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EXHIBIT 4.5
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SPECIAL
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PROTOTYPE DEFINED
CONTRIBUTION PLAN
ADOPTION AGREEMENT
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401(k) PLAN
EMPLOYEE THRIFT PLAN
PROFIT-SHARING PLAN
LETTER SERIAL NUMBER: D359287B
NATIONAL OFFICE LETTER DATE: 6/29/93
THIS PROTOTYPE PLAN AND ADOPTION AGREEMENT ARE IMPORTANT LEGAL INSTRUMENTS WITH
LEGAL AND TAX IMPLICATIONS FOR WHICH THE SPONSOR, ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇
& ▇▇▇▇▇, INCORPORATED, DOES NOT ASSUME RESPONSIBILITY. THE EMPLOYER IS URGED TO
CONSULT WITH ITS OWN ATTORNEY WITH REGARD TO THE ADOPTION OF THIS PLAN AND ITS
SUITABILITY TO ITS CIRCUMSTANCES.
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ADOPTION OF PLAN
The Employer named below hereby establishes or restates a profit-sharing plan
that includes a 401(k) [X], profit-sharing [X] and/or [ ] thrift plan feature
(the "Plan") by adopting the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Special Prototype Defined
Contribution Plan and Trust as modified by the terms and provisions of this
Adoption Agreement.
EMPLOYER AND PLAN INFORMATION
Employer Name:* Gadzooks, Inc.
Business Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Employer Taxpayer ID Number: ▇▇-▇▇▇▇▇▇▇
Employer Taxable Year ends on: a 52 or 53 week year which ends on the
Saturday nearest January 31.
Plan Name: Gadzooks, Inc. Savings Plan
Plan Number: 001
401(k) PROFIT-SHARING THRIFT
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Effective Date of Adoption or 04/01/98 04/01/98 __/__/__
Restatement:
Original Effective Date: 01/01/95 01/01/95 __/__/__
IF THIS PLAN IS A CONTINUATION OR AN AMENDMENT OF A PRIOR PLAN, ALL OPTIONAL
FORMS OF BENEFITS PROVIDED IN THE PRIOR PLAN MUST BE PROVIDED UNDER THIS PLAN TO
ANY PARTICIPANT WHO HAD AN ACCOUNT BALANCE, WHETHER OR NOT VESTED, IN THE PRIOR
PLAN.
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* If there are any Participating Affiliates in this Plan, list below the
proper name of each Participating Affiliate. N/A
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ARTICLE I. DEFINITIONS
A. "COMPENSATION"
(1) With respect to each Participant, except as provided below,
Compensation shall mean the (select all those applicable for each
column):
401(k)
AND/OR PROFIT-
THRIFT SHARING
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[ ] [ ] (a) amount reported in the "Wages Tips
and Other Compensation" Box on Form
W-2 for the applicable period
selected in Item 5 below.
[X] [X] (b) compensation for Code Section 415
safe-harbor purposes (as defined in
Section 3.9.1(H)(i) of basic plan
document #03) for the applicable
period selected in Item 5 below.
[ ] [ ] (c) amount reported pursuant to Code
Section 3401(a) for the applicable
period selected in Item 5 below.
[ ] [ ] (d) all amounts received (under either
option (a) or (b) above) for personal
services rendered to the Employer but
excluding (select all those
applicable):
[ ] overtime
[ ] bonuses
[ ] commissions
[ ] amounts in excess of $_____.
[ ] other (specify): _______.
(2) Treatment of Elective Contributions (select one):
[X] (a) For purposes of contributions, Compensation shall include
Elective Deferrals and amounts excludable from the gross income
of the Employee under Code Section 125, Code Section 402(e)(3),
Code Section 402(h) or Code Section 403(b) ("elective
contributions").
[ ] (b) For purposes of contributions, Compensation shall not include
"elective contributions."
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(3) CODA Compensation (select one):
[X] (a) For purposes of the ADP and ACP Tests, Compensation shall include
"elective contributions."
[ ] (b) For purposes of the ADP and ACP Tests, Compensation shall not
include "elective contributions."
(4) With respect to Contributions to an Employer Contributions Account,
Compensation shall include all Compensation (select one):
[ ] (a) during the Plan Year in which the Participant enters the Plan.
[X] (b) after the Participant's Entry Date.
(5) The applicable period for determining Compensation shall be (select one):
[X] (a) the Plan Year.
[ ] (b) the Limitation Year.
[ ] (c) the consecutive 12-month period ending on _____.
B. "DISABILITY"
(1) Definition
Disability shall mean a condition which results in the Participant's
(select one):
[ ] (a) inability to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment that
can be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than 12
months.
[ ] (b) total and permanent inability to meet the requirements of the
Participant's customary employment which can be expected to last
for a continuous period of not less than 12 months.
[ ] (c) qualification for Social Security disability benefits.
[X] (d) qualification for benefits under the Employer's long-term
disability plan.
(2) Contributions Due to Disability (select one):
[X] (a) No contributions to an Employer Contributions Account will be made
on behalf of a Participant due to his or her Disability.
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[ ] (b) Contributions to an Employer Contributions Account will be
made on behalf of a Participant due to his or her
Disability provided that: the Employer elected option (a)
or (c) above as the definition of Disability,
contributions are not made on behalf of a Highly
Compensated Employee, the contribution is based on the
Compensation each such Participant would have received for
the Limitation Year if the Participant had been paid at
the rate of Compensation paid immediately before his or
her Disability, and contributions made on behalf of such
Participant will be nonforfeitable when made.
C. "EARLY RETIREMENT" is (select one):
[X] (1) not permitted.
[ ] (2) permitted if a Participant terminates Employment before
Normal Retirement Age and has (select one):
[ ] (a) attained age ____.
[ ] (b) attained age ____ and completed _____ Years of Service.
[ ] (c) attained age ____ and completed _____ Years of Service
as a Participant.
D. "ELIGIBLE EMPLOYEES" (select one):
[X] (1) All Employees are eligible to participate in the Plan.
[ ] (2) The following Employees are not eligible to participate in
the Plan (select all those applicable):
[ ] (a) Employees included in a unit of Employees covered
by a collective bargaining agreement between the
Employer or a Participating Affiliate and the
Employee representatives (not including any
organization more than half of whose members are
Employees who are owners, officers, or executives
of the Employer or Participating Affiliate) in the
negotiation of which retirement benefits were the
subject of good faith bargaining, unless the
bargaining agreement provides for participation in
the Plan.
[ ] (b) non-resident aliens who received no earned income
from the Employer or a Participating Affiliate
which constitutes income from sources within the
United States.
[ ] (c) Employees of an Affiliate.
[ ] (d) Employees employed in or by the following specified
division, plant, location, job category or other
identifiable individual or group of Employees:
_____.
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E. "ENTRY DATE"
Entry Date shall mean (select as applicable):
401(k)
AND/OR PROFIT-
THRIFT SHARING
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[ ] [ ] (1) If the initial Plan Year is less
than twelve months, the _____ day
of ________ and thereafter.
[ ] [ ] (2) the first day of the Plan Year
following the date the Employee meets
the eligibility requirements. If the
Employer elects this option (2)
establishing only one Entry Date, the
eligibility "age and service"
requirements elected in Article II
must be no more than age 20-1/2 and 6
months of service.
[ ] [ ] (3) the first day of the month following
the date the Employee meets the
eligibility requirements.
[X] [X] (4) the first day of the Plan Year and
the first day of the seventh month of
the Plan Year following the date the
Employee meets the eligibility
requirements.
[ ] [ ] (5) the first day of the Plan Year, the
first day of the fourth month of the
Plan Year, the first day of the
seventh month of the Plan Year, and
the first day of the tenth month of
the Plan Year following the date the
Employee meets the eligibility
requirements.
[ ] [ ] (6) other: ____ .
provided that the Entry Date or Dates
selected are no later than any of the
options above.
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F. "HOURS OF SERVICE"
Hours of Service for the purpose of determining a Participant's Period of
Severance and Year of Service shall be determined on the basis of the method
specified below:
(1) Eligibility Service: For purposes of determining whether a
Participant has satisfied the eligibility requirements, the
following method shall be used (select one):
401(k)
AND/OR PROFIT-
THRIFT SHARING
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[ ] [ ] (a) elapsed time method
[X] [X] (b) hourly records method
(2) Vesting Service: A Participant's nonforfeitable interest shall
be determined on the basis of the method specified below (select
one):
[ ] (a) elapsed time method
[X] (b) hourly records method
[ ] (c) If this item (c) is checked, the Plan only provides
for contributions that are always 100% vested and
this item (2) will not apply.
(3) Hourly Records: For the purpose of determining Hours of
Service under the hourly record method (select one):
[X] (a) only actual hours for which an Employee is paid or
entitled to payment shall be counted.
[ ] (b) an Employee shall be credited with 45 Hours of
Service if such Employee would be credited with at
least 1 Hour of Service during the week.
G. "INTEGRATION LEVEL"
[ ] (1) This Plan is not integrated with Social Security.
[X] (2) This Plan is integrated with Social Security. The
Integration Level shall be (select one):
[X] (a) the Taxable Wage Base.
[ ] (b) $____ (a dollar amount less than the Taxable Wage
Base).
[ ] (c) _____% of the Taxable Wage Base (not to exceed 100%).
[ ] (d) the greater of $10,000 or 20% of the Taxable Wage Base.
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H. "LIMITATION COMPENSATION"
For purposes of Code Section 415, Limitation Compensation shall be compensation
as determined for purposes of (select one):
[X] (1) Code Section 415 Safe-Harbor as defined in Section
3.9.1(H)(i) of basic plan document #03.
[ ] (2) the "Wages, Tips and Other Compensation" Box on Form W-2.
[ ] (3) Code Section 3401(a) Federal Income Tax Withholding.
I. "LIMITATION YEAR"
For purposes of Code Section 415, the Limitation Year shall be (select one):
[X] (1) the Plan Year.
[ ] (2) the twelve consecutive month period ending on the _____
day of the month of _______.
J. "NET PROFITS" are (select one):
[X] (1) not necessary for any contribution.
[ ] (2) necessary for (select all those applicable):
[ ] (a) Profit-Sharing Contributions.
[ ] (b) Matching 401(k) Contributions.
[ ] (c) Matching Thrift Contributions.
K. "NORMAL RETIREMENT AGE"
Normal Retirement Age shall be (select one):
[ ] (1) attainment of age _____ (not more than 65) by the
Participant.
[X] (2) attainment of age 65 (not more than 65) by the Participant
or the 5th anniversary (not more than the 5th) of the
first day of the Plan Year in which the Eligible Employee
became a Participant, whichever is later.
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[ ] (3) attainment of age _____ (not more than 65) by the
Participant or the _____ anniversary (not more than the
5th) of the first day on which the Eligible Employee
performed an Hour of Service, whichever is later.
L. "PARTICIPANT DIRECTED ASSETS" are:
401(k)
AND/OR PROFIT-
THRIFT SHARING
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[X] [X] (1) permitted.
[ ] [ ] (2) not permitted.
M. "PLAN YEAR"
The Plan Year shall end on the last day of December.
N. "PREDECESSOR SERVICE"
Predecessor service will be credited (select one):
[X] (1) only as required by the Plan.
[ ] (2) to include, in addition to the Plan requirements and
subject to the limitations set forth below, service with
the following predecessor employer(s) determined as if
such predecessors were the Employer: __________.
Service with such predecessor employer applies [select either or both
(a) and/or (b); (c) is only available in addition to (a) and/or (b)]:
[ ] (a) for purposes of eligibility to participate;
[ ] (b) for purposes of vesting;
[ ] (c) except for the following service: _____.
O. "VALUATION DATE"
Valuation Date shall mean (select one for each column, as applicable):
401(k)
AND/OR PROFIT-
THRIFT SHARING
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[ ] [ ] (1) the last business day of each month.
[ ] [ ] (2) the last business day of each quarter within
the Plan Year.
[ ] [ ] (3) the last business day of each semi-annual
period within the Plan Year.
[X] [X] (4) the last business day of the Plan Year.
[ ] [ ] (5) other: _____.
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ARTICLE II. PARTICIPATION
PARTICIPATION REQUIREMENTS
An Eligible Employee must meet the following requirements to become a
Participant (select one or more for each column, as applicable):
401(k)
AND/OR PROFIT-
THRIFT SHARING
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[ ] [ ] (1) Performance of one Hour of Service.
[ ] [ ] (2) Attainment of age _____ (maximum
20-1/2) and completion of _____
(not more than 1/2) Years of
Service. If this item is selected,
no Hours of Service shall be
counted.
[X] [X] (3) Attainment of age 21 (maximum 21)
and completion of one Year(s) of
Service. If more than one Year of
Service is selected, the immediate
100% vesting schedule must be
selected in Article VII of this
Adoption Agreement.
[ ] [ ] (4) Attainment of age _____ (maximum
21) and completion of _____ Years
of Service. If more than one Year
of Service is selected, the
immediate 100% vesting schedule
must be selected in Article VII of
this Adoption Agreement.
[ ] [ ] (5) Each Employee who is an Eligible
Employee on _____ will be deemed
to have satisfied the
participation requirements on the
effective date without regard to
such Eligible Employee's actual
age and/or service.
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ARTICLE III. 401(k) CONTRIBUTIONS AND ACCOUNT ALLOCATION
A. ELECTIVE DEFERRALS
If selected below, a Participant's Elective Deferrals will be (select all
applicable):
[X] (1) a dollar amount or a percentage of Compensation, as
specified by the Participant on his or her 401(k) Election
form, which may not exceed 15% of his or her Compensation.
[X] (2) with respect to bonuses, such dollar amount or percentage
as specified by the Participant on his or her 401(k)
Election form with respect to such bonus.
B. MATCHING 401(k)CONTRIBUTIONS
If selected below, the Employer may make Matching 401(k) Contributions for each
Plan Year (select one):
[ ] (1) Discretionary Formula:
Discretionary Matching 401(k) Contribution equal to such a
dollar amount or percentage of Elective Deferrals, as determined
by the Employer, which shall be allocated (select one):
[ ] (a) based on the ratio of each Participant's Elective
Deferral for the Plan Year to the total Elective
Deferrals of all Participants for the Plan Year. If
inserted, Matching 401(k) Contributions shall be
subject to a maximum amount of $______ for each
Participant or _____% of each Participant's
Compensation.
[ ] (b) in an amount not to exceed _____% of each
Participant's first ____% of Compensation
contributed as Elective Deferrals for the Plan
Year. If any Matching 401(k) Contribution remains,
it is allocated to each such Participant in an
amount not to exceed _____% of the next _____% of
each Participant's Compensation contributed as
Elective Deferrals for the Plan Year.
Any remaining Matching 401(k) Contribution shall be allocated to
each such Participant in the ratio that such Participant's
Elective Deferral for the Plan Year bears to the total Elective
Deferrals of all such Participants for the Plan Year. If
inserted, Matching 401(k) Contributions shall be subject to a
maximum amount of $______ for each Participant or _____% of each
Participant's Compensation.
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[X] (2) Nondiscretionary Formula:
A nondiscretionary Matching 401 (k) Contribution for each Plan
Year equal to (select one):
[ ] (a) _____% of each Participant's Compensation
contributed as Elective Deferrals. If inserted,
Matching 401(k) Contributions shall be subject to a
maximum amount of $_____ for each Participant or
_____% of each Participant's Compensation.
[X] (b) 50% of the first 5% of the Participant's
Compensation contributed as Elective Deferrals and
0% of the next 11% of the Participant's
Compensation contributed as Elective Deferrals. If
inserted, Matching 401(k) Contributions shall be
subject to a maximum amount of $_______ for each
Participant or _____% of each Participant's
Compensation.
C. PARTICIPANTS ELIGIBLE FOR MATCHING 401(K) CONTRIBUTION ALLOCATION
The following Participants shall be eligible for an allocation to their Matching
401(k) Contributions Account (select all those applicable):
[X] (1) Any Participant who makes Elective Deferrals.
[ ] (2) Any Participant who satisfies those requirements elected
by the Employer for an allocation to his or her Employer
Contributions Account as provided in Article IV Section C.
[ ] (3) Solely with respect to a Plan in which Matching 401(k)
Contributions are made quarterly (or on any other regular
interval that is more frequent than annually) any
Participant whose 401(k) Election is in effect throughout
such entire quarter (or other interval).
D. QUALIFIED MATCHING CONTRIBUTIONS
If selected below, the Employer may make Qualified Matching Contributions for
each Plan Year (select all those applicable):
(1) In its discretion, the Employer may make Qualified Matching
Contributions on behalf of (select one):
[X] (a) all Participants who make Elective Deferrals in that
Plan Year.
[ ] (b) only those Participants who are Nonhighly Compensated
Employees and who make Elective Deferrals for that
Plan Year.
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(2) Qualified Matching Contributions will be contributed and
allocated to each Participant in an amount equal to (select
one):
[ ] (a) _____% of the Participant's Compensation
contributed as Elective Deferrals. If inserted,
Qualified Matching Contributions shall not exceed
_____% of the Participant's Compensation.
[ ] (b) Such an amount, determined by the Employer, which is
needed to meet the ACP Test.
(3) In its discretion, the Employer may elect to designate all or
any part of Matching 401(k) Contributions as Qualified Matching
Contributions that are taken into account as Elective Deferrals
-- included in the ADP Test and excluded from the ACP Test -on
behalf of (select one):
[ ] (a) all Participants who make Elective Deferrals for that
Plan Year.
[X] (b) Only Participants who are Nonhighly Compensated
Employees who make Elective Deferrals for that Plan
Year.
E. QUALIFIED NONELECTIVE CONTRIBUTIONS
If selected below, the Employer may make Qualified Nonelective Contributions for
each Plan Year (select all those applicable):
(1) In its discretion, the Employer may make Qualified Nonelective
Contributions on behalf of (select one):
[ ] (a) all Eligible Participants.
[X] (b) only Eligible Participants who are Nonhighly
Compensated Employees.
(2) Qualified Nonelective Contributions will be contributed and
allocate to each Eligible Participant in an amount equal to
(select one):
[ ] (a) _____% (no more than 15%) of the Compensation of
each Eligible Participant eligible to share in the
allocation.
[ ] (b) Such an amount determined by the Employer, which is
needed to meet either the ADP Test or ACP Test.
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(3) At the discretion of the Employer, as needed and taken into
account as Elective Deferrals included in the ADP Test on behalf
of (select one):
[ ] (a) all Eligible Participants.
[X] (b) only those Eligible Participants who are Nonhighly
Compensated Employees.
F. ELECTIVE DEFERRALS USED IN ACP TEST (select one):
[X] (1) At the discretion of the Employer, Elective Deferrals may
be used to satisfy the ACP Test.
[ ] (2) Elective Deferrals may not be used to satisfy the ACP
Test.
G. MAKING AND MODIFYING A 401(K) ELECTION
An Eligible Employee shall be entitled to increase, decrease or resume his or
her Elective Deferral percentage with the following frequency during the Plan
Year (select one):
[ ] (1) annually.
[ ] (2) semi-annually.
[X] (3) quarterly.
[ ] (4) monthly.
[ ] (5) other (specify): ______.
Any such increase, decrease or resumption shall be effective as of the first
payroll period coincident with or next following the first day of each period
set forth above. A Participant may completely discontinue making Elective
Deferrals at any time effective for the payroll period after written notice is
provided to the Administrator.
ARTICLE IV. PROFIT-SHARING CONTRIBUTIONS AND ACCOUNT ALLOCATION
A. PROFIT-SHARING CONTRIBUTIONS
If selected below, the following contributions for each Plan Year will be made:
Contributions to Employer Contributions Accounts (select one):
[X] (a) Such an amount, if any, as determined by the Employer.
[ ] (b) _____% of each Participant's Compensation.
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B. ALLOCATION OF CONTRIBUTIONS TO EMPLOYER CONTRIBUTIONS ACCOUNTS
(select one):
[ ] (1) Non-Integrated Allocation
The Employer Contributions Account of each Participant eligible
to share in the allocation for a Plan Year shall be credited
with a portion of the contribution, plus any forfeitures if
forfeitures are reallocated to Participants, equal to the ratio
that the Participant's Compensation for the Plan Year bears to
the Compensation for that Plan Year of all Participants entitled
to share in the contribution.
[X] (2) Integrated Allocation
Contributions to Employer Contributions Accounts with respect to
a Plan Year, plus any forfeitures if forfeitures are reallocated
to Participants, shall be allocated to the Employer
Contributions Account of each eligible Participant as follows:
(a) First, in the ratio that each such eligible Participant's
Compensation for the Plan Year bears to the Compensation
for that Plan Year of all eligible Participants but not in
excess of 3% of each Participant's Compensation.
(b) Second, any remaining contributions and forfeitures will
be allocated in the ratio that each eligible Participant's
Compensation for the Plan Year in excess of the
Integration Level bears to all such Participants' excess
Compensation for the Plan Year but not in excess of 3%.
(c) Third, any remaining contributions and forfeitures will be
allocated in the ratio that the sum of each Participant's
Compensation and Compensation in excess of the Integration
Level bears to the sum of all Participants' Compensation
and Compensation in excess of the Integration Level, but
not in excess of the Maximum Profit-Sharing Disparity Rate
(defined below).
(d) Fourth, any remaining contributions or forfeitures will be
allocated in the ratio that each Participant's
Compensation for that year bears to all Participants'
Compensation for that year.
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The Maximum Profit-Sharing Disparity Rate is equal to the lesser of:
(a) 2.7% or
(b) The applicable percentage determined in accordance with the
following table:
IF THE INTEGRATION LEVEL IS (AS A % OF THE APPLICABLE
THE TAXABLE WAGE BASE ("TWB")). PERCENTAGE IS:
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20% (or $10,000 if greater) or less of the TWB 2.7%
More than 20% (but not less than $10,000) but not more than 80% of 1.3%
the TWB
More than 80% but not less than 100% of the TWB 2.4%
100% of the TWB 2.7%
C. PARTICIPANTS ELIGIBLE FOR EMPLOYER CONTRIBUTION ALLOCATION
The following Participants shall be eligible for an allocation to their Employer
Contributions Account (select all those applicable):
[ ] (1) Any Participant who was employed during the Plan Year.
[ ] (2) In the case of a Plan using the hourly record method for
determining Vesting Service, any Participant who was
credited with a Year of Service during the Plan Year.
[ ] (3) Any Participant who was employed on the last day of the
Plan Year.
[ ] (4) Any Participant who was on a leave of absence on the last
day of the Plan Year.
[ ] (5) Any Participant who during the Plan Year died or became
Disabled while an Employee or terminated employment after
attaining Normal Retirement Age.
[ ] (6) Any Participant who was credited with at least 501 Hours
of Service whether or not employed on the last day of the
Plan Year.
[X] (7) Any Participant who was credited with at least 1,000
Hours of Service and was employed on the last day of the
Plan Year.
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ARTICLE ▇. ▇▇▇▇▇▇ CONTRIBUTIONS
A. EMPLOYEE THRIFT CONTRIBUTIONS N/A
If selected below, Employee Thrift Contributions, which are required for
Matching Thrift Contributions, may be made by a Participant in an amount equal
to (select one):
[ ] (1) A dollar amount or a percentage of the Participant's
Compensation which may not be less than _____% nor may not
exceed _____% of his or her Compensation.
[ ] (2) An amount not less than _____% of and not more than _____%
of each Participant's Compensation.
B. MAKING AND MODIFYING AN EMPLOYEE THRIFT CONTRIBUTION ELECTION N/A
A Participant shall be entitled to increase, decrease or resume his or her
Employee Thrift Contribution percentage with the following frequency during the
Plan Year (select one):
[ ] (1) annually.
[ ] (2) semi-annually.
[ ] (3) quarterly.
[ ] (4) monthly.
[ ] (5) other (specify): ______.
Any such increase, decrease or resumption shall be effective as of the first
payroll period coincident with or next following the first day of each period
set forth above. A Participant may completely discontinue making Employee Thrift
Contributions at any time effective for the payroll period after written notice
is provided to the Administrator.
▇. ▇▇▇▇▇▇ MATCHING CONTRIBUTIONS N/A
If selected below, the Employer will make Matching Thrift Contributions for each
Plan Year (select one):
[ ] (1) Discretionary Formula:
A discretionary Matching Thrift Contribution equal to such a
dollar amount or percentage as determined by the Employer, which
shall be allocated (select one):
[ ] (a) based on the ratio of each Participant's Employee
Thrift Contribution for the Plan Year to the total
Employee Thrift Contributions of all Participants
for the Plan Year. If inserted, Matching Thrift
Contributions shall be subject to a maximum amount
of $____ for each Participant or _____% of each
Participant's Compensation.
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[ ] (b) in an amount not to exceed _____% of each
Participant's first _____% of Compensation
contributed as Employee Thrift Contributions for
the Plan Year. If any Matching Thrift Contribution
remains, it is allocated to each such Participant
in an amount not to exceed _____% of the next
_____% of each Participant's Compensation
contributed as Employee Thrift Contributions for
the Plan Year.
Any remaining Matching Thrift Contribution shall be allocated to each
such Participant in the ratio that such Participant's Employee Thrift
Contributions for the Plan Year bears to the total Employee Thrift
Contributions of all such Participants for the Plan Year. If inserted,
Matching Thrift Contributions shall be subject to a maximum amount of
$___ for each Participant or _____% of each Participant's Compensation.
[ ] (2) Nondiscretionary Formula:
A nondiscretionary Matching Thrift Contribution for each Plan
Year equal to (select one):
[ ] (a) _____% of each Participant's Compensation
contributed as Employee Thrift Contributions. If
inserted, Matching Thrift Contributions shall be
subject to a maximum amount of $_____ for each
Participant or _____% of each Participant's
Compensation.
[ ] (b) _____% of the first _____% of the Participant's
Compensation contributed as Employee Thrift
Contributions and _____% of the next _____% of the
Participant's Compensation contributed as Employee
Thrift Contributions. If inserted, Matching Thrift
Contributions shall be subject to a maximum amount
of $______ for each Participant or _____% of each
Participant's Compensation.
D. QUALIFIED MATCHING CONTRIBUTIONS N/A
If selected below, the Employer may make Qualified Matching Contributions for
each Plan Year (select all those applicable):
[ ] (1) In its discretion, the Employer may make Qualified
Matching Contributions on behalf of (select one):
[ ] (a) all Participants who make Employee Thrift
Contributions.
[ ] (b) only those Participants who are Nonhighly
Compensated Employees and who make Employee Thrift
Contributions.
18
19
[ ] (2) Qualified Matching Contributions will be contributed and
allocated to each Participant in an amount equal to:
[ ] (a) _____% of the Participant's Employee Thrift
Contributions. If inserted, Qualified Matching
Contributions shall not exceed ____% of the
Participant's Compensation.
[ ] (b) such an amount, determined by the Employer, which is
needed to meet the ACP Test.
ARTICLE VI. PARTICIPANT CONTRIBUTIONS
PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS
Participant Voluntary Nondeductible Contributions are (select one):
[ ] (a) permitted.
[X] (b) not permitted.
ARTICLE VII. VESTING
A. EMPLOYER CONTRIBUTION ACCOUNTS
(1) A Participant shall have a vested percentage in his or her
Profit-Sharing Contributions, Matching 401(k) Contributions and/or
Matching Thrift Contributions, if applicable, in accordance with the
following schedule (select one):
MATCHING 401(k)
AND/OR MATCHING PROFIT-SHARING
THRIFT CONTRIBUTIONS CONTRIBUTIONS
-------------------- --------------
[ ] [ ] (a) 100% vesting immediately upon participation.
[ ] [ ] (b) 100% after _____ (not more than 5) years of Vesting Service.
[X] [X] (c) Graded vesting schedule:
0% 0% after 1 year of Vesting Service;
25% 25% after 2 years of Vesting Service;
50% 50% (not less than 20%) after 3 years of Vesting Service;
75% 75% (not less than 40%) after 4 years of Vesting Service;
100% 100% (not less than 60%) after 5 years of Vesting Service,
% % (not less than 80%) after 6 years of Vesting Service,
---- ----
100% after 7 years of Vesting Service.
(2) Top Heavy Plan
19
20
MATCHING 401(k)
AND/OR MATCHING PROFIT-SHARING
THRIFT CONTRIBUTIONS CONTRIBUTIONS
-------------------- --------------
VESTING SCHEDULE (SELECT ONE):
[ ] [ ] (a) 100% vesting immediately upon participation.
[ ] [ ] (b) 100% after _____ (not more than 3) years of Vesting Service.
[X] [X] (c) Graded vesting schedule:
0% 0% after 1 year of Vesting Service;
25% 25% (not less than 20%) after 2 years of Vesting Service;
50% 50% (not less than 40%) after 3 years of Vesting Service;
75% 75% (not less than 60%) after 4 years of Vesting Service;
100% 100% (not less than 80%) after 5 years of Vesting Service.
20
21
Top Heavy Ratio:
(a) If the adopting Employer maintains or has ever maintained a
qualified defined benefit plan, for purposes of establishing
present value to compute the top-heavy ratio, any benefit shall
be discounted only for mortality and interest based on the
following:
Interest Rate: 8%
Mortality Table: UP `84
(b) For purposes of computing the top-heavy ratio, the valuation
date shall be the last business day of each Plan Year.
B. ALLOCATION OF FORFEITURES
Forfeitures shall be (select one from each applicable column):
MATCHING 401(k)
AND/OR MATCHING PROFIT-SHARING
THRIFT CONTRIBUTIONS CONTRIBUTIONS
---------------------- --------------
[X] [ ] (1) used to reduce Employer
contributions for
succeeding Plan Year.
[ ] [X] [2} allocated in the
succeeding Plan Year in
the ratio which the
Compensation of each
Participant for the
Plan Year bears to the
total Compensation of
all Participants
entitled to share in
the Contributions. If
the Plan is integrated
with Social Security,
forfeitures shall be
allocated in accordance
with the formula
elected by the
Employer.
C. VESTING SERVICE
For purposes of determining Years of Service for Vesting Service [select (1) or
(2) and/or (3)]:
[X] (1) All Years of Service shall be included.
[ ] (2) Years of Service before the Participant attained age 18
shall be excluded.
[ ] (3) Service with the Employee prior to the effective date of the
Plan shall be excluded.
21
22
ARTICLE VIII. DEFERRAL OF BENEFIT
DISTRIBUTIONS, IN-SERVICE WITHDRAWALS AND LOANS
A. DEFERRAL OF BENEFIT DISTRIBUTIONS
401(k)
AND/OR PROFIT-
THRIFT SHARING
------ -------
[ ] [ ] If this item is checked, a Participant's
vested benefit in his or her Employer
Accounts shall be payable as soon as
practicable after the earlier of: (1) the
date the Participant terminates Employment
due to Disability or (2) the end of the Plan
Year in which a terminated Participant
attains Early Retirement Age, if applicable,
or Normal Retirement Age.
B. IN-SERVICE DISTRIBUTIONS
[X] (1) In-service distributions may be made from any of the
Participant's vested Accounts, at any time upon or after
the occurrence of the following events (select all
applicable):
[X] (a) a Participant's attainment of age 59-1/2.
[X] (b) due to hardships as defined in Section 5.9 of
the Plan.
[ ] (2) In-service distributions are not permitted.
C. LOANS ARE:
401(k)
AND/OR PROFIT-
THRIFT SHARING
------- --------
[X] [X] (1) permitted.
[ ] [ ] (2) not permitted.
ARTICLE IX. GROUP TRUST
[ ] If this item is checked, the Employer elects to establish a Group Trust
consisting of such Plan assets as shall from time to time be transferred
to the Trustee pursuant to Article X of the Plan. The Trust Fund shall be
a Group Trust consisting of assets of this Plan plus assets of the
following plans of the Employer or of an Affiliate: _____.
ARTICLE X. [DELETED]
22
23
The attached Supplement, dated January 29, 1998 is a part of the Plan.
EMPLOYER'S SIGNATURE
NAME OF EMPLOYER:
GADZOOKS, INC.
-----------------------------------------
By:
-------------------------------------
Authorized Signature
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Print Name
Sr. Vice-President and CFO
-------------------------------------
Title
DATED: JANUARY 29, 1998
TO BE COMPLETED BY ▇▇▇▇▇▇▇ ▇▇▇▇▇:
Sponsor Acceptance:
Subject to the terms and conditions of the Prototype Plan and this Adoption
Agreement, this Adoption Agreement is accepted by ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated as the Prototype Sponsor.
Authorized Signature:
-----------------------------------------------------------
23
24
TRUSTEE(S) SIGNATURE
This Trustee Acceptance is to be completed only if the Employer appoints one or
more Trustees and does not appoint a ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company as Trustee.
The undersigned hereby accept all of the terms, conditions, and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group Trust
in this Adoption Agreement, the undersigned Trustee(s) shall be the Trustee(s)
of the Group Trust.
AS TRUSTEE:
---------------------------------- ------------------------------------
(Signature) (print or type name)
---------------------------------- ------------------------------------
(Signature) (print or type name)
---------------------------------- ------------------------------------
(Signature) (print or type name)
---------------------------------- ------------------------------------
(Signature) (print or type name)
DATED: _______________, 1998
24
25
THE ▇▇▇▇▇▇▇ ▇▇▇▇▇ TRUST COMPANIES AS TRUSTEE
This Trustee Acceptance and designation of Investment Committee are to be
completed only when a ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company is appointed as Trustee.
TO BE COMPLETED BY THE EMPLOYER:
DESIGNATION OF INVESTMENT COMMITTEE*
The Investment Committee for the Plan is (print or type names):
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------------------------------------------
Name:
---------------------------------------------------------------------------
TO BE COMPLETED BY ▇▇▇▇▇▇▇ ▇▇▇▇▇ TRUST COMPANY:
ACCEPTANCE BY TRUSTEE:
The undersigned hereby accept all of the terms, conditions, and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group Trust
in this Adoption Agreement, the undersigned Trustee(s) shall be the Trustee(s)
of the Group Trust.
SEAL MERRILL ▇▇▇▇▇ TRUST COMPANY
[--------------------------]
By:
--------------------------------
DATED:1998
-----------------,
------------------
* The Investment Committee is the Administrative Committee. See the Supplement.
25
26
THE ▇▇▇▇▇▇▇ ▇▇▇▇▇ TRUST COMPANIES AS ONE OF THE TRUSTEES
This Trustee Acceptance is to be completed only if, in addition to a ▇▇▇▇▇▇▇
▇▇▇▇▇ Trust Companies as Trustee, the Employer appoints an additional Trustee of
a second trust fund.
The undersigned hereby accept all of the terms, conditions, and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group Trust
in this Adoption Agreement, the undersigned Trustee(s) shall be the Trustee(s)
of the Group Trust.
AS TRUSTEE
-------------------------------- -------------------------------------
(Signature) (print or type name)
DATED:
----------------, 1998
SEAL MERRILL ▇▇▇▇▇ TRUST COMPANY
[--------------------------]
By:
-----------------------------------
DATED:
----------------, 1998
DESIGNATION OF ADMINISTRATIVE COMMITTEE
The Administrative Committee for the Plan is (print or type names):
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------------------------------------------
Name:
---------------------------------------------------------------------------
26
27
------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
------
SPECIAL
------
PROTOTYPE
DEFINED CONTRIBUTION PLAN
------------------------------------
Base Plan Document #03 used in conjunction with:
Non-standardized Profit Sharing Plan with CODA
Letter Serial Number: D359287b
National Office Letter Date: 6/29/93
Non-standardized Money Purchase Pension Plan
Letter Serial Number: D359288b
National Office Letter Date: 6/29/93
Non-standardized Profit Sharing Plan
Letter Serial Number: D359289b
National Office Letter Date: 6/29/93
THIS PROTOTYPE PLAN AND ADOPTION AGREEMENT ARE IMPORTANT LEGAL INSTRUMENTS WITH
LEGAL AND TAX IMPLICATIONS FOR WHICH THE SPONSOR, ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇
& ▇▇▇▇▇, INCORPORATED, DOES NOT ASSUME RESPONSIBILITY. THE EMPLOYER IS URGED TO
CONSULT WITH ITS OWN ATTORNEY WITH REGARD TO THE ADOPTION OF THIS PLAN AND ITS
SUITABILITY TO ITS CIRCUMSTANCES.
28
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS...........................................................................................1
1.1 Account....................................................................................................1
1.2 Account Balance............................................................................................1
1.3 ACP Test...................................................................................................1
1.4 Actual Deferral Percentage.................................................................................1
1.5 Adjustment Factor..........................................................................................1
1.6 Administrator..............................................................................................1
1.7 Adoption Agreement.........................................................................................1
1.8 ADP Test...................................................................................................1
1.9 Affiliate..................................................................................................1
1.10 Annuity Contract..........................................................................................1
1.11 Average Actual Deferral Percentage........................................................................2
1.12 Average Contribution Percentage...........................................................................2
1.13 Beneficiary...............................................................................................2
1.14 Benefit Commencement Date.................................................................................2
1.15 CODA......................................................................................................2
1.16 CODA Compensation.........................................................................................2
1.17 Code......................................................................................................2
1.18 Compensation..............................................................................................2
1.19 Contribution Percentage...................................................................................3
1.20 Contribution Percentage Amounts...........................................................................3
1.21 Defined Benefit Plan......................................................................................3
1.22 Defined Contribution Plan.................................................................................3
1.23 Disability................................................................................................3
1.24 Early Retirement..........................................................................................3
1.25 Early Retirement Date.....................................................................................4
1.26 Earned Income.............................................................................................4
1.27 Elective Deferrals........................................................................................4
1.28 Elective Deferrals Account................................................................................4
1.29 Eligible Employee.........................................................................................4
1.30 Eligible Participant......................................................................................4
1.31 Employee..................................................................................................5
1.32 Employee Thrift Contributions.............................................................................5
1.33 Employee Thrift Contributions Account.....................................................................5
1.34 Employer..................................................................................................5
1.35 Employer Account..........................................................................................5
1.36 Employer Contributions....................................................................................5
1.37 Employer Contributions Account............................................................................5
1.38 Employment................................................................................................5
1.39 Entry Date................................................................................................5
1.40 ERISA.....................................................................................................5
1.41 Excess Aggregate Contributions............................................................................5
1.42 Excess Contributions......................................................................................6
1.43 Excess Elective Deferrals.................................................................................6
1.44 Family Member.............................................................................................6
1.45 401(k) Contributions Accounts.............................................................................6
1.46 401(k) Elections..........................................................................................6
1.47 Fully Vested Separation...................................................................................6
1.48 Group Trust...............................................................................................6
i
29
1.49 Highly Compensated Employee...............................................................................6
1.50 Hour of Service...........................................................................................7
1.51 Immediately Distributable.................................................................................8
1.52 Investment Manager........................................................................................8
1.53 Key Employee..............................................................................................8
1.54 Leased Employee...........................................................................................8
1.55 Limitation Year...........................................................................................8
1.56 Master or Prototype Plan..................................................................................8
1.57 Matching 401(k) Contributions.............................................................................8
1.58 Matching 401(k) Contributions Account.....................................................................8
1.59 Matching Thrift Contributions.............................................................................8
1.60 Matching Thrift Contribution Account......................................................................9
1.61 Net Profits...............................................................................................9
1.62 Nonhighly Compensated Employee............................................................................9
1.63 Nonvested Separation......................................................................................9
1.64 Normal Retirement Age.....................................................................................9
1.65 Owner-Employee............................................................................................9
1.66 Partially Vested Separation...............................................................................9
1.67 Participant...............................................................................................9
1.68 Participant Contributions Account.........................................................................9
1.69 Participant-Directed Assets...............................................................................9
1.70 Participant Voluntary Nondeductible Contributions.........................................................9
1.71 Participant Voluntary Nondeductible Contributions Account.................................................9
1.72 Participating Affiliate...................................................................................9
1.73 Period of Severance.......................................................................................9
1.74 Plan.....................................................................................................10
1.75 Plan Year................................................................................................10
1.76 Prototype Plan...........................................................................................10
1.77 Qualified Joint and Survivor Annuity:....................................................................10
1.78 Qualified Matching Contributions.........................................................................10
1.79 Qualified Matching Contributions Account.................................................................11
1.80 Qualified Nonelective Contributions......................................................................11
1.81 Qualified Nonelective Contributions Account..............................................................11
1.82 Qualified Plan...........................................................................................11
1.83 Qualifying Employer Securities...........................................................................11
1.84 Rollover Contributions...................................................................................11
1.85 Rollover Contributions Account...........................................................................11
1.86 Self-Employed Individual.................................................................................11
1.87 Social Security Retirement Age...........................................................................11
1.88 Sponsor..................................................................................................11
1.89 Spouse...................................................................................................11
1.90 Surviving Spouse.........................................................................................12
1.91 Taxable Wage Base........................................................................................12
1.92 Transferred Account......................................................................................12
1.93 Trust....................................................................................................12
1.94 Trust Fund...............................................................................................12
1.95 Trustee..................................................................................................12
1.96 Valuation Date...........................................................................................12
1.97 Vesting Service..........................................................................................12
1.98 Years of Service.........................................................................................12
ARTICLE II. PARTICIPATION.......................................................................................13
2.1 Admission as a Participant................................................................................13
ii
30
2.2 Rollover Membership and Trust to Trust Transfer...........................................................13
2.3 Crediting of Service for Eligibility Purposes.............................................................13
2.4 Termination of Participation..............................................................................14
2.5 Limitation for Owner-Employee.............................................................................14
2.6 Correction with Regard to Participation...................................................................14
2.7 Provision of Information..................................................................................15
ARTICLE III. CONTRIBUTIONS AND ACCOUNT ALLOCATIONS.............................................................15
3.1 Employer Contributions and Allocations....................................................................15
3.2 Participant Voluntary Nondeductible Contributions.........................................................16
3.3 Rollover Contributions and Trust to Trust Transfers.......................................................16
3.4 Section 401(k) Contributions and Account Allocations......................................................16
3.5 Matching 401(k) Contributions.............................................................................20
3.6 Thrift Contributions......................................................................................22
3.7 Treatment of Forfeitures..................................................................................23
3.8 Establishing of Accounts..................................................................................23
3.9 Limitation on Amount of Allocations.......................................................................24
3.10 Return of Employer Contributions Under Special
Circumstances.................................................................................................29
ARTICLE IV. VESTING...........................................................................................29
4.1 Determination of Vesting..................................................................................29
4.2 Rules for Crediting Vesting Service.......................................................................29
4.3 Employer Accounts Forfeitures.............................................................................30
4.4 Top-Heavy Provisions......................................................................................30
ARTICLE V. AMOUNT AND DISTRIBUTION OF BENEFITS, WITHDRAWALS AND LOANS........................................33
5.1 Distribution Upon Termination of Employment...............................................................33
5.2 Amount of Benefits Upon a Fully Vested Separation.........................................................33
5.3 Amount of Benefits Upon a Partially Vested Separation.....................................................33
5.4 Amount of Benefits Upon a Nonvested Separation............................................................33
5.5 Amount of Benefits Upon a Separation Due to Disability....................................................33
5.6 Distribution and Restoration..............................................................................33
5.7 Withdrawals During Employment.............................................................................34
5.8 Loans.....................................................................................................35
5.9 Hardship Distributions....................................................................................36
5.10 Limitation on Commencement of Benefits...................................................................37
5.11 Distribution Requirements................................................................................37
ARTICLE VI. FORMS OF PAYMENT OF RETIREMENT BENEFITS...........................................................41
6.1 Methods of Distribution...................................................................................41
6.2 Election of Optional Forms................................................................................43
6.3 Change in Form of Benefit Payments........................................................................44
6.4 Direct Rollovers..........................................................................................44
ARTICLE VII. DEATH BENEFITS....................................................................................45
7.1 Payment of Account Balances...............................................................................45
7.2 Beneficiaries.............................................................................................45
7.3 Life Insurance............................................................................................47
iii
31
ARTICLE VIII. FIDUCIARIES........................................................................................49
8.1 Named Fiduciaries.........................................................................................49
8.2 Employment of Advisers....................................................................................49
8.3 Multiple Fiduciary Capacities.............................................................................50
8.4 Indemnification...........................................................................................50
8.5 Payment of Expenses.......................................................................................50
ARTICLE IX. PLAN ADMINISTRATION................................................................................50
9.1 The Administrator.........................................................................................50
9.2 Powers and Duties of the Administrator....................................................................50
9.3 Delegation of Responsibility..............................................................................51
ARTICLE X TRUSTEE AND INVESTMENT COMMITTEE...................................................................51
10.1 Appointment of Trustee and Investment Committee..........................................................51
10.2 The Trust Fund...........................................................................................52
10.3 Relationship with Administrator..........................................................................52
10.4 Investment of Assets.....................................................................................53
10.5 Investment Direction, Participant-Directed Assets and
Qualifying Employer Investments...............................................................................54
10.6 Valuation of Accounts....................................................................................56
10.7 Insurance Contracts......................................................................................56
10.8 The Investment Manager...................................................................................57
10.9 Powers of Trustee........................................................................................58
10.10 Accounting and Records..................................................................................59
10.11 Judicial Settlement of Accounts.........................................................................60
10.12 Resignation and Removal of Trustee......................................................................60
10.13 Group Trust.............................................................................................61
ARTICLE XI. PLAN AMENDMENT OR TERMINATION......................................................................61
11.1 Prototype Plan Amendment.................................................................................61
11.2 Plan Amendment...........................................................................................62
11.3 Right of the Employer to Terminate Plan..................................................................63
11.4 Effect or Partial or Complete Termination or Complete
Discontinuance of Contributions...............................................................................63
11.5 Bankruptcy...............................................................................................64
ARTICLE XII. MISCELLANEOUS PROVISIONS...........................................................................65
12.1 Exclusive Benefit of Participants........................................................................65
12.2 Plan Not a Contract of Employment........................................................................65
12.3 Action by Employer.......................................................................................65
12.4 Source of Benefits.......................................................................................65
12.5 Benefits Not Assignable..................................................................................65
12.6 Domestic Relations Orders................................................................................66
12.7 Claims Procedure.........................................................................................66
12.8 Records and Documents; Errors............................................................................66
12.9 Benefits Payable to Minors, Incompetents and Others......................................................66
12.10 Plan Merger or Transfer of Assets.......................................................................67
12.11 Participating Affiliates................................................................................67
12.12 Controlling Law.........................................................................................67
12.13 Singular and Plural and Article and Section References..................................................67
iv
32
ARTICLE I. DEFINITIONS
As used in this Prototype Plan and in each Adoption Agreement, each of the
following terms shall have the meaning for that term set forth in this Article
I:
1.1 ACCOUNT: A separate Elective Deferrals Account, Employee Thrift
Contributions Account, Employer Contributions Account, Matching 401(k)
Contributions Account, Matching Thrift Contributions Account, Participant
Voluntary Nondeductible Contributions Account, Qualified Matching Contributions
Account, Qualified Nonelective Contributions Account, Rollover Contribution
Account, and Transferred Account, as the case may be.
1.2 ACCOUNT BALANCE: The value of an Account determined as of the applicable
Valuation Date.
1.3 ACP TEST: The Contribution Percentage test that is set forth in Section
3.5.2 of the Plan.
1.4 ACTUAL DEFERRAL PERCENTAGE: The ratio (expressed as a percentage), of (A)
Elective Deferrals made on behalf of an Eligible Participant for the Plan Year
(including Excess Elective Deferrals of Highly Compensated Employees and, at the
election of the Employer, Qualified Nonelective Contributions and/or Qualified
Matching Contributions), but excluding (1) Excess Elective Deferrals of
Nonhighly Compensated Employees that arise solely from Elective Deferrals made
under the Plan or plans of the Employer or an Affiliate and (2) Elective
Deferrals that are taken into account in the ACP Test (provided the ADP Test is
satisfied with or without the exclusion of such Elective Deferrals) to (B) the
Participant's CODA Compensation for the Plan Year (whether or not the Eligible
Employee was a Participant for the entire Plan Year). The Actual Deferral
Percentage of an Eligible Participant who would be a Participant but for the
failure to make an Elective Deferral is zero.
1.5 ADJUSTMENT FACTOR: The cost of living adjustment factor prescribed by the
Secretary of the Treasury under Code Section 415(d) for years beginning after
December 31, 1987, as applied to such items and in such manner as the Secretary
shall provide.
1.6 ADMINISTRATOR: The Employer, unless otherwise specified by duly authorized
action by the Employer.
1.7 ADOPTION AGREEMENT: The document so designated with respect to this
Prototype Plan that is executed by the Employer, as amended from time to time.
1.8 ADP TEST: The Average Actual Deferral Percentage test set forth in Section
3.4.2(B) of the Plan.
1.9 AFFILIATE: Any corporation or unincorporated trade or business (other than
the Employer) while it is:
(A) a member of a "controlled group of corporations" (within the meaning of Code
Section 414(b)) of which the Employer is a member;
(B) a member of any trade or business under "common control" (within the meaning
of Code Section 414(c)) with the Employer;
(C) a member of an "affiliated service group" (as that term is defined in Code
Section 414(m)) which includes the Employer; or
(D) any other entity required to be aggregated with the Employer pursuant to
Code Section 414(o). With respect to Section 3.9, "Affiliate" status shall be
determined in accordance with Code Section 415(h).
1.10 ANNUITY CONTRACT: An individual or group annuity contract issued by an
insurance company providing periodic benefits, whether fixed, variable or both,
the benefits or value of which a Participant or Beneficiary cannot transfer,
sell, assign, discount, or pledge as collateral for a loan or as security for
the performance of an obligation, or for any other purpose, to any person other
than the issuer thereof. The terms of any annuity contract purchased and
distributed by the Plan to a Participant or Spouse shall comply with the
requirements of this Plan.
1
33
1.11 AVERAGE ACTUAL DEFERRAL PERCENTAGE: For any group of Eligible Participants,
the average (expressed as a percentage) of the Actual Deferral Percentages for
each of the Eligible Participants in that group, including those not making
Elective Deferrals.
1.12 AVERAGE CONTRIBUTION PERCENTAGE: For any group of Eligible Participants,
the average (expressed as a percentage) of the Contribution Percentages for each
of the Participants in that group, including those on whose behalf Matching
401(k) Contributions and/or Matching Thrift Contributions, if applicable, are
not being made.
1.13 BENEFICIARY: A person or persons entitled to receive any payment of
benefits pursuant to Article VII.
1.14 BENEFIT COMMENCEMENT DATE: The first day, determined pursuant to Article V,
for which a Participant or Beneficiary receives or begins to receive payment in
any form of distribution as a result of death, Disability, termination of
Employment, Early Retirement, Plan termination or upon or after Normal
Retirement Age or age 70-1/2.
1.15 CODA: A cash or deferred arrangement pursuant to Code Section 401(k) which
is part of a profit sharing plan and under which an Eligible Participant may
elect to make Elective Deferrals in accordance with Section 3.4.1.
1.16 CODA COMPENSATION: Solely for purposes of determining the Actual Deferral
Percentage and the Contribution Percentage, CODA Compensation shall be
Compensation excluding or including "elective contributions" as specified in the
Adoption Agreement. The preceding sentence shall be effective for Plan Years
beginning on or after January 1, 1989.
1.17 CODE: The Internal Revenue Code of 1986, as now in effect or as amended
from time to time. A reference to a specific provision of the Code shall include
such provision and any applicable regulation pertaining thereto.
1.18 COMPENSATION: For purpose of contributions, Compensation shall be defined
in the Adoption Agreement and Section 3.9.1(H), subject to any exclusions
elected under Section I.A(d) of the Adoption Agreement, Section 3.1.4 and the
following modifications:
(A) For a Self-Employed Individual, Compensation means his or her Earned Income,
provided that if the Self-Employed Individual is not a Participant for an entire
Plan Year, his or her Compensation for that Plan Year shall be his or her Earned
Income for that Plan Year multiplied by a fraction the numerator of which is the
number of days he or she is a Participant during the Plan Year and the
denominator of which is the number of days in the Plan Year.
(B) Compensation of each Participant taken into account under this Plan for any
Plan Year beginning after December 21, 1988 shall be limited to the first
$200,000 as adjusted by the Adjustment Factor. In determining the Compensation
of a Participant for purposes of this limitation, the rule of Code Section
414(q)(6) shall apply, except in applying such rules, the term "family" shall
include only the Spouse of the Participant and any lineal descendants of the
Participant who have not attained the age of 19 before the close of the year.
If, as a result of the application of such rules, the adjusted $200,000
limitation is exceeded, (except for purposes of determining the portion of
Compensation up to the Integration Level if this Plan is integrated with Social
Security), the limitation shall be prorated among the affected Participants in
proportion to each such Participant's Compensation as determined under this
Section 1.18 prior to the application of this limitation. In a manner applied
uniformly to all Eligible Employees, only Compensation during the period in
which the Employee is an Eligible Employee may be taken into account for
purposes of the nondiscrimination tests described in Code Section 401(k) and
401(m).
(C) If Compensation for any prior Plan Year is taken into account in determining
an Employee's contributions or benefits for the current year, the Compensation
for such prior year is subject to the applicable annual compensation limit in
effect for that prior year. For this purpose, for years beginning before January
1, 1990, the applicable annual compensation limit is $200,000.
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(D) In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000 as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code.
The cost of living adjustment in effect for a calendar year applies to any
period, not exceeding 12 months, over which compensation is determined
(determination period) beginning in such calendar year. If a determination
period consists of fewer than 12 months, the OBRA '93 annual compensation limit
will be multiplied by a fraction, the numerator of which is the number of months
in the determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in this Plan
to the limitations under Section 401(a)(17) of the Code shall mean the OBRA '93
annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into account in
determining an Employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for prior determination period beginning before the first day of
the first Plan Year beginning on or after January 1, 1994, the OBRA '93
Compensation limit is $150,000.
1.19 CONTRIBUTION PERCENTAGE: The ration (expressed as a percentage) of the
Participant's Contribution Percentage Amounts to the Participant's CODA
Compensation for the Plan Year, whether or not the Eligible Employee was a
Participant for the entire Plan Year.
1.20 CONTRIBUTION PERCENTAGE AMOUNTS: shall mean the sum of the: (A) Matching
401(k) Contributions; (B) Matching Thrift Contributions;
(C) Qualified Matching Contributions (to the extent not taken into account for
purposes of the ADP Test); (D) Employee Thrift Contributions; and (E)
Participant Voluntary Nondeductible Contributions, as applicable, made on behalf
of the Participant for the Plan Year. Such Contribution Percentage Amounts shall
not include Matching 401(k) Contributions that are forfeited either to correct
Excess Aggregate Contributions or because the contributions to which they relate
are Excess Elective Deferrals, Excess Contributions or Excess Aggregate
Contributions. The Employee may include Qualified Nonelective Contribution in
the Contribution Percentage.
Amounts, as specified in the Adoption Agreement. Elective Deferrals may also be
used in the Contribution Percentage Amounts so long as the ADP Test is met
before the Elective Deferrals are used in the ACP Test and continues to be met
following the exclusion of those Elective Deferrals that are used to meet the
ACP Test, as specified in the Adoption Agreement. An Eligible Participant who
does not direct an Elective Deferral or an Employee Thrift Contribution shall be
treated as an Eligible Participant on behalf of whom no such contributions are
made.
1.21 DEFINED BENEFIT PLAN: A plan of the type defined in Code Section 414(j)
maintained by the Employer or Affiliate, as applicable.
1.22 DEFINED CONTRIBUTION PLAN: A plan of the type defined in Code Section
414(i) maintained by the Employer or Affiliate, as applicable.
1.23 DISABILITY: Disability is defined in the Adoption Agreement. The permanence
and degree of such impairment shall be supported by medical evidence.
1.24 EARLY RETIREMENT: An actively employed Participant is eligible for Early
Retirement upon satisfying the requirements set forth in the Adoption Agreement.
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1.25 EARLY RETIREMENT DATE: The Participant's Benefit Commencement Date
following his or her termination of Employment on or after satisfying the
requirements for Early Retirement and prior to Normal Retirement Age.
1.26 EARNED INCOME: The "net earnings from self-employment" within the meaning
of Code Section 401(c)(2) of a Self-Employed Individual from the trade or
business with respect to which the Plan is established, but only if the personal
services of the Self-Employed Individual are a material income-producing factor
in that trade or business. Net earnings will be determined without regard to
items not included in gross income and the deductions properly allocable to or
chargeable against such items and are to be reduced by contributions by the
Employer or Affiliate to a Qualified Plan to the extent deductible under Code
Section 404. Where this Plan refers to Earned Income in the context of a trade
or business other than that with respect to which the Plan is adopted, the term
Earned Income means such net earnings as would be Earned Income as defined above
if that trade or business was the trade or business with respect to which the
Plan is adopted.
Net earning shall be determined with regard to the deduction allowed to the
Employer by Code Section 164(f) for taxable years beginning after December 31,
1989.
1.27 ELECTIVE DEFERRALS: Contributions made to the Plan during the Plan Year by
the Employer, at the election of the Participant, in lieu of cash compensation
and shall include contributions that are made pursuant to a 401(k) Election.
A Participant's Elective Deferral in any taxable year is the sum of all Employer
and Affiliate contributions pursuant to an election to defer under any qualified
cash or deferred arrangement, any simplified employee pension plan or deferred
arrangement as described in Code Section 402(h)(1)(B), any eligible deferred
compensation plan under Code Section 457, any plan as described under Code
Section 501(c)(18), and any Employer contributions made on behalf of a
Participant for the purchase of an annuity under Code Section 403(b) pursuant to
a salary reduction agreement. Such contributions are nonforfeitable when made
and are not distributable under the terms of the Plan to Participants or their
Beneficiaries earlier than the earlier of:
(A) termination from Employment, death or Disability of the Participant;
(B) termination of the Plan without establishment of another Defined
Contribution Plan by the Employer or an Affiliate;
(C) disposition by the Employer or Affiliate to an unrelated corporation of
substantially all of its assets used in a trade or business if such unrelated
corporation continues to maintain this Plan after the disposition but only with
respect to Employees who continue employment with the acquiring unrelated
entity. The sale of 85% of the assets used in a trade or business will be deemed
a sale of "substantially all" the assets used in a trade or business;
(D) sale by Employer or Affiliate to an unrelated entity of its interest in an
Affiliate if such unrelated entity continues to maintain the Plan but only with
respect to Employees who continue employment with such unrelated entity; or
(E) the events specified in Part B, Article VIII of the Adoption Agreement.
Elective Deferrals shall not include any deferrals properly distributed as an
"Excess Amount" pursuant to Section 3.9.2.
1.28 ELECTIVE DEFERRALS ACCOUNT: The Account established for a Participant
pursuant to Section 3.8.1.
1.29 ELIGIBLE EMPLOYEE: Those Employees specified in the Adoption Agreement.
1.30 ELIGIBLE PARTICIPANT: An Eligible Employee who has met the eligibility
requirements set forth in the Adoption Agreement whether or not he or she makes
Elective Deferrals and/or Employee Thrift Contributions.
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1.31 EMPLOYEE: A Self-Employed Individual, or any individual who is employed by
the Employer in the trade or business with respect to which the Plan is adopted
and any individual who is employed by an Affiliate. Each Leased Employee shall
also be treated as an Employee of the recipient Employer. The preceding sentence
shall not apply, however, to any Leased Employee who is (A) covered by a money
purchase pension plan maintained by the "leasing organization" referred to in
Section 1.54 which provides, with respect to such Leased Employee, a
nonintegrated Employer contribution rate of a least 10% of Limitation
Compensation, but including amounts contributed pursuant to a salary reduction
agreement which are excluded from the Employee's gross income under Code Section
402(a)(8), Code Section 402(h) or Code Section 403(b), immediate participation,
and full and immediate vesting and (B) such Leased Employees do not constitute
more than 20% of the Employer's and Affiliates' nonhighly compensated workforce.
For purposes of the Plan, all Employees will be treated as employed by a single
employer.
1.32 EMPLOYEE THRIFT CONTRIBUTIONS: Employee nondeductible contributions which
are required to be eligible for a Matching Thrift Contribution. Employee Thrift
Contributions do not include Participant Voluntary Nondeductible Contributions.
1.33 EMPLOYEE THRIFT CONTRIBUTIONS ACCOUNT: The account established for a
Participant pursuant to Section 3.8.3.
1.34 EMPLOYER: The sole proprietorship, partnership or corporation that adopts
the Plan by executing the Adoption Agreement. For all purposes relating to
eligibility, participation, contributions, vesting and allocations, Employer
includes all Participating Affiliates.
1.35 EMPLOYER ACCOUNT: The Participant's Matching 401(k) Contributions Account,
Matching Thrift Contributions Account, Employer Contributions Account, Qualified
Matching Contributions Account and Qualified Nonelective Contributions Accounts,
as the case may be.
1.36 EMPLOYER CONTRIBUTIONS: Any contributions made by the Employer for the Plan
Year on behalf of a Participant in accordance with Section 3.1 of the Plan.
1.37 EMPLOYER CONTRIBUTIONS ACCOUNT: The Account established for a Participant
pursuant to section 3.8.2.
1.38 EMPLOYMENT: An Employee's employment or self-employment with the Employer,
Affiliate or a "leasing organization" referred to in Section 1.54 or, to the
extent required under Code Section 414(a)(2) or as otherwise specified by the
Administrator on a uniform and nondiscriminatory basis, any predecessor of any
of them. If any of them maintains a plan of a "predecessor employer" (within the
meaning of Code Section 414(a)(1) employment or self-employment with the
"predecessor employer" will be treated as Employment. Additionally, if the trade
or business conducted by a Self-Employed Individual becomes incorporated, all
employment with that trade or business or with any Affiliate shall be treated as
Employment with the Employer.
1.39 ENTRY DATE: The date on which an Eligible Employee becomes a Participant,
as specified in the Adoption Agreement.
1.40 ERISA: The Employee Retirement Income security Act of 1974, as amended from
time to time. Reference to a specific provision of ERISA shall include such
provision and any applicable regulation pertaining thereto.
1.41 EXCESS AGGREGATE CONTRIBUTIONS: With respect to any Plan Year, the excess
of:
(A) The aggregate Contribution Percentage Amounts, taken into account in
computing the numerator of the Contribution Percentage actually made on behalf
of Highly Compensated Employees for such Plan year, over (B) the maximum
Contribution Percentage Amounts permitted by the ACP Test (determined by
reducing contributions made on behalf of Highly Compensated Employees in the
order of their Contribution Percentages beginning with the highest of such
percentages).
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Such determination shall be made after first determining Excess Elective
Deferrals and then determining Excess Contributions.
1.42 EXCESS CONTRIBUTIONS: With respect to any Plan Year, the aggregate amount
of Elective Deferrals, Qualified Nonelective Contribution and Qualified Matching
Contributions, if applicable, actually paid over to the Trust Fund on behalf of
Highly Compensated Employees for such Plan Year, over the maximum amount of such
contributions permitted by the ADP Test (determined by reducing contributions
made on behalf of Highly Compensated Employees in order of the Actual Deferral
Percentages, beginning with the highest of such percentages).
1.43 EXCESS ELECTIVE DEFERRALS: The amount of Elective Deferrals for a
Participant's taxable year that are includible in the gross income of the
Participant to the extent that such Elective Deferrals exceed the Code Section
402(g) dollar limitation and which the Participant allocates to this Plan
pursuant to the procedure set forth in Section 3.4.2. Excess Elective Deferrals
shall be treated as an Annual Addition pursuant to Section 3.9, unless such
amounts are distributed no later than the first April 15th following the close
of the Participant's taxable year.
1.44 FAMILY MEMBER: An individual described in Code Section 414(q)(6)(B).
1.45 401(K) CONTRIBUTIONS ACCOUNTS: The Participant's Elective Deferral Account,
Qualified Nonelective Contributions Account, and/or Qualified Matching
Contributions Account, as the case may be.
1.46 401(K) ELECTIONS: The election by a Participant to make Elective Deferrals
in accordance with Section 3.4.1.
1.47 FULLY VESTED SEPARATION: Termination of Employment, by reason other than
death, of a Participant whose vested percentage in each Employer Account is
100%.
1.48 GROUP TRUST: A Trust Fund consisting of assets of any Plan maintained and
established by the Employer or an Affiliate pursuant to Section 10.14.
1.49 HIGHLY COMPENSATED EMPLOYEE: The term Highly Compensated Employee includes
highly compensated active Employees and highly compensated former employees.
(A) A highly compensated active Employee includes any Employee who performs
service for the Employer or Affiliate during the Plan Year and who, during the
look-back year (the twelve-month period immediately preceding the Plan Year):
(i) received Compensation from the Employer or Affiliate in excess of $75,000
(as adjusted by the Adjustment Factor):
(ii) received Compensation from the Employer or Affiliate in excess of $50,000
(as adjusted by the Adjustment Factor) and was a member of the top-paid group
for such year; or
(iii) was an officer of the Employer or Affiliate and received Compensation
during such year that is greater that 50% of the Defined Benefit Dollar
Limitation.
(B) The term Highly Compensated Employee also includes:
(i) Employees who are both described in the preceding sentence if the term "Plan
Year" is substituted for the term "look-back year" and the Employee is one of
the 100 Employees who received the most Compensation from the Employer or
Affiliate during the Plan Year; and
(ii) Employees who are 5% owners at any time during the look-back year or Plan
Year.
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(C) If no officer has received Compensation that is greater than 50% of the
Defined Benefit Dollar Limitation in effect during either the Plan Year or
look-back year, the highest paid officer of such year shall be treated as a
Highly Compensated Employee.
(D) A highly compensated former employee includes any Employee who terminated
Employment (or was deemed to have terminated) prior to the Plan Year, performs
no service for the Employer or Affiliate during the Plan year, and was a highly
compensated active employee for either the separation year or any Plan Year
ending on or after the Employee's 55th birthday.
(E) If an employee is, during a Plan Year or look-back year, a Family Member of
either (i) a 5% owner who is an active or former Employee or (ii) a Highly
Compensated Employee who is one of the ten most highly compensated employees
ranked on the basis of Compensation paid by the Employer or Affiliate during
such year, then the Family Member and the 5% owner or top-ten Highly Compensated
Employee shall be aggregated. In such case, the Family Member and 5% owner or
top-ten Highly Compensated Employee shall be treated as a single Employee
receiving Compensation and plan contributions or benefits equal to the sum of
such Compensation and contributions or benefits of the Family Member and 5%
owner or top-ten Highly Compensated Employee. For purposes of this section,
Family Member includes the Spouse, lineal ascendants and descendants of the
Employee or former employee and the spouses of such lineal ascendants and
descendants.
(F) 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 Code Section
414(q).
1.50 HOUR OF SERVICE: If the Employer elects in the Adoption Agreement the
hourly record method, an Hour of Service shall include:
(A) Each hour for which an Employee is paid, or entitled to payment, by the
Employer or an Affiliate for the performance of duties for the Employer or an
Affiliate. These hours will be credited to the Employee for each Plan year in
which the duties are performed, or with respect to eligibility under Article II,
the applicable computation period under the definition of Year of Service in
which the duties are performed;
(B) Each hour for which an Employee is paid, or entitled to payment, by the
Employer or an Affiliate due to a period of time during which no duties are
performed (irrespective of whether Employment has terminated) due to vacation,
holiday, illness, incapacity (including Disability), layoff, jury duty, military
duty, or leave of absence. No more than 501 Hours of Service will be credited
under this paragraph for any single continuous period (whether or not such
period occurs in a single computation period). Hours under this paragraph will
be calculated and credited pursuant to section 2530.200b-2 of the Department of
Labor Regulations which are incorporated herein by this reference; and
(C) Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Employer or an Affiliate. The same Hours of
Service will not be credited both under subparagraph (A) or subparagraph (B), as
the case may be, and under this subparagraph (C). These hours will be credited
to the Employee for the Year of Service or other computation period to which the
award or agreement pertains rather than the Year of Service or other computation
period in which the award, agreement or payment is made.
If the Employer elects in the Adoption Agreement the elapsed time method, an
Hour of Service is an hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer or an Affiliate.
With respect to both the hourly record method and the elapsed time method, in
addition to service with an Affiliate, Hours of Service will also be credited
for any individual considered an Employee for purposes of this Plan under Code
Section 414(n).
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1.51 IMMEDIATELY DISTRIBUTABLE: A Participant's Account is Immediately
Distributable if any part of such Account could be distributed to the
Participant or Participant's Surviving Spouse before the Participant attains (or
would have attained if not deceased) the later of Normal Retirement Age or age
62.
1.52 INVESTMENT MANAGER: Any person appointed by the Trustee or, with respect to
Participant-Directed Assets, by the Participant or Beneficiary having the power
to direct the investment of such assets, to serve as such in accordance with
Section 10.8.
1.53 KEY EMPLOYEE: Any employee or former Employee (and the beneficiaries of
such Employee) who at any time during the "determination period" was (A) an
officer of the Employer or Affiliate, having an annual Compensation greater than
50% of the Defined Benefit Dollar Limitation for any Plan Year within the
"determination period"; (B) an owner (or considered an owner under Code Section
318) of one of the ten largest interests in the Employer or Affiliate if such
Individual's Compensation exceeds 100% of the dollar limitation under Code
Section 415(c)(1)(A); (C) a "5% owner" (as defined in Code Section 416(i)) of
the Employer or Affiliate, or (D) a "1% owner" (as defined in Code Section
416(i)) of the Employer or Affiliate who has an annual Compensation of more than
$150,000. Annual Compensation means compensation as defined in Code Section
415(c)(3), but including amounts contributed by the Employer pursuant to a
salary reduction agreement which are excludible from the Employee's gross income
under Code Section 125, Code Section 402(a)(8), Code Section 402(h) or Code
Section 403(b). The "determination period" is the Plan Year containing the
"determination date" and the four preceding Plan Years. The "determination date"
for the first Plan Year is the last day of that Plan Year, and for any
subsequent Plan Year is the last day of the preceding Plan Year. The
determination of who is a Key Employee will be made in accordance with Code
Section 416(i).
1.54 LEASED EMPLOYEE: Any individual (other than an Employee of the recipient
Employer or Affiliate) who, pursuant to an agreement between the Employer or
Affiliate and any other person (the "leasing organization") has performed
services for the Employer (or for the Employer or Affiliate and "related
persons" determined in accordance with Code Section 414(n)(6)) on a
substantially full-time basis for a period of at least one year, which services
are of a type historically performed, in the business field of the recipient
Employer or Affiliate, by employees. Contributions or benefits provided a Leased
Employee by the leasing organization which are attributable to services
performed for the recipient Employer or Affiliate shall be treated as provided
by the recipient Employer.
1.55 LIMITATION YEAR: The Limitation Year as specified in the Adoption
Agreement. All Qualified Plans maintained by the Employer must use the same
Limitation Year. If the Limitation Year is amended to a different 12-consecutive
month period, the new Limitation Year must begin on a date within the Limitation
Year in which the amendment is made.
1.56 MASTER OF PROTOTYPE PLAN: A plan the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
1.57 MATCHING 401(k) CONTRIBUTIONS: Any Contribution made by the Employer to
this and/or any other Defined contribution Plan for the Plan Year, by reason of
the Participant's 401(k) Election, and allocated to a Participant's Matching
401(k) Contributions Account or to a comparable account in another Defined
Contribution Plan. Matching 401(k) Contributions are subject to the distribution
provisions applicable to Employer Accounts in the Plan.
1.58 MATCHING 401(k) CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.4.
1.59 MATCHING THRIFT CONTRIBUTIONS: Any contribution made by the Employer for
the Plan Year by reason of Employee Thrift Contributions. Matching Thrift
Contributions shall be subject to the distribution provisions applicable to
Employer Accounts in the Plan.
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1.60 MATCHING THRIFT CONTRIBUTION ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.5.
1.61 NET PROFITS: The current and accumulated profits of the Employer from the
trade or business of the Employer with respect to which the Plan is established,
as determined by the Employer before deductions for federal, state and local
taxes on income and before contributions under the Plan or any other Qualified
Plan.
1.62 NONHIGHLY COMPENSATED EMPLOYEE: An Employee of the Employer who is neither
a Highly Compensated Employee nor a Family Member.
1.63 NONVESTED SEPARATION: Termination of Employment of a Participant whose
vested percentage in each Employer Account is 0%.
1.64 NORMAL RETIREMENT AGE: The age specified in the Adoption Agreement.
Notwithstanding the Employer's election in the Adoption Agreement, if, for Plan
years beginning before January 1, 1988, Normal Retirement Age was determined
with reference to the anniversary of the participation commencement date (more
than 5 but not to exceed 10 years), the anniversary date for Participants who
first commenced participation under the Plan before the first Plan Year
beginning on or after January 1, 1988, shall be the earlier of (A) the tenth
anniversary of the date the Participant commenced participation in the Plan (or
such anniversary as had been elected by the Employer, if less than 10) or (B)
the fifth anniversary of the first day of the first Plan year beginning on or
after January 1, 1988.
1.65 OWNER-EMPLOYEE: An individual who is a sole proprietor, if the Employer is
a sole proprietorship, or if the Employer is a partnership, a partner owning
more than 10% of either the capital interest or the profits interest in the
Employer, provided that where this Plan refers to an Owner-Employee in the
context of a trade or business other than the trade or business with respect to
which the Plan is adopted, the term Owner-Employee means a person who would be
an Owner-Employee as defined above if that other trade or business was the
Employer.
1.66 PARTIALLY VESTED SEPARATION: Termination of Employment of a Participant
whose vested percentage in any Employer Account is less than 100% but greater
than 0%.
1.67 PARTICIPANT: An Employee who has commenced, but not terminated,
participation in the Plan as provided in Article II.
1.68 PARTICIPANT CONTRIBUTIONS ACCOUNT: The Participant's Participant Voluntary
Nondeductible Contributions Account and/or Employee Thrift Contributions
Account, as the case may be.
1.69 PARTICIPANT-DIRECTED ASSETS: The assets of an Account which are invested,
as described in Section 10.5.1, according to the direction of the Participant or
the Participant's Beneficiary, as the case may be, in either individually
selected investments or in commingled funds or in shares of regulated investment
companies.
1.70 PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS: Any voluntary
nondeductible contributions made in cash by a Participant to this Plan other
than Employee Thrift Contributions.
1.71 PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS ACCOUNT: The Account
established for a Participant pursuant to Section 3.8.6.
1.72 PARTICIPATING AFFILIATE: Any Affiliate or any other employer designated as
such by the Employer, and, by duly authorized action, that has adopted the Plan
with the consent of the Employer and has not withdrawn therefrom.
1.73 PERIOD OF SEVERANCE: For purposes of the hourly records method, a Period of
Severance is a period equal to the number of consecutive Plan Years or, with
respect to eligibility, the applicable computation period under the definition
of Year of Service, in which an Employee has 500 Hours of Service or less. The
Period of Severance
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shall be determined on the basis of Hours of Service and shall commence with the
first Plan Year in which the Employee has 500 Hours of Service or less. With
respect to any period of absence during which a Period of Severance does not
commence, the Participant shall be credited with the Hours of Service (up to a
maximum of 501 Hours of Service in a Plan Year) which would otherwise have been
credited to him or her but for such absence, or if such Hours of Service cannot
be determined, 8 Hours of Service for each day of absence.
For purposes of the elapsed time method, a Period of Severance is a continuous
period of at least 12-consecutive months during which an individual's Employment
is not continuing, beginning on the date an Employee retires, quits or is
discharged or, if earlier, the first 12-month anniversary of the date that the
individual is otherwise first absent from service (with or without pay) for any
other reason, and ending on the date the individual again performs an Hour of
Service.
Anything in the definition thereof to the contrary notwithstanding, a Period of
Severance shall not commence if the participant is:
(A) On an authorized leave of absence in accordance with standard personnel
policies applied in a nondiscriminatory manner to all Employees similarly
situated and returns to active Employment by the Employer or Affiliate
immediately upon the expiration of such leave of absence;
(B) On a military leave while such Employee's re-employment rights are protected
by law and returns to active Employment within ninety days after his or her
discharge or release (or such longer period as may be prescribed by law); or
(C) Absent from work by reason of (i) the pregnancy of the Employee, (ii) the
birth of a child of the Employee, or (iii) the placement of a child with the
Employment in connection with the adoption of such child by such Employee, or
(iv) the care of such child for a period beginning immediately following such
birth or placement. In determining when such a Participant's Period of Severance
begins, the Participant will be credited with (i) for purposes of the elapsed
time method, the 12-consecutive month period beginning on the first anniversary
of the first date of such absence; or (ii) for purposes of the hourly records
method, the Hours of Service he or she would normally have had but for such
absence, or if such Hours cannot be determined, eight Hours of Service for each
day of such absence; provided, however, that such Hours of Service shall not
exceed 501 and shall be credited only in the year in which such absence began if
such crediting would prevent the Participant from incurring a Period of
Severance in that year, or in any other case, shall be credited in the
immediately following year.
1.74 PLAN: The plan established by the Employer in the form of this Prototype
Plan and the applicable Adoption Agreement executed by the Employer. The Plan
shall have the name specified in the Adoption Agreement.
1.75 PLAN YEAR: Each 12-consecutive month period ending on the date specified in
the Adoption Agreement, during any part of which the Plan is in effect.
1.76 PROTOTYPE PLAN: The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Special Prototype Defined Contribution
Plan set forth in this document, as amended or restated from time to time.
1.77 QUALIFIED JOINT AND SURVIVOR ANNUITY: An immediate annuity for the life of
Participant with a survivor annuity continuing after the Participant's death to
the Participant's Surviving Spouse for the Surviving Spouse's life in an amount
equal to 50% of the amount of the annuity payable during the joint lives of the
Participant and such Surviving Spouse and which is the actuarial equivalent of a
single life annuity which could be provided for the Participant under an Annuity
Contract purchased with the aggregate vested Account Balances of the
Participant's Accounts at the Benefit Commencement Date.
1.78 QUALIFIED MATCHING CONTRIBUTIONS: Matching Contributions which, pursuant to
the election made by the Employer, and in accordance with Code Section 401(m),
are nonforfeitable when made and subject to the limitation on distribution set
forth in the definition of Qualified Nonelective Contributions.
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1.79 QUALIFIED MATCHING CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.7.
1.80 QUALIFIED NONELECTIVE CONTRIBUTIONS: Contributions (other than Matching
401(k) Contributions, Qualified Matching 401(k) Contributions or Elective
Deferrals), if any, made by the Employer which the Participant may not elect to
receive in cash until distributed from the Plan, which are nonforfeitable when
made, and which are not distributable under the terms of the Plan to
Participants or their Beneficiaries earlier than the earlier of:
(A) termination of Employment, death, or Disability of the Participant;
(B) attainment of the age 59-1/2 by the Participant;
(C) termination of the Plan without establishment of another Defined
Contribution Plan by the Employer or an Affiliate;
(D) disposition by the Employer or Participating Affiliate to an unrelated
corporation of substantially all of its assets used in a trade or business if
such unrelated corporation continues to maintain this Plan after the disposition
but only with respect to Employees who continue employment with the acquiring
unrelated entity. The sale of 85% of the assets used in a trade or business will
be deemed a sale of "substantially all" the assets used in a trade or business;
(E) sale by the Employer to an unrelated entity of its interest in an Affiliate
if such unrelated entity continues to maintain the Plan but only with respect to
Employees who continue employment with such unrelated entity; and
(F) effective for Plan Years beginning before January 1, 1989, upon the hardship
of the Participant.
1.81 QUALIFIED NONELECTIVE CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.7.
1.82 QUALIFIED PLAN: A Defined Benefit Plan or Defined Contribution Plan.
1.83 QUALIFYING EMPLOYER SECURITIES: Employer securities as that term is defined
in ERISA Section 407(d)(5).
1.84 ROLLOVER CONTRIBUTIONS: A contribution described in Section 3.3.
1.85 ROLLOVER CONTRIBUTIONS ACCOUNT: The Account established for a Participant
pursuant to Section 3.8.9.
1.86 SELF-EMPLOYED INDIVIDUAL: An individual who has Earned Income for the Plan
Year involved from the trade or business for which the Plan is established, or
who would have had such Earned Income but for the fact that the trade or
business with respect to which the Plan is established had no Net Profits for
that Plan Year.
1.87 SOCIAL SECURITY RETIREMENT AGE: Age 65 in the case of a Participant
attaining age 62 before January 1, 2000 (i.e., born before January 1, 1938), age
66 for a Participant attaining age 62 after December 31, 1999, and before
January 1, 2017 (i.e., born after December 31, 1937, but before January 1,
1955), and age 67 for a Participant attaining age 62 after December 31, 2016
(i.e., born after December 31, 1954).
1.88 SPONSOR: The mass submitter, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated and any successor thereto, and any other qualifying sponsoring
organization who sponsors with the consent of the mass submitter, the Prototype
Plan and makes the Prototype Plan available for adoption by Employers.
1.89 SPOUSE: The person married to a Participant, provided that a former spouse
will be treated as the Spouse to the extent provided under a "qualified domestic
relations order" (or a "domestic relations order" treated as such) as referred
to in Section 12.6.
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1.90 SURVIVING SPOUSE: The person married to a Participant on the earliest of:
(A) the date of the Participant's death;
(B) the Participant's Benefit Commencement Date; or
(C) the date on which an Annuity Contract is purchased for the Participant
providing benefits under the Plan;
Anything contained herein to the contrary notwithstanding, a former spouse will
be treated as a Surviving Spouse to the extent provided under a "qualified
domestic relations order" (or a "domestic relations order" treated as such) as
referred to in Section 12.6.
1.91 TAXABLE WAGE BASE: The maximum amount of earnings which may be considered
"wages" for the Plan Year involved under Code Section 3121(a)(1).
1.92 TRANSFERRED ACCOUNT: The Account established for a Participant pursuant to
Section 3.8.10.
1.93 TRUST: The trust established under the Plan to which Plan contributions are
made and in which Plan assets are held.
1.94 TRUST FUND: The assets of the Trust held by or in the name of the Trustee.
1.95 TRUSTEE: The person appointed as Trustee pursuant to Article X and any
successor Trustee.
1.96 VALUATION DATE: The last business day of each Plan Year, the date specified
in the Adoption Agreement or determined pursuant to Section 10.6, if applicable,
and each other date as may be determined by the Administrator.
1.97 VESTING SERVICE: The Years of Service credited to a Participant under
Article IV for purposes of determining the Participant's vested percentage in
any Employer Account established for the Participant.
1.98 YEARS OF SERVICE: If the Employer elects the hourly records method in the
Adoption Agreement, an Employee shall be credited with one Year of Service for
each Plan Year in which he or she has 1,000 Hours of Service. Solely for
purposes of eligibility to participate, and Employee shall be credited with a
Year of Service on the last day of the 12-consecutive month period which begins
on the first day on which he or she has an Hour of Service, if he or she has at
least 1,000 Hours of Service in that period.
If an Employee fails to be credited with a Year of Service on such date, he or
she shall be credited with a Year of Service on the last day of each succeeding
12-consecutive month period.
If the Employer elects the elapsed time method in the Adoption Agreement, the
Employee's Years of Service shall be a span of service equal to the sum of:
(A) the period commencing on the date the Employee first performs an Hour of
Service and ending on the date he or she quits, retires, is discharged, dies, or
if earlier, the 12-month anniversary of the date on which the Employee was
otherwise first absent from service (with or without pay) for any other reason;
and
(B) (i) if the Employee quits, retires, or is discharged, the period commencing
on the date the Employee terminated his or her Employment and ending on the
first date on which he or she again performs an Hour of Service, if such date is
within 12 months of the date on which he or she last performed an Hour of
Service; or
(ii) if the Employee is absent from work for any other reason and, within 12
months of the first day of such absence, the Employee quits, retires or is
discharged, the period commencing on the first day of such absence and ending on
the first day he or she again performs an Hour of Service if such day is within
12 months of the date his or her absence began.
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With respect to both the elapsed time method and the hourly records method,
service with a predecessor employer, determined in the manner in which the rules
of this Plan would have credited such service had the Participant earned such
service under the terms of this Plan, may be included in Years of Service, as
specified in the Adoption Agreement.
ARTICLE II. PARTICIPATION
2.1 ADMISSION AS A PARTICIPANT
2.1.1 An Eligible Employee shall become a Participant on the Entry Date
coincident with or next following the date on which he or she meets the
eligibility requirements specified in the Adoption Agreement; provided, however
that:
(A) an Eligible Employee who has met the eligibility requirements as of the
first day of Plan Year in which the Plan is adopted as a new Plan shall become a
Participant as of such date;
(B) an Eligible Employee who had met the eligibility requirements of a plan that
is restated and/or amended to become this Plan shall become a Participant as of
the date this Plan is adopted; and
(C) if selected in the Adoption Agreement, an Eligible Employee shall become a
Participant on the effective date of the Plan providing he or she is an Eligible
Employee on such date.
2.1.2 An Employee who did not become a Participant on the Entry Date coincident
with or next following the day on which he or she met the eligibility
requirements because he or she was not then an Eligible Employee shall become a
Participant on the first day on which he or she again becomes an Eligible
Employee unless determined otherwise in accordance with Section 2.3.1 of the
Plan.
2.1.3 If the Plan includes a CODA or thrift feature, in addition to the
participation requirements set forth in Section 2.1.1, an Eligible Employee
shall become a Participant upon filing his or her 401(k) Election or election to
make Employee Thrift Contributions with the Administrator. An election shall not
be required if the Employer has elected to make contributions to an Employer
Account and/or Qualified Nonelective Contributions with respect to all Eligible
Participants.
2.1.4 An individual who has ceased to be a Participant and who again becomes an
Eligible Employee shall become a Participant immediately upon reemployment as an
Eligible Employee unless determined otherwise in accordance with Section 2.3.1
of the Plan.
2.2 ROLLOVER MEMBERSHIP AND TRUST TO TRUST TRANSFER
An Eligible Employee who makes a Rollover Contribution or a trust to trust
transfer shall become a Participant as of the date of such contribution or
transfer even if he or she had not previously become a Participant. Such an
Eligible Employee shall be a Participant only for the purposes of such Rollover
Contribution or transfer and shall not be eligible to share in contributions
made by the Employer until he or she has become a Participant in accordance with
Section 2.1.
2.3 CREDITING OF SERVICE FOR ELIGIBILITY PURPOSES
2.3.1 For purposes of eligibility to participate, an Eligible Employee or
Participant without any vested interest in any Employer Account and without an
Elective Deferrals Account who terminates Employment shall lose credit for his
or her Years of Service prior to such termination of Employment if his or her
Period of Severance equals or exceeds five years or, if greater, the aggregate
number of Years of Service.
2.3.2 For purposes of eligibility to participate, a Participant who has vested
interest in any Employer Account and who terminates Employment shall retain
credit for his or her Years of Service prior to such termination of
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Employment without regard to the length of his or her Period of Severance. In
the event such Participant returns to Employment, he or she shall participate
immediately.
2.3.3 A former Eligible Employee who was not a Participant who again becomes an
Eligible Employee with no Years of Service to his or her credit shall be treated
as a new Employee.
2.4 TERMINATION OF PARTICIPATION
A Participant shall cease to be a Participant:
(A) upon his or her death;
(B) upon the payment to him or her of all nonforfeitable benefits due to him or
her under the Plan, whether directly or by the purchase of an Annuity Contract;
or
(C) upon his or her Nonvested Separation.
2.5 LIMITATION FOR OWNER-EMPLOYEE
2.5.1 If the Plan provides contributions or benefits for on or more
Owner-Employees who control the trade or business for which this Plan is
established and who also control as an Owner-Employee or as Owner-Employees one
or more other trades or businesses, this Plan and the plan established for each
such other trade or business must, when looked at as a single plan, satisfy the
requirements of Code Sections 401(a) and (d) with respect to the employees of
this and all of such other trades or businesses.
2.5.2 If the Plan provides contributions or benefits for one or more
Owner-Employees who control as an Owner-Employee or as Owner-Employees one or
more other trades or businesses, the employees of the other trades or businesses
must be included in a plan which satisfies the requirements of Code Sections
401(a) and (d) and which provides contributions and benefits for the employees
of such other trades or businesses not less favorable than the contributions and
benefits provided for Owner-Employees under this Plan.
2.5.3 If an individual is covered as an Owner-Employee under the plans of two or
more trades or businesses which are not controlled and the individual controls a
trade or business, then the contributions or benefits of the employees under the
plan of the trades or businesses which are controlled must be as favorable as
those provided for such individual under the most favorable plan of the trade or
business which is not controlled.
2.5.4 For purposes of the preceding three subsections, an Owner-Employee, or two
or more Owner-Employees, will be considered to control a trade or business if
the Owner-Employee, or two or more Owner-Employees together:
(A) own the entire interest in an unincorporated trade or business, or
(B) in the case of a partnership, own more than 50% of either the capital
interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees, shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control within the meaning
of the preceding sentence.
2.6 CORRECTION WITH REGARD TO PARTICIPATION
2.6.1 If in any Plan year an Eligible Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by the Employer for the year has been
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46
made, the Employer shall make a subsequent contribution with respect to the
omitted Eligible Employee in the amount which would have contributed with
respect to such Eligible Employee had he or she not been omitted. Such
contribution shall be made whether or not it is deductible in whole or in part
in any taxable year under applicable provisions of the Code. It shall be the
responsibility of the Employer and Administrator to take any and all actions as
required by this Section 2.6.1.
2.6.2 If in any Plan Year any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made, the
amount contributed on behalf of such ineligible person shall constitute a
forfeiture for the Plan Year in which the discovery is made. It shall be the
responsibility of the Employer and Administrator to take any and all actions as
required by this Section 2.6.2.
2.7 PROVISION OF INFORMATION
Each Employee shall execute such forms as may reasonably be required by the
Administrator, and shall make available to the Administrator any information the
Administrator may reasonably request in this regard. By virtue of his or her
participation in this Plan, an Employee agrees, on his or her own behalf and on
behalf of all persons who may have or claim any right by reason of the
Employee's participation in the Plan, to be bound by all provisions of the Plan.
ARTICLE III. CONTRIBUTIONS AND ACCOUNT ALLOCATIONS
3.1 EMPLOYER CONTRIBUTIONS AND ALLOCATIONS
3.1.1 If the Plan is a profit-sharing plan, the Employer will contribute cash
and/or Qualifying Employer Securities to the Trust Fund, in such amount, if any,
as specified in the Adoption Agreement and with respect to Qualifying Employer
Securities as is consistent with Sections 10.4.2 and 10.4.3. If the Plan is a
profit-sharing plan, Net Profits may be necessary for an Employer to make
contributions, as specified in the Adoption Agreement. Employer Contributions
for a Plan Year will be allocated no later than the last day of the Plan Year to
the Employer Contributions Account of Participants eligible for an allocation in
the manner specified in the Adoption Agreement. A not-for-profit corporation may
adopt a profit-sharing plan as an incentive plan; provided, however, that such a
plan may not contain a CODA feature unless otherwise permitted by law.
3.1.2 If the Plan is a money purchase pension plan, the Employer will contribute
cash to the Trust Fund in an mount equal to that percentage of the Compensation
of each Participant eligible for an allocation of Employer contributions for
that Plan Year as specified in the Adoption Agreement. Employer Contribution for
the Plan Year will be allocated as of the last day of the Plan Year to the
Employer Contributions Accounts of Participants eligible for an allocation and
entitled to share in such contributions in the manner specified in the Adoption
Agreement.
3.1.3 If the Plan is a target benefit plan, the Employer will contribute cash to
the Trust Fund in an amount specified in the Adoption Agreement. The amount
contributed with respect to the targeted benefit of each Participant eligible
for an allocation for that Plan Year will be allocated as of the last day of the
Plan Year to the Participant's Employer Contributions Account in the manner
specified in the Adoption Agreement.
3.1.4 If the Employer elects in the Adoption Agreement to make contributions on
behalf of a Participant whose Employment terminated due to Disability,
"Compensation" shall mean, with respect to such Participant, the Compensation he
or she would have received for the entire calendar year in which the Disability
occurred if he or she had been paid for such year at the rate at which he or she
was being paid immediately prior to such Disability. Employer Contributions may
be taken into account only if the Participant is a Nonhighly Compensated
Employee and contributions made on his or her behalf are nonforfeitable.
3.1.5 If an Employer has adopted more than one Adoption Agreement, or has
adopted a plan pursuant to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Special Prototype Defined Benefit
Plan and Trust, only one Adoption Agreement may be integrated with Social
Security.
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3.1.6 For purposes of the Plan, contributions provided by the "leasing
organization" referred to in Section 1.37 of a Leased Employee which are
attributable to services performed for the Employer shall be treated as provided
by the Employer.
3.2 PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS
3.2.1 If elected by the Employer in the Adoption Agreement, each Participant
while actively employed may make Participant Voluntary Nondeductible
Contributions in cash in a dollar amount or a percentage of Compensation which
does not, when included in the Contribution Percentage Amount, exceed the
limitations set forth in Code Section 401(m).
3.2.2 Participant Voluntary Nondeductible Contributions shall be made in
accordance with rules and procedures adopted by the Administrator.
3.3 ROLLOVER CONTRIBUTIONS AND TRUST TO TRUST TRANSFERS
3.3.1 Any Eligible Employee or Participant may make a Rollover Contribution
under the Plan. A Rollover Contribution shall be in cash or in other property
acceptable to the Trustee and shall be a contribution attributable to (a) a
"qualified total distribution" (as defined in Code Section 402(a)(5)),
distributed to the contributing Employee under Code Section 402(a)(5) from a
Qualified Plan or distributed to the Employee under Code Section 403(a)(4) from
an "employee annuity" or referred to in that section, or (b) a payout or
distribution to the Employee referred to in Code Section 408(d)(3) from an
"individual retirement account" or an "individual retirement annuity" described,
respectively, in Code Section 408(a) or Section 408(b) consisting exclusively of
amounts attributable to "qualified total distributions" (as defined in Code
Section 402(a)(5)) from a Qualified Plan.
The Plan shall not accept a Rollover Contribution attributable to any
accumulated deductible employee contributions as defined by Code Section
72(o)(5)(B). The Trustee may condition acceptance of a Rollover Contribution
upon receipt of such documents as it may require. In the event that an Employee
makes a contribution pursuant to this Section 3.3 intended to be a Rollover
Contribution but which did not qualify as a Rollover Contribution, the Trustee
shall distribute to the Employee as soon as practicable after that conclusion is
reached the entire Account balance in his or her Rollover Contributions Account
deriving from such contributions determined as of the valuation date coincident
with or immediately preceding such discovery.
3.3.2 Any Eligible Employee or Participant may direct the Administrator to
direct the Trustee to accept a transfer to the Trust Fund from another trust
established pursuant to another Qualified Plan of all or any part of the assets
held in such other trust. The Plan shall not accept a direct transfer
attributable to accumulated deductible employee contributions as defined by Code
Section 72(o)(5)(B). The Trustee may condition acceptance of such a trust or
trust transfer upon receipt of such documents as it may require.
3.4 SECTION 401(k) CONTRIBUTIONS AND ACCOUNT ALLOCATIONS
3.4.1 ELECTIVE DEFERRALS
(A) Amount of Elective Deferrals
Subject to the limitations contained in Section 3.4.2, the Employer will
contribute cash to the Trust Fund in an amount equal to:
(i) as specified on the Participant's 401(k) Election form, the specific dollar
amount, or the deferral percentage multiplied by each such Participant's
Compensation; or
(ii) a bonus contribution made pursuant to Section 3.4.1(C).
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(B) The amount elected by a Participant pursuant to a 401(k) Election shall be
determined within the limits specified in the Adoption Agreement. The 401(k)
election shall be made on a form provided by the Administrator but no election
shall be effective prior to approval by the Administrator. The Administrator may
reduce the amount of any 401(k) Election, or make such other modifications as
necessary, so that the Plan complies with the provisions of the Code. A
Participant's 401(k) Election shall remain in effect until modified or
terminated. Modification or termination of a 401(k) Election shall be made at
such time as specified in the Adoption Agreement.
(C) If elected by the Employer in the Adoption Agreement, an Eligible Employee
may make a 401(k) Election to have an amount withheld up to the amount of any
bonus payable for such Plan Year and direct the Employer to contribute the
amount so withheld to his or her Elective Deferrals Account.
3.4.2 LIMITATION ON ELECTIVE DEFERRALS
(A) Maximum Amount of Elective Deferrals and Distribution of Excess Elective
Deferrals
(i) No Participant shall be permitted to have Elective Deferrals made under this
Plan, or any other Qualified Plan maintained by the Employer, during any Plan
Year in excess of the dollar limitation contained in Code Section 402(g) in
effect at the beginning of the Participant's taxable year.
(ii) Notwithstanding any other provision of the Plan, Excess Elective Deferrals
made to this Plan or assigned to this Plan, plus any income and minus any loss
allocable thereto, shall be distributed no later than April 15, 1988, and each
April 15 thereafter, to Participants to whose accounts Excess Elective Deferrals
were designated for the preceding Plan Year and who claim Excess Elective
Deferrals for such taxable year. Excess Elective Deferrals shall be treated as
Annual Additions.
(iii) Claims. A Participant may designate to this Plan any amount of his or her
Elective Deferrals as Excess Elective Deferrals during his or her taxable year.
A Participant's claim shall be in writing, shall be submitted to the
Administrator no later than March 1, shall specify the Participant's Excess
Elective Deferral for the preceding Plan Year, and shall be accompanied by the
Participant's written statement that if such amounts are not distributed, such
Excess Elective Deferral, when added to amounts deferred under other plans or
arrangements described in Code Section 401(k), Code Section 408(k), Code Section
403(b) or Code Section 457, exceeds the limit imposed on the Participant by Code
Section 402(g) for the year in which the deferral occurred. A Participant is
deemed to notify the Administrator of any Excess Elective Deferrals that arise
by taking into account only those Elective Deferrals made to this Plan and any
other plans of the Employer or an Affiliate.
(iv) Determination of Income or Loss. Excess Elective Deferrals shall be
adjusted for income or loss up to the date of distribution. The income or loss
allocable to Participant's Excess Elective Deferrals is the sum of: (1) the
income or loss allocable to the Participant's Elective Deferrals Account for the
Participant's taxable year multiplied by a fraction, the numerator of which is
the Participant's Excess Elective Deferrals for the Participant's taxable year
and the denominator of which is the Account Balance of the Participant's
Elective Deferrals Account without regard to any income or loss occurring during
such taxable year; and (2) ten percent of the amount determined under (1)
multiplied by the number of whole calendar months between the end of the
Participant's taxable year and the date of distribution, counting the month of
distribution if distribution occurs after the 15th of such month.
Anything in the preceding paragraph of this Section 3.4.2(A)(iv) to the contrary
notwithstanding, any reasonable method for computing the income or loss
allocable to Excess Elective Deferrals may be used, provided that such method is
used consistently for all Participants and for all corrective distributions
under the Plan, and is used by the Plan for allocating income or loss to
Participant's Accounts. Income or loss allocable to the period between the end
of the taxable year and the date of distribution may be disregarded in
determining income or loss.
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(B) ADP Test
The Average Actual Deferral Percentage for Highly Compensated Employees for each
Plan Year and the Average Actual Deferral Percentage for Nonhighly Compensated
Employees for the same Plan Year must satisfy one of the following tests:
(i) The Average Actual Deferral Percentage for Eligible Participants who are
Highly Compensated Employees for the Plan Year shall not exceed the Average
Actual Deferral Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by 1.25; or
(ii) The Average Actual Deferral Percentage for Eligible Participants who are
Highly Compensated Employees for the Plan Year shall not exceed the Average
Actual Deferral Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by 2.0; provided that the
Average Actual Deferral Percentage for eligible Participants who are Highly
Compensated Employees does not exceed the Average Actual Deferral Percentage for
Participants who are Nonhighly Compensated Employees by more than two percentage
points.
(C) Special Actual Deferral Percentage Rules
(i) The Actual Deferral Percentage for any Eligible Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have Elective
Deferrals and Qualified Matching Contributions or Qualified Nonelective
Contributions, or both, if treated as Elective Deferrals for purposes of the ADP
Test, allocated to his or her accounts under two or more plans or arrangements
described in Code Section 401(k) that are maintained by the Employer shall be
determined as if all such Elective Deferrals, Qualified Matching Contributions
and Qualified Nonelective Contributions were made under a single arrangement. If
a Highly Compensated Employee participates in two or more cash or deferred
arrangements that have different plan years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a single
arrangement.
(ii) In the event that this Plan satisfies the requirements of Code Section
410(k), Code Section 401(a)(4) or Code Section 410(b) only i aggregated with on
or more other qualified plans, or if one or more other qualified plans satisfy
the requirements of such Code Sections only if aggregated with this Plan, then
this Section shall be applied by determining the Actual Deferral Percentage of
Employees as if all such qualified plans were a single qualified plan. For Plan
Years beginning after December 31, 1989, plans may be aggregated in order to
satisfy Code Section 401(k) only if they have the same plan year.
(iii) For purposes of determining the Actual Deferral Percentage of an Eligible
Participant who is a 5% owner or one of the ten most highly paid Highly
Compensated Employees, the Elective Deferrals (and Qualified Matching
Contributions or Qualified Nonelective Contributions, or both, if treated as
Elective Deferrals for purposes of one of the tests referred to in Section
3.4.2(B)) and CODA Compensation of such Participant shall include the Elective
Deferrals (and, if applicable, Qualified Matching Contributions, Qualified
Nonelective Contributions) and CODA Compensation for the Plan Year of Family
Members. Family Members with respect to such Highly Compensated Employees shall
be disregarded as separate employees in determining the Actual Deferral
Percentage both for Eligible Participants who are Nonhighly Compensated
Employees and for Eligible Participants who are Highly Compensated Employees.
(iv) For purposes of determining the ADP Test, Elective Deferrals, Qualified
Matching Contributions, and Qualified Nonelective must be made before the last
day of the 12-month period immediately following the Plan Year to which such
contributions relate.
(v) The Employer shall maintain records sufficient to demonstrate satisfaction
of the ADP Test and the amount of Qualified Nonelective Contributions and/or
Qualified Matching Contributions used in such test.
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(vi) The determination and treatment of the Elective Deferrals, Qualified
Matching Contributions, and Qualified Nonelective Contributions, used in the ADP
Test shall satisfy such other requirements as may be prescribed by the Secretary
of the Treasury.
(D) Distribution of Excess Contributions
(i) In General. Notwithstanding any other provision of the Plan except Section
3.4.2(E), Excess Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of each Plan Year
beginning after December 31, 1987, to Participants to whose Accounts Elective
Deferrals, Qualified Matching Contributions, and Qualified Nonelective
Contributions were allocated for the preceding Plan Year(1). Excess
Contributions of Participants who are subject to the Family Member aggregation
rules shall be allocated among the family members in proportion to the Elective
Deferrals (and amounts treated as Elective Deferrals) of each Family Member that
is combined to determine the combined Actual Deferral Percentage. Excess
Contributions shall be treated as Annual Additions.
(ii) Determination of Income or Loss. Excess Contributions shall be adjusted for
any income or loss up to the date of distribution. The income or loss allocable
to Excess Contributions is the sum of: (1) the income or loss allocable to the
Participant's Elective Deferrals Account (and, if applicable, the Qualified
Nonelective Contributions Account or the Qualified Matching Contributions
Account or both) for the Plan Year multiplied by a fraction, the numerator of
which is such Participant's Excess Contributions for the year and the
denominator of which is the Account Balances of Participant's Elective Deferrals
Account, Qualified Nonelective Contributions Account and Qualified Matching
Contributions Account if any of such contributions are included in the ADP Test,
without regard to any income or loss occurring during such Plan Year; and (2)
10% of the amount determined under (1) multiplied by the number of whole
calendar months between the end of the Plan Year and the date of distribution,
counting the month of distribution if distribution occurs after the 15th of such
month.
Anything in the preceding paragraph of this Section 3.4.2(D)(ii) to the contrary
notwithstanding, any reasonable method for computing the income or loss
allocable to Excess Contributions may be used, provided that such method is used
consistently for all Participants and for all corrective distributions under the
Plan for the Plan Year, and is used by the Plan for allocating income or loss to
Participant's Accounts. Income or loss allocable to the period between the end
of the Plan Year and the date of distribution may be disregarded in determining
income or loss.
(iii) Accounting for Excess Contributions. Amounts distributed under this
Section 3.4.2(D) shall first be distributed from the Participant's Elective
Deferrals Account and Qualified Matching Contributions Account in proportion to
the Participant's Elective Deferrals and Qualified Matching Contributions (to
the extent used in the ADP Test) for the Plan Year. Excess Contributions shall
be distributed from the Participant's Qualified Nonelection Contributions
Account only to the extent that such Excess Contributions exceed the balance in
the Participant's Elective Deferrals Account and Qualified Matching
Contributions Account.
(E) In lieu of distributing Excess Contributions pursuant to the preceding
Section 3.4.2(D), and as specified in the Adoption Agreement, the Employer may
make special Qualified Nonelective Contributions on behalf of Nonhighly
Compensated Employees that are sufficient to satisfy the ADP Test.
(F) In lieu of distributing Excess Contributions, the Participant may treat his
or her Excess Contributions as an amount distributed and then re-contributed by
such Participant. Recharacterized amounts are 100% nonforfeitable
--------------------
(1) DISTRIBUTION OF EXCESS CONTRIBUTIONS ON OR BEFORE THE LAST DAY OF THE PLAN
YEAR AFTER THE PLAN YEAR IN WHICH SUCH EXCESS AMOUNTS AROSE IS REQUIRED UNDER
CODE SECTION 401(k)(8) IF THE PLAN IS TO MAINTAIN ITS TAX-QUALIFIED STATUS.
HOWEVER, IF SUCH EXCESS AMOUNTS, PLUS ANY INCOME AND MINUS NAY LOSS ALLOCABLE
THERETO, ARE DISTRIBUTED MORE THAN 2-1/2 MONTHS AFTER THE LAST DAY OF THE PLAN
YEAR IN WHICH SUCH EXCESS AMOUNTS AROSE, THEN CODE SECTION 4979 IMPOSES A 10%
EXCISE TAX ON THE EMPLOYER MAINTAINING THE PLAN WITH RESPECT TO SUCH AMOUNTS.
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and subject to the same distribution requirements as Elective Deferrals. Amounts
may not be re-characterized by a Highly Compensated Employee to the extent that
such amount in combination with other amounts made to the Participant's
Participant Contributions Account would exceed any stated limit on such
contributions, as specified in the Adoption Agreement. If Excess Contributions
are re-characterized, they must be so no later than two and one half months
after the last day of the Plan Year in which such Excess Contributions arose and
they are deemed to occur no earlier than the date the last Highly Compensated
Employee is informed in writing of the amount re-characterized and the
consequences thereof. Recharacterized amounts are taxable to the Participant for
the tax year in which he or she would have received such contributions in cash.
(G) Under no circumstances may Elective Deferrals, Qualified Matching
Contributions and Qualified Nonelective Contributions be contributed and
allocated to the Trust later than the last day of the 12-month period
immediately following the Plan Year to which such contributions relate.
3.5 MATCHING 401(k) CONTRIBUTIONS
3.5.1 AMOUNT OF MATCHING CONTRIBUTIONS. Subject to the limitations contained in
Sections 3.9 and 3.5.2, for each Plan Year the Employer will contribute in cash
and/or Qualifying Employer Securities, Matching 401(k) Contributions to the
Trust Fund in an amount, if any, calculated by reference to the Participants'
Elective Deferrals as specified in the Adoption Agreement.
3.5.2 LIMITATION ON CONTRIBUTION PERCENTAGE
(A) ACP Test
The Average Contribution Percentage for Eligible Participants who are Highly
Compensated Employees for the Plan Year and the Average Contributions Percentage
for Eligible Participants who are Nonhighly Compensated Employee for the same
Plan Year must satisfy one of the following tests:
(i) the Average Contribution Percentage for Eligible Participants who are Highly
Compensated Employees for the Play Year shall not exceed the Average
Contribution Percentage for Eligible Participants who are Nonhighly Compensate
Employees for the same Plan Year multiplied by 1.25; or
(ii) the Average Contribution Percentage for Eligible Participants who are
Highly Compensated Employees for the Play Year shall not exceed the Average
Contribution Percentage for Eligible Participants who are Nonhighly Compensate
Employees by more than two percentage points or such lesser amount as the
Secretary of the Treasury shall prescribe to prevent the multiple use of this
alternative limitation with respect to any Highly Compensated Employee.
(B) Special Average Contribution Percentage Rules
(i) For purposes of this Section 3.5.2, the Contribution Percentage for any
Eligible Participant who is a Highly Compensated Employee for the Play Year and
who is eligible to have Matching 401(k) Contributions or Matching Thrift
Contributions, as the case may be (other than Qualified Matching Contributions),
allocated to his or her account under two or more qualified plans described in
Code Section 401(a), or arrangements described in Code Section 401(k) shall be
determined as if the total of such Contribution Percentage Amounts was made
under each plan.
If a Highly Compensated Employee participates in 2 or more cash or deferred
arrangement that have different plan years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a single
arrangement.
(ii) In the event that this Plan satisfies the requirements of Code Section
410(b) only if aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of Code Section 410(b) only if aggregated with
this Plan, then this Section 3.5.2 shall be applied by determining the
Contribution Percentages of Employees as
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if all such plans were a single plan. For Plan Years beginning after December
31, 1989, plans may be aggregated in order to satisfy Code Section 401(m) only
if they have the same plan year.
(iii) For purposes of determining the Contribution Percentage of an Eligible
Participant who is a 5% owner or one of the 10 most highly-paid Highly
Compensated Employees, the Contribution Percentage Amounts and the CODA
Compensation of such Participant shall include the Contribution Percentage
Amounts and CODA Compensation for the Plan Year of Family Members. Family
Members with respect to Highly Compensated Employee shall be disregarded as
separate employees in determining the Contribution Percentage both for
Participants who are Nonhighly Compensated Employees and for Participants who
are Highly Compensated Employees.
(iv) For purposes of determining the ACP Test, Matching 401(k) Contributions,
Matching Thrift Contributions and Qualified Nonelective Contributions will be
considered made for a Plan Year if made no later than the end of the 12-month
period beginning on the day after the close of the Plan Year.
(v) The Employer shall maintain records sufficient to demonstrate satisfaction
of the ACP Test and the amount of Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, used in such test.
(C) Multiple Use
If one or more Highly Compensated Employees participate in both a cash or
deferred arrangement and a plan subject to the ACP Test and the sum of the
Actual Deferral Percentage and the Actual Contribution Percentage of those
Highly Compensated Employees exceeds the "aggregate limit", then the Actual
Contribution Percentage of those Highly Compensated Employees will be reduced,
beginning with such Highly Compensated Employee whose Actual Contribution
Percentage is the highest, so that the limit is not exceeded.
The amount by which each Highly Compensated Employee's Contribution Percentage
is reduced shall be treated as an Excess Aggregate Contribution. The Actual
Deferral Percentage and Actual Contribution Percentage of the Highly Compensated
Employees are determined after any corrections required to meet the ADP Test and
the ACP Test. Multiple use does not occur if either the Average Deferral
Percentage or the Actual Contribution Percentage of the Highly Compensated
Employees does not exceed 1.25 multiplied by the Actual Deferral Percentage and
the Actual Contribution Percentage of the Nonhighly Compensated Employees. (i)
The "aggregate limit" is the sum of (1) 125% of the greater of the Actual
Deferral Percentage for Participants who are Nonhighly Compensated Employees for
the Plan Year or the Actual Deferral Percentage for Participants who are
Nonhighly Compensated Employees for the Plan Year beginning with or within the
Plan Year and (2) the lesser of 200% or two plus the lesser of such Actual
Deferral Percentage or Actual Contribution Percentage. "Lesser" is substituted
for "greater" in "(1)," above, and "greater" is substituted for "lesser" after
"two plus the" in "(2)" if it would result in a larger aggregate limit.
(D) Forfeiture of Excess Aggregate Contributions
(i) In General. Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited and applied to reduce subsequent Matching 401(k)
Contributions or Matching Thrift Contributions, as the case may be. No
forfeitures arising under this Section 3.6.2(D) shall be allocated to the
account of any Highly Compensated Employee. If not forfeitable, Excess Aggregate
Contributions shall be distributed no later than the last day of each Plan Year
beginning after December 31, 1987, to Participants to whose Accounts such Excess
Aggregate Contributions were allocated for the preceding Plan Year. Excess
Aggregate Contributions of Participants who are subject to the Family Member
aggregation rules shall be allocated among the Family Members in proportion to
the amounts constituting Contribution Percentage Amounts of each Family Member
that is combined to determine the combined Actual Contribution Percentage.
Excess Aggregate Contributions shall be treated as Annual Additions. Anything
above to the contrary notwithstanding, any forfeiture or distribution under this
Section 3.5.2(D)(i) shall occur only if sufficient Employee Thrift Contributions
and/or Participant Voluntary Nondeductible Contributions, as the case may be,
are not
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distributed from the qualified plan holding such Employee Thrift Contributions
and/or Participant Voluntary nondeductible Contributions, as the case may be(2).
(ii) Determination of Income or Loss. Excess Aggregate Contributions shall be
adjusted for any income or loss up to the date of distribution. The income or
loss allocable to Excess Aggregate Contributions is the sum of (1) the income or
loss allocable to the Participant's Matching 401(k) Contribution Account or
Matching Thrift Contribution Account (if any, and if all amounts therein are not
used in the ADP Test) and, if applicable, Qualified Nonelective Contribution
Account and Elective Deferrals Account for the plan Year multiplied by a
fraction, the numerator of which is such Participant's Excess Aggregate
Contributions for the year and the denominator of which is the Participant's
Account Balance(s) attributable to Contribution Percentage Amounts without
regard to any income or loss occurring during such Plan Year; and (2) 10% of the
amount determined under (1) multiplied by the number of whole calendar months
between the end of the Plan Year and the date of distribution, counting the
month of distribution if distribution occurs after the 15th of such month.
Anything in the preceding paragraph of this Section 3.5.2(D)(ii) to the contrary
notwithstanding, any reasonable method for computing the income or loss
allocable to Excess Aggregate Contributions may be used, provided that such
method is used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by the Plan for
allocating income or loss to Participants' Accounts. Income or loss allocable to
the period between the end of the Plan Year and the date of distribution may be
disregarded in determining income or loss.
(iii) The determination of the Excess Aggregate Contributions shall be made
after first determining the Excess Elective Deferrals, and then determining the
Excess Contributions.
3.5.3 For purposes of determining the ACP Test, Qualified Nonelective
Contributions, Matching 401(k) Contributions and Matching Thrift Contributions
will be considered made for a Plan Year if paid to the Trustee no later than the
end of the 12-month period beginning on the day after the close of the Plan
Year.
3.6 THRIFT CONTRIBUTIONS
3.6.1 EMPLOYEE THRIFT CONTRIBUTIONS. If elected by the Employer in the Adoption
Agreement to provide for Employee Thrift Contributions, the Employer will
contribute cash to the Trust Fund in an amount equal to (A) the Employee Thrift
Contribution percentage of each Participant on his or her Employee Thrift
Contribution election form multiplied by each such Participant's Compensation or
(B) the specific dollar amount set forth on the Participant's election form. The
amount elected by a part pursuant to a Participant's Employee Thrift
Contribution election shall be determined within the limits specified in the
Adoption Agreement. Such election shall be made on a form provided by the
Administrator but no election shall be effective prior to approval by the
Administrator.
The Administrator may reduce the amount of any Employee Thrift Contribution, or
make such other modification as necessary, so that the plan complies with the
provision of the Code. A Participant's election shall remain in effect until
modified or terminated at such time as specified in the Adoption Agreement.
3.6.2 MATCHING THRIFT CONTRIBUTIONS. Subject to the limitation contained in
Sections 3.9 and 3.5.2, for each Plan Year the Employer will contribute in cash
and/or Qualifying Employer Securities, Matching Thrift
------------
(2) DISTRIBUTION OF EXCESS CONTRIBUTIONS ON OR BEFORE THE LAST DAY OF THE PLAN
YEAR AFTER THE PLAN YEAR IN WHICH SUCH EXCESS AMOUNTS AROSE IS REQUIRED UNDER
CODE SECTION 401(m)(6) IF THE PLAN IS TO MAINTAIN ITS TAX-QUALIFIED STATUS.
HOWEVER, IF SUCH EXCESS AMOUNTS, PLUS ANY INCOME AND MINUS ANY LOSS ALLOCABLE
THERETO, ARE DISTRIBUTED MORE THAN 2-1/2 MONTHS AFTER THE LAST DAY OF THE PLAN
YEAR IN WHICH SUCH EXCESS AMOUNTS AROSE, THEN CODE SECTION 4979 IMPOSES A 10%
EXCISE TAX ON THE EMPLOYER MAINTAINING THE PLAN WITH RESPECT TO SUCH AMOUNTS.
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Contributions to the Trust Fund in an amount, if any, calculated by reference to
the Participants' Employee Thrift Contributions, as specified in the Adoption
Agreement.
Matching Thrift Contributions made by the Employer will be allocated to the
Matching Thrift Contributions Account of those Participants who have contributed
Employee Thrift Contributions to the Plan, as specified in the Adoption
Agreement.
3.7 TREATMENT OF FORFEITURES
3.7.1 If the Employer has elected in the Adoption Agreement to reallocate
forfeitures for a Plan Year among Participants, then such forfeitures, if any,
shall be allocated as of the last day of the Plan Year to the Employer Accounts
of those Participants who are eligible to share in the allocation of
contributions to that particular
Employer Account (whether or not a contribution was made for that Plan Year) for
that Plan Year in that particular Employer Account category with respect to
which such forfeitures are attributable. If the Plan is a Target Benefit Plan,
forfeitures may only be used to reduce Employer Contributions, in accordance
with Section 3.7.2.
3.7.2 If the Employer has elected in the Adoption Agreement to use forfeiture to
reduce contributions, then forfeitures shall be applied in the succeeding Plan
Year to reduce Employer Contributions in that particular Employer Account
category to which such forfeitures were attributable.
3.8 ESTABLISHING OF ACCOUNTS
3.8.1 An Elective Deferrals Account shall be established for each Eligible
Participant who makes a 401(k) Election to which the Administrator shall credit,
or cause to be credited, Elective Deferrals allocable to each such Participant,
plus earnings or losses thereon.
3.8.2 An Employer Contributions Account shall be established for each
Participant to which the Administrator shall credit or cause to be credited
Employer contributions pursuant to Section 3.1, and forfeitures attributable to
such contributions, if any, plus earnings or losses thereon.
3.8.3 An Employee Thrift Contributions Account shall be established for each
Participant who makes Employee Thrift Contributions to the Plan, to which the
Administrator shall credit, or cause to be credited, all amounts allocable to
each such Participant, plus earnings or losses thereon.
3.8.4 A Matching 401(k) Contributions Account shall be established for each
Participant for whom Matching 401(k) Contributions are made, to which the
Administrator shall credit, or cause to be credited, all such amounts allocable
to each such Participant, plus earnings or losses thereon.
3.8.5 A Matching Thrift Contributions Account shall be established for each
Participant for whom Matching Thrift Contributions are made, to which the
Administrator shall credit, or cause to be credited, all amounts allocable to
each such Participant, plus earnings or losses thereon.
3.8.6 A Participant Voluntary Nondeductible Contributions Account shall be
established for each Participant who makes Participant Voluntary Nondeductible
Contributions to the Plan, plus earnings or losses thereon.
3.8.7 A Qualified Matching Contributions Account shall be established for each
Eligible Participant for whom Qualified Matching Contributions are made, to
which the Administrator shall credit, or cause to be credited, all amounts
allocable to each such Participant, plus earnings or losses thereon.
3.8.8 A Qualified Nonelective Contributions Account shall be established for
each Participant for whom Qualified Nonelective Contributions are made, to which
the Administrator shall credit, or cause to be credited, all amounts allocable
to each such Participant, plus earnings or losses thereon.
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3.8.9 A Rollover Contributions Account shall be established for each Participant
who contributes to the Plan pursuant to Section 3.3 to which the Administrator
shall credit, or cause to be credited, Rollover Contributions made by the
Participant, plus earnings or losses thereon.
3.8.10 A Transferred Contributions Account shall be established for each
Participant for whom assets are transferred from another Qualified Plan, to
which the Administrator shall credit, or cause to be credited, transferred
assets, plus earnings or losses thereon.
3.9 LIMITATION ON AMOUNT OF ALLOCATIONS
3.9.1 As used in this Section 3.9, each of the following terms shall have the
meaning for that term set forth in this Section 3.9.1:
(A) Annual Additions means, for each Participant, the sum of the following
amounts credited to the Participant's Accounts for the Limitation Year:
(i) Employer contributions within the meaning of IRS regulation 1.415-6(b);
(ii) Employee Contributions;
(iii) forfeitures;
(iv) allocation under a simplified employee pension; and
(v) any Excess Amount applied under a Defined Contribution Plan in the
Limitation Year to reduce Employer Contributions will also be considered as part
of the Annual Additions for such Limitation Year.
Amounts allocated after March 31, 1984, to an "individual medical benefit
account" as defined in Code Section 415(1)(2) ("Individual Medical Benefit
Account") which is part of a pension or annuity plan maintained by the Employer
or Affiliate are treated as Annual Additions to a Defined Contribution Plan.
Also, amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after that date, which are attributable to
post-retirement medical benefits allocated to the separate account of a "key
employee" as defined in Code Section 419A(d)(3) under a "welfare benefit fund"
as defined in Code Section 419(e) ("Welfare Benefit Fund") maintained by the
Employer or Affiliate, are treated as Annual Additions to a Defined Contribution
Plan.
(B) Defined Benefit Dollar Limitation means $90,000 multiplied by the Adjustment
Factor or such other limitation set forth in Code Section 415(b)(1) as in effect
for the Limitation Year.
(C) Defined Benefit Fraction means a fraction, the numerator of which is the sum
of the Projected Annual Benefits of the Participant involved under all Defined
Benefit Plans (whether or not terminated) maintained by the Employer or
Affiliate, and the denominator of which is the lesser of 125% of the Defined
Benefit Dollar Limitation determined for the Limitation Year or 140% of the
Participant's Highest Average Limitation Compensation, including any adjustments
under Code Section 415(b).
Notwithstanding the above, if the Participant was a Participant as of the first
day of the first Limitation Year beginning after December 31, 1986, in one or
more Defined Benefit Plans maintained by the Employer or Affiliate which were in
existence on May 5, 1986, the denominator of this fraction will not be less than
125% of the sum of the annual benefits under such Plans which the Participant
had accrued as of the close of the last Limitation Year beginning before January
1, 1987, disregarding any changes in the terms and conditions of the plans after
May 5, 1986. The preceding sentence applies only if the Defined Benefit Plans
individually and in the aggregate satisfied the requirements of Code Section 415
for all Limitation Years beginning before January 1, 1987.
(D) Defined Contribution Dollar Limitation means $30,000 or if greater,
one-fourth of the Defined Benefit Dollar Limitation as in effect for the
Limitation Year.
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(E) Defined Contribution Fraction means a fraction, the numerator of which is
the sum of the Annual Additions to the Participant's Account or Accounts under
all the Defined Contribution Plans (whether or not terminated) maintained by the
Employer or Affiliate for the current and all prior Limitation Years (including
the Annual Additions attributable to the Participant's nondeductible
contributions to all Defined Benefit Plans, whether or not terminated,
maintained by the Employer or Affiliate and the Annual Additions attributable to
all Welfare Benefit Funds, Individual Medical Benefit Accounts, and simplified
employee pensions maintained by the Employer or Affiliate), and the denominator
of which is the sum of the "maximum aggregate amounts" (as defined in the
following sentence) for the current and all prior Limitation Years of service
with the Employer or Affiliate (regardless of whether a Defined Contribution
Plan was maintained by the Employer or Affiliate). The "maximum aggregate
amount" in any Limitation Year is the lesser of (i) 125% of the Defined Benefit
Dollar Limitation in effect under Code Section 415(c)(1)(A) or (ii) 35% of the
Participant's Compensation for such year.
If the Employee was a Participant as of the first day of the first Limitation
Year beginning after December 31, 1986, in one or more Defined Contribution
Plans maintained by the Employer or Affiliate in existence on May 5, 1986, the
numerator of this fraction will be adjusted if the sum of this fraction and the
Defined Benefit Fraction would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the product of (A) the excess of
the sum of the fractions over 1.0 times (B) the denominator of this fraction
will be permanently subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they would be computed as of the
later of the end of the last Limitation Year beginning before January 1, 1987,
and disregarding any changes in the terms and conditions of the Plans made after
May 6, 1986, but using the Code Section 415 limitation applicable to the first
Limitation Year beginning on or after January 1, 1987. The Annual Addition for
any Limitation Year beginning before January 1, 1987, shall not be recomputed to
treat all Participant contributions as Annual Additions.
(F) Excess Amounts means the excess of the Participant's Annual Additions for
the Limitation Year involved over the Maximum Permissible Amount for that
Limitation Year.
(G) Highest Average Limitation Compensation means the average Compensation as
defined in Code Section 415(c)(3) of the Participant involved for that period of
three consecutive Years of Service with the Employer or Affiliate (or if the
Participant has less than three such Years of Service, the actual number
thereof) that produces the highest average.
(H) Limitation Compensation means Compensation, as defined in either (i), (ii)
or (iii) below, as specified in the Adoption Agreement:
(i) Code Section 415 Safe-Harbor Compensation
For an Employee other than a Self-Employed Individual, the Employee's earned
income, wages, salaries, and fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of Employment (including, but
not limited to, commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits, and reimbursements or other expense allowances under a
non-accountable plan (as described in Reg. 1.62-2(c)) and excluding the
following:
(1) Employer contributions to a plan of deferred compensation which are not
includible in the Employee's gross income for the taxable year in which
contributed, or contributions under a "simplified employee pension" plan (within
the meaning of Code Section 408(k)) to the extent such contributions are
deductible by the Employee, or any distributions from a plan of deferred
compensation;
(2) amounts realized from the exercise of a non-qualified stock option, or when
restricted stock (or other property) held by the Employee either becomes freely
"transferable" or is no longer subject to a "substantial risk of forfeiture"
(both quoted terms within the meaning of Code Section 83(a));
(3) amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and
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(4) other amounts which received special tax benefits, or contributions made
(whether or not under a salary reduction agreement) towards the purchase of an
annuity described in Code Section 403(b) (whether or not the amounts are
actually excludable from the gross income of the Employee); or
For Limitation Years beginning after December 31, 1991, Limitation Compensation
shall include only that compensation which is actually paid or made available
during the Limitation Year.
(ii) Information required to be reported under Sections 6041 and 60951. ("Wages,
Tips and other Compensation Box" Form W-2).
Limitation Compensation is defined as wages as defined in Code Section 3401(a)
and all other payments of compensation to an Employee by the Employer (in the
course of the Employer's trade or business) for which the Employer is required
to furnish the Employee a written statement under Sections 6041(d) and
6051(a)(3) of the Code. Compensation must be determined without regard to any
rules under Section 3401(a) that limit the remuneration included in wages based
on the nature or location of the employment or the services performed (such as
the exception for agricultural labor in Section 3401(a)(2)).
(iii) Code Section 3401(a) wages
Limitation Compensation is defined as wages within the meaning of Code Section
3401(a) for the purposes of income tax withholding at the source but determined
without regard to any rules that limit the remuneration included in wages based
on the nature or location of the employment or the services performed (such as
the exception for agricultural labor in Code Section 3401(a)(2)).
Without regard to the definition of Limitation Compensation elected by the
Employer, for a Self-Employed Individual, Limitation Compensation means his or
her Earned Income, provided that if the Self-Employed Individual is not a
Participant for an entire Plan Year, his or her Limitation Compensation for that
Plan Year shall be his or her Earned Income for that Plan Year multiplied by a
fraction the numerator of which is the number of days he or she is a Participant
during the Plan Year and the denominator of which is the number of days in the
Plan Year. Additionally, Limitation Compensation for a Participant in a Defined
Contribution Plan who is permanently and totally disabled (as defined in Code
Section 22(e)) is the compensation such Participant would have received for the
Limitation Year if the Participant has been paid at the rate of compensation
paid immediately before becoming disabled, such imputed compensation may be
taken into account only if the Participant is not a Highly Compensated Employee
and contributions made on behalf of such Participant are nonforfeitable when
made.
(I) Maximum Permissible Amount means the maximum Annual Addition which may be
contributed or allocated to a Participant's Account under the Plan for any
Limitation Year. The maximum Annual Addition shall not exceed the lesser of (a)
the Defined Contribution Dollar Limitation, or (b) 25% of the Participant's
Compensation for the Limitation Year.
The Compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits (within the meaning of Code Sections 401(h) or
419A(f)(2)) which is otherwise treated as an Annual Addition under Code Section
415(l)(1) or 419A(d)(2). If a short Limitation Year is created because of an
amendment changing the Limitation Year to a different 12-consecutive month
period, the Maximum Permissible Amount will not exceed the Defined Contribution
Dollar Limitation multiplied by the following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
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(J) Projected Annual Benefit means the annual retirement benefit (adjusted to an
actuarially equivalent straight life annuity if such benefit is expressed in a
form other than a straight life annuity or Qualified Joint and Survivor Annuity)
to which the Participant would be entitled under the terms of a Defined Benefit
Plan assuming:
(i) the Participant continues in employment with the Employer or Affiliate until
the Participant's "normal retirement age" under the Plan within the meaning of
Code Section 411(a)(8) (or the Participant's current age, if later); and
(ii) the Participant's Limitation Compensation for the current Limitation Year
and all other relevant factors used to determine benefits under the Plan will
remain constant for all future Limitation Years.
3.9.2 The provisions of this subsection 3.9.2 apply with respect to a
Participant who does not participate in, and has never participated in, another
Qualified Plan, a Welfare Benefit Fund or an Individual Medical Benefit Account
or a simplified employee pension, as defined in Code Section 401(k), maintained
by the Employer or an Affiliate, which provides an Annual Addition as defined in
Section 3.9.1(A) of the Plan, other than this Plan:
(A) The amount of Annual Additions which may be credited to the Participant's
Account for any Limitation Year will not exceed the lesser of the Maximum
Permissible Amount or any other limitation contained in this Plan. If the
Employer Contribution that would otherwise be contributed or allocated to the
Participant's Account would cause the Annual Additions on behalf of the
Participant for the Limitation Year to exceed the Maximum Permissible Amount
with respect to that Participant for the Limitation Year, the amount contributed
or allocated will be reduced so that the Annual Additions on behalf of the
Participant for the Limitation Year will equal such Maximum Permissible Amount.
(B) Prior to determining the Participant's actual Limitation Compensation for a
Limitation Year, the Employer may determine the Maximum Permissible Amount for
the Participant for the Limitation Year on the basis of a reasonable estimation
of the Participant's Compensation for that Limitation Year. Such estimated
Compensation shall be uniformly determined for all Participants similarly
situated.
(C) As soon as is administratively feasible after the end of a Limitation Year,
the Maximum Permissible Amount for the Limitation Year will be determined on the
basis of the Participant's actual compensation for the Limitation Year.
(D) If pursuant to Section 3.9.2(C) or as a result of the allocation of
forfeitures, there is an Excess Amount with respect to the Participant for a
Limitation Year, the Excess Amount shall be disposed of as follows:
(i) First, any contribution to the Participant's Elective Deferrals Account,
Participant Voluntary Nondeductible Contributions Account or Employee Thrift
Contributions Account, if applicable, and any earnings allocable thereto will be
distributed to the Participant to the extent that the return thereof would
reduce the Excess Amount in such Participant's Accounts;
(ii) If after the application of Section 3.9.2(D)(i) an Excess Amount still
exists, and the Participant is covered by the Plan at the end of the Limitation
Year, the remaining Excess Amount in the Participant's Account will be used to
reduce Employer contributions (including allocation of any forfeitures) under
this Plan for such Participant in the next Limitation Year, and in each
succeeding Limitation Year, if necessary.
(iii) If after the application of Section 3.9.2(D)(i) an Excess Amount still
exists, and the Participant is not covered by the Plan at the end of the
Limitation Year, the Excess Amount will be held unallocated in a suspense
account. The suspense account will be applied to reduce future Employer
contributions under this Plan for all remaining Participants in the next
Limitation Year, and in each succeeding Limitation Year, if necessary; provided,
however, that if all or any part of the Excess Amount held in a suspense account
is attributable to a Participant's Elective Deferrals, such Excess Amount shall
be held unallocated in a suspense account to be used for such Participant in the
next Limitation Year and each succeeding Limitation Year as an Elective Deferral
if such Participant is covered by the Plan in the next and each succeeding
Limitation Year, if necessary.
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(iv) If a suspense account is in existence at any time during a Limitation Year
pursuant to Section 3.9.2(D)(iii), the suspense account will not participate in
the allocation of the Trust Fund's investment gains or losses to or from any
other Account. If a suspense account is in existence at any time during a
particular Limitation Year, all amounts in the suspense account must be
allocated and reallocated to Participants' Accounts before any Employer or
Participant contributions may be made to the Plan for the Limitation Year.
Excess Amounts, other than those Excess Amounts referred to in Section
3.9.2(D)(i), may not be distributed to Participants or Former Participants.
3.9.3 The provisions of this subsection 3.9.3 apply with respect to a
Participant who, in addition to this Plan, is covered or has been covered under
one or more Defined Contribution Plans which are Master or Prototype Plans,
Welfare Benefit Funds an Individual Medical Benefit Account or a simplified
employee pension maintained by the Employer or an Affiliate, which provides an
Annual Addition as described in Section 3.9.1(A) of the Plan during any
Limitation Year:
(A) The Annual Additions which may be credited to a Participant's Accounts under
this Plan for any such Limitation Year will not exceed the Maximum Permissible
Amount reduced by the Annual Additions credited to the Participant's account or
accounts under any other plans and Welfare Benefit Fund, Individual Medical
Benefit Account or simplified employee pension for the same Limitation Year.
If the Annual Additions with respect to the Participant under any one or more
other such Defined Contribution Plans or Welfare Benefit Funds, Individual
Medical Benefit Account or simplified employee pension maintained by the
Employer are less than the Maximum Permissible Amount and the Employer
Contribution that would otherwise be contributed or allocated to a Participant's
Account under this Plan would cause the Annual Additions for the Limitation Year
to exceed this limitation, the amount contributed or allocated shall be reduced
so that the Annual Additions under all such plans and funds for the Limitation
Year will equal the Maximum Permissible Amount. If the Annual Additions with
respect to the Participant under such other Defined Contribution Plans and
Welfare Benefit Funds, Individual Medical Benefit Account or simplified employee
pension in the aggregate are equal to or greater than the Maximum Permissible
Amount, no amount will be contributed or allocated to any of the Participant's
Account under this Plan for the Limitation Year.
(B) Prior to determining the Participant's actual compensation for a Limitation
Year, the Maximum Permissible Amount for a Participant may be determined in the
manner described in Section 3.9.2(B).
(C) As soon as is administratively feasible after the end of a Limitation Year,
the Maximum Permissible Amount for the Limitation Year will be determined on the
basis of the Participant's actual Limitation Compensation for the Limitation
Year.
(D) If, pursuant to subsection 3.9.3(C) above, or as a result of the allocation
of forfeitures, a Participant's Annual Additions under this Plan and the
Participant's Annual Additions under such other plans would result in an Excess
Amount for a Limitation Year, the Excess Amount will be deemed to consist of the
Annual Additions last allocated, except that Annual Additions attributable to
simplified employee pension will be deemed to have been allocated first,
followed by Annual Additions to a Welfare Benefit Fund or Individual Medical
Benefit Account regardless of the actual allocation date.
(E) If an Excess Amount was allocated to a Participant on an allocation date of
this Plan which coincides with an allocation date of another such plan, the
Excess Amount attributed to this Plan will be the product of:
(i) the total Excess Amount allocated as of such date, times
(ii) the ration of (A) the Annual Additions allocated to the Participant for the
Limitation Year as of such date under this Plan to (B) the total Annual
Additions allocated to the Participant for the Limitation Year as of such date
under this Plan and all of the other plans referred to in the first sentence of
this Section 3.9.3.
(F) Any Excess Amount attributed to this Plan will be disposed in the manner
described in Section 3.9.2(D).
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3.9.4 If a Participant is covered under one or more Defined Contribution Plans,
other than this Plan, maintained by the Employer or an Affiliate which are not
Master or Prototype Plans, or Welfare Benefit Funds or an Individual Medical
Benefit Account maintained by the Employer, Annual Additions which may be
credited to the Participant's Account under this Plan for any Limitation Year
shall be limited in accordance with the provisions of subsections 3.9.3(A)-(F)
above as though each such other plan was a Master or Prototype Plan.
3.9.5 If the Employer maintains, or at any time maintained, a Defined Benefit
Plan covering any Participant in this Plan, the sum of the Participant's Defined
Benefit Fraction and Defined Contribution Fraction will not exceed 1.0 in any
Limitation Year. If such sum would otherwise exceed 1.0 and if such Defined
Benefit Plan does not provide for a reduction in benefits thereunder, Annual
Additions which may be credited to a Participant's Account under this Plan for
any Limitation Year shall be limited in accordance with the provisions of
Section 3.9.2.
3.9.6 If required pursuant to Section 4.4.4, "100%" shall be substituted for
"125%" wherever the latter percentage appears in this Section 3.9.
3.10 RETURN OF EMPLOYER CONTRIBUTIONS UNDER SPECIAL CIRCUMSTANCES
Notwithstanding any provision of this Plan to the contrary, upon timely written
demand by the Employer or the Administrator to the Trustee:
(A) Any contribution by the Employer to the Plan under a mistake of fact shall
be returned to the Employer by the Trustee within one year after the payment of
the contribution.
(B) Any contribution made by the Employer incident to the determination by the
Commissioner of Internal Revenue that the Plan is initially a Qualified Plan
shall be returned to the Employer by the Trustee within one year after
notification from the Internal Revenue Service that the Plan is not initially a
Qualified Plan but only if the application for the qualification is made by the
time prescribed by law for filing the Employer's return for the taxable year in
which the Plan is adopted, or such later date as the Secretary of the Treasury
may prescribe.
(C) In the event the deduction of a contribution made by the Employer is
disallowed under Code Section 404, such contribution (to the extent disallowed)
must be returned to the Employer within one year of the disallowance of the
deduction.
ARTICLE IV. VESTING
4.1 DETERMINATION OF VESTING
4.1.1 A Participant shall at all times have a vested percentage of 100% in the
Account Balance of each of his or her Participant Contributions Account, 401(k)
Contributions Accounts, Rollover Contributions Account and Transferred Account.
4.1.2 A Participant shall have a vested percentage of 100% in his or her Account
Balance of each of his or her Employer Accounts if he or she terminates
Employment due to the attainment of Normal Retirement Age, Early Retirement
specified in the Adoption Agreement, if elected by the Employer in the Adoption
Agreement, or upon Disability or death.
4.1.3 The vested percentage of a Participant in the Account Balance of each of
his or her Employer Accounts not vested pursuant to Section 4.1.1 or 4.1.2 shall
be determined in accordance with the vesting rule or schedule specified in the
Adoption Agreement.
4.2 RULES FOR CREDITING VESTING SERVICE
4.2.1 Subject to Section 4.2.2, Years of Service shall be credited for purposes
of determining a Participant's Vesting Service as specified in the Adoption
Agreement. If the Employer maintains the plan of a predecessor employer, service
with such predecessor
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employer shall be treated as service with the Employer for purposes of Vesting
Service.
4.2.2 An Employee who terminates Employment with no vested percentage in an
Employer Account shall, if he or she returns to Employment, have no credit for
Vesting Service prior to such termination of Employment if his or her Period of
Severance equals or exceeds five years.
4.2.3 Vesting Service of an Employee following a Period of Severance of five
years or more shall not be counted for the purpose of computing his or her
vested percentage in his or her Employer Accounts derived from contributions
accrued prior to the Period of Severance. If applicable, separate records shall
be maintained reflecting the Participant's vested rights in his or her Account
Balance attributable to service prior to the Period of Severance and reflecting
the Participant's vested percentage in his or her Account Balance attributable
to service after the Period of Severance. Vesting Service prior to and following
an Employee's Period of Severance shall be counted for purposes of computing his
or her vested percentage in an Employer Account derived from contributions made
after the Period of Severance.
4.3 EMPLOYER ACCOUNTS FORFEITURES
4.3.1 Subject to Section 5.6, upon the Nonvested Separation of a Participant,
the nonvested portion of each Employer Account of such Participant will be
forfeited as of the date of termination of Employment. Upon the Partially Vested
Separation of a Participant, the nonvested portion of each Employer Account of
such Participant will be forfeited as of the date of termination of Employment;
provided, however, that such Participant receives a distribution in accordance
with Section 5.6. If a Participant does not receive a distribution following his
or her termination of Employment, the nonvested portion of each Employer Account
of the Participant shall be forfeited following a Period of Severance of five
years.
4.3.2 If the Employer elects in the Adoption Agreement to reallocate
forfeitures, forfeitures for a Plan Year shall be allocated in accordance with
Section 3.7.1. If the Employer elects in the Adoption Agreement to use
forfeitures to reduce Employer contributions, forfeitures shall be applied in
accordance with Section 3.7.2.
4.4 TOP-HEAVY PROVISIONS
4.4.1 As used in this Section 4.4, each of the following terms shall have the
meanings for that term set forth in this Section 4.4.1:
(A) Determination Date means, for any Plan Year subsequent to the first Plan
Year, the last day of the preceding Plan year. For the first Plan Year of the
Plan, the last day of that year.
(B) Permissive Aggregation Group means the Required Aggregation Group of plans
plus any other plan or plans of the Employer or Affiliate which, when considered
as a group with the Required Aggregation Group, would continue to satisfy the
requirements of Code Sections 401(a)(4) and 410.
(C) Required Aggregation Group means (i) each Qualified Plan of the Employer or
Affiliate in which at least one Key Employee participates or participated at any
time during the determination period (regardless of whether the Plan has
terminated), and (ii) any other qualified plan of the Employer or Affiliate
which enables a plan described in (i) to meet the requirements of Code Section
401(a)(4) or 410.
(D) Super Top-Heavy means, for any Plan Year beginning after December 31, 1983,
the Plan if any Top-Heavy Ratio as determined under the definition of Top-Heavy
Plan exceeds 90%.
(E) Top-Heavy Plan means, for any Plan Year beginning after December 31, 1983,
the Plan if any of the following conditions exists:
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(i) If the Top-Heavy Ratio for the Plan exceeds 60% and the Plan is not part of
any Required Aggregation Group or Permissive Aggregation Group of Plans.
(ii) If the Plan is a part of a Required Aggregation Group of plans but not part
of a Permissive Aggregation Group and the Top-Heavy Ratio for the group of plans
exceeds 60%.
(iii) If the Plan is a part of a Required Aggregation Group and part of a
Permissive Aggregation Group of plans and the Top-Heavy Ratio for the Permissive
Aggregation Group exceeds 60%.
(F) Top-Heavy Ratio means
(i) If the Employer or Affiliate maintains one or more Defined Contribution
Plans (including any Simplified Employee Pension Plan) and the Employer or
Affiliate has never maintained any Defined Benefit Plan which during the
five-year period ending on the Determination Date has or has had accrued
benefits, the Top-Heavy Ratio for this Plan alone or for the Required or
Permissive Aggregation Group as appropriate is a fraction, the numerator of
which is the sum of the Account Balances of all Key Employees as of the
Determination Date (including any part of any Account Balance distributed in the
five-year period ending on the Determination Date), and the denominator of which
is the sum of all Account Balances (including any part of any Account Balance
distributed in the five-year period ending on the Determination Date), both
computed in accordance with Code Section 416. Both the numerator and denominator
of the Top-Heavy Ratio are increased to reflect any contribution not actually
made as of the Determination Date, but which is required to be taken into
account on that date under Code Section 416.
(ii) If the Employer or an Affiliate maintains one or more Defined Contribution
Plans (including any Simplified Employee Pension Plan) and the Employer or an
Affiliate maintains or has maintained one or more Defined Benefit Plans which
during the five-year period ending on the Determination Date has or has had any
accrued benefits, the Top-Heavy Ratio for any Required or Permissive Aggregation
Group as appropriate is a fraction, the numerator of which is the sum of Account
Balances under the aggregated Defined Contribution Plans for all Key Employees,
determined in accordance with (i) above, and the present value of accrued
benefits under the aggregated Defined Benefit Plans for all Key Employees as of
the Determination Date, and the denominator of which is the sum of the Account
Balances under the aggregated Defined Contribution Plans for all Participants,
determined in accordance with (i) above, and the present value of accrued
benefits under the Defined Benefit Plans for all Participants as of the
Determination Date, all determined in accordance with Code Section 416. The
accrued benefit under a Defined Benefit Plan in both the numerator and
denominator of the Top-Heavy Ratio are increased for any distribution of an
accrued benefit made in the five-year period ending on the Determination Date.
(iii) For purposes of (i) and (ii) above, the value of Account Balances and the
present value of accrued benefits will be determined as of the most recent
Valuation Date that falls within or ends with the 12-month period ending on the
Determination Date, except as provided in Code Section 416 for the first and
second Plan Years of a Defined Benefit Plan. The Account Balances and accrued
benefits of a Participant (1) who is not a Key Employee but who was a Key
Employee in a prior year, or (2) who has not been credited with at least one
Hour of Service with the Employer or an Affiliate at any time during the
five-year period ending on the Determination Date, will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which distributions,
rollovers, and transfers are taken into account will be made in accordance with
Code Section 416.
Elective Deferrals will not be taken into account for purposes of computing the
Top-Heavy Ratio. When aggregating plans the value of Account Balances and
accrued benefits will be calculated with reference to the Determination Dates
that fall within the same calendar year.
The accrued benefit of a Participant who is not a Key Employee shall be
determined under (A) the method, if any, that uniformly applies for accrual
purposes under all Defined Benefit Plans or (B) if there is no such method, as
if such benefit accrued not more rapidly than the slowest accrual rate permitted
under the fractional rule of Code Section 411(b)(1)(C).
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4.4.2 If the Plan is determined to be a Top-Heavy Plan or a Super Top-Heavy Plan
as of any Determination Date after December 31, 1983, then the Top-Heavy vesting
schedule specified in the Adoption Agreement, beginning with the first Plan Year
commencing after such Determination Date, shall apply only for those Plan Years
in which the Plan continues to be a Top-Heavy Plan or Super Top-Heavy Plan, as
the case may be.
4.4.3 (A) Except as provided in Sections 4.4.3(C) and (D), for any Plan Year in
which the Plan is a Top-Heavy Plan, contributions and forfeitures allocated to
the Employer Contributions Account of any Participant who is not a Key Employee
in respect of that Plan Year shall not be less than the lesser of:
(i) 3% of such Participant's Limitation Compensation, or
(ii) if the Employer has no Defined Benefit Plan which designates this Plan to
satisfy Code Section 401, the largest percentage of contributions and
forfeitures, as a percentage of the Key Employee's Limitation Compensation,
allocated to the Employer Contributions Account of any Key Employee for that
year. The minimum allocation is determined without regard to any Social Security
contribution. This minimum allocation shall be made even though, under other
Plan provisions, the Participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation for the Plan Year because
of (a) the Participant's failure to complete a Year of Service, (b) the
Participant's failure to make mandatory Participant contributions to the Plan or
(c) compensation less than a stated amount.
(B) For purposes of computing the minimum allocation, a Participant's Limitation
Compensation will be applied.
(C) The provision in (A) above shall not apply to any Participant who was not
employed by the Employer or an Affiliate on the last day of the Plan Year.
(D) If the Employer or an Affiliate has executed Adoption Agreements covering
Participants by a plan which is a profit-sharing plan and by another plan which
is a money purchase pension plan or a target benefit plan, the minimum
allocation specified in the preceding Section 4.4.3(A) shall be provided by the
money purchase pension plan or by the target benefit plan, as the case may be.
If a Participant is covered under this Plan and a Defined Benefit Plan
maintained pursuant to Adoption Agreements offered by the Sponsor, the minimum
allocation specified in the preceding Section 4.4.3(A) shall not able applicable
and the Participant shall receive the minimum benefit specified in the Defined
Benefit Plan.
(E) With respect to any profit-sharing or money purchase pension plan which
becomes Top-Heavy and is integrated with Social Security, prior to making the
allocations specified in the Adoption Agreement, anything contained therein to
the contrary notwithstanding, there shall be an allocation of the Employer
Contribution to each eligible Participant's Employer Contribution Account in the
ratio for each such Participant's Limitation Compensation for the Plan Year
bears to the Limitation Compensation of all such Participants for the Plan Year,
but not in excess of 3% of such Limitation Compensation.
4.4.4 If the Plan becomes a Top-Heavy Plan, then the maximum benefit which can
be provided under Section 3.9 shall continue to be determined by applying "125%"
wherever it appears in that Section and by substituting "4%" for "3%" wherever
that appears in Section 4.4.3. However, if the Plan becomes a Super Top-Heavy
Plan, the maximum benefit which can be provided under Section 3.9 shall be
determined by substituting "100%" for "125%" wherever the latter percentage
appears and the 3% minimum contribution provided for in Section 4.4.4 shall
remain unchanged.
4.4.5 Beginning with the Plan Year in which this Plan is Top-Heavy, one of the
minimum Top-Heavy vesting schedules as specified in the Adoption Agreement will
apply. The minimum vesting schedule applies to all benefits within the meaning
of Code Section 411(a)(7) except those attributable to Employee contributions,
including benefits accrued before the effective date of Code Section 416 and
benefits accrued before the Plan became Top-Heavy. However, this Section 4.4
does not apply to the Account Balances of any Employee who does not have an Hour
of Service after the Plan has initially become Top-Heavy and such Employee's
vesting in his or her Employer
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Contributions Account will be determined without regard to this Section 4.4. The
minimum allocation pursuant to Section 4.4.3 (to the extent required to be
nonforfeitable under code Section 416(b)) may not be forfeited under Code
Section 411(a)(3)(B) or Code Section 411(a)(3)(D).
ARTICLE V. AMOUNT AND DISTRIBUTION OF BENEFITS, WITHDRAWALS AND LOANS
5.1 DISTRIBUTION UPON TERMINATION OF EMPLOYMENT
5.1.1 Subject to Section 5.1.2, a Participant's Benefit Commencement Date shall
be as soon as practicable following his or her Fully Vested Separation,
Partially Vested Separation or Nonvested Separation, if applicable, and in
accordance with Section 5.6. If the Plan includes a CODA feature, each 401(k)
Contributions Account of a Participant shall be payable in accordance with the
events specified in Section 1.27 of the Plan.
5.1.2 If specified in the Adoption Agreement, a Participant's Benefit
Commencement Date shall be deferred until the earliest of his or her Normal
Retirement Age, Disability, or if elected by the Employer in the Adoption
Agreement, Early Retirement. If a Participant terminates Employment after
satisfying any service requirement for Early Retirement specified in the
Adoption Agreement, he or she shall be entitled to elect to receive a
distribution of his or her vested Employer Accounts upon satisfaction of any age
requirement for Early Retirement.
5.2 AMOUNT OF BENEFITS UPON A FULLY VESTED SEPARATION
A Participant's benefits upon his or her Fully Vested Separation for any reason
other than Disability shall be the Account Balance of all of his or her Accounts
determined in accordance with Section 10.6.2.
5.3 AMOUNT OF BENEFITS UPON A PARTIALLY VESTED SEPARATION
A Participant's benefits upon his or her Partially Vested Separation for any
reason other than Disability shall be: (A) the Account Balance of his or her
Employer Accounts determined in accordance with Section 10.6.2 multiplied by his
or her vested percentage determined pursuant to Section 4.1.3, or, if
applicable, Section 4.4.2, plus (B) the Account Balance of his or her other
Accounts determined in accordance with Section 10.6.2.
5.4 AMOUNT OF BENEFITS UPON A NONVESTED SEPARATION
A Participant's benefits upon his or her Nonvested Separation shall be the
Account Balance of his or her Accounts other than Employer Accounts, if any,
determined in accordance with Section 10.6.2.
5.5 AMOUNT OF BENEFITS UPON A SEPARATION DUE TO DISABILITY
If a Participant terminates Employment due to a Disability, his or her benefit
shall be the Account Balance of all of his or her Accounts determined as a Fully
Vested Separation in accordance with Section 5.2 and Section 10.6.2. The Benefit
Commencement Date of any such Participant on whose behalf contributions are
being made pursuant to Section 3.1.4 shall be as soon as practicable after the
date such contributions cease.
5.6 DISTRIBUTION AND RESTORATION
5.6.1 If, upon a Participant's termination of Employment, the vested Account
Balance of his or her Accounts as of the applicable Valuation Date is equal to
or less than $3,500, such Participant will receive a distribution of her or her
entire vested benefit and the nonvested portion will be treated as forfeiture.
If the value of a Participant's vested Account is zero, the Participant shall be
deemed to have received a distribution of such vested Account.
5.6.2 If, upon a Participant's termination of Employment, the vested Account
Balance of his or her Accounts as of the applicable Valuation Date exceeds
$3,500, the Participant may elect, in accordance with Article VI, to receive a
distribution of the entire vested portion of such Accounts and the nonvested
portion, if any, will be treated as a forfeiture.
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5.6.3 If the vested Account Balance of a Participant's Accounts as of the
applicable Valuation Date has an aggregate value exceeding (or at the time of
any prior distribution exceeded) $3,500, and the Participant's benefit is
Immediately Distributable, the Participant and the Participant's Spouse (or
where either the Participant or the Spouse has died, the survivor) must consent
to any distribution of such benefit. The consent of the Participant and the
Participant's Spouse shall be obtained in writing within the 90-day period
ending on the Participant's Benefit Commencement Date; provided, however, that
if the Plan is a profit-sharing plan and Section 6.1.2 applies, the consent of
the Participant's Spouse will not be required. The Administrator shall notify
the Participant and the Participant Spouse of the right to defer any
distribution until the Participant's benefit is no longer Immediately
Distributable. Such notification shall include a general description of the
material features, and an explanation of the relative values of, the optional
forms of benefit available under the Plan in a manner that would satisfy the
notice requirements of Code Section 417(a)(3), and shall be provided no less
than 30 days and no more than 90 days prior to the Benefit Commencement Date.
5.6.4 Notwithstanding the foregoing, only the Participant need consent to the
commencement of a distribution in the form of a Qualified Joint and Survivor
Annuity while the Participant's benefit is Immediately Distributable. Neither
the consent of the Participant nor the Participant's Spouse shall be required to
the extent that a distribution is required to satisfy Code Section 401(a)(9) or
Code Section 415.
5.6.5 For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first Plan Year
beginning after December 31, 1988, the Participant's vested benefit shall not
include amounts attributable to accumulated deductible Participant contributions
within the meaning of Code Section 72(o)(5)(B).
5.6.6 If a Participant, who after termination of Employment received a
distribution and forfeited any portion of an Employer Account or is deemed to
have received a distribution in accordance with Section 5.6.1, resumes
Employment, he or she shall have the right, while an Employee, to repay the full
amount previously distributed from such Employer Account. Such repayment must
occur before the earlier of (i) the date on which he or she would have incurred
a Period of Severance of five years commencing after the distribution or (ii)
five years after the first date on which the Participant is subsequently
reemployed. If the Participant makes a repayment, the Account Balance of his or
her relevant Employer Account shall be restored to its value as of the date of
distribution. The restored amount shall be derived from forfeitures during the
Plan Year and, if such forfeitures are not sufficient, from a contribution by
the Employer made as of that date (determined without reference to Net Profits).
If an Employee who had a Nonvested Separation and was deemed to receive a
distribution resumes Employment before a Period of Severance of five years, his
or her Employer Account will be restored, upon reemployment, to the amount on
the date of such deemed distribution.
5.7 WITHDRAWALS DURING EMPLOYMENT
5.7.1 If the Plan is a profit-sharing plan, and if the Employer has elected in
the Adoption Agreement to permit withdrawals during Employment, prior to
termination of Employment, each Participant upon attainment of age 59-1/2 may
elect to withdraw, as of the Valuation Date next following the receipt of an
election by the Administrator, and upon such notice as the Administrator may
require, all or any part of the vested Account Balance of all of his or her
Accounts, as of such Valuation Date.
5.7.2 Notwithstanding Section 5.7.1, prior to termination of Employment, each
Participant with a Rollover Contributions Account and/or a Participant Voluntary
Nondeductible Contributions Account may elect to withdraw, as of the Valuation
Date next following the receipt of an election by the Administrator, and upon
such notice as the Administrator may require, all or any of such Account, as of
such Valuation Date.
5.7.3 The Administrator may establish from time to time rules and procedures
with respect to any withdrawals including the order of Accounts from which such
withdrawals shall be made.
5.7.4 No forfeitures shall occur as a result of a withdrawal pursuant to this
Section 5.7.
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5.7.5 If a Participant is married at the time of such election, the
Participant's Spouse must consent to such a withdrawal in the same manner as
provided in Section 6.2.4; provided, however, that if the Plan is a
profit-sharing plan and Section 6.1.2 applies, the consent of the Participant's
Spouse will not be required.
5.8 LOANS
5.8.1 If the Employer has elected in the Adoption Agreement to make loans
available, a Participant may submit an application to the Administrator to
borrow from any Account maintained for the Participant (on such terms and
conditions as the Administrator shall prescribe) an amount which when added to
the outstanding balance of all other loans to the Participant would not exceed
the lesser of (a) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans during the one year period ending on the day before
the loan is made, over the outstanding balance of loans from the Plan on the
date the loan is made, or (b) 50% of the vest portion of his or her Account from
which the borrowing is to be made as of the Valuation Date next following the
receipt of his or her loan application by the Administrator and the expiration
of such notice period as the Administrator may require. For this purpose, all
loans from Qualified Plans of the Employer or an Affiliate shall be aggregated,
and an assignment or pledge of any portion of the Participant's interest in the
Plan, and a loan, pledge or assignment with respect to any insurance contract
purchased under the Plan, will be treated as a loan under this Section 5.8.1.
5.8.2 If approved, each such loan shall comply with the following conditions:
(A) it shall be evidenced by a negotiable promissory note;
(B) the rate of interest payable on the unpaid balance of such loan shall be a
reasonable rate determined by the Administrator;
(C) the Participant must obtain the consent of his or her Spouse, if any, within
the 90-day period before the time an Account is used as security for the loan;
provided, however, that if the Plan is a profit-sharing plan that meets the
requirements in Section 6.1.2 of the Plan, the consent of the Participant's
Spouse will not be required. A new consent is required if an Account is used for
any increase in the amount of security. The consent shall comply with the
requirements of Section 6.2.4, but shall be deemed to meet any requirements
contained in Section 6.2.4 relating to the consent of any subsequent Spouse. A
new consent shall be required if an Account is used for renegotiation,
extension, renewal, or other revision of the loan;
(D) the loan, by its terms, must require repayment (principal and interest) be
amortized in level payments, not less frequently than quarterly, over a period
not extending beyond five years from the date of the loan; provided, however,
that if the proceeds of the loan are used to acquire a dwelling unit which
within a reasonable time (determined at the time the loan is made) will be used
as the principal residence of the Participant, the repayment schedule may be for
a term in excess of five years; and
(E) the loan shall be adequately secured and may be secured by no more than 50%
of the Participant's vested interest in the Account Balance of his or her
Accounts.
5.8.3 If a Participant or Beneficiary requests and is granted a loan, and the
loan is made from Participant-Directed Assets, principal and interest payments
with respect to the loan shall be credited solely to the Account of the
borrowing Participant from which the loan was made. Any loss caused by
nonpayment or other default on a Participant's loan obligations shall be charged
solely to that Account. Any other loan shall be treated as an investment of the
Trust Fund and interest and principal payments on account thereof shall be
credited to the Trust Fund. The Administrator shall determine the order of
Accounts from which a loan may be made.
5.8.4 Anything herein to the contrary notwithstanding:
(A) in the event of a default, foreclosure on the promissory note will not occur
until a distributable event occurs under this Article V;
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(B) no loan will be made to any Owner-Employee or to any "shareholder-employee"
of the Employer or a Participating Affiliate or with respect to any amounts
attributable to a Rollover Contribution or a trust to trust transfer and
relating to prior participation by such an individual in a Qualified Plan. For
this purpose, a "shareholder-employee" means an employee or officer of an
electing small business, i.e., an "S corporation" as defined in Code Section
1361, who owns (or is considered as owing within the meaning of Code Section
318(a)(1)) on any day during the taxable year of such corporation, more than 5%
of the outstanding stock of the corporation; and
(C) loans shall not be made available to Highly Compensated Employees in an
amount greater than the amount made available to other Employees.
5.8.5 If a valid spousal consent has been obtained in accordance with Section
5.8.2(C), then, notwithstanding any other provision of this Plan, the portion of
the Participant's vested Account used as a security interest held by the Plan by
reason of a loan outstanding to the Participant shall be taken into account for
purposes of determining the amount of the Participant's benefit payable at the
time of death or distribution; but only if the reduction is used as repayment of
the loan. If less than 100% of the Participant's vested benefit (determined
without regard to the preceding sentence) is payable to the Surviving Spouse,
then the Participant's benefit shall be adjusted by first reducing the
Participant's vested benefit by the amount of the security used as repayment of
the loan, and then determining the benefit payable to the Surviving Spouse.
5.9 HARDSHIP DISTRIBUTIONS
5.9.1 Effective January 1, 1989, if available and elected by the Employer in the
Adoption Agreement, a Participant may request a distribution due to hardship
from the vested portion of his or her Accounts, (other than from his or her
Qualified Nonelective Contributions Account, Qualified Matching Contributions
Account or earnings accrued after December 31, 1988, on the Participant's
Elective Deferrals) only if the distribution is made both due to an immediate
and heavy financial need of the Participant and is necessary to satisfy such
financial need.
5.9.2 A hardship distribution shall be permitted only if the distribution is due
to:
(A) expenses incurred or necessary for medical care described in Code Section
213(d) incurred by the Participant, the Participant's Spouse, or any dependents
of the Participant (as defined in Code Section 152);
(B) purchase (excluding mortgage payments) of a principal residence for the
Participant;
(C) payment of tuition and related education fees for the next 12 months of
post-secondary education for the Participant, his or her Spouse, children or
dependents;
(D) the need to prevent the eviction of the Participant from his or her
principal residence or foreclosure on the mortgage of the Participant's
principal residence; or
(E) any other condition or event which the Commissioner of the Internal Revenue
Service determines is a deemed immediate and financial need.
5.9.3 A distribution will be considered necessary to satisfy an immediate and
heavy financial need of a Participant if all of the following requirements are
satisfied:
(A) the distribution will not be in excess of the amount of the immediate and
heavy financial need of the Participant (including amounts necessary to pay any
Federal, state or local income taxes or penalties reasonably anticipated to
result from the distribution);
(B) the Participant obtains all distributions, other than hardship
distributions, and all nontaxable loans currently available under all plans
maintained by the Employer or an Affiliate;
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(C) the Participant's Elective Deferrals, Employee Thrift Contributions and
Participant Voluntary Nondeductible Contributions will be suspended for at least
12 months after receipt of the hardship distribution in this Plan and in all
other plans maintained by the Employer or an Affiliate; and
(D) the Participant may not make Elective Deferrals for the Participant's
taxable year immediately following the taxable year of the hardship distribution
in excess of the applicable limit under Code Section 402(g) for such next
taxable year less the amount of such Participant's Elective Deferrals for the
taxable year of the distribution in this Plan and in all other plans maintained
by the Employer or an Affiliate.
5.9.4 If the distribution is made from any Account other than a 401(k)
Contributions Account, a distribution due to hardship may be made without
application of Section 5.9.3(B), 5.9.3(C), or 5.9.3(D).
5.10 LIMITATION ON COMMENCEMENT OF BENEFITS
5.10.1 Anything in this Article V to the contrary notwithstanding, a
Participant's Benefit Commencement Date shall in no event be later than the 60th
day after the close of the Plan Year in which the latest of the following events
occur:
(A) the attainment by the Participant of his or her Normal Retirement Age;
(B) the tenth anniversary of the year in which the Participant commenced
participation in the Plan; or
(C) the Participant's termination of Employment. Notwithstanding the foregoing,
the failure of a Participant and Spouse to consent to a distribution while a
benefit is Immediately Distributable, shall be deemed to be an election to defer
commencement of payment of any benefit sufficient to satisfy this Section.
5.10.2 If it is not possible to distribute a Participant's Accounts because the
Administrator has been unable to locate the Participant after making reasonable
efforts to do so, then a distribution of the Participant's Accounts shall be
made when the Participant can be located.
5.11 DISTRIBUTION REQUIREMENTS
5.11.1 Subject to the Joint and Survivor Annuity rules set forth in Article VI,
the requirements of this Article shall apply to any distribution of a
Participant's interest and will take precedence over any inconsistent provisions
of this Plan. Unless otherwise specified, the provisions of this article apply
to calendar years beginning after December 31, 1984. As used in this Section
5.11, each of the following terms shall have the meaning for that term set forth
in this Section 5.11.1:
(A) Applicable Life Expectancy. The life expectance (or joint and last survivor
expectancy) calculated using the attained age of the Participant (or designated
Beneficiary) as of the Participant's (or designated Beneficiary's) birthday in
the applicable calendar year reduced by one for each calendar year which has
elapsed since the date Life Expectancy was first calculated. If Life Expectancy
is being recalculated, the Applicable Life Expectancy shall be the Life
Expectancy as so recalculated. The applicable calendar year shall be the first
distribution calendar year, and if Life Expectancy is being recalculated such
succeeding calendar year.
(B) Designated Beneficiary. The individual who is designated as the Beneficiary
under the Plan in accordance with Code Section 401(a)(9). In the event that a
Participant names a trust to be a designated Beneficiary, such designation shall
provide that, as of the later of the date on which the trust is named as a
Beneficiary or the Participant's Required Beginning Date, and as of all
subsequent periods during which the trust is named as a Beneficiary, the
following requirements are met:
(i) the trust is a valid trust under state law, or would be but for the fact
that there is no corpus; (ii) the trust is irrevocable; (iii) the Beneficiaries
of the trust who are Beneficiaries with respect to the trust's interest in the
Participant's benefits are identifiable from the trust instrument within the
meaning of Code Section 401(a)(9); and
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(iv) a copy of the trust is provided to the Plan.
(C) Distribution Calendar Year. A calendar year for which a minimum distribution
is required. For distributions beginning before the Participant's death, the
first Distribution Calendar Year is the calendar year immediately preceding the
calendar year which contains the Participant's Required Beginning Date. For
distributions beginning after the Participant's death, the first Distribution
Calendar Year is the calendar year in which distributions are required to begin
pursuant to Section 7.2.
(D) Life Expectancy . Life Expectancy and joint and last survivor expectancy are
computed by use of the expected return multiples in Tables V and VI of section
1.72-9 of the regulations issued under the Code.
Unless otherwise elected by the Participant (or Spouse, in the case of
distributions described in Section 7.2) by the time distributions are required
to begin, Life Expectancies shall not be recalculated annually. Such election
shall be irrevocable as to the Participant or Spouse and shall apply to all
subsequent years. The Life Expectancy of a nonspouse Beneficiary may not be
recalculated.
(E) Required Beginning Date
(i) General Rule. The Required Beginning Date of a Participant is the first day
of April of the calendar year following the calendar year in which the
Participant attains age 70 1/2.
(ii) Transitional Rule. The Required Beginning Date of a Participant who attains
age 70 1/2 before January 1, 1988, shall be determined in accordance with (1) or
(2) below:
(1) Non-5% Owners. The Required Beginning Date of a Participant who is not a "5%
owner" as defined in (iii) below is the first day of April of the calendar year
following the calendar year in which the later of retirement or attainment of
age 70 1/2 occurs.
(2) 5% Owners. The Required Beginning Date of a Participant who is a 5% owner
during any year beginning after December 31, 1979, is the first day of April
following the later of:
(a) the calendar year in which the Participant attains age 70 1/2; or
(b) the earlier of the calendar year with or within which ends the Plan Year in
which the Participant becomes a 5% owner, or the calendar year in which a
Participant retires. The Required Beginning Date of a Participant who is not a
5% owner who attains age 70 1/2 during 1988 and who has not retired as of
January 1, 1989, is April 1, 1990.
(iii) 5% Owner. A Participant is treated as a 5% owner for purposes of this
Section 5.11 if such Participant is a 5% owner as defined in Code Section 416(i)
(determined in accordance with section 416 but without regard to whether the
plan is top-heavy) at any time during the Plan Year ending with or within the
calendar year in which such owner attains age 66 1/2 or any subsequent Plan
Year.
(iv) Once distributions have begin to a 5% owner under this Section 5.11, they
must continue to be distributed, even if the Participant ceases to be a 5% owner
in a subsequent year.
5.11.2 All distributions required under this Section 5.11 shall be determined
and made in accordance with the Income Tax Regulations under Code Section
401(a)(9), including the minimum distribution incidental benefit requirement of
section 1.401(a)(9)-2 of the regulations issued under the Code. The entire
interest of a Participant must be distributed or begin to be distributed no
later than the Participant's Required Beginning Date.
5.11.3 LIMITS ON DISTRIBUTION PERIODS. As of the first Distribution Calendar
Year, distributions, if not made in a lump sum, may only be made over one of the
following periods (or a combination thereof):
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(A) the life of the Participant;
(B) the life of the Participant and a Designated Beneficiary;
(C) a period certain not extending beyond the Life Expectance of the
Participant; or
(D) a period certain not extending beyond the joint and last survivor expectancy
of the Participant and a Designated Beneficiary.
For calendar years beginning before January 1, 1989, if the Participant's Spouse
is not the Designated Beneficiary, the method of distribution selected must
assure that at least 50% of the present value of the amount available for
distribution is paid within the Life Expectancy of the Participant.
5.11.4 DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR. (A) If the
Participant's interest is to be paid in the form of annuity distributions under
the Plan (whether directly or in the form of an annuity purchased from an
insurance company), payments under the annuity shall satisfy the following
requirements:
(i) the annuity distributions must be paid in periodic payments made at
intervals not longer than one year;
(ii) the distribution period must be over a life (or lives) or over a period
certain not longer than a Life Expectancy (or joint life and last survivor
expectancy) described in Code Section 401(a)(9)(A)(ii) or Code Section
401(a)(9)(B)(iii), whichever is applicable;
(iii) the Life Expectancy (or joint life and last survivor expectancy) for
purposes of determining the period certain shall be determined without
recalculation of Life Expectancy;
(iv) once payments have begun over a period certain, the period certain may not
be lengthened even if the period certain is shorter than the maximum permitted;
(v) payments must either be nonincreasing or increase only as follows:
(1) with any percentage increase in a specified and generally recognized
cost-of-living index;
(2) to the extent of the reduction to the amount of the Participant's payments
to provide for a survivor benefit upon death, but only if the Beneficiary whose
life was being used to determine the distribution period described in Section
5.11.4(A)(iii) dies and the payments continue otherwise in accordance with that
section over the life of the Participant;
(3) to provide cash refunds of Employee contributions upon the Participant's
death; or
(4) because of an increase in benefits under the Plan
(vi) If the annuity is a life annuity (or a life annuity with a period certain
not exceeding 20 years), the amount which must be distributed on or before the
Participant's Required Beginning Date (or, in the case of distributions after
the death of the Participant, the date distributions are required to begin
pursuant to Section 7.2) shall be the payment which is required for one payment
interval. The second payment need not be made until the end of the next payment
interval even if that payment interval ends in the next calendar year. Payment
intervals are the periods for which payments are received, e.g., bimonthly,
monthly, semi-annually, or annually. If the annuity is a period certain annuity
without a life contingency (or is a life annuity with a period certain exceeding
20 years) periodic payments for each distribution calendar year shall be
combined and treated as an annual amount.
The amount which must be distributed by the Participant's Required Beginning
Date (or, in the case of distributions after the death of the Participant, the
date distributions are required to begin pursuant to Section 7.2) is the annual
amount for the first Distribution Calendar Year. The annual amount for other
Distribution Calendar Years, including
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the annual amount for the calendar year in which the Participant's Required
Beginning Date (or the date distributions are required to begin pursuant to
Section 7.2) occurs, must be distributed on or before December 31 of the
calendar year for which the distribution is required.
(B) Annuities purchased after December 31, 1988, are subject to the following
additional conditions:
(i) Unless the Participant's Spouse is the Designated Beneficiary, if the
Participant's interest is being distributed in the form of a period certain
annuity without a life contingency, the period certain as of the beginning of
the first Distribution Calendar Year may not exceed the applicable period
determined using the table set forth in Q&A A-5 of section 1/401(a)(9)-2 of the
regulations issued under the Code.
(ii) If the Participant's interest is being distributed in the form of a joint
and survivor annuity for the joint lives of the Participant and a nonspouse
Beneficiary, annuity payments to be made on or after the Participant's Required
Beginning Date to the Designated Beneficiary after the Participant's death must
not at any time exceed the applicable percentage of the annuity payment for such
period that would have been payable to the Participant using the table set forth
in Q&A A-6 of section 1.401(a)(9)-2 of the regulations under the Code.
(C) Transitional Rule. If payments under an annuity which complies with Section
5.11.4(A) begin prior to January 1, 1989, the minimum distribution requirements
in effect as of July 27, 1987, shall apply to distributions from this Plan,
regardless of whether the annuity form of payment is irrevocable. This
transitional rule also applies to deferred annuity contracts distributed to or
owned by the Participant prior to January 1, 1989, unless additional
contributions are made under the Plan by the Employer or Affiliate with respect
to such contract.
(D) If the form of distribution is an annuity made in accordance with Section
5.11.4, any additional benefits accruing to the Participant after his or her
Required Beginning Date shall be distributed as a separate and identifiable
component of the annuity beginning with the first payment interval ending in the
calendar year immediately following the calendar year in which such amount
accrues.
(E) Any part of the Participant's interest which is in the form of an individual
account shall be distributed in a manner satisfying the requirements of Code
Section 401(a)(9).
5.11.5 TRANSITIONAL RULE: SECTION 242 ELECTION. Notwithstanding the other
requirements of this Article and subject to the joint and Survivor Annuity rules
set forth in Article VI, distribution on behalf of any Employee, including a 5%
owner, may be made in accordance with all of the following requirements
(regardless of when such distribution commences):
(A) the distribution by the trust is one which would not have disqualified such
trust under Code Section 401(a)(9) as in effect prior to amendment by the
Deficit Reduction Act of 1984;
(B) the distribution is in accordance with a method of distribution designated
by the Employee whose interest in the trust is being distributed or, if the
Employee is deceased, by a Beneficiary of such Employee;
(C) such designation was in writing, was signed by the Employee or the
Beneficiary, and was made before January 1, 1984;
(D) the Employee had accrued a benefit under the Plan as of December 31, 1983;
and
(E) the method of distribution designated by the Employee or the Beneficiary
specifies the time at which distribution will commence, the period over which
distributions will be made, and in the case of any distribution upon the
Employee's death, the Beneficiaries of the Employee listed in order of priority.
A distribution upon death will not be covered by this transitional rule unless
the information in the designation contains the required information described
above with respect to the distributions to be made upon the death of the
Employee.
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For any distribution which commences before January 1, 1984, but continues after
December 31, 1983, the Employee, or the Beneficiary, to whom such distribution
is being made, will be presumed to have designated the method of distribution
under which the distribution is being made if the method of distribution was
specified in writing and the distribution satisfies the requirements in
subsection 5.11.5(A) and (E).
If a designation is revoked any subsequent distribution must satisfy the
requirements of Code Section 401(a)(9). If a designation is revoked subsequent
to the date distributions are required to begin, the trust must distribute by
the end of the calendar year following the calendar year in which the revocation
occurs the total amount not yet distributed to satisfy Code Section 401(a)(9)
but for the Section 242(b)(2) election.
For calendar years beginning after December 31, 1988, such distributions must
meet the minimum distribution incidental benefit requirements in section
1.401(a)(9)-2 of the regulations issued under the Code. Any changes in the
designation will be considered to be a revocation of the designation.
However, the mere substitution or addition of another Beneficiary (one not named
in the designation) under the designation will not be considered to be a
revocation of the designation, so long as such substitution or addition does not
alter the period over which distributions are to be made under the designation,
directly or indirectly (for example, by altering the relevant measuring life).
In the case in which an amount is transferred or rolled over form one plan to
another plan, the rules in Q&A J-2 and Q&A J-3 of section 1.401(a)(9)-1 of the
regulations issued under the Code.
ARTICLE VI. FORMS OF PAYMENT OF RETIREMENT BENEFITS
6.1 METHODS OF DISTRIBUTION
6.1.1 If the Plan is a money purchase pension plan or a target benefit plan, a
Participant's benefit shall be payable in the normal form of a Qualified Joint
and survivor Annuity if the Participant is married on his or her Benefit
Commencement Date and in the normal form of an immediate annuity for the life of
the Participant if the Participant is not married on that date. A Participant
who terminated Employment on or after satisfying the requirements for Early
Retirement may elect to have his or her Qualified Joint and Survivor Annuity
distributed upon attainment of such Early Retirement. If the plan is a
profit-sharing plan that satisfies the requirements set forth in Section 6.1.2,
a Participant's Accounts shall only be payable in the normal form of a lump-sum
distribution in accordance with Section 6.1.1(B) below. A Participant in a money
purchase pension plan, a target benefit plan, or a profit-sharing plan that does
not satisfy the requirements set forth in Section 6.1.2, may at any time after
attaining age 35 and prior to his or her Benefit Commencement Date elect, in
accordance with Section 6.2, any of the following optional forms of payment
instead of the normal form:
(A) An Annuity Contract payable as:
(i) a single life annuity;
(ii) a joint and 50% survivor annuity with a contingent annuitant;
(iii) a joint and 100% survivor annuity with a contingent annuitant;
(iv) an annuity for the life of the Participant with 120 monthly payments
certain;
(B) A lump-sum distribution in cash or in kind, or part in cash and part in
kind; or
(C) In installments payable in cash or in kind, or part in cash and part in kind
over a period not in excess of that required to comply with Section 5.11.4.
Anything in this Section 6.1.1 to the contrary notwithstanding, if the value of
a Participant's vested Account as of the applicable Valuation Date is $3.500 or
less, his or her benefit shall be paid in the form of a lump-sum
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distribution and no optional form of benefit payment shall be available.
6.1.2 If the Plan is a profit-sharing plan then: (A) the Participant cannot
elect payments in the form of a Life annuity (this Section 6.1.2 shall not apply
if a life annuity form is an optional form preserved under Code Section
411(d)(6)); (B) on the death of the Participant, the Participant' benefits will
be paid to his or her Surviving Spouse, if any, or, if his or her Surviving
Spouse has already consented in a manner conforming to an election under Section
6.2.4, then to the Participant's Beneficiary; and (C) the normal form of benefit
shall be a lump-sum and Section 6.2.1, 6.2.2 and 6.2.4 shall not be applied by
the Administrator. A Participant in such a profit-sharing plan may also elect to
receive his or her benefit in the form of installment in accordance with Section
6.1.1(C) of the Plan. This Section 6.1.2 shall not apply, however, with respect
to the Participant if it is determined that the Plan is a direct or indirect
transferee of a defined benefit plan, a money purchase pension plan (including a
target benefit plan) or a stock bonus or profit-sharing plan which is subject to
the surviving annuity requirements of Code Section 401(a)(11) and 417. In
addition, this Section 6.1.2 shall not apply unless the Participant's Surviving
Spouse, if any, is the Beneficiary of (i) the proceeds of any insurance of the
Participant's life purchased by Employer contributions or (ii) forfeitures
allocated to the Participant's Employer Account or unless the Participant's
Surviving Spouse has consented to the Participant's designation of another
Beneficiary as referred to in subsection (C) of this Section 6.1.2.
6.1.3 The following transitional rules shall apply for those Participants
entitled to but not receiving benefits as of August 23, 1984:
(A) Any living Participant not receiving benefits on August 23, 1984, who would
otherwise not receive the benefits prescribed by Section 6.1 must be given the
opportunity to elect to have Section 6.1 apply if such Participant is credited
with at least one Hour of Service under this Plan or a predecessor plan in a
Plan Year beginning on or after January 1, 1976, and such Participant had at
least 10 Years of Service when he or she terminated from Employment.
(B) Any living Participant not receiving benefits on August 23, 1984, who was
credited with at least one Hour of Service under this Plan or a predecessor plan
on or after September 2, 1974, and who is not otherwise credited with an Hour of
Service in a Plan Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance with this Section
6.1.3(D).
(C) The respective opportunities to elect (as described in these Sections
6.1.3(A) and (B)) must be afforded to the appropriate Participants during the
period commencing on August 23, 1984, and ending on such Participant's Benefit
Commencement Date.
(D) Any Participant who has elected pursuant to this Section 6.1.3(B) and any
Participant who does not elect under this Section 6.1.3(A) or who meets the
requirements of this Section 6.1.3(A) except that such Participant does not have
at least ten years of Service when he or she terminates from Employment, shall
have his or her benefits distributed in accordance with all of the following
requirements if benefits would have been payable in the form of a single life
annuity:
(1) Automatic Qualified Joint and Survivor Annuity
If benefits in the form of a single life annuity become payable to a married
Participant who:
(a) begins to receive payments on or after Normal Retirement Age; or
(b) dies on or after Normal Retirement Age while in active Employment; or
(c) begins to received payments on or after the "Qualified Early Retirement
Age", as that term is defined in Section 6.1.3(D)(3)(a); or
(d) terminates from Employment on or after attaining Normal Retirement Age (or
Qualified Early Retirement
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Age) and after satisfying the eligibility requirement for the payment of
benefits under the Plan and thereafter dies before his or her Benefit
Commencement Date; then such benefits will be received in the form of a
Qualified Joint and Survivor Annuity, unless the Participant has elected
otherwise during the election period which begins at least six months before the
Participant attains Qualified Early Retirement Age and ends no earlier than 90
days before his or her Benefit Commencement Date. Any election hereunder will be
in writing and may be changed by the Participant at any time.
(2) Election of early survivor annuity
A Participant who is employed after attaining the Qualified Early Retirement Age
will be given the opportunity to elect, beginning on the later of (1) the 90th
day before he or she attains his or her Qualified Early Retirement Age, or (2)
the date on which participation begins, and ending on the date he or she
terminated Employment, to have a survivor annuity payable on death. If the
Participant elects the survivor annuity, payments under such annuity must not be
less than the payments which would have been made to the Spouse under the
Qualified Joint and Survivor Annuity if the Participant had retired on the day
before his or her death. Any election under this provision will be in writing
and may be changed by the Participant at any time.
(3) Qualified Early Retirement Age
(a) For purposes of this section 6.1.3, Qualified Early Retirement Age is the
latest of:
(i) the earliest date, under the Plan, on which the Participant may elect to
receive retirement benefits,
(ii) the first day of the 120th month beginning before the Participant reaches
Normal Retirement Age, or
(iii) the date the Participant begins participation.
(b) Qualified Joint and Survivor Annuity is an annuity for the life of the
Participant with a survivor annuity for the life of the Spouse as described in
Section 1.77.
6.2 ELECTION OF OPTIONAL FORMS
6.2.1 By notice to the Administrator at any time prior to a Participant's date
of death and beginning on the first day of the Plan Year in which the
Participant attains age 35, the Participant may elect, in writing, not to
receive the normal form of benefit payment otherwise applicable and to receive
instead an optional form of benefit payment provided for in Section 6.1.1. If
the Participant separates from Employment prior to the first day of the Plan
Year in which the Participant attains age 35, the Participant may make such
election beginning on the date he or she separates from Employment. This Section
6.2.1 shall not be applicable if Section 6.1.2 applies to a Participant.
6.2.2 Within a reasonable period, but in any event no less than 30 and no more
than 90 days prior to each Participant's Benefit Commencement Date, the
Administrator shall provide to each Participant a written explanation of the
terms and conditions of a Qualified Joint and Survivor Annuity. Such written
explanation shall consist of:
(A) the terms and conditions of the Qualified Joint and Survivor Annuity;
(B) the Participant's right to make, and the effect of, an election to waive the
Qualified Joint and Survivor Annuity;
(C) the rights of the Participant's Spouse under Section 6.2.4;
(D) the right to make, and the effect of, a revocation of previous election to
waive the Qualified Joint and Survivor Annuity; and
(E) the relative values of the various optional forms of benefit under the Plan.
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(F) If the distribution is one to which Sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution may commence less than 30
days after the notice required under Section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(1) the Plan Administrator clearly informs the Participant that the Participant
has a right to a period of at least 30 days after receiving the notice to
consider the decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and
(2) the Participant, after receiving notice, affirmatively elects a
distribution.
The Administrator may, on a uniform and nondiscriminatory basis, provide for
such other notices, information or election periods or take such other action as
the Administrator considers necessary or appropriate to implement the provisions
of this Section 6.2.2.
6.2.3 A Participant may revoke his or her election to take an optional form of
benefit, and elect a different form of benefit, at any time prior to the
Participant's Benefit Commencement Date.
6.2.4 The election of an optional benefit by a Participant after December 31,
1984, must also be a waiver of a Qualified Joint and Survivor Annuity by the
Participant. Any waiver of a Qualified Joint and Survivor Annuity shall not be
effective unless (A) the Participant's Spouse consents in writing; (B) the
election designates a specific alternate Beneficiary, including any class of
Beneficiaries or any contingent Beneficiaries which may not be changed without
spousal consent (or the Spouse expressly permits designations by the Participant
without further spousal consent); (C) the Spouse's consent to the waiver is
witnessed by a Plan representative or notary public; and (D) the Spouse's
consent acknowledges the effect of the election. Additionally, a Participant's
waiver of the Qualified Joint and Survivor Annuity will not be effective unless
the election designates a form of benefit payment which may not be changed
without spousal consent or the Spouse expressly permits designations without
further spousal consent. Notwithstanding this consent requirement, if the
Participant establishes to the satisfaction of a Plan representative that such
written consent may not be obtained because there is no Spouse or the Spouse
cannot be located, the election will be deemed effective. Any consent necessary
under this provision will not be valid with respect to any other Spouse. A
consent that permits designations by the Participant without any requirement of
further consent by such Spouse must acknowledge that the Spouse has the right to
limit consent to a specific Beneficiary, and a specific form of benefit, where
applicable, and that the Spouse voluntarily elects to relinquish either or both
of such rights. Additionally, a revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any time before his or her
Benefit Commencement Date. The number of revocations shall not be limited. Any
new waiver will require a new consent by the electing Participant's Spouse. No
consent obtained under this provision shall be valid unless the Participant has
received notice as provided in this Section.
6.2.5 The election of an optional form of benefit which contemplates the payment
of an annuity shall not be given effect if any person who would receive benefits
under the annuity dies before the Benefit Commencement Date.
6.3 CHANGE IN FORM OF BENEFIT PAYMENTS
Any former Employee whose payments are being deferred or who is receiving
installment payments may request acceleration or other modification of the form
of benefit distribution, subject to Code Section 401(a)(9), provided that any
necessary consent to such change required pursuant to Section 6.2.4 is obtained
from the Employee's Spouse. This Section 6.3 shall not apply to any Employee who
becomes a Participant on or after January 1, 1989 or to Plans adopted after that
date.
6.4 DIRECT ROLLOVERS
6.4.1 The provisions of this Section 6.4 apply only to distributions made on or
after January 1, 1993.
6.4.2 Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's
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election under this Section 6.4, a Distributee may elect, at the time and in the
manner prescribed by the Administrator, to have any portion of an Eligible
Rollover Distribution paid directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover.
6.4.3 Definitions - All terms used in this Section 6.4 shall have the meaning
set forth below:
(A) Eligible Rollover Distribution: An Eligible Rollover Distribution is any
distribution of all or any portion of the balance to the credit of the
Distributee, except, that an Eligible Rollover Distribution does not include:
any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life ( or life
expectancy) of the Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent is
required under Code Section 401(a)(9); and the portion of any distribution that
is not includible in gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to employer securities).
(B) Eligible Retirement Plan: An Eligible Retirement Plan is an individual
retirement account described in Code Section 408(a), an individual retirement
annuity described in Code Section 408(b), an annuity plan described in Code
Section 403(a), or a qualified trust described in Code Section 401(a) that
accepts the Distributee's Eligible Rollover Distribution. However, in the case
of an Eligible Rollover Distribution to the Surviving Spouse, an Eligible
Retirement Plan is an individual retirement account or individual retirement
annuity.
(C) Distributee: A Distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's Surviving Spouse and the
Employee's or former Employee's Spouse or former Spouse who is the alternate
payee under a qualified domestic relations order, as defined in Code Section
414(p), are Distributees with regard to the interest of the Spouse or former
Spouse.
(D) Direct Rollover: A Direct Rollover is a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
ARTICLE VII. DEATH BENEFITS
7.1 PAYMENT OF ACCOUNT BALANCES
7.1.1 The benefits payable to the Beneficiary of a Participant who dies while an
Employee shall be the Account Balance of all of his or her Accounts including,
if applicable, the proceeds of any life insurance contract in effect on the pa's
life in accordance with Section 7.3. The benefits payable to the Beneficiary of
a Participant who dies after terminating Employment shall be the vested Account
Balance of all of his or her Accounts. Except as otherwise provided in this
Article VII, a Beneficiary may request that he or she be paid his or her
benefits as soon as practicable after the Participant's death.
7.1.2 If a Participant dies before distribution of his or her entire interest in
the plan has been completed, the remaining interest shall, subject to Section
7.2.5, be distributed to the Participant's Beneficiary in the form, at the time
and from among the methods specified in Section 6.1.1 as elected by the
Beneficiary in writing filed with the Administrator. If an election is not
received by the Administrator within 90 days following the date the
Administrator is notified of the Participant's death, the distribution shall be
made, if to a Surviving Spouse, in accordance with Section 7.2.5(B), and, if to
some other Beneficiary, to the Beneficiary in a lump-sum.
7.1.3 The value of the benefits payable to a Beneficiary shall be determined in
accordance with Section 10.6.2. If the value of such death benefit is $3,500 or
less, distribution of such benefit shall be made in a lump-sum as soon as
practicable following the death of the Participant.
7.2 BENEFICIARIES
7.2.1 The Administrator shall provide each Participant, within the period
described in Section 7.2.1(A) for such Participant, a written explanation of the
death benefit in such terms and in such a manner as would be comparable to
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the explanation provided for meeting the requirements applicable to a Qualified
Joint and Survivor Annuity. This Section 7.2.1 shall not be applicable if
Section 6.1.2 applies to the Participant.
(A) The period for providing a written explanation of the death benefit for the
Participant ends on the latest of the following to occur:
(i) the period beginning with the first day of the Plan Year in which the
Participant attains age 32 and ending with the close of the Plan Year preceding
the Plan Year in which the Participant attains age 35;
(ii) a reasonable period ending after the Employee becomes a Participant; or
(iii) a reasonable period ending after Code Section 417 first applies to the
Participant.
Notwithstanding the foregoing, notice must be provided within a reasonable
period ending after termination of Employment in case of a Participant who
terminates Employment before attaining age 35 and who has a vested interest in
his or her Account.
(B) For purposes of the preceding paragraph, a reasonable period ending after
the enumerated events described in (ii) and (iii) is the end of the two-year
period beginning one year prior to the date the applicable event occurs and
ending one year after that date. A Participant who has a vested interest in his
or her Account and who terminated Employment before the Plan in which age 35 is
attained, shall be provided such notice within the two-year period beginning one
year prior to and ending one year after termination. If such a Participant
returns to Employment, the applicable period for such Participant shall be
redetermined.
7.2.2 A Participant shall designate one or more Beneficiaries to who amounts due
after his or her death, other than under the Qualified Joint and Survivor
Annuity, shall be paid. In the event a Participant fails to make a proper
designation or in the event that no designated Beneficiary survives the
Participant, the Participant's Beneficiary shall be the Participant's Surviving
Spouse, or if the Participant has no Surviving Spouse, the legal representative
of the Participant's estate, as an asset of that estate. A Participant's
Beneficiary shall not have any right to benefits under the Plan unless he or she
shall survive the Participant.
7.2.3 Any designation or a Beneficiary incorporated into an Annuity Contract or
insurance contract shall be governed by the terms of such Annuity Contract or
insurance contract. Any other designation of a Beneficiary must be filed with
the Administrator, in a time and manner designated by such Administrator, in
order to be effective. Any such designation of a Beneficiary may be revoked by
filing a later designation or an instrument of revocation with the
Administrator, in a time and manner designated by the Administrator.
7.2.4 Effective after December 31, 1984, a married Participant whose designation
of a Beneficiary is someone other than his or her Spouse, including a
Beneficiary referred to in the first sentence of Section 7.2.3, or the change of
any Beneficiary to a new Beneficiary other than the Participant's Spouse, shall
not be valid unless made in writing and consented to by the Participant's Spouse
in such terms and in such a manner as would be comparable to the consent
provided for a waiver of the Qualified Joint and Survivor Annuity. The Spouse's
consent to such designation must be made in the manner described in Section
6.2.4.
7.2.5 Notwithstanding any other provision of the Plan to the contrary:
(A) If the Participant dies after his or her Benefit Commencement Date, but
before distribution of his or her benefit has been completed, the remaining
portion of such benefit may continue in the form and over the period in which
the distributions were being made, but in any event must continue to be made at
least as rapidly as under the method of distribution being used prior to the
Participant's death.
(B) If the Participant dies leaving a Surviving Spouse before his or her Benefit
Commencement Date, the Participant's benefit shall be payable to the
Participant's Surviving Spouse in the form of an annuity for the life of the
Surviving Spouse. The preceding sentence shall not apply if, within 90 days
following the date the
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Administrator is notified of the Participant's death, his or her Surviving
Spouse elects, by written notice to the Administrator, any other form of benefit
payment specified in Section 6.1.1, or the Surviving Spouse has already
consented in a manner described in Section 6.2.4 to a distribution to an
alternate Beneficiary designated by the Participant. If the Plan is a
profit-sharing plan which meets the requirements of Section 6.1.2, the Surviving
Spouse shall receive his or her distribution in the form of a lump-sum unless
she or he elects within 90 days following the date the Administrator is notified
of the Participant's death, any other form of benefit payment specified in
Section 6.1.1, or the Participant's Surviving Spouse has already consented in a
manner described in Section 6.2.4 to a distribution to an alternate Beneficiary
designated by the Participant. If the Participant's benefit is $3,500 or less,
distribution shall be made in the form of a lump-sum comprised of the assets in
the Account immediately prior to the distribution if the Account consists of the
Participant-Directed Assets. If the Account does not consist of
Participant-Directed Assets, the distribution shall be in cash. If the
Participant's benefit is distributable in the form of an annuity for the life of
the Surviving Spouse, the Surviving Spouse may elect to have such annuity
distributed immediately.
(C) If the Participant dies before his or her Benefit Commencement Date, the
distribution of the Participant's entire interest shall be completed by December
31 of the calendar year containing the fifth anniversary of the Participant's
death except to the extent that an election is made by the designated
Beneficiary involved to receive distributions in accordance with (i) or (ii) of
this subsection (C) below:
(i) if any portion of the Participant's interest is payable to a designated
Beneficiary who is an individual, distributions may be made in substantially
equal installments over the life or Life Expectancy, as defined in Section
5.11.1(D), of the designated Beneficiary commencing on or before December 31 of
the calendar year immediately following the calendar year of the Participant's
death;
(ii) if the designated Beneficiary is the Participant's Surviving Spouse, the
date distributions are required to begin in accordance with (i) of this
subsection (C) shall not be earlier than the later of December 31 of the
calendar year in which the Participant died and December 31 of the calendar year
in which the Participant would have attained age 65; and
(iii) if the Surviving Spouse dies before payments begin subsequent
distributions shall be made as if the Surviving Spouse had been the Participant.
(D) For purposes of this Section 7.2.5, distribution of a Participant's interest
is considered to begin on the Participant's Required Beginning Date, as defined
in Section 5.11.1(E). If distribution in the form of an annuity irrevocably
commences to the Participant before such Required Beginning Date, the date
distribution is considered to begin is the date distribution actually commences.
(E) For purposes of this Section 7.2.5, any amount paid to a child of the
Participant will be treated as if it had been paid to the Participant's
Surviving Spouse if the amount becomes payable to such Surviving Spouse when the
child reaches the ages of majority.
(F) If the Participant has not made an election pursuant to this Section 7.2.5
by the time of his or her death, the Participant's designated Beneficiary must
elect the method of distribution no later than the earlier of (i) December 31 of
the calendar year in which distributions would be required to begin under this
Section or (ii) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Participant. If the Participant has no
designated Beneficiary, or if the designated Beneficiary does not elect a method
of distribution, distribution of the Participant's entire interest must be
completed by December 31 of the calendar year containing the fifth anniversary
of the Participant's death.
7.3 LIFE INSURANCE
7.3.1 With the consent of the Administrator and upon such notice as the
Administrator may require, a Participant may direct that a portion of his or her
Account be used to pay premiums on life insurance on the Participant's life;
provided, however, that (a) the aggregate premiums paid on ordinary life
insurance must be less than 50% of the
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aggregate contributions allocated to the Participant's Employer Accounts, (b)
the aggregate premiums paid on term life insurance contracts, universal life
insurance contracts and all other life insurance contracts which are not
ordinary life insurance may not exceed 25% of the aggregate contributions
allocated to the Participant's Employer Accounts, and (c) the sum of one-half of
the premiums paid on ordinary life insurance and the total of all other life
insurance premiums may not exceed 25% of the aggregate contributions allocated
to the Employer Accounts of the Participant. For purposes of these limitations,
ordinary life insurance contracts are contracts with both non-decreasing death
benefits and non-increasing premiums.
7.3.2 The trustee shall be the owner of each life insurance contract purchased
under this Section 7.3 and the proceeds of each contract shall be payable to the
Trustee, provided that all benefits, rights and privileges under each contract
on the life of a Participant which are available while the Participant is living
shall be exercised by the Trustee only upon and in accordance with the written
instructions of the Participant. The proceeds of all such insurance on the life
of a Participant shall be paid over by the Trustee to the Participant's
Beneficiary in accordance with this Article VII. Under no circumstances shall
the Trustee retain any part of the proceeds.
7.3.3 Any dividends or credits earned on a life insurance contract shall be
applied when received in reduction of any premiums thereon, or, if no premiums
are due, applied to increase the proceeds of the insurance contract.
7.3.4 If a Participant is found by the Administrator to be insurable only at a
substandard premium rate, the policy shall provide a reduced death benefit using
the same premium as would be required if the Participant were a standard risk,
the amount of the death benefit being determined in accordance with the amount
of the rating.
7.3.5 The cash surrender value of an insurance contract to the extent deriving
from Employer or Participant contributions, if any, shall be included,
respectively, in the Account Balance of the Account from which the premiums were
paid. Any death benefits under an insurance contract payable before the
Participant's termination of Employment will be paid to the Trustee for addition
to the relevant Account of the Participant for distribution in accordance with
Section 7.1.
7.3.6 Any other provisions herein to the contrary notwithstanding, the purchase
of life insurance for any Participant shall be subject to such minimum premium
requirements as the Trustee may determine from time to time. 7.3.7 Premiums on
life insurance contracts on a Participant's life shall be paid by the Trustee,
unless directed otherwise by the Participant, first from cash in the
Participant's Employer Accounts to the extent thereof, and then from cash in the
Participant's Participant Contributions Accounts, if any, to the extent thereof.
If there is insufficient cash in either Account to pay premiums due, the Trustee
shall notify the Participant of this fact. If the Participant does not
thereafter instruct the Trustee to sell sufficient assets in an Account of the
Participant to pay premiums due on a timely bases, the Trustee shall not be
obligated to take any further action with respect to any life insurance contract
on the Participant's life, whether as regards continuing insurance on a paid-up
basis, effecting a reduction of the insurance in force, or otherwise, except at
the direction of the Participant.
7.3.8 Prior to such time as a Participant becomes entitled to receive a
distribution of any benefits under this Plan for any reason other than
Participant's death, the Trustee shall, pursuant to the written directions of
the Participant delivered to the Administrator within such period of time as is
acceptable to the Administrator, either convert all life insurance contracts on
the Participant's life into cash or an annuity to provide current or future
retirement income to the Participant or distribute the contracts to the
Participant as a part of a benefit distribution; provided, however, that:
(A) the contracts shall not be distributed unless, if the Participant is married
at the time the distribution of contracts is to be made, and the Plan is a money
purchase pension plan, a target benefit plan or a profit-sharing plan to which
Section 6.1.2 does not apply, the Participant's Spouse at that time consents to
a distribution in the manner prescribed by Section 6.2.4; and
(B) if the cash value of any contracts at the time they become distributable to
a Participant exceeds a
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Participant's vested interest in his or her Employer Accounts at that time, the
Participant shall be entitled to receive a distribution of such contracts only
if the Participant promptly pays such excess in cash to the Trust Fund.
Life insurance contracts on a Participant's life shall not continue to be
maintained under the Plan following the Participant's termination of Employment
or after Employer contributions have ceased.
If a Participant on whose life an insurance contract is held does not make a
timely and proper direction regarding the contract under this Section 7.3.8, the
Participant shall be deemed to have directed that the contract be converted into
cash to be distributed in the manner in which the Participant's benefit is to be
distributed.
7.3.9 Anything contained herein to the contrary notwithstanding, in the event of
any conflict between the terms of the Plan and the terms of any insurance
contract purchased under this Section 7.3, the provisions of the Plan shall
control.
ARTICLE VIII. FIDUCIARIES
8.1 NAMED FIDUCIARIES
8.1.1 The Administrator shall be a "named fiduciary" of the Plan, as that term
is defined in ERISA Section 402(a)(2), with authority to control and manage the
operation and administration of the Plan, other than authority to manage and
control Plan assets.
The Administrator shall also be the "administrator" and "plan administrator"
with respect to the Plan, as those terms are defined in ERISA Section 3(16)(A)
and in Code Section 414(g), respectively.
8.1.2 The Trustee, or Investment Committee if appointed by the Employer, shall
be a "named fiduciary" of the Plan, as that term is defined in ERISA Section
402(a)(2), with authority to manage and control all Trust Fund assets and to
select an Investment Manager or Investment Managers. If ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust
Company is the Trustee, it shall be a nondiscretionary trustee; an Investment
Committee shall be appointed and shall be the Employer, who may also remove such
Investment Committee; and the Investment Committee shall be the "named
fiduciary" with respect to the Trust Fund assets. Anything in this Section 8.1.2
to the contrary notwithstanding, with respect to Participant-Directed Assets,
the Participant or Beneficiary having the power to direct the investment of such
assets shall be the "named fiduciary" with respect thereto.
8.1.3 The Trustee, or Investment Committee if appointed by the Employer, shall
have the power to make and deal with any investment of the Trust Fund permitted
in Section 10.4, except Participant-Directed Assets or assets for which an
Investment Manager has such power, in any manner which it deems advisable and
shall also:
(A) establish and carry out a funding policy and method consistent with the
objectives of the Plan and the requirements of ERISA;
(B) have the power to select Annuity Contracts, if applicable;
(C) have the power to determine, if applicable, what investments specified in
Section 10.4, including, without limitation, Qualified Employer Securities and
regulated investment company shares, are available as Participant-Directed
Assets; and
(D) have all the rights, powers, duties and obligations granted or imposed upon
it elsewhere in the Plan.
8.2 EMPLOYMENT OF ADVISERS
A "named fiduciary", with respect to the Plan (as defined in ERISA Section
402(a)(2)) and any "fiduciary" (as defined in ERISA Section 3(4)) appointed by
such a "named fiduciary", may employ one or more persons to render advice with
regard to any responsibility of such "named fiduciary" or "fiduciary" under the
Plan.
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8.3 MULTIPLE FIDUCIARY CAPACITIES
Any "named fiduciary" with respect to the plan (as defined in ERISA Section
402(a)(2)) and any other "fiduciary" (as defined in ERISA Section 3(4)) with
respect to the Plan may serve in more than one fiduciary capacity.
8.4 INDEMNIFICATION
To the extent not prohibited by state or federal law, the Employer agrees to,
and shall indemnify and save harmless, as the case may be, each Administrator
(if a person other than the Employer), Trustee, Investment Committee and/or any
Employee, officer or director of the Employer, or an Affiliate, from all claims
for liability, loss, damage or expense (including payment of reasonable expenses
in connection with the defense against any such claim) which result from any
exercise or failure to exercise any of the indemnified person's responsibilities
with respect to the Plan, other than by reason of gross negligence.
8.5 PAYMENT OF EXPENSES
8.5.1 All Plan expenses, including without limitation, expenses and fees
(including fees for legal services rendered and fees to the Trustee) of the
Sponsor, Administrator, Investment Manager, Trustee, and any insurance company,
shall be charged against and withdrawn from the Trust Fund; provided, however,
the Employer may pay any of such expenses or reimburse the Trust Fund for any
payment.
8.5.2 All transactional costs or charges imposed or incurred (if any) for
Participant-Directed Assets shall be charged to the Account for the directing
Participant or Beneficiary. Transactional costs and charges shall include, but
shall not be limited to, charges for the acquisition or sale or exchange of
Participant-Directed Assets, brokerage commissions, service charges and
professional fees.
8.5.3 Any taxes which may be imposed upon the Trust Fund or the income therefrom
shall be deducted from and charged against the Trust Fund.
ARTICLE IX. PLAN ADMINISTRATION
9.1 THE ADMINISTRATOR
9.1.1 The Employer may appoint one or more persons as Administrator, who may
also be removed by the Employer. If any individual is appointed as
Administrator, and the individual is an Employee, the individual will be
considered to have resigned as Administrator if he or she terminates Employment
and at least one other person continues to serve as Administrator. Employees
shall receive no compensation for their services rendered to or as
Administrator.
9.1.2 If more than on person is designated as Administrator, the Administrator
shall act by a majority of its members at the time in office and such action may
be taken either at the time in office and such action may be taken either by
vote at a meeting or in writing without a meeting. However, if less than three
members are appointed, the Administrators shall act only upon the unanimous
consent of its members. An Administrator who is also a Participant shall not
vote or act upon any matter relating to himself or herself, unless such person
is the sole Administrator.
9.1.3 The Administrator may authorize in writing any person to execute any
document or documents on the Administrator's behalf, and any interested person,
upon receipt of notice of such authorization directed to it, may thereafter
accept and rely upon any document executed by such authorized person until the
Administrator shall deliver to such interested person a written revocation of
such authorization.
9.2 POWERS AND DUTIES OF THE ADMINISTRATOR
9.2.1 The Administrator shall have the power to construe the Plan and to
determine all questions of fact or
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interpretation that may arise thereunder, and any such construction or
determination shall be conclusively binding upon all persons interested in the
Plan.
9.2.2 The Administrator shall have the power to promulgate such rules and
procedures, to maintain or cause to be maintained such records and to issued
such forms as it shall deem necessary and proper for the administration of the
Plan.
9.2.3 Subject to the terms of the Plan, the Administrator shall determine the
time and manner in which all election authorized by the Plan shall be made or
revoked.
9.2.4. The Administrator shall have all the right, powers, duties and
obligations granted to or imposed upon it elsewhere in the Plan.
9.2.5 The Administrator shall exercise all of its responsibilities in a uniform
and nondiscriminatory manner.
9.3 DELEGATION OF RESPONSIBILITY
The Administrator may designate persons, including persons other than "named
fiduciaries" (as defined in ERISA Section 402(a)(2)) to carry out the specified
responsibilities of the Administrator and shall not be liable for any act or
omission of a person so designated.
ARTICLE X
TRUSTEE AND INVESTMENT COMMITTEE
10.1 APPOINTMENT OF TRUSTEE AND INVESTMENT COMMITTEE
10.1.1 The Employer shall appoint one or more persons as a Trustee who shall
serve as such for all or a portion of the Trust Fund. By executing the Adoption
Agreement: (i) the Employer represents that all necessary action has been taken
for the appointment of the Trustee; (ii) the Trustee acknowledges that it
accepts such appointment; and (iii) both the Employer and the Trustee agree to
act in accordance with the Trust provisions contained in this Article X.
10.1.2 An Employee appointed as Trustee or to the Investment Committee shall
receive no compensation for services rendered in such capacity and will be
considered to have resigned if he or she terminates Employment and at least one
other person continues to act as Trustee or as the Investment Committee, as the
case may be. If ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company is the Trustee, the Employer shall
appoint an Investment Committee and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company shall be a
nondiscretionary trustee.
10.1.3 If more than one person is acting as the Trustee, or as an Investment
Committee, such Trustee, or Investment Committee, shall act by a majority of the
persons at the time so acting and such action may be taken either by a vote at a
meeting or in writing without a meeting. If less than three members are serving,
the Trustee, or Investment Committee, shall act only upon the unanimous consent
of those serving. The Trustee, or Investment Committee, may authorize in writing
any person to execute any document or documents on its behalf, and any
interested person, upon receipt of notice of such authorization directed to it,
may thereafter accept and rely upon any document executed by such authorized
person until the Trustee, or Investment Committee, shall deliver to such
interested person a written revocation of such authorization.
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10.2 THE TRUST FUND
The Trustee shall receive such sums of money or other property acceptable to the
Trustee which shall from time to time be paid or delivered to the Trustee under
the Plan. The Trustee shall hold in the Trust Fund all such assets, without
distinction between principal and income, together with all property purchased
therewith and the proceeds thereof and the earnings and income thereon. The
Trustee shall not be responsible for, or have any duty to enforce, the
collection of any contributions or assets to be paid or transferred to it, or
for verifying whether contributions or transfers to it are allowable under the
Plan, nor shall the Trustee be responsible for the adequacy of the Trust Fund to
meet or discharge liabilities under the Plan.
10.2.1 The Trustee shall receive in cash or other assets acceptable to the
Trustee, so long as such assets received do not constitute a prohibited
transaction, all contributions paid or delivered to it which are allocable under
the Plan and to the Trust Fund and all transfers paid or delivered under the
Plan to the Trust Fund from a predecessor trustee or another trust (including a
trust forming a part of another plan qualified under Code Section 401(a));
provided, however, that the Trustee shall not be obligated to receive any such
contribution to transfer unless prior thereto or coincident therewith, as the
Trustee may specify, the Trustee has received such reconciliation, allocation,
investment or other information concerning, or such direction, contribution or
representation with respect to, the contribution or transfer or the source
thereof as the Trustee may require. The Trustee shall have no duty or authority
to (a) require any contributions or transfers to be made under the Plan or to
the Trustee, (b) compute any amount to be contributed or transferred under the
Plan to the Trustee, or (c) determine whether amounts received by the Trustee
comply with the Plan.
10.2.2 The Trust Fund shall consist of all money and other property received by
the Trustee pursuant to Section 10.2, increased by any income or gains on or
increment in such assets and decreased by any investment loss or expense,
benefit or disbursement paid pursuant to the Plan.
10.3 RELATIONSHIP WITH ADMINISTRATOR
10.3.1 Neither the Trustee, nor the Investment Committee, if any, shall be
responsible in any respect for the administration of the Plan. Payments of money
or property from the Trust Fund shall be made by the Trustee upon direction from
the Administrator or its designee. Payments by the Trustee shall be transmitted
to the Administrator or its designee for delivery to the proper payees or to
payee addresses supplied by the Administrator or its designee, and the Trustee's
obligation to make such payments shall be satisfied upon such transmittal. The
Trustee shall have no obligation to determine the identity of persons entitled
to payments under the Plan or their addresses.
10.3.2 Directions from or on behalf of the Administrator or its designee shall
be communicated to the Trustee or the Trustee's designee for that purpose only
in a manner and in accordance with procedures acceptable to the Trustee. The
Trustee's designee shall not, however, be empowered to implement any such
directions except in accordance with procedures acceptable to the Trustee. The
Trustee shall have no liability for following any such directions or failing to
act in the absence of any such directions. The Trustee shall have no liability
for the acts or omissions of any person making or failing to make any direction
under the Plan or the provisions of this Article X nor any duty or obligation to
review any such direction, act or omission.
10.3.3 If a dispute arises over the propriety of the Trustee making any payment
from the Trust Fund, the Trustee may withhold the payment until the dispute has
been resolved by a court of competent jurisdiction or settled by the parties to
the dispute. The Trustee may consult legal counsel and shall be fully protected
in acting upon the advice of counsel.
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10.4 INVESTMENT OF ASSETS
10.4.1 Except as provided in Section 10.4.2, investments of the Trust Fund shall
be made in the following, but only if compatible with the Sponsor's
administrative and operational requirement and framework:
(A) shares of any regulated investment company managed in whole or in part by
the Sponsor or any affiliate of the Sponsor;
(B) any property purchased through the Sponsor or any affiliate of the Sponsor,
whether or not productive of income or consisting of wasting assets, including,
without limitation by specification, governmental, corporate or personal
obligations, trust and participation certificates, leaseholds, fee titles,
mortgages and other interests in realty, preferred and common stocks,
convertible stocks and securities, shares of regulated investment companies,
certificates of deposit, put and call options and other option contracts of any
type, foreign or domestic, whether or not traded on any exchange, futures
contracts and options on futures contracts traded on or subject to the rules of
an exchange which has been designated as a contract market by the Commodity
Futures Trading Commission, an independent U.S. government agency, contracts
relating to the lending of property, evidences of indebtedness or ownership in
foreign corporations or other enterprises, or indebtedness of foreign
governments, group trust participations, limited or general partnership
interests, insurance contracts, annuity contracts, any other evidences of
indebtedness or ownership including oil, mineral or gas properties, royalty
interests or rights (including equipment pertaining thereto); and
(C) Qualifying Employer Securities or "qualifying employer real properties" (as
that term is defined in ERISA Section 407(d) to the extent permitted in Section
10.4.3).
10.4.2 (A) Up to 25% with the written consent of the Sponsor or its
representative, an additional percentage of each Plan Year's contributions may
be invested in property as specified in Section 10.4.1(B) acquired through a
person other than the Sponsor or an affiliate of Sponsor.
(B) Except as permitted by Section 10.4.2 and except as may result from a
Rollover Contribution or a trust to trust transfer, without the written consent
of the Sponsor or its representative, property may not be acquired through a
person other than the Sponsor or an affiliate of the Sponsor if following such
acquisitions the value of the property so acquired would exceed 25% of the value
of the Trust Fund.
10.4.3 In its sole discretion, the Investment Committee, or Trustee if there is
no Investment Committee:
(A) may permit the investment of up to 10% of the Trust Fund in Qualifying
Employer Securities or "qualifying employer real property" (as that term is
defined in ERISA Section 407(d)), to the extent such investment is compatible
with the Sponsor's administrative and operational requirements and framework;
and
(B) may determine, subject to Section 10.4.2, that a percentage of assets in
excess of 10% of the Trust Fund may be invested in Qualifying Employer
Securities or "qualifying employer real property" by a profit-sharing plan.
10.4.4 This Plan will be recognized as a Prototype Plan by the Sponsor only by
complying with the provisions of this Section 10.4.
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10.5 INVESTMENT DIRECTION, PARTICIPANT-DIRECTED ASSETS AND QUALIFYING EMPLOYER
INVESTMENTS
10.5.1 The Trustee, or Investment Committee if appointed, shall manage the
investment of the Trust Fund except insofar as (a) an Investment Manager has
authority to manage Trust assets, or (b) Participant-Directed Assets are
permitted as specified in the Adoption Agreement. Except as required by ERISA,
if an Investment Committee is acting, the Trustee shall invest the Trust Fund as
directed by the Investment Committee, an Investment Manager or a Participant or
Beneficiary, as the case may be, and the Trustee shall have no discretionary
control over, nor any other discretion regarding, the investment or reinvestment
of any asset of the Trust.
Participant-Directed Assets shall be invested in accordance with the direction
of the Participant or, in the event of the Participant's death before an Account
is fully paid out, the Participant's Beneficiary with respect to the assets
involved; provided, however, that Participant-Directed Assets may not be
invested in "collectibles" (as defined in Code Section 408(m)(2)). If there are
Participant-Directed Assets, the investment of these assets shall be made in
accordance with such rules and procedures established by the Administrator which
must be consistent with the rules and procedures of the Sponsor or its
affiliate, as the case may be.
10.5.2 With respect to Participant-Directed Assets, neither the Administrator,
the Investment Committee nor the Trustee shall:
(A) make any investments or dispose of any investments without the direction of
the Participant or Beneficiary for whom the Participant-Directed Assets are
maintained, except as provided in Section 8.5 so as to pay fees or expenses of
the Plan;
(B) be responsible for reviewing any investment direction with respect to
Participant-Directed Assets or for making recommendations on acquiring,
retaining or disposing of any assets or otherwise regarding any assets;
(C) have any duty to determine whether any investment is an authorized or proper
one; or
(D) be liable for following any investment direction or for any losses, taxes or
other consequences incurred as a consequence of investments selected by any
Participant or Beneficiary or for holding assets uninvested until it receives
proper instructions.
10.5.3 If Participant-Directed Assets are permitted, a list of the Participants
and Beneficiaries and such information concerning them as the Trustee may
specify shall be provided by the Employer or the Administrator to the Trustee
and/or such person as are necessary for the implementation of the directions in
accordance with the procedure acceptable to the Trustee.
10.5.4 It is understood that the Trustee may, from time to time, have on hand
funds which are received as contributions or transfers to the Trust Fund which
are awaiting investment or funds from the sale of Trust Fund asserts which are
awaiting reinvestment. Absent receipt by the Trustee of a direction from the
proper person for the investment or reinvestment of such funds or otherwise
prior to the application of funds in implementation of such a direction, the
Trustee shall cause such funds to be invested in shares of money market fund or
other short term investment vehicle as the Trustee, or Investment Committee if
appointed, may specify for this purpose from time to time. Any such investment
fund may be sponsored, managed or distributed by the Sponsor or an affiliate of
the Sponsor.
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10.5.5 Directions for the investment or reinvestment of Trust assets of a type
referred to in Section 10.4 from the Investment Committee, an Investment Manager
or a Participant or Beneficiary, as the case may be, shall, in a manner and in
accordance with procedures acceptable to the Trustee, be communicated to and
implemented by, as the case may be, the Trustee, the Trustee's designee or, with
the Trustee's consent and if an Investment Committee is operating, a
broker/dealer designated for the purpose by the Investment Committee.
Communication of any such direction to such a designee or broker/dealer shall
conclusively be deemed an authorization to the designee or broker/dealer to
implement the direction even though coming from a person other than the Trustee.
The Trustee shall have no liability for its or any other person's following such
directions or failing to act in the absence of any such directions. The Trustee
shall have no liability for the acts or omissions of any person directing the
investment or reinvestment of Trust Fund assets or making or failing to make any
direction referred to in Section 10.5.6.
10.5.6 The voting and other rights in securities or other assets held in the
Trust shall be exercised by the Trustee provided, however, that if an Investment
Committee is appointed, the Trustee shall act as directed by such person who at
the time has the right to direct the investment or reinvestment of the security
or other asset involved.
10.5.7 With respect to any Qualifying Employer Securities allocated to an
Account, each Participant shall be entitled to direct the Trustee in writing as
to the manner in which Qualifying Employer Securities are to be voted.
10.5.8 With respect to any Qualifying Employer Securities allocated to an
Account, each Participant shall be entitled to direct the Trustee in writing as
to the manner in which to respond to a tender or exchange offer or other
decisions with respect to the Qualifying Employer Securities.
The Administrator shall utilize its best efforts to timely distribute or cause
to be distributed to each Participant such information received from the Trustee
as will be distributed to shareholders of the Employer in connection with any
such tender or exchange offer or other similar matter or any vote referred to in
Section 10.5.7.
10.5.9 If an Investment Committee is appointed, notwithstanding any provision
hereof to the contrary, in the event the person with the right to direct a
voting or other decision with respect to any security, Qualifying Employer
Securities, or other asset held in the Trust does not communicate any decision
on the matter to the Trustee or the Trustee's designee by the time prescribed by
the Trustee or the Trustee's designee for that purpose or if the Trustee
notifies the Investment Committee, if applicable, either that it does not have
precise information as to the securities, Qualifying Employer Securities, or
other assets involved allocated on the applicable record date to the accounts of
all Participants and Beneficiaries or that time constraints make it unlikely
that Participant, Beneficiary or Investment Manager direction, as the case may
be, can be received on a timely basis, the decision shall be the responsibility
of the Investment Committee and shall be communicated to the Trustee on a timely
basis. In the event an Investment Committee with any right under the Plan to
direct a voting or other decision with respect to any security, Qualifying
Employer Securities, or other asset held in the Trust, does not communicate any
decision on the matter to the Trustee or the Trustee's designee by the time
prescribed by the Trustee for that purpose, the Trustee may, at the cost of the
Employer, retain an Investment Manager with full discretion to make the
decision. Except as required by ERISA, the Trustee shall (a) follow all
directions above referred to in this Section and (b) shall have no duty to
exercise voting or other rights relating to any such security, Qualifying
Employer Securities or other asset.
10.5.10 The Administrator shall establish, or cause to be established, a
procedure acceptable to the Trustee for the timely dissemination to each person
entitled to direct the Trustee or its designee as to a voting or other decision
called for thereby or referred to therein of all proxy and other materials
bearing on the decision.
10.5.11 Any person authorized to direct the investment of Trust assets may, if
the Trustee and the Investment
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Committee, if applicable, so permit, direct the Trustee to invest such assets in
a common or collective trust maintained by the Trustee for the investment of
assets of qualified trusts under section 401(a) of the Code, individual
retirement accounts under section 408(a) of the Code and plans or governmental
units described in section 818(a)(6) of the Code. The documents governing any
such common or collective trust fund maintained by the Trustee, and in which
Trust assets have been invested, are hereby incorporated into this Article X by
reference.
10.6 VALUATION OF ACCOUNTS
10.6.1 A Participant's Accounts shall be valued at fair market value on each
Valuation Date. Subject to Section 10.6.2(A), as of each Valuation Date, the
earnings and losses and expenses of the Trust Fund shall be allocated to each
Participant Account in the ratio that such Account Balance in that category of
Accounts bears to all Account Balances in that category. With respect to
Participant-Directed Assets, the earnings and losses and expenses (including
transactional expenses pursuant to Section 8.5.2) of such Participant-Directed
Assets shall be allocated to the Account of the Participant or Beneficiary
having authority to direct the investment of the assets in his or her Account.
10.6.2 The Valuation Date with respect to any distributions (including, without
limitation, loan distributions and purchase of annuities) from any Account upon
the occurrence of a Benefit Commencement Date or otherwise, shall be:
(A) with respect to Participant-Directed Asset, the date as of which the Account
distribution is made; and
(B) with respect to other assets, the Valuation Date immediately preceding the
Benefit Commencement Date, if applicable, or immediately preceding the proposed
date of any other distribution from an Account.
With respect to any contribution allocable to an Account which has not been made
as of a Valuation Date determined pursuant to this Section 10.6.2, the principal
amount of such contribution distributable because of the occurrence of a Benefit
Commencement Date shall be distributed as soon as practicable after the date
paid to the Trust fund.
10.6.3 The assets of the Trust shall be valued at fair market value as
determined by the Trustee based upon such sources of information as it may deem
reliable, including, but not limited to, stock market quotations, statistical
evaluation services, newspapers of general circulation, financial publications,
advice from investment counselors or brokerage firms, or any combination of
sources. The reasonable costs incurred in establishing values of the Trust Fund
shall be a charge against the Trust Fund, unless paid by the Employer.
When the Trustee is unable to arrive at a value based upon information from
independent sources, it may rely upon information from the Employer,
Administrator, Investment Committee, appraisers or other sources, and shall not
incur any liability for inaccurate valuation based in good faith upon such
information.
10.7 INSURANCE CONTRACTS
The Trustee, if an Investment Committee is not appointed, Investment Committee,
or Participant or Beneficiary with respect to Participant-Directed Assets, may
appoint one or more insurance companies to hold assets of the Plan, and
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may direct, subject to Section 7.3, the purchase of insurance contracts or
policies from one or more insurance companies with assets of the Plan. Neither
the Investment Committee, Trustee nor the Administrator shall be liable for the
validity of any such contract or policy, the failure of any insurance company to
make any payments or for any act or omission of an insurance company with
respect to any duties delegated to any insurance company.
10.8 THE INVESTMENT MANAGER
10.8.1 The Trustee, if an Investment Committee is not appointed, Investment
Committee, or the Participant or Beneficiary with respect to
Participant-Directed Assets, may, by an instrument in writing, appoint one or
more Investment Managers, who may be an affiliate of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust
Company, to direct the Trustee in the investment of all or a specified portion
of the assets of the Trust in property specified in Section 10.4. Any such
Investment Manager shall be directed by the Trustee, if an Investment Committee
is not appointed, Investment Committee, Participant or Beneficiary, as the case
may be, to act in accordance with the procedures referred to in Section 10.5.5.
If appointed, the Investment Committee shall notify the Trustee in writing
before the effectiveness of the appointment or removal of any Investment
Manager. If there is more than one Investment Manager whose appointment is
effective under the Plan at any one time, the Trustee shall, upon written
instructions from the Investment Committee, Participant or Beneficiary,
establish separate funds for control by each such Investment Manager. The funds
shall consist of those Trust Funds assets designated by the Investment
Committee, Participant or Beneficiary.
10.8.2 Each Person appointed as an Investment Manager shall be:
(A) an investment adviser registered under the Investment Advisers Act of 1940,
(B) a bank as defined in the Act, or
(C) an insurance company qualified to manage, acquire or dispose of any asset of
the Plan under the laws of more than one state.
10.8.3 Each Investment Manager shall acknowledge in writing that it is a
"fiduciary" (as defined in ERISA Section 3(21)) with respect to the Plan. The
Trustee, or the Investment Committee if appointed, shall enter into an agreement
with each Investment Manager specifying the duties and compensation of such
Investment Manager and the other terms and conditions under which such
Investment Manager shall be retained. Neither the Trustee nor the Investment
Committee, if appointed, shall be liable for any act or omission of any
Investment Manager and shall not be liable for following the advice of any
Investment Manager with respect to any duties delegated to any Investment
Manager.
10.8.4 The Trustee, or Investment Committee if appointed, or the Participant or
Beneficiary, if applicable with respect to Participant-Directed Assets, shall
have the power to determine the amount of Trust Fund assets to be invested
pursuant to the direction of a designated Investment Manager and to set
investment objectives and guidelines for the Investment Manager.
10.8.5 Second Trust Fund. The Employer may appoint a second trustee under the
Plan with respect to assets which the Employer desires to contribute or have
transferred to the Trust Fund, but which the other Trustee does not choose to
accept; provided, however, that if a ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company is a Trustee,
its consent (which consent may be evidenced by its acceptance of its appointment
as Trustee) shall be required. In the event and upon the effectiveness of
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the acceptance of the second Trustee's appointment, the Employer shall be deemed
to have created two trust funds under the Plan, each with its own Trustee, each
governed separately by this Article X. Each Trustee under such an arrangement
shall, however, discharge its duties and responsibilities solely with respect to
those assets of the Trust delivered in its possession and except pursuant to
ERISA, shall have no duties, responsibilities or obligations with respect to
property of the other Trust nor any liability for the acts or omissions of the
other Trustee. As a condition to its consent to the appointment of a second
trustee, the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company shall assure that recordkeeping,
distribution and reporting procedures are established on a coordinated basis
between it and the second trustee as considered necessary or appropriate with
respect to the Trusts.
10.9 POWERS OF TRUSTEE
10.9.1 At the direction of the person authorized to direct such action as
referred to in Section 10.5.1, but limited to those assets or categories of
assets acceptable to the Trustee as referred to in Section 10.4, or at its own
discretion if no such person is so authorized, the Trustee, or the Trustee's
designee or a broker/dealer as referred to in Section 10.5.5, is authorized and
empowered:
(A) To invest and reinvest the Trust Fund, together with the income therefrom,
in assets specified in Section 10.4;
(B) To deposit or invest all or any part of the assets of the Trust in savings
accounts or certificates of deposit or other deposits in a bank or savings and
loan association or other depository institution, including the Trustee or any
of its affiliates, provided with respect to such deposits with the Trustee or an
affiliate the deposits bear a reasonable interest rate;
(C) To hold, manage, improve, repair and control all property, real or personal,
forming part of the Trust Fund; to sell, convey, transfer, exchange, partition,
lease for any term, even extending beyond the duration of this Trust, and
otherwise dispose of the same from time to time;
(D) To have, respecting securities, all the rights, powers and privileges of an
owner, including the power to give proxies, pay assessments and other sums
deemed by the Trustee necessary for the protection of the Trust Fund; to vote
any corporate stock either in person or by proxy, with or without power of
substitution, for any purpose; to participate in voting trusts, pooling
agreements, foreclosures, reorganizations, consolidations, mergers and
liquidations, and in connection therewith to deposit securities with or transfer
title to any protective or other committee; to exercise or sell stock
subscriptions or conversion rights; and, regardless of any limitation elsewhere
in this instrument relative to investments by the Trustee, to accept and retain
as an investment any securities or other property received through the exercise
of any of the foregoing powers;
(E) Subject to Section 10.5.4 hereof, to hold in cash, without liability for
interest, such portion of the Trust Fund which it is directed to so hold pending
investments, or payments of expenses, or the distribution of benefits;
(F) To take such actions as may be necessary or desirable to protect the Trust
from loss due to the default on mortgages held in the Trust including the
appointment of agents or trustees in such other jurisdictions as may seem
desirable, to transfer property to such agents or trustees, to grant to such
agents such powers as are necessary or desirable to protect the Trust Fund, to
direct such agent or trustee, or to delegate such power to direct, and to remove
such agent or trustee;
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(G) To settle, compromise or abandon all claims and demands in favor of or
against the Trust Fund;
(H) To invest in any common or collective trust fund of the type referred to in
Section 10.5.8 hereof maintained by the Trustee;
(I) To exercise all of the further rights, powers, options and privileges
granted, provided for, or vested in trustees generally under the laws of the
State of New Jersey, so that the powers conferred upon the Trustee herein shall
not be in limitation of any authority conferred by law, but shall be in addition
thereto;
(J) To borrow money from any source and to execute promissory notes, mortgages
or other obligations and to pledge or mortgage any trust assets as security,
subject to applicable requirements of the Code and ERISA; and
(K) To maintain accounts at, execute transactions through, and lend on an
adequately secured basis stocks, bonds or other securities to, any brokerage or
other firm, including any firm which is an affiliate of the Trustee.
10.9.2. To the extent necessary or which it deems appropriate to implement its
powers under Section 10.9.1 or otherwise to fulfill any of its duties and
responsibilities as trustee of the Trust Fund, the Trustee shall have the
following additional powers and authority:
(A) to register securities, or any other property, in its name or in the name of
any nominee, including the name of any affiliate or the nominee name designated
by any affiliate, with or without indication of the capacity in which property
shall be held, or to hold securities in bearer form and to deposit any
securities or other property in a depository or clearing corporation;
(B) to designate and engage the services of, and to delegate powers and
responsibilities to, such agents, representatives, advisers, counsel and
accountants as the Trustee considers necessary or appropriate, any of whom may
be an affiliate of the Trustee or a person who renders services to such an
affiliate, and, as a part of its expenses under this Trust Agreement, to pay
their reasonable expenses and compensation;
(C) to make, execute and deliver, as Trustee, any and all deeds, leases,
mortgages, conveyances, waivers, releases or other instruments in writing
necessary or appropriate for the accomplishment of any of the powers listed in
this Trust Agreement; and
(D) generally to do all other acts which the Trustee deems necessary or
appropriate for the protection of the Trust Fund.
10.9.3. The Trustee shall have no duties or responsibilities other than those
specified in the Plan.
10.10 ACCOUNTING AND RECORDS
10.10.1. the Trustee shall maintain or cause to be maintained accurate records
and accounts of all Trust transaction and assets. The records and accounts shall
be available at reasonable times during normal business hours for inspection or
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audit by the Administrator, Investment Committee, if appointed, or any person
designated for the purpose by either of them.
10.10.2. Within 90 days following the close of each fiscal year of the Plan or
the effective date of the removal or resignation of the Trustee, the Trustee
shall file with the Administrator a written accounting setting forth all
transactions since the end of the period covered by the last previous accounting
. The accounting shall include a listing of the assets of the Trust showing the
value of such assets at the close of the period covered by the accounting. On
direction of the Administrator, and if previously agreed to by the Trustee, the
Trustee shall submit to the Administrator interim valuations, reports or other
information pertaining to the Trust.
The Administrator may approve the accounting by written approval delivered to
the Trustee or by failure to deliver written objections to the Trustee within 60
days after receipt of the accounting. Any such approval shall be binding on the
Employer, the Administrator, the Investment Committee and, to the extent
permitted by ERISA, all other persons.
10.11 JUDICIAL SETTLEMENT OF ACCOUNTS
The Trustee can apply to a court of competent jurisdiction at any time for
judicial settlement of any matter involving the Plan including judicial
settlement of the Group Trustee's account. If it does so, the Trustee must give
the Administrator the opportunity to participate in the court proceedings, but
the Trustee can also involve other persons. Any expenses the Trustee incurs in
legal proceedings involving the Plan, including attorney's fees, are chargeable
to the Trust Fund as an administrative expense. Any judgment or decree which may
be entered in such a proceeding, shall, subject to the provision of ERISA, be
conclusive upon all persons having or claiming to have any interest in the Trust
Fund or under any Plan.
10.12 RESIGNATION AND REMOVAL OF TRUSTEE
10.12.1. The Trustee may resign at any time upon at least 30 days' written
notice to the Employer.
10.12.2. The Employer may remove the Trustee upon at least 30 days' written
notice to the Trustee.
10.12.3. Upon resignation or removal of the Trustee, the Employer shall appoint
a successor trustee. Upon failure of the Employer to appoint, or the failure of
the effectiveness of the appointment by the Employer of, a successor trustee by
the effective date of the resignation or removal, the Trustee may apply to any
court of competent jurisdiction for the appointment of a successor.
Promptly after receipt by the Trustee of notice of the effectiveness of the
appointment of the successor trustee: (a) the Trustee shall deliver to the
successor trustee such records as may be reasonably requested to enable the
successor trustee to properly administer the Trust Fund and all property of the
Trust after deducting therefrom such amounts as the Trustee deems necessary to
provide for expenses, taxes, compensation or other amounts due to or by the
Trustee not paid by the Employer prior to the delivery; and (b) except if the
second Trustee is removed or resigns, the Plan will no longer be considered a
prototype plan.
10.12.4. Upon resignation or removal of the Trustee, the Trustee shall have the
right to a settlement of its account, which settlement shall be made, at the
Trustee's option, either by an agreement of settlement between the Trustee and
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the Employer or by a judicial settlement in an action instituted by the Trustee.
The Employer shall bear the cost of any such judicial settlement, including
reasonable attorneys fees.
10.12.5. The Trustee shall not be obligated to transfer Trust assets until the
Trustee is provided assurance by the Employer satisfactory to the Trustee that
all fees and expenses reasonably anticipated will be paid.
10.12.6. Upon settlement of the account and transfer of the Trust Fund to the
successor trustee, all rights and privileges under the Trust Agreement shall
vest in the successor trustee and all responsibility and liability of the
Trustee with respect to the Trust and assets thereof shall, except as otherwise
required by ERISA, terminate subject only to the requirement that the Trustee
execute all necessary documents to transfer the Trust assets to the successor
trustee.
10.13 GROUP TRUST
10.13.1. If elected by the Employer in the Adoption Agreement, the Trustee shall
be the Trustee for this Plan and for each other qualified plan specified in the
Adoption Agreement; provided, however, that such other qualified plan is in
effect pursuant to an Adoption Agreement under this Prototype Plan. Any
reference to Trustee and to the Trust Fund in this Plan shall mean the Trustee
as the trustee of a Group Trust consisting of the assets of each such plan. The
Plan and each other qualified plan specified in the Adoption Agreement shall be
deemed to join in and adopt the Trust as the trust for each such plan. By
executing the Adoption Agreement, the Trustee accepts designation as Trustee of
this Group Trust.
10.13.2. The Trustee shall establish and maintain such accounting records for
each of the Plans as shall be necessary to reflect the interest in the Group
Trust applicable at any time or from time to time to each Plan. No part of the
corpus or income of the Group Trust allocable to an individual Plan may be used
for or diverted to any purposes other than for the exclusive benefit of
Participants and their Beneficiaries entitled to benefits under that Plan. The
allocable interest of a Plan in the Group Trust may not be assigned.
ARTICLE XI.
PLAN AMENDMENT OR TERMINATION
11.1 PROTOTYPE PLAN AMENDMENT
11.1.1. The mass submitter, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
and any successor thereto, may amend any part of the Prototype Plan. For
purposes of sponsoring organization amendments, the mass submitter shall be
recognized as the agent of the sponsoring organization. If the sponsoring
organization does not adopt the amendments made by the mass submitter, it will
no longer be identical to or a minor modifier of the mass submitter plan.
11.1.2. An Employer shall have the right at any time, by an instrument in
writing, effective retroactively or otherwise, to (A) change the choice of
options in the Adoption Agreement, in whole or in part; (B) add overriding
language in the Adoption Agreement when such language is needed to satisfy Code
Section 415 or Code Section 416 because of the required aggregation of multiple
plans; and (C) add certain model amendments published by the Internal Revenue
Service which specifically provide that their adoption will not cause the Plan
to be treated as individually designed. No
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such amendment, however, shall have any of the effects specified in Section
11.2.1. If the adopting Employer amends the Plan or nonelective portions of the
Adoption Agreement except as previously provided, it will no longer participate
in the Prototype Plan, but will be considered to have an individually designed
plan for purposes of qualification under Code Section 401(a). In the event the
Employer is switching from an individually designed plan or from one prototype
plan to another, a list of the Section "411(d)(6) protected benefits" that must
be preserved may be attached, and such a list would not be considered an
amendment to the plan.
11.1.3. This Plan will be recognized as a Prototype Plan by the Sponsor only by
complying with the registration requirements as specified in the Adoption
Agreement.
11.2 PLAN AMENDMENT
11.2.1. Except as provided in Section 11.2.2, no amendment pursuant to Section
11.1 shall:
(A) authorize any part of the Trust Fund to be used for, or diverted to,
purposes other than for the exclusive benefit of Participants or their
Beneficiaries;
(B) decrease the accrued benefits of any Participant or his or her Beneficiary
under the Plan; An amendment which has the effect of (1) eliminating or reducing
an Early Retirement benefit or a retirement-type subsidy, or (2) eliminating an
optional form of benefit payment, with respect to benefits attributable to
service before the amendment shall be treated as reducing accrued benefits. In
the case of a retirement-type subsidy, the preceding sentence shall apply only
with respect to a Participant who satisfies (either before or after the
amendment) the preamendment conditions for the subsidy. In general, a
retirement-type subsidy is a subsidy that continues after retirement, but does
not include a qualified disability benefit, a medial benefit, a social security
supplement, a death benefit (including life insurance), or a plant shutdown
benefit (that does not continue after retirement age).
(C) reduce the vested percentage of any Participant determined without regard to
such amendment is adopted or the date it becomes effective;
(D) eliminate an optional form of benefit distribution with respect to benefits
attributable to service before the amendment; or
(E) change the vesting schedule, or in any way amend the Plan to either directly
or indirectly affect the computation of a Participant's vested percentage,
unless each Participant having not less than 3 years of Vesting Service is
permitted to elect, within a reasonable period specified by the Administrator
after the adoption of such amendment, to have his or her vested percentage
computed without regard to such amendment.
For Participants who do not have a least one Hour of Service in any Plan Year
beginning after December 31, 1988, the preceding sentence shall be applied by
substituting "5 Years of Vesting Service" for "3 Years of Vesting Service" where
such language appears. The period during which the election may be made shall
commence with the date the amendment is adopted and shall end on the later of:
(i) 60 days after the amendment is adopted;
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(ii) 60 days after the amendment becomes effective; or
(iii) 60 days after the Participant is issued written notice by the
Administrator.
11.2.2. Anything contained in this Section 11.2 to the contrary notwithstanding,
a Participant's benefit may be reduced to the extent permitted under Code
Section 412(c)(8).
11.3 RIGHT OF THE EMPLOYER TO TERMINATE PLAN
11.3.1. The Employer intends and expects that from year to year it will be able
to and will deem it advisable to continue this Plan in effect and to make
contributions as herein provided. The Employer reserves the right, however, to
terminate the Plan with respect to its Employees at any time by an instrument in
writing delivered to the Administrator and the Trustee, or to completely
discontinue its contributions thereto at any time.
11.3.2. The Plan will also terminate: (A) if the Employer is a sole
proprietorship, upon the death of the sole proprietor; (B) if the Employer is a
partnership, upon termination of the partnership; (C) if the Employer is
judicially declared bankrupt or insolvent; (D) upon the sale or other
disposition of all or substantially all of the assets of the business; or (E)
upon any other termination of the business. Any successor to or purchaser of the
Employer's trade or business, after any event specified in the prior sentence,
may continue the Plan, in which case the successor or purchaser will thereafter
be considered the Employer for purposes of the Plan. Such a successor or
purchaser shall execute an appropriate Adoption Agreement if and when requested
by the Administrator.
11.3.3. Anything contained herein to the contrary notwithstanding, if the
Employer fails to attain or retain qualification of the Plan under Code Section
401(a), the Plan will not participate in this Prototype Plan and will, instead,
be considered an individually designed plan for purposes of such qualification.
11.4 EFFECT OR PARTIAL OR COMPLETE TERMINATION OR COMPLETE DISCONTINUANCE OF
CONTRIBUTIONS
11.4.1. Determination of Date of Complete or Partial Termination. The date of
complete or partial termination shall be established by the Administrator in
accordance with the direction of the Employer (if then in existence) in
accordance with applicable law.
11.4.2. Effect of Termination.
(A) As of the date of a partial termination of the Plan:
(i) the accrued benefit of each affected Participant, to the extent funded,
shall become nonforfeitable;
(ii) no affected Participant shall be granted credit based on Hours of Service
after such date;
(iii) Compensation paid to affected Participants after such date shall not be
taken into account; and
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(iv) no contributions by affected Participants shall be required or permitted.
(B) As of the date of the complete termination of the Plan or of a complete
discontinuance of contributions:
(i) the accrued benefit of each affected Participant to the extent funded, shall
become nonforfeitable;
(ii) no affected Participant shall be granted credit based on Hours of Service
after such date;
(iii) Compensation paid after such date shall not be taken into account;
(iv) no contributions by affected Participants shall be required or permitted;
(v) no Eligible Employee shall become a Participant after such date; and
(vi) except as may otherwise be required by applicable law, all obligations of
the Employer and Participating Affiliates to fund the Plan shall terminate.
(C) All other provisions of the Plan shall remain in effect unless otherwise
amended.
11.4.3. Upon the complete discontinuance of profit-sharing contributions under
the Plan, at the Employer's election, either the Trust Fund shall continue to be
held and distributed as if the Plan had not been terminated (in which case such
Plan shall continue to be subject to all requirements under Title I of ERISA,
and qualification requirements under the Code) or any and all assets remaining
in the Trust Fund as of the date of such termination or discontinuance, together
with any earnings subsequently accruing thereon, shall be distributed by the
Trustee to the Participants at the Administrator's direction. Upon the complete
termination of the Plan, the Trust Fund shall be distributed to Participants
within one year after the date of termination.
If the Plan does not offer an annuity option (purchased from a commercial
provider) and if the Employer or any Affiliate does not maintain another Defined
Contribution Plan (other than an employee stock ownership plan as defined in
Code Section 4975(e)(7)), the Participant's benefit may, without the
Participant's consent, be distributed to the Participant. However, if any
Affiliate maintains another Defined Contribution Plan (other than an employee
stock ownership plan as defined in Code Section 4975(e)(7)), then the
Participant's Account(s) will be transferred, without the Participant's consent,
to the other plan if the Participant does not consent to an immediate
distribution. Distributions shall be made in compliance with the applicable
provisions, including restrictions, of Articles VI and VII. The Trust Fund shall
continue in effect until all distributions therefrom are complete. Upon the
completion of such distributions, the Trustee shall be relieved from all further
liability with respect to all amounts so paid or distributed.
11.5 BANKRUPTCY
In the event that the Employer shall at any time be judicially declared bankrupt
or insolvent without any provisions being made for the continuation of this
Plan, the Plan shall be completely terminated in accordance with this Article
XI.
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ARTICLE XII.
MISCELLANEOUS PROVISIONS
12.1 EXCLUSIVE BENEFIT OF PARTICIPANTS
Notwithstanding anything in the Plan to the contrary, the Trust Fund shall be
held for the benefit of all persons who shall be entitled to receive payments
under the Plan. Subject to Section 3.10, it shall be prohibited at any time for
any part of the Trust Fund (other than such part as is required to pay expenses)
to be used for, or diverted to, purposes other than for the exclusive benefit of
Participants or their Beneficiaries.
12.2 PLAN NOT A CONTRACT OF EMPLOYMENT
The Plan is not a contract of Employment, and the terms of Employment of any
Employee shall not be affected in any way by the Plan or related instruments
except as specifically provided therein.
12.3 ACTION BY EMPLOYER
Any action by an Employer which is a corporation shall be taken by the board of
directors of the corporation or any person or persons duly empowered to exercise
the powers of the corporation with respect to the Plan. In the case of an
Employer which is a partnership, action shall be taken by any general partner of
the partnership, action shall be taken by the sole proprietor.
12.4 SOURCE OF BENEFITS
Benefits under the Plan shall be paid or provided for solely from the Trust
Fund, and neither the Employer, any Participating Affiliate, the Trustee, the
Administrator, nor any Investment Manager or insurance company shall assume any
liability under the Plan therefor.
12.5 BENEFITS NOT ASSIGNABLE
Benefits provided under the Plan may not be assigned or alienated, either
voluntarily or involuntarily. In the event that a Participant or Beneficiary
becomes individually liable with respect to any expenses listed in Section 8.5,
the provision of Section 401(a)(13) of the Code shall be applicable with respect
to any claim the Plan may have against the Participant or Beneficiary
individually with respect to such expenses. The preceding sentence shall also
apply to the creation, assignment or recognition of a right to any benefit
payable with respect to a Participant pursuant to a "domestic relations order"
(as defined in Code Section 414(p)) unless such order is determined by the
Administrator to be a "qualified domestic relations order" (as defined in Code
Section 414(p)) or, in the case of a "domestic relations order" entered before
January 1, 1985, if either payment of benefits pursuant to the order has
commenced as of that date or the Administrator decides to treat such order as a
"qualified domestic relations order" within the meaning of Code Section 414(p)
even if it does not otherwise qualify as such.
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12.6 DOMESTIC RELATIONS ORDERS
Any other provision of the Plan to the contrary notwithstanding, the
Administrator shall have all powers necessary with respect to the Plan for the
proper operation of Code Section 414(p) with respect to "qualified domestic
relations orders" (or "domestic relations orders" treated as such) referred to
in Section 12.5, including, but not limited to, the power to establish all
necessary or appropriate procedures, to authorize the establishment of new
accounts with such assets and subject to such investment control by the
Administrator as the Administrator may deem appropriate, and the Administrator
may decide upon and direct appropriate distributions therefrom.
12.7 CLAIMS PROCEDURE
In the event that a claim by a Participant, Beneficiary, or other person for
benefits under the Plan is denied, the Administrator will so notify the
claimant, giving the reasons for the denial. This notice will also refer to the
specific provisions of the Plan on which the denial was based, will specify
whether any additional information is needed from the Participant or Beneficiary
and will explain the review procedure.
Within 60 days after receiving the denial, the claimant may submit, directly or
through a duly authorized representative, a written request for reconsideration
of the application to the Administrator. Documents or records relied on by the
claimant should be filed with the request. The person making the request may
review relevant documents and submit issues and additional comments in writing.
The Administrator will review the claim within 60 days (or 120 days if a hearing
is held because special circumstances exist) and provide a written response to
the appeal. The response will explain the reasons for the decision and will
refer to the Plan provisions on which the decision is based. The decision of the
Administrator is the final one under this claims procedure.
12.8 RECORDS AND DOCUMENTS; ERRORS
Participants and Beneficiaries must supply the Administrator with such personal
history data as may be required by the Administrator in the operation of the
Plan. Proof of age, when required, must be established by evidence satisfactory
to the Administrator, and the records of the Employer and Participating
Affiliates concerning length of service and compensation may be accepted by the
Administrator as conclusive for the purposes of the Plan. Should any error in
the records maintained under the Plan result in any Participant or Beneficiary
receiving from the Plan more or less than he or she would have been entitled to
received had the records been correct, the Administrator, in its discretion, may
correct such error and, as far as practicable, may adjust benefits in such a
manner that the aggregate value of the benefit under to Plan shall be the amount
to which such Participant or Beneficiary was properly entitled.
12.9 BENEFITS PAYABLE TO MINORS, INCOMPETENTS AND OTHERS
In the event any benefit is payable to a minor or to a Participant or
Beneficiary declared incompetent by a court having jurisdiction over such
matters and a guardian, committee, conservator or other legal representative of
the estate of such person is appointed, benefits to which he or she is entitled
shall be paid to the legally appointed person. The receipt by any such person to
whom any such payment on behalf of any Participant or Beneficiary is made shall
be sufficient discharge thereof.
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12.10 PLAN MERGER OR TRANSFER OF ASSETS
12.10.1 The merger or consolidation of the Employer with any other person, or
the transfer of the assets of the Employer to any other person, or the merger of
the Plan with any other plan shall not constitute a termination of the Plan if
provision is made for the continuation of the Plan.
12.10.2 The Plan may not merge or consolidate with, or transfer any assets or
liabilities to, any other plan, unless each Participant would (if the Plan had
then terminated) receive a benefit immediately after the merger, consolidation
or transfer which is equal to or greater than the benefit he or she would have
been entitled to receive immediately before the merger, consolidation or
transfer (if the Plan had then terminated). Any merger or consolidation shall
not constitute a termination of a Plan or require the acceleration of vesting of
Participants' Account Balances.
12.11 PARTICIPATING AFFILIATES
12.11.1 With the consent of the Employer and by duly authorized action, any
Affiliate may adopt the Plan. Such Affiliate shall determine the classes of its
Employees who shall be eligible Employees and the amount of its contribution to
the Plan on behalf of such Employees.
12.11.2 With the consent of the Employer and by duly authorized action, a
Participating Affiliate may terminate its participation in the Plan or withdraw
from the Plan. Any such withdrawal shall be deemed an adoption by such
Participating Affiliate of a plan and trust identical to the Plan and the Trust,
except that all references to the Employer shall be deemed to refer to such
Participating Affiliate. At such time and in such manner as the Employer
directs, the assets of the Trust allocable to Employees of such Participating
Affiliate shall be transferred to the trust deemed adopted by such Participating
Affiliate.
12.11.3 A Participating Affiliate shall have no power with respect to the Plan
except as specifically provided herein.
12.12 CONTROLLING LAW
The Plan is intended to qualify under Code Section 401(a) and to comply with
ERISA, and its terms shall be interpreted accordingly. Otherwise, to the extent
not preempted by ERISA, the laws of the State of New York shall control the
interpretation and performance of the terms of the Plan.
12.13 SINGULAR AND PLURAL AND ARTICLE AND SECTION REFERENCES
As used in the Plan, the singular includes the plural, and the plural includes
the singular, unless qualified by the context. Titles of Articles and Section of
the Plan are for convenience of reference only and are to be disregarded in
applying the provisions of the Plan. Any reference in this Prototype Plan to an
Article or Section is to the Article or Section so specified of the Prototype
Plan, unless otherwise indicated.
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SUPPLEMENT TO THE
GADZOOKS, INC. SAVINGS PLAN
(AS AMENDED AND RESTATED EFFECTIVE APRIL 1, 1998) (THE "PLAN")
The Employer is hereby amending and restating the Plan, effective April
1, 1998, as an individually-designed plan, rather than a prototype plan under
the sponsorship of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. The documents
comprising the Plan, as so amended and restated, consist of the ▇▇▇▇▇▇▇ ▇▇▇▇▇
Special Prototype Defined Contribution Plan Adoption Agreement as filled out and
executed by the Employer ("Adoption Agreement"), the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Special
Prototype Defined Contribution Plan Basic Plan Document #03 ("Basic Plan
Document") and the provisions of this Supplement. This Supplement modifies and
overrides the Adoption Agreement and the Basic Plan Document.
1. Article IX of the Basic Plan Document is hereby modified by
the addition of the following new section:
9.4 Appointment of Administrative Committee.
Notwithstanding the foregoing provisions of this Article IX,
the Employer may, while retaining its status as plan
administrator of the Plan under ERISA, appoint a committee to
administer the Plan and carry out all of the functions and
duties of the Administrator under the Plan (the
"Administrative Committee" or the "Committee"). The Committee
shall also act as the Investment Committee under the Plan. The
rules set forth in Section 9.1.2 of the Basic Plan Document
shall govern actions by the Committee. The members of the
Committee shall be deemed fiduciaries for purposes of ERISA
and shall be indemnified as described in Section 8.4 of the
Basic Plan Document.
2. Section 10.5.1 of the Basic Plan Document is hereby modified
by the addition of the following new paragraph at the end thereof:
A Participant shall not be permitted to direct that more than
50% of any contributions to any Account in the Plan be
initially invested in Qualifying Employer Securities.
3. The Basic Plan Document and the Adoption Agreement are hereby
modified to eliminate the functions and duties of the Sponsor and the mass
submitter, to the extent such functions and duties are to be performed by the
Sponsor or mass submitter in those capacities. The Employer shall assume all
such functions and duties that properly belong to the employer-sponsor of an
individually-designed qualified profit sharing plan under the Code and ERISA.
The Plan shall be construed and interpreted in a manner consistent with its
status as an individually-designed single employer plan of the Employer.
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GADZOOKS, INC.
By:
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Title:
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Date
-2-