in no
event later than the end of the Plan Year following such Plan Year or, in the
case of the termination of the Plan in accordance with Article XI, no later than
the end of the twelve-month period immediately following the date of such
termination.
For each such Member, the amounts so refunded shall be made in the following
order of priority: (i) to the extent that the amounts contributed by the Member
on an after-tax basis for such Plan Year exceed the highest rate of such
contributions with respect to which amounts were contributed by the Employer, by
refunding such amounts contributed by the Member which were not matched by his
Employer (and any earnings and losses allocable thereto) and (ii) by refunding
amounts contributed for such Plan Year by the Member which were matched by his
Employer (and any earnings and losses allocable thereto) and, solely to the
extent permitted under the Code and applicable IRS Regulations, distributing to
the Member amounts contributed for such Plan Year by the Employer with respect
to the amounts so returned (and any earnings and losses allocable thereto). All
such distributions shall be made to, or shall be with respect to, Highly
Compensated Members on the basis of the respective portions of such amounts
attributable to each such Highly Compensated Member.
SECTION 3.12 THE AGGREGATE LIMIT TEST
Notwithstanding any other provision of the Plan, the sum of the actual deferral
percentage and the actual contribution percentage determined in accordance with
the procedures described above of those Employees who are Highly Compensated
Employees may not exceed the aggregate limit as determined below.
For purposes of this Article III, the "aggregate limit" for a Plan Year is the
greater of:
(1) The sum of:
(a) 1.25 times the greater of the relevant actual
deferral percentage or the relevant actual
contribution percentage, and
(b) Two percentage points plus the lesser of the relevant
actual deferral percentage or the relevant actual
contribution percentage. In no event, however, shall
this amount exceed twice the lesser of the relevant
actual deferral percentage or the relevant actual
contribution percentage; or
16
(2) The sum of:
(a) 1.25 times the lesser of the relevant actual deferral
percentage or the relevant actual contribution
percentage, and
(b) Two percentage points plus the greater of the
relevant actual deferral percentage or the relevant
actual contribution percentage. In no event, however,
shall this amount exceed twice the greater of the
relevant actual deferral percentage or the relevant
actual contribution percentage; provided, however,
that if a less restrictive limitation is prescribed
by the IRS, such limitation shall be used in lieu of
the foregoing. The relevant actual deferral
percentage and relevant actual contribution
percentage are defined in accordance with the Code
and the IRS Regulations.
The TPA shall determine as of the end of the Plan Year whether the aggregate
limit has been exceeded. This determination shall be made after first
determining the treatment of excess deferrals within the meaning of Section
402(g) of the Code under Section 3.2 above, then determining the treatment of
excess contributions under Section 3.10 above, and then determining the
treatment of excess aggregate contributions under this Article III. In the event
that the aggregate limit is exceeded, the actual contribution percentage of
those Employees who are Highly Compensated Employees shall be reduced in the
same manner as described in Section 3.11 of this Article until the aggregate
limit is no longer exceeded, unless the TPA designates, in lieu of the reduction
of the actual contribution percentage a reduction in the actual deferral
percentage of those Employees who are Highly Compensated Employees, which
reduction shall occur in the same manner as described in Section 3.10 of this
Article until the aggregate limit is no longer exceeded. Notwithstanding the
provisions of Sections 3.2 and 3.10 above, the amount of excess contributions to
be distributed, with respect to a Member for a Plan Year, shall be reduced by
any excess deferrals distributed to such Member for such Plan Year.
SECTION 3.13 REMITTANCE OF CONTRIBUTIONS
The contributions of both the Employer and the Plan Members shall be recorded by
the Employer and remitted to the TPA for transmittal to the Trustee or custodian
or directly to the Trustee or custodian so that the Trustee or custodian shall
be in receipt thereof by the 15th day of the month next following the month in
respect of which such contributions are payable. Such amounts shall be used to
provide additional Units pursuant to Article V. Any contributions received by
the Trustee or custodian on the first working day of a month shall be deemed to
have been received on the last working day of the immediately preceding month.
Working day shall be defined as any day regular mail is delivered by the United
States Postal Service.
17
ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
SECTION 4.1 INVESTMENT BY TRUSTEE OR CUSTODIAN
All contributions to the Plan shall, upon receipt by the TPA, be delivered to
the Trustee or custodian to be held in the Trust Fund and invested and
distributed by the Trustee or custodian in accordance with the provisions of the
Plan and Trust Agreement. The Trust Fund shall consist of one or more of the
Investment Funds designated by the Employer in the Adoption Agreement.
With the exception of the Employer Stock Fund, the Trustee may in its discretion
invest any amounts held by it in any Investment Fund in any commingled or group
trust fund described in Section 401 (a) of the Code and exempt under Section 501
(a) of the Code or in any common trust fund exempt under Section 584 of the
Code, provided that such trust fund satisfies any requirements of the Plan
applicable to such Investment Funds. To the extent that the Investment Funds are
at any time invested in any commingled, group or common trust fund, the
declaration of trust or other instrument pertaining to such fund and any
amendments thereto are hereby adopted as part of the Plan.
The Employer will designate in the Adoption Agreement which of the Investment
Funds described therein will be made available to Members and the terms and
conditions under which such Funds will operate with respect to employee
direction of allocations to and among such designated Funds and the types of
contributions and/or deferrals eligible for investment therein.
SECTION 4.2 MEMBER DIRECTED INVESTMENTS
To the extent permitted by the Employer as set forth in the Adoption Agreement,
each Member shall direct in writing that his contributions and deferrals, if
any, and the contributions made by the Employer on his behalf shall be invested
(a) entirely in any one of the Investment Funds made available by the Employer,
or (b) among the available Investment Funds in any combination of multiples of
1%. If a Member has made any Rollover contributions in accordance with Article
III, Section 3.3, such Member may elect to apply separate investment directions
to such rollover amounts. Any such investment direction shall be followed by the
TPA until changed. Subject to the provisions of the following paragraphs of this
Section, as designated in the Adoption Agreement, a Member may change his
investment direction as to future contributions and also as to the value of his
accumulated Units in each of the available Investment Funds by filing written
notice with the TPA. Such directed change(s) will become effective upon the
Valuation Date coinciding with or next following the date which his notice was
received by the TPA or as soon as administratively practicable thereafter. If
the Adoption Agreement provides for Member directed investments, and if a Member
does not make a written designation of an Investment Fund or Funds, the Employer
or its designee shall direct the Trustee to invest all amounts held or received
on account of the such Member in the Investment Fund which in the opinion of the
Employer best protects principal.
Except as otherwise provided below, a Member may not direct a transfer from the
Stable Value Fund to the Government Money Market Fund and/or the Bond Index
Fund. A Member may direct a transfer from the 500 Stock Index Fund, the Midcap
400 Stock Index Fund, and/or the Employer Stock Fund to the Government Money
Market Fund and/or the Bond Index Fund provided that amounts previously
transferred from the Stable Value Fund to the 500 Stock Index Fund, the Midcap
400 Stock Index Fund
18
or the Employer Stock Fund remain in such Funds for a period of three months
prior to being transferred to the Government Money Market Fund or the Bond Index
Fund.
SECTION 4.3 EMPLOYER SECURITIES
If the Employer so elects in the Adoption Agreement, the Employer and/or Members
may direct that contributions will be invested in Qualifying Employer Securities
(within the meaning of Section 407(d)(5) of ERISA) through the Employer Stock
Fund.
19
ARTICLE V
MEMBERS' ACCOUNTS, UNITS AND VALUATION
The TPA shall establish and maintain an Account for each Member showing his
interests in the available Investment Funds, as designated by the Employer in
the Adoption Agreement. The interest in each Investment Fund shall be
represented by Units.
As of each Valuation Date, the value of a Unit in each Investment Fund shall be
determined by dividing (a) the sum of the net assets at market value determined
by the Trustee by (b) the total number of outstanding Units.
The number of additional Units to be credited to a Member's interest in each
available Investment Fund, as of any Valuation Date, shall be determined by
dividing (a) that portion of the aggregate contributions and/or deferrals by and
on behalf of the Member which was directed to be invested in such Investment
Fund and received by the Trustee during the month in which such Valuation Date
occurs by (b) the Unit value of such Investment Fund as of the next Valuation
Date. For purposes of the preceding sentence, in valuing a Member's Account,
contributions and/or deferrals of both Members and the Employer which have been
reported and received by the TPA on the first working day of a month shall be
deemed to have been received on the last working day of the immediately
preceding month. Working day shall be defined as any day regular mail is
delivered by the United States Postal Service.
The value of a Member's Account may be determined as of any Valuation Date by
multiplying the number of Units to his credit in each available Investment Fund
by that Investment Fund's Unit Value on such date and aggregating the results.
20
ARTICLE VI
VESTING OF UNITS
SECTION 6.1 VESTING OF MEMBER CONTRIBUTIONS AND/OR DEFERRALS
All Units credited to a Member's Account based on after-tax contributions and/or
401(k) deferrals made by the Member and any earnings related thereto (including
any rollover contributions allocated to a Member's Account under the Plan and
any earnings thereon) and, as provided in Section 3.9, Employer qualified
nonelective contributions made on behalf of such Member shall be immediately and
fully vested in him at all times.
SECTION 6.2 VESTING OF EMPLOYER CONTRIBUTIONS
The Employer may, at its option, elect one of the available vesting schedules
described herein for each of the employer contribution types applicable to the
Plan as designated in the Adoption Agreement.
SCHEDULE 1: All applicable Units shall immediately and fully vest. If the
eligibility requirement(s) selected by the Employer under
Article II require(s) that an Employee complete a period of
Employment which is longer than 12 consecutive months, this
vesting Schedule 1 shall be automatically applicable.
SCHEDULE 2: All applicable Units shall become nonforfeitable and fully
vested in accordance with the schedule set forth below:
Completed Vested
Years of Employment Percentage
------------------- ----------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
SCHEDULE 3: All applicable Units shall become nonforfeitable and fully
vested in accordance with the schedule set forth below:
Completed Vested
Years of Employment Percentage
------------------- ----------
Less than 5 0%
5 or more 100%
SCHEDULE 4: All applicable Units shall become nonforfeitable and fully
vested in accordance with the schedule set forth below:
Completed Vested
Years of Employment Percentage
------------------- ----------
Less than 3 0%
3 or more 100%
21
SCHEDULE 5: All applicable Units shall become nonforfeitable and fully
vested in accordance with the schedule set forth below:
Completed Vested
Years of Employment Percentage
------------------- ----------
Less than 1 0%
1 but less than 2 25%
2 but less than 3 50%
3 but less than 4 75%
4 or more 100%
SCHEDULE 6: All applicable Units shall become nonforfeitable and fully
vested in accordance with the schedule set forth below:
Completed Vested
Years of Employment Percentage
------------------- ----------
Less than 3 0%
3 but less than 4 20%
4 but less than 5 40%
5 but less than 5 60%
6 but less than 7 80%
7 or more 100%
SCHEDULE 7: All applicable Units shall become nonforfeitable and fully
vested in accordance with the schedule set forth in the
Adoption Agreement created by the Employer in accordance with
applicable law.
Notwithstanding the vesting schedules above, a Member's interest in his Account
shall become 100% vested in the event that (i) the Member dies while in active
Employment and the TPA has received notification of death, (ii) the Member has
been approved for Disability, pursuant to the provisions of Article VII, and the
TPA has received notification of Disability, or (iii) the Member has attained
Normal Retirement Age.
Except as otherwise provided hereunder, in the event that the Employer adopts
the Plan as a successor plan to another defined contribution plan qualified
under Sections 401(a) and 501(a) of the Code, or in the event that the Employer
changes or amends a vesting schedule adopted under this Article, any Member who
was covered under such predecessor plan or, in the case of a change or amendment
to the vesting schedule, any Member who has completed at least 3 Years of
Employment with the Employer may elect to have the nonforfeitable percentage of
the portion of his Account which is subject to such vesting schedule computed
under such predecessor plan's vesting provisions, or computed without regard to
such change or amendment (a "Vesting Election"). Any Vesting Election made under
this Subparagraph shall be made by notifying the TPA in writing within the
election period hereinafter described. The election period shall begin on the
date such amendment is adopted or the date such change is effective, or the date
the Plan which serves as a successor plan is adopted or effective, as the case
may be, and shall end no earlier than the latest of the following dates: (i) the
date which is 60 days after the day such amendment is adopted; (ii) the date
which is 60 days after the day such amendment or change becomes effective; (iii)
the date which is 60 days after the day the Member is given written notice of
such amendment or change by the TPA; (iv) the date which is 60 days after the
day the Plan is adopted by the Employer or becomes
22
effective; or (v) the date which is 60 days after the day the Member is given
written notice that the Plan has been designated as a successor plan. Any
election made pursuant to this Subparagraph shall be irrevocable.
To the extent permitted under the Code and Regulations, the Employer may, at its
option, elect to treat all Members who are eligible to make a Vesting Election
as having made such Vesting Election. Furthermore, subject to the requirements
of the applicable Regulations, the Employer may elect to treat all Members, who
were employed by the Employer on or before the effective date of the change or
amendment, as subject to the prior vesting schedule, provided such prior
schedule is more favorable.
SECTION 6.3 FORFEITURES
If a Member who was partially vested in his Account on the date of his
termination of Employment returns to Employment, his Years of Employment prior
to the Break(s) in Service shall be included in determining future vesting and,
if he returns before incurring 5 consecutive one year Breaks in Service, any
Units forfeited from his Account shall be restored to his Account, including all
interest accrued during the intervening period; provided, however, that if such
a Member has received a distribution pursuant to Article VII, his Account Units
shall not be restored unless he repays the full amount distributed to him to the
Plan before the earlier of (i) 5 years after the first date on which the Member
is subsequently reemployed by the Employer, or (ii) the close of the first
period of 5 consecutive one-year Breaks in Service commencing after the
withdrawal. The Units restored to the Member's Account will be valued on the
Valuation Date coinciding with or next following the later of (i) the date the
Employee is rehired, or (ii) the date a new enrollment application is received
by the TPA. If a Member terminates Employment without any vested interest in his
Account, he shall (i) immediately be deemed to have received a total
distribution of his Account and (ii) thereupon forfeit his entire Account;
provided that if such Member returns to Employment before the number of
consecutive one-year Breaks in Service equals or exceeds the greater of (i) 5,
or (ii) the aggregate number of the Member's Years of Service prior to such
Break in Service, his Account shall be restored in the same manner as if such
Member had been partially vested at the time of his termination of Employment,
and his Years of Employment prior to incurring the first Break in Service shall
be included in any subsequent determination of his vesting service.
Forfeited amounts, as defined in the preceding paragraph, shall be made
available to the Employer, through transfer from the Member's Account to the
Employer Credit Account, upon: (1) if the Member had a vested interest in his
Account at his termination of Employment, the earlier of (i) the date as of
which the Member receives a distribution of his entire vested interest in his
Account or (ii) the date upon which the Member incurs 5 consecutive one-year
Breaks in Service, or (2) the date of the Member's termination of Employment, if
the Member then has no vested interest in his Account. Once so transferred, such
amounts shall be used at the option of the Employer to (i) reduce administrative
expenses for that Contribution Determination Period, (ii) offset any
contributions to be made by the Employer for that Contribution Determination
Period or (iii) be allocated to all eligible Members deemed to be employed as of
the last day of the Contribution Determination Period. The Employer Credit
Account, referenced in this Subparagraph, shall be maintained to receive, in
addition to the forfeitures described above, (i) contributions in excess of the
limitations contained in Section 415 of the Code and (ii) Employer contributions
made in advance of the date allocable to Members, if any.
23
ARTICLE VII
WITHDRAWALS AND DISTRIBUTIONS
SECTION 7.1 GENERAL PROVISIONS
The Employer will define in the Adoption Agreement the terms and conditions
under which withdrawals and distributions will be permitted under the Plan. All
payments in respect of a Member's Account shall be made in cash from the Trust
Fund and in accordance with the provisions of this Article or Article XI. The
amount of payment will be determined in accordance with the Unit values on the
Valuation Date coinciding with or next following the date proper notice is filed
with the TPA, unless following such Valuation Date a decrease in the Unit values
of the Member's investment in any of the available Investment Funds occurs prior
to the date such Units of the Member are redeemed in which case that part of the
payment which must be provided through the sale of existing Units shall equal
the value of such Units determined on the date of redemption which date shall
occur as soon as administratively practicable on or following the Valuation Date
such proper notice is filed with the TPA. The redemption date Unit value with
respect to a Member's investment in any of the available Investment Funds shall
equal the value of a Unit in such Investment Fund, as determined in accordance
with the valuation method applicable to Unit investments in such Investment Fund
on the date the Member's investment is redeemed.
Except where otherwise specified, payments provided under this Article will be
made in a lump sum as soon as practicable after such Valuation Date or date of
redemption, as may be applicable, subject to any applicable restriction on
redemption imposed on amounts invested in any of the available Investment Funds.
Any partial withdrawal shall be deemed to come:
o First from the Member's after-tax contributions made prior to
January 1, 1987.
o Next from the Member's after-tax contributions made after December 31,
1986 plus earnings on all of the Member's after-tax contributions.
o Next from the Member's rollover contributions plus earnings thereon.
o Next from the Employer matching contributions plus earnings thereon.
o Next from the Employer supplemental contributions plus earnings thereon.
o Next from the Employer basic contributions plus earnings thereon.
o Next from the Member's 401(k) deferrals plus earnings thereon.
o Next from the Employer qualified nonelective contributions plus earnings
thereon.
o Next from the Employer profit sharing contributions plus earnings thereon.
24
SECTION 7.2 WITHDRAWALS WHILE EMPLOYED
The Employer may, at its option, permit Members to make withdrawals from one or
more of the portions of their Accounts while employed by the Employer, as
designated in the Adoption Agreement, under the terms and provisions described
herein.
VOLUNTARY WITHDRAWALS - To the extent permitted by the Employer as specified in
the Adoption Agreement, a Member may voluntarily withdraw some or all of his
Account (other than his 401(k) deferrals and Employer qualified nonelective
contributions treated as 401(k) deferrals except as hereinafter permitted) while
in Employment by filing a notice of withdrawal with the TPA; provided, however,
that in the event his Employer has elected to provide annuity options under
Section 7.3, no withdrawals may be made from a married Member's Account without
the written consent of such Member's Spouse (which consent shall be subject to
the procedures set forth in Section 7.3). Only one in-service withdrawal may be
made in any Plan Year from each of the rollover amount of the Member's Account
and the remainder of the Member's Account. This restriction shall not, however,
apply to a withdrawal under this Section in conjunction with a hardship
withdrawal.
Notwithstanding the foregoing paragraph, a Member may not withdraw any matching,
basic, supplemental, profit sharing or qualified nonelective contributions made
by the Employer under Article III unless (i) the Member has completed 60 months
of participation in the Plan; (ii) the withdrawal occurs at least 24 months
after such contributions were made by the Employer; (iii) the Employer
terminates the Plan without establishing a qualified successor plan; or (iv) the
Member dies, is disabled, retires, attains age 59-1/2% or terminates Employment.
For purposes of the preceding requirements, if the Member's Account includes
amounts which have been transferred from a defined contribution plan established
prior to the adoption of the Plan by the Employer, the period of time during
which amounts were held on behalf of such Member and the periods of
participation of such Member under such defined contribution plan shall be taken
into account.
HARDSHIP WITHDRAWALS - If designated by the Employer in the Adoption Agreement,
a Member may make a withdrawal of his 401(k) deferrals, Employer qualified
nonelective contributions which are treated as elective deferrals, and any
earnings credited thereto prior to January 1, 1989, prior to attaining age 59
1/2, provided that the withdrawal is solely on account of an immediate and heavy
financial need and is necessary to satisfy such financial need. For the purposes
of this Article, the term "immediate and heavy financial need" shall be limited
to the need of funds for (i) the payment of medical expenses (described in
Section 213(d) of the Code) incurred by the Member, the Member's Spouse, or any
of the Member's dependents (as defined in Section 152 of the Code), (ii) the
payment of tuition and room and board for the next 12 months of post-secondary
education of the Member, the Member's Spouse, the Member's children, or any of
the Member's dependents (as defined in Section 152 of the Code), (iii) the
purchase (excluding mortgage payments) of a principal residence for the Member,
or (iv) the prevention of eviction of the Member from his principal residence or
the prevention of foreclosure on the mortgage of the Member's principal
residence. For purposes of this Article, a distribution generally may be treated
as "necessary to satisfy a financial need" if the Plan Administrator reasonably
relies upon the Member's written representation that the need cannot be relieved
(i) through reimbursement or compensation by insurance or otherwise, (ii) by
reasonable liquidation of the Member's available assets, to the extent such
liquidation would not itself cause an immediate and heavy financial need, (iii)
by cessation of Member contributions and/or deferrals pursuant to Article III of
the Plan, to the extent such contributions and/or deferrals are permitted by the
Employer, or (iv) by other distributions or nontaxable (at the time of the loan)
loans from plans maintained by the Employer or by any other employer, or by
borrowing from
25
commercial sources on reasonable commercial terms. The amount of any withdrawal
pursuant to this Article shall not exceed the amount required to meet the
demonstrated financial hardship, including any amounts necessary to pay any
federal income taxes and penalties reasonably anticipated to result from the
distribution as certified to the Plan Administrator by the Member.
Notwithstanding the foregoing, no amounts may be withdrawn on account of
hardship pursuant to this Article prior to a Member's withdrawal of his other
available Plan assets without regard to any other withdrawal restrictions
adopted by the Employer.
SECTION 7.3 DISTRIBUTIONS UPON TERMINATION OF EMPLOYMENT
In accordance with the provisions for distributions designated by the Employer
in the Adoption Agreement, a Member who terminates Employment with the Employer
may request a distribution of his Account at any time thereafter up to
attainment of age 70 1/2. Except as otherwise provided, only one distribution
under this Section 7.3 may be made in any Plan Year and any amounts paid under
this Article may not be returned to the Plan.
Any distribution made under this Section 7.3 requires that a Request for
Distribution be filed with the TPA. If a Member does not file such a Request,
the value of his Account will be paid to him as soon as practicable after his
attainment of age 70 1/2, but in no event shall payment commence later than
April 1 of the calendar year following the calendar year in which the Member
attains age 70 1/2 unless otherwise provided by law.
LUMP SUM PAYMENTS - A Member may request a distribution of all or a part of his
Account no more frequently than once per calendar year by filing the proper
Request for Distribution with the TPA. In the event the Employer has elected to
provide an annuity option under the Plan, no distributions may be made from a
married Member's Account without the written consent of such married Member's
spouse (which consent shall be subject to the procedures set forth below).
INSTALLMENT PAYMENTS - To the extent designated by the Employer in the Adoption
Agreement and in lieu of any lump sum payment of his total Account, a Member who
has terminated his Employment may elect in his Request for Distribution to be
paid in up to 20 annual installments, provided that a Member shall not be
permitted to elect an installment period in excess of his remaining life
expectancy and if a Member attempts such an election, the TPA shall deem him to
have elected the installment period with the next lowest multiple within the
Member's remaining life expectancy. The amount of each installment will be equal
to the value of the total Units in the Member's Account, multiplied by a
fraction, the numerator of which is one and the denominator of which is the
number of remaining annual installments including the one then being paid, so
that at the end of the installment period so elected, the total Account will be
liquidated. The value of the Units will be determined in accordance with the
Unit values on the Valuation Date on or next following the TPA's receipt of his
Request for Distribution and on each anniversary thereafter subject to
applicable Regulations under Code Section 401(a)(9). Payment will be made as
soon as practicable after each such Valuation Date, but in no event shall
payment commence later than April 1 of the calendar year following the calendar
year in which the Member attains age 70-1/2 subject to the procedure for making
such distributions described below. The election of installments hereunder may
not be subsequently changed by the Member, except that upon written notice to
the TPA, the Member may withdraw the balance of the Units in his Account in a
lump sum at any time, notwithstanding the fact that the Member previously
received a distribution in the same calendar year.
26
ANNUITY PAYMENTS - The Employer may, at its option, elect to provide an annuity
option under the Plan. To the extent so designated by the Employer in the
Adoption Agreement and in lieu of any lump sum payment of his total Account, a
Member who has terminated his Employment may elect in his Request for
Distribution to have the value of his total Account be paid as an annuity
secured for the Member by the Plan Administrator through a Group Annuity
Contract adopted by the Plan. In the event the Employer elects to provide the
annuity option, the following provisions shall apply:
UNMARRIED MEMBERS -Any unmarried Member who has terminated his Employment may
elect, in lieu of any other available payment option, to receive a benefit
payable by purchase of a single premium contract providing for (i) a single life
annuity for the life of the Member or (ii) an annuity for the life of the Member
and, if the Member dies leaving a designated Beneficiary, a 50% survivor annuity
for the life of such designated Beneficiary.
MARRIED MEMBERS- Except as otherwise provided below, (i) any married Member who
has terminated his Employment shall receive a benefit payable by purchase of a
single premium contract providing for a Qualified Joint and Survivor Annuity, as
defined below, and (ii) the Surviving Spouse of any married Member who dies
prior to the date payment of his benefit commences shall be entitled to a
Preretirement Survivor Annuity, as defined below. Notwithstanding the foregoing,
any such married Member may elect to receive his benefit in any other available
form, and may waive the Preretirement Survivor Annuity, in accordance with the
spousal consent requirements described herein.
For purposes of this Section 7.3, the term "Qualified Joint and Survivor
Annuity" means a benefit providing an annuity for the life of the Member, ending
with the payment due on the last day of the month coinciding with or preceding
the date of his death, and, if the Member dies leaving a Surviving Spouse, a
survivor annuity for the life of such Surviving Spouse equal to one-half of the
annuity payable for the life of the Member under his Qualified Joint and
Survivor Annuity, commencing on the last day of the month following the date of
the Member's death and ending with the payment due on the first day of the month
coinciding with or preceding the date of such Surviving Spouse's death.
For purposes of this Section 7.3, the term "Preretirement Survivor Annuity"
means a benefit providing for payment of 50% of the Member's Account balance as
of the Valuation Date coinciding with or preceding the date of his death.
Payment of a Preretirement Survivor Annuity shall commence in the month
following the month in which the Member dies or as soon as practicable
thereafter; provided, however, that to the extent required by law, if the value
of the amount used to purchase a Preretirement Survivor Annuity exceeds $3,500,
then payment of the Preretirement Survivor Annuity shall not commence prior to
the date the Member reached (or would have reached, had he lived) Normal
Retirement Age without the written consent of the Member's Surviving Spouse.
Absence of any required consent will result in a deferral of payment of the
Preretirement Survivor Annuity to the month following the month in which occurs
the earlier of (i) the date the required consent is received by the TPA or (ii)
the date the Member would have reached Normal Retirement Age had he lived.
The TPA shall furnish or cause to be furnished, to each married Member with an
Account subject to this Section 7.3, explanations of the Qualified Joint and
Survivor Annuity and Preretirement Survivor Annuity. A Member may, with the
written consent of his Spouse (unless the TPA makes a written determination in
accordance with the Code and the Regulations that no such consent is required),
elect in writing (i) to receive his benefit in a single lump sum payment within
the 90 day period ending on the date payment of his benefit commences; and (ii)
to waive the Preretirement Survivor Annuity within the period beginning on the
first day of the Plan Year in which the Member attains age 35 and ending on the
date
27
of his death. Any election made pursuant to this Subparagraph may be revoked by
a Member, without spousal consent, at any time within which such election could
have been made. Such an election or revocation must be made in accordance with
procedures developed by the TPA and shall be notarized.
Notwithstanding the preceding provisions of this Section 7.3, any benefit of
$3,500, subject to the limits of Article X, or less, shall be paid in cash in a
lump sum in full settlement of the Plan's liability therefor; provided, however,
that in the case of a married Member, no such lump sum payment shall be made
after benefits have commenced without the consent of the Member and his Spouse
or, if the Member has died, the Member's Surviving Spouse. Furthermore, if the
value of the benefit payable to a Member or his Surviving Spouse is greater than
$3,500 and the Member has or had not reached his Normal Retirement Age, then to
the extent required by law, unless the Member (and, if the Member is married and
his benefit is to be paid in a form other than a Qualified Joint and Survivor
Annuity, his Spouse, or, if the Member was married, his Surviving Spouse)
consents in writing to an immediate distribution of such benefit, his benefit
shall continue to be held in the Trust until a date following the earlier of (i)
the date of the TPA's receipt of all required consents or (ii) the date the
Member reaches his earliest possible Normal Retirement Age under the Plan (or
would have reached such date had he lived), and thereafter shall be paid in
accordance with this Section 7.3.
Solely to the extent required under applicable law and regulations, and
notwithstanding any provisions of the Plan to the contrary that would otherwise
limit a Distributee's election under this Subparagraph, a Distributee may elect,
at the time and in the manner prescribed by the TPA, 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
Subparagraph, the following terms shall have the following meanings:
ELIGIBLE ROLLOVER DISTRIBUTION - Any distribution of all or any portion
of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include: any distribution that
is one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies) of the
Distributee and the Distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the Code; and
the portion of any distribution that is not includable in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
ELIGIBLE RETIREMENT PLAN - 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 a Surviving Spouse, an Eligible Retirement Plan is an individual
retirement account or an individual retirement annuity.
DISTRIBUTEE - A Distributee may be (i) an Employee, (ii) a former
Employee, (iii) an Employee's Surviving Spouse, (iv) a former
Employee's Surviving Spouse, (v) an Employee's Spouse or former Spouse
who is an alternate payee under a qualified domestic relations order,
as defined in Section 414(p) of the Code, or (vi) a former Employee's
Spouse or former Spouse who is an alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the Code,
with respect to the interest of the Spouse or former Spouse.
28
DIRECT ROLLOVER - A payment by the Plan to the Eligible Retirement Plan
specified by the Distributee .
SECTION 7.4 DISTRIBUTIONS DUE TO DISABILITY
A Member who is separated from Employment by reason of a disability which is
expected to last in excess of 12 consecutive months and who is either (i)
eligible for, or is receiving, disability insurance benefits under the Federal
Social Security Act or (ii) approved for disability under the provisions of any
other benefit program or policy maintained by the Employer, which policy or
program is applied on a uniform and nondiscriminatory basis to all Employees of
the Employer, shall be deemed to be disabled for all purposes under the Plan.
The Plan Administrator shall determine whether a Member is disabled in
accordance with the terms of the immediately preceding paragraph; provided,
however, approval of Disability is conditioned upon notice to the Plan
Administrator of such Member's Disability within 13 months of the Member's
separation from Employment. The notice of Disability shall include a
certification that the Member meets one or more of the criteria listed above.
Upon determination of Disability, a Member may withdraw his total Account
balance under the Plan and have such amounts paid to him in accordance with the
applicable provisions of this Article VII, as designated by the Employer. If a
disabled Member becomes reemployed subsequent to withdrawal of some or all of
his Account balance, such Member may not repay to the Plan any such withdrawn
amounts.
SECTION 7.5 DISTRIBUTIONS DUE TO DEATH
Subject to the provisions of Section 7.3 above, if a married Member dies, his
Spouse, as Beneficiary, will receive a death benefit equal to the value of the
Member's Account determined on the Valuation Date on or next following the TPA's
receipt of notice that such Member died; provided, however, that if such
Member's Spouse had consented in writing to the designation of a different
Beneficiary, the Member's Account will be paid to such designated Beneficiary.
Such nonspousal designation may be revoked by the Member without spousal consent
at any time prior to the Member's death. If a Member is not married at the time
of his death, his Account will be paid to his designated Beneficiary.
A Member may elect that upon his death, his Beneficiary, pursuant to this
Section 7.5, may receive, in lieu of any lump sum payment, payment in 5 annual
installments (10 if the Spouse is the Beneficiary, provided that the Spouse's
remaining life expectancy is at least 10 years) whereby the value of 1/5th of
such Member's Units (or 1/10th in the case of a spousal Beneficiary, provided
that the Spouse's remaining life expectancy is at least 10 years) in each
available Investment Fund will be determined in accordance with the Unit values
on the Valuation Date on or next following the TPA's receipt of notice of the
Member's death and on each anniversary of such Valuation Date. Payment will be
made as soon as practicable after each Valuation Date until the Member's Account
is exhausted. Such election may be filed at any time with the Plan Administrator
prior to the Member's death and may not be changed or revoked after such
Member's death. If such an election is not in effect at the time of the Member's
death, his Beneficiary (including any spousal Beneficiary) may elect to receive
distributions in accordance with this Article, except that any balance remaining
in the deceased Member's Account must be distributed on or before the December
31 of the calendar year which contains the 5th anniversary (the 10th anniversary
in the case of a spousal Beneficiary, provided that the Spouse's remaining life
expectancy is at least 10 years) of the Member's death. Notwithstanding the
foregoing, payment of a Member's Account shall
29
commence not later than the December 31 of the calendar year immediately
following the calendar year in which the Member died or, in the event such
Beneficiary is the Member's Surviving Spouse, on or before the December 31 of
the calendar year in which such Member would have attained age 70 1/2, if later
(or, in either case, on any later date prescribed by the IRS Regulations). If,
upon the Spouse's or Beneficiary's death, there is still a balance in the
Account, the value of the remaining Units will be paid in a lump sum to such
Spouse's or Beneficiary's estate.
SECTION 7.6 MINIMUM REQUIRED DISTRIBUTIONS
In no event may payment of a Member's Account begin later than April 1 of the
year following the calendar year in which a Member attains age 70-1/2; provided,
however, if a Member attained age 70% prior to January 1, 1988, except as
otherwise provided below, any benefit payable to such Member shall commence no
later than the April 1 of the calendar year following the later of (i) the
calendar year in which the Member attains age 70 1/2 or (ii) the calendar year
in which the Member retires. Such benefit shall be paid, in accordance with the
Regulations, over a period not extending beyond the life expectancy of such
Member. Life expectancy for purposes of this Section shall not be recalculated
annually in accordance with the Regulations.
If a Member who is a 5% owner attained age 70 1/2 before January 1, 1988, any
benefit payable to such Member shall commence no later than the April 1 of the
calendar year following the later of (i) the calendar year in which the Member
attains age 70 1/2 or (ii) the earlier of (a) the calendar year within which the
Member becomes a 5% owner or (b) the calendar year in which the Member retires.
For purposes of the preceding sentence, 5% owner shall mean a 5% owner of such
Member's Employer as defined in Section 416(i) of the Code at any time during
the Plan Year in which such owner attains age 66% or any subsequent Plan Year.
Distributions must continue to such Member even if such Member ceases to own
more than 5% of the Employer in a subsequent year.
30
ARTICLE VIII
LOAN PROGRAM
SECTION 8.1 GENERAL PROVISIONS
An Employer may, at its option, make available the loan program described herein
for any Member (and, if applicable under Section 8.8 of this Article, any
Beneficiary), subject to applicable law. The Employer shall so designate its
adoption of the loan program and the terms and provisions of its operation in
the Adoption Agreement. In the event that the Employer has elected to provide an
annuity option under Article VII or amounts are transferred to the Plan from a
retirement plan subject to Section 401(a)(11) of the Code, no loans may be made
from a married Member's Account without the written consent of such Member's
Spouse (in accordance with the spousal consent rules set forth under Section
7.3). In the event the Employer elects to permit loans to be made from rollover
contributions and earnings thereon, as designated in the Adoption Agreement,
loans shall be available from the Accounts of any Employees of the Employer who
have not yet become Members. Only one loan may be made to a Member in the Plan
Year.
SECTION 8.2 LOAN APPLICATION
Subject to the restrictions described in the paragraph immediately following, a
Member in Employment may borrow from his Account in each of the available
Investment Funds by filing a loan application with the TPA. Such application
(hereinafter referred to as a "completed application") shall (i) specify the
terms pursuant to which the loan is requested to be made and (ii) provide such
information and documentation as the TPA shall require, including a note, duly
executed by the Member, granting a security interest of an amount not greater
than 50% of his vested Account, to secure the loan. With respect to such Member,
the completed application shall authorize the repayment of the loan through
payroll deductions. Such loan will become effective upon the Valuation Date
coinciding with or next following the date on which his completed application
and other required documents were submitted, subject to the same conditions with
respect to the amount to be transferred under this Section which are specified
in the Plan procedures for determining the amount of payments made under Article
VII of the Plan.
The Employer shall establish standards in accordance with the Code and ERISA
which shall be uniformly applicable to all Members eligible to borrow from their
interests in the Trust Fund similarly situated and shall govern the TPA's
approval or disapproval of completed applications. The terms for each loan shall
be set solely in accordance with such standards.
The TPA shall. in accordance with the established standards, review and approve
or disapprove a completed application as soon as practicable after its receipt
thereof, and shall promptly notify the applying Member of such approval or
disapproval. Notwithstanding the foregoing, the TPA may defer its review of a
completed application, or defer payment of the proceeds of an approved loan, if
the proceeds of the loan would otherwise be paid during the period commencing on
December 1 and ending on the following January 31.
Subject to the preceding paragraph and Section 8.6, upon approval of a completed
application, the TPA shall cause payment of the loan to be made from the
available Investment Fund(s) in the same proportion that the designated portion
of the Member's Account is invested at the time of the loan, and the relevant
portion of the Member's interest in such Investment Fund(s) shall be canceled
and shall be transferred in
31
cash to the Member. The TPA shall maintain sufficient records regarding such
amounts to permit an accurate crediting of repayments of the loan.
SECTION 8.3 PERMITTED LOAN AMOUNT
The amount of each loan may not be less than $1,000 nor more than the maximum
amount as described below. The maximum amount available for loan under the Plan
(when added to the outstanding balance of all other loans from the Plan to the
borrowing Member) shall not exceed the lesser of: (a) $50,000 reduced by the
excess (if any) of (i) the highest outstanding loan balance attributable to the
Account of the Member requesting the loan from the Plan during the one-year
period ending on the day preceding the date of the loan, over (ii) the
outstanding balance of all other loans from the Plan to the Member on the date
of the loan, or (b) 50% of the value of the Member's vested portion of his
Account available for borrowing as of the Valuation Date on or next following
the date on which the TPA receives the completed application for the loan and
all other required documents. The maximum amount available for a loan for
purposes of item (b) of the preceding sentence shall be determined by valuing
the Member's interest in that portion of his Account from which the loan will be
deducted as of the applicable Valuation Date. In determining the maximum amount
that a Member may borrow, all vested assets of his Account, regardless of
whether any particular portion of his Account is actually available for the
loan, will be taken into consideration, provided that, where the Employer has
not elected to make a Member's entire Account available for loans, in no event
shall the amount of the loan exceed the value of such portion of the Member's
Account from which loans are permissible.
SECTION 8.4 SOURCE OF FUNDS FOR LOAN
The amount of the loan will be deducted from the Member's Account in the
available Investment Funds in accordance with Section 8.2 of this Article and
the Plan procedures for determining the amount of payments made under Article
VII. Loans shall be deemed to come (to the extent the Employer permits Members
to take loans from one or more of the portions of their Accounts, as designated
in the Adoption Agreement):
o First from the Employer profit sharing contributions plus earnings thereon.
o Next from the Employer qualified nonelective contributions plus earnings
thereon.
o Next from the Member's 401(k) deferrals plus earnings thereon.
o Next from the Employer basic contributions plus earnings thereon.
o Next from the Employer supplemental contributions plus earnings thereon.
o Next from the Employer matching contributions plus earnings thereon.
o Next from the Member's rollover contributions plus earnings thereon.
o Next from the Member's after-tax contributions made after December 31,
1986 plus earnings on all of the Member's after-tax contributions.
o Next from the Member's after-tax contributions made prior to January 1,
1987.
32
SECTION 8.5 CONDITIONS OF LOAN
Each loan to a Member under the Plan shall be repaid in level monthly amounts
through regular payroll deductions after the effective date of the loan, and
continuing thereafter with each payroll. Except as otherwise required by the
Code and the IRS Regulations, each loan shall have a repayment period of not
less than 12 months and not in excess of 60 months, unless the purpose of the
loan is for the purchase of a primary residence, in which case the loan may be
for not more than 180 months.
The rate of interest for the term of the loan will be established as of the loan
date, and will be the ▇▇▇▇▇▇'▇ Prime Rate (base rate) plus 1% as published on
the last Saturday of the preceding month, or such other rate as may be required
by applicable law and determined by reference to the prevailing interest rate
charged by commercial lenders under similar circumstances. The applicable rate
would then be in effect through the last business day of the month.
Repayment of all loans under the Plan shall be secured by 50% of the Member's
vested interest in his Account, determined as of the origination of such loan.
SECTION 8.6 CREDITING OF REPAYMENT
Upon lending any amount to a Member, the TPA shall establish and maintain a loan
receivable account with respect to, and for the term of, the loan. The
allocations described in this Section shall be made from the loan receivable
account. Upon receipt of each monthly installment payment and the crediting
thereof to the Member's loan receivable account, there shall be allocated to the
Member's Account in the available Investment Funds, in accordance with his most
recent investment instructions, the principal portion of the installment payment
plus that portion of the interest equal to the rate determined in Section 8.5 of
this Article, less 2%. The unpaid balance owed by a Member on a loan under the
Plan shall not reduce the amount credited to his Account. However, from the time
of payment of the proceeds of the loan to the Member, such Account shall be
deemed invested, to the extent of such unpaid balance, in such loan until the
complete repayment thereof or distribution from such Account. Any loan repayment
shall first be deemed allocable to the portions of the Member's Account on the
basis of a reverse ordering of the manner in which the loan was originally
distributed to the Member.
SECTION 8.7 CESSATION OF PAYMENTS ON LOAN
If a Member, while employed, fails to make a monthly installment payment when
due, as specified in the completed application, subject to applicable law, he
will be deemed to have received a distribution of the outstanding balance of the
loan. If such default occurs after the first 12 monthly payments of the loan
have been satisfied, the Member may pay the outstanding balance, including
accrued interest from the due date, within 60 days of the due date of the last
monthly installment payment, in which case no such distribution will be deemed
to have occurred. Subject to applicable law, notwithstanding the foregoing, a
Member that borrows any of his 401(k) deferrals and any of the earnings
attributable thereto may not cease to make monthly installment payments while
employed and receiving a Salary from the Employer.
Except as provided below, upon a Member's termination of Employment, death or
Disability, or the Employer's termination of the Plan, no further monthly
installment payments may be made. Unless the outstanding balance, including
accrued interest from the due date, is paid within 60 days of the date of such
occurrence, the Member will be deemed to have received a distribution of the
outstanding balance of the loan including accrued interest from the due date.
33
SECTION 8.8 LOANS TO FORMER MEMBERS
Notwithstanding any other provisions of this Article VIII, a member who
terminates Employment for any reason shall be permitted to continue making
scheduled repayments with respect to any loan balance outstanding at the time he
becomes a terminated Member. In addition, a terminated Member may elect to
initiate a new loan from his Account, subject to the conditions otherwise
described in this Article VIII. If any terminated Member who continues to make
repayments or who borrows from his Account pursuant to this Section 8.8 fails to
make a scheduled monthly installment payment within 60 days of the scheduled
payment date, he will be deemed to have received a distribution of the
outstanding balance of the loan.
34
ARTICLE IX
ADMINISTRATION OF PLAN AND ALLOCATION OF RESPONSIBILITIES
SECTION 9.1 FIDUCIARIES
The following persons are Fiduciaries under the Plan.
a) The Trustee,
b) The Employer,
c) The Plan Administrator or committee, appointed by the Employer pursuant
to this Article IX of the Plan and designated as the "Named Fiduciary"
of the Plan and the Plan Administrator, and
d) Any Investment Manager appointed by the Employer as provided in Section
9.4.
Each of said Fiduciaries shall be bonded to the extent required by ERISA.
The TPA is not intended to have the authority or responsibilities which would
cause it to be considered a Fiduciary with respect to the Plan unless the TPA
otherwise agrees to accept such authority or responsibilities in a service
agreement or otherwise in writing.
SECTION 9.2 ALLOCATION OF RESPONSIBILITIES AMONG THE FIDUCIARIES
a) The Trustee
The Employer shall enter into one or more Trust Agreements with a
Trustee or Trustees selected by the Employer. The Trust established
under any such agreement shall be a part of the Plan and shall provide
that all funds received by the Trustee as contributions under the Plan
and the income therefrom (other than such part as is necessary to pay
the expenses and charges referred to in Paragraph (b) of this Section)
shall be held in the Trust Fund for the exclusive benefit of the
Members or their Beneficiaries, and managed, invested and reinvested
and distributed by the Trustee in accordance with the Plan. Sums
received for investment may be invested (i) wholly or partly through
the medium of any common, collective or commingled trust fund
maintained by a bank or other financial institution and which is
qualified under Sections 401(a) and 501(a) of the Code and constitutes
a part of the Plan; (ii) wholly or partly through the medium of a group
annuity or other type of contract issued by an insurance company and
constituting a part of the Plan, and utilizing, under any such
contract, general, commingled or individual investment accounts; or
(iii) wholly or partly in securities issued by an investment company
registered under the Investment Company Act of 1940. Subject to the
provisions of Article XI, the Employer may from time to time and
without the consent of any Member or Beneficiary (a) amend the Trust
Agreement or any such insurance contract in such manner as the Employer
may deem necessary or desirable to carry out the Plan, (b) remove the
Trustee and designate a successor Trustee upon such removal or upon the
resignation of the Trustee, and (c) provide for an alternate funding
agency under the Plan. The Trustee shall make payments under the Plan
only to the extent, in the amounts, in the manner, at the time, and to
the persons as shall from time to time be set forth and designated in
written authorizations from the Plan Administrator or TPA.
35
The Trustee shall from time to time charge against and pay out of the
Trust Fund taxes of any and all kinds whatsoever which are levied or
assessed upon or become payable in respect of such Fund, the income or
any property forming a part thereof, or any security transaction
pertaining thereto. To the extent not paid by the Employer, the Trustee
shall also charge against and pay out of the Trust Fund other expenses
incurred by the Trustee in the performance of its duties under the
Trust, the expenses incurred by the TPA in the performance of its
duties under the Plan (including reasonable compensation for agents and
cost of services rendered in respect of the Plan), such compensation of
the Trustee as may be agreed upon from time to time between the
Employer and the Trustee, and all other proper charges and
disbursements of the Trustee or the Employer.
b) The Employer
The Employer shall be responsible for all functions assigned or
reserved to it under the Plan and any related Trust Agreement. Any
authority so assigned or reserved to the Employer, other than
responsibilities assigned to the Plan Administrator, shall be exercised
by resolution of the Employer's Board of Directors and shall become
effective with respect to the Trustee upon written notice to the
Trustee signed by the duly authorized officer of the Board advising the
Trustee of such exercise. By way of illustration and not by limitation,
the Employer shall have authority and responsibility:
(1) to amend the Plan;
(2) to merge and consolidate the Plan with all or part of the
assets or liabilities of any other plan;
(3) to appoint, remove and replace the Trustee and the Plan
Administrator and to monitor their performances;
(4) to appoint, remove and replace one or more Investment
Managers, or to refrain from such appointments, and to monitor
their performances;
(5) to communicate such information to the Plan Administrator,
TPA, Trustee and Investment Managers as they may need for the
proper performance of their duties; and
(6) to perform such additional duties as are imposed by law.
Whenever, under the terms of this Plan, the Employer is permitted or
required to do or perform any act, it shall be done and performed by an
officer thereunto duly authorized by its Board of Directors.
c) The Plan Administrator
The Plan Administrator shall have responsibility and discretionary
authority to control the operation and administration of the Plan in
accordance with the provisions of Article IX of the Plan, including,
without limiting, the generality of the foregoing:
36
(1) the determination of eligibility for benefits and the amount
and certification thereof to the Trustee;
(2) the hiring of persons to provide necessary services to the
Plan;
(3) the issuance of directions to the Trustee to pay any fees,
taxes, charges or other costs incidental to the operation and
management of the Plan;
(4) the preparation and filing of all reports required to be filed
with respect to the Plan with any governmental agency; and
(5) the compliance with all disclosure requirements imposed by
state or federal law.
d) The Investment Manager
Any Investment Manager appointed pursuant to Section 9.4 shall have
sole responsibility for the investment of the portion of the assets of
the Trust Fund to be managed and controlled by such Investment Manager.
An Investment Manager may place orders for the purchase and sale of
securities directly with brokers and dealers.
SECTION 9.3 NO JOINT FIDUCIARY RESPONSIBILITIES
This Article IX is intended to allocate to each Fiduciary the individual
responsibility for the prudent execution of the functions assigned to him, and
none of such responsibilities or any other responsibilities shall be shared by
two or more of such Fiduciaries unless such sharing is provided by a specific
provision of the Plan or any related Trust Agreement. Whenever one Fiduciary is
required to follow the directions of another Fiduciary, the two Fiduciaries
shall not be deemed to have been assigned a shared responsibility, but the
responsibility of the Fiduciary giving the directions shall be deemed his sole
responsibility, and the responsibility of the Fiduciary receiving those
directions shall be to follow them insofar as such instructions are on their
face proper under applicable law. To the extent that fiduciary responsibilities
are allocated to an Investment Manager, such responsibilities are so allocated
solely to such Investment Manager alone, to be exercised by such Investment
Manager alone and not in conjunction with any other Fiduciary, and the Trustee
shall be under no obligation to manage any asset of the Trust Fund which is
subject to the management of such Investment Manager.
SECTION 9.4 INVESTMENT MANAGER
The Employer may appoint a qualified Investment Manager or Managers to manage
any portion or all of the assets of the Trust Fund. For the purpose of this Plan
and the related Trust, a "qualified Investment Manager" means an individual,
firm or corporation who has been so appointed by the Employer to serve as
Investment Manager hereunder, and who is and has acknowledged in writing that he
is (a) a Fiduciary with respect to the Plan, (b) bonded as required by ERISA,
and (c) either (i) registered as an investment advisor under the Investment
Advisors Act of 1940, (ii) a bank as defined in said Act, or (iii) an insurance
company qualified to perform investment management services under the laws of
more than one state of the United States.
Any such appointment shall be by a vote of the Board of Directors of the
Employer naming the Investment Manager so appointed and designating the portion
of the assets of the Trust Fund to be
37
managed and controlled by such Investment Manager. Said vote shall be evidenced
by a certificate in writing signed by the duly authorized officer of the Board
and shall become effective on the date specified in such certificate but not
before delivery to the Trustee of a copy of such certificate, together with a
written acknowledgement by such Investment Manager of the facts specified in the
second sentence of this Section.
SECTION 9.5 ADVISOR TO FIDUCIARY
A Fiduciary may employ one or more persons to render advice concerning any
responsibility such Fiduciary has under the Plan and related Trust Agreement.
SECTION 9.6 SERVICE IN MULTIPLE CAPACITIES
Any person or group of persons may serve in more than one fiduciary capacity
with respect to the Plan, specifically including service both as Plan
Administrator and as a Trustee of the Trust; provided, however, that no person
may serve in a fiduciary capacity who is precluded from so serving pursuant to
Section 411 of ERISA.
SECTION 9.7 APPOINTMENT OF PLAN ADMINISTRATOR
The Employer shall designate the Plan Administrator in the Adoption Agreement.
The Plan Administrator may be an individual, a committee of two or more
individuals, whether or not, in either such case, the individual or any of such
individuals are Employees of the Employer, a consulting firm or other
independent agent, the Trustee (with its consent), the Board of the Employer, or
the Employer itself. Except as the Employer shall otherwise expressly determine,
the Plan Administrator shall be charged with the full power and responsibility
for administering the Plan in all its details. If no Plan Administrator has been
appointed by the Employer, or if the person designated as Plan Administrator is
not serving as such for any reason, the Employer shall be deemed to be the Plan
Administrator. The Plan Administrator may be removed by the Employer or may
resign by giving written notice to the Employer, and, in the event of the
removal, resignation, death or other termination of service of the Plan
Administrator, the Employer shall, as soon as is practicable, appoint a
successor Plan Administrator, such successor thereafter to have all of the
rights, privileges, duties and obligations of the predecessor Plan
Administrator.
SECTION 9.8 POWERS OF THE PLAN ADMINISTRATOR
The Plan Administrator is hereby vested with all powers and authority necessary
in order to carry out its duties and responsibilities in connection with the
administration of the Plan as herein provided, and is authorized to make such
rules and regulations as it may deem necessary to carry out the provisions of
the Plan and the Trust Agreement. The Plan Administrator may from time to time
appoint agents to perform such functions involved in the administration of the
Plan as it may deem advisable. The Plan Administrator shall have the
discretionary authority to determine any questions arising in the
administration, interpretation and application of the Plan, including any
questions submitted by the Trustee on a matter necessary for it to properly
discharge its duties; and the decision of the Plan Administrator shall be
conclusive and binding on all persons.
38
SECTION 9.9 DUTIES OF THE PLAN ADMINISTRATOR
The Plan Administrator shall keep on file a copy of the Plan and the Trust
Agreement(s), including any subsequent amendments, and all annual reports of the
Trustee(s), and such annual reports or registration statements as may be
required by the laws of the United States, or other jurisdiction, for
examination by Members in the Plan during reasonable business hours. Upon
request by any Member, the Plan Administrator shall furnish him with a statement
of his interest in the Plan as determined by the Plan Administrator as of the
close of the preceding Plan Year.
SECTION 9.10 ACTION BY THE PLAN ADMINISTRATOR
In the event that there shall at any time be two or more persons who constitute
the Plan Administrator, such persons shall act by concurrence of a majority
thereof.
SECTION 9.11 DISCRETIONARY ACTION
Wherever, under the provisions of this Plan, the Plan Administrator is given any
discretionary power or powers, such power or powers shall not be exercised in
such manner as to cause any discrimination prohibited by the Code in favor of or
against any Member, Employee or class of Employees. Any discretionary action
taken by the Plan Administrator hereunder shall be consistent with any prior
discretionary action taken by it under similar circumstances and to this end the
Plan Administrator shall keep a record of all discretionary action taken by it
under any provision hereof.
SECTION 9.12 COMPENSATION AND EXPENSES OF PLAN ADMINISTRATOR
Employees of the Employer shall serve without compensation for services as Plan
Administrator, but all expenses of the Plan Administrator shall be paid by the
Employer. Such expenses shall include any expenses incidental to the functioning
of the Plan, including, but not limited to, attorney's fees, accounting and
clerical charges, and other costs of administering the Plan. Non- Employee Plan
Administrators shall receive such compensation as the Employer shall determine.
SECTION 9.13 RELIANCE ON OTHERS
The Plan Administrator and the Employer shall be entitled to rely upon all
valuations, certificates and reports furnished by the Trustee(s), upon all
certificates and reports made by an accountant or actuary selected by the Plan
Administrator and approved by the Employer and upon all opinions given by any
legal counsel selected by the Plan Administrator and approved by the Employer,
and the Plan Administrator and the Employer shall be fully protected in respect
of any action taken or suffered by them in good faith in reliance upon such
Trustee(s), accountant, actuary or counsel and all action so taken or suffered
shall be conclusive upon each of them and upon all Members, retired Members, and
Former Members and their Beneficiaries, and all other persons.
SECTION 9.14 SELF INTEREST
No person who is the Plan Administrator shall have any right to decide upon any
matter relating solely to himself or to any of his rights or benefits under the
Plan. Any such decision shall be made by another Plan Administrator or the
Employer.
39
SECTION 9.15 PERSONAL LIABILITY - INDEMNIFICATION
The Plan Administrator shall not be personally liable by virtue of any
instrument executed by him or on his behalf. Neither the Plan Administrator, the
Employer, nor any of its officers or directors shall be personally liable for
any action or inaction with respect to any duty or responsibility imposed upon
such person by the terms of the Plan unless such action or inaction is
judicially determined to be a breach of that person's fiduciary responsibility
with respect to the Plan under any applicable law. The limitation contained in
the preceding sentence shall not, however, prevent or preclude a compromise
settlement of any controversy involving the Plan, the Plan Administrator, the
Employer, or any of its officers and directors. The Employer may advance money
in connection with questions of liability prior to any final determination of a
question of liability. Any settlement made under this Article IX shall not be
determinative of any breach of fiduciary duty hereunder.
The Employer will indemnify every person who is or was a Plan Administrator,
officer or member of the Board or a person who provides services without
compensation to the Plan for any liability (including reasonable costs of
defense and settlement) arising by reason of any act or omission affecting the
Plan or affecting the Member or Beneficiaries thereof, including, without
limitation, any damages, civil penalty or excise tax imposed pursuant to ERISA:
provided (1 ) that the act or omission shall have occurred in the course of the
person's service as Plan Administrator, officer of the Employer or member of the
Board or was within the scope of the Employment of any Employee of the Employer
or in connection with a service provided without compensation to the Plan, (2)
that the act or omission be in good faith as determined by the Employer, whose
determination, made in good faith and not arbitrarily or capriciously, shall be
conclusive, and (3) that the Employer's obligation hereunder shall be offset to
the extent of any otherwise applicable insurance coverage, under a policy
maintained by the Employer, or any other person, or other source of
indemnification.
SECTION 9.16 INSURANCE
The Plan Administrator shall have the right to purchase such insurance as it
deems necessary to protect the Plan and the Trustee from loss due to any breach
of fiduciary responsibility by any person. Any premiums due on such insurance
may be paid from Plan assets provided that, if such premiums are so paid, such
policy of insurance must permit recourse by the insurer against the person who
breaches his fiduciary responsibility. Nothing in this Article IX shall prevent
the Plan Administrator or the Employer, at its, or his, own expense, from
providing insurance to any person to cover potential liability of that person as
a result of a breach of fiduciary responsibility, nor shall any provisions of
the Plan preclude the Employer from purchasing from any insurance company the
right of recourse under any policy by such insurance company.
SECTION 9.17 CLAIMS PROCEDURES
Claims for benefits under the Plan shall be filed with the Plan Administrator on
forms supplied by the Employer. Written notice of the disposition of a claim
shall be furnished to the claimant within 90 days after the application thereof
is filed unless special circumstances require an extension of time for
processing the claim. If such an extension of time is required, written notice
of the extension shall be furnished to the claimant prior to the termination of
said 90-day period, and such notice shall indicate the special circumstances
which make the postponement appropriate.
40
SECTION 9.18 CLAIMS REVIEW PROCEDURES
In the event a claim is denied, the reasons for the denial shall be specifically
set forth in the notice described in this Section 9.18 in language calculated to
be understood by the claimant. Pertinent provisions of the Plan shall be cited,
and, where appropriate, an explanation as to how the claimant can request
further consideration and review of the claim will be provided. In addition, the
claimant shall be furnished with an explanation of the Plan's claims review
procedures. Any Employee, former Employee, or Beneficiary of either, who has
been denied a benefit by a decision of the Plan Administrator pursuant to
Section 9.17 shall be entitled to request the Plan Administrator to give further
consideration to his claim by filing with the Plan Administrator (on a form
which may be obtained from the Plan Administrator) a request for a hearing. Such
request, together with a written statement of the reasons why the claimant
believes his claim should be allowed, shall be filed with the Plan Administrator
no later than 60 days after receipt of the written notification provided for in
Section 9.17. The Plan Administrator shall then conduct a hearing within the
next 60 days, at which the claimant may be represented by an attorney or any
other representative of his choosing and at which the claimant shall have an
opportunity to submit written and oral evidence and arguments in support of his
claim. At the hearing (or prior thereto upon 5 business days' written notice to
the Plan Administrator), the claimant or his representative shall have an
opportunity to review all documents in the possession of the Plan Administrator
which are pertinent to the claim at issue and its disallowance. A final
disposition of the claim shall be made by the Plan Administrator within 60 days
of receipt of the appeal unless there has been an extension of 60 days and shall
be communicated in writing to the claimant. Such communication shall be written
in a manner calculated to be understood by the claimant and shall include
specific reasons for the disposition and specific references to the pertinent
Plan provisions on which the disposition is based. For all purposes under the
Plan, such decision on claims (where no review is requested) and decision on
review (where review is requested) shall be final, binding and conclusive on all
interested persons as to participation and benefits eligibility, the amount of
benefits and as to any other matter of fact or interpretation relating to the
Plan.
41
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 GENERAL LIMITATIONS
(A) In order that the Plan be maintained as a qualified plan and trust
under the Code, contributions in respect of a Member shall be subject
to the limitations set forth in this Section, notwithstanding any other
provision of the Plan. The contributions in respect of a Member to
which this Section is applicable are his own contributions and/or
deferrals and the Employer's contributions.
For purposes of this Section 10.1, a Member's contributions shall be
determined without regard to any rollover contributions as provided in
Section 402(a)(5) of the Code.
(B) Annual additions to a Member's Account in respect of any Plan Year may
not exceed the limitations set forth in Section 415 of the Code. which
are incorporated herein by reference. For these purposes, "annual
additions" shall have the meaning set forth in Section 415(c)(2) of the
Code, as modified elsewhere in the Code and the Regulations, and the
limitation year shall mean the Plan Year unless any other
twelve-consecutive-month period is designated pursuant to a resolution
adopted by the Employer and designated in the Adoption Agreement. If a
Member in the Plan also participates in any defined benefit plan (as
defined in Sections 414(j) and 415(k) of the Code) maintained by the
Employer or any of its Affiliates, in the event that in any Plan Year
the sum of the Member's "defined benefit fraction" (as defined in
Section 415(e)(2) of the Code) and the Member's "defined contribution
fraction" (as defined in Section 415(e)(3) of the Code) exceeds 1.0,
the benefit under such defined benefit plan or plans shall be reduced
in accordance with the provisions of that plan or those plans, so that
the sum of such fractions in respect of the Member will not exceed 1.0.
If this reduction does not ensure that the limitation set forth in this
Paragraph (B) is not exceeded, then the annual addition to any defined
contribution plan, other than the Plan, shall be reduced in accordance
with the provisions of that plan but only to the extent necessary to
ensure that such limitation is not exceeded.
(C) In the event that, due to forfeitures, reasonable error in estimating a
Member's compensation, or other limited facts and circumstances, total
contributions and/or deferrals to a Member's Account are found to
exceed the limitations of this Section, the TPA, at the direction of
the Plan Administrator, shall cause contributions made under Article
III in excess of such limitations to be refunded to the affected
Member, with earnings thereon, and shall take appropriate steps to
reduce, if necessary, the Employer contributions made with respect to
those returned contributions. Such refunds shall not be deemed to be
withdrawals, loans, or distributions from the Plan. If a Member's
annual contributions exceed the limitations contained in Paragraph (B)
of this Section after the Member's Article III contributions, with
earnings thereon, if any, have been refunded to such Member, any
Employer supplemental and/or profit sharing contribution to be
allocated to such Member in respect of any Contribution Determination
Period (including allocations as provided in this Paragraph) shall
instead be allocated to or for the benefit of all other Members who are
Employees in Employment as of the last day of the Contribution
Determination Period as determined under the Adoption Agreement and
allocated in the same proportion that each such Member's Salary for
such Contribution Determination Period bears to the total Salary for
such Contribution Determination Period of all such Members or, the TPA
may, at the election of the Employer, utilize such excess to reduce the
contributions which would otherwise be made for the succeeding
Contribution Determination Period by the Employer. If, with respect to
any
42
Contribution Determination Period, there is an excess profit sharing
contribution, and such excess cannot be fully allocated in accordance
with the preceding sentence because of the limitations prescribed in
Paragraph (B) of this Section, the amount of such excess which cannot
be so allocated shall be allocated to the Employer Credit Account and
made available to the Employer pursuant to the terms of Article VI. The
TPA, at the direction of the Plan Administrator, in accordance with
Paragraph (D) of this Section, shall take whatever additional action
may be necessary to assure that contributions to Members' Accounts meet
the requirements of this Section.
(D) In addition to the steps set forth in Paragraph (C) of this Section,
the Employer may from time to time adjust or modify the maximum
limitations applicable to contributions made in respect of a Member
under this Section 10.1 as may be required or permitted by the Code or
ERISA prior to or following the date that allocation of any such
contributions commences and shall take appropriate action to reallocate
the annual contributions which would otherwise have been made but for
the application of this Section.
(E) Membership in the Plan shall not give any Employee the right to be
retained in the Employment of the Employer and shall not affect the
right of the Employer to discharge any Employee.
(F) Each Member, Spouse and Beneficiary assumes all risk in connection with
any decrease in the market value of the assets of the Trust Fund.
Neither the Employer nor the Trustee guarantees that upon withdrawal,
the value of a Member's Account will be equal to or greater than the
amount of the Member~s own deferrals or contributions, or those
credited on his behalf in which the Member has a vested interest, under
the Plan.
(G) The establishment, maintenance or crediting of a Member's Account
pursuant to the Plan shall not vest in such Member any right, title or
interest in the Trust Fund except at the times and upon the terms and
conditions and to the extent expressly set forth in the Plan and the
Trust Agreement.
(H) The Trust Fund shall be the sole source of payments under the Plan and
the Employer, Plan Administrator and TPA assume no liability or
responsibility for such payments, and each Member, Spouse or
Beneficiary who shall claim the right to any payment under the Plan
shall be entitled to look only to the Trust Fund for such payment.
SECTION 10.2 TOP HEAVY PROVISIONS
The Plan will be considered a Top Heavy Plan for any Plan Year if it is
determined to be a Top Heavy Plan as of the last day of the preceding Plan Year.
The provisions of this Section 10.2 shall apply and supersede all other
provisions in the Plan during each Plan Year with respect to which the Plan is
determined to be a Top Heavy Plan.
(A) For purposes of this Section 10.2, the following terms shall have the
meanings set forth below:
(1) "AFFILIATE" shall mean any entity affiliated with the Employer
within the meaning of Section 414(b), 414(c) or 414(m) of the
Code, or pursuant to the IRS Regulations under Section 414(o)
of the Code, except that for purposes of applying the
provisions hereof with respect to the limitation on
contributions, Section 415(h) of the Code shall apply.
43
(2) "AGGREGATION GROUP" shall mean the group composed of each
qualified retirement plan of the Employer or an Affiliate in
which a Key Employee is a member and each other qualified
retirement plan of the Employer or an Affiliate which enables
a plan of the Employer or an Affiliate in which a Key Employee
is a member to satisfy Sections 401(a)(4) or 410 of the Code.
In addition, the TPA, at the direction of the Plan
Administrator, may choose to treat any other qualified
retirement plan as a member of the Aggregation Group if such
Aggregation Group will continue to satisfy Sections 401(a)(4)
and 410 of the Code with such plan being taken into account.
(3) "KEY EMPLOYEE" shall mean a "Key Employee" as defined in
Sections 416(i)(1) and (5) of the Code and the IRS Regulations
thereunder. For purposes of Section 416 of the Code and for
purposes of determining who is a Key Employee, an Employer
which is not a corporation may have "officers" only for Plan
Years beginning after December 31, 1985. For purposes of
determining who is a Key Employee pursuant to this
Subparagraph (3), compensation shall have the meaning
prescribed in Section 414(s) of the Code, or to the extent
required by the Code or the IRS Regulations, Section
1.415-2(d) of the IRS Regulations.
(4) "NON-KEY EMPLOYEE" shall mean a "Non-Key Employee" as defined
in Section 416(i)(2) of the Code and the IRS Regulations
thereunder.
(5) "TOP HEAVY PLAN" shall mean a "Top Heavy Plan" as defined in
Section 416(g) of the Code and the IRS Regulations thereunder.
(B) Subject to the provisions of Paragraph (D) below, for each Plan Year
that the Plan is a Top Heavy Plan, the Employer's contribution
(including contributions attributable to salary reduction or similar
arrangements) allocable to each Employee (other than a Key Employee)
who has satisfied the eligibility requirement(s) of Article II, Section
2, and who is in service at the end of the Plan Year, shall not be less
than the lesser of (i) 3% of such eligible Employee's compensation (as
defined in Section 414(s) of the Code or to the extent required by the
Code or the IRS Regulations, Section 1.415-2(d) of the Regulations), or
(ii) the percentage at which Employer contributions for such Plan Year
are made and allocated on behalf of the Key Employee for whom such
percentage is the highest. For the purpose of determining the
appropriate percentage under clause (ii), all defined contribution
plans required to be included in an Aggregation Group shall be treated
as one plan. Clause (ii) shall not apply if the Plan is required to be
included in an Aggregation Group which enables a defined benefit plan
also required to be included in said Aggregation Group to satisfy
Sections 401(a)(4) or 410 of the Code.
(C) If the Plan is a Top Heavy Plan for any Plan Year, and the Employer has
elected vesting Schedule 3 or 6 under Article VI, the vested interest
of each Member, who is credited with at least one Hour of Employment on
or after the Plan becomes a Top Heavy Plan, in the Units allocated to
his Account shall not be less than the percentage determined in
accordance with the following schedule:
44
Completed Vested
Years of Employment Percentage
------------------- ----------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 or more 100%
(D) (1) For each Plan Year that the Plan is a Top Heavy Plan, 1.0
shall be substituted for 1.25 as the multiplicand of the
dollar limitation in determining the denominator of the
defined benefit plan fraction and of the defined contribution
plan fraction for purposes of Section 415(e) of the Code.
(2) If, after substituting "90%" for "60%" wherever the latter
appears in Section 416(9) of the Code, the Plan is not
determined to be a Top Heavy Plan, the provisions of
Subparagraph (1) of this Paragraph (D) shall not be applicable
if the minimum Employer contribution allocable to any Member
who is a Non-Key Employee as specified in Paragraph (B) of
this Section is determined by substituting "4%" for 3%.
(E) The TPA shall, to the maximum extent permitted by the Code and in
accordance with the IRS Regulations, apply the provisions of this
Section 10.2 by taking into account the benefits payable and the
contributions made under any other qualified plan maintained by the
Employer, to prevent inappropriate omissions or required duplication of
minimum contributions.
SECTION 10.3 INFORMATION AND COMMUNICATIONS
Each Employer, Member, Spouse and Beneficiary shall be required to furnish the
TPA with such information and data as may be considered necessary by the TPA.
All notices, instructions and other communications with respect to the Plan
shall be in such form as is prescribed from time to time by the TPA, shall be
mailed by first class mail or delivered personally, and shall be deemed to have
been duly given and delivered only upon actual receipt thereof by the TPA. All
information and data submitted by an Employer or a Member, including a Member's
birth date, marital status, salary and circumstances of his Employment and
termination thereof, may be accepted and relied upon by the TPA. All
communications from the Employer or the Trustee to a Member, Spouse or
Beneficiary shall be deemed to have been duly given if mailed by first class
mail to the address of such person as last shown on the records of the Plan.
SECTION 10.4 SMALL ACCOUNT BALANCES
Notwithstanding the foregoing provisions of the Plan, if the value of all
portions of a Member's Account under the Plan, when aggregated, is equal to or
exceeds $3,500, then the Account will not be distributed without the consent of
the Member prior to age 65 (at the earliest), but if the aggregate value of all
portions of his Account is less than $3,500, then his Account will be
distributed as soon as practicable following the termination of Employment by
the Member.
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SECTION 10.5 AMOUNTS PAYABLE TO INCOMPETENTS, MINORS OR ESTATES
If the Plan Administrator shall find that any person to whom any amount is
payable under the Plan is unable to care for his affairs because of illness or
accident, or is a minor, or has died, then any payment due him or his estate
(unless a prior claim therefor has been made by a duly appointed legal
representative) may be paid to his Spouse, relative or any other person deemed
by the Plan Administrator to be a proper recipient on behalf of such person
otherwise entitled to payment. Any such payment shall be a complete discharge of
the liability of the Trust Fund therefor.
SECTION 10.6 NON-ALIENATION OF AMOUNTS PAYABLE
Except insofar as may otherwise be required by applicable law, or Article VIII,
or pursuant to the terms of a qualified Domestic Relations Order, no amount
payable under the Plan shall be subject in any manner to alienation by
anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge
or encumbrance of any kind, and any attempt to so alienate shall be void; nor
shall the Trust Fund in any manner be liable for or subject to the debts or
liabilities of any person entitled to any such amount payable; and further, if
for any reason any amount payable under the Plan would not devolve upon such
person entitled thereto, then the Employer, in its discretion, may terminate his
interest and hold or apply such amount for the benefit of such person or his
dependents as it may deem proper. For the purposes of the Plan, a "Qualified
Domestic Relations Order" means any judgment, decree or order (including
approval of a property settlement agreement) which has been determined by the
Plan Administrator, in accordance with procedures established under the Plan, to
constitute a Qualified Domestic Relations Order within the meaning of Section
414(p)(1) of the Code. No amounts may be withdrawn under Article VII, and no
loans granted under Article VIII, if the TPA has received a document which may
be determined following its receipt to be a Qualified Domestic Relations Order
prior to completion of review of such order by the Plan Administrator within the
time period prescribed for such review by the IRS Regulations.
SECTION 10.7 UNCLAIMED AMOUNTS PAYABLE
If the TPA cannot ascertain the whereabouts of any person to whom an amount is
payable under the Plan, and if, after 5 years from the date such payment is due,
a notice of such payment due is mailed to the address of such person, as last
shown on the records of the Plan, and within 3 months after such mailing such
person has not filed with the TPA or Plan Administrator written claim therefor,
the Plan Administrator may direct in accordance with ERISA that the payment
(including the amount allocable to the Member's contributions) be canceled, and
used in abatement of the Plan's administrative expenses, provided that
appropriate provision is made for recrediting the payment if such person
subsequently makes a claim therefor.
SECTION 10.8 LEAVES OF ABSENCE
(A) If the Employer's personnel policies allow leaves of absence for all
similarly situated Employees on a uniformly available basis under the
circumstances described in Paragraphs (B)(1)-(4) below, then
contribution allocations and vesting service will continue to the
extent provided in Paragraphs (B)(1)-(4).
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(B) For purposes of the Plan, there are only four types of approved Leaves of
Absence:
(1) Non-military leave granted to a Member for a period not in
excess of one year during which service is recognized for
vesting purposes and the Member is entitled to share in any
supplemental contributions under Article III or forfeitures
under Article VI, if any, on a pro-rata basis, determined by
the Salary earned during the Plan Year or Contribution
Determination Period; or
(2) Non-military leave or layoff granted to a Member for a period
not in excess of one year during which service is recognized
for vesting purposes, but the Member is not entitled to share
in any contributions or forfeitures as defined under (1)
above, if any, during the period of the leave; or
(3) To the extent not otherwise required by applicable law,
military or other governmental service leave granted to a
Member from which he returns directly to the service of the
Employer. Under this leave, a Member may not share in any
contributions or forfeitures as defined under (1) above, if
any, during the period of the leave, but vesting service will
continue to accrue; or
(4) To the extent not otherwise required by applicable law, a
military leave granted at the option of the Employer to a
Member who is subject to military service pursuant to an
involuntary call-up in the Reserves of the U.S. Armed Services
from which he returns to the service of the Employer within 90
days of his discharge from such military service. Under this
leave, a Member is entitled to share in any contributions or
forfeitures as defined under (1) above, if any, and vesting
service will continue to accrue. Notwithstanding any provision
of the Plan to the contrary, if a Member has one or more loans
outstanding at the time of this leave, repayments on such
loan(s) may be suspended, if the Member so elects, until such
time as the Member returns to the service of the Employer or
the end of the leave, if earlier.
SECTION 10.9 RETURN OF CONTRIBUTIONS TO EMPLOYER
(A) In the case of a contribution that is made by an Employer by reason of
a mistake of fact, the Employer may request the return to it of such
contribution within one year after the payment of the contribution,
provided such refund is made within one year after the payment of the
contribution.
(B) In the case of a contribution made by an Employer or a contribution
otherwise deemed to be an Employer contribution under the Code, such
contribution shall be conditioned upon the deductibility of the
contribution by the Employer under Section 404 of the Code. To the
extent the deduction for such contribution is disallowed, in accordance
with IRS Regulations, the Employer may request the return to it of such
contribution within one year after the disallowance of the deduction.
(C) In the event that the IRS determines that the Plan is not initially
qualified under the Code, any contribution made incident to that
initial qualification by the Employer must be returned to the Employer
within one year after the date the initial qualification is denied, but
only if the application for the qualification is made by the time
prescribed by law for filing the Employer's
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return for the taxable year in which the Plan is adopted, or such later
date as the Secretary of the Treasury may prescribe.
The contributions returned under (A), (B) or (C) above may not include any gains
on such excess contributions, but must be reduced by any losses.
SECTION 10.10 CONTROLLING LAW
The Plan and all rights thereunder shall be governed by and construed in
accordance with ERISA and the laws of the State of New York.
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ARTICLE XI
AMENDMENT & TERMINATION
SECTION 11.1 GENERAL
While the Plan is intended to be permanent, the Plan may be amended or
terminated completely by the Employer at any time at the discretion of its Board
of Directors. Except where necessary to qualify the Plan or to maintain
qualification of the Plan, no amendment shall reduce any interest of a Member
existing prior to such amendment. Subject to the terms of the Adoption
Agreement, written notice of such amendment or termination as resolved by the
Board shall be given to the Trustee, the Plan Administrator and the TPA. Such
notice shall set forth the effective date of the amendment or termination or
cessation of contributions.
SECTION 11.2 TERMINATION OF PLAN AND TRUST
This Plan and any related Trust Agreement shall in any event terminate whenever
all property held by the Trustee shall have been distributed in accordance with
the terms hereof.
SECTION 11.3 LIQUIDATION OF TRUST ASSETS IN THE EVENT OF TERMINATION
In the event that the Employer's Board of Directors shall decide to terminate
the Plan, or, in the event of complete cessation of Employer contributions, the
rights of Members to the amounts standing to their credit in their Accounts
shall be deemed fully vested and the Plan Administrator shall direct the Trustee
to either continue the Trust in full force and effect and continue so much of
the Plan in full force and effect as is necessary to carry out the orderly
distribution of benefits to Members and their Beneficiaries upon retirement,
Disability, death or termination of Employment; or (a) reduce to cash such part
or all of the Plan assets as the Plan Administrator may deem appropriate; (b)
pay the liabilities, if any, of the Plan; (c) value the remaining assets of the
Plan as of the date of notification of termination and proportionately adjust
Members' Account balances; (d) distribute such assets in cash to the credit of
their respective Accounts as of the notification of the termination date; and
(e) distribute all balances which have been segregated into a separate fund to
the persons entitled thereto; provided that no person in the event of
termination shall be required to accept distribution in any form other than
cash.
SECTION 11.4 PARTIAL TERMINATION
The Employer may terminate the Plan in part without causing a complete
termination of the Plan. In the event a partial termination occurs, the Plan
Administrator shall determine the portion of the Plan assets attributable to the
Members affected by such partial termination and the provisions of Section 11.3
shall apply with respect to such portion as if it were a separate fund.
SECTION 11.5 POWER TO AMEND
(A) Subject to Section 11.6, the Employer, through its Board of Directors,
shall have the power to amend the Plan in any manner which it deems
desirable, including, but not by way of limitation, the right to change
or modify the method of allocation of such contributions, to change any
provision relating to the distribution of payment, or both, of any of
the assets of the Trust Fund. Further, the Employer may (i) change the
choice of options in the Adoption Agreement; (ii) add overriding
language in the Adoption Agreement when such language is necessary to
satisfy
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Section 415 or Section 416 of the Code because of the required
aggregation of multiple plans; and (iii) add certain model amendments
published by the IRS which specifically provide that their adoption
will not cause the Plan to be treated as individually designed. An
Employer that amends the Plan for any other reason, including a waiver
of the minimum funding requirement under Section 412(d) of the Code,
will be considered to have an individually designed plan.
Any amendment shall become effective upon the vote of the Board of
Directors of the Employer, unless such vote of the Board of Directors
of the Employer specifies the effective date of the amendment.
Such effective date of the amendment may be made retroactive to the
vote of the Board of Directors, to the extent permitted by law.
(B) The Employer expressly recognizes the authority of the Sponsor,
Pentegra Services, Inc., to amend the Plan from time to time, except
with respect to elections of the Employer in the Adoption Agreement,
and the Employer shall be deemed to have consented to any such
amendment. The Employer shall receive a written instrument indicating
the amendment of the Plan and such amendment shall become effective as
of the date of such instrument. No such amendment shall in any way
impair, reduce or affect any Member's vested and nonforfeitable rights
in the Plan and Trust.
SECTION 11.6 SOLELY FOR BENEFIT OF MEMBERS, TERMINATED MEMBERS AND THEIR
BENEFICIARIES
No changes may be made in the Plan which shall vest in the Employer, directly or
indirectly, any interest, ownership or control in any of the present or
subsequent assets of the Trust Fund.
No part of the funds of the Trust other than such part as may be required to pay
taxes, administration expenses and fees, shall be reduced by any amendment or be
otherwise used for or diverted to purposes other than the exclusive benefit of
Members, retired Members, Former Members, and their Beneficiaries, except as
otherwise provided in Section 10.9 and under applicable law.
No amendment shall become effective which reduces the nonforfeitable percentage
of benefit that would be payable to any Member if his Employment were to
terminate and no amendment which modifies the method of determining that
percentage shall be made effective with respect to any Member with at least
three Years of Service unless such member is permitted to elect, within a
reasonable period after the adoption of such amendment, to have that percentage
determined without regard to such amendment.
SECTION 11.7 SUCCESSOR TO BUSINESS OF THE EMPLOYER
Unless this Plan and the related Trust Agreement be sooner terminated, a
successor to the business of the Employer by whatever form or manner resulting
may continue the Plan and the related Trust Agreement by executing appropriate
supplementary agreements and such successor shall thereupon succeed to all the
rights, powers and duties of the Employer hereunder. The Employment of any
Employee who has continued in the employ of such successor shall not be deemed
to have terminated or severed for any purpose hereunder if such supplemental
agreement so provides.
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SECTION 11.8 MERGER, CONSOLIDATION AND TRANSFER
The Plan shall not be merged or consolidated, in whole or in part, with any
other plan, nor shall any assets or liabilities of the Plan be transferred to
any other plan unless the benefit that would be payable to any affected Member
under such plan if it terminated immediately after the merger, consolidation or
transfer, is equal to or greater than the benefit that would be payable to the
affected Member under this Plan if it terminated immediately before the merger,
consolidation or transfer.
SECTION 11.9 REVOCABILITY
This Plan is based upon the condition precedent that it shall be approved by the
Internal Revenue Service as qualified under Section 401(a) of the Code and
exempt from taxation under Section 501(a) of the Code. Accordingly,
notwithstanding anything herein to the contrary, if a final ruling shall be
received in writing from the IRS that the Plan does not initially qualify under
the terms of Sections 401(a) and 501(a) of the Code, there shall be no vesting
in any Member of assets contributed by the Employer and held by the Trustee
under the Plan. Upon receipt of notification from the IRS that the Plan fails to
qualify as aforesaid, the Employer reserves the right, at its option, to either
amend the Plan in such manner as may be necessary or advisable so that the Plan
may so qualify, or to withdraw and terminate the Plan.
Upon the event of withdrawal and termination, the Employer shall notify the
Trustee and provide the Trustee with a copy of such ruling and the Trustee shall
transfer and pay over to the Employer all of the net assets contributed by the
Employer pursuant to the Plan which remain after deducting the proper expense of
termination and the Trust Agreement shall thereupon terminate. For purposes of
this Article XI, "final ruling" shall mean either (1) the initial letter ruling
from the District Director in response to the Employer's original application
for such a ruling, or (2) if such letter ruling is unfavorable and a written
appeal is taken or protest filed within 60 days of the date of such letter
ruling, it shall mean the ruling received in response to such appeal or protest.
If the Plan is terminated, the Plan Administrator shall promptly notify the IRS
and such other appropriate governmental authority as applicable law may require.
Neither the Employer nor its Employees shall make any further contributions
under the Plan after the termination date, except that the Employer shall remit
to the TPA a reasonable administrative fee to be determined by the TPA for each
Member with a balance in his Account to defray the cost of implementing its
termination. Where the Employer has terminated the Plan pursuant to this
Article, the Employer may elect to transfer assets from the Plan to a successor
plan qualified under Section 401 (a) of the Code in which event the Employer
shall remit to the TPA an additional administrative fee to be determined by the
TPA to defray the cost of such transfer transaction.
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TRUSTS ESTABLISHED UNDER THE PLAN
Assets of the Plan are held in trust under separate Trust Agreements with the
Trustee or Trustees. Any Eligible Employee or Member may obtain a copy of these
Trust Agreements from the Plan Administrator.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the Plan by
the Employer, the Employer has caused these presents to be executed on its
behalf and its corporate seal to be hereunder affixed as of the 13th day of
March, 1997.
ATTEST:
/s/ ▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Clerk
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