Metropolitan Life Insurance Company
ADOPTION AGREEMENT
for a
NON-STANDARDIZED
401(k) PLAN
By signing this Adoption Agreement, you (the employer) are adopting or
amending a 401(k)/profit sharing plan for the benefit of your eligible
employees. The terms of the plan are contained in the Metropolitan Life
Insurance Company Defined Contribution Basic Plan Document and in this
Adoption Agreement.
You should submit this non-standardized plan to your Internal Revenue
Service Key District Office for a determination that it is a tax-qualified
plan.
Please fill out this Adoption Agreement completely and properly. Failure to
do so may result in plan disqualification. Please type or print clearly
with a pen; do not use a pencil. Please make a copy of this Adoption
Agreement for your records.
PART A - GENERAL INFORMATION
A.1. NAME OF PLAN: This plan shall be known as the:
Interpool, Inc. Employee Savings Plan
A.2. NAME OF THE EMPLOYER: Interpool, Inc.
A.3. EMPLOYER TAX IDENTIFICATION NUMBER: ▇▇-▇▇▇▇▇▇▇
A.4. EMPLOYER'S ADDRESS: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
A.5. PLAN ADMINISTRATOR (If not the Employer):
ADDRESS:
A.6. TYPE OF BUSINESS ENTITY: |_| Partnership
|_| Limited Liability Partnership |_| Sole Proprietor
|_| Limited Liability Company |X| C Corporation
|_| S Corporation |_| Governmental Entity
|_| Tax-Exempt Organization |_| Other
A.7. DATE EMPLOYER'S BUSINESS COMMENCED: 1968
A.8. LAST DAY OF EMPLOYER'S TAXABLE YEAR: 12/31
--------------------------------
(month/day)
A.9. PLAN NUMBER: 002
---------
A.10. PLAN YEAR:
The plan year is the employer's Taxable Year unless another 12
consecutive month period is selected below.
Indicate last day of plan year if other than the Employer's
Taxable Year
------------------
(month/day)
|_| The period commencing on ____________________ and ending on
_______________; thereafter, the 12 month period commencing
on _______________________ and each anniversary thereof.
The limitation year is the plan year unless another 12-month
period is selected below:
|_| the limitation year will be from _________________________
to _______________________
A.11. NAME OF AMENDED PLAN:
Interpool, Inc. Employee Savings Plan
Original Effective Date: 7/1/1993
--------------------------------
A.12. ADOPTION OR AMENDMENT OF PLAN (complete either A., B. or C.)
A. The effective date of the new plan established by the
execution of this Adoption Agreement is: __________________
B. The effective date of amendments adopted by the execution
of this Adoption Agreement is: 9/1/2001
C. The effective date of this amendment to an earlier
Metropolitan Life Insurance Company Adoption Agreement
is: _____________________
PART B - PARTICIPATION
B.1. ELIGIBILITY (Plan ss.4.2)
There will be no age requirement unless checked below.
|_| An employee must have attained the age of _____________
(may not be greater than 21).
There will be no service requirement unless checked below.
|_| One year of service.
|_| _____ Months of Service (not to exceed 12) (If less than one
year of service is selected, the 1,000 hour of service
requirement for eligibility cannot be used.)
If the year(s) of service selected is or includes a fractional
year, an employee will not be required to complete any specified
number of hours of service to receive credit for such fractional
year.
|_| If checked, the above eligibility requirements apply for
purposes of eligibility to receive employer matching
contributions or employer profit-sharing contributions
and the following eligibility requirements apply for
purposes of eligibility to have 401(k) savings
contributions made on an employee's behalf or for an
employee to make after-tax savings contributions:
There will be no age requirement unless checked below.
|_| An employee must have attained the age of _______
(may not be greater than 21).
There will be no service requirement unless checked
below.
|_| One year of service.
|_| Months of Service (not to exceed 12). (If less than
one year of service is selected, the 1,000 hour of
service requirement for eligibility cannot be
used.)
If the year(s) of service selected is or includes a
fractional year, an employee will not be required
to complete any specified number of hours of
service to receive credit for such fractional year.
|_| Waiver of Requirements for New or Amended Plan.
If checked, each employee employed on the effective date
is automatically eligible to participate. Employees hired
after the effective date or amendment date are eligible
upon satisfying any service and/or age requirement.
B.2 SERVICE RULES (Plan ss.3A.2)
(a) Select one of the methods of measuring eligibility
service below.
|_| Hours of Service Method. (Plan ss. 3A)
An employee's service will be determined by
counting hours of service.
The employee must complete _____ hours of
service during a computation period to be
credited with a year of service. (Insert number;
cannot exceed 1,000.)
Hours of Service. An employee is credited with
his actual hours of service. However, if the
Employer checks one of the following boxes, an
employee is credited with the number of hours
specified:
|_| 10 hours per day
|_| 45 hours per week
|_| 95 hours per half month
|_| 190 hours per month
|X| Elapsed Time Method. (Plan ss.3B)
An employee's service will be determined using
the elapsed time method.
(b) Computation Periods. (Plan ss.3A or 3B)
For eligibility purposes, computation periods are used to
measure an employee's years of service.
|_| If checked, an employee's computation periods
are his first employment year, the first plan
year beginning within his first employment year,
and subsequent plan years. (Cannot be selected
if the Elapsed Time Method is chosen in (a)
above.)
|X| If checked, computation periods are an
employee's employment years.
B.3. Prior service with other businesses. (Planss.3A.10(c) or 3B.6(c))
(a) Predecessor Employers.
List any predecessor employer (other than the employer
adopting this plan, any related employer, or an employer
which previously carried on the employer's business) for
which service will count for eligibility and vesting
purposes.
Transamerica Leasing, Inc.
(b) Related Employers. (Plan ss. 3A.10 or 3B.6)
Years of service with the entities related to the employer
in the manner described in Code ss. 414(b), (c), (m), or (o)
shall include years before such entities were so related
unless otherwise noted below. List entities and special
restrictions:
B.4. ENTRY DATES (Plan ss. 4.3)
The plan's entry dates will be the first day of each of the first
and seventh months of the plan year, unless more frequent entry
dates are selected below:
|X| Monthly Entry Dates. The first day of each month is an
entry date.
|_| Quarterly Entry Dates. The first day of each of the
first, fourth, seventh and tenth months of the plan year
is an entry date.
|_| Payroll Entry Dates. The first day of each payroll period
is an entry date. The original effective date of the plan
is an entry date.
|_| If checked, the effective date of the plan's amendment is
an entry date.
B.5. CLASS EXCLUSIONS (Plan ss.4.1)
The following classes of individuals are not eligible to participate:
|X| If checked, all employees who are included in the
following unit(s) of employees covered by a collective
bargaining agreement, where retirement benefits were the
subject of good faith bargaining with the employer and
the agreement does not call for inclusion in this plan:
All bargaining units
|X| If checked, all nonresident alien employees who receive
no compensation from the employer which constitute income
from sources within the United States.
|X| If checked, all individuals performing services for the
Employer under an agreement, whether oral or written, by
which they acknowledge their status as independent
contractors, notwithstanding that such person is later
determined by a court of competent jurisdiction or the
Internal Revenue Service to be common law employees for
tax purposes.
|_| If checked, all employees of the following related
employer(s):
|X| Other (specify): Leased employees
B.6. WAIVER OF PARTICIPATION
|X| A Participant may not irrevocably waive participation in
the Plan.
|_| A Participant may irrevocably waive participation in the
Plan only at the time he or she is initially eligible to
participate, subject to the approval of the Plan
Administrator.
Note: This election must apply to all plans maintained by
the employer and must be made prior to the time the
participant becomes eligible for any plan maintained by
the employer.
PART C - CONTRIBUTIONS
C.1. PARTICIPANT 401(k) SAVINGS CONTRIBUTIONS (Plan ss. 5)
Each participant may make 401(k) savings contributions in
accordance with the provisions and limits in the Metropolitan Life
Insurance Company Plan Document.
A participant's 401(k) Savings Contributions shall be equal to at
least
|_| $ ___________ (minimum of $1.00) |X| 1 % of plan
compensation (minimum of 1%) (Check applicable box(es))
A participant's 401(k) savings contributions in a plan year may not
exceed 15% (not to exceed 20%) of his or her plan compensation for
the year. (If a limit is desired, insert the percentage.)
Optional 401(k) Savings Contributions from Bonus Payments.
A participant may also defer all or any portion of a bonus
payment, subject to the following limits:
|X| Not Applicable.
|_| A flat dollar amount not to exceed $ ;
------------
|_| A percentage of the bonus amount not to exceed %.
|_| The lesser of $ or % of
the participant's bonus amount.
|_| The greater of $ or % of
the participant's bonus amount.
Note: 401(k) Savings Contributions and Deferrals from
Bonus Payments are subject to regulatory limits.
C.2. PARTICIPANT AFTER-TAX CONTRIBUTIONS (Plan ss.6)
|_| If you check this box, participants may make voluntary
after-tax contributions to the plan in accordance with
the provisions and limits in the Metropolitan Life
Insurance Company plan document. A participant's
After-Tax Savings Contributions shall be equal to at
least:
|_| $_________________ (minimum of $1.00)
|_| ____% of plan compensation (minimum of 1%) (Check
applicable box(es)).
A participant's after-tax savings contributions in a plan
year may not exceed _____% of his or her plan
compensation for the year. (If a limit is desired, insert
the percentage.)
A participant's 401(k) savings contributions and
after-tax savings contributions in a plan year may not
exceed % of his or her plan compensation for the year.
(If a limit is desired, insert the percentage.)
|X| Not Applicable.
C.3. EMPLOYER CONTRIBUTIONS (Plan ss.8)
EMPLOYER MATCHING CONTRIBUTIONS. Each plan year, you (the
employer) will make matching contributions on behalf of each
participant who makes matchable savings contributions during the
plan year in accordance with whichever of the following boxes are
checked.
|X| Matching Contribution Formula. The matching contribution
will be equal to 75% (insert desired percentage for your
matching contribution) of the participant's matchable
savings contributions during such plan year.
Limit on Employer Matching Contributions.
|X| 401(k) savings contributions above $ or
6% of the participant's plan compensation will not be
matched. (if a limit is desired, insert the dollar amount
or percentage.)
|_| After-tax savings contributions above $
or % of the participant's Plan Compensation will not
be matched. (If a limit is desired, insert the dollar
amount or percentage.)
|_| Any combination of a participant's 401(k) savings
contributions and after-tax savings contributions above $
or % of such participant's Plan Compensation will not be
matched. (If a limit is desired, insert the dollar amount
or percentage.)
Note: Matching contributions on behalf of certain participants may
be limited under the Metropolitan Life Insurance Company plan
document.
|_| Discretionary Matching Contribution. The employer may
make matching contributions in an amount determined each
plan year on behalf of each participant who makes
matchable savings contributions. Discretionary matching
contributions will be allocated in accordance with any
one of the methods specified in the Plan, unless the
Employer elects, by checking the following box, to limit
the method of the allocation to the following method:
|_| Each eligible participant shall receive an equal
allocation as a percentage of his or her
matchable savings contributions during the
matching period up to a discretionary maximum
dollar amount or percentage of compensation.
Annual Matching Contribution. Unless checked below, the Employer
may make an additional matching contribution, which shall be
allocated among those participants whose matchable savings
contributions, when examined on an annual basis, was lower than
the maximum percentage of compensation for which matching
contributions could be made.
|_| Annual Matching Contributions are not permitted.
Matchable Savings.
The Employer will make a matching contribution on the following
participant savings contributions:
|X| 401(k) savings contributions.
|_| After-tax savings contributions.
|_| 401(k) savings contributions and after-tax savings
contributions.
|_| The matchable savings designated by the board of
directors of the Employer in the resolution announcing
the amount of the matching contribution. (May only be
used if a discretionary matching contribution is
selected.)
Matching Periods. The employer may make a matching contribution
for each matching period. The matching period will be the plan
year, unless any one of the following boxes are checked:
|_| Pay Period
|_| Monthly
|X| Quarterly
|_| Semi-annually
|_| The matching period designated by the board of directors
of the Employer in the resolution announcing the amount
of the matching contribution. (May only be used if a
discretionary matching contribution is selected.)
Employment Requirement for an Allocation.
Unless the employer checks the box below, a participant who was
employed at any point during a matching contribution period is
entitled to share in the allocation of matching contributions for
the matching contribution period. (Check the applicable box(es))
|_| A participant must be employed by the Employer on the
last day of the matching contribution period to share in
the allocation of Employer matching contributions for
such period.
|_| A participant must have completed at least hours of
service (cannot exceed 1,000) for the employer during the
plan year to receive a matching contribution for the plan
year. (Can only be elected if the matching contribution
period is the plan year.)
|_| The employment requirement for an allocation designated
by the board of directors of the Employer in the
resolution announcing the amount of the matching
contribution (but in no event shall a matching
contribution be denied to any participant who is employed
on the last day of the Plan Year and who has completed
more than 1,000 hours during the plan year). (May only be
used if a discretionary matching contribution is
selected.)
Exception: A participant whose employment with the
Employer ends because of his retirement, disability, or
death during a matching contribution period is not
required to fulfill the foregoing employment requirement
to receive a matching contribution for such period.
Special Rule for Partnerships. Unless checked below, if the
Employer is a partnership (or an entity treated as a partnership
for tax purposes), Employer Matching Contributions will be
allocated on behalf of a partner.
|_| Employer Matching Contributions will not be allocated on
behalf of a partner.
SUPPLEMENTAL EMPLOYER PROFIT SHARING CONTRIBUTIONS (Plan ss. 8.6)
|X| If checked, the employer may make a Supplemental Employer
Profit Sharing Contribution, which will be allocated in
the manner described below.
Unless otherwise checked below, the Non-Integrated Formula will be
used for allocating the Supplemental Employer Profit Sharing
Contribution (if any) for a plan year to participants' accounts.
Non-Integrated Formula. The Supplemental Employer Profit
Sharing Contribution (if any) for a plan year will be
allocated so that each eligible participant receives an
equal contribution as a percentage of his or her plan
compensation.
|_| Non-Integrated Formula Subject to Flat Dollar Limit. The
employer's contributions will be allocated so that each
eligible participant receives an equal contribution as a
percentage of his or her plan compensation, not to exceed
$_________________.
|_| Flat Dollar Allocation. The employer will contribute and
allocate to the account of each participant who is
entitled to receive an allocation of the employer's
contribution an amount equal to $___________.
|_| Discretionary Flat Dollar Allocation. The Employer may
make an Employer Profit Sharing Contribution. Such
contribution will be allocated as a flat dollar amount to
each eligible Participant.
|_| Unit Contribution Formula. The Employer will contribute
and allocate $ per (Check applicable box)
|_| hour, |_| week, |_| month or |_| Plan Year, for each
eligible employee.
|_| Integrated Formula. The Supplemental Employer Profit
Sharing Contribution (if any) for a plan year will be
allocated to eligible participants using the formula that
is integrated with Social Security. The integration level
will be the Social Security taxable wage base, unless
checked below.
The integration level is equal to:
|_| $ (a dollar amount less
than the taxable wage base)
|_| % of the taxable wage base (not to
exceed 100%).
Note: If you maintain any other plan that is integrated
with Social Security, you may not use the integrated
contribution formula.
Employment Requirement for an Allocation.
Unless the Employer checks one of the boxes below, a participant
is entitled to share in the allocation of supplemental employer
profit sharing contributions for the plan year if he was a
participant at any time during the plan year. (Check the
applicable box(es))
|X| If checked, a participant must be employed by the
employer on the last day of the plan year to share in the
allocation of supplemental employer profit sharing
contributions for the plan year.
|X| If checked, a participant must have completed at
least 1000 hours of service (cannot exceed 1,000) for the
employer during the plan year to share in the allocation
of supplemental employer profit sharing contributions for
the plan year.
Exception: A participant whose employment with the Employer ends
because of his retirement, disability, or death during the plan
year is not required to fulfill the foregoing employment
requirement to share in the allocation of supplemental employer
profit sharing contributions for such plan year.
C.4 PLAN COMPENSATION (Plan ss.2.19)
Plan compensation will mean all of such participant's Wages, Tips
and Other Compensation as reported on Form W-2 and which is
actually paid to the participant, unless the employer elects
otherwise by completing the boxes below. If checked below,
compensation will mean:
|X| 3401 wages
|_| 415 safe harbor compensation
|_| If checked, plan compensation will not exceed $ for any
plan year (insert desired amount; cannot exceed $150,000,
as adjusted for cost-of-living increases in accordance
with Section 401(a)(17)(B) of the Code (for Plan Years
beginning after December 31, 1993)).
Determination Period. Unless checked below, plan compensation
shall be based on compensation paid to the participant during the
plan year.
|_| Plan compensation shall be based on compensation which is
actually paid to the participant during the calendar year
ending with or within the plan year. For Employees whose
date of hire is less than 12 months before the end of the
12-month period designated, Plan Compensation will be
determined over the Plan Year.
Participant Status. Unless checked below, plan compensation shall
be limited to the period in which an employee is eligible to
participate in the plan.
|X| Plan compensation shall be determined over the entire
determination period whether or not an employee is
eligible to participate.
Elective Deferrals
Unless otherwise checked below, plan compensation shall include
employer contributions made pursuant to a salary reduction
agreement which are not includible in the gross income of the
participant under Code Sections 125, 402(e)(3), 402(h) or 403(b).
|_| Plan compensation shall not include employer
contributions made pursuant to a salary reduction
agreement which are not includible in the gross income of
the participant under Code Sections 125, 402(e)(3),
402(h) or 403(b).
Exclusions
If checked below (solely for purposes of determining plan
contributions), a participant's plan compensation excludes the
following checked items. (Note: the exclusion of bonuses,
commissions, overtime and/or other items may not be permitted if
such exclusion(s) would result in using by more than a de minimis
amount a higher percentage of total compensation for highly
compensated employees than for non-highly compensated employees.
Also, do not exclude any items (other than a dollar cap which is
above the Social Security wage base in effect for that year) if
you elected supplemental employer profit sharing contributions
with an integrated allocation formula.)
|_| bonuses
|_| commissions
|_| overtime
|X| other items (specify): Fringe Benefits, expense
reimbursements, deferred
compensation and welfare benefits
C.5 INVESTMENT DIRECTION (Plan ss. 15)
Unless checked below, participants will have investment direction
over all of their accounts under the Plan.
|X| The trustee will exercise investment control over the
following accounts (Check applicable box(es)):
|X| Employer Matching Contributions.
|_| Supplemental Employer Profit Sharing Contributions.
|_| Qualified Non-Elective Contributions.
|_| Qualified Matching Contributions.
C.6. QUALIFIED MATCHING AND NON-ELECTIVE CONTRIBUTIONS
Qualified Non-Elective Contributions. Unless checked below, the
Employer may make Qualified Non-Elective Contributions in
accordance with Section 5.7(b) of the Basic Plan Document.
|_| The Employer may not make Qualified Non-Elective
Contributions for any purposes.
Qualified Matching Contributions. Unless checked below,
the Employer may make Qualified Matching Contributions in
accordance with Section 5.7(c) of the Basic Plan Document.
|_| The Employer may not make Qualified Matching
Contributions for any purposes.
C.7 FORFEITURES
Indicate the method for disposing of forfeitures. (Must elect one
of the following methods: Reallocation or Contribution Reduction.
May also elect Expense Reduction.)
|X| Expense Reduction. Forfeitures will be applied to reduce
administrative expenses properly payable by the plan. (If
elected, choose one of the two following methods for the
use of any remaining forfeitures after plan expenses have
been paid.)
|_| Reallocation. Forfeitures of matching contributions shall
be allocated pro rata based on the Matching Contributions
for the entire Plan Year. If no Matching Contributions
have been allocated, then forfeitures of Matching
Contributions shall be allocated pro rata based on the
Matchable Savings Contributions for the entire plan year
without regard to any allocation conditions set forth in
Adoption Agreement Section C.3. If for some reason, no
Elective Deferrals or Matching Contributions are made,
forfeitures of Matching Contributions shall be allocated
into the Matching Contribution Account, but calculated if
it were an additional forfeiture of Profit Sharing
Contributions. Any forfeitures from employer profit
sharing contributions occurring during a plan year will
be allocated pro rata based on Profit Sharing
Contributions for the entire Plan Year. If no Profit
Sharing Contributions have been allocated, then
forfeitures of Profit Sharing Contributions shall be
allocated pro rata based on compensation for the Plan
Year, using compensation as defined for allocation of
Profit Sharing Contributions.
|X| Contribution reduction. Any forfeitures from matching
contributions or profit sharing contributions occurring
during a plan year will be used to reduce the amount the
employer must contribute for the next payable matching or
profit sharing contributions.
PART D - VESTING, LOANS AND WITHDRAWALS
D.1. VESTING (Plan ss.11)
(a) 100% Vesting in Employee Contributions.
Participants are 100% vested at all times in their 401(k)
savings contributions and after-tax contributions.
(b) Vesting in Employer Matching Contributions. Unless
elected below, participants are 100% vested at all times.
Participants are vested in employer matching
contributions (if any) on their behalf in accordance with
Schedule below. (Insert A, B, C, D, or E)
(c) Vesting in Supplemental Employer Profit Sharing
Contributions. Unless elected below, participants are
100% vested at all times. Participants are vested in
supplemental employer profit sharing contributions (if
any) on their behalf in accordance with Schedule D below.
(Insert A, B, C, D, or E)
(d) Vesting Schedules. The following vesting schedules are
available.
Schedule A: participants are vested under Schedule A
below. (For the first plan year in which the plan is top
heavy and for all subsequent plan years (whether or not
the plan is top heavy), 3 year cliff vesting applies, if
more favorable than the elected schedule.)
Schedule B: participants are vested under Schedule B
below. (For the first plan year in which the plan is top
heavy and for all subsequent plan years (whether or not
the plan is top heavy), the schedule in column B applies,
accelerated by one year, if more favorable than the
elected schedule.)
Schedule C: participants are vested under Schedule C
below
Schedule D: participants are vested under Schedule D
below. (If you select this, fill in the spaces to specify
the vesting you want; this schedule must be at least as
fast as either Schedule A or B. Spaces left blank are
treated as zeros.)
Schedule E: participants are vested under Schedule E
below. (If you select this, fill in the spaces to specify
the vesting you want; this schedule must be at least as
fast as either Schedule A or B. Spaces left blank are
treated as zeros.)
VESTING SCHEDULES
Years of Service A B C D E
---------------- - - - - -
Less than 1 0% 0% 0% 0 % %
-------- -------
At least 1 0% 0% 20% 0 % %
-------- -------
At least 2 0% 0% 40% 0 % %
-------- -------
At least 3 0% 20% 60% 20 % %
-------- -------
At least 4 0% 40% 80% 40 % %
-------- -------
At least 5 100% 60% 100% 60 % %
-------- -------
At least 6 100% 80% 100% 80 % %
-------- -------
At least 7 100% 100% 100% 100 % 100 %
-------- -------
D.2. SERVICE FOR VESTING
All years of service prior to the effective date are counted for
vesting unless checked below.
|_| Check this box if you want to exclude years of service
completed before the effective date of this plan (or a
predecessor plan) when calculating a participant's vested
percentage.
|_| Check this box if you want to exclude years of service
completed before the participant's birthday (insert
birthday - not greater than 18th).
D.3. YEAR OF SERVICE
(a) Select one of the methods of measuring vesting service below.
|_| Hours of Service Method. (Plan ss. 3A) An employee's
service for vesting purposes will be determined by
counting hours of service. However, if the Employer
checks one of the following boxes, an employee is
credited with the number of hours specified:
|_| 10 hours per day
|_| 45 hours per week
|_| 95 hours per half month
|_| 190 hours per month
The employee must complete hours of service during
a computation period to be credited with a year of
service. (Insert number; cannot exceed 1,000.)
|X| Elapsed Time Method. (Planss.3B) An employee's service
for vesting purposes will be determined using the elapsed
time method.
(b) Computation Periods. (Plan ss.3A or 3B)
For vesting purposes, computation periods are used to
measure an employee's years of service.
|_| If checked, an employee's computation periods are plan
years. (Cannot be elected if you selected the Elapsed
Time Method.)
|X| If checked, computation periods are an employee's
employment years.
D.4. REINSTATEMENT OF ACCOUNT BALANCE (Plan ss. 11.5)
Unless checked below, the nonvested portion of the account balance
of a participant who received a distribution of the vested portion
of his account balance following termination of employment will be
automatically reinstated upon his reemployment prior to incurring
five consecutive one-year breaks in service.
|X| The nonvested portion of the account balance of a
participant who received a distribution of his vested
account balance will be reinstated only if such
participant repays the amount of such distribution to the
plan by the earlier of (i) five years after the
participant is reemployed by the Employer or (ii) the
close of the first period of five consecutive one-year
breaks in service (or a 60 month period of severance, if
elapsed time is chosen) commencing after the
distribution.
D.5 LOANS
Loans to a participant from the plan will not be permitted unless
you check the following box.
|X| A participant may borrow from the plan, subject to the
plan's borrowing rules.
D.6 IN-SERVICE WITHDRAWALS
In-service withdrawals from a participant's 401(k) savings
contributions account, employer matching contributions account
and/or supplemental employer profit sharing contributions account
will not be permitted unless you check one or both of the
following box(es):
(a) 401(k) Savings Contributions.
|X| In-service withdrawals will be permitted from a
participant's 401(k) savings contributions
account if he has a financial hardship.
|X| In-service withdrawals will be permitted from a
participant's 401(k) savings contributions
account after attainment of age 59 1/2 without
financial hardship.
(b) After-Tax Savings Contributions.
Unless checked below, in-service withdrawals will be
permitted from a participant's after-tax savings
contributions account for any reason. To the extent that
a participant makes an in-service withdrawal of after-tax
savings contributions that are matchable savings
contributions, such participant may not make 401(k)
savings contributions or after-tax savings contributions
for a period of months after receiving the withdrawal.
(insert number, cannot be less than 6 nor more than 12)
|_| In-service withdrawals will not be permitted from a
participant's after-tax savings contributions account.
(c) Employer Matching Contributions.
|X| In-service withdrawals will be permitted from
the vested portion of a participant's matching
contributions account if he has a financial
hardship.
|_| Subject to Section 12.2, in-service withdrawals
will be permitted from the vested portion of a
participant's employer matching contribution
account for any reason.
|X| In-service withdrawals will be permitted from
the vested portion of a participant's employer
matching contributions account after attainment
of age 59 1/2 without financial hardship.
|_| In-service withdrawals by a participant who has
attained (Check applicable box) |_| Normal
Retirement Date |_| Early Retirement Date will
be permitted from his or her employer matching
contribution account.
(d) Supplemental Employer Profit Sharing Contributions.
|X| In-service withdrawals will be permitted from
the vested portion of a participant's
supplemental employer profit sharing
contributions account if they have a financial
hardship.
|_| Subject to Section 12.2, in-service withdrawals
will be permitted from the vested portion of a
participant's supplemental employer profit
sharing contribution account for any reason.
|X| In-service withdrawals will be permitted from
the vested portion of a participant's
supplemental employer profit sharing
contributions account after attainment of age 59
1/2 without financial hardship.
|_| In-service withdrawals by a participant who has
attained (Check applicable box) |_| Normal
Retirement Date |_| Early Retirement Date will
be permitted from their supplemental employer
profit sharing contribution account.
(e) Rollover Contributions.
Unless checked below, a participant may not make
in-service withdrawals from their rollover contributions
account.
|X| A participant may make in-service withdrawals from
their rollover contributions account for any
reason.
D.7 RETIREMENT DATE
Normal Retirement. Unless specified below, a participant will be
fully vested and may retire at the time he/she reaches age 65.
A participant will be fully vested and may retire at the time he/she
|_| reaches age (cannot exceed 65)
|_| reaches age (cannot exceed 65) or, if later,
the (cannot exceed the 5th) anniversary
of the time he/she commenced participation in the plan.
Early Retirement Date. If checked, a participant will be fully
vested and may retire prior to normal retirement upon
reaching
|X| age 55
|_| age or, if later, completing years of
service.
D.8 PLAN DISTRIBUTIONS
Cash-out of Account Balance. If a Participant's total vested
account balance does not exceed $ 3,500, then upon termination of
employment or retirement following normal or early retirement
date, the Employer will immediately distribute the Participant's
account balance in the form of a single sum, unless the employer
checks the box below.
|_| The employer will delay distribution of the Participant's
account balance until the Participant requests (or is
required to begin to receive) a distribution under the
Plan.
Minimum Distributions. Unless checked below, minimum distributions
payable for the life expectancy of the participant and the
participant's surviving spouse shall be recalculated.
|_| A participant may elect whether the life expectancy of
the participant and his spouse will be recalculated or
determined at the required beginning date and reduced by
one for each succeeding distribution calendar year.
Distributions to Missing Persons. If the Plan Administrator is
unable to locate any person to whom an account balance under this
plan is required to be distributed under the plan or by law, the
plan administrator shall dispose of such person's account balance
as follows:
|_| The plan administrator shall deposit such person's vested
account balance into a federally-insured interest-bearing
bank account for the benefit of such person.
|X| Such person's account balance shall be forfeited, subject
to reinstatement if such person files a claim for
benefits, the plan is required to commence distribution
to such person pursuant to Section 401(a)(9) of the Code
or upon the termination of the plan.
Annuity Form of Distribution. Unless checked below, no
distribution from the plan will be made in the form of an annuity.
|_| A participant may elect to receive a distribution of
his/her vested account balance in the form of an annuity.
PART E - MISCELLANEOUS
E.1. TRUST AGREEMENT
By signing this Adoption Agreement, you are also establishing a
trust to hold the plan's assets. The terms of the trust are
contained in the Metropolitan Life Insurance Company Trust which
is incorporated by reference into this Adoption Agreement.
E.2. OTHER PLANS;
If you maintained or later adopt any plan in addition to this plan
you may need special provisions to comply with Code Sections 415
and 416 (involving limits on contributions and benefits and
top-heavy minimum contributions and benefits). Such special
provisions should be set forth in an attachment.
If you maintain or ever maintained another qualified plan in which
any participant in this plan is (or was) a participant or could
become a participant, you must complete this section. You must
also complete this section if you maintain a welfare benefit fund,
as defined in section 419(e) of the Code, or an individual medical
account, as defined in section 415(1)(2) of the Code, under which
amounts are treated as annual additions with respect to any
participant in this plan.
A. If the participant is covered under another qualified
defined contribution plan maintained by you, other than a
master or prototype plan:
|X| The provisions of section 13.3 through 13.6 of
Article 13 will apply as if the other plan were
a master or prototype plan.
|_|
------------------------------------------------
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.
B. If the participant is or has ever been a participant in a
defined benefit plan maintained by you:
If contributions to this plan would cause the sum of a
participant's defined benefit and defined contribution
fractions to exceed 1.0, the participant's benefits
payable under the defined benefit plan shall be reduced
so that the 1.0 fraction is not exceeded.
Provide the method you will use to satisfy Code Section
415(e). Such language must preclude employer discretion.
E.3. TOP-HEAVY STATUS (Plan ss.14)
Unless one of the optional top-heavy testing rules is elected
below, the top-heavy tests are applied each year to determine
whether the plan is top-heavy. If the plan is top-heavy, or you
have selected one of the optional top-heavy testing elections, the
requirements for top-heavy plans apply (see Article 14 of the plan
document). As a result, there may be a requirement for minimum
contributions on behalf of certain participants in addition to
other employer contributions. Increased vesting may also be
required.
|_| Assumed top-heavy. If checked, the plan is treated as if
it is always top-heavy and the requirements for top-heavy
plans apply each plan year.
|_| Once top-heavy, always top-heavy. If checked, the
top-heavy tests are applied to determine whether the plan
is top-heavy for a plan year. If the plan is not
top-heavy, the requirements for top-heavy plans do not
apply. If the plan is top-heavy, the requirements for
top-heavy plans apply for that year and for all
subsequent plan years whether or not the plan is actually
top-heavy under the top-heavy tests; no further testing
is needed.
E.4. VALIDITY OF THIS PLAN
This Adoption Agreement does not create a valid plan until it is
signed by all appropriate parties below and receipt is
acknowledged by the Sponsor.
E.5. LEGAL DUTIES; UNDERTAKING OF EMPLOYER
You understand and agree that, by establishing this plan, you (the
employer) are the legal "plan administrator" under the pension
law, and you will incur certain duties and responsibilities as
employer maintaining the plan and as plan administrator and under
tax and other laws for which neither the trustee nor the sponsor
will be responsible. You warrant that:
(a) You also have read and signed the service agreement and
you agree to the terms contained in that agreement. You
understand your duties and responsibilities under this
plan and the applicable legal rules.
(b) You have obtained any legal and tax advice you wanted
before signing this Adoption Agreement. You understand
that you may not rely on the IRS opinion letter for this
prototype plan to show that the plan, as adopted by you,
is tax-qualified. To obtain such a ruling on your plan,
you must apply for your own determination letter from the
IRS Key District Office.
(c) You have received a prospectus(es) (where applicable) or
other materials describing the funding vehicles currently
available for this plan, and you have shown copies of
such prospectus(es) or other materials to all
participants.
E.6. DETERMINATION OF HIGHER PAID GROUP OF EMPLOYEES
|_| If this box is checked, the Employer elects to determine
the higher-paid group of Employees using the calendar
year election described in ss.1.414(q)-1T, Q&A-14(b) of
the temporary Income Tax Regulations.
PART F - SIGNATURES
F.1. EMPLOYER SIGNATURE
Signature:
--------------------------------------------------------
Name and title: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice President
------------------------------------------------
Please Print
Date:
------------------------------------------------------------
F.2. TRUSTEE(S) SIGNATURE
Signature(s):
--------------------------------------------------
Name of Trustee(s): MetLife Trust Company
-----------------------------------------
Please Print
Date:
------------------------------------------------------------
F.3. SPONSOR SIGNATURE
Signature:
------------------------------------------------------
Name and title: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Assistant Vice-President
------------------------------------------------
Please Print
Name of Sponsor: Metropolitan Life Insurance Company
--------------------------------------------
F.4. ADOPTION BY RELATED EMPLOYERS
All related employers should adopt the plan below unless the
employees of a related employer are specifically excluded as a
class in B.2.
If other employers become related employers, they must also adopt
the plan, unless this Adoption Agreement is amended to
specifically exclude the employees of such related employer.
The following employer hereby adopts the plan:
Name of related employer: Interpool Limited
----------------------------------
Employer identification number: ▇▇-▇▇▇▇▇▇▇
----------------------------
Signature:
-------------------------------------------------------
Name and title: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice President
-------------------------------------------------
Please Print
Date:
-------------------------------------------------------------
TYPE OF BUSINESS ENTITY |_| Partnership
|_| Limited Liability Partnership |_| Sole Proprietor
|_| Limited Liability Company |X| C Corporation
|_| S Corporation |_| Governmental Entity
|_| Tax-Exempt Organization |_| Other
-----------------
F.4. ADOPTION BY RELATED EMPLOYERS
All related employers should adopt the plan below unless the
employees of a related employer are specifically excluded as a
class in B.2.
If other employers become related employers, they must also adopt
the plan, unless this Adoption Agreement is amended to
specifically exclude the employees of such related employer.
The following employer hereby adopts the plan:
Name of related employer: Trac Lease, Inc.
------------------------------------
Employer identification number: ▇▇-▇▇▇▇▇▇▇
------------------------------
Signature:
---------------------------------------------------------
Name and title: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice President
---------------------------------------------------
Please Print
Date:
---------------------------------------------------------------
TYPE OF BUSINESS ENTITY |_| Partnership
|_| Limited Liability Partnership |_| Sole Proprietor
|_| Limited Liability Company |X| C Corporation
|_| S Corporation |_| Governmental Entity
|_| Tax-Exempt Organization |_| Other ______________________
F.4. ADOPTION BY RELATED EMPLOYERS
All related employers should adopt the plan below unless the
employees of a related employer are specifically excluded as a
class in B.2.
If other employers become related employers, they must also adopt
the plan, unless this Adoption Agreement is amended to
specifically exclude the employees of such related employer.
The following employer hereby adopts the plan:
Name of related employer: Datatrac Services, Inc.
-----------------------------------
Employer identification number: ▇▇-▇▇▇▇▇▇▇
-----------------------------
Signature:
--------------------------------------------------------
Name and title: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice President
--------------------------------------------------
Please Print
Date:
--------------------------------------------------------------
TYPE OF BUSINESS ENTITY |_| Partnership
|_| Limited Liability Partnership |_| Sole Proprietor
|_| Limited Liability Company |X| C Corporation
|_| S Corporation |_| Governmental Entity
|_| Tax-Exempt Organization |_| Other _________________
This Adoption Agreement may only be used in conjunction with the MetLife
Defined Contribution Basic Plan Document No. 07.
The identifying number for the Metropolitan Life Insurance Company Defined
Contribution Basic Plan Document is 07 and for this Adoption Agreement is
006. This Adoption Agreement may be used only with such document. The
sponsor of the prototype plan is Metropolitan Life Insurance Company, ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇-▇▇▇-▇▇▇-▇▇▇▇. The sponsor will
notify you if the sponsor amends or discontinues this prototype plan.
METROPOLITAN LIFE INSURANCE COMPANY
METLIFE(R) 401(K)
Defined Contribution Basic Plan Document
November, 1997
TABLE OF CONTENTS
Page
INDEX OF TERMS...............................................................................................vi-vii
ARTICLE 1: INTRODUCTION....................................................................................1
1.1 Establishment of Plan...........................................................................1
1.2 Plan Documents..................................................................................1
1.3 Paired Plans....................................................................................1
ARTICLE 2: DEFINITIONS.....................................................................................1
2.1 Actual Deferral Percentage......................................................................1
2.2 Adoption agreement..............................................................................2
2.3 Beneficiary.....................................................................................2
2.4 Code............................................................................................2
2.5 Effective Date..................................................................................2
2.6 Elective Deferrals..............................................................................2
2.7 Employee........................................................................................2
2.8 Employer........................................................................................3
2.9 ERISA...........................................................................................3
2.10 Excess Aggregate Contributions..................................................................3
2.11 Excess Contributions............................................................................3
2.12 Excess Elective Deferrals or Excess 401(k) Savings Contributions................................3
2.13 Family Medical Absence..........................................................................4
2.14 Military Absence................................................................................4
2.15 Owner-employee..................................................................................4
2.16 Participant.....................................................................................4
2.17 Plan............................................................................................4
2.18 Plan administrator..............................................................................4
2.19 Plan Compensation...............................................................................4
2.20 Plan year.......................................................................................6
2.21 Qualified Matching Contributions................................................................6
2.22 Qualified Non-elective Contributions............................................................6
2.23 Self-employed individual........................................................................6
2.24 Shareholder-employee............................................................................6
2.25 Sponsor.........................................................................................6
2.26 Trust...........................................................................................6
2.27 Trustee.........................................................................................6
2.28 Straight Life Annuity...........................................................................6
ARTICLE 3: DEFINITIONS AND RULES RELATING TO SERVICE.......................................................6
PART A: HOURS OF SERVICE METHOD.........................................................................6
3A.1 Applicability of Part A.........................................................................7
3A.2 Year of Service.................................................................................7
3A.3 Hour of Service.................................................................................7
3A.4 One-Year Break in Service.......................................................................8
3A.5 Employment Years Defined........................................................................8
3A.6 Eligibility Computation Period..................................................................8
3A.7 Vesting Computation Period......................................................................9
3A.8 Counting Years of Service for Participation.....................................................9
3A.9 Years of Service for Vesting....................................................................9
3A.10 Service With Other Organizations...............................................................10
PART B: ELAPSED TIME METHOD............................................................................10
3B.1 Applicability of Part B........................................................................10
3B.2 Service........................................................................................10
3B.3 Definitions Relating to Service................................................................10
3B.4 Certain Service Before Eligibility Disregarded.................................................11
3B.5 Service for Vesting............................................................................12
3B.6 Service With Other Organizations...............................................................12
ARTICLE 4: PARTICIPATION........................................................................................12
4.1 Eligible Employees.............................................................................12
4.2 Age and Service Requirements...................................................................13
4.3 Participation..................................................................................13
4.4 Termination of Participation...................................................................13
4.5 Re-entry of Former Participant.................................................................13
4.6 Transfers......................................................................................13
ARTICLE 5: EMPLOYEE 401(k) SAVINGS CONTRIBUTIONS; AVERAGE DEFERRAL PERCENTAGE TEST........................14
5.1 Eligibility....................................................................................14
5.2 Limits on Amount...............................................................................14
5.3 Procedures.....................................................................................15
5.4 Collection of 401(k) Savings Contributions.....................................................16
5.5 Savings Contributions Account..................................................................16
5.6 401(k) Limits..................................................................................16
5.7 Deferral Percentage............................................................................17
5.8 Higher and Lower Paid Groups Defined...........................................................19
5.9 Monitoring Participants' Deferral Percentages; Adjustments.....................................21
5.10 Treatment of Participant Who Reaches $7,000 Limit..............................................23
ARTICLE 6: AFTER-TAX EMPLOYEE SAVINGS CONTRIBUTIONS; AVERAGE CONTRIBUTION PERCENTAGE TEST.......................23
6.1 Eligibility....................................................................................23
6.2 Limits on Amount...............................................................................23
6.3 Procedures; Plan Administrator Rules...........................................................24
6.4 Collection of After-Tax Employee Contributions.................................................24
6.5 After-Tax Employee Contributions Account.......................................................26
6.6 401(m) Limits..................................................................................25
6.7 Contribution Percentage Defined................................................................25
6.8 Special Rules..................................................................................25
6.9 Additional Limits for Plans Subject to Both 401(k) and 401(m) Limits...........................28
ARTICLE 7: ROLLOVERS AND DEDUCTIBLE EMPLOYEE CONTRIBUTIONS......................................................29
7.1 Rollover Contributions.........................................................................29
7.2 Qualified Voluntary Employee Contributions.....................................................30
7.3 Withdrawals....................................................................................30
ARTICLE 8: EMPLOYER CONTRIBUTIONS; AMOUNT AND ALLOCATION........................................................31
8.1 Amount of Employer Contribution................................................................31
8.2 Profit-Sharing Plans...........................................................................31
8.3 Money Purchase Pension Plans...................................................................33
8.4 Employer Matching Contributions................................................................34
8.5 Persons Entitled to Share in Allocations.......................................................37
8.6 Allocation Rules...............................................................................38
ARTICLE 9: BENEFITS UPON RETIREMENT AND DISABILITY..............................................................41
9.1 Retirement Dates...............................................................................41
9.2 Disability Retirement..........................................................................42
9.3 Retirement Benefits............................................................................42
9.4 Method of Payment..............................................................................43
9.5 Married Participants...........................................................................43
9.6 Unmarried Participants.........................................................................46
9.6A. Direct Rollover Requirements...................................................................46
9.7 Distribution Requirements......................................................................47
9.8 Required Beginning Date........................................................................49
9.9 Transitional Rule..............................................................................49
9.10 Date Benefit Payments Begin....................................................................51
9.11 Annuities Nontransferable......................................................................51
ARTICLE 10: BENEFITS UPON DEATH.................................................................................51
10.1 Benefits upon Death............................................................................51
10.2 Method of Payment..............................................................................52
10.3 Qualified Preretirement Survivor Annuity.......................................................52
10.4 Limitation on Death Benefit Distributions......................................................54
10.5 Beneficiary....................................................................................57
10.6 Safe Harbor Rules..............................................................................57
10.7 Transitional Rules.............................................................................68
ARTICLE 11: TERMINATION OF EMPLOYMENT AND VESTED INTEREST.......................................................60
11.1 Vested Interest in Accrued Benefit.............................................................60
11.2 Changes in Vesting Schedule....................................................................60
11.3 Payment of Vested Interest.....................................................................60
11.4 Forfeiture of Non-Vested Interest..............................................................60
11.5 Protections Upon Resumption of Employment......................................................60
11.6 Calculating Vested Interest After Account Distribution.........................................61
ARTICLE 12: IN-SERVICE DISTRIBUTIONS AND WITHDRAWALS; LOANS.....................................................61
12.1 Withdrawal of After-Tax Contributions..........................................................61
12.2 In-Service Withdrawals from Profit Sharing Plans...............................................62
12.3 In-Service Withdrawals from 401(k) plans.......................................................63
12.4 In-Service Withdrawals from Money Purchase Plan Plan...........................................65
12.5 Loans..........................................................................................65
ARTICLE 13: MAXIMUM LIMITATION ON ALLOCATIONS...................................................................67
13.1 Section 415 Definitions........................................................................67
13.2 No Participation in Other Qualified Plans......................................................72
13.3 Participation in Other Qualified Master or Prototype Defined Contribution Plans................72
13.4 Participation In Another Qualified Plan, Other Than Master or Prototype Plans..................72
13.5 Estimated Limitation...........................................................................72
13.6 Apportionment Between Plans....................................................................73
13.7 Excess Amounts.................................................................................73
13.8 Defined Benefit and Defined Contribution Plan..................................................74
ARTICLE 14: TOP-HEAVY PROVISIONS................................................................................74
14.1 Application of Article.........................................................................74
14.2 Top-Heavy Definitions..........................................................................74
14.3 Minimum Allocation.............................................................................76
14.4 Apportionment of Minimum Benefits Between Multiple Plans.......................................77
14.5 Minimum Vesting Schedule.......................................................................77
14.6 Top Heavy Adjustments in Section 415 Fractions.................................................78
14.7 Additional Provisions For Paired Defined Contribution and Defined Benefit Plans................78
ARTICLE 15: ACCOUNTS AND INVESTMENTS............................................................................79
15.1 Separate Accounts..............................................................................79
15.2 Investment Media; Participant Investment Directions............................................79
15.3 Rules for Exercise of Investment Options.......................................................80
15.4 Segregated Accounts............................................................................81
15.5 Life Insurance Contracts.......................................................................81
15.6 Mutual Fund Shares.............................................................................82
15.7 Expenses.......................................................................................84
ARTICLE 16: ADMINISTRATOR OF THE PLAN...........................................................................84
16.1 Plan Administrator.............................................................................84
16.2 Administration of Plan.........................................................................84
16.3 Reporting and Disclosure.......................................................................85
16.4 Records........................................................................................85
16.5 Compensation and Expenses......................................................................85
16.6 Claims Procedure...............................................................................85
16.7 More than One Employer.........................................................................85
ARTICLE 17: AMENDMENT, TERMINATION OR MERGER OF PLAN............................................................86
17.1 Amendment by Sponsor...........................................................................86
17.2 Amendment by Employer..........................................................................86
17.3 Restrictions on Amendments.....................................................................86
17.4 Termination of Plan............................................................................87
17.5 Disposition and Termination of Trust...........................................................87
17.6 Merger of Plans................................................................................87
ARTICLE 18: TRANSFERS FROM OR TO OTHER QUALIFIED PLANS..........................................................88
18.1 Transfers from Another Plan of the Employer....................................................88
18.2 Transfers to Other Plans.......................................................................88
ARTICLE 19: MISCELLANEOUS.......................................................................................88
19.1 Prohibited Diversion...........................................................................88
19.2 Failure to Attain or Retain Qualification......................................................88
19.3 Nonalienation..................................................................................88
19.4 Qualified Domestic Relations Orders............................................................88
19.5 Limitation on Rights Created by Plan...........................................................89
19.6 Allocation of Responsibilities.................................................................90
19.7 Return of Contributions........................................................................90
19.8 Current Address of Payee.......................................................................90
19.9 Controlled Group...............................................................................90
19.10 Affiliated Service Groups......................................................................90
19.11 Other Aggregated Groups........................................................................91
19.12 Leased Employees...............................................................................91
19.13 Control of Trades or Businesses by Owner Employee..............................................91
19.14 Application of Plan's Terms....................................................................92
19.15 Rules of Construction..........................................................................92
19.16 Governing Law..................................................................................92
19.17 Payment for Minor or Incompetent...............................................................92
INDEX OF TERMS
The items listed below are defined, explained or clarified in the plan
sections or articles indicated.
Adoption agreement.................................................................................... 2.2
Allocation rules...................................................................................... 8.6
Annual additions.................................................................................. 13.1(a)
Beneficiary..................................................................................... 2.3, 10.5
Code.................................................................................................. 2.4
Claims procedure..................................................................................... 16.6
Compensation for Purposes of Code Section 415
(See also "plan compensation")........................................................... 13.1(b)
Contribution percentage............................................................................... 6.7
Deferral percentage................................................................................... 5.7
Eligible employee..................................................................................... 4.1
Employee.............................................................................................. 2.7
Employer..................................................................................... 2.8, 13.1(c)
ERISA................................................................................................. 2.9
Excess 401(k) savings contributions................................................................... 5.9
Financial hardship....................................................................... 12.2(b), 12.3(c)
401(k) limits............................................................................... 5.2, 5.6, 5.9
401(m) limits............................................................................... 6.2, 6.6, 6.9
Hour of service...................................................................................... 3A.3
Higher paid group.................................................................................. 5.8(a)
Limitation year................................................................................... 13.1(h)
Loans................................................................................................ 12.5
Lower paid group................................................................................... 5.8(b)
Method of payment............................................................................... 9.4, 10.2
One-year break in service............................................................................ 3A.4
Owner-employee....................................................................................... 2.15
Paired plans.......................................................................................... 1.3
Participant.......................................................................................... 2.16
Participation................................................................... Article IV, 4.3 Plan 2.19
Plan administrator...................................................................... Article XVI, 2.18
Plan compensation.................................................................................... 2.19
Plan service.................................................................................. Article III
Plan year............................................................................................ 2.20
Qualified domestic relations orders.................................................................. 19.4
Qualified joint and survivor annuity............................................................... 9.5(a)
Qualified voluntary employee contributions............................................................ 7.2
Retirement dates................................................................................. 9.1, 9.2
Rollover contributions................................................................................ 7.1
Segregated accounts.................................................................................. 15.4
Self-employed individual............................................................................. 2.23
Shareholder-employee................................................................................. 2.24
Sponsor.............................................................................................. 2.25
Top-heavy definitions................................................................................ 14.2
Trust................................................................................................ 2.26
Trustee.............................................................................................. 2.27
Vested interest.......................................................................... 11.1, 3A.9, 3B.5
Withdrawals.............................................................................. Article XII, 7.3
Year of service...................................................................................... 3A.2
ARTICLE 1:
INTRODUCTION
1.1 Establishment of Plan:
The employer established this plan under the name specified in the
adoption agreement.
1.2 Plan Documents:
The plan consists of this defined contribution basic plan
document, the adoption agreement executed by the employer, and the related
trust instrument, as each may be amended from time to time.
In this basic plan document, cross references that are arabic
numbers are to an article or section of this document, and cross references
that begin with a capital letter are to the adoption agreement.
1.3 Paired Plans:
(a) Two or more plans established using this basic plan document
(or the sponsor's defined benefit basic plan document) and standardized
adoption agreements may be paired plans. The Code requirements for
qualification of multiple plans will automatically be satisfied for paired
plans, and the employer who complies with the plans' provisions may rely
upon their qualification without obtaining individual determination letters
from the Internal Revenue Service.
(b) The requirements for paired plans are as follows:
(i) Each plan uses one of the sponsor's pairable
standardized adoption agreements. The following are pairable standardized
adoption agreements: adoption agreements numbered 001, 002 and 003.
(ii) Only one of such plans is (a) an integrated profit
sharing plan, (b) a non-integrated profit sharing plan, (c) a money
purchase pension plan, or (d) a defined benefit pension plan.
(iii) Only one of such plans is integrated with Social
Security.
(iv) Each adoption agreement specifies the employer's other
paired plan(s).
ARTICLE 2:
DEFINITIONS
A word or term defined in this article (or in any other article)
will have the same meaning throughout the plan unless the context clearly
requires a different meaning.
2.1 Actual Deferral Percentage:
(ADP) shall mean, for a specified group of participants for a Plan
Year, the average of the ratios (calculated separately for each participant
in such group) of (1) the amount of employer contributions actually paid
over to the trust on behalf of such participant for the plan year to (2)
the participant's Plan Compensation or compensation (based on a definition
of compensation selected by the employer for the Plan Year that satisfies
Code Section 414(s)) for such Plan Year (limited to the portion of the plan
year in which an employee was a participant, unless otherwise provided in
the adoption agreement). Employer contributions on behalf of any
participant shall include: (1) any elective deferrals made pursuant to the
participant's deferral election, including excess elective deferrals of
members of the higher paid group, but excluding (a) Excess Elective
Deferrals of the lower paid group that arise solely from elective deferrals
made under the plan or plans of this employer and (b) elective deferrals
that are taken into account in the contribution percentage test (provided
the ADP test is satisfied both with and without exclusion of these elective
deferrals); and (2) at the election of the employer, qualified non-elective
contributions and qualified matching contributions. For purposes of
computing actual deferral percentages, an employee who would be a
participant but for the failure to make elective deferrals shall be treated
as a participant on whose behalf no elective deferrals are made.
2.2 Adoption agreement means the Metropolitan Life Insurance
Company MetLife(R) 401(k) adoption agreement executed by the employer to
establish or amend the employer's plan and its related trust and to specify
optional provisions as part of the employer's plan.
2.3 Beneficiary means the individual(s) or entity(ies) designated
by a participant or beneficiary, or by the plan, to receive any benefit
payable upon the death of the participant or beneficiary.
2.4 Code means the Internal Revenue Code of 1986, as amended.
2.5 Effective Date shall mean the date specified in the initial
adoption agreement, but no earlier than the first day of the plan year in
which the initial adoption agreement is executed, except as otherwise
provided in this section. In the event that this plan is an amended plan,
the effective date shall be the initial effective date of the Plan. In
addition, if a section of the plan or the adoption agreement specifies an
effective date, such provision shall be effective on the later of the date
specified in such section or the initial effective date of the plan.
2.6 Elective Deferrals (or 401(k) savings contributions) shall
mean any employer contributions made to the plan at the election of the
participant, in lieu of cash compensation, and shall include contributions
made pursuant to a salary reduction agreement or other deferral mechanism.
With respect to any taxable year, a participant's Elective Deferral is the
sum of all employer contributions made on behalf of such participant
pursuant to an election to defer under any qualified CODA as described in
section 401(k) of the Code, any simplified employee pension cash or
deferred arrangement as described in section 402(h)(1)(B), any eligible
deferred compensation plan under section 457, any plan as described under
section 501(c)(18), and any employer contributions made on the behalf of a
participant for the purchase of an annuity contract under section 403(b)
pursuant to a salary reduction agreement. Elective Deferrals shall not
include any deferrals properly distributed as Excess Amounts.
2.7 Employee means (i) a person employed by the employer and, (ii)
an employee of any other employer required to be aggregated under Code
Section 414(b), (c), (m) or (o) with the employer maintaining the plan, or
(iii) an individual described in Section 19.12 who is deemed to be an
employee of any such employer under Code Sections 414(n) or 414(o).
Employee includes a self-employed individual.
2.8 Employer means the employer named in Part A of the adoption
agreement and any other employer which has joined the plan.
No employer may adopt a standardized plan unless each related
employer that is part of the same controlled group (as defined in Section
19.9) or the same affiliated service group (as defined in Section 19.10),
or that is aggregated under Section 19.11, with the employer designated in
Part A of the adoption agreement joins the plan. The failure of any such
related employer to join the plan will cause it to be considered a
nonstandardized plan so that the employers may not rely upon the plan's
qualification under Code Section 401(a) unless they obtain an individual
determination letter to such effect from the Internal Revenue Service.
In this plan, the term employer will refer to the employer named
in Part A of the adoption agreement, to each adopting employer
individually, or to all employers in the aggregate, as the context may
require. General rules of construction appear in Section 16.7, "More Than
One Employer."
2.9 ERISA means the Employee Retirement Income Security Act of
1974, as amended.
2.10 Excess Aggregate Contributions shall mean, with respect to
any Plan Year, the excess of:
a. The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution Percentage actually
made on behalf of Higher Paid Group for such Plan Year, over
b. The maximum Contribution Percentage Amounts permitted by
the ACP test (determined by reducing contributions made on behalf of
members of the Higher Paid Group in order of their Contribution Percentages
beginning with the highest of such percentages).
Such determination shall be made after first determining
Excess Elective Deferrals pursuant to section 5.9(b) and then determining
Excess Contributions pursuant to section 5.9(a).
2.11 Excess Contributions shall mean, with respect to any Plan
Year, the excess of:
a. The aggregate amount of employer contributions actually
taken into account in computing the ADP of Higher Paid Group for such Plan
Year, over
b. The maximum amount of such contributions permitted by the
ADP test (determined by reducing contributions made on behalf of Higher
Paid Group in order of the ADPs, beginning with the highest of such
percentages).
2.12 Excess Elective Deferrals or Excess 401(k) Savings
Contributions shall mean those Elective Deferrals or 401(k) savings
contributions that are includible in a participant's gross income under
section 402(g) of the Code to the extent such participant's Elective
Deferrals or 401(k) savings contributions for a taxable year exceed the
dollar limitation under such Code section. Excess Elective Deferrals or
Excess 401(k) Savings Contributions shall be treated as annual additions
under the plan unless such amounts are distributed no later than the first
April 15 following the close of the participant's taxable year.
2.13 Family Medical Absence means, with respect to an employee who
satisfies the notice, medical certification and reemployment provisions of
the Family and Medical Leave Act of 1993, an unpaid absence not in excess
of twelve workweeks in any year of service (a) for purposes of caring for
the employee's spouse, child, or parent with a serious health condition (as
defined in Section 101(11) of the Family and Medical Leave Act of 1993) or
(b) because of a serious health condition that makes the employee unable to
perform one or more of the essential functions of his or her job.
2.14 Military Absence means any unpaid leave of absence not in
excess of five years' duration (unless extended in accordance with the
Uniformed Services Employment and Reemployment Rights Act ("USERRA")) taken
by an Employee for purposes of serving in the uniformed services of the
United States, with respect to an Employee who satisfies the conditions for
reemployment specified by the USERRA following the expiration of such
leave.
2.15 Owner-employee means an individual who is the sole proprietor
(if the employer is a proprietorship), or who is a partner or shareholder
owning more than 10 percent of either the capital or profits interest (if
the employer is a partnership or a limited liability partnership or a
limited liability company that is treated as a partnership under the Code).
2.16 Participant means an employee who has become a participant in
the plan, a former employee who has an account balance under the Plan and
an employee who has not yet satisfied the age and service requirements of
Section 4.2 but has made a rollover contribution into the Plan, pursuant to
Section 7.1(c). A Participant's participation will end on the earlier of
the date on which (i) he or she receives a total distribution from the Plan
in the form of a single sum or (ii) he has no vested interest in the Plan
and a period of five consecutive one-year breaks in service has occurred.
A Participant is treated as benefiting under the Plan for any Plan
Year during which the Participant received or is deemed to receive an
allocation in accordance with section 1.410(b)-3(a). 2.17 Plan means the
employer's plan as set forth in this Metropolitan Life Insurance Company
basic plan document and the adoption agreement signed by the employer,
including all amendments to either document.
2.18 Plan Administrator means the person or persons designated in
the adoption agreement as plan administrator to control and manage the
operation and administration of the employer's plan as provided in Article
16.
2.19 Plan Compensation:
(a) General Definition. A participant's plan compensation
for a plan year means compensation as that term is defined in Section
13.1(b) of the Plan, as modified in the adoption agreement. Solely for
purposes of determining the amount of a participant's 401(k) savings
contributions, after-tax savings contributions and their related matching
contributions, plan compensation shall include employer contributions made
pursuant to a salary reduction agreement or other arrangement which are not
includible in the gross income of the participant under Code Sections 125,
402(e)(3), 402(h)(1)(B) or 403(b). Compensation shall include only that
compensation which is actually paid to the participant during the
determination period. Except as provided elsewhere in the Plan, the
determination period shall be the period elected by the Employer in the
Adoption Agreement. If the Employer makes no election, the determination
period shall be the Plan Year. For a self-employed individual, plan
compensation means his earned income. Except as otherwise provided in this
section, if elected by the Employer in the Adoption Agreement, Compensation
shall include any amount which is contributed by the Employer pursuant to a
salary reduction agreement or other arrangement and which is not includible
in the gross income of the Employee under sections 125, 402(e)(3),
402(h)(1)(B), or 403(b) of the Code.
For purposes of this subsection, earned income means net
earnings from self employment in the trade or business with respect to
which the plan is established, for which the personal services of the
individual are a material income producing factor. Net earnings will be
determined without regard to items excluded from 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 Code Section 404. Net earnings shall be determined with regard to the
deduction allowed to the taxpayer by Code Section 164(f) for taxable years
beginning after December 31, 1989.
For years beginning on or after January 1, 1989, and before
January 1, 1994, the annual compensation of each participant taken into
account for determining all benefits provided under the plan for any year
shall not exceed $200,000. This limitation shall be adjusted by the
Secretary at the same time and in the same manner as under section 415(d)
of the Code, except that the dollar increase in effect on January 1 of any
calendar year is effective for years beginning in such calendar year and
the first adjustment to the $200,000 limitation is effected on January 1,
1990. For Plan Years beginning on or after January 1, 1994, the annual
compensation of each Participant taken into account for determining all
benefits provided under the Plan for any Plan Year shall not exceed
$150,000, as adjusted for increases in the cost-of-living in accordance
with section 401(a)(17)(B) of the Code. The cost-of-living adjustment in
effect for a calendar year applies to any determination period beginning in
such calendar year.
If the determination period consists of fewer than 12
months, the annual compensation limit is an amount equal to the otherwise
applicable annual compensation limit multiplied by a fraction, the
numerator of which is the number of months in the short plan year, and the
denominator of which is 12. In determining the compensation of a
participant for purposes of this limitation, the rules of section 414(q)(6)
of the Code shall apply, except in applying such rules, the term "family"
shall include only the spouse of the Participant and any lineal decedents
of the Participant who have not attained age 19 before the close of the
year. If, as a result of the application of such rules the adjusted annual
compensation limitation is exceeded, then (except for purposes of
determining the portion of compensation up to the integration level if this
plan provides for permitted disparity), the limitation shall be prorated
among such affected individuals in proportion to each such individual's
compensation as determined under this section prior to the application of
this limitation. If compensation for any prior determination period is
taken into account in determining an employee's allocations or benefits for
the current Plan Year, the compensation for such prior year is subject to
the applicable annual compensation limit in effect for that prior year. For
this purpose, for years beginning before January 1, 1990, the applicable
annual compensation limit is $200,000. In addition, in determining
allocations in Plan Years beginning on or after January 1, 1994, the annual
compensation limit in effect for determination periods beginning before
that date is $150,000.
(b) Exception. For purposes of Article 13 (Code Section 415
limits), the foregoing definition of plan compensation will not apply (see
Section 13.1(b) for the applicable definition).
2.20 Plan year means the calendar year unless another plan year is
specified in the adoption agreement.
2.21 Qualified Matching Contributions shall mean employer matching
contributions which are subject to the distribution and nonforfeitability
requirements of Code Section 401(k) when made.
2.22 Qualified Non-elective Contributions shall mean contributions
(other than Matching Contributions or Qualified Matching Contributions)
made by the employer and allocated to participants' accounts that the
participants may not elect to receive in cash until distributed from the
plan; that are nonforfeitable when made; and that are distributable only in
accordance with the distribution provisions that are applicable to Elective
Deferrals and Qualified Matching Contributions.
2.23 Self-employed individual means an individual who has earned
income for the taxable year from the trade or business for which the plan
is established (or who would have had earned income but for the fact that
the trade or business had no net profits for the taxable year).
2.24 Shareholder-employee in any year means an employee or officer
of an S corporation (as defined in Code Section 1361(a)) who owns, directly
or indirectly, more than five percent of the outstanding stock of the
employer during such year.
2.25 Sponsor means Metropolitan Life Insurance Company or its
successor.
2.26 Trust means the trust established under the instrument
entitled Metropolitan Life Insurance Company MetLife(R) 401(k) Trust
Agreement for the payment of the benefits provided by the plan or such
custodial accounts or annuity contracts which meet the requirements of Code
Section 401(f).
2.27 Trustee means the trustee named in the trust agreement to
serve as trustee under the plan, or any successor trustee serving under the
Trust Agreement.
2.28 Straight Life Annuity means an annuity payable in equal
installments for the life of the Participant and that terminates upon the
Participant's death.
ARTICLE 3:
DEFINITIONS AND RULES RELATING TO SERVICE
PART A: HOURS OF SERVICE METHOD
3A.1 Applicability of Part A: The definitions and rules in this
Part A of Article 3 will apply unless in the adoption agreement the
employer elected to have employees' service determined entirely or partly
using the elapsed time method.
3A.2 Year of Service: A year of service of an employee is a 12
consecutive month computation period in which he completes at least 1,000
hours of service, or a smaller number of hours specified in the adoption
agreement.
3A.3 Hour of Service:
(a) Except as provided in subsection (b) below, an
employee's hours of service will be counted by giving the employee credit
for:
(i) each hour for which he is paid, or entitled to payment,
for the performance of duties for the employer. These hours will
be credited to him for the computation period in which the duties
are performed; and
(ii) each hour for which he is paid, or entitled to payment,
by the employer on account of a period of time during which no
duties are performed (regardless of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military
duty or leave of absence. No more than 501 hours of service will
be credited under this subsection (ii) for any single continuous
period (whether or not such period occurs within a single
computation period). Hours under this subsection (ii) will he
calculated and credited under Department of Labor Regulations, 29
C.F.R.ss.2530.200-2(b) and (c), which are incorporated herein by
this reference; and
(iii) each hour for which back pay, regardless of mitigation
of damages, is either awarded or agreed to by the employer. The
same hours of service will not he credited both under subsection
(i) or subsection (ii), as the case may be, and under this
subsection (iii). These hours will he credited to the employee for
the computation period or periods to which the award or agreement
pertains rather than the computation period in which the award,
agreement or payment is made.
(iv) In addition to hours credited to an employee under
subsections (i) through (iii) above, he will be credited with the
number of hours (not exceeding 40 for a full week or a pro rata
portion of 40 for a partial week) he normally would have worked
except for the fact that he was absent on one of the following
types of unpaid absence: (A) leave of absence for a period
authorized by the employer under a leave policy applied uniformly
to all employees, provided he returns to service with the employer
at or before the expiration of such period; or (B) a Military
Absence.
(v) Solely for purposes of determining whether a one-year
break in service, as defined in section 3A.4, has occurred in a
computation period, an employee who is absent from work for
maternity or paternity reasons, by reason of a Family Medical
Absence or by reason of a Military Absence will receive credit for
the hours of service which would otherwise have been credited to
such employee but for such absence, (or in any case in which such
hours cannot be determined, eight hours of service per day of such
absence). For purposes of this subsection (v), an absence from
work for maternity or paternity reasons means an absence (A) by
reason of the pregnancy of the employee, (B) by reason of a birth
of a child of the employee, (C) by reason of the placement of a
child with the employee in connection with the employee's adoption
of such child, or (D) for purposes of caring for such child for a
period beginning immediately following such birth or placement.
The hours of service credited under this subsection (v) will be
credited (A) in the computation period in which the absence begins
if the crediting is necessary to prevent a one-year break in
service in that period, or (B) in all other cases, in the
following computation period if necessary to prevent a one-year
break in service in that computation period.
(b) If the employer so elects in the adoption agreement, an
employee will be credited with the number of hours of service specified in
this subsection (b) for a period if the employee would have been credited
with at least one hour of service during such period under subsection (a)
above:
(i) 10 hours of service per day;
(ii) 45 hours of service per week;
(iii) 95 hours of service per semi-monthly payroll period;
or
(iv) 190 hours of service per month.
Only one such method may be elected and it must apply to all employees.
3A.4 One-Year Break in Service:
A one-year break in service of an employee is a 12-consecutive
month computation period during which he completes one-half or fewer of the
number of hours of service required for a year of service under Section
3A.2. The 12-month computation period will be the same period used to
determine a year of service under Section 3A.6 or Section 3A.7.
3A.5 Employment Years Defined:
Employment years of an employee are 12-consecutive month periods
beginning on the date he first completes an hour of service and on
subsequent anniversaries of such date.
3A.6 Eligibility Computation Period:
For purposes of determining whether an employee has completed the
service requirement (if any) for participation:
(a) The initial computation period will be his first employment
year.
(b) Subsequent computation periods will be either (i) his
subsequent employment years, or (ii) if the adoption agreement so
specifies, plan years beginning with the plan year that starts during his
first employment year regardless of whether the employee is entitled to be
credited with 1,000 hours of service during his first employment year. For
purposes of clause (ii) of the preceding sentence, an employee who is
credited with 1,000 hours of service in both his first employment year and
the plan year that starts during his first employment year will (unless his
employment year and the plan year coincide) be credited with two years of
service for purposes of eligibility to participate.
(c) If an employee has a one-year break in service, his
12-consecutive month eligibility computation periods will begin with his
first employment year after such break. If necessary for purposes of
measuring years of service for participation, subsequent 12-consecutive
month computation periods will be either (i) if the adoption agreement so
specifies under subsection (b)(i) above, subsequent employment years, or
otherwise (ii) plan years beginning with the plan year which begins during
his first employment year after such break.
3A.7 Vesting Computation Period:
For purposes of computing an employee's nonforfeitable right to
his employer contributions account, an employee's computation periods will
be either (a) plan years, or (b) if the adoption agreement so specifies,
employment years.
3A.8 Counting Years of Service for Participation:
All of an employee's years of service with the employer are
counted toward meeting the plan's participation eligibility requirement (if
any), except that, if the plan provides for 100% vesting after two years or
less of service, service before a one-year break in service which occurs
before the employee satisfies the plan's requirement for eligibility will
be disregarded unless the adoption agreement specifies otherwise. However,
the preceding sentence will not apply if the employer's plan is a 401(k)
plan.
If the service requirement to become a participant as specified in
the adoption agreement includes a fractional year, an employee will not be
required to complete any minimum number of hours of service to receive
credit for such fractional year.
3A.9 Years of Service for Vesting:
For purposes of determining a participant's vested percentage, all
of his years of service will be counted, including any period of Military
Absence, except that, if the adoption agreement specifically so provides,
the following years of service will not be counted:
(a) years of service completed before age 18;
(b) years of service before the employer maintained this plan or a
predecessor plan.
A plan is a predecessor plan if it was terminated on or after the
date it was required to comply with ERISA and within five years before or
after the effective date of this plan. A plan is not treated as a
predecessor plan with respect to an employee unless he was a participant in
such plan.
3A. 10 Service With Other Organizations:
(a) To determine whether an employee is a participant and to
determine his vested percentage, he will receive credit for hours of
service under Section 3A.3 with the following entities (or as a leased
employee under Code Section 414(n)) or Code section 414(o) as if those
hours of service were credited to the employee for service with the
employer: any member of an affiliated service group (under Code Section
414(m)) including the employer, any corporation which is included in a
controlled group of corporations (under Code Section 414(b)) with the
employer or any unincorporated trade or business which is under common
control (under Code Section 414(c)) with the employer, and any entity
required to be aggregated with the employer under Code Section 414(o).
Service credited under this subsection (a) shall be limited to the period
that the other entities were related to the employer in the manner
described in the applicable Code section, unless the employer has elected
in the adoption agreement to recognize service with any such entity for any
period prior to the time such relationship commenced.
(b) If the employer maintains a plan of a predecessor employer,
service with the predecessor employer will be treated as service with the
employer.
(c) If not treated as service with the employer under subsection
(b) above, service with any entity specifically so designated in the
adoption agreement will be treated as service with the employer.
PART B: ELAPSED TIME METHOD
3B.1 Applicability of Part B:
If in the Metropolitan Life Insurance Company MetLife(R) 401(k)
adoption agreement the employer elected to have employees' service
determined entirely or partly using the elapsed time method, then to that
extent the definitions and rules in this Part B will apply.
3B.2 Service:
(a) In General. Service of an employee includes all of the
following:
(i) any period of his employment, whether or not
continuous;
(ii) for a reemployed employee, any period of severance
provided that his reemployment date occurs within one year after his
severance date.
(b) Years of Service. To determine an employee's years of plan
service, all of his plan service will be aggregated and each 365 days of
such aggregated plan service will constitute one year of plan service. If
any provision of the plan calls for completion of a fractional year of plan
service, such fraction of 365 days of his aggregated plan service will
satisfy the provision; for example, if one-half year of plan service is
required, then such requirement will be met when the employee's aggregated
plan service equals 183 days.
3B.3 Definitions Relating to Service:
(a) Employment. An employee's employment means his service as an
employee, beginning on his employment date or reemployment date and ending
on his severance date.
(b) Employment Date. An employee's employment date or reemployment
date is the date on which he first completes an hour of service.
(c) Reemployment Date. In the case of an employee who has a period
of severance which is not taken into account under Section 3B.2(a) (ii),
the reemployment date is the date on which he first completes an hour of
service after such period of severance.
(d) Period of Severance. A period of severance of an employee
means a period beginning on his severance date and, if applicable, ending
on his reemployment date.
In the case of an employee who is absent from work for maternity
or paternity reasons, by reason of a Family Medical Absence or by reason of
a Military Absence, the 12-consecutive month period beginning on the first
anniversary of the first date of such absence will not constitute a period
of severance. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (1) by reason of the
pregnancy of the employee, (2) by reason of the birth of a child of the
employee, (3) by reason of the placement of a child with the employee in
connection with the employee's adoption of such child, or (4) for purposes
of caring for such child for a period beginning immediately following such
birth or placement.
Each employee will share in employer contributions for the period
beginning on the date the employee commences participation under the plan
and ending on the date on which such employee ▇▇▇▇▇▇ employment with the
employer or is no longer a member of an eligible class of employees.
If the employer is a member of an affiliated service group (under
section 414(m)), a controlled group of corporations (under section 414(b)),
a group of trades or businesses under common control (under section 414(c))
or any other entity required to be aggregated with the employer pursuant to
section 414(o) and the regulations thereunder, service will be credited for
any employment for any period of time for any other member of such group.
Service will also be credited for any individual required under section
414(n) or section 414(o) and the regulations thereunder to be considered an
employee of any employer aggregated under section 414(b), (c), or (m).
(e) Severance Date. An employee's severance date is the earlier
of:
(i) the date on which he quits, retires, is discharged or
dies, or
(ii) the first anniversary of the first day of a period
during which he is absent (with or without compensation) from performing
duties for the employer for any reason other than quit, retirement,
discharge or death, such as vacation, holiday, sickness, leave of absence
or layoff.
(f) Hour of Service. For purposes of this Part B of Article 3, an
hour of service is an hour for which the employee is paid or entitled to
payment for the performance of duties for the employer.
3B.4 Certain Service Before Eligibility Disregarded:
If the plan provides for 100% vesting after two years or less of
plan service, plan service will be disregarded if it was completed before a
period of severance of one year or more which occurs before the employee
satisfied the plan's service requirement for eligibility. However, this
section does not apply if the employer's plan is a 401(k) plan.
3B.5 Service for Vesting:
For purposes of determining a participant's vested percentage, all
of his service will be counted, including any period of Military Absence,
except that, if the adoption agreement so provides, the following service
will not be counted:
(a) service completed before age 18;
(b) service before the employer maintained this plan or a
predecessor plan.
A plan is a predecessor plan if it was terminated on or after the
date it was required to comply with ERISA and within five years before or
after the effective date of this plan. A plan is not treated as a
predecessor plan with respect to an employee unless he was a participant in
such plan.
3B.6 Service With Other Organizations:
(a) To determine whether an employee is a participant and to
determine his vested percentage, service with the following entities (or as
a leased employee under Code Section 414(n)) will count as service with the
employer: any member of an affiliated service group (under Code Section
414(m)), any corporation which is included in a controlled group of
corporations (under Section Code 414(b)) with the employer, any
unincorporated trade or business which is under common control (under
Section Code 414(c)) with the employer, and any entity aggregated with the
employer under Code Section 414(o)). Service credited under this subsection
(a) shall be limited to the period that the other entities were related to
the employer in the manner described in the applicable Code section, unless
the employer has elected in the adoption agreement to recognize service
with any such entity for any period prior to the time such relationship
commenced.
(b) If the employer maintains a plan of a predecessor employer,
service with the predecessor employer will be treated as service with the
employer.
(c) If not treated as plan service with the employer under
subsection (b) above, service with any entity specifically so designated in
the adoption agreement will be treated as service with the employer.
ARTICLE 4:
PARTICIPATION
4.1 Eligible Employees:
Except as otherwise provided in this section, each employee is
eligible to participate in the plan (an eligible employee). If the adoption
agreement so provides, an individual who is included in one of the
following classes of employees or workers is not eligible if:
(a) he is employed in a unit covered by a collective bargaining
agreement between the employer and employee representatives where
retirement benefits were the subject of good faith bargaining with the
employer and the agreement does not call for his inclusion in the plan and
if less than two percent of the employees of the employer who are covered
pursuant to that agreement are professionals as defined in section
1.410(b)-9(g) of the proposed regulations; the term "employee
representatives" does not include any organization more than half of whose
members are employees who are owners, officers or executives of the
employer; or
(b) he is a nonresident alien (within the meaning of Section
7701(b)(1)(B) of the Code) and receives no earned income (within the
meaning of Section 911(d)(2) of the Code) from the employer which
constitutes income from sources within the United States (within the
meaning of Section 861(a)(3) of the Code); or
(c) in the case of a non-standardized plan, he or she is
performing services for the employer under an agreement, whether written or
oral, which acknowledges his or her status as an independent contractor,
notwithstanding that he or she is later determined by a court of competent
jurisdiction or the Internal Revenue Service to be a common law employee
for tax purposes.
(d) he is a member of a class of employees explicitly excluded
from eligibility in the adoption agreement.
4.2 Age and Service Requirements:
Any minimum age and service requirements are set forth in the
Metropolitan Life Insurance Company MetLife(R) 401(k) adoption agreement.
The minimum service requirement may not exceed one year of service
(one-half year in the case of a plan with annual entry dates); however, if
the employer's plan provides for full and immediate vesting after two years
or less of service, the minimum service requirement may not exceed two
years of service (one and one-half years in the case of a plan with annual
entry dates). If applicable, the Employer shall elect in Section B.2 of the
Adoption Agreement whether to use the "Hours of Service" method or the
"Elapsed Time" method.
The minimum age requirement may not exceed 21 (20-1/2 in the case
of a plan with annual entry dates).
4.3 Participation:
(a) Each employee who, on the effective date of the plan, is an
eligible employee and has fulfilled the plan's age and service requirements
(if any) will become a participant as of such date.
(b) Each employee (other than one who is a participant under
subsection (a) above) will become a participant on the entry date when he
is an eligible employee and satisfies the plan's age and service
requirements (if any).
(c) Unless specified otherwise in the adoption agreement, the
entry dates will be the first day of the first and seventh months of the
plan year (January 1 and July 1 for calendar year plans). If the adoption
agreement provides for additional or other entry dates, the entry dates
will be as so specified; provided that the first day of the plan year will
always be an entry date.
(d) If the employer's plan permits employee 401(k) savings
contributions or after-tax employee contributions, each employee who has
become a participant under the preceding subsections of this section will
be eligible to make 401(k) savings contributions and/or after-tax employee
contributions subject to the applicable provisions of the plan and the
adoption agreement, and such an employee will be considered a participant
even if he elects not to make 401(k) savings contributions or after-tax
employee contributions. However, an employee may not make 401(k) savings
contributions and/or after-tax employee contributions before the date the
employer signs the adoption agreement.
(e) Notwithstanding any provision in this section to the contrary,
if permitted in the adoption agreement and the plan administrator consents,
an employee who has satisfied the plan's age and service requirements may
execute an irrevocable waiver of participation in a form acceptable to the
plan administrator. The plan administrator will only refuse his or her
consent if the employee's non-participation could adversely affect the
qualified status of the plan. Such a waiver of participation must be filed
with the plan administrator prior to the date that would otherwise be the
employee's entry date.
4.4 Termination of Participation:
An employee's participation will end when he is no longer an
eligible employee due either to a change in his employment status or to the
termination of his service as an employee because of disability, death,
retirement or any other reason.
4.5 Re-entry of Former Participant:
If a former participant returns to service with the employer as an
eligible employee, he will resume participation in the plan immediately
upon his return.
4.6 Transfers:
(a) If a non-eligible employee who satisfies the plan's age and
service requirements (if any) for participation becomes an eligible
employee due to a change in his employment status, he will become a
participant immediately if he would have become a participant on a previous
entry date had he always been an eligible employee.
(b) If a participant becomes ineligible due to a change in his
employment status but has not incurred a break in service, such employee
will be a participant again immediately upon returning to an eligible class
of employees.
ARTICLE 5:
EMPLOYEE 401(k) SAVINGS CONTRIBUTIONS:
AVERAGE DEFERRAL PERCENTAGE TEST
5.1 Eligibility:
If the Metropolitan Life Insurance Company adoption agreement so
provides, an employee who meets the requirements of Section 4.3 may elect
to make 401(k) savings contributions by payroll deduction and, if the
adoption agreement so provides, by deduction from a bonus payment under
Code Section 401(k). 401(k) savings contributions are voluntary and no
employee is required to make such contributions.
5.2 Limits on Amount:
(a) In General. His 401(k) savings contributions in any plan year
may not exceed whichever of the following is smallest: (i) the maximum
amount permitted under Section 5.6 for an employee in the higher-paid
group; (ii) the maximum amount that, with other amounts allocated to his
accounts hereunder, does not violate the limitations on annual additions
under Article 13; (iii) any maximum or other limitation imposed by the plan
administrator; or (iv) the dollar limitation contained in section 402(g) of
the Code in effect at the beginning of such taxable year.
(b) Hardship Withdrawals. Notwithstanding Section 5.1 and
subsection (a)(iv) above, a participant who makes a hardship withdrawal
under Section 12.3 may not make 401(k) savings contributions or after-tax
employee contributions hereunder (or under any other plan maintained by the
employer) for a period of 12 months following the date of the in-service
withdrawal. Also, in the taxable year following the date of the withdrawal,
such a participant may not make 401(k) savings contributions which, when
added to his 401(k) savings contributions during the taxable year of the
withdrawal, exceed the amount specified in the second paragraph of
subsection (a)(iv) above.
(c) Nonforfeitability. The participants accrued benefit from
elective deferrals, qualified non-elective contributions, employee
after-tax contributions and qualified matching contributions is
non-forfeitable.
(d) Distribution Requirements. Elective deferrals are subject to
the distribution requirements of Code Section 401(k)(2)(B).
(e) Make-up Contributions. As soon as practicable following the
timely reemployment of a participant who has taken a Military Absence, the
Plan administrator shall notify such participant of his or her right to
make up 401(k) savings contributions to which he or she would have been
entitled to make but for the period of Military Absence. 401(k) savings
contributions made in accordance with this subsection (e) shall be known as
401(k) savings make-up contributions. Subject to the limitation of Article
13 in effect in each year of such participant's Military Absence to which
401(k) savings make-up contributions relate, and provided that the maximum
amount of 401(k) savings make-up contributions attributable to each year of
Military Absence does not exceed the dollar limitation contained in section
402(g) of the Code in effect during each such year, the amount of 401(k)
savings make-up contributions permitted by this subsection (e) shall be
equal to (i) the maximum amount of 401(k) savings contributions, unadjusted
by any earnings thereon, that such participant would have been permitted to
make under subsection (a) during the period of Military Absence if such
participant had continued to be employed by and received plan compensation
from the employer during such period, (ii) reduced by the amount of 401(k)
savings contributions, if any, actually made during the period of Military
Absence. For purposes of the preceding sentence, a participant will be
treated as having received plan compensation during the period of Military
Absence equal to (i) the compensation such Participant would have received
during such period if he or she had not taken a Military Absence,
determined based on the rate of pay the participant would have received
from the employer but for the Military Absence, or (ii) if the plan
compensation the participant would have received during such period was not
reasonably certain, the participant's average plan compensation during the
12-month period immediately preceding the Military Absence or, if shorter,
the period of employment immediately preceding the Military Absence.
Notwithstanding any provision in this Plan to the contrary, 401(k) savings
make-up contributions shall not be subject to the limitations of Article 13
in the year such contributions are made and shall not be taken into
account, during either the year in which such contributions were made or
the years to which such contributions relate during the period of Military
Absence, for purposes of applying Sections 5.6, 6.6 or 6.9 or the
provisions of Article 14.
The Participant shall contribute to the Plan the amount of 401(k)
savings make-up contributions elected by him or her (not to exceed the
amount described in the preceding paragraph) during the period beginning
with the date of reemployment with the employer and extending to the lesser
of (i) three times the period of Military Absence or (ii) 5 years.
5.3 Procedures:
(a) In General. The participant must make an election in the
method specified by the plan administrator indicating the amount of 401(k)
savings contributions he wishes to make and agreeing to reduce his
compensation by such amount. Subject to any rules specified in the adoption
agreement or established by the plan administrator or sponsor, a
participant may increase, decrease, discontinue or resume his 401(k)
savings contributions during a plan year in accordance with procedures
established by the plan administrator. A discontinuance of 401(k) savings
contributions will be effective in accordance with procedures established
by the plan administrator. An increase or decrease of 401(k) savings
contributions, or a resumption after a discontinuance, will be effective in
accordance with any rules specified in the adoption agreement or
established by the plan administrator or sponsor.
No change under the preceding paragraph may cause a participant's
401(k) savings contributions to exceed the maximum provided for under
Section 5.2.
Either the plan administrator or the sponsor may establish
reasonable rules of uniform application governing participants' elections
and changes. Such rules may include the number and frequency of elections
or changes during any plan year, effective dates for elections or changes
(for example, the first day of the payroll period coinciding with or next
following the applicable election or change date), cutoff dates for timely
filing of elections or changes, and other rules to facilitate operation of
this article.
Notwithstanding the preceding, an eligible employee will be
permitted to change his election at least once each year.
(b) Election to Transfer Deferrals from Nonqualified Deferred
Compensation Plan. A participant who has elected to make deferrals to a
nonqualified deferred compensation plan maintained by the Employer may
elect to transfer from the nonqualified deferred compensation plan to this
plan an amount equal to the lesser of the maximum amount of 401(k) savings
contributions that can be made to the plan, determined after taking into
account the limitations of Section 402(g) and Section 5.6 and 13.1 of this
plan, or the amount deferred under the nonqualified deferred compensation
plan, unadjusted by any earnings under the nonqualified deferred
compensation plan, provided that such Participant has irrevocably elected
to make such transfer prior to the beginning of the calendar year in which
the deferrals to the nonqualified deferred compensation plan and the 401(k)
savings contributions to this plan are made and such transfer is made no
later than March 15 of the plan year following the plan year in which the
contributions were made.
5.4 Collection of 401(k) Savings Contributions:
The employer will collect participants' 401(k) savings
contributions using payroll or other procedures, including deductions from
bonus payments, if elected in the adoption agreement. The employer will
transfer the amounts collected to the trustee as of the earliest date when
such contributions can reasonably be segregated from the employer's general
assets, but not later than the maximum number of days prescribed by
Department of Labor regulations from the date on which such amounts would
otherwise have been payable to the participant in cash.
For purposes of Code Section 414(h), it is specifically provided
that participants' 401(k) savings contributions under this article are
employer contributions.
5.5 Savings Contributions Account:
A participant's 401(k) savings contributions will be credited to
his 401(k) savings contributions account. Such account will be fully vested
and nonforfeitable at all times
5.6 401(k) Limits:
(a) As of the last day of each plan year, the average of the
individual deferral percentages (ADP) of the higher paid group (such
average is called the HDP in this section) may not exceed the average of
the individual deferral percentages (ADP) of the lower paid group (such
average is called the LDP in this section) by more than the amount
specified in the following table
If LDP is: HDP may not exceed:
--------- ------------------
less than 2% two times LDP
over 2% but less than 8% two points more than LDP
8% or higher l.25 times LDP
The determination and treatment of participants' deferral
percentages will be subject to the requirements of any applicable
regulations. As provided in such regulations, if the only employees
eligible to make 401(k) savings contributions under this plan (and any
other plan which must be aggregated with this plan under such regulations)
are in the higher paid group, this plan will be deemed to meet the
requirements of this Section 5.6.
See Section 6.9 for additional 401(k) limits that may be
applicable in certain situations.
(b) Special Rules:
1. The ADP for any participant who is in the High Paid
Group for the Plan Year and who is eligible to have Elective
Deferrals (and qualified non-elective contributions or qualified
matching contributions, or both, if treated as elective deferrals
for purposes of the ADP test) allocated to his accounts under two
or more arrangements described in Code section 401(k), that are
maintained by the employer, shall be determined as if such
elective deferrals (and, if applicable, such qualified
non-elective contributions or qualified matching contributions, or
both) were made under a single arrangement. If a Higher paid
employee participates in two or more cash or deferred arrangements
that have different Plan Years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a
single arrangement. Notwithstanding the foregoing, certain plans
shall be treated as separate if mandatorily disaggregated under
regulations under Section 401(k) of the Code.
2. In the event that this plan satisfies the requirements
of sections 401(k), 401(a)(4), or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of such sections of the Code only
if aggregated with this plan, then this section shall be applied
by determining the ADP of employees as if all such plans were a
single plan. For plan years beginning after December 31, 1989,
plans may be aggregated in order to satisfy Code section 401(k)
only if they have the same Plan Year.
3. For purposes of determining the ADP of a participant
who is a 5-percent owner or one of the ten most highly-paid Higher
Paid employees, the elective deferrals (and qualified non-elective
contributions or qualified matching contributions, or both, if
treated as elective deferrals for purposes of the ADP test) and
Compensation of such participant shall include the elective
deferrals (and, if applicable, qualified non-elective
contributions and qualified matching contributions, or both) and
compensation for the Plan Year of Family members (as defined in
section 414(q)(6) of the Code). Family members, with respect to
such higher paid group employees, shall be disregarded as separate
employees in determining the ADP both for participants who are in
the lower paid group and for participants who are in the higher
paid group.
4. For purposes of determining the ADP test, elective
deferrals, qualified non-elective contributions and qualified
matching Contributions must be made before the last day of the
twelve-month period immediately following the Plan Year to which
contributions relate.
5. The employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount of
qualified non-elective contributions or qualified matching
contributions, or both, used in such test.
6. The determination and treatment of the ADP amounts of
any participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
5.7 Deferral Percentage:
(a) Basic Definition. For purposes of Section 5.6, the deferral
percentage of a participant for a plan year means his 401(k) savings
contributions for such year computed as a percentage of his Plan
Compensation or compensation (based on a definition of compensation
selected by the employer for the plan year that satisfies Code Section
414(s)) for such year (to the nearest one-hundredth of a percentage point).
If an employee is eligible to participate in 401(k) savings contributions
but has not elected to make such contributions, he will nevertheless be
taken into account as having made zero 401(k) savings contributions.
Notwithstanding the preceding paragraph, in the plan
administrator's discretion, 401(k) savings contributions of a participant
will not be included when determining his deferral percentage to the extent
that the requirements of Section 5.6 are met without taking such
contributions into account, and such contributions may be used in
performing the 401(m) tests if applicable to the employer's plan. See
Section 6.7(b).
(b) Qualified Non-Elective Contributions. Except as otherwise
provided in the adoption agreement, an employer may make Qualified
Non-Elective Contributions to the Plan in accordance with the provisions of
this subsection (b). Qualified Non-Elective Contributions are nonintegrated
employer contributions that are always fully vested when made, and are
subject to the limitations on distribution of Code Section 401(k)(2)(B)
(which means that such contributions made after December 31,1988 and
earnings thereon are not available for in-service withdrawals before age
59-1/2). In addition, other nonelective employer contributions must be
nondiscriminatory, determined both by taking Qualified Non-Elective
Contributions into account and by disregarding Qualified Nonelective
Contributions.
The employer may make Qualified Non-elective Contributions under
the plan by designating in the board of directors resolution (or records of
the employer authorizing the making of the contribution, if the Employer is
not a corporation) the amount of the Qualified Non-Elective Contribution
and any one of the following methods of allocation: (i) such amount as is
needed to meet the actual deferral percentage test and/or actual
contribution percentage test, allocated, in the Employer's absolute
discretion, selectively on behalf of any one or a number of employees in
the lower paid group; or (ii) a specified dollar amount or a specified
percentage of compensation to be allocated to (A) each participant who is
an employee in the lower paid group or (B) all participants.
Notwithstanding any provision in this Plan to the contrary, if the
Employer determines that the Plan does not satisfy one or more of the
qualification requirements imposed by the Code and the making of a
Qualified Non-Elective Contribution to affected participants would help the
Plan satisfy such qualification requirements, the Employer may make a
Qualified Non-Elective Contribution to the account of each affected
participant equal to the average deferral percentage of the group (higher
paid group or lower paid group) to which each such participant belongs.
(c) Qualified Matching Contributions. Except as otherwise provided
in the adoption agreement, an employer may make Qualified Matching
Contributions to the Plan in accordance with the provisions of this
subsection (c). Qualified Matching Contributions are matching employer
contributions that are always fully vested when made, and are subject to
the limitations on distribution of Code Section 401(k)(2)(B) (which means
that such contributions made after December 31, 1988 and earnings thereon
are not available for in-service withdrawals before age 59-1/2).
The employer may make Qualified Matching Contributions under the
plan by designating in the board of directors resolution (or records of the
employer authorizing the making of the contribution, if the Employer is not
a corporation) the amount of the Qualified Matching Contribution and any
one of the following methods of allocation: (i) such amount as is needed to
meet the actual deferral percentage test and/or actual contribution
percentage test, allocated, in the Employer's absolute discretion,
selectively on behalf of any one or a number of employees in the lower paid
group; or (ii) a specified dollar amount or a specified percentage of
compensation to be allocated to (A) each participant who is an employee in
the lower paid group who makes matchable savings contributions that are
401(k) savings contributions and/or employee after-tax contributions to the
plan or (B) all participants who make matchable savings contributions that
are 401(k) savings contributions and/or employee after-tax contributions to
the plan.
Qualified Matching Contributions which are used in determining an
employee's deferral percentage under subsection (a) above will not be used
in determining his contribution percentage under Section 6.7.
Notwithstanding any provision in this Plan to the contrary, if the
Employer determines that the Plan does not satisfy one or more of the
qualification requirements imposed by the Code and the making of a
Qualified Matching Contribution to affected participants would help the
Plan satisfy such qualification requirements, the Employer may make a
Qualified Matching Contribution to the account of each affected participant
equal to the average deferral percentage of the group (higher paid group or
lower paid group) to which each such participant belongs.
(d) If an employee in the higher paid group makes 401(k) savings
contributions or if employer profit sharing contributions or employer
matching contributions that are used in determining such an employee's
deferral percentage under subsection (a) above are made on his behalf to
another plan maintained by the employer, his deferral percentage will be
determined as if all such 401(k) savings contributions and employer profit
sharing contributions and employer matching contributions (whichever may be
applicable) were made under a single plan.
Notwithstanding the foregoing, certain plans shall be treated as
separate if mandatorily disaggregated under regulations under Code Section
401(k).
5.8 Higher and Lower Paid Groups Defined:
(a) An employee who is eligible to make 401(k) savings
contributions is in the higher paid group for a plan year if during such
plan year or the preceding plan year (i) he owns (or is considered to own
within the meaning of Code Section 318) more than 5% of the outstanding
stock of the employer or more than 5% of the capital or profits interest in
the employer, (ii) his compensation (as defined in Section 13.1(b), as
modified to include amounts which are contributed by the Employer pursuant
to a salary reduction agreement or other arrangement and which are not
includible in the gross income of the Employee under sections 125,
402(e)(3), 402(h)(1)(B), or 403(b) of the Code) exceeds $75,000, (iii) his
compensation (as defined in Section 13.1(b), as modified to include amounts
which are contributed by the Employer pursuant to a salary reduction
agreement or other arrangement and which are not includible in the gross
income of the Employee under sections 125, 402(e)(3), 402(h)(1)(B), or
403(b) of the Code) exceeds $50,000 and he is in the highest paid 20
percent of all employees, or (iv) he is an officer of the employer having
annual compensation (as defined in Section 13.1(b), as modified to include
amounts which are contributed by the Employer pursuant to a salary
reduction agreement or other arrangement and which are not includible in
the gross income of the Employee under sections 125, 402(e)(3),
402(h)(1)(B), or 403(b) of the Code) greater than 50% of the amount in
effect under Code Section 415(b)(1)(A) for such plan year. The $75,000 and
the $50,000 amounts in the preceding sentence will be adjusted in
accordance with Code Section 414(q). A former employee who was a member of
the higher paid group either when such employee terminated employment with
the employer or at any time after such employee reached age 55 will
continue to be treated as a member of the higher paid group.
(b) If an employee eligible to make 401(k) savings contributions
is not in the higher paid group for a plan year, then he is in the lower
paid group.
(c) In determining which employees are in the higher paid group
under subsection (a) above, the following special rules will apply:
(i) No more than the lesser of (A) 50 employees or (B)
the greater of 10% of employees or three employees will be
included in the higher paid group as officers under subsection
(a)(iv) above. However, if no officer meets the criteria of
subsection (a)(iv) above, the highest paid officer will be
included under such subsection.
(ii) If an employee is included in the higher paid group
under subsection (a)(ii), (iii) or (iv) for the current plan year
but was not so included for the preceding plan year, he will be in
the higher paid group for the current plan year only if he is one
of the 100 highest paid employees for the current plan year.
(iii) A family member of either (A) a 5% owner under
subsection (a)(i) above, or (B) one of the 10 highest paid
employees in the higher paid group under subsection (a) above will
not be considered an employee for purposes of Section 5.6. Plan
compensation of such person and any 401(k) savings contributions
by or (if applicable) employer matching or profit sharing
contributions on behalf of such person will be attributed to the
higher paid group member to the extent provided in applicable
regulations. Also, the adjustment of a higher paid group
participant's 401(k) savings contributions under Section 5.9 will
be performed by adjusting the 401(k) savings contributions of the
participant and his family member(s) as and to the extent required
in applicable regulations. For this purpose, a family member means
the employee's spouse and his lineal ascendants or descendants
(and their spouses).
(iv) For purposes of determining how many employees there
are (and hence how many are in the highest paid 20 percent or are
officers), an employee will be disregarded if he has not completed
6 months of service with the employer, he normally works less than
17-1/2 hours per week or 6 months during any year, he is under age
21, he is in a unit covered by an agreement which the Secretary of
Labor finds to be a collective bargaining agreement between
employee representatives and the employer (except to the extent
provided in regulations), or he is a nonresident alien with no
U.S. source income.
(d) If elected in the Adoption Agreement, the Employer may
determine which Employees are members of the highly paid group by way of
the calendar year election described in ss.1.414(q)-1T, Q&A-14(b) of the
temporary Income Tax Regulations.
5.9 Monitoring Participants' Deferral Percentages; Adjustments:
The plan administrator (or an administrative services provider -
which may be the trustee or the sponsor - retained by the plan
administrator to perform participant recordkeeping and other administrative
duties) will monitor participants' deferral percentages to insure
compliance with the requirements of Section 5.6 above. Any adjustments in
participants' elections or actual 401(k) savings contributions necessary to
meet the requirements of Section 5.6 will be made as follows. The plan
administrator will reduce the deferral percentage of the participant (or
participants) in the higher paid group with the highest deferral percentage
until it reaches the deferral percentage of the participant (or
participants) in the higher paid group with the next highest deferral
percentage; next the plan administrator will reduce the deferral
percentages of both or all such participants until they reach that of the
participant with the then next highest deferral percentage; and so on. The
foregoing reductions will be made only to the extent necessary to meet the
requirements of Section 5.6.
(a) Excess Contributions. The plan administrator will adjust
401(k) savings contributions elections by participants in the higher paid
group in accordance with the preceding paragraph at such time or times
before or during a plan year as the plan administrator deems advisable to
insure that the requirements of Section 5.6 are met as of the last day of
the plan year. If, notwithstanding the preceding sentence, the requirements
of Section 5.6 are not met as of the last day of a plan year, such
adjustments may be made after the end of a plan year in one or a
combination of the following ways: (i) paying to a participant the amount
of his excess contributions plus earnings (or losses) on such excess, (ii)
recharacterizing the excess contributions of such a participant as
after-tax employee contributions during such year, or (iii) in the
employer's discretion, by making an employer contribution that meets the
requirements of Section 5.7(b) on behalf of employees in the lower paid
group (or all employees, if provided in the adoption agreement) in the
amount needed so that the requirements of Section 5.6 are met. For purposes
of the preceding sentence, excess contributions means 401(k) savings
contributions by a participant in the higher paid group in excess of the
amount that would satisfy the requirements of Section 5.6 above. Also, for
purposes of such sentence, any such payment or recharacterization of excess
contributions will be designated as such by the employer, and will be made
by the end of the succeeding plan year to avoid plan disqualification (and
must be made within 2-1/2 months after the end of the current plan year to
avoid an excise tax on the employer equal to 10 percent of the excess).
However, the amount to be paid or recharacterized will be reduced by any
amounts relating to such plan year previously withdrawn by the participant
under Section 5.11. For purposes of clause (ii) of such sentence,
recharacterizing will be available only if the adoption agreement is a
non-standardized adoption agreement and permits after-tax employee
contributions.
Excess Contributions shall be allocated to Participants who are
subject to the family member aggregation rules of section 414(q)(6) of the
Code in proportion to the Elective Deferrals (and amounts treated as
Elective Deferrals) of each family member that is combined to determine the
combined ADP.
A participant may treat his or her Excess Contributions as an
amount distributed to the participant and then contributed by the
participant to the plan. Recharacterized amounts will remain nonforfeitable
and subject to the same distribution requirements as Elective Deferrals.
Amounts may not be recharacterized by a higher paid group Employee to the
extent that such amount in combination with other Employee Contributions
made by that employee would exceed any stated limit under the plan on
Employee Contributions.
Recharacterization must occur no later than two and one-half
months after the last day of the Plan Year in which such Excess
Contributions arose and is deemed to occur no earlier than the date the
last higher paid group Employee is informed of the amount recharacterized
and the consequences thereof. Recharacterized amounts will be taxable to
the participant for the participant's tax year in which the participant
would have received them in cash.
Determination of Income or Loss: Excess Contributions shall be
adjusted for any income or loss for the plan year in which such
contributions were made. Income or loss attributable to the period between
the end of the plan year and the date of distribution will be disregarded
in determining income or loss.
Accounting for Excess Contributions: Excess Contributions shall be
distributed from the participant's Elective Deferral account and Qualified
Matching Contribution account (if applicable) in proportion to the
participant's Elective Deferrals and Qualified Matching Contributions (to
the extent used in the ADP test) for the Plan Year. Excess Contributions
shall be distributed from the participant's Qualified Non-elective
Contribution account only to the extent that such Excess Contributions
exceed the balance in the participant's Elective Deferral account and
Qualified Matching Contribution account.
A distribution of excess contributions under this section may be
made notwithstanding any otherwise applicable restrictions or spousal
consent requirements on in-service withdrawals or distributions.
Any excess contributions distributed under this subsection will
nevertheless be considered as annual additions for purposes of applying the
limitations of Article 13.
The plan administrator will maintain records to show that the plan
met the requirements of Section 5.6 (and Section 6.6) for each plan year
(including records that show the extent to which employer profit sharing
contributions and/or matching contributions and/or 401(k) savings
contributions were used in performing the tests).
(b) Excess Elective Deferrals. A participant may assign to this
plan any excess Elective Deferrals made during a taxable year of the
participant by notifying the plan administrator on or before March 1
following such taxable year of the amount of the excess Elective Deferrals
to be assigned to the plan. A participant is deemed to notify the plan
administrator of any Excess Elective Deferrals that arise by taking into
account only those Elective Deferrals made to this plan and any other plans
of this employer.
Notwithstanding any other provision of the plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto, shall be
distributed no later than April 15 to any participant to whose account
Excess Elective Deferrals were assigned for the preceding year and who
claims Excess Elective Deferrals for such taxable year.
Determination of income or loss: Excess Elective Deferrals shall
be adjusted for any income or loss for the plan year in which such
contributions were made. Income or loss attributable to the period between
the end of the plan year and the date of distribution will be disregarded
in determining income or loss.
A withdrawal of an excess under this section may be made
notwithstanding any otherwise applicable restrictions or spousal consent
requirement on in-service withdrawals.
Any amounts withdrawn under this section will nevertheless be
considered as annual additions for purposes of applying the limitations of
Article 13 unless such amounts are distributed no later than the first
April 15 following the close of the participant's taxable year.
The amount of any 401(k) savings contributions to be withdrawn
under this section will be reduced by any amounts previously distributed or
recharacterized under Section 5.9.
5.10 Treatment of Participant Who Reaches $7,000 Limit:
If a participant makes 401(k) savings contributions in a calendar
year equal to $7,000 as adjusted in accordance with Code Section 402(g)),
his 401(k) savings contributions will immediately cease.
ARTICLE 6:
AFTER-TAX EMPLOYEE SAVINGS CONTRIBUTIONS;
AVERAGE CONTRIBUTION PERCENTAGE TEST
6.1 Eligibility:
If the Metropolitan Life Insurance Company adoption agreement so
provides, an employee who meets the requirements of Section 4.3 may elect
to make after-tax employee contributions by payroll deduction and, if the
adoption agreement so provides, by deduction from a bonus payment.
After-tax employee contributions are voluntary and no employee will be
required to make such contributions. Employee contributions and earnings
thereon are nonforfeitable at all times.
6.2 Limits on Amount:
(a) In General. Unless otherwise elected in the adoption
agreement, the minimum amount of after-tax employee contributions the
employee may elect is 1 percent of his plan compensation. His after-tax
employee contributions for any plan year may not exceed whichever of the
following is the smallest: (a) the maximum amount permitted under Section
6.6 for an employee in the higher-paid group; (b) the maximum amount that,
with other amounts allocated to his accounts hereunder, does not violate
the limitations on annual additions under Article 13; (c) any maximum or
other limitation imposed by the plan administrator.
(b) Make-up Contributions. As soon as practicable following the
timely reemployment of a participant who has taken a Military Absence, the
Plan administrator shall notify such participant of his or her right to
make up after-tax employee contributions to which he or she would have been
entitled to make but for the period of Military Absence. After-tax employee
contributions made in accordance with this subsection (b) shall be known as
after-tax employee make-up contributions. Subject to the limitation of
Article 13 in effect in each year of such participant's Military Absence to
which after-tax employee make-up contributions relate, the amount of
after-tax employee make-up contributions permitted by this subsection (b)
shall be equal to (i) the maximum amount of after-tax employee
contributions, unadjusted by any earnings thereon, that such participant
would have been permitted to make under subsection (a) during the period of
Military Absence if such participant had continued to be employed by and
received plan compensation from the employer during such period, (ii)
reduced by the amount of after-tax employee contributions, if any, actually
made during the period of Military Absence. For purposes of the preceding
sentence, a participant will be treated as having received plan
compensation during the period of Military Absence equal to (i) the
compensation such Participant would have received during such period if he
or she had not taken a Military Absence, determined based on the rate of
pay the participant would have received from the employer but for the
Military Absence, or (ii) if the plan compensation the participant would
have received during such period was not reasonably certain, the
participant's average plan compensation during the 12-month period
immediately preceding the Military Absence or, if shorter, the period of
employment immediately preceding the Military Absence. Notwithstanding any
provision in this Plan to the contrary, after-tax employee make-up
contributions shall not be subject to the limitations of Article 13 in the
year such contributions are made and shall not be taken into account,
during either the year in which such contributions were made or the years
to which such contributions relate during the period of Military Absence,
for purposes of applying Sections 5.6, 6.6 or 6.9 or the provisions of
Article 14.
The Participant shall contribute to the Plan the amount of
after-tax employee make-up contributions elected by him or her (not to
exceed the amount described in the preceding paragraph) during the period
beginning with the date of reemployment with the employer and extending to
the lesser of (i) three times the period of Military Absence or (ii) 5
years.
See the first sentence of Section 5.2(b) for an additional
restriction on after-tax employee contributions that applies in certain
cases to participants who made a hardship withdrawal.
6.3 Procedures; Plan Administrator Rules: The procedures for
electing and changing after-tax employee contributions, and plan
administrator rules therefore, will be similar to those described in
Section 5.3.
6.4.1 Collection of After-Tax Employee Contributions:
The employer will collect participants' after-tax employee
contributions using payroll or other procedures, including deductions from
bonus payments, if elected in the adoption agreement. The employer will
transfer the amounts collected to the trustee as of the earliest date on
which such contributions can reasonably be segregated from the employer's
general assets, but not later than the maximum number of days prescribed by
Department of Labor regulations from the date on which such amounts are
received by the employer or the date on which such amounts would otherwise
have been payable to the participant in cash.
6.5 After-Tax Employee Contributions Account:
A participant's after-tax employee contributions will be credited
to his after-tax employee contributions account. Such account will be fully
vested and nonforfeitable at all times.
6.6 401(m) Limits:
As of the last day of each plan year, the average of the
individual contribution percentages of the higher-paid group (ACP) (such
average is called the HCP in this section) may not exceed the average of
the individual contribution percentages of the lower-paid group (ACP) (such
average is called the LCP in this section) by more than the amount
specified in the following table:
If LCP is HCP may not exceed
--------- ------------------
less than 2% two times LCP
2% but less than 8% two points more than LCP
8% or more 1.25 times LCP
The determination and treatment of participants' contribution
percentages will be subject to the requirements of any applicable
regulations. As provided in such regulations, if the only employees
eligible to make after-tax employee contributions or to receive employer
matching contributions under this plan (and any other plan which must be
aggregated with this plan under such regulations) are in the higher paid
group, this plan will be deemed to meet the requirements of this Section
6.6.
See Section 6.9 for additional 401(m) limits that may be
applicable in certain situations.
6.7 Contribution Percentage Defined:
(a) Basic Definition. For purposes of this section, the
contribution percentage of a participant for a plan year means the sum of
any after-tax employee contributions he makes for such year and any
employer matching contributions on his behalf for such year (Contribution
Percentage Amounts), computed as a percentage of his Plan Compensation or
compensation (based on a definition of compensation selected by the
employer for the plan year that satisfies Code Section 414(s)) for such
year (limited to the portion of the plan year in which an employee was a
participant, unless otherwise elected in the adoption agreement) (to the
nearest one-hundredth of a percentage point). The average of the individual
contribution percentages will be referred to as the Average Contribution
Percentage (ACP). However, employer matching contributions will not be
included if they were (i) used in determining the participant's deferral
percentage under Section 5.7(c) or (ii) forfeited either (A) to correct
Excess Aggregate Contributions or (B) because the contributions to which
they relate are Excess Deferrals, Excess Contributions, or Excess Aggregate
Contributions. If an employee is eligible to make after-tax employee
contributions but has not elected to make such contributions, he will
nevertheless be taken into account as having made zero after-tax employee
contributions.
In computing the Average Contribution Percentage (ACP), the
employer may take into account and include as contribution percentage
amounts, elective deferrals and qualified non-elective contributions under
this plan or any other plan of the employer, as provided by this section
and the regulations for the Plan Year (b) Employee 401(k) Savings
Contributions. If the employer's plan provides for employee 401(k) savings
contributions, such contributions by a participant will be included in
determining his contribution percentage to the extent that, under the
second paragraph of Section 5.7(a), such contributions are not used in
determining his deferral percentage.
(c) Qualified Non-Elective Contributions. If the employer's plan
provides for Qualified Non-Elective Contributions described in Section
5.7(b), such contributions on behalf of a participant will be included in
determining his contribution percentage to the extent that, under the first
paragraph of Section 5.7(b), such contributions are not used in determining
his deferral percentage.
(d) Qualified Matching Contributions. If the Employer's plan
provides for Qualified Matching Contributions described in Section 5.7(c),
such contributions on behalf of a participant will be included in
determining his contribution percentage to the extent that, under Section
5.7(b), such contributions are not used in determining his deferral
percentage.
(e) The higher-paid group and the lower-paid group are defined in
Section 5.8(a) and (b) (including the special rules in Section 5.8(c)).
6.8 Special Rules:
(a) The contribution percentage of an employee in the higher paid
group who makes after-tax employee contributions or for whom employer
matching contributions are made (or for whom employer profit sharing
contributions or elective deferrals or qualified nonelective contributions
which are used in determining such employee's contribution percentage are
made) to any other qualified plan maintained by the employer will be
determined as if all such after-tax employee contributions and employer
matching contributions (and, if applicable, employer profit-sharing
contributions or elective deferrals or qualified nonelective contributions)
were made under a single plan.
In addition, if the employer's plan meets the requirements of Code
Sections 401(m), 401(a)(4) or 410(b) only if aggregated with one or more
other plans, or if one or more other plans meet the requirements of such
sections of the Code only if aggregated with the employer's plan, then the
contribution percentage of a participant will be determined by treating all
such plans as a single plan. For plan years beginning after December 31,
1989, plans may be aggregated in order to satisfy section 401(m) of the
Code only if they have the same Plan Year.
(b) The plan administrator will monitor and adjust participants'
contribution percentages to insure compliance with the requirements of
Section 6.6. Such monitoring and adjustments will be accomplished under
procedures similar to those specified in the first paragraph of Section
5.9.
(c) Compliance with Section 6.6 will be determined after taking
into account any amounts paid to participants, first under Section 5.9(b).
(d) (i) If necessary, the plan administrator will reduce the
after-tax employee contributions and if applicable employer
matching contributions (and, if applicable in determining such
participant's contribution percentage, his 401(k) savings
contributions or employer profit sharing contributions on his
behalf) for a participant in the higher paid group by such amount
as may be necessary to meet the requirements of Section 6.6. Any
reductions under the preceding sentence will apply pro rata to
such contributions.
(ii) Any reduction in employer matching contributions will
be effected by forfeiting the necessary amount if forfeitable.
Otherwise, such reduction will be effected by distributing the
necessary amount (plus earnings) to the participant. Any reduction
in a participant's after-tax employee contributions (or, if
applicable, 401(k) savings contributions) will be effected by
distributing the necessary amount (plus earnings) to the
participant. Any such distribution may be made notwithstanding any
otherwise applicable restrictions or spousal consent requirements
on in-service distributions.
Any amount forfeited under this subsection (ii) will be
treated in accordance with Section 8.4(c); provided that no such
forfeiture will ever be reallocated to the accounts of
participants in the higher paid group.
(iii) Excess Aggregate Contributions. Notwithstanding any
other provision of this plan, Excess Aggregate Contributions, plus
any income and minus any loss allocable thereto, shall be
forfeited, if forfeitable, or if not forfeitable, distributed no
later than the last day of each Plan Year to participants to whose
accounts such Excess Aggregate Contributions were allocated for
the preceding Plan Year. Excess Aggregate Contributions shall be
allocated to participants who are subject to the family member
aggregation rules of section 414(q)(6) of the Code among the
family members in proportion to the Employee and Matching
Contributions (or amounts treated as Matching Contributions) of
each family member that is combined to determine the combined ACP.
If such Excess Aggregate Contributions are distributed more than
2-1/2 months after the last day of the Plan Year in which such
excess amounts arose, a ten (10) percent excise tax will be
imposed on the employer maintaining the plan with respect to those
amounts. Excess Aggregate Contributions shall be treated as annual
additions under the plan.
Determination of Income or Loss: Excess Aggregate
Contributions shall be adjusted for any income or loss for the
plan year in which such contributions were made. Income or loss
allocable to the period between the end of the plan year and the
date of distribution will be disregarded in determining income or
loss.
Forfeitures of Excess Aggregate Contributions: Forfeitures
of Excess Aggregate Contributions shall be applied to reduce
employer contributions for the plan year. If the excess exceeds
employer contributions, forfeitures of excess aggregate
contributions shall be allocated after all other forfeitures under
the plan, to the Matching Contributions account of each lower paid
group participant who made 401(k) savings contributions or
employee after-tax contributions in the ratio which each such
participant's compensation bears to the total compensation of all
such participants for such plan year.
Accounting for Excess Aggregate Contributions: Excess
Aggregate Contributions shall be forfeited, if forfeitable or
distributed on a pro-rata basis from the participant's Employee
Contribution account, Matching Contribution account, and Qualified
Matching Contribution account (and, if applicable, the
participant's Qualified Non-elective Contribution account or
Elective Deferral account, or both).
(e) Multiple Use: If one or more higher paid group employees
participate in both a CODA and a plan subject to the ACP test maintained by
the employer and the sum of the ADP and ACP of those higher paid group
employees subject to either or both tests exceeds the Combined Limit, then
the ACP or ADP, as determined in the sole discretion of the plan
administrator, of those higher paid group employees who also participate in
a CODA will be reduced (beginning with such higher paid group employee
whose ACP is the highest) so that the limit is not exceeded. The amount by
which each higher paid group employee's Contribution Percentage Amounts is
reduced shall be treated as an Excess Aggregate Contribution. The ADP and
ACP of the higher paid group employees are determined after any corrections
required to meet the ADP and ACP tests. Multiple use does not occur if
either the ADP or ACP of the higher paid group employees does not exceed
1.25 multiplied by the ADP and ACP of the lower paid group employees or
such other limitations pursuant to regulations under the Code.
(f) For purposes of determining the Contribution Percentage test,
Employee after-tax Contributions are considered to have been made in the
Plan Year in which contributed to the trust. Matching Contributions and
Qualified Non-elective Contributions will be considered made for a Plan
Year if made no later than the end of the twelve-month period beginning on
the day after the close of the Plan Year.
(g) The determination and treatment of the Contribution Percentage
of any participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
6.9 Additional Limits for Plans Subject to Both 401(k) and 401(m)
Limits:
(a) Applicability of this Section. This section will apply if this
plan (or any other plan which is aggregated with this plan under applicable
regulations) provides for both 401(k) savings contributions and either
after-tax employee contributions or employer matching contributions) (or
both) on behalf of any employee in the higher paid group. If so, the
limitations specified in subsection (b) below will apply in addition to the
limitations set forth in Sections 5.6 and 6.6.
(b) Combined Limit. The sum of the HDP under Sections 5.6 and 5.7
and the HCP under Sections 6.6 and 6.7 cannot exceed the sum of the
following:
(i) 125 percent of the LDP (under Sections 5.6 and 5.7) or
the LCP (under Sections 6.6 and 6.7); and
(ii) two percentage points more than such LDP or such LCP,
whichever is not used in (i), but in no event more than twice such
smaller amount.
(c) Correction of Violation. If the sum of the HDP and the HCP
exceed the limit specified in subsection (b), the employer will reduce the
contribution percentages or deferral percentages of participants in the
higher paid group, in its sole discretion, in accordance with Section
6.8(d) and Section 5.9, to the extent necessary to meet subsection (b).
Subject to the multiple use rules of Section 6.8(e), the employer may limit
the participants affected by such reductions to those participants who are
subject to both the 401(k) limits and the 401(m) limits. If any other plan
maintained by the employer is also taken into account in applying the
limits specified in this section, the employer may designate the plan which
will be involved in correcting any violation of the limits.
ARTICLE 7:
ROLLOVERS AND DEDUCTIBLE EMPLOYEE CONTRIBUTIONS
7.1 Rollover Contributions:
(a) (i) With the approval of the plan administrator, an employee
may make a rollover transfer to the plan in an amount which constitutes (i)
an eligible rollover distribution (as defined in Section 402(c)(4) or
Section 403(a)(4) of the Code) or (ii) a rollover contribution (as defined
in Section 408(d)(3) of the Code). Any amounts rolled over to this plan
from an individual retirement account or annuity must consist solely of
amounts originally transferred to such account or annuity from another
qualified plan and may not include any nondeductible contributions by the
employee to such account or annuity.
(ii) With the approval of the plan administrator, an
employee may cause any amount to be transferred directly to the
trustee of this plan from the trustee or custodian of a qualified
plan or annuity or individual retirement account or annuity in a
trustee-to-trustee transfer. In the case of such transfers,
amounts consisting of the following will be accounted for
separately: employer contributions to a defined benefit or money
purchase plan, employer contributions to a profit-sharing or
401(k) plan, employee 401(k) savings contributions, after-tax
employee contributions, and qualified voluntary employee
contributions. The employee will be responsible for providing the
plan administrator with records that will reflect such amounts
separately.
(b) The employer, the plan administrator and the trustee have no
responsibility for determining the propriety of, proper amount or time of,
or status as a tax free transaction of any transfer under subsection (a)
above.
(c) If an employee who is not yet a participant makes a transfer
under subsection (a) above, he will be considered to be a participant with
respect to administering such transferred amount only. He will not be a
participant for any other purpose of the plan until he completes the
requirements for participation under Article 4. Such an employee may take
loans secured by his rollover contribution account.
(d) The employer or plan administrator in its discretion may
direct the return to the employee (or the retransfer to another trustee or
custodian designated by the employee) of any transfer to the extent that
such return is deemed necessary to insure the continued qualification of
this plan under Code Section 401(a) or that holding such contribution
hereunder would be administratively burdensome.
(e) The plan administrator will maintain a rollover account in the
name of each employee who makes a rollover contribution under this section,
and will credit such rollover to his rollover account as soon as
practicable after receipt thereof by the trustee. The plan administrator
will maintain a transfer account in the name of each employee on whose
behalf a trustee-to-trustee transfer is made under this section, and will
credit such transferred amount to his transfer account as soon as
practicable after receipt thereof by the trustee. Any amounts separately
accounted for under a transfer account will be separately accounted for
hereunder as subaccounts within the employee's transfer account. An
employee's rollover account and all amounts credited thereto (including
earnings) will be fully vested and nonforfeitable at all times. An
employee's transfer account and all amounts credited thereto (including
earnings) will be fully vested and nonforfeitable at all times.
7.2 Qualified Voluntary Employee Contributions:
(a) The provisions of this section apply if the employer's
execution of the adoption agreement constitutes the amendment and
restatement of an existing qualified plan under which participants made
qualified voluntary employee contributions for taxable years before 1987.
(b) Any such qualified voluntary employee contributions by a
participant will be held in a separate subaccount for such participant
within his rollover account which will be fully vested and nonforfeitable
at all times.
(c) No part of a participant's qualified voluntary employee
contributions account will be used to purchase life insurance or will be
taken into account in determining the participant's eligibility for or the
amount of any loan hereunder to the participant.
7.3 Withdrawals:
(a) Amounts. Unless the adoption agreement otherwise provides, a
participant may upon reasonable advance notice to the plan administrator
withdraw all or any portion of his rollover account or qualified voluntary
employee contributions subaccount. An employee who is not yet a participant
and has made a rollover contribution may withdraw all or any portion of his
rollover account. The plan administrator may establish reasonable minimum
withdrawal amounts.
Notwithstanding the preceding paragraph, amounts separately
accounted for under a transfer account will be subject to restrictions on
withdrawal as follows (unless the plan from which such amounts were
transferred imposes more or less restrictive conditions upon in-service
withdrawals): employer contributions to a defined benefit or money purchase
plan are not available for in-service withdrawal; employee 401(k) savings
contributions are available for in-service withdrawal only under Section
12.3; employer contributions to a 401(k) plan which were used in
determining the deferral percentages of participants are not available for
in-service withdrawal; other employer contributions to a profit-sharing
plan, after-tax employee contributions and qualified voluntary employee
contributions are available for in-service withdrawal.
(b) Payment. Any withdrawal under this section will be paid to the
participant as soon as practicable after the valuation date following the
date the plan administrator receives the participant's withdrawal request,
including a form or an electronic communication; however, the plan
administrator may approve an earlier payment of all or some of the amount
to be withdrawn if such earlier payment would not be detrimental to the
interests of the other participants. Unless limited by the investment
vehicle, the investments to be liquidated to pay such withdrawal to the
participant will be liquidated pro rata from the participant's accounts.
(c) Qualified Voluntary Employee Contributions. If a participant
has not attained age 59 1/2 or is not disabled at the time he makes a
withdrawal or receives a distribution from his qualified voluntary employee
contributions account, he will be subject to a federal income tax penalty
unless he completes a valid rollover transfer to a qualified plan or
individual retirement plan within 60 days after the date of distribution.
ARTICLE 8:
EMPLOYER CONTRIBUTIONS; AMOUNT AND ALLOCATION
8.1 Amount of Employer Contribution:
(a) For each plan year that the plan is in effect, the employer
will contribute the amount (if any) determined according to the provisions
of this article. If, due to miscalculation or error, the employer's
contribution exceeds the amount prescribed or determined by the employer,
such excess may, at the election of the employer, be treated as a
contribution for the succeeding plan year or years.
(b) The employer's contribution may be paid in a single sum or
installments, but the total amount will be paid to the trustee not later
than the time (including extensions thereof) prescribed by law for filing
the employer's federal income tax return for its taxable year beginning
with or within the plan year.
8.2 Profit-Sharing Plans:
If the employer's plan is a profit-sharing plan, the following
provisions will apply:
(a) Amount. Unless specified otherwise in the adoption agreement,
for each plan year the employer will contribute whatever amount (if any)
the employer determines in its discretion; the employer will not be
obligated to contribute any particular amount in a plan year or to make any
contribution at all in any particular plan year. However, if in the
adoption agreement the employer elected a formula for determining the
contribution for a plan year, the employer will contribute the amount
determined under such formula. Such a formula may include the contribution
of a flat dollar amount to the account of each participant who is eligible
to share in the allocation of the employer's contribution. If in the
adoption agreement, the employer elected to make a minimum contribution,
the employer will contribute the amount of such minimum contribution.
For each contribution period the employer will contribute an
amount which will equal the contribution the employer determined to make
for all participants entitled to receive an allocation for such period in
the Metropolitan Life Insurance Company adoption agreement.
Unless otherwise elected in the adoption agreement, the
contribution period shall be the plan year. The employer may elect any
other contribution period specified in the adoption agreement in lieu of
the plan year. Employer contributions for a contribution period will be
transferred to the trustee within a reasonable time after the end of such
period. However, the total amount of the employer's contributions for a
plan year will be paid to the trustee by the time specified in Section
8.1(b).
(b) Source of Contributions. Unless the Metropolitan Life
Insurance Company adoption agreement provides otherwise, the employer's
contribution for any year will not be limited to the employer's net profits
for such year or its accumulated earnings.
(c) Persons Entitled to Share in Contributions. The persons
entitled to share in any employer contributions for a plan year are
described in Section 8.6.
(d) Crediting Employer Contributions: Allocation Formula. Any
employer contributions for a plan year will be credited to the employer
contributions accounts of each person entitled to share therein (determined
under Section 8.6) in accordance with Section 8.7.
(e) Forfeitures. Forfeitures will be disposed of in accordance
with the employer's election under the adoption agreement. Subject to
Section 11.4, forfeitures will be released as soon as practicable following
the participant's separation from service.
(f) Employer Contributions Account. The plan administrator will
maintain a separate employer contributions account for each participant.
Employer contributions allocated to a participant will be credited to his
employer contributions account. No forfeitures will occur solely as a
result of an employee's withdrawal of employee contributions.
(g) Make-up Contributions. Following reemployment of a participant
after a Military Absence, the employer shall make an employer contribution
("employer make-up contribution") in the amount, unadjusted by earnings and
forfeitures, that the employer would have been permitted to make under
subsection (a) during the period of Military Absence if such participant
had continued to be employed by and received compensation from the employer
during such period, subject to the limitation of Article 13 in effect
during each year of such participant's Military Absence to which such
matching contribution relates. For purposes of the preceding sentence, a
participant will be treated as having received compensation during the
period of Military Absence equal to (i) the compensation such participant
would have received during such period if he or she had not taken a
Military Absence, determined based on the rate of pay the participant would
have received from the employer but for the Military Absence, or (ii) if
the compensation the participant would have received during such period was
not reasonably certain, the participant's average compensation during the
12-month period immediately preceding the Military Absence or, if shorter,
the period of employment immediately preceding the Military Absence.
Notwithstanding any provision in this plan to the contrary, employer
make-up contributions shall not be subject to the limitations of Article 13
in the year such contributions are made and shall not be taken into
account, during either the year in which such contributions were made or
the years to which such contributions relate during the period of Military
Absence, for purposes of applying Sections 5.6, 6.6 or 6.9 or the
provisions of Article 14.
8.3 Money Purchase Pension Plans:
If the employer's plan is a money purchase pension plan, the
following provisions will apply:
(a) Amount. For each contribution period the employer will
contribute an amount which will equal the contribution required for all
participants entitled to receive an allocation for such period under the
contribution formula elected by the employer in the Metropolitan Life
Insurance Company adoption agreement.
Unless otherwise elected in the adoption agreement, the
contribution period shall be the plan year. The employer may elect a
contribution period which may be shorter than the plan year such as each
month, three months (quarterly) or six months (semi-annual). Employer
contributions for a contribution period will be transferred to the trustee
within a reasonable time after the end of such period. However, the total
amount of the employer's contributions for a plan year will be paid to the
trustee by the time specified in Section 8.1(b).
(b) Persons Entitled to Share in Contributions. The persons
entitled to receive an allocation of employer contributions for a
contribution period are described in Section 8.6. However, if the adoption
agreement provides for a contribution period more frequent than the plan
year, a participant may be required to have completed a minimum period of
service and/or be an employee on the last day of a contribution period (or
to have left employment during such period because of retirement, death or
disability) in order to receive an employer contribution for such period.
(c) Crediting Employer Contributions: Allocation Formula. Employer
contributions for a contribution period will be credited to the employer
contributions accounts of each person entitled to share therein (determined
under Section 8.6) in accordance with the allocation formula selected in
Section 8.7.
(d) Forfeitures. Any forfeitures occurring during a contribution
period will be disposed of in accordance with the employer's election under
the adoption agreement. No forfeitures will occur solely as a result of an
employee's withdrawal of employee contributions. Subject to section 11.4,
forfeitures will be released as soon as practicable following the
participant's separation from service.
(e) Employer Contributions Account. The plan administrator will
maintain a separate employer contributions account for each participant.
Employer contributions allocated to a participant will be credited to his
employer contributions account.
(f) Make-up Contributions. Following reemployment of a participant
after a Military Absence, the employer shall make an employer contribution
("employer make-up contribution") in the amount, unadjusted by earnings and
forfeitures, that the employer would have been permitted to make under
subsection (a) during the period of Military Absence if such participant
had continued to be employed by and received compensation from the employer
during such period, subject to the limitation of Article 13 in effect
during each year of such participant's Military Absence to which such
contribution relates. For purposes of the preceding sentence, a participant
will be treated as having received compensation during the period of
Military Absence equal to (i) the compensation such participant would have
received during such period if he or she had not taken a Military Absence,
determined based on the rate of pay the participant would have received
from the employer but for the Military Absence, or (ii) if the compensation
the participant would have received during such period was not reasonably
certain, the participant's average compensation during the 12-month period
immediately preceding the Military Absence or, if shorter, the period of
employment immediately preceding the Military Absence. Notwithstanding any
provision in this plan to the contrary, employer make-up contributions
shall not be subject to the limitations of Article 13 in the year such
contributions are made and shall not be taken into account, during either
the year in which such contributions were made or the years to which such
contributions relate during the period of Military Absence, for purposes of
applying Sections 5.6, 6.6 or 6.9 or the provisions of Article 14.
8.4 Employer Matching Contributions:
(a) Matching Contributions. Matching Contribution shall mean an
employer contribution made to this or any other defined contribution plan
on behalf of a participant on account of an Employee after tax Contribution
made by such participant, or on account of a participant's Elective
Deferral, under a plan maintained by the employer. The employer will select
the matching period, which will be the plan year, unless, in the Adoption
Agreement, the Employer selects a period shorter than the plan year such as
each pay period, month, three months (quarterly), or six months
(semi-annual). For each matching period the employer will make a matching
contribution in cash on behalf of each participant who made 401(k) savings
contributions and/or after-tax employee contributions during such matching
period. However, if the adoption agreement so provides, a participant will
be required to have completed a minimum period of service (not to exceed
1,000 hours) and/or be an employee on the last day of a matching period (or
to have left employment during such period because of retirement, death or
disability) in order to receive an employer matching contribution for such
period. In the case of a short plan year, the minimum period of service
will be prorated by multiplying the minimum number of hours by a fraction,
the numerator of which is the number of months of the short plan year and
the denominator of which is 12.
Notwithstanding the matching period elected by the employer in the
adoption agreement, the employer may make, in its absolute discretion, an
additional matching contribution for the plan year in an amount to be
determined under this paragraph ("annual matching contribution"), unless
the employer has elected, in the adoption agreement, not to make an annual
matching contribution. The annual matching contribution shall be allocated
solely to the accounts of those participants who made matchable savings
contributions at any time during the plan year, but either did not make
savings contributions during the entire plan year or made savings
contributions as a percentage of compensation which was lower than the
maximum percentage of compensation for which matching contributions could
be made at any point during the plan year. The annual matching contribution
shall be based on an annual matching period. The amount of the annual
matching contribution shall be equal to the excess of the maximum
percentage of compensation for which matching contributions that could be
made during the plan year, based on the rate of matchable savings
contributions, expressed as an annualized percentage of compensation, or
that portion of the plan year ending on the date that (i) the participant
separates from service or (ii) the participant's plan compensation reaches
the limitation of Section 401(a)(17) of the Code over the actual amount of
matching contributions made on behalf of such participant during the plan
year.
However, (a) matching contributions on behalf of participants in
the higher-paid group will be made only to the extent that such
contributions do not cause the average of the deferral percentages or the
contribution percentages of such participants to exceed the limits provided
under Section 5.6 or 6.6 (whichever may be applicable); and (b) the
employer will not make an annual matching contribution with respect to any
401(k) savings contributions or after-tax employee contributions that are
distributed to the participant under Section 5.9 or Section 6.8, or with
respect to any 401(k) savings contributions that are recharacterized as
after-tax employee contributions under Section 5.9 (unless under the terms
of the employer's plan such after-tax employee contributions would also be
matched). If a participant who is making deferrals to a nonqualified
deferred compensation plan maintained by the Employer elects to transfer
such deferrals to the plan as 401(k) savings contributions, pursuant to
Section 5.3(b), and the nonqualified deferred compensation plan provides
for matching contributions, the amount to be transferred to the plan from
the nonqualified deferred compensation plan will include an amount of
matching contributions, unadjusted by earnings or losses under the
nonqualified deferred compensation plan, equal to the lesser of the maximum
amount of matching contributions permitted under this plan, after testing
the amount of matching contributions under Sections 6.6 and 6.9, that can
be made with respect to the 401(k) savings contributions transferred from
the nonqualified deferred compensation plan or the amount of matching
contributions made to the nonqualified deferred compensation plan. If the
employer is a partnership or is treated as a partnership under the Code,
the employer may elect in the adoption agreement not to allocate matching
contributions to partners or stockholders (in the case of an entity treated
under the Code as a partnership). If the employer is a partnership or is
treated as a partnership under the Code and the employer elects to allocate
matching contributions to partners or stockholders, all matching
contributions are required to be 100% vested at all times and those
matching contributions allocable to partners or shareholders are subject to
the withdrawal limitations of Section 12.3.
If the employer has selected a discretionary matching contribution
formula in the adoption agreement, such contributions shall be allocated
under one or more of the following methods, unless the employer has elected
in the adoption agreement to restrict the allocation method to one of the
following: (v) each eligible participant shall receive an equal allocation
as a percentage of the participant's matchable savings contributions during
such plan year or matching period; (w) each eligible participant in the
lower-paid group shall receive an equal allocation as a percentage of such
participant's matchable savings contributions during such plan year or
matching period, and each eligible participant in the higher-paid group
shall receive an equal allocation as a percentage of such participant's
matchable savings contributions during such plan year or matching period,
provided that the percentage of matchable savings contributions allocated
to the eligible participants in the lower-paid group is greater than the
percentage of matchable savings contributions allocated to the eligible
participants in the higher paid group; (x) such contributions will be
allocated solely among the eligible participants in the lower-paid group as
an equal percentage of such participant's matchable savings contributions
during such plan year or matching period; (y) two or more salary ranges
will be established such that the employer matching contribution as a
percentage of plan compensation which is allocated to the participants in
the lowest salary range is the greatest and the allocation of employer
matching contributions as a percentage of plan compensation decreases as
the salary ranges increase; or (z) two or more rates of matching
contributions based on the percentage of matchable savings contributions to
plan compensation will be established such that the employer matching
contributions, as a percentage of matchable savings contributions, which is
allocated to the participants making the lowest level of matchable savings
contributions, as a percentage of plan compensation, receive the greatest
rate of matching contribution, as a percentage of matchable savings
contributions, and the rate of matching contributions, as a percentage of
matchable savings contributions, declines as the matchable savings
contributions, as a percentage of plan compensation, increases. The
employer may limit discretionary matching contributions to a specified
percentage of each participant's matchable savings contributions, to a
specified percentage of each Participant's Plan Compensation or to a
specified dollar amount.
Matching contributions for a matching period will be transferred
to the trustee within a reasonable time after the end of such period.
However, the total amount of the employer's matching contributions for a
plan year will be paid to the trustee by the time specified in Section
8.1(b).
Matching Contributions shall be vested in accordance with the
vesting schedule selected in the adoption agreement. In any event, Matching
Contributions shall be fully vested at normal retirement age, upon the
complete or partial termination of the profit-sharing plan, or upon the
complete discontinuance of employer contributions.
Forfeitures of Matching Contributions, other than Excess Aggregate
Contributions, shall be made in accordance with section 8.2.
(b) Matching Contributions Account. The plan administrator will
maintain a matching contributions account for each participant for whom the
employer makes a matching contribution. Matching contributions on behalf of
the participant for a matching period will be credited to his matching
contributions account.
(c) Use of Forfeitures. Forfeitures occurring during a matching
period, will be applied according to the method specified in the adoption
agreement. Forfeitures of Excess Aggregate Contributions shall be made in
accordance with Section 6.8(d)(iii).
(d) Source of Contributions. Unless specified otherwise in the
adoption agreement, the employer will make the matching contributions
required under this section regardless of whether the employer has current
or accumulated profits.
(e) Matching Make-up Contributions. If a participant has elected
to make after-tax employee make-up contributions pursuant to Section 6.2(b)
and/or 401(k) savings make-up contributions pursuant to Section 5.2(e),
following reemployment after a Military Absence, the employer shall make a
matching contribution ("matching make-up contribution") in the amount,
unadjusted by earnings and forfeitures, that the employer would have been
permitted to make under subsection (a) during the period of Military
Absence if such participant had continued to be employed by and received
compensation from the employer during such period, subject to the
limitation of Article 13 in effect during each year of such participant's
Military Absence to which such matching contribution relates. For purposes
of the preceding sentence, a participant will be treated as having received
compensation during the period of Military Absence equal to (i) the
compensation such participant would have received during such period if he
or she had not taken a Military Absence, determined based on the rate of
pay the participant would have received from the employer but for the
Military Absence, or (ii) if the compensation the participant would have
received during such period was not reasonably certain, the participant's
average compensation during the 12-month period immediately preceding the
Military Absence or, if shorter, the period of employment immediately
preceding the Military Absence.
Notwithstanding any provision in this plan to the contrary,
matching make-up contributions shall not be subject to the limitations of
Article 13 in the year such contributions are made and shall not be taken
into account, during either the year in which such contributions were made
or the years to which such contributions relate during the period of
Military Absence, for purposes of applying Sections 5.6, 6.6 or 6.9 or the
provisions of Article 14.
The employer shall make matching make-up contributions during the
same period in which the Participant makes after-tax employee make-up
contributions and/or 401(k) savings make-up contributions.
(f) Supplemental Profit Sharing Contributions. If in the
Metropolitan Life Insurance Company MetLife(R) 401(k) adoption agreement
the employer elects profit sharing contributions or supplemental
contributions, the employer may make such contributions. Such contributions
(if any) are in addition to any matching contributions the employer makes.
Such contributions will be allocated to separate employer profit sharing
contributions accounts on behalf of participants accordance with the
adoption agreement and Section 8.2, except that any forfeitures from such
accounts will be applied in accordance with subsection (c) above instead of
Section 8.2(e).
8.5 Persons Entitled to Share in Allocations:
(a) Application of this Section. The rules in this section will
determine which persons are entitled to an allocation of employer
contributions for a plan year under a profit-sharing or a money purchase
pension plan or of employer supplemental profit-sharing contributions under
a 401(k) plan. See Section 8.4(a) for entitlement to an employer matching
contribution.
(b) Last Day of Plan Year Rule. If provided in the adoption
agreement, a person will not be entitled to an allocation of employer
contributions unless he was still an active employee on the last day of the
plan year.
(c) Year of Service Rule. If provided in the adoption agreement, a
person will not be entitled to an allocation of employer contributions
unless during such plan year he completed at least 1,000 hours of service
(or such smaller number of hours of service as is specified in the adoption
agreement for a year of service). In the case of a person who first became
an employee during a plan year, the number of hours of service required
will be prorated based on the date when he became an employee. In the case
of a short plan year, the minimum period of service will be prorated by
multiplying the minimum number of hours of service by a fraction, the
numerator of which is the number of months of the short plan year and the
denominator of which is 12.
(d) Last Day of Plan Year and Year of Service. If provided in the
adoption agreement, a person will not be entitled to an allocation of
employer contributions unless he satisfies the requirements of subsections
(b) and (c) as of the end of the plan year.
(e) Exception. The requirements of subsections (b), (c) and (d)
above will not apply to a person who terminated employment with the
employer during the plan year because of retirement, death or disability.
(f) Standardized Plans. Notwithstanding the above, a participant
must be employed by the employer on the last day of the plan year or must
have completed more than 500 hours of service during the plan year to share
in the allocation of profit sharing or matching contributions, unless the
employer has elected in the Adoption Agreement to impose less restrictive
conditions for sharing in the allocation of profit sharing or matching
contributions.
8.6 Allocation Rules:
(a) Application of this Section. This section governs the
allocation of employer contributions for a plan year under a profit sharing
or money purchase pension plan or employer supplemental profit-sharing
contributions under a 401(k) plan. See Section 8.4(a) for the allocation of
employer matching contributions (and any forfeitures used to reduce
employer matching contributions).
As used in this section, the term participant includes any person
entitled to share in the allocation of employer contributions (and/or
forfeitures) for the plan year.
(b) Non-Integrated Formula. If in the adoption agreement the
employer elected a non-integrated formula, employer contributions will be
allocated so that each participant who is entitled to receive an allocation
of the employer's contribution receives an equal contribution as either a
percentage of his plan compensation or a flat dollar amount for the plan
year (employer contributions to a profit-sharing plan or employer
supplemental profit-sharing contributions to a 401(k) plan), or so that
each participant receives the percentage of his plan compensation for the
plan year specified in the adoption agreement (money purchase pension
plan). However, notwithstanding the above, if selected in the adoption
agreement, a nonstandardized plan may require a participant to satisfy the
requirements of subsection (b), (c), or (d) of Section 8.6.
(c) Integrated Formula.
(i) Notwithstanding any section of the plan to the
contrary, this subsection (i) applies to the allocation of employer
contributions under a profit-sharing plan or employer supplemental
profit-sharing contributions to a 401(k) plan where the employer elected an
integrated formula in the adoption agreement. However, the integrated
formula shall not be taken into account with respect to 401(k) plan
contributions. Employer contributions for the plan year plus any
forfeitures will be allocated to participant's accounts as follows:
Step One: Contributions and forfeitures will be allocated
to each participant's account in the ratio that each participant's total
compensation bears to all participants' total compensation, but not in
excess of 3% of each participant's compensation.
Step Two: Any contributions and forfeitures remaining
after the allocation in Step One will be allocated to each participant's
account in the ratio that each participant's compensation for the plan year
in excess of the integration level bears to the excess compensation of all
participants but not in excess of 3% of each Participant's Plan
Compensation. For purposes of this Step Two, in the case of any Participant
who has exceeded the cumulative permitted disparity limit described below,
such Participant's total Plan Compensation for the Plan Year will be taken
into account.
Step Three: Any contributions and forfeitures remaining
after the allocation in Step Two will be allocated to each participant's
account in the ratio that the sum of each participant's total compensation
and compensation in excess of the integration level bears to the sum of all
participants total compensation and compensation in excess of the
integration level, but not in excess of the profit-sharing maximum
disparity rate. For purposes of this Step Three, in the case of any
Participant who has exceeded the cumulative permitted disparity limit
described below, two times such Participant's total Plan Compensation for
the Plan Year will be taken into account.
Step Four: Any remaining employer contributions or
forfeitures will be allocated to each participant's account in the ratio
that each participant's total compensation for the plan year bears to all
participants' total compensation for that year. Except as otherwise
provided in the adoption agreement, the profit-sharing maximum disparity
rate will be equal to 2.7% If the adoption agreement so provides, the
profit-sharing maximum disparity rate will be equal to the lesser of:
(A) 2.7%; or
(B) the applicable percentage determined in accordance with the
table below:
If the integration level is: the applicable
more than but not more than percentage is:
--------- ----------------- --------------
$0 X* 2.7%
X* 80% of TWB 1.3%
80% of TWB Y** 2.4%
*X = the greater of $ 10,000 or 20 percent of the TWB
**Y = any amount more than 80% of the TWB but less than 100% of the TWB.
TWB = the Social Security Taxable Wage Base.
(ii) This subsection (ii) applies to the allocation of
employer contributions under a money purchase pension plan where
the employer elected an integrated formula in the adoption
agreement. Such allocations will be performed so that each
participant receives the percentage of his total plan compensation
for the plan year specified in the adoption agreement (the "base
contribution percentage"), plus a percentage and not to exceed the
lesser of the base contribution percentage or the money purchase
maximum disparity rate of such participant's compensation in
excess of the integration level.
Except as otherwise provided in the adoption agreement,
the money purchase maximum disparity rate is 5.7%. If the adoption
agreement so provides, the money purchase maximum disparity rate
will be equal to the lesser of:
(A) 5.7%; or
(B) the applicable percentage determined in
accordance with the table below:
If the integration level is: the applicable
more than but not more than percentage is:
--------- ----------------- --------------
$0 X* 5.7%
X* 80% of TWB 4.3%
80% of TWB Y** 5.4%
*X = the greater of $ 10,000 or 20 percent of the TWB
**Y = any amount more than 80% of the TWB but less than 100% of the TWB.
TWB = the Social Security Taxable Wage Base.
(iii) Unless the employer elects a lower maximum
disparity rate in (i) or (ii) above, the integration level shall
be equal to the taxable wage base. The taxable wage base is the
contribution and benefit base under section 230 of the Social
Security Act as of the beginning of the plan year.
(iv) Overall Permitted Disparity Limits.
(A) Annual Overall Permitted Disparity Limit.
Notwithstanding the preceding paragraphs, for any Plan
Year this Plan benefits any Participant who benefits
under another qualified plan or simplified employee
pension, as defined in Section 408(k) of the Code,
maintained by the Employer that provides for permitted
disparity (or imputes disparity), Employer contributions
and forfeitures will be allocated to the account of each
Participant who either completes more than 500 hours of
service during the Plan Year or who is employed on the
last day of the Plan Year in the ratio that such
Participant's total Plan Compensation bears to the total
Plan Compensation of all Participants.
(B) Cumulative Permitted Disparity Limit.
Effective for Plan Years beginning on or after January 1,
1995, the cumulative permitted disparity limit for a
Participant is 35 total cumulative permitted disparity
years. Total cumulative permitted disparity years means
the number of years credited to the Participant for
allocation or accrual purposes under this Plan, any other
qualified plan or simplified employee pension plan
(whether or not terminated) ever maintained by the
Employer. For purposes of determining the Participant's
cumulative permitted disparity limit, all years ending in
the same calendar year are treated as the same year. If
the Participant has not benefited under a defined benefit
or target benefit plan for any year beginning on or after
January 1, 1994, the Participant has no cumulative
permitted disparity limit.
(e) Plan Compensation. For purposes of determining allocations to
a participant's account under this section (and, if applicable, under
Section 8.4(c)) plan compensation means the participant's plan compensation
for the plan year under Section 2.19, adjusted as follows:
(i) Unless otherwise provided in the adoption agreement,
excluding any plan compensation paid to the participant before he
became a participant under Section 4.3 or after he ceased to be a
participant under Section 4.4.
(ii) Excluding any plan compensation during the plan year
above the cap (if any) specified in the adoption agreement.
(iii) Excluding any items of plan compensation specified
in the adoption agreement. However, no items of plan compensation
will be excluded if the effect of such exclusion would be to use
for plan purposes a higher percentage of the total plan
compensation of employees in the higher paid group than the
percentage of total plan compensation used for plan purposes for
employees in the lower paid group.
Notwithstanding subsections (ii) and (iii) above, no
items of compensation will be excluded if in the adoption
agreement the employer elects an integrated formula for
allocations to participants' accounts (provided that the employer
may in the adoption agreement elect a dollar cap on compensation
which is above the Social Security wage base for such year).
ARTICLE 9:
BENEFITS UPON RETIREMENT OR DISABILITY
9.1 Retirement Dates:
(a) Normal Retirement Date. A participant may retire on his normal
retirement date. His normal retirement date is his 65th birthday unless the
employer specifies another date in the adoption agreement; any other date
may not be later than his 65th birthday or, if later, the 5th anniversary
of the first day of the plan year in which he commenced participation. If a
participant's normal retirement date is the date he completes a specified
number of years of participation, years of participation in any predecessor
plan will be counted toward meeting the requirement. If, for plan years
beginning before January 1, 1988, normal retirement age was determined with
reference to the anniversary of the participation commencement date (more
than 5 but not to exceed 10 years), the anniversary date for participants
who first commenced participation under the plan before the first plan year
beginning on or after January 1, 1988, shall be the earlier of (A) the
tenth anniversary of the date the participant commenced participation in
the plan (or such anniversary as had been elected by the employer, if less
than 10) or (B) the fifth anniversary of the first day of the first plan
year beginning on or after January 1, 1988. The participation commencement
date is the first day of the first plan year in which the participant
commenced participation in the plan.
(b) Early Retirement Date. If the employer selects an early
retirement provision in the adoption agreement, a participant may retire on
any date on or after he meets the age and service requirements specified in
the adoption agreement for early retirement. A participant who terminates
his employment after having satisfied the service but not the age
requirement for early retirement specified in the adoption agreement will
become eligible to receive early retirement benefits upon satisfaction of
the age requirement.
(c) Late Retirement Date. If a participant continues in employment
after his normal retirement date, he may continue to make 401(k) savings
contributions and/or after-tax employee contributions (if applicable in the
employer's plan) until his later retirement date, and he will continue to
share in employer contributions and forfeitures in accordance with the
plan's allocation formula until his late retirement date.
9.2 Disability Retirement:
(a) A participant will be considered to have retired if he leaves
the employer's service because of total and permanent disability. Total and
permanent disability means a permanent physical or mental impairment which
prevents the participant from engaging in any substantial gainful
occupation or employment. The permanence and degree of such impairment
shall be supported by medical evidence.
(b) The plan administrator will determine whether a participant
has a total and permanent disability under uniform rules of general
application, and the plan administrator's determination will be final.
9.3 Retirement Benefits:
(a) A participant who retires will be fully vested and will
receive benefit payments based upon the total amount credited to his
account. The participant will receive: (i) in the case of a single sum
payment, the total amount credited to his accounts at the date the
distribution is made; (ii) in the case of a profit sharing plan or 401(k)
plan, if elected by the employer in the adoption agreement, an annuity
contract, such total amount will be used to purchase such annuity contract;
or (iii) in the case of installment payments, the first such installment
will be based on such total amount, and subsequent installments will be
based on the total amount credited to the participant's accounts at the
date of each such installment. If the adoption agreement so provides, a
participant who has attained the normal or early (but not prior to the
attainment of age 59 1/2 in the case of a 401(k) plan) retirement age under
the plan may elect to withdraw all or any portion of his or her account
balance while still employed by the employer.
(b) The date of distribution to a retired participant (or the date
of the first installment payment to the retired participant) will be the
earliest practicable date after the valuation date coincident with or next
following either (i) the participant's retirement date or, (ii) such later
date as the participant designates, subject to the required distribution
date rules of Section 9.8. However, if the participant's account balance(s)
exceed $3,500 distribution before nor-mal retirement date will not be made
(or installment payments will not commence) unless the participant and his
spouse consents thereto in accordance with applicable regulations.
(c) The consent of the participant and the participant's spouse
shall be obtained in writing within the 90-day period ending on the annuity
starting date. The annuity starting date is the first day of the first
period for which an amount is paid as an annuity or any other form. The
plan administrator shall notify the participant and the participant's
spouse of the right to defer any distribution until the participant's
account balance is no longer immediately distributable. Such notification
shall include a general description of the material features, and an
explanation of the relative values of, the optional forms of benefit
available under the plan in a manner that would satisfy the notice
requirements of section 417(a)(3), and shall be provided no less than 30
days and no more than 90 days prior to the annuity starting date. However,
distribution may commence less than 30 days after the notice described in
the preceding sentence is given, provided the distribution is one to which
sections 401(a)(11) and 417 of the Code do not apply, the plan
administrator clearly informs the Participant that the Participant has a
right to a period of at least 30 days after receiving the notice to
consider the decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and the Participant, after
receiving the notice, affirmatively elects a distribution. The plan
administrator may substitute the date distribution commences for the
annuity starting date in applying this subsection (c).
Notwithstanding the foregoing, if, in the case of a profit sharing
plan or 401(k) plan for which the employer has elected, in the adoption
agreement, to provide an annuity distribution, only the participant need
consent to the commencement of a distribution in the form of a qualified
joint and survivor annuity while the account balance is immediately
distributable. (Furthermore, if payment in the form of a qualified joint
and survivor annuity is not required with respect to the participant
pursuant to section 10.6 of the plan, only the participant need consent to
the distribution of an account balance that is immediately distributable.)
Neither the consent of the participant nor the participant's spouse shall
be required to the extent that a distribution is required to satisfy
section 401(a)(9) or section 415 of the Code. In addition, upon termination
of this plan if the plan does not offer an annuity option (purchased from a
commercial provider) and if the employer or any entity within the same
controlled group as the employer does not maintain another defined
contribution plan (other than an employee stock ownership plan as defined
in section 4975(e)(7) of the Code), the participant's account balance may,
without the participant's consent, be distributed to the participant.
However, if any entity within the same controlled group as the employer
maintains another defined contribution plan (other than an employee stock
ownership plan as defined in section 4975(e)(7) of the Code) then the
participant's account balance will be transferred, without the
participant's consent, to the other plan if the participant does not
consent to an immediate distribution.
An account balance is immediately distributable if any part of the
account balance could be distributed to the participant (or surviving
spouse) before the participant attains or would have attained if not
deceased) the later of normal retirement age or age 62.
9.4 Method of Payment: Subject to the rules specified in this
article, a participant's retirement benefit will be paid to him in one or
more of the following methods, as elected by the participant:
(a) one or more payments within one taxable year of the
participant;
(b) approximately equal monthly, quarterly, semi-annual or annual
installments over a period certain not exceeding the life expectancy of the
participant or the joint life and last survivor expectancy of the
participant and his designated beneficiary;
(c) in the case of a profit sharing plan or a 401(k) plan for
which the employer has made the appropriate election in the adoption
agreement, applied toward the purchase of a fixed annuity contract with
payments over a period of time not exceeding the lifetime of the
participant or the lifetimes of the participant and his designated
beneficiary.
9.5 Married Participants:
(a) Qualified Joint and Survivor Annuity. Except in the case of a
participant in an exempt profit sharing or 401(k) plan (as defined in
subsection (d) below) or in the case of a participant with a small account
(as defined in subsection (e) below), retirement benefits to a married
participant will be paid in the form of the purchase and delivery of a
qualified joint and survivor annuity unless the participant elects
otherwise in writing during the 90-day period ending on the annuity
starting date. The participant may elect to have such annuity distributed
upon attainment of the earliest retirement age under the plan. The earliest
retirement age is the earliest date on which, under the plan, the
participant could elect to receive retirement benefits. Such an election
must be accompanied by his spouse's qualified consent (other than the
participant's election of a joint and survivor annuity giving the spouse a
50% or greater survivorship interest). At any time before the commencement
of benefits, the participant may make and revoke such an election without
limit as to the number of elections. The making of such an election
requires his spouse's qualified consent; revocation of such an election
does not.
A qualified joint and survivor annuity is an immediate annuity for
the life of the participant with a survivor annuity for the life of the
participant's spouse which is 50 percent of the amount of the annuity
payable during the joint lives of the participant and the participant's
spouse. The qualified joint and survivor annuity is the amount of benefit
that can be purchased with the participant's vested interest in his
accounts.
(b) Joint and Survivor Notice.
(i) The plan administrator will provide each married
participant no less than 30 days and no more than 90 days prior to
the annuity starting date with a written explanation of: the terms
and conditions of a qualified joint and survivor annuity; the
participant's right to make and the effect of an election to waive
the qualified joint and survivor annuity form of benefit; the
rights of a participant's spouse; and the right to make, and the
effect of, a revocation of a previous election to waive the
qualified joint and survivor annuity. A participant may waive the
requirement that the written explanation be provided no less than
30 days before the annuity starting date if the following
requirements are satisfied: (i) the participant affirmatively
elects, after having received the written explanation, a form of
distribution and the participant's spouse consents to such
election, if necessary; (ii) the plan administrator provides
information to the participant clearly indicating that the
participant has a right to at least 30 days to consider whether to
waive the Qualified Joint and Survivor Annuity and consent to a
form of distribution other than a Qualified Joint and Survivor
Annuity; (iii) the participant is permitted to revoke such
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 beginning after the written explanation is
provided to the participant; (iv) the annuity starting date is
after the date that the written explanation is provided to the
participant; and (v) distribution in accordance with the
affirmative election does not commence before the expiration of
the 7-day period beginning on the day after the written
explanation is provided to the participant. The annuity starting
date may precede the affirmative election and the 7-day period
described in (v).
(ii) Notwithstanding the other requirements of the notice
requirements prescribed by this section and section 10.3 with
respect to a preretirement qualified retirement annuity; notice
need not be given to a participant if (1) the plan "fully
subsidizes" the costs of a qualified joint and survivor annuity or
qualified preretirement survivor annuity, and (2) the plan does
not allow the participant to waive the qualified joint and
survivor annuity or qualified preretirement survivor annuity and
does not allow a married participant to designate a nonspouse
beneficiary. For purposes of this section, a plan fully subsidizes
the costs of a benefit if no increase in cost, or decrease in
benefits to the participant may result from the participant's
failure to elect another benefit.
(c) Qualified Consent. A waiver of a qualified joint and survivor
annuity or a qualified preretirement survivor annuity. Any waiver of a
qualified joint and survivor annuity or a qualified preretirement survivor
annuity shall not be effective unless: (a) the participant's spouse
consents in writing to the election; (b) the election designates a specific
beneficiary, including any class of beneficiaries or any contingent
beneficiaries, which may not be changed without spousal consent (or the
spouse expressly permits designations by the participant without any
further spousal consent); (c) the spouse's consent acknowledges the effect
of the election; and (d) the spouse's consent is witnessed by a plan
representative or notary public. Additionally, a participant's waiver of
the qualified joint and survivor annuity shall not be effective unless the
election designates a form of benefit payment which may not be changed
without spousal consent (or the spouse expressly permits designations by
the participant without any further spousal consent). If it is established
to the satisfaction of a plan representative that there is no spouse or
that the spouse cannot be located, a waiver will be deemed a qualified
consent.
Any consent by a spouse obtained under this provision (or
establishment that the consent of a spouse may not be obtained) shall be
effective only with respect to such spouse. A consent that permits
designations by the participant without any requirement of further consent
by such spouse must acknowledge that the spouse has the right to limit
consent to a specific beneficiary, and a specific form of benefit where
applicable, and that the spouse voluntarily elects to relinquish either or
both of such rights. A revocation of a prior waiver may be made by a
participant without the consent of the spouse at any time before the
commencement of benefits. The number of revocations shall not be limited.
No consent obtained under this provision shall be valid unless the
participant has received notice as provided in Section 9.5(b) with respect
to a qualified joint and survivor annuity or Section 10.3(b) with respect
to a qualified pre-retirement survivor annuity.
The requirement for a qualified consent is waived if the
participant establishes to the plan administrator's satisfaction that there
is no spouse or that the spouse cannot be located or under other
circumstances described in regulations under Code Section 417. The
requirement of a qualified consent is also waived for any election or
revocation by a participant which has the effect of increasing the
survivorship interest of the spouse.
(d) Exempt Profit Sharing Plans. An exempt profit sharing plan is
a plan which meets the Safe Harbor Rules under Section 10.6. In a profit
sharing plan or 401(k) plan, the sole beneficiary of a married participant
in the event of his death before retirement benefits commence is his
spouse, unless his spouse has agreed otherwise in a qualified consent (as
defined in subsection (c) above) (see Section 10.5(a)). Therefore, such a
plan is exempt from the qualified joint and survivor annuity requirement of
subsection (a) above. Under an exempt profit sharing or 401(k) plan, a
participant will receive his retirement benefit in the form of a lump sum
payment under Section 9.4(a) unless the participant elects otherwise.
However, a profit sharing or 401(k) plan is not exempt from the
qualified joint and survivor annuity requirement if the employer elects in
the adoption agreement that an annuity is an optional form of distribution
under the plan and the participant in fact elects an annuity form of
payment under Section 9.4(c). Also a profit sharing or 401(k) plan is not
exempt from such requirement with respect to any participant for whom the
plan is a direct or indirect transferee of a defined benefit pension plan,
a money purchase pension plan (including a target benefit plan) or a stock
bonus or profit sharing plan which provides for a life annuity form of
payment to the participant; however, this plan will not be treated as a
transferee plan solely by reason of a rollover from any such other plan. In
addition, a profit sharing plan will not be considered exempt unless the
participant's spouse is the beneficiary of any insurance on the
participant's life, unless his spouse agrees otherwise in a qualified
consent.
(e) Small Account Defined. A small account is an account with a
vested balance that does not exceed $3,500. In applying the $3,500 rule,
all accounts or portions of accounts from which the claimant is entitled to
payment are added together except for accounts attributable to qualified
voluntary employee contributions. If the present value of a participant's
account balance is zero, such participant shall be deemed to have received
a distribution of such vested account balance. Except as otherwise provided
in the adoption agreement, a small account will be distributed as soon as
practicable following termination of employment or retirement in the form
of a single sum payment.
(f) Transition Rules. The provisions of this section apply to any
participant who is credited with at least one hour of service on or after
August 23, 1984. They apply to any other participant in accordance with
section 10.7 who was credited with at least one hour of service between
September 1, 1974, and August 23, 1984 (a transition participant).
9.6 Unmarried Participants: Except in the case of an exempt profit
sharing or 401(k) plan (as defined in Section 9.5(d)) or as provided in
Section 9.5(f), unless the participant elects otherwise, benefits to an
unmarried participant will be paid in the form of an annuity providing
periodic payments for the lifetime of the participant in the amount that
can be purchased with the participant's vested interest in his accounts.
9.6A. Direct Rollover Requirements: This Section applies to
distributions made on or after January 1, 1993.
(a) Election to Make Direct Rollover. Notwithstanding any
provision of the plan to the contrary that would otherwise limit a
distributee's election under this Article, a distributee may elect, at the
time and in the manner prescribed by the plan administrator, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
(b) 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 years or more; any distribution
to the extent such distribution is required under section
401(a)(9) of the Code; and the portion of any distribution that is
not includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer
securities); and any other distribution(s) that is reasonably
expected to total less than $200 during a year.
(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 plan 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.
9.7 Distribution Requirements:
Rules Applicable to Installment Payments. The following rules will
apply to benefits payable in the form of installments under Section 9.4(b).
In the absence of a contrary election by the participant, the
participant's installment payment will be payable over the participant's
life expectancy as of the required beginning date. Life expectancy of the
participant and the participant's spouse is calculated as of the required
beginning date (see Section 9.8) or if elected by the participant (or the
spouse, if required) by the time distributions are required to begin, will
be recalculated annually thereafter. If the adoption agreement so provides,
a participant may elect to determine the life expectancy of the participant
and/or the participant's spouse under the recalculation method or by
determining such life expectancy as of the required beginning date and
reducing it by one for each succeeding distribution calendar year. The life
expectancy of a designated beneficiary other than the participant's spouse
will be calculated as of the required distribution date and payments for
any 12 consecutive month period after such date will be based on such life
expectancy less the number of whole years passed since such date. Life
expectancy and joint and last survivor expectancy are computed using the
return multiples in Section 1.72-9 of the Income Tax Regulations.
(a) (1) Subject to 9.5, Joint and Survivor Annuity Requirements,
the requirements of this article shall apply to any distribution
of a participant's interest and will take precedence over any
inconsistent provisions of this plan. Unless otherwise specified,
the provisions of this article apply to calendar years beginning
after December 31, 1984.
(2) All distributions required under this article shall
be determined and made in accordance with the proposed regulations
under section 401(a)(9), including the minimum distribution
incidental benefit requirement of section 1.401(a)(9)-2 of the
proposed federal income tax regulations.
(b) Required beginning date. The entire interest of a participant
must be distributed or begin to be distributed no later than the
participant's required beginning date.
(c) Limits on Distribution Periods. As of the first distribution
calendar year, distributions, if not made in a single-sum, may only be made
over one of the following periods (or a combination thereof):
(i) the life of the participant,
(ii) the life of the participant and a designated
beneficiary,
(iii) a period certain not extending beyond the life
expectancy of the participant, or
(iv) a period certain not extending beyond the joint and
last survivor expectancy of the participant and a designated
beneficiary.
(d) (1) Determination of amount to be distributed each year. If
the participant's interest is to be distributed in other than a single sum,
the following minimum distribution rules shall apply on or after the
required beginning date.
(2) Individual account.
(a) If a participant's benefit is to be distributed over (1) a
period not extending beyond the life expectancy of the participant or the
joint life and last survivor expectancy of the participant and the
participant's designated beneficiary or (2) a period not extending beyond
the life expectancy of the designated beneficiary, the amount required to
be distributed for each calendar year beginning with distributions for the
first distribution calendar year, must at least equal the quotient obtained
by dividing the participant's benefit by the applicable life expectancy.
(b) For calendar years beginning before January 1, 1989, if the
participant's spouse is not the designated beneficiary, the method of
distribution selected must assure that at least 50% of the present value of
the amount available for distribution is paid within the life expectancy of
the participant.
(c) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with distributions for the
first distribution calendar year shall not be less than the quotient
obtained by dividing the participant's benefit by the lesser of (1) the
applicable life expectancy or (2) if the participant's spouse is not the
designated beneficiary, the applicable divisor determined from the table
set forth in Q&A-4 of section 1.401(a)(9)-2 of the proposed regulations.
Distributions after the death of the participant shall be distributed using
the applicable life expectancy in section 9.7(d)(2)(a) above as the
relevant divisor without regard to Proposed Regulations section
1.401(a)(9)-2.
(d) The minimum distribution required for the participant's first
distribution calendar year must be made on or before the participant's
required beginning date. The minimum distribution for other calendar years,
including the minimum distribution for the distribution calendar year in
which the employee's required beginning date occurs, must be made on or
before December 31 of that distribution calendar year.
(3) Other Forms.
(a) If the participant's benefit is distributed in the form of an
annuity purchased from an insurance company, distributions thereunder shall
be made in accordance with the requirements of Section 401(a)(9) of the
Code and the proposed regulations thereunder.
9.8 Required Beginning Date:
Distribution to any participant (whether active, retired or
otherwise terminated) must be made, or installment or annuity payments must
begin, no later than April 1 following the calendar year in which he
reaches age 70 1/2 (the required beginning date). See Section 10.4(c) for
definitions.
9.9 Transitional Rule:
(a) In General. This section will apply if the employer's
execution of the adoption agreement constitutes an amendment and
restatement of an existing plan that was in effect before 1984, and with
respect to which one or more participants had made the designations
described in this section. Notwithstanding the requirements of Sections
9.7, but subject to the spousal protection and small benefits provisions of
Section 9.5, distributions on behalf of any employee may be made provided
that each of the following requirements is satisfied (regardless of when
such distribution commences):
(i) the distribution is one which would not have
disqualified the plan under Code Section 401(a)(9) as in effect
before amendment by the Deficit Reduction Act of 1984;
(ii) the distribution is in accordance with a method of
distribution designated by the employee whose interest in the plan
is being distributed or, if the employee is deceased, by a
beneficiary of such employee;
(iii) such designation was in writing, was signed by the
employee or the beneficiary, and was made before January 1, 1984;
(iv) the employee had accrued a benefit under the plan as
of December 31, 1983; and
(v) the method of distribution designated by the employee
or the beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made, and in
the case of any distribution upon the employee's death, the
beneficiaries of the employee listed in order of priority.
(b) Distributions on Death. A distribution upon death will not be
covered by this transitional rule unless the designation contains the
information described in subsection (a) above with respect to the
distributions to be made upon the death of the employee.
(c) Presumption of Designation. For any distribution which
commenced before January 1, 1984, and continued after December 31, 1983,
the employee, or the beneficiary, to whom such distribution is being made
will be presumed to have designated the method of distribution under which
the distribution is being made if the method of distribution was specified
in writing and the distribution satisfies the requirement in subsections
(a)(i) and (v) above.
(d) Revocation of Designation. If such a designation is revoked,
any subsequent form of distribution must satisfy the requirements of Code
Section 401(a)(9) and the proposed regulations thereunder as in effect at
the time of distribution. If a designation is revoked subsequent to the
date distributions are required to begin, the plan must distribute by the
end of the calendar year following the calendar year in which the
revocation occurs the total amount not yet distributed which would have
been required to have been distributed to satisfy section 401(a)(9) of the
Code and the proposed regulations thereunder, but for the section 242(b)(2)
election. For calendar years beginning after December 31, 1988, such
distributions must meet the minimum distribution incidental benefit
requirements in section 1.401(a)(9)-2 of the proposed regulations. Any
changes in the original or a subsequent designation will be considered to
be a revocation of the designation. However, the mere substitution or
addition of another beneficiary (one not named in the designation) under
the designation will not be considered to be a revocation of the
designation, so long as such substitution or addition does not alter
directly or indirectly the period over which distributions are to be made
under the designation (for example, by altering the relevant measuring
life). In the case in which an amount is transferred or rolled over from
one plan to another plan, the rules in Q&A J-2 and Q&A J-3 in section
1.401(a)(9) of the proposed regulations shall apply.
9.10 Date Benefit Payments Begin:
Unless the participant elects otherwise (but subject to the
required distribution date rule in Section 9.7), distribution of benefits
under the plan will begin no later than the 60th day following the close of
the plan year in which the latest of the following events occurs:
(a) the termination of the participant's employment with the
employer;
(b) the participant attains age 65 or the participant's normal
retirement date, if earlier; (c) the tenth anniversary of the year in which
the participant began participation in the plan.
Notwithstanding the foregoing, the failure of a participant and
spouse to consent to a distribution while a benefit is immediately
distributable, within the meaning of section 9.3 of the plan, shall be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this section.
9.11 Annuities Nontransferable:
Any annuity contract distributed to a participant, spouse or
beneficiary under the plan must be nontransferable. The terms of any
annuity contract purchased and distributed by the plan to a participant or
spouse shall comply with the requirements of this Plan.
ARTICLE 10:
BENEFITS UPON DEATH
10.1 Benefits upon Death:
(a) Death During Employment or After Retirement.
(1) In General. If a participant dies while employed by
the employer or after retirement (including disability
retirement), his beneficiary will receive: (i) in the case of a
single sum payment, the total amount credited to the participant's
accounts at the date distribution is made; (ii) in the case of an
annuity contract, such total amount will be used to purchase such
annuity contract; or (iii) in the case of installment payments,
the first such installment will be based on such total amount, and
subsequent installments will be based on the total amount credited
to the participant's accounts at the date of each such
installment.
(2) Special Rule for Accounts Invested in Certain Annuity
Contracts. If all or any portion of the participant's account is
invested in an annuity contract, and the terms of the contract so
provide, the participant's beneficiary will receive a death
benefit equal to the sum of (a) the total amount credited to the
participant's accounts which is not invested in such annuity
contract as of the distribution date and (b) the greatest of: (i)
the total amount credited to the participant under the contract at
the date distribution is made; (ii) the excess of the total
contributions to the contract over total withdrawals from the
contract; or (iii) the highest amount credited to the contract as
of the end of the calendar year in which any fifth anniversary of
the initial acquisition of the contract occurred. This paragraph
(2) will become effective on the date that a contract providing
for such death benefit is acquired.
(b) Death After Other Termination of Employment. If a participant
dies after termination of employment for any reason other than retirement
(including disability retirement), his beneficiary will receive death
benefits determined as follows:
(i) If the participant died before forfeiture of the
nonvested portion of his accounts under Section 11.4, the vested
amount in the participant's accounts will be determined and the
balance will be forfeited immediately, death benefits will be
based upon the vested amounts remaining after such forfeiture, and
such amount will be applied as provided in subsection (a) above.
(ii) if the participant died after forfeiture of the nonvested
portion of his accounts under Section 11.4, death benefits will be
based upon the vested amounts remaining after such forfeiture, and
such amount (reduced by any prior payments to the participant
before his death) will be applied as provided in subsection (a)
above.
(c) Date of Distribution. The date of distribution to a
beneficiary (or the date of the first installment payment to the
beneficiary) will be the earliest practicable date after the valuation date
coincident with or next following either (i) the date when the plan
administrator has received such evidence of the participant's death and
such evidence of the beneficiary's (or beneficiaries') right to receive
such distribution as the plan administrator deems necessary, or (ii) such
later date as the beneficiary designates, subject to Section 10.4. However,
where the participant's spouse is the beneficiary under Section 10.5(a),
payment will be made within 90 days after the participant's death (unless
under the circumstances, 90 days is unreasonably short); however, the
spouse may elect to defer payment until after the valuation date next
following the participant's death.
10.2 Method of Payment:
Subject to the requirements of Section 10.3, death benefits will
be paid in one or a combination of the following methods:
(a) one or more payments within one taxable year of the
beneficiary;
(b) approximately equal monthly, quarterly, semi-annual or annual
installments over a period certain permitted under Section 10.4;
(c) applied toward the purchase of a fixed annuity contract
providing for payments over a period permitted under Section 10.4.
The method of payment will be elected by the beneficiary unless
the participant in his designation of beneficiary form designated the form
of payment.
10.3 Qualified Preretirement Survivor Annuity:
(a) Unless an optional form of benefit has been selected within
the election period pursuant to a qualified consent as defined in 9.5(c) if
a participant dies before the annuity starting date then the participant's
vested account balance shall be applied toward the purchase of an annuity
for the life of the surviving spouse. The surviving spouse may elect to
have such annuity distributed within a reasonable period after the
participant's death.
(b) Notice. In the case of a qualified preretirement survivor
annuity as described in section (a), the plan administrator shall provide
each participant within the applicable period for such participant a
written explanation of the qualified preretirement survivor annuity in such
terms and in such manner as would be comparable to the explanation provided
for meeting the requirements of section 9.5(b)(i) applicable to a qualified
joint and survivor annuity.
The applicable period for a participant is whichever of the
following periods ends last: (i) the period beginning with the first day of
the plan year in which the participant attains age 32 and ending with the
close of the plan year preceding the plan year in which the participant
attains age 35; (ii) a reasonable period ending after the individual
becomes a participant; (iii) a reasonable period ending after section
9.5(b)(ii) ceases to apply to the participant; (iv) a reasonable period
ending after this article first applies to the participant. Notwithstanding
the foregoing, notice must be provided within a reasonable period ending
after separation from service in the case of a participant who separates
from service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in (ii), (iii) and (iv)
is the end of the two-year period beginning one year prior to the date the
applicable event occurs, and ending one year after that date. In the case
of a participant who separates from service before the plan year in which
age 35 is attained, notice shall be provided within the two-year period
beginning one year prior to separation and ending one year after
separation. If such a participant thereafter returns to employment with the
employer, the applicable period for such participant shall be redetermined.
(c) Definitions. For purposes of Section 10.3, the following
definitions shall apply:
(1) Election period: The period which begins on the first
day of the plan year in which the participant attains age 35 and
ends on the date of the participant's death. If a participant
separates from service prior to the first day of the plan year in
which age 35 is attained, with respect to the account balance as
of the date of separation, the election period shall begin on the
date of separation.
Pre-age 35 waiver: A participant who will not yet attain
age 35 as of the end of any current plan year may make a special
qualified election to waive the qualified preretirement survivor
annuity for the period beginning on the date of such election and
ending on the first day of the plan year in which the participant
will attain age 35. Such election shall not be valid unless the
participant receives a written explanation of the qualified
preretirement survivor annuity in such terms as are comparable to
the explanation required under section 9.5(b)(i). Qualified
preretirement survivor annuity coverage will be automatically
reinstated as of the first day of the plan year in which the
participant attains age 35. Any new waiver on or after such date
shall be subject to the full requirements of this article.
(2) Spouse (surviving spouse): The spouse or surviving
spouse of the participant, provided that a former spouse will be
treated as the spouse or surviving spouse and a current spouse
will not be treated as the spouse or surviving spouse to the
extent provided under a qualified domestic relations order as
described in section 414(p) of the Code.
(3) Annuity starting date: The first day of the first
period for which an amount is paid as an annuity or any other
form.
(4) Vested account balance: The aggregate value of the
participant's vested account balances derived from employer and
employee contributions (including rollovers), whether vested
before or upon death, including the proceeds of insurance
contracts, if any, on the participant's life. The provisions of
this article shall apply to a participant who is vested in amounts
attributable to employer contributions, employee contributions (or
both) at the time of death or distribution.
10.4 Limitation on Death Benefit Distributions:
(a) In General. This section 10.4 governs payment of death
benefits where the form of payment is not covered by an election made
before January 1, 1984 by a participant or beneficiary as described in
Section 9.9.
(b) Death Distribution Provisions.
(1) Distribution beginning before death. If the
participant dies after distribution of his or her interest has
begun, the remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of
distribution being used prior to the participant's death.
(2) Distribution beginning after death. If the
participant dies before distribution of his or her interest begins
distribution of the participant's entire interest shall be
completed by December 31 of the calendar year containing the fifth
anniversary of the participant's death except to the extent that
an election is made to receive distributions in accordance with
(a) or (b) below:
(a) if any portion of the participant's interest
is payable to a designated beneficiary, distributions may be made
over the life or over a period certain not greater than the life
expectancy of the designated beneficiary commencing on or before
December 31 of the calendar year immediately following the
calendar year in which the participant died;
(b) if the designated beneficiary is the
participant's surviving spouse, the date distributions are
required to begin in accordance with (2)(a) above shall not be
earlier than the later of (1) December 31 of the calendar year
immediately following the calendar year in which the participant
died and (2) December 31 of the calendar year in which the
participant would have attained age 70 1/2.
If the participant has not made an election pursuant to
this section 10.4(b)(2) by the time of his or her death, the
participant's designated beneficiary must elect the method of
distribution no later than the earlier of (1) December 31 of the
calendar year in which distributions would be required to begin
under this section, or (2) December 31 of the calendar year in
which contains the fifth anniversary of the date of death of the
participant. If the participant has no designated beneficiary, or
if the designated beneficiary does not elect a method of
distribution, distribution of the participant's entire interest
must be completed by December 31 of the calendar year containing
the fifth anniversary of the participant's death.
(3) For purposes of Section 10.4(b)(2) above, if the surviving
spouse dies after the participant, but before payments to such spouse
begin, the provisions of section 10.4(b)(2) with the exception of paragraph
(b) therein, shall be applied as if the surviving spouse were the
participant.
(4) For purposes of this section 10.4(b), any amount paid to a
child of the participant will be treated as if it had been paid to the
surviving spouse if the amount becomes payable to the surviving spouse when
the child reaches the age of majority.
(5) For the purposes of this section 10.4(b), distribution of a
participant's interest is considered to begin on the participant's required
beginning date (or, if section 10.4(b)(3) above is applicable, the date
distribution is required to begin to the surviving spouse pursuant to
section 10.4(b)(2) above). If distribution in the form of an annuity
irrevocably commences to the participant before the required beginning
date, the date distribution is considered to begin is the date distribution
actually commences.
(c) Definitions for this section and section 9.7.
1) Applicable life expectancy. The life expectancy (or
joint and last survivor expectancy) as recalculated using the
attained age of the participant (or designated beneficiary as of
the participant's (or designated beneficiary's) birthday in the
applicable calendar year. If the adoption agreement so provides,
the participant may elect to either recalculate applicable life
expectancy or to determine applicable life expectancy in
accordance with the following method: the life expectancy (or
joint and last survivor expectancy) calculated using the attained
age of the participant (or designated beneficiary as of the
participant's (or designated beneficiary's) birthday in the
applicable calendar year, reduced by one for each calendar year
which has elapsed since the date life expectancy was first
calculated. The applicable calendar year shall be the first
distribution calendar year, and if life expectancy is being
recalculated such succeeding calendar year.
(2) Designated beneficiary. The individual(s) designated
as the beneficiary under the plan in accordance with section
401(a)(9) and the proposed regulations thereunder.
(3) Distribution calendar year. A calendar year for which
a minimum distribution is required. For distributions beginning
before the participant's death, the first distribution calendar
year is the calendar year immediately preceding the calendar year
which contains the participant's required beginning date. For
distributions beginning after the participant's death, the first
distribution calendar year is the calendar year in which
distributions are required to begin pursuant to section 10.4(b)
above.
(4) Life expectancy. Life expectancy and joint and last
survivor expectancy are computed by use of the expected return
multiples in Tables V and VI of section 1.72-9 of the federal
income tax regulations.
Unless otherwise elected by the participant (or spouse, in the
case of distributions described in section 10.4(b)(2) above) by the time
distributions are required to begin, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the
participant (or spouse) and shall apply to all subsequent years. The life
expectancy of a nonspouse beneficiary may not be recalculated.
(5) Participant's benefit.
(a) The account balance as of the last valuation date in the
calendar year immediately preceding the distribution calendar year
(valuation calendar year) increased by the amount of any contributions or
forfeitures allocated to the account balance as of dates in the valuation
calendar year after the valuation date and decreased by distributions made
in the valuation calendar year after the valuation date.
(b) Exception for second distribution calendar year. For purposes
of paragraph (a) above, if any portion of the minimum distribution for the
first distribution calendar year is made in the second distribution
calendar year on or before the required beginning date, the amount of the
minimum distribution made in the second distribution calendar year shall be
treated as if it had been made in the immediately preceding distribution
calendar year.
(6) Required beginning date.
(a) General rule. The required beginning date of a participant is
the first day of April of the calendar year following the calendar year in
which the participant attains age 70 1/2.
(b) Transitional rules. The required beginning date of a
participant who attains age 70 1/2 before January 1, 1988, shall be
determined in accordance with (1) or (2) below:
(1) Non-5-percent owners. The required beginning
date of a participant who is not a 5-percent owner is the
first day of April of the calendar year following the
calendar year in which the later of retirement or
attainment of age 70 1/2 occurs.
(2) 5-percent owners. The required beginning
date of a participant who is a 5-percent owner during any
year beginning after December 31, 1979, is the first day
of April following the later of:
(i) the calendar year in which the participant attains age
70 1/2, or
(iii) the earlier of the calendar year with or within which
ends the plan year in which the participant becomes a 5-percent
owner, or the calendar year in which the participant retires.
The required beginning date of a participant who is not a
5-percent owner who attains age 70 1/2 during 1988 and who has not
retired as of January 1, 1989, is April 1, 1990.
(3) 5-percent owner. A participant is treated as a 5-percent owner
for purposes of this section if such participant is a 5-percent owner as
defined in section 416(i) of the Code (determined in accordance with
section 416 but without regard to whether the plan is top-heavy) at any
time during the plan year ending with or within the calendar year in which
such owner attains age 66 1/2 or any subsequent plan year.
(c) Once distributions have begun to a 5-percent owner under
this section, they must continue to be distributed, even if
the participant ceases to be a 5-percent owner in a
subsequent year.
10.5 Beneficiary:
(a) Designation of Beneficiary and Method of Payment. A
participant may designate one or more beneficiaries on a form or other
instrument filed with, and acceptable to, the plan administrator, and may
revoke or change such designation in like manner at any time. The
beneficiary may elect the form of payment under Section 10.2 (subject to
the requirements of Section 10.3); however, the participant may in the
designation of beneficiary form or other instrument specify the form of
payment (subject to Section 10.3) and death benefits will be paid in such
form. If a beneficiary is permitted to elect the method of payment of a
benefit payable to him, he may designate one or more beneficiaries to
receive any amount remaining undistributed at his death.
Notwithstanding the preceding paragraph, in an exempt profit
sharing plan or 401(k) plan as described in section 9.5(d), the sole
beneficiary of a married participant is the participant's spouse, unless
the spouse consents or has consented to the designation of another
beneficiary in a qualified consent (as defined in Section 9.5(c)).
(b) Payment in Absence of Designation of Beneficiary. Any portion
of a participant's death benefit which is not disposed of by a designation
of beneficiary, for any reason whatsoever, will be paid to the
participant's spouse if the spouse survives him, otherwise to the
participant's estate in a lump sum.
(c) Payment Under Prior Designation of Beneficiary. The plan
administrator will be fully protected in directing payment in accordance
with a prior designation of beneficiary if such direction (i) is given
before receipt by the plan administrator of a later designation or (ii) is
due to the inability of the plan administrator to verify the authenticity
of a later designation.
10.6 Safe Harbor Rules:
(a) This section shall apply to a participant in a profit-sharing
plan and 401(k) plan, and to any distribution, made on or after the first
day of the first plan year beginning after December 31, 1988, from or under
a separate account attributable solely to accumulated deductible employee
contributions, as defined in section 72(o)(5)(B) of the Code, and
maintained on behalf of a participant in a money purchase pension plan,
(including a target benefit plan) if the following conditions are
satisfied:
(1) the participant does not or cannot elect payments in
the form of a life annuity; and
(2) on the death of a participant, the participant's
vested account balance will be paid to the participant's surviving spouse,
but if there is no surviving spouse, or if the surviving spouse has
consented in a manner conforming to a qualified election, then to the
participant's designated beneficiary. The surviving spouse may elect to
have distribution of the vested account balance commence within the 90-day
period following the date of the participant's death. The account balance
shall be adjusted for gains or losses occurring after the participant's
death in accordance with the provisions of the plan governing the
adjustment of account balances for other types of distributions. This
section 10.6 shall not be operative with respect to a participant in a
profit-sharing plan or 401(k) plan if the plan is a direct or indirect
transferee of a defined benefit plan, money purchase plan, a target benefit
plan, stock bonus, or profit-sharing plan which is subject to the survivor
annuity requirements of section 401(a)(11) and section 417 of the Code. If
this section 10.6 is operative, then the provisions of section 10.3 shall
be inoperative.
(b) The participant may waive the spousal death benefit described
in this section at any time provided that no such waiver shall be effective
unless it satisfies the conditions of section 9.5(c) that would apply to
the participant's waiver of the qualified preretirement survivor annuity.
(c) For purposes of this section 10.6, vested account balance
shall mean, in the case of a money purchase pension plan or a target
benefit plan, the participant's separate account balance attributable
solely to accumulated deductible employee contributions within the meaning
of section 72(o)(5)(B) of the Code. In the case of a profit-sharing plan,
vested account balance shall have the same meaning as provided in section
10.3(c)(4)
10.7 Transitional Rules:
(a) Any living participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed by the
previous sections of this article must be given the opportunity to elect to
have the prior sections of this article and section 9.5 apply if such
participant is credited with at least one hour of service under this plan
or a predecessor plan in a plan year beginning on or after January 1, 1976,
and such participant had at least 10 years of vesting service when he or
she separated from service.
(b) Any living participant not receiving benefits on August 23,
1984, who was credited with at least one hour of service under this plan or
a predecessor plan on or after September 2, 1974, and who is not otherwise
credited with any service in a plan year beginning on or after January 1,
1976, must be given the opportunity to have his or her benefits paid in
accordance with section (d) of 10.7.
(c) The respective opportunities to elect (as described in
sections (a) and (b) above) must be afforded to the appropriate
participants during the period commencing on August 23, 1984, and ending on
the date benefits would otherwise commence to said participants.
(d) Any participant who has elected pursuant to section (b) of
this article and any participant who does not elect under section (a) or
who meets the requirements of section (a) except that such participant does
not have at least 10 years of vesting service when he or she separates from
service, shall have his or her benefits distributed in accordance with all
of the following requirements if benefits would have been payable in the
form of a life annuity:
(i) Automatic joint and survivor annuity. If benefits in
the form of a life annuity become payable to a married participant
who:
(1) begins to receive payments under the plan on
or after normal retirement age; or
(2) dies on or after normal retirement age while
still working for the employer; or
(3) begins to receive payments on or after the
qualified early retirement age; or
(4) separates from service on or after attaining
normal retirement age (or the qualified early retirement
age) and after satisfying the eligibility requirements
for the payment of benefits under the plan and thereafter
dies before beginning to receive such benefits; then such
benefits will be received under this plan in the form of
a qualified joint and survivor annuity, unless the
participant has elected otherwise during the election
period. The election period must begin at least 6 months
before the participant attains qualified early retirement
age and end not more than 90 days before the commencement
of benefits. Any election hereunder will be in writing
and may be changed by the participant at any time.
(ii) Election of early survivor annuity. A participant
who is employed after attaining the qualified early retirement age
will be given the opportunity to elect, during the election
period, to have a survivor annuity payable on death. If the
participant elects the survivor annuity, payments under such
annuity must not be less than the payments which would have been
made to the spouse under the qualified joint and survivor annuity
if the participant had retired on the day before his or her death.
Any election under this provision will be in writing and may be
changed by the participant at any time. The election period begins
on the later of (1) the 90th day before the participant attains
the qualified early retirement age, or (2) the date on which
participation begins, and ends on the date the participant
terminates employment.
(iii) For purposes of this section (d):
(a) Qualified early retirement age is the latest
of:
(i) the earliest date, under the plan,
on which the participant may elect to receive
retirement benefits,
(ii) the first day of the 120th month
beginning before the participant reaches normal
retirement age, or
(iii) the date the participant begins
participation.
(b) Qualified joint and survivor annuity is an
annuity for the life of the participant with a survivor
annuity for the life of the spouse as described in plan
section 9.5(a).
ARTICLE 11:
TERMINATION OF EMPLOYMENT AND VESTED INTEREST
11.1 Vested Interest in Accrued Benefit:
(a) Vesting Schedule. A participant will have a vested and
nonforfeitable interest in that percentage of his employer contributions
account or matching contributions account determined under the vesting
schedule specified in the adoption agreement.
(b) Full Vesting. Regardless of a participant's vesting under the
vesting schedule, the participant becomes fully vested in his employer
contributions account or matching contributions account upon the earlier of
(i) his attaining his normal retirement date while he is still employed by
the employer; (ii) his attaining his early retirement date as specified in
the adoption agreement while he is still employed by the employer; or (iii)
upon disability retirement under Section 9.2, or upon his death while he is
still an employee.
11.2 Changes in Vesting Schedule:
After the adoption of any amendment that changes the vesting
schedule or that directly or indirectly affects the computation of a
participant's vested percentage, or any shift in or out of a vesting
schedule because of a plan's top-heavy status, any participant having three
or more years of service will have his vested percentage determined under
whichever schedule gives him the higher vested percentage.
11.3 Payment of Vested Interest:
A participant's vested interest in his accrued benefit will be
paid to him, or payments will begin, on a date elected by the participant
and will be paid to him following his separation from service in one or
more of the methods described in Section 9.4 as elected by the participant.
The participant's election as to either time or form of payment will be
subject to the rules, other than sections 9.1, 9.2, and 9.3 of Article 9
11.4 Forfeiture of Non-Vested Interest:
Except as otherwise provided by the Adoption Agreement, a
participant will forfeit the non-vested portion of his account balance on
the earlier of the date on which he (i) incurs a period of five consecutive
one-year breaks in service (or, if the employer's plan counts service for
vesting purposes using the elapsed time rules of Article 3B, a period of
severance of 60 months in length) or (ii) receives a distribution of his
vested account balance. Forfeitures will first be applied to restore the
non-vested portion of the account of a participant described in the
preceding sentence and then as specified in the adoption agreement.
11.5 Protections Upon Resumption of Employment:
A former participant who returns to employment with the employer
after a period of one or more one-year breaks in service will nevertheless
receive credit for all his prior years of service for vesting purposes.
Unless otherwise elected in the Adoption Agreement, with respect to a
former participant who returns to employment before five consecutive
one-year breaks in service (or, if the employer's plan counts service for
vesting purposes using the elapsed time rules of Article 3B, a period of
severance of 60 months in length), and such former participant received a
distribution of his entire vested interest prior to his reemployment, the
employer shall immediately reinstate such participant's forfeited account
balance. If elected in the Adoption Agreement, the employer may elect to
reinstate the forfeited account balance of a participant described in the
preceding sentence only if he repays the full amount distributed to him
before the earlier of (1) five years after the first date on which such
participant is subsequently reemployed by the Employer or (2) the close of
the first period of five consecutive one-year breaks in service (a period
of severance of 60 months, in the event the elapsed time method is being
applied) commencing after the distribution. In the event such participant
does repay the full amount distributed to him, the undistributed portion of
the participant's account balance must be restored in full, unadjusted by
any gains or losses occurring subsequent to the date of his termination.
The source of such reinstatement shall first be any forfeitures occurring
during the year. If such source is insufficient, then the Employer shall
contribute an amount which is sufficient to restore any such forfeited
account.
11.6 Calculating Vested Interest After Account Distribution:
Where a participant's employer contributions account or matching
contributions account is charged with a withdrawal or distribution at a
time when he is not fully vested in such account, the remaining balance of
the participant in such account will be credited to a separate account
within the participant's employer contributions account or matching
contributions account, or accounting records will be maintained in a manner
which has the same effect as establishing a separate account. The
participant's vested interest in any such separate account at any
subsequent time will be equal to an amount ("Y") determined by the formula:
Y = P(AB + D) - D where P is his vested percentage at such time; AB is the
account balance in such separate account at such time; and D is the amount
of the withdrawal or distribution. The term remaining balance as used in
this section means a participant's interest in his employer contributions
account or matching distribution remaining after a withdrawal or
distribution of a portion or all of his vested interest therein.
ARTICLE 12:
IN-SERVICE DISTRIBUTIONS AND WITHDRAWALS; LOANS
12.1 Withdrawal of After-Tax Contributions:
(a) Amount. Except as otherwise provided in this section or in the
adoption agreement, a participant whose employment has not terminated may
upon reasonable advance notice to the plan administrator (and spousal
consent, if applicable) withdraw all or any portion of his after-tax
employee contributions account to the extent not previously withdrawn.
(b) Payment and Plan Administrator Rules. Any withdrawal under
this section will be paid to the participant as soon as practicable after
the valuation date next following the plan administrator's receipt of the
participant's withdrawal request; however the plan administrator may
approve an earlier payment of some or all of the amount to be withdrawn if
such earlier payment would not be detrimental to the interests of the other
participants. If elected in the adoption agreement, notwithstanding
Sections 5.1 and 6.1, a participant who makes an in-service withdrawal
under this section may not make a 401(k) savings contribution or after-tax
employee contribution for a period of up to 12 months following the date of
such in-service withdrawal. Notwithstanding the foregoing provisions of
this section, a participant who makes an in-service withdrawal of after-tax
employee contributions that are matchable savings contributions may not
make after-tax employee contributions for a period of at least 6 months
following the date of such in-service withdrawal. However, the employer may
elect in the adoption agreement to limit the suspension of after-tax
employee contributions to in-service withdrawals made prior to the date
that the participant attains age 59 1/2. The plan administrator or the
sponsor may establish reasonable minimum or maximum withdrawal amounts and
reasonable limitations on the frequency or number of withdrawals during a
plan year. No forfeitures will occur solely as a result of an employee's
making of an in-service withdrawal.
(c) Separate Contract. For purposes of Code Section 72, a
participant's after-tax employee contributions account attributable to
post-1986 after-tax employee contributions will be accounted for separately
and will be treated as a separate contract under the plan for income tax
purposes.
(d) Special Rules. If the employer's execution of the adoption
agreement constitutes the amendment and restatement of an existing plan to
which one or more participants made after-tax contributions before 1987,
such contributions will be accounted for separately, and for federal income
tax purposes any withdrawals or distributions from the plan will be deemed
to be a withdrawal or distribution of such contributions until they are
exhausted.
12.2 In-Service Withdrawals from Profit Sharing Plans:
(a) In General. This section applies only if the employer's plan
is a profit sharing plan (other than a 401(k) plan). To the extent provided
in the adoption agreement, a participant whose employment has not
terminated may make withdrawals from his accounts. The adoption agreement
may limit such in-service withdrawals to financial hardship situations, or,
as long as the requirements set forth in section 12.2(c) are met, may
permit in-service withdrawals for reasons other than financial hardship.
Notwithstanding the preceding paragraph, an in-service withdrawal
will be permitted under the following circumstances: (i) termination of the
plan without the establishment of a successor plan; (ii) the sale or other
disposition to an unrelated entity of at least 85 percent of the assets
used by the employer in a trade or business, provided the employee
continues in employment with the purchaser of the assets; or (iii) the sale
or other disposition to an unrelated entity of a subsidiary of the
employer, provided the employee continues in employment with the
subsidiary.
(b) Financial Hardship. For purposes of this section, financial
hardship means any of the circumstances specified in Section 12.3(c). The
request for a hardship withdrawal under this section will be in writing on
such form as the plan administrator may prescribe and will be filed with
the plan administrator. The plan administrator may require a participant to
submit such information or other evidence as is necessary to make the
determination of financial hardship. The plan administrator may rely upon
the accuracy of any information or materials submitted by the participant.
The plan administrator will determine the existence of a financial hardship
and the amount necessary to meet such financial hardship, and any such
determination will be binding on the participant.
(c) Amount. A participant may withdraw the amount he specifies,
provided that a withdrawal may not exceed the smallest of whichever the
following limitations applies:
(i) the participant's total vested account balances;
(ii) in the case of a hardship withdrawal, the amount
determined by the plan administrator as necessary to meet the
participant's financial hardship; or
(iii) in the case of a non-hardship withdrawal, the
amount attributable to employer contributions which have been on
deposit in the plan for at least two years; provided that this
limitation will apply only to employees who have been participants
in the plan for less than five years. The limitation in this
Section 12.2(c)(iii) will not apply to withdrawals after a
participant has attained age 59-1/2, or if such participant has
attained early or normal retirement age, if such withdrawals are
permitted in the adoption agreement.
(d) Spousal Consent to In-Service Withdrawals. Unless the plan is
an exempt profit sharing plan (as defined in Section 9.5(d)), a married
participant's spouse must consent to an in-service withdrawal under this
section in a qualified consent meeting the requirements of Section 9.5(c).
(d) Payment and Plan Administrator Rules. Provisions governing
the payment of a withdrawal under this section and plan
administrator rules for such withdrawals are found at
Section 12.1(b).
12.3 In-Service Withdrawals from 401(k) plans:
(a) In General. This section applies only if the employer's plan
is a 401(k) plan. Except as otherwise provided in the adoption agreement, a
participant whose employment has not terminated may make withdrawals from
his accounts subject to the limitations of this section and the adoption
agreement.
(b) Availability and Amount. The availability and amount of
in-service withdrawals will be subject to the restrictions specified below.
(i) 401(k) Savings Contributions Account. A participant
may make in-service withdrawals from his 401(k) savings
contributions account in the event of financial hardship. The
maximum withdrawal from the participant's 401(k) savings
contributions account is the smaller of the amount of his 401(k)
savings contributions, with-out earnings or investment gains
(except any income allocable to 401(k) savings contributions as of
December 31, 1988), or the amount needed to alleviate his
financial hardship.
If elected in the adoption agreement, notwithstanding
sections 5.1 and 6.1, a participant who makes an in-service
withdrawal under this section may not make a 401(k) savings
contribution or after-tax employee contribution for a period of up
to 12 months following such in-service withdrawal. However, the
employer may elect in the adoption agreement to limit the
suspension of employer contributions or matching contributions to
in-service withdrawals made prior to the date that the participant
attains age 59 1/2.
(ii) Employer Contributions and Matching Contributions
Accounts. To the extent provided in the adoption agreement, a
participant may make in-service withdrawals from his employer
contributions account (employer supplemental profit-sharing
contributions) and/or matching contributions account. The adoption
agreement may limit such in-service withdrawals to financial
hardship situations, or may permit in-service withdrawals for
reasons other than financial hardship; there may be different
rules for withdrawals from employer contributions accounts and
matching contributions accounts. The maximum in-service withdrawal
from a participant's employer contributions account or matching
contributions account is determined under the same limitations set
forth in Section 12.2(c).
(c) Financial Hardship.
(i) An in-service withdrawal will be on account of
financial hardship only if the participant has an immediate and
heavy financial need and the withdrawal is necessary to meet the
need.
(ii) A withdrawal will be deemed to be on account of an
immediate and heavy need if it is occasioned by (A) a deductible
medical expense (within the meaning of Code Section 213(d))
incurred by or necessary for the participant or his spouse,
children or dependent; (B) purchase of the participant's principal
residence (not including mortgage payments); (C) tuition, room and
board and related educational fees for the next 12 months of
post-secondary education for the participant or his spouse, child
or dependent; or (D) rent or mortgage payments to prevent the
participant's eviction from or the foreclosure of the mortgage on
his principal residence.
(iii) A withdrawal will be deemed necessary to satisfy
the participant's financial needs if the participant has made all
non-hardship withdrawals and obtained all nontaxable loans
available under all of the employer's qualified retirement plans,
unless obtaining all nontaxable loans under such plans would
result in an increase in the participant's immediate and heavy
need; and each such other plan which provides for 401(k) savings
contribution contains restrictions similar to those in Section
5.2(b).
(iv) A participant must establish to the plan
administrator's satisfaction both that the participant has an
immediate and heavy financial need and that the withdrawal is
necessary to meet the need (including amounts necessary to pay any
federal, state or local income taxes or penalties reasonably
anticipated to result from the distribution), as provided in
subsections (ii) and (iii) above.
A participant's application for a hardship withdrawal
will be in writing on such form and containing such information
(or other evidence or materials establishing the participant's
financial hardship) as the plan administrator may require. The
plan administrator's determination of the existence of and the
amount needed to meet a financial hardship will be binding on the
participant.
(d) Notwithstanding subsection (b) above,
(i) to the extent provided in the adoption agreement, a
participant may make in-service withdrawals from his 401(k) plan
accounts after he has reached age 59-1/2; and
(ii) a participant may make in-service withdrawals from
his 401(k) accounts under the circumstances described in the
second paragraph of 12.2(a).
(e) Miscellaneous. The spousal consent requirements are as
specified in Section 12.2(d), and the payment procedures and plan
administrator rules for withdrawals are as specified in Section 12.1(b).
12.4 In-Service Withdrawals from Money Purchase Plan:
Except as otherwise provided in this section, in-service
withdrawals are not permitted from employer contribution accounts under a
money purchase plan. If elected in the Adoption Agreement, in-service
withdrawals of employer contributions may be made to a participant who has
attained early or normal retirement age under the Plan.
12.5 Loans:
If the Metropolitan Life Insurance Company MetLife(R) 401(k)
adoption agreement so provides, loans will be available from the plan. If
loans are available, the plan administrator will establish guidelines and
procedures for loans from the plan to participants in specific instances,
which guidelines may include limitations on the number of loans that may be
outstanding to a participant at any time or on the frequency of loans. Each
loan must conform to the loan guidelines and procedures. The guidelines and
procedures must be formulated and administered so that they conform with
ERISA Section 408(b)(1) and ERISA Reg. ss.2550.408-1(d). In addition, the
following requirements of this Section must be satisfied.
(a) Loans are available to all active employees who are
participants and to all other participants and beneficiaries who are
parties in interest (as defined in Section 3(14) of ERISA) on a reasonably
equivalent basis. However, no loan will be made to a participant who is an
owner-employee or a shareholder employee unless such person has at his
expense has obtained an administrative exemption from ERISA's prohibited
transaction rules from the Department of Labor with respect to such loan
(unless the Department of Labor has issued a prohibited transaction class
exemption covering such loans). Any loan will be evidenced by a promissory
note or other writing permitted under applicable law signed by the
participant.
(b) Loans shall not be made available to highly compensated
employees (as defined in section 5.8 of the Plan) in an amount greater than
the amount made available to other employees.
(c) Loans are adequately secured and bear a reasonable rate of
interest. However, no more than 50% of a participant's nonforfeitable
accrued benefit may be pledged as collateral.
Each loan hereunder will be a participant-directed investment for
the benefit of the participant requesting such loan; accordingly, any
default in the repayment of principal or interest of any loan hereunder
will reduce the amount available for distribution to such participant (or
his beneficiary). Thus, any loan hereunder will be effectively and
adequately secured by the participant's accounts.
(d) (i) No participant loan exceeds the amount of 50% of the
participant's vested account balances (excluding his qualified voluntary
employee contributions account, if any). Also, the maximum loan (including
outstanding loans) will depend upon the vested amount in a participant's
accounts (excluding his qualified voluntary contributions account, if any)
as of the valuation date immediately preceding the date when the loan is
made, determined under the following table:
Vested Amount in Accounts Maximum Loan
------------------------- ------------
0-$100,000 50% of vested accounts
Over $100,000 $50,000
The $50,000 maximum loan limit in the above table will be
reduced by treating the highest outstanding loan balance during
the one-year period ending on the date of the current loan as
being outstanding on such date.
(ii) Except as provided in the next sentence, the maximum
term of a loan will be five years. If a participant requests a
loan for the acquisition of the principal residence of the
participant, the maximum repayment period will be determined by
reference to bank loans for the same purpose.
(e) Except for a profit sharing plan or a 401(k) plan (which are
exempt from the spousal consent requirements - see Section 9.5(d)), a
participant obtains the consent of his or her spouse, if any, within the 90
day period before the time the account balance is used as security for the
loan. A new consent is required if the account balance is used as security
for any increase in the loan balance, for renegotiation, extension,
renewal, or other revision of the loan. However, spousal consent is not
necessary if the total amount of loans outstanding hereunder does not
exceed $3,500. The consent will comply with the requirements of Section
9.5(c). The consent of any subsequent spouse will not be necessary in order
to foreclose the plan's security interest in the participant's account
balance if the participant's then spouse validly consented to the original
use of the account balance as security (or if the participant was unmarried
at such time).
If a valid spousal consent has been obtained in accordance with
this section, then, notwithstanding any other provision of this plan, the
portion of the participant's vested account balance used as a security
interest held by the plan by reason of a loan outstanding to the
participant shall be taken into account for purposes of determining the
amount of the account balance payable at the time of death or distribution,
but only if the reduction is used as repayment of the loan. If less than
100% of the participant's vested account balance (determined without regard
to the preceding sentence) is payable to the surviving spouse, then the
account balance shall be adjusted by first reducing the vested account
balance by the amount of the security used as repayment of the loan, and
then determining the benefit payable to the surviving spouse.
(f) The plan administrator may require a participant to agree to
repay the principal and interest of a loan through regular payroll
deduction payments from the participant's compensation. The plan
administrator may establish back-up repayment procedures for participants
who do not make payroll deduction repayment; except as may otherwise be
permitted under Treasury regulations, any such back-up procedures will
provide for substantially level amortization payments made quarterly or
more frequently. If a participant defaults on any payment of interest or
principal of a loan hereunder or defaults upon any other obligation
relating to such loan, the plan administrator may take (or direct the
trustee to take) such action or actions as it determines to be necessary to
protect the interest of the plan. Such actions may include commencing legal
proceedings against the participant, or foreclosing on any security
interest in the participant's account or other security given in connection
with a loan hereunder. In the event of a default, foreclosure on the
participant's note and attachment of one or more of the participant's
accounts given as security will not occur until a distributable event
occurs in the plan. An assignment or pledge of any portion of the
participant's interest in the plan and a loan, pledge, or assignment with
respect to any insurance contract purchased under the plan, will be treated
as a loan under this section.
(g) In the case of any participant with one or more loans
outstanding hereunder, the amount available for distribution to such
participant (or his beneficiary) will consist of the participant's vested
account balance(s) (not including the outstanding principal and accrued but
unpaid interest on such loans), plus the notes representing such loans.
ARTICLE 13:
MAXIMUM LIMITATIONS ON ALLOCATIONS
13.1 Section 415 Definitions: For purposes of this Article 13, the
following definitions apply:
(a) Annual additions means the sum of the following amounts
allocated on behalf of a participant for a limitation year:
(i) all employer contributions (including compensation
reduction amounts under any profit-sharing plan with a qualified
compensation reduction feature under Code Section 401(k)),
(ii) all forfeitures,
(iii) all after-tax employee contributions. For this
purpose, any excess amount applied under Section 13.7 to reduce
employer contributions will be considered annual additions for
such limitation year;
(iv) Amounts allocated after March 31, 1984, to an
individual medical account (as defined in Code Section 415(1)(2))
which is part of a pension or annuity plan maintained by the
employer 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
Code Section 419A(d)(3) under a welfare benefit fund (as defined
in Code Section 419(e)) maintained by the employer, are treated as
annual additions to a defined contribution plan; and
(iv) allocations under a simplified employee pension.
(b) Compensation. As elected by the employer in the adoption
agreement compensation shall mean all of the participant's compensation as
defined below. Nevertheless, elective deferrals will not be included for
Code section 415 compensation or the top-heavy minimum at plan section
14.3(b):
(1) Information required to be reported under sections
6041, 6051, and 6052 of the Code. (Wages, Tips and Other
Compensation as reported on Form W-2) Compensation is defined as
wages as defined in section 3401(a) and all other payments of
compensation to an employee by the employer (in the course of the
employer's trade or business) for which the employer is required
to furnish and employee a written statement under sections
6041(d), 6051(a)(3) and 6052 of the Code. Compensation must be
determined without regard to any rules under section 3401(a) that
limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the
exception for agricultural labor in section 3401(a)(2)).
(2) Section 3401(a) wages. Compensation is defined as
wages within the meaning of section 3401(a) for the purposes of
income tax withholding at the source but determined without regard
to any rules that limit the remuneration included in wages based
on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in section
3401(a)(2)).
(3) 415 safe-harbor compensation. Compensation is defined
as wages, salaries, and fees for professional services and other
amounts received (without regard to whether or not an amount is
paid in cash) for personal services actually rendered in the
course of employment with the employer maintaining the plan to the
extent that the amounts are includable in gross income (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 (as described in Reg. Sec. 1.62-2(c))), and excluding the
following:
(i) 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;
(ii) 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;
(iii) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(iv) other amounts which received special tax benefits or
contributions made by the employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity described
in Section 403(b) of the Code (whether or not the amounts are
actually excludable from the gross income of the employee).
(4) For any self-employed individual compensation will
mean earned income.
(5) For limitation years beginning after December 31,
1991, for purposes of applying the limitations of this article,
compensation for a limitation year is the compensation actually
paid or includible in gross income during such year.
Notwithstanding the preceding sentence, compensation for
a participant who is permanently and totally disabled (as defined
in Section 22(e)(3) of the Code) is the compensation such
participant would have received for the limitation year if the
participant had been paid at the rate of compensation paid
immediately before becoming permanently and totally disabled; such
imputed compensation for the disabled participant may be taken
into account only if the participant is not a highly compensated
employee (as defined in Section 5.8 of the Plan) and contributions
made on behalf of such participant are nonforfeitable when made.
(c) 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)), all trades or businesses
(whether or not incorporated) which are under common control as defined in
Section 414(c) of the Code as modified by Section 415(h)), all affiliated
service groups (as defined in Section 414(m) of the Code) of which the
adopting employer is a part, and all entities aggregated with the employer
under Code Section 414(o).
(d) Defined benefit fraction for any year means a fraction:
(i) whose numerator 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
(ii) whose 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. 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 for all limitation years beginning
before January 1, 1987.
(e) Defined contribution fraction for any year means a fraction:
(i) whose numerator is the sum of the annual additions to
the participant's account under all the defined contribution plans
(whether or not terminated) maintained by the employer for the
current and all prior limitation years (including the annual
additions attributable to the participant's nondeductible employee
contributions to all defined benefit plans, whether or not
terminated, maintained by the employer and the annual additions
attributable to all welfare benefit funds (as defined in Section
419(e) of the Code), individual medical accounts as defined in
section 415(l)(2) of the Code and simplified employee pensions as
defined in section 408(k) of the Code, and
(ii) whose denominator is the sum of the maximum
aggregate amounts for the current and all prior limitation years
of service with the employer (regardless of whether a defined
contribution plan was maintained by the employer). The maximum
aggregate amount in any limitation year is the lesser of (A) 1.25
multiplied by the dollar limitation determined under sections
415(b) and (d) of the Code, or (B) 35% of the participant's
compensation for such year.
If the employee was a participant as of the end of the
first day of the first limitation year beginning after December
31, 1986, in one or more defined contribution plans maintained by
the employer which were in existence on May 6, 1986, the numerator
of the defined contribution fraction will be adjusted if the sum
of the defined contribution 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 (i) the
excess of the sum of the fractions over 1.0 times (ii) the
denominator of the defined contribution fraction will be
permanently subtracted from the numerator of the defined
contribution 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 beginning before January
1, 1987 shall not be recomputed to treat all employee
contributions as annual additions.
(f) Excess amount means the excess of the participant's annual
additions for the limitation year over the maximum permissible amount.
(g) Highest average compensation means the average compensation
for the three consecutive years of plan service with the employer that
produce the highest average.
(h) Limitation year means the calendar year or another
12-consecutive month period elected by the employer in the adoption
agreement. All qualified plans of 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 (or any other 12-consecutive month
period adopted for all plans of the employer pursuant to a written
resolution adopted by the employer).
(i) Master or prototype plan means a plan the form of which is the
subject of a favorable opinion letter from the Internal Revenue Service.
(j) Maximum permissible amount. The maximum annual addition that
may be contributed or allocated to a participant's account under the plan
for any limitation year shall not exceed the lesser of (i) the defined
contribution dollar limitation or (ii) 25 percent of the participant's
compensation for the limitation year. The compensation limitation referred
to in (ii) shall not apply to any contribution for medical benefits (within
the meaning of section 401(h) or section 419A(f)(2) of the Code) which is
otherwise treated as an annual addition under section 415(l)(1) or
419A(d)(2) of the Code. 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 for the short limitation year will
not exceed the amount set forth in clause (i) of the preceding sentence
multiplied by a fraction whose numerator is the number of months in the
short limitation year and whose denominator is 12.
(k) Projected annual benefit means the annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity if such
benefit is expressed in a form other than a straight life annuity or
qualified joint and survivor annuity) to which the participant would be
entitled under the terms of the plan assuming his employment continues
until normal retirement age under the plan (or current age, if later), and
his compensation for the current limitation year and all other relevant
factors used to determine benefits under the plan will remain constant for
all future limitation years.
(l) Defined contribution dollar limitation means $30,000 or if
greater, one-fourth of the defined benefit dollar limitation set forth in
section 415(b)(1) of the Code as in effect for the limitation year.
13.2 No Participation in Other Qualified Plans:
If the participant does not participate in, and has never
participated in another qualified plan or a welfare benefit fund, as
defined in Code Section 419(e), maintained by the employer, an individual
medical account, as defined in section 415(1)(2) of the Code, or a
simplified employee pension, as defined in section 408(k) of the Code,
maintained by the employer, which provides an annual addition as defined in
section 13.1(a), the amount of annual additions which may be allocated
under this plan on a participant's behalf for a limitation year may not
exceed the lesser of the maximum permissible amount or any other limitation
contained in this plan. If the 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 under Section
13.7 so that the annual additions for the limitation year will equal the
maximum permissible amount.
13.3 Participation in Other Qualified Master or Prototype Defined
Contribution Plans:
If, in addition to this plan, the participant is covered under any
other qualified master or prototype defined contribution plan maintained by
the employer, a welfare benefit fund (as defined in Code Section 419(e)) or
a simplified employee pension, as defined in section 408(k) of the Code,
maintained by the employer or an individual medical account as defined in
Code Section 415(l)(2), maintained by the employer which provides an annual
addition as defined in Section 13.1 during any limitation year, the amount
of annual additions which may be credited under this plan on a
participant's behalf for a limitation year may not exceed the maximum
permissible amount, reduced by the sum of any annual additions allocated to
the participant's accounts for the same limitation year under such other
defined contribution plans and welfare benefit funds. If the annual
additions with respect to the participant under other defined contribution
plans and welfare benefit funds maintained by the employer are less that
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 benefit 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.
13.4 Participation In Another Qualified Plan, Other Than Master or
Prototype Plans:
If the participant is covered by another plan which is a qualified
defined contribution plan other than a master or prototype plan, annual
additions allocated under this plan on behalf of any participant will be
limited in accordance with the provisions of Section 13.3 through 13.6, as
though the other plan were a master or prototype plan, unless the employer
provides other limitations in the adoption agreement.
13.5 Estimated Limitation:
Before determining a participant's actual compensation for the
limitation year, the employer may determine the maximum permissible amount
on the basis of a reasonable estimation of the participant's annual
compensation for such limitation year uniformly determined for all
participants similarly situated. Any employer contribution (including
allocation of forfeitures) based on estimated annual compensation will be
reduced by any excess amounts carried over from prior years. As soon as
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 compensation for such limitation year.
13.6 Apportionment Between Plans:
(a) If pursuant to section 13.5 or as a result of the allocation
of forfeitures, a participant's annual additions under this plan and such
other plans would result in an excess amount for a limitation year, the
excess amount will be deemed to consist of the annual additions last
allocated, except that annual additions attributable to a welfare benefit
fund or individual medical account will be deemed to have been allocated
first regardless of the actual allocation date.
(b) If, in the application of Section 13.3, an excess amount was
allocated to a participant on an allocation date of this plan which
coincides with an allocation date of another plan, the excess amount
attributed to this plan will be the product of:
(i) the total excess amount allocated as of such date,
times
(ii) the ratio of (A) annual additions allocated to the
participant for the limitation year as of such date under this
plan, to (B) the total annual additions allocated to the
participant for the limitation year as of such date under this and
all other qualified master or prototype defined contribution
plans.
(c) Any excess amounts attributed to this plan will be disposed of
as provided in Section 13.7.
13.7 Excess Amounts:
If there is an excess amount with respect to a participant for a
limitation year, such excess amount will be disposed of as follows:
(a) Any after tax employee contributions (including any earnings
thereon or an additional amount of after tax employee contributions equal
to the earnings thereon) for which no matching employer contributions are
made will be returned to the participant to the extent that the
distribution or return would reduce the excess amounts in the participant's
account.
(b) If after the application of subsection (a) an excess amount
still exists, any elective deferrals (including any earnings thereon) for
which no matching employer contributions are made will be returned to the
participant to the extent that the distribution or return would reduce the
excess amounts in the participant's account.
(c) If after the application of subsection (b) an excess amount
still exists, the excess amounts will be equal to the sum of (i), (ii) and
(iii), as follows: (i) any after tax employee contributions (including any
earnings thereon) with respect to which employer matching contributions are
made will be returned to the participant, (ii) any elective deferrals
(including any earnings thereon) with respect to which employer matching
contributions are made will be returned to the participant and (iii) the
proportionate amount of employer matching contributions relating to such
after tax employee contributions and/or elective deferrals will be held
unallocated in a suspense account. The suspense account will be applied to
reduce future employer contributions for all remaining participants in the
next limitation year, and each succeeding limitation year if necessary. Any
such suspense account will not participate in the allocation of the trust's
investment gains and losses.
(d) If after the application of subsection (c) an excess amount
still exists, the excess amounts attributable to employer contributions
(other than matching contributions) 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. Any such suspense account will not participate in the
allocation of the trust's investment gains and losses.
13.8 Defined Benefit and Defined Contribution Plan:
If the employer maintains or at any time maintained, a qualified
defined benefit plan (other than a defined benefit plan which is a paired
plan with this plan) covering any participant in this plan, the sum of the
participant's defined benefit plan fraction and defined contribution plan
fraction will not exceed 1.0 in any limitation year. The annual additions
which may be credited to the participant's account under this plan for any
limitation year will be limited in accordance with the adoption agreement.
ARTICLE 14:
TOP-HEAVY PROVISIONS
14.1 Application of Article:
If the plan is or becomes top-heavy in any plan year beginning
after December 31, 1983, the provisions of this Article 14 will supersede
any conflicting provision in the plan or adoption agreement (except
provisions added or attached to the adoption agreement to coordinate the
top-heavy minimum contributions or benefits with another plan of the
employer).
14.2 Top-Heavy Definitions:
(a) Key employee means any employee or former employee (and the
beneficiaries of such employee) who at any time during the determination
period was (i) an officer of the employer if such individual's annual
compensation exceeds 50 percent of the dollar limitation under Code Section
415(b)(1)(A); (ii) an owner (or considered an owner under Section 318 of
the Code) of one of the ten largest interests in the employer if such
individual's compensation exceeds 100 percent of the dollar limitation
under Section 415(c)(1)(A) of the Code; (iii) a 5-percent owner of the
employer; or (iv) a 1 percent owner of the employer who has an annual
compensation of more than $150,000. Annual compensation means compensation
as defined in section C of the Adoption Agreement, but including amounts
contributed by the employer pursuant to a salary reduction agreement which
are excludable from the employee's gross income under section 125, section
402(e)(3), section 402(h)(1)(B) or section 403(b) of the Code. The
determination period is the plan year containing the determination date and
the 4 preceding plan years. The determination of who is a key employee will
be made in accordance with Section 416(i)(1) of the Code and the
regulations thereunder.
(b) Top-heavy plan means this plan if any of the following
conditions exist for any plan year:
(i) If the top-heavy ratio for this plan exceeds 60% and
this plan is not part of any required aggregation group or
permissive aggregation group of plans.
(ii) 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%.
(iii) If this plan is a part of a required aggregation
group and part of a permissive aggregation group of plans and the
top-heavy ratio for the permissive aggregation group exceeds 60%.
(c) Top-heavy ratio means the following:
(i) If the employer maintains one or more defined
contribution plans (including any simplified employee pension
plan) and the employer has not maintained any defined benefit plan
which during the 5-year period ending on the determination date(s)
has or has had accrued benefits, the top-heavy ratio for this plan
alone or for the required or permissive aggregation group as
appropriate is a fraction, the numerator of which is the sum of
the account balances of all key employees as of the determination
date(s) (including any part of any account balance distributed in
the 5-year period ending on the determination date(s)), and the
denominator of which is the sum of all account balances (including
any part of any account balance distributed in the 5-year period
ending on the determination date(s)), both computed in accordance
with Section 416 of the Code and the regulations thereunder. Both
the numerator and denominator of the top heavy ratio are increased
to reflect any contribution not actually made as of the
determination date but which is required to be taken into account
on that date under Section 416 of the Code and the regulations
thereunder.
(ii) If the employer maintains one or more defined
contribution plans (including any simplified employee pension
plan) and the employer maintains or has maintained one or more
defined benefit plans which during the 5-year period ending on the
determination date(s) has or has had any accrued benefits, the
top-heavy ratio for any required or permissive aggregation group
as appropriate is a fraction, the numerator of which is the sum of
account balances under the aggregated defined contribution plan or
plans for all key employees, determined in accordance with (i)
above, and the present value of accrued benefits under the
aggregated defined benefit plan or plans for all key employees as
of the determination date(s), and the denominator of which is the
sum of the account balances under the aggregated defined
contribution plan or plans for all participants determined in
accordance with (i) above, and the present value of accrued
benefits under the aggregated defined benefit plan or plans for
all participants as of the determination date(s), all determined
in accordance with Section 416 of the Code and the regulations
thereunder. The accrued benefits under a defined benefit plan in
both the numerator and denominator of the top-heavy ratio are
increased for any distribution of an accrued benefit made in the
5-year period ending on the determination date.
(iii) For purposes of (i) and (ii) above the value of
account balances and the present value of accrued benefits will be
determined as of the most recent valuation date that falls within
or ends with the 12 month period ending on the determination date,
except as provided in Code Section 416 and the regulations
thereunder for the first and second plan years of a defined
benefit plan. The account balances and accrued benefits of a
participant who is not a key employee but who was a key employee
in a prior year, or who has not been employed by any employer
maintaining the plan at any time during the 5-year period ending
on the determination date will be disregarded. The calculation of
the top-heavy ratio, and the extent to which distributions,
rollovers, and transfers are taken into account will be made in
accordance with Code Section 416 and the regulations thereunder.
Qualified voluntary employee contributions will not be taken into
account for purposes of computing the top heavy ratio. When
aggregating plans, the value of account balances and accrued
benefits will be calculated with reference to the determination
dates that fall within the same calendar year.
The accrued benefit of a participant other than a key
employee shall be determined under (a) the method, if any, that
uniformly applies for accrual purposes under all defined benefit
plans maintained by the employer, or (b) if there is no such
method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of
section 411(b)(1)(C) of the Code.
(d) Permissive aggregation group means the required aggregation
group of plans plus any other plan of the employer which, when considered
as a group with the required aggregation group, would continue to satisfy
the requirements of Code Sections 401(a)(4) and 410.
(e) Required aggregation group means (i) each qualified plan of
the employer in which at least one key employee participates or
participated at any time during the determination period (regardless of
whether the plan has terminated), and (ii) any other qualified plan of the
employer which enables a plan described in subsection (i) to meet the
requirements of Code Sections 401(a)(4) or 410.
(f) Determination date for any plan year subsequent to the first
plan year means the last day of the preceding plan year, and for the first
plan year of the plan, the last day of that year.
(g) Valuation date is the date as of which account balances or
accrued benefits are valued for purposes of calculating the top-heavy
ratio. The valuation date is the determination date.
(h) Present value of benefits for purposes of computing the
top-heavy ratio will be discounted only for mortality and interest. Unless
adopted otherwise, the following factors will apply: five percent interest
and the UP-1984 mortality table.
14.3 Minimum Allocation:
(a) Except as otherwise provided in (3) and (4) 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
(i) 3% of such participant's compensation, or (ii) in the case where the
employer has no defined benefit plan which designates this plan to satisfy
Section 401 of the Code, the largest percentage of employer contributions
and forfeitures, as a percentage of the key employee's compensation, as
limited by section 401(a)(17) of the Code, allocated on behalf of any key
employee for that year. The minimum allocation is determined without regard
to any social security contribution. This minimum allocation shall be made
even though, under other plan provisions, the participant would not
otherwise be entitled to receive an allocation or would have received a
lesser allocation for the year because of the participant's failure to
complete any required amount of service (or any equivalent provided in the
plan), the participant's failure to make mandatory employee contributions
to the plan or compensation less than a stated amount. However, this
section does not apply to any participant who was not employed by the
employer on the last day of the plan year. Neither Elective Deferrals nor
Matching Contributions may be taken into account for the purpose of
satisfying the minimum top-heavy contribution requirement.
(b) For purposes of computing the minimum allocation, compensation
will mean plan compensation as defined in Section 13.1(b), as limited by
section 401(a)(17) of the Code. Compensation for this purpose will include
any compensation to a participant during a plan year before he became a
participant or after he ceased to be a participant.
(c) The minimum allocation required (to the extent required to be
nonforfeitable under Code Section 416(b) may not be forfeited under Code
Section 411(a)(3)(B) or 411(a)(3)(D).
14.4 Apportionment of Minimum Benefits Between Multiple Plans:
(a) To prevent duplication of the minimum allocation required
under Section 14.3(a) above, if any participant in this plan is covered
under any other defined contribution plan or plans of the employer (whether
or not such plans are paired plans), the required minimum allocation will
be satisfied first from the money purchase plan, if any, and the minimum
required allocation from the profit-sharing plan (or plans) will be reduced
by the minimum allocation provided under the money purchase plan.
(b) The provisions in Section 14.3(a) will not apply to any
participant to the extent the participant is covered under a defined
benefit plan (or plans) of the employer 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.
14.5 Minimum Vesting Schedule:
For any plan year in which this plan is top-heavy, one of the
top-heavy vesting schedules elected by the employer in the adoption
agreement will automatically apply to the plan. The top-heavy vesting
schedule applies to all accrued benefits within the meaning of Section
411(a)(7) of the Code except those attributable to 401(k) savings
contributions or after-tax employee contributions, including benefits
accrued before the effective date of Code Section 416 and benefits accrued
before the plan became top-heavy. Further, no decrease in a participant's
nonforfeitable percentage may occur in the event the plan's status as
top-heavy changes for any plan year. However, this section does not apply
to the account balances of any employee who does not have an hour of
service after the plan has initially become top-heavy and such employee's
account balance attributable to employer contributions and forfeitures will
be determined without regard to this section.
14.6 Top Heavy Adjustments in Section 415 Fractions:
If the plan is a top-heavy plan for any plan year, the
denominators of the defined benefit fraction and the defined contribution
fraction will be determined for a plan year by substituting "1.0" for
"1.25" each time it appears in Section 13.1, unless the employer provides
in the adoption agreement for the additional top heavy minimum benefit
requirements of Code Section 416(h) and provided further that this plan is
not super top-heavy. This plan is super top-heavy in any plan year if it
would be top-heavy under Section 14.2(b) substituting 90% for 60% wherever
60% appears.
14.7 Additional Provisions For Paired Defined Contribution and
Defined Benefit Plans:
(a) This section is applicable if the employer has adopted paired
plans of the sponsor which include a defined benefit plan and one or more
defined contribution plans.
(b) (i) This subsection (b) will apply in any plan year
for which the plan is top-heavy but not super top-heavy unless in the
adoption agreement for the employer's paired defined benefit plan, the
employer has elected to apply the defined benefit fraction and the defined
contribution fraction in all plan years by substituting "1.0" for "1.25" in
each place it appears in Section 13.1.
(ii) The defined contribution plan employer contributions
and forfeitures allocated on behalf of any participant who is not
a key employee will not be less than the amount provided in (A)
below unless in the adoption agreement for the employer's paired
defined benefit plan the employer elects to provide the top-heavy
minimum accrued benefit in such defined benefit plan and to have
(B) below apply in this plan:
(A) For each non-key employee who is not a
participant in paired defined benefit plan, 4% of his
compensation; or for each non-key employee who is also a
participant in the paired defined benefit plan, 7-1/2% of
his compensation.
(B) For each non-key employee who is not a
participant in the paired defined benefit plan, 4% of his
compensation; or for each plan, no minimum contribution
(because he will receive the 3% minimum accrued benefit
under the paired defined benefit plan).
(c) (i) This subsection (c) will apply in any plan year in which
the plan is super top-heavy or in all plan years if in the
adoption agreement for the employer's paired defined benefit plan,
the employer has elected to apply the defined benefit fraction and
the defined contribution fraction in all plan years by
substituting "1.0" for "1.25" in each place it appears in Section
13.1.
(ii) The defined contribution plan employer contributions
and forfeiture allocated on behalf of any participant who is not a
key employee will not be less than the amount provided in (A)
below unless in the adoption agreement for the employer's paired
defined benefit plan the employer elects to provide the top-heavy
minimum accrued benefit in such defined benefit plan and to have
(B) below apply in this plan:
(A) For each non-key employee who is not a
participant in paired de-fined benefit plan, 3% of his
compensation; or for each non-key employee who is also a
participant in the paired defined benefit plan, 5% of his
compensation.
(B) For each non-key employee who is not a
participant in the paired defined benefit plan, 3% of his
compensation; or for each non-key employee who is also a
participant in the paired defined benefit plan, no
minimum contribution (because he will receive the 2%
minimum accrued benefit under the paired defined benefit
plan).
(d) Provisions similar to Sections 14.3(b) and (c) and 14.4(a)
will apply to minimum allocations under this section.
ARTICLE 15:
ACCOUNTS AND INVESTMENTS
15.1 Separate Accounts:
(a) The plan administrator shall create and maintain separate
accounts for each participant's 401(k) savings contributions, after-tax
employee contributions, employer contributions, matching employer
contributions, and rollover contributions (and any qualified voluntary
employee contributions); a participant's rollover account may contain
subaccounts as provided in Section 7.1(a)(ii). Earnings will be credited to
such accounts (and subaccounts) in accordance with the provisions of this
article. Such accounts will be primarily for accounting purposes and will
not restrict the operation of the trust or require separate earmarked
investments for any account; however, specific investments may be earmarked
to participants' accounts if a permitted investment medium under Section
15.2 so provides.
(b) The plan administrator may itself maintain records of
participants' accounts or the plan administrator may arrange for such
records o be maintained by an outside service provider (which may be the
sponsor or trustee or a contractor of the sponsor or trustee). If the plan
administrator arranges with a service provider to maintain records of
participants' accounts, the plan administrator will provide such
information as is necessary for the service provider to maintain such
accounts as required herein.
15.2 Investment Media; Participant Investment Directions:
(a) The Metropolitan Life Insurance Company MetLife(R) 401(k) may
impose requirements concerning the investment media or vehicles in which
contributions to the employer's plan must be invested, and the employer
agrees to observe such requirements as a condition of participating in this
prototype plan.
(b) Subject to any requirements imposed under subsection (a)
above, permissible investment media may include, but are not limited to,
contracts issued by an insurance company (including such contracts
providing for investments in a separate account maintained by the insurance
company), segregated accounts invested in one or more of savings or notice
accounts, deposits in or certificates issued by a bank, insurance or
annuity contracts, assets specified by the participant (Section 15.4), or
shares of one or more investment companies or mutual funds (Section 15.6).
In addition, the plan may invest in qualifying employer securities as
permitted under ERISA Section 407(d)(3).
(c) Unless the adoption agreement otherwise provides, the employer
shall have the sole discretion to direct the investment of the employer's
contributions to a money purchase plan among the permissible investment
media. Unless the adoption agreement otherwise provides, participants shall
have the sole discretion to direct the investment of all contributions to a
profit-sharing plan or 401(k) plan among the permissible investment media.
(d) Subject to the sponsor's requirements under subsection (a)
above, the employer will determine the investment of any account over which
the participant does not exercise investment control under subsection (c)
above. In making such investment determinations, the employer will
establish investment policies or rules of general application which do not
discriminate among participants.
(e) This subsection will apply where participants' accounts under
the employer's plan are commingled for investment purposes (in contrast to
segregated accounts whose valuation is governed by Section 15.4). In such a
case, the assets of the plan (or each separate investment fund thereunder
consisting of investments in a particular investment vehicle) will be
valued at their fair market value as of each valuation date. As of each
valuation date, the investment earnings and gains or losses in asset value
since the preceding valuation date will be allocated to participants'
accounts in the plan (or in each separate investment fund) in proportion to
the balance in each such account as a fraction of the aggregate account
balances as of the preceding valuation date. The last business day of the
plan year is a valuation date; the sponsor or employer may designate other
valuation dates. To the extent that the assets of the plan are valued on a
daily basis, such valuation will be conducted in a manner similar to that
described in Section 15.4(a). To the extent that the assets of the plan are
valued on a daily basis, such valuation generally will be determined as of
the close of each business day. However, such valuation may be determined
up to five business days in certain circumstances, including, but not
limited to, heavy volume market trading and temporary telephone or computer
technical difficulties.
15.3 Rules for Exercise of Investment Options: Any designation of
investments by participants will be subject to nondiscriminatory general
rules established by the plan administrator or the Metropolitan Life
Insurance Company MetLife(R) 401(k); such rules may include:
(a) restrictions on the minimum amount or percentage of any
contribution which may be placed in any particular investment medium;
(b) restrictions on the use of different amounts or percentages
for different types of contributions;
(c) minimums or maximums (or both) on the amount which may be
invested or transferred to or from any particular investment medium; and
(d) restrictions on the time and frequency of designations,
changes in designations and transfers from one investment medium to another
including the required advance notice.
These rules may differ for different types of contributions. The
effective date of any change in a participant's election respecting
allocation of contributions among investment options or any transfer from
one option to another must coincide with a valuation date for each option.
15.4 Segregated Accounts:
(a) The provisions of this section will apply to the extent that
the sponsor or employer designates segregated accounts as permitted
investment media. A segregated account is one in which all or a portion of
one or more of a participant's accounts are invested in individual
investments which are not commingled with investments for other
participants' accounts. Examples of investments for segregated accounts
include, but are not limited to, interest bearing savings or notice
accounts or certificates or other savings instruments maintained or issued
by a bank or other thrift institution, life insurance or annuity contracts
issued by a life insurance company authorized to issue such contracts in
the state, or self-directed investment accounts. Earnings and investment
gains and losses of assets held in a segregated account and dividends or
credits earned on insurance contracts will be credited solely to such
account.
(b) Where the employer designates self-directed accounts as a
permissible investment medium, the participant will be subject to such
administrative rules and restrictions on permissible investments as the
sponsor may impose. However, such rules and restrictions will not conflict
with the terms of this plan.
(c) The last business day of the plan year is a valuation date for
segregated accounts. The sponsor or employer may designate other valuation
dates. The trustee will determine the fair market value of the plan's
segregated accounts as of each valuation date and will report such value of
the plan administrator. Each participant with a self-directed account will
arrange for a statement of the value of the assets therein as of each
valuation date and will provide such statement to the trustee; the trustee
may rely upon such statement in making the valuations referred to in the
preceding sentence.
15.5 Life Insurance Contracts: Where the Metropolitan Life
Insurance Company MetLife(R) 401(k) permits and the employer designates
life insurance contracts as permissible investment media, such contracts
will be treated as segregated investments held in a segregated account
under Section 15.4, and the following restrictions and rules will apply:
(a) Ownership of Contract. The trustee, if the Plan is trusteed,
or custodian, if the Plan has a custodial account, shall apply for and will
be the owner of any insurance contract purchased under the terms of this
Plan. The insurance contract(s) must provide that proceeds will be payable
to the trustee (or custodian, if applicable), however, the trustee (or
custodian) shall be required to pay over all proceeds of the contract(s) to
the participant's beneficiary in accordance with the distribution
provisions of this plan. A participant's spouse will be the designated
beneficiary of the proceeds in all circumstances unless a qualified
election has been made in accordance with section 9.5, Joint and Survivor
Annuity Requirements, if applicable. Under no circumstances will the trust
(or custodial account) retain any part of the proceeds. Any dividends or
credits earned on life insurance contracts will be allocated to the account
of the participant derived from employer contributions in which the
contract is held.
(b) Limits on Amounts. Except to the extent that premiums on life
insurance contracts are paid from (1) a participant's after-tax savings
contribution account, (2) earnings on contributions held under the plan,
(3) in the event that the plan is a profit sharing plan, the amount
attributable to employer contributions which have been on deposit in the
plan for at least two years, or (4) in the event that the plan is a profit
sharing plan, employer contributions with respect to a participant who has
participated in the plan for at least 5 years, employer contributions used
to pay premiums on life insurance will be subject to the following
limitations:
(i) Ordinary life - For purposes of this subsection,
ordinary life insurance contracts are contracts with both nondecreasing
death benefits and nonincreasing premiums. If such contracts are purchased,
less than 1/2 of the aggregate employer contributions allocated to the
participant will be used to pay the premiums attributable to them.
(ii) Term and universal life - no more than 1/4 of the
aggregate employer contributions allocated to the 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.
(iii) Combination. The sum of 1/2 of the ordinary life
insurance premiums and all other life insurance premiums will not exceed
1/4 of the aggregate employer contributions allocated to the participant.
(c) Distributions. Upon commencement of benefits, life insurance
contracts on a participant's life will be converted to cash or an annuity
and distributed to the participant, subject to the plan's provisions on
distributions.
(d) Conflicts. In the event of any conflict between the terms of
this plan and the terms of any insurance contract hereunder, the plan
provisions will control.
(e) Transaction with Participant. The purchase and sale of
policies between a participant and the trustee will be permitted in
conformance with the applicable class exemption from prohibited
transactions issued by the Department of Labor.
15.6 Mutual Fund Shares:
(a) The provisions of this section will apply to the extent that
the sponsor or employer designates share of one or more investment
companies or mutual funds as permitted investment media.
(b) The trustee will as soon as reasonably practicable after
receipt of a contribution invest such contribution in shares and fractional
shares of such mutual funds in accordance with the investment instructions
applicable to such contribution.
(c) Upon receipt of instructions to transfer an amount invested in
one mutual fund to another mutual fund, the trustee will as soon as
reasonably practicable thereafter redeem sufficient shares of one mutual
fund and purchase shares of the other mutual fund in order to carry out
such instructions; such transfer may be carried out by exchange or shares
if permitted by the mutual funds involved.
(d) Upon receipt of instructions to redeem shares, the trustee
will redeem shares in one or more mutual funds as instructed in order to
make a cash disbursement, whether a plan distribution or withdrawal, loan,
payment of expenses or otherwise.
(e) The trustee will reinvest all dividends and capital gains or
other distributions received on shares of a mutual fund in additional
shares of such fund; where permitted such investment will be carried out by
the trustee's electing to receive such dividends and distributions in the
form of additional shares.
(f) All mutual fund shares purchased, received, redeemed or
exchanged by the trustee under the foregoing subsections of this section
will be credited to or debited from the appropriate account as directed by
the plan administrator. All such transactions will be effected at the
current public offering price or net asset value of the mutual fund shares
or as otherwise described in the then current prospectus pertaining to such
mutual fund.
(g) Investment income and gains or losses in value of each mutual
fund in which participants' accounts are invested will automatically and
continuously be credited or debited as a function of the net asset value of
the shares of such fund and the reinvestment of dividends and other
distributions in additional shares of such fund. Accordingly, to the extent
that the assets of the employer's plan are invested in shares of such
mutual funds, each business day will be a valuation date.
With respect to mutual funds which are not open end funds, the
last business day of the plan year is a valuation date. The employer may
designate other valuation dates with the consent of the trustee. The
trustee will determine the fair market value of the shares of such mutual
funds as of each valuation date and will report such value to the plan
administrator.
(h) The trustee will deliver to the plan administrator any notices
of shareholder meetings, proxy and proxy-soliciting materials, prospectuses
and annual or other reports to shareholders received by the trustee
relating to shares of a mutual fund held in the trust fund. The plan
administrator will exercise voting rights with respect to the shares,
unless the plan administrator has elected to pass voting rights through to
participants, in which case the plan administrator will deliver such items
to each participant whose account is invested in such shares. Within the
time limit imposed by the trustee or the plan administrator, each
participant may indicate in writing how the shares credited to his accounts
are to be voted. The plan administrator will deliver such written
instructions to the trustee who will vote the shares in the manner
indicated.
Alternatively, arrangements may be made whereby the mutual fund or
investment company sends any such materials directly to the participant and
the participant sends voting instructions directly to the mutual fund or
investment company.
15.7 Expenses:
Any administrative fees and expenses will be paid by the employer
unless it elects not to pay any or all such fees and expenses; in such
event, any administrative fee or expense not paid by the employer will be
paid from the trust and, if the employer has elected in the Adoption
Agreement to apply forfeitures to the payment of administrative expenses
under the Plan, such fees and expenses will be paid from the forfeitures
under the plan, if any, and allocated to the accounts of participants or to
collective investment funds in which accounts are invested in a manner
which reasonably reflects the accounts and investment funds that generated
such fees and expenses. Approximations may be used whenever it is not
feasible to allocate such expenses on an exact basis. The employer may
reimburse the trust for any fees and expenses paid by the trust. Such
reimbursement shall not be deemed to be a contribution for purposes of Code
Sections 404 and 415.
ARTICLE 16:
ADMINISTRATION OF THE PLAN
16.1 Plan Administrator:
The employer will be the plan administrator for purposes of ERISA,
and any reference in this document or the adoption agreement to the plan
administrator means the employer. The employer may in the adoption
agreement designate an individual or a group of individuals acting as a
committee to act of the employer's behalf in carrying out its duties as
plan administrator. Such persons may, but need not, be plan participants or
employees, partners, or officers of the employer. The employer will notify
the trustee of any such appointment. The employer may remove any such
individual or committee member at any time with or without cause, by filing
written notice of his removal with the trustee. Any such individual or
committee member may resign at any time by filing his written resignation
with the employer and the trustee. A vacancy however arising, will be
filled by the employer. If the employer does not appoint an individual or
committee to act for the employer, the employer will carry out the
responsibilities of the plan administrator. If the employer is a sole
proprietorship, in the event of the sole proprietor's death, his executor
or administrator will be the plan administrator. If the employer is a
partnership, in the event of the death of all the partners, the executor or
administrator of the last to die will be the plan administrator.
16.2 Administration of Plan:
The plan administrator is a named fiduciary of the plan and will
be the agent for receiving service of legal process on the plan. He will
control and manage the operation and administration of the plan and will
have all powers and authority necessary or appropriate to carry out its
provisions. He will interpret and apply all terms of the plan to particular
cases or circumstances. He will make all final determinations concerning
eligibility and status of employees, participants, vested interests, the
right to benefits and all other rights hereunder, and all other matters
concerning plan administration and interpretation. All determinations and
actions of the plan administrator are conclusive and binding upon the
employer, employees, beneficiaries, and all other persons, except as
otherwise provided herein or by law. The plan administrator will exercise
his powers in a non-discriminatory manner and will apply uniform
administrative rules of general application to insure that persons in
similar circumstances are treated alike.
16.3 Reporting and Disclosure:
The plan administrator will prepare file, submit, distribute or
make available any documents, plan descriptions, reports, statements, forms
or other information to any government agency, employee, former employee,
or beneficiary as may be required by law or by the plan.
16.4 Records:
The plan administrator will record his acts and decisions, and
will prepare and maintain all data and records necessary or helpful to the
plan's administration. The employer will supply all information required by
the plan administrator to administer the plan, and the plan administrator
may rely upon the accuracy of such information.
16.5 Compensation and Expenses: The plan administrator will serve
without compensation unless otherwise determined by the employer, but no
employee of the employer will be compensated for his service as plan
administrator. All reasonable expenses of operating and administering the
plan will be paid by the employer or from the assets of the trust fund, as
provided in Section 15.7. Such expenses include the compensation of all
persons employed or retained by the plan administrator (such as attorneys,
accountants, actuaries, or other consultants or specialists), premiums for
insurance or bonds protecting the plan or trust and required by law or
deemed advisable by the plan administrator, and all other fees, expenses or
costs of plan administration.
16.6 Claims Procedure:
Any request for benefits (the claim) by a participant or his
beneficiary (the claimant) will be filed in writing with the plan
administrator. Within a reasonable period after receipt of a claim, the
plan administrator will provide written notice to any claimant whose claim
has been wholly or party denied, including:
(a) the reasons for denial;
(b) the plan provisions on which the denial is based;
(c) any additional material or information necessary to perfect
the claim and the reasons it is necessary; and
(d) the plan's claims review procedure.
A claimant will be given a full and fair review by the plan
administrator of the denial of his claim if he makes a written request for
review within sixty (60) days after notification of the denial. The
claimant may review pertinent documents and may submit issues and comments
in writing. The plan administrator will render a written decision on review
promptly and will include specific reasons for the decision and references
to the plan provisions on which the decision is based.
16.7 More than One Employer:
If more than one employer has adopted the plan, the employer
designated in Part A of the adoption agreement will be considered the
employer for purposes of exercising certain powers and administrative
duties. In joining the plan, other employers delegate authority to such
employer to complete and select options in the adoption agreement and to
select permissible investment media under Article 15; to designate the plan
administrator and any other fiduciary; to amend or terminate the plan
without a separate written instrument from each joining employer, provided
that any such amendment or termination must apply equally to all adopting
employers; to determine the appropriate basis under which plan
administrative expenses will be shared or to redelegate that authority to
the plan administrator; and to take, or redelegate authority to the plan
administrator to take, such other action as may be necessary for the
efficient and proper administration of the plan. Each joining employer will
retain the authority to terminate the plan for its own employees. However,
any amendment or termination of the plan which does not uniformly apply to
all members of a controlled group or affiliated service group or other
aggregated group (within the meaning of Sections 19.9, 19.10 and 19.11
hereof) will cause any standardized plan to be considered a
non-standardized plan so that the employers may not rely upon the plan's
qualification under Code Section 401(a) unless they obtain a determination
letter to such effect from the Internal Revenue Service.
ARTICLE 17:
AMENDMENT, TERMINATION OR MERGER OF PLAN
17.1 Amendment by Sponsor:
The sponsor may amend any or all provisions of this prototype plan
at any time without obtaining the consent of the employer, and the employer
(and each other adopting employer) hereby expressly delegates authority to
amend this plan to the sponsor.
17.2 Amendment by Employer:
Except for (a) changes of design options selected in the adoption
agreement, (b) amendments stated in the adoption agreement which allow 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) adding certain model amendments published by the
Internal Revenue Service which specifically provide that their adoption
will not cause the plan to be treated as individually designed, if the
Employer amends the plan or non-elective portions of the adoption
agreement, for any other reason, it will no longer participate in this
prototype plan, but will be considered to have an individually designed
plan.
17.3 Restrictions on Amendments:
No amendment under Section 17.1 or 17.2 will:
(a) cause or permit any part of the assets of the trust to be
diverted to purposes other than the exclusive benefit of participants and
their beneficiaries, or cause or permit any portion of such assets to
revert to or become the property of the employer;
(b) retroactively deprive any participant of any benefit to which
he was entitled hereunder by reason of contributions made by the employer
or the participant before the amendment, unless such amendment is necessary
to conform the trust or plan to, or satisfy the conditions of any law,
governmental regulation or ruling or to permit the plan and trust to meet
the requirements of Sections 401(a) and 501(a) of the Code;
(c) decrease a participant's account balance, except to the extent
permitted under Section 412(c)(8) of the Code. For purposes of this
paragraph, a plan amendment which has the effect of decreasing a
participant's account balance or eliminating an optional form of benefit,
with respect to benefits attributable to service before the amendment shall
be treated as reducing an accrued benefit;
(d) if the vesting schedule of a plan is amended, for an employee
who is a participant as of the later of the date such amendment is adopted
or the date it becomes effective, cause the nonforfeitable percentage
(determined as of such date) of such employee's right to his
employer-derived accrued benefit to be less than his percentage computed
under the plan without regard to such amendment; also, in the event of an
amendment affecting the vesting schedule of the employer's plan, any
participant with three or more years of service will have his vesting
determined under the pre-amendment vesting schedule if this would result in
such participant having a greater vested interest than under the amended
vesting schedule. For participants who do not have at least 1 hour of
service in any plan year beginning after December 31, 1988, the preceding
sentence shall be applied by substituting "5 years of service" for "3 years
of service" where such language appears;
(e) eliminate an optional form of distribution in violation of
Code Section 411; or
(f) increase or otherwise affect the duties, liabilities or rights
of the trustee unless the trustee consents thereto in writing.
17.4 Termination of Plan:
The employer has established this plan with the bona fide
expectation and intention that it will continue to make contributions
indefinitely. However, circumstances not now foreseen or beyond the control
of the employer may make it impossible or inadvisable for the employer to
continue the plan. The employer may, therefore, in its discretion,
discontinue contributions or terminate the plan completely or partially at
any time with respect to its employees by delivering to the trustee a
notice of complete or partial termination specifying the date of
termination of the plan and in the case of a partial termination the
participants affected by such partial termination. The employer will be
deemed to have completely terminated the plan in the case of (a) complete
discontinuance of contributions or (b) termination of the employer's legal
existence. The employer will incur no liability to any person as a result
of any discontinuance of contributions or complete or partial termination
of the plan. In the event of a termination or partial termination of the
plan, or in the event of complete discontinuance of contributions under a
profit-sharing plan, the account balance of each affected employee will be
fully vested and nonforfeitable.
17.5 Disposition and Termination of Trust:
(a) Upon complete or partial termination of the plan, the plan
administrator will determine subject to the joint and survivor rules of
this plan, whether to direct the trustee to continue to hold the accounts
of participants affected by the termination or partial termination, to
disburse them as immediate benefit payments, to purchase immediate or
deferred annuity contracts, or to follow any other procedure he deems
advisable. The trustee will follow the directions of the plan
administrator.
(b) The trust created hereunder will terminate when all the assets
of the trust have been distributed.
17.6 Merger of Plans:
A merger or consolidation with, or transfer of assets or
liabilities to, any other plan will be permitted only if the benefit each
participant would receive if the plan were terminated immediately after the
merger, consolidation or transfer is not less than the benefit he would
have received if the plan had terminated immediately before the merger,
consolidation or transfer.
ARTICLE 18:
TRANSFERS FROM OR TO OTHER QUALIFIED PLANS
18.1 Transfers from Another Plan of the Employer:
(a) Notwithstanding any other provision hereof, the employer may
cause to be transferred to the trustee all or any of the assets held
(whether by a trustee, custodian, or otherwise) under any other defined
contribution plan which satisfies the requirements of Section 401(a) of the
Code and which is maintained by the employer for the benefit of any of the
participants hereunder. If the trustee is keeping separate accounts for
each participant, any such assets so transferred will be accompanied by
instructions from the employer or plan administrator naming the
participants for whose benefit such assets have been transferred and
showing separately the respective contributions by the employer and by the
participants and the current value of the assets attributable thereto.
(b) Upon receipt of any assets transferred to it under subsection
(a), the trustee may sell any non-cash assets and invest the proceeds and
any cash transferred to it. The trustee will make appropriate credits to
the proper accounts in accordance with the employer's or plan
administrator's instructions.
18.2 Transfers to Other Plans:
Upon the request of the employer, the trustee will transfer an
amount designated by the employer to the trustee or custodian of any other
qualified plan under which plan participants are covered.
ARTICLE 19:
MISCELLANEOUS
19.1 Prohibited Diversion:
Except as provided in Section 19.6, no portion of the corpus or
income of the trust will be used or diverted to purposes other than for the
exclusive benefit of participants, former participants and their
beneficiaries, and to defray administrative expenses of the plan and trust.
However, payment of sales charges, administrative expenses and taxes from
the trust assets is expressly permitted.
19.2 Failure to Attain or Retain Qualification:
If the employer's plan fails to attain or retain qualification,
such plan will no longer participate in this prototype plan and will be
considered an individually designed plan.
19.3 Nonalienation:
No benefit or interest of any participant, former participant or
beneficiary hereunder will be subject to assignment or alienation, either
voluntary or involuntary. This section applies to the creation, assignment
or recognition of a right to any benefit payable with respect to a
participant pursuant to a domestic relations order unless such order is
determined to be a qualified domestic relations order under Section 19.4
below, or any domestic relations order entered before January 1, 1985.
19.4 Qualified Domestic Relations Orders:
(a) A qualified domestic relations order (QDRO) is a judgment,
decree, or order which meets the requirements of Code Section 414(p). An
alternate payee is an individual named in the QDRO who is to receive some
or all of the participant's benefit.
(b) Upon receipt of an order which appears to be a QDRO, the plan
administrator will notify the participant involved and each alternate payee
under the order (and under any previous QDRO covering the participant's
benefits). The plan administrator will determine whether the order is a
QDRO and will notify each affected individual of his determination. In
general, the plan's claims procedure rules under Section 16.6 apply to this
determination and any subsequent determination relating to the order. In
applying these rules, an individual who is or may be an alternate payee
enjoys the status of a claimant. However, the plan administrator may take
any action or delay contemplated in Code Section 414(p) and the regulations
under it, whether or not contemplated in the plan's claims procedure rules.
(c) To the maximum extent permitted by law, the plan
administrator's determination that an order is or is not a QDRO is final.
Any subsequent change in this determination is applied only prospectively,
unless the plan administrator rules otherwise.
(d) Certain conflicts between a domestic relations order and the
plan's provisions will cause the order to fail to be a QDRO. However, once
an order is determined to be a QDRO, the provisions of the QDRO take
precedence over any conflicting provisions of the plan.
(e) Except as otherwise provided under the terms of the QDRO, all
benefits under a QDRO will be payable in the form of a single sum
commencing as soon as practicable after the plan administrator determines
that a domestic relations order is a QDRO. For purposes of determining the
accounts from which benefits under a QDRO will be distributed, the trustee
will distribute a pro rata amount from each of the participant's employer
contribution, after-tax employee contribution, savings contribution,
matching contribution, rollover contribution, and all other accounts
maintained on behalf of the participant, unless the QDRO otherwise
provides. To the extent provided in a QDRO (assuming that the QDRO does not
provide for the form of distribution described in the preceding sentence),
a former spouse will be treated as the spouse or surviving spouse of a
participant for purposes of the spousal protection and any other relevant
provisions of the plan.
(f) A domestic relations order entered before January 1, 1985,
will be treated as a QDRO if payment of benefits pursuant to the order has
commenced as of that date. At the plan administrator's discretion, it may
be treated as a QDRO if payment of benefits has not commenced as of that
date, even though the order does not satisfy the requirement of Code
Section 414(p).
19.5 Limitation on Rights Created by Plan:
(a) The adoption and maintenance of the plan and trust will not be
construed to give a participant the right to continue in the employ of the
employer or to interfere with the right of the employer to discharge, lay
off or discipline a participant at any time, or give the employer the right
to require any participant to remain in its employ or to interfere with the
participant's right to terminate his employment.
(b) The adoption and maintenance of the plan and trust, the
creation of any account or the payment of any benefit will not be construed
as creating any legal or equitable right against the employer or the trust
except as this plan specifically provides.
(c) The employer, the trustee, the plan administrator and the
sponsor do not guaranty the payment of benefits hereunder and benefits will
be paid only to the extent of the assets of the trust. It is a condition of
participation in the plan that each participant (and his beneficiary or
anyone else claiming through him) will look only to the assets of the trust
for the payment of any benefit to which he or his beneficiary or other
person is entitled.
19.6 Allocation of Responsibilities:
The employer, the trustee and the plan administrator will each
have only those duties and responsibilities specifically allocated to each
of them under the plan. There will be no joint fiduciary responsibility
between or among fiduciaries unless specifically stated otherwise. Any
person may serve in more than one fiduciary capacity.
19.7 Return of Contributions:
(a) If the Commissioner of Internal Revenue determines that the
plan is not initially qualified under the Code, any contribution made
conditionally subject to such initial qualification will be returned to the
employer if demand therefor is made within one year after the date initial
qualification is denied, but only if application for a determination
concerning the plan's initial qualification was made within the time
prescribed by law for filing the employer's tax return for the taxable year
in which the plan was adopted or within such longer time as the Secretary
of the Treasury may prescribe.
(b) All employer contributions are conditioned upon their
deductibility under Code Section 404. A contribution which is made because
of a mistake of fact or the deduction of which is disallowed, will be
returned to the employer within one year thereafter.
(c) If the trustee is keeping separate accounts for each
participant, participants' accounts will be adjusted in accordance with
instructions from the plan administrator to the trustee to reflect any
returns under this Section 19.6.
19.8 Current Address of Payee:
The plan administrator shall make reasonable efforts to locate any
participant, beneficiary, or alternate payee to whom benefits are required
to be paid under the terms of the plan or applicable law. If, as a result
of the exercise of reasonable efforts to locate any such person, the plan
administrator is unable to locate such person, the plan administrator shall
dispose of such person's account balance in the manner specified in the
adoption agreement. If disposition of any person's account balance under
any one or more of the methods described in this section is impracticable
or would adversely affect the qualification of the plan, the plan
administrator may substitute any other reasonable method, in its sole
discretion, which is consistent with the qualification requirements of
Subchapter D of the Code. If a benefit is forfeited because the Participant
or beneficiary cannot be found, such benefit will be reinstated if a claim
is made by the Participant or beneficiary.
19.9 Controlled Group:
Except as provided in Section 4.1(c), all employees of all
corporations which are members of a controlled group of corporations (as
defined in Section 414(b) of the Code) and all employees of all trades or
businesses, whether or not incorporated, which are under common control (as
defined in Section 414(c) of the Code) will be treated as employed by a
single employer.
19.10 Affiliated Service Groups:
All employees of all members of an affiliated service group (as
defined in Section 414(m) of the Code) will be treated as employed by a
single employer.
19.11 Other Aggregated Groups:
Employees of employers which are aggregated in accordance with
regulations under Code Section 414(o) will be treated as employed by one
employer to the extent provided in such regulations.
19.12 Leased Employees:
Any leased employee shall be treated as an employee of the
recipient employer. 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 such
services are under the primary direction and control of the recipient
employer. Contributions or benefits provided a leased employee by the
leasing organization which are attributable to services performed for the
recipient employer shall be treated as provided by the recipient employer.
A leased employee shall not be considered an employee of the
recipient if: (i) such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least 10
percent of compensation, as defined in section 415(c)(3) of the Code, but
including amounts contributed pursuant to a salary reduction agreement
which are excludable from the employee's gross income under section 125,
section 402(e)(3), section 402(h)(1)(B) or section 403(b) of the Code, (2)
immediate participation, and (3) full and immediate vesting; and (ii)
leased employees do not constitute more than 20 percent of the recipient's
nonhighly compensated workforce.
19.13 Control of Trades or Businesses by Owner Employee:
(a) If this plan provides contributions or benefits for one or
more owner-employees who control both the business for which this plan is
established and one or more other trades or businesses, this plan and the
plan established for other trades or businesses must, when looked at as a
single plan, satisfy Sections 401(a) and (d) of the Code for the employees
of this and all other trades or businesses.
(b) If the plan provides contributions or benefits for one or more
owner-employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a plan
which satisfies Sections 401(a) and (d) and which provides contributions
and benefits not less favorable than those provided for owner-employees
under this plan.
(c) If an individual is covered as an owner-employee under the
plans of two or more trades or businesses which are not controlled and the
individual controls a trade or business, then the contributions or benefits
of the employees under the plan of the trades or businesses which are
controlled must be as favorable as those provided for him under the most
favorable plan of the trade or business which is not controlled.
(d) For purposes of this section an owner-employee, or two or more
owner-employees, will be considered to control a trade or business if the
owner-employee or two or more owner-employees together:
(i) own the entire interest in an unincorporated trade or
business, or
(ii) in the case of a partnership, own more than 50
percent of either the capital interest or the profits interest in the
partnership.
For purposes of the preceding sentence, an owner-employee or two
or more owner-employees shall be treated as owning any interest in a
partnership which is owned directly or indirectly by a partnership which
such owner-employee, or such two or more owner-employees are considered to
control within the meaning of the preceding sentence.
19.14 Application of Plan's Terms:
(a) If an employee retired, died or otherwise terminated his
service before the effective date of the employer's plan, the employee and
his beneficiaries will receive no benefits and will have no rights under
the plan.
(b) If an employee retires, dies or otherwise terminates his
service on or after the effective date of the employer's plan, the benefits
and rights of the employee and his beneficiaries will be determined in
accordance with the terms of the plan that are in effect on the date of
such termination of service.
(c) The allocations to a participant's account for any year of
reference will be determined in accordance with the terms of the plan that
are in effect for such year.
19.15 Rules of Construction:
(a) This plan is intended to qualify as a profit sharing plan or a
pension plan under Section 401(a) of the Code to be an eligible individual
account plan as defined in Section 407(d)(3) of ERISA, and to comply with
all applicable requirements of both statutes. The terms of the plan will be
construed to carry out this intent.
(b) A word or phrase defined or explained in any section has the
same meaning throughout the plan unless the context indicates otherwise.
(c) Where the context so requires the masculine includes the
feminine, the singular includes the plural, and the plural includes the
singular.
(d) Unless the context indicates otherwise, the words "herein",
"hereof", "hereunder", and words of similar import refer to the plan as a
whole and not only to the section in which they appear.
(e) Headings and titles are for convenience only, and the text
will control in all matters.
(f) Reference to any section of the Code or ERISA includes
reference to a similar provision of a successor statute.
19.16 Governing Law:
To the extent that state law applies, the provisions of the plan
will be construed enforced and administered according to the laws of the
state where the principal offices of the trustee are located.
19.17 Payment for Minor or Incompetent:
In the event that any amount is payable under the plan to a minor
or to any person deemed by a court of competent jurisdiction to be
incompetent, either mentally or physically, such payment shall be made for
the benefit of such minor or incompetent person by payment to a person who
has been designated by a court of competent jurisdiction to receive such
amount.