040794
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, L.L.P.
401(k) VOLUME SUBMITTER PLAN AND TRUST AGREEMENT
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS........................................................................... 1
ARTICLE II ELIGIBILITY AND PARTICIPATION.........................................................18
ARTICLE III PARTICIPANT CONTRIBUTIONS.............................................................25
ARTICLE IV EMPLOYER CONTRIBUTIONS AND FORFEITURES................................................30
ARTICLE V TERMINATION OF SERVICE - PARTICIPANT VESTING..........................................59
ARTICLE VI TIME AND METHOD OF PAYMENT OF BENEFITS................................................65
ARTICLE VII WITHDRAWALS AND LOANS.................................................................82
ARTICLE VIII EMPLOYER ADMINISTRATIVE PROVISIONS....................................................88
ARTICLE IX PARTICIPANT ADMINISTRATIVE PROVISIONS.................................................91
ARTICLE X PLAN ADMINISTRATOR - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS....................95
ARTICLE XI TRUSTEE POWERS AND DUTIES............................................................104
ARTICLE XII CLAIMS PROCEDURE.....................................................................117
ARTICLE XIII PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY...............................120
ARTICLE XIV MISCELLANEOUS........................................................................125
ARTICLE XV EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION............................................129
ARTICLE XVI PARTICIPATING EMPLOYERS..............................................................136
ARTICLE XVII QUALIFIED DOMESTIC RELATIONS ORDERS..................................................141
ARTICLE XVIII TOP-HEAVY PLAN PROVISIONS............................................................143
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▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, L.L.P.
401(k) VOLUME SUBMITTER PLAN AND TRUST AGREEMENT
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, L.L.P., in its capacity as Volume Submitter Plan
Sponsor, establishes this Volume Submitter Plan intended to conform to and
qualify under section 401 and 501 of the Internal Revenue Code of 1986, as
amended. An Employer establishes a Plan and Trust under this Volume Submitter
Plan by executing an Adoption Agreement. If the Employer adopts this Plan as a
restated Plan in substitution for, and in amendment of, an existing plan, the
provisions of this Plan, as a restated Plan, apply solely to an Employee whose
employment with the Employer terminates on or after the Restated Effective Date
of the Employer's Plan. If an Employee's employment with the Employer terminates
prior to the Restated Effective Date, that Employee is entitled to benefits
under the Plan as the Plan existed on the date of the Employee's termination of
employment.
ARTICLE I
DEFINITIONS
1.01 "Account" means the separate account(s) which the Plan
Administrator or the Trustee maintains for a Participant under the Employer's
Plan, whether attributable to Employer or Participant contributions.
1.02 "Account Balance" means the amount standing in a Participant's
Account(s) as of any date derived from both Employer contributions and
Participant contributions, if any.
1.03 "Adjustment Date" means the last day of an Employer's Plan Year.
Subject to the Employer's adoption of an additional Valuation Date, provided by
the Adoption Agreement Section 1.51, the Plan Administrator will make all Plan
allocations for a particular Plan Year as of the Adjustment Date of that Plan
Year.
1.04 "Adoption Agreement" means the document executed by each Employer
adopting this Volume Submitter Plan. The terms of this Volume Submitter Plan, as
modified by the terms of an adopting Employer's Adoption Agreement, constitute a
separate Plan and Trust to be construed as a single Agreement. Each elective
provision of the Adoption Agreement corresponds by section reference to the
section of the Plan which establishes the election.
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1.05 "Affiliated Employer" means the Employer and any corporation which
is a member of a controlled group of corporations (as defined in Code section
414(b)) which includes the Employer; any trade or business (whether or not
incorporated) which is under common control (as defined in Code section 414(c))
with the Employer; any organization (whether or not incorporated) which is a
member of an affiliated service group (as defined in Code section 414(m) or
414(o)) which includes the Employer; and any other entity required to be
aggregated with the Employer pursuant to regulations under Code section 414(o).
1.06 "Annuity Starting Date" means the first day of the first period
for which the Plan pays an amount as an annuity or, in the case of a benefit not
payable in the form of an annuity, the first day on which all events have
occurred which entitle the Participant to such benefit.
1.07 "Beneficiary" is a person or persons or legal entity designated by
a Participant who is or may become entitled to a benefit under the Plan after
the Participant's death. A Beneficiary who becomes entitled to a benefit under
the Plan remains a Beneficiary under the Plan until the Trustee has fully
distributed his benefit to him. A Beneficiary's right to (and the Plan
Administrator's or Trustee's duty to provide to the Beneficiary) information or
data concerning the Plan does not arise until he first becomes entitled to
receive a benefit under the Plan.
1.08 "Break in Service" means a twelve (12) consecutive month period
during which a Participant completes five hundred (500) or fewer Hours of
Service with the Employer (excluding, however, any period covered by an
authorized leave of absence). The "twelve consecutive month period" is the same
twelve (12) consecutive month period for which the Plan measures "Years of
Service" under Section 1.52. For purposes of vesting, if, pursuant to Section
1.52, the Plan does not require more than 500 Hours of Service to receive credit
for a Year of Service, a Participant incurs a Break of Service in a vesting
computation period in which he fails to complete a Year of Service.
1.09 "Cash or Deferred Contribution" means the contribution made to the
Plan by the Employer which is subject to the election by a Participant to either
receive the contribution in cash currently or to defer receipt of all or any
portion of such contribution, pursuant to the terms and provisions of Section
4.02.
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1.10 "Code" means the Internal Revenue Code of 1986, as amended.
1.11 "Compensation" means, except as provided in the Employer's
Adoption Agreement Section 1.11, the Participant's Earned Income, wages,
salaries, fees for professional service and other amounts received for personal
services actually rendered in the course of employment with the Employer
maintaining the Plan (including, but not limited to, commissions paid to sales
persons, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips and bonuses). For any Self-Employed
Individual, Compensation will mean Earned Income. The Employer must elect in its
Adoption Agreement Section 1.11 whether to include Elective Contributions in the
definition of Compensation. "Elective Contributions" are amounts excludible from
the Employee's gross income under Code sectionsection 125, 402(a)(8), 402(h) or
403(b), and contributed by the Employer, at the Employee's election, to a Code
section 401(k) arrangement (other than this Plan), a simplified employee pension
plan, cafeteria plan or tax-sheltered annuity. The term "Compensation" does not
include:
(a) Employer contributions (other than "Elective
Contributions," if includible in the definition of Compensation under
Section 1.11 of the Employer's Adoption Agreement) to a plan of
deferred compensation to the extent the contributions are not
includible in the gross income of the Employee for the Taxable Year in
which contributed, on behalf of an Employee to a simplified employee
pension plan to the extent such contributions are excludible from the
Employee's gross income, and any distributions from a plan of deferred
compensation, regardless of whether such amounts are includible in the
gross income of the Employee when distributed;
(b) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer subject to
a substantial risk of forfeiture;
(c) Amounts realized from the sale, exchange or other
disposition of stock acquired under a stock option described in Part
II, Subchapter D, Chapter 1 of the Code; and
(d) Other amounts which receive special tax benefits, such as
premiums for group life insurance (but only to the extent that the
premiums are not includible in the gross income of the Employee) or
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contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Code section 403(b)(whether or not the amounts are
actually excludible from the gross income of the Employee), other than
"Elective Contributions" if elected in the Employer's Adoption
Agreement Section 1.11.
Any reference in this Plan to Compensation is a reference to the
definition in this Section 1.11, unless the Plan reference specifies a
modification to this definition. The Plan Administrator will take into account
only Compensation paid for the relevant period. A Compensation payment includes
Compensation by the Employer through another person under the common paymaster
provisions in Code sectionsection 3121 and 3306.
For Plan Years beginning after December 31, 1988, the annual
Compensation of each Participant taken into account under the Plan shall not
exceed $200,000. This limitation shall be adjusted by the Secretary at the same
time and in the same manner as under Code section 415(d), except that the dollar
increase in effect on January 1 of any calendar year is effective for Plan Years
beginning in such calendar year and the first adjustment to the $200,000
limitation is effected on January 1, 1990. If the Plan determines Compensation
on a period of time that contains fewer than twelve (12) calendar months, then
the annual Compensation limit is an amount equal to the annual Compensation
limit for the calendar year in which the Compensation period begins, multiplied
by the ratio obtained by dividing the number of full months in the period by
twelve (12).
In determining the Compensation of a Participant for purposes of this
limitation, the rules 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 age nineteen
(19) before the close of the year. If, for a Plan Year, the combined
Compensation of the Employee and such family members who are Participants
entitled to an allocation for that Plan Year exceeds the $200,000 (or adjusted)
limitation, "Compensation" for each such Participant, for purposes of the
contribution and allocation provisions of Article IV, means his Adjusted
Compensation. "Adjusted Compensation" is the amount which bears the same ratio
to the $200,000 (or adjusted) limitation as the affected Participant's
Compensation (without regard to the $200,000 Compensation limitation) bears to
the combined Compensation of all the affected Participants in the family unit.
If the Plan uses permitted disparity, the Plan Administrator must determine the
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integration level of each affected family member Participant prior to the
proration of the $200,000 Compensation limitation, but the combined integration
level of the affected Participants may not exceed $200,000 (or the adjusted
limitation). The combined Excess Compensation of the affected Participants in
the family unit may not exceed $200,000 (or the adjusted limitation) minus the
affected Participants' combined integration level (as determined under the
preceding sentence). If the combined Excess Compensation exceeds this
limitation, the Plan Administrator will prorate the Excess Compensation
limitation among the affected Participants in the family unit in proportion to
each such individual's Adjusted Compensation minus his integration level. The
Employer may elect to use a different method in determining the Adjusted
Compensation of the affected Participants by specifying the method in an
addendum to the Adoption Agreement, numbered Section 1.11.
For purposes of determining whether the Plan discriminates in favor of
Highly Compensated Employees, Compensation means Compensation as defined in this
Section 1.11, except: (1) the Employer may elect to include or to exclude
Elective Contributions, irrespective of the Employer's election in its Adoption
Agreement regarding Elective Contributions; and (2) the Employer will not give
effect to any elections made in the "Modifications to Compensation definition"
section of Adoption Agreement Section 1.11. The Employer's election described in
clause (1) must be consistent and uniform with respect to all Employees and all
plans of the Employer for any particular Plan Year. The Employer, irrespective
of clause (2), may elect to exclude from this nondiscrimination definition of
Compensation, any items of Compensation excludible under Code section 414(s) and
the applicable Treasury regulations, provided such adjusted definition conforms
to the nondiscrimination requirements of those regulations.
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 annual compensation limit
set forth under the Omnibus Budget Reconciliation Act of 1993 ("OBRA'93"). The
OBRA'93 annual compensation limit is $150,000, as adjusted by the Commissioner
for increases in the cost of living in accordance with Code section
401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding twelve (12) months, over which Compensation
is determined (determination period) beginning in such calendar year. If a
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determination period consists of fewer than twelve (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 twelve (12).
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Code section 401(a)(17) shall mean the OBRA'93
annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current Plan Year,
the Compensation for that prior determination period is subject to the OBRA'93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA'93 annual
compensation limit is $150,000.
1.12 "Deferral Contributions" mean Salary Reduction Contributions and
Cash or Deferred Contributions the Employer contributes to the Trust on behalf
of an Eligible Employee, irrespective of whether, in the case of Cash or
Deferred Contributions, the contribution is at the election of the Employee.
Deferral Contributions are 100% Nonforfeitable at all times and are subject to
the distribution restrictions described in Section 6.11.
1.13 "Discretionary Nonelective Contributions" mean Nonelective
Contributions made to the Plan by the Employer, in its discretion, and are
allocated to eligible Participants pursuant to the provisions of Section 4.05.
1.14 "Disability" means the Participant, because of a physical or
mental disability, will be unable to perform the duties of his customary
position of employment (or is unable to engage in any substantial gainful
activity) for an indefinite period which the Plan Administrator considers will
be of long continued duration. A Participant also is disabled if he incurs the
permanent loss or loss of use of a member or function of the body, or is
permanently disfigured, and incurs a Separation from Service. The Plan considers
a Participant disabled on the date the Plan Administrator determines the
Participant satisfies the definition of Disability, based on a statement from an
approved physician. The Plan Administrator will apply the provisions of this
Section 1.14 in a nondiscriminatory, consistent and uniform manner. The Employer
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may provide an alternate definition of Disability in an addendum to its Adoption
Agreement, numbered Section 1.14.
1.15 "Early Retirement Age" and "Early Retirement Date," if any, shall
be as specified in the Employer's Adoption Agreement Section 1.15. A Participant
shall become fully vested upon satisfying the Early Retirement requirements
provided in the Employer's Adoption Agreement if still employed by the Employer
at his Early Retirement Age.
A former Participant who terminates employment after satisfying the
service requirement for Early Retirement, if any, provided in the Employer's
Adoption Agreement, and who thereafter reaches the age requirement for Early
Retirement, as specified in the Adoption Agreement, shall be entitled to receive
his benefits under the Plan.
1.16 "Earned Income" means net earnings from self-employment in the
trade or business with respect to which the Employer has established the Plan,
provided personal services of the individual are a material income-producing
factor. The Plan Administrator will determine net earnings without regard to
items excluded from gross income and the deductions allocable to those items.
The Plan Administrator will determine net earnings after the deduction allowed
to the Self-Employed Individual for all contributions made by the Employer to a
qualified plan and, for Plan Years beginning after December 31, 1989, the
deduction allowed to the Self-Employed under Code section 164(f) for
self-employment taxes.
1.17 "Effective Date" and "Restated Effective Date," if applicable, of
this Plan are the dates specified in the Employer's Adoption Agreement Section
1.17.
1.18 "Elective Deferrals" mean all Salary Reduction Contributions and
that portion of any Cash or Deferred Contribution which the Employer contributes
to the Trust at the election of an Eligible Employee. Any portion of a Cash or
Deferred Contribution contributed to the Trust because of the Employee's failure
to make a cash election is an Elective Deferral. However, any portion of a Cash
or Deferred Contribution over which the Employee does not have a cash election
is not an Elective Deferral. Elective Deferrals do not include amounts which
have become currently available to the Employee prior to the election nor
amounts designated as nondeductible contributions at the time of deferral or
contribution.
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1.19 "Employee" means any employee (including a Self-Employed
Individual) of the Employer maintaining this Plan, or of any Affiliated Employer
which adopts this Plan in accordance with the terms and provisions of Section
16.01. The Employer must specify in its Adoption Agreement Section 1.19 any
Employee, or class of Employees, not eligible to participate in the Plan.
Notwithstanding anything herein to the contrary, collectively bargained
employees shall not be eligible to participate in the Plan. This exclusion
applies to any employee of the Employer included in a unit of employees covered
by an agreement which the Secretary of Labor finds to be a collective bargaining
agreement between employee representatives and one or more employers, unless the
collective bargaining agreement requires the employee to be included within the
Plan. The term "employee representatives" does not include any organization,
more than half the members of which are owners, officers, or executives of the
Employer. In addition, nonresident aliens who do not receive any earned income
(as defined in Code section 911(d)(2)) which constitutes U.S. source income (as
defined in Code section 861(a)(3)) are excluded from participation in the Plan.
1.20 "Employee Contributions" mean contributions made by a Participant
on an after-tax basis, whether voluntary or mandatory, and designated, at the
time of contribution, as an employee (or nondeductible) contribution. Elective
Deferrals and Deferral Contributions are not Employee Contributions. Participant
nondeductible contributions, including Mandatory Contributions made pursuant to
Section 3.02 of the Plan, are Employee Contributions.
1.21 "Employer" means the entity specified in the Adoption Agreement,
any Affiliated Employer which adopts this Plan and becomes a "Participating
Employer" hereunder, as defined in Section 16.01, by executing a Participation
Agreement to the Employer's Adoption Agreement, and any successor which shall
maintain this Plan or any predecessor which has maintained this Plan.
1.22 "Employment Commencement Date" means the date on which the
Employee first performs an Hour of Service for the Employer; provided, however,
the Employment Commencement Date of a terminated Participant who returns to
employment with the Employer shall be determined in accordance with the rules
for crediting prior service in Section 5.06.
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1.23 "Entry Date" means the date(s) specified in Section 1.23 of the
Employer's Adoption Agreement on which an eligible Employee begins participating
in the Plan.
1.24 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.25 "Highly Compensated Employee" includes Highly Compensated active
Employees and Highly Compensated former Employees.
A Highly Compensated active Employee includes any Employee who performs
service for the Employer during the determination year and who, during the
look-back year:
(a) received Compensation from the Employer in excess of
$75,000 (as adjusted pursuant to Codesection 415(d));
(b) received Compensation from the Employer in excess of
$50,000 (as adjusted pursuant to Code section 415(d)) and was a member
of the top-paid group for such year; or
(c) was an officer of the Employer and received Compensation
during such year that is greater than fifty percent (50%) of the dollar
limitation in effect under Code section 415(b)(1)(A).
The term "Highly Compensated Employee" also includes: (i) Employees who
are both described in the preceding sentence if the term "determination year" is
substituted for the term "look-back year" and the Employee is one of the one
hundred (100) Employees who received the most Compensation from the Employer
during the determination year; and (ii) Employees who are five percent (5%)
owners at any time during the look-back year or determination year. The number
of officers taken into account under clause (c) above will not exceed the
greater of three (3) or ten percent (10%) of the total number (after application
of Code section 414(q) exclusions) of Employees, but in no event more than fifty
(50) officers. If no officer has satisfied the Compensation requirement of (c)
above during either a determination year or look-back year, the highest paid
officer for such year shall be treated as a Highly Compensated Employee.
For purposes of this Section 1.25, the determination year shall be the
Plan Year and the look-back year shall be the twelve (12) month period
immediately preceding the determination year. However, in accordance with
Treasury regulations, the Employer may make a calendar year election to
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determine the Highly Compensated Employees for the Plan Year. Such an election
shall be made in an addendum to the Employer's Adoption Agreement, numbered
Section 1.25. If such a calendar year election is made, the look-back year shall
be the calendar year ending with or within the Plan Year for which testing is
being performed, and the determination year (if applicable) shall be the period
of time, if any, which extends beyond the look-back year and ends on the last
day of the Plan Year for which testing is being performed (the "lag period"). If
the "lag period" is less than twelve months long, the dollar threshold amounts
specified in (a), (b) and (c) above, shall be prorated based upon the number of
months in the "lag period." The calendar year election must apply to all plans
and arrangements of the Employer.
A Highly Compensated former Employee includes any Employee who
separated from Service (or was deemed to have separated from Service, as
determined under Treasury regulations) prior to the determination year, performs
no Service for the Employer during the determination year, and was a Highly
Compensated active Employee for either the separation year or any determination
year ending on or after the Employee's fifty-fifth (55th) birthday. If the
former Employee's Separation from Service occurred prior to January 1, 1987, he
is a Highly Compensated Employee only if he satisfied clause (a) of this Section
1.25 or received Compensation in excess of $50,000 during: (1) the year of his
Separation from Service (or the prior year); or (2) any year ending after his
fifty-fourth (54th) birthday.
If an Employee is, during a determination year or look-back year, a
Family Member of either a five percent (5%) owner who is an active or former
Employee or a Highly Compensated Employee who is one of the ten (10) most Highly
Compensated Employees ranked on the basis of Compensation paid by the Employer
during such year, then the Family Member and the five percent (5%) owner or
top-ten Highly Compensated Employee shall be aggregated. For purposes of
determining Highly Compensated Employees, "Family Member" shall mean a spouse,
lineal ascendant or descendant, or a spouse of a lineal ascendant or descendant.
In such case, the Family Member and five percent (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 five percent
(5%) owner or top-ten Highly Compensated Employee. This aggregation rule applies
to a Family Member even if that Family Member is a Highly Compensated Employee
without family aggregation.
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1.26 "Hour of Service" means:
(a) Each Hour of Service for which the Employer, either
directly or indirectly, pays an Employee, or for which the Employee is
entitled to payment, for the performance of duties for the Employer.
The Hours of Service under this subparagraph (a) will be credited to
the Employee for the computation period in which the Employee performs
the duties, irrespective of when paid;
(b) Each Hour of Service for which the Employer, either
directly or indirectly, pays an Employee, or for which the Employee is
entitled to payment (irrespective of whether the employment
relationship is terminated), for reasons other than for the performance
of duties during a computation period, such as leave of absence
(including maternity or paternity leave), vacation, holiday, sick
leave, illness, incapacity (including disability), layoff, jury duty or
military duty. No more than 501 Hours of Service will be credited under
this subparagraph (b) to an Employee on account of any single
continuous period during which the Employee does not perform any duties
(whether or not such period occurs during a single computation period).
Hours of Service under this subparagraph (b) will be calculated and
credited in accordance with the rules of paragraphs (b) and (c) of
Labor Regulation section 2530.200b-2, which the Plan, by this
reference, specifically incorporates in full within this subparagraph
(b); and
(c) Each Hour of Service for back pay, irrespective of
mitigation of damages, to which the Employer has agreed or for which
the Employee has received an award. The 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). Hours of Service will be
credited under this subparagraph (c) to the Employee for the
computation period(s) to which the award or the agreement pertains
rather than for the computation period in which the award, agreement or
payment is made.
A computation period for purposes of this Section 1.26 is the Plan
Year, Year of Service period, Break in Service period or other period, as
determined under the Plan provision for which the Employee's Hours of Service
are being measured.
Hours of Service will be credited for employment with other members of
an affiliated service group (under Code section 414(m)), a controlled group of
corporations (under Code section 414(b)), or a group of trades or businesses
11
under common control (under Code section 414(c)) of which the Employer is a
member, and any other entity required to be aggregated with the Employer
pursuant to Code section 414(o). Hours of Service will also be credited for any
individual considered an Employee for purposes of this Plan under Code section
414(n) or 414(o).
The Employer must elect in its Adoption Agreement Section 1.26 the
method the Plan Administrator will use in crediting an Employee with Hours of
Service. For purposes of the Plan, "actual" method means the determination of
Hours of Service from records of hours worked and hours for which the Employer
makes payment or for which payment is due from the Employer. If the Employer
elects to apply an "equivalency" method, for each equivalency period for which
the Employer would credit the Employee with at least one Hour of Service, the
Employer will credit the Employee with: (i) ten (10) Hours of Service for a
daily equivalency; (ii) forty-five (45) Hours of Service for a weekly
equivalency; (iii) ninety-five (95) Hours of Service for a semimonthly payroll
period equivalency; and (iv) one hundred ninety (190) Hours of Service for a
monthly equivalency.
1.27 "Leased Employee" means an individual (who otherwise is not an
Employee of the Employer) who, pursuant to a leasing agreement between the
Employer and any other person, has performed services for the Employer (or for
the Employer and any persons related to the Employer within the meaning of Code
section 414(n)(6)) on a substantially full time basis for at least one (1) year
and who performs services historically performed by employees in the Employer's
business field. Unless the Leased Employee is otherwise covered in a safe harbor
plan as provided below, the Plan treats a Leased Employee as an Employee of the
Employer for purposes of determining the number or identity of Highly
Compensated Employees, and for purposes of the pension requirements of Code
section 414(n)(3). If a Leased Employee is treated as an Employee by reason of
this Section 1.27, "Compensation" includes Compensation from the leasing
organization which is attributable to services performed for the Employer.
The Plan does not treat a Leased Employee as an Employee if the leasing
organization covers the employee in a safe harbor plan and, prior to application
of this safe harbor plan exception, twenty percent (20%) or less of the
Employer's Employees (other than Highly Compensated Employees) are Leased
Employees. A safe harbor plan is a money purchase pension plan providing
immediate participation, full and immediate vesting, and a nonintegrated
contribution formula equal to at least ten percent (10%) of the employee's
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compensation without regard to employment by the leasing organization on a
specified date. The safe harbor plan must determine the ten percent (10%)
contribution on the basis of compensation as defined in Code section 415(c)(3)
plus Elective Contributions (as defined in Section 1.11).
The Plan Administrator must apply this Section 1.27 in a manner
consistent with Code sectionsection 414(n) and 414(o) and the regulations
thereunder. The Employer must specify in the Adoption Agreement Section 1.27 the
manner in which the Plan will determine the allocation of Employer contributions
and Participant forfeitures on behalf of a Participant if the Participant is a
Leased Employee covered by a plan maintained by the leasing organization.
1.28 "Limitation Year" means the twelve (12) consecutive month period
specified in the Employer's Adoption Agreement Section 1.28 which applies to the
limitations on allocations described in Article IV. All qualified plans
maintained by the Employer must use the same Limitation Year. If the Limitation
Year is amended to a new different twelve (12) consecutive month period, the new
Limitation Year must begin on a date within the Limitation Year in which the
amendment is made.
1.29 "Mandatory Contributions" mean Employee Contributions which an
Employee is required to contribute to the Plan on a nondeductible basis in order
to be eligible to share in the Employer's Matching Contribution.
1.30 "Matching Contributions" mean contributions made by the Employer
on account of Elective Deferrals under a Code section 401(k) arrangement or on
account of Mandatory Contributions. Matching Contributions also include
Participant forfeitures allocated on account of such Elective Deferrals or
Mandatory Contributions.
1.31 "Named Fiduciary" means the person, designated as hereinafter
provided, who shall be in charge of the operation and administration of the
Plan.
1.32 "Net Profit" means with respect to any Taxable Year the Employer's
net income or profit for such Fiscal Year determined upon the basis of the
Employer's books of account in accordance with generally accepted accounting
principles, without any reduction for taxes based upon income, or for
contributions made by the Employer to this Plan and any other qualified plan.
13
1.33 "Nonforfeitable" means a Participant's or Beneficiary's
unconditional claim, legally enforceable against the Plan, to the Participant's
Account Balance.
1.34 "Nonelective Contributions" mean contributions made by the
Employer which are not subject to a deferral election by an Employee and which
are not Matching Contributions.
1.35 "Nonhighly Compensated Employee" means any Employee who is neither
a Highly Compensated Employee nor a Family Member.
1.36 "Nontransferable Annuity" means an annuity which by its terms
provides that it may not be sold, assigned, discounted, pledged as collateral
for a loan or security for the performance of an obligation or for any purpose
to any person other than the insurance company. If the Plan distributes an
annuity contract, the contract must be a Nontransferable Annuity.
1.37 "Normal Retirement Age" and "Normal Retirement Date" shall be as
specified in the Employer's Adoption Agreement Section 1.37. A Participant shall
become fully vested in his Account Balance upon his Normal Retirement Age, and
shall become eligible to receive a distribution of his Account Balance upon his
Normal Retirement Date.
1.38 "Participant" is an Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01 and shall have
acquired either a forfeitable or Nonforfeitable interest in the Trust Fund
pursuant to the provisions of the Plan.
1.39 "Plan" means the retirement plan established or continued by the
Employer in the form of this Agreement, including the Adoption Agreement under
which the Employer has elected to participate in this Volume Submitter Plan. The
Employer must designate the name of the Plan in the Plan Information section of
its Adoption Agreement. The Plan and the Trust created by each adopting Employer
is a separate Plan and a separate Trust, independent from the plan and the trust
of any other employer adopting this Volume Submitter Plan. All section
references within the Plan are Plan section references unless the context
clearly indicates otherwise.
1.40 "Plan Administrator" means the Named Fiduciary with authority to
control and manage the operation and administration of the Plan, as designated
in the Plan Information section of the Employer's Adoption Agreement. In
addition to its other duties, the Plan Administrator has full responsibility for
14
compliance with the reporting and disclosure requirements under ERISA as
respects this Agreement.
1.41 "Plan Year" means the twelve (12) consecutive month period
specified in the Employer's Adoption Agreement Section 1.41. Any short initial
or other Plan Year shall be designated in the Adoption Agreement.
1.42 "Qualified Matching Contributions" mean Matching Contributions
which are 100% Nonforfeitable at all times and which are subject to the
distribution restrictions described in Section 6.11. Matching Contributions are
not 100% Nonforfeitable at all times if the Employee has a 100% Nonforfeitable
interest because of his Years of Service taken into account under a vesting
schedule. Any Matching Contributions allocated to a Participant's Qualified
Matching Contributions Account under the Plan automatically satisfy the
definition of Qualified Matching Contributions.
1.43 "Qualified Nonelective Contributions" mean Nonelective
Contributions which are 100% Nonforfeitable at all times and which are subject
to the distribution restrictions described in Section 6.11. Nonelective
Contributions are not 100% Nonforfeitable at all times if the Employee has a
100% Nonforfeitable interest because of his Years of Service taken into account
under a vesting schedule. Any Nonelective Contributions allocated to a
Participant's Qualified Nonelective Contributions Account under the Plan
automatically satisfy the definition of Qualified Nonelective Contributions.
1.44 "Salary Reduction Contributions" mean the contributions made to
the Plan by the Employer subject to the election by a Participant to defer
receipt of all or any portion of such contribution by a reduction in his
Compensation, pursuant to the terms and provisions of Section 4.02.
1.45 "Self-Employed Individual/Owner-Employee." "Self-Employed
Individual" means an individual who has Earned Income (or who would have had
Earned Income but for the fact that the trade or business did not have net
earnings) for the Taxable Year from the trade or business for which the Plan is
established. "Owner-Employee" means a Self-Employed Individual who is the sole
proprietor in the case of a sole proprietorship. If the Employer is a
partnership, "Owner-Employee" means a Self-Employed Individual who is a partner
and who owns more than ten percent (10%) of either the capital or profits
interest of the partnership.
15
1.46 "Service" means any period of time the Employee is in the employ
of the Employer, including any period the Employee is on an unpaid leave of
absence authorized by the Employer under a uniform, nondiscriminatory policy
applicable to all Employees. "Separation from Service" means the Employee no
longer has an employment relationship with the Employer maintaining this Plan.
1.47 "Taxable Year" means the twelve (12) consecutive month period
adopted by the Employer for its tax purposes, as designated in the Employer's
Adoption Agreement Section 1.47. Any short initial Taxable Year shall be
designated in the Adoption Agreement. If, at any time, the term "Employer" shall
include more than one separate entity and all such separate entities shall not
have the same fiscal year, then such fiscal year of each separate entity shall
be the "Taxable Year" for each such separate entity.
1.48 "Trust" means the legal entity created under the Employer's Plan
by which the contributions to the Plan shall be received, held, invested and
disbursed to or for the benefit of Plan Participants or Beneficiaries.
1.49 "Trust Fund" means all property of every kind held or acquired by
the Employer's Plan, other than incidental benefit insurance contracts, together
with all income, profits or increments thereon.
1.50 "Trustee" means the person(s), corporation, association, or
combination of them, who as Trustee execute the Employer's Adoption Agreement,
or any successor in office who in writing accepts the position of Trustee. The
Employer must designate the Trustee in the Plan Information section of its
Adoption Agreement.
1.51 "Valuation Date" shall mean the date(s) specified in the
Employer's Adoption Agreement Section 1.51 as of which Plan allocations may be
made and Accounts valued, which date(s) shall be in addition to the Plan's
Adjustment Date.
1.52 "Year of Service" means any twelve consecutive month period
designated in the Employer's Adoption Agreement Section 1.52 during which the
Employee completes not less than the number of Hours of Service (not exceeding
1,000) specified in the Employer's Adoption Agreement. Furthermore, Years of
Service completed by any Employee with any corporation, partnership, or
proprietorship which is a member of a controlled group of corporations within
the meaning of Code section 1563(a), determined without regard to Code sections
1563(a)(4) and 1563(e)(3)(C), or is a member of an affiliated service group with
16
the Employer, or has adopted the Plan as a Participating Employer, in accordance
with Section 16.01, shall be recognized as Years of Service with any other
Employer.
17
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.01 ELIGIBILITY. Each Employee becomes a Participant in the Plan in
-----------
accordance with the participation and Entry Date options selected by the
Employer in its Adoption Agreement Sections 2.01 and 1.23, respectively,
provided such Employee is still employed by the Employer on his Plan Entry Date.
If this Plan is a restated Plan, each Employee who was a Participant in the Plan
on the day before the Restated Effective Date continues as a Participant in the
Plan, irrespective of whether he satisfies the participation conditions in the
restated Plan, unless otherwise provided in the Employer's Adoption Agreement.
2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an Employee's
--------------------------------
participation in the Plan under Adoption Agreement Section 2.01, the Plan takes
into account all of his Years of Service with the Employer, except as provided
in Section 2.03. With respect to eligibility to participate, the initial
eligibility computation period is the first twelve (12) consecutive month period
measured from the Employment Commencement Date. The Plan measures succeeding
eligibility computation periods in accordance with the option selected by the
Employer in its Adoption Agreement. If the Employer elects to measure subsequent
periods on a Plan Year basis, an Employee who receives credit for the required
number of Hours of Service during the initial eligibility computation period and
during the first applicable Plan Year will receive credit for two (2) Years of
Service under Article II. For purposes of eligibility to participate, if the
Employer elects a service condition under Adoption Agreement Section 2.01 based
on months, the Plan does not apply any Hour of Service requirement after the
completion of the first Hour of Service.
2.03 BREAK IN SERVICE - PARTICIPATION.
--------------------------------
(a) Two (2) Year Eligibility. If the Employer elects a two (2)
------------------------
Years of Service condition for eligibility purposes under Adoption
Agreement Section 2.01, the Plan treats an Employee who incurs a Break
in Service and who has never become a Participant as a new Employee on
the date he first performs an Hour of Service for the Employer after
the Break in Service.
(b) Suspension of Years of Service. The Employer must elect in
------------------------------
its Adoption Agreement Section 2.03 whether a Participant will incur a
suspension of Years of Service after incurring a Break in Service. If
this rule applies under the Employer's Plan, the Plan disregards a
18
Participant's Years of Service earned prior to a Break in Service until
the Participant completes another Year of Service, and the Plan
suspends the Participant's participation in the Plan. If the
Participant completes a Year of Service following his Break in Service,
the Plan restores that Participant's pre-Break Years of Service (and
the Participant resumes active participation in the Plan) retroactively
to the first day of the computation period in which the Participant
earns the first post-break Year of Service. The initial computation
period under this Section 2.03(b) is the twelve (12) consecutive month
period measured from the date the Participant first receives credit for
an Hour of Service following the Break in Service. The Plan measures
any subsequent periods, if necessary, in a manner consistent with the
computation period selected in Adoption Agreement Section 2.02. This
Section 2.03(b) does not affect a Participant's vesting credit under
Article V and, during a suspension period, the Participant's Account
continues to share fully in Trust Fund allocations under Section 10.08.
Furthermore, this Section 2.03(b) will not result in the restoration of
any Year of Service disregarded under the Break in Service rule of
Section 2.03(a).
2.04 MATERNITY OR PATERNITY LEAVE.
----------------------------
(a) Solely for purposes of determining whether an Employee has
incurred a Break in Service under any provision of this Plan, an
individual who is absent from work for maternity or paternity reasons
shall receive credit for the Hours of Service which would otherwise
have been credited to such individual but for such absence, or in any
case in which such hours cannot be determined, eight (8) Hours of
Service per day of such absence. The Plan Administrator will credit
only the number (not exceeding 501) of Hours of Service necessary to
prevent an Employee's Break in Service. The Plan Administrator credits
all Hours of Service described in this Section 2.04 to the computation
period in which the absence period begins or, if the Employee does not
need these Hours of Service to prevent a Break in Service in the
computation period in which his absence period begins, the Plan
Administrator credits these Hours of Service to the immediately
following computation period. For purposes of this Section 2.04, an
absence from work for maternity or paternity reasons means an absence:
(1) by reason of the pregnancy of the individual; (2) by reason of a
birth of a child of the individual; (3) by reason of the placement of a
19
child with the individual in connection with the adoption of such child
by such individual; or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement.
(b) No credit will be given for a maternity or paternity leave
of absence unless the Employee furnishes the Plan Administrator with
whatever timely information it may require to establish that the
absence from work is for one of the reasons described in this Section
2.04, as well as whatever timely information is necessary to establish
the number of days of the absence.
2.05 STATUS DURING LEAVE OF ABSENCE. If a Participant is on an
----------------------------------
authorized leave of absence, including but not limited to, any leave of absence
pursuant to the Family and Medical Leave Act of 1993, he shall continue to
remain a Participant during such leave of absence. During an authorized leave of
absence, however, no Employer contributions or Participant forfeitures, if
applicable, shall be allocated to the credit of the Participant's Account,
except upon the basis of such Compensation as the Participant may receive from
the Employer during the leave of absence. A Participant on a leave of absence
may receive credit for purposes of eligibility, vesting and allocation purposes
as provided by the Family and Medical Leave Act of 1993, as determined by the
Plan Administrator in its discretion. For purposes of the Plan, if a Participant
does not return to the employ of the Employer on or prior to the expiration of
the leave of absence, it shall be conclusively presumed that his employment was
terminated as of the date of the expiration of such leave of absence. If,
however, the death of such Participant occurs prior to the expiration of such
leave of absence, the death benefit provided in Section 6.05 shall be payable to
the Participant's designated Beneficiary.
2.06 PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose employment
--------------------------------
with the Employer terminates will re-enter the Plan as a Participant on the date
of his re-employment, subject to the Break in Service rule, if applicable, under
Section 2.03(b). An Employee who satisfies the Plan's eligibility conditions but
who terminates employment with the Employer prior to becoming a Participant will
become a Participant on the later of the Entry Date on which he would have
entered the Plan had he not terminated employment or the date of his
re-employment, subject to the Break in Service rule, if applicable, under
Section 2.03(b). Any Employee who terminates employment prior to satisfying the
20
Plan's eligibility conditions becomes a Participant in accordance with Adoption
Agreement Section 2.01.
2.07 CHANGE IN EMPLOYEE STATUS. If a Participant has not incurred a
-------------------------
Separation from Service but ceases to be eligible to participate in the Plan by
reason of employment within an employment classification excluded by the
Employer under Adoption Agreement Section 1.19 (an "Excluded Employee"), the
Plan Administrator must treat the Participant as an Excluded Employee during the
period such a Participant is subject to the Adoption Agreement exclusion. The
Plan Administrator determines a Participant's sharing in the allocation of
Employer contributions and Participant forfeitures, if applicable, by
disregarding his Compensation paid by the Employer for services rendered in his
capacity as an Excluded Employee. However, during such period of exclusion, the
Participant, without regard to employment classification, continues to receive
credit for vesting under Article V for each included Year of Service, and the
Participant's Account continues to share fully in Trust Fund allocations under
Section 10.08. Subject to the Break in Service rules of Section 2.03, if an
Excluded Employee who is not a Participant becomes eligible to participate in
the Plan by reason of a change in employment classification, he will participate
in the Plan immediately if he has satisfied the eligibility conditions of
Section 2.01 and would have been a Participant had he not been an Excluded
Employee during his period of Service. Furthermore, the Plan takes into account
all of the Participant's included Years of Service with the Employer as an
Excluded Employee for purposes of vesting credit under Article V.
2.08 INCLUSION OF INELIGIBLE EMPLOYEE. 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 Employer shall not be entitled to
recover the contribution made with respect to the ineligible person regardless
of whether or not a deduction is allowable with respect to such contribution. In
such event, the amount contributed with respect to the ineligible person shall
constitute a Forfeiture (except for Deferred Compensation which shall be
distributed to the ineligible person) for the Plan Year in which the discovery
is made.
2.09 ELECTION NOT TO PARTICIPATE. The Employer must specify in its
----------------------------
Adoption Agreement Section 2.09 whether an Employee eligible to participate, or
any present Participant, may elect not to participate in the Plan. For an
election to be effective for a particular Plan Year, the Employee or Participant
21
must file the election in writing with the Plan Administrator not later than the
Effective Date of the Plan, or the Adjustment Date of the Plan Year immediately
preceding the Plan Year for which such election is to be effective, or at such
other time or times as may be determined by the Plan Administrator in its
discretion. Any such election not to participate shall remain in effect for a
period not less than one (1) Plan Year. The Employer may not make a contribution
under the Plan for the Employee or for the Participant for the Plan Year for
which the election is effective, nor for any succeeding Plan Year, unless the
Employee or Participant re-elects to participate in the Plan. After an
Employee's or Participant's election not to participate has been effective for
at least the minimum period prescribed above, the Employee or Participant may
re-elect to participate in the Plan by filing such re-election in writing with
the Plan Administrator not later than the Adjustment Date of the Plan Year
immediately preceding the Plan Year for which such election is to be effective,
or at such other time or times as may be determined by the Plan Administrator in
its discretion. If the Employee or Participant does not re-elect to participate
in the prescribed time period, it will be deemed that such Employee or
Participant desires not to participate. Not more than one (1) re-election to
participate shall be permitted to be made by any Employee or Participant.
If an Employee is a Self-Employed Individual, the Employee's election
(except as permitted by Treasury regulations without creating a Code section
401(k) arrangement with respect to that Self-Employed Individual) must be
effective no later than the date the Employee first would become a Participant
in the Plan and the election must be irrevocable.
The Plan Administrator must furnish an Employee or a Participant any
form required for purposes of an election under this Section 2.09. A Participant
who elects not to participate may not receive a distribution of his Account
Balance attributable either to Employer or to Participant contributions, except
as provided under Article VI or under Article VII. However, for each Plan Year
for which a Participant's election not to participate is effective, the
Participant's Account, if any, continues to share in Trust Fund allocations
under Article X. Furthermore, the Employee or the Participant receives vesting
credit under Article V for each included Year of Service during the period the
election not to participate is effective.
2.10 SERVICE FOR PREDECESSOR EMPLOYER. If the Employer maintains the
--------------------------------
plan of a predecessor employer, the Plan treats service of the Employee with the
predecessor employer as service with the Employer. If the Employer does not
22
maintain the plan of a predecessor employer, the Plan does not credit service
with the predecessor employer, unless the Employer identifies the predecessor in
its Adoption Agreement Section 2.10 and specifies the purposes for which the
Plan will credit service with that predecessor employer.
2.11 SPECIAL RULES FOR OWNER-EMPLOYEES. The following special
------------------------------------
provisions and restrictions apply to Owner-Employees:
(a) If the Plan provides contributions or benefits for an
Owner-Employee or for a group of Owner-Employees who controls the trade
or business with respect to which this Plan is established, and the
Owner-Employee or group of Owner-Employees also control, as
Owner-Employees, one or more other trades or businesses, plans must
exist or be established with respect to all the controlled trades or
businesses so that when the plans are combined they form a single plan
which satisfies the requirements of Code sectionsection 401(a) and
401(d) with respect to the employees of the controlled trades or
businesses.
(b) The Plan excludes an Owner-Employee or group of
Owner-Employees if the Owner-Employee or group of Owner-Employees
controls any other trade or business, unless the employees of the other
controlled trade or business participate in a plan which satisfies the
requirements of Code sectionsection 401(a) and 401(d). The other
qualified plan must provide contributions and benefits which are not
less favorable than the contributions and benefits provided for the
Owner-Employee or group of Owner-Employees under this Plan, or if an
Owner-Employee is covered under another qualified plan as an
Owner-Employee, then the plan established with respect to the trade or
business he does control must provide contributions or benefits as
favorable as those provided under the most favorable plan of the trade
or business he does not control.
(c) For purposes of subparagraphs (a) and (b) of this Section
2.11, an Owner-Employee or group of Owner-Employees controls a trade or
business if the Owner-Employee or Owner-Employees together (1) own the
entire interest in an unincorporated trade or business; or (2) in the
case of a partnership, own more than fifty percent (50%) of either the
capital interest or the profits interest in the partnership. For
purposes of the preceding sentence, an Owner-Employee or group of
Owner-Employees shall be treated as owning any interest in a
partnership, which is owned, directly or indirectly, by a partnership
23
which such Owner-Employee or group of Owner-Employees, are considered
to control within the meaning of the preceding sentence.
24
ARTICLE III
PARTICIPANT CONTRIBUTIONS
3.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. The Employer must specify
---------------------------------------
in Adoption Agreement Section 3.01 whether Participant voluntary nondeductible
contributions shall be permitted under the Plan. Such voluntary nondeductible
Employee Contributions shall be made to the Plan on an after-tax basis and shall
be separately accounted for at all times. Any voluntary nondeductible Employee
Contributions made after December 31, 1986 are required to satisfy the
requirements of Code section 401(m), in accordance with Section 4.17 of the
Plan. Participant nondeductible contributions under the Plan may be paid by the
Participant to the Trustee, or may be deducted on an after-tax basis from the
Participant's paycheck. Upon the Participant's Normal Retirement Date, or such
other date when the Participant shall be entitled to receive benefits under the
Plan, the fair market value of the voluntary nondeductible Employee
Contributions shall be used to provide additional benefits to the Participant or
his beneficiary.
3.02 PARTICIPANT MANDATORY CONTRIBUTIONS. The Employer may elect in
-------------------------------------
Adoption Agreement Section 3.02 to require a Participant to make nondeductible
contributions in order to be eligible to receive a Matching Contribution. Any
required Participant nondeductible contributions eligible for Matching
Contributions are Mandatory Contributions. Mandatory Contributions under the
Plan shall be deducted on an after-tax basis from the Participant's paycheck.
The Plan Administrator will maintain a separate accounting, pursuant to Section
10.06 of the Plan, to reflect the Participant's Account Balance derived from his
Mandatory Contributions.
3.03 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS. Any voluntary
-----------------------------------------------
Participant contribution made in cash after December 31, 1981 attributable to
taxable years ending before January 1, 1987, shall be treated as a "Qualified
Voluntary Employee Contribution" within the meaning of Code section 219(e)(2) as
it existed prior to the enactment of the Tax Reform Act of 1986, as amended. A
qualified Plan may not accept Qualified Voluntary Employee Contributions
("QVECs") which are made for a Taxable Year beginning after December 31, 1987.
If the Employer's Plan includes QVECs made prior to January 1, 1988, the Plan
Administrator must maintain a separate accounting for the Participant's Account
Balance attributable to QVECs, including QVECs which are part of a rollover
contribution described in Section 3.04. The Plan Administrator will treat the
25
accumulated QVECs as part of the Participant's Account Balance for all purposes
of the Plan, except for purposes of determining the Top-Heavy Ratio under
Section 18.02. The Plan Administrator may not use QVECs to purchase life
insurance on the Participant's behalf.
3.04 ROLLOVER CONTRIBUTIONS.
----------------------
(a) The Employer must elect in its Adoption Agreement Section
3.04 if rollovers will be permitted to be made to the Plan. Provided
rollovers are permitted, any Employee, if elected by the Employer under
its Adoption Agreement, and/or any Participant who receives a lump sum
distribution as defined by Code section 402(e)(4)(A), or a qualified
total distribution as defined by Code section 402(a)(5)(E)(i), the
maximum amount of which constitutes the balance to the credit of the
Employee in the qualified plan reduced by nondeductible Employee
Contributions (other than accumulated deductible Employee Contributions
within the meaning of Code section 72(o)(5)), may roll over such
distribution into this Plan, in whole or in part, either directly from
such other qualified plan, or by the Employee individually, or through
the medium of a conduit individual retirement account or individual
retirement annuity, provided such distribution qualifies for tax-free
rollover treatment within the meaning of Code section 402 or 403, and
subject to the following requirements and limitations:
(1) Any rollover of a distribution from a prior
qualified plan into this Plan must occur within sixty (60)
days after the Employee receives the distribution from the
qualified plan.
(2) If a conduit individual retirement account or
individual retirement annuity is used, no amount in the
individual retirement account or individual retirement annuity
may be attributable to a source other than a qualified total
distribution or a lump sum distribution from a qualified plan.
(b) The Trustee will invest rollover contributions as part of
the Trust Fund, however, a Participant's rollover contribution Account
shall remain separately accounted for at all times. If this Plan
permits directed investments, as provided in the Employer's Adoption
Agreement Section 9.09, the Participant, from time to time, may direct
the Trustee in writing, in the form and manner prescribed by the Plan
Administrator, in its discretion, as to the investment of his rollover
26
Account in property, or property interest, of any kind, real, personal,
or mixed; provided however, the Participant may not direct the Trustee
to make loans to his Employer. The Trustee is not liable nor
responsible for any loss resulting to any Beneficiary, nor to any
Participant, by reason of any sale or investment made or other action
taken pursuant to and in accordance with the direction of the
Participant. In all other respects, the Trustee will hold, administer
and distribute a rollover contribution in the same manner as any
Employer contribution made to the Trust. A rollover contribution is not
an Annual Addition under Article IV.
(c) The Employer must provide in its Adoption Agreement
Section 3.04 whether an eligible Employee, prior to satisfying the
Plan's eligibility conditions, may make a rollover contribution to the
Trust to the same extent and in the same manner as a Participant. If an
Employee makes a rollover contribution to the Trust prior to satisfying
the Plan's eligibility conditions, the Plan Administrator and Trustee
must treat the Employee as a Participant for all purposes of the Plan
except the Employee is not a Participant for purposes of sharing in
Employer contributions or Participant forfeitures under the Plan until
he actually becomes a Participant in the Plan. If the Employee has a
Separation from Service prior to becoming a Participant, the Trustee
will distribute his rollover contribution Account to him as if it were
an Employer contribution Account.
3.05 TRUSTEE-TO-TRUSTEE TRANSFERS TO THE PLAN.
----------------------------------------
(a) The Employer shall specify in its Adoption Agreement
Section 3.05 if trustee-to-trustee transfers will be permitted to be
made to the Plan. If this Plan is not subject to the survivor annuity
rules described in Section 6.06, the Employer may further specify if
trustee-to-trustee transfers will be permitted from a Plan which is
subject to the survivor annuity rules.
(b) Provided transfers are permitted, if a Participant of the
Plan is or was previously a participant of another plan qualified under
Code section 401(a), including another qualified plan of the Employer,
the Trustee shall be authorized to accept the balance to the credit of
the Participant if transferred by the trustee of such other plan upon
the following conditions:
27
(1) the trustee of the other plan is authorized to
distribute the balance to the credit of the Participant in the
other plan;
(2) for record-keeping and accounting purposes, the
transferred account of the Participant shall be separately
accounted for; and
(3) the balance to the credit of the Participant
transferred to this Plan shall not in any way reduce any
obligations of the Employer under this Plan.
(c) The Plan Administrator may direct the Trustee to transfer
as a direct trustee-to-trustee transfer the balance to the credit of a
Participant to the trustee of another qualified plan, if the trustee of
the other plan is authorized to accept such a transfer.
(d) If this Plan is not otherwise subject to the survivor
annuity requirements of Article VI, any assets attributable to a
trustee-to-trustee transfer from a plan which is subject to the
survivor annuity requirements shall be separately accounted for at all
times. All of the provisions of the Plan, including the distribution
provisions of Article VI, relating to the survivor annuity requirements
of the Code shall, at all times, be applied to the segregated assets.
(e) If this Plan is subject to the survivor annuity
requirements of Article VI, any assets attributable to a
trustee-to-trustee transfer from a plan which is not subject to the
survivor annuity requirements shall be separately accounted for at all
times. At no time shall the survivor annuity requirements of the Code,
or the provisions of this Plan relating to such survivor annuity
requirements, be applied to the segregated assets.
3.06 NONFORFEITABILITY OF PARTICIPANT CONTRIBUTIONS. A Participant's
-----------------------------------------------
Account Balance is, at all times, one hundred percent (100%) Nonforfeitable to
the extent the value of his Account Balance is derived from his Participant
contributions described in this Article III.
3.07 PARTICIPANT CONTRIBUTIONS - ACCOUNT BALANCE. The Trustee must
----------------------------------------------
maintain a separate Account(s) in the name of each Participant to reflect the
Participant's Account Balance under the Plan derived from his Participant
contributions. A Participant's Account Balance derived from his Participant
28
contributions as of any applicable date is the balance of his separate
Participant contribution Account(s).
29
ARTICLE IV EMPLOYER
CONTRIBUTIONS AND FORFEITURES
Part 1 - Amount of Employer Contributions and Plan Allocations
--------------------------------------------------------------
4.01 EMPLOYER CONTRIBUTIONS. For each Plan Year, the Employer, from its
----------------------
records, determines the amount of any contributions to be made by it to the
Trust in accordance with the contribution options selected by the Employer in
its Adoption Agreement Sections 4.02 through 4.05. The Employer may not make a
contribution to the Trust for any Plan Year to the extent the contribution would
exceed the Participant's Maximum Permissible Amount, as defined in Section
4.31(i).
To make allocations under the Plan, the Plan Administrator must
establish a Deferral Contributions Account, a Qualified Matching Contributions
Account, a regular Matching Contributions Account, a Qualified Nonelective
Contributions Account, a Discretionary Nonelective Contributions Account for
each Participant, and any other accounts which the Plan Administrator may deem
necessary from time to time.
4.02 CODE SECTION 401(k) ARRANGEMENT. The Employer will elect in
---------------------------------
Section 4.02 of its Adoption Agreement the terms of the Code section 401(k)
arrangement, if any, under the Plan. The Code section 401(k) arrangement may be
a salary reduction arrangement or a cash or deferred arrangement. The Plan
Administrator will allocate to each Participant's Deferral Contributions Account
the amount of Deferral Contributions the Employer makes to the Trust on behalf
of the Participant.
(a) Salary Reduction Arrangement. If the Employer elects a
-----------------------------
salary reduction arrangement, any Employee eligible to participate in
the Plan may file a salary reduction agreement with the Plan
Administrator. The salary reduction agreement may not be effective
earlier than the following date which occurs last: (i) the Employee's
Plan Entry Date (or, in the case of a reemployed Employee, his
reparticipation date under Article II); (ii) the execution date of the
Employee's salary reduction agreement; (iii) the date the Employer
adopts the Code section 401(k) arrangement by executing the Adoption
Agreement; or (iv) the effective date of the Code section 401(k)
arrangement, as specified in the Employer's Adoption Agreement Section
1.17. Regarding clause (i), an Employee subject to the Break in Service
rule of Section 2.03(b) of the Plan may not enter into a salary
reduction agreement until the Employee has completed a sufficient
30
number of Hours of Service to receive credit for a Year of Service (as
defined in Section 2.02) following his reemployment commencement date.
A salary reduction agreement must specify the amount of Compensation
(as defined in Section 1.11) or percentage of Compensation the Employee
wishes to defer. The salary reduction agreement will apply only to
Compensation which becomes currently available to the Employee after
the effective date of the salary reduction agreement. The Employer will
apply a reduction election to all Compensation (and to increases in
such Compensation), including cash bonuses received within two and
one-half months following the end of the Plan Year, if so specified in
the Employer's Adoption Agreement Section 4.02. The Plan Administrator
may adopt uniform and nondiscriminatory rules and restrictions
applicable to the Employees' salary reduction agreements.
(b) If so specified in the Employer's Adoption Agreement
Section 4.02, any cash bonus attributable to services performed by the
Participant for the Employer during a given Plan Year and which are
received by the Participant on or before two and one-half months
following the end of the Plan Year shall be subject to the salary
reduction agreement of such Employee in effect for the Plan Year during
which the services are performed. Provided, however, the Employee may
specify in his salary reduction agreement to limit the election to
Compensation actually received during the Plan Year. A deferral
election may not be made with respect to cash bonuses which are
currently available on or before the date the Participant executed such
election. Notwithstanding the foregoing, cash bonuses attributable to
services performed by the Participant during a Plan Year but which are
to be paid to the Participant later than two and one-half months after
the close of such Plan Year will be subjected to whatever deferral
election is in effect at the time such cash bonus would have otherwise
been received.
(c) Cash or Deferred Arrangement. If the Employer elects a
----------------------------
cash or deferred arrangement, a Participant may elect to make a cash
election against his proportionate share of the Employer's Cash or
Deferred Contribution, in accordance with the Employer's election in
Adoption Agreement Section 4.02. A Participant's proportionate share of
the Employer's Cash or Deferred Contribution is the percentage of the
total Cash or Deferred Contribution which bears the same ratio that the
Participant's Compensation for the Plan Year bears to the total
31
Compensation of all Participants for the Plan Year. For purposes of
determining each Participant's proportionate share of the Cash or
Deferred Contribution, a Participant's Compensation is his Compensation
as determined under Section 1.11 of the Plan (as modified by Section
4.06 for allocation purposes), excluding any effect the proportionate
share may have on the Participant's Compensation for the Plan Year. The
Plan Administrator will determine the proportionate share prior to the
Employer's actual contribution to the Trust, to provide the
Participants the opportunity to file cash elections. That portion of
the Participant's allocable share not subject to a Cash or Deferred
election shall be the Employer's Nonelective Contribution and shall be
allocated to the Participant's account pursuant to Section 4.04. The
Employer will pay directly to the Participant the portion of his
proportionate share the Participant has elected to receive in cash.
(d) Election Not to Participate. A Participant's or
------------------------------
Employee's election not to participate, pursuant to Section 2.09,
includes his right to enter into a salary reduction agreement or to
share in the allocation of a Cash or Deferred Contribution, unless the
Participant or Employee limits the effect of the election to the
non-401(k) portions of the Plan.
4.03 MATCHING CONTRIBUTIONS.
----------------------
(a) The Employer may elect in Adoption Agreement Section 4.03
to provide Matching Contributions. The Employer must specify in its
Adoption Agreement whether the Plan Administrator will allocate
Matching Contributions to the Qualified Matching Contributions Account
or to the regular Matching Contributions Account of each Participant.
The Plan Administrator will make this allocation as of the last day of
each Plan Year unless, in Adoption Agreement Section 4.03, the Employer
elects more frequent allocation dates for Matching Contributions. The
Employer must specify in its Adoption Agreement Section 4.03 whether
Matching Contributions are fully vested or if they are subject to the
Plan's vesting schedule; provided, however, if such Matching
Contributions are Qualified Matching Contributions, such contributions
shall be fully vested and nonforfeitable at all times.
(b) To the extent the Employer makes Matching Contributions
under a fixed Matching Contribution formula, the Plan Administrator
will allocate the Matching Contribution to the Account of the
32
Participant on whose behalf the Employer makes that contribution. A
fixed Matching Contribution formula is a formula under which the
Employer contributes a certain percentage or dollar amount on behalf of
a Participant based on that Participant's Deferral Contributions or
Mandatory Contributions eligible for a match, as specified in Section
4.03 of the Employer's Adoption Agreement. The Employer may contribute
on a Participant's behalf under a specific Matching Contribution
formula only if the Participant satisfies the accrual requirements for
Matching Contributions specified in Section 4.03 of the Employer's
Adoption Agreement and only to the extent the Matching Contribution
does not exceed the Participant's annual additions limitation in Part 2
of Article IV.
(c) To the extent the Employer makes Matching Contributions
under a discretionary formula, the Plan Administrator will allocate the
discretionary Matching Contributions to the Account of each Participant
who satisfies the accrual requirements for Matching Contributions
specified in Section 4.06 of the Employer's Adoption Agreement. The
allocation of discretionary Matching Contributions to a Participant's
Account shall be in the same proportion that each Participant's
Eligible Contributions bear to the total Eligible Contributions of all
Participants. If the discretionary formula is a tiered formula, the
Plan Administrator will make this allocation separately with respect to
each tier of Eligible Contributions, allocating in such manner the
amount of the Matching Contributions made with respect to that tier.
"Eligible Contributions" are the Participant's Deferral Contributions
or Mandatory Contributions eligible for an allocation of Matching
Contributions, as specified in Section 4.03 of the Employer's Adoption
Agreement.
(d) If the Matching Contributions formula applies both to
Deferral Contributions and to Participant Mandatory Contributions, the
Matching Contributions apply first to Deferral Contributions.
Furthermore, the Matching Contribution formula does not apply to
Deferral Contributions that are excess deferrals under Section 4.10.
For this purpose: (a) excess deferrals relate first to Deferral
Contributions for the Plan Year not otherwise eligible for a Matching
Contribution; and (2) if the Plan Year is not a calendar year, the
excess deferrals for a Plan Year are the last Elective Deferrals made
for a calendar year.
33
4.04 DISCRETIONARY NONELECTIVE CONTRIBUTION.
--------------------------------------
(a) The Employer must specify in its Adoption Agreement
Section 4.04 whether Discretionary Nonelective Contributions shall be
made to the Plan. To the extent the Employer makes Discretionary
Nonelective Contributions, the Plan Administrator will allocate the
Discretionary Nonelective Contributions to the Account of each
Participant who satisfies the accrual requirements for Discretionary
Nonelective Contributions specified in Section 4.04 of the Employer's
Adoption Agreement. The Plan Administrator will determine the
allocation of Discretionary Nonelective Contributions on the basis of
the Plan Year in accordance with the Employer's elections in its
Adoption Agreement. The Plan Administrator will determine a
Participant's Compensation in accordance with the general definition of
Compensation under Section 1.11 of the Plan, as modified by the
Employer in Sections 1.11 and 4.06 of its Adoption Agreement.
(b) To the extent the Employer makes Nonelective Contributions
for the Plan Year which, at the time of contribution, it does not
designate as Qualified Nonelective Contributions, the Plan
Administrator will allocate those contributions in accordance with the
elections under Section 4.04 of the Employer's Adoption Agreement. For
purposes of the special nondiscrimination tests described in Sections
4.12 and 4.17, the Plan Administrator may treat Nonelective
Contributions allocated under this paragraph as Qualified Nonelective
Contributions, if the contributions otherwise satisfy the definition of
Qualified Nonelective Contributions.
4.05 QUALIFIED NONELECTIVE CONTRIBUTIONS. If the Employer, at the time
-----------------------------------
of contribution, designates a contribution to be a Qualified Nonelective
Contribution for the Plan Year, the Plan Administrator will allocate that
Qualified Nonelective Contribution to the Qualified Nonelective Contributions
Account of each Participant eligible for an allocation of that designated
contribution, as specified in Section 4.05 of the Employer's Adoption Agreement.
The Plan Administrator will make the allocation to each eligible Participant's
Account in the same ratio that the Participant's Compensation for the Plan Year
bears to the total Compensation of all eligible Participants for the Plan Year.
The Plan Administrator will determine a Participant's Compensation in accordance
34
with the general definition of Compensation under Section 1.11 of the Plan, as
modified by the Employer in Sections 1.11 and 4.06 of its Adoption Agreement.
4.06 ACCRUAL OF BENEFIT. The Plan Administrator will determine the
------------------
accrual of benefits (Employer contributions and Participant forfeitures) on the
basis of the Plan Year in accordance with the Employer's elections in its
Adoption Agreement.
(a) The Employer must specify in its Adoption Agreement
Section 4.06 the Compensation the Plan Administrator is to take into
account in allocating an Employer Contribution to a Participant's
Account for the Plan Year in which the Employee first becomes a
Participant. For all other Plan Years, the Plan Administrator will take
into account only the Compensation determined for the portion of the
Plan Year in which the Employee actually is a Participant.
Notwithstanding anything herein to the contrary, the Plan Administrator
must take into account the Employee's entire Compensation for a Plan
Year to determine whether the Plan satisfies the top-heavy minimum
allocation requirement of Section 18.04. The Employer, in an addendum
to its Adoption Agreement, numbered Section 4.06(a), may elect to
measure Compensation for the Plan Year for allocation purposes on the
basis of a specified period other than the Plan Year.
(b) Subject to the applicable minimum allocation requirements
of Section 18.04, and further subject to the minimum coverage
requirements of Code section 410, the Plan Administrator will not
allocate any portion of an Employer Contribution for a Plan Year to any
Participant's Account if the Participant does not complete the
applicable minimum Hours of Service requirement specified in the
corresponding sections of the Employer's Adoption Agreement.
(c) If the Employer's Adoption Agreement includes options for
other requirements affecting the Participant's receipt of an allocation
of an Employer Contribution under the Plan, the Plan Administrator will
apply this Section 4.06 in accordance with the Employer's Adoption
Agreement selections.
(d) The Employer may elect in its Adoption Agreement to
suspend the contribution requirements elected under Adoption Agreement
Sections 4.03, 4.04 and 4.05 if, for any Plan Year beginning after
December 31, 1989, the Plan fails to satisfy the participation test
under Code section 401(a)(26), or the coverage test under Code section
35
410(b). If this Section 4.06 applies for a Plan Year, the Plan
Administrator will suspend the contribution requirements for the
Includible Employees who are Participants, beginning first with the
Includible Employee(s) employed with the Employer on the last day of
the Plan Year, then the Includible Employee(s) who have the latest
Separation from Service, as defined in Section 1.46, during the Plan
Year, and continuing to suspend in descending order the contribution
requirements for each Includible Employee who incurred an earlier
Separation from Service, from the latest to the earliest Separation of
Service date, until the Plan satisfies both the participation and the
coverage tests for the Plan Year. For purposes of this Section 4.06(d),
"Includible" Employees are all Employees other than (1) those Employees
excluded from participating in the Plan for the entire Plan Year by
reason of the collective bargaining unit exclusion or the nonresident
alien exclusion under Adoption Agreement Section 1.19 or by reason of
the participation requirements of Sections 2.01 and 2.03; and (2) any
Employee who incurs a Separation from Service during the Plan Year and
fails to complete at least 501 Hours of Service for the Plan Year. If
two or more Includible Employees have a Separation from Service on the
same day, the Plan Administrator will suspend the contribution
requirements for all such Includible Employees, irrespective of whether
the Plan can satisfy the participation and the coverage tests by
accruing benefits for fewer than all such Includible Employees. If the
Plan suspends the contribution requirements for an Includible Employee,
that Employee will share in the allocation of Employer Contributions
and Participant forfeitures, if applicable, without regard to the
number of Hours of Service he has earned for the Plan Year and without
regard to whether he is employed by the Employer on the last day of the
Plan Year. The Employer may modify the operation of this Section
4.06(d) by electing appropriate modifications in Section 4.06 of its
Adoption Agreement.
4.07 RETURN OF EMPLOYER CONTRIBUTIONS.
--------------------------------
(a) The Employer contributes to this Plan on the condition
that its contribution is not due to a mistake of fact and that the
Internal Revenue Service will provide a favorable letter of
determination on the initial qualification of the Plan and will not
disallow the deduction for its contribution. The Trustee, upon written
request from the Employer, must return to the Employer the amount of
the Employer's contribution made by the Employer by mistake of fact or
36
the amount of the Employer's contribution disallowed as a deduction
under Code section 404, as well as all amounts contributed by the
Employer if the Plan is denied its initial contribution. The Trustee
will not return any portion of the Employer's contribution under the
provisions of this Section 4.07 more than one (1) year after:
(1) The Employer made the contribution by mistake of
fact; or
(2) The disallowance of the contribution as a
deduction, and then, only to the extent of the disallowance.
(b) The Trustee will not increase the amount of the Employer
contribution returnable under this Section 4.07 for any earnings
attributable to the contribution, but the Trustee will decrease the
Employer contribution returnable for any losses attributable to it. The
Trustee may require the Employer to furnish whatever evidence the
Trustee deems necessary to enable the Trustee to confirm the amount the
Employer has requested be returned is properly returnable under ERISA.
4.08 TIME OF PAYMENT OF CONTRIBUTION. The Employer must make Salary
-------------------------------
Reduction Contributions to the Trust within an administratively reasonable
period of time after withholding the corresponding Compensation from the
Participant. Furthermore, the Employer must make Salary Reduction Contributions,
Cash or Deferred Contributions, Employer Matching Contributions (including
Qualified Matching Contributions), Qualified Nonelective Contributions and
Discretionary Nonelective Contributions no later than the time prescribed by the
Code or by applicable Treasury regulations. Salary Reduction Contributions and
Cash or Deferred Contributions are Employer contributions for all purposes under
this Plan, except to the extent the Code or Treasury regulations prohibit the
use of these contributions to satisfy the qualification requirements of the
Code. Subject to the consent of the Trustee, the Employer may make its
contribution in property rather than in cash, provided that the contribution of
property is not a prohibited transaction under the Code or under ERISA.
4.09 FORFEITURE ALLOCATION. The amount of a Participant's Account
----------------------
Balance forfeited under the Plan is a Participant forfeiture. The Plan
Administrator will allocate Participant forfeitures in the manner(s) specified
37
by the Employer in its Adoption Agreement Section 4.09. The Employer shall
separately provide for the manner in which forfeited Matching Contributions,
including forfeited excess aggregate contributions pursuant to Section 4.21, and
forfeited Discretionary Nonelective Contributions shall be applied.
Notwithstanding anything herein to the contrary, if all Employer Contributions
under the Plan are fully vested and nonforfeitable at all times pursuant to the
Employer's Adoption Agreement elections, then any amounts which may otherwise be
forfeited under the Plan pursuant to Section 2.08 or 10.15 shall be used to
reduce the Discretionary Nonelective Contribution or Matching Contribution of
the Employer, in its discretion. The Plan Administrator will continue to hold
the undistributed, non-vested portion of a terminated Participant's Account
Balance in his Account solely for his benefit until a forfeiture occurs at the
time specified in Section 5.11, or if applicable, until the time specified in
Section 10.15.
Part 2 - Limitations on Allocations
-----------------------------------
4.10 ANNUAL ELECTIVE DEFERRAL LIMITATION.
-----------------------------------
(a) An Employee's Elective Deferrals for a calendar year
beginning after December 31, 1986, may not exceed the Code section
402(g) limitation. The Code section 402(g) limitation is the greater of
$7,000 or the adjusted amount determined by the Secretary of the
Treasury. If, pursuant to a salary reduction agreement or pursuant to a
cash or deferred election, the Employer determines the Employee's
Elective Deferrals to the Plan for a calendar year would exceed the
Code section 402(g) limitation, the Employer will suspend the
Employee's salary reduction agreement, if any, until the following
January 1 and pay in cash the portion of a cash or deferred election
which would result in the Employee's Elective Deferrals for the
calendar year exceeding the Code section 402(g) limitation. If the Plan
Administrator determines that an Employee's Elective Deferrals already
contributed to the Plan for a calendar year exceed the Code section
402(g) limitation, the Plan Administrator will distribute the amount in
excess of the Code section 402(g) limitation (the "excess deferral"),
as adjusted for allocable income, no later than April 15 of the
following calendar year. If the Plan Administrator distributes the
excess deferral by the appropriate April 15, it may make the
distribution irrespective of any other provision under this Plan or
under the Code. The Plan Administrator will reduce the amount of excess
deferrals for a calendar year distributable to the Employee by the
38
amount of excess contributions (as determined in Section 4.14), if any,
previously distributed to the Employee for the Plan Year beginning in
that calendar year.
(b) If an Employee participates in another plan under which he
makes Elective Deferrals pursuant to a Code section 401(k) arrangement,
Elective Deferrals under a Simplified Employee Pension, or Salary
Reduction Contributions to a tax-sheltered annuity, irrespective of
whether the Employer maintains the other plan, he may provide the Plan
Administrator a written claim for excess deferrals made for a calendar
year. The Employee must submit the claim no later than the March 1
following the close of the particular calendar year and the claim must
specify the amount of the Employee's Elective Deferrals under this Plan
which are excess deferrals. If the Plan Administrator receives a timely
claim, it will distribute the excess deferral (as adjusted for
allocable income) the Employee has assigned to this Plan, in accordance
with the distribution procedure described in the immediately preceding
paragraph.
4.11 ALLOCABLE INCOME ATTRIBUTABLE TO EXCESS DEFERRALS. For purposes of
-------------------------------------------------
making a distribution of excess deferrals pursuant to this Section 4.11,
allocable income means net income or net loss allocable to the excess deferrals
for the calendar year in which the Employee made the excess deferral. If so
elected in the Employer's Adoption Agreement Section 4.11, allocable income
shall include the "gap period" income measured from the beginning of the
calendar year following the calendar year of the excess deferral to the date of
the distribution. If the distribution of the excess deferral occurs during the
calendar year in which the Employee made the excess deferral, the Plan
Administrator will treat as a "gap period" the period from the first day of that
calendar year to the date of the distribution. Subject to an alternative method
of determining allocable income as specified in the Employer's Adoption
Agreement Section 4.11, the Plan Administrator will determine allocable income
in the same manner as described in Section 4.16 for excess contributions, except
the numerator of the allocation fraction will be the amount of the Employee's
excess deferrals and the denominator of the allocation fraction will be the
Employee's Account Balance attributable to his Elective Deferrals.
4.12 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST. For each Plan Year, the
-----------------------------------------
Plan Administrator must determine whether the Plan's Codesection 401(k)
arrangement satisfies either of the following ADP tests:
39
(a) The average ADP for those Participants who are Highly
Compensated Employees (the "Highly Compensated Group") does not exceed
1.25 times the average ADP of those Participants who are Nonhighly
Compensated Employees (the "Nonhighly Compensated Group"); or
(b) The average ADP for the Highly Compensated Group does not
exceed the average ADP for the Nonhighly Compensated Group by more than
two percentage points (or the lesser percentage permitted by the
multiple use limitation in Section 4.22) and the average ADP for the
Highly Compensated Group is not more than twice the average ADP for the
Nonhighly Compensated Group.
4.13 CALCULATION OF AVERAGE DEFERRAL PERCENTAGE.
------------------------------------------
(a) The average ADP for a group is the average (expressed as
percentage calculated to the nearest one-hundredth (1/100) of one
percent (1%)) of the separate ADPs calculated for each Eligible
Employee who is a member of that group. An Eligible Employee's ADP for
a Plan Year is the ratio (expressed as percentage calculated to the
nearest one-hundredth (1/100) of one percent (1%)) of the Eligible
Employee's Deferral Contributions for the Plan Year to the Employee's
Compensation for the Plan Year. For aggregated Family Members, as
defined in Section 1.25, treated as a single Highly Compensated
Employee, the ADP of the family unit is the greater of: (i) the ADP
determined by combining the Deferral Contributions and Compensation of
the Family Members who are Highly Compensated Employees without family
aggregation; or (ii) the ADP determined by combining the Deferral
Contributions and Compensation of all aggregated Family Members. A
Nonhighly Compensated Employee's ADP does not include Elective
Deferrals made to this Plan or to any other Plan maintained by the
Employer, to the extent such Elective Deferrals exceed the Code section
402(g) limitation described in Section 4.10.
(b) The Plan Administrator may determine (in a manner
consistent with Treasury regulations) the ADPs of the Eligible
Employees by taking into account Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, made to this Plan or to any
other qualified Plan maintained by the Employer. The Plan Administrator
may not include Qualified Nonelective Contributions in the ADP test
unless the allocation of Nonelective Contributions is nondiscriminatory
40
when the Plan Administrator takes into account all Nonelective
Contributions (including the Qualified Nonelective Contributions) and
also when the Plan Administrator takes into account only the
Nonelective Contributions not used in either the ADP test described in
this Section 4.12 or the ACP test described in Section 4.17. For Plan
Years beginning after December 31, 1989, the Plan Administrator may not
include in the ADP test any Qualified Nonelective Contributions or
Qualified Matching Contributions under another qualified plan unless
that plan has the same plan year as this Plan. The Plan Administrator
must maintain records to demonstrate compliance with the ADP test,
including the extent to which the Plan used Qualified Nonelective
Contributions or Qualified Matching Contributions to satisfy the test.
(c) To determine the ADP of any Highly Compensated Employee,
the Deferral Contributions taken into account must include any Elective
Deferrals made by the Highly Compensated Employee under any other Code
section 401(k) arrangement maintained by the Employer, unless the
Elective Deferrals are to an ESOP. If the plans containing the Code
section 401(k) arrangements have different plan years, the Plan
Administrator will determine the combined Deferral Contributions on the
basis of the plan years ending in the same calendar year.
4.14 AGGREGATION OF CERTAIN CODE SECTION 401(k) ARRANGEMENTS. If the
--------------------------------------------------------
Employer treats two plans as a unit for coverage or nondiscrimination purposes,
the Employer must combine the Code section 401(k) arrangements under such plans
to determine whether either plan satisfies the ADP test. This aggregation rule
applies to the ADP determination for all Eligible Employees, irrespective of
whether an Eligible Employee is a Highly Compensated Employee or a Nonhighly
Compensated Employee. The Plan Administrator also may elect to aggregate the
Code section 401(k) arrangements under plans which the Employer does not treat
as a unit for coverage or nondiscrimination purposes. For Plan Years beginning
after December 31, 1989, an aggregation of Code section 401(k) arrangements
under this paragraph does not apply to plans which have different plan years
and, for Plan Years beginning after December 31, 1988, the Plan Administrator
may not aggregate an ESOP (or the ESOP portion of a plan) with a non-ESOP plan
(or non-ESOP portion of a plan).
4.15 CHARACTERIZATION OF EXCESS CONTRIBUTIONS. If, pursuant to Section
----------------------------------------
4.13, the Plan Administrator has elected to include Qualified Matching
Contributions in the average ADP, the Plan Administrator will treat excess
41
contributions as attributable proportionately to Deferral Contributions and to
Qualified Matching Contributions allocated on the basis of those Deferral
Contributions. If the total amount of a Highly Compensated Employee's excess
contributions for the Plan Year exceeds his Deferral Contributions or Qualified
Matching Contributions for the Plan Year, the Plan Administrator will treat the
remaining portion of his excess contributions as attributable to Qualified
Nonelective Contributions. The Plan Administrator will reduce the amount of
excess contributions for a Plan Year distributable to a Highly Compensated
Employee by the amount of excess deferrals (as determined in Section 4.10), if
any, previously distributed to that Employee for the Employee's taxable year
ending in that Plan Year.
4.16 DISTRIBUTION OF EXCESS CONTRIBUTIONS.
------------------------------------
(a) If the Plan Administrator determines the Plan fails to
satisfy the ADP test for a Plan Year, it must distribute the excess
contributions, as adjusted for allocable income, during the next Plan
Year. However, the Employer will incur an excise tax equal to 10% of
the amount of excess contributions for a Plan Year not distributed to
the appropriate Highly Compensated Employees during the first 2 1/2
months of that next Plan Year. The excess contributions are the amount
of Deferral Contributions made by the Highly Compensated Employees
which causes the Plan to fail to satisfy the ADP test. The Plan
Administrator will distribute to each Highly Compensated Employee his
respective share of the excess contributions. The Plan Administrator
will determine the respective shares of excess contributions by
starting with the Highly Compensated Employee(s) who has the greatest
ADP, reducing his ADP to the next highest ADP, then, if necessary,
reducing the ADP of the Highly Compensated Employee(s) at the next
highest ADP level (including the ADP of the Highly Compensated
Employee(s) whose ADP the Plan Administrator already has reduced), and
continuing in this manner until the average ADP for the Highly
Compensated Group satisfies the ADP test. If the Highly Compensated
Employee is part of an aggregated family group, the Plan Administrator,
in accordance with the applicable Treasury regulations, will determine
each aggregated family member's allocable share of the excess
contributions assigned to the family unit.
(b) To determine the amount of the corrective distribution
required under this Section 4.16, the Plan Administrator must calculate
the allocable income for the Plan Year in which the excess
42
contributions arose. If so elected in the Employer's Adoption Agreement
Section 4.16, allocable income shall include the "gap period" income
measured from the beginning of the Plan Year following the Plan Year of
the excess contribution to the date of the distribution. "Allocable
income" means net income or net losection Subject to an alternative
method of calculating allocable income as specified in the Employer's
Adoption Agreement Section 4.16, the Plan Administrator will calculate
allocable income for the Plan Year by: (1) first determining the net
income or net loss for the Plan Year on the Highly Compensated
Employee's Account Balance attributable to Deferral Contributions; and
(2) then multiplying this net income or net loss by the following
fraction:
Amount of the Highly Compensated Employee's
excess contributions
-------------------------------------------
Account Balance attributable to
Deferral Contributions
(c) The Account Balance attributable to Deferral Contributions
includes the Account Balance attributable to Qualified Matching
Contributions and Qualified Nonelective Contributions taken into
account in the ADP test for the Plan Year or for any prior Plan Year.
For purposes of the denominator of the fraction, the Plan Administrator
will calculate the Account Balance attributable to Deferral
Contributions as of the last day of the Plan Year (without regard to
the net income or net loss for the Plan Year on that Account Balance).
(d) To calculate allocable income for the "gap period," the
Plan Administrator will perform the same calculation as described in
paragraph (b) above, except in clause (1) the Plan Administrator will
determine, as of the last day of the month preceding the date of
distribution, the net income or net loss for the "gap period" and in
clause (2) will calculate the Account Balance attributable to Deferral
Contributions as of the day before the distribution. If the Plan does
not perform a valuation on the last day of the month preceding the date
of distribution, the Plan Administrator, in lieu of the calculation
described in this paragraph, will calculate allocable income for each
month in the "gap period" as equal to 10% of the allocable income for
the Plan Year. Under this alternate calculation, the Plan Administrator
43
will disregard the month in which the distribution occurs, if the Plan
makes the distribution no later than the 15th day of that month.
4.17 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING CONTRIBUTIONS/
-----------------------------------------------------------------
PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. For Plan Years beginning after December
---------------------------------------
31, 1986, the Plan Administrator must determine whether the annual Employer
Matching Contributions (other than Qualified Matching Contributions used in the
ADP under Section 4.13), if any, and the Employee Contributions, if any, satisfy
either of the following average contribution percentage ("ACP") tests:
(i) The ACP for those Participants who are Highly Compensated Employees
(the "Highly Compensated Group") does not exceed 1.25 times the ACP of
those Participants who are Nonhighly Compensated Employees (the
"Nonhighly Compensated Group"); or
(ii) The ACP for the Highly Compensated Group does not exceed the ACP
for the Nonhighly Compensated Group by more than two (2) percentage
points (or the lesser percentage permitted by the multiple use
limitation in Section 4.22) and the ACP for the Highly Compensated
Group is not more than twice the ACP for the Nonhighly Compensated
Group.
4.18 CALCULATION OF AVERAGE CONTRIBUTION PERCENTAGE.
----------------------------------------------
(a) The ACP for a group is the average (expressed as a
percentage calculated to the nearest one-hundredth (1/100) of one
percent (1%)) of the separate contribution percentages calculated for
each Eligible Employee who is a member of that group. An Eligible
Employee's contribution percentage for a Plan Year is the ratio
(expressed as a percentage calculated to the nearest one-hundredth
(1/100) of one percent (1%)) of the Eligible Employee's aggregate
contributions for the Plan Year to the Employee's Compensation for the
Plan Year. 'Aggregate contributions' are Employer Matching
Contributions (other than Qualified Matching Contributions used in the
ADP test under Section 4.13) and Employee Contributions (as defined in
Section 1.20) made under the Plan on behalf of the Participant for a
Plan Year. Such aggregate contributions shall not include Matching
Contributions that are forfeited either to correct Excess Aggregate
Contributions or because the contributions to which they relate are
Excess Deferrals, excess contributions or excess aggregate
contributions. 'Total Compensation' means Compensation as defined by
Code section 414(s), without regard to the reductions in compensation
44
provided by Code sections 125, 402(a)(8), 402(h)(1)(B) and 403(b),
which for Plan Years beginning on or after December 31, 1988, shall not
exceed $200,000, adjusted pursuant to Code section 401(a)(17). For
aggregated Family Members, as defined in Section 1.25, treated as a
single Highly Compensated Employee, the contribution percentage of the
family unit is the greater of: (i) the contribution percentage
determined by combining the aggregate contributions and Compensation of
the Family Members who are Highly Compensated Employees without family
aggregation; or (ii) the contribution percentage determined by
combining the aggregate contributions and Compensation of all
aggregated Family Members.
(b) The Plan Administrator, in a manner consistent with
Treasury regulations, may determine the contribution percentages of the
Eligible Employees by taking into account Qualified Nonelective
Contributions (other than Qualified Nonelective Contributions used in
the ADP test under Section 4.13) or Elective Deferrals, or both, made
to this Plan or to any other qualified Plan maintained by the Employer.
The Plan Administrator may not include Qualified Nonelective
Contributions in the ACP test unless the allocation of Nonelective
Contributions is nondiscriminatory when the Plan Administrator takes
into account all Nonelective Contributions (including the Qualified
Nonelective Contributions) and also when the Plan Administrator takes
into account only the Nonelective Contributions not used in either the
ADP test described in Section 4.12 or the ACP test described in this
Section 4.17. The Plan Administrator may not include Elective Deferrals
in the ACP test, unless the Plan which includes the Elective Deferrals
satisfies the ADP test both with and without the Elective Deferrals
included in this ACP test. For Plan years beginning after December 31,
1989, the Plan Administrator may not include in the ACP test any
Qualified Nonelective Contributions or Elective Deferrals under another
qualified plan unless that plan has the same plan year as this Plan.
The Plan Administrator must maintain records to demonstrate compliance
with the ACP test, including the extent to which the Plan used
Qualified Nonelective Contributions or Elective Deferrals to satisfy
the test.
(c) To determine the contribution percentage of any Highly
Compensated Employee, the aggregate contributions taken into account
must include any Matching Contributions (other than Qualified Matching
Contributions used in the ADP test) and any Employee Contributions made
45
on his behalf to any other plan maintained by the Employer, unless the
other plan is an ESOP. If the plans have different plan years, the Plan
Administrator will determine the combined aggregate contributions on
the basis of the plan years ending in the same calendar year.
4.19 AGGREGATION OF CERTAIN PLANS. If the Employer treats two (2) plans
----------------------------
as a unit for coverage or nondiscrimination purposes, the Employer must combine
the plans to determine whether either plan satisfies the ACP test. This
aggregation rule applies to the contribution percentage determination for all
Eligible Employees, irrespective of whether an Eligible Employee is a Highly
Compensated Employee or a Nonhighly Compensated Employee. The Plan Administrator
also may elect to aggregate plans which the Employer does not treat as a unit
for coverage or nondiscrimination purposes. For Plan Years beginning after
December 31, 1989, an aggregation of plans under this Section 4.19 does not
apply to plans which have different plan years and, for Plan Years beginning
after December 31, 1988, the Plan Administrator may not aggregate an ESOP (or
the ESOP portion of plan) with a non-ESOP plan (or non-ESOP portion of a plan).
4.20 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
----------------------------------------------
(a) The Plan Administrator will determine excess aggregate
contributions after determining excess deferrals under Section 4.10 and
excess contributions under Section 4.15. If the Plan Administrator
determines the Plan fails to satisfy the ACP test for a Plan Year, it
must distribute the excess aggregate contributions, as adjusted for
allocable income, if applicable, pursuant to the Employer's election
under Adoption Agreement Section 4.20, during the next Plan Year.
However, the Employer will incur an excise tax equal to ten percent
(10%) of the amount of excess aggregate contributions for a Plan Year
not distributed to the appropriate Highly Compensated Employees during
the first two and one-half (2-1/2) months of that next Plan Year.
(b) The excess aggregate contributions are the amount of
aggregate contributions allocated on behalf of the Highly Compensated
Employees which causes the Plan to fail to satisfy the ACP test. The
Plan Administrator will distribute to each Highly Compensated Employee
his respective share of the excess aggregate contributions. The Plan
Administrator will determine the respective shares of excess aggregate
contributions by starting with the Highly Compensated Employee(s) who
46
has the greatest contribution percentage, reducing his contribution
percentage to the next highest contribution percentage, then, if
necessary, reducing the contribution percentage of the Highly
Compensated Employee(s) at the next highest contribution percentage
level (including the contribution percentage of the Highly Compensated
Employee(s) whose contribution percentage the Plan Administrator
already has reduced), and continuing in this manner until the ACP for
the Highly Compensated Group satisfies the ACP test. If the Highly
Compensated Employee is part of an aggregated family group, the Plan
Administrator, in accordance with the applicable Treasury regulations,
will determine each aggregated family member's allocable share of the
excess aggregate contributions assigned to the family unit.
(c) To determine the amount of the corrective distribution
required under this Section 4.20, the Plan Administrator must calculate
the allocable income for the Plan Year in which the excess aggregate
contributions arose. If so elected in the Employer's Adoption Agreement
Section 4.20, allocable income shall include the "gap period" income
measured from the beginning of the next Plan Year to the date of the
distribution. "Allocable income" means net income or net losection
Subject to an alternative method of calculating allocable income as
specified in the Employer's Adoption Agreement Section 4.20, the Plan
Administrator will determine allocable income in the same manner as
described in Section 4.16 for excess contributions, except the
numerator of the allocation fraction will be the Highly Compensated
Employee's excess aggregate contributions and the denominator of the
allocation fraction will be the Employee's Account Balance attributable
to aggregate contributions and, if applicable, to Qualified Nonelective
Contributions and Elective Deferrals included in the ACP test for the
Plan Year or for any prior Plan Year.
4.21 CHARACTERIZATION OF EXCESS AGGREGATE CONTRIBUTIONS. The Plan
------------------------------------------------------
Administrator will treat a Highly Compensated Employee's allocable share of
excess aggregate contributions in the following priority: (1) first as
attributable to his Employee Contributions which are voluntary contributions, if
any; (2) then as Matching Contributions allocable with respect to excess
contributions determined under the ADP test described in Section 4.12; (3) then
on a pro rata basis to Matching Contributions and to the Deferral Contributions
relating to those Matching Contributions which the Plan Administrator has
47
included in the ACP test; (4) then on a pro rata basis to Mandatory
Contributions, if any, and to the Matching Contributions allocated on the basis
of those Mandatory Contributions; and (5) last to Qualified Nonelective
Contributions used in the ACP test. To the extent the Highly Compensated
Employee's excess aggregate contributions are attributable to Matching
Contributions, and he is not 100% vested in his Account Balance attributable to
Matching Contributions, the Plan Administrator will distribute only the vested
portion and forfeit the nonvested portion. The vested portion of the Highly
Compensated Employee's excess aggregate contributions attributable to Employer
Matching Contributions is the total amount of such excess aggregate
contributions (as adjusted for allocable income) multiplied by his vested
percentage (determined as of the last day of the Plan Year for which the
Employer made the Matching Contribution). The Employer will specify in Adoption
Agreement Section 4.09 the manner in which the Plan will allocate forfeited
excess aggregate contributions.
4.22 MULTIPLE USE LIMITATION. For Plan Years beginning after December
-----------------------
31, 1988, if at least one Highly Compensated Employee is includible in the ADP
test under Section 4.12 and in the ACP test under Section 4.17, the sum of the
Highly Compensated Group's ADP and ACP may not exceed the multiple use
limitation.
The multiple use limitation is the greater of:
(a) the sum of:
(1) 125% of the greater of: (A) the ADP of the Nonhighly
Compensated Group under the Codesection 401(k)
arrangement; or (B) the ACP of the Nonhighly
Compensated Group for the Plan Year beginning with or
within the Plan year of the Codesection 401(k)
arrangement; and
(2) 2% plus the lesser of (1)(A) or (1)(B), but not more
than twice the lesser of (1)(A) or (1)(B); or
(b) the sum of:
(1) 125% of the lesser of: (A) the ADP of the Nonhighly
Compensated Group under the Codesection 401(k)
arrangement; or (B) the ACP of the Nonhighly
Compensated Group for the Plan Year beginning with or
within the Plan Year of the Codesection 401(k)
arrangement; and
48
(2) 2% plus the greater of (1)(A) or (1)(B), but not more
than twice the greater of (1)(A) or (1)(B).
The Plan Administrator will determine whether the Plan satisfies the
multiple use limitation after applying the ADP test under Section 4.12 and the
ACP test under Section 4.17 and after making any corrective distributions
required by those Sections. If, after applying this Section 4.22, the Plan
Administrator determines the Plan has failed to satisfy the multiple use
limitation, the Plan Administrator will correct the failure by treating the
excess amount as excess aggregate contributions under Section 4.21. This Section
4.22 does not apply unless, prior to application of the multiple use limitation,
the ADP and the ACP of the Highly Compensated Group each exceeds one hundred
twenty-five percent (125%) of the respective percentages for the Nonhighly
Compensated Group.
[NOTE: Sections 4.23 through 4.25 apply only to Participants in this Plan who do
not participate, and who have never participated, in another qualified plan or
in a welfare benefit fund (as defined in Code section 419(e)) maintained by the
Employer.]
4.23 LIMITATIONS ON ALLOCATIONS. The amount of Annual Additions which
--------------------------
may be credited under this Plan on a Participant's behalf for a Limitation Year
may not exceed the lesser of the Maximum Permissible Amount or any other
limitation contained in this Plan. If the amount the Employer otherwise would
contribute or allocate to the Participant's Account would cause the Annual
Addition for the Limitation Year to exceed the Maximum Permissible Amount, the
Employer will reduce the amount of its contribution or allocation so the Annual
Additions for the Limitation Year will equal the Maximum Permissible Amount. If
an allocation of Employer contributions would result in an Excess Amount (other
than an Excess Amount resulting from the circumstances described in Section
4.25) to the Participant's Account, the Plan Administrator will reallocate the
Excess Amount to the remaining Participants who are eligible for an allocation
of Employer contributions for the Plan Year in which the Limitation Year ends.
The Plan Administrator will make this reallocation on the basis of the
allocation method under the Plan as if the Participant whose Account otherwise
would receive the Excess Amount is not eligible for an allocation of Employer
contributions.
4.24 DETERMINATION OF MAXIMUM PERMISSIBLE AMOUNT.
-------------------------------------------
49
(a) Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Plan Administrator may
determine the Maximum Permissible Amount on the basis of the
Participant's estimated annual Compensation for such Limitation Year.
The Plan Administrator must make this determination on a reasonable and
uniform basis for all Participants similarly situated. The Plan
Administrator must reduce any Employer contributions (including any
allocation of forfeitures) based on estimated annual Compensation by
any Excess Amounts carried over from prior years.
(b) As soon as is administratively feasible after the end of
the Limitation Year, the Plan Administrator will determine the Maximum
Permissible Amount for such Limitation Year on the basis of the
Participant's actual Compensation for such Limitation Year.
4.25 ELIMINATION OF EXCESS AMOUNT. If, pursuant to Section 4.24, or
-----------------------------
because of the allocation of forfeitures, there is an Excess Amount with respect
to a Participant for a Limitation Year, the Plan Administrator will dispose of
such Excess Amount as follows:
(a) The Plan Administrator will return any voluntary Employee
Contributions to the Participant to the extent the return would reduce
the Excess Amount.
(b) If, after the application of subparagraph (a) above, an
Excess Amount still exists, and the Plan covers the Participant at the
end of the Limitation Year, then the Plan Administrator will use the
Excess Amount(s) to reduce future Employer contributions (including any
allocation of forfeitures) under the Plan for the next Limitation Year
and for each succeeding Limitation Year, as is necessary, for the
Participant.
(c) If, after the application of subparagraph (b) above, an
Excess Amount still exists, and the Plan does not cover the Participant
at the end of the Limitation Year, then the Plan Administrator will
hold the Excess Amount unallocated in a suspense account. The Plan
Administrator will apply the suspense account to reduce Employer
contributions (including allocation of forfeitures) for all remaining
Participants in the next Limitation Year, and in each succeeding
Limitation Year if necessary.
50
(d) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section 4.25, it will not participate
in the allocation of the Trust's investment gains and losses. If a
suspense account is in existence at any time during a particular
Limitation Year, all amounts in the suspense account must be allocated
and reallocated to Participants' Accounts before any Employer or
Participant contributions may be made to the Plan for that Limitation
Year.
(e) The Plan Administrator will not distribute any Excess
Amount(s) to Participants or to former Participants.
[NOTE: Sections 4.26 through 4.28 apply only to Participants who, in addition to
this Plan, participate in one or more plans (including Paired Plans), all of
which are qualified Master or Prototype defined contribution plans or welfare
benefit funds (as defined in Code section 419(e) maintained by the Employer
during the Limitation Year.]
4.26 LIMITATION ON ALLOCATIONS. The amount of Annual Additions which
-------------------------
the Plan Administrator may allocate under this Plan on a Participant's behalf
for a Limitation Year may not exceed the Maximum Permissible Amount, reduced by
the Annual Addition allocated to the Participant's Account for the same
Limitation Year under this Plan and such other defined contribution plan or
welfare benefit fund. If an allocation of Employer contributions would result in
an Excess Amount (other than an Excess Amount resulting from the circumstances
described in Section 4.25) to the Participant's Account, the Plan Administrator
will reallocate the Excess Amount to the remaining Participants who are eligible
for an allocation of Employer contributions for the Plan Year in which the
Limitation Year ends. The Plan Administrator will make this reallocation on the
basis of the allocation method under the Plan as if the Participant whose
Account otherwise would receive the Excess Amount is not eligible for an
allocation of Employer contributions.
4.27 DETERMINATION OF MAXIMUM PERMISSIBLE AMOUNT.
-------------------------------------------
(a) Prior to the determination of the Participant's actual
Compensation for the Limitation Year, the Plan Administrator may
determine the Maximum Permissible Amount on the basis of the
Participant's estimated annual Compensation for such Limitation Year.
The Plan Administrator will make this determination on a reasonable and
uniform basis for all Participants similarly situated. The Plan
51
Administrator must reduce any Employer contributions (including any
allocation of forfeitures) based on estimated annual Compensation by
any Excess Amounts carried over from prior years.
(b) As soon as is administratively feasible after the end of
the Limitation Year, the Plan Administrator will determine the Maximum
Permissible Amount on the basis of the Participant's actual
Compensation for such Limitation Year.
4.28 ELIMINATION OF EXCESS AMOUNT.
----------------------------
(a) If pursuant to Section 4.27, or because of the allocation
of forfeitures, a Participant's Annual Additions under this Plan and
all such other plans result in an Excess Amount for a Limitation Year,
such Excess Amount will be deemed to consist of the amounts last
allocated. The Plan Administrator will determine the amounts last
allocated by treating the Annual Additions attributable to a welfare
benefit fund or individual medical account as allocated first,
irrespective of the actual allocation date under the welfare benefit
fund or individual medical account.
(b) The Employer must specify in its Adoption Agreement
Section 4.28 the Excess Amount attributed to this Plan, if the Plan
Administrator allocates an Excess Amount to a Participant on an
allocation date of this Plan which coincides with an allocation date of
another plan.
(c) The Plan Administrator will dispose of any Excess Amounts
attributed to this Plan as provided in Section 4.25.
[NOTE: Section 4.29 applies only to Participants who, in addition to this Plan,
participate in one or more qualified plans which are qualified defined
contribution plans other than a Master or Prototype plan maintained by the
Employer during the Limitation Year.]
4.29 SPECIAL ALLOCATION LIMITATION. The Annual Addition which the Plan
-----------------------------
Administrator may allocate under this Plan for any Limitation Year on behalf of
any Participant is limited in accordance with the provisions of Sections 4.26
through 4.28, as though the other plan were a Master or Prototype plan, unless
the Employer provides other limitations in an addendum to the Adoption
Agreement, numbered Section 4.29.
4.30 DEFINED BENEFIT PLAN LIMITATION. If the Employer maintains a
---------------------------------
qualified defined benefit plan, or has ever maintained a qualified defined
52
benefit plan covering any Participant in the Plan, then the sum of the defined
benefit plan fraction and the defined contribution plan fraction, as defined in
Section 4.31 below, for any Participant for any Limitation Year must not exceed
1.0. The Employer must provide in Adoption Agreement Section 4.30 the manner in
which the Plan will satisfy this limitation. The Employer also must provide in
its Adoption Agreement Section 4.30 the manner in which the Plan will satisfy
the top-heavy requirements of Code section 416 after taking into account the
existence (or prior maintenance) of the defined benefit plan.
4.31 DEFINITIONS - ARTICLE IV. For purposes of Article IV, the
--------------------------
following terms means:
(a) "Annual Addition" - The sum of the following amounts
allocated on behalf of a Participant for a Limitation Year: (1)
Employer contributions; (2) forfeitures; and (3) Participant
contributions. Except to the extent provided in Treasury regulations,
Annual Additions include excess contributions described in Code section
401(k), Excess Aggregate Contributions described in Code section 401(m)
and excess deferrals described in Code section 402(g), irrespective of
whether the Plan distributes or forfeits such excess amounts. Annual
Additions also include Excess Amounts reapplied to reduce Employer
contributions under Section 4.25. Amounts allocated after March 31,
1984, to an individual medical account (as defined in Code section
415(1)(2)) included as part of a pension or annuity plan maintained by
the Employer are treated as Annual Additions. Furthermore, amounts
derived from contributions paid or accrued after December 31, 1985, for
Taxable Years ending after December 31, 1985, 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)) maintained by the
Employer are treated as Annual Additions to a defined contribution
plan. For purposes of this Section 4.31(a), any Excess Amount applied
under Section 4.25 or 4.28 in the Limitation Year to reduce Employer
contributions will be considered Annual Additions for such Limitation
Year.
(b) "Average contribution percentage" shall mean the average
of the aggregate contributions of the Eligible Employees in a group.
(c) "Eligible Employee" means, for purposes of the ADP test
described in Section 4.12, an Employee who is eligible to enter into a
53
salary reduction agreement for the Plan Year, irrespective of whether
he actually enters into such an agreement, and a Participant who is
eligible for an allocation of the Employer's Cash or Deferred
Contribution for the Plan Year. For purposes of the ACP test described
in Section 4.17, an "Eligible Employee" means a Participant who is
eligible to receive an allocation of Matching Contributions (or would
be eligible if he made the type of contributions necessary to receive
an allocation of Matching Contributions) and a Participant who is
eligible to make nondeductible contributions, irrespective of whether
he actually makes nondeductible contributions. An Employee continues to
be an Eligible Employee during a period the Plan suspends the
Employee's right to make Elective Deferrals or nondeductible
contributions following a hardship distribution.
(d) "Employer" - The Employer that adopts this Plan and any
Affiliated Employers. Solely for purposes of applying the limitations
on allocations in this Article IV, the Plan Administrator will
determine Affiliated Employers described in Section 16.01 by modifying
Code sectionsection 414(b) and (c) in accordance with Code section
415(h).
(e) "Excess Amount" - The excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
(f) "Defined Contribution Dollar Limitation" - $30,000 or, if
greater, one-fourth (1/4) of the defined benefit dollar limitation set
forth in Code section 415(b)(1) as in effect for the Limitation Year.
If there is a short Limitation Year because of a change in Limitation
Years, the Plan Administrator will multiply the Defined Contribution
Dollar Limitation by the following fraction:
Number of months in the short Limitation Year
-------------------------------------------------
12
(g) "Highly Compensated Employee" means an Eligible Employee
who satisfies the definition in Section 1.25 of the Plan. Family
members aggregated as a single Employee under Section 1.25 constitute a
single Highly Compensated Employee, whether a particular family member
is a Highly Compensated Employee or a Nonhighly Compensated Employee
without the application of family aggregation.
54
(h) "Master or Prototype Plan" - A plan the form of which is
the subject to a favorable notification letter or a favorable opinion
letter from the Internal Revenue Service.
(i) "Maximum Permissible Amount" - The lesser of (1) the
defined contribution dollar limitation, or (2) twenty-five percent
(25%) of the Participant's Compensation for the Limitation Year. The
Compensation limitation referred to in (2) shall not apply to any
contribution for medical benefits (within the meaning of Code section
401(h) or 419A(f)(2)) which is otherwise treated as an Annual Addition
under Code section 415(l)(1) or 419A(d)(2).
(j) "Nonhighly Compensated Employee" means an Eligible
Employee who is not a Highly Compensated Employee and who is not a
family member treated as a Highly Compensated Employee.
(k) "Defined contribution plan" - A retirement plan which
provides for an individual account for each Participant and for
benefits based solely on the amount contributed to the Participant's
Account, and any income, expenses, gains or losses, and any forfeitures
of accounts of other Participants which the Plan may allocate to such
Participant's Account. The Plan Administrator must treat all defined
contribution plans (whether or not terminated) maintained by the
Employer as a single plan. Solely for purposes of the limitations on
allocations in this Article IV, the Plan Administrator will treat
Participant contributions made to a defined benefit plan maintained by
the Employer as a separate defined contribution plan. The Plan
Administrator also will treat as a defined contribution plan an
individual medical account (as defined in Code section 415(l)(2))
included as part of a defined benefit plan maintained by the Employer
and, for Taxable Years ending after December 31, 1985, a welfare
benefit fund under Code section 419(e) maintained by the Employer to
the extent there are post-retirement medical benefits allocated to the
separate account of a key employee (as defined in Code section
419A(d)(3)).
(l) "Defined benefit plan" - A retirement plan which does not
provide for individual accounts for Employer contributions. The Plan
Administrator must treat all defined benefit plans (whether or not
terminated) maintained by the Employer as a single plan.
55
[NOTE: The definitions in subparagraphs (f), (g) and (h) apply only if the
limitation described in Section 4.30 applies to the Employer's Plan.]
(m) "Defined benefit plan fraction" - A fraction, the
numerator of which is the sum of projected annual benefits of the
Participant under the defined benefit plan(s) maintained by the
Employer (whether or not terminated), and the denominator of which is
the lesser of one hundred twenty-five percent (125%) of the dollar
limitation determined under Code sectionsection 415(b) and (d) for the
Limitation Year, or one hundred forty percent (140%) of the
Participant's average Compensation for his high three (3) consecutive
Years of Service, including any adjustments under Code section 415(b).
To determine the denominator of this fraction, the Plan
Administrator will make any adjustment required under Code section
415(b) and will determine a Year of Service, unless otherwise provided
in an addendum to the Employer's Adoption Agreement, numbered Section
4.30, as a Plan Year in which the Employee completed at least 1,000
Hours of Service. The "projected annual benefit" is the annual
retirement benefit (adjusted to an actuarially equivalent straight life
annuity if the plan expresses such benefit in a form other than a
straight life annuity or qualified joint and survivor annuity) of the
Participant under the terms of the defined benefit plan on the
assumptions he continues employment until his normal retirement age (or
current age, if later) as stated in the defined benefit plan, his
compensation continues at the same rate as in effect in the Limitation
Year under consideration until the date of his normal retirement age
and all other relevant factors used to determine benefits under the
defined benefit plan remain constant as of the current Limitation Year
for all future Limitation Years.
If the Participant accrued benefits in one or more defined
benefit plans maintained by the Employer which were in existence on May
6, 1986, the dollar limitation used in the denominator of this fraction
will not be less than the Participant's current Account Balance. A
Participant's current Account Balance is the sum of the annual benefits
under such defined benefit plans which the Participant had accrued as
of the end of the 1986 Limitation Year (the last Limitation Year
beginning before January 1, 1987), determined without regard to any
change in the terms or conditions of the Plan made after May 5, 1986,
56
and without regard to any cost of living adjustment occurring after May
5, 1986. This current Account Balance rule applies only if the defined
benefit plans individually and in the aggregate satisfied the
requirements of Code section 415 as in effect at the end of the 1986
Limitation Year.
(n) "Defined contribution plan fraction" - A fraction, the
numerator of which is the sum, as of the close of the Limitation Year,
of the Annual Additions to the Participant's Account under the defined
contribution plan(s) maintained by the Employer (whether or not
terminated) for the current and all prior Limitation Years (including
the annual additions attributable to the Participant's nondeductible
Employee Contributions to all defined benefit plans, whether or not
terminated, maintained by the Employer, and the annual additions
attributable to all welfare benefit funds, as defined in Code section
419(e), and individual medical accounts, as defined in Code section
415(l)(2), maintained by the Employer), and the denominator of which is
the sum of the lesser of the following amounts determined for the
Limitation Year and for each prior Year of Service with the Employer:
one hundred twenty-five percent (125%) of the dollar limitation in
effect under Code sectionsection 415(b) and (d) in effect under Code
section 415(c)(1)(A) for the Limitation Year (determined without regard
to the special dollar limitations for employee stock ownership plans),
or thirty-five percent (35%) of the Participant's Compensation for the
Limitation Year.
For purposes of determining the defined contribution plan
fraction, the Plan Administrator will not recompute Annual Additions in
Limitation Years beginning prior to January 1, 1987, to treat all
Participant contributions as Annual Additions. If the Plan satisfied
Code section 415 for Limitation Years beginning prior to January 1,
1987, the Plan Administrator will redetermine the defined contribution
plan fraction and the defined benefit plan fraction as of the end of
the 1986 Limitation Year, in accordance with this Section 4.31. If the
sum of the redetermined fractions exceeds 1.0, the Plan Administrator
will subtract permanently from the numerator of the defined
contribution plan fraction, an amount equal to the product of (1) the
excess of the sum of the fractions over 1.0, times (2) the denominator
of the defined contribution plan fraction. In making the adjustment,
the Plan Administrator must disregard any accrued benefit under the
defined benefit plan which is in excess of the current Account Balance.
This Plan continues any transitional rules applicable to the
57
determination of the defined contribution plan fraction under the
Employer's Plan as of the end of the 1986 Limitation Year.
(o) "One hundred percent (100%) limitation" - If the one
hundred percent (100%) limitation applies, the Plan Administrator must
determine the denominator of the defined benefit plan fraction and the
denominator of the defined contribution plan fraction by substituting
one hundred percent (100%) for one hundred twenty-five percent (125%).
The one hundred percent (100%) limitation applies only if: (1) the
Plan's Top-Heavy Ratio exceeds ninety percent (90%); or (2) the Plans's
Top-Heavy Ratio is greater than sixty percent (60%), and the Employer
does not elect in its Adoption Agreement Section 4.30 to provide extra
minimum benefits which satisfy Code section 416(h)(2).
58
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT. Notwithstanding the vesting schedule selected
-----------------
in the Employer's Adoption Agreement Section 5.05, a Participant's Account
Balance derived from Employer contributions is one hundred percent (100%)
Nonforfeitable upon and after attaining the Normal Retirement Age specified in
the Employer's Adoption Agreement Section 1.37 (if employed by the Employer on
or after that date). A Participant may terminate his employment with the
Employer and retire for the purposes hereof upon his Normal Retirement Date, as
specified in the Employer's Adoption Agreement Section 1.37, and all amounts
credited to such Participant's Account shall be paid to him as hereinafter set
forth in Section 6.06, subject to the provisions of Section 6.16 If a
Participant continues in the employment of the Employer after his Normal
Retirement Date, he shall continue to be treated in all respects as a
Participant until his actual retirement.
5.02 EARLY RETIREMENT. If the Employer elects to provide for early
----------------
retirement under the Plan, it must specify Early Retirement Date and Early
Retirement Age in its Adoption Agreement Section 1.15. A Participant's Account
Balance derived from Employer contributions is one hundred percent (100%)
Nonforfeitable upon his Early Retirement Date (if employed by the Employer on or
after that date). A Participant may terminate his employment with the Employer
and retire for the purposes hereof upon his Early Retirement Date by making
written application to the Employer at least thirty (30) days prior to the date
as of which he wishes to elect Early Retirement.
5.03 DISABILITY. The Employer may elect in its Adoption Agreement
----------
Section 5.03 to provide that a Participant's Account Balance derived from
Employer contributions will be one hundred percent (100%) Nonforfeitable if the
Participant's Separation from Service is a result of his Disability.
5.04 DEATH. The Employer may elect in its Adoption Agreement Section
-----
5.04 to provide that a Participant's Account Balance derived from Employer
contributions will be one hundred percent (100%) Nonforfeitable upon the
Participant's death.
5.05 VESTING SCHEDULE.
----------------
(a) Except as otherwise provided in Sections 5.01 through
5.04, for each Year of Service, a Participant's Nonforfeitable
percentage of his Account Balance derived from Employer contributions
59
equals the percentage in the vesting schedule completed by the Employer
in its Adoption Agreement Section 5.05.
(b) If the Trustee makes a distribution (other than
distribution of the Participant's entire Nonforfeitable Account
Balance, as described in Section 5.07) to a partially-vested
Participant, and the Participant has not incurred a Forfeiture Break in
Service, as defined in Section 5.06(a), at the relevant time, the Plan
Administrator will establish a separate Account for the Participant's
Account Balance. At any relevant time following the distribution, the
Plan Administrator will determine the Participant's Nonforfeitable
Account Balance derived from Employer contributions in accordance with
the following formula: P(AB + (R x D)) - (R x D).
To apply this formula, "P" is the Participant's current
vesting percentage at the relevant time, "AB" is the Participant's
Employer-derived Account Balance at the relevant time, "R" is the ratio
of "AB" to the Participant's Employer-derived Account Balance
immediately following the earlier distribution and "D" is the amount of
the earlier distribution. If, under a restated Plan, the Plan has made
distribution to a partially-vested Participant prior to its Restated
Effective Date and is unable to apply the provisions of Section 5.08 to
that prior distribution, this special vesting formula also applies to
that Participant's remaining Account. The Employer, in an addendum to
its Adoption Agreement, numbered Section 5.05, may elect to modify this
formula to read as follows: P(AB + D) - D.
5.06 INCLUDED YEARS OF SERVICE - VESTING. For purposes of determining
-----------------------------------
"Years of Service" with respect to vesting, the Plan takes into account all
Years of Service an Employee completes with the Employer except:
(a) For the sole purpose of determining a Participant's
Nonforfeitable percentage of his Account Balance derived from Employer
contributions which accrued for his benefit prior to a Forfeiture Break
in Service, the Plan disregards any Year of Service after the
Participant first incurs a Forfeiture Break of Service. The Participant
incurs a "Forfeiture Break in Service" when he incurs five (5)
consecutive Breaks in Service.
(b) The Plan disregards any Year of Service excluded under the
Employer's Adoption Agreement Section 5.06.
60
If the Employer experienced a change in Plan Years resulting in a short
Plan Year, as indicated in Adoption Agreement Section 1.41, each Participant who
completes a Year of Service for the twelve (12) month period beginning with the
first day of the short Plan Year and a Year of Service for the twelve (12) month
period beginning on the first day of the new Plan Year, shall be credited with
two (2) Years of Service for vesting purposes under the Plan.
5.07 DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS. If, pursuant to
------------------------------------------------
Article VI, a partially-vested Participant receives a distribution of the entire
amount of his Nonforfeitable Account Balance before he incurs a Forfeiture Break
in Service (as defined in Section 5.06(a)) (a "cash-out" distribution), the
distribution will result in an immediate forfeiture of the nonvested portion of
the Participant's Account Balance derived from Employer contributions. See
Section 5.11 for the provisions with respect to when a forfeiture occurs. A
partially-vested Participant is a Participant whose Nonforfeitable Percentage
determined under Section 5.05 is less than one hundred percent (100%).
5.08 RESTORATION OF FORFEITED ACCOUNT BALANCE.
----------------------------------------
(a) A partially-vested Participant who is re-employed by the
Employer after receiving a distribution of the entire amount of the
Nonforfeitable percentage of his Account Balance may repay to the
Trustee the amount of the distribution attributable to Employer
contributions, unless the Participant no longer has a right to
restoration by reason of the conditions of this Section 5.08. If a
partially-vested Participant makes the distribution repayment, the Plan
Administrator, subject to the conditions of this Section 5.08, must
restore his Account Balance attributable to Employer contributions to
the same dollar amount as the dollar amount of his Account Balance on
the Adjustment Date, or other Valuation Date, immediately preceding the
date of the cash-out distribution, unadjusted for any gains or losses
occurring subsequent to that Adjustment Date, or other Valuation Date.
Restoration of the Participant's Account Balance includes restoration
of all Code section 411(d)(6) protected benefits with respect to that
restored Account Balance, in accordance with the applicable Treasury
regulations. The Plan Administrator will not restore a re-employed
Participant's Account Balance under this Section 5.08 if:
61
(1) Five (5) years have elapsed since the
Participant's first re-employment date with the Employer
following the cash-out distribution; or
(2) The Participant incurred a Forfeiture Break in
Service (as defined in Section 5.06(a)).
(b) If neither of the two conditions preventing restoration of
the Participant's Account Balance in subparagraphs (1) and (2) above
applies, the Plan Administrator will restore the Participant's Account
Balance as of the Adjustment Date coinciding with or immediately
following the repayment. To restore the Participant's Account Balance,
the Plan Administrator, to the extent necessary, will allocate to the
Participant's Account:
(1) First, the amount, if any, of Participant
forfeitures the Plan Administrator would otherwise allocate
under Section 4.09;
(2) Second, the amount, if any, of the Trust Fund net
income or gain for the Plan Year; and
(3) Third, the Employer contribution for the Plan
Year to the extent made under a discretionary formula.
In an addendum to its Adoption Agreement, numbered Section
5.08, the Employer may eliminate as a means of restoration any of the
amounts described in clauses (1), (2) and (3) or may change the order
of priority of these amounts. To the extent the amounts described in
clauses (1), (2) and (3) are insufficient to enable the Plan
Administrator to make the required restoration, the Employer must
contribute, without regard to any requirement or condition of Section
4.01, the additional amount necessary to enable the Plan Administrator
to make the required restoration. If, for a particular Plan Year, the
Plan Administrator must restore the Account Balance of more than one
re-employed Participant, then the Plan Administrator will make the
restoration allocations to each such Participant's Account in the same
proportion that a Participant's restored amount for the Plan Year bears
to the restored amount for the Plan Year of all re-employed
Participants. The Plan Administrator will not take into account any
allocation under this Section 5.08 in applying the limitation on
allocations provisions in Article IV.
62
5.09 ZERO PERCENT (0%) VESTED PARTICIPANT. The Employer must specify in
------------------------------------
its Adoption Agreement Section 5.09 whether the deemed cash-out rule applies to
a zero percent (0%) vested Participant. A zero percent (0%) vested Participant
is a Participant whose Account Balance derived from Employer contributions is
entirely forfeitable at the time of his Separation from Service. A Participant's
Account Balance shall not include accumulated deductible Employee Contributions
within the meaning of Code section 72(o)(5)(B) for Plan Years beginning prior to
January 1, 1989. If the Participant's Account is not entitled to an allocation
of Employer contributions for the Plan Year in which he has a Separation from
Service, the Plan Administrator will apply the deemed cash-out rule as if the
zero percent (0%) vested Participant received a cash-out distribution on the
date of the Participant's Separation from Service. If the Participant's Account
is entitled to an allocation of Employer contributions or Participant
forfeitures for the Plan Year in which he has a Separation from Service, the
Plan Administrator will apply the deemed cash-out rule as if the zero percent
(0%) vested Participant received a cash-out distribution on the first day of the
first Plan Year beginning after his Separation from Service. For purposes of
applying the restoration provisions of this Section 5.09, the Plan Administrator
will treat the zero percent (0%) vested Participant as repaying his cash-out
"distribution" on the first date of his re-employment with the Employer. If the
deemed cash-out rule does not apply to the Employer's Plan, a zero percent (0%)
vested Participant will not incur a forfeiture until he incurs a Forfeiture
Break in Service.
5.10 SEGREGATED ACCOUNT FOR REPAID AMOUNT. Until the Plan Administrator
------------------------------------
restores the Participant's Account Balance, as described in Sections 5.08 and
5.09, the Trustee will invest the cash-out amount the Participant has repaid in
a segregated Account maintained solely for that Participant. The Trustee must
invest the amount in the Participant's segregated Account in Federally insured
interest bearing savings account(s) or time deposit(s) (or a combination of
both), or in other fixed income investments. Until commingled with the balance
of the Trust Fund on the date the Plan Administrator restores the Participant's
Account Balance, the Participant's segregated Account remains a part of the
Trust, but it alone shares in any income it earns and it alone bears any expense
or loss it incurs. Unless the repayment qualifies as a rollover contribution,
the Plan Administrator will direct the Trustee to repay to the Participant as
soon as is administratively practicable the full amount of the Participant's
segregated Account if the Plan Administrator determines either of the conditions
63
of Section 5.08 prevents restoration as of the applicable Adjustment Date,
notwithstanding the Participant's repayment.
5.11 FORFEITURE OCCURS. A Participant's forfeiture, if any, of his
-----------------
Account Balance derived from Employer contributions occurs under the Plan on the
earlier of:
(a) The last day of the vesting computation period in which
the Participant first incurs a Forfeiture Break in Service; or
(b) The distribution of the entire vested portion of the
Participant's Account.
The Plan Administrator determines the percentage of a Participant's
Account Balance forfeiture, if any, under this Section 5.11 solely by reference
to the vesting schedule selected in the Employer's Adoption Agreement Section
5.05. A Participant does not forfeit any portion of his Account Balance for any
other reason or cause except as expressly provided by this Section 5.11 or as
provided under Section 10.15.
64
ARTICLE VI
TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCOUNT BALANCE. The Plan Administrator shall
----------------------------------
direct the Trustee to commence distribution of a Participant's Nonforfeitable
Account Balance in accordance with the provisions of this Article VI. The
Participant's spouse must also consent in writing to any distribution for which
this Article VI requires spousal consent. A distribution date under this Article
VI, unless otherwise specified within the Plan, is the date or dates the
Employer specifies in the Adoption Agreement with respect to the event giving
rise to the Participant's Separation from Service, or as soon as
administratively practicable following that distribution date. For purposes of
the consent requirements under this Article VI, if the amount of the
Participant's Nonforfeitable Account Balance, at the time of any distribution,
exceeds $3,500, the Plan Administrator must treat that amount as exceeding
$3,500 for purposes of all subsequent Plan distributions to the Participant.
6.02 SEPARATION FROM SERVICE FOR REASONS OTHER THAN EARLY OR NORMAL
-----------------------------------------------------------------
RETIREMENT, DISABILITY OR DEATH.
-------------------------------
(a) If the Participant's Separation from Service is for any
reason other than retirement, Disability or death, and his
Nonforfeitable Account Balance does not exceed $3,500, nor has ever
exceeded $3,500, the Plan Administrator will direct the Trustee to
distribute the Participant's Nonforfeitable Account Balance in a lump
sum on the distribution date the Employer specifies in its Adoption
Agreement Section 6.02, but in no event later than the sixtieth (60th)
day following the close of the Plan Year in which the Participant
attains Normal Retirement Age. No consent is required for a
distribution not exceeding $3,500.
(b) If the Participant's Separation from Service is for any
reason other than retirement, Disability or death, and his
Nonforfeitable Account Balance exceeds $3,500, the Plan Administrator
will direct the Trustee to commence distribution of the Participant's
Nonforfeitable Account Balance, in accordance with the form and timing
elected by the Participant. The Participant may elect to have the
Trustee commence distribution as of any distribution date permitted
under the Employer's Adoption Agreement Section 6.02. The Participant
may reconsider an election at any time prior to the Annuity Starting
Date and elect to commence distribution as of any other distribution
65
date permitted under the Employer's Adoption Agreement, if the Employer
has elected under its Adoption Agreement Section 6.02 to permit
revocation of such an election. A Participant may not receive such a
distribution if, prior to the time the Trustee actually makes the
distribution, the Participant returns to employment with the Employer.
Following his attainment of Normal Retirement Age, a Participant who
has separated from Service may elect distribution as of any
distribution date, irrespective of the elections under Adoption
Agreement Section 6.02.
In the absence of an election by the Participant, the Plan
Administrator will direct the Trustee to distribute the Participant's
Nonforfeitable Account Balance in a lump sum (or, if applicable, the
normal annuity form of distribution required under Section 6.06(b)), on
the sixtieth (60th) day following the close of the Plan Year in which
the latest of the following events occurs:
(1) the Participant attains Normal Retirement Age;
(2) the Participant attains age sixty-two (62); or
(3) the Participant's Separation from Service.
6.03 EARLY OR NORMAL RETIREMENT. If the Participant's Separation from
--------------------------
Service is on account of Normal Retirement Age or satisfaction of the Early
Retirement requirements, if applicable, the Plan Administrator will direct the
Trustee to pay the Participant's Nonforfeitable Account Balance in a form
elected by the Participant, on the distribution date the Employer specifies in
Adoption Agreement Section 6.03. Such distribution shall be subject to the
notice and consent requirements of this Article VI, if the survivor annuity
rules are applicable, and subject to the applicable mandatory commencement dates
described in Sections 6.02(a) and (b).
6.04 DISABILITY. If the Participant's Separation from Service is
----------
because of Disability, the Plan Administrator will direct the Trustee to pay the
Participant's Nonforfeitable Account Balance in a form elected by the
Participant, on the distribution date the Employer specifies in Adoption
Agreement Section 6.04. Such distribution shall be subject to the notice and
consent requirements of this Article VI and subject to the applicable mandatory
commencement dates described in Sections 6.02(a) and (b).
66
6.05 DEATH OF THE PARTICIPANT. In the event of the death of the
--------------------------
Participant prior to his Annuity Starting Date, the Plan Administrator will
direct the Trustee, in accordance with this Section 6.05, to distribute to the
Participant's Beneficiary, the Participant's Nonforfeitable Account Balance
remaining in the Trust, on the distribution date the Employer specifies in
Adoption Agreement Section 6.05.
(a) If the deceased Participant's Nonforfeitable Account
Balance does not exceed $3,500, nor has ever exceeded $3,500, the Plan
Administrator, subject to the requirements of Section 6.07, shall
direct the Trustee to distribute the deceased Participant's
Nonforfeitable Account Balance in a lump sum, on the distribution date
the Employer specifies in the Adoption Agreement, or, if later, the
date on which the Plan Administrator receives notification of or
otherwise confirms the Participant's death.
(b) If the deceased Participant's Nonforfeitable Account
Balance exceeds $3,500, the Plan Administrator will direct the Trustee
to distribute the deceased Participant's Nonforfeitable Account Balance
at the time and in the form elected by the Participant or, if
applicable, by the Beneficiary, as permitted under this Article VI. In
the absence of an election, subject to the requirements of Section
6.07, the Plan Administrator will direct the Trustee to distribute the
Participant's undistributed Nonforfeitable Account Balance in a lump
sum on the first distribution date coinciding with or following the
close of the Plan Year in which the Participant's death occurs or, if
later, the first distribution date following the date the Plan
Administrator receives notification of or otherwise confirms the
Participant's death.
(c) If the amount of the deceased Participant's Nonforfeitable
Account Balance exceeds $3,500, the Participant's Beneficiary may elect
to have the Trustee distribute the Participant's Nonforfeitable Account
Balance in a form and within a period permitted under Section 6.05 and
Section 6.07 or 6.08, whichever is applicable. The Beneficiary's
election is subject to any restrictions designated in writing by the
Participant and not revoked as of his date of death.
6.06 METHOD OF PAYMENT OF ACCOUNT BALANCE.
------------------------------------
67
(a) The Employer may elect in its Adoption Agreement to
provide the benefit options of this Section 6.06(a), which do not
include survivor annuities. If the Employer makes this election, then,
except as specified otherwise, if a Participant's Nonforfeitable
Account Balance exceeds $3,500, distribution of benefits under the Plan
may be made, at the election of the Participant, or his Beneficiary, if
applicable, in one, or a combination, of the following forms:
(1) A lump sum;
(2) Approximately equal installments, as elected by
the Employer in Adoption Agreement Section 6.06, over a fixed
reasonable period of time, not exceeding the life expectancy
of the Participant, or the joint life and last survivor
expectancy of the Participant and his Beneficiary.
To facilitate installment payments to a Participant
or Beneficiary under this Section 6.06(a), the Plan
Administrator may direct the Trustee to segregate all or any
part of the Participant's Account Balance in a separate
Account. The Trustee will invest the Participant's segregated
Account in Federally insured interest bearing savings
account(s) or time deposit(s) (or a combination of both), or
in other fixed income investments. A segregated Account
remains a part of the Trust, but it alone shares in any income
it earns, and it alone bears any expense or loss it incurs. If
elected in the Employer's Adoption Agreement Section 6.06,
under an installment distribution, the Participant or
Beneficiary, at any time, may elect to accelerate the payment
of all, or any portion, of the Participant's unpaid
Nonforfeitable Account Balance, subject to the requirements of
Sections 6.17 and 6.18.
(3) The Employer may expand or limit these options in
the Adoption Agreement.
If a Participant, or the terms of the Plan, designate a
particular payment option for a Participant or his Beneficiary, the
Participant or Beneficiary, may, nevertheless, agree to a different
payment or option with the Plan Administrator, except as provided in
Section 6.17 or 6.18.
68
(b) In lieu of electing the benefit options of Section
6.06(a), the Employer may elect in its Adoption Agreement to provide
the benefit options of this Section 6.06(b), which include survivor
annuities. If the Employer makes this election, then, except as
specified otherwise, if a Participant's Nonforfeitable Account Balance
exceeds $3,500, distribution of benefits under the Plan may be made in
one, or a combination of the following forms:
(1) A lump sum;
(2) Approximately equal installments, as elected by
the Employer in Adoption Agreement Section 6.06, over a fixed
reasonable period of time, not exceeding the life expectancy
of the Participant, or the joint life and last survivor
expectancy of the Participant and his Beneficiary, subject to
the same provisions of Section 6.06(a)(2), above.
(3) A "Straight Life Annuity," which is an immediate
life annuity for the Participant which is purchasable with the
Participant's Nonforfeitable Account Balance; or
(4) A "Qualified Joint and Survivor Annuity," which
is an immediate annuity which is purchasable with the
Participant's Nonforfeitable Account Balance and which
provides a life annuity for the Participant and a survivor
annuity payable for the remaining life of the Participant's
surviving spouse equal to fifty percent (50%) of the amount of
the annuity payable during the life of the Participant.
However, the Participant may elect to receive a smaller
annuity benefit with continuation of payments to the spouse in
an amount equal to seventy-five percent (75%) or one hundred
percent (100%) of the amount of the annuity payable during the
life of the Participant.
(5) Except as required for married Participants, the
Employer may expand or limit these options in the Adoption
Agreement.
Payments to be made to a married Participant shall be in the form of a
Qualified Joint and Survivor Annuity (option (4) above) unless the
Participant elects otherwise and obtains spousal consent pursuant to
Section 6.13. Payments to be made to an unmarried Participant shall be
in the form of a Straight Life Annuity (option (3) above) unless
69
otherwise elected by the Participant. The Trustee may satisfy the
Plan's obligation to pay benefits in the form of a Straight Life
Annuity or a Qualified Joint and Survivor Annuity through the purchase
of a Nontransferable Annuity Contract or other similar contract from a
life insurance company whose products are qualified to be sold in the
state in which the Employer has its principal place of business;
provided that any such annuity otherwise complies with the terms of
this Plan.
6.07 DISTRIBUTIONS UPON DEATH - PRIOR TO ANNUITY STARTING DATE. Upon
-----------------------------------------------------------
the death of a Participant prior to his Annuity Starting Date, if his
Nonforfeitable Account Balance exceeds $3,500, the Participant's Account Balance
shall be paid:
(a) If the Employer elects in its Adoption Agreement the
provisions of Section 6.06(a) (no survivor annuities provided):
(1) If the Participant was married on the date of his
death for a period of at least one (1) year, if such provision
is elected by the Employer in its Adoption Agreement Section
6.06, the Participant's Account Balance shall be paid to his
spouse, in one of the optional forms of payment, as elected by
the Participant (or if no election has been made prior to the
Participant's death, by his spouse); or
(2) If the Participant was not married, or not
married for a period of at least one (1) year if such
provision is elected by the Employer in its Adoption Agreement
Section 6.06, the Participant's Account Balance shall be paid
to a Beneficiary designated by the Participant, in one of the
optional forms of payment, as elected by Participant (or if no
election has been made prior to the Participant's death, by
such Beneficiary).
(b) If the Employer elects in its Adoption Agreement the
provisions of Section 6.06(b) (survivor annuities provided):
(1) If the Participant was married on the date of his
death, for a period of at least one (1) year, if such
provision is elected by the Employer in its Adoption Agreement
Section 6.06, the Participant's Account Balance shall be paid
to his spouse in the form of a Qualified Preretirement
70
Survivor Annuity, or with the consent of the spouse given
before or after the Participant's death, in one of the
optional forms of payment. A "Qualified Preretirement Survivor
Annuity" is an annuity which is purchasable with at least
fifty percent (50%) of the Participant's Nonforfeitable
Account Balance (determined as of the date of the
Participant's death) and which is payable for the life of the
Participant's surviving spouse; or
(2) If the Participant was not married, or not
married for a period of at least one (1) year, if such
provision is elected by the Employer in its Adoption Agreement
Section 6.06, the Participant's Account Balance shall be paid
to a Beneficiary designated by the Participant, in one of the
other optional forms of payment, as elected by Participant (or
if no election has been made prior to the Participant's death,
by such Beneficiary).
The Employer shall elect in Adoption Agreement Section 6.07, the
actuarial equivalence percentage of the Qualified Preretirement
Survivor Annuity. Any amounts not required to be distributed in the
form above shall be distributed pursuant to the Participant's election,
or, if no such election was made, pursuant to the election of the
spouse.
(c) Payments under this Section 6.07 shall be made (or
commence) within a reasonable period of time following the
Participant's death, unless the Beneficiary elects otherwise with the
consent of the Plan Administrator.
6.08 DISTRIBUTIONS UPON DEATH - AFTER ANNUITY STARTING DATE.
------------------------------------------------------
(a) In the event of the death of a Participant prior to
distribution to him of all of his Nonforfeitable Account Balance, but
following his Annuity Starting Date, and if distribution is being made
in a non-annuity form, then the Nonforfeitable Account Balance
remaining to the credit of the Participant shall be paid to the
Beneficiary in the form selected by the Participant, subject to the
restrictions of Section 6.18.
(b) Notwithstanding any election under this Section 6.08(b),
the provisions of Sections 6.06(b) and 6.07(b) shall apply:
71
(1) To a Participant's Account Balance attributable
to a plan from which this Plan is a transferee plan within the
meaning of Code section 401(a)(11)(B)(III); and
(2) If this Plan was at one time subject to the
survivor annuity rules, and was later amended in a permissible
manner to elect the provisions of Sections 6.06(a) and
6.07(a), to the Participant's Account Balances as of the later
of (i) the date of the amendment, or (ii) the effective date
of the amendment.
The Plan Administrator shall establish segregated Accounts as
necessary, under the procedures of Section 3.04, to carry out the
provisions of this Section 6.08(b).
6.09 BENEFIT PAYMENT ELECTIONS.
-------------------------
(a) Not earlier than thirty (30) days but not later than
ninety (90) days before a Participant's Annuity Starting Date, the Plan
Administrator must provide a benefit notice to a Participant who is
eligible to make an election under this Section 6.09. The benefit
notice must explain the optional forms of benefit available under the
Plan, including the material features and relative values of those
options, and the Participant's right to defer distribution until he
attains the later of Normal Retirement Age or age sixty-two (62).
(b) If a Participant or Beneficiary makes an election
prescribed by this Section 6.09, the Plan Administrator will direct the
Trustee to distribute the Participant's Nonforfeitable Account Balance
in accordance with that election, subject to the other requirements of
this Article VI. The Participant or Beneficiary must make an election
under this Section 6.09 by filing his election with the Plan
Administrator at any time before the Trustee otherwise would commence
to pay a Participant's Account Balance, in accordance with the
requirements of this Article VI.
(c) If a distribution is one to which Code sectionsection
401(a)(11) and 417 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:
72
(1) the Plan Administrator clearly informs the
Participant that the Participant has a right to a period of at
least 30 days after receiving the notice to consider the
decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option); and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
6.10 DIRECT ROLLOVER TO ANOTHER QUALIFIED PLAN.
-----------------------------------------
(a) This Section 6.10 applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election under this
Section, a Distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an
Eligible Rollover Distribution paid directly to an Eligible Retirement
Plan specified by the Distributee in a direct rollover.
(b) The following definitions apply to this Section 6.10:
(1) "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 (10) years or more; any
distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(2) "Eligible Retirement Plan". An Eligible
Retirement Plan is an individual retirement account described
in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity
plan described in Section 403(a) of the Code, or a qualified
trust described in Section 401(a) of the Code, that accepts
73
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.
(2) "Distributee". A Distributee includes an Employee
or former Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or former
Employee's spouse or former spouse who is the alternate payee
under a Qualified Domestic Relations Order, as defined in
Section 414(p) of the Code, are Distributees with regard to
the interest of the spouse or former spouse.
(4) "Direct Rollover". A Direct Rollover is a payment
by the Plan to the Eligible Retirement Plan specified by the
Distributee.
(c) For distributions made prior to January 1, 1993, the Plan
Administrator may direct the Trustee to transfer as a direct
trustee-to-trustee transfer the balance to the credit of a Participant
to the trustee of another qualified plan, if the trustee of the other
plan is authorized to accept such a transfer.
6.11 DISTRIBUTION RESTRICTIONS. Notwithstanding anything herein to the
-------------------------
contrary, the events giving rise to a distribution pursuant to the provisions of
Sections 6.02 through 6.05 applicable to the Participant's Deferral
Contributions Account, Qualified Nonelective Contributions Account and Qualified
Matching Contributions Account must satisfy the distribution restrictions of
this Section 6.11. "Distribution restrictions" means the Employee may not
receive a distribution of the specified contributions (nor earnings on those
contributions) except in the event of (1) the Participant's death, disability,
termination of employment or attainment of age 59 1/2, (2) financial hardship
satisfying the requirements of Code section 401(k) and the applicable Treasury
regulations, (3) a plan termination, without establishment of a successor
defined contribution plan (other than an ESOP), (4) a sale of substantially all
of the assets (within the meaning of Code section 401(d)(2)) used in a trade or
business, but only to an employee who continues employment with the corporation
acquiring those assets, or (5) a sale by a corporation of its interest in a
subsidiary (within the meaning of Code section 409(d)(3)), but only to an
employee who continues employment with the subsidiary. For Plan Years beginning
after December 31, 1988, a distribution on account of financial hardship, as
74
directed in clause (2), may not include earnings on Elective Deferrals credited
as of a date later than December 31, 1988, and may not include Qualified
Matching Contributions and Qualified Nonelective Contributions, nor any earnings
on such contributions, irrespective of when credited. A distribution described
in clauses (3), (4) or (5), if made after March 31, 1988, must be a lump sum
distribution, as required under Code section 401(k)(10).
6.12 TRANSITIONAL ELECTIONS. Notwithstanding the provisions of this
-----------------------
Article VI, if the Participant (or Beneficiary) signed a written distribution
designation prior to January 1, 1984, the Plan Administrator must distribute the
Participant's Nonforfeitable Account Balance in accordance with that
designation, subject however, to the survivor annuity requirements, if
applicable, of this Article VI. This Section 6.12 does not apply to a pre-1985
distribution designation, and the Plan Administrator will not comply with that
designation, if any of the following applies: (1) the method of distribution
would have disqualified the Plan under Code section 401(a)(9) as in effect on
December 31, 1983; (2) the Participant did not have an Account Balance as of
December 31, 1983; (3) the distribution designation does not specify the timing
and form of the distribution and the death Beneficiaries (in order of priority);
(4) the substitution of a Beneficiary modifies the payment period of the
distribution; or (5) the Participant (or Beneficiary) modifies or revokes the
distribution designation. In the event of a revocation, the Plan must
distribute, no later than December 31 of the calendar year following the year of
revocation, the amount which the Participant (or Beneficiary) would have
received under Section 6.17 if the distribution designation had not been in
effect. The Plan Administrator will apply this Section 6.12 to rollovers and
transfers in accordance with Part J of the Code section 401(a)(9) Treasury
regulations.
6.13 ELECTION TO WAIVE PAYMENT METHOD.
--------------------------------
(a) Either or both of the Qualified Joint and Survivor Annuity
or the Qualified Preretirement Survivor Annuity may be waived by
election of the Participant if the following conditions are satisfied:
(1) The Participant's spouse consents in writing to
such election, such consent acknowledges the effect of the
election (including naming the specific nonspouse beneficiary
and, in the case of a Qualified Joint and Survivor Annuity,
75
the optional form of benefit being selected), and such consent
is witnessed by a Plan representative or acknowledged before a
notary public; or
(2) It is established to the satisfaction of the Plan
Administrator that such spouse's consent cannot be obtained
because there is no spouse, because the spouse cannot be
located, or because of other circumstances prescribed in
Treasury regulations.
(b) In the case of a Qualified Joint and Survivor Annuity,
such election is made during the ninety (90) day period ending on the
Participant's Annuity Starting Date.
(c) In the case of a Qualified Preretirement Survivor Annuity,
such election is made within the period ending on the date of the
Participant's death and beginning on the first day of the Plan Year in
which the Participant attains age thirty-five (35) or, if earlier, the
date on which the Participant's employment terminates. Notwithstanding
the foregoing, an earlier election will be valid if the required
explanation is given, however, such election shall become null and void
as of the first day of the Plan Year in which the Participant attains
age thirty-five (35).
The Participant shall have the right to revoke any election made under
this Section 6.13 at any time within the respective election periods specified
in subparagraphs (c) and (e) above. Any consent given by a Participant's spouse
shall be irrevocable.
6.14 NOTICE REQUIREMENTS.
-------------------
(a) In the case of a Qualified Joint and Survivor Annuity, the
Participant shall receive, not earlier than thirty (30) days, but not
later than ninety (90) days, before the Participant's Annuity Starting
Date (and consistent with Treasury regulations), a written explanation
describing:
(1) the terms and conditions of the Qualified Joint
and Survivor Annuity;
(2) the Participant's right to make, and the effect
of, an election to waive the Qualified Joint and Survivor
Annuity form of benefit;
(3) the rights of the Participant's spouse regarding
the waiver election; and
76
(4) the Participant's right to make, and the effect
of, a revocation of a waiver election. The Plan does not limit
the number of times the Participant may revoke a waiver of the
Qualified Joint and Survivor Annuity or make a new waiver
during the election period.
(b) In the case of a Qualified Preretirement Survivor Annuity,
a married Participant shall receive a written explanation of the
Qualified Preretirement Survivor Annuity comparable to that of the
Qualified Joint and Survivor Annuity described above. The explanation
must be provided to each married Participant by the Plan Administrator
within the following period which ends last: (1) the period beginning
on the first day of the Plan Year in which the Participant attains age
thirty-two (32) and ending with the close of the Plan Year preceding
the Plan Year in which the Participant attains age thirty-five (35);
(2) a reasonable period ending after an Employee becomes a Participant;
(3) a reasonable period ending after the survivor annuity rules first
become applicable to the Participant; or (4) a reasonable period ending
after a fully subsidized preretirement survivor annuity no longer
satisfies the requirements for a fully subsidized benefit. A reasonable
period described in clauses (2), (3) and (4) is the end of the two (2)
year period beginning one (1) year prior to the date the applicable
event occurs and ending one (1) year after that date. If the
Participant terminates employment before the Plan Year in which he
attains age thirty-five (35), clauses (1), (2), (3) and (4) do not
apply and the Plan Administrator must provide the written explanation
within the two (2) year period beginning one (1) year before and ending
one (1) year after the termination of employment. If such a Participant
thereafter returns to employment with the Employer, the applicable
period for such Participant shall be redetermined. The Plan does not
limit the number of times the Participant may revoke a waiver of the
Qualified Preretirement Survivor Annuity or make a new waiver during
the election period.
6.15 ADVANCE PAYMENT OF BENEFITS. Subject to the survivor annuity
-----------------------------
requirements of this Article VI, the Employer may elect in its Adoption
Agreement Section 6.15 to permit terminated Participants or Beneficiaries of
deceased Participants, or both, to elect to receive distribution of all or a
portion of the Participant's Nonforfeitable Account Balance under the Plan prior
to the distribution date otherwise selected by the Employer with respect to the
77
event giving rise to the Participant's Separation from Service, pursuant to the
provisions of this Article VI. If the Employer makes such an election, each
Participant (or Beneficiary, if applicable) may elect, in the form and manner
prescribed by the Plan Administrator, and in accordance with the corresponding
Sections 6.01 through 6.08, to receive distribution of the Nonforfeitable
Account Balance as soon as administratively possible following the Participant's
termination of employment. The Nonforfeitable Account Balance shall be valued as
of the immediately preceding Adjustment Date, or other more recent Valuation
Date, without any earnings or losses thereon. If the Participant (or
Beneficiary, if applicable) elects an advance distribution, any allocation of
the Employer's contribution which the Participant may subsequently become
entitled to receive in accordance with Article IV shall be distributed to such
Participant, or his Beneficiary, in accordance with the remaining provisions of
this Article VI. Provided, however, such Participant or Beneficiary must
acknowledge in writing, in the form and manner prescribed by the Plan
Administrator, that he may be entitled to receive an additional payment from the
Plan for the year of termination, in accordance with the allocation provisions
of Article IV, and must agree to waive any potential claims he may have on
account of possible adverse tax consequences.
6.16 REQUIRED BEGINNING DATE.
-----------------------
(a) If any distribution commencement date described under this
Section 6.16, either by Plan provision or by Participant election (or
nonelection), is later than the Participant's Required Beginning Date,
the Plan Administrator instead must direct the Trustee to make
distribution on the Participant's Required Beginning Date, subject to
the transitional election, if applicable, under Section 6.12.
(b) "Required Beginning Date" shall mean:
(1) 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 seventy and one-half (70 1/2).
(2) Transitional rules. The Required Beginning Date
of a Participant who attains age seventy and one-half (70 1/2)
before January 1, 1988, shall be determined in accordance with
(A) or (B) below:
78
(A) Non-five percent (5%) owners. The
Required Beginning Date of a Participant who is not a
five percent (5%) owner is the first day of April of
the calendar year following the calendar year in
which the later of termination of employment,
retirement or attainment of age seventy and one-half
(70 1/2) occurs.
(B) Five percent (5%) owners. The Required
Beginning Date of a Participant who is a five percent
(5%) owner during any year beginning after December
31, 1979, is the first day of April following the
later of:
(i) the calendar year in which the
Participant attains age seventy and one-half
(70 1/2); or
(ii) the earlier of the calendar
year with or within which ends the Plan Year
in which the Participant becomes a five
percent (5%) owner, or the calendar year in
which the Participant terminates employment.
The Required Beginning Date of a Participant who is
not a five percent (5%) owner who attains age seventy
and one-half (70 1/2) during 1988, and who has not
retired as of January 1, 1989, is April 1, 1990.
(iii) Five percent (5%) owner. A
Participant is treated as a five percent
(5%) owner for purposes of this Article if
such Participant is a five percent (5%)
owner as defined in Code section 416(i)
(determined in accordance with Code 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 owners attains age sixty-six
and one-half (66 1/2) or any subsequent Plan
Year.
(iv) Once distributions have begun
to a five percent (5%) owner under this
Article, they must continue to be
distributed, even if the Participant ceases
to be a five percent (5%) owner in a
subsequent year.
79
(c) A mandatory distribution at the Participant's Required
Beginning Date will be in a lump sum (or, if applicable, the normal
annuity form of distribution required under Section 6.06(b)) unless the
Participant, pursuant to the provisions of this Article VI, makes a
valid election to receive an alternative form of payment.
Notwithstanding the previous sentence, as of the first distribution
calendar year, distributions, if not made in a single lump sum, may
only be made over one of the following periods (or a combination
thereof):
(1) the life of the Participant,
(2) the life of the Participant and a designated
Beneficiary,
(3) a period certain not extending beyond the life
expectancy of the Participant, or
(4) a period certain not extending beyond the joint
and last survivor expectancy of the Participant and a
Beneficiary.
6.17 LIMITATIONS ON DISTRIBUTIONS - INCIDENTAL BENEFIT RULE.
------------------------------------------------------
(a) The Participant shall not select any form of benefit for
which the present value of the retirement benefits expected to be paid
solely to the Participant does not exceed fifty percent (50%) of the
present value of the total retirement benefits payable to the
Participant and his Beneficiaries. This rule is subject to an exception
for distributions made consistent with subparagraph (b)(2) below where
the designated Beneficiary is the Participant's spouse.
(b) Subject to subparagraph (a) above, the Participant may not
select a method of payment unless under that method distribution will
be made:
(1) Over a period not extending beyond the life or
life expectancy of the Participant; or
(2) Over a period not extending beyond the lives or
life expectancies of the Participant and an individual
designated Beneficiary.
80
Where the designated Beneficiary is the Participant's spouse,
the life expectancies of the Participant and his spouse may be
recalculated on an annual basis and payments adjusted accordingly.
6.18 RESTRICTIONS ON PAYMENTS AFTER DEATH OF PARTICIPANT.
---------------------------------------------------
(a) Notwithstanding any election a Participant may make, in
the event of the death of such Participant after installment payments
have commenced to him (or the death of his spouse if distribution has
commenced to such spouse), the Participant's remaining Account Balance
must be distributed to the Participant's Beneficiaries at least as
rapidly as under the method of distribution that was in effect at the
date of his death.
(b) If a Participant dies before receiving any distributions,
his Account Balance must be distributed within five (5) years after his
death; provided that the five (5) year requirement shall not be
applied: (1) where his spouse has survived him, benefits are payable to
the spouse, and distributions begin no later than the date on which the
Participant would have reached age seventy and one-half (70 1/2); or
(2) where the Account Balance is payable to a designated Beneficiary
over a period not extending beyond the life expectancy of such
Beneficiary the distributions begin no later than one (1) year after
the Participant's death or such later date as IRS regulations permit.
6.19 CODE SECTION 401(a)(9). The provisions of Article VI are intended
----------------------
to comply with Code section 401(a)(9) and the regulations thereunder, including
the rules on incidental death benefits. Sections 6.16 through 6.18 and Code
section 401(a)(9) apply to all distributions from the Plan, notwithstanding any
inconsistent provision or election otherwise permissible under this Article VI.
81
ARTICLE VII
WITHDRAWALS AND LOANS
7.01 EMPLOYEE CONTRIBUTIONS - WITHDRAWAL/DISTRIBUTION
------------------------------------------------
(a) A Participant, by giving prior written notice to the
Trustee, may withdraw all or any part of the value of his Account
Balance derived from his Employee Contributions subject to the
requirements of this Article VII and further subject to the
requirements of Section 3.02 with respect to Mandatory Contributions.
No forfeiture will occur solely as a result of a Participant's
withdrawal of his Employee Contributions to the Plan. A distribution of
Employee Contributions must comply with the survivor annuity
requirements described in Article VI, if those requirements apply to
the Participant. A Participant may exercise his right, if any, to
withdraw the value of his Account Balance derived from his Employee
Contributions not more often than annually, as of the date specified in
the Employer's Adoption Agreement Section 7.01. The Trustee, in
accordance with the direction of the Plan Administrator, will
distribute a Participant's unwithdrawn Account Balance attributable to
his Employee Contributions in accordance with the provisions of Article
VI applicable to the distribution of the Participant's Nonforfeitable
Account Balance, including, but not limited to, the notice and consent
requirements of Code sectionsection 417, if applicable, and 411(a)(11)
and the regulations thereunder. If the Participant elects to make a
withdrawal of his Employee Contributions which are voluntary Employee
Contributions, he is prohibited from making further voluntary Employee
Contributions to the Plan for a period of one (1) year from the date of
withdrawal.
(b) The Employer may prescribe special distribution
restrictions under Adoption Agreement Section 3.02 which will apply to
Mandatory Contributions prior to the Participant's termination of
employment. Following a Participant's termination of employment, the
general distribution provisions of Article VI apply to the distribution
of the Participant's Mandatory Contributions.
(c) Prior to January 1, 1987, withdrawals were limited to
voluntary Employee contributions and treated as a nontaxable return of
basis. Effective January 1, 1987, any withdrawals shall consist of both
voluntary Employee Contributions and any earnings thereon. The pro rata
82
basis recovery rules of section 72(e) shall apply to withdrawals of
voluntary Employee Contributions after December 31, 1986. In accordance
with the grandfather rule of Code section 72(e)(8)(D), which is
available if the Plan permitted withdrawals of voluntary Employee
Contributions on May 5, 1986, withdrawals shall be treated as a
nontaxable return of basis up to the amount of the Participant's
pre-1987 Employee Contributions (those made after December 31, 1986),
the amount of each withdrawal treated as a nontaxable return of basis
shall be determined by multiplying the amount of the withdrawal by a
fraction, the numerator of which is the Participant's total amount of
voluntary Employee Contributions, and the denominator of which is the
total amount in his voluntary Employee Contributions Account. The
remainder of the withdrawal shall be treated as taxable income to the
Participant for the taxable year of the Participant in which the
withdrawal was made.
7.02 HARDSHIP DISTRIBUTIONS - GENERAL PROVISIONS. The Employer may
----------------------------------------------
elect in its Adoption Agreement Section 7.02 to permit distributions on account
of a Participant's immediate and heavy financial need. Such hardship
distributions may be made to either an active Participant or a terminated
Participant not currently eligible to receive a distribution under the Plan, or
both, as elected by the Employer in its Adoption Agreement Section 7.02. The
distribution shall be made from the Participant's Accounts which are specified
by the Employer in its Adoption Agreement 7.02, provided, however,a hardship
distribution option may not apply to the Participant's Qualified Nonelective
Contributions Account or Qualified Matching Contributions Account. Such a
withdrawal shall be granted only if the Plan Administrator determines that the
purpose of the withdrawal is to meet an immediate and heavy financial need of
the Participant for which there is a lack of resources reasonably available, and
the amount of the withdrawal does not exceed the financial need, including any
amounts necessary to pay any federal, state or local income tax or penalties
reasonably anticipated to result from such distribution. Distributions made
pursuant to this Section 7.02 shall be made as soon as administratively possible
after the date of distribution selected in the Employer's Adoption Agreement
Section 7.02. Accounts shall be adjusted as of the Adjustment Date, or other
Valuation Date, on or before the withdrawal unless the Plan Administrator
elects, in its discretion, to have a special valuation, which will then control.
Any distribution made pursuant to this Section 7.02 shall be made in a manner
which is consistent with and satisfies the provisions of Article VI, including,
83
but not limited to, the notice and consent requirements of Code sectionsection
417, if applicable, and 411(a)(11) and the regulations thereunder.
7.03 HARDSHIP DISTRIBUTIONS - SAFE HARBOR. If the Employer elects to
--------------------------------------
provide the safe harbor hardship distribution requirements provided in
Regulations section 1.401(k)-1(d)(2) by so designating in the Adoption Agreement
Section 7.02, this Section 7.03 shall govern hardship distributions. The
Employer may select a method of administering hardship distributions other than
the safe harbor which shall be designated in an addendum to its Adoption
Agreement, numbered Section 7.02. If the Employer does not elect the safe harbor
requirements, then hardship distributions shall be administered and individual
determinations of financial hardship made pursuant to a hardship distribution
policy adopted by the Employer. If the safe harbor hardship provisions are
selected, the Plan Administrator, in making its determination of the existence
of a heavy and immediate financial need for which there is a lack of resources
reasonably available, may reasonably rely on the Participant's representation
that such need cannot be met by (1) insurance; (2) reasonable liquidation of the
assets of the Participant or his spouse and assets held by their children to the
extent not protected by the Uniform Transfers to Minors Act; (3) other
distributions or loans from any other plan maintained by the Employer or any
prior employer of the Participant or by a loan from any commercial source on
reasonable terms. A hardship withdrawal shall not be denied solely because a
Participant does not receive a nontaxable loan pursuant to Section 7.05
(provided the Employer permits loans in its Adoption Agreement Section 7.05) if
the loan is not made on account of a determination by the Plan Administrator
that the loan cannot be adequately secured, or if the loan would increase the
amount of the financial need. Any Participant receiving a hardship distribution
shall be ineligible to make further deferrals or Participant contributions under
this Plan or any other plan maintained by the Employer until the first day of
the Plan Year following the expiration of twelve (12) months following the date
of the hardship distribution. For the taxable year of the Participant following
the taxable year of the hardship distribution, such Participant's elective
contributions under any Plan maintained by the Employer may not exceed the
applicable limit under Code section 402(g), less the amount of the Participant's
elective contributions for the taxable year of the hardship distribution.
"Financial hardship" under this Section 7.03 shall mean a Participant's
immediate and heavy financial need that cannot be met from other reasonably
available resources and is caused by one or more of the following:
84
(a) Medical expenses incurred as the result of accident or
illness incurred by the Participant, or the Participant's spouse or
dependents, or the cost of such medical care if a hardship distribution
is necessary to obtain medical care;
(b) The cost of purchasing or preserving the principal
residence of the Participant, excluding mortgage payments;
(c) Payment of tuition and related educational fees for the
next twelve (12) months of post-secondary education for the Participant
or the Participant's spouse, children, or dependents;
(d) The cost of preventing the Participant's eviction from, or
foreclosure on the mortgage of, the Participant's principal residence;
or
(e) Other unexpected or unusual expenses creating a financial
need, as provided in published revenue rulings, notices or other
documents of general applicability.
7.04 IN-SERVICE DISTRIBUTIONS. Although the purpose of the Plan is to
-------------------------
provide for each Participant's retirement, the Employer may elect in its
Adoption Agreement Section 7.04 to permit a Participant, subject to the
limitations in the Employer's Adoption Agreement, to withdraw all or any portion
of his Nonforfeitable Account Balance prior to his Separation from Service. Any
such withdrawal shall be made as soon as administratively possible following the
date of distribution selected by the Employer in its Adoption Agreement. The
application shall include evidence of the Participant's age and a statement of
any other facts required by the Plan Administrator. The Trustee will distribute
the balance of the Participant's Account Balances not distributed pursuant to
his election(s) in accordance with the other distribution provisions of this
Plan. Any distribution made pursuant to this Section 7.04 shall be made in a
manner which is consistent with and satisfies the provisions of Article VI,
including, but not limited to, the notice and consent requirements of Code
sectionsection 417, if applicable, and 411(a)(11) and the regulations
thereunder.
7.05 LOANS.
-----
(a) If the Employer so elects in its Adoption Agreement
Section 7.05, the Trustee is specifically authorized to make loans on a
nondiscriminatory basis in accordance with the loan policy established
85
by the Plan Administrator, provided: (1) the loan policy satisfies the
requirements of Section 7.06; (2) loans are available to all
Participants on a reasonably equivalent basis and are not available in
a greater amount for Highly Compensated Employees than for other
Employees; (3) any loan is adequately secured and bears a reasonable
rate of interest; (4) the loan provides for repayment within a
specified time; (5) the default provisions of the note prohibit offset
of the Participant's Nonforfeitable Account Balance prior to the time
the Trustee otherwise would distribute the Participant's Nonforfeitable
Account Balance; (6) the amount of the loan does not exceed (at the
time the Plan extends the loan) the amount of the Participant's
Nonforfeitable Account Balance; and (7) the loan otherwise conforms to
the exemption provided by Code section 4975(d)(1).
(b) The Employer shall specify in its Adoption Agreement
Section 7.05 on whose behalf loans shall be permitted to be made under
the Plan. Any loans made on behalf of inactive Participants or
Beneficiaries shall be subject to the provisions of this Section 7.05
and Section 7.06. If the survivor annuity requirements of Article VI
apply to the Participant, the Participant may not pledge any portion of
his Account Balance as security for a loan made after August 18, 1985,
unless, within the ninety (90) day period ending on the date the pledge
becomes effective, the Participant's spouse, if any, consents (in a
manner described in Section 7.06 other than the requirement relating to
the consent of a subsequent spouse) to the security or, by separate
consent, to an increase in the amount of security.
(c) If the Employer is an unincorporated trade or business, a
Participant who is an Owner-Employee may not receive a loan from the
Plan, unless he has obtained a prohibited transaction exemption from
the Department of Labor. If the Employer is an "S Corporation," a
Participant who is a shareholder-employee (an employee or an officer)
who, at any time during the Employer's Taxable Year, owns more than
five percent (5%), either directly or by attribution under Code section
318(a)(1), of the Employer's outstanding stock may not receive a loan
from the Plan, unless he has obtained a prohibited transaction
exemption from the Department of Labor. If the Employer is not an
unincorporated trade or business nor an "S Corporation," this Section
7.05 does not impose any restrictions on the class of Participants
eligible for a loan from the Plan. Subject to the requirements of
86
Sections 6.07 and 6.08, the Plan Administrator will determine the death
benefit by reducing the Participant's Nonforfeitable Account Balance by
any security interest the Plan has against the Nonforfeitable Account
Balance by reason of an outstanding Participant loan.
7.06. LOAN POLICY. If the Plan Administrator adopts a loan policy,
pursuant to subparagraph 10.02(j), the loan policy must be a written document
and must include: (a) the identity of the person or positions authorized to
administer the Participant loan program; (b) a procedure for applying for the
loan; (c) the criteria for approving or denying a loan; (d) the limitations, if
any, on the types and amounts of loans available; (e) the procedure for
determining a reasonable rate of interest; (f) the types of collateral which may
secure the loan; and (g) the events constituting default and the steps the Plan
will take to preserve Plan assets in the event of default. This Section 7.06
specifically incorporates a written loan policy as part of the Employer's Plan.
7.07. COLLATERAL FOR LOAN. The Employer may elect in its Adoption
--------------------
Agreement Section 7.07 to require a Participant to secure a loan using
collateral which is in addition to a percentage of such Participant's vested
Account Balance under the Plan.
87
ARTICLE VIII
EMPLOYER ADMINISTRATIVE PROVISIONS
8.01 IN GENERAL. The Employer shall have the sole responsibility for
----------
making the contributions provided for under Article IV and the authority to
terminate its participation in this Plan. The Employer shall have the sole
authority to appoint and remove the Trustee and any Investment Manager or
Managers which it may elect to provide for managing all or any portion of the
Trust, and to appoint the Plan Administrator.
8.02 INFORMATION TO PLAN ADMINISTRATOR. If the Employer is not serving
---------------------------------
as the Plan Administrator, the Employer shall supply current information to the
Plan Administrator as to the name, date of birth, date of employment, annual
compensation, leaves of absence, Years of Service and date of termination of
employment of each Employee who is, or who will be eligible to become, a
Participant under the Plan, together with any other information which the Plan
Administrator considers necessary. The Employer's records as to the current
information the Employer furnishes to the Plan Administrator are conclusive as
to all persons.
8.03 NO LIABILITY. The Employer assumes no obligation or responsibility
------------
to any of its Employees, Participants or Beneficiaries for any act of, or
failure to act, on the part of its Plan Administrator (unless the Employer is
the Plan Administrator), or the Trustee.
8.04 INDEMNITY OF CERTAIN FIDUCIARIES. To the extent permitted by law,
--------------------------------
the Employer indemnifies and holds harmless the Plan Administrator, and any
person or persons serving in the capacity of Plan Administrator, as provided in
Section 10.01, from and against any and all loss resulting from liability to
which the Plan Administrator may be subjected by reason of any act or conduct
(except willful misconduct or gross negligence) in its official capacity in the
administration of this Trust or Plan or both, including all expenses reasonably
incurred in its defense, in case the Employer fails to provide such defense. No
Plan assets may be used for any such indemnification. The indemnification
provisions of this Section 8.04 do not relieve the Plan Administrator or any
person serving as a Plan Administrator from any liability he may have under
ERISA for breach of a fiduciary duty. Furthermore, the Plan Administrator and
the Employer may execute a letter agreement further delineating the
indemnification agreement of this Section 8.04, provided the letter agreement
must be consistent with and does not violate ERISA. The indemnification
88
provisions of this Section 8.04 extend to the Trustee solely to the extent
provided by a letter agreement executed by the Trustee and the Employer.
8.05 EMPLOYER DIRECTION OF INVESTMENT. The Employer has the right to
---------------------------------
direct the Trustee with respect to the investment and reinvestment of assets
comprising the Trust Fund only if the Trustee consents in writing to permit such
direction. If the Trustee consents to Employer direction of investment, the
Trustee and the Employer must execute a letter agreement as a part of this Plan
containing such conditions, limitations and other provisions they deem
appropriate before the Trustee will follow any Employer direction as respects
the investment or reinvestment of any part of the Trust Fund.
8.06 INVESTMENT FUNDS. The Employer may elect in its Adoption Agreement
----------------
Section 8.06 to authorize the use of one or more investment funds. If the
Employer makes such an election, each Participant shall be entitled to direct
the Trustee as to the investment and reinvestment of the amount credited to his
Account pursuant to a policy established and maintained by the Plan
Administrator. Such policy shall include, but not by way of limitation, (i) the
available investment fund options; (ii) that portion of the Participant's
Account Balance, or vested Account Balance, subject to such investment options;
(iii) the percentage increments of a Participant's Account which may be
allocated to each available investment fund; and (iv) the manner and timing of
elections by Participants. Each Eligible Employee, prior to his Entry Date shall
be permitted to elect how his Account Balance shall be invested in accordance
with uniform rules adopted by the Plan Administrator. If no investment direction
is received, the Plan Administrator shall direct the investment of the
Participant's Account in a uniform and nondiscriminatory manner. Each
Participant may elect the change the manner in which his account balance is
being invested at such time and in such manner as prescribed by the Plan
Administrator. This Section 8.06 specifically incorporates a written Investment
Fund Election Policy as part of the Employer's Plan. The Plan Administrator
reserves the right to amend or modify the Policy.
8.07 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves the
-----------------------------
right to amend the vesting schedule at any time, the Plan Administrator will not
apply the amended vesting schedule to reduce the Nonforfeitable percentage of
any Participant's Account Balance derived from Employer contributions
(determined as of the later of the date the Employer adopts the amendment, or
the date the amendment becomes effective) to a percentage less than the
Nonforfeitable percentage computed under the Plan without regard to the
amendment. An amended vesting schedule will apply to a Participant only if the
89
Participant receives credit for at least one Hour of Service after the new
schedule becomes effective. If the Employer makes a permissible amendment to the
vesting schedule, each Participant having at least three (3) Years of Service
with the Employer may elect to have the percentage of his Nonforfeitable Account
Balance computed under the Plan without regard to the amendment. For Plan Years
beginning prior to January 1, 1989, or with respect to Employees who fail to
complete at least one (1) Hour of Service in a Plan Year beginning after
December 31, 1998, the election described in the preceding sentence applies only
to Participants having at least five (5) Years of Service with the Employer. The
Participant must file his election with the Plan Administrator within sixty (60)
days of the latest of (a) the Employer's adoption of the amendment; (b) the
effective date of the amendment; or (c) the date the Participant receives
written notice of the amendment from the Employer or Plan Administrator. The
Plan Administrator, as soon as practicable, must forward written notice of any
amendment to the vesting schedule to each affected Participant, together with an
explanation of the effect of the amendment, the appropriate form upon which the
Participant may make an election to remain under the vesting schedule provided
under the Plan prior to the amendment and notice of the time within which the
Participant must make an election to remain under the prior vesting schedule.
The election described in this Section 8.07 does not apply to a Participant if
the amended vesting schedule provides for vesting at least as rapid at all times
as the vesting schedule in effect prior to the amendment. For purposes of this
Section 8.07, an amendment to the vesting schedule includes any Plan amendment
which directly or indirectly affects the computation of the Nonforfeitable
percentage of an Employee's rights to his Employer derived Account Balance.
Furthermore, the Plan Administrator must treat any shift in the vesting
schedule, due to a change in the Plan's top-heavy status, as an amendment to the
vesting schedule for purposes of this Section 8.07.
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ARTICLE IX
PARTICIPANT ADMINISTRATIVE PROVISIONS
9.01 BENEFICIARY DESIGNATION. Any Participant may from time to time
------------------------
designate, in writing, any person or persons, contingently or successively, to
whom the Trustee will pay his Nonforfeitable Account Balance (including any life
insurance proceeds payable to the Participant's Account) in the event of his
death and the Participant may designate the form and method of payment. The Plan
Administrator will prescribe the form for the written designation of Beneficiary
and, upon the Participant's filing the form with the Plan Administrator, the
form effectively revokes all designations filed prior to that date by the same
Participant.
9.02 COORDINATION WITH SURVIVOR ANNUITY REQUIREMENTS. If the survivor
-----------------------------------------------
annuity requirements of Article VI apply to the Participant, this Section 9.02
does not impose any special spousal consent requirements on the Participant's
Beneficiary designation. However, in the absence of spousal consent (as required
by Article VI) to the Participant's Beneficiary designation: (a) any waiver of
the Qualified Joint and Survivor Annuity or of the Qualified Preretirement
Survivor Annuity is not valid; and (b) if the Participant dies prior to his
Annuity Starting Date, the Participant's Beneficiary designation will apply only
to the portion of the death benefit which is not payable as a Qualified
Preretirement Survivor Annuity. Regarding clause (b), if the Participant's
surviving spouse is a primary Beneficiary under the Participant's Beneficiary
designation, the Trustee will satisfy the spouse's interest in the Participant's
death benefit first from the portion which is payable as a Qualified
Preretirement Survivor Annuity. If the survivor annuity requirements of Article
VI do not apply to the Participant, the Beneficiary designation of a married
Participant is not valid unless the Participant's spouse consents (in a manner
described in Section 6.13) to the Beneficiary designation. Unless the Employer
elects otherwise in Adoption Agreement Section 6.06, this spousal consent
requirement does not apply if the Participant and his spouse are not married
throughout the one (1) year period ending on the date of the Participant's
death, or if the Participant's spouse is the Participant's sole primary
Beneficiary.
9.03 NO BENEFICIARY DESIGNATION/DEATH OF BENEFICIARY. If a Participant
-----------------------------------------------
fails to name a Beneficiary in accordance with Section 9.01, or if the
Beneficiary named by a Participant predeceases him, then the Trustee will pay
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the Participant's Nonforfeitable Account Balance in accordance with Section 6.06
in the following order of priority, unless the Employer specifies a different
order of priority in an addendum to its Adoption Agreement, numbered Section
9.03, to:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted
children, in equal shares;
(c) The Participant's surviving parents, in equal shares; or
(d) The Participant's estate.
If the Beneficiary does not predecease the Participant, but dies prior
to distribution of the Participant's entire Nonforfeitable Account Balance, the
Trustee will pay the remaining Nonforfeitable Account Balance to the
Beneficiary's estate unless the Participant's Beneficiary designation provides
otherwise or unless the Employer provides otherwise in an addendum to its
Adoption Agreement, numbered Section 9.03. If the Plan is not subject to the
survivor annuity requirements of Article VI, the Employer may not specify a
different order of priority in an addendum to its Adoption Agreement unless the
Participant's surviving spouse will be first in the different order of priority.
The Plan Administrator will direct the Trustee as to the method and to whom the
Trustee will make payment under this Section 9.03.
9.04 PERSONAL DATA TO PLAN ADMINISTRATOR. Each Participant and each
-----------------------------------
Beneficiary of a deceased Participant must furnish to the Plan Administrator
such evidence, data or information as the Plan Administrator considers necessary
or desirable for the purpose of administering the Plan. The provisions of this
Plan are effective for the benefit of each Participant upon the condition
precedent that each Participant will furnish promptly full, true and complete
evidence, data and information when requested by the Plan Administrator,
provided the Plan Administrator advises each Participant of the effect of his
failure to comply with its request.
9.05 ADDRESS FOR NOTIFICATION. Each Participant and each Beneficiary of
------------------------
a deceased Participant must file with the Plan Administrator from time to time,
in writing, his post office address and any change of post office address. Any
communication, statement or notice addressed to a Participant, or Beneficiary,
at his last post office address filed with the Plan Administrator,
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or as shown on the records of the Employer, binds the Participant, or
Beneficiary, for all purposes of this Plan.
9.06 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within the time
-------------------------
prescribed by ERISA and the applicable regulations, must furnish all
Participants and Beneficiaries a summary description of any material amendment
to the Plan or notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.
9.07 LITIGATION AGAINST THE TRUST. A court of competent jurisdiction
-----------------------------
may authorize any appropriate equitable relief to redress violations of ERISA or
to enforce any provisions of ERISA or the terms of the Plan. A fiduciary may
receive reimbursement of expenses properly and actually incurred in the
performance of his duties with the Plan.
9.08 INFORMATION AVAILABLE. Any Participant in the Plan or any
----------------------
Beneficiary may examine copies of the Plan description, latest annual report,
any bargaining agreement, this Plan and Trust, contract or any other instrument
under which the Plan was established or is operated. The Plan Administrator will
maintain all of the items listed in this Section 9.08 in its office, or in such
other place or places as it may designate from time to time in order to comply
with the regulations issued under ERISA, for examination during reasonable
business hours. Upon the written request of a Participant or Beneficiary, the
Plan Administrator must furnish him with a copy of any item listed in this
Section 9.08. The Plan Administrator may make a reasonable charge to the
requesting person for the copy so furnished.
9.09 PARTICIPANT DIRECTION OF INVESTMENT.
-----------------------------------
(a) The Employer must elect in its Adoption Agreement Section
9.09 if Participants are permitted to direct the investment of their
respective Accounts under the Plan. If the Trustee consents, the
Trustee will accept direction from each Participant on a written
election form (or other written agreement), as a part of this Plan,
containing such conditions, limitations and other provisions the
parties deem appropriate. The Plan Administrator, in a uniform and
nondiscriminatory manner, shall establish written procedures,
incorporated specifically as a part of this Plan, relating to
Participant direction of investment under this Section 9.09. The
Trustee will maintain a segregated investment Account to the extent a
Participant's Account is subject to Participant self-direction. The
Trustee is not liable for any loss, nor is the Trustee liable for any
93
breach, resulting from a Participant's direction of the investment of
any part of his directed Account.
(b) The Plan Administrator, to the extent provided in a
written loan policy adopted under Section 7.06, will treat a loan made
to a Participant as a Participant direction of investment under this
Section 9.09. To the extent of the loan outstanding at any time, the
borrowing Participant's Account alone shares in any interest paid on
the loan, and it alone bears any expense or loss it incurs in
connection with the loan. The Trustee may retain any principal or
interest paid on the borrowing Participant's loan in an interest
bearing segregated Account on behalf of the borrowing Participant until
the Trustee deems it appropriate to add the amount paid to the
Participant's separate Account under the Plan.
94
ARTICLE X
PLAN ADMINISTRATOR - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
10.01 ADMINISTRATOR. The Employer shall be the Plan Administrator,
-------------
unless otherwise specified in the Plan Information Section of its Adoption
Agreement.
10.02 ADMINISTRATIVE POWERS AND DUTIES. The Plan Administrator shall
---------------------------------
administer the Plan in a uniform and nondiscriminatory manner in accordance with
its terms, and shall have all powers necessary to exercise its discretion in
carrying out the terms and provisions of the Plan. The Plan Administrator has
the following powers and duties:
(a) To establish the funding policy of the Plan in accordance
with Section 10.03;
(b) To determine the rights of eligibility of an Employee to
participate in the Plan, the value of a Participant's Account Balance
and the Nonforfeitable percentage of each Participant's Account
Balance;
(c) To adopt rules of procedure and regulations necessary for
the proper and efficient administration of the Plan, provided the rules
are not inconsistent with the terms of the Agreement;
(d) To construe and enforce the terms of the Plan and the
rules and regulations it adopts, including interpretation of the Plan
documents and documents related to the Plan's operation;
(e) To direct the Trustee as respects the crediting and
distribution of the Trust;
(f) To review and render decisions respecting a claim for (or
denial of a claim for) a benefit under the Plan;
(g) To furnish the Employer with information which the
Employer may require for tax or other purposes;
(h) To engage the service of agents whom it may deem advisable
to assist it with the performance of its duties;
(i) To engage the services of an Investment Manager or
Managers (as defined in ERISA section 3(3)), each of whom will have
95
full power and authority to manage, acquire or dispose (or direct the
Trustee with respect to acquisition or disposition) of any Plan asset
under its control;
(j) To establish, in its sole discretion, a nondiscriminatory
policy (see Section 7.06) which the Trustee must observe in making
loans, if any, to Participants and Beneficiaries; and
(k) To direct the Trustee as to the voting of stock held in
the Trust Fund established hereby, or as to any other actions that may
be appropriate with respect thereto (such as participation in
reorganizations, etc.); provided that in the absence of any such
direction, the Trustee shall have the right to vote such stock and take
such other actions in its sole discretion.
The Plan Administrator shall have no power to add to, subtract from or
modify any of the terms of the Plan, or to change or add to any benefits
provided by the Plan, or to waive or fail to apply any requirements of
eligibility for a benefit under the Plan.
10.03 FUNDING POLICY. The Plan Administrator shall have the authority
--------------
and responsibility for establishing and implementing a funding method and policy
consistent with the needs of the Plan and the requirements of ERISA. The funding
method and policy so established shall be in writing, and a copy thereof shall
be delivered to the Trustee. The Plan Administrator will review, not less often
than annually, all pertinent Employee information and Plan data in light of the
funding policy of the Plan and to determine the appropriate methods of carrying
out the Plan's objectives. The Plan Administrator must communicate periodically,
as it deems appropriate, to the Trustee and to any Plan Investment Manager the
Plan's short-term and long-term financial needs so investment policy can be
coordinated with Plan financial requirements.
10.04 RULES AND DECISIONS. The Plan Administrator may adopt such
--------------------
by-laws, rules and regulations as it deems necessary, desirable, or appropriate,
provided that same shall not be inconsistent with or contrary to the express
terms of the Plan. All such by-laws, rules, regulations and decisions of the
Plan Administrator shall be applied uniformly in all circumstances.
10.05 MANNER OF ACTION. If more than one person is designated as Plan
----------------
Administrator, the decision of a majority of such individuals appointed and
qualified controls. Such committee may authorize any one of its members, or its
96
secretary, to sign on its behalf any notices, directions, applications,
certificates, consents, approvals, waivers, letters or other documents. The Plan
Administrator must evidence this authority by an instrument signed by all
members and filed with the Trustee. A member of the committee who is a
Participant shall not vote on any issue relating specifically to himself, and
any such action shall be decided or voted by the majority of the remaining
committee members (except that such member may sign unanimous written consent to
resolutions adopted or other action taken without a meeting).
10.06 INDIVIDUAL ACCOUNTS.
-------------------
(a) The Plan Administrator will maintain, or direct the
Trustee to maintain, for purposes of administering the Plan, a separate
Account, or multiple Accounts, with respect to Employer contributions
and Participant contributions, in the name of each Participant to
reflect the Participant's Account Balance under the Plan. Separate
records shall be kept as to all transactions affecting the respective
accounts. Except when specifically designated otherwise, the above
accounts shall be collectively referred to as the Participant's
"Account." All contributions and the proportionate part of profits and
losses attributable thereto, and withdrawals therefrom, shall be
credited or debited respectively against each respective account.
Nevertheless, the respective accounts need not be segregated and held
by the Trustee as a separate fund but may be held as a commingled Trust
Fund together with the other funds of the Plan.
(b) If a Participant re-enters the Plan subsequent to his
having a Forfeiture Break in Service, the Plan Administrator, or the
Trustee, must maintain a separate Account for the Participant's
pre-Forfeiture Break in Service Account Balance and a separate Account
for his post-Forfeiture Break in Service Account Balance, unless the
Participant's entire Account Balance under the Plan is 100%
Nonforfeitable.
(c) The Plan Administrator will make its allocations, or
request the Trustee to make its allocations, to the Accounts of the
Participants in accordance with the provisions of Section 10.08. The
Plan Administrator may direct the Trustee to maintain a temporary
segregated investment Account in the name of a Participant to prevent a
97
distortion of income, gain or loss allocations under Section 10.08. The
Plan Administrator must maintain records of its activities.
10.07 VALUE OF PARTICIPANT'S ACCOUNT BALANCE. The value of each
------------------------------------------
Participant's Account Balance consists of that proportion of the net worth (at
fair market value) of the Employer's Trust Fund which the net credit balance in
his Account (exclusive of the cash value of incidental benefit insurance
contracts) bears to the total net credit balance in the Accounts (exclusive of
the cash value of the incidental benefit insurance contracts) of all
Participants plus the cash surrender value of any incidental benefit insurance
contracts held by the Trustee on the Participant's life. For purposes of a
distribution under the Plan, the value of a Participant's Account Balance is its
value as of the Valuation Date immediately preceding the date of the
distribution.
10.08 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. A
------------------------------------------------------------
"Valuation Date" under this Plan is each Adjustment Date and each interim
Valuation Date determined under the Employer's Adoption Agreement Section 1.51.
As of each Valuation Date the Plan Administrator must adjust Accounts to reflect
net income, gain or loss since the last Valuation Date. The valuation period is
the period beginning the day after the last Valuation Date and ending on the
current Valuation Date.
(a) With respect to all Participant Accounts other than
segregated investment Accounts, the Plan Administrator first will
adjust the Participant Accounts, as those Accounts stood at the
beginning of the current valuation period, by reducing the Accounts for
any forfeitures arising under Section 5.11 or under Section 10.15, for
amounts charged during the valuation period to the Accounts in
accordance with Section 10.14 (relating to distributions) and Section
13.02 (relating to insurance premiums), and for the cash value of
incidental benefit insurance contracts. The Plan Administrator then,
subject to the restoration allocation requirements of Sections 5.08 and
5.09 or of Section 10.15, will allocate the net income, gain or loss
pro rata to the adjusted Participant Accounts. The allocable net
income, gain or loss is the net income (or net loss), including the
increase or decrease in the fair market value of assets, since the last
Valuation Date. Notwithstanding anything herein to the contrary, no
gains or losses shall be credited to a Participant's Account between
the date such Account is valued for payment and the actual date it is
paid.
98
(b) Notwithstanding paragraph (a) above, with respect to
contributions made to the Plan after the previous Valuation Date, the
method specified in the Employer's Adoption Agreement Section 10.08
shall be used. If the Employer selects a weighted average method of
allocation contributions made to the Plan after the previous Valuation
Date, such "weighted average allocation" method will treat a weighted
portion of the applicable contributions as if includible in the
Participant's Account as of the beginning of the valuation period. The
weighted portion is a fraction, the numerator of which is the number of
months in the valuation period, excluding each month in the valuation
period which begins prior to the contribution date of the applicable
contributions, and the denominator of which is the number of months in
the valuation period.
As of the last day of each Plan Year (or, if earlier, an
allocation date coinciding with a Valuation Date) the Plan
Administrator will reallocate the segregated Account to the
Participant's appropriate Account, in accordance with Section 3.07 or
Section 4.04, whichever applies to the contributions.
(c) A segregated investment Account receives all income it
earns and bears all expense or loss it incurs. The Plan Administrator
will adopt uniform and nondiscriminatory procedures for determining
income or loss of a segregated investment Account in a manner which
reasonably reflects investment directions relating to pooled
investments and investment directions occurring during a valuation
period. As of the Valuation Date, the Plan Administrator must reduce a
segregated Account for any forfeiture arising under Section 5.11 after
the Plan Administrator has made all other allocations, changes or
adjustments to the Account for the Plan Year.
(d) An Excess Amount or suspense account described in Article
IV does not share in the allocation of net income, gain or loss
described in this Section 10.08. This Section 10.08 applies solely to
the allocation of net income, gain or loss of the Trust. The Plan
Administrator will allocate the Employer contributions and Participant
forfeitures, if applicable, in accordance with Article IV.
10.09 DETERMINATION AS TO ELIGIBILITY. Any question as to the
----------------------------------
eligibility of any Employee hereunder shall be determined by the Plan
Administrator in accordance with the terms hereof and such determination shall
be final and conclusive for all purposes. The Plan Administrator shall determine
99
the eligibility of Employees in accordance with the provisions of this Plan from
the books and records of the Employer, or from such other information or
evidence as it may deem sufficient, and shall provide notice to each Employee
when he becomes eligible to participate hereunder.
10.10 AUTHORIZATION OF BENEFIT PAYMENTS. The Plan Administrator shall
---------------------------------
issue directions to the Trustee concerning all benefits which are to be paid
from the Trust Fund pursuant to the provisions of the Plan. The Plan
Administrator may require a Participant to complete and file with the Plan
Administrator an application for a benefit and all other forms approved by the
Plan Administrator, and to furnish all pertinent information requested by the
Plan Administrator. The Plan Administrator may rely upon all such information so
furnished, including but not limited to the Participant's current mailing
address.
10.11 PAYMENT FOR BENEFIT OF DISABLED OR INCAPACITATED PERSON. Whenever
-------------------------------------------------------
in the opinion of the Plan Administrator a person entitled to receive any
payment of a benefit hereunder or installment thereof is under a legal
disability or is physically, mentally, or legally incapable of acknowledging
receipt of such payment, the Plan Administrator may direct the Trustee to make
payments to such person or to his legal representative or to a relative or
friend of such person for his benefit, or to an institution maintaining him if
no guardian or committee has been appointed for him, or the Plan Administrator
may direct the Trustee to apply the payment for the benefit of such person in
such manner as the Plan Administrator considers advisable. Any payment of a
benefit or installment thereof in accordance with the provisions of this Section
shall be a complete discharge of any liability for the making of such payment
under the provisions of the Plan.
10.12 BOND. To the extent required by ERISA, a fidelity bond or other
----
surety shall be required of the Employer and any other party at any time serving
as a fiduciary with respect to the Plan, and shall be in an amount equal to the
greater of $1,000, or ten percent (10%) of the assets in the Plan, but need not
be greater than $500,000, unless provided otherwise by the Secretary of Labor or
ERISA. The payment of premiums of such bond or other surety shall be paid by the
Employer within a reasonable time or, upon its failure to do so, by the Trustee
from the Trust Fund. The amount of such bond shall be fixed at the beginning of
each Plan Year in accordance with the provisions of section 412(a) of ERISA.
100
10.13 INDIVIDUAL STATEMENT. As soon as practicable after the Adjustment
--------------------
Date of each Plan Year, but within the time prescribed by ERISA and the
regulations under ERISA, the Plan Administrator will deliver to each Participant
(and to each Beneficiary) a statement reflecting the condition of his Account
Balance in the Trust as of that date and such other information ERISA requires
to be furnished to the Participant or Beneficiary. No Participant, except an
individual designated in Section 10.01 to serve as Plan Administrator, has the
right to inspect the records reflecting the Account of any other Participant.
10.14 ACCOUNT CHARGED. The Plan Administrator may charge a
-----------------
Participant's Account for all distributions made from that Account to the
Participant, to his Beneficiary or to an alternate payee. The Plan Administrator
may also charge a Participant's Account for any administrative expenses incurred
by the Plan directly related to that Account.
10.15 UNCLAIMED ACCOUNT PROCEDURE.
---------------------------
(a) The Plan does not require either the Trustee or the Plan
Administrator to search for, or to ascertain the whereabouts of, any
Participant or Beneficiary. At the time the Participant's or
Beneficiary's benefit becomes distributable under Article VI, the Plan
Administrator, by certified or registered mail addressed to his last
known address of record with the Plan Administrator or the Employer,
must notify any Participant, or Beneficiary, that he is entitled to a
distribution under this Plan. The notice must quote the provisions of
this Section 10.15 and otherwise must comply with the notice
requirements of Article VI. If the Participant, or Beneficiary, fails
to claim his distributive share or make his whereabouts known in
writing to the Plan Administrator within six (6) months from the date
of mailing of the notice, the Plan Administrator will treat the
Participant's or Beneficiary's unclaimed payable Account Balance as
forfeited and will reallocate the unclaimed payable Account Balance in
accordance with Section 4.09. A forfeiture under this Section will
occur at the end of the notice period or, if later, the earliest date
applicable Treasury regulations would permit the forfeiture. Pending
forfeiture, the Plan Administrator, following the expiration of the
notice period, may direct the Trustee to segregate the Nonforfeitable
Account Balance in a segregated Account and to invest that segregated
Account in Federally insured interest bearing savings accounts or time
deposits (or in a combination of both), or in other fixed income
investments.
101
(b) If a Participant or Beneficiary who has incurred a
forfeiture of his Account Balance under the provisions of this Section
10.15 makes a claim, at any time, for his forfeited Account Balance,
the Plan Administrator must restore the Participant's or Beneficiary's
forfeited Account Balance to the same dollar amount as the dollar
amount of the Account Balance forfeited, unadjusted for any gains or
losses occurring subsequent to the date of the forfeiture. The Plan
Administrator will make the restoration during the Plan Year in which
the Participant or Beneficiary makes the claim, first from the amount,
if any, of Participant forfeitures the Plan Administrator otherwise
would allocate for the Plan Year, then from the amount, if any, of the
Trust Fund net income or gain for the Plan Year and then from the
amount, or additional amount, the Employer contributes to enable the
Plan Administrator to make the required restoration. The Plan
Administrator must direct the Trustee to distribute the Participant's
or Beneficiary's restored Account Balance to him not later than sixty
(60) days after the close of the Plan Year in which the Plan
Administrator restored the forfeited Account Balance. The forfeiture
provisions of this Section 10.15 apply solely to the Participant's or
the Beneficiary's Account Balance derived from Employer contributions.
10.16 TERMS TO BE COMMUNICATED. The principal terms of the Plan shall
------------------------
be communicated to the Employees by the Plan Administrator, and the Plan
Administrator shall notify each Employee of his rights and benefits hereunder.
The Participants shall be conclusively deemed for all purposes to have consented
to all of the terms and provisions of this Plan and shall be bound thereby with
the same force and effect as if they had executed this Plan. A copy of the Plan
shall be available to each Participant hereunder by having a copy available at
the principal office of each Employer during business hours.
10.17 SIGNATURE AUTHORITY. If the Plan Administrator shall delegate
-------------------
specific fiduciary responsibilities, it may designate and authorize one or more
of the persons being so delegated to sign documents; and shall further notify
the Trustee of such action and the name or names of the person or persons so
designated. The Trustee shall thereafter accept and rely upon any document
executed by such person or persons as representing action by the Plan
Administrator until the Plan Administrator shall deliver to the Trustee a
written revocation of such designation.
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10.18 FIDUCIARY NOTICE REQUIREMENTS. The Plan Administrator and those
-----------------------------
to whom it has delegated fiduciary duties shall notify the Trustee of any action
taken with respect to the Plan, and when required to do so, shall notify any
other interested party. The Plan Administrator and those to whom it has
delegated fiduciary duties shall maintain all books of account, records, and
other data as shall be necessary to properly administer the Plan and satisfy the
disclosure and reporting requirements of ERISA and the Code. The Plan
Administrator shall ensure that the Plan is in compliance with the various
reporting requirements set forth in ERISA, the Code and the regulations
thereunder.
10.19 RELIANCE. The Plan Administrator shall be entitled to rely
--------
conclusively upon, and shall be fully protected in any actions taken by it in
good faith and in reliance upon any opinions or reports which shall be furnished
to it by an accountant, actuary, counsel, or other specialist. The Plan
Administrator shall not incur any liability for its action or failure to act,
excepting only liability for its own gross negligence or willful misconduct. The
Plan Administrator shall indemnify each person to whom it has delegated
fiduciary duties against all claims, losses, damages, expenses, and liabilities
arising from any action or failure to act, except when the same is judicially
determined to be due to the gross negligence or willful misconduct of such
person.
10.20 SUCCESSOR FIDUCIARY. Upon the death, resignation, or inability to
-------------------
serve of any person to whom the Employer or Plan Administrator has delegated
fiduciary duties, a successor fiduciary shall be appointed within thirty (30)
days. If the Employer shall cease to exist, or be dissolved, voluntarily or
involuntarily, or have a receiver or trustee in bankruptcy appointed, a
successor fiduciary shall be appointed within thirty (30) days by the then
remaining persons (if any) to whom fiduciary duties have been delegated. If
there are no remaining persons to whom the Employer has delegated fiduciary
duties, or in the event of the inability, failure, or refusal of the then
remaining fiduciaries to make such appointment, a successor fiduciary shall be
selected by a majority of the Participants under the Plan who are Employees of
the Employer at the time of the occurrence of the foregoing events.
10.21 UNIFORM APPLICATION. The provisions of this Plan shall apply to
-------------------
all Participants uniformly.
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ARTICLE XI
TRUSTEE POWERS AND DUTIES
11.01 TRUST. All assets of the Plan shall be held in the Trust forming
-----
part of this Plan, which shall be administered as a fund to provide for the
payment of benefits as provided in the Plan to the Participants or their
successors in interest, out of the income and principal of the Trust. The
Trustee shall discharge its duties as such solely in the interest of the
Participants and their successors in interest. The Trustee shall act:
(a) For the exclusive purposes of providing benefits to
Participants and their successors in interest and defraying reasonable
expenses of administering the Plan, including the Trust, which is a
part of the Plan;
(b) With the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of like character and with like aims; and
(c) In accordance with the Plan and Trust agreement, except to
the extent such document may be inconsistent with ERISA.
11.02 TRUST FUND. The Trustee shall hold the funds received from the
----------
Employer subject to the terms of this Plan and upon the uses and trusts, and for
the purposes herein set forth. The funds subject to the provisions of this Trust
shall include, but shall not be limited to, all monies, properties, securities,
investments, notes, bonds, mortgages, debentures, shares of stock, accounts, and
evidences of indebtedness of whatsoever kind or nature at any time or from time
to time acquired or held by the Trustee pursuant to the terms of this Plan;
however, the Trustee shall be responsible only for such funds as shall actually
be received by it as Trustee hereunder.
11.03 ESTABLISHMENT OF TRUST.
----------------------
(a) The Trustee shall hold and manage the assets of the Plan
and shall receive to be included in the Trust Fund any contributions
paid to it in cash, or other property approved by the Plan
Administrator and acceptable to the Trustee, and shall retain, manage,
administer, hold, and distribute the same, together with the income
104
therefrom, in accordance with the terms and provisions of this Plan. No
part of the corpus or income of the Trust Fund shall be used for any
purpose except for the exclusive benefit of Employees of the Employer
or their surviving spouses or other Beneficiaries, and payment of the
expenses of administration of the Plan and Trust.
(b) All contributions so received together with the income
therefrom shall be managed, invested and reinvested by the Trustee,
subject, however, to the right of the Employer to appoint and employ
any Investment Manager or Managers to manage and/or invest and reinvest
the Trust Fund, or any part thereof, as provided in Section 8.01.
11.04 ACCEPTANCE. The Trustee accepts the Trust created under the Plan
----------
and agrees to perform the obligations imposed. The Trustee must provide bond for
the faithful performance of its duties under the Trust to the extent required by
ERISA.
11.05 RECEIPT OF CONTRIBUTIONS. The Trustee is accountable to the
-------------------------
Employer for the funds contributed to it by the Employer, but does not have any
duty to see that the contributions received comply with the provisions of the
Plan. The Trustee is not obliged to collect any contributions from the Employer,
nor is obliged to see that funds deposited with it are deposited according to
the provisions of the Plan.
11.06 INVESTMENT POWERS. The Trustee has full discretion and authority
-----------------
with regard to the investment of the Trust Fund, except with respect to a Plan
asset under the control or direction of a properly appointed Investment Manager
or with respect to a Plan asset properly subject to Employer, Participant or
Plan Administrator direction of investment. The Trustee must coordinate its
investment policy with Plan financial needs as communicated to it by the Plan
Administrator. The Trustee is authorized and empowered, but not by way of
limitation, with the following powers, rights and duties:
(a) To invest any part or all of the Trust Fund in any common
or preferred stocks, open-end or closed-end mutual funds, put and call
options traded on a national exchange, United States retirement plan
bonds, corporate bonds, debentures, convertible debentures, commercial
paper, U.S. Treasury bills, U.S. Treasury notes and other direct or
indirect obligations of the Unites States Government or its agencies,
improved or unimproved real estate situated in the United States,
limited partnerships, insurance contracts of any type, mortgages, notes
or other property of any kind, real or personal, to buy or sell options
105
on common stock on a nationally recognized exchange with or without
holding the underlying common stock, to buy and sell commodities,
commodity options and contracts for the future delivery of commodities,
and to make any other investments the Trustee deems appropriate, as a
prudent man would do under like circumstances with due regard for the
purposes of this Plan. Any investment made or retained by the Trustee
in good faith is proper but must be of a kind constituting a
diversification considered by law suitable for trust investments.
(b) To retain in cash so much of the Trust Fund as it may deem
advisable to satisfy liquidity needs of the Plan and to deposit any
cash held in the Trust Fund in a bank account at reasonable interest.
(c) To invest, if the Trustee is a bank or similar financial
institution supervised by the United States or by a State, in any type
of deposit of the Trustee (or of a bank related to the Trustee within
the meaning of Code section 414(b)) at a reasonable rate of interest or
in a common trust fund, as described in Code section 584, or in a
collective investment fund, the provisions of which govern the
investment of such assets and which the Plan incorporates by this
reference, which the Trustee (or its affiliate, as defined in Code
section 1504) maintains exclusively for the collective investment of
money contributed by the bank (or the affiliate) in its capacity as
trustee and which conforms to the rules of the Comptroller of the
Currency.
(d) To manage, sell, contract to sell, grant options to
purchase, convey, exchange, transfer, abandon, improve, repair, insure,
lease for any term even though commencing in the future or extending
beyond the term of the Trust, and otherwise deal with all property,
real or personal, in such manner, for such considerations and on such
terms and conditions as the Trustee decides.
(e) To credit and distribute the Trust as directed by the Plan
Administrator. The Trustee is not obliged to inquire as to whether any
payee or distributee is entitled to any payment or whether the
distribution is proper or within the terms of the Plan, or as to the
manner of making any payment or distribution. The Trustee is
accountable only to the Plan Administrator for any payment or
distribution made by it in good faith on the order or direction of the
Plan Administrator.
106
(f) To borrow money, to assume indebtedness, extend mortgages
and encumber by mortgage or pledge.
(g) To compromise, contest, arbitrate or abandon claims and
demands, in its discretion.
(h) To have with respect to the Trust all of the rights of an
individual owner, including the power to give proxies, to participate
in any voting trusts, mergers, consolidations or liquidations, and to
exercise or sell stock subscriptions or conversion rights.
(i) To lease for oil, gas and other mineral purposes and to
create mineral severances by grant or reservation; to pool or unitize
interests in oil, gas and other minerals; and to enter into operating
agreements and to execute division and transfer orders.
(j) To hold any securities or other property in the name of
the Trustee or its nominee, with depositories or agent depositories or
in another form as it may deem best, with or without disclosing the
trust relationship.
(k) To perform any and all other acts in its judgment
necessary or appropriate for the proper and advantageous management,
investment and distribution of the Trust.
(l) To retain any funds or property subject to any dispute
without liability for the payment of interest, and to decline to make
payment or delivery of the funds or property until final adjudication
is made by a court of competent jurisdiction.
(m) To file all tax returns required of the Trustee.
(n) To furnish to the Employer and the Plan Administrator an
annual statement of account showing the condition of the Trust Fund and
all investments, receipts, disbursements and other transactions
effected by the Trustee during the Plan Year covered by the statement
and also stating the assets of the Trust held at the end of the Plan
Year, which accounts are conclusive on all persons, including the
Employer and the Plan Administrator, except as to any act or
transaction concerning which the Employer or the Plan Administrator
files with the Trustee written exceptions or objections within ninety
107
(90) days after the receipt of the accounts or for which ERISA
authorizes a longer period within which to object.
(o) To begin, maintain or defend any litigation necessary in
connection with the administration of the Plan, except that the Trustee
is not obliged or required to do so unless indemnified to its
satisfaction.
The powers granted to the Trustee shall be exercised in the sole
fiduciary discretion of the Trustee. However, if elected in the Employer's
Adoption Agreement Section 9.09, each Participant may direct the Trustee to
separate and keep separate all or a portion of his interest in the Plan; and
further, each Participant is authorized and empowered, in his sole and absolute
discretion, to give directions to the Trustee in such form as the Trustee may
require concerning the investment of the Participant's directed investment
Account, which directions must be followed by the Trustee, subject, however, to
restrictions on payment of life insurance premiums. Neither the Trustee nor any
other persons, including the Plan Administrator, shall be under any duty to
question any such direction of the Participant or to review any securities or
other property, real or personal, or to make any suggestions to the Participant
in connection therewith, and the Trustee shall comply as promptly as practicable
with directions given by the Participant hereunder. The Trustee may refuse to
comply with any direction from the Participant in the event the Trustee, in its
sole discretion, deems such directions improper by virtue of applicable law, and
in such event, the Trustee shall not be responsible or liable for any loss or
expense which may result.
Notwithstanding anything herein to the contrary, the Trustee shall not,
at any time after December 31, 1981, invest any portion of a Participant's
directed investment Account in "collectibles" as that term is defined in Code
section 408(m).
11.07 INVESTMENT IN QUALIFYING EMPLOYER SECURITIES AND QUALIFYING
----------------------------------------------------------------
EMPLOYER REAL PROPERTY. The investment options in this Section 11.07 include the
----------------------
ability to invest in qualifying Employer securities or qualifying Employer real
property, as defined in and as limited by ERISA. The Employer may elect in its
Adoption Agreement Section 11.07 to permit the aggregate investments in
qualifying Employer securities and in qualifying Employer real property to
exceed ten percent (10%) of the value of Plan assets.
11.08 RECORDS AND STATEMENTS. The records of the Trustee pertaining to
----------------------
the Plan must be open to the inspection of the Plan Administrator and the
108
Employer at all reasonable times and may be audited from time to time by any
person or persons as the Employer or Plan Administrator may specify in writing.
The Trustee must furnish the Plan Administrator with whatever information
relating to the Trust Fund the Plan Administrator considers necessary.
11.09 FEES AND EXPENSES FROM FUND. A Trustee will receive reasonable
---------------------------
annual compensation as may be agreed upon from time to time between the Employer
and the Trustee. No person who is compensated on a full-time basis from the
Employer may receive compensation for services as Trustee. The Trustee will pay
from the Trust Fund, pursuant to the provisions of ERISA, all fees and expenses
reasonably incurred by the Plan, to the extent such fees and expenses are for
the ordinary and necessary administration and operation of the Plan, unless the
Employer pays such fees and expenses. Any fee or expense paid, directly or
indirectly, by the Employer is not an Employer contribution to the Plan,
provided the fee or expense relates to the ordinary and necessary administration
of the Trust Fund.
11.10 EXERCISE OF POWERS. The powers granted the Trustee under Sections
------------------
11.06 and 11.07 shall be exercised by the Trustee in its discretion insofar as
such exercise does not contravene any written direction from the Employer or
Investment Manager or the policy for the funding of the Plan developed by the
Employer. The decision of the Trustee in matters within its jurisdiction shall
be final, binding, and conclusive upon the Employer, and upon each Employee,
Participant, Beneficiary, and every other interested person.
11.11 POWER TO DO ANY NECESSARY ACTS. The Trustee is authorized in its
------------------------------
discretion to do any and all acts and to make, execute, and deliver, as Trustee,
any and all instruments in writing necessary or proper for the effective
exercise of any of the Trustee's powers as stated herein or otherwise necessary
to accomplish the purposes of the Trust.
11.12 ACCOUNTING.
----------
(a) The Trustee shall keep accurate and detailed accounts of
all investments, receipts, disbursements, and other transactions
hereunder. All accounts, books and records relating thereto shall be
open for inspection and audit at all reasonable times by the Plan
Administrator, Investment Manager or by any other person designated by
the Employer.
109
(b) Within ninety (90) days following the close of each fiscal
year of the Trust and within ninety (90) days after the removal or
resignation of the Trustee, the Trustee shall file with the Plan
Administrator a written account setting forth all investments,
receipts, disbursements, and other transactions effected by it during
such fiscal year or during the period from the close of the last fiscal
year to the date of such removal or resignation, and setting forth the
current value of the Trust Fund. As of the close of business at the end
of the fiscal year of the Trust, the Trustee shall value the assets of
the Trust Fund at prevailing market values and shall render a statement
thereof promptly to the Plan Administrator. Nothing herein contained,
however, shall preclude the Trustee from having any of its accounts
judicially settled by a court of competent jurisdiction.
11.13 PARTIES TO LITIGATION. Except as otherwise provided by ERISA, no
---------------------
Participant or Beneficiary is a necessary party or is required to receive notice
of process in any court proceeding involving the Plan, the Trust Fund or any
fiduciary of the Plan. Any final judgment entered in any proceeding will be
conclusive upon the Employer, the Plan Administrator, the Trustee, Participants
and Beneficiaries.
11.14 PROFESSIONAL AGENTS. The Trustee may employ and pay from the
--------------------
Trust Fund reasonable compensation to agents, attorneys, accountants and other
persons to advise the Trustee as, in its opinion, may be necessary. The Trustee
may delegate to any agent, attorney, accountant or other person selected by it
any non-Trustee power or duty vested in it by the Plan, and the Trustee may act
or refrain from acting on the advice or opinion of any agent, attorney,
accountant or other person so selected.
11.15 DISTRIBUTION OF CASH OR PROPERTY. Pursuant to the Employer's
----------------------------------
election in its Adoption Agreement Section 11.15, the Trustee may make
distribution under the Plan in cash or property, or partly in each, at its fair
market value as determined by the Trustee. For purposes of a distribution to a
Participant or to a Participant's designated Beneficiary or surviving spouse,
"property" includes a Nontransferable Annuity Contract, provided the contract
satisfies the requirements of this Plan.
11.16 DISTRIBUTION DIRECTIONS. If no one claims a payment or
-------------------------
distribution made from the Trust, the Trustee must promptly notify the Plan
Administrator and then dispose of the payment in accordance with the subsequent
direction of the Plan Administrator.
110
11.17 THIRD PARTY/MULTIPLE TRUSTEES. No person dealing with the Trustee
-----------------------------
is obligated to see to the proper application of any money paid or property
delivered to the Trustee, or to inquire whether the Trustee has acted pursuant
to any of the terms of the Plan. Each person dealing with the Trustee may act
upon any notice, request or representation in writing by the Trustee, or by the
Trustee's duly authorized agent, and is not liable to any person in so acting.
The certificate of the Trustee that it is acting in accordance with the Plan
will be conclusive in favor of any person relying on the certificate. If more
than two persons act as Trustee, a decision of the majority of such persons
controls with respect to any decision regarding the administration or investment
of the Trust Fund or of any portion of the Trust Fund with respect to which such
persons act as Trustee. However, the signature of only one Trustee is necessary
to effect any transaction on behalf of the Trust.
11.18 RESIGNATION. The Trustee may resign its position at any time by
-----------
giving thirty (30) days' written notice in advance to the Employer; provided,
however, the Employer may agree to waive such thirty (30) day advance written
notice. If the Employer fails to appoint a successor Trustee within sixty (60)
days of its receipt of the Trustee's written notice of resignation, the Trustee
will treat the Employer as having appointed itself as Trustee and as having
filed its acceptance of appointment with the former Trustee.
11.19 REMOVAL. The Employer, by giving thirty (30) days' written notice
-------
in advance to the Trustee, may remove any Trustee; provided, however, the
Employer may elect to waive such thirty (30) day advance written notice. In the
event of the resignation or removal of a Trustee, the Employer must appoint a
successor Trustee if it intends to continue the Plan; provided, however, if,
following such resignation or removal, there is at least one person serving as a
Trustee, no appointment of a successor trustee shall be required. If two or more
persons hold the position of Trustee, in the event of the removal of one such
person, during any period the selection of a replacement is pending, or during
any period such person is unable to serve for any reason, the remaining person
or persons will act as the Trustee.
11.20 INTERIM DUTIES AND SUCCESSOR TRUSTEE. Each successor Trustee
-------------------------------------
succeeds to the title to the Trust vested in his predecessor by accepting in
writing his appointment as successor Trustee and by filing the acceptance with
the former Trustee and the Plan Administrator with the signing or filing of any
111
further statement. The resigning or removed Trustee, upon receipt of acceptance
in writing of the Trust by the successor Trustee, must execute all documents and
do all acts necessary to vest the title of record in any successor Trustee. Each
successor Trustee has and enjoys all of the powers, both discretionary and
ministerial, conferred under this Plan upon his predecessor. A successor Trustee
is not personally liable for any act or failure to act of any predecessor
Trustee, except as required under ERISA. With the approval of the Employer, a
successor Trustee, with respect to the Plan, may accept the account rendered and
the property delivered to it by a predecessor Trustee without incurring any
liability or responsibility for so doing.
11.21 VALUATION OF TRUST. The Trustee must value the Trust Fund as of
------------------
each Adjustment Date (or other Valuation Date) to determine the fair market
value of each Participant's Account Balance in the Trust. The Trustee also must
value the Trust Fund on any other valuation dates which may be directed in
writing by the Plan Administrator.
11.22 AUTHORITY OF TRUSTEE. All persons dealing with the Trustee are
--------------------
hereby released from any necessity for questioning the authority of the Trustee
hereunder or to see to the application of any monies, securities or other
property paid or delivered to the Trustee as a purchase price or otherwise.
11.23 DOCUMENTS AND NOTICES. All documents, notices, information,
----------------------
accountings, or other correspondence shall be submitted by the Trustee in
writing over the signature of a duly authorized officer of the Trustee if the
Trustee is a corporate Trustee; and the Employer, the Plan Administrator, or any
other person or persons to whom such matters are directed may rely upon the
genuineness of the matter submitted without any duty to inquire into its
genuineness.
11.24 POSTPONEMENT OF ACTION. If any dispute shall arise as to any act
----------------------
to be performed by the Trustee, the Trustee may postpone the performing of such
act until actual adjudication of such dispute shall have been made in a court of
competent jurisdiction or it shall be indemnified to its satisfaction against
loss arising out of such dispute.
11.25 DELEGATION OF RESPONSIBILITIES. The Trustee and any other party
------------------------------
serving as a fiduciary with respect to the Plan shall act prudently in the
delegation or allocation of responsibilities to other persons, and if at any
time there is more than one authorized Trustee serving, each Trustee shall
exercise reasonable care to prevent the other Trustees from committing a breach
112
of such other Trustees' obligations and responsibilities hereunder. The Trustee
shall conduct a periodic review to assure that delegated functions are carried
out properly. Neither the Trustee nor any other person serving at any time as a
fiduciary with respect to the Plan shall be liable for the actions of any other
Trustee or fiduciary unless he participates, approves, acquiesces in or conceals
a breach of obligations and responsibilities committed by the other.
11.26 DETERMINATION OF ELIGIBILITY. The Trustee shall not be required
----------------------------
to determine the facts concerning the eligibility of Employees for
participation, their identity, the eligibility of Participants or their
designated Beneficiaries for benefits under the Plan, or the manner and method
of payment or disbursement of benefits. In such matters the Trustee shall rely
solely upon the written advice and direction of the Employer or the Plan
Administrator, and shall not be required to question or verify the facts in any
manner or at any time.
11.27 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER, ANCILLARY
----------------------------------------------------------------
TRUSTEE OR INDEPENDENT FIDUCIARY APPOINTED.
------------------------------------------
(a) The Trustee is not liable for the acts or omissions of any
Investment Manager the Plan Administrator may appoint, nor is the
Trustee under any obligation to invest or otherwise manage any asset of
the Plan which is subject to the management of a properly appointed
Investment Manager. The Plan Administrator, the Trustee and any
properly appointed Investment Manager may execute a letter agreement as
a part of this Plan delineating the duties, responsibilities and
liabilities of the Investment Manager with respect to any part of the
Trust Fund under the control of the Investment Manager.
(b) The limitation on liability described in this Section
11.27 also applies to the acts or omissions of any ancillary trustee or
independent fiduciary properly appointed under Section 11.29 of the
Plan. However, if the Trustee, pursuant to the delegation described in
Section 11.29 of the Plan, appoints an ancillary trustee, the Trustee
is responsible for the periodic review of the ancillary trustee's
actions and must exercise its delegated authority in accordance with
the terms of the Plan and in a manner consistent with ERISA. The
Employer, the Trustee and an ancillary trustee may execute a letter
agreement as a part of this Plan delineating any indemnification
agreement between the parties.
113
11.28 INVESTMENT IN GROUP TRUST FUND.
------------------------------
(a) The Employer, by adopting this Plan, specifically
authorizes the Trustee to invest all or any portion of the assets
comprising the Trust Fund in any group trust fund which at the time of
the investment provides for the pooling of the assets of plans
qualified under Code section 401(a). This authorization applies solely
to a group trust fund exempt from taxation under Code section 501(a)
and the trust agreement of which satisfies the requirements of Revenue
Ruling 81-100. The provisions of the group trust fund agreement, as
amended from time to time, are by this reference incorporated within
this Plan and Trust. The provisions of the group trust fund will govern
any investment of Plan assets in that fund. The Employer must specify
in an addendum to its Adoption Agreement, numbered Section 11.28, the
group trust fund(s) to which this authorization applies. Pursuant to
Section 11.07, a Trustee has the authority to invest in certain common
trust funds and collective investment funds without the need for the
authorizing addendum described in this Section 11.28.
(b) Furthermore, at the Employer's direction, the Trustee, for
collective investment purposes may combine into one trust fund the
Trust created under this Plan with the Trust created under any other
qualified retirement plan the Employer maintains. However, the Trustee
must maintain separate records of account for the assets of each Trust
in order to reflect properly each Participant's Account Balance under
the plan(s) in which he is a Participant.
11.29 APPOINTMENT OF ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY.
---------------------------------------------------------
(a) The Employer, in writing, may appoint any person in any
State to act as ancillary trustee with respect to a designated portion
of the Trust Fund. An ancillary trustee must acknowledge in writing its
acceptance of the terms and conditions of its appointment as ancillary
trustee and its fiduciary status under ERISA. The ancillary trustee has
the rights, powers, duties and discretion as the Employer may delegate,
subject to any limitations or directions specified in the instrument
evidencing appointment of the ancillary trustee and to the terms of the
Plan or of ERISA. The investment powers delegated to the ancillary
trustee may include any investment powers available under Section 11.06
of the Plan including the right to invest any portion of the assets of
the Trust Fund in a common trust fund, as described in Code section
114
584, or in any collective investment fund, the provisions of which
govern the investment of such assets and which the Plan incorporates by
this reference, but only if the ancillary trustee is a bank or similar
financial institution supervised by the United States or by a State and
the ancillary trustee (or its affiliate, as defined in Code section
1504) maintains the common trust fund or collective investment fund
exclusively for the collective investment of money contributed by the
ancillary trustee (or its affiliate) in a trustee capacity and which
conforms to the rules of the Comptroller of the Currency. The Employer
also may appoint as an ancillary trustee, the trustee of any group
trust fund designated for investment pursuant to the provisions of
Section 11.28 of the Plan.
(b) The ancillary trustee may resign its position at any time
by providing at least thirty (30) days' advance written notice to the
Employer, unless the Employer waives this notice requirement. The
Employer, in writing, may remove an ancillary trustee at any time. In
the event of resignation or removal, the Employer may appoint another
ancillary trustee, return the assets to the control and management of
the Trustee or receive such assets in the capacity of ancillary
trustee. The Employer may delegate its responsibilities under this
Section 11.29 to the Trustee under the Plan, subject to the acceptance
by the Trustee of that delegation.
(c) If the U.S. Department of Labor (the "Department")
requires engagement of an independent fiduciary to have control or
management of all or a portion of the Trust Fund, the Employer will
appoint such independent fiduciary, as directed by the Department. The
independent fiduciary will have the duties, responsibilities and powers
prescribed by the Department and will exercise those duties,
responsibilities and powers in accordance with the terms, restrictions
and conditions established by the Department and, to the extent not
inconsistent with ERISA, the terms of the Plan. The independent
fiduciary must accept its appointment in writing and must acknowledge
its status as a fiduciary of the Plan.
11.30 PROHIBITED TRANSACTIONS. Notwithstanding anything herein to the
-----------------------
contrary, neither the Trustee, nor any other party at any time serving as a
fiduciary with respect to the Plan, shall cause the Plan to engage in any
"prohibited transactions" as defined and applicable to this Plan under section
406 of ERISA, subject to any available and applicable exemption contained in or
115
allowed by ERISA, and in complying with such limitations, neither the Trustee
nor any other fiduciary shall engage in any transaction which it knows or should
know constitutes a direct or indirect:
(a) Sale or exchange, or leasing, of any property between the
Trust Fund and a "party-in-interest" or a "disqualified person" (such
terms as used in this Plan shall have the meanings which they have
under ERISA);
(b) Lending of money or other extension of credit between the
Trust Fund and a party-in-interest or a disqualified person;
(c) Furnishing of goods, services, or facilities between the
Trust Fund and a party-in-interest or a disqualified person;
(d) Transfer to, or use by or for the benefit of, a
party-in-interest or a disqualified person, of any assets of the Trust
Fund; or
(e) Acquisition, on behalf of the Trust Fund, of any Employer
security or real property which would violate Section 407 of ERISA.
Unless such transaction is permissible under ERISA, neither the Trustee
nor any other fiduciary shall deal with the assets of the Trust Fund in its own
interest of for its own account or act in any transaction involving the Trust
Fund on behalf of a party (or represent a party) whose interests are adverse to
the interests of the Trust Fund or the interests of its Participants or
Beneficiaries. No fiduciary shall receive any consideration for its own personal
account from any party dealing with the Trust Fund in connection with a
transaction involving the assets of the Trust Fund.
116
ARTICLE XII
CLAIMS PROCEDURE
12.01 FILING A CLAIM. A Participant or Beneficiary shall have the right
--------------
to file a claim, inquire if he has any right to benefits, or appeal the denial
of a claim. A Participant or Beneficiary (the "claimant") shall make a claim for
the benefits provided under the Plan by filing a written claim with the Plan
Administrator. If the Plan Administrator is a committee and if any member of the
committee shall be the claimant, all actions which are required to be taken by
the Plan Administrator pursuant to this Article shall be taken instead by
another member of the committee as designated by the Employer.
12.02 NOTIFICATION TO CLAIMANT. The Plan Administrator shall notify the
------------------------
claimant of its decisions with respect to a claim within ninety (90) days
following the receipt of the claim by the Plan Administrator or any member of a
committee serving as Plan Administrator (or within ninety (90) days following
the expiration of the initial ninety (90) day period, in a case where there are
special circumstances requiring extension of time for processing the claim). If
special circumstances require an extension of time for processing the claim,
written notice of the extension shall be furnished by the Plan Administrator to
the claimant prior to the expiration of the initial ninety (90) day period. The
notice of extension shall indicate the special circumstances requiring the
extension and the date by which the notice of decision with respect to the claim
shall be furnished. Commencement of benefit payments shall constitute notice of
approval of a claim to the extent of the amount of the approved benefit. If such
claim shall be wholly or partially denied, such notice shall be in writing and
worded in a manner calculated to be understood by the claimant, and shall set
forth:
(a) The specific reason or reasons for the denial;
(b) Specific reference to the Plan provisions that apply in
the case;
(c) A description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of
why such material or information is necessary; and
(d) An explanation of the Plan's claims review procedure.
117
If the Plan Administrator fails to notify the claimant of the decision regarding
his claim in accordance with this Article, the claim shall be deemed denied and
the claimant shall then be permitted to proceed with the claims review procedure
provided in Section 12.03.
12.03 CLAIMS REVIEW PROCEDURE. Within sixty (60) days following receipt
-----------------------
by the claimant of notice of the claim denial, or within sixty (60) days
following the close of the ninety (90) day period referred to in Section 12.02,
if the Plan Administrator fails to notify the claimant of the decision within
such ninety (90) day period, the claimant may appeal the denial by filing a
written application for review with the Plan Administrator. Following such
request for review, the Plan Administrator shall fully and fairly review the
decision denying the claim. Prior to the decision of the Plan Administrator
pursuant to Section 12.04, the claimant shall be given an opportunity to review
pertinent documents and to submit issues and comments in writing.
12.04 DECISION ON REVIEW. The decision on review of a denied claim
------------------
shall be made in the following manner:
(a) The Plan Administrator shall make its decision regarding
the merits of the denied claim promptly, and within sixty (60) days
following receipt by the Plan Administrator of the request for review
(or within one hundred twenty (120) days after such receipt, in a case
where there are special circumstances requiring extension of time for
reviewing the appealed claim), shall deliver the decision to the
claimant in writing. If an extension of time for reviewing the appealed
claim is required because of special circumstances, written notice of
the extension shall be furnished to the claimant prior to the
commencement of the extension. If the decision on review is not
furnished within the prescribed time, the claim shall be deemed denied
on review.
(b) The decision on review shall set forth specific reasons
for the decision, shall be written in a manner designed to be
understood by the claimant, and shall cite specific references to the
pertinent Plan provisions on which the decision is based.
(c) The decision of the Plan Administrator shall be final and
conclusive.
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12.05 ACTION BY AUTHORIZED REPRESENTATIVE OF CLAIMANT. All actions set
-----------------------------------------------
forth in this Article to be taken by the claimant may likewise be taken by a
representative of the claimant duly authorized by him to act in his behalf on
such matters. The Plan Administrator may require such evidence as it may
reasonably deem necessary or advisable of any such representative's authority to
act.
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ARTICLE XIII
PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
13.01 INVESTMENT IN INSURANCE. The Employer may elect in its Adoption
-----------------------
Agreement Section 13.01 whether insurance shall be permitted as an investment
under the Plan. If insurance is permitted, such investment shall be governed by
the provisions of this Article XIII. If, in the Employer's Adoption Agreement
Section 9.09, the Employer permits Participants to direct all or any portion of
their respective Account Balances under the Plan, and the Employer further
permits, in its Adoption Agreement Section 13.01, insurance as an investment
option available under the Plan, each Participant may direct the Trustee as to
the purchase of insurance with respect to his Account Balance. The remaining
provisions of this Article XIII apply only if the Employer has elected to permit
the purchase of life insurance under the Plan.
13.02 INSURANCE BENEFIT.
-----------------
(a) The Employer may elect to provide incidental life
insurance benefits for insurable Participants who consent to life
insurance benefits by signing the appropriate insurance company
application form. The Trustee will not purchase any incidental life
insurance benefit for any Participant prior to an allocation to the
Participant's Account. At an insured Participant's written direction,
the Trustee will use all or any portion of the Participant's
nondeductible voluntary contributions, if any, to pay insurance
premiums covering the Participant's life. This Section 13.02 also
authorizes the purchase of life insurance, for the benefit of the
Participant, on the life of a Family Member of the Participant or on
any person in whom the Participant has an insurable interest. However,
if the policy is on the joint lives of the Participant and another
person, the Trustee may not maintain that policy if that other person
predeceases the Participant.
(b) The Employer will direct the Trustee as to the insurance
company and insurance agent through which the Trustee is to purchase
the insurance contracts, the amount of the coverage and the applicable
dividend plan. Each application for a policy, and the policies
themselves, must designate the Trustee as sole owner, with the right
reserved to the Trustee to exercise any right or option contained in
the policies, subject to the terms and provisions of this Plan. The
Trustee must be the named beneficiary for the Account of the insured
120
Participant. Proceeds of insurance contracts paid to the Participant's
Account under this Article XIII are subject to the distribution
requirements of Article V and of Article VI. The Trustee will not
retain any such proceeds for the benefit of the Trust.
(c) The Trustee will charge the premiums on any incidental
benefit insurance contract covering the life of a Participant against
the Account of that Participant. The Trustee will hold all incidental
benefit insurance contracts issued under the Plan as assets of the
Trust created under the Plan.
13.03 INCIDENTAL INSURANCE BENEFITS. The aggregate of life insurance
------------------------------
premiums paid for the benefit of a Participant, at all times, may not exceed the
following percentages of the aggregate of the Employer's contributions allocated
to any Participant's Account: (a) forty-nine (49%) in the case of the purchase
of ordinary life insurance contracts (contracts with both nondecreasing death
benefits and nonincreasing premiums); or (b) twenty-five (25%) in the case of
the purchase of term life insurance or universal life insurance contracts and
all other life insurance contracts which are not ordinary life. If the Trustee
purchases a combination of ordinary life insurance contract(s) and term life
insurance or universal life insurance contract(s), then the sum of one-half of
the premiums paid for the ordinary life insurance contract(s) and the premiums
paid for the term life insurance or universal life insurance contract(s) may not
exceed twenty-five (25%) of the Employer contributions allocated to any
Participant's Account. The incidental insurance benefits requirement does not
apply to the Plan if the Plan purchases life insurance benefits only from
Employer contributions accumulated in the Participant's Account for at least two
years (measured from the allocation date).
13.04 LIMITATION ON LIFE INSURANCE PROTECTION. The Trustee will not
-----------------------------------------
continue any life insurance protection for any Participant beyond his Annuity
Starting Date (as defined in Article VI). If the Trustee holds any incidental
benefit insurance contract(s) for the benefit of a Participant when he
terminates his employment (other than by reason of death), the Trustee must
proceed as follows:
(a) If the entire cash value of the contract(s) is vested in
the terminating Participant, or if the contract(s) will have no cash
value at the end of the policy year in which termination of employment
occurs, the Trustee will transfer the contract(s) to the Participant
121
endorsed so as to vest in the transferee all right, title and interest
to the contract(s), free and clear of the Trust; subject however, to
restrictions as to surrender or payment of benefits as the issuing
insurance company may permit and as the Plan Administrator directs;
(b) If only part of the cash value of the contract(s) is
vested in the terminating Participant, the Trustee, to the extent the
Participant's interest in the cash value of the contract(s) is not
vested, may adjust the Participant's interest in the value of his
Account attributable to Trust assets other than incidental benefit
insurance contracts and proceed as in (a), or the Trustee must effect a
loan from the issuing insurance company on the sole security of the
contract(s) for an amount equal to the difference between the cash
value of the contract(s) at the end of the policy year in which
termination of employment occurs and the amount of the cash value that
is vested in the terminating Participant, and the Trustee must transfer
the contract(s) endorsed so as to vest in the transferee all right,
title and interest to the contract(s), free and clear of the Trust;
subject however, to the restrictions as to surrender or payment of
benefits as the issuing insurance company may permit and the Plan
Administrator directs;
(c) If no part of the cash value of the contract(s) is vested
in the terminating Participant, the Trustee must surrender the
contract(s) for cash proceeds as may be available.
In accordance with the written direction of the Plan Administrator, the
Trustee will make any transfer of contract(s) under this Section 13.04 on the
Participant's Annuity Starting Date (or as soon as administratively practicable
after that date). The Trustee may not transfer any contract under this Section
13.04 which contains a method of payment not specifically authorized by Article
VI or which fails to comply with the survivor annuity requirements, if
applicable, of Article VI. In this regard, the Trustee either must convert such
a contract to cash and distribute the cash instead of the contract, or before
making the transfer, require the issuing company to delete the unauthorized
method of payment option from the contract.
13.05 DEFINITIONS. For purposes of this Article XIII:
-----------
(a) "Policy" means an ordinary life insurance contract or a
term life insurance contract issued by an insurer on the life of a
Participant.
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(b) "Issuing insurance company" is any life insurance company
which has issued a policy upon application by the Trustee under the
terms of this Plan.
(c) "Contract" or "Contracts" means a policy of insurance. In
the event of any conflict between the provisions of this Plan and the
terms of any contract or policy of insurance issued in accordance with
this Article XIII, the provisions of the Plan control.
(d) "Insurable Participant" means a Participant to whom an
insurance company, upon an application being submitted in accordance
with the Plan, will issue insurance coverage, either as a standard risk
or as a risk in an extra mortality classification.
13.06 DIVIDEND PLAN. The dividend plan is premium reduction unless the
-------------
Plan Administrator directs the Trustee to the contrary. The Trustee must use all
dividends for a contract to purchase insurance benefits or additional insurance
benefits for the Participant on whose life the insurance company has issued the
contract. Furthermore, the Trustee must arrange, where possible, for all
policies issued on the lives of Participants under the Plan to have the same
premium due date and all ordinary life insurance contracts to contain guaranteed
cash values with as uniform basic options as are possible to obtain. The term
"dividends" includes policy dividends, refunds of premiums and other credits.
13.07 INSURANCE COMPANY NOT A PARTY TO AGREEMENT. No insurance company,
------------------------------------------
solely in its capacity as an issuing insurance company, is a party to this Plan
nor is the company responsible for its validity.
13.08 INSURANCE COMPANY NOT RESPONSIBLE FOR TRUSTEE'S ACTIONS. No
-----------------------------------------------------------
insurance company, solely in its capacity as an issuing insurance company, need
examine the terms of this Plan nor is responsible for any action taken by the
Trustee.
13.09 INSURANCE COMPANY RELIANCE ON TRUSTEE'S SIGNATURE. For the
------------------------------------------------------
purpose of making application to an insurance company and in the exercise of any
right or option contained in any policy, the insurance company may rely upon the
signature of the Trustee and is saved harmless and completely discharged in
acting at the direction and authorization of the Trustee.
123
13.10 ACQUITTANCE. An insurance company is discharged from all
-----------
liability for any amount paid to the Trustee or paid in accordance with the
direction of the Trustee, and is not obliged to see to the distribution or
further application of any monies it so pays.
13.11 DUTIES OF INSURANCE COMPANY. Each insurance company must keep
---------------------------
such records, make such identification of contracts, funds and accounts with
funds, and supply such information as may be necessary for the proper
administration of the Plan under which it is carrying insurance benefits.
124
ARTICLE XIV
MISCELLANEOUS
14.01 PURPOSE OF PLAN AND TRUST. This Plan is created for the exclusive
-------------------------
benefit of Employees of the Employer and their Beneficiaries and shall be
interpreted in a manner consistent with its being an Employees' Trust as defined
in Code section 401(a). At no time prior to the satisfaction of all liabilities
with respect to Employees and their Beneficiaries shall any part of the corpus
or income of this Trust be used for, or diverted to, purposes other than for the
exclusive benefit of Employees of the Employer hereunder, or their
beneficiaries. This Section cannot be altered or amended except to accord with
any amendment of Code section 401(a)(2).
14.02 ALTERNATIVE ACTS. If it becomes impossible for the Employer or
-----------------
the Trustee to perform any act under this Trust, that act shall be performed in
a manner which in the judgment of the Plan Administrator will most nearly carry
out the intent and purpose of this Trust. All parties to this Trust or in any
way interested herein shall be bound by any acts performed under such
conditions.
14.03 NECESSARY ACTS. All parties to this Trust and all persons
---------------
claiming any interest whatsoever hereunder agree to perform any and all acts and
execute any and all documents and papers which may be necessary or desirable for
the carrying out of this Trust or any of its provisions.
14.04 MAXIMUM DURATION. If the indefinite continuance of this Trust
----------------
would be in violation of the law, then this Trust shall continue for the maximum
period permitted by law and shall then terminate, whereupon distribution of its
assets shall be made as provided under the provisions of this Plan with respect
to the termination of the Trust.
14.05 BINDING EFFECT. The Plan shall be binding upon the successors
--------------
and assigns of any and all parties hereto, present and future.
14.06 EVIDENCE. Anyone required to give evidence under the terms of the
--------
Plan may do so by certificate, affidavit, document or other information which
the person to act in reliance may consider pertinent, reliable and genuine, and
to have been signed, made or presented by the proper party or parties. The Plan
125
Administrator and the Trustee are fully protected in acting and relying upon any
evidence described under the immediately preceding sentence.
14.07 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee nor
--------------------------------------
the Plan Administrator has any obligation or responsibility with respect to any
action required by the Plan to be taken by the Employer, any Participant or
eligible Employee, or for failure of any of the above persons to act or make any
payment or contribution, or to otherwise provide any benefit contemplated under
this Plan. Furthermore, the Plan does not require the Trustee or the Plan
Administrator to collect any contribution required under the Plan, or to
determine the correctness of the amount of any Employer contribution. Neither
the Trustee nor the Plan Administrator need inquire into or be responsible for
any action or failure to act on the part of the others, or on the part of any
other person who has any responsibility regarding the management, administration
or operation of the Plan, whether by the express terms of the Plan or by a
separate agreement authorized by the Plan or by the applicable provisions of
ERISA. Any action required of a corporate Employer must be by its Board of
Directors or its designate.
14.08 FIDUCIARIES NOT INSURERS. The Trustee, the Plan Administrator and
------------------------
the Employer in no way guarantee the Trust Fund from loss or depreciation. The
Employer does not guarantee the payment of any money which may be or become due
to any person from the Trust Fund. The liability of the Plan Administrator and
the Trustee to make any payment from the Trust Fund at any time and all times is
limited to the then available assets of the Trust.
14.09 WAIVER OF NOTICE. Any person entitled to notice under the Plan
----------------
may waive the notice, unless the Code or Treasury regulations prescribe the
notice or ERISA specifically or impliedly prohibits such a waiver.
14.10 SUCCESSORS. The Plan is binding upon all persons entitled to
----------
benefits under the Plan, their respective heirs and legal representatives, upon
the Employer, its successors and assigns, and upon the Trustee, the Plan
Administrator and their successors.
14.11 NONALIENATION OF BENEFITS.
-------------------------
(a) Benefits payable under this Plan shall not be subject in
any manner to anticipation, alienation, sale, transfer, assignment,
126
pledge, encumbrance, charge, garnishment, execution, or levy of any
kind, either voluntary or involuntary (unless such liability is for
alimony or other payments for the support of a spouse or former spouse,
or for any other relative of the Participant under a qualified domestic
relations order), prior to actually being received by the person
entitled to the benefit under the terms of the Plan. Any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, charge
or otherwise dispose of any right to benefits payable hereunder, shall
be void. The Trust Fund shall not in any manner be liable for, or
subject to, the debts, contracts, liabilities, engagements or torts of
any person entitled to benefits hereunder.
(b) In any action or proceeding involving the Trust Fund, or
any property constituting part or all thereof, or the administration
thereof, the Employer, the Plan Administrator, and the Trustee shall be
the only necessary parties, and no Employees or former Employees of the
Employer or their beneficiaries or any other person having or claiming
to have an interest in the Trust Fund or under the Plan shall be
entitled to any notice or service of procesection
(c) Any final judgment which is not appealed or appealable
that may be entered in any such action or proceeding shall be binding
and conclusive on the parties hereto, the Plan Administrator and all
persons having or claiming to have any interest in the Trust Fund or
under the Plan.
14.12 RIGHTS TO TRUST ASSETS. No Participant shall have any right to,
----------------------
or interest in, any assets of the Trust Fund upon termination of employment or
otherwise, except as provided for under the terms of this Plan, and then only to
the extent of the benefits payable under the Plan to such Participant out of the
assets of the Trust Fund. Except as otherwise may be provided under Title IV of
ERISA, all payments of benefits as provided for in this Plan shall be made
solely out of the assets of the Trust Fund and none of the fiduciaries shall be
liable therefor in any manner.
14.14 HEADINGS. The headings of Articles and Sections are for the ease
--------
of reference only and shall in no way be construed to limit or modify the
detailed provisions hereof.
127
14.14 GENDER AND NUMBER. Masculine pronouns shall include the feminine
-----------------
gender (and vice versa), and the singular shall include the plural (and vice
versa) unless the context indicates otherwise. The pronouns "it" and "its" shall
refer to a natural person (and vice versa) if the context so requires.
14.15 STATE LAW. The law of the state of the Employer's principal place
---------
of business (unless otherwise designated in an addendum to the Employer's
Adoption Agreement, numbered Section 14.15) will determine all questions arising
with respect to the provisions of this Plan except to the extent superseded by
Federal law.
14.16 EMPLOYER'S RIGHT TO PARTICIPATE. If the Employer's Plan fails to
-------------------------------
qualify or to maintain qualification or if the Employer makes any amendment or
modification to a provision of this Plan (other than a proper completion of an
elective provision under the Adoption Agreement or the attachment of an addendum
authorized by the Plan or by the Adoption Agreement), the Employer may no longer
participate under this Volume Submitter Plan. Furthermore, if the Employer no
longer is a client of the Volume Submitter Sponsor, subsequent amendments to
this Volume Submitter Plan by the Volume Submitter Sponsor, pursuant to Section
15.04, will result in the discontinuance of the Employer's participation in this
Volume Submitter Plan unless it resumes its client relationship with the Volume
Submitter Sponsor. If the Employer is not entitled to participate under this
Volume Submitter Plan, the Employer's Plan is an individually-designed plan and
the reliance procedures specified in the Adoption Agreement no longer will
apply.
14.17 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or
--------------------------
with respect to the establishment of the Trust, or any modification or amendment
to the Plan or Trust, or in the creation of any Account, or the payment of any
benefit, gives any Employee, Employee-Participant or any Beneficiary any right
to continue employment, any legal or equitable right against the Employer, or
Employee of the Employer, or against the Trustee, or its agents or employees, or
against the Plan Administrator, except as expressly provided by the Plan, the
Trust, ERISA or by a separate agreement.
128
ARTICLE XV
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
15.01 EXCLUSIVE BENEFIT. Except as provided under Article IV, the
------------------
Employer has no beneficial interest in any asset of the Trust and no part of any
asset in the Trust may ever revert to or be repaid to an Employer, either
directly or indirectly; nor, prior to the satisfaction of all liabilities with
respect to the Participants and their Beneficiaries under the Plan, may any part
of the corpus or income of the Trust Fund, or any asset of the Trust, be (at any
time) used for, or diverted to, purposes other than the exclusive benefit of the
Participants or their Beneficiaries. However, if the Commissioner of Internal
Revenue, upon the Employer's request for initial approval of this Plan,
determines the Trust created under the Plan is not a qualified trust exempt from
Federal income tax, then (and only then) the Trustee, upon written notice from
the Employer, will return the Employer's contributions (and increment
attributable to the contributions) to the Employer. The Trustee must make the
return of the Employer contribution under this Section 15.01 within one (1) year
of a final disposition of the Employer's request for initial approval of the
Plan. The Employer's Plan and Trust will terminate upon the Trustee's return of
the Employer's contributions.
15.02 AMENDMENT BY EMPLOYER. The Employer has the right at any time
---------------------
and from time to time:
(a) To amend the elective provisions of the Adoption Agreement
in any manner it deems necessary or advisable in order to qualify (or
maintain qualification of) this Plan and the Trust created under it
under the provisions of Code section 401(a);
(b) To amend the Plan to allow the Plan to operate under a
waiver of the minimum funding requirement; and
(c) To amend this Agreement in any other manner.
No amendment may authorize or permit any of the Trust Fund (other than
the part which is required to pay taxes and administration expenses) to be used
for or diverted to purposes other than for the exclusive benefit of the
Participants or their Beneficiaries or estates. No amendment may cause or permit
any portion of the Trust Fund to revert to or become a property of the Employer.
The Employer also may not make any amendment which affects the rights, duties or
responsibilities of the Trustee or the Plan Administrator without the written
129
consent of the affected Trustee or the Plan Administrator. The Employer must
make all amendments in writing. Each amendment must state the date to which it
is either retroactively or prospectively effective. See Section 14.16 for the
effect of certain amendments adopted by the Employer.
15.03 CODE SECTION 411(d)(6) PROTECTED BENEFITS. An amendment
-----------------------------------------------
(including the adoption of this Plan as a restatement of an existing plan) may
not decrease a Participant's Account Balance, except to the extent permitted
under Code section 412(c)(8), and may not reduce or eliminate Code section
411(d)(6) protected benefits determined immediately prior to the adoption date
(or, if later, the effective date) of the amendment. An amendment reduces or
eliminates Code section 411(d)(6) protected benefits if the amendment has the
effect of either (a) eliminating or reducing an early retirement benefit or a
retirement-type subsidy (as defined in Treasury regulations), or (b) except as
provided by Treasury regulations, eliminating an optional form of benefit. The
Plan Administrator must disregard an amendment to the extent application of the
amendment would fail to satisfy this Section. If the Plan Administrator must
disregard an amendment because the amendment would violate clause (a) or clause
(b), the Plan Administrator must maintain a schedule of the early retirement
option or other optional forms of benefit the Plan must continue for the
affected Participants.
15.04 AMENDMENT BY VOLUME SUBMITTER PLAN SPONSOR. The Volume Submitter
------------------------------------------
Plan Sponsor, without the Employer's consent, may amend the Plan and Trust, from
time to time, in order to conform the Plan and Trust to any requirement for
qualification of the Plan and Trust under the Code. The Volume Submitter Plan
Sponsor may not amend the Plan in any manner which would modify any election
made by the Employer under the Plan without the Employer's written consent.
Furthermore, the Volume Submitter Plan Sponsor may not amend the Plan in any
manner which would violate the proscription of Sections 15.02 and 15.03. A
Trustee does not have the power to amend the Plan or Trust.
15.05 DISCONTINUANCE. The Employer has the right, at any time, to
suspend or discontinue its contributions under the Plan, and to terminate, at
any time, this Plan and the Trust created under this Agreement. The Plan will
terminate upon the first to occur of the following:
(a) The date terminated by action of the Employer;
130
(b) The dissolution or merger of the Employer, unless the
successor makes provision to continue the Plan, in which event the
successor must substitute itself as the Employer under this Plan. Any
termination of the Plan resulting from this subparagraph (b) is not
effective until compliance with any applicable notice requirements
under ERISA.
15.06 FULL VESTING ON TERMINATION. Upon either full or partial
------------------------------
termination of the Plan, or, if applicable, upon complete discontinuance of
profit sharing plan contributions to the Plan, an affected Participant's right
to his Account Balance is one hundred percent (100%) Nonforfeitable,
irrespective of the Nonforfeitable percentage which otherwise would apply under
Article V.
15.07 MERGER/DIRECT TRANSFER.
----------------------
(a) The Trustee may not consent to, or be a party to, any
merger or consolidation with another plan, or to a transfer of assets
or liabilities to another plan, unless immediately after the merger,
consolidation or transfer, the surviving Plan provides each Participant
a benefit equal to or greater than the benefit each Participant would
have received had the Plan terminated immediately before the merger or
consolidation or transfer. The Trustee possesses the specific authority
to enter into merger agreements or direct transfer of assets agreements
with the trustees of other retirement plans described in Code section
401(a), including an elective transfer, and to accept the direct
transfer of plan assets, or to transfer plan assets, as a party to any
such agreement.
(b) If this Plan is not subject to the survivor annuity
requirements of the Code, and the Trustee accepts a transfer of assets
from a qualified plan which is subject to the survivor annuity
requirements of the Code, such assets shall be separately accounted for
at all times and shall be administered and distributed in accordance
with the provisions of Section 6.06(b), or Section 6.07 or 6.08, if
applicable. If this Plan is subject to the survivor annuity
requirements of the Code, the Trustee may accept a transfer of assets
from a qualified plan which is not subject to the survivor annuity
requirements of the Code, provided such assets shall be separately
accounted for at all times and shall be administered and distributed in
accordance with the provisions of Section 6.06(a), or Section 6.07 or
6.08, if applicable.
131
(c) The Trustee may accept a direct transfer of plan assets on
behalf of an Employee prior to the date the Employee satisfies the
Plan's eligibility conditions. If the Trustee accepts such a direct
transfer of plan assets, the Plan Administrator and Trustee must treat
the Employee as a Participant for all purposes of the Plan except the
Employee is not a Participant for purposes of sharing in Employer
contributions or Participant forfeitures under the Plan until he
actually becomes a Participant in the Plan.
(d) If the Plan receives a direct transfer (by merger or
otherwise) of Elective Contributions (or amounts treated as Elective
Contributions) under a Plan with a Code section 401(k) arrangement, the
distribution restrictions of Code sectionsection 401(k)(2) and (10)
continue to apply to those transferred Elective Contributions.
15.08 ELECTIVE TRANSFERS. The Trustee, after August 9, 1988, may not
------------------
consent to, or be a party to a merger, consolidation or transfer of assets with
a defined benefit plan, except with respect to an elective transfer, or unless
the transferred benefits are in the form of paid-up individual annuity contracts
guaranteeing the payment of the transferred benefits in accordance with the
terms of the transferor plan and in a manner consistent with the Code and with
ERISA. The Trustee will hold, administer and distribute the transferred assets
as a part of the Trust Fund and the Trustee must maintain a separate Employer
contribution Account for the benefit of the Employee on whose behalf the Trustee
accepted the transfer in order to reflect the value of the transferred assets.
Unless a transfer of assets to this Plan is an elective transfer, the Plan will
preserve all Code section 411(d)(6) protected benefits with respect to those
transferred assets, in the manner described in Section 15.03. A transfer is an
elective transfer if:
(a) the transfer satisfies the first paragraph of this Section
15.08;
(b) the transfer is voluntary, under a fully informed election
by the Participant;
(c) the Participant has an alternative that retains his Code
section 411(d)(6) protected benefits (including an option to leave his
benefit in the transferor plan, if that plan is not terminating);
(d) the transfer satisfies the applicable spousal consent
requirements of the Code;
132
(e) the transferor plan satisfies the joint and survivor
annuity notice requirements of the Code, if the Participant's
transferred benefit is subject to those requirements;
(f) the Participant has a right to immediate distribution from
the transferor plan, in lieu of the elective transfer;
(g) the transferred benefit is at least the greater of the
single sum distribution provided by the transferor plan for which the
Participant is eligible or the Participant's accrued benefit under the
transferor plan payable at that plan's normal retirement age;
(h) the Participant has a one hundred percent (100%)
Nonforfeitable interest in the transferred benefit; and
(i) the transfer otherwise satisfies applicable Treasury
regulations.
An elective transfer may occur between qualified plans of any type. Any
direct transfer of assets from a defined benefit plan after August 9, 1988,
which does not satisfy the requirements of this Section 15.08 will render the
Employer's Plan individually-designed. See Section 14.16.
15.09 TERMINATION.
-----------
(a) If the Employer decides it is impossible or inadvisable to
make contributions as herein provided, the Employer shall have the
power to terminate the Plan with respect to its Employees by
appropriate resolution. A certified copy of such resolution or
resolutions shall be delivered to the Trustee, and as soon as possible
thereafter, the Plan Administrator shall send or deliver a copy of said
resolutions to each Participant, or otherwise notify each Participant
whose membership arises by reason of his employment with the Employer.
After the date specified in such resolutions, the Employer shall make
no further contributions under the Plan. The Trust, however, shall
remain in existence as well as all other provisions of the Plan, except
for provisions for contributions by the Employer. Furthermore, the
provisions for forfeitures by Participants shall remain in full force
and effect. All Account Balances of Participants shall continue to be
133
held, administered and distributed by the Trustee in accordance with
the provisions of the Plan.
(b) If the Employer shall decide to terminate completely the
Plan and the Trust with respect to its Employees, such termination
shall be effective as of a date to be specified in certified copies of
its resolutions to be delivered to its Participants and the Trustee,
conditioned on the satisfaction of all applicable regulatory
requirements. Upon termination of the Plan and Trust, and after payment
of all expenses and proportional adjustment of Accounts of Employees to
reflect such expenses, Trust fund profit or losses, and reallocations
to the date of termination, each employed or retired Participant
entitled to receive benefits shall be entitled to receive his Account
Balance. The Trustee shall make payment of such amounts to the
Participants in accordance with the provisions of Article VI above,
unless the Employer shall direct that payment be made in a
Trustee-to-Trustee transfer to another qualified plan.
(c) The portion of the Participant's Nonforfeitable Account
Balance attributable to Elective Contributions (or to amounts treated
under the Code section 401(k) arrangement as Elective Contributions) is
not distributable on account of Plan termination, as described in this
Section 15.09, unless: (a) the Participant otherwise is entitled under
the Plan to a distribution of that portion of his Nonforfeitable
Account Balance; or (b) the Plan termination occurs without the
establishment of a successor plan. A successor plan under clause (b) is
a defined contribution plan (other than an ESOP) maintained by the
Employer (or by an Affiliated Employer) at the time of the termination
of the Plan or within the period ending twelve (12) months after the
final distribution of assets. A distribution made after March 31, 1988,
pursuant to clause (b), must be part of a lump sum distribution to the
Participant of his Nonforfeitable Account Balance.
15.10. EXERCISE OF AUTHORITY. To the extent that the Employer has the
---------------------
authority to amend or terminate the Plan, including the adoption of amendments
authorized by Section 15.02 and the termination of the Plan as authorized by
Sections 15.05 and 15.09, such authority shall be exercised as follows: (i) if
the Employer is a Corporation, by resolution of its board of directors; (ii) if
the Employer is an unincorporated entity, by appropriate action of its governing
body; or (iii) if the Employer is a sole proprietor, by appropriate action of
134
such individual. In addition, such authority shall be exercised in conformance
with the internal guidelines established by such board of directors, governing
body or individual and in a manner consistent with the requirements of ERISA
Section 402(b)(3), as determined by the Plan Administrator and communicated to
Participants.
135
ARTICLE XVI
PARTICIPATING EMPLOYERS
16.01 PARTICIPATING EMPLOYERS.
-----------------------
(a) The term "Employer" shall include any Affiliated Employer
for purposes of crediting Hours of Service, determining Years of
Service and Breaks in Service under Articles III and VI, applying the
participation and coverage tests described in Article IV, applying the
limitations on allocations in Article IV, applying the top-heavy rules
and the minimum allocation requirements of Articles IV and XVIII, the
definitions of Employee, Highly Compensated Employee, Compensation and
Leased Employee, and for any other purpose required by the applicable
Code Section or by a Plan provision.
(b) An Affiliated Employer may contribute to the Plan only by
being a signatory to the Execution Page of the Adoption Agreement or to
a Participation Agreement to the Employer's Adoption Agreement (a
"Participating Employer"). If one or more of the Affiliated Employers
become Participating Employers by executing a Participation Agreement
to the Employer's Adoption Agreement, the term "Employer" includes the
Participating Employer for all purposes of the Plan, and "Plan
Administrator" means the Employer that is the signatory to the
Execution Page of the Adoption Agreement, or such other person or
entity designated by that Employer pursuant to Section 10.01 of the
Plan.
(c) The Employer must specify in Section 16.01 of its Adoption
Agreement, whether the employees of Affiliated Employers that are not
Participating Employers are eligible to participate in the Plan. The
Employer may elect to exclude from the definition of "Compensation" for
allocation purposes any Compensation received from an Affiliated
Employer that has not executed a Participation Agreement and whose
employees are not eligible to participate in the Plan.
16.02 REQUIREMENTS OF PARTICIPATING EMPLOYERS.
---------------------------------------
(a) Each such Participating Employer shall be required to use
the same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to, commingle,
hold and invest as one Trust Fund all contributions made by
136
Participating Employers, as well as all increments thereof.
(c) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the Employer
or a Participating Employer, shall not affect such Participant's rights
under the Plan, and all amounts credited to such Participant's Account
as well as his accumulated service time with the transferor or
predecessor, and his length of participation in the Plan, shall
continue to his credit.
(d) Any expenses of the Trust which are to be paid by the
Employer or borne by the Trust Fund shall be paid by each Participating
Employer in the same proportion that the total amount standing to the
credit of all Participants employed by such Employer bears to the total
standing to the credit of all Participants.
16.03 DESIGNATION OF AGENT. Each Participating Employer shall be deemed
--------------------
to be a part of this Plan; provided, however, that with respect to all of its
relations with the Trustee and Plan Administrator for the purpose of this Plan,
each Participating Employer shall be deemed to have designated irrevocably the
Employer as its agent. Unless the context of the Plan clearly indicates the
contrary, the word "Employer" shall be deemed to include each Participating
Employer as related to its adoption of the Plan.
16.04 EMPLOYEE TRANSFERS. In the event of a transfer of an Employee
-------------------
between Affiliated Employers which are Participating Employers, whether or not
the Employer to which the Participant is transferred is the Employer or a
Participating Employer, the Employee transferred shall not be considered to have
terminated employment for purposes of the Plan. If the Employer to which the
Employee is transferred is not the Employer or a Participating Employer, then
the Participant's Account will continue to be accounted for under the account
for the Employer or Participating Employer from which the Participant
transferred, and service with all Affiliated Employers shall be credited for
purposes of determining Years of Service for vesting. No Employer contributions
or forfeitures shall be allocated to the Account of the Participant who
transferred to an Affiliated Employer which is not the Employer or a
Participating Employer, however, earnings and losses shall be allocated to the
Participant's Account in the manner provided in Section 10.08. Distribution of
the Participant's Account shall be made at such time and in such manner as is
137
otherwise provided by the terms and provisions of the Plan as though such
Participant's employment with the Affiliated Employer was considered employment
with the Employer or a Participating Employer.
If a Participant is transferred to the Employer or a Participating
Employer and, if taking into account accumulated service for all Affiliated
Employers as provided above, the Participant would be entitled to an allocation
pursuant to Section 4.04 in the Plan Year of his transfer, the Employer and each
Participating Employer for which the Participant was employed, will make a pro
rata allocation on behalf of the Participant from any Employer or Participating
Employer contribution. The pro rata allocation, as determined by the
Administrator in a uniform and nondiscriminatory manner and consistent with
applicable provisions of the Code, shall be based on the Participant's
Compensation paid from the Employer and each Participating Employer.
16.05 PARTICIPATING EMPLOYER'S CONTRIBUTION. Unless elected otherwise
-------------------------------------
by the Employer in its Adoption Agreement Section 16.05, all contributions made
by a Participating Employer, as provided for in this Plan, shall be determined
separately by each Participating Employer, and shall be paid to and held by the
Trustee for the exclusive benefit of the Employees of such Participating
Employer and the Beneficiaries of such Employees, subject to all the terms and
conditions of this Plan. Unless elected otherwise by the Employer in its
Adoption Agreement Section 16.05, any Forfeiture by an Employee of a
Participating Employer subject to allocation during each Plan Year shall be
allocated only for the exclusive benefit of the Participants of such
Participating Employer in accordance with the provisions of this Plan, or
otherwise used to reduce the contribution of such Participating Employer, as
elected in the Employer's Adoption Agreement Section 4.09. On the basis of the
information furnished by the Administrator, the Trustee shall keep separate
books and records concerning the affairs of each Participating Employer
hereunder and as to the accounts and credits of the Employees of each
Participating Employer. The Trustee may, but need not, register Contracts so as
to evidence that a particular Participating Employer is the interested Employer
hereunder, but in the event of an Employee transfer from one Participating
Employer to another, the employing Employer shall immediately notify the Trustee
thereof.
16.06 AMENDMENT. Amendment of this Plan by the Employer at any time
---------
when there shall be a Participating Employer hereunder shall only be by the
written action of each and every Participating Employer and with the consent of
138
the Trustee where such consent is necessary in accordance with the terms of this
Plan.
16.07 DISCONTINUANCE OF PARTICIPATION. Any Participating Employer shall
-------------------------------
be permitted to discontinue or revoke its participation in the Plan. At the time
of any such discontinuance or revocation, satisfactory evidence thereof and of
any applicable conditions imposed shall be delivered to the Trustee. The Trustee
shall thereafter transfer, deliver and assign Contracts and other Trust Fund
assets allocable to the Participants of such Participating Employer to such new
Trustee as shall have been designated by such Participating Employer, in the
event that it has established a separate pension plan for its Employees. If no
successor is designated, the Trustee shall retain such assets for the Employees
of said Participating Employer pursuant to the provisions of Article VIII
hereof. In no such event shall any part of the corpus or income of the Trust as
it relates to such Participating Employer be used for or diverted for purposes
other than for the exclusive benefit of the Employees of such Participating
Employer.
16.08 ADMINISTRATOR'S AUTHORITY. The Administrator shall have authority
-------------------------
to make any and all necessary rules or regulations, binding upon all
Participating Employers and all Participants, to effectuate the purpose of this
Article.
16.09 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE. If any
-----------------------------------------------------
Participating Employer is prevented in whole or in part from making a
contribution to the Trust Fund which it would otherwise have made under the Plan
by reason of having no current or accumulated earnings or profits, or because
such earnings or profits are less than the contribution which it would otherwise
have made, then, pursuant to Code section 404(a)(3)(B), so much of the
contribution which such Participating Employer was so prevented from making may
be made, for the benefit of the participating employees of such Participating
Employer, by the other Participating Employers who are members of the same
affiliated group within the meaning of Code section 1504 to the extent of their
current or accumulated earnings or profits, except that such contribution by
each such other Participating Employer shall be limited to the proportion of its
total current and accumulated earnings or profits remaining after adjustment for
its contribution to the Plan made without regard to this Section which the total
prevented contribution bears to the total current and accumulated earnings or
profits of all the Participating Employers remaining after adjustment for all
contributions made to the Plan without regard to this Section.
139
A Participating Employer on behalf of whose Employees a contribution is
made under this Section shall reimburse the contributing Participating
Employers.
140
ARTICLE XVII
QUALIFIED DOMESTIC RELATIONS ORDERS
17.01 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS.
---------------------------------------------
(a) Nothing contained in this Plan prevents the Trustee, in
accordance with the direction of the Plan Administrator, from complying
with the provisions of a qualified domestic relations order (as defined
in Code section 414(o)). This Plan specifically permits distribution to
an alternate payee under a qualified domestic relations order at any
time, irrespective of whether the Participant has attained his earliest
retirement age (as defined under Code section 414(p)) under the Plan. A
distribution to an alternate payee prior to the Participant's
attainment of earliest retirement age is available only if: (1) such
distribution shall not otherwise violate the provisions of Code section
414(p); (2) the order specifies distribution at that time or permits an
agreement between the Plan and the alternate payee to authorize an
earlier distribution; and (3) if the amount of the alternate payee's
benefits under the Plan exceeds $3,500, and the order requires, the
alternate payee consents to any distribution occurring prior to the
Participant's attainment of earliest retirement age. The Employer, in
an addendum to its Adoption Agreement, numbered Section 17.01, may
elect to limit distribution to an alternate payee only when the
Participant has attained his earliest retirement age under the Plan.
Nothing in this Section 17.01 gives a Participant a right to receive
distribution at a time otherwise not permitted under the Plan nor does
it permit the alternate payee to receive a form of payment not
otherwise permitted under the Plan.
(b) The Plan Administrator must establish reasonable
procedures to determine the qualified status of a domestic relations
order. Upon receiving a domestic relations order, the Plan
Administrator promptly will notify the Participant and any alternate
payee named in the order, in writing, of the receipt of the order and
the Plan's procedures for determining the qualified status of the
order. Within a reasonable period of time after receiving the domestic
relations order, the Plan Administrator must determine the qualified
status of the order and must notify the Participant and each alternate
payee, in writing, of its determination. The Plan Administrator must
provide notice under this Section by mailing to the individual's
141
address specified in the domestic relations order, or in a manner
consistent with Department of Labor regulations.
(c) If any portion of the Participant's Nonforfeitable Account
Balance is payable during the period the Plan Administrator is making
its determination of the qualified status of the domestic relations
order, the Plan Administrator must make a separate accounting of the
amounts payable. If the Plan Administrator determines the order is a
qualified domestic relations order within eighteen (18) months of the
date amounts first are payable following receipt of the order, the Plan
Administrator will direct the Trustee to distribute the payable amounts
in accordance with the order. If the Plan Administrator does not make
its determination of the qualified status of the order within the
eighteen (18) month determination period, the Plan Administrator will
direct the Trustee to distribute the payable amounts in the manner the
Plan would distribute if the order did not exist and will apply the
order prospectively if the Plan Administrator later determines the
order is a qualified domestic relations order.
(d) To the extent it is not inconsistent with the provisions
of the qualified domestic relations order, the Plan Administrator may direct the
Trustee to invest any partitioned amount in a segregated subaccount or separate
account and to invest the account in Federally insured, interest-bearing savings
account(s) or time deposit(s) (or a combination of both), or in other fixed
income investments. A segregated subaccount remains a part of the Trust, but it
alone shares in any income it earns, and it alone bears any expense or loss it
incurs. The Trustee will make any payments or distributions required under this
Article by separate benefit checks or other separate distribution to the
alternate payee(s).
142
ARTICLE XVIII
TOP-HEAVY PLAN PROVISIONS
18.01 EFFECT OF ARTICLE XVIII ON PLAN. Notwithstanding any contrary
--------------------------------
provisions contained in any other Article of the Plan, if at any time the Plan
shall be a Top-Heavy Plan (as hereinafter defined), this Article shall control;
and any contrary terms of the Plan shall be deemed replaced by the provisions of
this Article. However, this Article shall not be effective for any subsequent
Plan Year in which the Plan is determined not to be a Top-Heavy Plan.
Definitions applicable to this Article XVIII are set out in Section 18.03.
18.02 DETERMINATION OF TOP-HEAVY STATUS.
---------------------------------
(a) If this Plan is the only qualified plan maintained by the
Employer, the Plan is top-heavy for a Plan Year if the Top-Heavy Ratio
as of the Determination Date exceeds sixty percent (60%). The Plan
Administrator must include in the Top-Heavy Ratio, as part of the
Account Balances, any contribution not made as of the Determination
Date but includible under Code section 416 and the applicable Treasury
regulations, and distributions made within the Determination Period.
The Plan Administrator must calculate the Top-Heavy Ratio by
disregarding the Account Balance (and distributions, if any, of the
Account Balance) of any Non-Key Employee who was formerly a Key
Employee, and by disregarding the Account Balance (including
distributions, if any, of the Account Balance) of an individual who has
not received credit for at least one Hour of Service with the Employer
during the Determination Period. The Plan Administrator must calculate
the Top-Heavy Ratio, including the extent to which it must take into
account distributions, rollovers and transfers, in accordance with Code
section 416 and the regulations thereunder.
(b) If the Employer maintains other qualified plans (including
a simplified employee pension plan), or maintained another such plan
which now is terminated, this Plan is top-heavy only if it is part of
the Required Aggregation Group, and the Top-Heavy Ratio for the
Required Aggregation Group and for the Permissive Aggregation Group, if
any, each exceeds sixty percent (60%). The Plan Administrator will
calculate the Top-Heavy Ratio in the same manner as required in
subparagraph (a) of this Section 18.02, taking into account all plans
within the Aggregation Group. To the extent the Plan Administrator must
143
take into account distributions to a Participant, the Plan
Administrator must include distributions from a terminated plan which
would have been part of the Required Aggregation Group if it were in
existence on the Determination Date. The Plan Administrator will
calculate the present value of accrued benefits under defined benefit
plans or simplified employee pension plans included within the group in
accordance with the terms of those plans, Code section 416 and the
regulations thereunder. If a Participant in a defined benefit plan is a
Non-Key Employee, the Plan Administrator will determine his accrued
benefit under the accrual method, if any, which is applicable uniformly
to all defined benefit plans maintained by the Employer or, if there is
no uniform method, in accordance with the slowest accrual rate
permitted under the fractional rule accrual method described in Code
section 416(b)(1)(C). If the Employer maintains a defined benefit plan,
the Employer must specify in Adoption Agreement Section 4.30 the
actuarial assumptions (interest and mortality only) the Plan
Administrator will use to calculate the present value of accrued
benefits from a defined benefit plan. If an aggregated plan does not
have a valuation date coinciding with the Determination Date, the Plan
Administrator must value the Account Balances in the aggregated plan as
of the most recent valuation date falling within the twelve (12) month
period ending on the Determination Date, except as Code section 416 and
applicable Treasury regulations require for the first and second plan
year of a defined benefit plan. The Plan Administrator will calculate
the Top-Heavy Ratio with reference to the Determination Dates that fall
within the same calendar year.
(c) The Account Balance of a Participant other than a Key
Employee shall be determined under (1) the method, if any, that
uniformly applies for accrual purposes under all defined benefit plans
maintained by the Employer, or (2) 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).
18.03 DEFINITIONS. For purposes of applying the provisions of this
-----------
Article XVIII:
(a) "Top-Heavy Ratio" is a fraction, the numerator of which is
the sum of the Account Balances of all Key Employees as of the
Determination Date and the denominator of which is a similar sum
determined for all Employees.
144
(b) "Key Employee" means, as of any Determination Date, any
Employee or former Employee (or Beneficiary of such Employee) who, for
any Plan Year in the Determination Period: (i) has Compensation in
excess of fifty percent (50%) of the dollar amount prescribed in Code
section 416(b)(1)(A) (relating to defined benefit plans) and is an
officer of the Employer; (ii) has Compensation in excess of the dollar
amount prescribed in Code section 415(c)(1)(A) (relating to defined
contribution plans) and is one of the Employees owning the ten (10)
largest interests in the Employer; (iii) is a more than five percent
(5%) owner of the Employer; or (iv) is a more than one percent (1%)
owner of the Employer and has Compensation of more than $150,000. The
constructive ownership rules of Code section 318 (or the principles of
that Section, in the case of an unincorporated Employer) will apply to
determine ownership in the Employer. The number of officers taken into
account under clause (i) will not exceed the greater of three (3) or
ten percent (10%) of the total number (after application of the Code
section 414(q) exclusions) of Employees, but no more than fifty (50)
officers. The Plan Administrator will make the determination of who is
a Key Employee in accordance with Code section 416(i)(1) and the
regulations thereunder.
(c) "Non-Key Employee" is an Employee who does not meet the
definition of Key Employee.
(d) "Compensation" means Compensation as determined under
Section 1.11 for purposes of identifying Highly Compensated Employees.
(e) "Required Aggregation Group" means: (i) each qualified
plan of the Employer in which at least one Key Employee participates at
any time during the Determination Period; and (ii) any other qualified
plan of the Employer which enables a plan described in clause (i) to
meet the requirements of Code section 401(a)(4) or 410.
(f) "Permissive Aggregation Group" is the Required Aggregation
Group plus any other qualified plans maintained by the Employer, but
only if such group would satisfy in the aggregate the requirements of
Code sectionsection 401(a)(4) and 410. The Plan Administrator will
determine the Permissive Aggregation Group.
(g) "Employer" means the Employer that adopts this Plan and
any Affiliated Employers described in Section 16.01.
145
(h) "Determination Date" for any Plan Year is the Adjustment
Date of the preceding Plan Year or, in the case of the first Plan Year
of the Plan, the Adjustment Date of that Plan Year. The "Determination
Period" is the five (5) year period ending on the Determination Date.
18.04 TOP-HEAVY ALLOCATIONS.
---------------------
(a) Top-Heavy Minimum Allocation. The Plan must comply with
----------------------------
the provisions of this Section 18.04, subject to the elections in the
Employer's Adoption Agreement Section 4.06. The top-heavy minimum
allocation requirement applies only in Plan Years for which the Plan is
top-heavy. Except as provided in the Employer's Adoption Agreement, if
the Plan is top-heavy in any Plan Year:
(1) Each Non-Key Employee who is a Participant and is
employed on the last day of the Plan Year will receive a
top-heavy minimum allocation for that Plan Year, irrespective
of whether he satisfies the Hours of Service condition under
Section 4.06 of the Employer's Adoption Agreement; and
(2) The top-heavy minimum allocation is the lesser of
three percent (3%) of the Non-Key Employee's Compensation for
the Plan Year or the highest contribution rate for the Plan
Year made on behalf of any Key Employee. However, if a defined
benefit plan maintained by the Employer which benefits a Key
Employee depends on this Plan to satisfy the nondiscrimination
rules of Code section 401(a)(4) or the coverage rules of Code
section 410 (or another plan benefiting the Key Employee so
depends on such defined benefit plan), the top-heavy minimum
allocation is three percent (3%) of the Non-Key Employee's
Compensation regardless of the contribution rate for the Key
Employees.
(b) Special Definitions. For purposes of this Section 18.04,
-------------------
the term "Participant" includes any Employee otherwise eligible to
participate in the Plan but who is not a Participant because of his
Compensation level or because of his failure to make Elective Deferrals
under a Code section 401(k) arrangement or because of his failure to
make Mandatory Contributions. For purposes of subparagraph (a)(2),
"Compensation" means Compensation as defined in Section 1.11, except
146
Compensation does not include Elective Contributions, as defined in
Section 1.11, irrespective of whether the Employer has elected to
include these amounts in Section 1.11 of its Adoption Agreement, any
exclusion selected in Section 1.11 of the Adoption Agreement (other
than the exclusion of Elective Contributions) does not apply, and any
modification to the definition of Compensation in Section 4.04 does not
apply.
(c) Determining Contribution Rates. For purposes of this
--------------------------------
Section 18.04, a Participant's contribution rate is the sum of all
Employer contributions (not including Employer contributions to Social
Security) and forfeitures allocated to the Participant's Account for
the Plan Year, divided by his Compensation for the entire Plan Year. To
determine a Participant's contribution rate, the Plan Administrator
must treat all top-heavy defined contribution plans maintained by the
Employer or by any Affiliated Employer described in Section 16.01 as a
single plan.
(d) No Allocations. If, for a Plan Year, there are no
---------------
allocations of Employer contributions or forfeitures for any Key
Employee (for purposes of Section 18.04(a)(2)), the Plan does not
require any top-heavy minimum allocation for the Plan Year, unless a
top-heavy minimum allocation applies because of the maintenance by the
Employer of more than one plan.
(e) Election of Method. The Employer must specify in its
-------------------
Adoption Agreement Section 4.06 the manner in which the Plan will
satisfy the top-heavy minimum allocation requirement.
(1) If the Employer elects to make any necessary
additional contribution to the Plan, the Plan Administrator
first will allocate the Employer contributions (and
Participant forfeitures, if applicable) for the Plan Year in
accordance with the provisions of Adoption Agreement Section
4.06. The Employer then will contribute an additional amount
for the Account of any Participant entitled under this Section
18.04 to a top-heavy minimum allocation and whose contribution
rate for the Plan Year, under this Plan and any other plan
aggregated under subparagraph (c), is less than the top-heavy
minimum allocation. The additional amount is the amount
necessary to increase the Participant's contribution rate to
the top-heavy minimum allocation. The Plan Administrator will
allocate the additional contribution to the Account of the
147
Participant on whose behalf the Employer makes the
contribution.
(2) If the Employer elects to guarantee the top-heavy
minimum allocation under another plan, this Plan does not
provide the top-heavy minimum allocation and the Plan
Administrator will allocate the annual Employer contributions
(and Participant forfeitures, if applicable) under the Plan
solely in accordance with the allocation method selected under
Adoption Agreement Section 4.06.
For any Plan Year in which this Plan is top-heavy, one of the
minimum vesting schedules as elected by the Employer in Adoption
Agreement Section 5.05 will automatically apply to the Plan. The
minimum vesting schedule applies to all benefits within the meaning of
Code section 411(a)(7) except those attributable to Participant
contributions, including benefits accrued before the effective date of
Code section 416 and benefits accrued before the Plan became top-heavy.
Further, no decrease in a Participant's nonforfeitable percentage may
occur in the event the Plan's status as top-heavy changes for any Plan
Year. However, this Section 18.04 does not apply to the Account Balance
of any Employee who does not have an Hour of Service after the Plan has
initially become top-heavy, and such Employee's Account Balance
attributable to Employer contributions and forfeitures will be
determined without regard to this Section.
148
365\467527
FIRST AMENDMENT
---------------
TO THE
------
KRISPY KREME DOUGHNUT CORPORATION
---------------------------------
RETIREMENT SAVINGS PLAN
-----------------------
This First Amendment to the Krispy Kreme Doughnut Corporation
Retirement Savings Plan (the "Plan"), made this ____ day of _____________, 19__,
effective January 1, 1994, except as otherwise indicated.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Krispy Kreme Doughnut Corporation (the "Corporation") has
determined that it is in the best interest of Plan participants to exclude
highly compensated employees at the director level and above from participating
in the allocation of forfeitures under the Plan; and
WHEREAS, Section 15.02 authorizes the Corporation to amend the Plan.
NOW, THEREFORE, BE IT RESOLVED, that the Plan is amended effective
January 1, 1994 by revising Section 4.09(e) of the Adoption Agreement to read as
follows:
[X] (e) (SPECIFY) Allocated only among Participants with profit-sharing
--------------------------------------------------------------
accounts whose employment status is below the director level.
--------------------------------------------------------------
IN WITNESS WHEREOF, the Corporation has caused this First
Amendment to be executed by its authorized representative as of the day and year
first written above.
KRISPY KREME DOUGHNUT CORPORATION
[Corporate Seal]
By:
---------------------------------
President
-----------
ATTEST:
---------------------------
Secretary
----------
[SECOND AMENDMENT TO RETIREMENT SAVINGS PLAN GOES HERE]
THIRD AMENDMENT TO THE
KRISPY KREME DOUGHNUT CORPORATION
RETIREMENT SAVINGS PLAN
This Third Amendment to the Krispy Kreme Doughnut Corporation
Retirement Savings Plan (the "Plan") made this _____ day of ___________________,
2000, by Krispy Kreme Doughnut Corporation, and effective January 1, 2000,
unless otherwise indicated.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Krispy Kreme Doughnut Corporation (the "Company") adopted the
Krispy Kreme Profit-Sharing Stock Ownership Plan (the "KSOP") effective February
1, 1999; and
WHEREAS, the Company desires to amend the Plan to reflect the
establishment of the KSOP; and
WHEREAS, the Company has completed an initial public offering of the
stock of the Company; and
WHEREAS, the Company believes it is in the best interest of Plan
participants for Plan participants to be allowed to direct the investment of
their accounts under the Plan into Krispy Kreme stock; and
WHEREAS, the Company is authorized to amend the Plan.
NOW, THEREFORE, BE IT RESOLVED: That the Plan shall be amended as
follows:
1. Section 4.02(a), as set forth in the Adoption Agreement, shall be
deleted in its entirety and replaced with the provisions of Section 4.02(a) on
the revised page 13 to the Adoption Agreement, as attached to this Amendment.
2. Section 4.03, as set forth in the Adoption Agreement, shall be
amended to eliminate the obligation to make matching contributions by deleting
the existing section in its entirety and replacing it with pages 14-16 to the
Adoption Agreement, as attached to this Amendment.
3. Section 8.06 of the Plan shall be amended by adding the following
provisions concerning the investment of Plan assets in Krispy Kreme stock:
(a) Investment in Krispy Kreme Stock. Effective June 1, 2000,
--------------------------------
the investment funds available to Participants under the Plan shall
include an "Employer Stock Fund." The Employer Stock Fund shall be
invested solely in shares of common stock of Krispy Kreme Doughnuts,
Inc. ("Common Stock"). Such shares shall constitute "qualifying
employer securities" within the meaning of Code Section 4975(e)(8). The
Employer Stock Fund shall operate as an "unitized" investment fund.
(b) Voting of Stock Generally. Each Participant shall have the
-------------------------
right and shall be afforded the opportunity to instruct the Trustee how
to vote at any meeting of the Employer's shareholders that
proportionate number of the total number of shares of the Common Stock
held in the Trust Fund which is the same proportion that the value of
his interest bears to the total value of the Fund. Instructions by
Participants to the Trustee shall be in such form and pursuant to such
regulations as the Committee may prescribe. Any such instructions shall
remain in the strict confidence of the Trustee. Any shares for which no
such instructions are received by the Trustee shall be voted by the
Trustee in the same proportion as the shares for which instructions are
received.
(c) Participant Direction - Tender or Exchange Offer. The
---------------------------------------------------
Trustee's functions and responsibilities with respect to Company Stock
held under the Plan with respect to all decisions made in response to a
tender offer shall be exercised as follows:
(i) In the event a tender offer is commenced, the
Committee, promptly after receiving notice of the commencement
of any such tender offer, shall transfer certain of the Plan's
record-keeping functions to an independent record-keeper
(which, if the Trustee consents in writing, may be the
Trustee). The functions so transferred shall be those
necessary to preserve the confidentiality of any directions
given by Participants and Beneficiaries, in connection with
the tender offer. The record-keeper shall use its best efforts
timely to distribute or to cause to be distributed to each
Participant and Beneficiary such information as is being
distributed to other stockholders of the Employer in
connection with any such tender offer. The Employer and the
Committee shall cooperate with such record-keeper in an
attempt to ensure that Participants and Beneficiaries receive
the requisite information in a timely manner. The independent
record-keeper shall solicit confidentially from each
Participant and Beneficiary the directions described below as
to the action to be taken with respect to Company Stock held
under the Plan in response to the tender offer. The
independent record-keeper, if different from the Trustee,
shall instruct the Trustee as to required action, including an
identification of the number of shares covered by any
particular required action, in accordance with the following
provisions.
(ii) Each Participant and Beneficiary shall have the
right to direct the Trustee not to tender or exchange Company
Stock allocated to his or her Account. Upon timely receipt of
directions not to tender or exchange, the Trustee shall not
tender or exchange shares of Company Stock (including
fractional shares) allocated to such Participant's or
Beneficiary's Account. The Trustee shall tender or exchange
all other shares of Company Stock (including fractional
shares) allocated to any Participant's or Beneficiary's
Account, and the Trustee shall have no discretion in such
matter. The instructions received by the Trustee from
Participants and Beneficiaries shall not be divulged or
released to any person, including the Committee, or the
officers or employees of the Employer.
(d) No Additional Rights Conferred.
------------------------------
(i) Nothing contained in this Section 8.06 shall
confer upon Participants, Beneficiaries or the Trustee of any
additional voting rights in respect of Company Stock held
under the Plan other than such rights set forth in the
certificate of incorporation of Krispy Kreme Doughnuts, Inc.
(or of any other Employer, as applicable) and applicable under
the General Corporation Law of the State of North Carolina and
federal law.
(ii) Nothing contained in this Section 8.06 shall
confer upon Participants, Beneficiaries or the Trustee any
additional rights in respect of a tender offer, merger or
consolidation relating to the Company Stock held under the
Plan other than such rights set forth in the certificate of
incorporation of Krispy Kreme Doughnuts, Inc. (or any other
Employer, as applicable) and applicable under the General
Corporation Law of the State of North Carolina and federal
law.
4. Section 11.07, as set forth in the Adoption Agreement, shall be
deleted in its entirety and replaced with the provisions of Section 11.07 on the
revised page 38 to the Adoption Agreement, as attached to this Amendment.
5. Section 11.15, as set forth in the Adoption Agreement, shall be
deleted in its entirety and replaced with the provisions of Section 11.15 on the
revised page 38 to the Adoption Agreement, as attached to this Amendment.
3
IN WITNESS WHEREOF, the Company has caused this Third Amendment to be
executed by the proper officers and its corporate seal hereto affixed as the day
and year first written above.
KRISPY KREME DOUGHNUT CORPORATION
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
President
ATTEST:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------
Secretary
4
ARTICLE IV
EMPLOYER CONTRIBUTIONS AND FORFEITURES
4.02 CODE SECTION 401(k) ARRANGEMENT. The Code section 401(k) arrangement
------------------------------- shall be:
[X] (a) Salary Reduction Arrangement. Each Employee may elect
to have his compensation reduced by:
[ ] (1) ________%
[ ] (2) up to __________%
[X] (3) from 1 % to 15 %
---------- ----------
[ ] (4) up to the maximum percentage allowable not
to exceed the limits of Code sections
401(k), 404 and 415.
[ ] (b) Cash or Deferred Arrangement. Each Participant may
elect to receive in cash, up to _____% of Employer's
allocable contribution. (IF THIS OPTION (B) IS
SELECTED, PLEASE SKIP TO SECTION 4.04.)
SALARY REDUCTION ELECTIONS. (COMPLETE ONLY IF OPTION (A) ABOVE SELECTED). Each
Participant's Salary Reduction Election shall be effective as of his Entry Date.
Thereafter, modifications may be made:
[ ] (a) As of the first day of each Plan Year.
[ ] (b) Semi-annually. The first day of the Plan Year and
the first day of the seventh month of the Plan Year.
[ ] (c) Quarterly, based on the Plan Year.
[ ] (d) As of any pay period.
[X] (e) (SPECIFY) As of the beginning of any month. In
addition to regular Salary Reduction Agreement made
pursuant to section 4.02, each Participant may make
special election to defer up to 100% of bonus or
incentive pay designated by the Employer as being
eligible for this special election. Such special
election must be made by August 1 of each year.
NOTE: All elections to modify a Salary Reduction Election must be made prior to
the first day of the pay period for which such modification shall be effective.
BONUSES PAID. Shall cash bonuses paid within 2 1/2 months after the end of the
Plan Year be subject to a Participant's Salary Reduction Election for the prior
Plan Year?
[X] (a) No
[ ] (b) Yes, subject to the election of the Employee in his
salary reduction agreement
4.03 MATCHING CONTRIBUTIONS. Subject to the maximum contribution indicated
below, and further subject to any limitations set forth in Section
4.06, the Employer shall make Matching Contributions to the Plan in
accordance with the following formula (OPTION (B) MAY BE SELECTED IN
ADDITION TO OPTION (C) OR (D)):
[ ] (a) N/A. No matching contributions shall be made.
[ ] (b) Matching Contributions shall be an amount equal to
_____% of the Participant's Mandatory Nondeductible
Contribution.
13
[X] (c) Matching Contributions in a discretionary
percentage, to be determined by the Employer, of
the Participant's Salary Reduction Contribution.
[ ] (d) Matching Contributions shall be an amount equal to
_____% of the Participant's Salary Reduction
Contribution.
[ ] (e) Matching Contributions shall be an amount equal to
the percentage determined under the following
schedule:
Participant's Total Matching Percentage
Years of Service
_____ _____
_____ _____
_____ _____
[ ] (f) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
MAXIMUM PERMITTED MATCHING CONTRIBUTION. The amount of the Employer's Matching
Contribution shall be limited to:
[X] (a) Only salary reductions up to 6% of a Participant's
Compensation will be matched. ---
[ ] (b) $______________
[ ] (c) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
ALLOCATION OF MATCHING CONTRIBUTIONS. Subject to satisfaction of the allocation
requirements, Matching Contributions shall be made on behalf of:
[X] (a) All Participants
[ ] (b) Only nonhighly compensated Participants
ALLOCATION REQUIREMENTS FOR MATCHING CONTRIBUTIONS. To receive an allocation of
Employer Matching Contributions for the Plan Year, an eligible Participant who
made Deferral Contributions under the Plan must satisfy the conditions described
in the following elections:
[X] (a) No conditions other than making Deferral
Contributions.
14
[ ] (b) SAFE HARBOR. If the Participant is employed by the
Employer on the last day of the Plan Year or
completes at least 501 Hours of Service during the
Plan Year prior to termination of employment.
Provided, however, Participant will receive an
allocation of the Employer's Matching Contribution
regardless of Hours of Service and employment status
on the last day of the Plan Year if such Participant
terminates employment during the Plan Year on account
of:
[ ] (1) N/A, no exceptions.
[ ] (2) Death.
[ ] (3) Disability.
[ ] (4) Completion of Early Retirement requirements
in the current or a prior Plan Year.
[ ] (5) Attainment of Normal Retirement Age in the
current or a prior Plan Year.
[ ] (c) HOURS OF SERVICE CONDITION. The Participant must
complete the following minimum number of Hours of
Service for the Plan Year:
[ ] (1) 1,000 Hours of Service.
[ ] (2) (SPECIFY, BUT MAY NOT EXCEED 1,000) _______.
[ ] (3) No Hour of Service requirement if the
Participant terminates employment during the
Plan Year on account of (MAY ONLY BE ELECTED
IN ADDITION TO (1) OR (2) ABOVE):
[ ] (i) N/A, no exceptions.
[ ] (ii) Death.
[ ] (iii) Disability.
[ ] (iv) Completion of Early Retirement
requirements in the current or a
prior Plan Year.
[ ] (v) Attainment of Normal Retirement Age
in the current Plan Year or in a
prior Plan Year.
[ ] (d) EMPLOYMENT CONDITION. The Participant must be
employed by the Employer on the last day of the Plan
Year, regardless of whether he satisfies any Hours of
Service condition under Option (c). Provided,
however, the employment condition shall not apply if
the Participant terminates employment on account of:
[ ] (1) N/A, no exceptions.
[ ] (2) Death.
[ ] (3) Disability.
[ ] (4) Completion of Early Retirement requirements
in the current or a prior Plan Year.
[ ] (5) Attainment of Normal Retirement Age in the
current or a prior Plan Year.
[ ] (e) (SPECIFY OTHER CONDITIONS, IF APPLICABLE):___________
_____________________________________________________
15
_____________________________________________________
ALLOCATION DATES FOR MATCHING CONTRIBUTIONS. Subject to satisfaction of the
allocation requirements, Matching Contributions shall be made on behalf of
Participants as of:
[X] (a) The last day of the Plan Year
[ ] (b) The last day of each quarter of the Plan Year
[ ] (c) Semi-annually, as of the last day of the sixth month
of the Plan Year
[ ] (d) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
TREATMENT OF MATCHING CONTRIBUTIONS. All Matching Contributions under the Plan
shall be allocated by the Plan Administrator to the Participant's:
[ ] (a) Qualified Matching Contribution Account. The Matching
Contribution will be used to satisfy the deferral
percentage test of Plan Section 4.12.
[X] (b) Regular Matching Contribution Account. The Matching
Contribution will be tested pursuant to Plan
Section 4.18.
VESTING OF MATCHING CONTRIBUTIONS. Matching Contributions:
[X] (a) Are 100% vested and nonforfeitable at all times
(MUST BE SELECTED IF MATCHING CONTRIBUTIONS ARE
ALLOCATED TO THE QUALIFIED MATCHING CONTRIBUTION
ACCOUNT).
[ ] (b) Shall vest in accordance with the vesting schedule
elected in Adoption Agreement Section 5.05.
4.04 DISCRETIONARY NONELECTIVE CONTRIBUTIONS. Discretionary Nonelective
--------------------------------------- Contributions:
[ ] (a) Shall not be made.
[X] (b) Are made out of the Employer's current or accumulated
Net Profit.
[ ] (c) Are not limited to the Employer's current or
accumulated Net Profit.
ALLOCATION OF DISCRETIONARY NONELECTIVE CONTRIBUTION. Subject to any restoration
allocation required under Sections 5.08 and 5.09 or 10.15, to the top-heavy
minimum allocation provisions of Section 18.04(a), and to any limitations set
forth in Section 4.06, the Plan Administrator will allocate and credit each
annual Employer contribution to the Account of each Participant who is entitled
to receive an allocation, in accordance with the allocation method selected
under this Section 4.04 (CHOOSE AN ALLOCATION METHOD UNDER (A), (B), (C), (D) OR
(E); (F) IS MANDATORY IF THE EMPLOYER ELECTS (C), (D) OR (E)).
[ ] (a) NONINTEGRATED ALLOCATION FORMULA. In the ratio that
each Participant's Compensation for the Plan Year
bears to the total Compensation of all Participants
entitled to receive an allocation for the Plan Year.
16
ARTICLE X
PLAN ADMINISTRATOR -
DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
10.08 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. The Employer
may elect to allocate Trust Fund earnings and losses on amounts
contributed to the Plan after the previous Adjustment Date, or
Valuation Date, in a manner other than the manner provided in Section
10.08, which uses the "beginning balance," as follows:
[X] (a) No modification to Section 10.08.
[ ] (b) by using a weighted average
[ ] (c) by treating one-half of all such contributions as
being a part of the Participant's nonsegregated
Account Balance as of the previous Adjustment Date.
[ ] (d) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
38
031694
ADOPTION AGREEMENT
NONSTANDARDIZED 401(K) PLAN AND TRUST
The undersigned, KRISPY KREME DOUGHNUT CORPORATION ("Employer"), by executing
this Adoption Agreement, elects to become a participating Employer in the ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, L.L.P. 401(k) VOLUME SUBMITTER PLAN AND TRUST by adopting the
accompanying Plan and Trust in full as if the Employer were a signatory to that
Agreement. The Employer makes the following elections granted under the
provisions of the Volume Submitter Plan document.
PLAN INFORMATION
PLAN NAME
(SECTION 1.39): Krispy Kreme Doughnut Corporation Retirement Savings Plan
----------------------------------------------------------------------------------------
PLAN NUMBER: 001
----------------------------------------------------- ------
EMPLOYER: Krispy Kreme Doughnut Corporation
----------------------------------------------------------------------------------------
ADDRESS: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------------------------------------------
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------------------------------------------------
CONTACT: ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------------------------------------------------
EMPLOYER
TELEPHONE: ( ▇▇▇ ) ▇▇▇-▇▇▇▇ IDENTIFICATION NUMBER: ▇▇-▇▇▇▇▇▇▇
-------- ---------------- -------------------------------
DATE BUSINESS BUSINESS CODE
COMMENCED: January 11, 1982 NUMBER (FROM FORM 1120):
-------------------------- -----------------------------
TYPE OF ENTITY: Corporation
(corporation, "S" corporation, limited liability corporation, partnership, sole
proprietorship, or other unincorporated business)
LOCATION OF PRINCIPAL
OFFICE OF EMPLOYER: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------------------------------------------------
IS THE EMPLOYER
A MEMBER OF A(N): CONTROLLED GROUP X (Yes) (No)
--------- ---------
AFFILIATED SERVICE GROUP (Yes) X (No)
--------- ---------
PARTICIPATING
EMPLOYERS:
(COMMONLY
CONTROLLED) Krispy Kreme Doughnuts Company
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
AGENT FOR
SERVICE OF
PROCESS: ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------------------------------------------------
c/o Krispy Kreme Doughnut Corporation
----------------------------------------------------------------------------------------
ADDRESS: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
----------------------------------------------------------------------------------------
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------------------------------------------------
TRUSTEE(S)
(SECTION 1.50): Southern National Bank of North Carolina
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
TRUSTEE
ADDRESS: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------------------------------------------
▇.▇. ▇▇▇ ▇▇▇▇
----------------------------------------------------------------------------------------
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ TELEPHONE: ( ▇▇▇ ) ▇▇▇-▇▇▇▇
---------------------------------------- ------ ----------------------------
PLAN
ADMINISTRATOR
(SECTION 1.40): Krispy Kreme Doughnut Corporation
----------------------------------------------------------------------------------------
ADDRESS: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------------------------------------------
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------------------------------------------------
IDENTIFICATION
TELEPHONE: ( ▇▇▇ ) ▇▇▇-▇▇▇▇ NUMBER: ▇▇-▇▇▇▇▇▇▇
-------- ---------------- ----------------------------------------------
2
ARTICLE I
DEFINITIONS
1.11 COMPENSATION.
------------
DEFINITION OF COMPENSATION. In lieu of the Code Section 415 safe harbor
definition of Compensation included in Plan Section 1.11, the Plan shall define
Compensation as:
[ ] (a) N/A. Compensation shall be defined pursuant to the
Code Section 415 safe-harbor included in the Plan.
[X] (b) Earnings reportable as W-2 wages for Federal income
tax withholding purposes, subject to any other
election under this Adoption Agreement Section 1.11.
[ ] (c)
Wages within the meaning of Section 3401(a) of the
Code for the purposes of income tax withholding a the
source but determined without regard to any rules
that limit the remuneration included in wages based
on the nature or location of the employment or the
services performed (such as the exception for
agricultural labor in Section 3401(a)92) of the
Code).
MODIFICATIONS TO COMPENSATION DEFINITION. [NOTE: Special limitations apply with
respect to the definition of Compensation for various Plan purposes.]
Compensation shall be defined as selected in (a), (b) or (c) above, subject to
the following exclusions:
[ ] (a) Include salary deferral contributions made to this
Plan. (THIS IS NOT A SAFE-HARBOR DEFINITION OF
COMPENSATION.)
[X] (b) Include Elective Contributions (as defined in Section
1.11 of the Plan) to plans maintained by the
Employer, as well as salary deferral contributions
under this Plan.
[ ] (c) Exclude Compensation in excess of $ .
-----------------
[ ] (d) Exclude bonuses.
[ ] (e) Exclude overtime.
[ ] (f) Exclude commissions.
[X] (g) (SPECIFY) Exclude auto allowance and insurance
-----------------------------------------------------
allowance provided to Highly Compensated Employees.
-----------------------------------------------------
-----------------------------------------------------
If, for any Plan Year, the Plan uses permitted disparity in the
contribution or allocation formula elected under Article IV, any
election of Options (d), (e), or (f) is ineffective for such Plan Year
with respect to any Nonhighly Compensated Employee.
METHOD FOR DETERMINING COMPENSATION. Compensation shall mean remuneration:
[X] (a) Actually paid.
[ ] (b) Accrued [NOTE: Unavailable for Plan Years beginning
after December 31, 1991.]
NOTE: A written resolution must be adopted by the governing body of the Employer
if accrued compensation is elected for Plan Years beginning prior to January 1,
1992.
PERIOD ON WHICH COMPENSATION BASED. Compensation shall be based on:
3
[X] (a) The Plan Year.
[ ] (b) The fiscal year coinciding with or ending within the
Plan Year.
[ ] (c) The calendar year coinciding with or ending within
the Plan Year:
1.15 EARLY RETIREMENT.
----------------
EARLY RETIREMENT AGE. Early Retirement Age under the Plan is:
[ ] (a) None provided.
[ ] (b) ___________[STATE AGE; NO SERVICE REQUIREMENT].
[X] (c) Attainment of age 55 and completion of at least
--------
10 Years of Service.
--------
EARLY RETIREMENT DATE. Early Retirement Date under the Plan is:
[ ] (a) The date the Participant attains Early Retirement Age.
[ ] (b) The first day of the month coinciding with or
following attainment of Early Retirement Age.
[ ] (c) The Adjustment Date of any Plan Year coinciding
with or following attainment of Early Retirement Age
and prior to Normal Retirement Age.
[ ] (d) (SPECIFY)
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
1.17 EFFECTIVE DATE.
--------------
[ ] (a) NEW PLAN. The "Effective Date" of the Plan is
____________________, 19__.
[X] (b) RESTATED PLAN. The "Restated Effective Date" is
January 1, 1989. This Plan is an amendment and
restatement of an existing retirement plan(s) with an
original "Effective Date" of February 1, 1982. [NOTE:
See the Effective Date Addendum.] The Plan was last
amended and restated effective January 1, 1985. Prior
to this amendment and restatement, the name of the
Plan was Krispy Kreme Doughnut Corporation Retirement
--------------------------------------------
Savings Plan.
------------
401(K) ARRANGEMENT. The 401(k) arrangement selected in Adoption Agreement
Section 4.02 is effective as of January 1, 1989 (INSERT EITHER THE "EFFECTIVE
---------------
DATE OF THE PLAN" IF THIS IS A NEW PLAN, OR THE APPLICABLE EFFECTIVE DATE).
1.19 EMPLOYEE. The following Employees are not eligible to participate in
-------- the Plan:
[X] (a) No exclusions.
[ ] (b) Any Employee compensated on a commission basis.
[ ] (c) Any Employee compensated on a salaried basis.
[ ] (d) Any Employee compensated on an hourly basis.
4
[ ] (e) Any part-time Employee (an Employee who has a
regularly scheduled workweek of fewer than ________
hours).
[ ] (f) (SPECIFY)
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
NOTE: Participating Employers are subject to the same eligibility exclusions, if
any, of this Adoption Agreement Section 1.19, unless specifically provided
otherwise in an addendum.
1.23 ENTRY DATE. Entry Date means one or more of the following:
----------
[ ] (a) Effective Date (FOR ALL EMPLOYEES IN THE INITIAL YEAR
OF PLAN ADOPTION, REGARDLESS OF ANY ELIGIBILITY
REQUIREMENTS, THEREAFTER:)
[ ] (b) Semi-annual Entry Dates. The first day of the Plan
Year and the first day of the seventh month of the
Plan Year coinciding with or following completion
of the eligibility requirements.
[ ] (c) The first day of the Plan Year in which the
eligibility requirements are completed.
[ ] (d) The first day of the Plan Year next following
completion of the eligibility requirements
(ELIGIBILITY REQUIREMENTS MAY NOT EXCEED 6 MONTHS OF
SERVICE (1-1/2 YEARS IF 100% VESTING PROVIDED),
AND/OR AGE 20-1/2).
[X] (e) The first day of the month coinciding with or
following completion of the eligibility requirements.
[ ] (f) The first day of the Plan Year, if the
eligibility requirements are completed in the first 6
months of the Plan Year, or the first day of the next
succeeding Plan Year if the eligibility requirements
are completed in the last 6 months of the Plan Year.
[ ] (g) (SPECIFY ENTRY DATES)
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
[THE EMPLOYEE MUST BECOME A PARTICIPANT BY THE EARLIER OF: (1) THE FIRST DAY OF
THE PLAN YEAR BEGINNING AFTER THE DATE THE EMPLOYEE COMPLETES THE AGE AND
SERVICE REQUIREMENTS OF CODE SS. 410(A); OR (2) 6 MONTHS AFTER THE DATE THE
EMPLOYEE COMPLETES THOSE REQUIREMENTS.]
1.26 HOUR OF SERVICE. The crediting method for Hours of Service is:
---------------
[X] (a) The actual method.
[ ] (b) The __________________ (DAILY, WEEKLY, SEMI-MONTHLY
PAYROLL PERIODS, OR MONTHLY) equivalency method,
except:
[ ] (1) No exceptions.
[ ] (2) The actual method applies for purposes of:
(CHOOSE AT LEAST ONE)
[ ] (i) Participation under Article III.
[ ] (ii) Vesting under Article VI.
[ ] (iii) Allocation of contributions under
Article IV.
5
1.27 LEASED EMPLOYEES. Any Leased Employee treated as an Employee under
---------------- Section 1.27 of the Plan is:
[X] (a) Not eligible to participate in the Plan.
[ ] (b) Eligible to participate in the Plan, unless excluded
by reason of an exclusion classification elected
under Adoption Agreement Section 1.19.
1.28 LIMITATION YEAR. The Limitation Year is:
---------------
[X] (a) The Plan Year.
[ ] (b) The fiscal year of the Employer
[ ] (c) The 12 consecutive month period ending every _______.
1.37 NORMAL RETIREMENT.
-----------------
NORMAL RETIREMENT AGE. Normal Retirement Age under the Plan is:
[X] (a) 65 [STATE AGE, BUT MAY NOT EXCEED AGE 65].
---------
[ ] (b) The later of the date the Participant attains _______
years of age or the anniversary of the first day of
the Plan Year in which the Participant commenced
participation in the Plan. [THE AGE SELECTED MAY NOT
EXCEED AGE 65 AND THE ANNIVERSARY SELECTED MAY NOT
EXCEED THE 5TH. IF THE ANNIVERSARY EVER EXCEEDED THE
5TH, COMPLETE THE FOLLOWING.]
[ ] (1) N/A - Original Plan Effective Date after
12/31/88 OR pre-1988 Normal Retirement Age
provided five or fewer years of participation.
[ ] (2) No transition desired. The selection made in
(b) above shall apply to all Participants,
regardless of the commencement date of
participation in the Plan.
[ ] (3) The pre-1988 participation requirement was ___
years of participation. The Normal Retirement
Date for any Participant who commenced
participation prior to the first day of the
Plan Year beginning in 1988, shall not be
earlier than the earlier of (i) the required
years of participation in effect at such time,
or (ii) the 5th anniversary of the first day
of the Plan Year beginning in 1988.
NORMAL RETIREMENT DATE. Normal Retirement Date under the Plan is:
[X] (a) The date the Participant attains Normal Retirement
Age.
[ ] (b) The first day of the month coinciding with or
following attainment of Normal Retirement Age.
[ ] (c) The Adjustment Date of the Plan Year coinciding with
or following attainment of Normal Retirement Age.
[ ] (d) The Adjustment Date of the Plan Year nearest the
Participant's Normal Retirement Age.
6
[ ] (e) (SPECIFY)
--------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
1.41 PLAN YEAR. Plan Year means:
---------
[X] (a) The 12 consecutive month period ending every
December 31.
-----------
[ ] (b) (SPECIFY)
--------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
CHANGE IN PLAN YEAR.
[X] (a) No change in Plan Year.
[ ] (b) Short Plan Year commenced ____________________, 19___
and ended ___________________, 19__.
SHORT INITIAL YEAR.
[X] (a) No short initial year.
[ ] (b) Short initial year commenced _______________________,
19__ and ended _______________, 19__.
1.47 TAXABLE YEAR. The Employer's Taxable Year is:
------------
[X] (a) The 12 consecutive month period ending every
January 31.
----------
[ ] (b) (SPECIFY)
SHORT INITIAL TAXABLE YEAR.
[X] (a) No short year.
[ ] (b) Short taxable year commenced __________________, 19__
and ended _________________, 19__.
1.51 VALUATION DATE. In addition to each Adjustment Date, allocations shall
---------------
be made and Accounts shall be valued as of the following valuation
date(s) during the Plan Year:
[ ] (a) No other mandatory valuation dates.
[ ] (b) Semi-annual valuation dates (the Adjustment Date and
the date which is the end of the sixth month
thereafter).
[ ] (c) Quarterly valuation dates.
[ ] (d) Monthly valuation dates.
[X] (e) Daily valuation.
[ ] (f) (SPECIFY)
--------------------------------------------
7
-----------------------------------------------------
-----------------------------------------------------
1.52 YEAR OF SERVICE. After the initial computation period measured from
---------------
the Employment Commencement Date, the Plan measures a Year of Service
on the basis of the following 12 consecutive month period:
[X] (a) Plan Year.
[ ] (b) Employment Year. An Employment Year is the 12
consecutive month period measured from the Employee's
Employment Commencement Date and each successive 12
consecutive month period measured from each
anniversary of such Employment Commencement Date.
NOTE: The Employer is required to credit each Participant with two Years of
Service for vesting purposes if the Plan experienced a short Plan Year because
of a change in Plan Years, provided the Participant completes a Year of Service
for the twelve month period beginning with the first day of the short Plan Year,
and further completes a Year of Service for the twelve month period beginning on
the first day of the new Plan Year.
HOURS OF SERVICE. The minimum number of Hours of Service an Employee must
complete during a computation period to receive credit for a Year of Service is:
[X] (a) 1,000 Hours of Service.
[ ] (b) ____________ Hours of Service (MAY NOT EXCEED 1,000).
8
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.01 ELIGIBILITY.
-----------
ELIGIBILITY CONDITIONS. An Employee must satisfy the following conditions to
become a Participant in the Plan:
[ ] (a) No age or service required - immediate eligibility
upon Employment Commencement Date.
AGE AND/OR SERVICE: (IF (A) NOT SELECTED, CHOOSE (B) AND/OR (C))
[X] (b) AGE. Attainment of age 18 (SPECIFY AGE, NOT
EXCEEDING 21). ------
[X] (c) SERVICE. Service requirement. (CHOOSE ONE OF (1)
THROUGH (3))
[X] (1) One Year of Service.
[ ] (2) Two Years of Service, without an intervening
Break in Service. See Section 2.03(a) of the
Plan. (IF THIS OPTION IS SELECTED, THE PLAN
MUST PROVIDE FOR 100% VESTING)
[ ] (3) ________ months (NOT EXCEEDING 24) following
the Employee's Employment Commencement Date.
(IF NUMBER OF MONTHS EXCEEDS 12, THE PLAN
MUST PROVIDE FOR 100% VESTING)
DUAL ELIGIBILITY. If this is an amended and restated Plan with amended
eligibility conditions, then such amended conditions shall apply solely to
Employees employed by the Employer after________________________________________
_______________________________________________________________________________.
2.02 YEAR OF SERVICE - PARTICIPATION.
-------------------------------
ELIGIBILITY COMPUTATION PERIOD. After the initial eligibility computation period
described in Section 2.02 of the Plan (WHICH IS THE 12 CONSECUTIVE MONTH PERIOD
MEASURED FROM THE EMPLOYMENT COMMENCEMENT DATE), the Plan measures the
eligibility computation period as:
[X] (a) The Plan Year, beginning with the Plan Year which
includes the first anniversary of the Employee's
Employment Commencement Date.
[ ] (b) The 12 consecutive month period beginning with each
anniversary of the Employee's Employment Commencement
Date.
2.03 BREAK IN SERVICE - PARTICIPATION. The Break in Service rule described
-------------------------------- in Section 2.03(b) of the Plan:
[X] (a) Does not apply to the Plan.
[ ] (b) Applies to the Plan.
9
2.09 ELECTION NOT TO PARTICIPATE. The Plan:
---------------------------
[ ] (a) Does not permit eligible Employees or Participants to
elect not to participate.
[X] (b) Permits eligible Employees or Participants to elect
not to participate in accordance with Section 2.09 of
the Plan.
2.10 SERVICE FOR PREDECESSOR EMPLOYER. In addition to the predecessor
-----------------------------------
service, the Plan must credit by reason of Section 2.10 of the Plan,
the Plan credits Service with the following predecessor employer(s):
Predecessor Employer: Period for which Service Credited (INSERT
-------------------- -------------------------------------
EITHER: ACTUAL DATES, "PERIOD PLAN WAS
MAINTAINED," OR "PERIOD OF EMPLOYMENT")
------------------------- ---------------------------------------
------------------------- ---------------------------------------
------------------------- ---------------------------------------
------------------------- ---------------------------------------
------------------------- ---------------------------------------
Service with the designated predecessor employer(s) applies:
[ ] (a) For purposes of participation under Article III.
[ ] (b) For purposes of vesting under Article VI.
10
ARTICLE III
PARTICIPANT CONTRIBUTIONS
3.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. The Plan:
---------------------------------------
[ ] (a) Does not permit voluntary nondeductible
contributions.
[ ] (b) (FOR RESTATED PLANS ONLY) Does not permit voluntary
nondeductible contributions, but maintains accounts
for such contributions made prior to January 1, 1987.
[ ] (c) (FOR RESTATED PLANS ONLY) Does not permit voluntary
nondeductible contributions, but maintains accounts
for such contributions made prior to _______________,
19___ (INSERT DATE).
[X] (d) Permits voluntary nondeductible contributions. [NOTE:
Voluntary nondeductible contributions are subject to
strict nondiscrimination requirements.]
[ ] (e) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
3.02 PARTICIPANT MANDATORY CONTRIBUTIONS. In order to be eligible to
------------------------------------
share in Employer Matching Contributions, each Participant is required
to contribute:
[X] (a) N/A. No mandatory contributions required.
[ ] (b) ________% of his Compensation.
[ ] (c) From ___________% to __________% of his Compensation.
WITHDRAWAL RESTRICTIONS OF MANDATORY CONTRIBUTIONS. Mandatory contributions:
[ ] (a) May not be withdrawn by a Participant prior to his
termination of employment.
[ ] (b) May be withdrawn only if Mandatory Contributions
are suspended and further restrictions are imposed as
though the Mandatory Contributions were Elective
Contributions and the Participant received a hardship
distribution subject to the safe-harbor provisions
of Plan Section 7.03.
3.03 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS (FOR RESTATED PLANS ONLY).
------------------------------------------
The Plan:
[X] (a) Never permitted Qualified Voluntary Employee
Contributions.
[ ] (b) Permitted Qualified Voluntary Employee Contributions
prior to January 1, 1987.
3.04 ROLLOVER CONTRIBUTIONS. The Plan:
----------------------
[ ] (a) Does not permit rollovers.
[X] (b) Permits rollovers:
[ ] (1) By Participants only.
[X] (2) By Employees and Participants
3.05 TRUSTEE-TO-TRUSTEE TRANSFERS TO THE PLAN. The Plan:
----------------------------------------
11
[ ] (a) Does not accept trustee-to-trustee transfers.
[X] (b) Accepts trustee-to-trustee transfers:
[X] (1) only from a plan which is not otherwise
subject to the survivor annuity requirements
of the Code.
[ ] (2) from any plan.
12
ARTICLE IV
EMPLOYER CONTRIBUTIONS AND FORFEITURES
4.02 CODE SECTION 401(k) ARRANGEMENT. The Code section 401(k) arrangement
------------------------------- shall be:
[X] (a) Salary Reduction Arrangement. Each Employee may elect
to have his compensation reduced by:
[ ] (1) ________%
[ ] (2) up to __________%
[X] (3) from 1 % to 15 %
---------- ----------
[ ] (4) up to the maximum percentage allowable not
to exceed the limits of Code section 401(k),
404 and 415.
[ ] (b) Cash or Deferred Arrangement. Each Participant may
elect to receive in cash, up to _____% of Employer's
allocable contribution. (IF THIS OPTION (B) IS
SELECTED, PLEASE SKIP TO SECTION 4.04.)
SALARY REDUCTION ELECTIONS. (COMPLETE ONLY IF OPTION (A) ABOVE SELECTED). Each
Participant's Salary Reduction Election shall be effective as of his Entry Date.
Thereafter, modifications may be made:
[ ] (a) As of the first day of each Plan Year.
[ ] (b) Semi-annually. The first day of the Plan Year and
the first day of the seventh month of the Plan Year.
[ ] (c) Quarterly, based on the Plan Year.
[ ] (d) As of any pay period.
[X] (e) (SPECIFY) As of the beginning of any month. In
addition to regular Salary Reduction Agreement made
pursuant to ss. 4.02, each Participant may make
special election to defer up to 100% of bonus or
incentive pay designated by the Employer as being
eligible for this special election. Such special
election must be made by August 1 of each year.
NOTE: All elections to modify a Salary Reduction Election must be made prior to
the first day of the pay period for which such modification shall be effective.
BONUSES PAID. Shall cash bonuses paid within 2 1/2 months after the end of the
Plan Year be subject to a Participant's Salary Reduction Election for the prior
Plan Year?
[X] (a) No
[ ] (b) Yes, subject to the election of the Employee in his
salary reduction agreement
13
4.03 MATCHING CONTRIBUTIONS. Subject to the maximum contribution indicated
below, and further subject to any limitations set forth in Section
4.06, the Employer shall make Matching Contributions to the Plan in
accordance with the following formula (OPTION (B) MAY BE SELECTED IN
ADDITION TO OPTION (C) OR (D)):
[ ] (a) N/A. No matching contributions shall be made.
[ ] (b) Matching Contributions shall be an amount equal to
_____% of the Participant's Mandatory Nondeductible
Contribution.
[X] (c) Matching Contributions in a discretionary
percentage, to be determined by the Employer, of
the Participant's Salary Reduction Contribution.
[ ] (d) Matching Contributions shall be an amount equal to
_____% of the Participant's Salary Reduction
Contribution.
[ ] (e) Matching Contributions shall be an amount equal to
the percentage determined under the following
schedule:
Participant's Total Matching Percentage
Years of Service
_____ _____
_____ _____
_____ _____
[ ] (f) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
MAXIMUM PERMITTED MATCHING CONTRIBUTION. The amount of the Employer's Matching
Contribution shall be limited to:
[X] (a) Only salary reductions up to 6% of a Participant's
Compensation will be matched. ---
[ ] (b) $______________
[ ] (c) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
ALLOCATION OF MATCHING CONTRIBUTIONS. Subject to satisfaction of the allocation
requirements, Matching Contributions shall be made on behalf of:
[X] (a) All Participants
[ ] (b) Only nonhighly compensated Participants
ALLOCATION REQUIREMENTS FOR MATCHING CONTRIBUTIONS. To receive an allocation of
Employer Matching Contributions for the Plan Year, an eligible Participant who
made Deferral Contributions under the Plan must satisfy the conditions described
in the following elections:
[X] (a) No conditions other than making Deferral
Contributions.
[ ] (b) SAFE HARBOR. If the Participant is employed by the
Employer on the last day of the Plan Year or
completes at least 501 Hours of Service during the
Plan Year prior to termination of employment.
14
Provided, however, Participant will receive an
allocation of the Employer's Matching Contribution
regardless of Hours of Service and employment status
on the last day of the Plan Year if such Participant
terminates employment during the Plan Year on account
of:
[ ] (1) N/A, no exceptions.
[ ] (2) Death.
[ ] (3) Disability.
[ ] (4) Completion of Early Retirement requirements
in the current or a prior Plan Year.
[ ] (5) Attainment of Normal Retirement Age in the
current or a prior Plan Year.
[ ] (c) HOURS OF SERVICE CONDITION. The Participant must
complete the following minimum number of Hours of
Service for the Plan Year:
[ ] (1) 1,000 Hours of Service.
[ ] (2) (SPECIFY, BUT MAY NOT EXCEED 1,000) _______.
[ ] (3) No Hour of Service requirement if the
Participant terminates employment during the
Plan Year on account of (MAY ONLY BE ELECTED
IN ADDITION TO (1) OR (2) ABOVE):
[ ] (i) N/A, no exceptions.
[ ] (ii) Death.
[ ] (iii) Disability.
[ ] (iv) Completion of Early Retirement
requirements in the current or a
prior Plan Year.
[ ] (v) Attainment of Normal Retirement Age
in the current Plan Year or in a
prior Plan Year.
[ ] (d) EMPLOYMENT CONDITION. The Participant must be
employed by the Employer on the last day of the Plan
Year, regardless of whether he satisfies any Hours of
Service condition under Option (c). Provided,
however, the employment condition shall not apply if
the Participant terminates employment on account of:
[ ] (1) N/A, no exceptions.
[ ] (2) Death.
[ ] (3) Disability.
[ ] (4) Completion of Early Retirement requirements
in the current or a prior Plan Year.
[ ] (5) Attainment of Normal Retirement Age in the
current or a prior Plan Year.
[ ] (e) (SPECIFY OTHER CONDITIONS, IF APPLICABLE):___________
15
_____________________________________________________
_____________________________________________________
ALLOCATION DATES FOR MATCHING CONTRIBUTIONS. Subject to satisfaction of the
allocation requirements, Matching Contributions shall be made on behalf of
Participants as of:
[X] (a) The last day of the Plan Year
[ ] (b) The last day of each quarter of the Plan Year
[ ] (c) Semi-annually, as of the last day of the sixth month
of the Plan Year
[ ] (d) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
TREATMENT OF MATCHING CONTRIBUTIONS. All Matching Contributions under the Plan
shall be allocated by the Plan Administrator to the Participant's:
[ ] (a) Qualified Matching Contribution Account. The Matching
Contribution will be used to satisfy the deferral
percentage test of Plan Section 4.12.
[X] (b) Regular Matching Contribution Account. The Matching
Contribution will be tested pursuant to Plan
Section 4.18.
VESTING OF MATCHING CONTRIBUTIONS. Matching Contributions:
[X] (a) Are 100% vested and nonforfeitable at all times
(MUST BE SELECTED IF MATCHING CONTRIBUTIONS ARE
ALLOCATED TO THE QUALIFIED MATCHING CONTRIBUTION
ACCOUNT).
[ ] (b) Shall vest in accordance with the vesting schedule
elected in Adoption Agreement Section 5.05.
4.04 DISCRETIONARY NONELECTIVE CONTRIBUTIONS. Discretionary Nonelective
--------------------------------------- Contributions:
[ ] (a) Shall not be made.
[X] (b) Are made out of the Employer's current or accumulated
Net Profit.
[ ] (c) Are not limited to the Employer's current or
accumulated Net Profit.
ALLOCATION OF DISCRETIONARY NONELECTIVE CONTRIBUTION. Subject to any restoration
allocation required under Sections 5.08 and 5.09 or 10.15, to the top-heavy
minimum allocation provisions of Section 18.04(a), and to any limitations set
forth in Section 4.06, the Plan Administrator will allocate and credit each
annual Employer contribution to the Account of each Participant who is entitled
to receive an allocation, in accordance with the allocation method selected
under this Section 4.04 (CHOOSE AN ALLOCATION METHOD UNDER (A), (B), (C), (D) OR
(E); (F) IS MANDATORY IF THE EMPLOYER ELECTS (C), (D) OR (E)).
[ ] (a) NONINTEGRATED ALLOCATION FORMULA. In the ratio that
each Participant's Compensation for the Plan Year
bears to the total Compensation of all Participants
entitled to receive an allocation for the Plan Year.
[ ] (b) POINT SYSTEM. In the ratio that each Participant's
Points for the Plan Year bears to the total Points of
all Participants entitled to receive an allocation
for the Plan Year. (CHOOSE (1) AND/OR (2))
16
[ ] (1) ______ Points for each Plan Year of Service.
[ ] (2) ______ Points for each $____________ of
Compensation.
[X] (c) TWO-TIERED INTEGRATED ALLOCATION FORMULA - MAXIMUM
DISPARITY. First, in the ratio that each
Participant's Compensation plus Excess Compensation
(ELECTED IN (F) BELOW) for the Plan Year bears to the
total Compensation plus Excess Compensation of all
Participants entitled to receive an allocation for
the Plan Year, not to exceed the maximum disparity
rate, subject to the provisions of Section 18.04 of
the Plan.
Second, any remaining amount in the ratio that each
Participant's Compensation for the Plan Year bears to
the total Compensation of all Participants entitled
to receive an allocation for the Plan Year.
[ ] (d) THREE-TIERED INTEGRATED ALLOCATION FORMULA. First, in
the ratio that each Participant's Compensation for
the Plan Year bears to the total Compensation of all
Participants entitled to receive an allocation for
the Plan Year, but not exceeding 3% of each
Participant's Compensation.
Second, in the ratio that each Participant's Excess
Compensation (ELECTED IN (F) below) for the Plan Year
bears to the total Excess Compensation of all
Participants entitled to receive an allocation for
the Plan Year, not to exceed the maximum disparity
rate, subject to the provisions of Section 18.04 of
the Plan.
Finally, any remaining amount in the ratio that each
Participant's Compensation for the Plan Year bears to
the total Compensation of all Participants entitled
to receive an allocation for the Plan Year.
[ ] (e) FOUR-TIERED INTEGRATED ALLOCATION FORMULA. First, in
the ratio that each Participant's Compensation
for the Plan Year bears to the total Compensation of
all Participants entitled to receive an allocation
for the Plan Year, but not exceeding 3% of each
Participant's Compensation.
Second, in the ratio that each Participant's Excess
Compensation (ELECTED IN (F) below) for the Plan Year
bears to the total Excess Compensation of all
Participants entitled to receive an allocation for
the Plan Year, but not exceeding 3% of each
Participant's Excess Compensation.
Third, in the ratio that each Participant's
Compensation plus Excess Compensation for the Plan
Year bears to the total Compensation plus Excess
Compensation of all Participants entitled to receive
an allocation for the Plan Year, not to exceed the
maximum disparity rate, subject to the provisions of
Section 18.04 of the Plan.
Fourth, any remaining amount in the ratio that each
Participant's Compensation for the Plan Year bears to
the total Compensation of all Participants entitled
to receive an allocation for the Plan Year.
[ ] (f) EXCESS COMPENSATION/INTEGRATION LEVEL. "Excess
Compensation" means Compensation in excess of the
following Integration Level: (CHOOSE (1) OR (2))
[ ] (1) 100% of the taxable wage base in effect on
the first day of the Plan Year, as
determined under Section 230 of the Social
Security Act
[ ] (2) The greater of $10,000 or 20% of the taxable
wage base.
17
[X] (3) 50 % (NOT TO EXCEED 100%) of the taxable
------ wage base (SEE NOTE BELOW)
[ ] (4) $_________ [NOTE: Not exceeding the taxable
wage base for the Plan Year in which this
Adoption Agreement first is effective.] (SEE
NOTE BELOW)
NOTE: The excess percentage in Option (f) above may not exceed the
LESSER of the following limits and shall be adjusted each year as
appropriate:
A. The base contribution percentage.
B. 4.3% if Option (3) or (4) above is more than 20% and
less than or equal to 80% of the taxable wage base.
C. 5.4% if Option (3) or (4) above is less than 100% and
more than 80% of the taxable wage base.
ADDITIONAL ALLOCATION REQUIREMENTS FOR DISCRETIONARY NONELECTIVE CONTRIBUTIONS.
Subject to the suspension of contribution requirements of Section 4.06(d) of the
Plan, to receive an allocation of Employer Discretionary Nonelective
Contributions and Participant forfeitures, if applicable, for the Plan Year, a
Participant must satisfy the conditions described in the following elections:
[X] (a) SAFE HARBOR RULE. If the Participant is employed
by the Employer on the last day of the Plan Year or
completes at least 501 Hours of Service during the
Plan Year prior to termination of employment.
Provided, however, Participant will receive an
allocation of the Employer's Discretionary
Nonelective Contribution regardless of Hours of
Service and employment status on the last day of the
Plan Year if such Participant terminates employment
during the Plan Year on account of:
[ ] (1) N/A, no exceptions.
[X] (2) Death.
[X] (3) Disability.
[X] (4) Completion of Early Retirement requirements
in the current or a prior Plan Year.
[X] (5) Attainment of Normal Retirement Age in the
current or a prior Plan Year.
[ ] (b) HOURS OF SERVICE CONDITION. The Participant must
complete the following minimum number of Hours of
Service for the Plan Year:
[ ] (1) 1,000 Hours of Service.
[ ] (2) (SPECIFY, BUT MAY NOT EXCEED 1,000)________.
[ ] (3) No Hour of Service requirement if the
Participant terminates employment during the
Plan Year on account of (MAY ONLY BE ELECTED
IN ADDITION TO (1) OR (2) ABOVE):
[ ] (i) N/A, no exceptions.
[ ] (ii) Death.
[ ] (iii) Disability.
[ ] (iv) Completion of Early Retirement
requirements in the current or a
prior Plan Year.
18
[ ] (v) Attainment of Normal Retirement Age
in the current Plan Year or in a
prior Plan Year.
[ ] (c) EMPLOYMENT CONDITION. The Participant must be
employed by the Employer on the last day of the Plan
Year, regardless of whether he satisfies any Hours of
Service condition under Option (b). Provided,
however, the employment condition shall not apply if
the Participant terminates employment because of:
[ ] (1) N/A, no exceptions.
[ ] (2) Death.
[ ] (3) Disability.
[ ] (4) Completion of Early Retirement requirements
in the current or a prior Plan Year.
[ ] (5) Attainment of Normal Retirement Age in the
current or a prior Plan Year.
[X] (d) (SPECIFY OTHER CONDITIONS, IF APPLICABLE):
Discretionary Nonelective Contributions may be
-----------------------------------------------------
allocated to specified nondiscriminatory
-----------------------------------------------------
classifications of employees. Special Discretionary
-----------------------------------------------------
Nonelective Contributions of $20 per week shall be
-----------------------------------------------------
made on behalf of eligible Participants who decline
-----------------------------------------------------
coverage under the Flexible Benefits Plan. Special
-----------------------------------------------------
Discretionary Nonelective Contributions of up to $25
-----------------------------------------------------
per week shall be made on behalf of eligible
-----------------------------------------------------
Participants who are route sales persons, shop
-----------------------------------------------------
managers, assistant shop managers, or key staff
-----------------------------------------------------
employees, to the extent that such Participants
-----------------------------------------------------
decline full coverage under the Flexible Benefits
-----------------------------------------------------
Plan.
----
4.05 QUALIFIED NONELECTIVE CONTRIBUTIONS.
-----------------------------------
[ ] (a) N/A, no Qualified Non-Elective Contributions shall be
made to the Plan.
[ ] (b) The Employer shall make a Qualified Non-Elective
Contribution equal to ___________% of the total
Compensation of all Participants eligible to share in
the allocations.
[X] (c) The Employer may make a Qualified Non-Elective
Contribution in an amount to be determined by the
Employer in its discretion.
ALLOCATIONS TO TERMINATED PARTICIPANTS. Any Participant who terminated
employment during the Plan Year for any reason other than death, Total and
Permanent Disability or retirement (either on account of satisfaction of the
Early Retirement requirements or attainment of Normal Retirement age) shall be
entitled to an allocation of the Employer's Qualified Non-Elective Contribution,
subject to the following elections:
[ ] (a) N/A, Plan does not provide for such contributions.
[ ] (b) Terminated Participants who completed more than 500
Hours of Service.
[ ] (c) Terminated Participants who completed a Year of
Service.
[ ] (d) Terminated Participants shall not share in such
allocations, regardless of Hours of Service.
NOTE: If (c) or (d) is selected, the Plan could violate minimum participation
and coverage requirements under Code Sections 401(a)(26) and 410.
19
4.06 ACCRUAL OF BENEFIT.
COMPENSATION TAKEN INTO ACCOUNT. For the initial Plan Year in which the Employee
becomes a Participant, the Participant's compensation for purposes of the
Employer's Nonelective Contributions will be based on:
[X] (a) The entire Plan Year.
[ ] (b) The period from such Participant's Entry Date to the
end of the Plan Year.
ALLOCATION OFFSET (OPTIONAL). The Plan Administrator will reduce a Participant's
allocation otherwise made under this Section 4.06 by the Participant's
allocation under the following qualified plan(s) maintained by the Employer:
TOP-HEAVY MINIMUM ALLOCATION - METHOD OF COMPLIANCE. If a Participant's
allocation under this Section 4.06 is less than the top-heavy minimum allocation
to which he is entitled under Section 18.04(a):
[X] (a) The Employer will make any necessary additional
contribution to the Participant's Account, as
described in Sections 18.04(e) of the Plan.
[ ] (b) The Employer will satisfy the top-heavy minimum
allocation under the following plan(s): __________
_____________________________________________________
SUSPENSION OF CONTRIBUTIONS TO SATISFY COVERAGE OR PARTICIPATION REQUIREMENTS.
The suspension of contribution requirements of Section 4.06(d) of the Plan:
[ ] (a) Applies to the Plan.
[X] (b) Does not apply to the Plan.
[ ] (c) Applies in modified form to the Plan, as described in
an addendum to this Adoption Agreement, numbered
Section 4.06(d).
4.09 FORFEITURE ALLOCATION. All Participant forfeitures shall be subject to
---------------------- any restoration required under Sections 5.08,
5.09 or 10.15.
FORFEITURES OF DISCRETIONARY NONELECTIVE CONTRIBUTIONS. The Plan Administrator
will apply Participant forfeitures from Discretionary Nonelective Contributions
((A) OR (B) MUST BE ELECTED):
[ ] (a) N/A, Discretionary Nonelective Contributions always
100% vested.
[X] (b) As a Discretionary Nonelective Contribution for
the Plan Year in which the forfeiture occurs, as if
the Participant forfeiture were an additional
Discretionary Nonelective Contribution for that Plan
Year.
[ ] (c) To reduce the Discretionary Nonelective Contribution
for the Plan Year in which the forfeiture occurs, and
if necessary, in the succeeding Plan Year.
[ ] (d) First to reduce the Plan's ordinary and necessary
administrative expenses for the Plan Year, with the
balance to be allocated pursuant to Option (b) or
Option (c), whichever was elected.
[X] (e) (SPECIFY) Allocated only among Participants with
------------------------------------------
Profit-Sharing Accounts.
-----------------------
20
FORFEITURES OF MATCHING CONTRIBUTIONS. The Plan Administrator will apply
Participant forfeitures of Matching Contributions, including forfeited excess
aggregate contributions pursuant to Plan Section 4.21 (OPTION (A), (B), (C) OR
(D) MUST BE ELECTED, (E) MAY BE ELECTED IN ADDITION TO ANY OTHER OPTION):
[X] (a) N/A. Matching Contribution always 100% vested.
[ ] (b) To reduce the Employer Matching Contribution for the
Plan Year in which the forfeiture occurs, and if
necessary, in the succeeding Plan Year.
[ ] (c) Added to the Employer's Discretionary Nonelective
Contribution (or treated as a Discretionary
Nonelective Contribution if none is made) and
reallocated to all Participants eligible to share in
the Employer's contribution, based on Compensation.
[ ] (d) Added to the Employer's Discretionary Nonelective
Contribution (or treated as a Discretionary
Nonelective Contribution if none is made) and
reallocated to all non-highly compensated
Participants eligible to share in the Employer's
contribution, based on Compensation.
[ ] (e) First to reduce the Plan's ordinary and necessary
administrative expenses for the Plan Year, with the
balance to be allocated pursuant to Option (b), (c)
or (d), whichever was elected.
[ ] (f) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
4.11 ALLOCABLE INCOME ATTRIBUTABLE TO EXCESS DEFERRALS. In lieu of the
manner of determining allocable income with respect to Excess
Deferrals, as set forth in Section 4.11 of the Plan, the Employer
elects to use the following reasonable method of computing income (THE
SELECTED METHOD MUST BE USED CONSISTENTLY FOR ALL CORRECTIVE
DISTRIBUTIONS UNDER THE PLAN AND MUST BE THE MANNER USED BY THE PLAN IN
ALLOCATING INCOME TO PARTICIPANT'S ACCOUNTS):
[X] (a) N/A The Employer elects to use the manner of
determining allocable income as set forth in Section
4.11 of the Plan.
[ ] (b) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
GAP PERIOD INCOME ON EXCESS DEFERRALS. With respect to the "gap period," the
Employer elects the following manner of allocating income on Excess Deferrals:
[X] (a) No income will be allocated for the gap period.
[ ] (b) Income will be allocated for the gap period in the
manner provided in Section 4.11.
[ ] (c) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
4.16 DISTRIBUTION OF EXCESS CONTRIBUTIONS. In lieu of the manner of
---------------------------------------
determining allocable income with respect to Excess Contributions, as
set forth in Section 4.16 of the Plan, the Employer elects to use the
following reasonable method of computing income (THE SELECTED METHOD
21
MUST BE USED CONSISTENTLY FOR ALL CORRECTIVE DISTRIBUTIONS UNDER THE
PLAN AND MUST BE THE MANNER USED BY THE PLAN IN ALLOCATING INCOME TO
PARTICIPANT'S ACCOUNTS):
[X] (a) N/A. The Employer elects to use the manner of
determining allocable income as set forth in Section
4.16 of the Plan.
[ ] (b) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
GAP PERIOD INCOME ON EXCESS CONTRIBUTIONS. With respect to the "gap period," the
Employer elects the following manner of allocating income on Excess
Contributions:
[X] (a) No income will be allocated for the gap period.
[ ] (b) Income will be allocated for the gap period in the
manner provided in Section 4.11.
[ ] (c) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
4.20 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. In lieu of the manner
-----------------------------------------------
of determining allocable income with respect to Excess Aggregate
Contributions, as set forth in Section 4.20 of the Plan, the Employer
elects to use the following reasonable method of computing income (THE
SELECTED METHOD MUST BE USED CONSISTENTLY FOR ALL CORRECTIVE
DISTRIBUTIONS UNDER THE PLAN AND MUST BE THE MANNER USED BY THE PLAN IN
ALLOCATING INCOME TO PARTICIPANT'S ACCOUNTS):
[X] (a) N/A. The Employer elects to use the manner of
determining allocable income as set forth in Section
4.20 of the Plan.
[ ] (b) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
GAP PERIOD INCOME ON EXCESS AGGREGATE CONTRIBUTIONS. With respect to the "gap
period," the Employer elects the following manner of allocating income on Excess
Contributions:
[X] (a) No income will be allocated for the gap period.
[ ] (b) Income will be allocated for the gap period in the
manner provided in Section 4.11.
[ ] (c) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
4.28 ELIMINATION OF EXCESS AMOUNT. If the provisions of Plan Section
-------------------------------
4.28 apply, the Excess Amount attributed to this Plan equals:
[ ] (a) The product of (i) the total Excess Amount allocated
as of such date (including any amount which the Plan
Administrator would have allocated but for the
limitations of Code ss. 415), multiplied by (ii) the
ratio of (1) the amount allocated to the
Participant as of such date under this Plan, divided
by (2) the total amount allocated as of such date
under all qualified defined contribution plans
(determined without regard to the limitations of Code
Section 415).
[X] (b) The total Excess Amount.
22
[ ] (c) None of the Excess Amount.
4.30 DEFINED BENEFIT PLAN LIMITATION.
-------------------------------
APPLICATION OF LIMITATION. The limitation under Section 4.30 of the Plan:
[X] (a) Does not apply because the Employer does not
maintain and never has maintained a defined benefit
plan covering any Participant in this Plan.
[ ] (b) Applies to the Plan. To the extent necessary to
satisfy the limitation under Section 4.30, the
Employer will reduce:
[ ] (1) The Participant's projected annual benefit
under the defined benefit plan, as provided
pursuant to the terms of the defined
benefit plan.
[ ] (2) Its contribution or allocation on behalf
of the Participant to the defined
contribution plan and then, if necessary,
the Participant's projected annual benefit
under the defined benefit plan.
[NOTE: IF THE EMPLOYER SELECTED OPTION (A) ABOVE, THE REMAINING OPTIONS IN THIS
SECTION 4.30 DO NOT APPLY TO THE EMPLOYER'S PLAN. PLEASE SKIP TO ARTICLE V.]
COORDINATION WITH TOP-HEAVY MINIMUM ALLOCATION. The Plan Administrator will
apply the top-heavy minimum allocation provisions of Section 18.04 of the Plan
with the following modifications:
[ ] (a) No modifications.
[ ] (b) For Non-Key Employees participating only in this
Plan, the top-heavy minimum allocation is the minimum
allocation described in Section 18.04 of the Plan
determined by substituting ______% (NOT LESS THAN 4%)
for "3%," except: (CHOOSE (1) OR (2))
[ ] (1) No exceptions.
[ ] (2) Plan Years in which the Top-Heavy Ratio
exceeds 90%.
[ ] (c) For Non-Key Employees also participating in the
defined benefit plan, the top-heavy minimum is:
(CHOOSE (1) OR (2))
[ ] (1) 5% of Compensation (AS DETERMINED UNDER
SECTION 18.04 OF THE PLAN) irrespective of
the contribution rate of any Key Employee,
except: (CHOOSE (i) OR (ii))
[ ] (i) No exceptions.
[ ] (ii) Substituting "7-1/2%" for "5%" if
the Top-Heavy Ratio does not exceed
90%.
[ ] (2) 0%. [NOTE: The Employer may not select this
Option (2) unless the defined benefit plan
satisfies the top-heavy minimum benefit
requirements of Code Section 416 for these
Non-Key Employees.]
ACTUARIAL ASSUMPTIONS FOR TOP-HEAVY CALCULATION. To determine the Top-Heavy
Ratio, the Plan Administrator will use the following interest rate and mortality
assumptions to value accrued benefits under a defined benefit plan: ___________.
23
________________________________________________________________________________
If the elections under this Section 4.30 are not appropriate to satisfy the
limitations of Section 4.30 of the Plan, or the top-heavy requirements under
Code ss. 416, the Employer must provide the appropriate provisions in an
addendum to this Adoption Agreement.
24
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.03 DISABILITY. The 100% vesting rule under Section 5.03 of the Plan:
----------
[ ] (a) Does not apply to disability.
[X] (b) Applies to disability.
5.04 DEATH. The 100% vesting rule under Section 5.04 of the Plan:
-----
[ ] (a) Does not apply to death.
[X] (b) Applies to death.
5.05 VESTING SCHEDULE. The Employer elects the following vesting schedule:
----------------
[ ] (a) IMMEDIATE VESTING. 100% Nonforfeitable at all times.
[NOTE: This option must be elected if the eligibility
conditions under Adoption Agreement Section 2.01(c)
require 2 Years of Service or more than 12 months of
employment.]
[X] (b) GRADUATED VESTING SCHEDULE. *
[X] (1) 0-2 years 0% [ ] (2) 0-1 year 0%
3 years 20% 2 years 20%
4 years 40% 3 years 40%
5 years 60% 4 years 60%
6 years 80% 5 years 80%
7 years 100% 6 years 100%
* DOES NOT APPLY TO CONTRIBUTIONS MADE PURSUANT TO LAST SENTENCE OF
SECTION 4.04(D).
[ ] (3) 1 year 20% [ ] (4) 1 year 25%
2 years 40% 2 years 50%
3 years 60% 3 years 75%
4 years 80% 4 years 100%
5 years 100%
[ ] (c) CLIFF VESTING SCHEDULE.
[ ] (1) 0-4 years 0% [ ] (2) 0-2 years 0%
5 years 100% 3 years 100%
[ ] (d) OTHER. (MUST BE NO LESS FAVORABLE THAN (b)(1) OR
(c)(1) ABOVE).
Years of Service Percent Vested
________________ ______________
________________ ______________
________________ ______________
________________ ______________
________________ ______________
________________ ______________
________________ ______________
25
FOR AMENDED AND RESTATED PLANS. If the vesting schedule has been amended to a
less favorable schedule, enter the pre-amended schedule below:
[ ] Years of Service Percent Vested
________________ ______________
________________ ______________
________________ ______________
________________ ______________
________________ ______________
________________ ______________
________________ ______________
________________ ______________
________________ ______________
________________ ______________
TOP-HEAVY VESTING. If this Plan becomes a Top-Heavy Plan, the following vesting
schedule shall apply and shall be treated as a Plan amendment pursuant to this
Plan.
[ ] (a) Not applicable (THE VESTING SCHEDULE SELECTED ABOVE
SATISFIES THE TOP-HEAVY VESTING REQUIREMENTS).
[X] (b) 0-1 year 0%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 years 100%
[ ] (c) 0-2 years 0%
3 years 100%
[ ] (d) Years of Service Percent Vested
________________ ______________
________________ ______________
________________ ______________
________________ ______________
________________ ______________
________________ ______________
________________ ______________
________________ ______________
NOTE: The top-heavy provisions of this Section do not apply to the Account
Balances of any Participant who does not perform an Hour of Service after the
Plan first becomes Top-Heavy. Such Participant's Account Balance attributable to
Employer contributions (and forfeitures, if applicable) will be determined
without regard to this Section.
[X] (c) The Top-Heavy Schedule elected under Option (b)
applies:
[ ] (1) For all Plan Years.
[X] (2) Only in a Plan Year for which the Plan is
top-heavy.
[ ] (3) In the Plan Year for which the Plan first
becomes top-heavy and then in all subsequent
Plan Years. [NOTE: The Employer may not
elect Option (h) or (i) unless it has
completed a Non Top-Heavy Schedule.]
26
5.06 INCLUDED YEARS OF SERVICE - VESTING.
-----------------------------------
YEARS OF SERVICE EXCLUDED. The Employer specifically excludes the following
Years of Service:
[X] (a) None other than as specified in Section 5.06(a) of
the Plan.
[ ] (b) Any Year of Service before the Participant attained
the age of _____ (MAY NOT EXCEED AGE 18).
[ ] (c) Any Year of Service during the period the Employer
did not maintain this Plan or a predecessor plan.
[ ] (d) In the case of a Participant who is 0% vested in his
Account Balance at the time he has a Break in
Service, any Year of Service before a Break in
Service if the number of consecutive Breaks in
Service equals or exceeds the greater of 5 or the
aggregate number of the Years of Service prior to the
Break.
[ ] (e) Any Year of Service after the Participant incurs
5 consecutive Breaks in Service shall not be taken
into account for purposes of determining the vested
percentage of his Account Balance derived from
Employer contributions allocated prior to such Break
in Service.
[ ] (f) Any Year of Service earned prior to the effective
date of ERISA if the Plan would have disregarded
that Year of Service on account of an Employee's
Separation from Service under a Plan provision in
effect and adopted before January 1,
1974.
5.09 ZERO PERCENT VESTED PARTICIPANT. The deemed cash-out rule described in
-------------------------------
Section 5.09 of the Plan:
[ ] (a) Does not apply.
[X] (b) Applies to determine the timing of forfeitures for 0%
vested Participants.
27
ARTICLE VI
TIME AND METHOD OF PAYMENTS OF BENEFITS
NOTE: The Plan allows the Trustee an administratively reasonable period of time
to make the actual distribution relating to a particular distribution date.
6.02 SEPARATION FROM SERVICE FOR REASON OTHER THAN EARLY OR NORMAL RETIREMENT,
-------------------------------------------------------------------------
DISABILITY OR DEATH
--------------------
VESTED ACCOUNT BALANCE OF $3,500 OR LESS. Subject to the limitations of Section
6.02, the distribution date for distribution of a vested Account Balance of
$3,500 or less upon a Participant's termination of employment is:
[ ] (a) The Adjustment Date coinciding with or immediately
following the Participant's termination of Service.
[ ] (b) As soon as administratively possible following the
Participant's termination of Service, valued as of
the preceding Adjustment Date or Valuation Date,
whichever is earlier. [NOTE: Participant may be
entitled to subsequent distribution if entitled to
allocation for the year of termination of Service.]
[ ] (c) The Adjustment Date coinciding with or following the
date the Participant ____ incurs Break(s) in Service.
[ ] (d) The Valuation Date coinciding with or immediately
following the Participant's termination of Service.
[ ] (e) No cash outs for vested Account Balances of $3,500
or less. Account Balance will be distributed in
accordance with the provisions below for the
distribution of vested Account Balances exceeding
$3,500.
[X] (f) (SPECIFY) As soon as administratively possible
--------------------------------------------
following the later of a Participant's termination of
-----------------------------------------------------
Service or request for a distribution, valued as of
-----------------------------------------------------
the current Valuation Date.
---------------------------
VESTED ACCOUNT BALANCE EXCEEDING $3,500. Subject to the limitations of Section
6.02, the distribution date for distribution of a vested Account Balance in
excess of $3,500 upon a Participant's termination of employment is:
[ ] (a) The Adjustment Date coinciding with or following the
Participant's termination of Service.
[ ] (b) As soon as administratively possible following the
Participant's termination of Service, valued as of
the preceding Adjustment Date or Valuation Date,
whichever is earlier. [NOTE: Participant may be
entitled to subsequent distribution if entitled to
allocation for the year of termination of Service.]
[ ] (c) The Adjustment Date coinciding with or following the
date the Participant incurs ____ Break(s) in Service.
[ ] (d) The Valuation Date coinciding with or following the
Participant's termination of service.
[ ] (e) The Adjustment Date coinciding with or following the
Participant's satisfaction of Early Retirement
requirements.
28
[ ] (f) The Adjustment Date coinciding with or following the
Participant's attainment of Normal Retirement Age.
[X] (g) (SPECIFY) As soon as administratively possible
--------------------------------------------
following the Participant's request for distribution,
-----------------------------------------------------
valued as of the current Valuation Date.
---------------------------------------
REVOCABILITY OF ELECTION. A Participant with an Account Balance in excess of
$3,500 who elects to delay distribution until the earliest date on which a
distribution is required:
[ ] (a) has made an irrevocable election until such date
[X] (b) may revoke such election at any time and elect to
receive a distribution as of any subsequent Valuation
Date or Adjustment Date in accordance with procedures
adopted by the Plan Administrator.
6.03 EARLY OR NORMAL RETIREMENT AGE. Upon a Participant's Early or Normal
--------------------------------
Retirement Date, his Account Balance shall be distributed:
[X] (a) As of the Adjustment Date or Valuation Date
coinciding with or immediately following the
Participant's termination of Service on account of
Early or Normal Retirement.
[ ] (b) As soon as administratively possible following
the Participant's termination of Service on account
of Early or Normal Retirement, valued as of the
preceding Adjustment Date or Valuation Date,
whichever is earlier. [NOTE: Participant may be
entitled to subsequent distribution if entitled to
allocation for the year of termination of Service on
account of Early or Normal Retirement. A waiver
should be obtained from the Participant with respect
to potential adverse tax consequences.]
6.04 DISABILITY. Upon disability, a Participant's Account Balance shall be
----------
distributed:
[ ] (a) As soon as administratively possible following the
Participant's termination of employment on account
of disability, valued as of the preceding Adjustment
Date or Valuation Date, whichever is earlier.
[ ] (b) As of the Adjustment Date or Valuation Date
coinciding with or immediately following the
Participant's termination of Service on account of
disability.
[X] (c) The same as if the Participant had terminated
employment without disability.
[ ] (d) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
6.05 DEATH. Upon death, a Participant's Account Balance shall be
----- distributed:
[ ] (a) As soon as administratively possible after the
Participant's death, valued as of the preceding
Adjustment Date or Valuation Date, whichever is
earlier.
[ ] (b) As of the Adjustment Date or Valuation Date
coinciding with or immediately following the
Participant's death.
29
[X] (c) (SPECIFY) As soon as administratively possible
--------------------------------------------
following the Beneficiary's request for distribution,
-----------------------------------------------------
valued as of the current Valuation Date.
-----------------------------------------------------
6.06 METHOD OF PAYMENT OF ACCOUNT BALANCE.
------------------------------------
[X] (a) If this option is selected, the provisions of
Plan Sections 6.06(a) and 6.07(a), allowing
non-annuity forms of distribution, govern
distribution of benefits to Participants and
beneficiaries.
[ ] (b) If this option is selected, the provisions of
Plan Sections 6.06(b) and 6.07(b) which provide for
payment in the form of an annuity shall govern
distribution of benefits to Participants and
beneficiaries.
ONE-YEAR MARRIAGE REQUIREMENT. (CHOOSE ONE ONLY OF (a) OR (b) BELOW, IF SURVIVOR
----
ANNUITIES ARE ELECTED UNDER SECTION 6.06(b) ABOVE.)
[ ] (a) A qualified joint and survivor annuity or a
qualified preretirement survivor annuity, whichever
is applicable, will be provided if the Participant
was married on the date of death.
[ ] (b) A qualified joint and survivor annuity or a
qualified preretirement survivor annuity will be
provided only if the Participant has been married for
the one-year period ending on the earlier of the
Participant's annuity starting date or date of death.
MODIFICATIONS TO DISTRIBUTION. The Plan Administrator will apply Section 6.06
of the Plan with the following modifications:
[ ] (a) No modifications.
[X] (b) An installment distribution: (CHOOSE (1), OR AT LEAST
ONE OF (2), (3) (4) (5) AND (6))
[X] (1) Is not available under the Plan.
[ ] (2) May not exceed the lesser of ______ years or
the maximum period permitted under Section
6.06.
[ ] (3) May be made as follows (IF THE EMPLOYER
SELECTS MULTIPLE OPTIONS, THE PARTICIPANT
MAY CHOOSE FROM THOSE SELECTED):
[ ] (i) Monthly
[ ] (ii) Quarterly
[ ] (iii) Semi-Annually
[ ] (iv) Annually
[ ] (v) As elected by the Participant.
[ ] (4) Periodic payment must be in an amount equal
to at least $____________.
[ ] (5) The Participant or Beneficiary may elect to
accelerate the payment of all, or any
portion of the unpaid nonforfeitable Account
Balance as of any Adjustment Date, or
Valuation Date, if earlier, subject to the
requirements of Sections 6.15 and 6.16 of
the Plan.
[ ] (6) (SPECIFY)___________________________________
____________________________________________
30
____________________________________________
[ ] (c) The Plan contains Transfer Accounts which are
the only Accounts subject to the survivor annuity
requirements, as described in Section 15.07 of the
Plan.
[ ] (d) The Plan contains Transfer Accounts which are
the only Accounts not subject to the survivor annuity
requirements, as described in Section 15.07 of the
Plan.
NOTE: The Employer may specify additional annuity options in an addendum to this
Adoption Agreement, numbered 6.06.
6.07 DISTRIBUTIONS UPON DEATH - PRIOR TO ANNUITY STARTING DATE.
----------------------------------------------------------
[ ] If distributions are payable in the form of an annuity, the
Qualified Preretirement Survivor Annuity shall be actuarially
equivalent to % (NOT LESS THAN 50%) of the Participant's
Nonforfeitable account balance as of the date of death.
6.14 ADVANCE PAYMENT OF BENEFITS.
---------------------------
[X] (a) Are not permitted.
[ ] (b) Shall be permitted.
31
ARTICLE VII
WITHDRAWALS AND LOANS
7.01 EMPLOYEE CONTRIBUTIONS - WITHDRAWAL/DISTRIBUTION. Participants, by
---------------------------------------------------
making a prior election in the manner prescribed by the Plan
Administrator, may withdraw all or any portion of their Participant
Voluntary Nondeductible Contributions and earnings thereon under the
Plan as follows:
[ ] (a) As of any Adjustment Date.
[ ] (b) As of any Valuation Date.
[X] (c) At any time during the Plan Year.
[ ] (d) (SPECIFY)____________________________________________
_____________________________________________________
7.02 HARDSHIP DISTRIBUTIONS.
----------------------
[ ] (a) The Plan does not permit hardship distributions.
[X] (b) The Plan permits hardship distributions to be made:
[X] (1) By Participants who are actively employed by
the Employer.
[ ] (2) By terminated Participants not currently
eligible to receive a distribution under the
Plan.
[X] (c) Hardship distributions under the Plan shall be
made (OPTION (2) MAY BE SELECTED IN ADDITION TO
OPTION (1) ONLY IF THE PLAN ADMINISTRATOR SHALL
SEPARATELY DETERMINE HARDSHIP DISTRIBUTIONS FOR
DISCRETIONARY NONELECTIVE CONTRIBUTIONS AND/OR
REGULAR MATCHING CONTRIBUTIONS):
[ ] (1) Pursuant to the safe harbor provisions of
Section 7.03 of the Plan.
[X] (2) As provided in the addendum to this
Adoption Agreement, numbered Section 7.02
(APPLIES SOLELY TO DISCRETIONARY NONELECTIVE
CONTRIBUTIONS AND/OR REGULAR MATCHING
CONTRIBUTIONS).
ACCOUNTS SUBJECT TO HARDSHIP DISTRIBUTIONS. Hardship distributions shall be
permitted from (OPTION (a) MAY BE SELECTED IN ADDITION TO OPTION (b) OR (c)):
[ ] (a) The Participant's Deferral Contributions, excluding
Qualified Matching Contributions and Qualified
Nonelective Contributions.
[ ] (b) The Participant's Nonelective Contributions, which
include Discretionary Nonelective Contributions and
regular Matching Contributions, provided such
Participant is 100% vested in the respective
accounts.
[ ] (c) The vested portion of the Participant's Nonelective
Contributions, which include Discretionary
Nonelective Contributions and/or regular Matching
Contributions.
[X] (d) (SPECIFY) Deferral Contributions, plus earnings prior
--------------------------------------------
to 12/31/88; Matching Contributions Account as of
-----------------------------------------------------
12/31/88; Voluntary Nondeductible Contributions,
-----------------------------------------------------
plus earnings; Rollover Account; Deferral
-----------------------------------------------------
Contributions since 1/01/89.
----------------------------
DISTRIBUTION DATE. Hardship Distributions shall be made as follows:
32
[ ] (a) As of any Adjustment Date or Valuation Date,
whichever is earlier.
[X] (b) At any time during the Plan Year.
[ ] (c) (SPECIFY)
7.04 IN-SERVICE DISTRIBUTIONS. Subject to the restrictions of Section 3.02
-------------------------
and Article VI, the following distribution options apply prior to a
Participant's separation from Service.
NONELECTIVE CONTRIBUTIONS. In-service distributions of a Participant's regular
Matching Contributions Account and Discretionary Nonelective Contributions
Account shall be permitted upon:
NOTE: If an integrated allocation formula is selected in Adoption Agreement
Section 4.06, distributions of discretionary Nonelective Contributions are not
allowed prior to Separation from Service.
[ ] (a) N/A. Distribution not permitted prior to Separation
from Service.
[X] (b) Attainment of Specified Age. Until retirement,
the Participant has a continuing election to receive
all or any portion of his vested Account Balance
after the attainment of:
[ ] (1) Satisfaction of Early Retirement
requirements.
[X] (2) Normal Retirement Age.
[ ] (3) ________ years of age
[ ] (4) ________ years of age, provided the
Participant is 100% vested in his Account
Balance.
[ ] (c) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
ELECTIVE CONTRIBUTIONS. In-service distributions of a Participant's Deferral
Contributions Account, Qualified Matching Contributions Account and Qualified
Nonelective Contributions Account shall be permitted upon:
[ ] (a) N/A. Distribution shall not be permitted prior to
Separation from Service.
[X] (b) Attainment of Specified Age. Until retirement, the
Participant has a continuing election to receive all
or any portion of his vested Account Balance after
the attainment of:
[ ] (1) Satisfaction of Early Retirement
requirements (PROVIDED EARLY RETIREMENT AGE
IS NOT LESS THAN AGE 59-1/2).
[ ] (2) Normal Retirement Age (PROVIDED NORMAL
RETIREMENT AGE IS NOT LESS THAN AGE 59-1/2)
[X] (3) 59 1/2 years of age (MUST BE AT LEAST AGE
-------
59-1/2).
[ ] (c) (SPECIFY) In-service distributions of Rollover
--------------------------------------------
Account, Voluntary Nondeductible Account and Matching
-----------------------------------------------------
Contributions Account as of 12/31/88 are permitted.
-----------------------------------------------------
33
_____________________________________________________
DISTRIBUTION DATE. In-service Distributions shall be made as follows:
[ ] (a) As of any Adjustment Date or Valuation Date,
whichever is earlier.
[X] (b) At any time during the Plan Year.
[ ] (c) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
7.05 PARTICIPANT LOANS. Loans from a Participant's Account Balance:
-----------------
[ ] (a) Are not permitted.
[X] (b) Are permitted:
[X] (1) By Participants who are actively employed by
the Employer.
[ ] (2) By terminated Participants with a
nonforfeitable account balance under the
Plan.
[ ] (3) By beneficiaries of deceased Participants
entitled to receive benefits under the Plan.
[ ] (4) By Parties-in-Interest.
LOANS AS INVESTMENTS. For investment purposes, loans:
[X] (a) Are treated as directed investments (REGARDLESS
OF ANY ELECTION UNDER THIS ADOPTION AGREEMENT SECTION
9.09).
[ ] (b) Are treated as general investments of the Trust.
7.07 COLLATERAL FOR LOANS. Collateral in addition to a percentage of the
--------------------
Participant's Account Balance under the Plan:
[X] (a) Shall not be accepted.
[ ] (b) Is permitted:
[ ] (1) Only in the form of a deed of trust.
[ ] (2) In the form of a deed of trust, or any
other form which the Plan Administrator
deems acceptable, pursuant to a uniform and
nondiscriminatory policy.
34
ARTICLE VIII
EMPLOYER ADMINISTRATIVE PROVISIONS
8.06 INVESTMENT FUNDS. Selected investment funds under which each
-----------------
Participant shall direct the Plan Administrator as to the investment
of his Account Balance:
[ ] (a) Shall not be offered under the Plan.
[X] (b) Shall be provided pursuant to a uniform and
nondiscriminatory policy established by the Plan
Administrator.
35
ARTICLE IX
PARTICIPANT ADMINISTRATIVE PROVISIONS
9.09 PARTICIPANT DIRECTION OF INVESTMENT. The Employer:
-----------------------------------
[ ] (a) Does not permit Participants to direct the investment
of their respective Accounts under the Plan.
[ ] (b) Permits each Participant to direct the investment of
all or any portion of t he vested portion of his
Account.
[ ] (c) Permits each Participant to direct the investment of
all or any portion of his vested and non-vested
Account.
[X] (d) (SPECIFY) Permits each Participant to direct the
--------------------------------------------
investment of the vested portion of his Account only
-----------------------------------------------------
with respect to loans in accordance with Section 7.06
-----------------------------------------------------
of the Plan.
------------
36
ARTICLE X
PLAN ADMINISTRATOR -
DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
10.08 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. The Employer
---------------------------------------------------------
may elect to allocate Trust Fund earnings and losses on amounts
contributed to the Plan after the previous Adjustment Date, or
Valuation Date, in a manner other than the manner provided in Section
10.08, which uses the "beginning balance," as follows:
[X] (a) No modification to Section 10.08.
[ ] (b) by using a weighted average
[ ] (c) by treating one-half of all such contributions as
being a part of the Participant's nonsegregated
Account Balance as of the previous Adjustment Date.
[ ] (d) (SPECIFY)____________________________________________
_____________________________________________________
_____________________________________________________
37
ARTICLE XI
TRUSTEE POWERS AND DUTIES
11.07 INVESTMENT POWERS. Pursuant to Section 11.07 of the Plan, the aggregate
------------------
investments in qualifying Employer securities and in qualifying
Employer real property:
[ ] (a) May not exceed 10% of Plan assets.
[X] (b) May not exceed 100 % of Plan assets. (THE PERCENTAGE
MAY NOT EXCEED 100%.)
----
11.15 DISTRIBUTION OF CASH OR PROPERTY. Distributions of a Participant's
--------------------------------
Account Balance may be made in:
[ ] (a) Cash only (excluding insurance or annuity contracts,
if applicable).
[X] (b) Cash or property (right to receive property applies
only to distribution of Company Stock).
38
ARTICLE XIII
PROVISIONS RELATING TO INSURANCE
13.01 INVESTMENT IN INSURANCE.
-----------------------
[X] (a) Life Insurance may not be purchased.
[ ] (b) Life insurance may be purchased.
VESTING OF INSURANCE CONTRACTS. The Participant's Account Balance attributable
to insurance contracts purchased on his behalf under Article XI is:
[ ] (a) Subject to the vesting schedule election under this
Adoption Agreement Section 5.05.
[ ] (b) 100% Nonforfeitable at all times.
39
ARTICLE XVI
PARTICIPATING EMPLOYERS
16.05 PARTICIPATING EMPLOYERS. If two or more Affiliated Employers (as
------------------------
defined in Section 1.05 of the Plan) contribute to this Plan, all
Employer contributions shall be allocated in accordance with the
elections in Adoption Agreement Article IV:
[X] (a) Without regard to which contributing Participating
Employer employs the Participant.
[ ] (b) Only to the Participants directly employed by
the contributing Participating Employer. If a
Participant receives Compensation from more than one
contributing Employer during the Limitation Year, the
Plan Administrator will determine the allocations
under this Adoption Agreement Section 16.01 by
prorating among the participating Employers the
Participant's Compensation and, if applicable, the
Integration Level under Option (f) of Adoption
Agreement Section 4.04.
FORFEITURES. Any forfeiture by a Participant of a Participating Employer, which
is subject to re-allocation during the Plan Year shall be allocated in
accordance with the elections in Adoption Agreement Section 4.04, as follows:
[X] (a) Without regard to which contributing Participating
Employer employs such Participant.
[ ] (b) Only to the remaining Participants of such
Participating Employer which employs the Participant.
40
EFFECTIVE DATE ADDENDUM
(RESTATED PLANS ONLY)
The Employer must complete this addendum only if the Restated Effective Date
specified in Adoption Agreement Section 1.17 is different than the Restated
Effective Date for at least one of the provisions listed in this addendum. In
lieu of the Restated Effective Date in Adoption Agreement Section 1.17, the
following special effective dates apply: (CHOOSE WHICHEVER ELECTIONS APPLY)
[ ] (a) COMPENSATION DEFINITION. The Compensation definition of
Section 1.11 (other than the $200,000 limitation) is effective
for Plan Years beginning after , 19 . [NOTE: May not be
effective later than the first day of the first Plan Year
beginning after the Employer executes this Adoption Agreement
to restate the Plan for the Tax Reform Act of 1986, if
applicable.]
[ ] (b) ELIGIBILITY CONDITIONS. The eligibility conditions specified
in Adoption Agreement Section 2.01 are effective for Plan
Years beginning after _________________, 19___. The prior
eligibility requirements were _______________________________.
[ ] (c) SUSPENSION OF YEARS OF SERVICE. The suspension of Years of
Service rule elected under Adoption Agreement Section 2.03 is
effective for Plan Years beginning after ____________________,
19___.
[ ] (d) CONTRIBUTION/ALLOCATION FORMULA. The contribution formula
elected under Adoption Agreement (SELECT ONE OR MORE) Section
4.03___ Section 4.04___ Section 4.05 and the method of
allocation elected under Adoption Agreement (SELECT ONE OR
MORE) Section 4.03 Section 4.04 Section 4.05 is effective for
Plan Years beginning after ________________, 19___. The prior
method of allocation was __________________________________ .
[ ] (e) ACCRUAL REQUIREMENTS. The accrual requirements of Section 4.06
are effective for Plan Years beginning after ________________,
19___.
[ ] (f) EMPLOYMENT CONDITION. The employment condition of (SELECT ONE
OR MORE) ____ Section 4.04 ____ Section 4.05 ____ Section 4.06
is effective for Plan Years beginning after ___________, 19__.
[ ] (g) ELIMINATION OF NET PROFITS. The requirement for the Employer
not to have net profits to contribute to this Plan is
effective for Plan Years beginning after ____________, 19___.
[NOTE: The date specified may not be earlier than December 31,
1985.]
[ ] (h) VESTING SCHEDULE. The vesting schedule elected under Adoption
Agreement Section 5.05 is effective for Plan Years beginning
after _________________, 19___.
[ ] (i) (SPECIFY)_____________________________________________________
______________________________________________________________
______________________________________________________________
For Plan Years prior to the special Effective Date, the terms of the Plan prior
to its restatement under this Adoption Agreement will control for purposes of
the designated provisions. A special Effective Date may not result in the delay
of a Plan provision beyond the permissible Effective Date under any applicable
law requirements.
41
EXECUTION PAGE
The Employer hereby executes this Adoption Agreement, and agrees to
the provisions of the Plan and Trust. The Trustee accepts its position and
agrees to all the obligations, responsibilities and duties imposed upon the
Trustee under the Plan and Trust.
IN WITNESS WHEREOF, the parties hereby execute this Agreement this 30
day of December, 1994.
CORPORATE EMPLOYER:
------------------
[Corporate Seal]
KRISPY KREME DOUGHNUT CORPORATION
-----------------------------------------------
ATTEST: (Name of Employer)
/s/ ▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------- -------------------------------------------
Secretary Vice President, Human Resources
CORPORATE TRUSTEE:
-----------------
[Corporate Seal]
SOUTHERN NATIONAL BANK
-----------------------------------------------
ATTEST: (Name of Trustee)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By /s/
------------------- --------------------------------------------
Assistant Secretary Vice President & Trust Officer
USE OF ADOPTION AGREEMENT. Failure to properly complete the elections in this
Adoption Agreement may result in disqualification of the Employer's Plan.
RELIANCE ON ADVISORY LETTER. ▇▇▇▇▇▇ Stockton, L.L.P. has obtained an Advisory
Letter from the Internal Revenue Service on a Volume Submitter Specimen 401(k)
Plan, and execution of this Adoption Agreement entitles the Employer to obtain
its determination letter on such a basis. You may not rely on the Advisory
Letter for qualification.
42
PARTICIPATION ADDENDUM
FOR PARTICIPATION BY AFFILIATED EMPLOYERS
The undersigned Employer, by executing this Participation Addendum, elects to
become a Participating Employer in the Plan as if the Participating Employer
were a signatory to that Agreement. The Participating Employer accepts, and
agrees to be bound by, all of the elections granted under the provisions of the
Volume Submitter 401(k) Plan as adopted by KRISPY KREME DOUGHNUT CORPORATION,
the Signatory Employer to the Signature Page of the Adoption Agreement.
1. The Effective Date of the undersigned Employer's participation
in the designated Plan is: October 1, 1994
2. The undersigned Employer's adoption of this Plan constitutes:
[ ] (a) The adoption of a new plan by the
Participating Employer.
[X] (b) The adoption of an amendment and
restatement of a plan currently maintained
by the Employer, identified as Krispy Kreme
Doughnut Corporation Retirement Savings Plan
and having an original effective date of
January 1, 1984 .
Dated this 30 day of December, 1994.
PARTICIPATING EMPLOYER:
----------------------
[Corporate Seal]
KRISPY KREME DOUGHNUTS COMPANY
-----------------------------------
ATTEST: (Name of Employer)
/s/ ▇▇▇▇▇ ▇. HALKIATIS By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------- --------------------
Secretary President
Participating Employer's EIN: ▇▇-▇▇▇▇▇▇▇
ACCEPTANCE BY THE SIGNATORY EMPLOYER TO THE SIGNATURE PAGE OF THE ADOPTION
AGREEMENT.
SIGNATORY EMPLOYER:
------------------
[Corporate Seal]
KRISPY KREME DOUGHNUT CORPORATION
-----------------------------------
ATTEST: (Name of Employer)
/s/ ▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------- -----------------------
Secretary President
43
KRISPY KREME DOUGHNUT CORPORATION RETIREMENT SAVINGS PLAN
ADDENDUM TO SECTION 7.02 OF ADOPTION AGREEMENT
A hardship distribution may be made for one of the following reasons:
1. Medical expenses incurred by the employee, his or her spouse, or
dependents.
2. To purchase a principal residence for the employee (excluding
mortgage payments).
3. To prevent eviction from, or foreclosure on the mortgage, the
employee's principal residence.
4. Death of a participant, his or her spouse, or dependents.
5. Divorce of a participant.
6. Illness, injury, disability, or layoff of a participant, or his
or her spouse.
7. Post-secondary educational expenses incurred on behalf of the
employee, his or her spouse, or dependents.
44
