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EXHIBIT 99.1
InnerDyne, Inc.
Defined Contribution Plan
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▇▇▇▇▇▇▇ ▇▇▇▇▇
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SPECIAL
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PROTOTYPE DEFINED
CONTRIBUTION PLAN
ADOPTION AGREEMENT
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401(k) PLAN
EMPLOYEE THRIFT PLAN
PROFIT-SHARING PLAN
Letter Serial Number: D359287b
National Office Letter Date: 6/29/93
This Prototype Plan and Adoption Agreement are important legal instruments with
legal and tax implications for which the Sponsor, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇, Incorporated, does not assume responsibility. The Employer is urged to
consult with its own attorney with regard to the adoption of this Plan and its
suitability to its circumstances.
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ADOPTION OF PLAN
The Employer named below hereby establishes or restates a profit-sharing plan
that includes a [x] 401(k), [x] profit-sharing and/or [ ] thrift plan feature
(the "Plan") by adopting the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Special Prototype Defined
Contribution Plan and Trust as modified by the terms and provisions of this
Adoption Agreement.
EMPLOYER AND PLAN INFORMATION
Employer Name:* INNERDYNE, INC.
Business Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Employer Taxpayer ID Number: ▇▇-▇▇▇▇▇▇▇
Employer Taxable Year ends on: DECEMBER 31ST
Plan Name: INNERDYNE, INC. DEFINED CONTRIBUTION PLAN
Plan Number: 001
(401(k) PROFIT SHARING THRIFT
Effective Date of Adoption
or Restatement: 01/01/1999 01/01/1999 __/__/__
Original Effective Date: 01/01/1988 01/01/1988 __/__/__
IF THIS PLAN IS A CONTINUATION OR AN AMENDMENT OF A PRIOR PLAN, ALL OPTIONAL
FORMS OF BENEFITS PROVIDED IN THE PRIOR PLAN MUST BE PROVIDED UNDER THIS PLAN
TO ANY PARTICIPANT WHO HAD AN ACCOUNT BALANCE, WHETHER OR NOT VESTED, IN THE
PRIOR PLAN.
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*If there are any Participating Affiliates in this Plan, list below the proper
name of each participating Affiliate.
_________.
_________.
_________.
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ARTICLE I. DEFINITIONS
A. "COMPENSATION"
(1) With respect to each Participant, except as provided below, Compensation
shall mean the (select all those applicable for each column):
401(k) AND/ PROFIT
OR THRIFT SHARING
/ / / / (a) amount reported in the "Wages Tip and Other Compensation"
Box on Form W-2 for the applicable period selected in
Item 5 below.
/ / / / (b) compensation for Code Section 415 safe-harbor purposes
(as defined in Section 3.9.1 (H)(i) of basic plan
document #03) for the applicable period selected in
Item 5 below.
/X/ /X/ (c) amount reported pursuant to Code Section 3401(a) for the
applicable period selected in Item 5 below.
/ / / / (d) all amounts received (under either option (a) (b) or (c)
above) for personal services rendered to the Employer by
excluding (select one):
/ / overtime
/ / bonuses
/ / commissions
/ / amounts in excess of $
/ / other (specify) ____.
(2) Treatment of Elective Contributions (select one):
/X/ (a) For purposes of contributions, Compensation shall include Elective
Deferrals and amounts excludable from the gross income of the
Employee under Code Section 125, Code Section 402(e)(3), Code
Section 402(h) or Code Section 403(b) ("elective contributions").
/ / (b) For purposes of contributions, Compensation shall not include
"elective contributions."
(3) CODA Compensation (select one):
/X/ (a) For purposes of the ADP and ACP Tests, Compensation shall
include "elective contributions."
/ / (b) For purposes of the ADP and ACP Tests, Compensation shall not
include "elective contributions."
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(4) With respect to Contributions to an Employer Contributions Account,
Compensation shall include all Compensation (select one):
[ ] (a) during the Plan Year in which the Participant enters the Plan.
[X] (b) after the Participant's Entry Date.
(5) The applicable period for determining Compensation shall be (select one):
[X] (a) the Plan Year.
[ ] (b) the Limitation Year.
[ ] (c) the consecutive 12-month period ending on ________.
B. "DISABILITY"
(1) Definition
Disability shall mean a condition which results in the Participant's
(select one):
[ ] (a) inability to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment that
can be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than 12
months.
[X] (b) total and permanent inability to meet the requirements of the
Participant's customary employment which can be expected to last
for a continuous period of not less than 12 months.
[ ] (c) qualification for Social Security disability benefits.
[ ] (d) qualification for benefits under the Employer's long-term
disability plan.
(2) Contributions Due to Disability (select one):
[X] (a) No contributions to an Employer Contributions Account will be made
on behalf of a Participant due to his or her Disability.
[ ] (b) Contributions to an Employer Contributions Account will be made on
behalf of a Participant due to the his or her Disability provided
that: the Employer elected option (a) or (c) above as the
definition of Disability, contributions are not made on behalf of
a Highly Compensated Employee, the contribution is based on the
Compensation each such Participant would have received for the
Limitation Year if the Participant had been paid at the rate of
Compensation paid immediately before his or her Disability, and
contributions made on behalf of such Participant will be
nonforfeitable when made.
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C. "EARLY RETIREMENT" is (select one):
[ ] (1) not permitted.
[X] (2) permitted if a Participant terminates Employment before Normal
Retirement Age and has (select one):
[ ] (a) attained age ____.
[X] (b) attained age 55 and completed 7 Years of Service.
[ ] (c) attained age ____ and completed ____ Years of
Service as a Participant.
D. "ELIGIBLE EMPLOYEES" (select one):
[ ] (1) All Employees are eligible to participate in the Plan.
[X] (2) The following Employees are not eligible to participate in the
Plan (select all those applicable):
[X] (a) Employees included in a unit of Employees covered by a
collective bargaining agreement between the Employer
or a Participating Affiliate and the Employee
representatives (not including any organization more
than half of whose members are Employees who are
owners, officers, or executives of the Employer or
Participating Affiliate) in the negotiation of which
retirement benefits were the subject of good faith
bargaining, unless the bargaining agreement provides
for participation in the Plan.
[X] (b) non-resident aliens who received no earned income from
the Employer or a Participating Affiliate which
constitutes income from sources within the United
States.
[ ] (c) Employees of an Affiliate.
[ ] (d) Employees employed in or by the following specified
division, plant, location, job category or other
identifiable individual or group of Employees: _____.
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E. "ENTRY DATE" Entry Date shall mean (select as applicable):
401(k)
AND/OR PROFIT
THRIFT SHARING
[ ] [ ] (1) If the initial Plan Year is less than twelve months, the ____ day of __________ and
thereafter:
[ ] [ ] (2) the first day of the Plan Year following the date the Employee meets the
eligibility requirements. If the Employer elects this option (2) establishing
only one Entry Date, the eligibility "age and service" requirements
elected in Article II must be no more than age 20-1/2 and 6 months of
service.
[X] [X] (3) the first day of the month following the date the Employee meets the
eligibility requirements.
[ ] [ ] (4) the first day of the Plan Year and the first day of the seventh month of
the Plan Year following the date the Employee meets the eligibility
requirements.
[ ] [ ] (5) the first day of the Plan Year, the first day of the fourth month of the Plan
Year, the first day of the seventh month of the Plan Year, and the first
day of the tenth month of the Plan Year following the date the Employee
meets the eligibility requirements.
[ ] [ ] (6) other:
provided that the Entry Date or Dates selected are no later than any of
the options above.
F. "HOURS OF SERVICE"
Hours of Service for the purpose of determining a Participant's Period of
Severance and Year of Service shall be determined on the basis of the method
specified below:
(1) Eligibility Service: For purposes of determining whether a Participant
has satisfied the eligibility requirements, the following method shall
be used (select one):
401(k)
AND/OR PROFIT
THRIFT SHARING
[X] [X] (a) elapsed time method
[ ] [ ] (b) hourly records method
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(2) Vesting Service: A Participant's nonforfeitable interest shall be
determined on the basis of the method specified below (select one):
[ ] (a) elapsed time method
[X] (b) hourly records method
[ ] (c) if this item (c) is checked, the Plan only provides for
contributions that are always 100% vested and this item (2)
will not apply.
(3) Hourly Records: For the purpose of determining Hours of Service
under the hourly record method (select one):
[ ] (a) only actual hours for which an Employee is paid or entitled
to payment shall be counted.
[X] (b) an Employee shall be credited with 45 hours of Service if
such Employee would be credited with at least 1 Hour of
Service during the week.
G. "INTEGRATION LEVEL"
[X] (1) This Plan is not integrated with Social Security.
[ ] (2) This Plan is integrated with Social Security. The Integration
Level shall be (select one):
[ ] (a) the Taxable Wage Base.
[ ] (b) $________ (a dollar amount less than the Taxable Wage
Base).
[ ] (c) _________% of the Taxable Wage Base (not to exceed 100%).
[ ] (d) the greater of $10,000 or 20% of the Taxable Wage Base.
H. "LIMITATION COMPENSATION"
For purposes of Code Section 415, Limitation Compensation shall be compensation
as determined for purposes of (select one):
[ ] (1) Code Section 415 Safe-Harbor as defined in Section 3.9.1(H)(i) of
basic plan document #03.
[ ] (2) the "Wages, Tips and Other Compensation" Box on Form W-2.
[X] (3) Code Section 3401(a) Federal Income Tax Withholding.
I. "LIMITATION YEAR"
For purposes of Code Section 415, the Limitation Year shall be (select one):
[X] (1) the Plan Year.
[ ] (2) the twelve consecutive month period ending on the ____ day of the
month of _______.
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J. "NET PROFITS" are (select one):
[X] (1) not necessary for any contribution.
[ ] (2) necessary for (select all those applicable):
[ ] (a) Profit-Sharing Contributions.
[ ] (b) Matching 401(k) Contributions.
[ ] (c) Matching Thrift Contributions.
K. "NORMAL RETIREMENT AGE"
Normal Retirement Age shall be (select one):
[X] (1) attainment of age 65 (not more than 65) by the Participant.
[ ] (2) attainment of age __ (not more than 65) by the Participant or
the _____ anniversary (not more than the 5th) of the first
day of the Plan Year in which the Eligible Employee became a
Participant, whichever is later.
[ ] (3) attainment of age __ (not more than 65) by the Participant or
the _____ anniversary (not more than the 5th) of the first
day on which the Eligible Employee performed an Hour of
Service, whichever is later.
L. "PARTICIPANT DIRECTED ASSETS" are:
401(k) AND/ PROFIT
OR THRIFT SHARING
[X] [X] (1) permitted.
[ ] [ ] (2) not permitted.
M. "PLAN YEAR"
The Plan Year shall end on the 31ST day of DECEMBER.
N. "PREDECESSOR SERVICE"
Predecessor service will be credited (select one):
[ ] (1) only as required by the Plan.
[X] (2) to include, in addition to the Plan requirements and
subject to the limitations set forth below, service with the
following predecessor employer(s) determined as if such
predecessors were the Employer: INNERDYNE MEDICAL, INC.;
CARDIO PULMONICS.
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Service with such predecessor employer applies [select either or both (a)
and/or (b); (c) is only available in addition to (a) and/or (b)]:
[X] (a) for purposes of eligibility to participate;
[X] (b) for purposes of vesting;
[ ] (c) except for the following service: _____.
O. "VALUATION DATE"
Valuation Date shall mean (select one for each column, as applicable):
401(k) AND/ PROFIT
OR THRIFT SHARING
[ ] [ ] (1) the last business day of each month
[ ] [ ] (2) the last business day of each quarter within the Plan Year
[ ] [ ] (3) the last business day of each semi-annual period within the Plan Year.
[ ] [ ] (4) the last business day of the Plan Year.
[X] [X] (5) other: DAILY BASIS.
ARTICLE II. PARTICIPATION
PARTICIPATION REQUIREMENTS
An Eligible Employee must meet the following requirements to become a
Participant (select one or more for each column, as applicable):
401(k) AND/ PROFIT
OR THRIFT SHARING
[ ] [ ] (1) Performance of one Hour of Service
[ ] [ ] (2) Attainment of age ___ (maximum 20 1/2) and completion of ___ (not
more than 1/2) Year(s) of Service. If this item is selected, no Hours
of Service shall be counted.
[X] [X] (3) Attainment of age 21 (maximum 21) and completion of 1/12 Year(s) of
Service. If more than one Year of Service is selected, the immediate 100%
vesting schedule must be selected in Article VII of this Adoption Agreement.
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401(k) AND/ PROFIT
OR THRIFT SHARING
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[ ] [ ] (4) Attainment of age ___ (maximum 21) and completion of ___ Years of Service. If more than one Year of
Service is selected, the immediate 100% vesting schedule must be selected in Article VII of this
Adoption Agreement.
[ ] [ ] (5) Each Employee who is an Eligible Employee on ___ will be deemed to have satisfied the participation
requirements on the effective date without regard to such Eligible Employee's actual age and/or service.
ARTICLE III. 401(k) CONTRIBUTIONS AND ACCOUNT ALLOCATION
If selected below, a Participant's Elective Deferrals will be (select all
applicable):
[X} (1) a dollar amount or a percentage of Compensation, as specified by the
Participant on his or her 401(k) Election form, which may not exceed
18% of his or her Compensation.
[ ] (2) with respect to bonuses, such dollar amount or percentage as
specified by the Participant on his or her 401(k) Election form
with respect to such bonus.
B. MATCHING 401(k) CONTRIBUTIONS
If selected below, the Employer may make Matching 401(k) Contributions for each
Plan Year (select one):
[X] (a) Discretionary Formula:
Discretionary Matching 401(k) Contribution equal to such a dollar amount or
percentage of Elective Deferrals, as determined by the Employer, which
shall be allocated (select one):
[ ] (a) based on the ratio of each Participant's Elective Deferral for
the Plan Year to the total Elective Deferrals of all
Participants for the Plan Year. If inserted, Matching 401(k)
Contributions shall be subject to a maximum amount of $___ for
each Participant or ___% of each Participant's Compensation.
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[X] (b) in an amount not to exceed 100% of each Participant's first 18% of
Compensation contributed as Elective Deferrals for the Plan Year.
If any Matching 401(k) Contribution remains, it is allocated to
each such Participant in an amount not to exceed ___% of the next
___% of each Participant's Compensation contributed as Elective
Deferrals for the Plan Year.
Any remaining Matching 401(k) Contribution shall be allocated to each such
Participant in the ratio that such Participant's Elective Deferral for the
Plan Year bears to the total Elective Deferrals of all such Participants
for the Plan Year. If inserted, Matching 401(k) Contributions shall be
subject to a maximum amount of $____ for each Participant or ___% of each
Participant's Compensation.
[ ] (2) Nondiscretionary Formula:
A nondiscretionary Matching 401(k) Contribution for each Plan Year equal
to (select one):
[ ] (a) ___% of each Participant's Compensation contributed as
Elective Deferrals. If inserted, Matching 401(k) Contributions
shall be subject to a maximum amount of $____ for each
Participant or ___% of each Participant's Compensation.
[ ] (b) ___% of the first ___% of the Participant's Compensation
contributed as Elective Deferrals and ___% of the next ___%
of the Participant's Compensation contributed as Elective
Deferrals. If inserted, Matching 401(k) Contributions shall
be subject to a maximum amount of $____ for each Participant
or ___% of each Participant's Compensation.
C. PARTICIPANTS ELIGIBLE FOR MATCHING 401(k) CONTRIBUTION ALLOCATION
The following Participants shall be eligible for an allocation to their Matching
401(k) Contributions Account (select all those applicable):
[X] (1) Any Participant who makes Elective Deferrals.
[ ] (2) Any Participant who satisfies those requirements elected by the
Employer for an allocation to his or her Employer Contributions
Account as provided in Article IV Section C.
[ ] (3) Solely with respect to a Plan in which Matching 401(k)
Contributions are made quarterly (or on any other regular interval
that is more frequent than annually) any Participant whose 401(k)
Election is in effect throughout such entire quarter (or other
interval). (quarterly, monthly or semi-annual)
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D. QUALIFIED MATCHING CONTRIBUTIONS
If selected below, the Employer may make Qualified Matching Contributions for
each Plan Year (select all those applicable):
(1) In its discretion, the Employer may make Qualified Matching
Contributions on behalf of (select one):
[X] (a) all Participants who make Elective Deferrals in that Plan
Year.
[ ] (b) only those Participants who are Nonhighly Compensated Employes
and who make Elective Deferrals for that Plan Year.
(2) Qualified Matching Contributions will be contributed and allocated to
each Participant in an amount equal to (select one):
[ ] (a) ___% of the Participant's Compensation contributed as Elective
Deferrals. If inserted, Qualified Matching Contributions shall
not exceed ___% of the Participant's Compensation.
[X] (b) Such an amount, determined by the Employer, which is needed to
meet the ACP Test.
(3) In its discretion, the Employer may elect to designate all or any part
of Matching 401(k) Contributions as Qualified Matching Contributions
that are taken into account as Elective Deferrals -- included in the
ADP Test and excluded from the ACP Test -- on behalf of (select one):
[X] (a) all Participants who make Elective Deferrals for that Plan
Year.
[ ] (b) Only Participants who are Nonhighly Compensated Employees who
make Elective Deferrals for that Plan Year.
E. QUALIFIED NONELECTIVE CONTRIBUTIONS
If selected below, the Employer may make Qualified Nonelective Contributions for
each Plan Year (select all those applicable):
(1) In its discretion, the Employer may make Qualified Nonelective
Contributions on behalf of (select one):
[ ] (a) all Eligible Participants.
[X] (b) only Eligible Participants who are Nonhighly Compensated
Employees.
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(2) Qualified Nonelective Contributions will be contributed and allocated
to each Eligible Participant in an amount equal to (select one):
[ ] (a) ____% (no more than 15%) of the Compensation of each
Eligible Participant eligible to share in the allocation.
[X] (b) Such an amount determined by the Employer, which is needed
to meet either the ADP Test or ACP Test.
(3) At the discretion of the Employer, as needed and taken into account as
Elective Deferrals included in the ADP Test on behalf of (select one):
[ ] (a) all Eligible Participants.
[X] (b) only those Eligible Participants who are Nonhighly
Compensated Employees.
F. ELECTIVE DEFERRALS USED IN ACP TEST (select one):
[X] (1) At the discretion of the Employer, Elective Deferrals may be used
to satisfy the ACP Test.
[ ] (2) Elective Deferrals may not be used to satisfy the ACP Test.
G. MAKING AND MODIFYING A 401(k) ELECTION
An Eligible Employee shall be entitled to increase, decrease or resume his or
her Elective Deferral percentage with the following frequency during the Plan
Year (select one):
[ ] (1) annually.
[ ] (2) semi-annually.
[ ] (3) quarterly.
[X] (4) monthly.
[ ] (5) other (specify): ___.
Any such increase, decrease or resumption shall be effective as of the
first payroll period coincident with or next following the first day of
each period set forth above. A Participant may completely discontinue
making Elective Deferrals at any time effective for the payroll period
after written notice is provided to the Administrator.
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ARTICLE IV. PROFIT-SHARING CONTRIBUTIONS AND ACCOUNT ALLOCATION
A. PROFIT-SHARING CONTRIBUTIONS:
If selected below, the following contributions for each Plan Year will be made:
Contributions to Employer Contributions Accounts (select one):
[X] (a) Such an amount, if any, as determined by the Employer.
[ ] (b) _____% of each Participant's Compensation.
B. ALLOCATION OF CONTRIBUTIONS TO EMPLOYER CONTRIBUTIONS ACCOUNTS (select one):
[X] (1) Non-Integrated Allocation
The Employer Contributions Account of each Participant eligible
to share in the allocation for a Plan Year shall be credited with
a portion of the contribution, plus any forfeitures if
forfeitures are reallocated to Participants, equal to the ratio
that the Participant's Compensation for the Plan Year bears to
the Compensation for that Plan Year of all Participants entitled
to share in the contribution.
[ ] (2) Integrated Allocation
Contributions to Employer Contributions Accounts with respect to
a Plan Year, plus any forfeitures if forfeitures are reallocated
to Participants, shall be allocated to the Employer Contributions
Account of each eligible Participant as follows:
(a) First, in the ratio that each such eligible Participant's
Compensation for the Plan Year bears to the Compensation for
that Plan Year of all eligible Participants but not in
excess of 3% of each Participant's Compensation.
(b) Second, any remaining contributions and forfeitures will be
allocated in the ratio that each eligible Participant's
Compensation for the Plan Year in excess of the Integration
Level bears to all such Participants' excess Compensation
for the Plan Year but not in excess of 3%.
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(c) Third, any remaining contributions and forfeitures
will be allocated in the ratio that the sum of each
Participant's Compensation and Compensation in excess
of the Integration Level bears to the sum of all
Participants' Compensation and Compensation in excess
of the Integration Level, but not in excess of the
Maximum Profit-Sharing Disparity Rate (defined below).
(d) Fourth, any remaining contributions or forfeitures
will be allocated in the ratio that each Participant's
Compensation for that year bears to all Participants'
Compensation for that year.
The Maximum Profit-Sharing Disparity Rate is equal to the lesser
of:
(a) 2.7% or
(b) The applicable percentage determined in accordance
with the following table:
IF THE INTEGRATION LEVEL IS
(AS A % OF THE TAXABLE WAGE
BASE ("TWB")). THE APPLICABLE PERCENTAGE IS:
20% (or $10,000 if greater)
or less of the TWB 2.7%
More than 20% (but not less
than $10,001 but not
more than 80% of the TWB 1.3%
More than 80% but not less
than 100% of the TWB 2.4%
100% of the TWB 2.7%
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C. PARTICIPANTS ELIGIBLE FOR EMPLOYER CONTRIBUTION ALLOCATION
The following Participants shall be eligible for an allocation to their
Employer Contributions Account (select all those applicable):
[ ] (1) Any Participant who was employed during the Plan Year.
[ ] (2) In the case of a Plan using the hourly record method for
determining Vesting Service, any Participant who was
credited with a Year of Service during the Plan Year.
[ ] (3) Any Participant who was employed on the last day of the
Plan Year.
[ ] (4) Any Participant who was on a leave of absence on the last
day of the Plan Year.
[X] (5) Any Participant who during the Plan Year died or became
Disabled while an Employee or terminated employment after
attaining Normal Retirement Age.
[ ] (6) Any Participant who was credited with at least 501 Hours of
Service whether or not employed on the last day of the Plan
Year.
[X] (7) Any Participant who was credited with at least 1,000 Hours
of Service and was employed on the last day of the Plan
Year.
ARTICLE ▇. ▇▇▇▇▇▇ CONTRIBUTIONS
A. EMPLOYEE THRIFT CONTRIBUTIONS
If selected below, Employee Thrift Contributions, which are required for
Matching Thrift Contributions, may be made by a Participant in an amount equal
to (select one):
[ ] (1) A dollar amount or a percentage of the Participant's
Compensation which may not be less than ___% nor may not exceed
____% of his or her Compensation.
[ ] (2) An amount not less than ____% of and not more than ____% of each
Participant's Compensation.
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B. MAKING AND MODIFYING AN EMPLOYEE THRIFT CONTRIBUTION ELECTION
A Participant shall be entitled to increase, decrease or resume his or her
Employee Thrift Contribution percentage with the following frequency during the
Plan Year (select one):
[ ] (1) annually
[ ] (2) semi-annually
[ ] (3) quarterly
[ ] (4) monthly
[ ] (5) other (specify): ____
Any such increase, decrease or resumption shall be effective as of the first
payroll period coincident with or next following the first day of each period
set forth above. A Participant may completely discontinue making Employee
Thrift Contributions at any time effective for the payroll period after written
notice is provided to the Administrator.
▇. ▇▇▇▇▇▇ MATCHING CONTRIBUTIONS
If selected below, the Employer will make Matching Thrift Contributions for
each Plan Year (select one):
[ ] (1) Discretionary Formula:
A discretionary Matching Thrift Contribution equal to such a dollar amount
or percentage as determined by the Employer, which shall be allocated
(select one):
[ ] (a) based on the ratio of each Participant's Employee Thrift
Contribution for the Plan Year to the total Employee Thrift
Contributions of all Participants for the Plan Year. If
inserted, Matching Thrift Contributions shall be subject to a
maximum amount of $_____ for each Participant or ___% of each
Participant's Compensation.
[ ] (b) in an amount not to exceed ___% of each Participant's first
___% of Compensation contributed as Employee Thrift
Contributions for the Plan Year. If any Matching Thrift
Contribution remains, it is allocated to each such Participant
in an amount not to exceed ___% of the next ___% of each
Participant's Compensation contributed as Employee Thrift
Contributions for the Plan Year.
Any remaining Matching Thrift Contribution shall be allocated to each such
Participant in the ratio that such Participant's Employee Thrift
Contributions for the Plan Year bears to the total Employee Thrift
Contributions of all such Participants for the Plan Year. If inserted,
Matching Thrift Contributions shall be subject to a maximum amount of
$_____ for each Participant or ___% of each Participant's Compensation.
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[ ] (2) Nondiscretionary Formula:
A nondiscretionary Matching Thrift Contribution for each Plan Year equal to
(select one):
[ ] (a) ___% of each Participant's Compensation contributed as
Employee Thrift Contributions. If inserted, Matching Thrift
Contributions shall be subject to a maximum amount of $_____
for each Participant or ___% of each Participant's
Compensation.
[ ] (b) ___% of the first ___% of the Participant's Compensation
contributed as Employee Thrift Contributions and ___% of the
next ___% of the Participant's Compensation contributed as
Employee Thrift Contributions. If inserted, Matching Thrift
Contributions shall be subject to a maximum amount of $_____
for each Participant or ___% of each Participant's
Compensation.
D. QUALIFIED MATCHING CONTRIBUTIONS
If selected below, the Employer may make Qualified Matching Contributions for
each Plan Year (select all those applicable):
(1) In its discretion, the Employer may make Qualified Matching
Contributions on behalf of (select one):
[ ] (a) all Participants who make Employee Thrift Contributions.
[ ] (b) only those Participants who are Nonhighly Compensated
Employees and who make Employee Thrift Contributions.
(2) Qualified Matching Contributions will be contributed and allocated to
each Participant in an amount equal to:
[ ] (a) ___% of the Participant's Employee Thrift Contributions. If
inserted, Qualified Matching Contributions shall not exceed
___% of the Participant's Compensation.
[ ] (b) such an amount, determined by the Employer, which is needed to
meet the ACP Test.
ARTICLE VI. PARTICIPANT CONTRIBUTIONS
PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS
Participant Voluntary Nondeductible Contributions are (select one):
[X] (a) permitted.
[ ] (b) not permitted.
18
20
ARTICLE VII. VESTING
A. EMPLOYER CONTRIBUTION ACCOUNTS
(1) A Participant shall have a vested percentage in his or her
Profit-Sharing Contributions, Matching 401(k) Contributions and/or
Matching Thrift Contributions, if applicable, in accordance with the
following schedule (Select one):
MATCHING 401(k)
AND/OR MATCHING PROFIT-SHARING
THRIFT CONTRIBUTIONS CONTRIBUTIONS
-------------------- --------------
[ ] [ ] (a) 100% vesting immediately upon participation.
[X] [X] (b) 100% after 1 (not more than 5) years of Vesting
Service.
[ ] [ ] (c) Graded vesting schedule:
____% ____% after 1 year of Vesting Service;
____% ____% after 2 years of Vesting Service;
____% ____% (not less than 20%) after 3 years of Vesting Service;
____% ____% (not less than 40%) after 4 years of Vesting Service;
____% ____% (not less than 60%) after 5 years of Vesting Service;
____% ____% (not less than 80%) after 6 years of Vesting Service;
100% after 7 years of Vesting Service.
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(2) Top Heavy Plan
MATCHING 401(K)
AND/OR MATCHING PROFIT-SHARING
THRIFT CONTRIBUTIONS CONTRIBUTIONS
-------------------- --------------
Vesting Schedule (Select one):
[ ] [ ] (a) 100% vesting immediately upon participation.
[X] [X] (b) 100% after 1 (not more than 3) years of Vesting
Service.
[ ] [ ] (c) Graded vesting schedule:
____% ____% after 1 year of Vesting Service;
____% ____% (not less than 20%) after 2 years of Vesting Service;
____% ____% (not less than 40%) after 3 years of Vesting Service;
____% ____% (not less than 60%) after 4 years of Vesting Service;
____% ____% (not less than 80%) after 5 years of Vesting Service;
100% after 6 years of Vesting Service.
Top Heavy Ratio:
(a) If the adopting Employer maintains or has ever maintained a qualified
defined benefit plan, for purposes of establishing present value to
compute the top-heavy ratio, any benefit shall be discounted only for
mortality and interest based on the following:
Interest Rate: 8%
Mortality Table: UP '84
(b) For purposes of computing the top-heavy ratio, the valuation date shall
be the last business day of each Plan Year.
20
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B. ALLOCATION OF FORFEITURES
Forfeitures shall be (select one from each applicable column):
MATCHING 401(k)
AND/OR MATCHING PROFIT-SHARING
THRIFT CONTRIBUTIONS CONTRIBUTIONS
-------------------- ---------------
[X] [ ] (1) used to reduce Employer contributions for succeeding Plan Year.
[ ] [X] (2) allocated in the succeeding Plan Year in the ratio which the Compensation of each
Participant for the Plan Year bears to the total Compensation of all Participants
entitled to share in the Contributions. If the Plan is integrated with Social
Security, forfeitures shall be allocated in accordance with the formula elected by
the Employer.
C. VESTING SERVICE
For purposes of determining Years of Service for Vesting Service [select
(1) or (2) and/or (3)]:
[X] (1) All Years of Service shall be included.
[ ] (2) Years of Service before the Participant attained age 18 shall be
excluded.
[ ] (3) Service with the Employer prior to the effective date of the Plan
shall be excluded.
ARTICLE VIII. DEFERRAL OF BENEFIT DISTRIBUTIONS,
IN-SERVICE WITHDRAWALS AND LOANS
A. DEFERRAL OF BENEFIT DISTRIBUTIONS
401(k) AND/ PROFIT
OR THRIFT SHARING
----------- -------
[ ] [ ] If this item is checked, a Participant's vested benefit in his or her Employer Accounts shall be payable as
soon as practicable after the earlier of: (1) the date the Participant terminates Employment due to
Disability or (2) the end of the Plan Year in which a terminated Participant attains Early Retirement
Age, if applicable, or Normal Retirement Age.
21
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B. IN-SERVICE DISTRIBUTIONS
[X] (1) In-service distributions may be made from any of the Participant's
vested Accounts, at any time upon or after the occurrence of the
following events (select all applicable):
[X] (a) a Participant's attainment of age 59-1/2.
[X] (b) due to hardships as defined in Section 5.9 of the Plan.
[ ] (2) In-service distributions are not permitted.
C. LOANS ARE:
401(K) AND/ PROFIT
OR THRIFT SHARING
[X] [X] (1) permitted.
[ ] [ ] (2) not permitted.
ARTICLE IX. GROUP TRUST
[ ] If this item is checked, the Employer elects to establish a Group Trust
consisting of such Plan assets as shall from time to time be transferred
to the Trustee pursuant to Article X of the Plan. The Trust Fund shall be
a Group Trust consisting of assets of this Plan plus assets of the
following plans of the Employer or of an Affiliate: __________
ARTICLE X. MISCELLANEOUS
A. IDENTIFICATION OF SPONSOR
The address and telephone number of the Sponsor's authorized
representative is ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇;
(▇▇▇) ▇▇▇-▇▇▇▇. This authorized representative can answer inquiries
regarding the adoption of the Plan, the intended meaning of any Plan
provisions, and the effect of the opinion letter.
The Sponsor will inform the adopting Employer of any amendments made to
the Plan or the discontinuance or abandonment of the Plan.
22
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B. PLAN REGISTRATION
1. Initial Registration
This Plan must be registered with the Sponsor, ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, in order to be considered a
Prototype Plan by the Sponsor. Registration is required so that
the Sponsor is able to provide the Administrator with documents,
forms and announcements relating to the administration of the
Plan and with Plan amendments and other documents, all of which
relate to administering the Plan in accordance with applicable
law and maintaining compliance of the Plan with the law.
The Employer must complete and sign the Adoption Agreement. Upon
receipt of the Adoption Agreement, the Plan will be registered
as a Prototype Plan of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated. The Adoption Agreement will be countersigned by an
authorized representative and a copy of the countersigned
Adoption Agreement will be returned to the Employer.
2. Registration Renewal
Annual registration renewal is required in order for the Employer
to continue to receive any and all necessary updating documents.
There is an annual registration renewal fee in the amount set
forth with the initial registration material. The adopting
Employer authorizes ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, to debit the account established for the Plan for
payment of agreed upon annual fee; provided, however, if the
assets of an account are invested solely in Participant-Directed
Assets, a notice for this annual fee will be sent to the Employer
annually. The Sponsor reserves the right to change this fee from
time to time and will provide written notice in advance of any
change.
C. PROTOTYPE REPLACEMENT PLAN
This Adoption Agreement is a replacement prototype plan for the (1)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Special Prototype Defined Contribution Plan and Trust -
401(k) Plan #03-004 and (2) ▇▇▇▇▇▇▇ ▇▇▇▇▇ Assets Management, Inc., Special
Prototype Defined Contribution Plan and Trust - 401(k) Plan Adoption
Agreement #03-004.
D. RELIANCE
The adopting Employer may not rely on the opinion letter issued by the
National Office of the Internal Revenue Service as evidence that this Plan
is qualified under Code Section 401. In order to obtain reliance, the
Employee must apply to the appropriate Key District Director of the
Internal Revenue Service for a determination letter with respect to the
Plan.
23
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EMPLOYER'S SIGNATURE
Name of Employer: INNERDYNE, INC.
--------------------------------------[x]
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------------[x]
Authorized Signature
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------------[x]
Print Name
Controller
------------------------------------------------[x]
Title
Date: October 22, 1999
----------------------[x]
TO BE COMPLETED BY ▇▇▇▇▇▇▇ ▇▇▇▇▇:
SPONSOR ACCEPTANCE:
Subject to the terms and conditions of the Prototype Plan and this Adoption
Agreement, this Adoption Agreement is accepted by ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated as the Prototype Sponsor.
Authorized
Signature: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------------------------------------
24
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TRUSTEE(S) SIGNATURE
This Trustee Acceptance is to be completed only if the Employer appoints one or
more Trustees and does not appoint a ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company as Trustee.
The undersigned hereby accept all of the terms, conditions, and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group
Trust in this Adoption Agreement, the undersigned Trustee(s) shall be the
Trustee(s) of the Group Trust.
AS TRUSTEE:
_____________________________________ __________________________________ [X]
(Signature) (print or type name)
_____________________________________ __________________________________ [X]
(Signature) (print or type name)
_____________________________________ __________________________________ [X]
(Signature) (print or type name)
_____________________________________ __________________________________ [X]
(Signature) (print or type name)
_____________________________________ __________________________________ [X]
(Signature) (print or type name)
_____________________________________ __________________________________ [X]
(Signature) (print or type name)
DATED:_______________________, 19____ [X]
25
27
THE ▇▇▇▇▇▇▇ ▇▇▇▇▇ TRUST COMPANIES AS TRUSTEE
This Trustee Acceptance and designation of Investment Committee are to be
completed only when a ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company is appointed as Trustee.
TO BE COMPLETED BY THE EMPLOYER:
DESIGNATION OF INVESTMENT COMMITTEE
The Investment Committee for the Plan is (print or type names):
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------------------------------------
Name:
--------------------------------------------------------------------------
Name:
--------------------------------------------------------------------------
TO BE COMPLETED BY ▇▇▇▇▇▇▇ ▇▇▇▇▇ TRUST COMPANY:
ACCEPTANCE BY TRUSTEE:
The undersigned hereby accepts all of the terms, conditions, and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group
Trust in this Adoption Agreement, the undersigned Trustee(s) shall be the
Trustee(s) of the Group Trust.
SEAL MERRILL ▇▇▇▇▇ TRUST COMPANY [______________________]
By: /s/ [SIGNATURE ILLEGIBLE]
------------------------------------------
Dated: 3/16/00
----------
26
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-------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
---------
SPECIAL
---------
PROTOTYPE
DEFINED CONTRIBUTION PLAN
-------------------
Base Plan Document #03 used in conjunction with:
Non-standardized Profit Sharing Plan with CODA
Letter Serial Number: D359287b
National Office Letter Date: 6/29/93
Non-standardized Money Purchase Pension Plan
Letter Serial Number D359288b
National Office Letter Date: 6/29/93
Non-standardized Profit Sharing Plan
Letter Serial Number: D359289b
National Office Letter Date: 6/29/93
Non-standardized Target Benefit Plan
Letter Serial Number: D361009a
National Office Letter Date: 6/29/93
This Prototype Plan and Adoption Agreement are important legal instruments with
legal and tax implications for which the Sponsor, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇, Incorporated, does not assume responsibility. The Employer is urged to
consult with its own attorney with regard to the adoption of this Plan and its
suitability to its circumstances.
29
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
1.1 "Account" 1
1.2 "Account Balance" 1
1.3 "ACP Test" 1
1.4 "Actual Deferral Percentage" 1
1.5 "Adjustment Factor" 1
1.6 "Administrator" 1
1.7 "Adoption Agreement" 1
1.8 "ADP ▇▇▇▇" ▇
1.9 "Affiliate" 1
1.10 "Annuity Contract" 1
1.11 "Average Actual Deferral Percentage" 1
1.12 "Average Contribution Percentage" 1
1.13 "Beneficiary" 1
1.14 "Benefit Commencement Date" 2
1.15 "CODA" 2
1.16 "CODA Compensation" 2
1.17 "Code" 2
1.18 "Compensation" 2
1.19 "Contribution Percentage" 3
1.20 "Contribution Percentage Amounts" 3
1.21 "Defined Benefit Plan" 3
1.22 "Defined Contribution Plan" 3
1.23 "Disability" 3
1.24 "Early Retirement" 3
1.25 "Early Retirement Date" 3
1.26 "Earned Income" 3
1.27 "Elective Deferrals" 3
1.28 "Elective Deferrals Account" 4
1.29 "Eligible Employee" 4
1.30 "Eligible Participant" 4
1.31 "Employee" 4
1.32 "Employee Thrift Contributions" 4
1.33 "Employee Thrift Contributions Account" 4
1.34 "Employer" 4
1.35 "Employer Account" 4
1.36 "Employer Contributions" 4
1.37 "Employer Contributions Account" 4
1.38 "Employment" 4
1.39 "Entry Date" 4
1.40 "ERISA" 4
1.41 "Excess Aggregate Contributions" 5
1.42 "Excess Contributions" 5
1.43 "Excess Elective Deferrals" 5
1.44 "Family Member" 5
1.45 "401(k) Contributions Accounts" 5
1.46 "401(k) Election" 5
1.47 "Fully Vested Separation" 5
1.48 "Group Trust" 5
1.49 "Highly Compensated Employee" 5
1.50 "Hour of Service" 6
1.51 "Immediately Distributable" 6
1.52 "Investment Manager" 6
1.53 "Key Employee" 6
30
TABLE OF CONTENTS
1.54 "Leased Employee" 7
1.55 "Limitation Year" 7
1.56 "Master or Prototype Plan" 7
1.57 "Matching 401(k) Contribution" 7
1.58 "Matching 401(k) Contributions Account" 7
1.59 "Matching Thrift Contributions" 7
1.60 "Matching Thrift Contributions Account" 7
1.61 "Net Profits" 7
1.62 "Nonhighly Compensated Employee" 7
1.63 "Nonvested Separation" 7
1.64 "Normal Retirement Age" 7
1.65 "Owner-Employee" 7
1.66 "Partially Vested Separation" 8
1.67 "Participant" 8
1.68 "Participant Contributions Account" 8
1.69 "Participant-Directed Assets" 8
1.70 "Participant Voluntary Nondeductible Contributions" 8
1.71 "Participant Voluntary Nondeductible Contributions Account" 8
1.72 "Participating Affiliate" 8
1.73 "Period of Severance 8
1.74 "Plan" 8
1.75 "Plan Year" 8
1.76 "Prototype Plan" 9
1.77 "Qualified Joint and Survivor Annuity" 9
1.78 "Qualified Matching Contributions" 9
1.79 "Qualified Matching Contributions Account" 9
1.80 "Qualified Nonelective Contributions" 9
1.81 "Qualified Nonelective Contributions Account" 9
1.82 "Qualified Plan" 9
1.83 "Qualifying Employer Securities" 9
1.84 "Rollover Contribution" 9
1.85 "Rollover Contributions Account" 9
1.86 "Self-Employed Individual" 9
1.87 "Social Security Retirement Age" 9
1.88 "Sponsor" 9
1.89 "Spouse" 9
1.90 "Surviving Spouse" 10
1.91 "Taxable Wage Base" 10
1.92 "Transferred Account" 10
1.93 "Trust" 10
1.94 "Trust Fund" 10
1.95 "Trustee" 10
1.96 "Valuation Date" 10
1.97 "Vesting Service" 10
1.98 "Years of Service" 10
ARTICLE II PARTICIPATION
2.1 Admission as a Participant 10
2.2 Rollover Membership and Trust to Trust Transfer 11
2.3 Crediting of Service for Eligibility Purposes 11
31
TABLE OF CONTENTS
2.4 Termination of Participation 11
2.5 Limitation for Owner-Employee 11
2.6 Corrections with Regard to Participation 12
2.7 Provision of Information 12
ARTICLE III CONTRIBUTIONS AND ACCOUNT ALLOCATIONS
3.1 Employer Contributions and Allocations 12
3.2 Participant Voluntary Nondeductible Contributions 13
3.3 Rollover Contributions and Trust to Trust Transfers 13
3.4 Section 401(k) - Contributions and Account Allocations 13
3.5 Matching 401(k) Contributions 16
3.6 Thrift Contributions 18
3.7 Treatment of Forfeitures 19
3.8 Establishing of Accounts 19
3.9 Limitation on Amount of Allocations 19
3.10 Return of Employer Contributions Under Special Circumstances 24
ARTICLE IV VESTING
4.1 Determination of Vesting 24
4.2 Rules for Crediting Vesting Service 24
4.3 Employer Accounts Forfeitures 24
4.4 Top-Heavy Provisions 25
ARTICLE V AMOUNT AND DISTRIBUTIONS OF
BENEFITS, WITHDRAWALS AND LOANS
5.1 Distribution Upon Termination of Employment 27
5.2 Amount of Benefits Upon a Fully Vested Separation 27
5.3 Amount of Benefits Upon a Partially Vested Separation 27
5.4 Amount of Benefits Upon a Nonvested Separation 27
5.5 Amount of Benefits Upon a Separation Due to Disability 27
5.6 Distribution and Restoration 27
5.7 Withdrawals During Employment 28
5.8 Loans 28
5.9 Hardship Distributions 30
5.10 Limitation on Commencement of Benefits 30
5.11 Distribution Requirements 30
ARTICLE VI FORMS OF PAYMENT OF RETIREMENT BENEFITS
6.1 Methods of Distribution 34
6.2 Election of Optional Forms 35
6.3 Change in Form of Benefit Payments 36
6.4 Direct Rollovers 36
ARTICLE VII DEATH BENEFITS
7.1 Payment of Account Balances 37
7.2 Beneficiaries 37
7.3 Life Insurance 39
32
TABLE OF CONTENTS
ARTICLE VIII FIDUCIARIES
8.1 Named Fiduciaries 40
8.2 Employment of Advisers 40
8.3 Multiple Fiduciary Capacities 40
8.4 Indemnification 40
8.5 Payment of Expenses 40
ARTICLE IX PLAN ADMINISTRATION
9.1 The Administrator 41
9.2 Powers and Duties of the Administrator 41
9.3 Delegation of Responsibility 41
ARTICLE X TRUSTEE AND INVESTMENT COMMITTEE
10.1 Appointment of Trustee and Investment Committee 41
10.2 The Trust Fund 42
10.3 Relationship with Administrator 42
10.4 Investment of Assets 42
10.5 Investment Direction, Participant-Directed Assets
and Qualifying Employer Investments 43
10.6 Valuation of Accounts 45
10.7 Insurance Contracts 45
10.8 The Investment Manager 45
10.9 Powers of Trustee 46
10.10 Accounting and Records 47
10.11 Judicial Settlement of Accounts 47
10.12 Resignation and Removal of Trustee 47
10.13 Group Trust 48
ARTICLE XI PLAN AMENDMENT OR TERMINATION
11.1 Prototype Plan Amendment 48
11.2 Plan Amendment 48
11.3 Right of the Employer to Terminate Plan 49
11.4 Effect of Partial or Complete Termination or
Complete Discontinuance of Contributions 49
11.5 Bankruptcy 50
ARTICLE XII MISCELLANEOUS PROVISIONS
12.1 Exclusive Benefit of Participants 50
12.2 Plan Not a Contract of Employment 50
12.3 Action by Employer 50
12.4 Source of Benefits 50
12.5 Benefits Not Assignable 50
12.6 Domestic Relations Orders 51
12.7 Claims Procedure 51
12.8 Records and Documents; Errors 51
12.9 Benefits Payable to Minors, Incompetents and Others 51
12.10 Plan Merger or Transfer of Assets 51
12.11 Participating Affiliates 52
12.12 Controlling Law 52
12.13 Singular and Plural and Article and Section References 52
33
ARTICLE 1
DEFINITIONS
As used in this Prototype Plan and in each Adoption Agreement, each of the
following terms shall have the meaning for that term set forth in this Article
1:
1.1 ACCOUNT: A Separate Elective Deferrals Account, Employee Thrift
Contributions Account, Employer Contributions Account, Matching 401(k)
Contributions Account, Matching Thrift Contributions Account, Participant
Voluntary Nondeductible Contributions Account, Qualified Matching Contributions
Account, Qualified Nonelective Contributions Account, Rollover Contribution
Account, and Transferred Account, as the case may be.
1.2 ACCOUNT BALANCE: The value of an Account determined as of the applicable
Valuation Date.
1.3 ACP TEST: The Contribution Percentage test that is set forth in Section
3.5.2 of the Plan.
1.4 ACTUAL DEFERRAL PERCENTAGE: The ratio (expressed as a percentage), of (A)
Elective Deferrals made on behalf of an Eligible Participant for the Plan Year
(including Excess Elective Deferrals of Highly Compensated Employees and, at
the election of the Employer, Qualified Nonelective Contributions and/or
Qualified Matching Contributions), but excluding (1) Excess Elective Deferrals
of Nonhighly Compensated Employees that arise solely from Elective Deferrals
made under the Plan or plans of the Employer or an Affiliate and (2) Elective
Deferrals that are taken into account in the ACP Test (provided the ADP Test is
satisfied with or without the exclusion of such Elective Deferrals) to (B) the
Participant's CODA Compensation for the Plan Year (whether or not the Eligible
Employee was a Participant for he entire Plan Year). The Actual Deferral
Percentage of an Eligible Participant who would be a Participant but for the
failure to make an Elective Deferral is zero.
1.5 ADJUSTMENT FACTOR: The cost of living adjustment factor prescribed by the
Secretary of the Treasury under Code Section 415(d) for years beginning after
December 31, 1987, as applied to such items and in such manner as the Secretary
shall provide.
1.6 ADMINISTRATOR: The Employer, unless otherwise specified by duly authorized
action by the Employer.
1.7 ADOPTION AGREEMENT: The document so designated with respect to this
Prototype Plan that is executed by the Employer, as amended from time to time.
1.8 ADP TEST: The Average Actual Deferral Percentage test set forth in Section
3.4.2(B) of the Plan.
1.9 AFFILIATE: Any corporation or unincorporated trade or business (other than
the Employer) while it is:
(A) A member of a "controlled group of corporations" (within the meaning of
Code Section 414(b)) of which the Employer is a member;
(B) a member of any trade or business under "common control" (within the
meaning of Code Section 414(c)) with the Employer;
(C) a member of an "affiliated service group" (as that term is defined in Code
Section 414(m)) which includes the Employer; or
(D) any other entity required to be aggregated with the Employer pursuant to
Code Section 414(o). With respect to Section 3.9, "Affiliate" status shall be
determined in accordance with Code Section 415(h).
1.10 ANNUITY CONTRACT: An individual or group annuity contract issued by an
insurance company providing periodic benefits, whether fixed, variable or both,
the benefits or value of which a Participant or Beneficiary cannot transfer,
sell, assign, discount, or pledge as collateral for a loan or as security for
the performance of an obligation, or for any other purpose, to any person other
than the issuer thereof. The terms of any annuity contract purchased and
distributed by the Plan to a Participant or Spouse shall comply with the
requirements of this Plan.
1.11 AVERAGE ACTUAL DEFERRAL PERCENTAGE: For any group of Eligible
Participants, the average (expressed as a percentage) of the Actual Deferral
Percentages for each of the Eligible Participants in that group, including those
not making Elective Deferrals.
1.12 AVERAGE CONTRIBUTION PERCENTAGE: For any group of Eligible Participants,
the average (expressed as a percentage) of the Contribution Percentages for
each of the Participants in that group, including those on whose behalf
Matching 401(k) Contributions and/or Matching Thrift Contributions, if
applicable, are not being made.
1.13 BENEFICIARY: A person or persons entitled to receive any payment of
benefits pursuant to Article VII.
1
34
1.14 BENEFIT COMMENCEMENT DATE: The first day, determined pursuant to Article
V, for which a Participant or Beneficiary receives or begins to receive payment
in any form of distribution as a result of death, Disability, termination of
employment, Early Retirement, Plan termination or upon or after Normal
Retirement Age or age 70-1/2.
1.15 CODA: A cash or deferred arrangement pursuant to Code Section 401(k)
which is part of a profit sharing plan and under which an Eligible Participant
may elect to make Elective Deferrals in accordance with Section 3.4.1.
1.16 CODA COMPENSATION: Solely for purposes of determining the Actual Deferral
Percentage and the Contribution Percentage, CODA Compensation shall be
Compensation excluding or including "elective contributions" as specified in
the Adoption Agreement. The preceding sentence shall be effective for Plan
Years beginning on or after January 1, 1989.
1.17 CODE: The Internal Revenue Code of 1986, as now in effect or as amended
from time to time. A reference to a specific provision of the Code shall
include such provision and any applicable regulation pertaining thereto.
1.18 COMPENSATION: For purposes of contributions, Compensation shall be
defined in the Adoption Agreement and Section 3.9.1(H), subject to any
exclusions elected under Section 1AA(d) of the Adoption Agreement Section 3.1.4
and the following modifications:
(A) For a Self-Employed Individual, Compensation means his or her Earned
Income, provided that if the Self-Employed Individual is not a Participant for
an entire Plan Year, his or her Compensation for that Plan Year shall be his
or her Earned Income for that Plan Year multiplied by a fraction the numerator
of which is the number of days he or she is a Participant during the Plan Year
and the denominator of which is the number of days in the Plan Year.
(B) Compensation of each Participant taken into account under this Plan for
any Plan Year beginning after December 21, 1988 shall be limited to the first
$200,000 as adjusted by the Adjustment Factor. In determining the Compensation
of a Participant for purposes of this limitation, the rule of Code Section
414(q)(6) shall apply, except in applying such rules, the term "family" shall
include only the Spouse of the Participant and any lineal descendants of the
Participant who have not attained the age of 19 before the close of the year.
If, as a result of the application of such rules, the adjusted $200,000
limitation is exceeded, (except for purposes of determining the portion of
Compensation up to the Integration Level if this Plan is integrated with Social
Security), the limitation shall be prorated among the affected Participants in
proportion to each such Participant's Compensation as determined under this
Section 1.18 prior to the application of this limitation. In a manner applied
uniformly to all Eligible Employees, only Compensation during the period in
which the Employee is an Eligible Employee may be taken into account for
purposes of the nondiscrimination tests described in Code Section 401(k) and
401(m).
(C) If Compensation for any prior Plan Year is taken into account in
determining an Employee's contributions or benefits for the current year, the
Compensation for such prior year is subject to the applicable annual
compensation limit in effect for that prior year. For this purpose, for years
beginning before January 1, 1990, the applicable annual compensation limit is
$200,000.
(D) In addition to other applicable limitations set forth in the Plan, and
not withstanding any other provision of the Plan to the contrary, for Plan
Years beginning on or after January 1, 1994, the annual compensation of each
employee taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000 as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code.
The cost of living adjustment in effect for a calendar year applies to any
period, not exceeding 12 months, over which compensation is determined
(determination period) beginning in such calendar year. If a determination
period consists of fewer than 12 months, the OBRA '93 annual compensation limit
will be multiplied by a fraction the numerator of which is the number of months
in the determination period, and the denominator of which is 12.
For Plan years beginning on or after January 1, 1994, any reference in this
Plan to the limitations under Section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into account in
determining an Employee's benefits accruing, in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for prior determination periods beginning before the first day of
the first Plan year beginning on or after January 1, 1994, the OBRA '93
Compensation limit is $150,000.
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1.19 CONTRIBUTION PERCENTAGE: The ratio (expressed as a percentage) of the
Participant's Contribution Percentage Amounts to the Participant's CODA
Compensation for the Plan Year, whether or not the Eligible Employee was a
Participant for the entire Plan Year.
1.20 CONTRIBUTION PERCENTAGE AMOUNTS shall beam the sum of the: (A) Matching
401(k) Contributions; (B) Matching Thrift Contributions; (C) Qualified Matching
Contributions (to the extent not taken into account for purposes of the ADP
Test); (D) Employee Thrift Contributions; and (E) Participant Voluntary
Nondeductible Contributions, as applicable, made on behalf of the Participant
for the Plan Year. Such Contribution Percentage Amounts shall not include
Matching 401(k) Contributions that are forfeited either to correct Excess
Aggregate Contributions or because the contributions to which they relate are
Excess Elective Deferrals, Excess Contributions or Excess Aggregate
Contributions. The Employer may include Qualified Nonelective Contributions in
the Contribution Percentage Amounts, as specified in the Adoption Agreement.
Elective Deferrals may also be used in the Contribution Percentage Amounts so
long as the ADP Test is met before the Elective Deferrals are used in the ACP
Test and continues to be met following the exclusion of those Elective
Deferrals that are used to meet the ACP Test, as specified in the Adoption
Agreement. An Eligible Participant who does not direct an Elective Deferral or
an Employee Thrift Contribution shall be treated as an Eligible Participant on
behalf of whom no such contributions are made.
1.21 DEFINED BENEFIT PLAN: A plan of the type defined in Code Section 414(j)
maintained by the Employer or Affiliate, as applicable.
1.22 DEFINED CONTRIBUTION PLAN: A plan of the type defined in Code Section
414(i) maintained by the Employer or Affiliate, as applicable.
1.23 DISABILITY: Disability as defined in the Adoption Agreement. The
permanence and degree of such impairment shall be supported by medical evidence.
1.24 EARLY RETIREMENT: An actively employed Participant is eligible for Early
Retirement upon satisfying the requirements set forth in the Adoption Agreement.
1.25 EARLY RETIREMENT DATE: The Participant's Benefit Commencement Date
following his or her termination of Employment on or after satisfying the
requirements for Early Retirement and prior to Normal Retirement Age.
1.26 EARNED INCOME: The "net earnings from self-employment" within the meaning
of Code Section 401(c)(2) of a Self-Employed Individual from the trade or
business with respect to which the Plan is established, but only if the
personal services of the Self-Employed Individual are a material
income-producing factor in that trade or business. Net earnings will be
determined without regard to items not included in gross income and the
property allocable to or chargeable against such items and are to be
reduced by contributions by the Employer or Affiliate to a Qualified Plan to
the extent deductible under Code Section 404. Where this Plan refers to Earned
Income in the context of a trade or business other than that with respect to
which the Plan is adopted, the term Earned Income means such net earnings as
would be Earned Income as defined above if that trade or business was the trade
or business with respect to which the Plan is adopted.
Net earnings shall be determined with regard to the deduction allowed to the
Employer by Code Section 164(f) for taxable years beginning after December 31,
1989.
1.27 ELECTIVE DEFERRALS: Contributions made to the Plan during the Plan Year by
the Employer, at the election of the Participant, in lieu of cash compensation
and shall include contributions that are made pursuant to a 401(k) Election. A
Participant's Elective Deferral in any taxable year is the sum of all Employer
and Affiliate contributions pursuant to an election to defer under any
qualified cash or deferred arrangement, any simplified employee pension plan or
deferred arrangement as described in Code Section 402(h)(1)(B), any eligible
deferred compensation plan under Code Section 457, any plan as described under
Code Section 457, any plan as described under Code Section 501(c)(18), and any
Employer contributions made on behalf of a Participant for the purchase of an
annuity under Code Section 403(b) pursuant to a salary reduction agreement.
Such contributions are nonforfeitable when made and are not distributable under
the terms of the Plan to Participants or their Beneficiaries earlier than the
earlier of:
(A) termination from Employment, death or Disability of the Participant;
(B) termination of the Plan without establishment of another Defined
Contribution Plan by the Employer or an Affiliate;
(C) disposition by the Employer or Affiliate to an unrelated corporation of
substantially all of its assets used in a trade or business if such unrelated
corporation continues to maintain this Plan after the disposition but only with
respect to Employees who continue employment with the acquiring unrelated
entity. The sale of 85% of the assets used in a trade or business will be
deemed a sale of "substantially all" the assets used in a trade or business;
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(D) sale by the Employer or Affiliate to an unrelated entity of its interest in
an Affiliate if such unrelated entity continues to maintain the Plan but only
with respect to Employees who continue employment with such unrelated entity; or
(E) the events specified in Part B, Article VIII of the Adoption Agreement.
Elective Deferrals shall not include any deferrals properly distributed as an
"Excess Amount" pursuant to Section 3.9.2.
1.28 ELECTIVE DEFERRALS ACCOUNT: The Account established for a Participant
pursuant to Section 3.8.1.
1.29 ELIGIBLE EMPLOYEE: Those Employees specified in the Adoption Agreement.
1.30 ELIGIBLE PARTICIPANT: An Eligible Employee who has met the eligibility
requirements set forth in the Adoption Agreement whether or not he or she
makes Elective Deferrals and/or Employee Thrift Contributions.
1.31 EMPLOYEE: A self-employed individual, or any individual who is employed by
the Employer in the trade or business with respect to which the Plan is adopted
and any individual who is employed by an Affiliate. Each Leased Employee shall
also be treated as an Employee of the recipient Employer. The preceding
sentence shall not apply, however, to any Leased Employee who is (A) covered by
a money purchase pension plan maintained by the "leasing organization" referred
to in Section 1.54 which provides, with respect to such Leased Employee, a
nonintegrated Employer contribution rate of at least 10% of Limitation
Compensation, but including amounts contributed pursuant to a salary
reduction agreement which are excluded from the Employee's gross income under
Code Section 402(a)(8), Code Section 402(h) or Code Section 403(b), immediate
participation, and full and immediate vesting and (B) such Leased Employees do
not constitute more than 20% of the Employer's and Affiliates' nonhighly
compensated workforce. For purposes of the Plan, all Employees will be treated
as employed by a single employer.
1.32 EMPLOYEE THRIFT CONTRIBUTIONS: Employee nondeductible contributions which
are required to be eligible for a Matching Thrift Contribution. Employee Thrift
Contributions do not include Participant Voluntary Nondeductible Contributions.
1.33 EMPLOYEE THRIFT CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.3.
1.34 EMPLOYER: The sole proprietorship, partnership or corporation that adopts
the Plan by executing the Adoption Agreement. For all purposes relating to
eligibility, participation, contributions, vesting and allocations, Employer
includes all Participating Affiliates.
1.35 EMPLOYER ACCOUNT: The Participant's Matching 401(k) Contributions Account,
Matching Thrift Contributions Account, Employer Contributions Account,
Qualified Matching Contributions Account and Qualified Nonelective
Contributions Account, as the case may be.
1.36 EMPLOYER CONTRIBUTIONS: Any contributions made by the Employer for the
Plan Year on behalf of a Participant in accordance with Section 3.1 of the Plan.
1.37 EMPLOYER CONTRIBUTIONS ACCOUNT: The Account established for a Participant
pursuant to Section 3.8.2.
1.38 EMPLOYMENT: An Employee's employment or self-employment with the Employer,
Affiliate or a "leasing organization" referred to in Section 1.54 or, to the
extent required under Code Section 414(a)(2) or as otherwise specified by the
Administrator on a uniform and nondiscriminatory basis, any predecessor of any
of them. If any of them maintains a plan of a "predecessor employer" (within
the meaning of Code Section 414(a)(1)) employment or self-employment with the
"predecessor employer" will be treated as Employment. Additionally, if the
trade or business conducted by a Self-Employed Individual becomes incorporated,
all employment with that trade or business or with any Affiliate shall be
treated as Employment with the Employer.
1.39 ENTRY DATE: The date on which an Eligible Employee becomes a Participant,
as specified in the Adoption Agreement.
1.40 ERISA: The Employee Retirement Income Security Act of 1974, as amended
from time to time. Reference to a specific provision of ERISA shall include
such provision and any applicable regulation pertaining thereto.
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37
1.41 EXCESS AGGREGATE CONTRIBUTIONS: With respect to any Plan Year, the excess
of:
(A) The aggregate Contribution Percentage Amounts taken into account in
computing the numerator of the Contribution Percentage actually made on behalf
of Highly Compensated Employees for such Plan Year, over
(B) The maximum Contribution Percentage Amounts permitted by the ACP Test
(determined by reducing contributions made on behalf of Highly Compensated
Employees in the order of their Contribution Percentages beginning with the
highest of such percentages). Such determination shall be made after first
determining Excess Elective Deferrals and then determining Excess Contributions.
1.42 EXCESS CONTRIBUTIONS: With respect to any Plan Year, the aggregate amount
of Elective Deferrals, Qualified Nonelective Contributions and Qualified
Matching Contributions, if applicable, actually paid over to the Trust Fund on
behalf of Highly Compensated Employees for such Plan Year, over the maximum
amount of such contributions permitted by the ADP Test (determined by reducing
contributions made on behalf of Highly Compensated Employees in order of the
Actual Deferral Percentages, beginning with the highest of such percentages).
1.43 EXCESS ELECTIVE DEFERRALS: The amount of Elective Deferrals for a
Participant's taxable year that are includible in the gross income of the
Participant to the extent that such Elective Deferrals exceed the Code Section
402(g) dollar limitation and which the Participant allocates to this Plan
pursuant to the procedure set forth in Section 3.4.2. Excess Elective
Deferrals shall be treated as an Annual Addition pursuant to Section 3.9,
unless such amounts are distributed no later than the first April 15th
following the close of the Participant's taxable year.
1.44 FAMILY MEMBER: An individual described in Code Section 414(q)(6)(B).
1.45 401(k) CONTRIBUTIONS ACCOUNTS: The Participant's Elective Deferral
Account, Qualified Nonelective Contributions Account, and/or Qualified Matching
Contributions Account, as the case may be.
1.46 401(k) ELECTION: The election by a Participant to make Elective Deferrals
in accordance with Section 3.4.1.
1.47 FULLY VESTED SEPARATION: Termination of Employment, by reason other than
death, of a Participant whose vested percentage in each Employer Account is
100%.
1.48 GROUP TRUST: A Trust Fund consisting of assets of any Plan maintained and
established by the Employer or an Affiliate pursuant to Section 10.14.
1.49 HIGHLY COMPENSATED EMPLOYEE: The term Highly Compensated Employee includes
highly compensated active Employees and highly compensated former employees.
(A) A highly compensated active Employee includes any Employee who performs
service for the Employer or Affiliate during the Plan Year and who, during the
look-back year (the twelve-month period immediately preceding the Plan Year):
(i) received Compensation from the Employer or Affiliate in excess of $75,000
(as adjusted by the Adjustment Factor);
(ii) received Compensation from the Employer or Affiliate in excess of $50,000
(as adjusted by the Adjustment Factor) and was a member of the top-paid group
for such year; or
(iii) was an officer of the Employer or Affiliate and received Compensation
during such year that is greater than 50% of the Defined Benefit Dollar
Limitation.
(B) The term Highly Compensated Employee also includes:
(i) Employees who are both described in the preceding sentence if the term
"Plan Year" is substituted for the term "look-back year" and the Employee is
one of the 100 Employees who received the most Compensation from the Employer
or Affiliate during the Plan Year; and
(ii) Employees who are 5% owners at any time during the look-back year or Plan
Year.
(C) If no officer has received Compensation that is greater than 50% of the
Defined Benefit Dollar Limitation in effect during either the Plan Year or
look-back year, the highest paid officer of such year shall be treated as a
Highly Compensated Employee.
(D) A highly compensated former employee includes any Employee who terminated
Employment (or was deemed to have terminated) prior to the Plan Year, performs
no service for the Employer or Affiliate during the Plan Year, and was a highly
compensated active employee for either the separation year or any Plan Year
ending on or after the Employee's 55th birthday.
(E) If an Employee is, during a Plan Year or look-back year, a Family Member of
either (i) a 5% owner who is an active or former Employee or (ii) a Highly
Compensated Employee who is one of the ten most
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38
highly compensated employees ranked on the basis of Compensation paid by the
Employer or Affiliate during such year, then the Family Member and the 5% owner
or top-ten Highly Compensated Employee shall be aggregated. In such case, the
Family Member and 5% owner or top-ten Highly Compensated Employee shall be
treated as a single Employee receiving Compensation and plan contributions or
benefits equal to the sum of such Compensation and contributions or benefits of
the Family Member and 5% owner or top-ten Highly Compensated Employee. For
purposes of this section, Family Member includes the Spouse, lineal ascendants
and descendants of the Employee or former employee and the spouses of such
lineal ascendants and descendants.
(F) The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group;
the top 100 Employees; the number of Employees treated as officers; and the
Compensation that is considered will be made in accordance with Code Section
414(q).
1.50 HOUR OF SERVICE: If the Employer elects in the Adoption Agreement the
hourly record method, an Hour of Service shall include:
(A) Each hour for which an Employee is paid, or entitled to payment, by the
Employer or an Affiliate for the performance of duties for the Employer or an
Affiliate. These hours will be credited to the Employee for each Plan Year in
which the duties are performed or with respect to eligibility under Article II,
the applicable computation period under the definition of Year of Service in
which the duties are performed;
(B) Each hour for which an Employee is paid, or entitled to payment, by the
Employer or an Affiliate due to a period of time during which no duties are
performed (irrespective of whether Employment has terminated) due to vacation,
holiday, illness, incapacity (including Disability), layoff, jury duty, military
duty, or leave of absence. No more than 501 Hours of Service will be credited
under this paragraph for any single continuous period (whether or not such
period occurs in a single computation period). Hours under this paragraph will
be calculated and credited pursuant to section 2530.200b-2 of the Department of
Labor Regulations which are incorporated herein by this reference; and
(C) Each hour of which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Employee or an Affiliate. The same Hours of
Service will not be credited both under subparagraph (A) or subparagraph (B), as
the case may be, and under this subparagraph (C). These hours will be credited
to the Employee for the Year of Service or other computation period to which the
award or agreement pertains rather than the Year of Service or other computation
period in which the award, agreement or payment is made.
If the Employer elects in the Adoption Agreement the elapsed time method, an
Hour of Service is an hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer or an Affiliate.
With respect to both the hourly record method and the elapsed time method, in
addition to service with an Affiliate, Hours of Service will also be credited
for any individual considered an Employee for purposes of this Plan under Code
Section 414(n).
1.51 IMMEDIATELY DISTRIBUTABLE: A Participants's Account is Immediately
Distributable if any part of such Account could be distributed to the
Participant or Participant's Surviving Spouse before the Participant attains (or
would have attained if not deceased) the later of Normal Retirement Age or age
62.
1.52 INVESTMENT MANAGER: Any person appointed by the Trustee or, with respect to
Participant-Directed Assets, by the Participant or Beneficiary having the power
to direct the investment of such assets, to service as such in accordance with
Section 10.8.
1.53 KEY EMPLOYEE: Any Employee or former Employee (and the beneficiaries of
such Employee) who at any time during the "determination period" was (A) an
officer of the Employer or Affiliate, having an annual Compensation greater than
50% of the Defined Benefit Dollar Limitation for any Plan Year within the
"determination period"; (B) an owner (or considered an owner under Code Section
318) of one of the ten largest interests in the Employer or Affiliate if such
individual's Compensation exceeds 100% of the dollar limitation under Code
Section 415(c)(1)(A); (C) a "5% owner" (as defined in Code Section 416(i)) of
the Employer or Affiliate; or (D) a "1% owner" (as defined in Code Section
416(i)) of the Employer or Affiliate who has an annual Compensation of more than
$150,000. Annual Compensation means compensation as defined in Code Section
415(c)(3), but including amounts contributed by the Employer pursuant to a
salary reduction agreement which are excludible from the Employee's gross income
under Code Section 125, Code Section 402(a)(8), Code Section 402(h) or Code
Section 403(b). The "determination period" is the Plan Year containing the
"determination date" and the four preceding Plan Years. The "determination date"
for the first Plan Year is the last day of the Plan Year, and for any subsequent
Plan Year is the last day of the preceding Plan Year. The determination of who
is a Key Employee will be made in accordance with Code Section 416(i).
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1.54 LEASED EMPLOYEE: Any individual (other than an Employee of the recipient
Employer or Affiliate) who, pursuant to an agreement between the Employer or
Affiliate and any other person (the "leasing organization") has performed
services for the Employer (or for the Employer or Affiliate and "related
persons" determined in accordance with Code Section 414(n)(6)) on a
substantially full-time basis for a period of at least one year, which services
are of a type historically performed, in the business field of the recipient
Employer or Affiliate, by employees. Contributions or benefits provided a
Leased Employee by the leasing organization which are attributable to services
performed for the recipient Employer or Affiliate shall be treated as provided
by the recipient Employer.
1.55 LIMITATION YEAR. The Limitation Year as specified in the Adoption
Agreement. All Qualified Plans maintained by the Employer must use the same
Limitation Year. If the Limitation Year is amended to a different 12-consecutive
month period, the new Limitation Year must begin on a date within the Limitation
Year in which the amendment is made.
1.56 MASTER OR PROTOTYPE PLAN: A plan the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
1.57 MATCHING 401(k) CONTRIBUTION: Any contribution made by the Employer to
this and/or any other Defined Contribution Plan for the Plan Year, by reason of
the Participant's 401(k) Election, and allocated to a Participant's Matching
401(k) Contributions Account or to a comparable account in another Defined
Contribution Plan. Matching 401(k) Contributions are subject to the
distribution provisions applicable to Employer Accounts in the Plan.
1.58 MATCHING 401(k) CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.4.
1.59 MATCHING THRIFT CONTRIBUTIONS: Any contribution made by the Employer for
the Plan Year by reason of Employee Thrift Contributions. Matching Thrift
Contributions shall be subject to the distribution provisions applicable to
Employer Accounts in the Plan.
1.60 MATCHING THRIFT CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.5.
1.61 NET PROFITS: The current and accumulated profits of the Employer from the
trade or business of the Employer with respect to which the Plan is
established, as determined by the Employer before deductions for federal, state
and local taxes on income and before contributions under the Plan or any other
Qualified Plan.
1.62 NONHIGHLY COMPENSATED EMPLOYEE: An Employee of the Employer who is neither
a Highly Compensated Employee nor a Family Member.
1.63 NONVESTED SEPARATION: Termination of Employment of a Participant whose
vested percentage in each Employer Account is 0%.
1.64 NORMAL RETIREMENT AGE: The age specified in the Adoption Agreement.
Notwithstanding the Employer's election in the Adoption Agreement, if, for Plan
Years beginning before January 1, 1988, Normal Retirement Age was determined
with reference to the anniversary of the participation commencement date (more
than 5 but not to exceed 10 years), the anniversary date for Participants who
first commenced participation under the Plan before the first Plan Year
beginning on or after January 1, 1988, shall be the earlier of (A) the tenth
anniversary of the date the Participant commenced participation in the Plan (or
such anniversary as had been elected by the Employer, if less than 10) or (B)
the fifth anniversary of the first day of the first Plan Year beginning on or
after January 1, 1988.
1.65 OWNER-EMPLOYEE: An individual who is a sole proprietor, if the Employer is
a sole proprietorship, or if the Employer is a partnership, a partner owning
more than 10% of either the capital interest or the profits interest in the
Employer; provided that where this Plan refers to an Owner-Employee in the
context of a trade or business other than the trade or business with respect to
which the Plan is adopted, the term Owner-Employee means a person who would be
an owner. Employer as defined above if that other trade or business was the
Employer.
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1.66 PARTIALLY VESTED SEPARATION: Termination of Employment of a Participant
whose vested percentage in any Employer Account is less than 100% but greater
than 0%.
1.67 PARTICIPANT: An Employee who has commenced, but not terminated,
participation in the Plan as provided in Article II.
1.68 PARTICIPANT CONTRIBUTIONS ACCOUNT: The Participant's Participant Voluntary
Nondeductible Contributions Account and/or Employee Thrift Contributions
Account, as the case may be.
1.69 PARTICIPANT-DIRECTED ASSETS: The assets of an Account which are invested,
as described in Section 10.5.1, according to the direction of the Participant
or the Participant's Beneficiary, as the case may be, in either individually
selected investments or in commingled funds or in shares of regulated
investment companies.
1.70 PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS: Any voluntary
nondeductible contributions made in cash by a Participant to this Plan other
than Employee Thrift Contributions.
1.71 PARTICIPANT VOLUNTARY NONDEDUCTIVE CONTRIBUTIONS ACCOUNT: The Account
established for a Participant pursuant to Section 3.8.6.
1.72 PARTICIPATING AFFILIATE: Any Affiliate or any other employer designated as
such by the Employer, and, by duly authorized action, that has adopted the Plan
with the consent of the Employer and has not withdrawn therefrom.
1.73 PERIOD OF SEVERANCE: For purposes of the hourly records method, a Period
of Severance is a period equal to the number of consecutive Plan Years or, with
respect to eligibility, the applicable computation period under the definition
of Year of Service, in which an Employee has 500 Hours of Service or less. The
Period of Severance shall be determined on the basis of Hours of Severance and
shall commence with the first Plan Year in which the Employee has 500 Hours of
Service or less. With respect to any period of absence during which a Period of
Severance does not commence, the Participant shall be credited with the Hours
of Service (up to a maximum of 501 Hours of Service in a Plan Year) which would
otherwise have been credited to him or her but for such absence, or if such
Hours of Service cannot be determined, 8 Hours of Service for each day of
absence.
For purposes of the elapsed time method, a Period of Severance is a continuous
period of at least 12-consecutive months during which an individual's Employment
is not continuing, beginning on the date an Employee retires, quits or is
discharged or, if earlier, the first 12-month anniversary of the date that the
individual is otherwise first absent from service (with or without pay) for any
other reason, and ending on the date the individual again performs an Hour of
Service.
Anything in the definition thereof to the contrary notwithstanding, a Period of
Severance shall not commence if the Participant is:
(A) On an authorized leave of absence in accordance with standard personnel
policies applied in a nondiscriminatory manner to all Employees similarly
situated and returns to active Employment by the Employer or Affiliate
immediately upon the expiration of such leave of absence;
(B) On a military leave while such Employee's re-employment rights are
protected by law and returns to active employment within ninety days after his
or her discharge or release (or such longer period as may be prescribed by law);
or
(C) Absent from work by reason of (i) the pregnancy of [copy illegible] of a
child of the Employee, or (iii) the placement of a child with the Employment in
connection with the adoption of such child by such Employee, or (iv) the care of
such child for a period beginning immediately following such birth or placement.
In determining when such a Participant's Period of Severance begins, the
Participant will be credited with (i) for purposes of the elapsed time method,
the 12-consecutive month period beginning on the first anniversary of the first
date of such absence; or (ii) for purposes of the hourly records method, the
Hours of Service he or she would normally have had but for such absence, or if
such Hours cannot be determined, eight Hours of Service for each day of such
absence; provided, however, that such Hours of Service shall not exceed 501 and
shall be credited only in the year in which such absence began if such crediting
would prevent the Participant from incurring a Period of Severance in that year,
or in any other case, shall be credited in the immediately following year.
1.74 PLAN: The plan established by the Employer in the form of this Prototype
Plan and the applicable Adoption Agreement executed by the Employer. The Plan
shall have the name specified in the Adoption Agreement.
1.75 PLAN YEAR: Each 12-consecutive month period ending on the date specified
in the Adoption Agreement, during any part of which the Plan is in effect.
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1.76 PROTOTYPE PLAN: The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Special Prototype Defined Contribution
Plan set forth in this document, as amended or restated from time to time.
1.77 QUALIFIED JOINT AND SURVIVOR ANNUITY: An immediate annuity for the life of
Participant with a survivor annuity continuing after the Participant's death to
the Participant's Surviving Spouse for the Surviving Spouse's life in an amount
equal to 50% of the amount of the annuity payable during the joint lives of the
Participant and such Surviving Spouse and which is the actuarial equivalent of
a single life annuity which could be provided for the Participant under an
Annuity Contract purchased with the aggregate vested Account Balances of the
Participant's Accounts at the Benefit Commencement Date.
1.78 QUALIFIED MATCHING CONTRIBUTIONS: Matching Contributions which, pursuant
to the election made by the Employer, and in accordance with Code Section
401(m), are nonforfeitable when made and subject to the limitation on
distribution set forth in the definition of Qualified Nonelective Contributions.
1.79 QUALIFIED MATCHING CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.7.
1.80 QUALIFIED NONELECTIVE CONTRIBUTIONS: Contributions (other than Matching
401(k) Contributions, Qualified Matching 401(k) Contributions or Elective
Deferrals), if any, made by the Employer which the Participant may not elect to
receive in cash until distributed from the Plan, which are nonforfeitable when
made, and which are not distributable under the terms of the Plan to
Participants or their Beneficiaries earlier than the earlier of:
(A) termination of Employment, death, or Disability of the Participant;
(B) attainment of the age 59-1/2 by the Participant;
(C) termination of the Plan without establishment of another Defined
Contribution Plan by the Employer or an Affiliate;
(D) disposition by the Employer or Participating Affiliate to an unrelated
corporation of substantially all of its assets used in a trade or business if
such unrelated corporation continues to maintain this Plan after the
disposition but only with respect to Employees who continue employment with the
acquiring unrelated entity. The sale of 85% of the assets used in a trade or
business will be deemed a sale of "substantially all" the assets used in a
trade or business;
(E) sale by the Employer to an unrelated entity of its interest in an Affiliate
if such unrelated entity continues to maintain the Plan but only with respect
to Employees who continue employment with such unrelated entity; and
(F) effective for Plan Years beginning before January 1, 1989, upon the
hardship of the Participant.
1.81 QUALIFIED NONELECTIVE CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.7.
1.82 QUALIFIED PLAN: A Defined Benefit Plan or Defined Contribution Plan.
1.83 QUALIFYING EMPLOYER SECURITIES: Employer securities, as that term is
defined in ERISA Section 407(d)(5).
1.84 ROLLOVER CONTRIBUTION: A contribution described in Section 3.4.
1.85 ROLLOVER CONTRIBUTIONS ACCOUNT: The Account established for a Participant
pursuant to Section 3.8.9.
1.86 SELF-EMPLOYED INDIVIDUAL: An individual who has Earned Income for the Plan
Year involved from the trade or business for which the Plan is established, or
who would have had such Earned Income but for the fact that the trade or
business with respect to which the Plan is established had no Net Profits for
that Plan Year.
1.87 SOCIAL SECURITY RETIREMENT AGE: Age 65 in the case of a Participant
attaining age 62 before January 1, 2000 (i.e., born before January 1, 1938),
age 66 for a Participant attaining age 62 after December 31, 1999, and before
January 1, 2017 (i.e., born after December 31, 1937, but before January 1,
1955), and age 67 for a Participant attaining age 62 after December 31, 2016
(i.e., born after December 31, 1954).
1.88 SPONSOR: The mass submitter, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated and any successor thereto, and any other qualifying sponsoring
organization who sponsors with the consent of the mass submitter, the Prototype
Plan and makes the Prototype Plan available for adoption by Employers.
1.89 SPOUSE: The person married to a Participant, provided that a former spouse
will be treated as the Spouse to the extent provided under a "qualified
domestic relations order" (or a "domestic relations order" treated as such) as
referred to in Section 12.6.
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1.90 SURVIVING SPOUSE: The Person married to a Participant on the earliest of:
(A) the date of the Participant's death;
(B) the Participant's Benefit Commencement Date; or
(C) the date on which an Annuity Contract is purchased for the Participant
providing benefits under the Plan.
Anything contained herein to the contrary notwithstanding, a former spouse will
be treated as the Surviving Spouse to the extent provided under a "qualified
domestic relations order" (or a "domestic relations order" treated as such) as
referred to in Section 12.6.
1.91 TAXABLE WAGE BASE: The maximum amount of earnings which may be considered
"wages" for the Plan Year involved under Code Section 3121(a)(I).
1.92 TRANSFERRED ACCOUNT: The Account established for a Participant pursuant to
Section 3.8.10.
1.93 TRUST: The trust established under the Plan to which Plan contributions
are made and in which Plan assets are held.
1.94 TRUST FUND: The assets of the Trust held by or in the name of the Trustee.
1.95 TRUSTEE: The person appointed as Trustee pursuant to Article X and any
successor Trustee.
1.96 VALUATION DATE: The last business day of each Plan Year, the date
specified in the Adoption Agreement or determined pursuant to Section 10.6, if
applicable, and each other date as may be determined by the Administrator.
1.97 VESTING SERVICE: The Years of Service credited to a Participant under
Article IV for purposes of determining the Participant's vested percentage in
any Employer Account established for the Participant.
1.98 YEARS OF SERVICE: If the Employer elects the hourly records method in the
Adoption Agreement, an Employee shall be credited with one Year of Service for
each Plan Year in which he or she has 1,000 Hours of Service. Solely for
purposes of eligibility to participate, an Employee shall be credited with a
Year of Service on the last day of the 12-consecutive month period which
begins on the first day on which he or she has an Hour of Service, if he or she
has at least 1,000 Hours of Service in that period. If an Employee fails to be
credited with a Year of Service on such date, he or she shall be credited with
a Year of Service on the last day of each succeeding 12-consecutive month
period.
If the Employer elects the elapsed time method in the Adoption Agreement, the
Employee's Years of Service shall be a span of service equal to the sum of:
(A) the period commencing on the date the Employee first performs an Hour of
Service and ending on the date he or she quits, retires, is discharged, dies,
or if earlier, the 12-month anniversary of the date on which the Employee was
otherwise first absent from service (with or without pay) for any other reason;
and
(B)(i) if the Employee quits, retires, or is discharged, the period commencing
on the date the Employee terminated his or her Employment and ending on the
first date on which he or she again performs an Hour of Service, if such date
is within 12 months of the date on which he or she last performed an Hour of
Service; or
(ii) if the Employee is absent from work for any other reason and, within 12
months of the first day of such absence, the Employee quits, retires or is
discharged, the period commencing on the first day of such absence and ending
on the first day he or she again performs an Hour of Service if such day is
within 12 months of the date his or her absence began.
With respect to both the elapsed time method and the hourly record method,
service with a predecessor employer, determined in the manner in which the
rules of this Plan would have credited such service had the Participant earned
such service under the terms of this Plan, may be included in Years of Service,
as specified in the Adoption Agreement.
ARTICLE II PARTICIPATION
2.1 ADMISSION AS A PARTICIPANT
2.1.1 An Eligible Employee shall become a Participant on the Entry Date
coincident with or next following the date on which he or she meets the
eligibility requirements specified in the Adoption Agreement; provided, however
that
(A) an Eligible Employee who has met the eligibility requirements as of the
first day of the Plan Year in which the Plan is adopted as a new Plan shall
become a Participant as of such date;
(B) an Eligible Employee who had met the eligibility requirements of a plan
that is restated and/or amended to become this Plan shall become a Participant
as of the date this Plan is adopted; and
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(C) if selected in the Adoption Agreement, an Eligible Employee shall become a
Participant on the effective date of the Plan providing he or she is an Eligible
Employee on such date.
2.1.2 An Employee who did not become a Participant on the Entry Date coincident
with or next following the day on which he or she met the eligibility
requirements because he or she was not an Eligible Employee shall become a
Participant on the first day on which he or she again becomes an Eligible
Employee unless determined otherwise in accordance with Section 2.3.1 of the
Plan.
2.1.3 If the Plan includes a CODA or thrift feature, in addition to the
participation requirements set forth in Section 2.1.1, an Eligible Employee
shall become a Participant upon filing his or her 401(k) Election or election
to make Employee Thrift Contributions with the Administrator. An election shall
not be required if the Employer has elected to make contributions to an
Employer Account and/or Qualified Nonelective Contributions with respect to all
Eligible Participants.
2.1.4 An individual who has ceased to be a Participant and who again becomes an
Eligible Employee shall become a Participant immediately upon reemployment as
an Eligible Employee unless determined otherwise in accordance with Section
2.3.1 of the Plan.
2.2 ROLLOVER MEMBERSHIP AND TRUST TO TRUST TRANSFER
An Eligible Employee who makes a Rollover Contribution or a trust to trust
transfer shall become a Participant of the date of such contribution or
transfer even if he or she had not previously become a Participant. Such an
Eligible Employee shall be a Participant only for the purposes of such Rollover
Contribution or transfer and shall not be eligible to share in contributions
made by the Employer until he or she has become a Participant with Section 2.1.
2.3 CREDITING OF SERVICE FOR ELIGIBILITY PURPOSES
2.3.1 For purposes of eligibility to participate, an Eligible Employee or
Participant without any vested interest in any Employer Account and without an
Elective Deferrals Account who terminates Employment shall lose credit for his
or her Years of Service prior to such termination of Employment if his or her
Period of Service equals or exceeds five years or, if greater, the aggregate
number of Years of Service.
2.3.2 For purposes of eligibility to participate, a Participant who has a vested
interest in any Employer Account and who terminates Employment shall retain
credit for his or her Years of Service prior to such termination of Employment
without regard to the length of his or her Period of Severance. In the event
such Participant returns to Employment, he or she shall participate immediately.
2.3.3 A former Eligible Employee was not a Participant who again becomes an
Eligible Employee with no Years of Service to his or her credit shall be
treated as a new Employee.
2.4 TERMINATION OF PARTICIPATION
A Participant shall cease to be a Participant:
(A) upon his or her death;
(B) upon the payment to him or her of all nonforfeitable benefits due to him or
her under the Plan, whether directly or by the purchase of an Annuity Contract;
or
(C) upon his or her Nonvested Separation.
2.5 LIMITATION FOR OWNER-EMPLOYEE
2.5.1 If the Plan provides contributions or benefits for one or more
Owner-Employees who control the trade or business for which this Plan is
established and who also control as an Owner-Employee or as Owner-Employees one
or more other trades or business, this Plan and the plan established for each
such other trade or business must, when looked at as a single plan, satisfy the
requirements of Code Sections 401(a) and (d) with respect to the employees of
this and all of such other trades or businesses.
2.5.2 If the Plan provides contributions or benefits for one or more
Owner-Employees who control as an Owner-Employee or as Owner-Employees one or
more other trades or businesses, the employees of the other trades or
businesses must be included in a plan which satisfies the requirements of Code
Sections 401(a) and(d) and which provides contributions and benefits for the
employees of such other trades or businesses not less favorable than the
contributions and benefits provided for Owner-Employees under this Plan.
2.5.3 If an individual is covered as an Owner-Employee under the plans of two or
more trades or businesses which are not controlled and the individual controls a
trade or business, then the contributions or benefits of the employees under the
plan of the trades or businesses which are controlled must be as favorable as
those provided for such individual under the most favorable plan of the trade or
business which is not controlled.
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2.5.4 For purposes of the preceding three subsections, an Owner-Employee, or
two or more Owner-Employees, will be considered to control a trade or business
if the Owner-Employee, or two or more Owner-Employees together:
(A) own the entire interest in an unincorporated trade or business, or
(B) in the case of a partnership, own more than 50% of either the capital
interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees, shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such Owner-Employee,
or such two or more Owner-Employees, are considered to control within the
meaning of the preceding sentence.
2.6 CORRECTIONS WITH REGARD TO PARTICIPATION
2.6.1 If in any Plan Year an Eligible Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission
is not made until after a contribution by the Employer for the year has been
made, the Employer shall make a subsequent contribution with respect to the
omitted Eligible Employee in the amount which would have contributed with
respect to such Eligible Employee had he or she not been omitted. Such
contribution shall be made whether or not it is deductible in whole or in part
in any taxable year under applicable provisions of the Code. It shall be the
responsibility of the Employer and Administrator to take any and all actions as
required by this Section 2.6.1.
2.6.2 If in any Plan Year any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made,
the amount contributed on behalf of such ineligible person shall constitute a
forfeiture for the Plan Year in which the discovery is made. It shall be the
responsibility of the Employer and Administrator to take any and all actions as
required by this Section 2.6.2.
2.7 PROVISION OF INFORMATION
Each Employee shall execute such forms as may reasonably be required by the
Administrator, and shall make available to the Administrator any information the
Administrator may reasonably request in this regard. By virtue of his or her
participation in this Plan, an Employee agrees, on his or her own behalf and on
behalf of all persons who may have or claim any right by reason of the
Employee's participation in the Plan, to be bound by all provisions of the Plan.
ARTICLE III
CONTRIBUTIONS AND ACCOUNT ALLOCATIONS
3.1 EMPLOYER CONTRIBUTIONS AND ALLOCATIONS
3.1.1 If the Plan is a profit-sharing plan, the Employer will contribute cash
and/or Qualifying Employer Securities to the Trust Fund, in such amount, if
any, as specified in the Adoption Agreement and with respect to Qualifying
Employer Securities as is consistent with Sections 10.4.2 and 10.4.3. If the
Plan is a profit-sharing plan, Net Profits may be necessary for an Employer to
make contributions, as specified in the Adoption Agreement. Employer
Contributions for a Plan Year will be allocated no later than the last day of
the Plan Year to the Employer Contributions Account of Participants eligible
for an allocation in the manner specified in the Adoption Agreement. A
not-for-profit corporation may adopt a profit-sharing plan as an incentive
plan; provided, however, that such a plan may not contain a CODA feature unless
otherwise permitted by law.
3.1.2 If the Plan is a money purchase pension plan, the Employer will
contribute cash to the Trust Fund in an amount equal to that percentage of the
Compensation of each Participant eligible for an allocation of Employer
contributions for that Plan Year as specified in the Adoption Agreement.
Employer Contributions for the Plan Year will be allocated as of the last day
of the Plan Year to the Employer Contributions Accounts of Participants
eligible for an allocation and entitled to share in such contributions in the
manner specified in the Adoption Agreement.
3.1.3 If the Plan is a target benefit plan, the Employer will contribute cash
to the Trust Fund in an amount specified in the Adoption Agreement. The amount
contributed with respect to the targeted benefit of each Participant eligible
for an allocation for that Plan Year will be allocated as of the last day of
the Plan Year to the Participant's Employer Contributions Account in the manner
specified in the Adoption Agreement.
3.1.4 If the Employer elects in the Adoption Agreement to make contributions on
behalf of a Participant whose Employment terminated due to Disability,
"Compensation" shall mean, with respect to
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such Participant, the Compensation he or she would have received for the entire
calendar year in which the Disability occurred if he or she had been paid for
such year at the rate of which he or she was being paid immediately prior to
such Disability. Employer Contributions may be taken into account only if the
Participant is a Nonhighly Compensated Employee and contributions made on his or
her behalf are nonforfeitable.
3.1.5 If an Employer has adopted more than one Adoption Agreement, or has
adopted a plan pursuant to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Special Prototype Defined Benefit
Plan and Trust, only one Adoption Agreement may be integrated with Social
Security.
3.1.6 For purposes of the Plan, contributions provided by the "leasing
organization" referred to in Section 1.37 of a Leased Employee which are
attributable to services performed for the Employer shall be treated as
provided by the Employer.
3.2 PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS
3.2.1 If elected by the Employer in the Adoption Agreement, each Participant
while actively employed may make Participant Voluntary Nondeductible
Contributions in cash in a dollar amount or a percentage of Compensation which
does not, when included in the Contribution Percentage Amount, exceed the
limitations set forth in Code Section 401(m).
3.2.2 Participant Voluntary Nondeductible Contributions shall be made in
accordance with rules and procedures adopted by the Administrator.
3.3 ROLLOVER CONTRIBUTIONS AND TRUST TO TRUST TRANSFERS
3.3.1 Any Eligible Employee or Participant may make a Rollover Contribution
under the Plan. A Rollover Contribution shall be in cash or in other property
acceptable to the Trustee and shall be a contribution attributable to (a) a
"qualified total distribution" (as defined in Code Section 402(a)(5)),
distributed to the contributing Employee under Code Section 402(a)(5) from a
Qualified Plan or distributed to the Employee under Code Section 403(a)(4) from
an "employee annuity" or referred to in that section, or (b) a payout or
distribution to the Employee referred to in Code Section 408(d)(3) from an
"individual retirement account" or an "individual retirement annuity"
described, respectively, in Code Section 408(a) or Section 408(b) consisting
exclusively of amounts attributable to "qualified total distributions" (as
defined in Code Section 402(a)(5)) from a Qualified Plan. The Plan shall not
accept a Rollover Contribution attributable to any accumulated deductible
employee contributions as defined by Code Section 72(o)(5)(B). The Trustee may
condition acceptance of a Rollover Contribution upon receipt of such documents
as it may require. In the event that an Employee makes a contribution pursuant
to this Section 3.3 intended to be a Rollover Contribution but which did not
qualify as a Rollover Contribution, the Trustee shall distribute to the
Employee as soon as practicable after that conclusion is reached the entire
Account balance in his or her Rollover Contributions Account deriving from such
contributions determined as of the valuation date coincident with or
immediately preceding such discovery.
3.3.2 Any Eligible Employee or Participant may direct the Administrator to
direct the Trustee to accept a transfer to the Trust Fund from another trust
established pursuant to another Qualified Plan of all or any part of the assets
held in such other trust. The Plan shall not accept a direct transfer
attributable to accumulated deductible employee contributions as defined by
Code Section 72(o)(5)(B). The Trustee may condition acceptance of such a trust
to trust transfer upon receipt of such documents as it may require.
3.4 SECTION 401(k) CONTRIBUTIONS AND ACCOUNT ALLOCATIONS
3.4.1 ELECTIVE DEFERRALS
(a) Amount of Elective Deferrals
Subject to the limitations contained in Section 3.4.2, the Employer will
contribute cash to the Trust Fund in an amount equal to:
(i) as specified on the Participant's 401(k) Election form, the specific dollar
amount, or the deferral percentage multiplied by each such Participant's
Compensation; or
(ii) a bonus contribution made pursuant to Section 3.4.1(C).
(B) The amount elected by a Participant pursuant to a 401(k) Election shall be
determined within the limits specified in the Adoption Agreement. The 401(k)
Election shall be made on a form provided by the Administrator but no election
shall be effective prior to approval by the Administrator. The Administrator
may reduce the amount of any 401(k) Election, or make such other modifications
as necessary, so that the Plan complies with the provisions of the Code. A
Participant's 401(k) Election shall remain in effect until modified or
terminated. Modification or termination of a 401(k) Election shall be made at
such time as specified in the Adoption Agreement.
(c) If elected by the Employer in the Adoption Agreement, an Eligible Employee
may make a 401(k) Election to have an amount withheld up to the amount
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of any bonus payable for such Plan Year and direct the Employer to contribute
the amount so withheld to his or her Elective Deferrals Account.
3.4.2 LIMITATION ON ELECTIVE DEFERRALS
(A) Maximum Amount of Elective Deferrals and Distribution of Excess Elective
Deferrals
(i) No Participant shall be permitted to have Elective Deferrals made under
this Plan, or any other Qualified Plan maintained by the Employer, during any
Plan Year in excess of the dollar limitation contained in Code Section 402(g)
in effect at the beginning of the Participant's taxable year.
(ii) Notwithstanding any other provision of the Plan, Excess Elective Deferrals
made to this Plan or assigned to this Plan, plus any income and minus any loss
allocable thereto, shall be distributed no later than April 15, 1988, and each
April 15 thereafter, to Participants to whose accounts Excess Elective Deferrals
were designated for the preceding Plan Year and who claim Excess Elective
Deferrals for such taxable year. Excess Elective Deferrals shall be treated as
Annual Additions.
(iii) Claims. A Participant may designate to this Plan any amount of his or her
Elective Deferrals as Excess Elective Deferrals during his or her taxable year.
A Participant's claim shall be in writing, shall be submitted to the
Administrator no later than March 1, shall specify the Participant's Excess
Elective Deferral for the preceding Plan Year, and shall be accompanied by the
Participant's written statement that if such amounts are not distributed, such
Excess Elective Deferral, when added to amounts deferred under other plans or
arrangements described in Code Section 401(k), Code Section 408(k), Code Section
403(b) or Code Section 457, exceeds the limit imposed on the Participant by Code
Section 402(g) for the year in which the deferral occurred. A Participant is
deemed to notify the Administrator of any Excess Elective Deferrals that arise
by taking into account only those Elective Deferrals made to this Plan and any
other plans of the Employer or an Affiliate.
(iv) Determination of Income or Loss. Excess Elective Deferrals shall be
adjusted for income or loss up to the date of distribution. The income or loss
allocable to Participant's Excess Elective Deferrals is the sum of: (1) the
income or loss allocable to the Participant's Elective Deferrals Account for
the Participant's taxable year multiplied by a fraction, the numerator of
which is the Participant's Excess Elective Deferrals for the Participant's
taxable year and the denominator of which is the Account Balance of the
Participant's Elective Deferrals Account without regard to any income or loss
occurring during such taxable year; and (2) ten percent of the amount
determined under (1) multiplied by the number of whole calendar months between
the end of the Participant's taxable year and the date of distribution,
counting the month of distribution if distribution occurs after the 15th of
such month.
Anything in the preceding paragraph of this Section 3.4.2(A)(iv) to the
contrary notwithstanding, any reasonable method for computing the income or
loss allocable to Excess Elective Deferrals may be used, provided that such
method is used consistently for all Participants and for all corrective
distributions under the Plan, and is used by the Plan for allocating income or
loss to Participants' Accounts. Income or loss allocable to the period between
the end of the taxable year and the date of distribution may be disregarded in
determining income or loss.
(B) ADP TEST
The Average Actual Deferral Percentage for Highly Compensated Employees for
each Plan Year and the Average Actual Deferral Percentage for Nonhighly
Compensated Employees for the same Plan Year must satisfy one of the following
tests:
(i) The Average Actual Deferral Percentage for Eligible Participants who are
Highly Compensated Employees for the Plan Year shall not exceed the Average
Actual Deferral Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by 1.25; or
(ii) The Average Actual Deferral Percentage for Eligible Participants who are
Highly Compensated Employees for the Plan Year shall not exceed the Average
Actual Deferral Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by 2.0; provided that the
Average Actual Deferral Percentage for Eligible Participants who are Highly
Compensated Employees does not exceed the Average Actual Deferral Percentage
for Participants who are Nonhighly Compensated Employees by more than two
percentage points.
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(C) Special Actual Deferral Percentage Rules
(i) The Actual Deferral Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to have
Elective Deferrals and Qualified Matching Contributions or Qualified
Nonelective Contributions, or both, if treated as Elective Deferrals for
purposes of the ADP Test, allocated to his or her accounts under two or more
plans or arrangements described in Code Section 401(k) that are maintained by
the Employer shall be determined as if all such elective Deferrals, Qualified
Matching Contributions and Qualified Nonelective Contributions were made under
a single arrangements. If a Highly Compensated Employee participates in two or
more cash or deferred arrangements that have different plan years, all cash or
deferred arrangements ending with or within the same calendar year shall be
treated as a single arrangement.
(ii) In the event that this Plan satisfies the requirements of Code Section
401(k), Code Section 401(a)(4) or Code Section 401(b) only if aggregated with
one or more other qualified plans, or if one or more other qualified plans
satisfy the requirements of such Code Sections only if aggregated with this
Plan, then this Section shall be applied by determining the Actual Deferral
Percentage of Employees as if all such qualified plans were a single qualified
plan. For Plan Years beginning after December 31, 1989, plans may be aggregated
in order to satisfy Code Section 401(k) only if they have the same plan year.
(iii) For purposes of determining the Actual Deferral Percentage of an Eligible
Participant who is a 5% owner or one of the ten most highly paid Highly
Compensated Employees, the Elective Deferrals (and Qualified Matching
Contributions or Qualified Nonelective Contributions, or both, if treated as
Elective Deferrals for purposes of one of the tests referred to in Section
3.4.2(B)) and CODA Compensation of such Participant shall include the Elective
Deferrals (and, if applicable, Qualified Matching Contributions, Qualified
Nonelective Contributions) and CODA Compensation for the Plan Year of Family
Members. Family Members with respect to such Highly Compensated Employees shall
be disregarded as separate employees in determining the Actual Deferral
Percentage both for Eligible Participants who are Nonhighly Compensated
Employees and for Eligible Participants who are Highly Compensated Employees.
(iv) For purposes of determining the ADP Test, Elective Deferrals, Qualified
Matching Contributions, and Qualified Nonelective must be made before the last
day of the 12-month period immediately following the Plan Year to which such
contributions relate.
(v) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP Test and the amount of Qualified Nonelective
Contributions and/or Qualified Matching Contribution used in such test.
(vi) The determination and treatment of the Elective Deferrals, Qualified
Matching Contributions, and Qualified Nonelective Contributions, used in the
ADP Test shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
(D) Distribution of Excess Contributions
(i) In General. Notwithstanding any other provision of the Plan except
Section 3.4.2(E), Excess Contributions, plus any income and minus any loss
allocable thereto, shall be distributed no later than the last day of each Plan
Year beginning after December 31, 1987, to Participants to whose Accounts
Elective Deferrals, Qualified Matching Contributions, and Qualified Nonelective
Contributions were allocated for the preceding Plan Year.(1) Excess
Contributions of Participants who are subject to the Family Member aggregation
rules shall be allocated among the Family Members in proportion to the Elective
Deferrals (and amounts treated as Elective Deferrals) of each Family Member
that is combined to determine the combined Actual Deferral Percentage. Excess
Contributions shall be treated as Annual Additions.
(ii) Determination of Income or Loss. Excess Contributions shall be adjusted
for any income or loss up to the date of distribution. The income or loss
allocable to Excess Contributions is the sum of: (1) the income or loss
allocable to the Participant's Elective Deferrals Account (and, if applicable,
the Qualified Nonelective Contributions Account or the Qualified Matching
Contributions Account or both) for the Plan Year multiplied by a fraction, the
numerator of which is such Participant's Excess Contributions for the year and
the denominator of which is the Account Balances of Participant's Elective
Deferrals Account, Qualified Nonelective Contributions Account and Qualified
Matching Contributions Account if any of such contributions are included in the
ADP Test, without regard to any income or loss occurring during such Plan Year;
and
_______________
(1) Distribution of Excess Contributions on or before the last day of the
Plan Year after the Plan Year in which such excess amounts arose is required
under Code Section 401(k)(8) if the Plan is to maintain its tax-qualified
status. However, if such excess amounts, plus any income and minus any loss
allocable thereto, are distributed more than 2-1/2 months after the last day of
the Plan Year in which such excess amounts arose, then Code Section 4979
imposes a 10% excise tax on the employer maintaining the plan with respect to
such amounts.
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(2) 10% of the amount determined under (1) multiplied by the number of whole
calendar months between the end of the Plan Year and the date of distribution,
counting the month of distribution if distribution occurs after the 15th of
such month.
Anything in the preceding paragraph of this Section 3.4.2(D)(ii) to the
contrary notwithstanding, any reasonable method for computing the income or
loss allocable to Excess Contributions may be used, provided that such method
is used consistently for all Participants and for all corrective distributions
under the Plan for the Plan Year, and is used by the Plan for allocating income
or loss to Participant's Accounts. Income or loss allocable to the period
between the end of the Plan Year and the date of distribution may be
disregarded in determining income or loss.
(iii) Accounting for Excess Contributions. Amounts distributed under this
Section 3.4.2(D) shall first be distributed from the Participant's Elective
Deferrals Account and Qualified Matching Contributions Account in proportion to
the Participant's Elective Deferrals and Qualified Matching Contributions (to
the extent used in the ADP Test) for the Plan Year. Excess Contributions shall
be distributed from the Participant's Qualified Nonelective Contributions
Account only to the extent that such Excess Contributions exceed the balance in
the Participant's Elective Deferrals Account and Qualified Matching
Contributions Account.
(E) In lieu of distributing Excess Contributions pursuant to the preceding
Section 3.4.2(D), and as specified in the Adoption Agreement, the Employer may
make special Qualified Nonelective Contributions on behalf of Nonhighly
Compensated Employees that are sufficient to satisfy the ADP Test.
(F) In lieu of distributing Excess Contributions, the Participant may treat his
or her Excess Contributions as an amount distributed and then re-contributed by
such Participant. Recharacterized Amounts are 100% nonforfeitable and subject
to the same distribution requirements as Elective Deferrals. Amounts may not be
recharacterized by a Highly Compensated Employee to the extent that such amount
in combination with other amounts made to the Participant's Participant
Contributions Account would exceed any stated limit on such contributions, as
specified in the Adoption Agreement. If Excess Contributions are
recharacterized, they must be so no later than two and one half months after
the last day of the Plan Year in which such Excess Contributions arose and they
are deemed to occur no earlier than the date the last Highly Compensated
Employee is informed in writing of the amount recharacterized and the
consequences thereof. Recharacterized amounts are taxable to the Participant
for the tax year in which he or she would have received such contributions in
cash.
(G) Under no circumstances may Elective Deferrals, Qualified Matching
Contributions and Qualified Nonelective Contributions be contributed and
allocated to the Trust later than the last day of the 12-month period
immediately following the Plan Year to which such contributions relate.
3.5 MATCHING 401(k) CONTRIBUTIONS
3.5.1 Amount of Matching Contributions. Subject to the limitations contained in
Sections 3.9 and 3.5.2, for each Plan Year the Employer will contribute in cash
and/or Qualifying Employer Securities, Matching 401(k) Contributions to the
Trust Fund in an amount, if any, calculated by reference to the Participants'
Elective Deferrals as specified in the Adoption Agreement.
3.5.2 LIMITATION ON CONTRIBUTION PERCENTAGE
(A) ACP Test
The Average Contribution Percentage for Eligible Participants who are Highly
Compensated Employees for the Plan Year and the Average Contributions
Percentage for Eligible Participants who are Nonhighly Compensated Employees
for the same Plan Year must satisfy one of the following tests:
(i) the Average Contribution Percentage for Eligible Participants who are
Highly Compensated Employees for the Plan Year shall not exceed the Average
Contribution Percentage for Eligible Participants who are Nonhighly Compensated
Employees for the same Plan Year multiplied by 1.25; or
(ii) the Average Contribution Percentage for Eligible Participants who are
Highly Compensated Employees shall not exceed the Average Contribution
Percentage for Eligible Participants who are Nonhighly Compensated Employees by
more than two percentage points or such lesser amount as the Secretary of the
Treasury shall prescribe to prevent the multiple use of this alternative
limitation with respect to any Highly Compensated Employee.
(B) Special Average Contribution Percentage Rules
(i) For purposes of this Section 3.5.2, the Contribution Percentage for any
Eligible Participant who is a Highly Compensated Employee for the Plan Year and
who is eligible to have Matching 401(k) Contributions
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or Marketing Thrift Contributions, as the case may be (other than Qualified
Matching Contributions), allocated to his or her account under two or more
qualified plans described in Code Section 401(a), or arrangements described in
Code Section 401(k) shall be determined as if the total of such Contribution
Percentage Amounts was made under each plan. If a Highly Compensated Employee
participates in 2 or more cash or deferred arrangements that have different
plan years, all cash or deferred arrangements ending with or within the same
calendar year shall be treated as a single arrangement.
(ii) In the event that this Plan satisfies the requirements of Code Section
401(b) only if aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of Code Section 410(b) only if aggregated with
this Plan, then this Section 3.5.2 shall be applied by determining the
Contribution Percentages of Employees as if all such plans were a single plan.
For Plan Years beginning after December 31, 1989, plans may be aggregated in
order to satisfy Code Section 401(m) only if they have the same plan year.
(iii) For purposes of determining the Contribution Percentage of an Eligible
Participant who is a 5% owner or one of the 10 most highly-paid Highly
Compensated Employees, the Contribution Percentage Amounts and the CODA
Compensation of such Participant shall include the Contribution Percentage
Amounts and CODA Compensation for the Plan Year of Family Members. Family
Members with respect to Highly Compensated Employees shall be disregarded as
separate employees in determining the Contribution Percentage both for
Participants who are Nonhighly Compensated Employees and for Participants who
are Highly Compensated Employees.
(iv) For purposes of determining the ACP Test, Matching 401(k) Contributions,
Matching Thrift Contributions and Qualified Nonelective Contributions will be
considered made for a Plan Year if made no later than the end of the 12-month
period beginning on the day after the close of the Plan Year.
(v) The Employer shall maintain records sufficient to demonstrate satisfaction
of the ACP Test and the amount of Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, used in such test.
(C) Multiple Use
If one or more Highly Compensated Employees participate in both a cash or
deferred arrangement and a plan subject to the ACP Test and the sum of the
Actual Deferral Percentage and the Actual Contribution Percentage of those
Highly Compensated Employees exceeds the "aggregate limit", then the Actual
Contribution Percentage of those Highly Compensated Employees will be reduced,
beginning with such Highly Compensated Employee whose Actual Contribution
Percentage is the highest, so that the limit is not exceeded. The amount by
which each Highly Compensated Employee's Contribution Percentage is reduced
shall be treated as an Excess Aggregate Contribution. The Actual Deferral
Percentage and Actual Contribution Percentage of the Highly Compensated
Employees are determined after any corrections required to meet the ADP Test
and the ACP Test. Multiple use does not occur if either the Average Deferral
Percentage or Actual Contribution Percentage of the Highly Compensated
Employees does not exceed 1.25 multiplied by the Actual Deferral Percentage
and the Actual Contribution Percentage of the Nonhighly Compensated Employees.
(i) The "aggregate limit" is the sum of (1) 125% of the greater of the Actual
Deferral Percentage for Participants who are Nonhighly Compensated Employees
for the Plan Year or the Actual Deferral Percentage for Participants who are
Nonhighly Compensated Employees for the Plan Year beginning with or within the
Plan Year and (2) the lesser of 200% or two plus the lesser of such Actual
Deferral Percentage or Actual Contribution Percentage. "Lesser" is substituted
for "greater" in "(1)," above and "greater" is substituted for "lesser" after
"two plus the" in "(2)" if it would result in a larger aggregate limit.
(D) Forfeiture of Excess Aggregate Contributions
(i) In General. Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited and applied to reduce subsequent Matching 401(k)
Contributions or Matching Thrift Contributions, as the case may be. No
forfeitures arising under this Section 3.6.2(D) shall be allocated to the
account of any Highly Compensated Employees. If not forfeitable, Excess
Aggregate Contributions shall be distributed no later than the last day of each
Plan Year beginning after December 31, 1987, to Participants to whose Accounts
such Excess Aggregate Contributions were allocated for the preceding Plan Year.
Excess Aggregate Contributions of Participants who are subject to the Family
Member
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aggregation rules shall be allocated among the Family Members in proportion to
the amounts constituting Contribution Percentage Amounts of each Family Member
that is combined to determine the combined Actual Contribution Percentage.
Excess Aggregate Contributions shall be treated as Annual Additions. Anything
above to the contrary notwithstanding, any forfeiture or distribution under
this Section 3.5.2(D)(i) shall occur only if sufficient Employee Thrift
Contributions and/or Participant Voluntary Nondeductible Contributions, as the
case may be, are not distributed from the qualified plan holding such Employee
Thrift Contributions and/or Participant Voluntary Nondeductible Contributions,
as the case may be.(2)
(ii) Determination of Income or Loss. Excess Aggregate Contributions shall be
adjusted for any income or loss up to the date of distribution. The income or
loss allocable to Excess Aggregate Contributions is the sum of: (1) the income
or loss allocable to the Participant's Matching 401(k) Contribution Account or
Matching Thrift Contribution Account (if any, and if all amounts therein are
not used in the ADP Test) and, if applicable, Qualified Nonelective
Contribution Account and Elective Deferrals Account for the Plan Year
multiplied by a fraction, the numerator of which is such Participant's Excess
Aggregate Contributions for the year and the denominator of which is the
Participant's Account Balance(s) attributable to Contribution Percentage
Amounts without regard to any income or loss occurring during such Plan Year;
and (2) 10% of the amount determined under (1) multiplied by the number of
whole calendar months between the end of the Plan Year and the date of
distribution, counting the month of distribution if distribution occurs after
the 15th of such month.
Anything in the preceding paragraph of this Section 3.5.2(D)(ii) to the
contrary notwithstanding, any reasonable method for computing the income or
loss allocable to Excess Aggregate Contributions may be used, provided that
such method is used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by the Plan for
allocating income or loss to Participants' Accounts. Income or loss allocable
to the period between the end of the Plan Year and the date of distribution may
be disregarded in determining income or loss.
(iii) The determination of the Excess Aggregate Contributions shall be made
after first determining the Excess Elective Deferrals, and then determining the
Excess Contributions.
3.5.3 For purposes of determining the ACP Test, Qualified Nonelective
Contributions, Matching 401(k) Contributions and Matching Thrift Contributions
will be considered made for a Plan Year if paid to the Trustee no later than
the end of the 12-month period beginning on the day after the close of the Plan
Year.
3.6 THRIFT CONTRIBUTIONS
3.6.1 EMPLOYEE THRIFT CONTRIBUTIONS. If elected by the Employer in the Adoption
Agreement to provide for Employee Thrift Contributions, the Employer will
contribute cash to the Trust Fund in an amount equal to (A) the Employee Thrift
Contribution percentage of each Participant on his or her Employee Thrift
Contribution election form multiplied by each such Participant's Compensation
or (B) the specific dollar amount set forth on the Participant's election form.
The amount elected by a Participant pursuant to a Participant's Employee Thrift
Contribution election shall be determined within the limits specified in the
Adoption Agreement. Such election shall be made on a form provided by the
Administrator but no election shall be effective prior to approval by the
Administrator. The Administrator may reduce the amount of any Employee Thrift
Contribution, or make such other modifications as necessary, so that the Plan
complies with the provisions of the Code. A Participant's election shall remain
in effect until modified or terminated at such times as specified in the
Adoption Agreement.
3.6.2 MATCHING THRIFT CONTRIBUTIONS. Subject to the limitations contained in
Sections 3.9 and 3.5.2 for each Plan Year the Employer will contribute in cash
and/or Qualifying Employer Securities, Matching Thrift Contributions to the
Trust Fund in an amount, if any, calculated by reference to the Participants'
Employee Thrift Contributions, as specified in the Adoption Agreement.
Matching Thrift Contributions made by the Employer will be allocated to the
Matching Thrift Contributions Account of those Participants who have
contributed Employee Thrift Contributions to the Plan, as specified in the
Adoption Agreement.
------------
(2) Distribution or forfeiture of Excess Aggregate Contributions on or before
the last day of the Plan Year after the Plan Year in which such excess amounts
arose is required under Code Section 401(m)(6) if the Plan is to maintain its
tax-qualified status. However, if such excess amounts, plus any income and
minus any loss allocable thereto, are distributed more than 2-1/2 months after
the last day of the Plan Year in which such excess amounts arose then Code
Section 4979 imposes a 10% excise tax on the employer maintaining the plan with
respect to such amounts.
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3.7 TREATMENT OF FORFEITURES
3.7.1 If the Employer has elected in the Adoption Agreement to reallocate
forfeitures for a Plan Year among Participants, then such forfeitures, if any,
shall be allocated as of the last day of the Plan Year to the Employer Accounts
of those Participants who are eligible to share in the allocation of
contributions to that particular Employer Account (whether or not a
contribution was made for that Plan Year) for that Plan Year in that particular
Employer Account category with respect to which such forfeitures are
attributable. If the Plan is a Target Benefit Plan, forfeitures may only be
used to reduce Employer Contributions, in accordance with Section 3.7.2.
3.7.2 If the Employer has elected in the Adoption Agreement to use forfeiture
to reduce contributions, then forfeitures shall be applied in the succeeding
Plan Year to reduce Employer Contributions in that particular Employer Account
category to which such forfeitures were attributable.
3.8 ESTABLISHING OF ACCOUNTS
3.8.1 An Elective Deferrals Account shall be established for each Eligible
Participant who makes a 401(k) Election to which the Administrator shall
credit, or cause to be credited, Elective Deferrals allocable to each such
Participant, plus earnings or losses thereon.
3.8.2 An Employer Contributions Account shall be established for each
Participant to which the Administrator shall credit or cause to be credited
Employer contributions pursuant to Section 3.1, and forfeitures attributable to
such contributions, if any, plus earnings or losses thereon.
3.8.3 An Employee Thrift Contributions Account shall be established for each
Participant who makes Employee Thrift Contributions to the Plan, to which the
Administrator shall credit, or cause to be credited, all amounts allocable to
each such Participant, plus earnings or losses thereon.
3.8.4 A Matching 401(k) Contributions Account shall be established for each
Participant for whom Matching 401(k) Contributions are made, to which the
Administrator shall credit, or cause to be credited, all such amounts allocable
to each such Participant, plus earnings or losses thereon.
3.8.5 A Matching Thrift Contributions Account shall be established for each
Participant for whom Matching Thrift Contributions are made, to which the
Administrator shall credit, or cause to be credited, all amounts allocable to
each such Participant, plus earnings or losses thereon.
3.8.6 A Participant Voluntary Nondeductible Contributions Account shall be
established for each Participant who make Participant Voluntary Nondeductible
Contributions to the Plan, plus earnings or losses thereon.
3.8.7 A Qualified Matching Contributions Account shall be established for each
Eligible Participant for whom Qualified Matching Contributions are made, to
which the Administrator shall credit, or cause to be credited, all amounts
allocable to each such Participant, plus earnings or losses thereon.
3.8.8 A Qualified Nonelective Contributions Account shall be established for
each Participant for whom Qualified Nonelective Contributions are made, to
which the Administrator shall credit, or cause to be credited, all amounts
allocable to each such Participant, plus earnings or losses thereon.
3.8.9 A Rollover Contributions Account shall be established for each
Participant who contributes to the Plan pursuant to Section 3.3 to which the
Administrator shall credit, or cause to be credited, Rollover Contributions
made by the Participant, plus earnings or losses thereon.
3.8.10 A Transferred Contributions Account shall be established for each
Participant for whom assets are transferred from another Qualified Plan, to
which the Administrator shall credit, or cause to be credited, transferred
assets, plus earnings or losses thereon.
3.9 LIMITATION ON AMOUNT OF ALLOCATIONS
3.9.1 As used in this Section 3.9, each of the following terms shall have the
meaning for that term set forth in this Section 3.9.1:
(A) Annual Additions means, for each Participant, the sum of the following
amounts credited to the Participant's Accounts for the Limitation Year.
(i) Employer Contributions within the meaning of IRS regulation 1.415-6(b);
(ii) Employee Contributions;
(iii) forfeitures;
(iv) allocation under a simplified employee pension; and
(v) any Excess Amount applied under a Defined Contribution Plan in the
Limitation Year to reduce Employer Contributions will also be considered as
part of the Annual Additions for such Limitation Year.
Amounts allocated after March 31, 1984, to an "individual medical benefit
account" as defined in Code
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Section 415(1)(2) ("Individual Medical Benefit Account") which is part of a
pension or annuity plan maintained by the Employer or Affiliate are treated as
Annual Additions to a Defined Contribution Plan. Also, amounts derived from
contributions paid or accrued after December 31, 1985, in taxable years ending
after that date, which are attributable to post-retirement medical benefits
allocated to the separate account of a "key employee" as defined in Code Section
419A(d)(3) under a "welfare benefit fund" as defined in Code Section 419(e)
("Welfare Benefit Fund") maintained by the Employer or Affiliate, are treated as
Annual Additions to a Defined Contribution Plan.
(B) Defined Benefit Dollar Limitation means $90,000 multiplied by the
Adjustment Factor or such other limitation set forth in Code Section 415(b)(1)
as in effect for the Limitation Year.
(C) Defined Benefit Fraction means a fraction, the numerator of which is the
sum of the Projected Annual Benefits of the Participant involved under all
Defined Benefit Plans (whether or not terminated) maintained by the Employer or
Affiliate, and the denominator of which is the lesser of 125% of the Defined
Benefit Dollar Limitation determined for the Limitation Year or 140% of the
Participant's Highest Average Limitation Compensation, including any
adjustments under Code Section 415(b).
Notwithstanding the above, if the Participant was a Participant as of the first
day of the first Limitation Year beginning after December 31, 1986, in one or
more Defined Benefit Plans maintained by the Employer or Affiliate which were
in existence on May 5, 1986, the denominator of this fraction will not be less
than 125% of the sum of the annual benefits under such Plans which the
Participant had accrued as of the close of the last Limitation Year beginning
before January 1, 1987, disregarding any changes in the terms and conditions of
the plans after May 5, 1986. The preceding sentence applies only if the Defined
Benefit Plans individually and in the aggregate satisfied the requirements of
Code Section 415 for all Limitation Year beginning before January 1, 1987.
(D) Defined Contribution Dollar Limitation means $30,000 or if greater,
one-fourth of the Defined Benefit Dollar Limitation as in effect for the
Limitation Year.
(E) Defined Contribution Fraction means a fraction, the numerator of which is
the sum of the Annual Additions to the Participant's Account or Accounts under
all the Defined Contribution Plans (whether or not terminated) maintained by
the Employer or Affiliate for the current and all prior Limitation Years
(including the Annual Additions attributable to the Participant's nondeductible
contributions to all Defined Benefit Plans, whether or not terminated,
maintained by the Employer or Affiliate and the Annual Additions attributable
to all Welfare Benefit Funds, Individual Medical Benefit Accounts, and
simplified employee pensions maintained by the Employer or Affiliate), and the
denominator of which is the sum of the "maximum aggregate amounts" (as defined
in the following sentence) for the current and all prior Limitation Years of
service with the Employer or Affiliate (regardless of whether a Defined
Contribution Plan was maintained by the Employer or Affiliate). The "maximum
aggregate amount" in any Limitation Year is the lesser of (i) 125% of the
Defined Benefit Dollar Limitation in effect under Code Section 415(c)(1)(A) or
(ii) 35% of the Participant's Compensation for such year.
If the Employee was a Participant as of the first day of the first Limitation
Year beginning after December 31, 1986, in one or more Defined Contribution
Plans maintained by the Employer or Affiliate in existence on May 5, 1986, the
numerator of this fraction will be adjusted if the sum of this fraction and the
Defined Benefit Fraction would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the product of (A) the excess of
the sum of the fractions over 1.0 times (B) the denominator of this fraction
will be permanently subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they would be computed as of the
later of the end of the last Limitation Years beginning before January 1, 1987,
and disregarding any changes in the terms and conditions of the Plans made after
May 6, 1986, but using the Code Section 415 limitation applicable to the first
Limitation Year beginning on or after January 1, 1987. The Annual Addition for
any Limitation Year beginning before January 1, 1987, shall not be recomputed to
treat all Participant contributions as Annual Additions.
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(F) Excess Amounts means the excess of the Participant's Annual Additions for
the Limitation Year involved over the Maximum Permissible Amount for that
Limitation Year.
(G) Highest Average Limitation Compensation means the average Compensation as
defined in Code Section 415(c)(3) of the Participant involved for that period
of three consecutive Years of Service with the Employer or Affiliate (or if the
Participant has less than three such Years of Service, the actual number
thereof) that produces the highest average.
(H) Limitation Compensation means Compensation, as defined in either (i), (ii)
or (iii) below, as specified in the Adoption Agreement.
(i) Code Section 415 Safe-Harbor Compensation
For an Employee other than a Self-Employed Individual, the Employee's earned
income, wages, salaries, and fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of Employment (including, but
not limited to, commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits, and reimbursements or other expense allowances under
a nonaccountable plan (as described in Reg. 1.62-2(c)) and excluding the
following:
(1) Employer contributions to a plan of deferred compensation which are not
includible in the Employee's gross income for the taxable year in which
contributed, or contributions under a "simplified employee pension" plan (within
the meaning of Code Section 408(k)) to the extent such contributions are
deductible by the Employee, or any distributions from a plan of deferred
compensation;
(2) amounts realized from the exercise of a non-qualified stock option, or when
restricted stock (or other property) held by the Employee either becomes freely
"transferable" or is no longer subject to a "substantial risk of forfeiture"
(both quoted terms within the meaning of Code Section 83(a));
(3) amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and
(4) other amounts which received special tax benefits, or contributions made
(whether or not under a salary reduction agreement) towards the purchase of an
annuity described in Code Section 403(b) (whether or not the amounts are
actually excludable from the gross income of the Employee); or For Limitation
Years beginning after December 31, 1991, Limitation Compensation shall include
only that compensation which is actually paid or made available during the
Limitation Year.
(ii) Information required to be reported under Sections 6041 and 5051. ("Wages,
Tips and other Compensation Box" Form W-2) Limitation Compensation is defined
as wages as defined in Code Section 3401(a) and all other payments of
compensation to an Employee by the Employer (in the course of the Employer's
trade or business) for which the Employer is required to furnish the Employee
a written statement under Sections 6041(d) and 6051(a)(3) of the Code.
Compensation must be determined without regard to any rules under Section
3401(a) that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the exception for
agricultural labor in Section 3401(a)(2)).
(iii) Code Section 3401(a) wages
Limitation Compensation is defined as wages within the meaning of Code Section
3401(a) for the purposes of income tax withholding at the source but determined
without regard to any rules that limit the remuneration included in wages based
on the nature or location of the employment or the services performed (such as
the exception for agricultural labor in Code Section 3401(a)(2)).
Without regard to the definition of Limitation Compensation elected by the
Employer, for a Self-Employed Individual, Limitation Compensation means his or
her Earned Income, provided that if the Self-Employed Individual is not a
Participant for an entire Plan Year, his or her Limitation Compensation for that
Plan Year shall be his or her Earned Income for that Plan Year multiplied by a
fraction the numerator of which is the number of days he or she is a Participant
during the Plan Year and the denominator of which is the number of days in the
Plan Year. Additionally, Limitation Compensation for a Participant in a Defined
Contribution Plan who is permanently and totally disabled (as defined in Code
Section 22(e)) is the compensation such Participant would have received for the
Limitation Year if the Participant had been paid at the rate of compensation
paid immediately before becoming disabled; such imputed compensation may be
taken into account only if the Participant is not a Highly Compensated Employee
and contributions made on behalf of such Participant are nonforfeitable when
made.
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(I) Maximum Permissible Amount means the maximum Annual Addition which may be
contributed or allocated to a Participant's Account under the Plan for any
Limitation Year. The maximum Annual Addition shall not exceed the lesser of:
(a) the Defined Contribution Dollar Limitation, or (b) 25% of the Participant's
Compensation for the Limitation Year. The Compensation limitation referred to
in (b) shall not apply to any contribution for medical benefits (within the
meaning of Code Sections 401(h) or 419A(f)(2)) which is otherwise treated as an
Annual Addition under Code Section 415(I)(1) or 419A(d)(2). If a short
Limitation Year is created because of an amendment changing the Limitation Year
to a different 12-consecutive month period, the Maximum Permissible Amount will
not exceed the Defined Contribution Dollar Limitation multiplied by the
following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
(J) Projected Annual Benefit means the annual retirement benefit (adjusted to
an actuarially equivalent straight life annuity if such benefit is expressed in
a form other than a straight life annuity or Qualified Joint and Survivor
Annuity) to which the Participant would be entitled under the terms of a
Defined Benefit Plan assuming:
(i) the Participant continues in employment with the Employer or Affiliate
until the Participant's "normal retirement age" under the Plan within the
meaning of Code Section 411(a)(8) (or the Participant's current age, if later);
and
(ii) the Participant's Limitation Compensation for the current Limitation Year
and all other relevant factors used to determine benefits under the Plan will
remain constant for all future Limitation Years.
3.9.2 The provisions of this subsection 3.9.2 apply with respect to a
Participant who does not participate in, and has never participated in, another
Qualified Plan, a Welfare Benefit Fund or an Individual Medical Benefit Account
or a simplified employee pension, as defined in Code Section 401(k), maintained
by the Employer or an Affiliate, which provides an Annual Addition as defined
in Section 3.9.1(A) of the Plan, other than this Plan:
(A) The amount of Annual Additions which may be credited to the Participant's
Account for any Limitation Year will not exceed the lesser of the Maximum
Permissible Amount or any other limitation contained in this Plan. If the
Employer Contribution that would otherwise be contributed or allocated to the
Participant's Account would cause the Annual Additions on behalf of the
Participant for the Limitation Year to exceed the Maximum Permissible Amount
with respect to that Participant for the Limitation Year, the amount
contributed or allocated will be reduced so that the Annual Additions on behalf
of the Participant for the Limitation Year will equal such Maximum Permissible
Amount.
(B) Prior to determining the Participant's actual Limitation Compensation for a
Limitation Year, the Employer may determine the Maximum Permissible Amount for
the Participant for the Limitation Year on the basis of a reasonable estimation
of the Participant's Compensation for that Limitation Year. Such estimated
Compensation shall be uniformly determined for all Participants similarly
situated.
(C) As soon as is administratively feasible after the end of a Limitation Year,
the Maximum Permissible Amount for the Limitation Year will be determined on
the basis of the Participant's actual compensation for the Limitation Year.
(D) If pursuant to Section 3.9.2(C) or as a result of the allocation of
forfeitures, there is an Excess Amount with respect to the Participant for a
Limitation Year, the Excess Amounts shall be disposed of as follows:
(i) First, any contribution to the Participant's Elective Deferrals Account,
Participant Voluntary Nondeductible Contributions Account or Employee Thrift
Contributions Account, if applicable, and any earnings allocable thereto will
be distributed to the Participant to the extent that the return thereof would
reduce the Excess Amount in such Participant's Accounts;
(ii) If after the application of Section 3.9.2(D)(i) an Excess Amount still
exists, and the Participant is covered by the Plan at the end of the Limitation
Year, the remaining Excess Amount in the Participant's Account will be used to
reduce Employer contributions (including allocation of any forfeitures) under
this Plan for such Participant in the next Limitation Year, and in each
succeeding Limitation Year, if necessary.
(iii) If after the application of Section 3.9.2(D)(i) an Excess Amount still
exists, and the Participant is not covered by the Plan at the end of the
Limitation Year, the Excess Amount will be held unallocated in a suspense
account. The suspense account will be applied to reduce future Employer
contributions under this Plan for all remaining Participants in the next
Limitation Year, and in each succeeding Limitation Year, if necessary; provided,
however that if all or any part of the Excess Amount held in a suspense account
is attributable to a Participant's Elective Deferrals, such Excess Amount shall
be held unallocated in a suspense account to be used for such Participant in the
next Limitation Year and each succeeding Limitation Year as an Elective Deferral
if such Participant is covered by
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the Plan in the next and each succeeding Limitation Year, if necessary.
(iv) If a suspense account is in existence at any time during a Limitation Year
pursuant to Section 3.9.2(D)(iii), the suspense account will not participate in
the allocation of the Trust Fund's investment gains or losses to or from any
other Account. If a suspense account is in existence at any time during a
particular Limitation Year, all amounts in the suspense account must be
allocated and reallocated to Participants' Accounts before any Employer or
Participant contributions may be made to the Plan for the Limitation Year.
Excess Amounts, other than those Excess Amounts referred to in Section
3.9.2(D)(i), may not be distributed to Participants or Former Participants.
3.9.3 The provisions of this subsection 3.9.3 apply with respect to a
Participant who, in addition to this Plan, is covered or has been covered under
one or more Defined Contribution Plans which are Master or Prototype Plans,
Welfare Benefit Funds, an Individual Medical Benefit Account or a simplified
employee pension maintained by the Employer or an Affiliate, which provides an
Annual Addition as described in Section 3.9.1(A) of the Plan during any
Limitation Year.
(A) The Annual Additions which may be credited to a Participant's Accounts
under this Plan for any such Limitation Year will not exceed the Maximum
Permissible Amount reduced by the Annual Additions credited to the
Participant's account or accounts under any other plans and Welfare Benefit
Fund, Individual Medical Benefit Account or simplified employee pension for the
same Limitation Year. If the Annual Additions with respect to the Participant
under any one or more other such Defined Contribution Plans or Welfare Benefit
Funds, Individual Medical Benefit Account or simplified employee pension
maintained by the Employer are less than the Maximum Permissible Amount and the
Employer Contribution that would otherwise be contributed or allocated to a
Participant's Account under this Plan would cause the Annual Additions for the
Limitation Year to exceed this limitation, the amount contributed or allocated
shall be reduced so that the Annual Additions under all such plans and funds
for the Limitation Year will equal the Maximum Permissible Amount.
If the Annual Additions with respect to the Participant under such other
Defined Contribution Plans and Welfare Benefit Funds, Individual Medical
Benefit Account or simplified employee pension in the aggregate are equal to or
greater than the Maximum Permissible Amount, no amount will be contributed or
allocated to any of the Participant's Account under this Plan for the
Limitation Year.
(B) Prior to determining the Participant's actual compensation for a Limitation
Year, the Maximum Permissible Amount for a Participant may be determined in the
manner described in Section 3.9.2(B).
(C) As soon as is administratively feasible after the end of a Limitation Year,
the Maximum Permissible Amount for the Limitation Year will be determined on
the basis of the Participant's actual Limitation Compensation for the
Limitation Year.
(D) If, pursuant to subsection 3.9.3(C) above, or as a result of the allocation
of forfeitures, a Participant's Annual Additions under this Plan and the
Participant's Annual Additions under such other plans would result in an Excess
Amount for a Limitation Year, the Excess Amount will be deemed to consist of
the Annual Additions last allocated, except that Annual Additions attributable
to simplified employee pension will be deemed to have been allocated first,
followed by Annual Additions to a Welfare Benefit Fund or Individual Medical
Benefit Account regardless of the actual allocation date.
(E) If an Excess Amount was allocated to a Participant on an allocation date of
this Plan which coincides with an allocation date of another such plan, the
Excess Amount attributed to this Plan will be the product of:
(i) the total Excess Amount allocated as of such date, times
(ii) the ratio of (A) the Annual Additions allocated to the Participant for the
Limitation Year as of such date under this Plan to (B) the total Annual
Additions allocated to the Participant for the Limitation Year as of such date
under this Plan and all of the other plans referred to in the first sentence of
this Section 3.9.3.
(F) Any Excess Amount attributed to this Plan will be disposed in the manner
described in Section 3.9.2(D).
3.9.4 If a Participant is covered under one or more Defined Contribution Plans,
other than this Plan, maintained by the Employer or an Affiliate which are not
Master or Prototype Plans, or Welfare Benefit Funds or an Individual Medical
Benefit Account maintained by the Employer, Annual Additions which may be
credited to the Participant's Account under this Plan for any Limitation Year
shall be limited in accordance with the provisions of subsections 3.9.3(A)-(F)
above as though each such other plan was a Master or Prototype Plan.
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3.9.5 If the Employer maintains, or at any time maintained, a Defined Benefit
Plan covering any Participant in this Plan, the sum of the Participant's
Defined Benefit Fraction and Defined Contribution Fraction will not exceed 1.0
in any Limitation Year. If such sum would otherwise exceed 1.0 and if such
Defined Benefit Plan does not provide for a reduction in benefits thereunder,
Annual Additions which may be credited to a Participant's Account under this
Plan for any Limitation Year shall be limited in accordance with the provisions
of Section 3.9.2.
3.9.6 If required pursuant to Section 4.4.4, "100%" shall be substituted for
"125%" wherever the latter percentage appears in this Section 3.9.
3.10 RETURN OF EMPLOYER CONTRIBUTIONS UNDER SPECIAL CIRCUMSTANCES
Notwithstanding any provision of this plan to the contrary, upon timely
written demand by the Employer or the Administrator to the Trustee:
(A) Any contribution by the Employer to the Plan under a mistake of fact shall
be returned to the Employer by the Trustee within one year after the payment of
the contribution.
(B) Any contribution made by the Employer incident to the determination by the
Commissioner of Internal Revenue that the Plan is initially a Qualified Plan
shall be returned to the Employer by the Trustee within one year after
notification from the Internal Revenue Service that the Plan is not initially a
Qualified Plan but only if the application for the qualification is made by the
time prescribed by law for filing the Employer's return for the taxable year in
which the Plan is adopted, or such later date as the Secretary of the Treasury
may prescribe.
(C) In the event the deduction of a contribution made by the Employer is
disallowed under Code Section 404, such contribution (to the extent disallowed)
must be returned to the Employer within one year of the disallowance of the
deduction.
ARTICLE IV VESTING
4.1 DETERMINATION OF VESTING
4.1.1 A Participant shall at all times have a vested percentage of 100% in the
Account Balance of each of his or her Participant Contributions Accounts,
401(k) Contributions Accounts, Rollover Contributions Account and Transferred
Account.
4.1.2 A Participant shall have a vested percentage of 100% in his or her
Account Balance of each of his or her Employer Accounts if he or she terminates
Employment due to the attainment of Normal Retirement Age, Early Retirement
specified in the Adoption Agreement, if elected by the Employer in the Adoption
Agreement, or upon Disability or death.
4.1.3 The vested percentage of a Participant in the Account Balance of each of
his or her Employer Accounts not vested pursuant to Section 4.1.1 or 4.1.2
shall be determined in accordance with the vesting rule or schedule specified
in the Adoption Agreement.
4.2 RULES FOR CREDITING VESTING SERVICE
4.2.1 Subject to Section 4.2.2, Years of Service shall be credited for purposes
of determining a Participant's Vesting Service as specified in the Adoption
Agreement. If the Employer maintains the plan of a predecessor employer,
service with such predecessor employer shall be treated as service with the
Employer for purposes of Vesting Service.
4.2.2 An Employee who terminates Employment with no vested percentage in an
Employer Account shall, if he or she returns to Employment, have no credit for
Vesting Service prior to such termination of Employment if his or her Period of
Severance equals or exceeds five years.
4.2.3 Vesting Service of an Employee following a Period of Severance of five
years or more shall not be counted for the purpose of computing his or her
vested percentage in his or her Employer Accounts derived from contributions
accrued prior to the Period of Severance. If applicable, separate records shall
be maintained reflecting the Participant's vested rights in his or her Account
Balance attributable to service prior to the Period of Severance and reflecting
the Participant's vested percentage in his or her Account Balance attributable
to service after the Period of Severance. Vesting Service prior to and
following an Employee's Period of Severance shall be counted for purposes of
computing his or her vested percentage in an Employer Account derived from
contributions made after the Period of Severance.
4.3 EMPLOYER ACCOUNTS FORFEITURES
4.3.1 Subject to Section 5.6, upon the Nonvested Separation of a Participant,
the nonvested portion of each Employer Account of such Participant will be
forfeited as of the date of termination of Employment.
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Upon the Partially Vested Separation of a Participant, the nonvested portion of
each Employer Account of such Participant will be forfeited as of the date of
termination of Employment; provided, however, that such Participant receives a
distribution in accordance with Section 5.6. If a Participant does not receive
a distribution following his or her termination of Employment, the nonvested
portion of each Employer Account of the Participant shall be forfeited
following a Period of Severance of five years.
4.3.2 If the Employer elects in the Adoption Agreement to reallocate
forfeitures, forfeitures for a Plan Year shall be allocated in accordance with
Section 3.7.1. If the Employer elects in the Adoption Agreement to use
forfeitures to reduce Employer contributions, forfeitures shall be applied in
accordance with Section 3.7.2.
4.4 TOP-HEAVY PROVISIONS
4.4.1 As used in this Section 4.4, each of the following terms shall have the
meanings for that term set forth in this Section 4.4.1:
(A) Determination Date means, for any Plan Year subsequent to the first Plan
Year, the last day of the preceding Plan Year. For the first Plan Year of the
Plan, the last day of that year.
(B) Permissive Aggregation Group means the Required Aggregation Group of plans
plus any other plan or plans of the Employer or Affiliate which, when
considered as a group with the Required Aggregation Group, would continue to
satisfy the requirements of Code Sections 401(a)(4) and 410.
(C) Required Aggregation Group means (i) each Qualified Plan of the Employer or
Affiliate in which at least one Key Employee participates or participated at
any time during the determination period (regardless of whether the Plan has
terminated), and (ii) any other qualified plan of the Employer or Affiliate
which enables a plan described in (i) to meet the requirements of Code Sections
401(a)(4) or 410.
(D) Super Top-Heavy means, for any Plan Year beginning after December 31, 1983,
the Plan if any Top-Heavy Ratio as determined under the definition of Top-Heavy
Plan exceeds 90%.
(E) Top-Heavy Plan means, for any Plan Year beginning after December 31, 1983,
the Plan if any of the following conditions exists:
(i) If the Top-Heavy Ratio for the Plan exceeds 60% and the Plan is not part of
any Required Aggregation Group or Permissive Aggregation Group of Plans.
(iii) If the Plan is a part of a Required Aggregation Group of plans but not
part of a Permissive Aggregation Group and the Top-Heavy Ratio for the group of
plans exceeds 60%.
(iii) If the Plan is a part of a Required Aggregation Group and part of a
Permissive Aggregation Group of plans and the Top-Heavy Ratio for the
Permissive Aggregation Group exceeds 60%.
(F) Top-Heavy Ratio means
(i) If the Employer or Affiliate maintains one or more Defined Contribution
Plans (including any Simplified Employee Pension Plan) and the Employer or
Affiliate has never maintained any Defined Benefit Plan which during the
five-year period ending on the Determination Date has or has had accrued
benefits, the Top-Heavy Ratio for this Plan alone or for the Required or
Permissive Aggregation Group as appropriate is a fraction, the numerator of
which is the sum of the Account Balances of all Key Employees as of the
Determination Date (including any part of any Account Balance distributed in
the five-year period ending on the Determination Date), and the denominator of
which is the sum of all Account Balances (including any part of any Account
Balance distributed in the five-year period ending on the Determination Date),
both computed in accordance with Code Section 416. Both the numerator and
denominator of the Top-Heavy Ratio are increased to reflect any contribution
not actually made as of the Determination Date, but which is required to be
taken into account on that date under Code Section 416.
(ii) If the Employer or an Affiliate maintains one or more Defined Contribution
Plans (including any Simplified Employee Pension Plan) and the Employer or an
Affiliate maintains or has maintained one or more Defined Benefit Plans which
during the five-year period ending on the Determination Date has or has had any
accrued benefits, the Top-Heavy Ratio for any Required or Permissive Aggregation
Group as appropriate is a fraction, the numerator of which is the sum of Account
Balances under the aggregated Defined Contribution Plans for all Key Employees,
determined in accordance with (i) above, and the present value of accrued
benefits under the aggregated Defined Benefit Plans for all Key Employees as of
the Determination Date, and the denominator of which is the sum of the Account
Balances under the aggregated Defined Contribution Plans for all Participants,
determined in accordance with (i) above, and the present value of accrued
benefits under the Defined Benefit Plans for all Participants as of the
Determination Date, all determined in accordance with Code Section 416. The
accrued benefit under a Defined Benefit Plan in both the numerator and
denominator of the Top-Heavy Ratio are increased for any distribution of an
accrued benefit made in the five-year period ending on the Determination Date.
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(iii) For purposes of (i) and (ii) above, the value of Account Balances and
the present value of accrued benefits will be determined as of the most recent
Valuation Date that falls within or ends with the 12-month period ending on the
Determination Date, except as provided in Code Section 416 for the first and
second Plan Years of a Defined Benefit Plan. The Account Balances and accrued
benefits of a Participant (i) who is not a Key Employee but who was a Key
Employee in a prior year, or (2) who has not been credited with at least one
Hour of Service with the Employer or an Affiliate at any time during the
five-year period ending on the Determination Date, will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which distributions,
rollovers, and transfers are taken into account will be made in accordance with
Code Section 416.
Elective Deferrals will not be taken into account for purposes of computing the
Top-Heavy Ratio. When aggregating plans the value of Account Balances and
accrued benefits will be calculated with reference to the Determination Dates
that fall within the same calendar year.
The accrued benefit of a Participant who is not a Key Employee shall be
determined under (A) the method, if any, that uniformly applies for accrual
purposes under all Defined Benefit Plans or (B) if there is no such method, as
if such benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional rule of Code Section 411(b)(1)(C).
4.4.2 If the Plan is determined to be a Top-Heavy Plan or a Super Top-Heavy
Plan as of any Determination Date after December 31, 1983, then the Top-Heavy
vesting schedule specified in the Adoption Agreement, beginning with the first
Plan Year commencing after such Determination Date, shall apply only for those
plan Years in which the Plan continues to be a Top-Heavy Plan or Super
Top-Heavy Plan, as the case may be.
4.4.3 (A) Except as provided in Sections 4.4.3(C) and (D), for any Plan Year in
which the Plan is a Top-Heavy Plan, contributions and forfeitures allocated to
the Employer Contributions Account of any Participant who is not a Key Employee
in respect of that Plan Year shall not be less than the lesser of:
(i) 3% of such Participant's Limitation Compensation, or
(ii) if the Employer has no Defined Benefit Plan which designates this Plan to
satisfy Code Section 401, the largest percentage of contributions and
forfeitures, as a percentage of the Key Employee's Limitation Compensation,
allocated to the Employer Contributions Account of any Key Employee for that
year. The minimum allocation is determined without regard to any Social Security
contribution. This minimum allocation shall be made even though, under other
Plan provisions, the Participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation for the Plan Year because
of (a) the Participant's failure to complete a Year of Service, (b) the
Participant's failure to make mandatory Participant contributions to the Plan or
(c) compensation less than a stated amount.
(B) For purposes of computing the minimum allocation, a Participant's
Limitation Compensation will be applied.
(C) The provision in (A) above shall not apply to any Participant who was not
employed by the Employer or an Affiliate on the last day of the Plan Year.
(D) If the Employer or an Affiliate has executed Adoption Agreements covering
Participants by a plan which is a profit-sharing plan and by another plan which
is a money purchase pension plan or a target benefit plan, the minimum
allocation specified in the preceding Section 4.4.3(A) shall be provided by the
money purchase pension plan or by the target benefit plan, as the case may be.
If a Participant is covered under this Plan and a Defined Benefit Plan
maintained pursuant to Adoption Agreements offered by the Sponsor, the minimum
allocation specified in the preceding Section 4.4.3(A) shall not be applicable
and the Participant shall receive the minimum benefit specified in the Defined
Benefit Plan.
(E) With respect to any profit-sharing or money purchase pension plan which
becomes Top-Heavy and is integrated with Social Security, prior to making the
allocations specified in the Adoption Agreement, anything contained therein to
the contrary notwithstanding, there shall be an allocation of the Employer
Contribution to each eligible Participant's Employer Contribution Account in
the ratio that each such Participant's Limitation Compensation for the Plan
Year bears to the Limitation Compensation of all such Participants for the Plan
Year, but not in excess of 3% of such Limitation Compensation.
4.4.4 If the Plan becomes a Top-Heavy Plan, then the maximum benefit which can
be provided under Section 3.9 shall continue to be determined by applying
"125%" wherever it appears in that Section and by substituting "4%" for "3%"
wherever that appears in Section 4.4.3. However, if the Plan becomes a Super
Top-Heavy Plan, the maximum benefit which can be provided under Section 3.9
shall be determined by substituting "100%" for "125%" wherever the latter
percentage appears and the 3% minimum contribution provided for in Section
4.4.4 shall remain unchanged.
4.4.5 Beginning with the Plan Year in which this Plan is Top-Heavy, one of the
minimum Top-Heavy vesting
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schedules as specified in the Adoption Agreement will apply. The minimum
vesting schedule applies to all benefits within the meaning of Code Section
411(a)(7) except those attributable to Employee contributions, including
benefits accrued before the effective date of Code Section 416 and benefits
accrued before the Plan became Top-Heavy. However, this Section 4.4 does not
apply to the Account Balances of any employee who does not have an Hour of
Service after the Plan has initially become Top-Heavy and such Employee's
vesting in his or her Employer Contributions Account will be determined without
regard to this Section 4.4. The minimum allocation pursuant to Section 4.4.3
(to the extent required to be nonforfeitable under Code Section 416(b)) may not
be forfeited under Code Section 411(a)(3)(B) or Code Section 411(a)(3)(D).
ARTICLE V
AMOUNT AND DISTRIBUTION OF BENEFITS, WITHDRAWALS AND LOANS
5.1 DISTRIBUTION UPON TERMINATION OF EMPLOYMENT
5.1.1 Subject to Section 5.1.2, a Participant's Benefit Commencement Date shall
be as soon as practicable following his or her Fully Vested Separation,
Partially Vested Separation or Nonvested Separation, if applicable, and in
accordance with Section 5.6. If the Plan includes a CODA feature, each 401(k)
Contributions Account of a Participant shall be payable in accordance with the
events specified in Section 1.27 of the Plan.
5.1.2 If specified in the Adoption Agreement, a Participant's Benefit
Commencement Date shall be deferred until the earliest of his or her Normal
Retirement Age, Disability, or if elected by the Employer in the Adoption
Agreement, Early Retirement. If a Participant terminates Employment after
satisfying any service requirement for Early Retirement specified in the
Adoption Agreement, he or she shall be entitled to elect to receive a
distribution of his or her vested Employer Accounts upon satisfaction of any
age requirement for Early Retirement.
5.2 AMOUNT OF BENEFITS UPON A FULLY VESTED SEPARATION
A participant's benefits upon his or her Fully Vested Separation for any reason
other than Disability shall be the Account Balance of all of his or her
Accounts determined in accordance with Section 10.6.2.
5.3 AMOUNT OF BENEFITS UPON A PARTIALLY VESTED SEPARATION
A Participant's benefits upon his or her Partially Vested Separation for any
reason other than Disability shall be: (A) The Account Balance of his or her
Employer Accounts determined in accordance with Section 10.6.2 multiplied by
his or her vested percentage determined pursuant to Section 4.1.3, or, if
applicable, Section 4.4.2, plus (B) the Account Balance of his or her other
Accounts determined in accordance with Section 10.6.2.
5.4 AMOUNT OF BENEFITS UPON A NONVESTED SEPARATION
A Participant's benefits upon his or her Nonvested Separation shall be the
Account Balance of his or her Accounts other than Employer Accounts, if any,
determined in accordance with Section 10.6.2.
5.5 AMOUNTS OF BENEFITS UPON A SEPARATION DUE TO DISABILITY
If a Participant terminates Employment due to a Disability, his or her benefit
shall be the Account Balance of all of his or her Accounts determined as a
Fully Vested Separation in accordance with Section 5.2 and Section 10.6.2. The
Benefit Commencement Date of any such Participant on whose behalf contributions
are being made pursuant to Section 3.1.4 shall be as soon as practicable after
the date such contributions cease.
5.6 DISTRIBUTION AND RESTORATION
5.6.1 If, upon a Participant's termination of Employment, the vested Account
Balance of his or her Accounts as of the applicable Valuation Date is equal to
or less than $3,500, such Participant will receive a distribution of his or her
entire vested benefit and the nonvested portion will be treated as forfeiture.
If the value of a Participant's vested Account is zero, the Participant shall
be deemed to have received a distribution of such vested Account.
5.6.2 If, upon a Participant's termination of Employment, the vested Account
Balance of his or her Accounts as of the applicable Valuation Date exceeds
$3,500, the Participant may elect, in accordance with Article VI, to receive a
distribution of the entire vested portion of such Accounts and the nonvested
portion, if any, will be treated as a forfeiture.
5.6.3 If the vested Account Balance of a Participant's Accounts as of the
applicable Valuation Date has an
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aggregate value exceeding (or at the time of any prior distribution exceeded)
$3,500, and the Participant's benefit is Immediately Distributable, the
Participant and the Participant's Spouse (or where either the Participant or the
Spouse has died, the survivor) must consent to any distribution of such
benefit. The consent of the Participant and the Participant's Spouse shall be
obtained in writing within the 90-day period ending on the Participant's Benefit
Commencement Date; provided, however, that if the Plan is a profit-sharing plan
and Section 6.1.2 applies, the consent of the Participant's Spouse will not be
required. The Administrator shall notify the Participant and the Participant's
Spouse of the right to defer any distribution until the Participant's benefit is
no longer Immediately Distributable. Such notification shall include a general
description of the material features, and an explanation of the relative values
of, the optional forms of benefit available under the Plan in a manner that
would satisfy the notice requirements of Code Section 417(a)(3), and shall be
provided no less than 30 days and no more than 90 days prior to the Benefit
Commencement Date.
5.6.4 Notwithstanding the foregoing, only the Participant need consent to the
commencement of a distribution in the form of a Qualified Joint and Survivor
Annuity while the Participant's benefit is Immediately Distributable. Neither
the consent of the Participant nor the Participant's Spouse shall be required to
the extent that a distribution is required to satisfy Code Section 401(a)(9) or
Code Section 415.
5.6.5 For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first Plan Year
beginning after December 31, 1988, the Participant's vested benefit shall not
include amounts attributable to accumulated deductible Participant contributions
within the meaning of Code Section 72(o)(5)(B).
5.6.6 If a Participant, who after termination of Employment received a
distribution and forfeited any portion of an Employer Account or is deemed to
have received a distribution in accordance with Section 5.6.1, resumes
Employment, he or she shall have the right, while an Employee, to repay the full
amount previously distributed from such Employer Account. Such repayment must
occur before the earlier of (i) the date on which he or she would have incurred
a Period of Severance of five years commencing after the distribution or (ii)
five years after the first date on which the Participant is subsequently
reemployed. If the Participant makes a repayment, the Account Balance of his or
her relevant Employer Account shall be restored to its value as of the date of
distribution. The restored amount shall be derived from forfeitures during the
Plan Year and, if such forfeitures are not sufficient, from a contribution by
the Employer made as of that date (determined without reference to Net Profits).
If an Employee who had a Nonvested Separation and was deemed to receive a
distribution resumes Employment before a Period of Severance of five years, his
or her Employer Account will be restored, upon reemployment, to the amount on
the date of such deemed distribution.
5.7 WITHDRAWALS DURING EMPLOYMENT
5.7.1 If the Plan is a profit-sharing plan, and if the Employer has elected in
the Adoption Agreement to permit withdrawals during Employment, prior to
termination of Employment, each Participant upon attainment of age 59-1/2 may
elect to withdraw, as of the Valuation Date next following the receipt of an
election by the Administrator, and upon such notice as the Administrator may
require, all or any part of the vested Account Balance of all of his or her
Accounts, as of such Valuation Date.
5.7.2 Notwithstanding Section 5.7.1 prior to termination of Employment, each
Participant with a Rollover Contributions Account and/or a Participant Voluntary
Nondeductible Contributions Account may elect to withdraw, as of the Valuation
Date next following the receipt of an election by the Administrator, and upon
such notice as the Administrator may require, all or any of such Account, as of
such Valuation Date.
5.7.3 The Administrator may establish from time to time rules and procedures
with respect to any withdrawals including the order of Accounts from which such
withdrawals shall be made.
5.7.4 No forfeitures shall occur as a result of a withdrawal pursuant to this
Section 5.7.
5.7.5 If a Participant is married at the time of such election, the
Participant's Spouse must consent to such a withdrawal in the same manner as
provided in Section 6.2.4; provided, however, that if the Plan is a
profit-sharing plan and Section 6.1.2 applies, the consent of the Participant's
Spouse will not be required.
5.8 LOANS
5.8.1 If the Employer has elected in the Adoption Agreement to make loans
available, a Participant may submit an application to the Administrator to
borrow from any Account maintained for the Participant (on such terms and
conditions as the Administrator shall prescribe) an amount which when added to
the outstanding balance of all other loans to the Participant would not exceed
the lesser of (a) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans during the one year period ending on the day before
the loan is made, over the outstanding balance of loans from the Plan on the
date the loan is made, or (b) 50% of the vested portion of his or her Account
from
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which the borrowing is to be made as of the Valuation Date next following the
receipt of his or her loan application by the Administrator and the expiration
of such notice period as the Administrator may require. For this purpose, all
loans from Qualified Plans of the Employer or an Affiliate shall be aggregated,
and an assignment or pledge of any portion of the Participant's interest in the
Plan, and a loan, pledge or assignment with respect to any insurance contract
purchased under the Plan, will be treated as a loan under this Section 5.8.1.
5.8.2 If approved, each such loan shall comply with the following
conditions:
(A) it shall be evidenced by a negotiable promissory note;
(B) the rate of interest payable on the unpaid balance of such loan shall be a
reasonable rate determined by the Administrator;
(C) the Participant must obtain the consent of his or her Spouse, if any,
within the 90-day period before the time an Account is used as security for the
loan; provided, however, that if the Plan is a profit-sharing plan that meets
the requirements in Section 6.1.2 of the Plan, the consent of the Participant's
Spouse will not be required. A new consent is required if an Account is used
for any increase in the amount of security. The consent shall comply with the
requirements of Section 6.2.4, but shall be deemed to meet any requirements
contained in section 6.2.4 relating to the consent of any subsequent Spouse. A
new consent shall be required if an Account is used for renegotiation,
extension, renewal, or other revision of the loan;
(D) the loan, by its terms, must require repayment (principal and interest) be
amortized in level payments, not less frequently than quarterly, over a period
not extending beyond five years from the date of the loan; provided, however,
that if the proceeds of the loan are used to acquire a dwelling unit which
within a reasonable time (determined at the time the loan is made) will be used
as the principal residence of the Participant, the repayment schedule may be
for a term in excess of five years; and
(E) the loan shall be adequately secured and may be secured by no more than
50% of the Participant's vested interest in the Account Balance of his or her
Accounts.
5.8.3 If a Participant or Beneficiary requests and is granted a loan, and
the loan is made from Participant-Directed Assets, principal and interest
payments with respect to the loan shall be credited solely to the Account of
the borrowing Participant from which the loan was made. Any loss caused by
nonpayment or other default on a Participant's loan obligations shall be
charged solely to that Account. Any other loan shall be treated as an
investment of the Trust Fund and interest and principal payments on account
thereof shall be credited to the Trust Fund. The Administrator shall determine
the order of Accounts from which a loan may be made.
5.8.4 Anything herein to the contrary notwithstanding:
(A) in the event of a default, foreclosure on the promissory note will not
occur until a distributable event occurs under this Article V;
(B) no loan will be made to any Owner-Employee or to any
"shareholder-employee" of the Employer or a Participating Affiliate or with
respect to any amounts attributable to a Rollover Contribution or a trust to
trust transfer and relating to prior participation by such an individual in a
Qualified Plan. For this purpose, a "shareholder-employee" means an employee or
officer of an electing small business, i.e. an "S corporation" as defined in
Code Section 1361, who owns (or is considered as owning within the meaning of
Code Section 318(a)(1) on any day during the taxable year of such corporation,
more than 5% of the outstanding stock of the corporation; and
(C) loans shall not be made available to Highly Compensated Employees in an
amount greater than the amount made available to other Employees.
5.8.5 If a valid spousal consent has been obtained in accordance with
Section 5.8.2(C), then, notwithstanding any other provision of this Plan, the
portion of the Participant's vested Account used as a security interest held by
the Plan by reason of a loan outstanding to the Participant shall be taken into
account for purposes of determining the amount of the Participant's benefit
payable at the time of death or distribution; but only if the reduction is used
as repayment of the loan. If less than 100% of the Participant's vested benefit
(determined without regard to the preceding sentence) is payable to the
Surviving Spouse, then the Participant's benefit shall be adjusted by first
reducing the Participant's vested benefit by the amount of the security used as
repayment of the loan, and then determining the benefit payable to the
Surviving Spouse.
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5.9 HARDSHIP DISTRIBUTIONS
5.9.1 Effective January 1, 1989, if available and elected by the Employer
in the Adoption Agreement, a Participant may request a distribution due to
hardship from the vested portion of his or her Accounts, (other than from his
or her Qualified Nonelective Contributions Account, Qualified Matching
Contributions Account or earnings accrued after December 31, 1988, on the
Participant's Elective Deferrals) only if the distribution is made both due to
an immediate and heavy financial need of the Participant and is necessary to
satisfy such financial need.
5.9.2 A hardship distribution shall be permitted only if the distribution
is due to:
(A) expenses incurred or necessary for medical care described in Code Section
213(d) incurred by the Participant, the Participant's Spouse, or any dependents
of the Participant (as defined in Code Section 152);
(B) purchase (excluding mortgage payments) of a principal residence for the
Participants;
(C) payment of tuition and related educational fees for the next 12 months of
post-secondary education for the Participation, his or her Spouse, children or
dependents;
(D) the need to prevent the eviction of the Participant from his or her
principal residence or foreclosure on the mortgage of the Participant's
principal residence; or
(E) any other condition or event which the Commissioner of the Internal
Revenue Service determines is a deemed immediate and financial need.
5.9.3 A distribution will be considered necessary to satisfy an immediate
and heavy financial need of a Participant if all of the following requirements
are satisfied:
(A) the distribution will not be in excess of the amount of the immediate and
heavy financial need of the Participant (including amounts necessary to pay any
Federal, state or local income taxes or penalties reasonably anticipated to
result from the distribution);
(B) the Participant obtains all distributions, other than hardship
distributions, and all nontaxable loans currently available under all plans
maintained by the Employer or an Affiliate;
(C) the Participant's Elective Deferrals, Employee Thrift Contributions and
Participant Voluntary Nondeductible Contributions will be suspended for at
least 12 months after receipt of the hardship distribution in this Plan and in
all other plans maintained by the Employer or an Affiliate; and
(D) the Participant may not make Elective Deferrals for the Participant's
taxable year immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Code Section 402(g) for
such next taxable year less the amount of such Participant's Elective Deferrals
for the taxable year of the distribution in this Plan and in all other plans
maintained by the Employer or an Affiliate.
5.9.4 If the distribution is made from any Account other than a 401(k)
Contributions Account, a distribution due to hardship may be made without
application of Section 5.9.3(B), 5.9.3(C), or 5.9.3(D).
5.10 LIMITATION ON COMMENCEMENT OF BENEFITS
5.10.1 Anything in this Article V to the contrary notwithstanding, a
Participant's Benefit Commencement Date shall in no event be later than the
60th day after the close of the Plan Year in which the latest of the following
events occur.
(A) the attainment by the Participant of his or her Normal Retirement Age;
(B) the tenth anniversary of the year in which the Participant commenced
participation in the Plan; or
(C) the Participant's termination of Employment. Notwithstanding the foregoing,
the failure of a Participant and Spouse to consent to a distribution while a
benefit is Immediately Distributable, shall be deemed to be an election to
defer commencement of payment of any benefit sufficient to satisfy this Section.
5.10.2 If it is not possible to distribute a Participant's Accounts because
the Administrator has been unable to locate the Participant after making
reasonable efforts to do so, then a distribution of the Participant's Accounts
shall be made when the Participant can be located.
5.11 DISTRIBUTION REQUIREMENTS
5.11.1 Subject to the Joint and Survivor Annuity rules set forth in Article
VI, the requirements of this Article shall apply to any distribution of a
Participant's interest and will take precedence over any inconsistent
provisions of this Plan. Unless otherwise specified, the provisions of this
article apply to calendar years beginning after December 31, 1984. As used in
this Section 5.11, each of the following terms shall have the meaning for that
term set forth in this Section 5.11.1:
(A) APPLICABLE LIFE EXPECTANCY. The life 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
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Beneficiary's) birthday in the applicable calendar year reduced by one for each
calendar year which has elapsed since the date Life Expectancy was first
calculated. If Life Expectancy is being recalculated, the Applicable Life
Expectancy shall be the Life Expectancy as so recalculated. The applicable
calendar year shall be the first distribution calendar year, and if Life
Expectancy is being recalculated such succeeding calendar year.
(B) Designated Beneficiary. The individual who is designated as the Beneficiary
under the Plan in accordance with Code Section 401(a)(9). In the event that a
Participant names a trust to be a designated Beneficiary, such designation
shall provide that, as of the later of the date on which the trust is named as
a Beneficiary or the Participant's Required Beginning Date, and as of all
subsequent periods during which the trust is named as a Beneficiary, the
following requirements are met: (i) the trust is a valid trust under state law,
or would be but for the fact that there is no corpus; (ii) the trust is
irrevocable; (iii) the Beneficiaries of the trust who are Beneficiaries with
respect to the trust's interest in the Participant's benefits are identifiable
from the trust instrument within the meaning of Code Section 401(a)(9); and (iv)
a copy of the trust is provided to the Plan.
(C) Distribution Calendar Year. A calendar year for which a minimum
distribution is required. For distributions beginning before the Participant's
death, the first Distribution Calendar Year is the calendar year immediately
preceding the calendar year which contains the Participant's Required Beginning
Date. For distributions beginning after the Participant's death, the first
Distribution Calendar Year is the calendar year in which distributions are
required to begin pursuant to Section 7.2.
(D) Life Expectancy. Life Expectancy and joint and last survivor expectancy are
computed by use of the expected return multiples in Tables V and VI of section
1.72-9 of the regulations issued under the Code.
Unless otherwise elected by the Participant (or Spouse, in the case of
distributions described in Section 7.2) by the time distributions are required
to begin. Life Expectancies shall not be recalculated annually. Such election
shall be irrevocable as to the Participant or Spouse and shall apply to all
subsequent years. The Life Expectancy of a nonspouse Beneficiary may not be
recalculated.
(E) Required Beginning Date.
(I) General rule. The Required Beginning Date of a Participant is the first day
of April of the calendar year following the calendar year in which the
Participant attains age 70-1/2.
(ii) Transitional rule. The Required Beginning Date of a Participant who
attains age 70-1/2 before January 1, 1988, shall be determined in accordance
with (1) or (2) below:
(1) Non-5% owners. The Required Beginning Date of a Participant who is not a
"5% owner" as defined in (iii) below is the first day of April of the calendar
year following the calendar year in which the later of retirement or attainment
of age 70-1/2 occurs.
(2) 5% owners. The Required Beginning Date of a Participant who is a 5% owner
during any year beginning after December 31, 1979, is the first day of April
following the later of:
(a) the calendar year in which the Participant attains age 70-1/2; or
(b) the earlier of the calendar year with or within which ends the Plan Year in
which the Participant becomes a 5% owner, or the calendar year in which the
Participant retires.
The Required Beginning Date of a Participant who is not a 5% owner who attains
age 70-1/2 during 1988 and who has not retired as of January 1, 1989, is April
1, 1990.
(iii) 5% owner. A Participant is treated as a 5% owner for purposes of this
Section 5.11 if such Participant is a 5% owner as defined in Code Section
416(i) (determined in accordance with section 416 but without regard to whether
the plan is top-heavy) at any time during the Plan Year ending with or within
the calendar year in which such owner attains age 66-1/2 or any subsequent Plan
Year.
(iv) Once distributions have begun to a 5% owner under this Section 5.11,
they must continue to be distributed, even if the Participant ceases to be a 5%
owner in a subsequent year.
5.11.2 All distributions required under this Section 5.11 shall be determined
and made in accordance with the Income Tax Regulations under Code Section
401(a)(9), including the minimum distribution incidental benefit requirement of
section 1.401(a)(9)-2 of the regulations issued under the Code. The entire
interest of a Participant must be distributed or begin to be distributed no
later than the Participant's Required Beginning Date.
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5.11.3 LIMITS ON DISTRIBUTION PERIODS. As of the first Distribution Calendar
Year, distributions, if not made in a lump sum, may only be made over one of
the following periods (or a combination thereof):
(A) the life of the Participant;
(B) the life of the Participant and a Designated Beneficiary;
(C) a period certain not extending beyond the Life Expectancy of the
Participant; or
(D) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a Designated Beneficiary.
For calendar years beginning before January 1, 1989, if the Participant's
Spouse is not the Designated Beneficiary, the method of distribution selected
must assure that at least 50% of the present value of the amount available for
distribution is paid within the Life Expectancy of the Participant.
5.11.4 DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR. (A) If the
Participant's interest is to be paid in the form of annuity distributions under
the Plan (whether directly or in the form of an annuity purchased from an
insurance company), payments under the annuity shall satisfy the following
requirements:
(i) the annuity distributions must be paid in periodic payments made at
intervals not longer than one year;
(ii) the distribution period must be over a life (or lives) or over a period
certain not longer than a Life Expectancy (or joint life and last survivor
expectancy) described in Code Section 401(a)(9)(A)(ii) or Code Section
401(a)(9)(B)(iii), whichever is applicable;
(iii) the Life Expectancy (or joint life and last survivor expectancy) for
purposes of determining the period certain shall be determined without
recalculation of Life Expectancy;
(iv) once payments have begun over a period certain, the period certain may not
be lengthened even if the period certain is shorter than the maximum permitted;
(v) payments must either be nonincreasing or increase only as follows:
(1) with any percentage increase in a specified and generally recognized
cost-of-living index;
(2) to the extent of the reduction to the amount of the Participant's payments
to provide for a survivor benefit upon death, but only if the Beneficiary whose
life was being used to determine the distribution period described in Section
5.11.4(A)(iii) dies and the payments continue otherwise in accordance with that
section over the life of the Participant;
(3) to provide cash refunds of Employee contributions upon the Participant's
death; or
(4) because of an increase in benefits under the Plan.
(vi) If the annuity is a life annuity (or a life annuity with a period certain
not exceeding 20 years), the amount which must be distributed on or before the
Participant's Required Beginning Date (or, in the case of distributions after
the death of the Participant, the date distributions are required to begin
pursuant to Section 7.2) shall be the payment which is required for one payment
interval. The second payment need not be made until the end of the next payment
interval even if that payment interval ends in the next calendar year. Payment
intervals are the periods for which payments are received, e.g., bimonthly,
monthly, semi-annually, or annually.
If the annuity is a period certain annuity without a life contingency (or is a
life annuity with a period certain exceeding 20 years) periodic payments for
each distribution calendar year shall be combined and treated as an annual
amount. The amount which must be distributed by the Participant's Required
Beginning Date (or, in the case of distributions after the death of the
Participant, the date distributions are required to begin pursuant to Section
7.2) is the annual amount for the first Distribution Calendar Year. The annual
amount for other Distribution Calendar Years, including the annual amount for
the calendar year in which the Participant's Required Beginning Date (or the
date distributions are required to begin pursuant to Section 7.2) occurs, must
be distributed on or before December 31 of the calendar year for which the
distribution is required.
(B) Annuities purchased after December 31, 1988, are subject to the following
additional conditions:
(i) Unless the Participant's Spouse is the Designated Beneficiary, if the
Participant's interest is being distributed in the form of a period certain
annuity without a life contingency, the period certain as of the beginning of
the first Distribution Calendar Year may not exceed the applicable period
determined using the table set forth in Q&A A-5 of section 1.40(a)(9)-2 of the
regulations issued under the Code.
(ii) If the Participant's interest is being distributed in the form of a joint
and survivor annuity for the joint lives of the Participant and a nonspouse
Beneficiary, annuity payments to be made on or after the Participant's Required
Beginning Date to the Designated Beneficiary after the Participant's death must
not at any time exceed the applicable percentage
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of the annuity payment for such period that would have been payable to the
Participant using the table set forth in Q&A A-6 of section 1.401(a)(9)-2 of the
regulations under the Code.
(C) Transitional Rule. If payments under an annuity which complies with Section
5.11(A) begin prior to January 1, 1989, the minimum distribution requirements in
effect as of July 27, 1987, shall apply to distributions from this Plan,
regardless of whether the annuity form of payment is irrevocable. This
transitional rule also applies to deferred annuity contracts distributed to or
owned by the Participant prior to January 1, 1989, unless additional
contributions are made under the Plan by the Employer or Affiliate with respect
to such contract.
(D) If the form of distribution is an annuity made in accordance with Section
5.11.4, any additional benefits accruing to the Participant after this or her
Required Beginning Date shall be distributed as a separate and identifiable
component of the annuity beginning with the first payment interval ending in the
calendar year immediately following the calendar year in which such amount
accrues.
(E) Any part of the Participant's interest which is in the form of an individual
account shall be distributed in a manner satisfying the requirements of Code
Section 401(a)(9).
5.11.5 TRANSITIONAL RULE: SECTION 242 ELECTION. Notwithstanding the other
requirements of this Article and subject to the Joint and Survivor Annuity rules
set forth in Article VI, distribution on behalf of any Employee, including a 5%
owner, may be made in accordance with all of the following requirements
(regardless of when such distribution commences):
(A) the distribution by the trust is one which would not have disqualified such
trust under Code Section 401(a)(9) as in effect prior to amendment by the
Deficit Reduction Act of 1984;
(B) the distribution is in accordance with the method of distribution designated
by the Employee whose interest in the trust is being distributed or, if the
Employee is deceased, by a Beneficiary of such Employee;
(C) such designation was in writing, was signed by the Employee or the
Beneficiary, and was made before January 1, 1984;
(D) the Employee had accrued a benefit under the Plan as of December 31, 1983;
and
(E) the method of distribution designated by the Employee or the Beneficiary
specifies the time at which distribution will commence, the period over which
distributions will be made, and in the case of any distribution upon the
Employer's death, the Beneficiaries of the Employee listed in order of priority.
A distribution upon death will not be covered by this transitional rule unless
the information in the designation contains the required information described
above with respect to the distributions to be made upon the death of the
Employee.
For any distribution which commences before January 1, 1984, but continues after
December 31, 1983, the Employee, or the Beneficiary, to whom such distribution
is being made, will be presumed to have designated the method of distribution
under which the distribution is being made if the method of distribution was
specified in writing and the distribution satisfies the requirements in
subsections 5.11.5(A) and (E).
If a designation is revoked any subsequent distribution must satisfy the
requirements of Code Section 401(a)(9). If a designation is revoked subsequent
to the date distributions are required to begin, the trust must distribute by
the end of the calendar year following the calendar year in which the revocation
occurs the total amount not yet distributed to satisfy Code Section 401(a)(9)
but for the Section 242(b)(2) election. For calendar years beginning after
December 31, 1988, such distribution must meet the minimum distribution
incidental benefit requirements in section 1.401(a)(9)-2 of the regulations
issued under the Code. Any changes in the designation will be considered to be a
revocation of the designation. However, the mere substitution or addition of
another Beneficiary (one not named in the designation) under the designation
will not be considered to be a revocation of the designation, so long as such
substitution or addition does not alter the period over which distribution are
to be made under the designation, directly or indirectly (for example, by
altering the relevant measuring life). In the case 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 of section 1.401(a)(9)-1 of the regulations issued under the Code.
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ARTICLE VI
FORMS OF PAYMENT OF RETIREMENT BENEFITS
6.1 METHODS OF DISTRIBUTION
6.1.1 If the Plan is a money purchase pension plan or a target benefit plan, a
Participant's benefit shall be payable in the normal form of a Qualified Joint
and Survivor Annuity if the Participant is married on his or her Benefit
Commencement Date and in the normal form of an immediate annuity for the life
of the Participant if the Participant is not married on that date. A
Participant who terminated Employment on or after satisfying the requirements
for Early Retirement may elect to have his or her Qualified Joint and Survivor
Annuity distributed upon attainment of such Early Retirement. If the Plan is a
profit-sharing plan that satisfies the requirements set forth in Section 6.1.2,
a Participant's Accounts shall only be payable in the normal form of a lump-sum
distribution in accordance with Section 6.1.1(B) below. A Participant in a
money purchase pension plan, a target benefit plan, or a profit-sharing plan
that does not satisfy the requirements set forth in Section 6.1.2, may at any
time after attaining age 35 and prior to his or her Benefit Commencement Date
elect, in accordance with Section 6.2, any of the following optional forms of
payment instead of the normal form:
(A) An Annuity Contract payable as:
(i) a single life annuity;
(ii) a joint and 50% survivor annuity with a contingent annuitant;
(iii) a joint and 100% survivor annuity with a contingent annuitant;
(iv) an annuity for the life of the Participant with 120 monthly payments
certain;
(B) A lump-sum distribution in cash or in kind, or part in cash and part in
kind; or
(C) In installments payable in cash or in kind, or part in cash and part in
kind over a period not in excess of that required to comply with Section 5.11.4.
Anything in this Section 6.1.1 to the contrary notwithstanding, if the value of
a Participant's vested Account as of the applicable Valuation Date is $3,500 or
less, his or her benefit shall be paid in the form of a lump-sum distribution
and no optional form of benefit payment shall be available.
6.1.2 If the Plan is a profit-sharing plan then: (A) the Participant cannot
elect payments in the form of a Life annuity (this Section 6.1.2 shall not
apply if a life annuity form is an optional form preserved under Code Section
411(d)(6)); (B) on the death of the Participant, the Participant's benefits
will be paid to his or her Surviving Spouse, if any, or, if his or her
Surviving Spouse has already consented in a manner conforming to an election
under Section 6.2.4, then to the Participant's Beneficiary; and (C) the normal
form of benefit shall be a lump-sum and Sections 6.2.1, 6.2.2 and 6.2.4 shall
not be applied by the Administrator. A Participant in such a profit-sharing
plan may also elect to receive his or her benefit in the form of installments
in accordance with Section 6.1.3(C) of the Plan. This Section 6.1.2 shall not
apply, however, with respect to the Participant if it is determined that the
Plan is a direct or indirect transferee of a defined benefit plan, a money
purchase pension plan (including a target benefit plan) or a stock bonus or
profit-sharing plan which is subject to the survivor annuity requirements of
Code Sections 401(a)(11) and 417. In addition, this Section 6.1.2 shall not
apply unless the Participant's Surviving Spouse, if any, is the Beneficiary of
(i) the proceeds of any insurance on the Participant's life purchased by
Employer contributions or (ii) forfeitures allocated to the Participant's
Employer Account or unless the Participant's Surviving Spouse has consented to
the Participant's designation of another Beneficiary as referred to in
subsection (C) of this Section 6.1.2.
6.1.3 The following transitional rules shall apply for those Participants
entitled to but not receiving benefits as of August 23, 1984:
(A) Any living Participant not receiving benefits on August 23, 1984, who would
otherwise not receive the benefits prescribed by Section 6.1 must be given the
opportunity to elect to have Section 6.1 apply if such Participant is credited
with at least one Hour of Service under this Plan or a predecessor plan in a
Plan Year beginning on or after January 1, 1987, and such Participant had at
least 10 Years of Service when he or she terminated from Employment.
(B) Any living Participant not receiving benefits on August 23, 1984, who was
credited with at least one Hour of Service under this Plan or a predecessor
plan on or after September 2, 1974, and who is not otherwise credited with an
Hour of Service in a Plan Year beginning on or after January 1, 1976, must be
given the opportunity to have his or her benefits paid in accordance with this
Section 6.1.3(D).
(C) The respective opportunities to elect (as described in these Sections
6.1.3(A) and (B)) must be afforded to the appropriate Participants during the
period commencing on August 23, 1984, and ending on such Participant's Benefit
Commencement Date.
(D) Any Participant who has elected pursuant to this Section 6.1.3(B) and any
Participant who does not elect under this Section 6.1.3(A) or who meets the
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requirements of this Section 6.1.3(A) except that such Participant does not
have at least ten Years of Service when he or she terminates from Employment,
shall have his or her benefits distributed in accordance with all of the
following requirements if benefits would have been payable in the form of a
single life annuity:
(1) Automatic Qualified Joint and Survivor Annuity
If benefits in the form of a single life annuity become payable to a married
Participant who:
(a) begins to receive payments on or after Normal Retirement Age; or
(b) dies on or after Normal Retirement Age while in active Employment; or
(c) begins to receive payments on or after the "Qualified Early Retirement
Age", as that term is defined in Section 6.1.3(D)(3)(a); or
(d) terminates from Employment on or after attaining Normal Retirement Age (or
Qualified Early Retirement Age) and after satisfying the eligibility requirement
for the payment of benefits under the Plan and thereafter dies before his or
her Benefit Commencement Date; then such benefits will be received in the form
of a Qualified Joint and Survivor Annuity, unless the Participant has elected
otherwise during the election period which begins at least six months before
the Participant attains Qualified Early Retirement Age and ends no earlier than
90 days before his or her Benefit Commencement Date. Any election hereunder
will be in writing and may be changed by the Participant at any time.
(2) Election of Early Survivor Annuity
A Participant who is employed after attaining the Qualified Early Retirement
Age will be given the opportunity to elect, beginning on the later of (1) the
90th day before he or she attains his or her Qualified Early Retirement Age, or
(2) the date on which participation begins, and ending on the date he or she
terminates Employment, to have a survivor annuity payable on death. If the
Participant elects the survivor annuity, payments under such annuity must not
be less than the payments which would have been made to the Spouse under the
Qualified Joint and Survivor Annuity if the Participant had retired on the day
before his or her death. Any election under this provision will be in writing
and may be changed by the Participant at any time.
(3) Qualified Early Retirement Age
(a) For purposes of this section 6.1.3, Qualified Early Retirement Age is the
latest of:
(i) the earliest date, under the Plan, on which the Participant may elect to
receive retirement benefits,
(ii) the first day of the 120th month beginning before the Participant reaches
Normal Retirement Age, or
(iii) the date the Participant begins participation.
(b) Qualified Joint and Survivor Annuity is an annuity for the life of the
Participant with a survivor annuity for the life of the Spouse as described in
Section 1.77.
6.2 ELECTION OF OPTIONAL FORMS
6.2.1 By notice to the Administrator at any time prior to a Participant's date
of death and beginning on the first day of the Plan Year in which the
Participant attains age 35, the Participant may elect, in writing, not to
receive the normal form of benefit payment otherwise applicable and to receive
instead an optional form of benefit payment provided for in Section 6.1.1. If
the Participant separates from Employment prior to the first day of the Plan
Year in which the Participant attains age 35, the Participant may make such
election beginning on the date he or she separates from Employment. This
Section 6.2.1 shall not be applicable if Section 6.1.2 applies to a Participant.
6.2.2 Within a reasonable period, but in any event no less than 30 and no more
than 90 days prior to each Participant's Benefit Commencement Date, the
Administrator shall provide to each Participant a written explanation of the
terms and conditions of a Qualified Joint and Survivor Annuity. Such written
explanation shall consist of:
(A) the terms and conditions of the Qualified Joint and Survivor Annuity;
(B) the Participant's right to make, and the effect of, an election to waive
the Qualified Joint and Survivor Annuity;
(C) the rights of the Participant's Spouse under Section 6.2.4;
(D) the right to make, and the effect of, a revocation of a previous election
to waive the Qualified Joint and Survivor Annuity; and
(E) the relative values of the various optional forms of benefit under the Plan.
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The Administrator may, on a uniform and nondiscriminatory basis, provide for
such other notices, information or election periods or take such other action
as the Administrator considers necessary or appropriate to implement the
provisions of this Section 6.2.2.
6.2.3 A Participant may revoke his or her election to take an optional form of
benefit, and elect a different from of benefit, at any time prior to the
Participant's Benefit Commencement Date.
6.2.4 The election of an optional benefit by a Participant after December 31,
1984, must also be a waiver of a Qualified Joint and Survivor Annuity by the
Participant. Any waiver of a Qualified Joint and Survivor Annuity shall not be
effective unless (A) the Participant's Spouse consents in writing; (B) the
election designates a specific alternate Beneficiary, including any class of
Beneficiaries or any contingent Beneficiaries which may not be changed without
spousal consent (or the Spouse expressly permits designations by the
Participant without any further spousal consent); (C) the Spouse's consent to
the waiver is witnessed by a Plan representative or notary public; and (D) the
Spouse's consent acknowledges the effect of the election. Additionally, a
Participant's waiver of the Qualified Joint and Survivor Annuity will not be
effective unless the election designates a form of benefit payment which may
not be changed without spousal consent or the Spouse expressly permits
designations without any further spousal consent. Notwithstanding this consent
requirement, if the Participant establishes to the satisfaction of a Plan
representative that such written consent may not be obtained because there is
no Spouse or the Spouse cannot be located, the election will be deemed
effective. Any consent necessary under this provision will not be valid with
respect to any other Spouse. A consent that permits designations by the
Participant without any requirement of further consent by such Spouse must
acknowledge that the Spouse has the right to limit consent to a specific
Beneficiary, and a specific form of benefit, where applicable, and that the
Spouse voluntarily elects to relinquish either or both of such rights.
Additionally, a revocation of a prior waiver may be made by a Participant
without the consent of the Spouse at any time before his or her Benefit
Commencement Date. The number of revocations shall not be limited. Any new
waiver will require a new consent by the electing Participant's Spouse. No
consent obtained under this provision shall be valid unless the Participant has
received notice as provided in this Section.
6.2.5 The election of an optional form of benefit which contemplates the
payment of an annuity shall not be given effect if any person who would receive
benefits under the annuity dies before the Benefit Commencement Date.
6.3 CHANGE IN FORM OF BENEFIT PAYMENTS
Any former Employee whose payments are being deferred or who is receiving
installment payments may request acceleration or other modification of the form
of benefit distribution, subject to Code Section 410(a)(9), provided that any
necessary consent to such change required pursuant to Section 6.2.4 is obtained
from the Employee's Spouse. This Section 6.3 shall not apply to any Employee
who becomes a Participant on or after January 1, 1989 or to Plans adopted after
that date.
6.4 DIRECT ROLLOVERS
6.4.1 The provisions of this Section 6.4 apply only to distributions made on or
after January 1, 1993.
6.4.2 Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this Section 6.4, a Distributee
may elect, at the time and in the manner prescribed by the Administrator, to
have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Distributee in a Direct Rollover.
6.4.3 Definitions - All terms used in this Section 6.4 shall have the meaning
set forth below:
(A) Eligible Rollover Distribution: An Eligible Rollover Distribution is any
distribution of all or any portion of the balance to the credit of the
Distributee, except, that an Eligible Rollover Distribution does not include:
any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under Code Section 401(a)(9); and the portion of any
distribution that is not includible in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities).
(B) Eligible Retirement Plan: An Eligible Retirement Plan is an individual
retirement account described in Code Section 408(a), an individual retirement
annuity described in Code Section 408(b), an annuity plan described in Code
Section 403(a), or a qualified trust described in Code Section 401(a) that
accepts the Distributee's Eligible Rollover Distribution. However, in the case
of an Eligible Rollover Distribution to the Surviving Spouse, an Eligible
Retirement Plan is an individual retirement account or individual retirement
annuity.
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(C) Distributee: A Distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's Surviving Spouse and the
Employee's or former Employee's Spouse or former Spouse who is the alternate
payee under a qualified domestic relations order, as defined in Code Section
414(p), are Distributees with regard to the interest of the Spouse or former
Spouse.
(D) Direct Rollover: A Direct Rollover is a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
ARTICLE VII
DEATH BENEFITS
7.1 PAYMENT OF ACCOUNT BALANCES
7.1.1 The benefits payable to the Beneficiary of a Participant who dies while
an Employee shall be the Account Balance of all of his or her Accounts
including, if applicable, the proceeds of any life insurance contract in effect
on the Participant's life in accordance with Section 7.3. The benefits payable
to the Beneficiary of a Participant who dies after terminating Employment shall
be the vested Account Balance of all of his or her Accounts. Except as
otherwise provided in this Article VII, a Beneficiary may request that he or
she be paid his or her benefits as soon as practicable after the Participant's
death.
7.1.2 If a Participant dies before distribution of his or her entire interest
in the Plan has been completed, the remaining interest shall, subject to
Section 7.2.5, be distributed to the Participant's Beneficiary in the form, at
the time and from among the methods specified in Section 6.1.1 as elected by
the Beneficiary in writing filed with the Administrator. If an election is not
received by the Administrator within 90 days following the date the
Administrator is notified of the Participant's death, the distribution shall be
made, if to a Surviving Spouse, in accordance with Section 7.2.5(B), and, if to
some other Beneficiary, to the Beneficiary in a lump-sum.
7.1.3 The value of the benefits payable to a Beneficiary shall be determined
in accordance with Section 10.6.2. If the value of such death benefit is $3,500
or less, distribution of such benefit shall be made in a lump-sum as soon as
practicable following the death of the Participant.
7.2 BENEFICIARIES
7.2.1 The Administrator shall provide each Participant, within the period
described in Section 7.2.1(A) for such Participant, a written explanation of
the death benefit in such terms and in such a manner as would be comparable
to the explanation provided for meeting the requirements applicable to a
Qualified Joint and Survivor Annuity. This Section 7.2.1 shall not be
applicable if Section 6.1.2 applies to a Participant.
(A) The period for providing a written explanation of the death benefit for a
Participant ends on the latest of the following to occur:
(i) the period beginning with the first day of the Plan Year in which the
Participant attains age 32 and ending with the close of the Plan Year preceding
the Plan Year in which the Participant attains age 35;
(ii) a reasonable period ending after the Employee becomes a Participant; or
(iii) a reasonable period ending after Code Section 417 first applies to the
Participant.
Notwithstanding the foregoing, notice must be provided within a reasonable
period ending after termination of Employment in case of a Participant who
terminates Employment before attaining age 35 and who has a vested interest
in his or her Account.
(B) For purposes of the preceding paragraph, a reasonable period ending after
the enumerated events described in (ii) and (iii) is the end of the two-year
period beginning one year prior to the date the applicable event occurs and
ending one year after that date. A Participant who has a vested interest in
his or her Account and who terminates Employment before the Plan in which age
35 is attained, shall be provided such notice within the two-year period
beginning one year prior to and ending one year after termination. If such a
Participant returns to Employment, the applicable period for such Participant
shall be redetermined.
7.2.2 A Participant shall designate one or more Beneficiaries to whom amounts
due after his or her death, other than under the Qualified Joint and Survivor
Annuity, shall be paid. In the event a Participant fails to make a proper
designation or in the event that no designated Beneficiary survives the
Participant, the Participant's Beneficiary shall be the Participant's Surviving
Spouse, or if the Participant has no Surviving Spouse, the legal
representative of the Participant's estate, as an asset of that estate. A
Participant's Beneficiary shall not have any right to benefits under the Plan
unless he or she shall survive the Participant.
7.2.3 Any designation of a Beneficiary incorporated into an Annuity Contract
or insurance contract shall be governed by the terms of such Annuity Contract
or insurance contract. Any other designation of a Beneficiary must be filed
with the Administrator, in a time and manner designated by such Administrator,
in order to be effective. Any such designation of a Beneficiary may be revoked
by filing a later designation
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or an instrument of revocation with the Administrator, in a time and manner
designated by the Administrator.
7.2.4 Effective after December 31, 1984, a married Participant whose designation
of a Beneficiary is someone other than his or her Spouse, including a
Beneficiary referred to in the first sentence of Section 7.2.3, or the change of
any such Beneficiary to a new Beneficiary other than the Participant's Spouse,
shall not be valid unless made in writing and consented to by the Participant's
Spouse in such terms and in such a manner as would be comparable to the consent
provided for a waiver of the Qualified Joint and Survivor Annuity. The Spouse's
consent to such designation must be made in the manner described in Section
6.2.4.
7.2.5 Notwithstanding any other provision of the Plan to the contrary:
(A) If the Participant dies after his or her Benefit Commencement Date, but
before distribution of his or her benefit has been completed, the remaining
portion of such benefit may continue in the form and over the period in which
the distributions were being made, but in any event must continue to be made at
least as rapidly as under the method of distribution being used prior to the
Participant's death.
(B) If the Participant dies leaving a Surviving Spouse before his or her Benefit
Commencement Date, the Participant's benefit shall be payable to the
Participant's Surviving Spouse in the form of an annuity for the life of the
Surviving Spouse. The preceding sentence shall not apply if, within 90 days
following the date the Administrator is notified of the Participant's death, his
or her Surviving Spouse elects, by written notice to the Administrator, any
other form of benefit payment specified in Section 6.1.1., or the such Surviving
Spouse has already consented in a manner described in Section 6.2.4 to a
distribution to an alternate Beneficiary designated by the Participant. If the
Plan is a profit-sharing plan which meets the requirements of Section 6.1.2, the
Surviving Spouse shall receive his or her distribution in the form of a
lump-sum unless she or he elects within 90 days following the date the
Administrator is notified of the Participant's death, any other form of benefit
payment specified in Section 6.1.1, or the Participant's Surviving Spouse has
already consented in a manner described in Section 6.2.4 to a distribution to an
alternate Beneficiary designated by the Participant. If the Participant's
benefit is $3,500 or less, distribution shall be made in the form of a lump-sump
comprised of the assets in the Account immediately prior to the distribution if
the Account consists of Participant-Directed Assets. If the Account does not
consist of Participant-Directed Assets, the distribution shall be in cash. If
the Participant's benefit is distributable in the form of an annuity for the
life of the Surviving Spouse, the Surviving Spouse may elect to have such
annuity distributed immediately.
(C) If the Participant dies before his or her Benefit Commencement Date, the
distribution of the Participant's entire interest shall be completed by
December 31 of the calendar year containing the fifth anniversary of the
Participant's death except to the extent that an election is made by the
designated Beneficiary involved to receive distributions in accordance with (i)
or (ii) of this subsection (C) below:
(i) if any portion of the Participant's interest is payable to a designated
Beneficiary who is an individual, distributions may be made in substantially
equal installments over the life or Life Expectancy, as defined in Section
5.11.1(D), of the designated Beneficiary commencing on or before December 31 of
the calendar year immediately following the calendar year of the Participant's
death;
(ii) if the designated Beneficiary is the Participant's Surviving Spouse, the
date distributions are required to begin in accordance with (i) of this
subsection (C) shall not be earlier than the later of December 31 of the
calendar year in which the Participant died and December 31 of the calendar
year in which the Participant would have attained age 65; and
(iii) if the Surviving Spouse dies before payments begin subsequent
distributions shall be made as if the Surviving Spouse had been the Participant.
(D) For purposes of this Section 7.2.5, distribution of a Participant's interest
is considered to begin on the Participant's Required Beginning Date, as defined
in Section 5.11.1(E). If distribution in the form of an annuity irrevocably
commences to the Participant before such Required Beginning Date, the date
distribution is considered to begin is the date distribution actually commences.
(E) For purposes of this Section 7.2.5, any amount paid to a child of the
Participant will be treated as if it had been paid to the Participant's
Surviving Spouse if the amount becomes payable to such Surviving Spouse when
the child reaches the age of majority.
(F) If the Participant has not made an election pursuant to this Section 7.2.5
by the time of his or her death, the Participant's designated Beneficiary must
elect the method of distribution no later than the earlier of (i) December 31 of
the calendar year in which distributions would be required to begin under this
Section or (ii) December 31 of the calender year which contains the fifth
anniversary of the date of death of the Participant. If the Participant has no
designated Beneficiary, or if the designated Beneficiary does not elect a method
of distribution, distribution of the Participant's entire interest must be
completed by
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December 31 of the calendar year containing the fifth anniversary of the
Participant's death.
7.3 LIFE INSURANCE
7.3.1 With the consent of the Administrator and upon such notice as the
Administrator may require, a Participant may direct that a portion of his or
her Account be used to pay premiums on life insurance on the Participant's
life; provided, however, that (a) the aggregate premiums paid on ordinary life
insurance must be less than 50% of the aggregate contributions allocated to the
Participant's Employer Accounts, (b) the aggregate premiums paid on term life
insurance contracts, universal life insurance contracts and all other life
insurance contracts which are not ordinary life insurance may not exceed 25% of
the aggregate contributions allocated to the Participant's Employer Account,
and (c) the sum of one-half of the premiums paid on ordinary life insurance and
the total of all other life insurance premiums may not exceed 25% of the
aggregate contributions allocated to the Employer Account of the Participant.
For purposes of these limitations, ordinary life insurance contracts are
contracts with both non-decreasing death benefits and non-increasing premiums.
7.3.2 The Trustee shall be the owner of each life insurance contract purchased
under this Section 7.3 and the proceeds of each such contract shall be payable
to the Trustee, provided that all benefits, rights and privileges under each
contract on the life of a Participant which are available while the Participant
is living shall be exercised by the Trustee only upon and in accordance with
the written instructions of the Participant. The proceeds of all such insurance
on the life of a Participant shall be paid over by the Trustee to the
Participant's Beneficiary in accordance with this Article VII. Under no
circumstances shall the Trustee retain any part of the proceeds.
7.3.3 Any dividends or credits earned on a life insurance contract shall be
applied when received in reduction of any premiums thereon, or, if no premiums
are due, applied to increase the proceeds of the insurance contract.
7.3.4 If a Participant is found by the Administrator to be insurable only at a
substandard premium rate, the policy shall provide a reduced death benefit
using the same premium as would be required if the Participant were a standard
risk, the amount of the death benefit being determined in accordance with the
amount of the rating.
7.3.5 The cash surrender value of an insurance contract to the extent deriving
from Employer or Participant contributions, if any, shall be included,
respectively, in the Account Balance of the Account from which the premiums
were paid. Any death benefits under an insurance contract payable before the
Participant's termination of Employment will be paid to the Trustee for
addition to the relevant Account of the Participant for distribution in
accordance with Section 7.1.
7.3.6 Any other provisions herein to the contrary notwithstanding, the purchase
of life insurance for any Participant shall be subject to such minimum premium
requirements as the Trustee may determine from time to time.
7.3.7 Premiums on life insurance contracts on a Participant's life shall be paid
by the Trustee, unless directed otherwise by the Participant, first from cash in
the Participant's Employer Accounts to the extent thereof, and then from cash in
the Participant's Participant Contributions Accounts, if any, to the extent
thereof. If there is insufficient cash in either Account to pay premiums due,
the Trustee shall notify the Participant of this fact. If the Participant does
not thereafter instruct the Trustee to sell sufficient assets in an Account of
the Participant to pay premiums due on a timely basis, the Trustee shall not be
obligated to take any further action with respect to any life insurance contract
on the Participant's life, whether as regards continuing insurance on a paid-up
basis, effecting a reduction of the insurance in force, or otherwise, except at
the direction of the Participant.
7.3.8 Prior to such time as a Participant becomes entitled to receive a
distribution of any benefits under this Plan of any reason other than the
Participant's death, the Trustee shall, pursuant to the written direction of
the Participant delivered to the Administrator within such period of time as is
acceptable to the Administrator, either convert all life insurance contracts on
the Participant's life into cash or an annuity to provide current or future
retirement income to the Participant or distribute the contracts to the
Participant as a part of a benefit distribution; provided, however, that:
(A) the contracts shall not be distributed unless, if the Participant is
married at the time the distribution of the contracts is to be made, and the
Plan is a money purchase pension plan, a target benefit plan or a
profit-sharing plan to which Section 6.1.2 does not apply, the Participant's
Spouse at that time consents to a distribution in the manner prescribed by
Section 6.2.4; and
(B) if the cash value of any contracts at the time they become distributable to
a Participant exceeds a Participant's vested interest in his or her Employer
Accounts at that time, the Participant shall be entitled to receive a
distribution of such contracts only if the Participant promptly pays such
excess in cash to the Trust Fund.
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Life insurance contracts on a Participant's life shall not continue to be
maintained under the Plan following the Participant's termination of Employment
or after Employer contributions have ceased.
If a Participant on whose life an insurance contract is held does not make a
timely and proper direction regarding the contract under this Section 7.3.8,
the Participant shall be deemed to have directed that the contract be converted
into cash to be distributed in the manner in which the Participant's benefit is
to be distributed.
7.3.9 Anything contained herein to the contrary notwithstanding in the event of
any conflict between the terms of the Plan and the terms of any insurance
contract purchased under this Section 7.3, the provisions of the Plan shall
control.
ARTICLE VIII
FIDUCIARIES
8.1 NAMED FIDUCIARIES
8.1.1 The Administrator shall be a "named fiduciary" of the Plan, as that term
is defined in ERISA Section 402(a)(2), with authority to control and manage the
operation and administration of the Plan, other than authority to manage and
control Plan assets. The Administrator shall also be the "administrator" and
"plan administrator" with respect to the Plan, as those terms are defined in
ERISA Section 3(16)(A) and in Code Section 414(g), respectively.
8.1.2 The Trustee, or Investment Committee if appointed by the Employer, shall
be a "named fiduciary" of the Plan, as that term is defined in ERISA Section
402(a)(2), with authority to manage and control all Trust Fund assets and to
select an Investment Manager or Investment Managers. If ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust
Company is the Trustee, it shall be a nondiscretionary trustee; an Investment
Committee shall be appointed and shall be the Employer, who may also remove
such Investment Committee; and the Investment Committee shall be the "named
fiduciary" with respect to Trust Fund assets. Anything in this Section 8.1.2 to
the contrary notwithstanding, with respect to Participant-Directed Assets, the
Participant or Beneficiary having the power to direct the investment of such
assets shall be the "named fiduciary" with respect thereto.
8.1.3 The Trustee, or Investment Committee if appointed by the Employer, shall
have the power to make and deal with any investment of the Trust Fund permitted
in Section 10.4, except Participant-Directed Assets or assets for which an
Investment Manager has such power, in any manner which it deems advisable and
shall also:
(A) establish and carry out a funding policy and method consistent with the
objectives of the Plan and the requirements of ERISA;
(B) have the power to select Annuity Contracts, if applicable;
(C) have the power to determine, if applicable, what investments specified in
Section 10.4, including without limitation, Qualified Employer Securities and
regulated investment company shares, are available as Participant-Directed
Assets; and
(D) have all rights, powers, duties and obligations granted or imposed upon
it elsewhere in the Plan.
8.2 EMPLOYMENT OF ADVISERS
A "named fiduciary", with respect to the Plan (as defined in ERISA Section
402(a)(2)) and any "fiduciary" (as defined in ERISA Section 3(4)) appointed by
such a "named fiduciary", may employ one or more persons to render advice with
regard to any responsibility of such "named fiduciary" or "fiduciary" under the
Plan.
8.3 MULTIPLE FIDUCIARY CAPACITIES
Any "named fiduciary" with respect to the Plan (as defined in ERISA Section
402(a)(2) and any other "fiduciary" (as defined in ERISA Section 3(4)) with
respect to the Plan may serve in more than one fiduciary capacity.
8.4 INDEMNIFICATION
To the extent not prohibited by state or federal law, the Employer agrees to,
and shall indemnify and save harmless, as the case may be, each Administrator
(if a person other than the Employer), Trustee, Investment Committee and/or any
Employee, officer or director of the Employer, or an Affiliate, from all claims
for liability, loss, damage or expense (including payment of reasonable
expenses in connection with the defense against any such claim) which result
from any exercise or failure to exercise any of the indemnified person's
responsibilities with respect to the Plan, other than by reason of gross
negligence.
8.5 PAYMENT OF EXPENSES
8.5.1 All Plan expenses, including without limitation, expenses and fees
(including fees for legal services rendered and fees to the Trustee) of the
Sponsor, Administrator, Investment Manager, Trustee, and any insurance company,
shall be charged against and withdrawn from the Trust Fund; provided, however,
the Employer may pay any of such expenses or reimburse the Trust Fund for any
payment.
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8.5.2 All transactional costs or charges imposed or incurred (if any) for
Participant-Directed Assets shall be charged to the Account of the directing
Participant or Beneficiary. Transactional costs and charges shall include, but
shall not be limited to, charges for the acquisition or sale or exchange of
Participant-Directed Assets, brokerage commissions, service charges and
professional fees.
8.5.3 Any taxes which may be imposed upon the Trust Fund or the income therefrom
shall be deducted from and charged against the Trust Fund.
ARTICLE IX
PLAN ADMINISTRATION
9.1 THE ADMINISTRATOR
9.1.1 The Employer may appoint one or more persons as Administrator, who may
also be removed by the Employer. If any individual is appointed as
Administrator, and the individual is an Employee, the individual will be
considered to have resigned as Administrator if he or she terminates Employment
and at least one other person continues to serve as Administrator. Employees
shall receive no compensation for their services rendered to or as
Administrator.
9.1.2 If more than one person is designated as Administrator, the Administrator
shall act by a majority of its members at the time in office and such action may
be taken either by a vote at a meeting or in writing without a meeting. However,
if less than three members are appointed, the Administrators shall act only upon
the unanimous consent of its members. An Administrator who is also a Participant
shall not vote or act upon any matter relating to himself or herself, unless
such person is the sole Administrator.
9.1.3 The Administrator may authorize in writing any person to execute any
document or documents on the Administrator's behalf, and any interested person,
upon receipt of notice of such authorization directed to it may thereafter
accept and rely upon any document executed by such authorized person until the
Administrator shall deliver to such interested person a written revocation of
such authorization.
9.2 POWERS AND DUTIES OF THE Administrator
9.2.1 The Administrator shall have the power to construe the Plan and to
determine all questions of fact or interpretation that may arise thereunder, and
any such construction or determination shall be conclusively binding upon all
persons interested in the Plan.
9.2.2 The Administrator shall have the power to promulgate such rules and
procedures, to maintain or cause to be maintained such records and to issue such
forms as it shall deem necessary and proper for the administration of the Plan.
9.2.3 Subject to the terms of the Plan, the Administrator shall determine the
time and manner in which all elections authorized by the Plan shall be made or
revoked.
9.2.4 The Administrator shall have all the rights, powers, duties and
obligations granted to or imposed upon it elsewhere in the Plan.
9.2.5 The Administrator shall exercise all of its responsibilities in a uniform
and nondiscriminatory manner.
9.3 DELEGATION OF RESPONSIBILITY
The Administrator may designate persons, including persons other than "named
fiduciaries" (as defined in ERISA Section 402(a)(2)) to carry out the specified
responsibilities of the Administrator and shall not be liable for any act or
omission of a person so designated.
ARTICLE X
TRUSTEE AND INVESTMENT COMMITTEE
10.1 APPOINTMENT OF TRUSTEE AND INVESTMENT COMMITTEE
10.1.1 The Employer shall appoint one or more persons as a Trustee who shall
serve as such for all or a portion of the Trust Fund. By executing the Adoption
Agreement: (i) the Employer represents that all necessary action has been taken
for the appointment of the Trustee; (ii) the Trustee acknowledges that it
accepts such appointment; and (iii) both the Employer and the Trustee agree to
act in accordance with the Trust provisions contained in this Article X.
10.1.2 An Employee appointed as Trustee or to the Investment Committee shall
receive no compensation for services rendered in such capacity and will be
considered to have resigned if he or she terminates Employment and at least one
other person continues to act as Trustee or as the Investment Committee, as the
case may be. If ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company is the Trustee, the Employer shall
appoint an Investment Committee and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company shall be a
nondiscretionary trustee.
10.1.3 If more than one person is acting as the Trustee, or as an Investment
Committee, such Trustee, or Investment Committee, shall act by a majority of the
persons at the time so acting and such action may be taken either by a vote at a
meeting or in writing without a meeting. If less than three members are serving,
the Trustee, or Investment Committee, shall act only upon the unanimous consent
of those serving.
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The Trustee, or Investment Committee, may authorize in writing any person to
execute any document or documents on its behalf, and any interested person, upon
receipt of notice of such authorization directed to it may thereafter accept and
rely upon any document executed by such authorized person until the Trustee, or
Investment Committee, shall deliver to such interested person a written
revocation of such authorization.
10.2 THE TRUST FUND
The Trustee shall receive such sums of money or other property acceptable to
the Trustee which shall from time to time be paid or delivered to the Trustee
under the Plan. The Trustee shall hold in the Trust Fund all such assets,
without distinction between principal and income, together with all property
purchased therewith and the proceeds thereof and the earnings and income
thereon. The Trustee shall not be responsible for, or have any duty to enforce,
the collection of any contributions or assets to be paid or transferred to it,
or for verifying whether contributions or transfers to it are allowable under
the Plan, nor shall the Trustee be responsible for the adequacy of the Trust
Fund to meet or discharge liabilities under the Plan.
10.2.1 The Trustee shall receive in cash or other assets acceptable to the
Trustee, so long as such assets received do not constitute a prohibited
transaction, all contributions paid or delivered to it which are allocable
under the Plan and to the Trust Fund and all transfers paid or delivered under
the Plan to the Trust Fund from a predecessor trustee or another trust
(including a trust forming part of another plan qualified under Code Section
401(a); provided, however, that the Trustee shall not be obligated to receive
any such contribution or transfer unless prior thereto or coincident therewith,
as the Trustee may specify, the Trustee has received such reconciliation,
allocation, investment or other information concerning, or such direction,
contribution or representation with respect to, the contribution or transfer or
the source thereof as the Trustee may require. The Trustee shall have no duty or
authority to (a) require any contributions or transfers to be made under the
Plan or to the Trustee, (b) compute any amount to be contributed or transferred
under the Plan to the Trustee, or (c) determine whether amounts received by the
Trustee comply with the Plan.
10.2.2 The Trust Fund shall consist of all money and other property received by
the Trustee pursuant to Section 10.2, increased by any income or gains on or
increment in such assets and decreased by any investment loss or expense,
benefit or disbursement paid pursuant to the Plan.
10.3 RELATIONSHIP WITH ADMINISTRATOR
10.3.1 Neither the Trustee, nor the Investment Committee, if any, shall be
responsible in any respect for the administration of the Plan. Payments of
money or property from the Trust Fund shall be made by the Trustee upon
direction from the Administrator or its designee. Payments by the Trustee shall
be transmitted to the Administrator or its designee for delivery to the proper
payees or to payee addresses supplied by the Administrator or its designee, and
the Trustee's obligation to make such payments shall be satisfied upon such
transmittal. The Trustee shall have no obligation to determine the identity of
persons entitled to payments under the Plan or their addresses.
10.3.2 Directions from or on behalf of the Administrator or its designee shall
be communicated to the Trustee or the Trustee's designee for that purpose only
in a manner and in accordance with procedures acceptable to the Trustee. The
Trustee's designee shall not, however, be empowered to implement any such
directions except in accordance with procedures acceptable to the Trustee. The
Trustee shall have no liability for following any such directions or failing to
act in the absence of any such directions. The Trustee shall have no liability
for the acts or omissions of any person making or failing to make any direction
under the Plan or the provisions of this Article X nor any duty or obligation
to review any such direction, act or omission.
10.3.3 If a dispute arises over the propriety of the Trustee making any payment
from the Trust Fund, the Trustee may withhold the payment until the dispute has
been resolved by a court of competent jurisdiction or settled by the parties to
the dispute. The Trustee may consult legal counsel and shall be fully protected
in acting upon the advice of counsel.
10.4 INVESTMENT OF ASSETS
10.4.1 Except as provided in Section 10.4.2, investments of the Trust Fund
shall be made in the following, but only if compatible with the Sponsor's
administrative and operational requirement and framework:
(A) shares of any regulated investment company managed in whole or in part by
the Sponsor or any affiliate of the Sponsor;
(B) any property purchased through the Sponsor or any affiliate of the Sponsor,
whether or not productive of income or consisting of wasting assets, including,
without limitation by specification, governmental, corporate or personal
obligations, trust and participation certificates, leaseholds, fee titles,
mortgages and other interests in realty, preferred and common stocks,
convertible stocks and securities, shares of regulated investment companies,
certificates
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???? and call options and other option ???? any type, foreign or domestic,
whether or ???? on any exchange, futures contracts and ???? futures contracts
traded on or subject to the ???? exchange which has been designated as a ????
by the Commodity Futures Trading ???? an independent U.S. government agency,
contracts relating to the lending of property, evidences of indebtedness or
ownership in foreign corporations or other enterprises, or indebtedness of
foreign governments, group trust participations, limited or general partnership
interests, insurance contracts, annuity contracts, any other evidences of
indebtedness or ownership including oil, mineral or gas properties, royalty
interests or rights (including equipment pertaining thereto); and
(C) Qualifying Employer Securities or "qualifying employer real properties" (as
that term is defined in ERISA Section 407(d) to the extent permitted in Section
10.4.3).
10.4.2 (A) Up to 25% or with the written consent of the Sponsor or its
representative, an additional percentage of each Plan Year's contributions may
be invested in property as specified in Section 10.4.1(B) acquired through a
person other than the Sponsor or an affiliate of the Sponsor.
(B) Except as permitted by Section 10.4.2 and except as may result from a
Rollover Contribution or a trust to trust transfer, without the written consent
of the Sponsor or its representative, property may not be acquired through a
person other than the Sponsor or an affiliate of the Sponsor if following such
acquisitions the value of the property so acquired would exceed 25% of the
value of the Trust Fund.
10.4.3 In its sole discretion, the Investment Committee, or Trustee if there is
no Investment Committee:
(A) may permit the investment of up to 10% of the Trust Fund in Qualifying
Employer Securities or "qualifying employer real property" (as that term is
defined in ERISA Section 407(d)), to the extent such investment is compatible
with the Sponsor's administrative and operational requirements and framework;
and
(B) may determine, subject to Section 10.4.2, that a percentage of assets in
excess of 10% of the Trust Fund may be invested in Qualifying Employer
Securities or "qualifying employer real property" by a profit-sharing plan.
10.4.4 This Plan will be recognized as a Prototype Plan by the Sponsor only by
complying with the provisions of this Section 10.4.
10.5 INVESTMENT DIRECTION, PARTICIPANT-DIRECTED ASSETS AND QUALIFYING EMPLOYER
INVESTMENTS
10.5.1 The Trustee, or Investment Committee if appointed, shall manage the
investment of the Trust Fund except insofar as (a) an Investment Manager has
authority to manage Trust assets, or (b) Participant-Directed Assets are
permitted as specified in the Adoption Agreement. Except as required by ERISA,
if an Investment Committee is acting, the Trustee shall invest the Trust Fund
as directed by the Investment Committee, an Investment Manager or a Participant
or Beneficiary, as the case may be, and the Trustee shall have no discretionary
control over, nor any other discretion regarding, the investment or
reinvestment of any asset of the Trust. Participant-Directed Assets shall be
invested in accordance with the direction of the Participant or, in the event
of the Participant's death before an Account is fully paid out, the
Participant's Beneficiary with respect to the assets involved; provided,
however, that Participant-Directed Assets may not be invested in "collectibles"
(as defined in Code Section 408(m)(2)). If there are Participant-Directed
Assets, the investment of these assets shall be made in accordance with such
rules and procedures established by the Administrator which must be consistent
with the rules and procedures of the Sponsor or its affiliate, as the case may
be.
10.5.2 With respect to Participant-Directed Assets, neither the Administrator,
the Investment Committee nor the Trustee shall:
(A) make any investments or dispose of any investments without the direction of
the Participant or Beneficiary for whom the Participant-Directed Assets are
maintained, except as provided in Section 8.5 so as to pay fees or expenses of
the Plan;
(B) be responsible for reviewing any investment direction with respect to
Participant-Directed Assets or for making recommendations on acquiring,
retaining or disposing of any assets or otherwise regarding any assets;
(C) have any duty to determine whether any investment is an authorized or
proper one; or
(D) be liable for following any investment direction or for any losses, taxes
or other consequences incurred as a consequence of investments selected by any
Participant or Beneficiary or for holding assets uninvested until it receives
proper instructions.
10.5.3 If Participant-Directed Assets are permitted, a list of the Participants
and Beneficiaries and such information concerning them as the Trustee may
specify shall be provided by the Employer or the Administrator to the Trustee
and/or such person as are necessary for the implementation of the directions in
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accordance with the procedure acceptable to the Trustee.
10.5.4 It is understood that the Trustee may, from time to time, have on
hand funds which are received as contributions or transfers to the Trust Fund
which are awaiting investment or fund's from the sale of Trust Fund assets
which are awaiting reinvestment. Absent receipt by the Trustee of a direction
from the proper person for the investment or reinvestment of such funds or
otherwise prior to the application of funds in implementation of such a
direction, the Trustee shall cause such funds to be invested in shares of such
money market fund or other short term investment vehicle as the Trustee, or
Investment Committee if appointed, may specify for this purpose from time to
time. Any such investment fund may be sponsored, managed or distributed by the
Sponsor or an affiliate of the Sponsor.
10.5.5 Directors for the investment or reinvestment of Trust assets of a
type referred to in Section 10.4 from the Investment Committee, an Investment
Manager or a Participant or Beneficiary, as the case may be, shall, in a manner
and in accordance with procedures acceptable to the Trustee, be communicated to
and implemented by, as the case may be, the Trustee, the Trustee's designee or,
with the Trustee's consent and if an investment Committee is operating, a
broker/dealer designated for the purpose by the Investment Committee.
Communication of any such direction to such a designee or broker/dealer shall
conclusively be deemed an authorization to the designee or broker/dealer to
implement the direction even though coming from a person other than the
Trustee. The Trustee shall have no liability for its or any other person's
following such directions or failing to act in the absence of any such
directions. The Trustee shall have no liability for the acts or omissions of
any person directing the investment or reinvestment of Trust Fund assets or
making or failing to make any direction referred to in Section 10.5.6.
10.5.6 The voting and other rights in securities or other assets held in the
Trust shall be exercised by the Trustee provided, however, that if an
Investment Committee is appointed, the Trustee shall act as directed by such
person who at the time has the right to direct the investment or reinvestment
of the security or other asset involved.
10.5.7 With respect to any Qualifying Employer Securities allocated to an
Account, each Participant shall be entitled to direct the Trustee in writing as
to the manner in which Qualifying Employer Securities are to be voted.
10.5.8 With respect to any Qualifying Employer Securities allocated to an
Account, each Participant shall be entitled to direct the Trustee in writing as
to the manner in which to respond to a tender or exchange offer or other
decisions with respect to the Qualifying Employer Securities. The Administrator
shall utilize its best efforts to timely distribute or cause to be distributed
to each Participant such information received from the Trustee as will be
distributed to shareholders of the Employer in connection with any such tender
or exchange offer or other similar matter or any vote referred to in Section
10.5.7.
10.5.9 If an Investment Committee is appointed, notwithstanding any provision
hereof to the contrary, in the event the person with the right to direct a
voting or other decision with respect to any security, Qualifying Employer
Securities, or other asset held in the Trust does not communicate any decision
on the matter to the Trustee or the Trustee's designee by the time prescribed by
the Trustee or the Trustee's designee for that purpose or if the Trustee
notifies the Investment Committee, if applicable, either that it does not have
precise information as to the securities, Qualifying Employer Securities, or
other assets involved allocated on the applicable record date to the accounts of
all Participants and Beneficiaries or that time constraints make it unlikely
that Participant, Beneficiary or Investment Manager direction, as the case may
be, can be received on a timely basis, the decision shall be the responsibility
of the Investment Committee and shall be communicated to the Trustee on a timely
basis. In the event an Investment Committee with any right under the Plan to
direct a voting or other decision with respect to any security, Qualifying
Employer Securities, or other asset held in the Trust, does not communicate any
decision on the matter to the Trustee or the Trustee's designee by the time
prescribed by the Trustee for that purpose, the Trustee may, at the cost of the
Employer, retain an Investment Manager with full discretion to make the
decision. Except as required by ERISA, the Trustee shall (a) follow all
directions above referred to in this Section and (b) shall have no duty to
exercise voting or other rights relating to any such security, Qualifying
Employer Security or other asset.
10.5.10 The Administrator shall establish, or cause to be established, a
procedure acceptable to the Trustee for the timely dissemination to each person
entitle to direct the Trustee or its designee as to a voting or other decision
called for thereby or referred to therein of all proxy and other materials
bearing on the decision.
10.5.11 Any person authorized to direct the investment of Trust assets may,
if the Trustee and the Investment Committee, if applicable, so permit, direct
the Trustee to invest such assets in a common or collective trust maintained by
the Trustee for the investment of assets of qualified trusts under section
401(a) of the Code, individual retirement accounts under section 408(a) of the
Code and plans or governmental units described in section 818(a)(6) of the
Code. The documents
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governing any such common or collective trust fund maintained by the Trustee,
and in which Trust assets have been invested, are hereby incorporated into this
Article X by reference.
10.6 VALUATION OF ACCOUNTS
10.6.1 A Participant's Accounts shall be valued at fair market value on each
Valuation Date. Subject to Section 10.6.2(A), as of each Valuation Date, the
earnings and losses and expenses of the Trust Fund shall be allocated to each
Participant Account in the ratio that such Account Balance in that category of
Accounts bears to all Account Balances in that category. With respect to
Participant-Directed Assets, the earnings and losses and expenses (including
transactional expenses pursuant to Section 8.5.2) of such Participant-Directed
Assets shall be allocated to the Account of the Participant or Beneficiary
having authority to direct the investment of the assets in his or her Account.
10.6.2 The Valuable Date with respect to any distributions (including,
without limitation, loan distributions and purchase of annuities) from any
Account upon the occurrence of a Benefit Commencement Date or otherwise, shall
be:
(A) with respect to Participant-Directed Asset, the date as of which the
Account distribution is made; and
(B) with respect to other assets, the Valuation Date immediately preceding the
Benefit Commencement Date, if applicable, or immediately preceding the proposed
date of any other distribution from an Account.
With respect to any contribution allocable to an Account which has not been
made as of a Valuation Date determined pursuant to this Section 10.6.2, the
principal amount of such contribution distributable because of the occurrence
of a Benefit Commencement Date shall be distributed as soon as practicable
after the date paid to the Trust Fund.
10.6.3 The assets of the Trust shall be valued at fair market value as
determined by the Trustee based upon such sources of information as it may deem
reliable, including, but not limited to, stock market quotations, statistical
evaluation services, newspapers of general circulation, financial publications,
advice from investment counselors or brokerage firms, or any combination of
sources. The reasonable costs incurred in establishing values of the Trust Fund
shall be a charge against the Trust Fund, unless paid by the Employer.
When the Trustee is unable to arrive at a value based upon information from
independent sources, it may rely upon information from the Employer,
Administrator, Investment Committee, appraisers or other sources, and shall not
incur any liability for inaccurate valuation based in good faith upon such
information.
10.7 INSURANCE CONTRACTS
The Trustee, if an Investment Committee is not appointed, Investment Committee,
or Participant or Beneficiary with respect to Participant-Directed Assets, may
appoint one or more insurance companies to hold assets of the Plan, and may
direct, subject to Section 7.3, the purchase of insurance contracts or policies
from one or more insurance companies with assets of the Plan. Neither the
Investment Committee, Trustee nor the Administrator shall be liable for the
validity of any such contract or policy, the failure of any insurance company
to make any payment or for any act or omission of an insurance company with
respect to any duties delegated to any insurance company.
10.8 THE INVESTMENT MANAGER
10.8.1 The Trustee, if an Investment Committee is not appointed, Investment
Committee, or the Participant or Beneficiary with respect to
Participant-Directed Assets, may, by an instrument in writing, appoint one or
more Investment Managers, who may be an affiliate of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust
Company, to direct the Trustee in the investment of all or a specified portion
of the assets of the Trust in property specified in Section 10.4. Any such
Investment Manager shall be directed by the Trustee, if an Investment Committee
is not appointed, Investment Committee, Participant or Beneficiary, as the case
may be, to act in accordance with the procedures referred to in Section 10.5.5.
If appointed, the Investment Committee shall notify the Trustee in writing
before the effectiveness of the appointment or removal of any Investment
Manager. If there is more than one Investment Manager whose appointment is
effective under the Plan at any one time, the Trustee shall, upon written
instructions from the Investment Committee, Participant or Beneficiary,
establish separate funds for control by each such Investment Manager. The funds
shall consists of those Trust Fund assets designated by the Investment
Committee, Participant or Beneficiary.
10.8.2 Each person appointed as an Investment Manager shall be:
(A) an investment adviser registered under the Investment Advisers Act of 1940,
(B) a bank as defined in that Act, or
(C) an insurance company qualified to manager, acquire or dispose of any asset
of the Plan under the laws of more than one state.
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10.8.3 Each Investment Manager shall acknowledge in writing that it is a
"fiduciary" (as defined in ERISA Section 3(21)) with respect to the Plan. The
Trustee, or the Investment Committee if appointed, shall enter into an
agreement with each Investment Manager specifying the duties and compensation
of such Investment Manager and the other terms and conditions under which such
Investment Manager shall be retained. Neither the trustee nor the Investment
Committee, if appointed, shall be liable for any act or omission of any
Investment Manager and shall not be liable for following the advice of any
Investment Manager with respect to any duties delegated to any Investment
Manager.
10.8.4 The Trustee, or Investment Committee if appointed, or the Participant
or Beneficiary, if applicable, with respect to Participant-Directed Assets,
shall have the power to determine the amount of Trust Fund assets to be
invested pursuant to the direction of a designated Investment Manager and to
set investment objectives and guidelines for the Investment Manager.
10.8.5 Second Trust Fund. The Employer may appoint a second trustee under the
Plan with respect to assets which the Employer desires to contribute or have
transferred to the Trust Fund, but which the other Trustee does not choose to
accept; provided, however, that if a ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company is a Trustee,
its consent (which consent may be evidenced by its acceptance of its appointment
as Trustee) shall be required. In the event and upon the effectiveness of the
acceptance of the second Trustee's appointment, the Employer shall be deemed to
have created two trust funds under the Plan, each with its own Trustee, each
governed separately by this Article X. Each Trustee under such an arrangement
shall, however, discharge its duties and responsibilities solely with respect to
those assets of the Trust delivered into its possession and except pursuant to
ERISA, shall have no duties, responsibilities or obligations with respect to
property of the other Trust nor any liability for the acts or omissions of the
other Trustee. As a condition to its consent to the appointment of a second
trustee, the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company shall assure that recordkeeping,
distribution and reporting procedures are established on a coordinated basis
between it and the second trustee as considered necessary or appropriate with
respect to the Trusts.
10.9 POWERS OF TRUSTEE
10.9.1 At the direction of the person authorized to direct such action as
referred to in Section 10.5.1, but limited to those assets or categories of
assets acceptable to the Trustee as referred to in Section 10.4, or at its own
discretion if no such person is so authorized, the Trustee, or the Trustee's
designee or a broker/dealer as referred to in Section 10.5.5, is authorized
and empowered:
(A) To invest and reinvest the Trust Fund, together with the income therefrom,
in assets specified in Section 10.4;
(B) To deposit or invest all or any part of the assets of the Trust in savings
accounts or certificates of deposit or other deposits in a bank or savings and
loan association or other depository institution, including the Trustee or any
of its affiliates, provided with respect to such deposits with the Trustee or
an affiliate the deposits bear a reasonable interest rate;
(C) To hold, manage, improve, repair and control all property, real or
personal, forming part of the Trust Fund; to sell, convey, transfer, exchange,
partition, lease for any term, even extending beyond the duration of this
Trust, and otherwise dispose of the same from time to time;
(D) To have, respecting securities, all the rights, powers and privileges of an
owner, including the power to give proxies, pay assessments and other sums
deemed by the Trustee necessary for the protection of the Trust Fund; to vote
any corporate stock either in person or by proxy, with or without power of
substitution, for any purpose; to participate in voting trusts, pooling
agreements, foreclosures, reorganizations, consolidations, mergers and
liquidations, and in connection therewith to deposit securities with or
transfer title to any protective or other committee; to exercise or sell stock
subscriptions or conversion rights; and, regardless of any limitation elsewhere
in this instrument relative to investments by the Trustee, to accept and retain
as an investment any securities or other property received through the
exercise of any of the foregoing powers.
(E) Subject to Section 10.5.4 hereof, to hold in cash, without liability for
interest, such portion of the Trust Fund which it is directed to so hold
pending investments, or payment of expenses, or the distribution of benefits;
(F) To take such actions as may be necessary or desirable to protect the Trust
from loss due to the default on mortgages held in the Trust including the
appointment of agents or trustees in such other jurisdictions as may seem
desirable, to transfer property to such agents or trustees, to grant to such
agents such powers as are necessary or desirable to protect the Trust Fund, to
direct such agent or trustee, or to delegate such power to direct, and to
remove such agent or trustee;
(G) To settle,compromise or abandon all claims and demands in favor of or
against the Trust Fund;
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(H) To invest in any common or collective trust fund of the type referred to in
Section 10.5.8 hereof maintained by the Trustee;
(I) To exercise all of the further rights, powers, options and privileges
granted, provided for, or vested in trustees generally under the laws of the
State of New Jersey, so that the powers conferred upon the Trustee herein shall
not be in limitation of any authority conferred by law, but shall be in addition
thereto;
(J) To borrow money from any source and to execute promissory notes, mortgages
or other obligations and to pledge or mortgage any trust assets as security,
subject to applicable requirements of the Code and ERISA; and
(K) To maintain accounts at, execute transactions through, and lend on an
adequately secured basis stocks, bonds or other securities to, any brokerage or
other firm, including any firm of which is an affiliate of the Trustee.
10.9.2 To the extent necessary or which it deems appropriate to implement its
powers under Section 10.9.1 or otherwise to fulfill any of its duties and
responsibilities as trustee of the Trust Fund, the Trustee shall have the
following additional powers and authority:
(A) to register securities, or any other property, in its name or in the name of
any nominee, including the name of any affiliate or the nominee name designated
by any affiliate, with or without indication of the capacity in which property
shall be held, or to hold securities in bearer form and to deposit any
securities or other property in a depository or clearing corporation;
(B) to designate and engage the services of, and to delegate powers and
responsibilities to, such agents, representatives, advisers, counsel and
accountants as the Trustee considers necessary or appropriate, any of whom may
be an affiliate of the Trustee or a person who renders services to such an
affiliate, and, as a part of its expenses under this Trust Agreement, to pay
their reasonable expenses and compensation;
(C) to make, execute and deliver, as Trustee, any and all deeds, leases,
mortgages, conveyances, waivers, releases or other instruments in writing
necessary or appropriate for the accomplishment of any of the power listed in
this Trust Agreement; and
(D) generally to do all other acts which the Trustee deems necessary or
appropriate for the protection of the Trust Fund.
10.9.3 The Trustee shall have no duties or responsibilities other than those
specified in the Plan.
10.10 ACCOUNTING AND RECORDS
10.10.1 The Trustee shall maintain or cause to be maintained accurate records
and accounts of all Trust transactions and assets. The records and accounts
shall be available at reasonable times during normal business hours for
inspection or audit by the Administrator, Investment Committee, if appointed,
or any person designated for the purpose by either of them.
10.10.2 Within 90 days following the close of each fiscal year of the Plan or
the effective date of the removal or resignation of the Trustee, the Trustee
shall file with the Administrator a written accounting setting forth all
transactions since the end of the period covered by the last previous
accounting. The accounting shall include a listing of the assets of the Trust
showing the value of such assets at the close of the period covered by the
accounting. On direction of the Administrator, and if previously agreed to by
the Trustee, the Trustee shall submit to the Administrator interim valuations,
reports or other information pertaining to the Trust.
The Administrator may approve the accounting by written approval delivered to
the Trustee or by failure to deliver written objections to the Trustee within 60
days after receipt of the accounting. Any such approval shall be binding on the
Employer, the Administrator, the Investment Committee and, to the extent
permitted by ERISA, all other persons.
10.11 JUDICIAL SETTLEMENT OF ACCOUNTS
The Trustee can apply to a court of competent jurisdiction at any time for
judicial settlement of any matter involving the Plan including judicial
settlement of the Group Trustee's account. If it does so, the Trustee must give
the Administrator the opportunity to participate in the court proceedings, but
the Trustee can also involve other persons. Any expenses the Trustee incurs in
legal proceedings involving the Plan, including attorney's fees, are chargeable
to the Trust Fund as an administrative expense. Any judgment or decree which may
be entered in such a proceeding shall, subject to the provision of ERISA, be
conclusive upon all persons having or claiming to have any interest in the Trust
Fund or under any Plan.
10.12 RESIGNATION AND REMOVAL OF TRUSTEE
10.12.1 The Trustee may resign at any time upon at least 30 days' written notice
to the Employer.
10.12.2 The Employer may remove the Trustee upon at least 30 days' written
notice to the Trustee.
10.12.3 Upon resignation or removal of the Trustee, the Employer shall appoint a
successor trustee. Upon failure of the Employer to appoint, or the failure of
the
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effectiveness of the appointment by the Employer of, a successor trustee by the
effective date of the resignation or removal, the Trustees may apply to any
court of competent jurisdiction for the appointment of a successor.
Promptly after receipt by the Trustee of notice of the effectiveness of the
appointment of the successor trustee: (a) the Trustee shall deliver to the
successor trustee such records as may be reasonably requested to enable the
successor trustee to properly administer the Trust Fund and all property of the
Trust after deducting therefrom such amounts as the Trustee deems necessary to
provide for expenses, taxes, compensation or other amounts due to or by the
Trustee not paid by the Employer prior to the delivery; and (b) except if the
second Trustee is removed or resigns, the Plan will no longer be considered a
prototype plan.
10.12.4 Upon resignation or removal of the Trustee, the Trustee shall have the
right to a settlement of its account, which settlement shall be made,at the
Trustee's option, either by an agreement of settlement between the Trustee and
the Employer or by a judicial settlement in an action instituted by the Trustee.
The Employer shall bear the cost of any such judicial settlement, including
reasonable attorneys fees.
10.12.5 The Trustee shall not be obligated to transfer Trust assets until the
Trustee is provided assurance by the Employer satisfactory to the Trustee that
all fees and expenses reasonably anticipated will be paid.
10.12.6 Upon settlement of the account and transfer of the Trust Fund to the
successor trustee, all rights and privileges under the Trust Agreement shall
vest in the successor trustee and all responsibility and liability of the
Trustee with respect to the Trust and assets thereof shall, except as otherwise
required by ERISA, terminate subject only to the requirement that the Trustee
execute all necessary documents to transfer the Trust assets to the successor
trustee.
10.13 GROUP TRUST
10.13.1 If elected by the Employer in the Adoption Agreement, the Trustee shall
be the Trustee for this Plan and for each other qualified plan specified in the
Adoption Agreement; provided, however, that such other qualified plan is in
effect pursuant to an Adoption Agreement under this Prototype Plan. Any
reference to Trustee and to the Trust Fund in this Plan shall mean the Trustee
is the trustee of a Group Trust consisting of the assets of each such plan. The
Plan and each other qualified plan specified in the Adoption Agreement shall be
deemed to join in and adopt the Trust as the trust for each such plan. By
executing the Adoption Agreement, the Trustee accepts designation as Trustee of
this Group Trust.
10.13.2 The Trustee shall establish and maintain such accounting records for
each of the Plans as shall be necessary to reflect the interest in the Group
Trust applicable at any time or from time to time to each Plan. No part of the
corpus or income of the Group Trust allocable to an individual Plan may be used
for or diverted to any purposes other than for the exclusive benefit of
Participants and their Beneficiaries entitled to benefits under that Plan. The
allocable interest of a Plan in the Group Trust may not be assigned.
ARTICLE XI
PLAN AMENDMENT OR TERMINATION
11.1 PROTOTYPE PLAN AMENDMENT
11.1.1 The mass submitter, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
and any successor thereto, may amend any part of the Prototype Plan. For
purposes of sponsoring organization amendments, the mass submitter shall be
recognized as the agent of the sponsoring organization. If the sponsoring
organization does not adopt the amendments made by the mass submitter, it will
no longer be identical to or a minor modifier of the mass submitter plan.
11.1.2 An Employer shall have the right at any time, by an instrument in
writing, effective retroactively or otherwise, to (A) change the choice of
options in the Adoption Agreement, in whole or in part; (B) add overriding
language in the Adoption Agreement when such language is needed to satisfy Code
Section 415 or Code Section 416 because of the required aggregation of multiple
plans; and (C) add certain model amendments published by the Internal Revenue
Service which specifically provide that their adoption will not cause the Plan
to be treated as individually designed. No such amendment, however, shall have
any of the effects specified in Section 11.2.1. If the adopting Employer amends
the Plan or nonelective portions of the Adoption Agreement except as previously
provided, it will no longer participate in the Prototype Plan, but will be
considered to have an individually designed plan for purposes of qualification
under Code Section 401(a). In the event the Employer is switching from an
individually designed plan or from one prototype plan to another, a list of the
Section "411(d)(6) protected benefits" that must be preserved may be attached,
and such a list would not be considered an amendment to the plan.
11.1.3 This Plan will be recognized as a Prototype Plan by the Sponsor only by
complying with the registration requirements as specified in the Adoption
Agreement.
11.2 PLAN AMENDMENT
11.2.1 Except as provided in Section 11.2.2, no amendment pursuant to Section
11.1 shall:
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(A) authorize any part of the Trust Fund to be used for, or diverted to,
purposes other than for the exclusive benefit of Participants or their
Beneficiaries;
(B) decrease the accrued benefits of any Participant or his or her Beneficiary
under the Plan. An amendment which has the effect of (1) eliminating or reducing
an Early Retirement benefit or a retirement-type subsidy, or (2) eliminating an
optional form of benefit payment, with respect to benefits attributable to
service before the amendment shall be treated as reducing accrued benefits. In
the case of a retirement-type subsidy, the preceding sentence shall apply only
with respect to a Participant who satisfies (either before or after the
amendment) the preamendment conditions for the subsidy. In general, a
retirement-type subsidy is a subsidy that continues after retirement, but does
not include a qualified disability benefit, a medical benefit, a social security
supplement, a death benefit (including life insurance), or a plant shutdown
benefit (that does not continue after retirement age);
(C) reduce the vested percentage of any Participant determined without regard
to such amendment as of the later of the date such amendment is adopted or the
date it becomes effective;
(D) eliminate an optional form of benefit distribution with respect to benefits
attributable to service before the amendment; or
(E) change the vesting schedule, or in any way amend the Plan to either
directly or indirectly affect the computation of a Participant's vested
percentage, unless each Participant having not less than 3 years of Vesting
Service is permitted to elect, within a reasonable period specified by the
Administrator after the adoption of such amendment, to have his or her vested
percentage computed without regard to such amendment.
For Participants who do not have at least one Hour of Service in any Plan Year
beginning after December 31, 1988, the preceding sentence shall be applied by
substituting "5 Years of Vesting Service" for "3 Years of Vesting Service"
where such language appears. The period during which the election may be made
shall commence with the date the amendment is adopted and shall end on the
later of:
(i) 60 days after the amendment is adopted:
(ii) 60 days after the amendment becomes effective; or
(iii) 60 days after the Participant is issued written notice by the
Administrator.
11.2.2 Anything contained in this Section 11.2 to the contrary notwithstanding,
a Participant's benefit may be reduced to the extent permitted under Code
Section 412(c)(8).
11.3 RIGHT OF THE EMPLOYER TO TERMINATE PLAN
11.3.1 The Employer intends and expects that from year to year it will be able
to and will deem it advisable to continue this Plan in effect and to make
contributions as herein provided. The Employer reserves the right, however, to
terminate the Plan with respect to its Employees at any time by an instrument
in writing delivered to the Administrator and the Trustee, or to completely
discontinue its contributions thereto at any time.
11.3.2 The Plan will also terminate: (A) if the Employer is a sole
proprietorship, upon the death of the sole proprietor; (B) if the Employer is a
partnership, upon termination of the partnership; (C) if the Employer is
judicially declared bankrupt or insolvent; (D) upon the sale or other
disposition of all or substantially all of the assets of the business; or (E)
upon any other termination of the business. Any successor to or purchaser of
the Employer's trade or business, after any event specified in the prior
sentence, may continue the Plan, in which case the successor or purchaser will
thereafter be considered the Employer for purposes of the Plan. Such a
successor or purchaser shall execute an appropriate Adoption Agreement if and
when requested by the Administrator.
11.3.3 Anything contained herein to the contrary notwithstanding, if the
Employer fails to attain or retain qualification of the Plan under Code Section
401(a), the Plan will not participate in this Prototype Plan and will, instead,
be considered an individually designed plan for purposes of such qualification.
11.4 EFFECT OF PARTIAL OR COMPLETE TERMINATION OR COMPLETE DISCONTINUANCE OF
CONTRIBUTIONS
11.4.1 DETERMINATION OF DATE OF COMPLETE OR PARTIAL TERMINATION. The date of
complete or partial termination shall be established by the Administrator in
accordance with the directions of the Employer (if then in existence) in
accordance with applicable law.
11.4.2 EFFECT OF TERMINATION.
(A) As of the date of a partial termination of the Plan:
(i) the accrued benefit of each affected Participant to the extend funded,
shall become nonforfeitable;
(ii) no affected Participant shall be granted credit based on Hours of Service
after such date;
(iii) Compensation paid to affected Participants after such date shall not be
taken into account and
(iv) no contributions by affected Participants shall be required or permitted.
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(B) As of the date of the complete termination of the Plan or of a complete
discontinuance of contributions:
(i) the accrued benefit of each affected Participant to the extent funded,
shall become nonforfeitable;
(ii) no affected Participant shall be granted credit based on Hours of Service
after such date;
(iii) Compensation paid after such date shall not be taken into account;
(iv) no contributions by affected Participants shall be required or permitted;
(v) no Eligible Employee shall become a Participant after such date; and
(vi) except as may otherwise be required by applicable law, all obligations of
the Employer and Participating Affiliates to fund the Plan shall terminate.
(C) All other provisions of the Plan shall remain in effect unless otherwise
amended.
Upon the complete discontinuance of profit-sharing contributions under the
Plan, at the Employer's election, either the Trust Fund shall continue to be
held and distributed as if the Plan had not been terminated (in which case such
Plan shall continue to be subject to all requirements under Title I of ERISA,
and qualification requirements under the Code) or any and all assets remaining
in the Trust Fund as of the date of such termination or discontinuance,
together with any earnings subsequently accruing thereon, shall be distributed
by the Trustee to the Participants at the Administrator's direction. Upon the
complete termination of the Plan, the Trust Fund shall be distributed to
Participants within one year after the date of termination. If the Plan does
not offer an annuity option (purchased from a commercial provider) and if the
Employer or any Affiliate does not maintain another Defined Contribution Plan
(other than an employee stock ownership plan as defined in Code Section
4975(e)(7)), the Participant's benefit may, without the Participant's consent,
be distributed to the Participant. However, if any Affiliate maintains another
Defined Contribution Plan (other than an employee stock ownership plan as
defined in Code Section 4975(e)(7)), then the Participant's Account(s) will be
transferred, without the Participant's consent, to the other plan if the
Participant does not consent to an immediate distribution. Distributions shall
be made in compliance with the applicable provisions, including restrictions,
of Article VI and VII. The Trust Fund shall continue in effect until all
distributions therefrom are complete. Upon the completion of such
distributions, the Trustee shall be relieved from all further liability with
respect to all amounts so paid or distributed.
11.5 BANKRUPTCY
In the event that the Employer shall at any time be judicially declared
bankrupt or insolvent without any provisions being made for the continuation of
this Plan, the Plan shall be completely terminated in accordance with this
Article XI.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 EXCLUSIVE BENEFIT OF PARTICIPANTS
Notwithstanding anything in the Plan to the contrary, the Trust Fund shall be
held for the benefit of all persons who shall be entitled to receive payments
under the Plan. Subject to Section 3.10, it shall be prohibited at any time for
any part of the Trust Fund (other than such part as is required to pay
expenses) to be used for, or diverted to, purposes other than for the exclusive
benefit of Participants or their Beneficiaries.
12.2 PLAN NOT A CONTRACT OF EMPLOYMENT
The Plan is not a contract of Employment and the terms of Employment of any
Employee shall not be affected in any way by the Plan or related instruments
except as specifically provided therein.
12.3 ACTION BY EMPLOYER
Any action by an Employer which is a corporation shall be taken by the board of
directors of the corporation or any person or persons duly empowered to
exercise the powers of the corporation with respect to the Plan. In the case of
an Employer which is a partnership, action shall be taken by any general
partner of the partnership, and in the case of an Employer which is a sole
proprietorship, action shall be taken by the sole proprietor.
12.4 SOURCE OF BENEFITS
Benefits under the Plan shall be paid or provided for solely from the Trust
Fund, and neither the Employer, any Participating Affiliate, the Trustee, the
Administrator, nor any Investment Manager or insurance company shall assume any
liability under the Plan therefor.
12.5 BENEFITS NOT ASSIGNABLE
Benefits provided under the Plan may not be assigned or alienated, either
voluntarily or involuntarily. In the event that a Participant or Beneficiary
becomes individually liable with respect to any expenses listed in Section 8.5,
the provision of Section 401(a)(13) of the
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Code shall be applicable with respect to any claim the Plan may have against
the Participant or Beneficiary individually with respect to such expenses. The
preceding sentence shall also apply to the creation, assignment or recognition
of a right to any benefit payable with respect to a Participant pursuant to a
"domestic relations order" (as defined in Code Section 414(p)) unless such
order is determined by the Administrator to be a "qualified domestic relations
order" (as defined in Code Section 414(p)) or, in the case of a "domestic
relations order" entered before January 1, 1985, if either payment of benefits
pursuant to the order has commenced as of that date or the Administrator
decides to treat such order as a "qualified domestic relations order" within
the meaning of Code Section 414(p) even if it does not otherwise qualify as
such.
12.6 DOMESTIC RELATIONS ORDERS
Any other provision of the Plan to the contrary notwithstanding, the
Administrator shall have all powers necessary with respect to the Plan for the
proper operation of Code Section 414(p) with respect to "qualified domestic
relations orders" (or "domestic relations orders" treated as such) referred to
in Section 12.5, including, but not limited to, the power to establish all
necessary or appropriate procedures, to authorize the establishment of new
accounts with such assets and subject to such investment control by the
Administrator as the Administrator may deem appropriate, and the Administrator
may decide upon and direct appropriate distributions therefrom.
12.7 CLAIMS PROCEDURE
In the event that a claim by a Participant, Beneficiary, or other person for
benefits under the Plan is denied, the Administrator will so notify the
claimant, giving the reasons for the denial. This notice will also refer to the
specific provisions of the Plan on which the denial was based, will specify
whether any additional information is needed from the Participant or
Beneficiary and will explain the review procedure.
Within 60 days after receiving the denial, the claimant may submit, directly or
through a duly authorized representative, a written request for reconsideration
of the application to the Administrator. Documents or records relied on by the
claimant should be filed with the request. The person making the request may
review relevant documents and submit issues and additional comments in writing.
The Administrator will review the claim within 60 days (or 120 days if a
hearing is held because special circumstances exist) and provide a written
response to the appeal. The response will explain the reasons for the decision
and will refer to the Plan provisions on which the decision is based. The
decision of the Administrator is the final one under this claims procedure.
12.8 RECORDS AND DOCUMENTS; ERRORS
Participants and Beneficiaries must supply the Administrator with such personal
history data as may be required by the Administrator in the operation of the
Plan. Proof of age, when required, must be established by evidence satisfactory
to the Administrator, and the records of the Employer and Participating
Affiliates concerning length of service and compensation may be accepted by the
Administrator as conclusive for the purposes of the Plan. Should any error in
the records maintained under the Plan result in any Participant or Beneficiary
receiving from the Plan more or less than he or she would have been entitled to
receive had the records been correct, the Administrator, in its discretion, may
correct such error and, as far as practicable, may adjust benefits in such
manner that the aggregate value of the benefit under the Plan shall be the
amount to which such Participant or Beneficiary was properly entitled.
12.9 BENEFITS PAYABLE TO MINORS, INCOMPETENTS AND OTHERS
In the event any benefit is payable to a minor or to a Participant or
Beneficiary declared incompetent by a court having jurisdiction over such
matters and a guardian, committee, conservator or other legal representative of
the estate of such a person is appointed, benefits to which he or she is
entitled shall be paid to the legally appointed person. The receipt by any such
person to whom any such payment on behalf of any Participant or Beneficiary is
made shall be a sufficient discharge therefor.
12.10 PLAN MERGER OR TRANSFER OF ASSETS
12.10.1 The merger or consolidation of the Employer with any other person, or
the transfer of the assets of the Employer to any other person, or the merger
of the Plan with any other plan shall not constitute a termination of the Plan
if provision is made for the continuation of the Plan.
12.10.2 The Plan may not merge or consolidate with, or transfer any assets or
liabilities to, any other plan, unless each Participant would (if the Plan had
then terminated) receive a benefit immediately after the merger, consolidation
or transfer which is equal to or greater than the benefit he or she would have
been entitled to receive immediately before the merger, consolidation or
transfer (if the Plan had then terminated). Any merger or consolidation shall
not constitute a termination of a Plan or require the acceleration of vesting
of Participants' Account Balances.
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12.11 PARTICIPATING AFFILIATES
12.11.1 With the consent of the Employer and by duly authorized action, any
Affiliate may adopt the Plan. Such Affiliate shall determine the classes of its
Employees who shall be Eligible Employees and the amount of its contribution to
the Plan on behalf of such Employees.
12.11.2 With the consent of the Employer and by duly authorized action, a
Participating Affiliate may terminate its participation in the Plan or withdraw
from the Plan. Any such withdrawal shall be deemed an adoption by such
Participating Affiliate of a plan and trust identical to the Plan and the
Trust, except that all references to the Employer shall be deemed to refer to
such Participating Affiliate. At such time and in such manner as the Employer
directs, the assets of the Trust allocable to Employees of such Participating
Affiliate shall be transferred to the trust deemed adopted by such
Participating Affiliate.
12.11.4 A Participating Affiliate shall have no power with respect to the Plan
except as specifically provided herein.
12.12 CONTROLLING LAW
The Plan is intended to qualify under Code Section 401(a) and to comply with
ERISA, and its terms shall be interpreted accordingly. Otherwise, to the extent
not preempted by ERISA, the laws of the State of New York shall control the
interpretation and performance of the terms of the Plan.
12.13 SINGULAR AND PLURAL AND ARTICLE SECTION REFERENCES
As used in the Plan, the singular includes the plural, and the plural includes
the singular, unless qualified by the context. Titles of Articles and Sections
of the Plan are for convenience of reference only and are to be disregarded in
applying the provisions of the Plan. Any reference in this Prototype Plan to an
Article or Section is to the Article or Section so specified of the Prototype
Plan, unless otherwise indicated.
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