EXHIBIT 10.10
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.L.L.
PROTOTYPE PROFIT SHARING PLAN #001
ADOPTION AGREEMENT
(NON-STANDARDIZED)
MERIDIAN BIOSCIENCE, INC.
SAVINGS AND INVESTMENT PLAN
The Plan and Trust consist of:
- This Adoption Agreement
- The ▇▇▇▇▇▇▇, Muething & ▇▇▇▇▇▇▇, P.L.L. Basic Prototype Plan Document
- The ▇▇▇▇▇▇▇, Muething & ▇▇▇▇▇▇▇, P.L.L. Prototype Trust Agreement
IRS Opinion Letter Serial Number: K373773a
INSTRUCTIONS AND PROTOTYPE INFORMATION
1. INSTRUCTIONS. For each item in this Adoption Agreement:
(a) if there are boxes, then, except as otherwise noted,
check one box; and
(b) fill in any blank lines (other than blanks applicable
to unchecked boxes).
FAILURE TO PROPERLY FILL OUT THIS ADOPTION AGREEMENT
MAY RESULT IN DISQUALIFICATION OF THE PLAN.
2. NEED TO APPLY TO THE IRS. An adopting Employer should apply to
the appropriate Key District Office of the Internal Revenue
Service for a determination that the Plan is qualified under
section 401 of the Internal Revenue Code.
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EMPLOYER INFORMATION
EMPLOYER: MERIDIAN BIOSCIENCE, INC.
ADDRESS: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
TELEPHONE NO.: (▇▇▇) ▇▇▇-▇▇▇▇
EMPLOYER IDENTIFICATION NUMBER: ▇▇-▇▇▇▇▇▇▇
EMPLOYER'S FISCAL YEAR END: 09/30
NATURE OF EMPLOYER:
X Corporation other than S Corporation S Corporation
Sole Proprietor Partnership
Limited Liability Company
Nature of Business (if not incorporated): _____________
Tax-exempt Organization Governmental
Other ______________________________________________________
The following additional Employers related to the above Employer also adopt the
Plan (use additional pages, if necessary):
BIODESIGN International Incorporated
Meridian Bioscience Corporation
Viral Antigens, Inc.
(A related Employer may adopt the Plan later than the "Effective Date" (below)
by attaching a separate page to this Adoption Agreement reflecting its adoption
of the Plan and the effective date of its adoption.)
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BASIC PLAN INFORMATION
1. PLAN STATUS AND EFFECTIVE DATE. This Plan:
is a new Plan with an "Effective Date" of
________________; or
X is a complete amendment and restatement of an
existing Plan. (If selected, complete each of the
following.)
- The "Effective Date" of the amendment and
restatement is January 1, 2002.
- The original effective date for the Plan was
October 1, 1983.
2. PLAN NUMBER. The Plan number (three digits) of the Plan is
001.
3. PLAN YEAR. The "Plan Year" is the 12-consecutive month period
beginning on January 1 and on each anniversary thereof.
4. LIMITATION YEAR. The "Limitation Year" is the 12-consecutive
month period beginning on January 1 and on each anniversary
thereof.
5. PLAN ADMINISTRATOR. The Administrator is:
X the Employer; or
_________________________
- The Administrator's telephone number is:
(▇▇▇) ▇▇▇-▇▇▇▇.
6. TRUSTEE(S):
▇▇▇▇▇ Bank N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
7. NORMAL RETIREMENT AGE. Normal Retirement Age is:
X Age 65;
Age ___ (not to exceed 65); or
the later of age ___ (not to exceed 65) or the ___th
anniversary (not to exceed 5) of the time the
Participant commenced participation in the Plan.
8. MAINTENANCE OF ACCOUNTS. The Trustee shall have the
ministerial function of maintaining Participants' Accounts in
accordance with information, interpretations, and directions
from the Administrator.
X Yes
No
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TYPE OF PLAN AND AUTHORIZED CONTRIBUTIONS
9. TYPE OF PLAN:
PROFIT SHARING ONLY. This Plan permits discretionary
(profit sharing) contributions but has no Section
401(k) feature (skip Items 14-30); or
401(K) ONLY (WITH OR WITHOUT MATCH). This Plan has a
Section 401(k) feature but does not provide for
discretionary (profit sharing) contributions (except
for any required minimum top-heavy contributions)
(skip Items 31- 35); or
X PROFIT SHARING AND 401(K). This Plan permits
discretionary (profit sharing) contributions and also
has a Section 401(k) feature.
10. VOLUNTARY (AFTER-TAX) PARTICIPANT CONTRIBUTIONS. Voluntary
(after-tax) Participant contributions are:
X not permitted; or
permitted on a nondeductible basis only. (Not
permitted if Safe Harbor 401(k) Plan election in Item
14(b) is in effect.) (If elected, complete Items 22
and 23.)
11. ROLLOVER CONTRIBUTIONS:
X BY PARTICIPANTS AND ELIGIBLE EMPLOYEES. The Plan
shall accept rollover contributions from Participants
(and Eligible Employees prior to becoming
Participants); or
BY PARTICIPANTS ONLY. The Plan shall accept rollover
contributions from Participants (but not from
Eligible Employees prior to becoming Participants);
or
NOT PERMITTED. The Plan shall not accept rollover
contributions from Participants or Eligible
Employees.
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ELIGIBILITY
12. ELIGIBLE EMPLOYEE. "Eligible Employee" means:
any person who is an Employee of the Employer;
X any person who is an Employee of the Employer except
for a temporary employee who is not expected to work
at least 1,000 hours in a year; or
any person who is an Employee of the Employer fitting
the following description ___________________________
__________________________; or
any employee of the Employer, any employee of any
other employer required to be aggregated under
section 414(b), (c), (m) or (o) of the Code, or any
individual deemed under section 414(n) of the Code to
be an employee of the Employer or any such employer.
(All aggregated Employers should adopt this Plan by
executing the Adoption Agreement.)
Note: Unless specified in the second or third option above, in no event shall
Employees in the following categories be considered Eligible Employees:
Employees subject to a collective bargaining agreement not providing for their
coverage by this Plan; leased employees; and nonresident aliens with no US
source income. (See Section 1.18 of the Plan.) Any election to exclude Employees
under the second or third option may not be based on the hours worked by an
Employee.
13. ENTRY DATE AND AGE AND SERVICE REQUIREMENTS. The Plan either
has one or multiple sets of Entry Date and age and service
requirements as elected below. (Select one and complete.)
The Plan has one set of Entry Date and age and
service requirements (applicable to all types of
contributions permitted under the Plan) which are as
follows:
(a) ENTRY DATE. "Entry Date" means the Effective
Date if the Plan is a new plan and also
means each of the following occurring on or
after the Effective Date:
each _____ (either the first day or
last day of the Plan Year) and (the
date six months after the other
Entry Date); or
the date on which the Employee
satisfies the eligibility age and
service requirements; or
the first day of each month; or
the first day of each Plan Year
quarter.
(b) AGE AND SERVICE REQUIREMENTS. The
eligibility age and service requirements for
this type of contribution are (complete all
blanks; specify "0" if there is no
requirement):
(1) for a person who is an Eligible
Employee on the Effective Date:
(A) attainment of age and
(B) completion of Years of Service;
(2) for a person who is not an Eligible
Employee on the
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Effective Date:
(A) attainment of age________ and
(B) completion of ________ Years of
Service.
X The Plan has more than one set of Entry Date and age
and service requirements as follows:
PARTICIPANT CONTRIBUTIONS.
N/A. Neither of these types of contributions
are permitted under the Plan; or
X To the extent Section 401(k) elective
deferrals or voluntary (after-tax)
contributions are permitted under the Plan,
the Entry Date and age and service
requirements as follows:
(a) ENTRY DATE. "Entry Date" for these types of
contributions means the Effective Date if
the Plan is a new plan and also means each
of the following occurring on or after the
Effective Date:
each _____ (either the first day or
last day of the Plan Year)
and ______ (the date six months
after the other Entry Date); or
X the date on which the Employee
satisfies the eligibility age and
service requirements; or
the first day of each month; or
the first day of each Plan Year
quarter.
(b) AGE AND SERVICE REQUIREMENTS. The
eligibility age and service requirements are
(complete all blanks; specify "0" if there
is no requirement):
(1) for a person who is an Eligible
Employee on the Effective Date:
(A) attainment of age 0 and
(B) completion of 0 Years of
Service;
(2) for a person who is not an Eligible
Employee on the Effective Date:
(A) attainment of age 0 and
(B) completion of 0 Years of
Service.
NOTE: These eligibility criteria also apply to qualified nonelective
contributions (QNECs) and qualified matching contributions if permitted under
the Plan; as well as the 401(k) Safe Harbor, if elected.
MATCHING CONTRIBUTIONS SUBJECT TO ACP.
N/A. This type of contribution is not
permitted; or
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X The Entry Date and age and service
requirements for Employer matching
contributions to be taken into account in
determining the Actual Contribution
Percentage are as follows:
(a) ENTRY DATE. "Entry Date" for these types of
contributions means the Effective Date if
the Plan is a new plan and also means each
of the following occurring on or after the
Effective Date:
each _____ (either the first day or
last day of the Plan Year)
and ______ (the date six months
after the other Entry Date); or
the date on which the Employee
satisfies the eligibility age and
service requirements; or
the first day of each month; or
X the first day of each Plan Year
quarter.
(b) AGE AND SERVICE REQUIREMENTS. The
eligibility age and service requirements for
this type of contribution are (complete all
blanks; specify "0" if there is no
requirement):
(1) for a person who is an Eligible
Employee on the Effective Date:
(A) attainment of age 0 and
(B) completion of 1 Years of
Service;
(2) for a person who is not an Eligible
Employee on the Effective Date:
(A) attainment of age 0 and
(B) completion of 1 Years of
Service.
PROFIT SHARING (DISCRETIONARY) EMPLOYER CONTRIBUTIONS.
N/A. This type of contribution is not
permitted; or
X The Entry Date and age and service
requirements for profit sharing
(discretionary) contributions are as
follows:
(a) ENTRY DATE. "Entry Date" for this type of
contribution means the Effective Date if the
Plan is a new plan and also means each of
the following occurring on or after the
Effective Date:
each _____ (either the first day or
last day of the Plan Year)
and ______ (the date six months
after the other Entry Date); or
the date on which the Employee
satisfies the eligible age and
service requirements; or
the first day of each month; or
X the first day of each Plan Year
quarter.
(b) AGE AND SERVICE REQUIREMENTS. The
eligibility age and service
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requirements for this type of contribution
are (complete all blanks; specify "0" if
there is no requirement):
(1) for a person who is an Eligible
Employee on the Effective Date:
(A) attainment of age 0 and
(B) completion of 1 Years of
Service;
(2) for a person who is not an Eligible
Employee on the Effective Date:
(A) attainment of age 0 and
(B) completion of 1 Years of
Service.
(Note: The age requirement cannot be greater than 21. The service requirement
cannot exceed 1 year, except that up to 2 years may be required if the Plan
provides for full vesting after not more than 2 Years of Service and a Section
401(k) feature is not adopted. If a fractional Year of Service is specified, an
Employee will not be required to complete any specified number of Hours of
Service to receive credit for such fractional year.)
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SECTION 401(k) FEATURE
(THE FOLLOWING ITEMS 14 THROUGH 30 SHOULD BE COMPLETED ONLY IF A
SECTION 401(k) FEATURE IS PART OF THE PLAN PURSUANT TO ITEM 9; BUT
COMPLETE ITEMS 22 AND 23 IF THE PLAN ALLOWS VOLUNTARY (AFTER-TAX)
PARTICIPANT CONTRIBUTIONS. OTHERWISE, SKIP TO ITEM 31.)
14. SECTION 401(k) FEATURE. In addition to Section 401(k) elective
deferrals by Participants, the Plan shall allow the Employer
to make other type(s) of contributions in accordance with the
following:
(a) X REGULAR (NON-SAFE HARBOR) SECTION 401(k)
FEATURE. The Plan does not follow the 401(k) Safe
Harbor provisions of Section 3.10 of the Plan and
allows the Employer to make the following type(s) of
contributions in connection with the Section 401(k)
feature:
X QNECs. This Plan permits the
Employer to make qualified
nonelective contributions (which are
fully vested and subject to the
401(k) distribution limitations) to
be taken into account in determining
the Actual Deferral Percentage.
X QUALIFIED MATCHING CONTRIBUTIONS
SUBJECT TO ADP. This Plan permits
the Employer to make qualified
matching contributions (which are
fully vested and subject to the
401(k) distribution limitations) to
be taken into account in determining
the Actual Deferral Percentage.
X MATCHING CONTRIBUTIONS SUBJECT TO
ACP. This Plan permits the Employer
to make matching contributions to
the Employer Matching Accounts
(which are subject to the vesting
schedule selected in Item 49) to be
taken into account in determining
the Actual Contribution Percentage.
(b) SAFE HARBOR 401(k) PLAN. The Plan shall
follow the 401(k) Safe Harbor provisions of
Section 3.10 of the Plan. (If elected,
complete Items 15 and 16 and then skip to
Items 27-30.)
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SECTION 401(k) FEATURE
ELECTIVE DEFERRALS
15. LIMITATIONS ON ELECTIVE DEFERRALS. (Any limitations selected
are in addition to the Section 402(g) limits and other limits
under the Basic Plan Document.)
(a) PLAN YEAR LIMITATIONS. (Select only one and complete
as necessary.)
A Participant's elective deferrals for a
Plan Year may not exceed the lesser of ___%
of his Compensation for the Plan Year or
$______; or
No Plan Year limitations other than those
otherwise imposed under the Plan; or
X The Administrator may set a maximum and/or
minimum limit (which may change from time to
time) to be applied uniformly to the
Participants on the percentage or dollar
amount of a Participant's Compensation that
may be reduced for any Plan Year under a
salary reduction election hereunder.
(b) PAY PERIOD LIMITATIONS. (Select only one and complete
as necessary.)
A Participant's salary reductions for a pay
period or with respect to a bonus or other
special payment may not exceed the lesser of
___% of his Compensation otherwise payable
for such pay period or as a bonus or special
payment or $______; or
No pay period limitations other than those
otherwise imposed under the Plan or the law;
or
X The Administrator may set a maximum and/or
minimum limit (which may change from time to
time) to be applied uniformly to the
Participants on the percentage or dollar
amount of a Participant's Compensation that
may be reduced under a salary reduction
agreement hereunder for any pay period or
for a bonus or special payment.
NOTE: Any limit imposed may not prevent a Participant from receiving the maximum
match.
16. ELECTION, CHANGE AND TERMINATION OF SALARY DEFERRALS.
(a) ELECTIONS. A Participant may enter (or re-enter
following a termination under (d) below) into a
salary reduction agreement by providing the
prescribed election form to the Employer on or before
one of the following applicable dates and the
election shall become effective as soon after the
applicable date coinciding with or first following
the Employer's receipt of the Participant's election
form as is administratively feasible: (Select only
one of the following and complete as necessary.)
X Each of the following dates: (Fill in one or
more dates during a year.) any date within
the first 30 days after hire, otherwise the
first day of each calendar quarter; or
Any time; or
Such dates (at least one each calendar year)
as may be prescribed by the Administrator
from time to time.
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(b) CHANGES. A Participant may change a salary reduction
agreement by providing the prescribed election form
to the Administrator on or before one of the
following applicable dates and the change shall
become effective as soon after the applicable date
coinciding with or first following the
Administrator's receipt of the Participant's election
form as is administratively feasible: (Select only
one of the following and complete as necessary.)
X Each of the following dates: (Fill in one or
more dates during a year.) January 1; April
1; July 1; October 1; or
Any time; or
Such dates (at least one each calendar year)
as may be prescribed by the Administrator
from time to time.
(c) LIMIT ON NUMBER OF CHANGES. A Participant may make
changes to his salary reduction agreement no more
frequently than: (Select only one of the following
and complete as necessary.)
__ times per Plan Year (Fill in number (at
least one).); or
X The Administrator may prescribe limits from
time to time on the number of changes that
can be made per Plan Year, provided that at
least one change shall be permitted each
Plan Year.
(d) TERMINATIONS. A Participant may terminate a salary
reduction agreement by providing the prescribed
election form to the Administrator at any time and
the termination shall become effective as soon after
the Administrator's receipt of the Participant's
election form as is administratively feasible.
(e) SPECIAL BONUS ELECTIONS. The Administrator may allow
Participants to enter special salary reduction
agreements effective only with respect to the next
bonus or other special payment due and payable after
the Administrator's receipt of the election form.
Yes ("Yes" may not be elected if bonuses are
excluded from the definition of Compensation
under Item 39 of the Adoption Agreement.)
X No
Pre-existing salary reduction elections under (a) and (b) above shall not be
affected by a special election hereunder and a special election hereunder shall
be disregarded for purposes of (c), (d) and (e) above.
12
SECTION 401(k) FEATURE
QNECS
(THE FOLLOWING ITEMS 17 AND 18 SHOULD BE COMPLETED ONLY IF THE BOX IN
ITEM 14(a) ENTITLED "QNECS" IS SELECTED. DO NOT COMPLETE ITEMS 17 AND
18 IF THE SAFE HARBOR PLAN ELECTION IN ITEM 14(b) IS SELECTED.)
17. QNEC ALLOCATION METHOD AND AMOUNT. The Employer shall be
authorized to make annual qualified nonelective contributions
to the Plan to the Nonelective Contribution Accounts for
allocation as follows: (Select (a) and/or (b) and complete. An
Employer may elect to make contributions under one or both
QNEC allocation methods.)
(a) X proportionate to the Compensation for the
Plan Year of all Participants eligible under Item 18
below and in the following amount: (Select one and
complete.)
___% of the Compensation of all
Participants who are entitled under
Item 18 below to receive an
allocation for the Plan Year; or
X such other amount (if any) as may be
properly determined by the Employer
for such Plan Year.
(b) X an equal flat dollar amount for each
Participant eligible under Item 18 below in
the following amount: (Select one and
complete.)
$______ for each Participant who is
entitled under Item 18 below to
receive an allocation for the Plan
Year; or
X such other flat dollar amount (if
any) as may be properly determined
by the Employer for such Plan Year.
18. PARTICIPANTS ENTITLED TO RECEIVE A QNEC.
(a) "HIGHLY COMPENSATED" STATUS. (Select only one.)
Only Participants who are Non-highly
Compensated Employees eligible under (b) or
(c) below shall be entitled to share in the
Employer contribution under Item 17 to the
Nonelective Contribution Accounts for a Plan
Year; or
All Participants who are eligible under (b)
or (c) below shall be entitled to share in
the Employer contribution under Item 17 to
the Nonelective Contribution Accounts for a
Plan Year; or
X On a year to year basis, the Administrator
shall determine whether all Participants
eligible under (b) or (c) below or only
those Participants who are Non-highly
Compensated Employees eligible under (b) or
(c) below shall be entitled to share in the
Employer contribution under Item 17 to the
Nonelective Contribution Accounts for the
Plan Year.
(b) EMPLOYMENT STATUS. A Participant eligible under (a)
above shall be entitled to share in the Employer
contribution under Item 17 to the Nonelective
Contribution Accounts for a Plan Year if: (Select
only one.)
X he is an Eligible Employee at any time
during the Plan Year;
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he is an Eligible Employee on the last day
of the Plan Year;
he receives credit for at least 500 Hours of
Service during the Plan Year or he is an
Eligible Employee on the last day of the
Plan Year;
he receives credit for at least 1,000 Hours
of Service during the Plan Year, regardless
of whether he is an Eligible Employee on the
last day of the Plan Year; or
he receives credit for at least 1,000 Hours
of Service during the Plan Year and he is an
Eligible Employee on the last day of the
Plan Year.
(c) CERTAIN FORMER EMPLOYEES. In addition, a Participant
eligible under (a) above who has Compensation for a
Plan Year shall be entitled to share in such Employer
contribution for such Plan Year if he is on an
approved leave of absence at the end of such Plan
Year or if his employment by the Employer terminates
during such Plan Year on account of death,
Disability, retirement at or after Normal Retirement
Age, or (if provided for in Item 47) early
retirement.
X Yes
No
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SECTION 401(k) FEATURE
QUALIFIED MATCHING CONTRIBUTIONS SUBJECT TO ADP
(THE FOLLOWING ITEMS 19 THROUGH 21 SHOULD BE COMPLETED ONLY IF THE BOX
IN ITEM 14(a) ENTITLED "QUALIFIED MATCHING CONTRIBUTIONS SUBJECT TO
ADP" IS SELECTED. DO NOT COMPLETE ITEMS 19 THROUGH 21 IF THE SAFE
HARBOR PLAN ELECTION IN ITEM 14(b) IS SELECTED.)
19. QUALIFIED MATCHING CONTRIBUTIONS ALLOCATION METHOD AND AMOUNT.
The Employer shall be authorized to make matching
contributions to the Nonelective Contribution Accounts of
those Participants who both make elective deferrals hereunder
for the Plan Year and who are entitled under Item 20 below to
receive this type of matching contribution for the year for
allocation as follows: (Select any that apply and complete. An
Employer may elect to make more than one type of matching
contribution by selecting more than one of the following
options.)
(a) X As a percentage of Participants' Section
401(k) elective deferrals;
(b) Proportionate to the Compensation for the
Plan Year of all Participants who are entitled to
this type of matching contribution for the Plan Year,
in the following amount: (Select one and complete.)
___% of the Compensation of all
Participants who are entitled to
receive this type of matching
contribution for the Plan Year; or
such other amount (if any) as may be
properly determined by the Employer
for such Plan Year;
(c) An equal flat dollar amount for each
Participant who is entitled to this type of matching
contribution for the Plan Year in the following
amount: (Select one and complete.)
$______ for each Participant who is
entitled to receive this type of
matching contribution for the Plan
Year; or
such other flat dollar amount (if
any) as may be properly determined
by the Employer for such Plan Year.
20. PARTICIPANTS ENTITLED TO RECEIVE A QUALIFIED MATCHING
CONTRIBUTION.
(a) "HIGHLY COMPENSATED" STATUS. (Select only one.)
Only Participants who are Non-highly
Compensated Employees eligible under (b) or
(c) below (and who make elective deferrals
hereunder for the Plan Year) shall be
entitled to receive the qualified matching
contribution under Item 19 to the
Nonelective Contribution Accounts for a Plan
Year; or
X All Participants who are eligible under (b)
or (c) below (and who make elective
deferrals hereunder for the Plan Year) shall
be entitled to receive the qualified
matching contribution under Item 19 to the
Nonelective Contribution Accounts for a Plan
Year; or
On a year to year basis, the Administrator
shall determine whether all Participants
eligible under (b) or (c) below or only
those Participants who are Non-highly
Compensated Employees eligible under (b) or
(c) below (and who make elective deferrals
hereunder
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for the Plan Year) shall be entitled to
receive the qualified matching contribution
under Item 19 to the Nonelective
Contribution Accounts for the Plan Year.
(b) EMPLOYMENT STATUS. A Participant eligible under (a)
above shall be entitled to receive a qualified
matching contribution under Item 19 to the
Nonelective Contribution Account for a Plan Year if:
(Select only one.)
X he is an Eligible Employee at any time
during the Plan Year;
he is an Eligible Employee on the last day
of the Plan Year;
he receives credit for at least 500 Hours of
Service during the Plan Year or he is an
Eligible Employee on the last day of the
Plan Year;
he receives credit for at least 1,000 Hours
of Service during the Plan Year, regardless
of whether he is an Eligible Employee on the
last day of the Plan Year; or
he receives credit for at least 1,000 Hours
of Service during the Plan Year and he is an
Eligible Employee on the last day of the
Plan Year.
(c) CERTAIN FORMER EMPLOYEES. In addition, a Participant
eligible under (a) above shall be entitled to receive
such a qualified matching contribution for such Plan
Year if he is on an approved leave of absence at the
end of such Plan Year or if his employment by the
Employer terminates during such Plan Year on account
of death, Disability, retirement at or after Normal
Retirement Age, or (if provided for in Item 47) early
retirement.
X Yes
No
21. MATCHES AS A PERCENTAGE OF ELECTIVE DEFERRALS. (Complete this
Item only if box (a) under Item 19 is selected.)
(a) AMOUNT. Subject to (b) and (c) below, the Employer's
annual qualified matching contribution (if any) to
the Plan to the Nonelective Contribution Account of
each Participant entitled to receive this type of
matching contribution for the Plan Year shall be an
amount equal to: (Select only one and complete as
necessary.)
___% of the Participant's elective deferrals
hereunder for the Plan Year not in excess of
% of the Participant's Compensation for the
Plan Year; or
___% of the portion of the Participant's
elective deferrals hereunder for the Plan
Year not in excess of ___% of the
Participant's Compensation for the Plan Year
plus ___% of the portion of the
Participant's elective deferrals hereunder
for the Plan Year in excess of that amount
but not in excess of ___% of the
Participant's Compensation for the Plan
Year; or
X such other percentage of such portion of the
Participant's elective deferrals hereunder
for the Plan Year as may be properly
determined by the Administrator for such
Plan Year and applied uniformly with respect
to those Participants entitled to receive
this
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type of matching contribution hereunder.
(b) PAY PERIOD LIMITATIONS. The same
percentage-of-Compensation limitations specified
under (a) above also shall be applied on a pay period
basis (and with respect to bonuses or other special
payments) such that the Employer's qualified matching
contributions shall be with respect to only such
percentage of Compensation otherwise payable for a
pay period (or as a bonus or other special payment).
Yes
X No
(c) BONUSES SUBJECT TO MATCH. Elective deferrals with
respect to bonuses or other special payments shall be
matched to the same extent and subject to the same
limitations as any other part of a Participant's
Compensation.
X Yes -- elective deferrals with respect to
bonuses and special payments shall be
matched
No -- elective deferrals with respect to
bonuses and special payments shall not be
matched
17
SECTION 401(k) FEATURE
ADP/ACP TESTING METHODS
(THE FOLLOWING ITEMS 22 AND 23 SHOULD BE COMPLETED ONLY IF ITEM 14(a)
(NON-SAFE HARBOR 401(k) PLAN) IS SELECTED OR THE PLAN ALLOWS VOLUNTARY
(AFTER-TAX) PARTICIPANT CONTRIBUTIONS IN ITEM 10.)
22. ADP/ACP TESTING METHOD.
(a) Testing Method. The ADP and/or ACP testing shall be
applied using: (Select only one.)
PRIOR YEAR TESTING METHOD (referred to in
Sections 3.1(e)(1) and 3.2(b)(1)).
New Feature Election. (If Prior Year Testing
Method is selected, the Plan is not a
successor plan and if the Section 401(k)
feature (or either the Employer matching
contribution feature or voluntary
(after-tax) Participant contribution
feature) was first made a part of the Plan
on or after the "Effective Date" in Item 1,
then select one of the following:)
For the first Plan Year in which a section
401(k) feature (or either the Employer
matching contribution feature or voluntary
(after-tax) Participant contribution
feature) is part of the Plan, the Actual
Deferral Percentage (or Actual Contribution
Percentage, as the case may be) for
Non-highly Compensated Employees to be taken
into account shall be:
deemed to be 3 percent, or
the Actual Deferral Percentage (or
Actual Contribution Percentage, as
the case may be) for such first Plan
Year for Participants who are
Non-highly Compensated Employees
eligible to make Section 401(k)
contributions (or voluntary
after-tax Participant contributions)
for such Plan Year.
X CURRENT YEAR TESTING METHOD (referred to in
Sections 3.1(e)(2) and 3.2(b)(2)).
NOTE: A Plan may change from the Current Year Testing Method to the Prior Year
Testing Method only if (1) the Plan has been using the Current Year Testing
method for the preceding 5 Plan Years, or, if lesser, the number of Plan Years
the Plan has been in existence; or (2) the Plan otherwise meets one of the
conditions specified in Notice 98-1 (or superseding guidance) for changing from
the Current Year Testing method.
(b) METHODS USED FOR PRE-EFFECTIVE DATE PLAN YEARS.
(Complete this Item only if the Plan was not
previously amended for GUST and the choices in Item
22(a) would have been relevant and available in a
Plan Year prior to the Effective Date.) (Select only
one.)
The testing method selected in Item 22(a)
was used for all relevant Plan Years prior
to the Effective Date.
18
X The Plan used the methods for ADP and/or ACP
testing in relevant Plan Years before the
Effective Date as described in an
attachment. (If selected, describe the
testing in an attachment.)
23. OTHER TESTING METHODOLOGIES. (Select any of the following as
are applicable; otherwise do not select.) (See Section 1.26(c)
of the Plan.)
TOP-PAID GROUP ELECTION. In determining who is a
Highly Compensated Employee, the Employer makes a top-paid
group election. The effect of this election is that an
Employee (who is not a Five-Percent Owner at any time during
the determination year or the look-back year) with Section 415
Compensation in excess of $80,000 (as adjusted) for the
look-back year is a Highly Compensated Employee only if the
Employee was in the top-paid group for the look-back year.
CALENDAR YEAR ELECTION. In determining who is a
Highly Compensated Employee (other than as a Five-Percent
Owner), the Employer makes a calendar year data election. The
effect of this election is that the look-back year is the
calendar year beginning with or within the look-back year.
X NOT APPLICABLE. Neither of these elections applies.
19
SECTION 401(k) FEATURE
MATCHING CONTRIBUTIONS SUBJECT TO ACP
(THE FOLLOWING ITEMS 24 THROUGH 26 SHOULD BE COMPLETED ONLY IF THE BOX
IN ITEM 14(a) ENTITLED "MATCHING CONTRIBUTIONS SUBJECT TO ACP" IS
SELECTED. DO NOT COMPLETE ITEMS 24 THROUGH 26 IF THE SAFE HARBOR PLAN
ELECTION IN ITEM 14(b) IS SELECTED.)
24. EMPLOYER MATCHING CONTRIBUTIONS TO EMPLOYER MATCHING ACCOUNTS.
The Employer shall be authorized to make matching
contributions to the Employer Matching Accounts of those
Participants who both make elective deferrals hereunder for
the Plan Year and who are entitled under Item 25 below to
receive this type of matching contribution for the year for
allocation as follows: (Select any that apply and complete. An
Employer may elect to make more than one type of matching
contribution by selecting more than one of the following
options.)
(a) X As a percentage of Participants' Section
401(k) elective deferrals (complete Items 25 and 26);
(b) Proportionate to the Compensation for the
Plan Year of all Participants who are entitled to
this type of matching contribution for the Plan Year,
in the following amount: (Select one and complete.)
____________% of the Compensation of
all Participants who are entitled to
receive this type of matching
contribution for the Plan Year; or
such other amount (if any) as may be
properly determined by the Employer
for such Plan Year;
(c) An equal flat dollar amount for each
Participant who is entitled to this type of matching
contribution for the Plan Year in the following
amount: (Select one and complete.)
$____ for each Participant who is
entitled to receive this type of
matching contribution for the Plan
Year; or
such other flat dollar amount (if
any) as may be properly determined
by the Employer for such Plan Year.
25. PARTICIPANTS ENTITLED TO RECEIVE EMPLOYER MATCHING
CONTRIBUTION TO EMPLOYER MATCHING ACCOUNTS.
(a) "HIGHLY COMPENSATED" STATUS. (Select only one.)
Only Participants who are Non-highly
Compensated Employees eligible under (b) or
(c) below (and who make elective deferrals
hereunder for the Plan Year) shall be
entitled to receive the matching
contribution under Item 24 to the Employer
Matching Accounts for a Plan Year; or
X All Participants who are eligible under (b)
or (c) below (and who make elective
deferrals hereunder for the Plan Year) shall
be entitled to receive the matching
contribution under Item 24 to the
20
Employer Matching Accounts for a Plan Year;
or
On a year to year basis, the Administrator
shall determine whether all Participants
eligible under (b) or (c) below or only
those Participants who are Non-highly
Compensated Employees eligible under (b) or
(c) below (and who make elective deferrals
hereunder for the Plan Year) shall be
entitled to receive the matching
contribution under Item 24 to the Employer
Matching Accounts for the Plan Year.
(b) EMPLOYMENT STATUS. A Participant who has met the
eligibility criteria in Item 13 applicable to this
type of contribution and who is eligible under (a)
above shall be entitled to receive a matching
contribution under Item 24 to the Employer Matching
Account for a Plan Year if: (Select only one.)
X he is an Eligible Employee at any time
during the Plan Year;
he is an Eligible Employee on the last day
of the Plan Year;
he receives credit for at least 500 Hours of
Service during the Plan Year or he is an
Eligible Employee on the last day of the
Plan Year;
he receives credit for at least 1,000 Hours
of Service during the Plan Year, regardless
of whether he is an Eligible Employee on the
last day of the Plan Year; or
he receives credit for at least 1,000 Hours
of Service during the Plan Year and he is an
Eligible Employee on the last day of the
Plan Year.
(c) CERTAIN FORMER EMPLOYEES. In addition, a Participant
who has met the eligibility criteria in Item 13
applicable to this type of contribution and who
is eligible under (a) above shall be entitled to
receive such a matching contribution for such Plan
Year if he is on an approved leave of absence at the
end of such Plan Year or if his employment by the
Employer terminates during such Plan Year on account
of death, Disability, retirement at or after Normal
Retirement Age, or (if provided for in Item 47) early
retirement.
X Yes
No
26. MATCHES AS A PERCENTAGE OF ELECTIVE DEFERRALS. (Complete this
Item only if box (a) under Item 24 is selected.)
(a) AMOUNT. Subject to (b) and (c) below, the Employer's
annual matching contribution (if any) to the Plan to
the Employer Matching Account of each Participant
entitled to receive this type of matching
contribution for the Plan Year shall be an amount
equal to: (Select only one and complete as
necessary.)
___% of the Participant's elective deferrals
hereunder for the Plan Year not in excess of
___% of the Participant's Compensation for
the Plan Year; or
___% of the portion of the Participant's
elective deferrals hereunder for the Plan
Year not in excess of ___% of the
Participant's Compensation for the Plan Year
plus ___% of the portion of the
Participant's elective deferrals hereunder
for the Plan
21
Year in excess of that amount but not in
excess of ___% of the Participant's
Compensation for the Plan Year; or
X such other percentage of such portion of the
Participant's elective deferrals hereunder
for the Plan Year as may be properly
determined by the Administrator for such
Plan Year and applied uniformly with respect
to those Participants entitled to receive
this type of matching contribution
hereunder.
(b) PAY PERIOD LIMITATIONS. The same
percentage-of-Compensation limitations specified
under (a) above also shall be applied on a pay period
basis (and with respect to bonuses or other special
payments) such that the Employer's matching
contributions shall be with respect to only such
percentage of Compensation otherwise payable for a
pay period (or as a bonus or other special payment).
X Yes
No
(c) BONUSES SUBJECT TO MATCH. Elective deferrals with
respect to bonuses or other special payments shall be
matched to the same extent and subject to the same
limitations as any other part of a Participant's
Compensation.
X Yes -- elective deferrals with respect to
bonuses and special payments shall be
matched
No -- elective deferrals with respect to
bonuses and special payments shall not be
matched
22
SECTION 401(k) FEATURE
SAFE HARBOR 401(k) PLAN
(THE FOLLOWING ITEMS 27 THROUGH 30 SHOULD BE COMPLETED ONLY IF THE SAFE
HARBOR 401(k) PLAN SELECTION IN ITEM 14(b) IS SELECTED.)
27. EMPLOYER CONTRIBUTIONS.. The Employer shall satisfy the safe
harbor contribution requirement by making the following type
of contributions: (Select one of the following:)
Safe Harbor Matching Contribution (complete Items 28
and 30); or
Safe Harbor Nonelective Contribution (complete Items
29 and 30).
28. SAFE HARBOR MATCHING CONTRIBUTIONS.. (Complete only if the
first box in Item 27 is selected.)
(a) AMOUNT. The Employer's matching contributions to the
Nonelective Contribution Accounts of those
Participants who make elective deferrals for the Plan
Year and who are entitled under Item 30 below to
receive this type of contribution shall be an amount
equal to: (Select one and complete as necessary.)
BASIC MATCH ONLY. The Employer's matching
contributions to the Nonelective
Contribution Accounts of those Participants
who make elective deferrals for the Plan
Year and who are entitled under Item 30
below to receive this type of contribution
shall be 100% of the Participant's elective
deferrals hereunder up to 3% of the
Participant's Compensation, plus 50% of the
Participant's elective deferrals up to the
next 2% of Compensation.
ENHANCED MATCH. The Employer's matching
contributions shall be ___________% of the
Participant's elective deferrals hereunder
up to ___________% (not less than 3% or more
than 6%) of the Participant's Compensation
plus ___________% (not more than the first
percentage) of the Participant's elective
deferrals in excess of that amount but not
in excess of ___________% (not more than 6%)
of the participant's Compensation.
NOTE: The Enhanced Match option must entitle a Participant to at least as great
a match at any level of elective deferrals as he would have under the Basic
Match option.
(b) APPLICATION OF LIMITATIONS. The
percentage-of-Compensation limitations specified
under (a) above shall be applied (select one):
on a pay period basis;
on a monthly basis;
on a quarterly basis; or
on an annual (Plan Year) basis.
29. SAFE HARBOR NONELECTIVE CONTRIBUTION.. (Complete only if the
second box in Item 27 is selected.) The Employer shall make
contributions equal to at least ________% (at least 3%) of
Compensation for each Participant who is eligible under Item
30 below to receive this type of contribution.
23
30. PARTICIPANTS ENTITLED TO SAFE HARBOR CONTRIBUTIONS.. A
Participant shall be entitled to an Employer safe harbor
matching contribution or nonelective contribution if (select
only one):
he is an Eligible Employee at any time during the
Plan Year; or
he is a Nonhighly Compensated Employee who is an
Eligible Employee at any time during the Plan Year.
24
DISCRETIONARY (PROFIT SHARING) CONTRIBUTIONS
(THE FOLLOWING ITEMS 31 THROUGH 35 SHOULD BE COMPLETED ONLY IF A
DISCRETIONARY (PROFIT SHARING) CONTRIBUTION FEATURE IS PART OF THE PLAN
PURSUANT TO ITEM 9.)
31. DISCRETIONARY CONTRIBUTIONS ALLOCATION METHOD AND AMOUNT. The
Employer shall be authorized to make discretionary (profit
sharing) contributions to the Plan for allocation to the
Employer Contribution Accounts as follows: (Select (a), (b)
and/or (c) and complete. An Employer may elect to make
contributions under one or more allocation methods.)
(a) X proportionate to Compensation method
:(Complete Item 34 to specify the amount of the
contribution; and below to select whether such
allocations are to be on an integrated or
non-integrated basis)
ALLOCATION OF EMPLOYER CONTRIBUTIONS. This
type of Employer contribution shall be
allocated, for each participant eligible
under Items 32 and 33 below, on:
X a non-integrated basis (see Section
3.3(a)(2) of the Plan), or
an integrated basis (see Section
3.3(a)(3) of the Plan) (complete
Item 35).
(b) an equal flat dollar amount for each
Participant eligible under Items 32 and 33 below in
the following amount: (Select one and complete.)
$______ for each Participant who is
entitled under Items 32 and 33 below
to receive an allocation for the
Plan Year; or
such other flat dollar amount (if
any) as may be properly determined
by the Employer for such Plan Year.
(c) $______ for each Hour of Service credited
for a Participant eligible under Items 32 and 33
below for the Plan Year.
32. PARTICIPANTS ENTITLED TO RECEIVE AN ALLOCATION OF EMPLOYER
CONTRIBUTION (PART 1). A Participant who has met the
eligibility criteria in Item 13 applicable to this type of
contribution shall be entitled to share in the Employer
contribution to the Employer Contribution Accounts for a Plan
Year if: (Select only one.)
he is an Eligible Employee at any time during the
Plan Year;
he is an Eligible Employee on the last day of the
Plan Year;
he receives credit for at least 500 Hours of Service
during the Plan Year or he is an Eligible Employee on
the last day of the Plan Year;
he receives credit for at least 1,000 Hours of
Service during the Plan Year, regardless of whether
he is an Eligible Employee on the last day of the
Plan Year; or
X he receives credit for at least 1,000 Hours of
Service during the Plan Year and he is an Eligible
Employee on the last day of the Plan Year.
33. PARTICIPANTS ENTITLED TO RECEIVE AN ALLOCATION OF EMPLOYER
CONTRIBUTION (PART
25
2). In addition, a Participant who has met the eligibility
criteria in Item 13 applicable to this type of contribution
and who has Compensation for a Plan Year shall be entitled to
share in the Employer contribution for such Plan Year if he is
on an approved leave of absence at the end of such Plan Year
or if his employment by the Employer terminates during such
Plan Year on account of death, Disability, retirement at or
after Normal Retirement Age, or (if provided for in Item 47 of
this Adoption Agreement) early retirement.
X Yes
No
34. DETERMINATION. The Employer's annual discretionary (profit
sharing) contribution (if any) to the Plan for a Plan Year for
allocation to the Employer Contribution Accounts shall be an
amount equal to:
___% of the Compensation of all Participants who are
entitled to receive an allocation for such Plan Year;
___% of the Employer's current Profits for such Plan
Year;
___% of the Employer's current Profits in excess of
$______ for such Plan Year; or
X such other amount as may be properly determined by
the Employer for such Plan Year.
35. INTEGRATED ALLOCATION FORMULA. (Complete only if integrated
basis is selected in 31(a) above.)
(a) INTEGRATION FORMULA. Employer contributions under
Item 31(a) of the Adoption Agreement (and any
forfeitures allocated with this type of contribution)
shall be allocated, as follows, among the Employer
Contribution Accounts of those Participants entitled
to receive such an allocation: (Select only one.)
MAXIMUM DISPARITY METHOD. First, such
contribution (and forfeitures) shall be
allocated in the same ratio that the sum of
such Participants' Compensation plus Excess
Compensation for the Plan Year bears to the
sum of all such Participants' Compensation
plus Excess Compensation, but the amount so
allocated, expressed as a percentage, shall
not exceed the Maximum Disparity Rate.
Second, the balance, if any, of such
contribution (and forfeitures) shall be
allocated in proportion to such
Participants' Compensation for the Plan
Year.
FOUR-TIER METHOD. First, such contribution
(and forfeitures) shall be allocated in
proportion to the Participants' Compensation
for such Plan Year, but not in excess of 3
percent of each Participant's Compensation.
Second, any remaining contribution (and
forfeitures) shall be allocated in
proportion to the Participants' Excess
Compensation for the Plan Year but not in
excess of 3 percent of each Participant's
Excess Compensation. Third, any remaining
contribution (and forfeitures) shall be
allocated in the same ratio that the sum of
such Participants' Compensation plus Excess
Compensation for the Plan Year bears to the
sum of all such Participants' Compensation
plus Excess Compensation, but the amount so
allocated, expressed as a percentage, shall
not exceed the Maximum Disparity Rate less
three percentage points. Fourth, any
remaining contribution (and forfeitures)
shall be allocated in proportion to the
Participants' Compensation for the
26
Plan Year.
(b) TAXABLE WAGE BASE. For purposes of allocating on an
integrated basis, "Taxable Wage Base" means:
the contribution and benefit base under
section 230 of the Social Security Act, as
of the first day of the particular Plan
Year; or
$___________ (not to exceed the contribution
and benefit base under section 230 of the
Social Security Act, as of the first day of
the Plan Year in which the Effective Date
falls); or
___________% (not to exceed 100%) of the
contribution and benefit base under section
230 of the Social Security Act, as of the
first day of the particular Plan Year.
If a Plan Year consists of less than 12 months, then the Taxable Wage Base for
such Plan Year shall be multiplied by the fraction the numerator of which is the
number of months in the short Plan Year and the denominator of which is 12.
27
COMPENSATION TAKEN INTO ACCOUNT UNDER THE PLAN
36. BASE DEFINITION.
INSTRUCTIONS: Complete Column A for the definition of "Compensation" generally
applicable under the Plan, including for the allocation of contributions.
Complete Column B for the definition of "Section 415 Compensation" (Section
4.1(k) of the Plan) applicable in determining the section 415 limitations.
FOR SELF-EMPLOYED INDIVIDUALS (INCLUDING PARTNERS IN A PARTNERSHIP),
SEE SECTION 1.12(e) OF THE PLAN.
B
A "SECTION 415
"COMPENSATION" COMPENSATION"
-------------- -------------
IRS SAFE HARBORS
- W-2, Total Compensation Box
- Earnings subject to Federal
Income Tax Withholding X
- General Section 415 definition X
OTHER CHOICE
- FICA definition N/A
37. EXCLUSION OF ELECTIVE DEFERRALS. The Compensation definition
(but not the Section 415 Compensation definition) shall
exclude any amount contributed pursuant to a salary reduction
agreement and which are not includible in the Employee's gross
income by reason of Sections 401(k), 402(e)(3), 125 or
132(f)(4) and similar Compensation reduction elections
(Section 1.11(d) of Plan). (This exclusion is not available
for the definition of Section 415 Compensation.)
Yes - these amounts are excluded.
X No - these amounts are included.
38. PARTIAL YEAR OF PARTICIPATION. Compensation for any part of a
Plan Year during which an Employee is not a Participant or has
not met the eligibility criteria for a particular type of
Employer contribution (or forfeiture allocation): (Select
one.)
shall be taken into account in the allocation of
Employer contributions (and forfeitures) under the
Plan; or
X shall not be taken into account in the allocation of
Employer contributions (and forfeitures) under the
Plan.
39. EXCLUSIONS. Compensation shall exclude the following (check
any that apply):
FOR INTEGRATED ALLOCATIONS (SEE ITEM 35), ONE OF THE FOLLOWING
TWO ALTERNATIVES MUST BE SELECTED
No exclusions
X Safe-harbor exclusion of allowances, reimbursements
and fringe benefits
28
'
(Section 1.11(c) of Plan)
ANY OF THE FOLLOWING EXCLUSIONS REQUIRE 414(s) TESTING
Bonuses Overtime
Commissions Other (specify)
40. CASH BASIS. Compensation should be taken into account in the
Plan Year in which it is actually paid.
41. EFFECTIVE DATE. If the selections in Item 36 change the Plan's
base definition of Compensation or Section 415 Compensation,
or if the selections in Items 37-40 otherwise change the
Plan's provisions as of a date other than the Effective Date,
fill in the effective date of the change, identify the change
and specify or attach the provisions in effect prior to the
change: n/a
29
SERVICE TAKEN INTO ACCOUNT UNDER THE PLAN
42. METHOD OF DETERMINATION. For eligibility and vesting purposes,
service shall be determined on the basis of:
the elapsed time method (skip to Item 46 unless a
minimum Hours of Service requirement for sharing in
certain contributions is elected in Item 18, 20, 24,
31 or 32), or
X the hour-counting method.
43. DETERMINATION OF HOURS OF SERVICE. An Employee's Hours of
Service shall be determined on the basis of:
X the actual hours for which he is paid or entitled to
payment, determined from records of hours worked and
hours for which payment is made or due;
10 Hours of Service for each day for which he would
be required to be credited with at least one Hour of
Service;
45 Hours of Service for each week for which he would
be required to be credited with at least one Hour of
Service;
95 Hours of Service for each semi-monthly payroll
period for which he would be required to be credited
with at least one Hour of Service;
190 Hours of Service for each month for which he
would be required to be credited with at least one
Hour of Service.
44. SERVICE COMPUTATION PERIOD (ELIGIBILITY). "Service Computation
Period" means, for eligibility purposes: (Complete only if the
hour-counting method is elected in Item 42.)
the 12 consecutive month period beginning on an
Employee's Employment Commencement Date or on an
anniversary thereof; or
X the 12 consecutive month period beginning on an
Employee's Employment Commencement Date and,
thereafter in all cases, each Plan Year, beginning
with the Plan Year containing the first anniversary
of such Employment Commencement Date. An Employee who
is credited with 1,000 Hours of Service in both the
initial eligibility computation period and the first
Plan Year which commences prior to the first
anniversary of the Employee's Employment Commencement
Date will be credited with two Years of Service for
purposes of eligibility to participate.
45. SERVICE COMPUTATION PERIOD (VESTING). "Service Computation
Period" means, for purposes of determining Years of Service
and One-Year Breaks for vesting purposes: (Complete only if
the hour-counting method is elected in Item 42.)
X the Plan Year, or
the 12 consecutive month period beginning on an
Employee's Employment Commencement Date or on an
anniversary thereof.
46. PREDECESSOR AND OTHER EMPLOYERS. For purposes of the Plan,
service for the Employer shall be deemed to include service
(including service as a self-employed individual) for the
following organization(s):
30
None
X prior employers acquired by Meridian including Gull
Laboratories, Biodesign, Viral Antigens and such
other entities that may be specified by Meridian from
time to time.
47. EARLY RETIREMENT. May Participants retire early with full
vesting and immediate entitlement to benefits?
X Yes, upon attainment of age 50 and completion of at
least 15 Years of Service for vesting purposes.
No
48. DISABILITY. Disability means with respect to a Participant:
that he is unable to engage in any substantial,
gainful activity by reason of any
medically-determinable physical or mental impairment
which can be expected to result in death or to be of
long-continued and indefinite duration;
(1) that he is unable to engage in any substantial,
gainful activity by reason of any
medically-determinable physical or mental impairment
which can be expected to result in death or which has
lasted, or can be expected to last, for a continuous
period of not less than 12 months, and (2) that the
Social Security Administration has determined that he
is entitled to a Social Security disability benefit;
an injury or disease which was not intentionally
self-inflicted and which the Administrator has
determined, on the basis of such evidence as it
determines to be satisfactory, permanently prevents
such Participant from performing his regular duties
with the Employer;
that the Administrator has determined, on the basis
of such evidence as it determines to be satisfactory,
that such Participant is unable to engage in each and
every occupation or employment for remuneration or
profit (except for the purpose of his rehabilitation
not incompatible with his Disability), for which he
is reasonably qualified by education, training and
work experience, because of a physical or mental
condition or impairment, which the Administrator
determines will be permanent and continuous during
the remainder of such Participant's lifetime, and
which (1) was not intentionally self-inflicted, and
(2) was not incurred while or as a result of engaging
in any unlawful activity, and (3) was not incurred as
a result of chronic or excessive use of intoxicants,
drugs or narcotics, and (4) was not incurred as a
result of military service for which such Participant
received a military pension; or
X other: a Participant who is established by a licensed
physician selected by the Plan Administrator to (a)
have suffered a disability which is expected to
result in the Participant's death or last for not
less than 12 months; and (b) not be able to perform
his or her job or any job for which he or she is
reasonably suited as a result of his or her
education, training and experience. The determination
by the Plan Administrator with respect to whether a
Participant is totally and permanently disabled shall
be made in a nondiscriminatory manner.
31
VESTING IN EMPLOYER CONTRIBUTIONS
49. VESTING SCHEDULE. The vesting schedule applicable, under
Section 6.1(d)(3)(A) of the Plan, to a Participant's Employer
Contribution Account, shall be as follows: (Do not complete
unless the Plan authorizes Employer contributions subject to a
vesting schedule.)
NONFORFEITABLE PERCENTAGE
Option Option Option Option Option
1 2 3 4 5
X
Years
of (2 year (5 year
Service (2 to 6) (3 to 7) cliff) cliff) (other)
-------
less than 1 0 0 0 0 ___
1 0 0 0 0 ___
2 20 0 100 0 ___
3 40 20 0 ___
4 60 40 0 ___
5 80 60 100 ___
6 100 80 ___
7 100 ___
NOTE: (1) Vesting must be at least as rapid as Option 3 if more than 1
Year of Service is required for eligibility.
(2) Any vesting schedule elected under Option 5 must be at least
as rapid, at every point, as Option 2, Option 4, or (if more
than 1 Year of Service is required for eligibility) Option 3.
50. SERVICE DISREGARDED IN DETERMINATION OF NONFORFEITABLE
PERCENTAGE. In addition to service disregarded in determining
Years of Service under Section 1.58 of the Plan, the following
service shall be disregarded in determining an Employee's
service for vesting purposes (check any boxes that apply):
Years of Service (if the hour-counting method
applies) or Service (if the elapsed time method
applies) before age 18 (age 22 for a Participant who
does not have at least 1 Hour of Service on or after
the REA Effective Date).
Years of Service (if the hour-counting method
applies) or Service (if the elapsed time method
applies) during any period for which the Employer did
not maintain the Plan or a predecessor plan, as
defined in the applicable regulations of the
Secretary of the Treasury.
51. FORFEITURE PROVISIONS.
(a) FORFEITURE UPON CASH-OUT. Upon the distribution to a
terminated Participant, his forfeitable interest in
his Account shall be forfeited in accordance with
Section 6.1(d)(6) of the Plan (select only one):
X immediately;
upon the incurrence of a One-Year Break; or
not applicable -- forfeiture delayed until
the incurrence of a Break in Service (as
defined in Section 1.09 of the Plan).
32
(b) APPLICATION OF FORFEITURES.
(1) Forfeitures occurring during a Plan Year
shall be applied (select only one):
X to the reduction of the amount the
Employer would otherwise contribute
to the Plan; or
in addition to the amount the
Employer would otherwise contribute
to the Plan.
(2) Forfeitures occurring during the Plan Year
shall be applied as specified in (1) to the
following type(s) of Employer contributions
(select only a type of contribution that is
available under the Plan):
X Profit Sharing Contributions (under
Section 3.3 of the Plan)
X Matching Contributions Subject to
ACP (under Section 3.2 of the Plan)
X QNECs (under Section 3.1 of the
Plan)
Qualified Matching Contributions
Subject to ADP (under Section 3.1 of
the Plan)
Safe Harbor Contributions to Safe
Harbor 401(k) Plan (only if Safe
Harbor 401(k) Plan election of Item
14(b) is elected)
33
INVESTMENT OF PLAN ASSETS AND PLAN LOANS
52. PARTICIPANT INVESTMENT ELECTIONS.
(a) AVAILABILITY OF INVESTMENT ELECTIONS. Each
Participant shall elect the manner in which his
entire Account (or such subaccounts selected in (b)
below) and any contributions and forfeitures
allocated thereto are to be invested:
X Yes (If Yes, complete (b) and (c).)
No (Skip to Item 54.)
(b) SUBACCOUNTS SUBJECT TO PARTICIPANT INVESTMENT
DISCRETION.
X Investment elections apply to entire
Account, or
Investment elections apply only to the
following subaccount(s): (Select all that
apply.)
Section 401(k) Account (including
the Nonelective Contribution
Account) (applicable only if a
Section 401(k) feature is part of
the Plan)
Nondeductible Voluntary Contribution
Account (and Deductible Voluntary
Contribution Account)
Rollover Account
Employer Contribution Account
(excluding the Employer Matching
Account unless selected below)
Employer Matching Account
(c) EXTENT OF PARTICIPANT INVESTMENT DISCRETION. In
determining how his Account (or selected subaccounts)
shall be invested, each Participant may:
(Select only one.)
X choose from among such investment funds as
the Administrator directs the Trustee to
make available; or
select any legally permissible investments
which the Trustee agrees to hold for his
Account (including such investment funds as
the Administrator directs the Trustee to
make available).
Pending execution of investment directions, the Trustee shall be authorized to
hold balances in short- term, liquid deposit accounts or other investments.
53. QUALIFYING EMPLOYER SECURITIES. Subject to the other
provisions of the Plan and Trust Agreement, Plan Assets may be
invested in qualifying employer securities (as defined in
ERISA section 407):
Yes
X No (Skip to Item 54.)
(a) DISTRIBUTION AND WITHDRAWAL OF QUALIFYING EMPLOYER
SECURITIES. (Select one.)
34
To the extent a Participant's Account is
invested in qualifying employer securities,
a Participant may elect to take a
distribution or withdrawal to which he is
otherwise entitled under the Plan in
qualifying employer securities.
A Participant may not take a distribution or
withdrawal in qualifying employer
securities.
To the extent a Participant's Account is
invested in qualifying employer securities,
a Participant may elect to take a
distribution or withdrawal to which he is
otherwise entitled under the Plan in
qualifying employer securities, except as
follows:
____________________________________________
____________________________________________
____________________________________________
(b) VOTING OF QUALIFYING EMPLOYER SECURITIES. To the
extent a Participant's Account is invested in
qualifying employer securities, the following shall
have the right to exercise any voting rights with
respect to such securities:
(Select one.)
The Participant (or in the event of his
death, his Beneficiary); or
The Employer (if more than one Employer has
adopted the Plan, the first Employer named
in this Adoption Agreement); or
The Plan Administrator; or
An investment manager appointed under the
terms of the Trust Agreement; or
The Trustee; or
Other: _____________________________________
____________________________________________
____________________________________________
54. VALUATION METHOD. (Select only one.)
DAILY VALUATION METHOD FOR ENTIRE ACCOUNT. For Plan
accounting purposes, Plan Assets shall be allocable
separately to each Participant's Account and the
value of a Participant's Account at any particular
time shall be equal to the value of the Plan Assets
so allocated to his Account at that time; or
X BALANCE FORWARD VALUATION METHOD FOR ENTIRE ACCOUNT.
For Plan accounting purposes, Plan Assets shall be
valued as of each Accounting Date and the value of
each Participant's Account shall be adjusted only as
of each Accounting Date; or
DAILY VALUATION METHOD FOR CERTAIN SUBACCOUNTS. For
Plan accounting purposes, the daily valuation method
shall apply to the Plan Assets attributable to the
following subaccounts (and the balance forward
valuation method shall apply to the other
subaccounts). (Select all to which daily valuation
will apply.)
Section 401(k) Account (including the
Nonelective Contribution Account)
(applicable only if a Section 401(k) feature
is part of the Plan)
35
Nondeductible Voluntary Contribution Account
(and Deductible Voluntary Contribution
Account)
Rollover Account
Employer Contribution Account (excluding the
Employer Matching
Account unless selected below)
Employer Matching Account
55. LOANS. Are Participant loans permitted?
X Yes (Complete (a) through (f) below.)
No (Skip to Item 56.)
(a) LOANS ONLY TO EMPLOYEES. A loan is available
to a Participant only while an Employee and
loans shall be due and payable in full upon
a Participant's termination of employment.
X Yes
No
(b) PAYROLL WITHHOLDING REQUIRED. Loans shall be
repaid only by payroll withholding properly
authorized by the Participant; provided that
the Administrator may allow prepayment
through other means; and if the available
amount of payroll withholding is
insufficient to meet the payments, the
Administrator may authorize other means.
X Yes
No
(c) MINIMUM LOAN AMOUNT. The minimum loan amount
for any single loan shall be:
X $1,000
Other $________ (fill-in but not to
exceed $1,000)
N/A - No loan minimum
(d) SECURITY. The following types of collateral
may secure a Participant loan: (Select only
one.)
X 50% of the Participant's accrued
nonforfeitable benefit under the
Plan (excluding any Deductible
Voluntary Contribution Account)
50% of the Participant's accrued
nonforfeitable benefit under the
Plan (excluding any Deductible
Voluntary Contribution Account) and
the following:
____________________________________
____________________________________
____________________________________
(e) NUMBER OF LOANS. A Participant may have no
more than the following number of loans
outstanding at any given time:
36
1
2
X other 3 (fill in)
N/A - no maximum number of loans
(f) OTHER SPECIFIC LOAN PROVISIONS. In addition
to the provisions governing loans in Section
5.5 of the Plan and above, the following
provisions apply to Plan loans (attach
additional pages, if necessary):
(1) limitations (if any) in addition to
limits in Section 5.5 and above on
the types and amounts of loans
offered:
____________________________________
____________________________________
____________________________________
(2) procedure for determining reasonable
rate of interest: The rate a bank or
other professional lender would
charge for making a loan in a
similar circumstance.
37
WITHDRAWALS AND DISTRIBUTIONS
IN-SERVICE WITHDRAWALS BY PLAN PARTICIPANTS
56. WITHDRAWALS FROM SECTION 401(k) ACCOUNT. (Complete only if a
Section 401(k) feature is part of the Plan pursuant to Item
9.)
(a) HARDSHIP. Subject to the limits of Section 7.2 of the
Plan, withdrawals from a Participant's Section 401(k)
Account by an Eligible Employee shall be permitted in
the event of hardship.
X Yes
No
(b) AGE 59-1/2. Withdrawals from a Participant's Section
401(k) Account by an Eligible Employee shall be
permitted after his attainment of age 59-1/2.
X Yes
No
57. WITHDRAWALS ON OR AFTER ATTAINMENT OF AGE 59-1/2.
(a) WITHDRAWAL RIGHT. Withdrawals from a Participant's
Account (from such subaccounts as he may elect), to
the extent vested and nonforfeitable, by an Eligible
Employee prior to termination of employment shall be
permitted after his attainment of the age specified
in (b) below.
X Yes (If Yes, complete (b) and (c) below.)
No (Skip to Item 58.)
(b) AGE REQUIREMENT.
X 59-1/2
______ (Must be older than age 59-1/2.)
58. REQUIRED BEGINNING DATE (AGE 70-1/2) PAYMENTS. The Required
Beginning Date for the payment of a Participant's
distributions under the Plan (as referred to in Section 7.6(d)
of the Plan) is (select (a) or (b)):
(a) CONTINUATION OF PRIOR LAW. The April 1 of
the calendar year following the calendar year in
which the Participant attains age 70-1/2.
(b) X NEW LAW. For Participants other than
Five-Percent Owners, the April 1 of the calendar year
following the later of the calendar year in which the
Participant attains age 70-1/2 or the calendar year
in which the Participant retires. For a Five-Percent
Owner, the April 1 of the calendar year following the
calendar year in which the Participant attains age
70-1/2. (If (b) is selected, complete the following:)
(i) PRE-EFFECTIVE DATE ATTAINMENT OF AGE
70-1/2. For calendar years prior to
the Effective Date, the Plan
permitted Participants (other than
Five-Percent Owners) who attained
age 70-1/2 to elect to apply these
new law Required Beginning Date
provisions and defer their
38
distributions:
Yes-For Participants who
attained age 70-1/2 in the
following years (1996 or
later):
___________________________
X No
(ii) PRE-EFFECTIVE DATE CESSATION OF
DISTRIBUTIONS. Participants other
than Five-Percent Owners who had
commenced receiving distributions
prior to 1997 as required under
prior law were permitted to elect to
stop receiving such distributions
until the new Required Beginning
Date.
Yes - The election was
first provided in
__________________________.
The Administrator shall
follow Internal Revenue
Service guidance regarding
the re-commencement of
benefit payments. There is
either (select one)
A new annuity
starting date upon
recommencement, or
No new annuity
starting date upon
recommencement.
X No.
(iii) OPTIONAL IN-SERVICE COMMENCEMENT AT
AGE 70-1/2. Although distributions
are not required, a Participant may
elect to commence distribution prior
to termination of employment on or
after April 1 of the calendar year
following his attainment of 70-1/2.
N/A - Item 57 already
allows withdrawals by an
Eligible Employee who
attains age 70-1/2.
X Yes.
No - (if No, select one of
the following):
Participants who
attained age
70-1/2 in or after
calendar year
________ may not
elect to commence
distribution while
remaining an
Employee (the year
inserted above
must comply with
applicable
Treasury
Regulations and
must be a year
subsequent to 1998
and subsequent to
the year in which
the amendment is
adopted).
New Plan or Plan
never has allowed
in-service
distributions upon
attainment of age
70-1/2.
59. OTHER WITHDRAWAL RIGHTS. Are any additional withdrawal rights
available under the Plan?
Yes (Describe the applicable withdrawal rights
in detail in an attachment.)
39
X No
Note: The above withdrawal rights (and those listed on any attachment) are
considered protected optional forms of benefit which cannot be changed with
respect to benefits already accrued by a participant.
40
WITHDRAWALS AND DISTRIBUTIONS
EVENTS OF DISTRIBUTION AND TIME OF PAYMENT
60. TIME OF PAYMENT. Subject to Sections 7.6 and 7.7 and Article
10 of the Plan, distribution to a Participant whose benefit
has become distributable shall commence in accordance with the
following: (Check (a) or (b) and the applicable box(es) under
the Item selected.)
(a) X SIMPLIFIED OPTION. Upon the Participant's
termination of employment, as soon as
administratively feasible (check the box that
applies):
X after the Participant elects
commencement of his benefit; or
after the first Accounting Date
coincident with or next following
the Participant's election to
commence benefits.
(b) DETAILED OPTION.
(1) NORMAL RETIREMENT. Upon a Participant's
termination of employment on or after
attaining Normal Retirement Age, as soon as
administratively feasible (check the box
that applies):
after such termination of
employment;
after the first Accounting Date
coincident with or next following
such termination of employment;
after the Participant elects
commencement of his benefit; or
after the first Accounting Date
coincident with or next following
the Participant's election to
commence benefits.
(2) EARLY RETIREMENT. (Complete only if the
early retirement provision in Item 60(b)(5)
is elected.) Upon a Participant's
termination of employment on or after
satisfying the criteria in Item 60(b)(5) for
early retirement but before attaining Normal
Retirement Age (Item 7), as soon as
administratively feasible (check the box
that applies):
after the Participant elects
commencement of his benefit;
after the first Accounting Date
coincident with or next following
the Participant's election to
commence benefits; or
other (specify time or times)
____________________________________
____________________________________
____________________________________
(3) DISABILITY RETIREMENT. Upon a Participant's
termination of employment, prior to Normal
Retirement Age (Item 7) and prior to
satisfying the criteria for early retirement
(if the Plan has an early retirement
provision), on account of the incurrence of
a Disability, as soon as administratively
feasible (check the box that applies):
after the Participant elects
commencement of his benefit;
41
after the first Accounting Date
coincident with or next following
the Participant's election to
commence benefits; or
other (specify time or times)
____________________________________
____________________________________
____________________________________
(4) OTHER TERMINATION. Upon a Participant's
termination of employment prior to Normal
Retirement Age (Item 7), prior to satisfying
the criteria for early retirement (if the
Plan has an early retirement provision) and
prior to incurring a Disability, as soon as
administratively feasible (check the box
that applies):
after the Participant elects
commencement of his benefit;
after the first Accounting Date
coincident with or next following
the Participant's election to
commence benefits;
after the first Accounting Date
coincident with or next following
the Participant's termination of
employment, if elected by the
Participant, but if not elected,
after the first Accounting Date
coincident with or next following
the Participant's attainment of
Normal Retirement Age (Item 7); or
other (specify time or times):
____________________________________
____________________________________
____________________________________
(5) OTHER. Are any additional commencement dates
available under the Plan?
Yes (Describe the applicable
forms in detail in an
attachment.)
No
Note: The above commencement dates (and those listed on any attachment) are
considered protected optional forms of benefit which cannot be changed with
respect to benefits already accrued by a participant.
42
WITHDRAWALS AND DISTRIBUTIONS
FORM OF PAYMENT
61. FORMS OF BENEFIT PAYMENT. The following alternative forms of
distribution and withdrawal are available under the Plan
(check any boxes that apply):
X a single sum,
X periodic installment payments, not less frequently
than annually, with any installments remaining unpaid
at the Participant's death to be paid to his
Beneficiary,
in the case of a Participant who has attained age
70-1/2 and who is required to commence benefit
payments under Section 7.6(d) while employed by the
Employer, periodic installment payments sufficient in
amount and frequency to satisfy the minimum
distribution requirements of Section 8.5, with a lump
sum distribution of his remaining Account balance
upon termination of employment,
a single life annuity,
a Qualified Joint and Survivor Annuity,
a joint and survivor annuity for the Participant and
his Surviving Spouse under which the survivor annuity
is more than one-half of, but not greater than, the
annuity payable during the joint lives of the
Participant and such spouse,
X the additional forms of benefit specified in the
applicable attachment. (Describe the additional forms
in detail in an attachment.)
(NOTE: For a plan which is a transferee of a plan required to have annuities,
the Qualified Joint and Survivor Annuity and the single life annuity will
automatically be available. Refer to Section 8.2 of the Plan.)
NOTE: The above alternative forms of benefit (and those listed on any
attachment) are considered protected forms of benefit which can be changed with
respect to benefits already accrued by a Participant only as permitted by
Treasury Regulations.
62. CASH OR IN-KIND PAYMENTS. If a Participant's benefit is
payable other than in an annuity form and other than in
qualifying employer securities, the Participant's distribution
or withdrawal shall be paid:
X in cash, or
in cash, or at the election of the Participant, in
kind subject to the following limitations (describe
in-kind withdrawal or distribution rights):
_____________________________________________________
_____________________________________________________
_____________________________________________________
43
NOTE: An in-kind withdrawal or distribution option is considered a protected
form of benefit that can be changed with respect to benefits already accrued by
a Participant only as permitted by Treasury Regulations.
44
WITHDRAWALS AND DISTRIBUTIONS
CASH-OUT
63. $5000 CASH-OUT. Notwithstanding the benefit commencement dates
otherwise adopted in Item 60 and the alternative forms of
benefit otherwise adopted in Item 61, any amount payable to a
Participant or any Preretirement Survivor Annuity payable to a
Surviving Spouse shall be paid in a cash lump sum if such
payment is made before payment otherwise begins and if, in the
case of an amount payable to a Participant, the value
(determined as of the date of distribution) of his
nonforfeitable benefit does not exceed $5,000 or, in the case
of a Preretirement Survivor Annuity, the value (determined as
of the date of distribution) of such annuity does not exceed
$5,000, and such lump sum shall be paid as soon as
administratively feasible (whether or not the Participant or
his spouse has consented to the distribution) (check the
applicable box):
X after the Participant's termination of employment
(death, in the case of the Preretirement Survivor
Annuity);
after the first Accounting Date following the
Participant's termination of employment (death, in
the case of the Preretirement Survivor Annuity); or
Not Applicable -- This provision shall not be a part
of the Plan.
This provision, if adopted, shall be applied by treating any Deductible
Voluntary Contribution Account separately from other portions of the
Participant's benefit.
45
TOP-HEAVY RULES AND SECTION 415 LIMITATIONS
64. TOP-HEAVY TESTING. For purposes of the provisions of the Plan
applicable if the Plan is a Top-Heavy Plan:
the Plan shall be deemed always to be a Top-Heavy
Plan; or
X the Plan shall be tested each year to determine
whether it is a Top-Heavy Plan.
65. TOP-HEAVY MINIMUMS. If a Participant is covered under any
other plan or plans of the Employer, then:
X Section 3.4 of the Plan shall apply as if such
Participant were not so covered; or
Section 3.4 shall be modified by the attached
provisions, in order to prevent duplication.
66. DEFINED BENEFIT ACTUARIAL ASSUMPTIONS. (Complete only if
second option under Item 64 is selected and if there is one or
more defined benefit plans in the Permissive Aggregation Group
or the Required Aggregation Group.) The interest and mortality
rates, for purposes of establishing Present Value to compute
the Top-Heavy Ratio, with respect to any defined benefit plans
in the Permissive Aggregation Group or the Required
Aggregation Group shall be:
Interest Rate: ______%
Mortality Table: ______________________________
______________________________
67. TOP-HEAVY VESTING. For any Plan Year in which the Plan is a
Top-Heavy Plan, the vesting schedule, applicable under Section
6.1(d)(3)(A) of the Plan, to a Participant's Employer
Contribution Account, shall be as follows: (Skip this Item if
the general vesting schedule elected in Item 49 is at least as
fast as Option 1 or 3 in Item 49.)
100% vesting after ___ (not to exceed 3) Years of
Service.
___% (not less than 20) vesting after 2 Years of
Service,
___% (not less than 40) vesting after 3 Years of
Service,
___% (not less than 60) vesting after 4 Years of
Service,
___% (not less than 80) vesting after 5 Years of
Service,
100% vesting after 6 Years of Service.
If the vesting schedule under the Plan shifts in or out of the above schedule
for any Plan Year because of the Plan's top-heavy status, such shift is an
amendment to the vesting schedule and the election in Section 12.3(c) of the
Plan applies.
LIMITATIONS ON ANNUAL ADDITIONS. If the Employer maintains or ever maintained
another qualified plan in which any Participant in this Plan is (or was) a
participant, or could possibly become a participant, the following two items
must be completed. They must also be completed if the Employer maintains a
welfare benefit fund, as defined in section 419(e) of the Code, or an individual
medical benefit account, as defined in section 415(l)(2) of the Code, under
which amounts are treated as Annual Additions with respect to any Participant in
the Plan.
68. If a Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a
Master or Prototype Plan:
46
X the provisions of Section 4.3 of the Plan will apply
as if the other plan were a Master or Prototype Plan;
or
the attached provisions will apply. (Provide the
method under which the plans will limit total Annual
Additions to the Maximum Permissible Amount and will
properly reduce any excess amounts, in a manner that
precludes employer discretion.)
69. If any Participant is, or has ever been, a participant in a
qualified defined benefit plan maintained by the Employer (as
defined in Section 4.1 of the Plan), then the attached
provisions shall apply to Limitation Years beginning before
January 1, 2000. (Attach provisions which will satisfy the 1.0
limitation of section 415(e) of the Code for Limitation Years
beginning before January 1, 2000. Such provisions must
preclude employer discretion.)
47
MISCELLANEOUS
SPONSORING ORGANIZATION. The sponsor of this prototype is: ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, P.L.L., 1400 Provident Tower, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇; (▇▇▇) ▇▇▇-▇▇▇▇.
FURTHER DEVELOPMENTS. If ▇▇▇▇▇▇▇, Muething & ▇▇▇▇▇▇▇, P.L.L. amends the Plan or
discontinues or abandons sponsorship of the prototype documents, the Employer
will be notified.
ADOPTION OF PLAN. This Adoption Agreement may be used only in conjunction with
the ▇▇▇▇▇▇▇, Muething & ▇▇▇▇▇▇▇, P.L.L. Basic Prototype Plan Document. By this
Agreement between the Employer and the Trustee(s), the Employer hereby adopts
the ▇▇▇▇▇▇▇, Muething & ▇▇▇▇▇▇▇, P.L.L. Basic Prototype Plan Document, as
supplemented by this Adoption Agreement, and the ▇▇▇▇▇▇▇, Muething & ▇▇▇▇▇▇▇,
P.L.L. Prototype Trust Agreement, as said Plan Document, Adoption Agreement, and
Trust Agreement are now in effect or may be hereafter amended, for the purpose
of establishing or amending a profit-sharing plan and hereby accepts all the
terms and conditions thereof. Pursuant to section 401(a)(27) of the Code, this
Plan is designated a profit-sharing plan.
RELIANCE. This prototype plan has been approved as to form by the Internal
Revenue Service, in Opinion Letter Serial Number K373773a. The adopting employer
may rely on an opinion letter issued by the Internal Revenue Service as evidence
that the plan is qualified under section 401 of the Internal Revenue Code only
to the extent provided in Announcement 2001-77, 2001-30 I.R.B.
The employer may not rely on the opinion letter in certain other circumstances
or with respect to certain qualification requirements, which are specified in
the opinion letter issued with respect to the plan and in Announcement 2001-77.
In order to have reliance in such circumstances or with respect to such
qualification requirements, application for a determination letter must be made
to Employee Plans Determinations of the Internal Revenue Service.
LISTING FOR IRS: By executing this Adoption Agreement, the Employer authorizes
▇▇▇▇▇▇▇, Muething & ▇▇▇▇▇▇▇, P.L.L. to include the Employer's name, address and
taxpayer identification number on a list it is required to provide to the
Internal Revenue Service annually.
The Employer will notify the Trustee in writing of any changes in this
information.
48
Signed on the following date: ________________________________.
EMPLOYER
MERIDIAN BIOSCIENCE, INC.
By: _________________________________
Other Employers Adopting the Plan:
BIODESIGN INTERNATIONAL INCORPORATED
By: _________________________________
MERIDIAN BIOSCIENCE CORPORATION
By: _________________________________
VIRAL ANTIGENS, INC.
By: _________________________________
49
Signed on the following date: ________________________________.
TRUSTEE
▇▇▇▇▇ BANK N.A.
By: _________________________________
50
MERIDIAN BIOSCIENCE, INC.
SAVINGS AND INVESTMENT PLAN
22(b). METHODS USED FOR PRE-EFFECTIVE DATE PLAN YEARS ATTACHMENT
The Plan used the following methods for ADP and/or ACP testing in relevant Plan
Years before the Effective Date:
1997 Current
1998 Current
1999 Current
2000 Current
2001 Prior
MERIDIAN BIOSCIENCE, INC.
SAVINGS AND INVESTMENT PLAN
61. ALTERNATIVE FORMS OF BENEFIT ATTACHMENT
Prior to October 1, 2003, a joint and survivor annuity for the
Participant and his Surviving Spouse under which the survivor annuity is more
than one-half of, but not greater than, the annuity payable during the joint
lives of the Participant and such spouse, and subject to Section 8.2 of the
Plan.
INTERNAL REVENUE SERVICE Department of the Treasury
Plan Description: Prototype Non-standardized
Profit Sharing Plan with CODA
FFN: 503A4530001-001 Case: ▇▇▇▇▇▇▇▇▇ EIN: ▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Letter Serial No: K373773a Contact Person:
▇▇. ▇▇▇▇▇▇▇▇▇ 50-00197
▇▇▇▇▇▇▇ MUETHING & ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ TOWER Telephone Number: (202)
ONE EAST FOURTH ST 283-8811
CINCINNATI, OH 45202
In Reference to:
T:EP:RA:T4
Date: 04/30/2002
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to Employee Plans Determinations in
Cincinnati at the address specified in section 9.11 of Rev. Proc. 2000-20,
2000-6 I.R.B. 553.
This letter considers the changes in qualifications requirements made by the
Uruguay Round Agreements Act (GATT), Pub. L. 103-465, the Small Business Job
Protection Act of 1996, Pub. L. 104-188, the Uniformed Services Employment and
Reemployment Rights Act of 1994, Pub. L. 103-353, the Taxpayer Relief Act of
1997, Pub. L. 105-34, the Internal Revenue Service Restructuring and Reform Act
of 1998, Pub. L. 105-206 and the Community Renewal Tax Relief Act of 2000, Pub.
L. 106-554. These laws are referred to collectively as GUST.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). However, an employer that adopts this plan may rely on this letter with
respect to the qualification of its plan under Code section 401(a), as provided
for in Announcement 2001-77, 2001-30 I.R.B. and outlined below. The terms of the
plan must be followed in operation.
Except as provided below, our opinion does not apply with respect to the
requirements of: (a) Code sections 401(a)(4), 401 (a)(26), 401(1), 410(b) and
414(s). Our opinion does not apply for purposes of Code section 401(a)(10)(B)
and section 401(a)(16) if an employer ever maintained another qualified plan for
one or more employees who are covered by this plan. For this purpose, the
employer will not be considered to have maintained another plan merely because
the employer has maintained another defined contribution plan(s), provided such
other plan(s) has been terminated prior to the effective date of this plan and
no annual additions have been credited to the account of any participant under
such other plan(s) as of any date within the limitation year of this plan.
Likewise, if this plan is first effective on or after the effective date of the
repeal of Code section 415(e), the employer will not be considered to have
maintained another plan merely because the employer has maintained a defined
benefit plan(s), provided the defined benefit plan(s) has been terminated prior
to the effective date of this plan. Our opinion also does not apply for purposes
of Code section 401(a) (16) if, after December 31, 1985, the employer maintains
a welfare benefit fund defined in Code section 419(e), which provides
postretirement medical benefits allocated to separate accounts for key employees
as defined in Code section 419A(d)(3).
Our opinion applies with respect to the requirements of Code section 410(b) if
100 percent of all nonexcludable employees benefit under the plan. Employers
that elect a safe harbor allocation formula and a safe harbor compensation
definition can also rely on an opinion letter with respect to the
nondiscriminatory amounts requirement under section 401(a)(4) and the
requirements of sections 401(k) and 401(m) (except where the plan is a safe
harbor plan under section 401(k)(12) that provides for the safe harbor
contribution to be made under another plan).
An employer that elects to continue to apply the pre-GUST family aggregation
rules in years beginning after December 31, 1996, or the combined plan limit of
section 415(e) in years beginning after December 31, 1999, will not be able to
rely on the opinion letter without a determination letter. The employer may
request a determination letter by filing an application with Employee Plans
Determinations on Form 5307, Application for Determination for Adopters of
Master or Prototype or Volume Submitter Plans.
If you, the master or prototype sponsor, have any questions concerning the IRS
processing of this case, please call the above
53
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ PLL
FFN: 503A4530001-001
Page 2
telephone number. This number is only for use of the sponsor. Individual
participants and/or adopting employers with questions concerning the plan should
contact the master or prototype sponsor. The plan's adoption agreement must
include the sponsor's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial Number
and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
Director
Employee Plans Rulings & Agreements
▇▇▇▇▇▇▇, MUETHING & KLEKAMP, P.L.L.
PROTOTYPE TRUST AGREEMENT
▇▇▇▇▇▇▇, MUETHING & ▇▇▇▇▇▇▇, P.L.L.
PROTOTYPE TRUST AGREEMENT
TABLE OF CONTENTS
ARTICLES
1. Title, Purpose and Definitions
2. Contributions and Payments
3. Investment Duties and Powers of the Trustee
4. Compensation, Expenses, and Accounts
5. Actions of the Trustee
6. Resignation, Removal and Succession of the Trustee
7. Amendment and Termination
8. Miscellaneous
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.L.L.
PROTOTYPE TRUST AGREEMENT
By executing an Adoption Agreement under the ▇▇▇▇▇▇▇, Muething &
▇▇▇▇▇▇▇, P.L.L. Basic Prototype Plan Document, the Employer named therein (the
"Employer") and the Trustee or Trustees named therein (the "Trustee" which term
shall include the plural in the event there is more than one Trustee) agree to
the following terms and conditions.
ARTICLE 1
TITLE, PURPOSE AND DEFINITIONS
1.1 Title. The Trust established pursuant hereto shall be known as
the Trust Agreement for the Plan named in the Adoption Agreement.
1.2 Purpose. The Trust is established for the purpose of holding
the Plan Assets and for the exclusive benefit of Participants and their
beneficiaries. Subject to the provisions of the Plan that are consistent with
ERISA, it shall be impossible, by any means, and at any time before the
satisfaction of all liabilities to Participants or their beneficiaries, for any
part of the Plan Assets to be used for, or diverted to, purposes other than for
the exclusive benefit of the Participants and their beneficiaries.
1.3 Definitions. As used in this Trust Agreement, the following
terms shall have the following meanings and provisions applicable thereto.
(a) "Administrator" means the individual, group of
individuals, or entity appointed as such by the Employer; provided that if none
is so appointed, then it means the first Employer designated in the Adoption
Agreement.
(b) "Adoption Agreement" means the document in which the
Employer specifies the elective provisions of the Plan.
(c) "Code" means the Internal Revenue Code of 1986, as amended
at the particular time applicable. A reference to a section of the Code shall
include said section and any comparable section or sections of any future
legislation that amends, supplements or supersedes said section.
(d) "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended, at the particular time applicable.
(e) "Participant" means a person who has become a Participant
as provided under Article 2 of the Plan. Any such person shall remain a
Participant as long as an Account is maintained for him under the Plan.
(f) "Plan" means the plan set forth in the ▇▇▇▇▇▇▇, Muething &
▇▇▇▇▇▇▇, P.L.L. Basic Prototype Plan Document and in the Adoption Agreement as
adopted by the Employer, and if amended at any time, then as so amended.
(g) "Plan Assets" means the assets of the Plan at the
particular time applicable.
(h) "Trust Year" means the Plan Year of the Plan.
ARTICLE 2
CONTRIBUTIONS AND PAYMENTS
2.1 Receipt of Contributions. The Trustee shall receive any
contributions paid to it in cash or in the form of such other property as it may
from time to time deem acceptable and which shall have been delivered to it. All
contributions so received, together with the income therefrom and any other
increment thereon, shall be held, invested, reinvested and administered by the
Trustee pursuant to the terms of this Trust Agreement. The Trustee shall not be
responsible for the calculation or collection of any contribution under or
required by the Plan, or for the determination of whether any contributions
received by it are correct or are otherwise in compliance with the provisions of
the Plan, but shall be responsible only as provided in this Trust Agreement for
property received by it.
2.2 Payments from the Plan Assets.
(a) From time to time, upon the Trustee's receipt of written
directions from the Administrator that payments from the Plan are due, the
Trustee shall make such payments from the Plan Assets to such persons in such
form, in such amounts and at such time as the Administrator shall have directed;
provided however, the Trustee shall not be required to make any payment from the
Plan Assets until it receives copies of such government filings and/or approvals
as the Trustee may reasonably request; and provided further, contributions to
the Plan shall be returned to the Employer only under those circumstances set
forth in the Plan and consistent with ERISA.
(b) Upon the distribution of Plan Assets in accordance with
(a) above, to the extent permitted by law, the Trustee shall be released and
discharged from all further accountability or liability respecting such Plan
Assets, shall be fully protected in making payments out of the Plan Assets in
accordance with such written directions, shall have no responsibility to see to
the application of such payments or to ascertain whether such directions comply
with the provisions of the Plan, and shall have no responsibility for any
payments made by it in good faith without actual notice or knowledge of the
changed condition or status of any person receiving such payments.
(c) If any payment directed to be paid from the Plan Assets is
not claimed, then the Trustee shall notify the Administrator of that fact
promptly. The Trustee shall have no obligation to search for or ascertain the
whereabouts of any payee under the Plan.
(d) If any dispute arises as to the persons to whom payment of
any funds or delivery of any other Plan Assets should be made by the Trustee,
then the Trustee may withhold such payment or delivery until such dispute shall
have been determined by a court of competent jurisdiction or shall have been
settled by the parties concerned.
ARTICLE 3
INVESTMENT DUTIES AND POWERS OF THE TRUSTEE
3.1 Investment Duties. Subject to the funding policy for the Plan
as communicated to the Trustee in writing by the Employer, the Trustee shall,
except to the extent it deems it expedient (pending investment of Plan Assets or
pending payment of current expenses or benefits of the Plan) to keep Plan Assets
temporarily uninvested and in cash, invest and reinvest the principal and income
of the Plan Assets and keep the Plan Assets invested, without being restricted
to securities or property of the character authorized for investments by
trustees under the laws of any state, district or territory, in such securities
and/or in such property, real or personal, tangible or intangible, or part
interest therein, wherever situate, whether or not productive of income, or
consisting of wasting assets, as the Trustee shall deem advisable. The Employer
shall establish and communicate to the Trustee a funding policy which shall be
- 4 -
consistent with the objectives of the Plan, ERISA, and other applicable legal
requirements and which shall identify the Plan's short-run and long-run
financial needs with respect to liquidity and growth, as the same may change
from time to time.
3.2 Investment Powers. The Trustee is authorized and empowered, in
addition to powers granted under any applicable statutes, regulations or rules
which, to the extent of their granting of powers applicable to trusts of a
similar nature to the Trust, are incorporated herein by reference:
(a) to invest in any collective, common or pooled trust fund
operated or maintained by any bank or trust company, including a Trustee or an
affiliate of any Trustee, exclusively for the commingling and collective
investment of monies or other assets held under or as a part of a plan which is
established in conformity with and qualifies under section 401(a) of the Code;
and, anything herein to the contrary notwithstanding, to the extent monies or
other assets are transferred to such collective trust in exchange for an
interest in such collective trust, the terms and conditions of such collective
trust, as amended from time to time, shall govern the investment duties,
responsibilities and powers of the trustee of such collective trust and, to the
extent required by law, such terms, responsibilities and powers shall be
incorporated herein by reference and shall be a part of this Trust Agreement;
and, for purposes of valuation, the value of the interest maintained by the Plan
Assets in such collective trust shall be the fair market value of the collective
fund units held by the Trustee determined in accordance with generally
recognized valuation procedures;
(b) to purchase and subscribe for any securities or other
property and to retain such securities or other property in trust;
(c) to sell at public or private sale, for cash, or upon
credit, or otherwise dispose of any property, real or personal, and no person
dealing with the Trustee shall be bound to see to the application or to inquire
into the validity, expediency or propriety of any such sale or other
disposition;
(d) to exercise any conversion privilege, subscription right
or other option pertaining to or in connection with securities or other property
held by it;
(e) to exercise itself, or by general or limited power of
attorney, any right, including the right to vote, incident to any securities or
other property held by it;
(f) to join in, dissent from or oppose the reorganization,
recapitalization, consolidation, sale or merger of corporations or properties of
which it may hold stocks, bonds or other securities or in which it may be
interested, to pay any expenses, assessments or subscriptions in connection
therewith, and to accept and to hold any other securities issued in connection
therewith;
(g) to register any investment held in the Plan Assets in its
own name or in the name of a nominee or to hold any investment in bearer form;
(h) to employ suitable agents, accountants and counsel and to
pay their reasonable expenses and compensation;
(i) to hold any part or all of the Plan Assets uninvested;
(j) to invest in savings accounts, certificates of deposit and
other deposits which bear a reasonable rate of interest, with any financial
institution or quasi financial institution, either domestic or foreign,
including any such financial institution operated or maintained by any Trustee
(or an affiliate) in its corporate capacity;
(k) to form corporations and partnerships and to create trusts
to hold title to any
- 5 -
securities or other property, all upon such terms and conditions as it may deem
advisable;
(l) to invest in open-end investment companies (mutual funds)
and closed-end investment companies, investment trusts, and in any partnership,
limited or unlimited, joint venture or other form of joint enterprise created
for any lawful purpose;
(m) to adjust, settle, contest, compromise and arbitrate any
claims, debts, or damages due or owing to or from the Plan Assets, and to ▇▇▇,
commence or defend any legal proceedings in reference thereto;
(n) to borrow money upon such terms and conditions as may be
deemed advisable to carry out the purposes of the Trust and to pledge securities
or other property in repayment of any such loan; provided, however, that loans
or advances may be made by the Trustee by way of overdrafts or otherwise on a
temporary basis on which no interest is payable;
(o) to enter into any type of contract with any insurance
company or companies, either for the purposes of investment or otherwise, and,
to the extent the Plan so provides, to purchase any life insurance policy or
annuity contract;
(p) to buy, sell, and deal in options as writer of call
options against securities, stocks, convertible preferred stocks, convertible
bonds and warrants, which are owned by the Trust, to repurchase written call
options in a closing transaction, to deliver the securities for cash if the
option is exercised, to buy put options for securities, stock, convertible
preferred stock, convertible bonds and warrants, which are owned by the Trust,
to resell put options, in a closing transaction and to deliver the securities
for cash if the option is exercised;
(q) to appoint an investment manager, as defined in section
3(38) of ERISA, to manage (including the power to acquire and dispose of) any of
the Plan Assets;
(r) to make, execute and deliver as Trustee any and all deeds,
leases, mortgages, advances, contracts, waivers, releases or other instruments
in writing necessary or proper in the employment of any of the foregoing powers;
(s) to hold qualifying employer securities, limited in the
case of a money purchase pension plan or a profit sharing plan the benefits of
which are taken into account in determining the benefits payable to any
participant under a defined benefit plan, to 10% of Plan Assets, all as provided
in section 407 of ERISA; and
(t) to exercise, generally, any of the powers which an
individual owner might exercise in connection with property either real,
personal or mixed held in the Plan Assets, and to do all other acts that the
Trustee may deem necessary or proper to carry out any of the powers set forth in
this Article 3 or otherwise in the best interests of the Trust.
3.3 Separate Accounts with Respect to Non-Corporate Employers. If
the Employer is not a corporation, then the Trustee, in its sole discretion, may
segregate and separately invest and account for the account of any Participant,
if necessary, to company with any applicable securities laws. The Administrator
shall be responsible for notifying the Trustee as to Participants' residency.
3.4 Power of the Employer, Administrator or Participants to Direct
Investments and Exercise of Powers.
(a) General. The Employer or Administrator may, at any time
and from time to time, by written action, advise and direct the Trustee in the
investment of the Plan Assets or in the exercise of any of the Trustee's powers.
The Employer or Administrator may also, at any time and from time to time, by
written direction, require the Trustee to obtain the written approval of the
Employer or Administrator before making investments of a particular type
- 6 -
specified in such direction or before exercising any of the Trustee's powers as
may be specified in such direction.
(b) Participant Investment Direction. If the Plan permits
Participants to elect the manner in which their Accounts or specified
subaccounts are invested, the Administrator shall be responsible for
implementing the investment elections by direction to the Trustee. Unless
specifically agreed otherwise by the Administrator and the Trustee, the Trustee
shall receive, and act upon, investment instructions solely from the
Administrator (and not the Participants directly).
(c) Relationship to the Trustee. The Trustee shall follow the
directions of the Administrator in making investment funds specified by the
Administrator available under the Plan. The Trustee shall be under no duty or
obligation to review the selection of investment funds by the Administrator or
Participants. The Trustee shall have no fiduciary responsibility whatsoever in
connection with any such investment funds (or other Participant directed
investments) except for such investment funds over which the Trustee has
investment management authority as directed by the Administrator. The Trustee
shall have no liability or responsibility for action pursuant to the direction
of the Administrator, Employer or Participants (if applicable).
3.5 Investment Manager.
(a) Appointment. Notwithstanding anything to the contrary in
this Trust Agreement contained, the Employer may direct, by written notice, the
segregation of all or any portion or portions of the Plan Assets in a separate
investment account or investment accounts and in such event, may appoint an
investment manager to direct the investment and reinvestment of any such
investment account pursuant to this Article 3. If investment of the Plan Assets
is to be directed in whole or in part by an investment manager, then the
Employer shall deliver to the Trustee a copy of the instruments appointing the
investment manager and evidencing the investment manager's acceptance of such
appointment, an acknowledgement by the investment manager that it is a fiduciary
of the Plan, and evidence that such investment manager is (1) registered as an
investment adviser under the Investment Advisers Act of 1940, (2) a bank as
defined in that Act, or (3) an insurance company qualified, under the laws of
more than one State, to manage, acquire, or dispose of any asset of a plan. The
Trustee shall be fully protected in relying upon such documents until otherwise
notified in writing by the Employer.
(b) Relationship to the Trustee. The Trustee shall follow the
directions of the investment manager regarding the investment and reinvestment
of the Plan Assets or such portion thereof as shall be under management by the
investment manager and shall exercise the powers set forth in this Article 3, as
directed by the investment manager. The Trustee shall be under no duty or
obligation to review any investment to be acquired, held or disposed of pursuant
to such directions nor to make any recommendations with respect to the
disposition or retention of any such investment or the exercise or nonexercise
of the powers in this Article 3. The Trustee shall have no liability or
responsibility for acting or not acting pursuant to the direction of, or failing
to act in the absence of any direction from, the investment manager, unless the
Trustee knows that by such action or failure to act it would be itself
committing or participating in a breach of fiduciary duty by the investment
manager.
(c) Securities Transactions. Upon receipt of written
notification from the investment manager that it has issued an order for the
purchase or sale of securities directly to a broker, the Trustee shall execute
and deliver any appropriate trading authorizations that may be requested, and
the Trustee shall be authorized to, and shall, pay for securities purchased
against receipt thereof and deliver securities sold against payment therefor, as
the case may be.
(d) Resignation or Removal. If an investment manager should
resign or be removed by the Employer, then the Trustee shall, pursuant to this
Article 3, manage the investment of the Plan Assets which had been managed by
such investment manager unless and
- 7 -
until he shall be notified of the appointment of another investment manager with
respect thereto as provided in this Section.
(e) Trustee's Records and Accounts. The accounts, books and
records of the Trustee shall reflect the segregation, pursuant to the provisions
of this Section, of any portion or portions of the Plan Assets in a separate
investment account or accounts.
ARTICLE 4
COMPENSATION, EXPENSES, AND ACCOUNTS
4.1 Compensation. The Trustee shall be entitled to such
compensation for services rendered by it as may be provided for in its schedule
of fees as in effect from time to time; provided however, any Trustee who is not
a bank or trust company shall not be entitled to any compensation from the Plan
Assets for services rendered by him as Trustee.
4.2 Trust Expenses. The expenses incurred by the Trustee in the
performance of its duties, including fees for legal services, and such
compensation to the Trustee as may be provided for pursuant to Section 4.1, and
all other proper charges and disbursements of the Trustee, shall be paid by the
Employer; provided however, any such expense not so paid by the Employer shall
be paid from the Plan Assets. The Employer shall be primarily liable for the
payment of the Trustee's fees and expenses, and the Employer hereby agrees to
pay any unpaid fees, taxes and expenses which the Plan Assets are not sufficient
to satisfy.
4.3 Tax Assessments. The Trustee shall notify the Employer with
regard to any tax assessments which it receives on any income or property
maintained in the Plan Assets and, unless notified to the contrary by the
Employer at least ten (10) days before the tax is due, shall pay any such
assessments from the Plan Assets. If the Employer notifies the Trustee within
said period that in its opinion or in the opinion of counsel such assessments
are invalid or that they should be contested, then the Trustee shall take
whatever action is indicated in the notice received from the Employer or
counsel, including contesting the assessment or litigating any claims.
4.4 Accounts, Records, Reports and Valuations.
(a) The Trustee shall keep accurate and detailed accounts of
all investments, receipts, disbursements and other transactions under the Trust
and all such accounts and other records relating thereto shall be open to
inspection and audit at all reasonable times by any person designated by the
Employer. Within ninety (90) days following the close of the Trust Year, the
Trustee shall make a valuation of the Plan Assets (other than any insurance
contracts) at fair market value as of the last day of such Trust Year and shall
file with the Employer a written copy of such valuation and a written account
setting forth all investments, receipts, disbursements and other transactions
effected by it under the Trust during such Trust Year. To the extent permitted
by law, but subject to any express provision of applicable law as may be in
effect from time to time to the contrary, no person other than the Employer may
require an accounting or bring any action against the Trustee with respect to
the Plan Assets or its actions as Trustee.
(b) Notwithstanding any other provision of this Trust
Agreement, the Trustee shall have the right to have a judicial settlement of its
accounts. In any proceeding for a judicial settlement of the Trustee's accounts,
or for instructions in connection with the Plan Assets, the only necessary party
thereto in addition to the Trustee shall be the Employer. If the Trustee so
elects, it may bring any other person or persons as a party or parties
defendant.
(c) All accounts and records maintained by the Trustee with
respect to the Plan
- 8 -
Assets shall be preserved for such period as may be required under any
applicable law. Upon the expiration of any such required retention period, the
Trustee shall have the right to destroy such records and accounts after first
notifying the Employer of its intention and transferring to the Employer any
such accounts and records requested by it. The Trustee shall have the right to
preserve all accounts and records in original form, or on microfilm, magnetic
tape, or any other similar process.
(d) The Trustee shall make such periodic reports to the
Employer as the Trustee shall deem necessary and proper and such other reports
as the Employer may reasonably request, including a valuation of the Plan Assets
at fair market value as of any date requested by the Employer.
ARTICLE 5
ACTIONS OF THE TRUSTEE
5.1 General Fiduciary Duties of the Trustee. The Trustee
acknowledges that it assumes the fiduciary duties established by this Trust
Agreement and imposed by law. Subject to the provisions of the Plan which are
consistent with ERISA and which permit Plan Assets to be returned to the
Employer, the Trustee shall discharge its duties with respect to the Plan solely
in the interest of the Participants and beneficiaries and for the exclusive
purpose of providing benefits to such Participants and their beneficiaries and
defraying reasonable expenses of administering the Plan, 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 a like character and with like aims, and by
diversifying the investments of the Plan so as to minimize the risk of large
losses, unless under the circumstances it is clearly prudent not to do so, all
in accordance with the provisions of this Trust Agreement insofar as they are
consistent with the provisions of ERISA, as this Trust Agreement and ERISA may
be from time to time amended. No Trustee shall be required to investigate, or be
responsible for, any acts or omissions occurring before it became, or after it
ceased to be, a fiduciary with respect to the Plan.
5.2 Extent of Responsibilities. The Trustee shall have only such
responsibilities as are stated in this Trust Agreement; provided however, to the
extent that the Trustee is the payor of benefits under the Plan, the plan
administrator (as defined in section 414(g) of the Code) of the Plan may,
subject to providing the Trustee with such information as the Secretary of the
Treasury may require, direct the Trustee to withhold applicable federal income
taxes under and in accordance with section 3405 of the Code. In addition, it may
be specified in Item 37 of the Adoption Agreement that the Trustee shall have
the ministerial function of maintaining Participants' accounts in accordance
with information, interpretations, and directions from the Administrator. The
Trustee shall have no discretionary responsibility for the administration of the
provisions of the Plan.
5.3 Discharge of Trustees' Duties.
(a) Trustees to Act by Majority. The Employer, from time to
time, may appoint one or more additional Trustees and, if there is more than one
Trustee, may decrease (but not below one) the number of Trustees. At any time
when there is more than one Trustee, the decision of the majority of the
Trustees then serving shall be the decision of the Trustees, and the joint
action of the majority of the Trustees then serving shall be the action of the
Trustees; provided however, that the signature of any one Trustee on any
application for a life insurance policy on the life of a Participant shall be
sufficient evidence for any insurance company that such application is in
accordance with the terms of the Plan; and provided further, that the signature
of any one Trustee shall be sufficient to transfer securities. Unless he is the
sole Trustee, no Trustee shall take any action, as Trustee, on matters
pertaining to the payment of his
- 9 -
own benefit under the Plan, and any such action shall be taken by the majority
of the remaining Trustees.
(b) Court Approval. At no time during the administration of
this Trust shall the Trustees be required to obtain any court approval of any
act required of them in connection with the performance of their duties or in
the performance of any act required of them, in the administration of their
duties as Trustees. The Trustees shall have full authority to exercise their
judgment in all matters and at all times without court approval of such
decisions; provided, however, that if any application to or proceeding or action
in the courts is made, only the Employer and the Trustees shall be necessary
parties, and no Participant in the Plan or other person having an interest in
the Plan shall be entitled to any notice or service of process. Any judgment
entered in such proceeding or action shall be conclusive upon all persons
claiming an interest under the Plan.
(c) Court Actions. The Trustees shall not be required to
institute any legal action for the protection of the Trust or in carrying out
the duties as the Trustees hereunder unless they shall first be indemnified by
the Employer for any and all expenses in connection therewith.
5.4 Rights of Reliance by the Trustee.
(a) Counsel. The Trustee may consult with legal counsel (who
may be of counsel to the Employer) concerning any question which may arise with
reference to its duties under this Trust Agreement and the opinion of such
counsel shall be full and complete protection to the Trustee in respect to any
action taken or suffered by the Trustee in good faith and in accordance with the
opinion of such counsel.
(b) Directions, Statements, and Certificates.
(1) The Employer shall furnish the Trustee from time
to time with a written list of those persons authorized to give directions,
statements, or certificates to the Trustee, and the Trustee shall be entitled to
rely upon such list and shall not be charged with notice of any change with
respect thereto until the Employer shall have furnished the Trustee with a new
written list evidencing such change. The Trustee shall be entitled to rely upon
any direction, statement, certificate, or other communication believed by it to
be genuine and to be from the Employer or any such person to the full extent
permitted by law.
(2) Any action required by any provision of this
Trust Agreement to be taken by the Board of Directors, if any, of the Employer
shall be evidenced by a resolution of the Board of Directors certified to the
Trustee by the Secretary of the Employer, and the Trustee shall be fully
protected in relying upon any resolution so certified to it to the full extent
permitted by law.
(c) Plan Qualification. The Employer shall furnish the Trustee
with copies of all determination letters from the Internal Revenue Service
relating to the qualification of the Plan under section 401 of the Code, and the
Trustee may rely upon such letters.
5.5 Indemnification of the Trustee. Anything in the Plan to the
contrary notwithstanding, and whether or not the Trustee has resigned or been
removed, except to the extent that it is judicially determined that the Trustee
has acted with gross neglect or willful misconduct, the Employer shall indemnify
the Trustee against any liabilities, losses, damages, and expenses, including
attorney's, accountant's, and other advisors' fees, incurred as a result of:
(a) any action of the Trustee taken in good faith in
accordance with any information, instruction, direction, or opinion given to the
Trustee by the Employer, its Board of Directors (if any), the Administrator, or
legal counsel of the Employer, or any person or entity appointed by any of them
and authorized to give any information, instruction, direction, or opinion to
the Trustee;
- 10 -
(b) the failure of the Employer, its Board of Directors (if
any), the Administrator, or any person or entity appointed by any of them to
make timely disclosure to the Trustee of information which any of them or any
appointee knows or should know if it acted in a reasonably prudent manner; or
(c) any breach of fiduciary duty by the Employer, its Board of
Directors (if any), the Administrator, or any person or entity appointed by any
of them, other than such a breach which is caused by any failure of the Trustee
to perform its duties under this Trust Agreement.
5.6 Bond. The Trustee shall not be required to give any bond or
any other security for the faithful performance of its duties under this Trust
Agreement, except such as may be required by a law which prohibits the waiver
thereof.
ARTICLE 6
RESIGNATION, REMOVAL AND SUCCESSION OF THE TRUSTEE
6.1 Resignation and Removal. A Trustee may be removed by the
Employer (by action of its Board of Directors if it is a corporation) at any
time by notice in writing to the Trustee. The Trustee may resign at any time
upon sixty (60) days' notice in writing to the Employer. Within thirty (30) days
after such removal or resignation, the Trustee shall file with the Employer a
written report setting forth all investments, receipts and disbursements and
other transactions effected by the Trustee since the end of the preceding Trust
Year. Such report shall contain an exact description of all securities and
property purchased and sold, the cost or net proceeds of sale (excluding accrued
interest paid or received) and shall further indicate such assets held to such
date of removal or resignation, together with the cost of each item thereof, as
carried on the books of the Trustee.
6.2 Successor. Upon removal or resignation of the Trustee, but in
no event more than sixty (60) days thereafter, the Employer (by action of its
Board of Directors if it is a corporation) shall, except to the extent it
determines to reduce the number of Trustees pursuant to Section 5.3(a),
designate and procure acceptance by, a successor trustee to act hereunder with
the same powers and duties as those conferred upon the removed or resigning
Trustee. Upon such designation, and upon the written acceptance of such
successor, the resigning or removed Trustee shall assign, transfer and pay over
to such successor the assets then constituting the Plan Assets; provided,
however, that the resigning or removed Trustee is authorized to reserve such sum
of money (and for that purpose to liquidate such property as may be necessary to
produce such sum) as may seem advisable for payment of all proper charges
against the Plan Assets including proper and reasonable expenses in connection
with such resignation or removal, and any balance of such reserve remaining
after the payment of such charges shall be paid over to the successor. Upon the
payment and delivery to any successor of all the Plan Assets, and after full
settlement of accounts, the responsibilities of the resigning or removed Trustee
shall terminate.
ARTICLE 7
AMENDMENT AND TERMINATION
7.1 Amendment.
(a) By the Employer and the Trustee. This Trust Agreement may
be amended by the Employer and the Trustee by an instrument in writing; provided
however, if this Trust Agreement is so amended, then the Employer will no longer
participate in a prototype plan but will be considered to have an individually
designed plan unless:
- 11 -
(1) the amendment does not conflict with any other
provision of the Plan and does not cause the Plan to fail to qualify under
section 401(a) of the Code; and
(2) with respect to any Plan of which Adoption
Agreement #003 or #004 is a part, the amendment involves any matter other than
the specification of the names of the Plan, Employer, Trustee, custodian,
Administrator or other fiduciaries, the Trust Year, or the name of any pooled
trust in which the Trust will participate.
(b) Conditions. Any amendment may be made effective
retroactively if necessary to bring the Trust into conformity with governmental
regulations which must be complied with in order to make the Plan or Trust
eligible for tax benefits. No amendment shall operate to deprive any Participant
or beneficiary of any vested rights or benefits accrued to him prior to such
amendment, nor shall any amendment or modification cause or authorize any part
of the Plan Assets to revert to or be refunded to the Employer, except as
otherwise provided in the Plan and consistent with ERISA.
7.2 Termination.
(a) This Trust Agreement and the Trust created hereby may be
terminated at any time by the Employer and upon such termination, the Plan
Assets shall be paid out by the Trustee as and when directed by the
Administrator pursuant to Section 2.2.
(b) Upon such termination of the Trust in whole or in part,
the Trustee shall have a right to have its accounts settled as provided in
Section 4.4.
(c) When the Plan Assets shall have been applied or
distributed as provided herein, then the Trustee shall be released and
discharged from all further accountability or liability respecting the Plan
Assets (or that part of the Plan Assets so applied or distributed if the Trust
is terminated only in part) or any part thereof so applied or distributed and
shall not be responsible in any way or to any person for the further disposition
of the Plan Assets (or that part of the Plan Assets so applied or distributed,
if the Trust is terminated only in part) or any part thereof so applied or
distributed.
ARTICLE 8
MISCELLANEOUS
8.1 Headings. The headings are for reference only. In the event of
a conflict between a heading and the content of a Section, the content of the
Section shall control.
8.2 Gender and Number. Except when otherwise indicated by the
context, the genders of pronouns and the singular and plural numbers of terms
shall be interchangeable.
8.3 Governing Law. This Trust shall be deemed to be an Ohio trust
and shall in all respects be construed and regulated by the laws of the State of
Ohio, except where such laws are preempted by the Code or by ERISA.
8.4 Successors. This Trust Agreement shall be binding upon, and
the powers herein granted to the Employer and the Trustee, respectively, shall
be exercisable by the respective successors and assigns of the Employer and the
Trustee. Any corporation which shall, by merger, consolidation, purchase or
otherwise, succeed to substantially all the trust business of the Trustee, upon
such succession and without any appointment or other action by any person, shall
be and become successor trustee hereunder.
- 12 -
8.5 Participant's Interest. Except as otherwise provided in the
Plan or this Trust Agreement, no Participant or beneficiary under the Plan shall
have any interest in or right to the Plan Assets and, to the full extent of all
applicable laws, the assets of this Trust shall not be subject to any form of
attachment, garnishment, sequestration, or other actions afforded creditors of
any Participant or beneficiary.
8.6 Severability. In case any provision of this Trust Agreement
shall be held illegal or invalid for any reason, such illegality or invalidity
shall not affect the remaining provisions of this Trust Agreement, and this
Trust Agreement shall be construed and interpreted as if such illegal or invalid
provision had never been a part of it.
- 13 -
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.L.L.
BASIC PROTOTYPE PLAN DOCUMENT
▇▇▇▇▇▇▇, MUETHING & ▇▇▇▇▇▇▇, P.L.L.
BASIC PROTOTYPE PLAN DOCUMENT
TABLE OF CONTENTS
ARTICLES
1. Definitions
2. Eligibility and Participation
3. Contributions and Their Allocation
4. Limitations on Annual Additions
5. Investment of Accounts
6. Vesting and Forfeitures
7. Withdrawals and Distributions
8. Form of Payment to Participants
9. Death Benefits
10. Payment Exceptions
11. Administration
12. Amendment and Termination
13. Miscellaneous
▇▇▇▇▇▇▇, MUETHING & ▇▇▇▇▇▇▇, P.L.L.
BASIC PROTOTYPE PLAN DOCUMENT
ARTICLE 1
DEFINITIONS
As used in the Plan and Adoption Agreement, the following terms, when
capitalized, shall have the following meanings, except when otherwise indicated
by the context:
1.1 ACCOUNT. "Account" means a Participant's allocable share of the Plan
Assets. A Participant's Account may include one or more of the following
subaccounts:
(a) Employer Contribution Account;
(b) Employer Matching Account (a subaccount of the Employer
Contribution Account applicable in the case of certain profit sharing plans with
Section 401(k) features);
(c) Nondeductible Voluntary Contribution Account;
(d) Section 401(k) Account (in the case of a profit sharing plan
with a Section 401(k) feature);
(e) Nonelective Contribution Account (a subaccount of the Section
401(k) Account applicable in the case of certain profit sharing plans with
Section 401(k) features);
(f) Deductible Voluntary Contribution Account (holding deductible
voluntary contributions which were permitted under prior law); and
(g) Rollover Account.
1.2 ACCOUNTING DATE. "Accounting Date" means the last day of each Plan Year
and such other date or dates as the Administrator may establish from time to
time; provided however, if such last day or any such other date falls on a
Saturday, Sunday or holiday, then the preceding business day shall be the
Accounting Date.
1.3 ACTUAL CONTRIBUTION PERCENTAGE.
(a) "Actual Contribution Percentage" for a group of Participants
for a Plan Year is the average of the ratios, calculated separately for each
such Employee in such group, of:
(1) the amount contributed to the Plan for such Plan Year
under Section 3.2 on behalf of each such Employee, plus the amount actually
contributed to the Employee's Nondeductible Voluntary Contribution Account under
Section 3.7 during the Plan Year, to
(2) the Employee's Compensation for such Plan Year.
(b) If the Plan satisfies the requirements of section 401(m),
401(a)(4) or 410(b) of the Code only if aggregated with one or more other plans,
or if one or more other plans satisfy such requirements only if aggregated with
this Plan, then such other plans shall be aggregated with this Plan for purposes
of computing the Actual Contribution Percentages and for determining whether the
nondiscrimination rules of Section 3.2(b) are satisfied. Any adjustments to the
Actual Contribution Percentage for Non-highly Compensated Employees for the
prior year will be made in accordance with Notice 98-1 and any superseding
guidance, unless the Employer has elected in the Adoption Agreement to use the
"Current Year Testing Method." Plans may be aggregated hereunder only if they
have the same plan year and testing method.
(c) For purposes of computing the separate ratio under (a) above
for any Highly Compensated Employee, all plans described in section 401(a) of
the Code or arrangements described in section 401(k) of the Code of the Employer
(and other employers taken into account under section 414 of the Code) in which
such Highly Compensated Employee is a participant, shall be treated as one such
plan or arrangement.
(d) Effective for Plan Years beginning after December 31, 1996,
the family aggregation rules previously in effect for this purpose no longer
apply.
1-3
1.4 ACTUAL DEFERRAL PERCENTAGE.
(a) "Actual Deferral Percentage" for a group of Participants for a
Plan Year is the average of the ratios, calculated separately for each such
Employee in such group, of:
(1) the amounts contributed on behalf of each such
Employee to the Plan for such Plan Year under Sections 3.1(a), (b) and (c) to
(2) the Employee's Compensation for such Plan Year.
(b) If the Plan satisfies the requirements of section 401(k),
401(a)(4) or 410(b) of the Code only if aggregated with one or more other plans,
or if one or more other plans satisfy such requirements only if aggregated with
this Plan, then such other plans shall be aggregated with this Plan for purposes
of computing the Actual Deferral Percentages and for determining whether the
nondiscrimination rules of Section 3.1(e) are satisfied. Any adjustments to the
Actual Deferral Percentage for Non-highly Compensated Employees for the prior
year will be made in accordance with Notice 98-1 and any superseding guidance,
unless the Employer has elected in the Adoption Agreement to use the "Current
Year Testing Method." Plans may be aggregated hereunder only if they have the
same plan year and testing method.
(c) For purposes of computing the separate ratio under (a) above
for any Highly Compensated Employee, all cash or deferred arrangements under
section 401(k) of the Code of the Employer (and other employers taken into
account under section 414 of the Code) in which such Highly Compensated Employee
is a participant, shall be treated as one cash or deferred arrangement under
section 401(k) of the Code. If such arrangements have different plan years, this
provision shall be applied by treating all such arrangements ending with or
within the same calendar year as a single arrangement.
(d) Effective for Plan Years beginning after December 31, 1996,
the family aggregation rules previously in effect for this purpose no longer
apply.
(e) If the Plan changes from the Current Year Testing Method to
the Prior Year Testing Method, as described in Section 3.1(e), in computing the
Actual Deferral Percentage, such contributions shall be disregarded as
determined pursuant to Internal Revenue Service pronouncements to avoid double
counting of the same contributions.
1.5 ADMINISTRATOR. "Administrator" means the individual, group of
individuals, or entity appointed as such by the Employer; provided that if none
is so appointed, then it means the first Employer designated in the Adoption
Agreement.
1.6 ADOPTION AGREEMENT. "Adoption Agreement" means the document in which
the Employer specifies the elective provisions of the Plan.
1.7 AFFILIATE. "Affiliate" means each of the following for such period of
time as is applicable under section 414 of the Code:
(a) a corporation which, together with the Employer, is a member
of a controlled group of corporations within the meaning of section 414(b) of
the Code (as modified by section 415(h) thereof for the purposes of Article 5)
and the applicable regulations thereunder;
(b) a trade or business (whether or not incorporated) with which
the Employer is under common control within the meaning of section 414(c) of the
Code (as modified by section 415(h) thereof for the purposes of Article 5) and
the applicable regulations thereunder;
(c) an organization which, together with the Employer, is a member
of an affiliated service group (as defined in section 414(m) of the Code); and
(d) any other entity required to be aggregated with the Employer
under section 414(o) of the Code.
1.8 BENEFICIARY. "Beneficiary" means the person or persons entitled to
receive the distributions, if any, payable under the Plan upon or after a
Participant's death, to such person, or persons as such Participant's
Beneficiary. Each Participant shall designate a Beneficiary by filing the proper
form with the Administrator. A Participant may designate one or more contingent
Beneficiaries to receive any distributions after the death of a prior
Beneficiary. A designation shall be effective upon said filing, provided that it
is so filed during such Participant's lifetime, and may be changed from time to
time by the Participant; provided however, if a Participant has at least one
Hour of Service or at least one hour of paid leave from the Employer (or any
other employer for whom service is treated as service for the Employer) on or
after August 23, 1984, then, effective
1-4
August 23, 1984 if he has waived the Preretirement Survivor Annuity or effective
as of the REA Effective Date if he has waived the Qualified Joint and Survivor
Annuity, his spouse must consent to any change of Beneficiary designation in
accordance with Section 9.1(e)(5) or Section 8.2(d)(4) with respect to any
distributions otherwise payable in such forms. If the Plan is a profit sharing
plan and if the Preretirement Survivor Annuity is otherwise inapplicable (under
Section 9.1(a) because the Participant has not elected a life annuity and the
Plan is not a transferee Plan requiring annuities with respect to the
Participant) to a Participant who has at least one Hour of Service or at least
one hour of paid leave from the Employer (or any other employer for whom service
is treated as service for the Employer) on or after August 23, 1984 and is
survived by a Surviving Spouse, then such spouse shall be his Beneficiary unless
the designation of another Beneficiary is consented to by such spouse in a
written consent satisfying the requirements of Section 9.1(e)(5). If there is no
designated Beneficiary to receive any amount that becomes payable to a
Beneficiary, then the Participant's Beneficiary shall be the Participant's
Surviving Spouse or, if none, the legal representative of the last surviving of
the Participant and any properly designated Beneficiaries.
1.9 BREAK IN SERVICE.
(a) Hour-Counting Method. "Break in Service" means, if the
hour-counting method is elected in the Adoption Agreement:
(1) before the REA Effective Date, one or more
consecutive One-Year Breaks during one or more days of the first of which an
individual is not employed by the Employer; provided however, an Employee of the
Employer shall not be deemed to have incurred a Break in Service if he is on an
Employer approved leave of absence, not to exceed one year, provided he returns
to the employment of the Employer on or before the end of such leave of absence;
and
(2) on and after the REA Effective Date, five or more
consecutive One-Year Breaks during one or more days of the first of which an
individual is not employed by the Employer; provided however, if as of the day
before the REA Effective Date, service was not required to be taken into account
under the provisions of section 410(a) or 411(a) of the Code, then this
paragraph (2) shall not cause such service to be taken into account.
(b) Elapsed Time Method. "Break in Service" means, if the elapsed
time method is elected in the Adoption Agreement:
(1) before the REA Effective Date, a Severance of at
least 12 consecutive months; and
(2) on and after the REA Effective Date, a Severance of
at least 60 consecutive months; provided however, if as of the day before the
REA Effective Date, service was not required to be taken into account under the
provisions of section 410(a) or 411(a) of the Code, then this paragraph (2)
shall not cause such service to be taken into account. In the case of an
individual who incurs an absence from work, beginning on or after the REA
Effective Date, for maternity or paternity reasons, as defined in Section
1.34(c), a Break in Service shall not begin earlier than one year after it would
otherwise begin.
1.10 CODE. "Code" means the Internal Revenue Code of 1986, as amended at the
particular time applicable. A reference to a section of the Code shall include
said section and any comparable section or sections of any future legislation
that amends, supplements or supersedes said section.
1.11 COMPENSATION.
(a) General. "Compensation" shall have the meaning selected in the
Adoption Agreement, excluding such items as may be selected in the Adoption
Agreement. Compensation for any part of a Plan Year in which an Employee is not
a Participant shall be taken into account only if so provided in the Adoption
Agreement. In the case of a Participant whose employment classification changes
so that either he is no longer an Eligible Employee or he becomes an Eligible
Employee, Compensation for all purposes of the Plan shall not be taken into
account for any period that he is not an Eligible Employee. Compensation shall
further be construed in accordance with other selections in the Adoption
Agreement.
(b) Base Definitions. The following base definitions of
Compensation referred to in the Adoption Agreement shall have the following
meanings:
(1) "W-2, Total Compensation Box" means the total wages
as defined in section 3401 of the Code and all other payments of compensation by
the Employer (in the course of its trade or business) for which the Employer is
required to furnish the Employee a written statement under sections 6041(d),
6051(a)(3) and 6052 of the Code but excluding amounts paid or reimbursed for
moving expenses to the extent it is reasonable to believe (at the time of
payment) that the amounts are deductible by the Employee under section
1-5
217 of the Code; 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)(2) of the Code). In addition, effective for Plan Years and
Limitation Years (as defined in Section 4.1(g)) beginning after December 31,
1997, this definition shall include any elective deferrals (as defined in
section 402(g)(3) of the Code) and any amount which is contributed or deferred
at the election of the Employee and which is not includible in the Employee's
gross income by reason of section 125 or 457 of the Code. In addition, for Plan
Years and Limitation Years (as defined in Section 4.1(g)) beginning after
December 31, 2000 (or such earlier date as the Plan may have operated in such
manner), this definition shall include elective amounts that are not included in
gross income by reason of section 132(f)(4) of the Code.
(2) "Earnings Subject To Federal Income Tax Withholding"
means the total wages as defined in section 3401(a) of the Code (for purposes of
income tax withholding at the source) from the Employer 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)(2) of the Code). In
addition, effective for Plan Years and Limitation Years (as defined in Section
4.1(g)) beginning after December 31, 1997, this definition shall include any
elective deferrals (as defined in section 402(g)(3) of the Code) and any amount
which is contributed or deferred at the election of the Employee and which is
not includible in the Employee's gross income by reason of section 125 or 457 of
the Code. In addition, for Plan Years and Limitation Years (as defined in
Section 4.1(g)) beginning after December 31, 2000 (or such earlier date as the
Plan may have operated in such manner), this definition shall include elective
amounts that are not included in gross income by reason of section 132(f)(4) of
the Code.
(3) "General Section 415 Definition" means wages,
salaries, other amounts received for personal services actually rendered
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits and reimbursements or other expense
allowances under a nonaccountable plan), and earned income (within the meaning
of section 401(c)(2) of the Code) from the Employer and all Affiliates. The term
includes income from sources outside the United States (as defined in section
911(b) of the Code) and is determined without regard to the exclusions from
gross income in sections 931 and 933 of the Code. The term excludes the
following:
(A) Employer contributions to a plan of deferred
compensation which are not includible in the Employee's gross income for the
taxable year in which contributed, or Employer contributions under a simplified
employee pension plan to the extent such contributions are deductible by the
Employee, or any distributions from a plan of deferred compensation;
(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 qualified stock option; and
(D) other amounts which receive special tax
benefits, or contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract described in
section 403(b) of the Code (whether or not the amounts are actually excludable
from the gross income of the Employee).
In addition, effective for Plan Years and Limitation Years (as defined in
Section 4.1(g)) beginning after December 31, 1997, this definition shall include
any elective deferrals (as defined in section 402(g)(3) of the Code) and any
amount which is contributed or deferred at the election of the Employee and
which is not includible in the Employee's gross income by reason of section 125
or 457 of the Code. In addition, for Plan Years and Limitation Years (as defined
in Section 4.1(g)) beginning after December 31, 2000 (or such earlier date as
the Plan may have operated in such manner), this definition shall include
elective amounts that are not included in gross income by reason of section
132(f)(4) of the Code.
(4) "FICA Definition" means the total wages as defined in
section 3121(a) of the Code, for purposes of calculating social security taxes,
from the Employer but determined without regard to the wage base limitation in
section 3121(a)(1) of the Code, the limitations on the exclusions from wages in
section 3121(a)(5)(C) and (D) of the Code for elective contributions and
payments by reason of salary reduction agreements, the special rules in section
3121(v) of the Code (applicable to certain elective contributions and
nonqualified deferred compensation), any rules that limit covered employment
based on the type or location of an employee's employer, and any rules that
limit the remuneration included in wages based on familial relationship or based
on the nature or location of the employment or the services performed (such as
the exceptions to the definition of employment in section 3121(b)(1) through
(20) of the Code). In addition, effective for Plan Years and Limitation Years
(as defined in Section 4.1(g) beginning after December 31,
1-6
1997, this definition shall include any elective deferrals (as defined in
section 402(g)(3) of the Code) and any amount which is contributed or deferred
at the election of the Employee and which is not includible in the Employee's
gross income by reason of section 125 or 457 of the Code. In addition, for Plan
Years and Limitation Years (as defined in Section 4.1(g)) beginning after
December 31, 2000 (or such earlier date as the Plan may have operated in such
manner), this definition shall include elective amounts that are not included in
gross income by reason of section 132(f)(4) of the Code.
(c) Safe Harbor Exclusion. The Safe Harbor Exclusion, if elected
in the Adoption Agreement, will cause to be excluded from the definition of
Compensation, reimbursements or other expense allowances, fringe benefits (cash
and noncash), moving expenses, deferred compensation and welfare benefits.
(d) Exclusion of Elective Contributions. If elected in the
Adoption Agreement, the definition of Compensation shall exclude amounts that
otherwise would have been included within the definition that were contributed
pursuant to a salary reduction agreement and which were not includible in the
Employee's gross income by reason of section 402(e)(3) of the Code (relating to
a salary reduction election under section 401(k) of the Code), section 125 of
the Code (relating to the cafeteria or flexible benefit plans), section
132(f)(4) (effective for Plan Years beginning on or after January 1, 2001, or
such earlier date as the Plan may have been operated in such manner) (relating
to a qualified transportation arrangement), section 402(h) of the Code (relating
to SEPs), section 403(b) of the Code (relating to certain tax deferred
annuities), section 457(b) of the Code (relating to deferred compensation plans
of state and local governments and tax-exempt organizations) or section
414(h)(2) of the Code (relating to certain picked-up employee contributions).
(e) Self-Employed Individuals. Notwithstanding any other provision
of the Plan, "Compensation" means with respect to a Self-Employed Individual,
his Earned Income. Unless the Exclusion of Elective Contributions is elected in
the Adoption Agreement, a Self-Employed Individual's Compensation shall include
any elective contributions described in Section 1.11(d). In the event any other
exclusions from Compensation are elected in the Adoption Agreement, the
Administrator shall limit the amount of a Self-Employed Individual's Earned
Income taken into account under the Plan to the same proportion of Compensation
(before the exclusions) that is taken into account (after giving effect to the
exclusions) for other Employees.
(f) ADP/ACP Testing. Solely for purposes of determining the Actual
Deferral Percentage and/or the Actual Contribution Percentage, the
Administrator, in lieu of the definition of "Compensation" otherwise applicable,
may use any definition that satisfies section 414(s) of the Code and may either
exclude, or include, Compensation paid to an Eligible Employee prior to the time
he satisfies the Plan's eligibility criterial applicable to the Section 401(k)
feature or after the time he is no longer an Eligible Employee.
(g) Section 401(a)(17) Limitation. For any Plan Year, only the
first $150,000 (as adjusted by the Secretary of Treasury in accordance with
section 401(a)(17) of the Code) of a Participant's Compensation shall be taken
into account. Effective for Plan Years beginning after December 31, 1996, the
family aggregation rules previously in effect for this purpose no longer apply.
If a Plan Year consists of less than 12 months, then the adjusted $150,000
limitation for such Plan Year shall be multiplied by the fraction, the numerator
of which is the number of months in the short Plan Year and the denominator of
which is 12.
1.12 DEDUCTIBLE VOLUNTARY CONTRIBUTION ACCOUNT. "Deductible Voluntary
Contribution Account" means a subaccount of each Participant's Account which
reflects the Participant's deductible voluntary contributions, as adjusted in
accordance with Article 5.
1.13 DETERMINATION DATE (FOR TOP-HEAVY TEST). "Determination Date" means,
for any Plan Year subsequent to the first Plan Year, the last day of the
preceding Plan Year, and, for the first Plan Year of the Plan, the last day of
that Plan Year.
1.14 DETERMINATION PERIOD (FOR TOP-HEAVY TEST). "Determination Period"
means, with respect to any Plan Year, the five Plan Years ending on the
Determination Date with respect to such Plan Year.
1.15 DISABILITY. "Disability" shall have the meaning selected in the
Adoption Agreement.
1.16 EARNED INCOME. "Earned Income" means, with respect to a Self-Employed
Individual, the net earnings from self-employment in the trade or business with
respect to which the Plan is established, for which personal services of the
individual are a material income-producing factor. Net earnings will be
determined without regard to items not included in gross income and the
deductions allocable to such items. Net earnings are reduced by contributions by
the Employer to a qualified plan to the extent deductible under section 404 of
the Code. Net earnings shall be determined with regard to the deduction allowed
to the Employer by section 164(f) of the Code for taxable years beginning after
1989.
1.17 EFFECTIVE DATE. "Effective Date" means the date identified as such in
the Adoption Agreement. If the
1-7
Plan has not been amended previously to comply with the Uruguay Round Agreements
Act, the Uniformed Services Employment and Reemployment Rights Act of 1994, the
Small Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997,
and/or the Internal Revenue Service Restructuring and Reform Act of 1998
(hereinafter "GUST"), then such earlier effective dates as are specified in the
Plan for particular provisions shall be applicable.
1.18 ELIGIBLE EMPLOYEE.
(a) "Eligible Employee" means, except as provided below, an
Employee of the Employer meeting the criteria of the Eligible Employee Item of
the Adoption Agreement.
(b) An Employee shall not be an Eligible Employee if he is within
a unit of Employees covered by an agreement determined by the Secretary of Labor
to be a collective bargaining agreement between employee representatives and one
or more Employers if the retirement benefits provided by the Plan were the
subject of good faith bargaining between such employee representatives and such
Employer or Employers and if such agreement does not provide for the inclusion
in the Plan of Employees in such unit or the Adoption Agreement does not
specifically state that such Employees shall be Eligible Employees. In
determining whether there is a collective bargaining agreement between employee
representatives and one or more Employers, the term "employee representatives"
shall not include any organization more than one-half of the members of which
are employees who are owners, officers, or executives of the employer.
(c) Any leased employee shall be treated as an Eligible Employee
if the Employer is the recipient employer but only if the Adoption Agreement
specifically states that leased employees are to be Eligible Employees; however,
contributions or benefits provided by the leasing organization which are
attributable to services performed for the recipient employer shall be treated
as provided by the recipient employer. The preceding sentence shall not apply
(so that leased employees may not be covered by the Plan) to any leased employee
with respect to services performed after December 31, 1986 if leased employees
do not constitute more than 20 percent of the recipient's nonhighly compensated
workforce and if such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least ten
percent of Section 415 Compensation, (2) immediate participation, and (3) full
and immediate vesting. For purposes of this subsection, the term "leased
employee" means any person (other than an employee of the recipient) who
pursuant to an agreement between the recipient and any other person ("leasing
organization") has performed services for the recipient (or for the recipient
and related persons determined in accordance with section 414(n)(6) of the Code)
on a substantially full time basis for a period of at least one year and,
effective for Plan Years beginning after December 31, 1996, such services are
performed under primary direction or control of the recipient employer.
(d) An Employee shall not be an Eligible Employee if he is a
nonresident alien who does not receive any earned income from the Employer which
constitutes United States source income unless the Adoption Agreement
specifically states that such Employees shall be Eligible Employees.
1.19 EMPLOYEE. "Employee" means an individual who performs services for the
Employer and who is considered by the Employer in its sole and absolute
discretion to be an Employee for purposes of the Plan. An individual who
performs services for the Employer as an independent contractor, leased
employee, employee of a temporary agency or in any other capacity not considered
by the Employer in its sole and absolute discretion to result in classification
as an Employee for purposes of the Plan shall not be considered an Employee. A
determination that an individual is an employee of the Employer for other
purposes such as employment tax purposes, shall have no bearing whatsoever on
the determination of whether the individual is an Employee under the Plan if the
Employer does not consider the individual to be its Employee for purposes of the
Plan. If the Employer is not incorporated, any Self-Employed Individual shall
also be considered an Employee.
1.20 EMPLOYER. "Employer" means the person or entity first designated as
such in the Adoption Agreement and any of the following which are further
designated in the Adoption Agreement, and the successors and assigns of any of
them:
(a) any other person or entity which, together with the Employer
first designated, constitute a controlled group of corporations within the
meaning of section 414(b) of the Code or a group of trade or businesses under
common control within the meaning of section 414(c) of the Code; or
(b) an organization which, together with the Employer first
designated, is a member of an affiliated service group (as defined in section
414(m) of the Code), or any other entity required to be aggregated with the
Employer first designated under section 414(o) of the Code.
1.21 EMPLOYER CONTRIBUTION ACCOUNT. "Employer Contribution Account" means a
subaccount of each
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Participant's Account which reflects the Employer's contributions under Sections
3.2 and 3.3 of the Plan and any forfeitures allocated thereto as adjusted in
accordance with Article 5. An Employer Contribution Account may include a
subaccount, the Employer Matching Account.
1.22 EMPLOYER MATCHING ACCOUNT. "Employer Matching Account" means a
subaccount of each Participant's Employer Contribution Account which reflects
the Employer's contributions under Section 3.2 of the Plan and any forfeitures
allocated thereto, as adjusted in accordance with Article 5.
1.23 EMPLOYMENT COMMENCEMENT DATE. "Employment Commencement Date" means,
with respect to an Employee, the first day for which he is paid or entitled to
be paid for the performance of duties.
1.24 ERISA. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, at the particular time applicable. A reference to a section of
ERISA shall include said section and any comparable section or sections of any
future legislation that amends, supplements or supersedes said section.
1.25 FIVE-PERCENT OWNER. "Five-Percent Owner" means:
(a) if the Employer is a corporation, any person who owns (or is
considered as owning within the meaning of sections 318 and 416 of the Code)
more than 5 percent of the outstanding stock of the Employer or stock possessing
more than 5 percent of the total combined voting power of all stock of the
Employer; or
(b) if the Employer is not a corporation, any person who owns more
than 5 percent of the capital or profits interest in the Employer.
1.26 HIGHLY COMPENSATED EMPLOYEE.
(a) General. "Highly Compensated Employee," with respect to a Plan
Year beginning after December 31, 1996, means, as determined under section
414(q) of the Code and the Treasury Regulations thereunder, an individual who at
any time during the Plan Year is an Eligible Employee, and who:
(1) during the Plan Year or the preceding twelve month
period, was at any time a Five-Percent Owner; or
(2) received Section 415 Compensation from the Employer
in excess of $80,000 (as adjusted pursuant to section 414(q)(1) of the Code)
during the twelve month period preceding the Plan Year, and, if the Employer so
elects was in the group consisting of the top 20 percent of Employees when
ranked on the basis of Section 415 Compensation paid during such preceding
twelve month period.
(b) Operating Rules. The determination of Highly Compensated
Employees shall be made in accordance with the following:
(1) For purposes of determining the number of Employees
under (a)(2), the Employees described in section 414(q)(5) of the Code shall be
disregarded.
(2) The Employer shall be treated as including any other
entities required to be aggregated under section 414 of the Code.
(3) A highly compensated former employee is based on the
rules applicable to determining highly compensated employee status as in effect
for that determination year, in accordance with section 1.414(q)-1T, A-4 of the
temporary Income Tax Regulations and Notice 97-45.
(4) In determining whether an Employee is a High ly
Compensated Employee for years beginning in 1997, the amendments to section
414(q) stated above are treated as having been in effect for years beginning in
1996.
(c) Alternative Determinations. In lieu of the foregoing, as
provided in an Adoption Agreement, the Administrator may use a "calendar year"
election or "top-paid group" election to identify the Highly Compensated
Employees.
1.27 HOUR OF SERVICE. "Hour of Service" means each of the following,
determined (if the hour-counting method is elected in the Adoption Agreement for
eligibility and/or vesting purposes or if a minimum Hours of Service requirement
is elected in an Adoption Agreement for purposes of sharing in contributions) on
the basis elected in the Adoption Agreement:
(a) each hour for which an Employee is paid, or entitled to
payment, for the performance of duties,
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which hours shall be credited to such individual for the computation period or
periods in which the duties are performed;
(b) each hour for which an Employee is paid, or entitled to
payment, on account of a period of time during which no work is performed
(irrespective of whether his employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military duty or leave of absence, but excluding any payments which solely
reimburse him for medical or medically related expenses and excluding any
payments made or due under a plan maintained solely for the purposes of
complying with applicable worker's compensation or unemployment compensation or
disability insurance laws; provided however, no more than 501 Hours of Service
shall be credited under this paragraph for any single continuous period (whether
or not such period occurs in a single computation period); and provided further
that Hours of Service under this paragraph shall be calculated and credited
pursuant to section 2530.200b-2 of the Department of Labor Regulations which are
incorporated herein by this reference;
(c) each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to with respect to an Employee; provided
however, that the same Hours of Service shall not be credited both under
subsection (a) or subsection (b), as the case may be, and under this subsection
(c); and provided further, that Hours of Service for back pay awarded or agreed
to with respect to periods described in subsection (b) shall be subject to the
limitations set forth therein and shall be calculated pursuant to the
regulations referred to therein; and provided further, that these Hours of
Service shall be credited to such individual for the computation period or
periods to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made; and
(d) each hour for which an Employee would have received credit
during Military Service if his employment status immediately prior thereto had
continued.
(e) For purposes of determining service under (a), (b) and (c)
above, service (including service as a Self- Employed Individual) for the
following shall be treated as if it were service for the Employer:
(1) each Affiliate;
(2) each predecessor employer within the meaning of, and
to the extent required under, section 414(a) of the Code; and
(3) each other employer identified in the Adoption
Agreement for service crediting purposes. In the case of a standardized Plan,
any past service credited must comply with the five-year safe harbor in Treasury
Regulations section 1.401(a)(4)-5(a)(3).
1.28 KEY EMPLOYEE. "Key Employee," with respect to any Plan Year, means, as
determined under section 416(i) of the Code and the regulations thereunder, any
person (including a deceased person) who, at any time during the Determination
Period with respect to such Plan Year, is:
(a) an officer of the Employer (or any other employer taken into
account under section 414 of the Code) who:
(1) has Section 415 Compensation greater than 50 percent
of the dollar limitation in effect under section 415(b)(1)(A) of the Code for
any such Plan Year, and
(2) is taken into account under section 416(i) of the
Code;
(b) one of the 10 Employees who:
(1) owns (or is considered as owning within the meaning
of sections 318 and 416(i) of the Code) both more than a 1/2 percent ownership
interest in value and one of the 10 largest percentage ownership interests in
value of the Employer; and
(2) has (during the Plan Year of ownership) Section 415
Compensation from the Employer (and any other employers taken into account under
section 414 of the Code) of more than the limitation in effect under section
415(c)(1)(A) of the Code for the calendar year in which such Plan Year ends;
(c) a Five-Percent Owner; or
(d) a 1-percent owner (as defined in section 416(i) of the Code)
of the Employer having Section 415 Compensation from the Employer (and any other
employers taken into account under section 414 of the Code) of more than
$150,000.
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1.29 MILITARY SERVICE. "Military Service" means, with respect to a person
employed immediately prior thereto by the Employer, the period of time that he
spends in the Armed Forces of the United States, or its equivalent recognized
pursuant to federal law, provided he returns to the service of the Employer
within such period, if any, as is then provided by law for the protection of his
reemployment rights, and provided he has not been employed elsewhere before
returning to work for the Employer.
1.30 NONDEDUCTIBLE VOLUNTARY CONTRIBUTION ACCOUNT. "Nondeductible Voluntary
Contribution Account" means a subaccount of each Participant's Account which
reflects the Participant's nondeductible voluntary contributions, as adjusted in
accordance with Article 5.
1.31 NONELECTIVE CONTRIBUTION ACCOUNT. "Nonelective Contribution Account"
means a subaccount of each Participant's Section 401(k) Account which reflects
contributions on behalf of such Participant under Sections 3.1(b) and (c) (which
shall be separately accounted for within this Account) and Section 3.10 (in the
case of a Safe Harbor 401(k) Plan) and any forfeitures allocated thereto, as
adjusted in accordance with Article 5.
1.32 NON-HIGHLY COMPENSATED EMPLOYEE. "Non-highly Compensated Employee"
means an individual who is not a Highly Compensated Employee and who, at any
time during the Plan Year, is an Eligible Employee.
1.33 NORMAL RETIREMENT AGE. "Normal Retirement Age" shall have the meaning
selected in the Adoption Agreement.
1.34 ONE-YEAR BREAK.
(a) Hour-Counting Method.
(1) "One-Year Break" means, if the hour-counting method
is elected in the Adoption Agreement, a Service Computation Period (as defined
in the Adoption Agreement) during which an individual does not complete more
than 500 Hours of Service.
(2) Solely for purposes of determining whether a One-Year
Break has occurred in a computation period, an individual who incurs an absence
from work, beginning on or after the REA Effective Date, for maternity or
paternity reasons (as defined in (c) below) 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 of Service cannot be
determined, 8 Hours of Service per day of such absence, and such Hours of
Service shall be credited to the computation period in which the absence begins
if such crediting would prevent a One-Year Break in that computation period or,
in any other case, to the following computation period.
(b) Elapsed Time Method.
(1) "One-Year Break" means, if the elapsed time method is
elected in the Adoption Agreement, a Severance of at least 12 consecutive
months.
(2) In the case of an individual who incurs an absence
from work, beginning on or after the REA Effective Date, for maternity or
paternity reasons, as defined in (c) below, a One-Year Break shall not begin
earlier than one year after it would otherwise begin.
(c) Maternity or Paternity Reasons. For purposes of (a) and (b)
above, an absence for maternity or paternity reasons means an absence:
(1) by reason of the pregnancy of the individual;
(2) by reason of the birth of a child of the individual;
(3) by reason of the placement of a child with the
individual in connection with the adoption of such child by the individual; or
(4) for purposes of caring for such child for a period
beginning immediately following such birth or placement.
1.35 OWNER-EMPLOYEE. "Owner-Employee" means, if the Employer is not
incorporated, an individual who is a sole proprietor of the Employer, or who is
a partner in the Employer owning more than 10 percent of either the capital or
profits interest of the partnership.
1-11
1.36 PARTICIPANT. "Participant" means a person who has become a Participant
as provided under Article 2. Any such person shall remain a Participant as long
as an Account is maintained for him under the Plan. The making of a rollover
contribution under Section 3.9 by an Eligible Employee who has not yet become a
Participant (if elected in the Adoption Agreement) as provided under Article 2
shall not result in the Eligible Employee becoming a Participant any earlier
than provided under Article 2. As provided in Section 2.1, if elected in the
Adoption Agreement, a person may become a "Participant" for purposes of
different types of contributions at different times.
1.37 PERMISSIVE AGGREGATION GROUP (FOR TOP-HEAVY TEST). "Permissive
Aggregation Group" means the Required Aggregation Group of plans plus any other
plan or plans of the Employer (or any other employer taken into account under
section 414 of the Code) which the Employer elects to aggregate and which, when
considered as a group with the Required Aggregation Group, would continue to
satisfy the requirements of sections 401(a)(4) and 410 of the Code.
1.38 PLAN. "Plan" means the plan set forth in this document and in the
Adoption Agreement as adopted by the Employer, and if amended at any time, then
as so amended.
1.39 PLAN ASSETS. "Plan Assets" means the assets of the Plan at the
particular time applicable.
1.40 PLAN YEAR. "Plan Year" means the period so designated in the Adoption
Agreement.
1.41 PRESENT VALUE (FOR TOP-HEAVY TEST). "Present Value" means, with respect
to a defined benefit plan, the present value based on the interest and mortality
rates specified in the Adoption Agreement for purposes of computing the top-
heavy ratio. The actuarial assumptions used for all plans within the same
aggregation group must be the same.
1.42 PROFITS (FOR PROFIT SHARING PLANS). "Profits" means the Employer's net
income or profits for its taxable year ending with or within the Plan Year and
for all prior taxable years determined by the Employer upon the basis of its
books of account in accordance with sound accounting practices, without any
deduction for current taxes based upon income and for current contributions made
by the Employer under this Plan or any other plan that is qualified under
section 401 of the Code.
1.43 PROTOTYPE SPONSOR. "Prototype Sponsor" means ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇.
1.44 REA EFFECTIVE DATE. "REA Effective Date" means the first day of the
first Plan Year beginning after December 31, 1984.
1.45 REEMPLOYMENT COMMENCEMENT DATE (FOR ELAPSED TIME METHOD). "Reemployment
Commencement Date" means the first day, after a Severance, for which an Employee
is paid or entitled to be paid for the performance of duties.
1.46 REQUIRED AGGREGATION GROUP (FOR TOP-HEAVY TEST). "Required Aggregation
Group" means:
(a) each qualified plan or simplified employee pension of the
Employer (or any other employer taken into account under section 414 of the
Code) in which at least one Key Employee participates or participated at any
time during the Determination Period (regardless of whether the plan has
terminated), and
(b) any other qualified plan of the Employer (or any other
employer taken into account under section 414 of the Code) which enables a plan
described in subsection (a) to meet the requirements of section 401(a)(4) or 410
of the Code.
1.47 ROLLOVER ACCOUNT. "Rollover Account" means a subaccount of each
Participant's Account which reflects his rollover contributions, if any, as
adjusted in accordance with Article 5. Pursuant to Section 3.9, a Rollover
Account may be established for an Eligible Employee making a rollover
contribution prior to becoming a Participant (if elected in the Adoption
Agreement); and in such a case, the Rollover Account shall represent the
Eligible Employee's allocable share of Plan Assets.
1.48 SECTION 401(k) ACCOUNT. "Section 401(k) Account" means a subaccount of
each Participant's Account which reflects contributions on behalf of such
Participant under Section 3.1 of the Plan and any forfeitures allocated thereto,
as adjusted in accordance with Article 5. A Section 401(k) Account may include a
subaccount, the Nonelective Contribution Account.
1.49 SELF-EMPLOYED INDIVIDUAL. "Self-Employed Individual" means, if the
Employer is not incorporated, any individual who has Earned Income for the
Employer's taxable year ending with or within the Plan Year from the trade or
business for which the Plan is established and any individual who would have had
Earned
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Income but for the fact that the trade or business had no Profits for such
taxable year.
1.50 SERVICE (FOR ELAPSED TIME METHOD).
(a) "Service" means, with respect to an Employee for purposes of
eligibility and vesting, the sum of the following periods (whether or not
continuous), provided that no period of time shall be counted more than once:
(1) each period beginning on an Employment Commencement
Date or Reemployment Commencement Date and ending with the next Severance;
(2) any separation from service of 12 months or less; and
(3) Military Service.
(b) For purposes of determining service under (a)(1) and (2)
above, service (including service as a Self- Employed Individual) for the
following shall be treated as if it were service for the Employer:
(1) each Affiliate;
(2) each predecessor employer within the meaning of, and
to the extent required under, section 414(a) of the Code; and
(3) each other employer identified in the Adoption
Agreement for service crediting purposes. In the case of a standardized Plan,
any past service credited must comply with the five-year safe harbor in Treasury
Regulations section 1.401(a)(4)-5(a)(3).
(c) Anything in the Plan to the contrary notwithstanding, the
following transition rules shall apply in the case of an individual who
transfers from a class of Employees for whom service has been computed on the
basis of Hours of Service during 12-month computation periods. Such an
individual shall receive credit for a period of service consisting of:
(1) the number of Years of Service credited to him before
the computation period in which the transfer occurs plus
(2) the greater of
(A) the period of service that would be credited
to him under the elapsed time method under (a) above for his service during the
entire computation period in which the transfer occurs or
(B) the service taken into account under the
computation periods method as of the date of the transfer.
In addition, the individual shall receive credit for service
subsequent to the transfer commencing on the day after the last day of the
computation period in which the transfer occurs.
1.51 SEVERANCE (FOR ELAPSED TIME METHOD). "Severance" means, with respect to
an Employee, an absence from employment from the Employer and all Affiliates
beginning on the earliest of death, quit, discharge, retirement or the first
anniversary of any other absence (with or without pay).
1.52 SURVIVING SPOUSE. "Surviving Spouse" means a Participant's surviving
spouse (who, in the case of the Qualified Joint and Survivor Annuity, is the
spouse to whom the Participant was married on the date on which his benefit
payments commenced) except to the extent that a former spouse is treated as
such, for purposes of the Plan, under a qualified domestic relations order as
described in section 414(p) of the Code.
1.53 TOP-HEAVY PLAN. "Top-Heavy Plan" means the Plan, for any Plan Year
beginning after December 31, 1983, if any of the following conditions exists:
(a) if this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans and the Top-Heavy Ratio for this Plan
exceeds 60 percent;
(b) if this Plan is a part of a Required Aggregation Group of
plans but not part of a Permissive Aggregation Group and the Top-Heavy Ratio for
the group of plans exceeds 60 percent; or
(c) if this Plan is a part of a Required Aggregation Group and
part of a Permissive Aggregation
1-13
Group of plans and the Top-Heavy Ratio for the Permissive Aggregation Group
exceeds 60 percent.
1.54 TOP-HEAVY RATIO. "Top-Heavy Ratio" means the following:
(a) If the Plan is not aggregated with any defined benefit plan,
the Top-Heavy Ratio is a fraction, the numerator of which is the sum of the
account balances, under this Plan and any aggregated defined contribution plans,
of all Key Employees and the denominator of which is the sum of all account
balances of all participants.
(b) If the Plan is aggregated with one or more defined benefit
plans, the Top-Heavy Ratio is a fraction, the numerator of which is the sum of
account balances under the defined contribution plans for all Key Employees and
the Present Value of accrued benefits under the defined benefit plans for all
Key Employees, and the denominator of which is the sum of the account balances
under the defined contribution plans for all participants and the Present Value
of accrued benefits under the defined benefit plans for all participants.
(c) For purposes of (a) and (b) above, the Top-Heavy Ratio shall
be determined in accordance with section 416 of the Code and the applicable
regulations thereunder, including, without limitation, the provisions relating
to rollovers and transfers and the following provisions:
(1) The value of account balances under the Plan will be
determined as of the Determination Date with respect to the applicable Plan
Year.
(2) The value of account balances and accrued benefits
under plans aggregated with the Plan shall be calculated with reference to the
determination dates under such plans that fall within the same calendar year as
the applicable Determination Date under the Plan.
(3) The value of account balances and the present value
of accrued benefits will be determined as of the most recent valuation date that
falls within or ends with the 12-month period ending on the applicable
determination date, except as provided in section 416 of the Code and the
regulations thereunder for the first and second plan years of a defined benefit
plan.
(4) A simplified employee pension shall be treated as a
defined contribution plan; provided however, at the election of the Employer,
the Top-Heavy Ratio shall be computed by taking into account aggregate employer
contributions in lieu of the aggregate of the accounts of employees.
(5) Distributions (including distributions under a
terminated plan which had it not been terminated would have been included in the
Required Aggregation Group) within the 5-year period ending on a determination
date shall be taken into account.
(6) Defined contribution account balances shall be
increased to reflect any contribution not actually made as of a determination
date but required to be taken into account on that date under section 416 of the
Code and the regulations thereunder.
(7) Deductible voluntary contributions shall not be
included.
(8) There shall be disregarded the account balances and
accrued benefits of a Participant
(A) who is not a Key Employee but who was a Key
Employee in a prior Plan Year; or
(B) with respect to a plan year beginning after
1984, who has not performed services for the employer maintaining the plan at
any time during the 5-year period ending on the determination date.
(9) Effective for Plan Years beginning after December 31,
1986, the accrued benefit of a Participant other than a Key Employee shall be
determined (A) under the method, if any, which uniformly applies for accrual
purposes under all defined benefit plans of the Employer, or (B) if there is no
such method, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional rule of section 411(b)(1)(C) of the
Code.
1.55 TRUST. "Trust" means the trust established, with respect to the Plan,
under the Trust Agreement.
1.56 TRUST AGREEMENT. "Trust Agreement" means the trust agreement which is
identified in the Adoption Agreement as the trust agreement under which the Plan
Assets are held.
1.57 TRUSTEE. "Trustee" means the Trustee under the Trust Agreement named in
the Adoption Agreement.
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1.58 YEAR OF SERVICE.
(a) General. "Year of Service" means:
(1) if the hour-counting method is elected in the
Adoption Agreement, a Service Computation Period (as defined in the Adoption
Agreement) during which an Employee is credited with at least 1,000 Hours of
Service; or
(2) if the elapsed time method is elected in the Adoption
Agreement, 12 months of Service. Nonsuccessive periods of Service shall be
aggregated, and less than whole year periods of Service (whether or not
consecutive) shall be aggregated on the basis that 12 months of Service (30 days
are deemed to be a month in the case of aggregation of fractional months) equal
a whole Year of Service.
If a Service Computation Period (if the hour-counting method is elected) is the
Plan Year and if a short Plan Year is created because of an amendment changing
the Plan Year, then for purposes of determining whether an Eligible Employee is
credited with at least 1000 Hours of Service in the Service Computation Period
which otherwise would end on the last day of the short Plan Year (and for
determining whether a One-Year Break has occurred), such Service Computation
Period shall be treated as including the period after such short Plan Year
through the date the Plan Year previously in effect would have ended.
(b) Rule of Parity. If an Employee who does not have any
nonforfeitable right to an Employer Contribution Account or Section 401(k)
Account incurs a Break in Service, then, for purposes of eligibility and
vesting, all of his Years of Service (if the hour-counting method applies) or
Service (if the elapsed time method applies) prior to such Break in Service
shall be disregarded if such Break in Service equals or exceeds his Years of
Service or his Service before such Break in Service, provided that such prior
service shall not include any service disregarded by reason of any prior Breaks
in Service.
(c) Eligibility. If it is specified under the Adoption Agreement
that each Participant's Employer Contribution Account is fully vested after not
more than 2 Years of Service, and if an Employee incurs a One-Year Break before
completing 2 Years of Service, then all of his Years of Service credited to him
for eligibility purposes before the commencement of such One-Year Break shall be
disregarded.
(d) Vesting. In addition to any service disregarded pursuant to
selections in the Adoption Agreement, if the Plan was in existence before the
Effective Date, then Years of Service (if the hour-counting method applies) or
Service (if the elapsed time method applies) before the Effective Date shall be
disregarded for vesting purposes if such service would have been disregarded
under the rules of the Plan with regard to breaks in service as in effect on the
applicable date prior to the Effective Date. Such rules mean rules relating to
circumstances under which a period of an employee's service or plan
participation is disregarded, for purposes of determining the extent to which
his rights to his account derived from Employer contributions are unconditional,
if under such rules such service is disregarded by reason of such employee's
failure to complete a required period of service within a specified period of
time.
(e) Other Federal Law. Anything in the Plan to the contrary
notwithstanding, in determining an Employee's service, he shall be entitled to
such credit, if any, as is required by federal law.
1-15
ARTICLE 2
ELIGIBILITY AND PARTICIPATION
2.1 REQUIREMENTS.
(a) General. Each Eligible Employee shall be a Participant but no
earlier than the first Entry Date (as defined in the Adoption Agreement)
coinciding with or next following the date on which he meets the eligibility age
and service requirements specified in the Adoption Agreement. If an Eligible
Employee meets such age and service requirements on an Entry Date and if
(subject to Section 2.2) he is an Eligible Employee on such Entry Date, then he
shall become a Participant on such Entry Date. Anything in the foregoing to the
contrary notwithstanding, if the Plan was in existence before the Effective
Date, then any person who was a Participant therein immediately before the
Effective Date shall continue to be a Participant.
(b) Multiple Criteria. If, pursuant to the Adoption Agreement, the
Plan has more than one set of Entry Date and age and service criteria, an
Eligible Employee shall be considered a "Participant" for purposes of a
particular type of contribution only if he has met such eligibility criteria
specified for such contributions in the Adoption Agreement. As such, if an
Eligible Employee meets the age and service requirements specified for a
particular type of contribution on a specified Entry Date, then he shall become
a Participant for purposes of such contribution type on such Entry Date.
Accordingly, an Eligible Employee may be a "Participant" for one type of
contribution but not for another.
2.3 ABSENCES AND SEVERANCES OF LESS THAN 12 MONTHS (ELAPSED TIME METHOD).
If the elapsed time method is elected in the Adoption Agreement, then:
(a) Absences. If, on the Entry Date determined under Section 2.1,
an Eligible Employee is absent from employment for reasons other than quit,
discharge, or retirement, and if he returns to employment within 12 months,
then, upon the termination of such absence, and provided he is an Eligible
Employee, he shall become a Participant retroactive to such Entry Date.
(b) Severances. If an Employee's Entry Date determined under
Section 2.1 falls within a period of Severance of 12 months or less taken into
account as Service under Section 1.50, then, provided he is an Eligible
Employee, he shall become a Participant on the date on which such period of
Severance ends.
2.4 SPECIAL RULES FOR PLANS COVERING OWNER-EMPLOYEES. Effective for Plan
Years beginning after December 31, 1996, the special rules for a Plan covering
Owner-Employees no longer apply.
2.5 REEMPLOYMENT. If a former Participant is reemployed as an Eligible
Employee, and if his prior Years of Service are not disregarded under Section
1.59, then he shall become a Participant immediately upon such reemployment.
2.6 CHANGE OF EMPLOYEE CLASSIFICATION.
(a) In the event a Participant is no longer a member of an
eligible class of Employees and becomes ineligible to participate, but has not
incurred a Break in Service, such individual will participate immediately upon
returning to an eligible class of Employees. If such Participant incurs a Break
in Service, eligibility will be determined under the break in service rules of
Section 1.59 of the Plan.
(b) In the event an Employee who is not a member of the eligible
class of Employees becomes a member of the eligible class, such Employee will
participate immediately if such Employee has satisfied the minimum age and
service requirements and would have otherwise previously become a Participant.
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ARTICLE 3
CONTRIBUTIONS AND THEIR ALLOCATION
3.1 SECTION 401(k) CONTRIBUTIONS.
(a) Elective Deferrals.
(1) Salary Reduction. In the case of a profit sharing
plan, if a Section 401(k) feature is elected in the Adoption Agreement, each
Participant (who, in accordance with Section 2.1, has satisfied the Plan's
eligibility criteria applicable to the Section 401(k) feature) who is an
Eligible Employee may enter into a salary reduction agreement with the Employer
whereby he authorizes the Employer to reduce his Compensation (which would
otherwise be payable absent such an agreement), or any part thereof, by such
percentage or dollar amount (subject to such limitations as may be imposed under
the Adoption Agreement) as he shall specify. Under the Adoption Agreement, the
Administrator may set uniform maximum and/or minimum limits on the percentage or
dollar amount of a Participant's Compensation that may be reduced for any Plan
Year or for any period during a Plan Year. Contributions of this type may be
referred to in the Plan as elective deferrals or as salary reduction
contributions.
(2) 402(g) Annual Limit. In no event shall a
Participant's Compensation in any calendar year be reduced by a salary reduction
agreement under (1) (and under all other plans, contracts or arrangements of the
Employer which allow elective deferrals within the meaning of section 402(g)(3)
of the Code) in an amount greater than the applicable limit under section 402(g)
of the Code for the year.
(3) Contribution to the Plan. Subject to the limits under
Article 4 of the Plan and (2) above, the Employer shall reduce the Participant's
Compensation (which would otherwise be payable absent such an agreement), or
part thereof, by the percentage or amount elected by the Participant in
accordance with the terms of the Plan and shall contribute such amounts to the
Plan on behalf of such Participant. Such contributions shall be credited to the
Participant's Section 401(k) Account. Such contributions shall be made as soon
as the Employer can reasonably segregate such amounts, but not later than the
15th business day of the month following the month in which such amounts would
have otherwise been payable to the Participant.
(4) Effect of Hardship Withdrawal. In the event an
Eligible Employee makes a hardship withdrawal under Section 7.2(b):
(A) the Participant's salary reduction agreement
shall immediately terminate and the Participant may not enter a new salary
reduction agreement for at least 12 months after receipt of the hardship
withdrawal; and
(B) for the Participant's taxable year following
the taxable year of the hardship withdrawal, the Participant's salary reduction
contributions may not exceed the applicable limit under section 402(g) of the
Code for that taxable year less the amount of such Participant's salary
reduction contributions for the taxable year of the hardship withdrawal.
(5) Procedural Matters. A Participant may enter, change
or terminate a salary reduction agreement under (1) in accordance with the
provisions adopted by the Employer in the Adoption Agreement. In no event may a
salary reduction agreement be entered into retroactively. In addition, the
Employer may require or allow a Highly Compensated Employee to reduce the
percentage or amount specified in his salary reduction agreement to the extent
that the Employer reasonably anticipates that without the reduction, the limits
set forth in Section 3.1(e) or Article 4 would be exceeded for the Plan Year. A
Participant's salary reduction agreement shall terminate if his employment
status changes so that he is no longer an Eligible Employee. In accordance with
such rules and procedures as the Administrator deems appropriate, and which
provides an Eligible Employee with an effective opportunity to receive cash, the
Employer may treat each Eligible Employee who has satisfied the Plan's
eligibility criteria applicable to the Section 401(k) feature, as having made a
salary reduction election unless and until such Participant affirmatively elects
to revoke or revise such deemed salary reduction election,
(b) QNECs.
(1) Optional QNECs. If elected in the Adoption Agreement,
the Employer shall contribute to the Plan an amount determined pursuant to the
Adoption Agreement for allocation to the Nonelective Contribution Accounts of
those Participants (who, in accordance with Section 2.1, have satisfied the
Plan's eligibility criteria applicable to the Section 401(k) feature) entitled
under the Adoption Agreement to receive an allocation of this type of
contribution. Subject to the limitations of Article 4 of the Plan, as of the
last Accounting Date for a Plan Year, there shall be allocated to the
Nonelective Contribution Account of each
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Participant qualified, under the Adoption Agreement, to receive such an
allocation:
(A) if the allocation method selected in the
Adoption Agreement provides for the allocation to be made proportionate to
Compensation, that portion of the Employer's contribution for the Plan Year that
bears the same ratio to the total amount of such contribution as the
Compensation of such Participant for such Plan Year bears to the total amount of
the Compensation of all such Participants for such Plan Year; and/or
(B) the same flat dollar amount allocable to all
other qualified Participants, if this allocation method is selected in the
Adoption Agreement.
(2) Failsafe QNEC.
(A) The Employer, in its sole discretion, may
contribute to the Plan for allocation to the Nonelective Contribution Accounts
of those Participants (who, in accordance with Section 2.1, have satisfied the
Plan's eligibility criteria applicable to the Section 401(k) feature) entitled
under (B) below to receive an allocation, such amount as it determines
appropriate to satisfy the nondiscrimination tests of section 401(k)(3)(A) and
401(m)(2) of the Code for a Plan Year. Any such contribution shall be allocated
as of the last Accounting Date for the Plan Year for which the Employer makes
the contribution.
(B) Only Participants who are Eligible Employees
at any time during the Plan Year and who are not Highly Compensated Employees
with respect to the Plan Year shall be qualified to receive an allocation of any
contribution under (A) above for a Plan Year; provided that any such
contribution shall be allocated by making the maximum permissible allocation
permitted under Article 4 beginning with the Participant with the least
Compensation for the Plan Year and continuing such maximum permissible
allocation to each such Participant in order of Compensation (least Compensation
to highest Compensation) until the entire contribution is allocated.
The types of contributions under this subsection (b) may be referred to in the
Plan as a qualified nonelective contribution. This type of contribution is
nonforfeitable when made (see Section 6.1(c)) and is subject to the withdrawal
and distribution limitations of Section 7.7.
(c) Matching Contributions to Nonelective Contribution Accounts.
If elected in the Adoption Agreement, the Employer shall make matching
contributions to the Nonelective Contribution Accounts of those Participants for
whom salary reduction contributions are made under (a) above for the Plan Year
and who also are qualified under the Adoption Agreement to receive such a
matching contribution. Such a matching contribution shall be allocated under the
method(s) selected in the Adoption Agreement. In the event the rate of matching
contribution (determined after corrective distribution of elective deferrals
under sections 401(k) or (m) or 402(g) of the Code) is determined by the
Administrator to be discriminatory in favor of one or more Highly Compensated
Employees, the Administrator shall forfeit that part of such matching
contribution (as adjusted in accordance with Article 5) as is necessary to make
such rate nondiscriminatory (and in such a case the contributions shall be
disregarded under the Plan's provisions relative to sections 401(k)(3) and
401(m)(2) of the Code).
This type of contribution may be referred to in the Plan as a qualified matching
contribution. This type of contribution is nonforfeitable when made (see Section
6.1(c)) and is subject to the withdrawal and distribution limitations of Section
7.7.
(d) Time for Contributions. Contributions under (b) and (c) for a
Plan Year shall be made no later than the end of the Plan Year following the
Plan Year to which the contributions relate (or such later time as may be
permitted by Treasury Regulations or the Internal Revenue Service).
(e) Limitation on Section 401(k) Contributions.
(1) Prior Year Testing. Effective for Plan Years
beginning after December 31, 1996, if the "Prior Year Testing Method" is elected
in the Adoption Agreement, the Actual Deferral Percentage for any Plan Year for
Participants who are Highly Compensated Employees eligible to make Section
401(k) contributions shall not exceed the greater of:
(A) 1.25 times the Actual Deferral Percentage
for the preceding Plan Year for Participants who were Non-highly Compensated
Employees eligible to make Section 401(k) contributions for such preceding Plan
Year; or
(B) the lesser of:
(i) 2 times the Actual Deferral
Percentage for the preceding Plan Year for the
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Participants who were Non-highly Compensated Employees eligible to make Section
401(k) contributions for such preceding Plan Year, provided that the Actual
Deferral Percentage for the Participants who are Highly Compensated Employees
shall not exceed the Actual Deferral Percentage for the preceding Plan Year for
Participants who were Non-highly Compensated Employees eligible to make Section
401(k) contributions for such preceding Plan Year by more than 2 percentage
points; or
(ii) such amount as the Secretary of the
Treasury or his delegate may prescribe to prevent multiple use of this
alternative limitation with respect to any Highly Compensated Employee.
For the first Plan Year in which a section 401(k) feature is part of the Plan,
the Actual Deferral Percentage for Non- highly Compensated Employees to be taken
into account under (A) and (B) above shall be deemed to be 3 percent, or, at the
election of the Employer in the Adoption Agreement, the Actual Deferral
Percentage for such first Plan Year for Participants who are Non-highly
Compensated Employees eligible to make Section 401(k) contributions for such
first Plan Year.
(2) Current Year Testing. Effective for Plan Years
beginning after December 31, 1996, if the "Current Year Testing Method" is
elected in the Adoption Agreement, the limitations in (1)(A) and (B) above shall
be applied by reference to the current Plan Year rather than the preceding Plan
Year. Once made, this election can only be undone if the Plan meets the
requirements for changing to Prior Year Testing set forth in Notice 98-1 (or
superseding guidance). A Participant is a Highly Compensated Employee for a
particular Plan Year if he or she meets the definition of a Highly Compensated
Employee in effect for that Plan Year. Similarly, a Participant is a Non-highly
Compensated Employee for a particular Plan Year if he or she does not meet the
definition of a Highly Compensated Employee in effect for that Plan Year.
(3) Special Rules for Early Participation . If the Plan
allows Eligible Employees to participate in the Section 401(k) feature under age
and service criteria lower than the greatest minimum age and service conditions
permissible under section 410(a) of the Code and the Employer elects to apply
the special rule of section 410(b)(4)(B) of the Code in determining that the
Section 401(k) feature satisfies the coverage rules of section 410(b)(1) of the
Code, then the following special rules apply. In such a case, for testing
purposes, the Plan shall be treated as two separate plans: one benefitting the
Eligible Employees who have satisfied the lower minimum age and service
conditions of the Plan but not the greatest such conditions permitted under
section 410(a) of the Code (hereinafter "Component Plan A"); and one benefitting
Eligible Employees who have satisfied the greatest such conditions permitted
under section 410(a) of the Code (hereinafter "Component Plan B"). The testing
in this Section 3.1(e) shall be applied as follows:
(A) For Plan Years beginning before January 1,
1999, and at the election of the Employer, for Plan Years beginning after
December 31, 1998, the testing shall be applied separately to Component Plan A
and Component Plan B. In this regard, the Actual Deferral Percentages and Actual
Contribution Percentages shall be determined separately for each such Component
Plan.
(B) For Plan Years beginning after December 31,
1998, at the election of the Employer, in lieu of the testing as provided in (A)
above, the testing shall be applied solely to Component Plan B (and not
Component Plan A); provided however any Highly Compensated Employees in
Component Plan A must be included in the Actual Deferral Percentage and testing
of Component Plan B.
This provision shall be administered in accordance with rules and regulations
promulgated by the Secretary of Treasury or its delegate.
(4) Special Rules for Plan Disaggregation. If, pursuant
to Treasury Regulations or promulgations of the Internal Revenue Service, the
Plan is to be treated as two or more separate plans for Section 401(k) testing
purposes, then the Administrator shall apply the testing in this Section 4.1(e)
separately to such plans as the Administrator shall determine. This provision
shall be administered in accordance with such Treasury Regulations or
promulgations.
(f) Return of Excess Elective Deferrals.
(1) Participant Election. If amounts are includible in a
Participant's gross income under section 402(g) of the Code for a taxable year
of the Participant, the Participant may elect to receive a distribution from his
Section 401(k) Account in an amount up to the sum (or difference) of:
(A) the lesser of:
(i) the amount includible in his gross
income under section 402(g) of the Code for the taxable year; or
(ii) the amount of his salary deferrals
under Section 3.1(a) for the taxable year;
1-19
plus (or minus)
(B) the income (or loss) allocable to the amount
determined under (A) determined in accordance with Treasury Regulations under
any reasonable method used consistently for all Participants and for all
corrective distributions under the Plan for the Plan Year.
(2) Procedure An election under (1) above shall be made
in writing, signed by the Participant, on such form as the Administrator shall
direct and shall be effective only if received by the Administrator no later
than the first March 1st following the close of the Participant's taxable year
to which the election relates. A Participant who has exceeded the limits of
Section 3.1(a)(2) shall be deemed to have made an election hereunder to the
extent of such excess.
(3) Distribution. Any other provisions of the Plan to the
contrary notwithstanding, the amount determined under (1) if properly elected
under (2) shall be paid to the Participant as a lump sum no later than the first
April 15th following the close of the Participant's taxable year to which the
election relates.
(4) Effect on Other Provisions. Except to the extent
provided by the Secretary of the Treasury or his delegate, distributions
hereunder shall be taken into account under Sections 3.1(e) and 3.2(b).
(g) Excess Section 401(k) Contributions.
(1) Excess Actual Deferral Percentage. If the Actual
Deferral Percentage for a Plan Year for the Participants who are Highly
Compensated Employees eligible to make Section 401(k) contributions exceeds the
maximum amount allowable under Section 3.1(e), then the Administrator shall
determine the amount to be distributed ("Excess Contributions") in accordance
with the Code and applicable Treasury Regulations and the following. "Excess
Contributions" shall mean, with respect to any Plan Year, the excess of:
(A) The aggregate amount of contributions
actually taken into account in computing the Actual Deferral Percentage of
Highly Compensated Employees for such Plan Year, over
(B) The maximum amount of such contributions
permitted by the Actual Deferral Percentage test (determined by hypothetically
reducing contributions made on behalf of Highly Compensated Employees in order
of the ratios calculated separately for each such Participant (under Section
1.4) beginning with the highest of such percentages).
(2) Required Distributees. Excess Contributions are
allocated to the Highly Compensated Employees with the largest amounts of
contributions taken into account in calculating the Actual Deferral Percentage
test for the year in which the excess arose, beginning with the Highly
Compensated Employee with the largest amount of such contributions and
continuing in descending order until all the Excess Contributions have been
allocated. For purposes of the preceding sentence, the "largest amount" is
determined after distribution of any Excess Contributions.
(3) Distribution. The Administrator shall distribute to
each Highly Compensated Employee specified in (2) above from his Section 401(k)
Account the sum (or difference) of:
(A) the amount (if any) determined under (2)
above; plus (or minus)
(B) the income (or loss) allocable to the amount
determined under (A) determined by the Administrator in accordance with Treasury
Regulations under any reasonable method used consistently for all Participants
and for all corrective distributions under the Plan for the Plan Year; minus
(C) that part of the distribution (if any) under
(f) above attributable to salary deferrals under Section 3.1(a) of the Plan
during the Plan Year.
Any other provisions of the Plan to the contrary notwithstanding, the
Administrator shall distribute the amount so determined as a lump sum no later
than the last day of the following Plan Year; provided however, the Employer
shall be subject to a 10% excise tax under section 4979 of the Code if the
distributions are not made before the close of the first 2-1/2 months of such
following Plan Year.
(4) Alternative Limitation. If the alternative limitation
referred to in Section 3.1(e)(1)(B) is exceeded, then the Administrator shall
take corrective action under either this Section, Section 3.8, or a combination
of the two, as determined by the Administrator.
(5) Allocation of Excess. Distributions hereunder shall
be from the Participant's Section 401(k) Account (other than his Nonelective
Contribution Account) and Nonelective Contribution Account (in
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proportion to the Participant's salary deferral contributions under Section
3.1(a) for the Plan Year and the matching contributions under Section 3.1(c)
thereto for the Plan year) to the extent of the contributions thereto for the
Plan Year plus the income allocable to such contributions and the excess (if
any) shall be distributed from the Participant's Nonelective Contribution
Account from the amounts attributable to discretionary Employer contributions
under Section 3.1(b).
(6) Effect on Other Provisions. If distributions are made
in accordance with this Section 3.1(g) with respect to a Plan Year, then the
limitations of Section 3.1(e) shall be deemed satisfied for the Plan Year.
Except to the extent provided by the Secretary of the Treasury, distributions
hereunder shall be taken into account under Article 4.
3.2 EMPLOYER MATCHING CONTRIBUTIONS TO EMPLOYER MATCHING ACCOUNTS.
(a) Employer Matches. In the case of a profit sharing plan, if a
Section 401(k) feature is part of the Plan pursuant to the Adoption Agreement,
and if elected in the Adoption Agreement, the Employer shall make matching
contributions to the Employer Matching Accounts of those Participants (who, in
accordance with Section 2.1, have satisfied the Plan's eligibility criteria
applicable to this type of contribution) for whom salary reduction contributions
are made under Section 3.1(a) for the Plan Year and who also are qualified under
the Adoption Agreement to receive such a matching contribution. Such a matching
contribution shall be allocated under the method(s) selected in the Adoption
Agreement. In the event the rate of matching contribution (determined after
corrective distribution of elective deferrals under sections 401(k) or (m) or
402(g) of the Code) is determined by the Administrator to be discriminatory in
favor of one or more Highly Compensated Employees, the Administrator shall
forfeit that part of such matching contribution (as adjusted in accordance with
Article 5) as is necessary to make such rate nondiscriminatory (and in such a
case the contributions shall be disregarded under the Plan's provisions relative
to sections 401(k)(3) and 401(m)(2) of the Code).
(b) Limitation on Employer Matching and Voluntary (After-Tax)
Contributions.
(1) Prior Year Testing. Effective for Plan Years
beginning after December 31, 1996, if the "Prior Year Testing Method" is elected
in the Adoption Agreement, the Actual Contribution Percentage for any Plan Year
for Participants who are Highly Compensated Employees eligible to make Section
401(k) contributions or voluntary (after- tax) contributions shall not exceed
the greater of:
(A) 1.25 times the Actual Contribution
Percentage for the preceding Plan Year for Participants who were Non-highly
Compensated Employees eligible to make Section 401(k) contributions or voluntary
(after-tax) contributions for such preceding Plan Year; or
(B) the lesser of:
(i) 2 times the Actual Contribution
Percentage for the preceding Plan Year for the Participants who were Non-highly
Compensated Employees eligible to make Section 401(k) contributions for such
preceding Plan Year, provided that the Actual Contribution Percentage for the
Participants who are Highly Compensated Employees shall not exceed the Actual
Contribution Percentage for the preceding Plan Year for Participants who were
Non-highly Compensated Employees eligible to make Section 401(k) or voluntary
(after-tax) contributions for such preceding Plan Year by more than 2 percentage
points; or
(ii) such amount as the Secretary of the
Treasury or his delegate may prescribe to prevent multiple use of this
alternative limitation with respect to any Highly Compensated Employee.
For the first Plan Year in which the Plan provides for Employer matching
contributions subject to the Actual Contribution Percentage test or voluntary
(after-tax) contributions, the Actual Contribution Percentage for Non-highly
Compensated Employees to be taken into account under (A) and (B) above shall be
deemed to be 3 percent, or, at the election of the Employer in the Adoption
Agreement, the Actual Contribution Percentage for such first Plan Year for
Participants who are Non-highly Compensated Employees eligible to make Section
401(k) contributions or voluntary (after-tax) contributions for such first Plan
Year.
(2) Current Year Testing. Effective for Plan Years
beginning after December 31, 1996, if the "Current Year Testing Method" is
elected in the Adoption Agreement, the limitations in (1)(A) and (B) above shall
be applied by reference to the current Plan Year rather than the preceding Plan
Year.
(3) Special Rules for Early Participation . If the Plan
allows Eligible Employees to participate in the feature providing Employer
matching contributions subject to the Actual Contribution Percentage test or
voluntary (after-tax) contributions, under age and service criteria lower than
the greatest minimum age and service conditions permissible under section 410(a)
of the Code and the Employer elects to apply the special rule of section
1-21
410(b)(4)(B) of the Code in determining that such feature satisfies the coverage
rules of section 410(b)(1) of the Code, then the following special rules apply.
In such a case, for testing purposes, the Plan shall be treated as two separate
plans: one benefitting the Eligible Employees who have satisfied the lower
minimum age and service conditions of the Plan but not the greatest such
conditions permitted under section 410(a) of the Code (hereinafter "Component
Plan A"); and one benefitting Eligible Employees who have satisfied the greatest
such conditions permitted under section 410(a) of the Code (hereinafter
"Component Plan B"). The testing in this Section 3.2(b) shall be applied as
follows:
(A) For Plan Years beginning before January 1,
1999, and at the election of the Employer, for Plan Years beginning after
December 31, 1998, the testing shall be applied separately to Component Plan A
and Component Plan B. In this regard, the Actual Deferral Percentages and Actual
Contribution Percentages shall be determined separately for each such Component
Plan.
(B) For Plan Years beginning after December 31,
1998, at the election of the Employer, in lieu of the testing as provided in (A)
above, the testing shall be applied solely to Component Plan B (and not
Component Plan A); provided however any Highly Compensated Employees in
Component Plan A must be included in the Actual Deferral Percentage, Actual
Contribution Percentage and testing of Component Plan B.
This provision shall be administered in accordance with rules and regulations
promulgated by the Secretary of Treasury or its delegate.
(4) Special Rules for Plan Disaggregation. If, pursuant
to Treasury Regulations or promulgations of the Internal Revenue Service, the
Plan is to be treated as two or more separate plans for Section 401(m) testing
purposes, then the Administrator shall apply the testing in this Section 3.2(b)
separately to such plans as the Administrator shall determine. This provision
shall be administered in accordance with such Treasury Regulations or
promulgations.
(5) Special Rule. To the extent necessary to avoid a
violation of this limitation, amounts contributed under Section 3.1, shall be
treated as contributions taken into account under Section 1.3; but only if, and
to the extent, the limitations in Section 3.1(e) would not be violated if such
amounts were not taken into account under Section 1.4. The determination and
treatment of the separate ratios under Section 1.3 of the Plan for each
Participant shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury or his delegate.
(c) Time for Matches and Nondeductible Contributions.
Contributions under this Section 3.2 for a Plan Year shall be made no later than
the end of the Plan Year following the Plan Year to which the contributions
relate (or such later time as may be permitted by Treasury Regulations).
Voluntary (after-tax) Participant contributions (if permitted in the Adoption
Agreement) shall be made as soon as the Employer can reasonably segregate such
amounts, but not later than the 15th business day of the month following the
month in which such amounts would have otherwise been payable to the
Participant.
3.3 EMPLOYER CONTRIBUTION.
(a) Profit Sharing Plans.
(1) General. In the case of a profit sharing plan, in
addition to amounts otherwise contributed (if any) under Sections 3.1 and 3.2,
the Employer shall contribute to the Plan an amount determined pursuant to the
Adoption Agreement, and such contribution shall be allocated among the
Participants (who, in accordance with Section 2.1, have satisfied the Plan's
eligibility criteria applicable to this type of contribution) as provided in the
Adoption Agreement. Unless specifically provided for in an Adoption Agreement in
the case of a profit sharing plan, contributions, including contributions to a
profit sharing plan for Plan Years beginning after December 31, 1985, shall not
be conditioned on Profits.
(2) Non-Integrated Allocation Formula. If the Adoption
Agreement provides for the Employer contributions under this Section 3.3 to be
allocated proportionate to Compensation and on a non-integrated basis, then
subject to the limitations of Article 4, and subject to the top-heavy minimum if
applicable, as of the last Accounting Date for a Plan Year, there shall be
allocated to the Employer Contribution Account of each Participant entitled to
receive such an allocation (determined pursuant to the Adoption Agreement), that
portion of the Employer's contribution and any forfeitures allocated with such
contribution for such Plan Year that bears the same ratio to the total amount of
such contribution and forfeitures as the Compensation of such Participant for
such Plan Year bears to the total amount of the Compensation of all such
Participants for such Plan Year.
(3) Integrated Allocation Formula.
1-22
(A) General. If the Adoption Agreement provides
for the Employer contributions under this Section 3.3 to be allocated on an
integrated basis, then subject to the limitations of Article 4 and the overall
permitted disparity limits of (E) below, and subject to the top-heavy minimum if
applicable, as of the last Accounting Date for a Plan Year, the Employer
contribution under Section 3.3 of the Plan and any forfeitures allocated with
such contribution for such Plan Year shall be allocated under the method
specified in the Adoption Agreement.
(B) Excess Compensation. "Excess Compensation"
means Compensation for a particular Plan Year in excess of the Taxable Wage Base
for that Plan Year.
(C) Taxable Wage Base. "Taxable Wage Base" has
the meaning determined under the Adoption Agreement.
(D) Maximum Disparity Rate.
(i) In General. "Maximum Disparity
Rate" for a Plan Year, subject to (ii) below, means the greater of --
(I) 5.7 percent, or
(II) the rate of tax under
section 3111(a) of the Code (in effect as of the beginning of the Plan Year)
which is attributable to the old age portion of the Old Age, Survivors and
Disability Insurance provisions of the Social Security Act.
(ii) Special Rule for Reduced Taxable
Wage Base. If a reduced Taxable Wage Base is elected in the Adoption Agreement
and the amount specified therein is greater than the greater of $10,000 or
one-fifth of the contribution and benefits base under section 230 of the Social
Security Act as of the first day of the particular Plan Year, the 5.7 percent
factor under (i)(I)above, shall be reduced to 4.3 percent if the amount
specified in the Adoption Agreement is not more than 80 percent of the
contribution and benefit base under section 230 of the Social Security Act and
to 5.4 percent if the amount so specified is greater than 80 percent of such
base amount; and the factor under (i)(II)above shall be reduced proportionately.
(E) Overall Permitted Disparity Limits.
(i) Annual Overall Permitted Disparity
Limit. If, for any Plan Year, a Participant participates in this Plan and
another plan of the Employer that provides for permitted disparity (or imputed
disparity), the Participant's total annual disparity fraction (as defined in
Treasury Regulation section 1.401(l)-5(b)) may not exceed one. If such fraction
would exceed one, the amount allocated to such Participant shall be reduced to
the extent necessary to satisfy such limit.
(ii) Cumulative Permitted Disparity
Limit. Effective for Plan Years beginning on or after January 1, 1995, in the
case of a Participant who has benefitted under a defined benefit plan or target
benefit plan of the Employer for a plan year beginning on or after January 1,
1994, such participant's cumulative disparity fraction (as defined in Treasury
Regulation section 1.401(l)-5(c)) may not exceed 35. If such fraction would
exceed 35, the amount allocated to such Participant shall be reduced to the
extent necessary to satisfy such limit.
(b) Money Purchase Pension Plans. In the case of a money purchase
pension plan, the Employer shall contribute to the Plan an amount determined
pursuant to the Adoption Agreement, and such contribution shall be allocated
among the Participants as provided in the Adoption Agreement.
3.4 TOP-HEAVY MINIMUMS. If, for any Plan Year, the Plan is a Top-Heavy
Plan, then the following provisions shall apply for such Plan Year:
(a) Except as otherwise provided in (b) and (c) below, the
Employer contributions and forfeitures allocated on behalf of any Participant
who is not a Key Employee shall not be less than the lesser of three percent of
such Participant's Section 415 Compensation or in the case where the Employer
has no defined benefit plan which designates this Plan to satisfy section 401 of
the Code, the largest percentage of Employer contributions and forfeitures,
expressed as a percentage of Section 415 Compensation, allocated on behalf of
any Key Employee for that year. For these purposes and for purposes of Section
3.4(f), "Section 415 Compensation" shall mean the first $150,000 (as adjusted by
the Secretary of Treasury in accordance with section 401(a)(17) of the Code) of
a Participant's Section 415 Compensation (as defined in Section 4.1(k)). The
minimum allocation is determined without regard to any Social Security
contribution and, if the Plan is a profit sharing plan, without regard to
Profits. This minimum allocation shall be made even though, under other Plan
provisions, the Participant would not otherwise be entitled to receive an
allocation, or would have
1-23
received a lesser allocation for the year because of (1) the Participant's
failure to complete 1,000 Hours of Service or (2) compensation of less than a
stated amount.
(b) The provision in (a) above shall not apply to any Participant
who was not an Eligible Employee on the last day of the Plan Year.
(c) The provision in (a) above shall not apply to any Participant
to the extent the Participant is covered under any other plan or plans and the
Employer has provided in the Adoption Agreement that the minimum allocation or
benefit requirement applicable to top-heavy plans will be met in the other plan
or plans.
(d) In the case of a profit sharing plan, if a Section 401(k)
feature has been adopted in the Adoption Agreement by the Employer, to the
extent required by Treasury Regulations, contributions under Section 3.1(a)
allocated to a Key Employee shall be taken into account in determining the
minimum required contribution under (a) above; provided however, such
contributions under Section 3.1(a) allocated to Participants other than Key
Employees shall not count toward satisfying the minimum contribution required
under (a) above.
(e) In the case of a profit sharing plan, if a Section 401(k)
feature has been adopted in the Adoption Agreement by the Employer, to the
extent necessary to prevent a violation of the nondiscrimination requirements
under section 401(a)(4) of the Code, matching contributions under Sections
3.1(c) and 3.2 shall not count toward satisfying the minimum contribution
required under (a) above. If the Safe Harbor 401(k) Plan election is in effect,
any Safe Harbor Matching Contribution shall not count toward satisfying such
minimum contribution requirements.
(f) If a Participant participates in one or more defined benefit
plans which are aggregated with the Plan under section 416 of the Code for
purposes of determining top heaviness, and if such defined benefit plan or plans
do not satisfy the minimum benefit requirements of section 416 of the Code with
respect to such Participant, then, with respect to such Participant, the words
"five percent of such Participant's Section 415 Compensation" shall be
substituted for the words "the lesser of three percent of such Participant's
Section 415 Compensation or in the case where the Employer has no defined
benefit plan which designates this Plan to satisfy section 401 of the Code, the
largest percentage of Employer contributions and forfeitures, expressed as a
percentage of Section 415 Compensation, allocated on behalf of any Key Employee
for that year" in (a) above.
3.5 ALLOCATION AMONG EMPLOYERS. If more than one Employer has adopted the
Plan, each Employer shall contribute under the Plan the same proportion of the
total contribution as the proportion allocated to its Employees of the total
contribution.
3.6 RETURN OF EMPLOYER CONTRIBUTIONS.
(a) Mistake of Fact. If a contribution by the Employer to the Plan
is made by reason of a mistake of fact, then, subject to (d) below, such
contribution may be returned to the Employer within 1 year after the payment of
such contribution.
(b) Qualification. Contributions by the Employer to the Plan are
conditioned upon initial qualification of the Plan under section 401 of the
Code. If the Plan receives an adverse determination with respect to its initial
qualification under the Code, then the entire assets attributable to the
Employer's contributions may be returned to the Employer within 1 year after
such determination, but only if the application for the qualification is made by
the time prescribed by law for filing the Employer's return for the taxable year
in which the Plan is adopted, or such later date as the Secretary of the
Treasury may prescribe.
(c) Deductibility. Contributions by the Employer to the Plan
(other than any contributions allocable to the purchase of life insurance for a
Self-Employed Individual) are conditioned upon the deductibility of such
contributions under section 404 of the Code, and, subject to (d) below, such
contributions (to the extent disallowed) may be returned to the Employer within
1 year after the disallowance of the deduction.
(d) Limitation on Return. The amount of the contribution which may
be returned to the Employer under subsection (a) or (c) above shall be limited
to the excess of the amount contributed over the amount that would have been
contributed had there not occurred a mistake of fact or a mistake in determining
the deduction. Earnings attributable to such excess may not be returned to the
Employer, but losses attributable thereto must reduce the amount to be so
returned. Furthermore, the amount of the contribution which may be returned
shall be limited so as not to cause the balance to the credit of a Participant's
Account to be reduced to less than the balance which would have been credited to
his Account had such contribution not been made.
3.7 VOLUNTARY (AFTER-TAX) PARTICIPANT CONTRIBUTIONS.
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(a) General. If the Adoption Agreement provides for voluntary
(after-tax) Participant contributions, then each Employee who is a Participant
(who, in accordance with Section 2.1, has satisfied the Plan's eligibility
criteria applicable to this type of contribution) may make voluntary
contributions in cash to the Plan, subject to the limitations in subsection (c)
below.
(b) Designation. Effective for taxable years beginning after
December 31, 1986, qualified voluntary employee contributions (as defined in
section 219(e)(2)(A) of the Code prior to amendment by the Tax Reform Act of
1986) are no longer permitted. Amounts credited to the Participant's Deductible
Voluntary Contribution Account as of December 31, 1986 as adjusted in accordance
with Article 5 shall continue to be held until withdrawal or distribution in
accordance with the terms of the Plan. A Participant's contributions for tax
years after December 31, 1986 shall be considered nondeductible contributions
and shall be credited to the Participant's Nondeductible Voluntary Contribution
Account.
(c) Limitations. Subject to the applicable limitations of Article
4, the aggregate amount of a Participant's contributions to his Nondeductible
Voluntary Contribution Account (together with his nondeductible voluntary
contributions to any other qualified plans maintained by the Employer) for all
Plan Years since he became a Participant shall not exceed 10 percent of the
aggregate compensation that he has received for all such Plan Years.
3.8 EXCESS MATCHING AND PARTICIPANT CONTRIBUTIONS.
(a) Excess Actual Contribution Percentage. If the Actual
Contribution Percentage for a Plan Year for the Participants who are Highly
Compensated Employees eligible to make Section 401(k) contributions or voluntary
(after- tax) contributions exceeds the maximum amount allowable under Section
3.2(b) (after application of Section 3.1(f) and (g)), then the Administrator
shall determine the amount to be distributed (or, if forfeitable, forfeited)
("Excess Aggregate Contributions") in accordance with the Code and applicable
Treasury Regulations and the following. "Excess Aggregate Contributions" shall
mean, with respect to any Plan Year, the excess of:
(1) The aggregate amount of contributions actually taken
into account in computing the Actual Contribution Percentage of Highly
Compensated Employees for such Plan Year, over
(2) The maximum amount of such contributions permitted by
the Actual Contribution Percentage test (determined by hypothetically reducing
contributions made on behalf of Highly Compensated Employees in order of the
ratios calculated separately for each such Participant (under Section 1.3)
beginning with the highest of such percentages).
(b) Required Distributees and Forfeitures. Excess Aggregate
Contributions are allocated to the Highly Compensated Employees with the largest
amounts of contributions taken into account in calculating the Actual
Contribution Percentage test for the year in which the excess arose, beginning
with the Highly Compensated Employee with the largest amount of such
contributions and continuing in descending order until all the Excess Aggregate
Contributions have been allocated. For purposes of the preceding sentence, the
"largest amount" is determined after distribution (or forfeiture) of any Excess
Aggregate Contributions.
(c) Distribution and Forfeiture. The Administrator shall
distribute to (or forfeit from in the case of a forfeitable amount) each Highly
Compensated Employee specified in (b) above from his Account the sum (or
difference) of:
(1) the amount (if any) determined under (b) above; plus
(or minus)
(2) the income (or loss) allocable to the amount
determined under (1) determined by the Administrator in accordance with Treasury
Regulations under any reasonable method used consistently for all Participants
and for all corrective distributions under the Plan for the Plan Year.
Any other provisions of the Plan to the contrary notwithstanding, the
Administrator shall distribute (or forfeit, as applicable) the amount so
determined as a lump sum no later than the last day of the following Plan Year;
provided however, the Employer shall be subject to a 10% excise tax under
section 4979 of the Code if the distributions (or forfeitures) are not made
before the close of the first 2-1/2 months of such following Plan Year. Any
forfeitures in this Section 3.8 may not be allocated to Participants who receive
a distribution or incur a forfeiture under this Section 3.8.
(d) Alternative Limitation. If the alterative limitation referred
to in Section 3.2(b)(1)(B) is exceeded, then the Administrator shall take
corrective action under either this Section, Section 3.1(g) or a combination of
the two, as determined by the Administrator.
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(e) Allocation of Excess. The amount determined above shall be
distributed from the Participant's Nondeductible Voluntary Contribution Account
to the extent of the contributions thereto for the Plan Year plus the income
allocable to such contributions and the excess (if any) shall be distributed or
forfeited from the Participant's Employer Matching Account in accordance with
the vested percentage of the Participant's Employer Matching Account.
(f) Effect on Other Provisions. If distributions are made in
accordance with this Section 3.8 with respect to a Plan Year, then the
limitations of Section 3.2(b) shall be deemed satisfied for the Plan Year.
Except to the extent provided by the Secretary of the Treasury, distributions
hereunder shall be taken into account under Article 4.
3.9 ROLLOVER CONTRIBUTIONS.
(a) General. If elected in the Adoption Agreement, an Eligible
Employee who has satisfied the Plan's eligibility criteria applicable to any
type of contributions, may contribute to the Plan money and/or other property
(acceptable to the Trustee) that the Administrator reasonably concludes
qualifies for such a rollover under the provisions of section 402(c) or
403(a)(4) of the Code or that qualifies as a rollover contribution under section
408(d)(3) of the Code. Any such contribution shall be credited to such
Participant's Rollover Account. Anything in the foregoing to the contrary
notwithstanding, amounts constituting accumulated deductible employee
contributions, as defined in section 72(o)(5) of the Code, may not be rolled
over to the Plan. If the Administrator later determines that the contribution
was an invalid rollover contribution, such contribution plus any earnings
attributable thereto shall be distributed to the Participant within a reasonable
time after such determination.
(b) Pre-Participation Rollovers. If elected in the Adoption
Agreement, an Eligible Employee, prior to satisfying the Plan's eligibility
requirements and becoming a Participant, may make a rollover contribution in
accordance with (a) above (if the availability of rollovers is elected in the
Adoption Agreement). Any such contribution shall be credited to a Rollover
Account established for the Eligible Employee in which the Eligible Employee's
interest is nonforfeitable at all times. Making such a rollover contribution,
however, shall not result in the Eligible Employee becoming a Participant any
earlier than otherwise provided in the Plan (and, in particular an Eligible
Employee prior to becoming a Participant, will not be entitled to make any
other, or share in any other, types of contributions under the Plan). For
purposes of investments (including the allocation of earnings and losses),
withdrawals and distributions, an Eligible Employee with a Rollover Account
shall have the same rights as a Participant with a Rollover Account.
3.10 SAFE HARBOR 401(k) PLAN.
(a) General. For Plan Years beginning after December 31, 1998, if
the Safe Harbor 401(k) Plan election is made in the Adoption Agreement, the
Actual Deferral Percentage limitations of Section 3.1(e) and the Actual
Contribution Percentage limitations of Section 3.2(b) shall not apply. Instead,
the provisions of this Section 3.10 and the Safe Harbor 401(k) Plan provisions
of the Adoption Agreement shall apply.
(b) Required Contributions. In accordance with the selections in
the Adoption Agreement, the Employer shall make contributions to the Nonelective
Contribution Accounts of Participants eligible to receive an allocation of such
contributions. Such contributions shall be made no later than the end of the
Plan Year following the Plan Year to which the contributions relate (or by such
other time as may be required or permitted under Treasury Regulations or
Internal Revenue Service promulgations).
(c) Compensation. "Compensation" is defined in Section 1.11 of the
Plan, except, for purposes of this Section, no dollar limit, other than the
limit imposed by section 401(a)(17) of the Code, applies to the Compensation of
a Non-highly Compensated Employee. However, solely for purposes of determining
the Compensation subject to a Participant's deferral election, the Employer may
use an alternative definition to the one described in the preceding sentence,
provided such alternative definition is a reasonable definition within the
meaning of section 1.414(s)-1(d)(2) of the Treasury Regulations and permits each
Participant to elect sufficient elective deferrals to receive the maximum amount
of matching contributions (determined using the definition of Compensation
described in the preceding sentence) available to the Participant under the
Plan.
(d) Vesting. Since such contributions are allocated to the
Nonelective Contribution Accounts, they are fully vested at all times. See
Section 6.1(c) of the Plan.
(e) Restrictions on Withdrawals and Distributions. Since such
contributions are allocated to the Nonelective Contribution Accounts, they are
subject to the restrictions on withdrawals and distributions in Section 7.7 of
the Plan.
(f) Notice Requirement. The Employer shall meet the notice
requirements of section 401(k)(12)(D)
1-26
of the Code. In this regard, at least 30 days, but not more than 90 days, before
the beginning of the Plan Year, the Employer will provide each Participant a
comprehensive notice of the Employee's rights and obligations under the Plan,
written in a manner calculated to be understood by the average Participant. If
an Employee becomes eligible after the 90th day before the beginning of the Plan
Year and does not receive the notice for that reason, the notice must be
provided no more than 90 days before the Employee becomes eligible but not later
than the date the employee becomes eligible. In addition to any other election
periods provided under the Plan, each Participant may make or modify a deferral
election during the 30-day period immediately following receipt of the notice
described above.
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ARTICLE 4
LIMITATIONS ON ANNUAL ADDITIONS
4.1 DEFINITIONS. As used in this Article 4, the following terms shall have
the following meanings.
(a) Annual Additions. "Annual Additions" means the sum of the
following amounts credited to a Participant's account for the Limitation Year:
(1) Employer contributions;
(2) forfeitures; and
(3) (A) for Limitation Years beginning before January 1, 1987,
the lesser of:
(i) one-half of the nondeductible employee
contributions or
(ii) the nondeductible employee contributions in
excess of 6 percent of the Participant's Section 415 Compensation for the
Limitation Year; and
(B) for Limitation Years beginning after December 31, 1986,
100 percent of the nondeductible employee contributions.
For this purpose, any excess amount applied under Sections 4.2(d) or
4.3(e) in the Limitation Year to reduce Employer contributions will be
considered Annual Additions for such Limitation Year.
Amounts allocated, in years beginning after March 31, 1984, to an
individual medical benefit account, as defined in section 415(l)(2) of the Code,
which is part of a pension or annuity plan maintained by the Employer or an
Affiliate are treated as Annual Additions to a defined contribution plan. Also,
amounts derived from contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable to post-retirement
medical benefits allocated to the separate account of a key employee, as defined
in section 419A(d)(3) of the Code, under a welfare benefits fund, as defined in
section 419(e) of the Code, maintained by the Employer or an Affiliate, are
treated as Annual Additions to a defined contribution plan. Allocations under a
simplified employee pension as defined in section 408(k) of the Code, are
treated as Annual Additions.
(b) Defined Benefit Fraction. "Defined Benefit Fraction" means a
fraction, the numerator of which is the sum of the Participant's Projected
Annual Benefits under all the defined benefit plans (whether or not terminated)
maintained by the Employer and all Affiliates, and the denominator of which is
the lesser of 125 percent of the dollar limitation determined for the Limitation
Year under sections 415(b) and (d) of the Code or 140 percent of the Highest
Average Compensation, including any adjustments under section 415(b) of the
Code.
If a Limitation Year beginning before January 1, 2000 contains any
portion of a Plan Year for which the Plan is a Top-Heavy Plan, then "100
percent" shall be substituted for "125 percent"; provided however, any
limitation which results from the application of this sentence may be exceeded
so long as there are no defined benefit plan accruals for the individual and no
employer contributions, forfeitures, or voluntary nondeductible contributions
allocated to the individual; and provided further, this sentence shall not apply
if the sum, for the applicable aggregation group, of the Key Employees' benefits
from all defined benefit plans and defined contribution plans does not exceed 90
percent of the total of all participants' benefits and if the Employer
contribution would satisfy the requirements of Section 3.4 if "four percent"
were substituted for "three percent" and "7-1/2 percent" were substituted for
"five percent".
Notwithstanding the above, if the Participant was a participant as of
the first day of the first Limitation Year beginning after December 31, 1986, in
one or more defined benefit plans maintained by the Employer which were in
existence on May 6, 1986, the denominator of this fraction will not be less than
125 percent of the sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last Limitation Year beginning
before January 1, 1987, disregarding any changes in the terms and conditions of
the plan after May 5, 1986. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the requirements of
section 415 of the Code for all Limitation Years beginning before January 1,
1987.
(c) Defined Contribution Fraction. "Defined Contribution Fraction"
means a fraction, the numerator of which is the sum of the Annual Additions to
the Participant's account under all the defined contribution
1-28
plans (whether or not terminated) maintained by the Employer or an Affiliate 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 or
an Affiliate, and the Annual Additions attributable to all welfare benefits
funds, as defined in section 419(e) of the Code, and individual medical benefit
accounts, as defined in section 415(l)(2) of the Code, maintained by the
Employer or an Affiliate), and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior Limitation Years of
service with the Employer or an Affiliate (regardless of whether a defined
contribution plan was maintained by the Employer or an Affiliate). The maximum
aggregate amount in any Limitation Year is the lesser of 125 percent of the
dollar limitation in effect under section 415(c)(1)(A) of the Code or 35 percent
of the Participant's Section 415 Compensation for such year.
If a Limitation Year beginning before January 1, 2000 contains any
portion of a Plan Year for which the Plan is a Top-Heavy Plan, then "100
percent" shall be substituted for "125 percent"; provided however, any
limitation which results from the application of this sentence may be exceeded
so long as there are no defined benefit plan accruals for the individual and no
employer contributions, forfeitures, or voluntary nondeductible contributions
allocated to the individual; and provided further, this sentence shall not apply
if the sum, for the applicable aggregation group, of the Key Employees' benefits
from all defined benefit plans and defined contribution plans does not exceed 90
percent of the total of all participants' benefits and if the Employer
contribution would satisfy the requirements of Section 3.4 if "four percent"
were substituted for "three percent" and "7-1/2 percent" were substituted for
"five percent".
If the Employee was a participant as of the end of the first day of the
first Limitation Year beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which were in existence on May 6,
1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the Defined Benefit Fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of (1)
the excess of the sum of the fractions over 1.0 times (2) the denominator of
this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the Plan made
after May 5, 1986, but using the section 415 limitation applicable to the first
Limitation Year beginning on or after January 1, 1987. The Annual Addition for
any Limitation Year shall not be recomputed to treat all nondeductible employee
contributions as Annual Additions.
(d) Employer. "Employer" means the employer that adopts this Plan,
and all members of a controlled group of corporations (as defined in section
414(b) of the Code as modified by section 415(h) of the Code), all commonly
controlled trades or businesses (as defined in section 414(c) of the Code as
modified by section 415(h) of the Code), all affiliated service groups (as
defined in section 414(m) of the Code) of which the adopting employer is a part,
and any other entity required to be aggregated with the Employer pursuant to
Treasury Regulations under section 414(o) of the Code.
(e) Excess Amount. "Excess Amount" means the excess of the
Participant's Annual Additions for the Limitation Year over the Maximum
Permissible Amount.
(f) Highest Average Compensation. "Highest Average Compensation"
means the average Section 415 Compensation for the three consecutive years of
service with the Employer that produces the highest average. A year of service
with the Employer is the calendar year or any other 12-consecutive month period
defined pursuant to the Adoption Agreement.
(g) Limitation Year. "Limitation Year" means a calendar year, or
the 12-consecutive month period elected by the Employer in the Adoption
Agreement. All qualified plans maintained by the Employer must use the same
Limitation Year. If the Limitation Year is amended to a different 12-consecutive
month period, the new Limitation Year must begin on a date within the Limitation
Year in which the amendment is made.
(h) Master or Prototype Plan. "Master or Prototype Plan" means a
plan the form of which is the subject of a favorable opinion letter from the
Internal Revenue Service.
(i) Maximum Permissible Amount. "Maximum Permissible Amount" means
the lesser of (1) $30,000 (as adjusted by the Secretary of Treasury in
accordance with Section 415(d) of the Code) or (2) 25 percent of the
Participant's Section 415 Compensation for the Limitation Year.
The Section 415 Compensation limitation in (2) shall not apply
to any contribution for medical benefits (within the meaning of section 401(h)
or 419A(f)(2) of the Code) which is otherwise treated as an Annual Addition.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12-consecutive month period, the
Maximum Permissible Amount will not exceed $30,000 (as
1-29
adjusted by the Secretary of Treasury in accordance with Section 415(d) of the
Code) multiplied by the following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
(j) Projected Annual Benefit. "Projected Annual Benefit" means the
annual retirement benefit (adjusted to an actuarially equivalent straight life
annuity if such benefit is expressed in a form other than a straight life
annuity or qualified joint and survivor annuity) to which the Participant would
be entitled under the terms of the plan assuming:
(1) the participant will continue employment until normal
retirement age under the plan (or current age, if later), and
(2) the participant's compensation for the current
Limitation Year and all other relevant factors used to determine benefits under
the plan will remain constant for all future Limitation Years.
(k) Section 415 Compensation. "Section 415 Compensation" shall
have the meaning selected in the Adoption Agreement.
Section 415 Compensation actually paid or made available by the Employer to a
Participant within a Limitation Year (including, at the election of the
Employer, amounts earned but not paid in a Limitation Year because of the timing
of pay periods and pay days if these amounts are paid during the first few weeks
of the next Limitation Year, the amounts are included on a uniform and
consistent basis with respect to all similarly situated Employees and no amount
is included in more than one Limitation Year) shall be used unless, for
Limitation Years beginning before December 31, 1991 (or such later date as may
be prescribed by Treasury Regulations), the Employer had elected to use the
Section 415 Compensation accrued for an entire Limitation Year.
4.2 LIMITATION IN CASE OF NO OTHER PLAN.
(a) Limitation. If the Participant does not participate in, and
has never participated in another qualified plan, or a welfare benefits fund as
defined in section 419(e) of the Code, maintained by the Employer, or an
individual medical benefit account, as defined in section 415(l)(2) of the Code,
maintained by the Employer or a simplified employee pension as defined in
section 408(k) of the Code, which provides an Annual Addition, the amount of
Annual Additions which may be credited to the Participant's Account for any
Limitation Year will not exceed the lesser of the Maximum Permissible Amount or
any other limitation contained in this Plan. If the Employer contribution that
would otherwise be contributed or allocated to the Participant's Account would
cause the Annual Additions for the Limitation Year to exceed the Maximum
Permissible Amount, the amount contributed or allocated will be reduced so that
the Annual Additions for the Limitation Year will equal the Maximum Permissible
Amount.
(b) Estimated. Prior to determining the Participant's actual
Section 415 Compensation for the Limitation Year, the Employer may determine the
Maximum Permissible Amount for a Participant on the basis of a reasonable
estimation of the Participant's Section 415 Compensation for the Limitation
Year, uniformly determined for all Participants similarly situated.
(c) Actual. As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible Amount for the Limitation Year
will be determined on the basis of the Participant's actual Section 415
Compensation for the Limitation Year.
(d) Disposition of Excess. If, pursuant to (c) above, as a result
of the allocation of forfeitures, a reasonable error in determining the amount
of elective deferrals (within the meaning of section 402(g)(3) of the Code) that
may be made within the limits of section 415 of the Code, or under other facts
and circumstances which the Commissioner of Internal Revenue finds justify the
availability of the rules set forth herein, there is an Excess Amount, the
excess will be disposed of as follows:
(1) elective deferrals (within the meaning of section
402(g) of the Code) and employee contributions to the extent matching
contributions were not made with respect thereto together with any gains
allocated thereto shall be returned to the extent that the return would reduce
the excess amount (and in such a case the contributions shall be disregarded
under the Plan's provisions relative to sections 402(g), 401(k)(3) and 401(m)(2)
of the Code);
(2) elective deferrals (within the meaning of section
402(g) of the Code) and employee contributions together with any gains allocated
thereto shall be returned to the extent that the return and the
1-30
forfeiture of any matching contributions made with respect to such contributions
would reduce the excess amount (and in such a case the contributions shall be
disregarded under the Plan's provisions relative to sections 402(g), 401(k)(3)
and 401(m)(2) of the Code);
(3) If after the application of paragraphs (1) and (2) an
Excess Amount still exists, and the Participant is covered by the Plan at the
end of the Limitation Year, the Excess Amount in the Participant's Account will
be used to reduce Employer contributions (including any allocation of
forfeitures) for such Participant in the next Limitation Year, and each
succeeding Limitation Year if necessary.
(4) If after the application of paragraphs (1) and (2) an
Excess Amount still exists, and the Participant is not covered by the Plan at
the end of a Limitation Year, the Excess Amount will be held unallocated in a
suspense account. The suspense account will be applied to reduce future Employer
contributions (including allocation of any forfeitures) for all remaining
Participants in the next Limitation Year, and each succeeding Limitation Year if
necessary;
(5) If a suspense account is in existence at any time
during a Limitation Year pursuant to this Section, it will not participate in
the allocation of the Plan's investment gains and losses. If a suspense account
is in existence at any time during a particular Limitation Year and paragraph
(5) above is applicable, all amounts in the suspense account must be allocated
and reallocated to Participants' Accounts before any Employer or employee
contributions may be made to the Plan for that Limitation Year. Except as
provided in paragraphs (1) and (2), excess amounts may not be distributed to
Participants or former Participants.
4.3 LIMITATION IN CASE OF ANOTHER MASTER OR PROTOTYPE DEFINED CONTRIBUTION
PLAN.
(a) General. This Section applies if, in addition to this Plan,
the Participant is covered under another qualified master or prototype defined
contribution plan maintained by the Employer, or a welfare benefits fund as
defined in section 419(e) of the Code, maintained by the Employer, or an
individual medical benefit account, as defined in section 415(l)(2) of the Code,
maintained by the Employer, which provides an Annual Addition, during any
Limitation Year. The Annual Additions which may be credited to a Participant's
Account under this Plan for any such Limitation Year will not exceed the Maximum
Permissible Amount reduced by the Annual Additions credited to a Participant's
account under the other plans and welfare benefits funds for the same Limitation
Year. If the Annual Additions with respect to the Participant under other
defined contribution plans and welfare benefits funds maintained by the Employer
are less than the Maximum Permissible Amount and the Employer contribution that
would otherwise be contributed or allocated to the Participant's Account under
this Plan would cause the Annual Additions for the Limitation Year to exceed
this limitation, the amount contributed or allocated will be reduced so that the
Annual Additions under all such plans and funds for the Limitation Year will
equal the Maximum Permissible Amount. If the Annual Additions with respect to
the Participant under such other defined contribution plans and welfare benefits
funds in the aggregate are equal to or greater than the Maximum Permissible
Amount, no amount will be contributed or allocated to the Participant's Account
under this Plan for the Limitation Year.
(b) Estimated. Prior to determining the Participant's actual
Section 415 Compensation for the Limitation Year, the Employer may determine the
Maximum Permissible Amount for a Participant in the manner described in Section
4.2(b).
(c) Actual. As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible Amount for the Limitation Year
will be determined on the basis of the Participant's actual Section 415
Compensation for the Limitation Year.
(d) Allocation of Excess Among Plans. If, pursuant to (c) above,
as a result of the allocation of forfeitures, a reasonable error in determining
the amount of elective deferrals (within the meaning of section 402(g)(3) of the
Code) that may be made within the limits of section 415 of the Code, or under
other facts and circumstances which the Commissioner of Internal Revenue finds
justify the availability of the rules set forth herein, a Participant's Annual
Additions under this Plan and such other plans and funds would result in an
Excess Amount for a Limitation Year, the Excess Amount will be deemed to consist
of the following (in the following order of priority):
(1) first, employee contributions under any plan of the
Employer to the extent matching contributions were not made with respect
thereto;
(2) second, elective deferrals (within the meaning of
section 402(g)(3) of the Code) under any plan of the Employer to the extent
matching contributions were not made with respect thereto;
(3) third, employee contributions under any plan of the
Employer proportionate with matching contributions made with respect thereto;
1-31
(4) fourth, elective deferrals (within the meaning of
section 402(g)(3) of the Code) under any plan of the Employer proportionate with
matching contributions made with respect thereto;
(5) fifth, any other allocations under the Employer's
profit sharing plan;
(6) sixth, any other allocations under the Employer's
money purchase pension plan; and
(7) seventh, any other Annual Additions under all other
plans.
(e) Disposition of Excess. Any Excess Amount attributed to this
Plan will be disposed in the manner described in Section 4.2(d).
4.4 LIMITATION IN CASE OF ANOTHER DEFINED CONTRIBUTION PLAN OTHER THAN A
MASTER OR PROTOTYPE PLAN. If the Participant is covered under another qualified
defined contribution plan maintained by the Employer which is not a Master or
Prototype Plan, Annual Additions which may be credited to the Participant's
Account under this Plan for any Limitation Year will be limited in accordance
with Section 4.3 as though the other plan were a Master or Prototype Plan unless
the Employer provides other limitations under the Adoption Agreement.
4.5 LIMITATION IN CASE OF ANOTHER DEFINED BENEFIT PLAN. If the Employer
maintains, or at any time maintained, a qualified defined benefit plan covering
any Participant in this Plan, the sum of the Participant's Defined Benefit
Fraction and Defined Contribution Fraction will not exceed 1.0 in any Limitation
Year beginning before January 1, 2000. The Annual Additions which may be
credited to the Participant's Account under this Plan for any Limitation Year
beginning before January 1, 2000 will be limited in accordance with the Adoption
Agreement.
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ARTICLE 5
INVESTMENT OF ACCOUNTS
5.1 GENERAL. Accounts shall be invested as provided in the Adoption
Agreement and the Trust Agreement.
5.2 INVESTMENT ELECTIONS. If elected in the Adoption Agreement, each
Participant shall elect the manner in which either his entire Account or the
selected subaccounts, as elected in the Adoption Agreement, and any future
contributions and forfeitures allocated thereto are to be invested. In such a
case, each Participant may choose from among such funds as the Administrator
directs the Trustee to make available and, if elected in the Adoption Agreement,
any other legally permissible investments which the Trustee agrees to hold. Such
an election shall be made in writing and shall be given to the Employer, who
shall deliver it to the Trustee. Elections relating to existing Account (or
subaccount) balances may be changed only effective as of an Accounting Date if
the change would involve one or more of the funds made available by the Trustee
unless the daily valuation option is elected in the Adoption Agreement for the
entire Account (or particular subaccount). The Administrator may prescribe rules
deemed appropriate for administering this provision including but not limited to
rules which limit the frequency of changes to elections, prescribe times for
making elections, regulate the amount or increment a Participant may allocate to
a particular fund, require or allow an election (or election change) to relate
only to future contributions and forfeitures and provide for the investment of
an Account (or subaccount) of a Participant who fails to make an investment
election.
5.3 INVESTMENT ADJUSTMENT.
(a) Investment Elections. If the availability of Participant
investment elections is elected in the Adoption Agreement, then this provision
shall apply with respect to the entire Accounts of Participants or with respect
to only the subaccounts of Participants for which Participant investment
elections are available, as elected in the Adoption Agreement.
(1) Investment Funds.
(A) Balance Forward Valuation. If the daily
valuation option is not applicable to the entire Account or to particular
subaccounts, as of each Accounting Date, each of the separate funds comprising
the Plan Assets (attributable to the entire Account or such subaccounts, as the
case may be) shall be valued at fair market value and on the basis of such
value, earnings or losses in the respective funds since the preceding Accounting
Date shall be determined and reflected in the Participants' Accounts (in the
appropriate subaccounts) in a fair and nondiscriminatory manner on the basis of
their varying interests therein since the preceding Accounting Date.
(B) Daily Valuation. If the daily valuation
option is applicable to the entire Account or to particular subaccounts, then
the Trustee shall account for the investments and investment transactions
attributable to each Account or such subaccount, as the case may be, separately.
Earnings or losses on Plan Assets attributable to a particular Account or
subaccount shall be allocated solely to that Account or subaccount.
(2) Outright Participant Investment Discretion. If, under
the Adoption Agreement, a Participant may choose any legally permissible
investments which the Trustee agrees to hold, and if the Participant directs the
investment of the Account, or any portion thereof, in any investment other than
the funds made available by the Trustee under Section 5.2, the Trustee shall
account for such investments and investment transactions of such Participant
separately. Earnings or losses on Plan Assets attributable to a particular
Account shall be allocated solely to that Account. A Participant will be
entitled to receive a statement of his Account value at least one time per Plan
Year.
(b) No Investment Elections. If the availability of Participant
investment elections is not elected in the Adoption Agreement, or is elected but
only with respect to some (but not all) subaccounts, then this provision shall
apply.
(1) Balance Forward Valuation. If the daily valuation
option is not applicable to the entire Account or to particular subaccounts, as
of each Accounting Date, the Plan Assets (excluding insurance contracts and
excluding Plan Assets subject to investment elections under (a) above)
(attributable to the entire Account or such subaccounts, as the case may be)
shall be valued at fair market value and on the basis of such value, earnings or
losses on the Plan Assets not subject to investment elections under (a) above
since the preceding Accounting Date shall be determined and reflected in the
Participants' Accounts (in the appropriate subaccounts) in a fair and
nondiscriminatory manner on the basis of their varying interests therein since
the preceding Accounting Date.
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(2) Daily Valuation. If the daily valuation option is
applicable to the entire Account or to particular subaccounts, then the Trustee
shall account for the investments and investment transactions attributable to
each Account or such subaccounts, as the case may be, separately. Earnings or
losses on Plan Assets attributable to a particular Account or subaccount shall
be allocated solely to that Account or subaccount. A Participant will be
entitled to receive a statement of his Account value at least one time per Plan
Year.
(c) Special Rule for Non-Publicly Traded Qualifying Employer
Securities. In the event Plan Assets are invested in qualifying employer
securities for which there is no generally recognized market, notwithstanding a
selection of the daily valuation option in the Adoption Agreement, the
Administrator may determine to use (in a consistent and non-discriminatory
manner) the balance forward valuation method with respect to such qualifying
employer securities.
5.4 INSURANCE.
(a) Trust Agreement. If the Trust Agreement provides for the
purchase of life insurance, then the Employer may direct that, subject to the
limitations in (d) below, a Participant's Account be applied to the purchase of
life insurance on the life of such Participant. If any part of a Participant's
Deductible Voluntary Contribution Account is used to purchase life insurance,
the amount so used will be treated as a distribution.
(b) Earmarking. If insurance contracts are so acquired, then
either such acquisition shall be only at the Participant's request or the amount
devoted to such purpose shall be a uniform percentage of each Participant's
interest in the Employer's contribution. If such percentage of the Account of
any Participant will provide an amount which is insufficient to purchase an
insurance contract as above provided, then such purchase shall be deferred until
the amount available therefor is sufficient; in the meantime retaining such
amount as a reserve, in cash or invested so as to be readily converted into
cash, for the benefit of such Participant.
(c) Accounting. For purposes of Section 5.3, an Account shall be
reduced by any insurance premiums allocable thereto. The proceeds or, if the
policy is surrendered, the cash value of any such insurance policy shall be
allocated, in proportion to the premium paid, to the subaccount or subaccounts
to which the premiums were charged. Any dividends or credits earned on insurance
contracts will be allocated to the Account of the Participant for whose benefit
the contract is held.
(d) Limitations.
(1) General. Payments for life insurance premiums from a
Participant's Employer Contribution Account shall be limited as follows:
(A) Ordinary life - For purposes of these
incidental insurance provisions, ordinary life insurance contracts are contracts
with both nondecreasing death benefits and nonincreasing premiums. If such
contracts are purchased, less than one-half of the aggregate Employer
contributions allocated to any Participant will be used to pay the premiums
attributable to them.
(B) Term and universal life - No more than one-
fourth of the aggregate Employer contributions allocated to any Participant will
be used to pay the premiums on term life insurance contracts, universal life
insurance contracts, and all other life insurance contracts which are not
ordinary life.
(C) Combination - The sum of one-half of the
ordinary life insurance premiums and all other life insurance premiums will not
exceed one-fourth of the aggregate Employer contributions allocated to any
Participant.
(2) Non-integrated Profit Sharing Plan. If the Plan is a
profit sharing plan and if, under the Adoption Agreement, Employer contributions
are allocated on a non-integrated basis, then, at any time, the aggregate
payments for life insurance premiums from a Participant's Employer Contribution
Account shall be limited to:
(A) the aggregate Employer contributions made at
least 2 years before such time, plus
(B) the limitation determined under (1) above
with respect to Employer contributions made less than 2 years prior to such
time.
(e) Termination of Employment. Upon a Participant's termination of
employment, the entire value of the life insurance contract or contracts shall,
subject to Section 8.2, be converted into cash or to provide
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periodic income, pursuant to one of the forms of payment provided under the
Plan, without life insurance protection beyond retirement, or the contract or
contracts shall be distributed at retirement to the Participant; provided
however, unless the Adoption Agreement provides for an annuity as a form of
payment, no contract may be converted to a life annuity.
(f) Ownership. The Trustee shall apply for and will be the owner
of any insurance contract purchased under the Plan. The insurance contract(s)
must provide that the proceeds will be payable to the Trustee. Any proceeds
shall be applied pursuant to the applicable provisions of Article 9.
(g) Conflict. In the event of any conflict between the terms of
this Plan and the terms of any insurance contracts hereunder, the Plan
provisions shall control.
5.5 LOANS.
(a) Eligibility. If the Adoption Agreement provides for loans,
then, upon written application and filing the proper form with the Administrator
by a Participant, the Administrator may authorize and direct the Trustee to
grant a loan to such Participant, subject to the conditions set forth below.
(b) Conditions. Loans under (a) above shall meet all of the
following requirements:
(1) Loans shall be made available to all Participants on
a reasonably equivalent basis. If the Adoption Agreement provides that loans are
available only to Participants while they are Employees, loans nevertheless
shall be available to former Employees who are parties in interest.
(2) Loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount made available to
other Participants.
(3) Loans shall bear a reasonable rate of interest.
(4) Loans shall be adequately secured, which security
may, notwithstanding Section 13.2, consist of up to 50 percent (100 percent for
loans granted or renewed prior to October 19, 1989) of an assignment of a
borrowing Participant's accrued nonforfeitable benefit under the Plan (excluding
any Deductible Voluntary Contribution Account).
(5) If such a loan is secured by a Participant's accrued
nonforfeitable benefit under the Plan and if the Qualified Joint and Survivor
Annuity would be the automatic form of benefit to the Participant under Section
8.2 of the Plan at the time such accrued nonforfeitable benefit is used as
security, then, with respect to any loan made after August 18, 1985, such loan
and the possible reduction in the Participant's benefit must, within the 90-day
period prior to making the loan, be consented to by the Participant and (if he
is married) his spouse. A new consent is required if the Participant's Account
balance is used for any increase in the amount of security or if a loan is
renegotiated, extended, renewed or otherwise revised. The consent shall comply
with the requirements of Section 8.2(d)(4) but shall be deemed to meet any
requirements contained therein even though the Participant is married to a
different spouse at the time of any setoff.
(6) No Participant loan shall exceed the limitations
under (c) below.
(7) In the event of default, foreclosure on the
Participant's accrued nonforfeitable benefit, to the extent used as security for
the loan, will not occur until a distributable event occurs under the Plan,
which (for purposes hereof) shall include satisfaction of the limitations in (d)
below. Events constituting default shall be specified in the promissory note or
security agreement executed by the Participant. A suspension of loan repayments
pursuant to section 414(u)(4) of the Code shall not constitute a default.
(8) No loans will be made to any Owner-Employee or, if
the Employer is an electing small business (Subchapter S) corporation, to any
employee or officer of the Employer who owns (or is considered as owning within
the meaning of section 318(a)(1) of the Code), on any day during the taxable
year of the Employer, more than 5 percent of the outstanding stock of the
Employer.
(c) Limitation on Amount. A loan under the Plan (when added to any
other loans outstanding under the Plan and any other plans taken into account
under section 72(p)(2)(D) of the Code) to a Participant made, renewed,
renegotiated, modified or extended after December 31, 1986 shall not exceed the
lesser of:
(1) $50,000 reduced by the excess (if any) of -
(A) the highest outstanding balance of loans
from the Plan (and other plans taken into account) during the one-year period
ending on the day before the date on which such loan was made, over
1-35
(B) the outstanding balance of loans from the
Plan (and other plans taken into account) on the date such loan was made, or
(2) the greater of
(A) for loans granted or extended prior to
October 19, 1989, the present value of the nonforfeitable portion of the
Participant's Account (excluding any Deductible Voluntary Contribution Account)
not in excess of $10,000 or
(B) one-half of the present value of the
nonforfeitable portion of the Participant's Account (excluding any Deductible
Voluntary Contribution Account).
(d) Profit Sharing Plan Distributable Event. Solely for purposes
of foreclosure on the Participant's accrued nonforfeitable benefit, to the
extent used as security for the loan, default on a Participant's note shall be
deemed to be a distributable event for a Participant who has been a Participant
for at least 60 months, and for any other Participant except to the extent of
the portion of his Account attributable to Employer contributions actually made
to the Plan during the 2-year period preceding the foreclosure; provided,
however, with respect to a Participant's Section 401(k) Account, such a default
shall be deemed a distributable event if, and only if, the Participant has
attained age 59-1/2.
(e) Repayment Period. Each loan, by its terms, shall be required
to be repaid within 5 years; provided, however, such requirement shall not apply
to any loan made, renewed, renegotiated, modified or extended after December 31,
1986 used to acquire any dwelling unit which within a reasonable time is to be
used (determined at the time the loan is made) as the principal residence of the
Participant.
(f) Level Amortization. Each loan made, renewed, renegotiated,
modified or extended after December 31, 1986 shall be subject to substantially
level amortization, with payments of principal and interest not less frequently
than quarterly, over the term of the loan.
(g) Earmarking. Anything in the Plan to the contrary
notwithstanding, if a loan is made to a Participant pursuant to (a) above, then
his interest in other Plan Assets shall be reduced by the amount of the loan,
the loan shall be an investment of his Account, and interest and other amounts
allocable to such loan shall be allocated only to his Account. If the
Participant's Account represented by a loan becomes payable to him in accordance
with the terms of the Plan (and the Participant has not repaid the loan at the
time the distribution is to be made) the Administrator shall either include the
loan in the distribution or cancel the loan and treat the unpaid loan balance as
a distribution.
(h) Effect of Default on Benefits. For purposes of determining the
amount of the Qualified Joint and Survivor Annuity or Preretirement Survivor
Annuity otherwise payable under Section 8.2 or 9.1, a Participant's Account
shall be reduced by that part of his Account held as security for the loan and
treated as payment in satisfaction of the loan (including accrued interest).
Upon a Participant's death, if less than 100 percent of his Account is payable
to his Surviving Spouse, then, in determining the amount payable to the
Surviving Spouse, the amount treated as payment in satisfaction of any loan
(including accrued interest) shall first be treated as reducing the Account.
(i) Assignments. As assignment or pledge of any portion of a
Participant's interest in the Plan and a loan, pledge or assignment with respect
to an insurance contract purchased under the Plan, will be treated as a loan
under this Section.
(j) Administration. The Administrator is authorized to administer
the loan program. Loans will be approved if the proper forms and documentation
are completed and delivered to the Administrator, the amount of the loan
requested does not exceed the limits specified in this Section or the Adoption
Agreement, adequate security authorized in this Section is delivered to the
Trustee, and the other provisions of this Section are satisfied.
5.6 SEPARATELY ALLOCABLE PLAN EXPENSES. The Administrator may direct that
any expenses, including but not limited to Trustee fees, taxes and
administrative fees, attributable to specific Participants' accounts due to
investment elections under Section 5.2 (if elected in the Adoption Agreement),
life insurance under Section 5.4, loans under Section 5.5 (if elected in the
Adoption Agreement) or otherwise, be deducted directly from the Account for
which the expense was incurred to the extent paid from Plan Assets.
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ARTICLE 6
VESTING AND FORFEITURES
6.1 VESTING PROVISIONS.
(a) Voluntary Contribution Accounts. A Participant's rights to his
Deductible Voluntary Contribution Account and/or his Nondeductible Voluntary
Contribution Account shall be nonforfeitable at all times.
(b) Rollover Account. A Participant's right to his Rollover
Account shall be nonforfeitable at all times.
(c) Section 401(k) Account. A Participant's right to his Section
401(k) Account including any Nonelective Contribution Account shall be
nonforfeitable at all times.
(d) Employer Contribution Account.
(1) At Normal Retirement Age. Upon and after a
Participant's attainment of Normal Retirement Age, if he is then in the service
of the Employer or an Affiliate, he shall have a nonforfeitable right to his
Employer Contribution Account.
(2) At Early Retirement Age. If the Adoption Agreement
provides for early retirement, then, upon and after a Participant's satisfaction
of the requirements thereunder, if he is then an Employee, he shall have a
nonforfeitable right to his Employer Contribution Account.
(3) Prior to Normal Retirement Age.
(A) Vesting Schedule. A Participant with at
least one Hour of Service in a Plan Year beginning after December 31, 1988 shall
have a nonforfeitable right to a percentage of his Employer Contribution Account
on the basis of the vesting schedule specified in the Adoption Agreement. A
Participant who does not receive credit for at least one Hour of Service in a
Plan Year beginning After December 31, 1988 shall have the vested percentage of
his Employer Contribution Account determined under the applicable provisions of
the Plan in effect prior to the Plan Year beginning in 1989. If a Participant
incurs a forfeiture and is rehired, then separate accounts shall be maintained
for the Participant's pre-forfeiture and post-forfeiture Employer-derived
accrued benefit, both accounts shall share in the earnings and losses of the
Plan, and the pre-forfeiture account shall be fully vested.
(B) Vested Percentage Prior to Effective Date.
Notwithstanding (A) above, if the Plan was in existence prior to the Effective
Date, then the vested percentage of a Participant's Employer Contribution
Account shall not be less than such percentage computed under the Plan as of the
later of the Effective Date or the date of adoption of the Adoption Agreement.
(C) Death or Disability. If a Participant's
employment as an Employee terminates because of his death or incurrence of a
Disability, then his Employer Contribution Account shall be fully vested.
(D) Top-Heavy Rules. For any Plan Year in which
this Plan is a Top-Heavy Plan, and if the Plan's vesting schedule does not
satisfy section 416 of the Code, one of the minimum vesting schedules as elected
by the Employer in the Adoption Agreement will automatically apply to the Plan;
provided however, no Participant's vested percentage (as of the day before the
Plan's becoming a Top-Heavy Plan) shall be reduced. The minimum vesting schedule
applies to all benefits within the meaning of section 411(a)(7) of the Code
except those attributable to employee contributions, including benefits accrued
before the effective date of section 416 of the Code and benefits accrued before
the Plan became a Top-Heavy Plan. Further, no decrease in a Participant's
nonforfeitable percentage may occur in the event the Plan's status as a
Top-Heavy Plan changes for any Plan Year. However, this subparagraph (D) does
not apply to the account balances of any Employee who does not have an Hour of
Service after the Plan has become a Top-Heavy Plan, and such Employee's account
balance attributable to Employer contributions and forfeitures will be
determined without regard to this subparagraph (D).
(4) Forfeiture for Break in Service. If a Participant
incurs a Break in Service, and if he has not already incurred a forfeiture under
(6) or (8) below, then his forfeitable interest (as of such incurrence) in his
Employer Contribution Account shall be forfeited.
(5) Effect of Certain Distributions. Except as provided
in paragraph (6), if a Participant who is
1-37
not fully vested in his Employer Contribution Account receives an amount
therefrom prior to his incurrence of a forfeiture, then, at any relevant time
after such distribution and prior to his incurrence of a forfeiture, the vested
portion ("X") of his Employer Contribution Account ("AB") after the distribution
shall be an amount determined by the formula
X = P (AB + D) - D
where "P" is the vested percentage at the relevant time and "D" is the amount of
the distribution.
(6) Effect of Cash-Out Distributions.
(A) Forfeiture. If a Participant, who is not
fully vested in his Employer Contribution Account, terminates service and,
pursuant to Article 7, receives a distribution of the present value of his
entire nonforfeitable interest, then, if elected in the Adoption Agreement, his
forfeitable interest therein shall be forfeited immediately or upon the
incurrence of a One-Year Break as provided in the Adoption Agreement; provided
however, there shall be no forfeiture hereunder unless:
(i) the Participant has voluntarily
requested to receive such distribution; or
(ii) the value (determined as of the
date of distribution) of the Participant's nonforfeitable benefit under the Plan
(excluding any Deductible Voluntary Contribution Account) does not exceed
$5,000. The $5,000 amount specified above was increased from $3,500 effective on
the first day of the Plan Year beginning after August 5, 1997 or such later date
as the Administrator implemented this increase. If a Participant would have
received a distribution under the preceding sentence but for the fact that the
Participant's vested Account balance exceeded $5,000 when the Participant
terminated service and if at a later time such Account balance is reduced such
that it is not greater than $5,000, the Participant will receive a distribution
of such Account balance and the nonvested portion will be treated as a
forfeiture.
(B) Restoration. Effective as of the REA
Effective Date, any amount that a Participant forfeited under (A) above shall be
restored, unadjusted for any gains or losses, if such Participant resumes
employment with the Employer covered by the Plan and if he repays to the Plan
the full amount of such distribution before the earlier of:
(i) his incurrence of a Break in
Service, or
(ii) the end of the five-year period
beginning with his resumption of employment with the Employer covered by the
Plan.
(C) Source of Restoration. Any restoration under
(B) above shall be made from available forfeitures before any other allocation
thereof, and, if such forfeitures are insufficient, then the Employer (whether
or not it has Profits) shall contribute the difference.
(D) Special Rule. A Participant, who has no
vested interest in his Account and who terminates service, shall be treated for
purposes of (A) above as if he had received a distribution of the present value
of his entire nonforfeitable interest as of the date of his termination of
service. Such a Participant who resumes employment with the Employer covered by
the Plan before he incurs a Break in Service, shall be treated under (B) above
as if he had repaid to the Plan the full amount of that distribution as of the
date of his resumption of employment.
(7) Forfeiture for Death After Separation from Service.
If a Participant dies after his separation from service with the Employer and if
the Administrator has notice of such death, then any forfeitable portion of such
Participant's Account shall be forfeited.
6.2 APPLICATION OF FORFEITURES.
(a) Profit Sharing Plans.
(1) No 401(k) Feature. If the Plan is a profit sharing
plan and if a Section 401(k) feature is not elected in the Adoption Agreement,
then forfeitures occurring during a Plan Year (unadjusted for gain or loss
during such Plan Year) shall be applied as determined by the Employer in the
Adoption Agreement either to the reduction of the Employer's contributions to
the Plan or, added to the Employer's contributions for such Plan Year and,
subject to Article 4, shall be allocated to Participants' Employer Contribution
Accounts as if they were part of such contributions.
(2) With 401(k) Feature. If the Plan is a profit sharing
plan and if a Section 401(k) feature is
1-38
elected in the Adoption Agreement, then, subject to Article 4, forfeitures
occurring during a Plan Year shall be applied as determined by the Employer in
the Adoption Agreement either to the reduction of the Employer's contributions
to the Plan or, added to the Employer's contributions for such Plan Year under
such of the following Sections of the Plan as the Employer shall determine, and
shall be allocated as if they were part of such contributions:
(A) Section 3.1(b);
(B) Section 3.1(c);
(C) Section 3.2;
(D) Section 3.3; or
(E) Section 3.10.
Amounts allocated under (A), (B), or (C) shall be treated as Employer
contributions under the applicable Section for purposes of determining the
Actual Deferral Percentage or Actual Contribution Percentage.
(b) Money Purchase Pension Plans. If the Plan is a money purchase
pension plan, then forfeitures (unadjusted for gain or loss) shall be applied as
elected by the Employer in the Adoption Agreement either to the reduction of the
Employer's contributions to the Plan or, added to the Employer's contributions
for such Plan Year and, subject to Article 4, shall be allocated to
Participant's Employer Contribution Accounts as if they were part of such
contribution.
(c) Plan Expenses. In the discretion of the Employer, prior to the
application of forfeitures under (a) or (b) above, forfeitures may be used to
pay administrative expenses of the Plan.
6.3 VESTING UPON TERMINATION OR PARTIAL TERMINATION OF THE PLAN OR
DISCONTINUANCE OF CONTRIBUTIONS. Notwithstanding the provisions of Section 6.1,
upon the termination or partial termination of the Plan, or (if the Plan is a
profit sharing plan) upon the complete discontinuance of contributions under the
Plan, the amounts then credited to all affected Participants' Accounts shall be
nonforfeitable.
6.4 UNCLAIMED BENEFITS. Anything in the Plan to the contrary
notwithstanding, if a Participant or other person entitled to a benefit has not
been found within 5 years after such payment becomes due (i.e., the payment is
$5,000 or less and is subject to being cashed-out under Section 10.2 or consent
to the payment is not needed under Section 7.6(c)), then such benefit shall be
forfeited. However, if such Participant or other person is thereafter located,
then, no later than 60 days after the date on which such Participant or other
person is located, the Employer shall contribute the amount of such benefit to
the Plan, and such contribution shall be used to restore such benefit
retroactively and shall be in the same amount as was payable at the time such
benefit became due without any adjustment for the time between the date such
benefit became due and such restoration.
1-39
ARTICLE 7
WITHDRAWALS AND DISTRIBUTION
7.1 WITHDRAWALS FROM VOLUNTARY CONTRIBUTION ACCOUNT AND ROLLOVER ACCOUNT.
(a) Election. A Participant shall have the right to make
withdrawals from his Deductible Voluntary Contribution Account, Nondeductible
Voluntary Contribution Account and Rollover Account, except to the extent that a
loan is secured thereby. In no event, however, may the amount of a withdrawal
from his Nondeductible Voluntary Contribution Account, when added to the amount
of any prior withdrawals therefrom by the Participant, exceed the aggregate
amount of his contributions thereto. The Participant's exercise of his rights of
withdrawal shall be made on such forms and subject to such time and other
limitations as the Administrator shall prescribe.
(b) Payment. Any withdrawal pursuant to this Section shall be
payable in a reasonable time (giving consideration to the nature of the Plan
investments) after the Participant requests a withdrawal.
(c) Limitations. A Participant may receive a withdrawal under this
Section from his Deductible Voluntary Contribution Account and/or his
Nondeductible Voluntary Contribution Account only once per Plan Year. A
Participant may receive a withdrawal under this Section from his Rollover
Account only once per Plan Year.
(d) No Effect on Employer Contributions. No part of a
Participant's Employer Contribution Account (whether or not otherwise
nonforfeitable) shall be forfeited because of any withdrawal under this Section
7.1.
7.2 WITHDRAWALS FROM SECTION 401(k) ACCOUNT.
(a) Election. If elected in the Adoption Agreement, during his
employment with the Employer as an Eligible Employee, and subject to filing such
forms and following such time and other limitations as the Administrator shall
prescribe, a Participant may make withdrawals from his Section 401(k) Account
except to the extent a loan is secured thereby:
(1) in case of hardship; or
(2) after his attainment of age 59-1/2.
(b) Hardship.
(1) General. For purposes of (a)(1) above, "hardship"
means an immediate and heavy financial need of an Eligible Employee, determined
in accordance with (2) below. A withdrawal based upon financial hardship cannot
exceed the amount necessary to satisfy the financial need (including taxes and
penalties on the withdrawal) determined in accordance with (3) below. A
withdrawal in case of hardship may not be made from amounts credited to a
Participant's Nonelective Contribution Account after the later of December 31,
1988 or the end of the last Plan Year ending before July 1, 1989 or from
earnings on the Participant's aggregate salary deferrals after such date.
(2) Immediate and Heavy Financial Need. A withdrawal will
be deemed to be made on account of an immediate and heavy financial need of an
Eligible Employee if and only if the withdrawal is on account of:
(A) medical expenses described in section 213(d)
of the Code incurred by the Eligible Employee, the Eligible Employee's spouse,
or any dependents of the Eligible Employee (within the meaning of section 152 of
the Code);
(B) purchase (excluding mortgage payments) of a
principal residence of the Eligible Employee;
(C) payment of tuition for the next semester or
quarter of post-secondary education for the Eligible Employee, his spouse,
children, or other dependents; or
(D) the need to prevent the eviction of the
Eligible Employee from his principal residence or foreclosure on the mortgage on
the Eligible Employee's principal residence.
In the discretion of the Administrator, the hardship criteria specified in (A)
may be expanded to include the need for any of such persons to obtain such
medical care; and the hardship criteria in (C) may be expanded to
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include related educational fees, room and board expenses and tuition for the
next 12 months (rather than the next semester or quarter).
(3) Necessity of the Withdrawal. A withdrawal will be
deemed necessary to satisfy an immediate and heavy financial need of an Eligible
Employee if and only if all of the following requirements are satisfied:
(A) the withdrawal is not in excess of the
amount of the immediate and heavy financial need of the Eligible Employee;
(B) the Eligible Employee has obtained all
withdrawals and distributions (other than hardship withdrawals) and all
nontaxable loans currently available under all plans maintained by the Employer;
(C) the Plan, and all other plans maintained by
the Employer, provide that the Eligible Employee's salary reduction
contributions under section 401(k) of the Code and nondeductible employee
contributions will be suspended for at least 12 months after receipt of the
hardship withdrawal; and
(D) the Plan, and all other plans maintained by
the Employer, provide that the Eligible Employee may not make salary reduction
contributions under section 401(k) of the Code for the Eligible Employee's
taxable year immediately following the taxable year of the hardship withdrawal
in excess of the applicable limit under section 402(g) of the Code for such next
taxable year less the amount of such Eligible Employee's elective contributions
for the taxable year of the hardship withdrawal.
(c) Payment. Any withdrawal pursuant to this Section shall be
payable in a reasonable time (giving consideration to the nature of the Plan
investments) after the Participant requests a withdrawal.
(d) No Effect on Employer Contributions. No part of a
Participant's Employer Contribution Account (whether or not otherwise
nonforfeitable) shall be forfeited because of any withdrawal under this Section
7.2.
7.3 WITHDRAWALS ON OR AFTER ATTAINMENT OF AGE 59-1/2.
(a) Election. If elected in the Adoption Agreement, during his
employment with the Employer as an Eligible Employee, and subject to filing such
forms and following such time and other limitations as the Administrator shall
prescribe, a Participant may make withdrawals from his Account (from such
subaccounts as he may elect) except to the extent a loan is secured thereby
after his attainment of age 59-1/2 or such later age as may be elected in the
Adoption Agreement. The Participant's exercise of his rights of withdrawal shall
be made on such forms and subject to such time and other limitations as the
Administrator shall prescribe.
(b) Payment. Any withdrawal pursuant to this Section shall be
payable in a reasonable time (giving consideration to the nature of the Plan
investments) after the Participant requests a withdrawal.
(c) Limitations. The amount of any withdrawal from a subaccount
may not exceed the Participant's vested and nonforfeitable interest in that
subaccount. A Participant may receive a withdrawal under this Section only once
per Plan Year.
(d) No Effect on Employer Contributions. No part of a
Participant's Employer Contribution Account (whether or not otherwise
nonforfeitable) shall be forfeited because of any withdrawal under this Section
7.3.
7.4 EVENTS OF DISTRIBUTION TO PARTICIPANTS. A Participant's benefit shall
become distributable to him upon:
(a) retirement on or after Normal Retirement Age;
(b) early retirement, if applicable and as defined under the
Adoption Agreement;
(c) retirement for Disability;
(d) other termination of employment; or
(e) the date required under Section 7.6(d).
7.5 AMOUNT OF PAYMENT.
(a) Balance Forward Valuation. If the daily valuation option is
not applicable to the entire Account or to particular subaccounts, the amount of
a distribution attributable to such Account or subaccounts, as the
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case may be, shall be based on the nonforfeitable percentage of the
Participant's Account or subaccounts, as the case may be, valued as of the
Accounting Date coinciding with or last preceding the payment, increased by any
nonforfeitable contributions made by or on behalf of such Participant after such
Accounting Date but not yet credited to such Account or subaccounts, as the case
may be, and reduced by any payments and/or withdrawals after such Accounting
Date. If, under the Adoption Agreement, a Participant has the discretion to
choose any legally permissible investments which the Trustee agrees to hold, in
determining the amount of a distribution (other than a distribution occurring on
an Accounting Date), the Participant's Account valued as of the preceding
Accounting Date shall be adjusted to reflect any earnings or losses after such
Accounting Date with respect to Plan Assets separately allocable to such
Participant's Account.
(b) Daily Valuation. If the daily valuation option is applicable
to the entire Account or to particular subaccounts, the amount of a distribution
attributable to such Account or subaccounts, as the case may be, shall be based
on the nonforfeitable percentage of the Participant's Account or subaccounts, as
the case may be, at the cash value of the Plan Assets allocable to such Account
or subaccounts, as the case may be, as said Plan Assets are converted to cash
(after taking into account all prior payments and/or withdrawals and the
allocation of all contributions to which the Participant is entitled).
7.6 TIME OF PAYMENT TO A PARTICIPANT.
(a) General. Subject to (b), (c) and (d) below, Section 7.7 and
Article 10, distribution to a Participant whose benefit has become distributable
shall commence in accordance with the Adoption Agreement.
(b) Satisfaction of Early Retirement Requirements. If the Adoption
Agreement provides for early retirement, and if a Participant separates from
service before satisfying the age requirement but after satisfying the service
requirement, the Participant will be entitled to elect to receive distribution
of his benefit as provided in the Adoption Agreement as if he had separated from
service upon satisfaction of such age requirement.
(c) Consent.
(1) General. If the value of a Participant's
nonforfeitable benefit (excluding any Deductible Voluntary Contribution Account)
under the Plan exceeds $5,000 (or, for distributions prior to October 17, 2000,
at the time of any prior distribution exceeded $5,000), then no part of such
benefit may be distributed to him prior to Normal Retirement Age unless he
consents in writing to the distribution. If a Participant's Deductible Voluntary
Contribution Account exceeds $5,000 (or, for distributions prior to October 17,
2000, at the time of any prior distribution exceeded $5,000), then no part of
such benefit may be distributed to him on or after the Effective Date prior to
Normal Retirement Age unless he consents to the distribution in writing. The
$5,000 amount specified above was increased from $3,500 effective on the first
day of the Plan Year beginning after August 5, 1997 or such later date as the
Administrator implemented this increase.
(2) Written Explanation. The Administrator shall provide
to each Participant whose consent is required under (1) above, no less than 30
days and no more than 90 days prior to the commencement of benefit payments (or,
in the discretion of the Administrator, the annuity starting date), a written
explanation of the material features and relative values of the optional forms
of benefit under the Plan, and his right (if any) to defer receipt of the
distribution. A Participant may elect to commence his distribution in less than
thirty days (if administratively feasible) from the date he is provided with the
explanation provided he is informed of his right to the 30-day period.
(3) Time of Consent. A Participant's consent to a
distribution must not be made before he receives the written explanation under
(2) above and must not be made more than 90 days before benefit payments
commence (or, in the discretion of the Administrator, the annuity starting
date). This Section 7.6(c) shall be deemed to have been satisfied with respect
to any setoff of a Participant loan against the Participant's Account if the
Participant agreed to use his Account as security for the loan.
(d) Latest Date of Payment. The payment of a Participant's
distribution under the Plan shall begin not later than the earlier of:
(1) the later of:
(A) the 60th day after the close of the Plan
Year in which occurs the latest of
(i) the attainment by the Participant
of Normal Retirement Age,
(ii) the 10th anniversary of the date on
which the Participant commenced participation in the Plan, or
(iii) the termination of the
Participant's service with the Employer and all
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Affiliates; or
(B) such date as the Participant may elect (but
not earlier than the consent of a Participant if required under (c) above); or
(2) the Required Beginning Date elected in the Adoption
Agreement.
If the "New Law" option is selected in the Adoption Agreement, a special rule
applies for a Participant who is not a Five-Percent Owner for the Plan Year that
ends with or within the calendar year in which such Participant attains age
70-1/2 but who later becomes a Five-Percent Owner. If such a Participant has not
retired, his Required Beginning Date shall be April 1 of the calendar year
following the calendar year in which he became a Five-Percent Owner.
Payments commenced prior to the Effective Date in accordance with the required
beginning date provisions of the Plan then in effect shall continue in
accordance with such provisions except as provided below. In connection with the
"New Law" option in the "Required Beginning Date" item of the Adoption
Agreement, the Plan may allow a Participant who previously commenced receiving
distributions prior to 1997 to cease receiving distributions until his new
Required Beginning Date.
7.7 RESTRICTIONS ON SECTION 401(k) WITHDRAWALS AND DISTRIBUTIONS.
Notwithstanding any other provisions to the contrary, a Participant's Section
401(k) Account shall not be withdrawn or distributed earlier than one of the
following:
(a) the Participant's separation from service;
(b) the Participant's death;
(c) the Participant's incurrence of a Disability;
(d) the termination of the Plan without the establishment or
maintenance of another defined contribution plan (other than an employee stock
ownership plan, as defined in section 4975(e) or 409 of the Code, or a
simplified employee pension, as defined in section 408(k) of the Code);
(e) the date of the disposition by a corporation of substantially
all of the assets (within the meaning of section 409(d)(2) of the Code) used by
such corporation in a trade or business of such corporation if the corporation
continues to maintain the Plan, and if the purchaser is unrelated and does not
adopt or maintain the Plan, but only with respect to an Employee who continues
employment with the corporation acquiring such assets;
(f) the date of the disposition by a corporation of such
corporation's interest in a subsidiary (within the meaning of section 409(d)(3)
of the Code) if the corporation continues to maintain the Plan, and if the
purchaser is unrelated and does not adopt or maintain the Plan, but only with
respect to an Employee who continues employment with such subsidiary;
(g) to the extent provided in Section 7.2 or 7.3, attainment of
age 59-1/2 or incurrence of a hardship.
An event described in (d), (e) or (f) shall qualify as an event allowing a
withdrawal or distribution only if the payment in a lump sum.
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ARTICLE 8
FORM OF PAYMENT TO PARTICIPANTS
8.1 ALTERNATIVE FORMS OF DISTRIBUTION AND WITHDRAWAL.
(a) Optional Forms. Subject to the provisions of Section 8.2, the
amount of the distribution or withdrawal to which a Participant is entitled
shall be paid in such one or a combination of the following forms as are made a
part of the Plan under the Adoption Agreement, as the Participant elects:
(1) a single sum;
(2) periodic installment payments, not less frequently
than annually, with any installments remaining unpaid at the Participant's death
to be paid to his Beneficiary;
(3) in the case of a Participant who has attained age
70-1/2 and who is required to commence benefit payments under Section 7.6(d)
while employed by the Employer, periodic installment payments sufficient in
amount and frequency to satisfy the minimum distribution requirements of Section
8.5, with a lump sum distribution of his remaining Account balance upon
termination of employment;
(4) a single life annuity;
(5) a Qualified Joint and Survivor Annuity;
(6) a joint and survivor annuity for the Participant and
his Surviving Spouse under which the survivor annuity is more than one-half of,
but not greater than, the annuity payable during the joint lives of the
Participant and such spouse; or
(7) any other optional form of benefit available under
the Plan prior to amendment or available under a transferor plan which, pursuant
to Treasury Regulation Section 1.411(d)-4, cannot be eliminated from the Plan.
(b) Cash or In-Kind Payment. Withdrawals and distributions
generally are payable in cash. If elected in the Adoption Agreement, subject to
Section 10.2, if a Participant's benefit is payable other than in an annuity
form, he may elect to receive any payment to which he is entitled in an in-kind
payment as described in the Adoption Agreement. In the absence of a valid
election to take an in-kind payment by the date payments are to commence, the
payments shall be in cash.
(c) In-Kind Payment in Qualifying Employer Securities. If elected
in the Adoption Agreement, subject to Section 10.2, if a Participant's benefit
is payable other than in an annuity form, and if his Account is invested in
whole or in part in qualifying employer securities, he may elect to receive any
payment to which he is entitled in such qualifying employer securities. In the
absence of a valid election to take such securities by the date payments are to
commence, the payments shall be in cash.
8.2 QUALIFIED JOINT AND SURVIVOR ANNUITY.
(a) Applicability. Subject to Section 10.2, this Section 8.2 shall
apply to any distribution to a Participant (regardless of when the Participant
separated from service) unless:
(1) the Plan is a profit sharing plan;
(2) such Participant does not elect a payment of benefits
in the form of a life annuity; and
(3) with respect to such Participant, the Plan is not a
direct or indirect transferee of a transfer made on or after January 1, 1985 by
a defined benefit plan, a defined contribution plan which is subject to the
funding standards of section 412 of the Code, or any other defined contribution
plan to which the joint and survivor requirements of section 401(a)(11) of the
Code, as amended by the Retirement Equity Act of l984, applied with respect to
such Participant; unless, for transfers on or after August 10, 1988, the
elective transfer rules of Treasury Regulation section 1.411(d)-4, A-3(c) are
satisfied.
(b) Automatic Form of Payment. Subject to the cash-out rules of
Section 10.2 of the Plan, unless the waiver provided for in (d) below is
effective with respect to such Participant, the form of payment to him under the
Plan shall be a Qualified Joint and Survivor Annuity (defined in (c) below);
provided however, the entitlement to and payment of the Qualified Joint and
Survivor Annuity with respect to distributions
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commencing on or after the Effective Date and prior to the REA Effective Date
shall continue to be governed by the provisions, if any, of the Plan in
existence on August 22, 1984 and applicable to the qualified joint and survivor
annuity under section 401(a)(11) of the Code prior to the Retirement Equity Act
of 1984, subject to (d)(4) below.
(c) Definition of Qualified Joint and Survivor Annuity.
(1) Married Participant. For a Participant who is married
(including a Participant who is subject to an applicable qualified domestic
relations order as described in section 414(p) of the Code), "Qualified Joint
and Survivor Annuity" means an immediate annuity for the life of the Participant
with a survivor annuity for the life of the Participant's Surviving Spouse which
is equal to one-half of the annuity payable during the joint lives of the
Participant and such spouse.
(2) Single Participant. For a Participant who is not
married, "Qualified Joint and Survivor Annuity" means an immediate annuity for
the life of the Participant.
(3) Amount. The Qualified Joint and Survivor Annuity will
be the amount of benefit which can be purchased with the Participant's
nonforfeitable Account balance.
(d) Waiver.
(1) Election Period. A Participant may waive the
Qualified Joint and Survivor Annuity form of benefit at any time during a 90-day
election period ending on the annuity starting date. Such a waiver must be in
writing and must specify the optional form of benefit elected and the specific
Beneficiary or Beneficiaries, if any, to whom any death benefits under the Plan
will be payable.
(2) Revocation. A Participant may also revoke any waiver
under (1) above during the election period thereunder. There shall be no
limitation on the number of such waivers and revocations permitted during such
election period.
(3) Written Explanation. The Administrator shall provide
to each Participant, no less than 30 days and no more than 90 days prior to the
annuity starting date (and consistent with such regulations as the Secretary of
the Treasury may prescribe), a written explanation of:
(A) the terms and conditions of the Qualified
Joint and Survivor Annuity,
(B) the Participant's right to make, and the
effect of, an election to waive the Qualified Joint and Survivor Annuity form of
benefit,
(C) the rights of the Participant's spouse under
(4) below,
(D) the right to make, and the effect of, a
revocation of an election, and
(E) the eligibility requirements, material
features and relative values of any optional forms of benefit under the Plan.
To the extent permitted by Treasury Regulations or pronouncements of the
Internal Revenue Service, the Administrator may permit the Participant to waive
the 30-day limit and/or to provide such written explanation after the annuity
starting date. The annuity starting date for a distribution in a form other than
a Qualified Joint and Survivor Annuity may be less than 30 days after receipt of
the written explanation provided: (i) the Participant has been provided with
information that clearly indicates that the Participant has at least 30 days to
consider whether to waive the Qualified Joint and Survivor Annuity and elect
(with spousal consent) to a form of distribution other than a Qualified Joint
and Survivor Annuity; (ii) the Participant is permitted to revoke any
affirmative distribution election at least until the annuity starting date or,
if later, at any time prior to the expiration of the 7-day period that begins
the day after the explanation of the Qualified Joint and Survivor Annuity is
provided to the Participant; and (iii) the annuity starting date is a date after
the date that the written explanation was provided to the Participant.
(4) Spousal Consent. A waiver (including any new waiver
after any revocation of a prior waiver) of the Qualified Joint and Survivor
Annuity shall not take effect with respect to a spouse of a Participant unless:
(A) such spouse consents in writing to such
election, and such spouse's consent:
(i) acknowledges the effect of such
election,
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(ii) acknowledges the specific
Beneficiary or Beneficiaries, if any, to whom any death benefits under the Plan
will be payable, which may not be changed without spousal consent (or the
consent of the spouse expressly permits designations by the Participant without
any requirement of further consent by the spouse),
(iii) for waivers made in Plan Years
beginning after December 31, 1986, acknowledges the specific optional form of
benefit elected which may not be changed without spousal consent (except back to
the Qualified Joint and Survivor Annuity) (or the consent of the spouse
expressly permits changes by the Participant without any requirement of further
consent by the spouse), and
(iv) is witnessed by a Plan
representative or a notary public; or
(B) it is established to the satisfaction of a
Plan representative that the consent required under (A) above may not be
obtained because there is no spouse, because the spouse cannot be located, or
because of such other circumstances as may be provided in regulations of the
Internal Revenue Service.
General consents referred to in the parentheticals under (A)(ii) and (iii) above
executed after October 21, 1986 must acknowledge that the spouse has the right
to limit consent to a specific Beneficiary or Beneficiaries and a specific
optional form or forms of benefit and that the spouse voluntarily elects to
relinquish the rights so relinquished.
8.3 INCIDENTAL BENEFITS.
(a) Pre-1989. For calendar years beginning before 1989 (and for
annuity contracts distributed before 1989) either the requirements in (b) below
must be satisfied or the cost or present value of the payments to be made to a
Participant shall be more than 50 percent of the present value of the total
payments to be made to such Participant and his beneficiary unless each periodic
payment to his beneficiary will be no greater than each payment to such
Participant during his lifetime and the payment of survivor benefits to such
beneficiary will be limited to the period over which such Participant's spouse
survives him.
(b) Post-1988. For calendar years beginning after 1988, (excluding
annuity contracts distributed before 1989), in determining the minimum
distributions during the Participant's lifetime for years in which minimum
distributions are required under Section 8.5, if the Participant's benefit is
distributed other than as a single life annuity and if the participant has a
Beneficiary other than his spouse, in no event shall the divisor specified in
section 8.5(a) exceed the divisor specified in Treasury Regulations under
section 401(a)(9) of the Code applicable for the incidental benefit requirement.
If the Participant's Account is used to purchase an annuity contract (other than
a single life annuity) from an insurance company in order to provide the
Participant's benefit, the maximum period certain and the maximum survivor
annuity permissible in the case of a non-spouse Beneficiary, shall be determined
in accordance with Treasury Regulations under section 401(a)(9) of the Code. In
the case of a change in Beneficiaries the minimum distributions required shall
be determined in accordance with applicable Treasury Regulations under section
401(a)(9) of the Code.
8.4 DISTRIBUTION PERIODS.
(a) General. Except to the extent that distribution is made in the
form of a lump sum, and subject to the provisions of Section 8.2 (relating to
the Qualified Joint and Survivor Annuity), distribution to a Participant must be
made over any of the following periods (or any combination thereof):
(1) the life of the Participant;
(2) the lives of the Participant and his Beneficiary (if
the Beneficiary is an individual);
(3) a period certain not extending beyond the life
expectancy of the Participant; or
(4) a period certain not extending beyond the joint life
and last survivor expectancy of the Participant and his Beneficiary (if the
Beneficiary is an individual).
(b) Determination of Distribution Periods. For purposes of
determining minimum distributions under Section 8.5, the determination of
distribution periods under (a) above shall be made in accordance with section
401(a)(9) of the Code, the Treasury Regulations thereunder and the following:
(1) the Beneficiary as of the date benefits are required
to commence under Section 7.6(d), shall be determinative; provided that if
annuity payments commence to a Participant on or before the date benefits are
required to commence, the Beneficiary determined as of any date during the 90
days before the commencement of annuity payments shall be determinative;
1-46
(2) if more than one individual would be a Participant's
Beneficiary as of the date benefits are required to commence under Section
7.6(d), the individual Beneficiary with the shortest life expectancy shall be
determinative; provided that if the Participant's spouse is a Beneficiary and
the spouse's life expectancy is recalculated pursuant to Section 8.6, that
recalculated life expectancy shall be compared annually to the remaining life
expectancies of the other Beneficiaries, not recalculated, and the shortest life
expectancy shall be used for determining the minimum distribution for that
calendar year;
(3) if, as of the date benefits are required to commence
under Section 7.6(d), at least one of the Participant's Beneficiaries would be
other than an individual (other than a trust satisfying the requirements of (5)
below), the distribution periods specified in (a)(2) and (4) above shall not be
available;
(4) any Beneficiary whose entitlement, as of that date,
is contingent on the death of a prior Beneficiary shall be disregarded;
(5) if a trust is a Participant's Beneficiary, the
beneficiaries of that trust (and not the trust itself) shall be treated as the
Participant's Beneficiaries if all of the following requirements are met:
(A) the trust is valid under state law (or would
be but for the fact that there is no corpus);
(B) the trust is irrevocable;
(C) the trust's beneficiaries are identifiable
from the trust instrument; and
(D) a copy of the trust instrument is provided
to the Plan.
(c) Change in Beneficiaries. If, after the date benefits are
required to commence under Section 7.6(d), there is a new or additional
Beneficiary or other change in Beneficiaries, the distribution periods under (a)
shall be affected as provided in section 401(a)(9), the Treasury Regulations
thereunder and the following:
(1) if the new Beneficiary is an individual with a life
expectancy shorter than the life expectancy of the Beneficiary whose life
expectancy was used for determining the maximum distribution periods under (a)
above, the maximum distribution period shall be recalculated as of the date
benefits were required to commence under Section 7.6(d), effective for calendar
years subsequent to the year of the Beneficiary change; provided that if one of
the beneficiaries involved is the Participant's spouse and the spouse's life
expectancy is recalculated pursuant to Section 8.6, that recalculated life
expectancy shall be compared annually to the remaining life expectancies of the
other Beneficiaries, not recalculated, and the shortest life expectancy shall be
used for determining the minimum distribution for that year and each succeeding
year.
(2) if the new Beneficiary is an individual with a life
expectancy longer than the life expectancy of the Beneficiary whose life
expectancy was being used, there shall be no effect on the maximum distribution
periods even though the old beneficiary is no longer a Beneficiary; provided
that if one of the beneficiaries involved is the Participant's spouse and the
spouse's life expectancy is recalculated pursuant to Section 8.6, that
recalculated life expectancy shall be compared annually to the remaining life
expectancies of the other Beneficiaries, not recalculated, and the shortest life
expectancy shall be used for determining the minimum distribution for that year
and each succeeding year;
(3) if the change results in the Participant having a
Beneficiary which is not an individual (other than a trust meeting the
requirements of (b)(5) above), or, if a trust satisfying the requirements of
(b)(5) above as of the date benefits were required to commence under Section
7.6(d) later fails to satisfy those requirements, the distribution periods
specified in (a)(2) and (4) above shall no longer be available and the maximum
distribution periods under (a) shall be recalculated as of the date benefits
were required to commence under Section 7.6(d), effective for the calendar years
subsequent to the year of the Beneficiary change, or trust change, as the case
may be;
(4) if the Beneficiary whose life expectancy was used for
determining the maximum distribution periods under (a) dies, such Beneficiary's
remaining life expectancy (deemed to be zero in the case of a Participant's
spouse if life expectancies had been recalculated pursuant to Section 8.6) shall
continue to apply whether or not a Beneficiary with a shorter life expectancy
receives the benefits.
8.5 MINIMUM DISTRIBUTION.
(a) General. For Plan Years beginning after December 31, l984, subject to
Section 10.1, if the Participant's entire interest is to be distributed in a
form other than a lump sum or a Qualified Joint and Survivor Annuity, then the
minimum amount to be distributed beginning with the first calendar year for
which
1-47
distributions are required and for each succeeding calendar year, will, to the
extent of his Account balance, be the amount equal to the quotient obtained by
dividing his Account balance by the life expectancy of the Participant or the
joint life and last survivor expectancy of the Participant and his Beneficiary.
The first calendar year for which distributions are required is the calendar
year in which the Participant attains age 70-1/2, retires or becomes a
Five-Percent Owner (whichever is determinative of the latest commencement date
under Section 7.6(d)).
(b) Time for Distributions. The distribution for the first
calendar year for which distributions are required shall be made on or before
the applicable April 1 determined under Section 7.6(d). The minimum distribution
for succeeding calendar years (including the calendar year in which such
applicable April 1 falls) shall be made on or before December 31 of each such
year.
(c) Account Balance. For purposes of determining required minimum
distributions, the relevant Account balance shall be the Account balance as of
the last Accounting Date in the calendar year immediately preceding the calendar
year for which the required distributions are being determined, increased by the
amount of any contributions and forfeitures made by or on behalf of the
Participant as of dates in such immediately preceding calendar year after such
last Accounting Date, reduced by any payments or withdrawals in such immediately
preceding calendar year after such last Accounting Date, and, in the case of
minimum distributions for the second calendar year for which distributions are
required, reduced by distributions made in such second calendar year on or
before the required benefit commencement date (under Section 7.6(d)) that are
not in excess (when added to amounts distributed in the first calendar year) of
the amount required to meet the minimum distribution for the first calendar
year; provided that, in no event shall an amount greater than the Participant's
nonforfeitable percentage be distributed.
(d) Transitional Rules. In the case of a Participant whose benefit
commencement date under Section 7.6(d) would have been April 1, 1986, or April
1, 1987, the minimum distributions for 1985 and 1986 need not be made until
December 31, 1987. The amount of such distributions and subsequent distributions
(including distribution of survivor benefits under (e) below) shall be made in
accordance with applicable Treasury Regulations under section 401(a)(9) of the
Code.
(e) Survivor Benefits. Any survivor benefits under this Article 8
shall be distributed at least as rapidly as under the method of distribution
being used prior to the Participant's death; provided that if the Participant
dies before the latest commencement date for benefits under Section 7.6(d) and
has been receiving benefits in a form other than an annuity, the remaining
survivor benefits must also be distributed as rapidly as provided in Section
9.2.
(f) Annuity Contracts. If a Participant's Account is used to
purchase an annuity contract from an insurance company in order to provide the
Participant's benefit, notwithstanding the foregoing, the minimum distribution
requirements will be satisfied if the annuity provides for periodic payments at
intervals not longer than one year, commencing on or before the date a minimum
distribution would otherwise be required over a period not exceeding the maximum
period described in Section 8.4 remaining (without recalculation of life
expectancies after the annuity purchase). Any such annuity contract must satisfy
the requirements of the applicable Treasury Regulations under section 401(a)(9)
of the Code.
8.6 LIFE EXPECTANCY.
(a) General. For purposes of Sections 8.4 and 8.5, life expectancy
and joint life and last survivor expectancy will be computed in accordance with
applicable Treasury Regulations under section 401(a)(9) of the Code and by the
use of the return multiples contained in Tables V and VI of Treasury Regulation
1.72-9 and, except as provided in (b) and (c) below, will be determined as of
the Participant's (and Beneficiary's) birthday in the calendar year in which the
Participant attains age 70-1/2, retires or becomes a Five-Percent Owner
(whichever is determinative of the latest commencement date under Section
7.6(d)), and such multiple shall be reduced by one for each subsequent taxable
year.
(b) Recalculation. If the Participant so elects, the life
expectancy of a Participant and/or his spouse may be recalculated no more
frequently than annually if such election is irrevocable, is made no later than
the date benefits must commence under Section 7.6(d), and is applicable to all
subsequent years. If recalculation is applicable, the life expectancy of the
participant or spouse shall be determined using his or her age as of his or her
birthday in each succeeding calendar year.
(c) Annuity Contracts. If annuity payments commence to a
Participant before the latest commencement date under Section 7.6(d), life
expectancies of the Participant and Beneficiary shall be determined as of their
birthdays in the calendar year in which payments commence.
ARTICLE 9
DEATH BENEFITS
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9.1 PRERETIREMENT SURVIVOR ANNUITY.
(a) Applicability. This Section 9.1 shall apply upon the death of
any Participant covered under (c) below unless:
(1) the Plan is a profit sharing plan;
(2) such Participant does not elect a payment of benefits
in the form of a life annuity; and
(3) with respect to such Participant, the Plan is not a
direct or indirect transferee of a transfer made on or after January 1, 1985 by
a defined benefit plan, a defined contribution plan which is subject to the
funding standards of Section 412 of the Code, or any other defined contribution
plan to which the joint and survivor requirements of section 401(a)(11) of the
Code, as amended by the Retirement Equity Act of l984, applied with respect to
such Participant; unless for transfers on or after August 10, 1988, the elective
transfer rules of Treasury Regulation section 1.411(d)-4, A-3(b) are satisfied.
(b) General.
(1) Death After August 22, 1984. If a Participant dies
before the commencement of benefit payments, if he has a Surviving Spouse, and
if he is covered under (c) below by the Preretirement Survivor Annuity, then his
Surviving Spouse shall be entitled to the Preretirement Survivor Annuity,
provided that the Participant and such Surviving Spouse were married throughout
the 1-year period ending on the date of the Participant's death or, if such
Surviving Spouse is a former spouse treated as a Surviving Spouse pursuant to a
qualified domestic relations order as described in section 414(p) of the Code,
that the Participant and such Surviving Spouse were married for at least 1 year.
(2) Death Before August 23, 1984. Anything in the Plan to
the contrary notwithstanding, the entitlement to and payment of the
Preretirement Survivor Annuity with respect to a Participant who dies prior to
August 23, 1984, shall continue to be governed by the provisions, if any, of the
Plan in existence on August 22, l984 and applicable to the qualified joint and
survivor annuity under section 401(a)(11) of the Code prior to the Retirement
Equity Act of l984.
(c) Coverage.
(1) Service on or After August 23, 1984. Subject to the
cash-out rules of Section 10.2, the Preretirement Survivor Annuity applies to
any Participant:
(A) who has at least 1 Hour of Service or at
least 1 hour of paid leave from the Employer (or any other employer for whom
service is treated as service for the Employer) on or after August 23, 1984;
(B) who has a nonforfeitable right to any
portion of his Employer Contribution Account; and
(C) who has not elected, under (e) below, to
waive the Preretirement Survivor Annuity.
(2) Entitlement Under Pre-REA Provisions of Plan. If the
Plan was in existence on August 22, l984, the Preretirement Survivor Annuity
applies to any Participant:
(A) to whom (1) above does not apply;
(B) on whose behalf benefits were accrued on or
after the first day of the first Plan Year beginning on or after January 1,
1976;
(C) who separated from service on or after
becoming entitled to the qualified joint and survivor annuity under the
applicable Plan and Code provisions prior to the Retirement Equity Act of 1984;
and
(D) who has not elected, under (e) below, to
waive the Preretirement Survivor Annuity.
(3) Election for Certain Separated Participants. If the
Plan was in existence on August 22, l984, the Preretirement Survivor Annuity
applies to any Participant:
(A) to whom neither (1) nor (2) above applies;
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(B) who has at least 1 Hour of Service in the
first Plan Year beginning on or after January l, 1976;
(C) who separated from service with at least 10
Years of Service and had a nonforfeitable right to all or part of his Employer
Contribution Account;
(D) who is alive on August 23, 1984;
(E) whose benefit payments have not commenced
prior to August 23, 1984; and
(F) who elects the coverage of such Annuity
during the period beginning on August 23, 1984 and ending on the earlier of the
date his benefit payments commence or the date of his death.
(d) Definition of Preretirement Survivor Annuity. The
"Preretirement Survivor Annuity" is an annuity which is for the life of a
Participant's Surviving Spouse, which is the actuarial equivalent of 50 percent
of the Participant's nonforfeitable Account balance as of the date of his death,
whether vested before or upon death and including the proceeds of any insurance
contracts, and under which annuity payments commence as of a date (not later
than December 31 of the calendar year in which the Participant would have
attained age 70-1/2) elected by such Surviving Spouse.
(e) Waiver of Preretirement Survivor Annuity.
(1) General. A Participant to whom (c)(1) or (2) above
applies may waive coverage of the Preretirement Survivor Annuity at any time
during his election period under (3) below. Such a waiver must be in writing and
must specify the specific Beneficiary or Beneficiaries, if any, to whom any
death benefits under the Plan will be payable.
(2) Revocation. Any waiver under (1) above may be revoked
at any time during the Participant's election period under (3) below. There
shall be no limitation on the number of such waivers and revocations permitted
during such election period.
(3) Election Period. For purposes of (1) and (2) above,
the election period shall be the period
(A) beginning on the earlier of
(i) the first day of the Plan Year in
which the Participant attains age 35, or
(ii) the date of the Participant's
separation from service; provided however, if the Participant returns to
service, then any election made prior to the first day of the Plan Year in which
he attains age 35 shall be voided; and
(B) ending on the Participant's date of death.
(4) Written Explanation.
(A) The Administrator shall provide to each
Participant, within the "Applicable Period," as defined below, and consistent
with such regulations as the Secretary of the Treasury may prescribe, a written
explanation of:
(i) the terms and conditions of the
Preretirement Survivor Annuity;
(ii) the Participant's right to make,
and the effect of, an election under (1) above to waive the coverage of the
Preretirement Survivor Annuity;
(iii) the rights of the Participant's
spouse under (5) below;
(iv) the right to make, and the effect
of, a revocation of an election under (2) above; and
(v) the eligibility conditions,
material features and relative values of any optional forms of benefit under the
Plan.
(B) "Applicable Period" means, with respect to a
Participant, whichever of the following periods ends last:
(i) the period beginning with the first
day of the Plan Year in which the Participant attains age 32 and ending with the
close of the Plan Year preceding the Plan Year in which the
1-50
Participant attains age 35;
(ii) the period beginning one year prior
to, and ending one year after, the date the individual becomes a Participant, or
(iii) the period beginning one year
before, and ending one year after, Section 8.2 first applies to the Participant.
In the case of a Participant who separates
from service before attaining age 35, the "Applicable Period" means in all
events the period beginning one year before the separation from service and
ending one year after such separation; provided that if such a Participant
returns to service, the provisions of (i), (ii) and (iii) above shall again
apply.
(5) Spousal Consent. A waiver under (1) above (including
any new waiver after any revocation of a prior waiver) shall not be effective
with respect to a spouse of a Participant unless:
(A) such spouse consents in writing to such
election, and such spouse's consent (effective for Plan Years beginning after
October 22, 1986):
(i) acknowledges the effect of such
election,
(ii) acknowledges the specific
Beneficiary or Beneficiaries to whom any death benefits under the Plan will be
payable, which may not be changed without spousal consent (or the consent of the
spouse expressly permits designations by the Participant without any requirement
of further consent by the spouse) and
(iii) is witnessed by a Plan
representative or a notary public; or
(B) it is established to the satisfaction of a
Plan representative that the consent required under (A) above may not be
obtained because there is no spouse, because the spouse cannot be located, or
because of such other circumstances as may be provided in regulations of the
Internal Revenue Service.
General consents referred to in the parenthetical of (A)(ii) above executed
after October 21, 1986 must acknowledge that the spouse has the right to limit
consent to a specific Beneficiary or Beneficiaries and that the spouse
voluntarily elects to relinquish such right.
(6) Election Under Pre-REA Provisions of Plan. Anything
in the foregoing to the contrary notwithstanding, in the case of a Participant
to whom (c)(2) above applies, any waiver of the Preretirement Survivor Annuity
prior to January 1, 1985 shall be governed by the applicable Plan and Code
provisions prior to the Retirement Equity Act of 1984.
(f) Spouse's Election of Lump Sum Payment. A Surviving Spouse
entitled to a Preretirement Survivor Annuity may elect to receive a lump sum
payment of the amount that would otherwise be applied to the purchase of such
Annuity. Such election shall be in writing, shall acknowledge its effect, and
shall be witnessed by a Plan representative or a notary public.
9.2 BALANCE OF DEATH BENEFIT.
(a) Entitlement. Upon the death of a Participant, prior to the
application of his Account for his benefit, his Beneficiary shall be entitled to
a benefit equal to:
(1) (A) if the daily valuation option is not applicable
to the entire Account or to particular subaccounts, the nonforfeitable balance
to the credit of such Participant's Account or subaccounts, as the case may be,
valued as of the Accounting Date coinciding with or last preceding the date on
which such benefit payments begin and if, under the Adoption Agreement, a
Participant has the discretion to choose any legally permissible investments
which the Trustee agrees to hold, in determining the amount of death benefit
hereunder, the Participant's Account valued as of the preceding Accounting Date
shall be adjusted to reflect any earnings or losses after such Accounting Date
with respect to Plan Assets separately allocable to such Participant's Account;
plus
(B) if the daily valuation option is applicable
to the entire Account or to particular subaccounts, the nonforfeitable
percentage of such Participant's Account or subaccounts, as the case may be, at
the cash value of the Plan Assets allocable to such Account or subaccounts, as
the case may be, as said Plan Assets are converted to cash; plus
1-51
(2) any nonforfeitable contributions made by or on behalf
of such Participant after such Accounting Date but not yet credited to such
Account or subaccounts, as the case may be; plus
(3) any life insurance proceeds received after such
Accounting Date for the Account of such Participant but not yet credited to his
Account; minus
(4) any amount applied for the benefit of the
Participant's Surviving Spouse pursuant to Section 9.1; minus
(5) any payments to and/or withdrawals by such
Participant not yet taken into account.
(b) Payment of Death Benefits.
(1) General. Death benefits under (a) above shall,
subject to the subsections below, be payable to a Participant's Beneficiary in
such form (otherwise available under the Plan under the Adoption Agreement but
excluding the joint and survivor annuity forms) as the Participant or
Beneficiary elects. Subject to (c) below, distribution of death benefits under
(a) above shall commence at such time as the Participant or Beneficiary elects
and, unless administratively impractical, shall first be available for
distribution within 90 days after the Participant's death.
(2) Election. An election by a Participant or Beneficiary
under (1) above must be made no later than the earliest date specified in (c)(1)
and (2) below for the commencement of death benefits. As of such date, the
election must be irrevocable with respect to the Beneficiary (and all subsequent
Beneficiaries) and must apply to all subsequent years. In the absence of a valid
election by the required date, the death benefits under (a) shall be distributed
as soon as administratively feasible after the date by which the election would
have been required in a single sum.
(c) Distribution Periods. Death benefits under (a) above shall be
distributed to a Participant's Beneficiary:
(1) no later than December 31 of the calendar year
containing the fifth anniversary of the Participant's death; or
(2) if the Beneficiary is an individual:
(A) beginning not later than December 31 of the
calendar year immediately following the calendar year of the Participant's death
(or, if later, and if the Beneficiary is the Participant's spouse, not later
than December 31 of the calendar year in which the Participant would have
attained age 70-1/2, and if such spouse dies before payments are required to
commence, then the distribution period hereunder shall be determined as if such
spouse were the Participant); and
(B) (i) over the life of such Beneficiary (if
the Beneficiary is an individual) or
(ii) over a period not extending beyond
the life expectancy of such Beneficiary (if the Beneficiary is an individual).
(d) Determination of Distribution Periods. The determination of
distribution periods under (c)(2) above shall be made in accordance with section
401(a)(9) of the Code, the Treasury Regulations thereunder and the following:
(1) the Beneficiary as of the date of the Participant's
death (or, if applicable, the surviving spouse's death) shall be determinative;
(2) if more than one individual would be a Participant's
(or surviving spouse's) Beneficiary as of the date of the Participant's death
(or, if applicable, the surviving spouse's death) the individual Beneficiary
with the shortest life expectancy shall be determinative; provided that if the
Participant's spouse is a Beneficiary and the spouse's life expectancy is
recalculated pursuant to (f) below, that recalculated life expectancy shall be
compared annually to the remaining life expectancies of the other Beneficiaries,
not recalculated, and the shortest life expectancy shall be used for determining
the minimum distribution for that calendar year;
(3) if, as of the date of the Participant's death, at
least one of the Participant's Beneficiaries is other than an individual (other
than a trust satisfying the requirements of (5) below), the distribution periods
specified in (c)(2) above shall not be available;
(4) any Beneficiary whose entitlement, as of the date of
the Participant's death, is contingent on
1-52
the death of a prior Beneficiary shall be disregarded;
(5) if a trust is a Participant's Beneficiary as of the
date of the Participant's death, the beneficiaries of that trust (and not the
trust itself) shall be treated as the Participant's Beneficiaries if all of the
following requirements are met:
(A) the trust is valid under state law (or would
be but for the fact that there is no corpus);
(B) the trust is irrevocable;
(C) the trust's beneficiaries are identifiable
from the trust instrument; and
(D) a copy of the trust instrument is provided
to the Plan.
(e) Minimum Distribution.
(1) General. For Plan Years beginning after December 31,
1984, subject to such transitional rules as may be provided in Treasury
Regulations for the purposes of (c)(2)(B) above the minimum amount to be
distributed beginning with the first calendar year for which distributions are
required and for each succeeding calendar year, will, to the extent of the
Participant's Account balance, be the amount equal to the quotient obtained by
dividing his Account balance by the life expectancy of the Beneficiary. The
first calendar year for which distributions are required is the calendar year in
which the Participant dies or a spouse dies (whichever is applicable).
(2) Time for Distributions. Distributions which are
required shall be made on or before December 31 each year commencing with the
calendar year specified in (c)(2)(A) above.
(3) Account Balance. For purposes of determining required
minimum distributions, the relevant Account balance shall be the Account balance
as of the last Accounting Date in the calendar year immediately preceding the
calendar year for which the required distributions are being determined,
increased by the amount of any contributions and forfeitures made by or on
behalf of the Participant as of dates in such immediately preceding calendar
year after such last Accounting Date, reduced by any payments or withdrawals in
such immediately preceding calendar year after such last Accounting Date;
provided that, in no event shall an amount greater than the Participant's
nonforfeitable percentage be distributed.
(4) Annuity Contracts. If a Participant's Account is used
to purchase an annuity contract from an insurance company in order to provide
the Beneficiary's benefit hereunder, notwithstanding the foregoing, the minimum
distribution requirements will be satisfied if the annuity provides for periodic
payments at intervals not longer than one year, commencing on or before the date
a minimum distribution would otherwise be required over a period not exceeding
the maximum period described in (c)(2)(B) above remaining (without recalculation
of life expectancies after the annuity purchase). Any such annuity contract must
satisfy the requirements of the applicable Treasury Regulations under section
401(a)(9) of the Code.
(f) Life Expectancy.
(1) General. For purposes of Sections (c),(d) and (e)
above, life expectancy will be computed in accordance with applicable Treasury
Regulations under section 401(a)(9) of the Code and by the use of the return
multiples contained in Tables V and VI of Treasury Regulation 1.72-9 and, except
as provided in (2) and (3) below, will be determined as of the Beneficiary's
birthday in the calendar year in which distributions are required to commence
under (c)(2) above, and such multiple shall be reduced by one for each
subsequent taxable year.
(2) Recalculation. If a Beneficiary who was the
Participant's spouse so elects, the life expectancy of such spouse may be
recalculated no more frequently than annually if such election is irrevocable,
is made no later than the date benefits must commence under (c)(2) above, and is
applicable to all subsequent years. If recalculation is applicable, the life
expectancy of the spouse shall be determined using his or her age as of his or
her birthday in each succeeding calendar year.
(3) Annuity Contracts. If annuity payments commence
irrevocably to a Beneficiary before the latest commencement date under (c)(2)
above, the Beneficiary's life expectancy shall be determined as of his birthday
in the calendar year in which payments commence.
1-53
ARTICLE 10
PAYMENT EXCEPTIONS
10.1 PRE-1984 DESIGNATIONS.
(a) General. Anything in the Plan (other than the provisions
relating to the Qualified Joint and Survivor Annuity and the Preretirement
Survivor Annuity) to the contrary notwithstanding, distribution on behalf of any
Participant may be made in accordance with the following requirements
(regardless of when such distribution commences):
(1) the distribution is one which would not have
disqualified the Plan under section 401(a)(9) of the Code as in effect prior to
amendment by the Deficit Reduction Act of 1984;
(2) the distribution is in accordance with a method of
distribution designated by the Participant whose interest is being distributed
or, if the Participant is deceased, by a beneficiary of such Participant;
(3) such designation was in writing, was signed by the
Participant or beneficiary, and was made before January 1, 1984;
(4) the Participant had accrued a benefit under the Plan
as of December 31, 1983; and
(5) the method of distribution designated by the
Participant or the beneficiary specifies the form of the distribution, the time
at which distribution will commence, the period over which distributions will be
made, and in the case of any distribution upon the Participant's death, the
beneficiaries of the Participant listed in order of priority.
(b) Distributions Upon Death. A distribution upon death will not
be covered by this transitional rule unless the information in the designation
contains the required information described above with respect to the
distributions to be made upon the death of the Participant.
(c) Distributions Commencing Before January 1, 1984. For any
distribution which commences before January 1, 1984, but continues after
December 31, 1983, the Participant, or the beneficiary, to whom such
distribution is being made, will be presumed to have designated the method under
which the distribution is being made if the method of distribution was specified
in writing and the distribution satisfies the requirements in paragraphs (1) and
(5) of (a) above.
(d) Effect of Revocation. If a designation is revoked, any
subsequent distribution must satisfy the requirements of section 401(a)(9) of
the Code as in effect at the time and the Treasury Regulations thereunder. If a
designation is revoked, the Plan shall distribute by the end of the calendar
year following the calendar year in which the revocation occurs, the total
amount not yet distributed which would have been required under section
401(a)(9) of the Code (including, for calendar years after 1988, the minimum
distribution incidental benefit requirement), had the designation not been in
effect. Any changes in the designation will be considered to be a revocation of
the designation; provided however, the mere substitution or addition of another
beneficiary (one not named in the designation) under the designation will not be
considered to be a revocation of the designation so long as such substitution or
addition does not alter the period over which distributions are to be made under
the designation, directly or indirectly (for example, by altering the relevant
measuring life).
10.2 CASH-OUT DISTRIBUTIONS.
(a) Cash-Out Limits. Any other provisions of the Plan to the
contrary notwithstanding, any amount payable to a Participant or any
Preretirement Survivor Annuity payable to a Surviving Spouse (with respect to a
Participant who has at least one Hour of Service or one hour of paid leave on or
after August 23, 1984), shall be paid in a cash lump sum; provided that:
(1) If elected in the Adoption Agreement:
(A) in the case of an amount payable to a
Participant, the value (determined as of the date of distribution or, for
distributions prior to October 17, 2000, any prior distribution) of his
nonforfeitable benefit under the Plan does not exceed $5,000 and such payment is
made before payment otherwise begins; or
(B) in the case of a Preretirement Survivor
Annuity, the value (determined as of the date of distribution) of such
Preretirement Survivor Annuity does not exceed $5,000 and such payment is made
1-54
before payment otherwise begins; or
(2) (A) in the case of a payment to a Participant, the
Participant consents in writing to the distribution and (if the Qualified Joint
and Survivor Annuity applies to him under Section 8.2(a)) his spouse consents,
in the manner described in Section 8.2(d)(4), to the distribution; or
(B) in the case of a Preretirement Survivor
Annuity, the Surviving Spouse consents in writing to the distribution.
For purposes of (1)(A) and (B) above, a Participant's nonforfeitable benefit
under the Plan and the value of the Preretirement Survivor Annuity shall be
determined by excluding any Deductible Voluntary Contribution Account; and such
rules shall be applied separately to any Deductible Voluntary Contribution
Account as if such Account was the Participant's sole benefit under the Plan.
The $5,000 amount specified above was increased from $3,500 effective on the
first day of the Plan Year beginning after August 5, 1997 or such later date as
the Administrator implemented this increase.
(b) Transitional Rules for Cash-Out Limits.
(1) General. This subsection provides transitional rules
with regard to the cash-out limits for distributions made prior to October 17,
2000.
(2) Distributions Subject to Section 417. If the payment
in the form of a Qualified Joint and Survivor Annuity is required with regard to
a Participant, the rule in this Section 10.2(b)(2) is substituted for the rule
in section 10.2(a). If the value of a Participant's vested Account balance
derived from Employer and employee contributions exceeds (or at the time of any
prior distribution (A) in Plan Years beginning before August 6, 1997, exceeded
$3,500 or (B) in Plan Years beginning after August 5, 1997 exceeded) $5,000, and
the Account balance is immediately distributable, the Participant and the
Participant's spouse (or where either the Participant or the spouse has died,
the survivor) must consent to any distribution of such Account balance.
(3) Distributions not Subject to Section 417. If payment
in the form of a Qualified Joint and Survivor Annuity is not required with
respect to a Participant, the rule in this Section 10.2(b)(3) is substituted for
the rule in Section 10.2(a).
If the value of a Participant's vested Account balance derived from Employer and
employee contributions:
(A) for Plan Years beginning before August 6, 1997, exceeds $3,500
(or exceeded $3,500 at the time of any prior distribution),
(B) for Plan Years beginning after August 5, 1997, and for a
distribution made prior to March 22, 1999, exceeds $5,000 (or exceeded $5,000 at
the time of any prior distribution),
(C) and for Plan Years beginning after August 5, 1997 and for a
distribution made after March 21, 1999, that either exceeds $5,000 or is a
remaining payment under a selected optional form of payment that exceeded $5,000
at the time the selected payment began,
and the Account balance is immediately distributable, the Participant and the
Participant's spouse (or where either the Participant or the spouse has died,
the survivor) must consent to any distribution of such Account balance.
10.3 DIRECT ROLLOVER.
(a) General. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under this Section,
but subject to such exceptions permitted by the Internal Revenue Service, a
distributee may elect, at the time and in the manner prescribed by the
Administrator, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover.
(b) Definitions.
(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
1-55
years or more; any distribution to the extent such distribution is required
under section 401(a)(9) of the Code; any hardship distribution described in
section 401(k)(2)(B)(i)(IV) received after December 31, 1998; 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 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.
(3) 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.
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ARTICLE 11
ADMINISTRATION
11.1 PURPOSES OF THE PLAN. The purposes of the Plan are to provide
retirement and other benefits for Participants and their respective
beneficiaries. Except as otherwise provided by Sections 3.6 and 12.6 and by law,
the assets of the Plan shall be held for the exclusive purpose of providing
benefits to Participants and their beneficiaries and defraying reasonable
expenses of administering the Plan, and it shall be impossible for any part of
the assets or income of the Plan to be used for, or diverted to, purposes other
than such exclusive purposes.
11.2 ADMINISTRATOR.
(a) Named Fiduciary. The Administrator shall be the "Named
Fiduciary" for the Plan.
(b) Responsibilities. The Administrator shall discharge its
responsibilities with respect to the Plan in accordance with the documents and
instruments governing the Plan insofar as such documents and instruments are
consistent with the provisions of title I of ERISA.
(c) Powers. In addition to the powers and responsibilities which
are expressly provided in the Plan, the Administrator shall have the power and
authority in its sole, absolute and uncontrolled discretion to control and
manage the operation and administration of the Plan and shall have all powers
necessary to accomplish these purposes including, but not limited to the
following:
(1) the power to determine who is a Participant;
(2) the power to determine allocations, balances, and
nonforfeitable percentages with respect to Participants' Accounts; provided
however, it may be specified in the Adoption Agreement that the Trustee shall
have the ministerial function of maintaining Participants' Accounts in
accordance with information, interpretations, and directions from the
Administrator;
(3) the power to determine when, to whom, in what amount,
and in what form distributions are to be made; and
(4) such powers as are necessary, appropriate or
desirable to enable it to perform its responsibilities, including the power to
establish rules, regulations and forms with respect thereto.
Benefits under this Plan will be paid only if the Administrator decides in its
discretion that the applicant is entitled to them.
11.3 PROCEDURES FOR DELEGATION.
(a) Delegations. The Administrator or the Employer may delegate to
one or more persons or entities certain of its fiduciary responsibilities (other
than duties involving the management or control of the Plan Assets) under an
arrangement whereby it shall have the opportunity for such periodic review of
the delegate's performance as is appropriate under the circumstances and at such
times and in such manner as it may choose for the purpose of its evaluation of
continuing such designation and delegation and whereby it can promptly terminate
the delegate's services.
(b) Advisors. The Administrator shall have the right to employ one
or more persons or entities to render advice with regard to any responsibility
it has under the Plan.
(c) Removal, Resignation, and Vacancies. A holder of a delegated
position of fiduciary responsibility (including an individual member of a group
holding such position) may be removed therefrom at any time and without cause by
the person or entity making the delegation and may resign at any time upon prior
written notice to such person or entity. Vacancies in any such positions created
by removal, resignation, death or other cause may be filled by such person or
entity or the fiduciary responsibilities for such position may be retained
and/or redelegated by such person or entity.
11.4 MISCELLANEOUS ADMINISTRATION PROVISIONS.
(a) Written Records. The Administrator shall maintain all such
books of account and other records and data as are necessary for the proper
performance of its responsibilities under the Plan.
(b) Administrative Expenses. The Employer may pay the reasonable
expenses of administering the
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Plan, including any expenses incident to the functioning of the Administrator
and the professional fees of any consultants or advisors with respect to the
Plan; provided however, any expenses not so paid by the Employer shall be paid
from the Plan Assets; and provided further, no person who already receives
full-time pay from the Employer shall receive any compensation from the Plan,
except for reimbursement of expenses properly and actually incurred.
(c) Incompetency or Disability. Each person to whom a distribution
is payable under the Plan shall be conclusively presumed to be mentally
competent and not under a disability that renders him unable to care for his
affairs, until the date on which the Administrator receives a written notice, in
a form and manner acceptable to the Administrator, indicating that a guardian,
conservator, or other party legally vested with the care of the person or the
estate of such person has been appointed by a court of competent jurisdiction,
and any payment of a distribution due thereafter shall be made to the same,
provided that proper proof of his appointment and continuing qualification is
furnished in a form and manner acceptable to the Administrator. The
Administrator shall not be required to look to the application of any such
payment so made.
(d) Indemnification. The Employer may indemnify, through insurance
or otherwise, some or all of the fiduciaries with respect to the Plan against
claims, losses, damages, expenses and liabilities arising from their performance
of their responsibilities under the Plan.
(e) Effectiveness of Elections, etc. An election, designation,
request or revocation provided for in the Plan shall be made in writing and
shall not become effective until it has been properly filed with the
Administrator.
(f) Administration Consistent with ERISA and the Code. The Plan is
intended to comply with the provisions of ERISA and of the Code, and the Plan
shall be interpreted and administered consistently with such provisions and with
the applicable regulations and rulings thereunder.
(g) Interpretations. All interpretations of the Plan and questions
concerning its administration and application as determined by the Administrator
in its sole, absolute and uncontrolled discretion shall be binding on all
persons having an interest under the Plan.
(h) Uniform and Non-Discriminatory Application. All determinations
and actions under the Plan shall be uniformly and consistently applied in a
non-discriminatory manner to all persons under similar circumstances.
(i) Service in More Than One Fiduciary Capacity. Any person or
entity may serve in more than one fiduciary capacity for the Plan.
(j) Qualified Domestic Relations Order Procedures. The
Administrator shall establish reasonable procedures to determine the qualified
status, under section 4l4(p) of the Code, of domestic relations orders and to
administer distributions under such qualified orders.
11.5 INITIAL CLAIMS PROCEDURE.
(a) Claim.
(1) Filing. In order to present a complaint regarding the
nonpayment of a Plan benefit or a portion thereof (a "Claim"), a Participant or
beneficiary under the Plan (a "Claimant") or his duly authorized representative
must file such Claim by mailing or delivering a writing stating such Claim to
the Administrator.
(2) Acknowledgement. Upon such receipt of a Claim, the
Administrator shall furnish to the Claimant a written acknowledgement which
shall inform such Claimant of the time limit set forth in (b)(1) below and of
the effect, pursuant to (b)(3) below, of failure to decide the Claim within such
time limit.
(b) Initial Decision.
(1) Time Limit. The Administrator shall decide upon a
Claim within a reasonable period of time after receipt of such Claim; provided
however, that such period shall in no event exceed 90 days, unless special
circumstances require an extension of time for processing. If such an extension
of time for processing is required, then the Claimant shall, prior to the
termination of the initial 90-day period, be furnished a written notice
indicating such special circumstances and the date by which the Administrator
expects to render a decision. In no event shall an extension exceed a period of
90 days from the end of the initial period.
(2) Notice of Denial. If the Claim is wholly or partially
denied, then the Administrator shall furnish to the Claimant, within the time
limit applicable under (1) above, a written notice setting forth in a manner
calculated to be understood by the Claimant:
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(A) the specific reason or reasons for such
denial;
(B) specific reference to the pertinent Plan
provisions on which such denial is based;
(C) a description of any additional material or
information necessary for such Claimant to perfect his Claim and an explanation
of why such material or information is necessary; and
(D) appropriate information as to the steps to
be taken if such Claimant wishes to submit his Claim for review pursuant to
Section 11.6, including notice of the time limits set forth in Section
11.6(b)(2).
(3) Deemed Denial for Purposes of Review. If a Claim is
not granted and if, despite the provisions of (1) and (2) above, notice of the
denial of a Claim is not furnished within the time limit applicable under (1)
above, then the Claimant may deem such Claim denied and may request a review of
such deemed denial pursuant to the provisions of Section 11.6.
11.6 CLAIM REVIEW PROCEDURE.
(a) Claimant's Rights. If a Claim is wholly or partially denied
under Section 11.5, then the Claimant or his duly authorized representative
shall have the following rights:
(1) to obtain, subject to (b) below, a full and fair
review by the Administrator;
(2) to review pertinent documents; and
(3) to submit issues and comments in writing.
(b) Request for Review.
(1) Filing. To obtain a review pursuant to (a) above, a
Claimant entitled to such a review or his duly authorized representative shall,
subject to (2) below, mail or deliver a writing requesting such a review (a
"Request for Review") to the Administrator.
(2) Time Limits for Requesting a Review. A Request for
Review must be mailed or delivered within 60 days after receipt by the Claimant
of written notice of the denial of the Claim or within such longer period as is
reasonable and related to the nature of the benefit which is the subject of the
Claim and to other attendant circumstances.
(3) Acknowledgement. Upon such receipt of a Request for
Review, the Administrator shall furnish to the Claimant a written
acknowledgement which shall inform such Claimant of the time limit set forth in
(c)(1) below and of the effect, pursuant to (c)(3) below, of failure to furnish
a decision on review within such time limit.
(c) Decision on Review.
(1) Time Limit. If, pursuant to (b) above, a review is
requested, then the Administrator shall make a decision promptly and no later
than 60 days after receipt of the Request for Review; except that, if special
circumstances require an extension of time for processing, then the decision
shall be made as soon as possible but not later than 120 days after receipt of
the Request for Review. The Administrator must furnish the Claimant written
notice of any extension prior to its commencement.
(2) Notice of Decision. The Administrator shall furnish
to the Claimant, within the time limit applicable under (1) above, a written
notice setting forth in a manner calculated to be understood by the Claimant:
(A) the specific reason or reasons for the
decision on review; and
(B) specific reference to the pertinent Plan
provisions on which the decision on review is based.
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(3) Deemed Denial. If, despite the provisions of (1) and
(2) above, the decision on review is not furnished within the time limit
applicable under (1) above, then the Claimant shall be deemed to have exhausted
his remedies under the Plan and he may deem the Claim to have been denied on
review.
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ARTICLE 12
AMENDMENT AND TERMINATION
12.1 AMENDMENT OF THE PLAN BY THE PROTOTYPE SPONSOR. The Employer delegates
to the Prototype Sponsor full authority and right, at any time and from time to
time, to amend the Plan in any manner which the Prototype Sponsor deems
desirable, subject to Section 12.3. A copy of any such amendment shall be given
to the Employer.
12.2 AMENDMENTS BY THE EMPLOYER. The Employer shall have the right to adopt:
(a) changes to the choice of options in the Adoption Agreement
(and may do so by completing a new Adoption Agreement or by a separate document
specifying the choices in the Adoption Agreement being changed);
(b) overriding language stated in the Adoption Agreement which
allows the Plan to satisfy section 415 of the Code or to avoid duplication of
minimums under section 416 of the Code because of the required aggregation of
multiple plans; and
(c) model amendments published by the Internal Revenue Service
which specifically provide that their adoption will not cause a plan to be
treated as individually designed.
If the adopting employer amends the Plan for any other reason, including a
waiver of the minimum funding requirement under section 412(d) of the Code, it
will no longer participate in the prototype plan, but will be considered to have
an individually designed plan.
If the Plan is maintained by more than one Employer, the first Employer
designated in the Adoption Agreement shall have the right to amend the Plan on
behalf of all Employers. If, at any time, by reason of the adoption of an
amendment or modification of the Plan, the provisions of the Plan with respect
to any of the other Employers differ from those that are applicable to the first
Employer designated in the Adoption Agreement, such other Employer or Employers
shall be deemed to have adopted a separate plan.
If the Employer (or the first Employer designated in the Adoption Agreement) is
a corporation, the amendments may be made by action of its Board of Directors.
For any other entity, the amendments may be made on behalf of the Employer by
the person or persons having the legal authority to act on behalf of the entity.
An Employer may adopt different amendment procedures by attachment to the
Adoption Agreement.
12.3 LIMITATIONS ON AMENDMENTS.
(a) General. Neither the Prototype Sponsor nor the Employer shall
have the right to amend the Plan in the following respects:
(1) to vest in the Employer, directly or indirectly, any
interest in, or ownership of, or control of the Plan Assets; or
(2) to provide that the Plan Assets, or any part thereof,
may or shall be used for or diverted to purposes other than for the exclusive
benefit of Participants or for the payment of administration expenses of the
Administrator and of the Trustee; or
(3) to reduce any then vested or accrued interest of a
Participant unless permitted under section 412(c)(8) of the Code or necessary to
comply with a ruling to qualify the Plan or keep the Plan qualified under the
Code.
(b) Treatment of Certain Amendments. For purposes of (a)(3) above,
an amendment which has the effect, with respect to benefits attributable to
service before the amendment, of -
(1) eliminating or reducing an early retirement benefit
or a retirement-type subsidy or
(2) (except as otherwise provided by Treasury
Regulations) eliminating an optional form of benefit shall be treated as
reducing accrued benefits. In the case of a retirement-type subsidy, the
preceding sentence shall apply only with respect to a Participant who satisfies
(either before or after the amendment) the preamendment conditions for the
subsidy. In addition, this prohibition shall not apply to a Plan amendment
1-61
that eliminates or restricts the ability of a Participant to receive payment of
his or her Account balance under a particular optional form of benefit if the
amendment satisfies the conditions of (A) and (B) below:
(A) The amendment provides a single-sum
distribution form that is otherwise identical to the optional form of benefit
eliminated or restricted. For purposes of this condition (A), a single-sum
distribution form is otherwise identical only if it is identical in all respects
to the eliminated or restricted optional form of benefit (or would be identical
except that it provides greater rights to the Participant) except with respect
to the timing of payments after commencement.
(B) The amendment is not effective unless the
amendment provides that the amendment shall not apply to any distribution with
an annuity starting date earlier than the earlier of: (i) the 90th day after the
date the Participant receiving the distribution has been furnished a summary
that reflects the amendment and that satisfies the ERISA requirements at 29 CFR
2520.104b-3 relating to a summary of material modifications or (ii) the first
day of the second Plan Year following the Plan Year in which the amendment is
adopted.
(c) Changes in Vesting Schedule. No amendment shall reduce the
nonforfeitable percentage of a Participant's accrued benefit (determined as of
the later of the date such amendment is adopted or the date such amendment
becomes effective). Further, if the Plan's vesting schedule is amended, or the
Plan is amended in any way that directly or indirectly affects the computation
of the Participant's nonforfeitable percentage, or if the Plan is deemed amended
by an automatic change to or from a top-heavy vesting schedule, each Participant
with at least 5 Years of Service (3 Years of Service for Plan Years beginning
after December 31, 1988 with respect to Participants with at least one Hour of
Service in a Plan Year beginning after December 31, 1988) with the Employer may
elect, within a reasonable period after the adoption of the amendment, to have
the nonforfeitable percentage computed under the Plan without regard to such
amendment. The period during which the election may be made shall commence with
the date the amendment is adopted and shall end on the latest of:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective; or
(3) 60 days after the Participant is issued written
notice of the amendment by the Employer or Administrator.
12.4 TERMINATION.
(a) Voluntary. The Employer shall have the right to terminate the
Plan. If the Plan is maintained by more than one Employer, the First Employer
designated in the Adoption Agreement shall have the right to terminate the Plan
on behalf of all Employers. Otherwise, a termination with respect to one
Employer shall not cause a termination with respect to any other Employer.
(b) Automatic Termination of the Plan. The Plan shall
automatically terminate upon the discontinuance or liquidation of the Employer's
business or the merger or consolidation of the Employer with or into any other
business organization or the sale by the Employer of substantially all of its
assets unless a successor business organization agrees with the Employer to
continue the Plan.
12.5 DISTRIBUTION OF PLAN ASSETS UPON TERMINATION OF THE PLAN. If the Plan
is terminated, then distributions and withdrawals shall continue to be made as
provided in the Plan; provided however, the Administrator may cause
Participants' Accounts to be paid to them on account of such termination of the
Plan.
12.6 DISPOSITION OF UNALLOCATED FORFEITURES AND SUSPENSE ACCOUNT AMOUNTS
UPON TERMINATION.
(a) Profit Sharing Plans. If the Plan is a profit sharing plan,
then any unallocated forfeitures or suspense account amounts remaining at the
time the Plan terminates shall be allocated among the Participants in an
equitable and nondiscriminatory manner, subject to the provisions of Article 4.
(b) Pension Plans. If the Plan is a pension plan, then after the
satisfaction of all liabilities to Participants or the Beneficiaries, any
suspense account amounts remaining at the time the Plan terminates shall be paid
to the Employer.
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ARTICLE 13
MISCELLANEOUS
13.1 ARTICLE AND SECTION REFERENCE. Except as otherwise indicated by the
context, all references to Articles or Sections in the Plan refer to Articles or
Sections of the Plan. The titles thereto are for convenience of reference only
and the Plan shall not be construed by reference thereto.
13.2 ASSIGNMENT OR ALIENATION OF BENEFITS.
(a) General. Except as provided in (b) below and section
401(a)(13)(C) of the Code, benefits provided under the Plan may not be
anticipated, assigned (either at law or in equity), alienated or subject to
attachment, garnishment, levy, execution or other legal or equitable process.
(b) QDRO. Notwithstanding (a) above, benefits shall be paid in
accordance with the applicable requirements of any domestic relations order
which is a qualified domestic relations order (as defined in section 206(d) of
ERISA or section 414(p) of the Code); and provided further that benefits shall
be paid pursuant to any domestic relations order was entered before January 1,
1985 if either the Plan is paying benefits pursuant to such order on such date
or the Administrator elects to treat such order as a qualified domestic
relations order.
(1) Immediate Single Sum Distribution. If a qualified
domestic relations order so provides, the Alternate Payee's entire benefit shall
be paid as soon as administratively feasible after the Administrator's receipt
of the order, determination of its qualified status and determination of the
amount payable thereunder; or, if the Participant's benefit, upon becoming
distributable to him, would commence only after the first Accounting Date
following his election, the payment to the Alternate Payee may not be made until
after the first Accounting Date following the Administrator's receipt of the
order, determination of its qualified status and determination of the amount
payable thereunder.
(2) Alternate Payee's Beneficiary. In the event an
Alternate Payee who is entitled to a benefit hereunder pursuant to a qualified
domestic relations order dies prior to the receipt of the entire benefit due,
the Alternate Payee's remaining benefit shall be payable to the Alternate
Payee's beneficiary designated in the order or on a form specified by the
Administrator and received by the Administrator prior to the Alternate Payee's
death. In the event there is no designated beneficiary to receive any such
amount then such amount shall be payable to the estate of the Alternate Payee.
(3) Alternate Payee Defined. "Alternate Payee" shall have
the meaning given in section 414(p)(8) of the Code.
13.3 DATA.
(a) Obligation to Furnish. Each person who participates or claims
benefits under the Plan shall furnish to the Administrator, the Trustee, or any
insurance company involved in the funding of the benefits under the Plan, such
signatures, documents, evidence, or information as the Administrator, the
Trustee, or such insurance company shall consider necessary or desirable for the
purpose of administering the Plan.
(b) Mistakes or Misstatements. In the event of a mistake or a
misstatement as to any item of such information, as is furnished pursuant to (a)
above, which has an effect on the amount of benefits to be paid under the Plan,
or in the event of a mistake or misstatement as to the amount of payments to be
made to a person entitled to receive a benefit under the Plan, then the
Administrator shall cause such amounts to be withheld or accelerated, as shall
in its judgment accord to such person the payment to which he is properly
entitled under the Plan.
13.4 EMPLOYMENT RELATIONSHIP.
(a) No Enlargement of Rights. Except as otherwise provided by law
or legally enforceable contract, the establishment of the Plan or of any fund or
any insurance contract thereunder, any amendment of the Plan, participation in
the Plan, or the payment of any distribution under the Plan, shall not be
construed as giving any person whomsoever any legal or equitable claims or
rights against any other person or against any entity or organization, or as
giving any person the right to be retained in the employment of the Employer.
(b) Employer's Rights. The right of the Employer to discipline or
discharge an employee shall not be effected by reason of any of the provisions
of the Plan.
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13.5 GENDER AND NUMBER. As used in the Plan, except when otherwise indicated
by the context, the genders of pronouns and the singular and plural numbers of
terms shall be interchangeable.
13.6 GOVERNING LAW. The Plan and all rights and duties under the Plan shall
be governed, construed and administered in accordance with the laws of the state
of the Employer's principal place of business, except as governed separately by
or preempted by federal law.
13.7 MERGER OR CONSOLIDATION OF THE PLAN. In the case of any merger or
consolidation of the Plan with, or transfer of assets or liabilities of the Plan
to, any other plan, each Participant in the Plan shall (if the surviving plan
terminated immediately after the merger, consolidation, or transfer) be entitled
to receive a benefit which is equal to or greater than the benefit he would have
been entitled to receive immediately before the merger, consolidation, or
transfer (if the Plan had then terminated). The Employer shall have the power to
direct such a merger, consolidation or transfer and the Trustee shall follow
such instructions as it may receive from the Employer in order to implement the
transaction. The Employer, and not the Trustee, shall have sole responsibility
for maintaining the qualified status of the Plan in connection with such a
transaction. The Trustee shall have no liability or responsibility for acting
pursuant to the direction of the Employer in implementing a merger,
consolidation or transfer.
13.8 ANNUITIES. Any annuity contract distributed from the Plan must be
nontransferable. The terms of any such annuity contract shall comply with the
requirements of the Plan.
13.9 ACCEPTANCE OF TRANSFERS AND MERGERS. The Employer may direct that the
Plan accept transfers of assets and benefit liabilities from other qualified
plans and mergers of other qualified plans into the Plan. In the event of any
such transfer or merger, the Plan Assets received shall be held in such
subaccounts as are appropriate to reflect the vesting provisions, distribution
limitations and optional forms of benefit applicable to the transferred or
merged benefits. The Employer shall amend the Plan as necessary to reflect the
appropriate vesting and optional forms of benefit applicable with respect to
such transferred benefits and to make such other amendments as it deems
necessary or appropriate in order to maintain the qualified status of the Plan.
The Employer, and not the Trustee, shall have sole responsibility for
maintaining the qualified status of the Plan in connection with such a
transaction. The Trustee shall have no liability or responsibility for acting
pursuant to the direction of the Employer in accepting a merger or transfer.
In the event another plan merged into the Plan prior to such other plan having
been amended for GUST, then provisions in this Plan affecting qualification
under section 401 of the Code with effective dates on or before the merger date
shall be treated as amendments to such plan, as it existed prior to the merger,
effective as of the same effective dates.
13.10 USERRA. Notwithstanding any provision of this Plan to the contrary,
effective December 12, 1994, contributions, benefits and service credit with
respect to qualified military service will be provided in accordance with
section 414(u) of the Code.
13.11 FAILURE TO QUALIFY. If the Plan fails to attain or retain qualification
under the Code, the Plan will no longer participate in this prototype plan and
will be considered an individually designed plan. The Employer is responsible
for the qualified status of the Plan.
13.12 SEVERABILITY. In case any provision of the Plan shall be held illegal
or invalid for any reason, such illegality or invalidity shall not affect the
remaining provisions of this Plan, and this Plan shall be construed and
interpreted as if such illegal or invalid provision had never been a part of it.
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