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FLEXIBLE STANDARDIZED 401(k) PROFIT SHARING PLAN
ADOPTION AGREEMENT
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SECTION 1. EMPLOYER INFORMATION
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Name of Employer Antigenics, LLC
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Address ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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City ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇
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Telephone ▇▇▇-▇▇▇-▇▇▇▇ Employer's Federal Tax Identification Number ▇▇-▇▇▇▇▇▇▇
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Type of Business (Check only one) [ ] Sole Proprietorship [ ] Partnership [ ] Corporation [ ] Corporation
[X] Other (Specify) Limited Liability Company
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[ ] Check here if Related Employers may participate in this Plan and attach
a Related Employer Participation Agreement for each Related Employer
who will participate in this Plan.
Business Code
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Name of Plan Antigenics 401(k)
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Name of Trust (if different from Plan name)
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Plan Sequence Number 001 (Enter 001 if this is the first qualified plan the
--- Employer has ever maintained, enter 002 if it is
the second, etc.)
Trust Identification Number (if applicable) Account Number (Optional) 41145
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SECTION 2. EFFECTIVE DATES
COMPLETE PARTS A AND B
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PART A. GENERAL EFFECTIVE DATES (Check and Complete Option 1 or 2):
OPTION 1: [X] This is the initial adoption of a profit sharing plan
by the Employer.
The Effective Date of this Plan is 01-01-1997.
NOTE: The effective date is usually the first day of
the Plan Year in which this Adoption Agreement is
signed.
OPTION 2: [ ] This is an amendment and restatement of an existing
profit sharing plan (a Prior Plan).
The Prior Plan was initially effective on
__________________ .
The Effective Date of this amendment and restatement
is __________________ .
NOTE: The effective date is usually the first day of
the Plan Year in which this Adoption Agreement is
signed.
PART B. COMMENCEMENT OF ELECTIVE DEFERRALS:
Elective Deferrals may commence on 06-12-1997.
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NOTE: This date may be no earlier than the date this Adoption
Agreement is signed because Elective Deferrals cannot be made
retroactively.
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SECTION 3. RELEVANT TIME PERIODS
COMPLETE PARTS A THROUGH C
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PART A. EMPLOYER'S FISCAL YEAR:
The Employer's fiscal year ends (Specify month and date) 12-31
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PART B. PLAN YEAR MEANS:
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OPTION 1: [ ] The 12-consecutive month period which coincides with
the Employers fiscal year.
OPTION 2: [X] The calendar year.
OPTION 3: [ ] Other 12-consecutive month period (Specify)
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NOTE: If no option is selected, Option 1 will be deemed to be
selected.
If the initial Plan Year is less than 12 months (a short Plan Year)
specify such Plan Year's beginning and ending dates.
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PART C. LIMITATION YEAR MEANS:
OPTION 1: [X] The Plan Year.
OPTION 2: [ ] The calendar year.
OPTION 3: [ ] Other 12-consecutive month period (Specify)
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NOTE: If no option is selected, Option 1 will be deemed to be selected.
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SECTION 4. ELIGIBILITY REQUIREMENTS
COMPLETE PARTS A THROUGH F
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PART A. YEARS OF ELIGIBILITY SERVICE REQUIREMENT:
1. ELECTIVE DEFERRALS.
An Employee will be eligible to become a Contributing Participant
in the Plan (and thus be eligible to make Elective Deferrals) and
receive Matching Contributions (including Qualified Matching
Contributions, if applicable) after completing 1 (enter 0, 1 or any
fraction less than 1) Years of Eligibility Service.
2. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
An Employee will be eligible to become a Participant in the Plan
for purposes of receiving an allocation of any Employer Profit
Sharing Contribution made pursuant to Section 10 of the Adoption
Agreement after completing 1 (enter 0, 1, 2 or any fraction less
than 2) Years of Eligibility Service.
NOTE: If more than 1 year is selected for Item 2, the immediate 100%
vesting schedule of Section 12 will automatically apply for
contributions described in such item. If either item is left blank, the
Years of Eligibility Service required for such item will be deemed to
be 0. If a fraction is selected, an Employee will not be required to
complete any specified number of Hours of Service to receive credit for
a fractional year. If a single Entry Date is selected in Section 4,
Part F for an item, the Years of Eligibility Service required for such
item cannot exceed 1 1/2 (1/2 for Elective Deferrals).
PART B. AGE REQUIREMENT:
1. ELECTIVE DEFERRALS.
An Employee will be eligible to become a Contributing Participant
(and thus be eligible to make Elective Deferrals) and receive
Matching Contributions (including Qualified Matching Contributions,
if applicable) after attaining age 21 (no more than 21).
2. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
An Employee will be eligible to become a Participant in the Plan
for purposes of receiving an allocation of any Employer Profit
Sharing Contribution made pursuant to Section 10 of the Adoption
Agreement after attaining age 21 (no more than 21).
NOTE: If either of the above items in this Section 4, Part B is left
blank, it will be deemed there is no age requirement for such item. If
a single Entry Date is selected in Section 4, Part F for an item, no
age requirement can exceed 20 1/2 for such item.
PART C. EMPLOYEES EMPLOYED AS OF EFFECTIVE DATE:
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Will all Employees employed as of the Effective Date of this Plan who
have not otherwise met the requirements of Part A or Part B above be
considered to have met those requirements as of the Effective Date?
[X] Yes [ ] No
NOTE: If a box is not checked for any item in this Section 4, Part C,
"No" will be deemed to be selected.
PART D. EXCLUSION OF CERTAIN CLASSES OF EMPLOYEES:
All Employees will be eligible to become Participants in the Plan
except:
a. [X] Those Employees included in a unit of Employees covered by a
collective bargaining agreement between the Employer and
Employee representatives, if retirement benefits were the
subject of good faith bargaining and if two percent or less of
the Employees who are covered pursuant to that agreement are
professionals as defined in Section 1.410(b)-9 of the
regulations. For this purpose, the term "employee
representatives" does not include any organization more than
half of whose members are Employees who are owners, officers,
or executives of the Employer.
b. [X] Those Employees who are non-resident aliens (within the meaning
of Section 7701(b)(1)(B) of the Code) and who received no
earned income (within the meaning of Section 911(d)(2) of the
Code) from the Employer which constitutes income from sources
within the United States (within the meaning of Section
861(a)(3) of the Code).
PART E. HOURS REQUIRED FOR ELIGIBILITY PURPOSES:
1. 1000 Hours of Service (no more than 1,000) shall be required
to constitute a Year of Eligibility Service.
2. 500 Hours of Service (no more than 500 but less than the
number of specified in Section 4, Part E, Item 1, above) must
be exceeded to avoid a Break in Eligibility Service.
3. For purposes of determining Years of Eligibility Service,
Employees shall be given credit for Hours of Service with the
following predecessor employer(s): (Complete if applicable)
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PART F. ENTRY DATES:
The Entry Dates for participation shall be (Choose one):
OPTION 1: [ ] The first day of the Plan Year and the first day of the
seventh month of the Plan Year.
OPTION 2: [X} Other (Specify) THE FIRST DAY OF EACH MONTH
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NOTE: If no option is selected, Option 1 will be deemed to be selected
Option 2 can be selected for an item only if the eligibility
requirements and Entry Dates are coordinated such that each Employee
will become a Participant in the Plan no later than the earlier of: (1)
the first day of the Plan Year beginning after the date the Employee
satisfies the age and service requirements of Section 410(a) of the
Code; or (2) 6 months after the date the Employee satisfies such
requirements..
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SECTION 5. METHOD OF DETERMINING SERVICE
COMPLETE PART A OR B
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PART A. HOURS OF SERVICE EQUIVALENCIES:
Service will be determined on the basis of the method selected below.
Only one method may be selected. The method selected will be applied to
all Employees covered under the Plan. (Choose one):
OPTION 1: [X] On the basis of actual hours for which an Employee is
paid or entitled to payment.
OPTION 2: [ ] On the basis of days worked. An Employee will be
credited with 10 Hours of Service if under Section 1.24
of the Plan such Employee would be credited with at
least 1 Hour of Service during the day.
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OPTION 3: [ ] On the basis of weeks worked. An Employee will be
credited with 45 Hours of Service if under Section 1.24
of the Plan such Employee would be credited with at
least 1 Hour of Service during the week.
OPTION 4: [ ] On the basis of months worked. An Employee will be
credited with 190 Hours of Service if under Section 1.24
of the Plan such Employee would be credited with at
least 1 Hour of Service during the month.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
This Section 5, Part A will not apply if the Elapsed Time Method of
Section 5, Part B is selected.
PART B. ELAPSED TIME METHOD:
In lieu of tracking Hours of Service of Employees, will the elapsed
time method described in Section 2.07 of the Plan be used? (Choose
one):
OPTION 1: [ ] No.
OPTION 2: [ ] Yes.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
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SECTION 6. ELECTIVE DEFERRALS
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PART A. AUTHORIZATION OF ELECTIVE DEFERRALS:
Will Elective Deferrals be permitted under this Plan? (Choose one):
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
Complete the remainder of Section 6 only if Option 1 is selected.
PART B. LIMITS ON ELECTIVE DEFERRALS:
If Elective Deferrals are permitted under the Plan, a contributing
Participant may elect under a salary reduction agreement to have his or
her Compensation reduced by an amount as described below (Choose one):
OPTION 1: [X] An amount equal to a percentage of the Contributing
Participant's Compensation from 1% to 15% in increments
of 1%.
OPTION 2: [ ] An amount of the Contributing Participant's Compensation
not less than ______ and not more than ______.
The amount of such reduction shall be contributed to the Plan by the
Employer on behalf of the Contributing Participant. For any taxable
year, a Contributing Participant's Elective Deferrals shall not exceed
the limit contained in Section 402(g) of the Code in effect at the
beginning of such taxable year.
PART C. ELECTIVE DEFERRALS BASED ON BONUSES:
Instead of or in addition to making Elective Deferrals through payroll
deduction, may a Contributing Participant elect to contribute to the
Plan, as an Elective Deferral, part or all of a bonus rather than
receive such bonus in cash? (Choose one):
OPTION 1: [ ] Yes.
OPTION 2: [X] No.
NOTE: If no option is selected, Option 2 will be deemed to be selected.
PART D. RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE DEFERRALS:
A Participant who ceases Elective Deferrals by revoking a salary
reduction agreement may return as a Contributing Participant as of such
times established by the Plan Administrator in a uniform and
nondiscriminatory manner.
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PART E. CHANGING ELECTIVE DEFERRALS AMOUNTS:
A Contributing Participant may modify a salary reduction agreement to
prospectively increase or decrease the amount of his or her Elective
Deferrals as of such times established by the Plan Administrator in a
uniform and nondiscriminatory manner.
PART F. CLAIMING EXCESS ELECTIVE DEFERRALS:
Participants who claim Excess Elective Deferrals for the preceding
calendar year must submit their claims in writing to the Plan
Administrator by (Choose one):
OPTION 1: [X] March 1.
OPTION 2: [ ] Other (Specify a date not later than April 15)______
NOTE: If no option is selected, Option 1 will be deemed to be selected.
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SECTION 7. MATCHING CONTRIBUTIONS
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PART A. AUTHORIZATION OF MATCHING CONTRIBUTIONS:
Will the Employer make Matching Contributions to the Plan on behalf of
Qualifying Contributing Participants? (Choose one):
OPTION 1: [X] Yes, but only with respect to a Contributing
Participant's Elective Deferrals.
OPTION 2: [ ] Yes, but only with respect to a Participant's
Nondeductible Employee Contributions.
OPTION 3: [ ] Yes, with respect to both Elective Deferrals and
Nondeductible Employee Contributions.
OPTION 4: [ ] No.
NOTE: If no option is selected, Option 4 will be deemed to be selected.
Complete the remainder of Section 7 only if Option 1, 2 or 3 is
selected.
PART B. MATCHING CONTRIBUTION FORMULA:
If the Employer will make Matching Contributions, then the amount of
such Matching Contributions made on behalf of a Qualifying Contributing
Participant each Plan Year shall be (Choose one):
OPTION 1: [X] An amount equal to 100% of such Contributing
Participant's Elective Deferral (and/or Nondeductible
Employee Contribution, if applicable).
OPTION 2: [ ] An amount equal to the sum of _____% of the portion of
such Contributing Participant's Elective Deferral
(and/or Nondeductible Employee Contribution, if
applicable) which does not exceed _____% of the
Contributing Participant's Compensation plus _____% of
the portion of such Contributing Participant's Elective
Deferral (and/or Nondeductible Employee Contribution, if
applicable) which exceeds _____% of the Contributing
Participant's Compensation.
OPTION 3: [ ] Such amount, if any, equal to that percentage of each
Contributing Participant's Elective Deferral (and/or
Nondeductible Employee Contribution, if applicable)
which the Employer, in its sole discretion, determines
from year to year.
OPTION 4: [ ] Other Formula. (Specify)
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NOTE: If Option 4 is selected, the formula specified can only allow
Matching Contributions to be made with respect to a Contributing
Participant's Elective Deferrals (and/or Nondeductible Employee
Contribution, if applicable).
PART C. LIMIT ON MATCHING CONTRIBUTIONS:
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Notwithstanding the Matching Contribution formula specified above, no
Matching Contribution will be made with respect to a Contributing
Participant's Elective Deferrals (and/or Nondeductible Employee
Contributions, if applicable) in excess of ________ or _____% of such
Contributing Participant's Compensation.
PART D. QUALIFYING CONTRIBUTING PARTICIPANTS:
A Contributing Participant who satisfies the eligibility requirements
described in Section 4 will be a Qualifying Contributing Participant
and thus entitled to share in Matching Contribution for any Plan Year
only in the Participant is a Contributing Participant and satisfies the
following additional conditions (Check one or more Options):
OPTION 1: [ ] No Additional Conditions.
OPTION 2: [X] Hours of Service Requirement. The Contributing
Participant completes at least 500 (not more than 500)
Hours of Service during the Plan Year. However, this
condition will be waived for the following reasons
(Check at least one):
[X] The Contributing Participant's Death.
[X] The Contributing Participant's Termination of
Employment after having incurred a Disability.
[X] The Contributing Participant's Termination of
Employment after having reached Normal Retirement
Age.
[ ] This condition will not be waived.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
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SECTION 8. QUALIFIED NONELECTIVE CONTRIBUTIONS
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PART A. AUTHORIZATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS:
Will the Employer make Qualified Nonelective Contributions to the Plan?
(Choose one):
OPTION 1: [ ] Yes.
OPTION 2: [X] No.
If the Employer elects to make Qualified Nonelective Contributions,
then the amount, if any, of such contribution to the Plan for each Plan
Year shall be an amount determined by the Employer.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
Complete the remainder of Section 8 only if Option 1 is selected.
PART B. PARTICIPANTS ENTITLED TO QUALIFIED NONELECTIVE CONTRIBUTIONS:
Allocation of Qualified Nonelective Contributions shall be made to the
Individual Accounts of (Choose one):
OPTION 1: [ ] Only Participants who are not Highly Compensated
Employees.
OPTION 2: [ ] All Participants.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
PART C. ALLOCATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS:
Allocation of Qualified Nonelective Contributions to Participants
entitled thereto shall be made (Choose one):
OPTION 1: [ ] In the ratio which each Participant's Compensation for
the Plan Year bears to the total Compensation of all
Participants for such Plan Year.
OPTION 2: [ ] In the ratio which each Participant's Compensation not
in excess of ______ for the Plan Year bears to the total
Compensation of all Participants not in excess of ______
for such Plan Year.
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NOTE: If no option is selected, Option 1 will be deemed to be selected.
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SECTION 9. QUALIFIED MATCHING CONTRIBUTIONS
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PART A. AUTHORIZATION OF QUALIFIED MATCHING CONTRIBUTIONS:
Will the Employer make Qualified Matching Contributions to the Plan on
behalf of Qualifying Contributing Participants? (Choose one):
OPTION 1: [ ] Yes, but only with respect to a Contributing
Participant's Elective Deferrals.
OPTION 2: [ ] Yes, but only with respect to a Participant's
Nondeductible Employee Contributions.
OPTION 3: [ ] Yes, with respect to both Elective Deferrals and
Nondeductible Employee Contributions.
OPTION 4: [X] No.
NOTE: If no option is selected, Option 3 will be deemed to be selected.
Complete the remainder of Section 9 only if Option 1, 2 or 3 is
selected.
PART B. QUALIFIED MATCHING CONTRIBUTION FORMULA:
If the Employer will make Qualified Matching Contributions, then the
amount of such Qualified Matching Contributions made on behalf of a
Qualifying Contributing Participant each Plan Year shall be (Choose
one):
OPTION 1: [ ] An amount equal to ______% of such Contributing
Participant's Elective Deferral (and/or Nondeductible
Employee Contribution, if applicable).
OPTION 2: [ ] An amount equal to the sum of _______% of the portion of
such Contributing Participant's Elective Deferral
(and/or Nondeductible Employee Contribution, if
applicable) which does not exceed ________% of the
Contributing Participant's Compensation plus ________%
of the portion of such Contributing Participant's
Elective Deferral (and/or Nondeductible Employee
Contribution, if applicable) which exceeds ________% of
the Contributing Participant's Compensation.
OPTION 3: [ ] Such amount, if any, as determined by the Employer in
its sole discretion, equal to that percentage of the
Elective Deferrals (and/or Nondeductible Employee
Contribution, if applicable) of each Contributing
Participant entitled thereto which would be sufficient
to cause the Plan to satisfy the Actual Contribution
Percentage tests (described in Section 11.402 of the
Plan) for the Plan Year.
OPTION 4: [ ] Other Formula. (Specify)
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NOTE: If no option is selected, Option 3 will be deemed to be selected.
PART C. PARTICIPANTS ENTITLED TO QUALIFIED MATCHING CONTRIBUTIONS:
Qualified Matching Contributions, if made to the Plan, will be made on
behalf of (Choose one):
OPTION 1: [ ] Only Contributing Participants who make Elective
Deferrals who are not Highly Compensated Employees.
OPTION 2: [ ] All Contributing Participants who make Elective
Deferrals.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
PART D. LIMIT ON QUALIFIED MATCHING CONTRIBUTIONS:
Notwithstanding the Qualified Matching Contribution formula specified
above, the Employer will not match a Contributing Participant's
Elective Deferrals (and/or Nondeductible Employee Contribution, if
applicable) in excess of ________ or _____% of such Contributing
Participant's Compensation.
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SECTION 10. EMPLOYER PROFIT SHARING CONTRIBUTIONS
COMPLETE PARTS A, B AND C
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PART A. CONTRIBUTION FORMULA:
For each Plan Year the Employer will contribute an Amount to be
determined from year to year.
PART B. ALLOCATION FORMULA: (Choose one)
OPTION 1: [ ] Pro Rata Formula. Employer Profit Sharing Contributions
shall be allocated to the Individual Accounts of
Qualifying Participants in the ratio that each
Qualifying Participant's Compensation for the Plan Year
bears to the total Compensation of all Qualifying
Participants for the Plan Year.
OPTION 2: [X] Integrated Formula. Employer Profit Sharing
Contributions shall be allocated as follows (Start with
Step 3 if this Plan is not a Top-Heavy Plan):
Step 1. Employer Profit Sharing Contributions shall
first be allocated pro rata to Qualifying
Participants in the manner described in Section
10, Part B, Option 1. The percent so allocated
shall not exceed 3% of each Qualifying
Participant's Compensation.
Step 2. Any Employer Profit Sharing Contributions
remaining after the allocation in Step 1 shall
be allocated to each Qualifying Participant's
Individual Account in the ratio that each
Qualifying Participant's Compensation for the
Plan Year in Excess of the integration level
bears to all Qualifying Participants'
Compensation in excess of the integration
level, but not in excess of 3%.
Step 3. Any Employer Profit Sharing Contributions
remaining after the allocation in Step 2 shall
be allocated to each Qualifying Participant's
Individual Account in the ratio that the sum of
each Qualifying Participant's total
Compensation and Compensation in excess of the
integration level bears to the sum of all
Qualifying Participants' total Compensation and
Compensation in excess of the integration
level, but not in excess of the profit sharing
maximum disparity rate as described in Section
3.01(B)(3) of the Plan.
Step 4. Any Employer Profit Sharing Contributions
remaining after the allocation in Step 3 shall
be allocated pro rata to Qualifying
Participants in the manner described in Section
10, Part B, Option 1.
The integration level shall be (Choose one):
SUBOPTION (a): [X] The Taxable Wage Base.
SUBOPTION (b): [ ] _________ (a dollar amount less than
the Taxable Wage Base).
SUBOPTION (c): [ ] _____% (not more than 100%) of the
Taxable Wage Base.
NOTE: If no option is selected, Suboption (a) will be
deemed to be selected.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
PART C. QUALIFYING PARTICIPANTS:
A Participant will be a Qualifying Participant and thus entitled to
share in the Employer Profit Sharing Contribution for any Plan Year
only if the Participant is a Participant on at least one day of such
Plan Year and satisfies the following additional conditions (Check one
or more Options):
OPTION 1: [ ] No Additional Conditions.
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OPTION 2: [X] Hours of Service Requirement. The Participant completes
at least 500 (not more than 500) Hours of Service during
the Plan Year. However, this condition will be waived
for the following reasons (Check at least one):
[X] The Participant's Death.
[X] The Participant's Termination of Employment after
having incurred a Disability.
[X] The Participant's Termination of Employment after
having reached Normal Retirement Age.
[ ] This condition will not bewaived.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
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SECTION 11. COMPENSATION
COMPLETE PARTS A THROUGH D
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PART A. BASIC DEFINITION:
Compensation will mean all of each Participant's (Choose one):
OPTION 1: [X] W-2 wages.
OPTION 2: [ ] Section 3401(a) wages.
OPTION 3: [ ] 415 safe-harbor compensation.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
PART B. MEASURING PERIOD FOR COMPENSATION:
Compensation shall be determined over the following applicable period
(Choose one):
OPTION 1: [ ] The Plan Year.
OPTION 2: [X] The calendar year ending with or within the Plan Year.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
PART C. INCLUSION OF ELECTIVE DEFERRALS:
Does Compensation include Employer Contributions made pursuant to a
salary reduction agreement which are not includible in the gross income
of the Employee under Section 125, 402(e)(3), 402(h)(1)(B), and 403(b)
of the Code? [X] Yes [ ] No
NOTE: If neither box is checked, "Yes" will be deemed to be selected.
PART D. PRE-ENTRY DATE COMPENSATION:
For the Plan Year in which an Employee enters the Plan, the Employee's
Compensation which shall be taken into account for purposes of the Plan
shall be (Choose one):
OPTION 1: [ ] The Employee's Compensation only from the time the
Employee became a Participant in the Plan.
OPTION 2: [X] The Employee's Compensation for the whole of such Plan
Year.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
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SECTION 12. VESTING AND FORFEITURES
COMPLETE PARTS A THROUGH G
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PART A. VESTING SCHEDULE FOR EMPLOYER PROFIT SHARING CONTRIBUTIONS. A
Participant shall become Vested in his or her Individual Account
derived from Profit Sharing Contributions made pursuant to Section 10
of the Adoption Agreement as follows (Choose one):
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VESTED PERCENTAGE
YEARS OF
VESTING SERVICE Option 1 [ ] Option 2 [ ] Option 3 [ ] Option 4 [ ] Option 5 [X] (Complete if Chosen)
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1 0% 0% 100% 0% 0%
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2 0% 20% 100% 0% 25%
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3 0% 40% 100% 20% 50% (not less than 20%)
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4 0% 60% 100% 40% 75% (not less than 40%)
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5 100% 80% 100% 60% 100% (not less than 60%)
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6 100% 100% 100% 80% 100% (not less than 80%)
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7 100% 100% 100% 100% 100% (not less than 100%)
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NOTE: If no option is selected, Option 3 will be deemed to be selected.
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PART B. VESTING SCHEDULE FOR MATCHING CONTRIBUTIONS. A Participant shall become
Vested in his or her Individual Account derived from Matching
Contributions made pursuant to Section 7 of the Adoption Agreement as
follows (Choose one):
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VESTED PERCENTAGE
YEARS OF
VESTING SERVICE Option 1 [ ] Option 2 [ ] Option 3 [ ] Option 4 [ ] Option 5 [X] (Complete if Chosen)
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1 0% 0% 100% 0% 0%
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2 0% 20% 100% 0% 25%
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3 0% 40% 100% 20% 50% (not less than 20%)
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4 0% 60% 100% 40% 75% (not less than 40%)
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5 100% 80% 100% 60% 100% (not less than 60%)
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6 100% 100% 100% 80% 100% (not less than 80%)
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7 100% 100% 100% 100% 100% (not less than 100%)
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NOTE: If no option is selected, Option 3 will be deemed to be selected.
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PART C. HOURS REQUIRED FOR VESTING PURPOSES:
1. 1000 Hours of Service (no more than 1,000) shall be required
to constitute a Year of Vesting Service.
2. 500 Hours of Service (no more than 500 but less than the
number of specified in Section 12, Part C, Item 1, above) must
be exceeded to avoid a Break in Vesting Service.
3. For purposes of determining Years of Vesting Service,
Employees shall be given credit for Hours of Service with the
following predecessor employer(s): (Complete if applicable)
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PART D. EXCLUSION OF CERTAIN YEARS OF VESTING SERVICE:
All of an Employee's Years of Vesting Service with the Employer are
counted to determine the vesting percentage in the Participant's
Individual Account except (Check any that apply):
[ ] Years of Vesting Service before the Employee reaches age 18.
[ ] Years of Vesting Service before the Employer maintained this Plan
or a predecessor plan.
PART E. ALLOCATION OF FORFEITURES OF EMPLOYER PROFIT SHARING CONTRIBUTIONS:
Forfeitures of Employer Profit Sharing Contributions shall be
(Choose one):
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OPTION 1: [ ] Allocated to the Individual Accounts of the Participants
specified below in the manner as described in Section
10, Part B (for Employer Profit sharing Contributions).
The Participants entitled to receive allocations of such
Forfeitures shall be (Choose one):
SUBOPTION (a): [ ] Only Qualifying Participants.
SUBOPTION (b): [ ] All Participants.
OPTION 2: [X] Applied to reduce Employer Profit Sharing Contributions
(Choose one):
SUBOPTION (a): [X] For the Plan Year for which the
Forfeiture arises.
SUBOPTION (b): [ ] For any Plan Year subsequent to the
Plan Year for which the Forfeiture
arises.
OPTION 3: [ ] Applied first to the payment of the Plan's
administrative expenses and any excess applied to reduce
Employer Profit Sharing Contributions (Choose one):
SUBOPTION (a): [ ] For the Plan Year for which the
Forfeiture arises.
SUBOPTION (b): [ ] For any Plan Year subsequent to the
Plan Year for which the Forfeiture
arises.
NOTE: If no option is selected, Option 1 and Suboption (a) will be
deemed to be selected.
PART F. ALLOCATION OF FORFEITURES OF MATCHING CONTRIBUTIONS:
Forfeitures of Matching Contributions shall be (Choose one):
OPTION 1: [ ] Allocated, after all other Forfeitures under the Plan,
to each Participant's Individual Account in the ratio
which each Participant's Compensation for the Plan Year
bears to the total Compensation of all Participants for
such Plan Year.
The Participants entitled to receive allocations of such
Forfeitures shall be (Choose one):
SUBOPTION (a): [ ] Only Qualifying Contributing
Participants.
SUBOPTION (b): [ ] Only Qualifying Participants.
SUBOPTION (c): [ ] All Participants.
OPTION 2: [X] Applied to reduce Matching Contributions (Choose one):
SUBOPTION (a): [X] For the Plan Year for which the
Forfeiture arises.
SUBOPTION (b): [ ] For any Plan Year subsequent to the
Plan Year for which the Forfeiture
arises.
OPTION 3: [ ] Applied first to the payment of the Plan's
administrative expenses and any excess applied to reduce
Matching Contributions (Choose one):
SUBOPTION (a): [ ] For the Plan Year for which the
Forfeiture arises.
SUBOPTION (b): [ ] For any Plan Year subsequent to the
Plan Year for which the Forfeiture
arises.
NOTE: If no option is selected, Option 1 and Suboption (a) will be
deemed to be selected.
PART G. ALLOCATION OF FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS:
Forfeitures of Excess Aggregate Contributions shall be (Choose one):
11
12
OPTION 1: [ ] Allocated, after all other Forfeitures under the Plan,
to each Contributing Participant's Matching Contribution
account in the ratio which each Contributing
Participant's Compensation for the Plan Year bears to
the total Compensation of all Contributing Participants
for such Plan Year. Such Forfeitures will not be
allocated to the account of any Highly Compensated
Employee.
OPTION 2: [X] Applied to reduce Matching Contributions (Choose one):
SUBOPTION (a): [X] For the Plan Year for which the
Forfeiture arises.
SUBOPTION (b): [ ] For any Plan Year subsequent to the
Plan Year for which the Forfeiture
arises.
OPTION 3: [ ] Applied first to the payment of the Plan's
administrative expenses and any excess applied to reduce
Matching Contributions (Choose one):
SUBOPTION (a): For the Plan Year for which the
Forfeiture arises.
SUBOPTION (b): For any Plan Year subsequent to the Plan
Year for which the Forfeiture arises.
NOTE: If no option is selected, Option 2 and Suboption (a) will be
deemed to be selected.
--------------------------------------------------------------------------------
SECTION 13. NORMAL RETIREMENT AGE AND EARLY RETIREMENT AGE
--------------------------------------------------------------------------------
PART A. THE NORMAL RETIREMENT AGE UNDER THE PLAN SHALL BE (Check and complete
one option):
OPTION 1: [X] Age 65.
OPTION 2: [ ] Age ________ (not to exceed 65).
OPTION 3: [ ] The later of age _______ (not to exceed 65) or the ____
(not to exceed 5th) anniversary of the first day of the
first Plan Year in which the Participant commenced
participation in the Plan.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
PART B. EARLY RETIREMENT AGE (Choose one option):
OPTION 1: [X] An Early Retirement Age is not applicable under the
Plan.
OPTION 2: [ ] Age ________ (not less than 55 nor more than 65).
OPTION 3: [ ] A Participant satisfies the Plan's Early Retirement Age
conditions by attaining age _______ (not less than 55)
and completing _____ Years of Vesting Service.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
--------------------------------------------------------------------------------
SECTION 14. DISTRIBUTIONS
--------------------------------------------------------------------------------
DISTRIBUTABLE EVENTS. ANSWER EACH OF THE FOLLOWING ITEMS.
A. Termination of Employment Before Normal Retirement Age. May a Participant
who has not reached Normal Retirement Age request a distribution from the
Plan upon Termination of Employment? [X] Yes [ ] No
B. Disability. May a Participant who has incurred a Disability request a
distribution from the Plan? [X] Yes [ ] No
C. Attainment of Normal Retirement Age. May a Participant who has attained
Normal Retirement Age but has not incurred a Termination of Employment
request a distribution from the Plan? [X] Yes [ ] No
D. Attainment of Age 59 1/2. Will Participants who have attained age 59 1/2 be
permitted to withdraw Elective Deferrals while still employed by the
Employer? [ ] Yes [X] No
12
13
E. Hardship Withdrawals of elective Deferrals. will Participants be permitted
to withdraw Elective Deferrals on account of hardship pursuant to Section
11.503 of the Plan? [X] Yes [ ] No
F. In-Service Withdrawals. Will Participants be permitted to request a
distribution during service pursuant to Section 6.01(A)(3) of the Plan?
[ ] Yes [X] No
G. Hardship Withdrawals. Will Participants be permitted to make hardship
withdrawals pursuant to Section 6.01(A)(4) of the Plan? [ ] Yes [X] No
H. Withdrawals of Rollover or Transfer Contributions. Will Employees be
permitted to withdraw their Rollover or Transfer Contributions at any time?
[X] Yes [ ] No
NOTE: If a box is not checked for an item, "Yes" will be deemed to be selected
for that item. Section 411(d)(6) of the Code prohibits the elimination of
protected benefits. In general, protected benefits include the forms and timing
of payout options. If the Plan is being adopted to amend and replace a Prior
Plan that permitted a distribution option described above, you must answer "Yes"
to that item.
--------------------------------------------------------------------------------
SECTION 15. JOINT AND SURVIVOR ANNUITY
--------------------------------------------------------------------------------
PART A. RETIREMENT EQUITY ACT SAFE HARBOR:
OPTION 1: [ ] Yes.
OPTION 2: [X] No.
NOTE: You must select "No" if you are adopting this Plan as an
amendment and restatement of a Prior Plan that was subject to the joint
and survivor annuity requirements.
PART B. SURVIVOR ANNUITY PERCENTAGE: (Complete only if your answer in Section
15, Part A is "No")
The survivor annuity portion of the Joint and Survivor Annuity shall be
a percentage equal to 50% (at least 50% but no more than 100%) of the
amount paid to the Participant prior to his or her death.
--------------------------------------------------------------------------------
SECTION 16. OTHER OPTIONS
ANSWER "YES" OR "NO" TO EACH OF THE FOLLOWING QUESTIONS BY CHECKING THE
APPROPRIATE BOX. IF A BOX IS NOT CHECKED FOR A QUESTION, THE ANSWER WILL BE
DEEMED TO BE "NO.
--------------------------------------------------------------------------------
A. Loans: Will loans to Participants pursuant to Section [X] Yes [ ] No
6.08 of the Plan be permitted?
B. Insurance: Will the Plan allow for the investment in [X] Yes [ ] No
insurance policies pursuant to Section 5.13 of the
Plan?
C. Employer Securities: Will the Plan allow for the [ ] Yes [X] No
investment in qualifying Employer securities or
qualifying Employer real property?
D. Rollover Contributions: Will Employees be permitted to [X] Yes [ ] No
make rollover contributions to the Plan pursuant to
Section 3.03 of the Plan? [ ] Yes, but only
after becoming
a Participant.
E. Transfer Contributions: Will Employees be permitted to [ ] Yes [X] No
make transfer contributions to the Plan pursuant to
Section 3.04 of the Plan? [ ] Yes, but only
after becoming
a Participant.
F. Nondeductible Employee Contributions: Will Employees be [ ] Yes [X] No
permitted to make Nondeductible Employee Contributions
pursuant to Section 11.305 of the Plan?
Check here if such contributions will be mandatory. [ ]
G. Will Participants be permitted to direct the investment [X] Yes [ ] No
of their Plan assets pursuant to Section 5.14 of the
Plan?
13
14
--------------------------------------------------------------------------------
SECTION 17. LIMITATION ON ALLOCATIONS
MORE THAN ONE PLAN.
--------------------------------------------------------------------------------
If you maintain or ever maintained another qualified plan (other than a paired
standardized money purchase pension plan using the same Basic Plan Document as
this Plan) in which any Participant in this Plan is (or was) a Participant or
could become a Participant, you must complete this section. You must also
complete this section if you maintain a welfare benefit fund, as defined in
Section 419(e) of the Code, or an individual medical account, as defined in
Section 415(1)(2) of the Code, under which amounts are treated as annual
additions with respect to any Participant in this Plan.
PART C. INDIVIDUALLY DESIGNED DEFINED CONTRIBUTION PLAN:
If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a master or
prototype plan:
1. [X] The provisions of Section 3.05(B)(1) through 3.05(B)(6) of the
Plan will apply as if the other plan were a master or prototype
plan.
2. [ ] Other method. (Provide the method under which the plans will
limit total annual additions to the maximum permissible amount,
and will properly reduce any excess amounts, in a manner that
precludes Employer discretion.) _______________________________
_______________________________________________________________
_______________________________________________________________
PART D. DEFINED BENEFIT PLAN:
If the Participant is or has ever been a participant in a defined
benefit plan maintained by the Employer, the Employer will provide
below the language which will satisfy the 1.0 limitation of Section
415(e) of the Code.
1. [X] If the projected annual addition to this Plan to the account of
a Participant for any limitation year would cause the 1.0
limitation of Section 415(e) of the Code to be exceeded, the
annual benefit of the defined benefit plan for such limitation
year shall be reduced so that the 1.0 limitation shall be
satisfied.
If it is not possible to reduce the annual benefit of the
defined benefit plan and the projected annual addition to this
Plan to the account of a Participant for a limitation year
would cause the 1.0 limitation to be exceeded, the Employer
shall reduce the Employer Contribution which is to be allocated
to this Plan on behalf of such Participant so that the 1.0
limitation will be satisfied. (The provisions of Section 415(e)
of the Code are incorporated herein by reference under the
authority of Section 1106(h) of the Tax Reform Act of 1986.)
2. [ ] Other method. (Provide language describing another method. Such
language must preclude Employer discretion.) __________________
_______________________________________________________________
_______________________________________________________________
--------------------------------------------------------------------------------
SECTION 18. TOP-HEAVY MINIMUM
COMPLETE PARTS A AND B
--------------------------------------------------------------------------------
PART E. MINIMUM ALLOCATION OR BENEFIT:
For any Plan Year with respect to which this Plan is a Top-Heavy Plan,
any minimum allocation required pursuant to Section 3.01(E) of the Plan
shall be made (Choose one):
OPTION 1: [X] To this Plan.
OPTION 2: [ ] To the following other plan maintained by the Employer
(Specify name and plan number of plan)
--------------------------------------------------------
--------------------------------------------------------
14
15
OPTION 3: [ ] In accordance with the method described on an attachment
to this Adoption Agreement. (Attach language describing
the method that will be used to satisfy Section 416 of
the Code. Such method must preclude Employer
discretion.)
NOTE: If no option is selected, Option 1 will be deemed to be selected.
PART F. TOP-HEAVY VESTING SCHEDULE:
Pursuant to Section 6.01(C) of the Plan, the vesting schedule that will
apply when this Plan is a Top-Heavy Plan (unless the Plan's regular
vesting schedule provides for more rapid vesting) shall be (Choose
one):
OPTION 1: [X] 6 Year Graded.
OPTION 2: [ ] 3 Year Cliff.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
--------------------------------------------------------------------------------
SECTION 19. PROTOTYPE SPONSOR
--------------------------------------------------------------------------------
Name of Prototype Sponsor TRAVELERS INSURANCE COMPANY
------------------------------------------------------
Address ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------------------------------
Telephone Number ▇▇▇-▇▇▇-▇▇▇▇
---------------------------------------------------------------
PERMISSIBLE INVESTMENTS
The assets of the Plan shall be invested only in those investments described
below (To be completed by the Prototype Sponsor):
VARIABLE ANNUITY CONTRACT
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECTION 20. TRUSTEE OR CUSTODIAN
--------------------------------------------------------------------------------
OPTION A: [X] Financial Organization as Trustee or Custodian
CHECK ONE: [X] Custodian, [ ] Trustee without full trust powers, or
[ ] Trustee with full trust powers
Financial Organization ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------------------
Signature
----------------------------------------------------------------------
Type Name
----------------------------------------------------------------------
COLLECTIVE OR COMMINGLED FUNDS
List any collective or commingled funds maintained by the financial organization
Trustee in which assets of the Plan may be invested (Complete if applicable).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OPTION B: [X] Individual Trustee(s)
Signature /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Signature
----------------------- ----------------------------
Type Name /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Type Name
----------------------- ----------------------------
Signature Signature
----------------------- ----------------------------
Type Name Type Name
----------------------- ----------------------------
--------------------------------------------------------------------------------
SECTION 21. RELIANCE
--------------------------------------------------------------------------------
15
16
An Employer who has ever maintained or who later adopts any plan (including a
welfare benefit fund, as defined in Section 419(e) of the Code, which provides
post-retirement medical benefits allocated to separate accounts for key
employees, as defined in Section A(d)(3) of the Code, or an individual medical
account, as defined in Section 415(1)(2) of the Code) in addition to this Plan
(other than a paired standardized money purchase pension plan using the same
Basic Plan Document as this Plan) 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 Section 401 of the Internal Revenue Code. If the Employer who
adopts or maintains multiple plans wishes to obtain reliance that his or her
plan(s) are qualified, application for a determination letter should be made to
the appropriate Key District Director of Internal Revenue.
The 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
Section 401 of the code unless the terms of the Plan, as herein adopted or
amended, that pertain to the requirements of Sections 401(a)(4), 401(a)(17),
401(1), 401(a)(5), 410(b) and 414(s) of the Code, as amended by the Tax Reform
Act of 1986, or later laws, (a) are made effective retroactively to the first
day of the first Plan Year beginning after December 31, 1988 (or such later date
on which these requirements first become effective with respect to this Plan);
or (b) are made effective no later than the first day on which the Employer is
no longer entitled, under regulations, to rely on a reasonable, good faith
interpretation of these requirements, and the prior provisions of the Plan
constitute such an interpretation.
This Adoption Agreement may be used only in conjunction with Basic Plan Document
No. 04.
--------------------------------------------------------------------------------
SECTION 22. EMPLOYER SIGNATURE
IMPORTANT: PLEASE READ BEFORE SIGNING
--------------------------------------------------------------------------------
I am an authorized representative of the Employer named above and I state the
following:
1. I acknowledge that I have relied upon my own advisors regarding the
completion of this Adoption Agreement and the legal tax implications of
adopting this Plan.
2. I understand that my failure to properly complete this Adoption Agreement
may result in disqualification of the Plan.
3. I understand that the Prototype Sponsor will inform me of any amendments
made to the Plan and will notify me should it discontinue or abandon the
Plan.
4. I have received a copy of this Adoption Agreement and the corresponding
Basic Plan Document.
Signature for Employer /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Date Signed 8/13/97
------------------------ -----------------
Type Name ▇▇▇▇ ▇ ▇▇▇▇▇▇▇ Title Chief Operating Officer
------------------------------------- -------------------------
16
17
QUALIFIED RETIREMENT PLAN/403(b)
LOAN DISCLOSURE
================================================================================
As a participant in the qualified retirement plan/403(b) adopted by your
employer, you may be able to borrow a portion of your vested account balance.
The loan program adopted by your employer is available on a uniform basis to all
parties in interest to the plan who meet loan qualification requirements. For
additional information about the loan program available under your employer's
plan, contact the loan program administrator listed below.
NOTE: THIS LOAN DISCLOSURE CONSTITUTES PART OF THE SUMMARY PLAN DESCRIPTION
(SPD) OF YOUR QUALIFIED RETIREMENT PLAN AND SHOULD BE KEPT WITH YOUR OTHER SPD
DOCUMENTS.
--------------------------------------------------------------------------------
PLAN LOAN INFORMATION
--------------------------------------------------------------------------------
Plan Name Antigenics 401(k)
----------------------------------------------------------------------
Plan Number 001 Plan Year-End 12-31
-------------------------- --------------------------
--------------------------------------------------------------------------------
EFFECTIVE DATE
--------------------------------------------------------------------------------
The effective date of the plan loan program is 01-01-1997
---------------------------------
--------------------------------------------------------------------------------
LOAN PROGRAM ADMINISTRATOR
--------------------------------------------------------------------------------
The person responsible for administering your loan program is ▇▇▇▇▇ ▇▇▇▇▇▇▇
Your loan program administrator may be reached at the following address and/or
telephone number: ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------
--------------------------------------------------------------------------------
LOAN APPLICATION PROCEDURE
--------------------------------------------------------------------------------
To apply for a loan under this plan, you must complete and return to the loan
program administrator a Loan Application Form, furnishing all information
requested and pay any required loan application processing fees. In addition,
you must follow the procedures described below. (specify)
-----------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
LIMITATIONS ON TYPES OF LOANS
--------------------------------------------------------------------------------
Loans from this plan may be used for the following purposes:
[X] all
[ ] purchase of your principal residence
[ ] post-secondary tuition for you or your immediate family
[ ] medical expenses for you or your immediate family
[ ] rent or mortgage payments to prevent eviction or foreclosure from your
principal residence
[ ] other (specify)
-------------------------------------------------------------
--------------------------------------------------------------------------------
LOAN APPROVAL STANDARDS
--------------------------------------------------------------------------------
Decisions approving or denying loans from this Plan will be based on the
following criteria:
[X] the value of your vested individual account balance
[ ] other (specify)
------------------------------------------------------------
18
NOTE: LOAN APPROVAL BASIS SELECTED MUST NOT CAUSE LOANS TO BE MADE AVAILABLE ON
A DISCRIMINATORY BASIS.
--------------------------------------------------------------------------------
LOAN PRINCIPAL LIMITATIONS
--------------------------------------------------------------------------------
Loans from this plan shall be in a minimum amount of: $ 500.00 (may not exceed
$1,000.)
The maximum amount of all loans outstanding cannot exceed: [X] one-half of your
vested account balance or $50,000
[ ] other (specify)
-------------------------------------------------------------
NOTE: IF THE "OTHER" OPTION IS SELECTED, THE AMOUNT ENTERED CANNOT EXCEED THE
LESSER OF ONE-HALF THE VESTED BALANCE OR $50,000.
--------------------------------------------------------------------------------
INTEREST CALCULATION
--------------------------------------------------------------------------------
Interest on loans from this plan will be computed on the following basis:
[ ] prime rate (as specified in the Wall Street Journal)
-----------------------
--------------------------------------------------------------------------------
[ ] prime rate (as specified in the Wall Street Journal) plus
-------------------
percent
-------------------------------------------------------------------------
[X] other (specify) the prime rate as of the first day of each month plus two
-----------------------------------------------------------
percent
-----------------------------------------------------------
NOTE: THE INTEREST RATE MUST BE COMPARABLE TO THAT CHARGED BY COMMERCIAL LENDERS
IN A SIMILAR TRANSACTION. ANY LOAN RENEWALS ARE SUBJECT TO INTEREST RATE
MODIFICATION.
--------------------------------------------------------------------------------
COLLATERAL PLEDGE
--------------------------------------------------------------------------------
A percentage of your vested account balance equal to the amount borrowed divided
by your vested account balance is pledged as security of repayment of loans
under this program.
--------------------------------------------------------------------------------
DEFAULT PROVISIONS
--------------------------------------------------------------------------------
The following are deemed to be acts of default under your qualified plan/403(b)
loan program:
* failure to remit payment in a timely manner as required under the Loan
Agreement
* breach of any of your obligations or duties under the Loan Agreement
* termination of employment
* other (specify)
------------------------------------------------------------
Upon default, your loan program administrator is entitled to foreclose its
security interest in your vested account balance pledged for repayment upon the
occurrence of an event which triggers a distribution of your benefits.
In addition, the loan program administrator will report as taxable any amounts
which are deemed distributed as a result of failing to make loan payments.
2
19
QUALIFIED RETIREMENT PLAN AND TRUST
DEFINED CONTRIBUTION BASIC PLAN DOCUMENT 04
--------------------------------------------------------------------------------
SECTION ONE DEFINITIONS
The following words and phrases when used in the Plan with
initial capital letters shall, for the purpose of this Plan,
have the meanings set forth below unless the context indicates
that other meanings are intended:
1.01 ADOPTION AGREEMENT
Means the document executed by the Employer through which it
adopts the Plan and Trust and thereby agrees to be bound by
all terms and conditions of the Plan and Trust.
1.02 BASIC PLAN DOCUMENT
Means this prototype Plan and Trust document.
1.03 BENEFICIARY
Means the individual or individuals designated pursuant to
Section 6.03(A) of the Plan.
1.04 BREAK IN ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with an
Eligibility Computation Period during which an Employee fails
to complete more than 500 Hours of Service (or such lesser
number of Hours of Service specified in the Adoption Agreement
for this purpose).
1.05 BREAK IN VESTING SERVICE
Means a Plan Year (or other vesting computation period
described in Section 1.50) during which an Employee fails to
complete more than 500 Hours of Service (or such lesser number
of Hours of Service specified in the Adoption Agreement for
this purpose).
1.06 CODE
Means the Internal Revenue Code of 1986 as amended from
time-to-time.
20
1.07 COMPENSATION
A. Basic Definition
For Plan Years beginning on or after January 1, 1989,
the following definition of Compensation shall apply:
As elected by the Employer in the Adoption Agreement
(and if no election is made, W-2 wages will be deemed
to have been selected), Compensation shall mean one
of the following:
1. W-2 wages. Compensation is defined as
information required to be reported under
Sections 6041 and 6051, and 6052 of the Code
(Wages, tips and other compensation as
reported on Form W-2). Compensation is
defined as wages within the meaning of
Section 3401(a) of the Code 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), and 6052 of the Code.
Compensation must be determined without
regard to any rules under Section 3401(a)
that limit the remuneration included in
wages based on the nature or location of the
employment or the services performed (such
as the exception for agricultural labor in
Section 3401(a)(2)).
2. Section 3401(a) wages. Compensation is
defined as wages within the meaning of
Section 3401(a) of the Code, for the
purposes of income tax withholding at the
source but determined without regard to any
rules that limit the remuneration included
in wages based on the nature or location of
the employment or the services performed
(such as the exception for agricultural
labor in Section 3401(a)(2)).
3. 415 safe-harbor compensation. Compensation
is defined as wages, salaries, and fees for
professional services and other amounts
received (without regard to whether or not
an amount is paid in cash) for personal
services actually rendered in the course of
employment with the Employer maintaining the
Plan to the extent that the amounts are
includible in gross income (including, but
not limited to, commissions paid salesmen,
compensation for services on the basis of a
percentage of profits, commissions on
insurance premiums, tips, bonuses, fringe
benefits, and reimbursements or other
expense allowances under a nonaccountable
plan (as described in 1.62-2(c)), and
excluding the following:
a. Employer contributions to a plan of
deferred compensation which are not
includible in the Employee's gross
income for the taxable year in which
contributed, or employer contributions
under a
2
21
simplified employee pension plan to
the extent such contributions are
deductible by the Employee, or any
distributions from a plan of deferred
compensation;
b. Amounts realized from the exercise of
a nonqualified stock option, or when
restricted stock (or property) held by
the Employee either becomes freely
transferable or is no longer subject
to a substantial risk of forfeiture;
c. Amounts realized from the sale,
exchange or other disposition of stock
acquired under a qualified stock
option; and
d. Other amounts which received special
tax benefits, or contributions made by
the Employer (whether or not under a
salary reduction agreement) towards
the purchase of an annuity contract
described in Section 403(b) of the
Code (whether or not the contributions
are actually excludable from the gross
income of the Employee).
For any Self-Employed Individual covered under the
Plan, Compensation will mean Earned Income.
B. Determination Period And Other Rules
Compensation shall include only that Compensation
which is actually paid to the Participant during the
determination period. Except as provided elsewhere in
this Plan, the determination period shall be the Plan
Year unless the Employer has selected another period
in the Adoption Agreement. If the Employer makes no
election, the determination period shall be the Plan
Year.
Unless otherwise indicated in the Adoption Agreement,
Compensation shall include any amount which is
contributed by the Employer pursuant to a salary
reduction agreement and which is not includible in
the gross income of the Employee under Sections 125,
402(e)(3), 402(h)(1)(B) or 403(b) of the Code.
Where this Plan is being adopted as an amendment and
restatement to bring a Prior Plan into compliance
with the Tax Reform Act of 1986, such Prior Plan's
definition of Compensation shall apply for Plan Years
beginning before January 1, 1989.
C. Limits On Compensation
For years beginning after December 31, 1988 and
before January 1, 1994, the annual Compensation of
each Participant taken into account for determining
all benefits provided under the Plan for any
determination period shall not exceed $200,000. This
limitation shall be adjusted by the Secretary at the
same time and in the same manner as under Section 4
3
22
15(d) of the Code, except that the dollar increase in
effect on January 1 of any calendar year is effective
for Plan Years beginning in such calendar year and
the first adjustment to the $200,000 limitation is
effective on January 1, 1990.
For Plan Years beginning on or after January 1, 1994,
the annual Compensation of each Participant taken
into account for determining all benefits provided
under the Plan for any Plan Year shall not exceed
$150,000, as adjusted for increases in the
cost-of-living in accordance with Section
401(a)(17)(B) of the Internal Revenue Code. The
cost-of-living adjustment in effect for a calendar
year applies to any determination period beginning in
such calendar year.
If the period for determining Compensation used in
calculating an Employee's allocation for a
determination period is a short Plan Year (i.e.,
shorter than 12 months), the annual Compensation
limit is an amount equal to the otherwise applicable
annual Compensation limit multiplied by a fraction,
the numerator of which is the number of months in the
short Plan Year, and the denominator of which is 12.
In determining the Compensation of a Participant for
purposes of this limitation, the rules of Section
414(q)(6) of the Code shall apply, except in applying
such rules, the term "family" shall include only the
spouse of the Participant and any lineal descendants
of the Participant who have not attained age 19
before the close of the year. If, as a result of the
application of such rules the adjusted $200,000
limitation is exceeded, then (except for purposes of
determining the portion of Compensation up to the
integration level, if this Plan provides for
permitted disparity), the limitation shall be
prorated among the affected individuals in proportion
to each such individual's Compensation as determined
under this Section prior to the application of this
limitation.
If Compensation for any prior determination period is
taken into account in determining an Employee's
allocations or benefits for the current determination
period, the Compensation for such prior determination
period is subject to the applicable annual
Compensation limit in effect for that prior period.
For this purpose, in determining allocations in Plan
Years beginning on or after January 1, 1989, the
annual Compensation limit in effect for determination
periods beginning before that date is $200,000. In
addition, in determining allocations in Plan Years
beginning on or after January 1, 1994, the annual
Compensation limit in effect for determination
periods beginning before that date is $150,000.
1.08 CUSTODIAN
Means an entity specified in the Adoption Agreement as
Custodian or any duly appointed successor as provided in
Section 5.09.
4
23
1.09 DISABILITY
Unless the Employer has elected a different definition in the
Adoption Agreement, Disability means the 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. The permanence and degree of such impairment shall be
supported by medical evidence.
1.10 EARLY RETIREMENT AGE
Means the age specified in the Adoption Agreement. The Plan
will not have an Early Retirement Age if none is specified in
the Adoption Agreement.
1.11 EARNED INCOME
Means the net earnings from self-employment in the trade or
business with respect to which the Plan is established, for
which personal services of the individual are a material
income-producing factor. Net earnings will be determined
without regard to items not included in gross income and the
deductions allocable to such items. Net earnings are reduced
by contributions by the Employer to a qualified plan to the
extent deductible under Section 404 of the Code.
Net earnings shall be determined with regard to the deduction
allowed to the Employer by Section 164(t) of the Code for
taxable years beginning after December 31, 1989.
1.12 EFFECTIVE DATE
Means the date the Plan becomes effective as indicated in the
Adoption Agreement. However, as indicated in the Adoption
Agreement, certain provisions may have specific effective
dates. Further, where a separate date is stated in the Plan as
of which a particular Plan provision becomes effective, such
date will control with respect to that provision.
1.13 ELIGIBILITY COMPUTATION PERIOD
An Employee's initial Eligibility Computation Period shall be
the 12 consecutive month period commencing on the Employee's
Employment Commencement Date. The Employee's subsequent
Eligibility Computation Periods shall be the 12 consecutive
month periods commencing on the anniversaries of his or her
Employment Commencement Date; provided, however, if pursuant
to the Adoption Agreement, an Employee is required to complete
one or less Years of Eligibility Service to become a
Participant, then his or her subsequent Eligibility
Computation Periods shall be the Plan Years commencing with
the Plan Year beginning during his or her initial Eligibility
Computation Period. An Employee does not complete a Year of
Eligibility Service before the end of the 12 consecutive month
period regardless of when during such period the Employee
completes the required number of Hours of Service.
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24
1.14 EMPLOYEE
Means any person employed by an Employer maintaining the Plan
or of any other employer required to be aggregated with such
Employer under Sections 4 14(b), (c), (m) or (0) of the Code.
The term Employee shall also include any Leased Employee
deemed to be an Employee of any Employer described in the
previous paragraph as provided in Section 414(n) or (0) of the
Code.
1.15 EMPLOYER
Means any corporation, partnership, sole-proprietorship or
other entity named in the Adoption Agreement and any successor
who by merger, consolidation, purchase or otherwise assumes
the obligations of the Plan. A partnership is considered to be
the Employer of each of the partners and a sole-proprietorship
is considered to be the Employer of a sole proprietor. Where
this Plan is being maintained by a union or other entity that
represents its member Employees in the negotiation of
collective bargaining agreements, the term Employer shall mean
such union or other entity.
1.16 EMPLOYER CONTRIBUTION
Means the amount contributed by the Employer each year as
determined under this Plan.
1.17 EMPLOYMENT COMMENCEMENT DATE
An Employee's Employment Commencement date means the date the
Employee first performs an Hour of Service for the Employer.
1.18 EMPLOYER PROFIT SHARING CONTRIBUTION
Means an Employer Contribution made pursuant to the Section of
the Adoption Agreement titled "Employer Profit Sharing
Contributions." The Employer may make Employer Profit Sharing
Contributions without regard to current or accumulated
earnings or profits.
1.19 ENTRY DATES
Means the first day of the Plan Year and the first day of the
seventh month of the Plan Year, unless the Employer has
specified different dates in the Adoption Agreement.
1.20 ERISA
Means the Employee Retirement Income Security Act of 1974 as
amended from time-to-time.
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1.21 FORFEITURE
Means that portion of a Participant's Individual Account
derived from Employer Contributions which he or she is not
entitled to receive (i.e., the nonvested portion).
1.22 FUND
Means the Plan assets held by the Trustee for the
Participants' exclusive benefit.
1.23 HIGHLY COMPENSATED EMPLOYEE
The term Highly Compensated Employee includes highly
compensated active employees and highly compensated former
employees.
A highly compensated active employee includes any Employee who
performs service for the Employer during the determination
year and who, during the look-back year: (a) received
Compensation from the Employer in excess of $75,000 (as
adjusted pursuant to Section 415(d) of the Code); (b)received
Compensation from the Employer in excess of $50,000 (as
adjusted pursuant to Section 415(d) of the Code) and was a
member of the top-paid group for such year; or (c) was an
officer of the Employer and received Compensation during such
year that is greater than 50% of the dollar limitation in
effect under Section 415(b)(1)(A) of the Code. The term Highly
Compensated Employee also includes: (a) Employees who are both
described in the preceding sentence if the term "determination
year" is substituted for the term "look-back year" and the
Employee is one of the 100 Employees who received the most
Compensation from the Employer during the determination year;
and (b) Employees who are 5% owners at any time during the
look-back year or determination year.
If no officer has satisfied the Compensation requirement of
(c) above during either a determination year or look-back
year, the highest paid officer for such year shall be treated
as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan
Year. The look-back year shall be the 12 month period
immediately preceding the determination year.
A highly compensated former employee includes any Employee who
separated from service (or was deemed to have separated) prior
to the determination year, performs no service for the
Employer during the determination year, and was a highly
compensated active employee for either the separation year or
any determination year ending on or after the Employee's 55th
birthday.
If an Employee is, during a determination year or look-back
year, a family member of either a 5% owner who is an active or
former Employee or a Highly Compensated Employee who is one of
the 10 most Highly Compensated Employees ranked on the basis
of Compensation paid by the Employer during such year, then
the family member and the 5% owner or top 10 Highly
Compensated Employee shall be aggregated. In such case, the
family member and 5% owner or top 10 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
7
26
equal to the sum of such Compensation and contributions or
benefits of the family member and 5% owner or top 10 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.
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 Section
414(q) of the Code and the regulations thereunder.
1.24 HOURS OF SERVICE - Means
A. Each hour for which an Employee is paid, or entitled
to payment, for the performance of duties for the
Employer. These hours will be credited to the
Employee for the computation period in which the
duties are performed; and
B. Each hour for which an Employee is paid, or entitled
to payment, by the Employer on account of a period of
time during which no duties are performed
(irrespective of whether the employment relationship
has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty,
military duty or leave of absence. No more than 501
Hours of Service will be credited under this
paragraph for any single continuous period (whether
or not such period occurs in a single computation
period). Hours under this paragraph shall be
calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations
which is incorporated herein by this reference; and
C. Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to
by the Employer. The same Hours of Service will not
be credited both under paragraph (A) or paragraph
(B), as the case may be, and under this paragraph
(C). These hours will be credited to the Employee for
the computation period or periods to which the award
or agreement pertains rather than the computation
period in which the award, agreement, or payment is
made.
D. Solely for purposes of determining whether a Break in
Eligibility Service or a Break in Vesting Service has
occurred in a computation period (the computation
period for purposes of determining whether a Break in
Vesting Service has occurred is the Plan Year or
other vesting computation period described in Section
1.50) an individual who is absent from work for
maternity or paternity reasons shall receive credit
for the Hours of Service which would otherwise have
been credited to such individual but for such
absence, or in any case in which such hours cannot be
determined, 8 Hours of Service per day of such
absence. For purposes of this paragraph, an absence
from work for maternity or paternity reasons means an
absence (1) by reason of the pregnancy of the
individual, (2) by reason of a birth of a child of
the individual, (3) by reason of the placement of a
child with the individual in connection with
8
27
the adoption of such child by such individual, or (4)
for purposes of caring for such child for a period
beginning immediately following such birth or
placement. The Hours of Service credited under this
paragraph shall be credited (1) in the Eligibility
Computation Period or Plan Year or other vesting
computation period described in Section 1.50 in which
the absence begins if the crediting is necessary to
prevent a Break in Eligibility Service or a Break in
Vesting Service in the applicable period, or (2) in
all other cases, in the following Eligibility
Computation Period or Plan Year or other vesting
computation period described in Section 1.50.
E. Hours of Service will be credited for employment with
other members of an affiliated service group (under
Section 4 14(m) of the Code), a controlled group of
corporations (under Section 414(b) of the Code), or a
group of trades or businesses under common control
(under Section 4 14(c) of the Code) of which the
adopting. Employer is a member, and any other entity
required to be aggregated with the Employer pursuant
to Section 4 14(o) of the Code and the regulations
thereunder.
Hours of Service will also be credited for any
individual considered an Employee for purposes of
this Plan under Code Sections 4 14(n) or 4 14(o) and
the regulations thereunder.
F. Where the Employer maintains the plan of a
predecessor employer, service for such predecessor
employer shall be treated as service for the
Employer.
G. The above method for determining Hours of Service may
be altered as specified in the Adoption Agreement.
1.25 INDIVIDUAL ACCOUNT
Means the account established and maintained under this Plan
for each Participant in accordance with Section 4.01.
1.26 INVESTMENT FUND
Means a subdivision of the Fund established pursuant to
Section 5.05.
1.27 KEY EMPLOYEE
Means any person who is determined to be a Key Employee under
Section 10.08.
1.28 LEASED EMPLOYEE
Means any person (other than an Employee of the recipient) who
pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined
in accordance with Section 414(n)(6) of the Code) on a
substantially full time basis for a period of at least one
year, and such services are of a type historically performed
by Employees in the business field of the recipient
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28
Employer. Contributions or benefits provided a Leased Employee
by the leasing organization which are attributable to services
performed for the recipient Employer shall be treated as
provided by the recipient Employer.
A Leased Employee shall not be considered an Employee of the
recipient if: (1) such employee is covered by a money purchase
pension plan providing: (a) a nonintegrated employer
contribution rate of at least 10% of compensation, as defined
in Section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are
excludable from the employee's gross income under Section 125,
Section 402(e)(3), Section 402(h)(l)(B) or Section 403(b) of
the Code, (b)immediate participation, and (c) full and
immediate vesting; and (2) Leased Employees do not constitute
more than 20% of the recipient's nonhighly compensated work
force.
1.29 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Means any contribution made to the Plan by or on behalf of a
Participant that is included in the Participant's gross income
in the year in which made and that is maintained under a
separate account to which earnings and losses are allocated.
1.30 NORMAL RETIREMENT AGE
Means the age specified in the Adoption Agreement. However, if
the Employer enforces a mandatory retirement age which is less
than the Normal Retirement Age, such mandatory age is deemed
to be the Normal Retirement Age. If no age is specified in the
Adoption Agreement, the Normal Retirement Age shall be age 65.
1.31 OWNER - EMPLOYEE
Means an individual who is a sole proprietor, or who is a
partner owning more than 10% of either the capital or profits
interest of the partnership.
1.32 PARTICIPANT
Means any Employee or former Employee of the Employer who has
met the Plan's eligibility requirements, has entered the Plan
and who is or may become eligible to receive a benefit of any
type from this Plan or whose Beneficiary may be eligible to
receive any such benefit.
1.33 PLAN
Means the prototype defined contribution plan adopted by the
Employer. The Plan consists of this Basic Plan Document plus
the corresponding Adoption Agreement as completed and signed
by the Employer.
1.34 PLAN ADMINISTRATOR
Means the person or persons determined to be the Plan
Administrator in accordance with Section 8.01.
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1.35 PLAN YEAR
Means the 12 consecutive month period which coincides with the
Employer's fiscal year or such other 12 consecutive month
period as is designated in the Adoption Agreement.
1.36 PRIOR PLAN
Means a plan which was amended or replaced by adoption of this
Plan document as indicated in the Adoption Agreement.
1.37 PROTOTYPE SPONSOR
Means the entity specified in the Adoption Agreement that
makes this prototype plan available to employers for adoption.
1.38 QUALIFYING PARTICIPANT
Means a Participant who has satisfied the requirements
described in Section 3.01(B)(2) to be entitled to share in any
Employer Contribution (and Forfeitures, if applicable) for a
Plan Year.
1.39 RELATED EMPLOYER
Means an employer that may be required to be aggregated with
the Employer adopting this Plan for certain qualification
requirements under Sections 414(b), (c), (m) or (o) of the
Code (or any other employer that has ownership in common with
the Employer). A Related Employer may participate in this Plan
if so indicated in the Section of the Adoption Agreement
titled "Employer Information" or if such Related Employer
executes a Related Employer Participation Agreement.
1.40 RELATED EMPLOYER PARTICIPATION AGREEMENT
Means the agreement under this prototype Plan that a Related
Employer may execute to participate in this Plan.
1.41 SELF-EMPLOYED INDIVIDUAL
Means an individual who has Earned Income for the taxable year
from the trade or business for which the Plan is established;
also, an individual who would have had Earned Income but for
the fact that the trade or business had no net profits for the
taxable year.
1.42 SEPARATE FUND
Means a subdivision of the Fund held in the name of a
particular Participant representing certain assets held for
that Participant. The assets which comprise a Participant's
Separate Fund are those assets earmarked for him or her and
those assets subject to the Participant's individual direction
pursuant to Section 5.14.
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1.43 TAXABLE WAGE BASE
Means, with respect to any taxable year, the contribution and
benefit base in effect under Section 230 of the Social
Security Act at the beginning of the Plan Year.
1.44 TERMINATION OF EMPLOYMENT
A Termination of Employment of an Employee of an Employer
shall occur whenever his or her status as an Employee of such
Employer ceases for any reason other than death. An Employee
who does not return to work for the Employer on or before the
expiration of an authorized leave of absence from such
Employer shall be deemed to have incurred a Termination of
Employment when such leave ends.
1.45 TOP-HEAVY PLAN
This Plan is a Top-Heavy Plan for any Plan Year if it is
determined to be such pursuant to Section 10.08.
1.46 TRUSTEE
Means an individual, individuals or corporation specified in
the Adoption Agreement as Trustee or any duly appointed
successor as provided in Section 5.09. Trustee shall mean
Custodian in the event the financial organization named as
Trustee does not have full trust powers.
1.47 VALUATION DATE
Means the date or dates as specified in the Adoption
Agreement. If no date is specified in the Adoption Agreement,
the Valuation Date shall be the last day of the Plan Year and
each other date designated by the Plan Administrator which is
selected in a uniform and nondiscriminatory manner when the
assets of the Fund are valued at their then fair market value.
1.48 VESTED
Means nonforfeitable, that is, a claim which is unconditional
and legally enforceable against the Plan obtained by a
Participant or the Participant's Beneficiary to that part of
an immediate or deferred benefit under the Plan which arises
from a Participant's Years of Vesting Service.
1.49 YEAR OF ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with an
Eligibility Computation Period during which an Employee
completes at least 1,000 Hours of Service (or such lesser
number of Hours of Service specified in the Adoption Agreement
for this purpose). An Employee does not complete a Year of
Eligibility Service before the end of the 12 consecutive month
period regardless of when during such period the Employee
completes the required number of Hours of Service.
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1.50 YEAR OF VESTING SERVICE
Means a Plan Year during which an Employee completes at least
1,000 Hours of Service (or such lesser number of Hours of
Service specified in the Adoption Agreement for this purpose).
Notwithstanding the preceding sentence, where the Employer so
indicates in the Adoption Agreement, vesting shall be computed
by reference to the 12 consecutive month period beginning with
the Employee's Employment Commencement Date and each
successive 12 month period commencing on the anniversaries
thereof.
In the case of a Participant who has 5 or more consecutive
Breaks in Vesting Service, all Years of Vesting Service after
such Breaks in Vesting Service will be disregarded for the
purpose of determining the Vested portion of his or her
Individual Account derived from Employer Contributions that
accrued before such breaks. Such Participant's prebreak
service will count in vesting the postbreak Individual Account
derived from Employer Contributions only if either:
(A) such Participant had any Vested right to any portion
of his or her Individual Account derived from
Employer Contributions at the time of his or her
Termination of Employment; or
(B) upon returning to service, the number of consecutive
Breaks in Vesting Service is less than his or her
number of Years of Vesting Service before such
breaks.
Separate subaccounts will be maintained for the Participant's
prebreak and postbreak portions of his or her Individual
Account derived from Employer Contributions. Both subaccounts
will share in the gains and losses of the Fund.
Years of Vesting Service shall not include any period of time
excluded from Years of Vesting Service in the Adoption
Agreement.
In the event the Plan Year is changed to a new 12-month
period, Employees shall receive credit for Years of Vesting
Service, in accordance with the preceding provisions of this
definition, for each of the Plan Years (the old and new Plan
Years) which overlap as a result of such change.
SECTION TWO ELIGIBILITY AND PARTICIPATION
2.01 ELIGIBILITY TO PARTICIPATE
Each Employee of the Employer, except those Employees who
belong to a class of Employees which is excluded from
participation as indicated in the Adoption Agreement, shall be
eligible to participate in this Plan upon the satisfaction of
the age and Years of Eligibility Service requirements
specified in the Adoption Agreement.
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2.02 PLAN ENTRY
A. If this Plan is a replacement of a Prior Plan by
amendment or restatement, each Employee of the
Employer who was a Participant in said Prior Plan
before the Effective Date shall continue to be a
Participant in this Plan.
B. An Employee will become a Participant in the Plan as
of the Effective Date if the Employee has met the
eligibility requirements of Section 2.01 as of such
date. After the Effective Date, each Employee shall
become a Participant on the first Entry Date
following the date the Employee satisfies the
eligibility requirements of Section 2.01 unless
otherwise indicated in the Adoption Agreement.
C. The Plan Administrator shall notify each Employee who
becomes eligible to be a Participant under this Plan
and shall furnish the Employee with the application
form, enrollment forms or other documents which are
required of Participants. The eligible Employee shall
execute such forms or documents and make available
such information as may be required in the
administration of the Plan.
2.03 TRANSFER TO OR FROM INELIGIBLE CLASS
If an Employee who had been a Participant becomes ineligible
to participate because he or she is no longer a member of an
eligible class of Employees, but has not incurred a Break in
Eligibility Service, such Employee shall participate
immediately upon his or her return to an eligible class of
Employees. If such Employee incurs a Break in Eligibility
Service, his or her eligibility to participate shall be
determined by Section 2.04.
An Employee who is not a member of the eligible class of
Employees will become a Participant immediately upon becoming
a member of the eligible class provided such Employee has
satisfied the age and Years of Eligibility Service
requirements. If such Employee has not satisfied the age and
Years of Eligibility Service requirements as of the date he or
she becomes a member of the eligible class, such Employee
shall become a Participant on the first Entry Date following
the date he or she satisfies those requirements unless
otherwise indicated in the Adoption Agreement.
2.04 RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILiTY SERVICE
A. Employee Not Participant Before Break - If an
Employee incurs a Break in Eligibility Service before
satisfying the Plan's eligibility requirements, such
Employee's Years of Eligibility Service before such
Break in Eligibility Service will not be taken into
account.
B. Nonvested Participants - In the case of a Participant
who does not have a Vested interest in his or her
Individual Account derived from Employer
Contributions, Years of Eligibility Service before a
period of consecutive Breaks in Eligibility Service
will not be taken into account for eligibility
purposes if the number of consecutive Breaks in
Eligibility Service in
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33
such period equals or exceeds the greater of 5 or the
aggregate number of Years of Eligibility Service
before such break. Such aggregate number of Years of
Eligibility Service will not include any Years of
Eligibility Service disregarded under the preceding
sentence by reason of prior breaks.
If a Participant's Years of Eligibility Service are
disregarded pursuant to the preceding paragraph, such
Participant will be treated as a new Employee for
eligibility purposes. If a Participant's Years of
Eligibility Service may not be disregarded pursuant
to the preceding paragraph, such Participant shall
continue to participate in the Plan, or, if
terminated, shall participate immediately upon
reemployment.
C. Vested Participants - A Participant who has sustained
a Break in Eligibility Service and who had a Vested
interest in all or a portion of his or her Individual
Account derived from Employer Contributions shall
continue to participate in the Plan, or, if
terminated, shall participate immediately upon
reemployment.
2.05 DETERMINATIONS UNDER THIS SECTION
The Plan Administrator shall determine the eligibility of each
Employee to be a Participant. This determination shall be
conclusive and binding upon all persons except as otherwise
provided herein or by law.
2.06 TERMS OF EMPLOYMENT
Neither the fact of the establishment of the Plan nor the fact
that a common law Employee has become a Participant shall give
to that common law Employee any right to continued employment;
nor shall either fact limit the right of the Employer to
discharge or to deal otherwise with a common law Employee
without regard to the effect such treatment may have upon the
Employee's rights under the Plan.
2.07 SPECIAL RULES WHERE ELAPSED TIME METHOD IS BEING USED
This Section 2.07 shall apply where the Employer has indicated
in the Adoption Agreement that the elapsed time method will be
used. When this Section applies, the definitions of year of
service, break in service and hour of service in this Section
will replace the definitions of Year of Eligibility Service,
Year of Vesting Service, Break in Eligibility Service, Break
in Vesting Service and Hours of Service found in the
Definitions Section of the Plan (Section One).
For purposes of determining an Employee's initial or continued
eligibility to participate in the Plan or the Vested interest
in the Participant's Individual Account balance derived from
Employer Contributions, (except for periods of service which
may be disregarded on account of the "rule of parity"
described in Sections 1.50 and 2.04) an Employee will receive
credit for the aggregate of all time period(s) commencing with
the Employee's first day of employment or reemployment and
ending on the date a break in service begins. The first day of
employment or reemployment is the first day the Employee
performs an hour of
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34
service. An Employee will also receive credit for any period
of severance of less than 12 consecutive months. Fractional
periods of a year will be expressed in terms of days.
For purposes of this Section, hour of service will mean each
hour for which an Employee is paid or entitled to payment for
the performance of duties for the Employer. Break in service
is a period of severance of at least 12 consecutive months.
Period of severance is a continuous period of time during
which the Employee is not employed by the Employer. Such
period begins on the date the Employee retires, quits or is
discharged, or if earlier, the 12 month anniversary of the
date on which the Employee was otherwise first absent from
service.
In the case of an individual who is absent from work for
maternity or paternity reasons, the 12 consecutive month
period beginning on the first anniversary of the first date of
such absence shall not constitute a break in service. For
purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (1) by reason of the
pregnancy of the individual, (2) by reason of the birth of a
child of the individual, (3) by reason of the placement of a
child with the individual in connection with the adoption of
such child by such individual, or (4) for purposes of caring
for such child for a period beginning immediately following
such birth or placement.
Each Employee will share in Employer Contributions for the
period beginning on the date the Employee commences
participation under the Plan and ending on the date on which
such Employee ▇▇▇▇▇▇ employment with the Employer or is no
longer a member of an eligible class of Employees.
If the Employer is a member of an affiliated service group
(under Section 414(m) of the Code), a controlled group of
corporations (under Section 414(b) of the Code), a group of
trades or businesses under common control (under Section 4
14(c) of the Code), or any other entity required to be
aggregated with the Employer pursuant to Section 414(o) of the
Code, service will be credited for any employment for any
period of time for any other member of such group. Service
will also be credited for any individual required under
Section 4 14(n) or Section 4 14(o) to be considered an
Employee of any Employer aggregated under Section 414(b), (c),
or (m) of the Code.
2.08 ELECTION NOT TO PARTICIPATE
This Section 2.08 will apply if this Plan is a nonstandardized
plan and the Adoption Agreement so provides. If this Section
applies, then an Employee or a Participant may elect not to
participate in the Plan for one or more Plan Years. The
Employer may not contribute for an Employee or Participant for
any Plan Year during which such Employee's or Participant's
election not to participate is in effect. Any election not to
participate must be in writing and filed with the Plan
Administrator.
The Plan Administrator shall establish such uniform and
nondiscriminatory rules as it deems necessary or advisable to
carry out the terms of this Section, including, but not
limited to, rules prescribing the timing of the filing of
elections not to participate and the procedures for electing
to re-participate in the Plan.
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35
An Employee or Participant continues to earn credit for
vesting and eligibility purposes for each Year of Vesting
Service or Year of Eligibility Service he or she completes and
his or her Individual Account (if any) will share in the gains
or losses of the Fund during the periods he or she elects not
to participate.
SECTION THREE CONTRIBUTIONS
3.01 EMPLOYER CONTRIBUTIONS
A. Obligation to Contribute - The Employer shall make
contributions to the Plan in accordance with the
contribution formula specified in the Adoption
Agreement. If this Plan is a profit sharing plan, the
Employer shall, in its sole discretion, make
contributions without regard to current or
accumulated earnings or profits.
B. Allocation Formula and the Right to Share in the
Employer Contribution -
1. General - The Employer Contribution for any
Plan Year will be allocated or contributed
to the Individual Accounts of Qualifying
Participants in accordance with the
allocation or contribution formula specified
in the Adoption Agreement. The Employer
Contribution for any Plan Year will be
allocated to each Participant's Individual
Account as of the last day of that Plan
Year.
Any Employer Contribution for a Plan Year
must satisfy Section 401(a)(4) and the
regulations thereunder for such Plan Year.
2. Qualifying Participants - A Participant is a
Qualifying Participant and is entitled to
share in the Employer Contribution for any
Plan Year if the Participant was a
Participant on at least one day during the
Plan Year and satisfies any additional
conditions specified in the Adoption
Agreement. If this Plan is a standardized
plan, unless the Employer specifies more
favorable conditions in the Adoption
Agreement, a Participant will not be a
qualifying Participant for a Plan Year if he
or she incurs a Termination of Employment
during such Plan Year with not more than 500
Hours of Service if he or she is not an
Employee on the last day of the Plan Year.
The determination of whether a Participant
is entitled to share in the Employer
Contribution shall be made as of the last
day of each Plan Year.
3. Special Rules for Integrated Plans - This
Plan may not allocate contributions based on
an integrated formula if the Employer
maintains any other plan that provides for
allocation of contributions based on an
integrated formula that benefits any of the
same Participants. If the Employer has
selected the integrated contribution or
allocation formula in the Adoption
Agreement, then the maximum disparity rate
shall be determined in accordance with the
following table.
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MAXIMUM DISPARITY RATE
Integration Level Top-Heavy Nonstandardized and
Money Purchase Profit Sharing Non-Top-Heavy Profit Sharing
Taxable Wage Base (TWB) 5.7% 2.7% 5.7%
More than $0 but not more
than 20% of TWB 5.7% 2.7% 5.7%
More than 20% of TWB but
not more than 80% of TWB 4.3% 1.3% 4.3%
More than 80% of TWB but
not more than TWB 5.4% 2.4% 5.4%
C. Allocation of Forfeitures - Forfeitures for a Plan
Year which arise as a result of the application of
Section 6.01(D) shall be allocated as follows:
1. Profit Sharing Plan - If this is a profit
sharing plan, unless the Adoption Agreement
indicates otherwise, Forfeitures shall be
allocated in the manner provided in Section
3.01(B) (for Employer Contributions) to the
Individual Accounts of Qualifying
Participants who are entitled to share in
the Employer Contribution for such Plan
Year. Forfeitures shall be allocated as of
the last day of the Plan Year during which
the Forfeiture arose (or any subsequent Plan
Year if indicated in the Adoption
Agreement).
2. Money Purchase Pension and Target Benefit
Plan - If this Plan is a money purchase plan
or a target benefit plan, unless the
Adoption Agreement indicates otherwise,
Forfeitures shall be applied towards the
reduction of Employer Contributions to the
Plan. Forfeitures shall be allocated as of
the last day of the Plan Year during which
the Forfeiture arose (or any subsequent Plan
Year if indicated in the Adoption
Agreement).
D. Timing of Employer Contribution - The Employer
Contribution for each Plan Year shall be delivered to
the Trustee (or Custodian, if applicable) not later
than the due date for filing the Employer's income
tax return for its fiscal year in which the Plan Year
ends, including extensions thereof.
E. Minimum Allocation for Top-Heavy Plans - The
contribution and allocation provisions of this
Section 3.01(E) shall apply for any Plan Year with
respect to which this Plan is a Top-Heavy Plan.
1. Except as otherwise provided in (3) and (4)
below, the Employer Contributions and
Forfeitures allocated on behalf of any
Participant who is not a Key Employee shall
not be less than the lesser of 3% of such
Participant's Compensation or (in the case
where the Employer has no defined benefit
plan which
18
37
designates this Plan to satisfy Section 401
of the Code) the largest percentage of
Employer Contributions and Forfeitures, as a
percentage of the first $200,000 ($150,000
for Plan Years beginning after December 31,
1993), (increased by any cost of living
adjustment made by the Secretary of Treasury
or the Secretary's delegate) of the Key
Employee's Compensation, allocated on behalf
of any Key Employee for that year. The
minimum allocation is determined without
regard to any Social Security contribution.
The Employer may, in the Adoption Agreement,
limit the Participants who are entitled to
receive the minimum allocation. This minimum
allocation shall be made even though under
other Plan provisions, the Participant would
not otherwise be entitled to receive an
allocation, or would have received a lesser
allocation for the year because of (a) the
Participant's failure to complete 1,000
Hours of Service (or any equivalent provided
in the Plan), or (b) the Participant's
failure to make mandatory Nondeductible
Employee Contributions to the Plan, or (c)
Compensation less than a stated amount.
2. For purposes of computing the minimum
allocation, Compensation shall mean
Compensation as defined in Section 1.07 of
the Plan and shall include any amounts
contributed by the Employer pursuant to a
salary reduction agreement and which is not
includible in the gross income of the
Employee under Sections 125, 402(e)(3),
402(h)(1)(B) or 403(b) of the Code even if
the Employer has elected to exclude such
contributions in the definition of
Compensation used for other purposes under
the Plan.
3. The provision in (1) above shall not apply
to any Participant who was not employed by
the Employer on the last day of the Plan
Year.
4. The provision in (1) above shall not apply
to any Participant to the extent the
Participant is covered under any other plan
or plans of the Employer and the Employer
has provided in the adoption agreement that
the minimum allocation or benefit
requirement applicable to Top-Heavy Plans
will be met in the other plan or plans.
5. The minimum allocation required under this
Section 3.01(E) and Section 3.0l(F)(1) (to
the extent required to be nonforfeitable
under Code Section 4 16(b)) may not be
forfeited under Code Section 41 1(a)(3)(B)
or 41 1(a)(3)(D).
F. Special Requirements for Paired Plans - The Employer
maintains paired plans if the Employer has adopted
both a standardized profit sharing plan and a
standardized money purchase pension plan using this
Basic Plan Document.
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38
1. Minimum Allocation - When the paired plans
are top-heavy, the top-heavy requirements
set forth in Section 3.01(E)(1) of the Plan
shall apply.
a. Same eligibility requirements. In
satisfying the top-heavy minimum
allocation requirements set forth in
Section 3.01(E) of the Plan, if the
Employees benefiting under each of the
paired plans are identical, the
top-heavy minimum allocation shall be
made to the money purchase pension
plan.
b. Different eligibility requirements. In
satisfying the top-heavy minimum
allocation requirements set forth in
Section 3.01(E) of the Plan, if the
Employees benefiting under each of the
paired plans are not identical, the
top-heavy minimum allocation will be
made to both of the paired plans.
A Participant is treated as benefiting
under the Plan for any Plan Year
during which the Participant received
or is deemed to receive an allocation
in accordance with
Section 1 .410(b)-3(a).
2. Only One Plan Can Be Integrated - If the
Employer maintains paired plans, only one of
the Plans may provide for the disparity in
contributions which is permitted under
Section 40 1(l) of the Code. In the event
that both Adoption Agreements provide for
such integration, only the money purchase
pension plan shall be deemed to be
integrated.
G. Return of the Employer Contribution to the Employer
Under Special Circumstances - Any contribution made
by the Employer because of a mistake of fact must be
returned to the Employer within one year of the
contribution.
In the event that the Commissioner of Internal
Revenue determines that the Plan is not initially
qualified under the Code, any contributions made
incident to that initial qualification by the
Employer must be returned to the Employer within one
year after the date the initial qualification is
denied, but only if the application for 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.
In the event that a contribution made by the Employer
under this Plan is conditioned on deductibility and
is not deductible under Code Section 404, the
contribution, to the extent of the amount disallowed,
must be returned to the Employer within one year
after the deduction is disallowed.
20
39
H. Omission of Participant
1. If the Plan is a money purchase plan or a
target benefit plan and, if in any Plan
Year, any Employee who should be included as
a Participant is erroneously omitted and
discovery of such omission is not made until
after a contribution by the Employer for the
year has been made and allocated, the
Employer shall make a subsequent
contribution to include earnings thereon,
with respect to the omitted Employee in the
amount which the Employer would have
contributed with respect to that Employee
had he or she not been omitted.
2. If the Plan is a profit sharing plan, and if
in any Plan Year, any Employee who should be
included as a Participant is erroneously
omitted and discovery of such omission is
not made until after the Employer
Contribution has been made and allocated,
then the Plan Administrator must re-do the
allocation (if a correction can be made) and
inform the Employee. Alternatively, the
Employer may choose to contribute for the
omitted Employee the amount to include
earnings thereon, which the Employer would
have contributed for the Employee.
3.02 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
This Plan will not accept Nondeductible Employee Contributions
and matching contributions for Plan Years beginning after the
Plan Year in which this Plan is adopted by the Employer.
Nondeductible Employee Contributions for Plan Years beginning
after December 31, 1986, together with any matching
contributions as defined in Section 401(m) of the Code, will
be limited so as to meet the nondiscrimination test of Section
40 1(m) of the Code.
A separate account will be maintained by the Plan
Administrator for the Nondeductible Employee Contributions of
each Participant.
A Participant may, upon a written request submitted to the
Plan Administrator withdraw the lesser of the portion of his
or her Individual Account attributable to his or her
Nondeductible Employee Contributions or the amount he or she
contributed as Nondeductible Employee Contributions.
Nondeductible Employee Contributions and earnings thereon will
be nonforfeitable at all times. No Forfeiture will occur
solely as a result of an Employee's withdrawal of
Nondeductible Employee Contributions.
The Plan Administrator will not accept deductible employee
contributions which are made for a taxable year beginning
after December 31, 1986. Contributions made prior to that date
will be maintained in a separate account which will be
nonforfeitable at all times. The account will share in the
gains and losses of the Fund in the same manner as described
in Section 4.03 of the Plan. No part of the deductible
employee contribution account will be used to purchase life
insurance. Subject to Section 6.05, joint and survivor annuity
requirements (if applicable),
21
40
the Participant may withdraw any part of the deductible
employee contribution account by making a written application
to the Plan Administrator.
3.03 ROLLOVER CONTRIBUTIONS
If so indicated in the Adoption Agreement, an Employee may
contribute a rollover contribution to the Plan. The Plan
Administrator may require the Employee to submit a written
certification that the contribution qualifies as a rollover
contribution under the applicable provisions of the Code. If
it is later determined that all or part of a rollover
contribution was ineligible to be rolled into the Plan, the
Plan Administrator shall direct that any ineligible amounts,
plus earnings attributable thereto, be distributed from the
Plan to the Employee as soon as administratively feasible.
A separate account shall be maintained by the Plan
Administrator for each Employee's rollover contributions which
will be nonforfeitable at all times. Such account will share
in the income and gains and losses of the Fund in the manner
described in Section 4.03 and shall be subject to the Plan's
provisions governing distributions.
The Employer may, in a uniform and nondiscriminatory manner,
only allow Employees who have become Participants in the Plan
to make rollover contributions.
3.04 TRANSFER CONTRIBUTIONS
If so indicated in the Adoption Agreement, the Trustee (or
Custodian, if applicable) may receive any amounts transferred
to it from the trustee or custodian of another plan qualified
under Code Section 40 1(a). If it is later determined that all
or part of a transfer contribution was ineligible to be
transferred into the Plan, the Plan Administrator shall direct
that any ineligible amounts, plus earnings attributable
thereto, be distributed from the Plan to the Employee as soon
as administratively feasible.
A separate account shall be maintained by the Plan
Administrator for each Employee's transfer contributions which
will be nonforfeitable at all times. Such account will share
in the income and gains and losses of the Fund in the manner
described in Section 4.03 and shall be subject to the Plan's
provisions governing distributions.
The Employer may, in a uniform and nondiscriminatory manner,
only allow Employees who have become Participants in the Plan
to make transfer contributions.
3.05 LIMITATION ON ALLOCATIONS
A. If the Participant does not participate in, and has
never participated in another qualified plan
maintained by the Employer or a welfare benefit fund,
as defined in Section 4 19(e) of the Code maintained
by the Employer, or an individual medical account, as
defined
22
41
in Section 415(l)(2) of the Code, or a simplified
employee pension plan, as defined in Section 408(k)
of the Code, maintained by the Employer, which
provides an annual addition as defined in Section
3.08(E)(l), the following rules shall apply:
1. The amount of annual additions which may be
credited to the Participant's Individual
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 Individual Account
would cause the annual additions for the
limitation year to exceed the maximum
permissible amount, the amount contributed
or allocated will be reduced so that the
annual additions for the limitation year
will equal the maximum permissible amount.
2. Prior to determining the Participant's
actual Compensation for the limitation year,
the Employer may determine the maximum
permissible amount for a Participant on the
basis of a reasonable estimation of the
Participant's Compensation for the
limitation year, uniformly determined for
all Participants similarly situated.
3. As soon as is administratively feasible
after the end of the limitation year, the
maximum permissible amount for the
limitation year will be determined on the
basis of the Participant's actual
Compensation for the limitation year.
4. If pursuant to Section 3.05(A)(3) or as a
result of the allocation of Forfeitures
there is an excess amount, the excess will
be disposed of as follows:
a. Any Nondeductible Employee
Contributions, to the extent they
would reduce the excess amount, will
be returned to the Participant;
b. If after the application of paragraph
(a) an excess amount still exists, and
the Participant is covered by the Plan
at the end of the limitation year, the
excess amount in the Participant's
Individual Account will be used to
reduce Employer Contributions
(including any allocation of
Forfeitures) for such Participant in
the next limitation year, and each
succeeding limitation year if
necessary;
c. If after the application of paragraph
(b) an excess amount still exists, and
the Participant is not covered by the
Plan at the end of a limitation year,
the excess amount will be held
unallocated in a suspense account. The
suspense account will be applied to
reduce future Employer Contributions
(including allocation of any
Forfeitures) for all remaining
Participants in the next limitation
year, and each succeeding limitation
year if necessary;
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42
d. If a suspense account is in existence
at any time during a limitation year
pursuant to this Section, it will not
participate in the allocation of the
Fund's investment gains and losses. If
a suspense account is in existence at
any time during a particular
limitation year, all amounts in the
suspense account must be allocated and
reallocated to Participants'
Individual Accounts before any
Employer Contributions or any
Nondeductible Employee Contributions
may be made to the Plan for that
limitation year. Excess amounts may
not be distributed to Participants or
former Participants.
B. If, in addition to this Plan, the Participant is
covered under another qualified master or prototype
defined contribution plan maintained by the Employer,
a welfare benefit fund maintained by the Employer, an
individual medical account maintained by the
Employer, or a simplified employee pension maintained
by the Employer that provides an annual addition as
defined in Section 3.05(E)(1), during any limitation
year the following rules apply:
1. The annual additions which may be credited
to a Participant's Individual Account under
this Plan for any such limitation year will
not exceed the maximum permissible amount
reduced by the annual additions credited to
a Participant's Individual Account under the
other qualified master or prototype plans,
welfare benefit funds, individual medical
accounts and simplified employee pensions
for the same limitation year. If the annual
additions with respect to the Participant
under other qualified master or prototype
defined contribution plans, welfare benefit
funds, individual medical accounts and
simplified employee pensions maintained by
the Employer are less than the maximum
permissible amount and the Employer
Contribution that would otherwise be
contributed or allocated to the
Participant's Individual Account under this
Plan would cause the annual additions for
the limitation year to exceed this
limitation, the amount contributed or
allocated will be reduced so that the annual
additions under all such plans and funds for
the limitation year will equal the maximum
permissible amount. If the annual additions
with respect to the Participant under such
other qualified master or prototype defined
contribution plans, welfare benefit funds,
individual medical accounts and simplified
employee pensions in the aggregate are equal
to or greater than the maximum permissible
amount, no amount will be contributed or
allocated to the Participant's Individual
Account under this Plan for the limitation
year.
2. Prior to determining the Participant's
actual Compensation for the limitation year,
the Employer may determine the maximum
permissible amount for a Participant in the
manner described in Section 3.05(A)(2).
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43
3. As soon as is administratively feasible
after the end of the limitation year, the
maximum permissible amount for the
limitation year will be determined on the
basis of the Participant's actual
Compensation for the limitation year.
4. If, pursuant to Section 3.05(B)(3) or as a
result of the allocation of Forfeitures a
Participant's annual additions under this
Plan and such other plans would result in an
excess amount for a limitation year, the
excess amount will be deemed to consist of'
the annual additions last allocated, except
that annual additions attributable to a
simplified employee pension will be deemed
to have been allocated first, followed by
annual additions to a welfare benefit fund
or individual medical account, regardless of
the actual allocation date.
5. If an excess amount was allocated to a
Participant on an allocation date of this
Plan which coincides with an allocation date
of another plan, the excess amount
attributed to this Plan will be the product
of,
a. the total excess amount allocated as
of such date, times
b. the ratio of (i) the annual additions
allocated to the Participant for the
limitation year as of such date under
this Plan to (ii) the total annual
additions allocated to the Participant
for the limitation year as of such
date under this and all the other
qualified prototype defined
contribution plans.
6. Any excess amount attributed to this Plan
will be disposed in the manner described in
Section 3.05(A)(4).
C. If the Participant is covered under another qualified
defined contribution plan maintained by the Employer
which is not a master or prototype plan, annual
additions which may be credited to the Participant's
Individual Account under this Plan for any limitation
year will be limited in accordance with Sections
3.05(B)(l) through 3.05(B)(6) as though the other
plan were a master or prototype plan unless the
Employer provides other limitations in the Section of
the Adoption Agreement titled "Limitation on
Allocation - More Than One Plan."
D. If the Employer maintains, or at any time maintained,
a qualified defined benefit plan covering any
Participant in this Plan, the sum of the
Participant's defined benefit plan fraction and
defined contribution plan fraction will not exceed
1.0 in any limitation year. The ANNUAL additions
which may be credited to the Participant's Individual
Account under this Plan for any limitation year will
be limited in accordance with the Section of the
Adoption Agreement titled "Limitation on Allocation -
More Than One Plan."
25
44
E. The following terms shall have the following meanings
when used in this Section 3.05:
1. Annual additions: The sum of the following
amounts credited to a Participant's
Individual Account for the limitation year:
a. Employer Contributions,
b. Nondeductible Employee Contributions,
c. Forfeitures,
d. amounts allocated, after March 31,
1984, to an individual medical
account, as defined in Section
415(l)(2) of the Code, which is part
of a pension or annuity plan
maintained by the Employer are treated
as annual additions to a defined
contribution plan. Also amounts
derived from contributions paid or
accrued after December 31, 1985, in
taxable years ending after such date,
which are attributable to
post-retirement medical benefits,
allocated to the separate account of a
key employee, as defined in Section
419A(d)(3) of the Code, under a
welfare benefit fund, as defined in
Section 4 19(e) of the Code,
maintained by the Employer are treated
as annual additions to a defined
contribution plan, and
e. allocations under a simplified
employee pension.
For this purpose, any excess amount applied
under Section 3.05(A)(4) or 3.05(B)(6) in
the limitation year to reduce Employer
Contributions will be considered annual
additions for such limitation year.
2. Compensation: Means Compensation as defined
in Section 1.07 of the Plan except that
Compensation for purposes of this Section
3.05 shall not include any amounts
contributed by the Employer pursuant to a
salary reduction agreement and which is not
includible in the gross income of the
Employee under Sections 125, 402(e)(3),
402(h)(1)(B) or 403(b) of the Code even if
the Employer has elected to include such
contributions in the definition of
Compensation used for other purposes under
the Plan. Further, any other exclusion the
Employer has elected (such as the exclusion
of certain types of pay or pay earned before
the Employee enters the Plan) will not apply
for purposes of this Section.
Notwithstanding the preceding sentence,
Compensation for a Participant in a defined
contribution plan who is permanently and
totally disabled (as defined in Section
22(e)(3) of the Code) is the Compensation
such Participant would have received for
26
45
the limitation year if the Participant had
been paid at the rate of Compensation paid
immediately before becoming permanently and
totally disabled; such imputed Compensation
for the disabled Participant may be taken
into account only if the Participant is not
a Highly Compensated Employee (as defined in
Section 414(q) of the Code) and
contributions made on behalf of such
Participant are nonforfeitable when made.
3. Defined benefit fraction: A fraction, the
numerator of which is the sum of the
Participant's projected annual benefits
under all the defined benefit plans (whether
or not terminated) maintained by the
Employer, and the denominator of which is
the lesser of 125% of the dollar limitation
determined for the limitation year under
Section 4 15(b) and (d) of the Code or 140%
of the highest average compensation,
including any adjustments under Section
415(b) of the Code.
Notwithstanding the above, if the
Participant was a Participant as of the
first day of the first limitation year
beginning after December 31, 1986, in one or
more defined benefit plans maintained by the
Employer which were in existence on May 6,
1986, the denominator of this fraction will
not be less than 125% of the sum of the
annual benefits under such plans which the
Participant had accrued as of the close of
the last limitation year beginning before
January 1, 1987, disregarding any changes in
the terms and conditions of the plan after
May 5, 1986. The preceding sentence applies
only if the defined benefit plans
individually and in the aggregate satisfied
the requirements of Section 415 of the Code
for all limitation years beginning before
January 1, 1987.
4. Defined contribution dollar limitation:
$30,000 or if greater, one-fourth of the
defined benefit dollar limitation set forth
in Section 415(b)(l) of the Code as in
effect for the limitation year.
5. Defined contribution fraction: A fraction,
the numerator of which is the sum of the
annual additions to the Participant's
account under all the defined contribution
plans (whether or not terminated) maintained
by the Employer for the current and all
prior limitation years (including the ANNUAL
additions attributable to the Participant's
nondeductible employee contributions to all
defined benefit plans, whether or not
terminated, maintained by the Employer, and
the animal additions attributable to all
welfare benefit funds, as defined in Section
419(e) of the Code, individual medical
accounts, and simplified employee pensions,
maintained by the Employer), and the
denominator of which is the sum of the
maximum aggregate amounts for the current
and all prior limitation years of service
with the Employer (regardless of whether a
defined contribution plan was maintained by
the Employer). The maximum aggregate amount
in any limitation year is the lesser of 125%
of the dollar
27
46
limitation determined under Section 4 15(b)
and (d) of the Code in effect under Section
415(c)(l)(A) of the Code or 35% of the
Participant's Compensation for such year.
If the Employee was a Participant as of the
end of the first day of the first limitation
year beginning after December 31, 1986, in
one or more defined contribution plans
maintained by the Employer which were in
existence on May 6, 1986, the numerator of
this fraction will be adjusted if the sum of
this fraction and the defined benefit
fraction would otherwise exceed 1.0 under
the terms of this Plan. Under the
adjustment, an amount equal to the product
of (1) the excess of the sum of the
fractions over 1.0 times (2) the denominator
of this fraction, will be permanently
subtracted from the numerator of this
fraction. The adjustment is calculated using
the fractions as they would be computed as
of the end of the last limitation year
beginning before January 1, 1987, and
disregarding any changes in the terms and
conditions of the Plan made after May 5,
1986, but using the Section 415 limitation
applicable to the first limitation year
beginning on or after January 1, 1987.
The annual addition for any limitation year
beginning before January 1, 1987, shall not
be recomputed to treat all Nondeductible
Employee Contributions as annual additions.
6. Employer: For purposes of this Section 3.05,
Employer shall mean the Employer that adopts
this Plan, and all members of a controlled
group of corporations (as defined in Section
4 14(b) of the Code as modified by Section
415(h)), all commonly controlled trades or
businesses (as defined in Section 414(c) as
modified by Section 4 15(b)) or affiliated
service groups (as defined in Section
414(m)) of which the adopting Employer is a
part, and any other entity required to be
aggregated with the Employer pursuant to
regulations under Section 414(o) of the
Code.
7. Excess amount: The excess of the
Participant's annual additions for the
limitation year over the maximum permissible
amount.
8. Highest average compensation: The average
compensation for the three consecutive years
of service with the Employer that produces
the highest average.
9. Limitation year: A calendar year, or the
12-consecutive month period elected by the
Employer in the Adoption Agreement. All
qualified plans maintained by the Employer
must use the same limitation year. If the
limitation year is amended to a different
12-consecutive month period, the new
limitation year must begin on a date within
the limitation year in which the amendment
is made.
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47
10. Master or prototype plan: A plan the form of
which is the subject of a favorable opinion
letter from the Internal Revenue Service.
11. Maximum permissible amount: The maximum
annual addition that may be contributed or
allocated to a Participant's Individual
Account under the Plan for any limitation
year 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
Section 401(h) or Section 419A(f)(2) of the
Code) which is otherwise treated as an
annual addition under Section 415(l)(1) or
419A(d)(2) of the Code.
If a short limitation year is created
because of an amendment changing the
limitation year to a different
12-consecutive month period, the maximum
permissible amount will not exceed the
defined contribution dollar limitation
multiplied by the following fraction:
Number of months in the short limitation year
---------------------------------------------
12
12. Projected annual benefit: The annual
retirement benefit (adjusted to an
actuarially equivalent straight life annuity
if such benefit is expressed in a form other
than a straight life annuity or qualified
joint and survivor annuity) to which the
Participant would be entitled under the
terms of the Plan assuming:
a. the Participant will continue
employment until Normal Retirement Age
under the Plan (or current age, if
later), and
b. the Participant's Compensation for the
current limitation year and all other
relevant factors used to determine
benefits under the Plan will remain
constant for all future limitation
years.
Straight life annuity means an annuity
payable in equal installments for the life
of the Participant that terminates upon the
Participants' death.
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SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
4.01 INDIVIDUAL ACCOUNTS
A. The Plan Administrator shall establish and maintain
an Individual Account in the name of each Participant
to reflect the total value of his or her interest in
the Fund. Each Individual Account established
hereunder shall consist of such subaccounts as may be
needed for each Participant including:
1. a subaccount to reflect Employer
Contributions and Forfeitures allocated on
behalf of a Participant;
2. a subaccount to reflect a Participant's
rollover contributions;
3. a subaccount to reflect a Participant's
transfer contributions;
4. a subaccount to reflect a Participant's
Nondeductible Employee Contributions; and
5. a subaccount to reflect a Participant's
deductible employee contributions.
B. The Plan Administrator may establish additional
accounts as it may deem necessary for the proper
administration of the Plan, including, but not
limited to, a suspense account for Forfeitures as
required pursuant to Section 6.01(D).
4.02 VALUATION OF FUND
The Fund will be valued each Valuation Date at fair market
value.
4.03 VALUATION OF INDIVIDUAL ACCOUNTS
A. Where all or a portion of the assets of a
Participant's Individual Account are invested in a
Separate Fund for the Participant, then the value of
that portion of such Participant's Individual Account
at any relevant time equals the sum of the fair
market values of the assets in such Separate Fund,
less any applicable charges or penalties.
B. The fair market value of the remainder of each
Individual Account is determined in the following
manner:
1. First, the portion of the Individual Account
invested in each Investment Fund as of the
previous Valuation Date is determined. Each
such portion is reduced by any withdrawal
made from the applicable Investment Fund to
or for the benefit of a Participant or the
Participant's Beneficiary, further reduced
by any amounts forfeited by the Participant
pursuant to Section 6.01(D) and further
reduced by any transfer to another
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49
Investment Fund since the previous Valuation
Date and is increased by any amount
transferred from another Investment Fund
since the previous Valuation Date. The
resulting amounts are the net Individual
Account portions invested in the Investment
Funds.
2. Secondly, the net Individual Account
portions invested in each Investment Fund
are adjusted upwards or downwards, pro rata
(i.e., ratio of each net Individual Account
portion to the sum of all net Individual
Account portions) so that the sum of all the
net Individual Account portions invested in
an Investment Fund will equal the then fair
market value of the Investment Fund.
Notwithstanding the previous sentence, for
the first Plan Year only, the net Individual
Account portions shall be the sum of all
contributions made to each Participant's
Individual Account during the first Plan
Year.
3. Thirdly, any contributions to the Plan and
Forfeitures are allocated in accordance with
the appropriate allocation provisions of
Section 3. For purposes of Section 4,
contributions made by the Employer for any
Plan Year but after that Plan Year will be
considered to have been made on the last day
of that Plan Year regardless of when paid to
the Trustee (or Custodian, if applicable):
Amounts contributed between Valuation Dates
will not be credited with investment gains
or losses until the next following Valuation
Date.
4. Finally, the portions of the Individual
Account invested in each Investment Fund
(determined in accordance with (1), (2) and
(3) above) are added together.
4.04 MODIFICATION OF METHOD FOR VALUING INDIVIDUAL ACCOUNTS
If necessary or appropriate, the Plan Administrator may
establish different or additional procedures (which shall be
uniform and nondiscriminatory) for determining the fair market
value of the Individual Accounts.
4.05 SEGREGATION OF ASSETS
If a Participant elects a mode of distribution other than a
lump sum, the Plan Administrator may place that Participant's
account balance into a segregated Investment Fund for the
purpose of maintaining the necessary liquidity to provide
benefit installments on a periodic basis.
4.06 STATEMENT OF INDIVIDUAL ACCOUNTS
No later than 270 days after the close of each Plan Year, the
Plan Administrator shall furnish a statement to each
Participant indicating the Individual Account balances of such
Participant as of the last Valuation Date in such Plan Year.
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SECTION FIVE TRUSTEE OR CUSTODIAN
5.01 CREATION OF FUND
By adopting this Plan, the Employer establishes the Fund which
shall consist of the assets of the Plan held by the Trustee
(or Custodian, if applicable) pursuant to this Section 5.
Assets within the Fund may be pooled on behalf of all
Participants, earmarked on behalf of each Participant or be a
combination of pooled and earmarked. To the extent that assets
are earmarked for a particular Participant, they will be held
in a Separate Fund for that Participant.
No part of the corpus or income of the Fund may be used for,
or diverted to, purposes other than for the exclusive benefit
of Participants or their Beneficiaries.
5.02 INVESTMENT AUTHORITY
Except as provided in Section 5.14 (relating to individual
direction of investments by Participants), the Employer, not
the Trustee (or Custodian, if applicable), shall have
exclusive management and control over the investment of the
Fund into any permitted investment. Notwithstanding the
preceding sentence, a Trustee may make an agreement with the
Employer whereby the Trustee will manage the investment of all
or a portion of the Fund. Any such agreement shall be in
writing and set forth such matters as the Trustee deems
necessary or desirable.
5.03 FINANCIAL ORGANIZATION CUSTODIAN OR TRUSTEE WITHOUT FULL TRUST
POWERS
This Section 5.03 applies where a financial organization has
indicated in the Adoption Agreement that it will serve, with
respect to this Plan, as Custodian or as Trustee without full
trust powers (under applicable law). Hereinafter, a financial
organization Trustee without full trust powers (under
applicable law) shall be referred to as a Custodian. The
Custodian shall have no discretionary authority with respect
to the management of the Plan or the Fund but will act only as
directed by the entity who has such authority.
A. Permissible Investments - The assets of the Plan
shall be invested only in those investments which are
available through the Custodian in the ordinary
course of business which the Custodian may legally
hold in a qualified plan and which the Custodian
chooses to make available to Employers for qualified
plan investments. Notwithstanding the preceding
sentence, the Prototype Sponsor may, as a condition
of making the Plan available to the Employer, limit
the types of property in which the assets of the Plan
may be invested.
B. Responsibilities of the Custodian - The
responsibilities of the Custodian shall be limited to
the following:
1. To receive Plan contributions and to hold,
invest and reinvest the Fund without
distinction between principal and interest;
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provided, however, that nothing in this Plan
shall require the Custodian to maintain
physical custody of stock certificates (or
other indicia of ownership of any type of
asset) representing assets within the Fund;
2. To maintain accurate records of
contributions, earnings, withdrawals and
other information the Custodian deems
relevant with respect to the Plan;
3. To make disbursements from the Fund to
Participants or Beneficiaries upon the
proper authorization of the Plan
Administrator; and
4. To furnish to the Plan Administrator a
statement which reflects the value of the
investments in the hands of the Custodian as
of the end of each Plan Year and as of any
other times as the Custodian and Plan
Administrator may agree.
▇. ▇▇▇▇▇▇ of the Custodian - Except as otherwise
provided in this Plan, the Custodian shall have the
power to take any action with respect to the Fund
which it deems necessary or advisable to discharge
its responsibilities under this Plan including, but
not limited to, the following powers:
1. To invest all or a portion of the Fund
(including idle cash balances) in time
deposits, savings accounts, money market
accounts or similar investments bearing a
reasonable rate of interest in the
Custodian's own savings department or the
savings department of another financial
organization;
2. To vote upon any stocks, bonds, or other
securities; to give general or special
proxies or powers of attorney with or
without power of substitution; to exercise
any conversion privileges or subscription
rights and to make any payments incidental
thereto; to oppose, or to consent to, or
otherwise participate in, corporate
reorganizations or other changes affecting
corporate securities, and to pay any
assessment or charges in connection
therewith; and generally to exercise any of
the powers of an owner with respect to
stocks, bonds, securities or other property;
3. To hold securities or other property of the
Fund in its own name, in the name of its
nominee or in bearer form; and
4. To make, execute, acknowledge, and deliver
any and all documents of transfer and
conveyance and any and all other instruments
that may be necessary or appropriate to
carry out the powers herein granted.
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5.04 FINANCIAL ORGANIZATION TRUSTEE WITH FULL TRUST POWERS AND
INDIVIDUAL TRUSTEE
This Section 5.04 applies where a financial organization has
indicated in the Adoption Agreement that it will serve as
Trustee with full trust powers. This Section also applies
where one or more individuals are named in the Adoption
Agreement to serve as Trustee(s).
A. Permissible Investments - The Trustee may invest the
assets of the Plan in property of any character, real
or personal, including, but not limited to the
following: stocks, including shares of open-end
investment companies (mutual funds); bonds; notes;
debentures; options; limited partnership interests;
mortgages; real estate or any interests therein; unit
investment trusts; Treasury Bills, and other U.S.
Government obligations; common trust funds, combined
investment trusts, collective trust funds or
commingled funds maintained by a bank or similar
financial organization (whether or not the Trustee
hereunder); savings accounts, time deposits or money
market accounts of a bank or similar financial
organization (whether or not the Trustee hereunder);
annuity contracts; life insurance policies; or in
such other investments as is deemed proper without
regard to investments authorized by statute or rule
of law governing the investment of trust funds but
with regard to ERISA and this Plan.
Notwithstanding the preceding sentence, the Prototype
Sponsor may, as a condition of making the Plan
available to the Employer, limit the types of
property in which the assets of the Plan may be
invested.
B. Responsibilities of the Trustee - The
responsibilities of the Trustee shall be limited to
the following:
1. To receive Plan contributions and to hold,
invest and reinvest the Fund without
distinction between principal and interest;
provided, however, that nothing in this Plan
shall require the Trustee to maintain
physical custody of stock certificates (or
other indicia of ownership) representing
assets within the Fund;
2. To maintain accurate records of
contributions, earnings, withdrawals and
other information the Trustee deems relevant
with respect to the Plan;
3. To make disbursements from the Fund to
Participants or Beneficiaries upon the
proper authorization of the Plan
Administrator; and
4. To furnish to the Plan Administrator a
statement which reflects the value of the
investments in the hands of the Trustee as
of the end of each Plan Year and as of any
other times as the Trustee and Plan
Administrator may agree.
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▇. ▇▇▇▇▇▇ of the Trustee - Except as otherwise provided
in this Plan, the Trustee shall have the power to
take any action with respect to the Fund which it
deems necessary or advisable to discharge its
responsibilities under this Plan including, but not
limited to, the following powers:
1. To hold any securities or other property of
the Fund in its own name, in the name of its
nominee or in bearer form;
2. To purchase or subscribe for securities
issued, or real property owned, by the
Employer or any trade or business under
common control with the Employer but only if
the prudent investment and diversification
requirements of ERISA are satisfied;
3. To sell, exchange, convey, transfer or
otherwise dispose of any securities or other
property held by the Trustee, by private
contract or at public auction. No person
dealing with the Trustee shall be bound to
see to the application of the purchase money
or to inquire into the validity, expediency,
or propriety of any such sale or other
disposition, with or without advertisement;
4. To vote upon any stocks, bonds, or other
securities; to give general or special
proxies or powers of attorney with or
without power of substitution; to exercise
any conversion privileges or subscription
rights and to make any payments incidental
thereto; to oppose, or to consent to, or
otherwise participate in, corporate
reorganizations or other changes affecting
corporate securities, and to delegate
discretionary powers, and to pay any
assessments or charges in connection
therewith; and generally to exercise any of
the powers of an owner with respect to
stocks, bonds, securities or other property;
5. To invest any part or all of the Fund
(including idle cash balances) in
certificates of deposit, demand or time
deposits, savings accounts, money market
accounts or similar investments of the
Trustee (if the Trustee is a bank or similar
financial organization), the Prototype
Sponsor or any affiliate of such Trustee or
Prototype Sponsor, which bear a reasonable
rate of interest;
6. To provide sweep services without the
receipt by the Trustee of additional
compensation or other consideration (other
than reimbursement of direct expenses
properly and actually incurred in the
performance of such services);
7. To hold in the form of cash for distribution
or investment such portion of the Fund as,
at any time and from time-to-time, the
Trustee shall deem prudent and deposit such
cash in interest bearing or noninterest
bearing accounts;
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8. To make, execute, acknowledge, and deliver
any and all documents of transfer and
conveyance and any and all other instruments
that may be necessary or appropriate to
carry out the powers herein granted;
9. To settle, compromise, or submit to
arbitration any claims, debts, or damages
due or owing to or from the Plan, to
commence or defend suits or legal or
administrative proceedings, and to represent
the Plan in all suits and legal and
administrative proceedings;
10. To employ suitable agents and counsel, to
contract with agents to perform
administrative and recordkeeping duties and
to pay their reasonable expenses, fees and
compensation, and such agent or counsel may
or may not be agent or counsel for the
Employer;
11. To cause any part or all of the Fund,
without limitation as to amount, to be
commingled with the funds of other trusts
(including trusts for qualified employee
benefit plans) by causing such money to be
invested as a part of any pooled, common,
collective or commingled trust fund
(including any such fund described in the
Adoption Agreement) heretofore or hereafter
created by any Trustee (if the Trustee is a
bank), by the Prototype Sponsor, by any
affiliate bank of such a Trustee or by such
a Trustee or the Prototype Sponsor, or by
such an affiliate in participation with
others; the instrument or instruments
establishing such trust fund or funds, as
amended, being made part of this Plan and
trust so long as any portion of the Fund
shall be invested through the medium
thereof; and
12. Generally to do all such acts, execute all
such instruments, initiate such proceedings,
and exercise all such rights and privileges
with relation to property constituting the
Fund as if the Trustee were the absolute
owner thereof.
5.05 DIVISION OF FUND INTO INVESTMENT FUNDS
The Employer may direct the Trustee (or Custodian) from
time-to-time to divide and redivide the Fund into one or more
Investment Funds. Such Investment Funds may include, but not
be limited to, Investment Funds representing the assets under
the control of an investment manager pursuant to Section 5.12
and Investment Funds representing investment options available
for individual direction by Participants pursuant to Section
5.14. Upon each division or redivision, the Employer may
specify the part of the Fund to be allocated to each such
Investment Fund and the terms and conditions, if any, under
which the assets in such Investment Fund shall be invested.
5.06 COMPENSATION AND EXPENSES
The Trustee (or Custodian, if applicable) shall receive such
reasonable compensation as may be agreed upon by the Trustee
(or Custodian) and the
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Employer. The Trustee (or Custodian) shall be entitled to
reimbursement by the Employer for all proper expenses incurred
in carrying out his or her duties under this Plan, including
reasonable legal, accounting and actuarial expenses. If not
paid by the Employer, such compensation and expenses may be
charged against the Fund.
All taxes of any kind that may be levied or assessed under
existing or future laws upon, or in respect of, the Fund or
the income thereof shall be paid from the Fund.
5.07 NOT OBLIGATED TO QUESTION DATA
The Employer shall furnish the Trustee (or Custodian, if
applicable) and Plan Administrator the information which each
party deems necessary for the administration of the Plan
including, but not limited to, changes in a Participant's
status, eligibility, mailing addresses and other such data as
may be required. The Trustee (or Custodian) and Plan
Administrator shall be entitled to act on such information as
is supplied them and shall have no duty or responsibility to
further verify or question such information.
5.08 LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS
The Plan Administrator shall be responsible for withholding
federal income taxes from distributions from the Plan, unless
the Participant (or Beneficiary, where applicable) elects not
to have such taxes withheld. The Trustee (or Custodian) or
other payor may act as agent for the Plan Administrator to
withhold such taxes and to make the appropriate distribution
reports, if the Plan Administrator furnishes all the
information to the Trustee (or Custodian) or other payor it
may need to do withholding and reporting.
5.09 RESIGNATION OR REMOVAL OF TRUSTEE (OR CUSTODIAN)
The Trustee (or Custodian, if applicable) may resign at any
time by giving 30 days advance written notice to the Employer.
The resignation shall become effective 30 days after receipt
of such notice unless a shorter period is agreed upon.
The Employer may remove any Trustee (or Custodian) at any time
by giving written notice to such Trustee (or Custodian) and
such removal shall be effective 30 days after receipt of such
notice unless a shorter period is agreed upon. The Employer
shall have the power to appoint a successor Trustee (or
Custodian).
Upon such resignation or removal, if the resigning or removed
Trustee (or Custodian) is the sole Trustee (or Custodian), he
or she shall transfer all of the assets of the Fund then held
by such Trustee (or Custodian) as expeditiously as possible to
the successor Trustee (or Custodian) after paying or reserving
such reasonable amount as he or she shall deem necessary to
provide for the expense in the settlement of the accounts and
the amount of any compensation due him or her and any sums
chargeable against the Fund for which he or she may be liable.
If the Funds as reserved are not sufficient for such purpose,
then he or she shall be entitled to reimbursement from the
successor Trustee (or Custodian) out of the
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assets in the successor Trustee's (or Custodian's) hands under
this Plan. If the amount reserved shall be in excess of the
amount actually needed, the former Trustee (or Custodian)
shall return such excess to the successor Trustee (or
Custodian).
Upon receipt of the transferred assets, the successor Trustee
(or Custodian) shall thereupon succeed to all of the powers
and responsibilities given to the Trustee (or Custodian) by
this Plan.
The resigning or removed Trustee (or Custodian) shall render
an accounting to the Employer and unless objected to by the
Employer within 30 days of its receipt, the accounting shall
be deemed to have been approved and the resigning or removed
Trustee (or Custodian) shall be released and discharged as to
all matters set forth in the accounting. Where a financial
organization is serving as Trustee (or Custodian) and it is
merged with or bought by another organization (or comes under
the control of any federal or state agency), that organization
shall serve as the successor Trustee (or Custodian) of this
Plan, but only if it is the type of organization that can so
serve under applicable law.
Where the Trustee or Custodian is serving as a nonbank trustee
or custodian pursuant to Section 1.401-12(n) of the Income Tax
Regulations, the Employer will appoint a successor Trustee (or
Custodian) upon notification by the Commissioner of Internal
Revenue that such substitution is required because the Trustee
(or Custodian) has failed to comply with the requirements of
Section 1.401-12(n) or is not keeping such records or making
such returns or rendering such statements as are required by
forms or regulations.
5.10 DEGREE OF CARE - LIMITATIONS OF LIABILITY
The Trustee (or Custodian) shall not be liable for any losses
incurred by the Fund by any direction to invest communicated
by the Employer, Plan Administrator, investment manager
appointed pursuant to Section 5.12 or any Participant or
Beneficiary. The Trustee (or Custodian) shall be under no
liability for distributions made or other action taken or not
taken at the written direction of the Plan Administrator. It
is specifically understood that the Trustee (or Custodian)
shall have no duty or responsibility with respect to the
determination of matters pertaining to the eligibility of any
Employee to become a Participant or remain a Participant
hereunder, the amount of benefit to which a Participant or
Beneficiary shall be entitled to receive hereunder, whether a
distribution to Participant or Beneficiary is appropriate
under the terms of the Plan or the size and type of any policy
to be purchased from any insurer for any Participant hereunder
or similar matters; it being understood that all such
responsibilities under the Plan are vested in the Plan
Administrator.
5.11 INDEMNIFICATION OF PROTOTYPE SPONSOR AND TRUSTEE (OR
CUSTODIAN)
Notwithstanding any other provision herein, and except as may
be otherwise provided by ERISA, the Employer shall indemnify
and hold harmless the Trustee (or Custodian, if applicable)
and the Prototype Sponsor, their officers, directors,
employees, agents, their heirs, executors, successors and
assigns, from and
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against any and all liabilities, damages, judgments,
settlements, losses, costs, charges, or expenses (including
legal expenses) at any time arising out of or incurred in
connection with any action taken by such parties in the
performance of their duties with respect to this Plan, unless
there has been a final adjudication of gross negligence or
willful misconduct in the performance of such duties.
Further, except as may be otherwise provided by ERISA, the
Employer will indemnify the Trustee (or Custodian) and
Prototype Sponsor from any liability, claim or expense
(including legal expense) which the Trustee (or Custodian) and
Prototype Sponsor shall incur by reason of or which results,
in whole or in part, from the Trustee's (or Custodian's) or
Prototype Sponsor's reliance on the facts and other directions
and elections the Employer communicates or fails to
communicate.
5.12 INVESTMENT MANAGERS
A. Definition of Investment Manager - The Employer may
appoint one or more investment managers to make
investment decisions with respect to all or a portion
of the Fund. The investment manager shall be any firm
or individual registered as an investment adviser
under the Investment Advisers Act of 1940, a bank as
defined in said Act or an insurance company qualified
under the laws of more than one state to perform
services consisting of the management, acquisition or
disposition of any assets of the Plan.
B. Investment Manager's Authority - A separate
Investment Fund shall be established representing the
assets of the Fund invested at the direction of the
investment manager. The investment manager so
appointed shall direct the Trustee (or Custodian, if
applicable ) with respect to the investment of such
Investment Fund. The investments which may be
acquired at the direction of the investment manager
are those described in Section 5.03(A) (for
Custodians) or Section 5.04(A) (for Trustees).
C. Written Agreement - The appointment of any investment
manager shall be by written agreement between the
Employer and the investment manager and a copy of
such agreement (and any modification or termination
thereof) must be given to the Trustee (or Custodian).
The agreement shall set forth, among other matters, the
effective date of the investment manager's appointment and an
acknowledgement by the investment manager that it is a
fiduciary of the Plan under ERISA.
D. Concerning the Trustee (or Custodian) - Written
notice of each appointment of an investment manager
shall be given to the Trustee (or Custodian) in
advance of the effective date of such appointment.
Such notice shall specify which portion of the Fund
will constitute the Investment Fund subject to the
investment manager's direction. The Trustee (or
Custodian) shall comply with the investment direction
given to it by the investment manager and will not be
liable for any loss which may result by reason of any
action (or inaction) it takes at the direction of the
investment manager.
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5.13 MATTERS RELATING TO INSURANCE
A. If a life insurance policy is to be purchased for a
Participant, the aggregate premium for certain life
insurance for each Participant must be less than a
certain percentage of the aggregate Employer
Contributions and Forfeitures allocated to a
Participant's Individual Account at any particular
time as follows:
1. Ordinary Life Insurance - For purposes of
these incidental insurance provisions,
ordinary life insurance contracts are
contracts with both nondecreasing death
benefits and nonincreasing premiums. If such
contracts are purchased, less than 50% of
the aggregate Employer Contributions and
Forfeitures allocated to any Participant's
Individual Account will be used to pay the
premiums attributable to them,
2. Term and Universal Life Insurance - No more
than 25% of the aggregate Employer
Contributions and Forfeitures allocated to
any Participant's Individual Account will be
used to pay the premiums on term life
insurance contracts, universal life
insurance contracts, and all other life
insurance contracts which are not ordinary
life.
3. Combination - The sum of 50% of the ordinary
life insurance premiums and all other life
insurance premiums will not exceed 25% of
the aggregate Employer Contributions and
Forfeitures allocated to any Participant's
Individual Account.
If this Plan is a profit sharing plan, the above
incidental benefits limits do not apply to life
insurance contracts purchased with Employer
Contributions and Forfeitures that have been in the
Participant's Individual Account for at least 2 full
Plan Years, measured from the date such contributions
were allocated.
B. Any dividends or credits earned on insurance
contracts for a Participant shall be allocated to
such Participant's Individual Account.
C. Subject to Section 6.05, the contracts on a
Participant's life will be converted to cash or an
annuity or distributed to the Participant upon
commencement of benefits.
D. The Trustee (or Custodian, if applicable) shall apply
for and will be the owner of any insurance
contract(s) purchased under the terms of this Plan.
The insurance contract(s) must provide that proceeds
will be payable to the Trustee (or Custodian),
however, the Trustee (or Custodian) shall be required
to pay over all proceeds of the contract(s) to the
Participant's designated Beneficiary in accordance
with the distribution provisions of this Plan. A
Participant's spouse will be the designated
Beneficiary of the proceeds in all circumstances
unless a qualified election has been made in
accordance with Section 6.05. Under no circumstances
shall the Fund retain any part of the proceeds. In
the
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event of any conflict between the terms of this Plan
and the terms of any insurance contract purchased
hereunder, the Plan provisions shall control.
E. The Plan Administrator may direct the Trustee (or
Custodian) to sell and distribute insurance or
annuity contracts to a Participant (or other party as
may be permitted) in accordance with applicable law
or regulations.
5.14 DIRECTION OF INVESTMENTS BY PARTICIPANT
If so indicated in the Adoption Agreement, each Participant
may individually direct the Trustee (or Custodian, if
applicable) regarding the investment of part or all of his or
her Individual Account. To the extent so directed, the
Employer, Plan Administrator, Trustee (or Custodian) and all
other fiduciaries are relieved of their fiduciary
responsibility under Section 404 of ERISA.
The Plan Administrator shall direct that a Separate Fund be
established in the name of each Participant who directs the
investment of part or all of his or her Individual Account.
Each Separate Fund shall be charged or credited (as
appropriate) with the earnings, gains, losses or expenses
attributable to such Separate Fund. No fiduciary shall be
liable for any loss which results from a Participant's
individual direction. The assets subject to individual
direction shall not be invested in collectibles as that term
is defined in Section 408(m) of the Code.
The Plan Administrator shall establish such uniform and
nondiscriminatory rules relating to individual direction as it
deems necessary or advisable including, but not limited to,
rules describing (1) which portions of Participant's
Individual Account can be individually directed; (2) the
frequency of investment changes; (3) the forms and procedures
for making investment changes; and (4) the effect of a
Participant's failure to make a valid direction.
The Plan Administrator may, in a uniform and nondiscriminatory
manner, limit the available investments for Participants'
individual direction to certain specified investment options
(including, but not limited to, certain mutual funds,
investment contracts, deposit accounts and group trusts). The
Plan Administrator may permit, in a uniform and
nondiscriminatory manner, a Beneficiary of a deceased
Participant or the alternate payee under a qualified domestic
relations order (as defined in Section 414(p) of the Code) to
individually direct in accordance with this Section.
SECTION SIX VESTING AND DISTRIBUTION
6.01 DISTRIBUTION TO PARTICIPANT
A. Distributable Events
1. Entitlement to Distribution - The Vested
portion of a Participant's Individual
Account shall be distributable to the
Participant upon (1) the occurrence of any
of the distributable events specified in the
Adoption Agreement; (2) the Participant's
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Termination of Employment after attaining
Normal Retirement Age; (3) the termination
of the Plan; and (4) the Participant's
Termination of Employment after satisfying
any Early Retirement Age conditions.
If a Participant separates from service
before satisfying the Early Retirement Age
requirement, but has satisfied the service
requirement, the Participant will be
entitled to elect an early retirement
benefit upon satisfaction of such age
requirement.
2. Written Request: When Distributed - A
Participant entitled to distribution who
wishes to receive a distribution must submit
a written request to the Plan Administrator.
Such request shall be made upon a form
provided by the Plan Administrator. Upon a
valid request, the Plan Administrator shall
direct the Trustee (or Custodian, if
applicable) to commence distribution no
later than the time specified in the
Adoption Agreement for this purpose and, if
not specified in the Adoption Agreement,
then no later than 90 days following the
later of:
a. the close of the Plan Year within
which the event occurs which entitles
the Participant to distribution; or
b. the close of the Plan Year in which
the request is received.
3. Special Rules for Withdrawals During Service
- If this is a profit sharing plan and the
Adoption Agreement so provides, a
Participant may elect to receive a
distribution of all or part of the Vested
portion of his or her Individual Account,
subject to the requirements of Section 6.05
and further subject to the following limits:
a. Participant for 5 or more years. An
Employee who has been a Participant in
the Plan for 5 or more years may
withdraw up to the entire Vested
portion of his or her Individual
Account.
b. Participant for less than 5 years. An
Employee who has been a Participant in
the Plan for less than 5 years may
withdraw only the amount which has
been in his or her Individual Account
attributable to Employer Contributions
for at least 2 full Plan Years.
measured from the date such
contributions were allocated. However,
if the distribution is on account of
hardship, the Participant may withdraw
up to his or her entire Vested portion
of the Participant's Individual
Account. For this purpose, hardship
shall have the meaning set forth in
Section 6.01(A)(4) of the Code.
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4. Special Rules for Hardship Withdrawals - If
this is a profit sharing plan and the
Adoption Agreement so provides, a
Participant may elect to receive a hardship
distribution of all or part of the Vested
portion of his or her Individual Account,
subject to the requirements of Section 6.05
and further subject to the following limits:
a. Participant for 5 or more years. An
Employee who has been a Participant in
the Plan for 5 or more years may
withdraw up to the entire Vested
portion of his or her Individual
Account.
b. Participant for less than 5 years. An
Employee who has been a Participant in
the Plan for less than 5 years may
withdraw only the amount which has
been in his or her Individual Account
attributable to Employer Contributions
for at least 2 full Plan Years,
measured from the date such
contributions were allocated.
For purposes of this Section
6.01(A)(4) and Section 6.0l(A)(3)
hardship is defined as an immediate
and heavy financial need of the
Participant where such Participant
lacks other available resources. The
following are the only financial needs
considered immediate and heavy:
expenses incurred or necessary for
medical care, described in Section 2
13(d) of the Code, of the Employee,
the Employee's spouse or dependents;
the purchase (excluding mortgage
payments) of a principal residence for
the Employee; payment of tuition and
related educational fees for the next
12 months of post-secondary education
for the Employee, the Employee's
spouse, children or dependents; or the
need to prevent the eviction of the
Employee from, or a foreclosure on the
mortgage of, the Employee's principal
residence.
A distribution will be considered as
necessary to satisfy an immediate and
heavy financial need of the Employee
only if:
1) The employee has obtained all
distributions, other than
hardship distributions, and
all nontaxable loans under
all plans maintained by the
Employer;
2) The distribution is not in
excess of the amount of an
immediate and heavy financial
need (including amounts
necessary to pay any federal,
state or local income taxes
or penalties reasonably
anticipated to result from
the distribution).
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5. One-Time In-Service Withdrawal Option - If
this is a profit sharing plan and the
Employer has elected the one-time in-service
withdrawal option in the Adoption Agreement,
then Participants will be permitted only one
in-service withdrawal during the course of
such Participants employment with the
Employer. The amount which the Participant
can withdraw will be limited to the lesser
of the amount determined under the limits
set forth in Section 6.01(A)(3) or the
percentage of the Participant's Individual
Account specified by the Employer in the
Adoption Agreement. Distributions under this
Section will be subject to the requirements
of Section 6.05.
6. Commencement of Benefits - Notwithstanding
any other provision, unless the Participant
elects otherwise, distribution of benefits
will begin no later than the 60th day after
the latest of the close of the Plan Year in
which:
a. the Participant attains Normal
Retirement Age;
b. occurs the 10th anniversary of the
year in which the Participant
commenced participation in the Plan;
or
c. the Participant incurs a Termination
of Employment.
Notwithstanding the foregoing, the failure of a
Participant and spouse to consent to a distribution
while a benefit is immediately distributable, within
the meaning of Section 6.02(B) of the Plan, shall be
deemed to be an election to defer commencement of
payment of any benefit sufficient to satisfy this
Section.
B. Determining the Vested Portion - In determining the
Vested portion of a Participant's Individual Account,
the following rules apply:
1. Employer Contributions and Forfeitures - The
Vested portion of a Participant's Individual
Account derived from Employer Contributions
and Forfeitures is determined by applying
the vesting schedule selected in the
Adoption Agreement (or the vesting schedule
described in Section 6.01(C) if the Plan is
a Top-Heavy Plan).
2. Rollover and Transfer Contributions - A
Participant is fully Vested in his or her
rollover contributions and transfer
contributions.
3. Fully Vested Under Certain Circumstances - A
Participant is fully Vested in his or her
Individual Account if any of the following
occurs:
a. the Participant reaches Normal
Retirement Age;
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b. the Plan is terminated or partially
terminated; or
c. there exists a complete discontinuance
of contributions under the Plan.
Further, unless otherwise indicated in the
Adoption Agreement, a Participant is fully
Vested if the Participant dies, incurs a
Disability, or satisfies the conditions for
Early Retirement Age (if applicable).
4. Participants in a Prior Plan - If a
Participant was a participant in a Prior
Plan on the Effective Date, his or her
Vested percentage shall not be less than it
would have been under such Prior Plan as
computed on the Effective Date.
C. Minimum Vesting Schedule for Top-Heavy Plans - The
following vesting provisions apply for any Plan Year
in which this Plan is a Top-Heavy Plan.
Notwithstanding the other provisions of this Section
6.01 or the vesting schedule selected in the Adoption
Agreement (unless those provisions or that schedule
provide for more rapid vesting), a Participant's
Vested portion of his or her Individual Account
attributable to Employer Contributions and
Forfeitures shall be determined in accordance with
the vesting schedule elected by the Employer in the
Adoption Agreement (and if no election is made the 6
year graded schedule will be deemed to have been
elected) as described below:
6 YEAR GRADED 3 YEAR CLIFF
Years of Years of
Vesting Service Vested Percentage Vesting Service Vested Percentage
--------------- ----------------- --------------- -----------------
1 0 1 0
2 20 2 0
3 40 3 100
4 60
5 80
6 100
This minimum vesting schedule applies to all benefits
within the meaning of Section 411 (a)(7) of the Code,
except those attributable to Nondeductible Employee
Contributions including benefits accrued before the
effective date of Section 416 of the Code and
benefits accrued before the Plan became a Top-Heavy
Plan. Further, no decrease in a Participant's Vested
percentage may occur in the event the Plan's status
as a Top-Heavy Plan changes for any Plan Year.
However, this Section 6.0 1(C) does not apply to the
Individual Account of any Employee who does not have
an Hour of Service after the Plan has initially
become a Top-Heavy Plan and such Employee's
Individual Account attributable to
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Employer Contributions and Forfeitures will be
determined without regard to this Section.
If this Plan ceases to be a Top-Heavy Plan, then in
accordance with the above restrictions, the vesting
schedule as selected in the Adoption Agreement will
govern. If the vesting schedule under the Plan shifts
in or out of top-heavy status, such shift is an
amendment to the vesting schedule and the election in
Section 9.04 applies.
D. Break in Vesting Service and Forfeitures - If a
Participant incurs a Termination of Employment, any
portion of his or her Individual Account which is not
Vested shall be held in a suspense account. Such
suspense account shall share in any increase or
decrease in the fair market value of the assets of
the Fund in accordance with Section 4 of the Plan.
The disposition of such suspense account shall be as
follows:
1. Breaks in Vesting Service - If a Participant
neither receives nor is deemed to receive a
distribution pursuant to Section 6.01(D)(3)
or (4) and the Participant returns to the
service of the Employer before incurring 5
consecutive Breaks in Vesting Service, there
shall be no Forfeiture and the amount in
such suspense account shall be recredited to
such Participant's Individual Account.
2. Five Consecutive Breaks in Vesting Service -
If a Participant neither receives nor is
deemed to receive a distribution pursuant to
Section 6.01(D)(3) or (4) and the
Participant does not return to the service
of the Employer before incurring 5
consecutive Breaks in Vesting Service, the
portion of the Participant's Individual
Account which is not Vested shall be treated
as a Forfeiture and allocated in accordance
with Section 3.01(C).
3. Cash-out of Certain Participants - If the
value of the Vested portion of such
Participant's Individual Account derived
from Nondeductible Employee Contributions
and Employer Contributions does not exceed
$3,500, the Participant shall receive a
distribution of the entire Vested portion of
such Individual Account and the portion
which is not Vested shall be created as a
Forfeiture and allocated in accordance with
Section 3.01(C). For purposes of this
Section, if the value of the Vested portion
of a Participant's Individual Account is
zero, the Participant shall be deemed to
have received a distribution of such Vested
Individual Account. A Participant's Vested
Individual Account balance shall not include
accumulated deductible employee
contributions within the meaning of Section
72(o)(5)(B) of the Code for Plan Years
beginning prior to January 1, 1989.
4. Participants Who Elect to Receive
Distributions - If such Participant elects
to receive a distribution, in accordance
with Section 6.02(B), of the value of the
Vested portion of his or her
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Individual Account derived from
Nondeductible Employee Contributions and
Employer Contributions, the portion which is
not Vested shall be treated as a Forfeiture
and allocated in accordance with Section
3.01(C).
5. Re-employed Participants - If a Participant
receives or is deemed to receive a
distribution pursuant to Section 6.0l(D)(3)
or (4) above and the Participant resumes
employment covered under this Plan, the
Participant's Employer-derived Individual
Account balance will be restored to the
amount on the date of distribution if the
Participant repays to the Plan the full
amount of the distribution attributable to
Employer Contributions before the earlier of
5 years after the first date on which the
Participant is subsequently re-employed by
the Employer, or the date the Participant
incurs 5 consecutive Breaks in Vesting
Service following the date of the
distribution.
Any restoration of a Participant's Individual Account
pursuant to Section 6.01(D)(5) shall be made from
other Forfeitures, income or gain to the Fund or
contributions made by the Employer.
E. Distribution Prior to Full Vesting - If a
distribution is made to a Participant who was not
then fully Vested in his or her Individual Account
derived from Employer Contributions and the
Participant may increase his or her Vested percentage
in his or her Individual Account, then the following
rules shall apply:
1. a separate account will be established for
the Participant's interest in the Plan as of
the time of the distribution, and
2. at any relevant time the Participant's
Vested portion of the separate account will
be equal to an amount ("X") determined by
the formula: X=P (AB + (R x D)) - (R x D)
where "P" is the Vested percentage at the
relevant time, "AB" is the separate account
balance at the relevant time; "D" is the
amount of the distribution; and "R" is the
ratio of the separate account balance at the
relevant time to the separate account
balance after distribution.
6.02 FORM OF DISTRIBUTION TO A PARTICIPANT
A. Value of Individual Account Does Not Exceed $3,500 -
If the value of the Vested portion of a Participant's
Individual Account derived from Nondeductible
Employee Contributions and Employer Contributions
does not exceed $3,500, distribution from the Plan
shall be made to the Participant in a single lump sum
in lieu of all other forms of distribution from the
Plan as soon as administratively feasible.
B. Value of Individual Account Exceeds $3,500
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1. If the value of the Vested portion of a
Participant's Individual Account derived
from Nondeductible Employee Contributions
and Employer Contributions exceeds (or at
the time of any prior distribution exceeded)
$3,500, and the Individual Account is
immediately distributable, the Participant
and the Participant's spouse (or where
either the Participant or the spouse died,
the survivor) must consent to any
distribution of such Individual Account. The
consent of the Participant and the
Participant's spouse shall be obtained in
writing within the 90-day period ending on
the annuity starting date. The annuity
starting date is the first day of the first
period for which an amount is paid as an
annuity or any other form. The Plan
Administrator shall notify the Participant
and the Participant's spouse of the right to
defer any distribution until the
Participant's Individual Account is no
longer immediately distributable. Such
notification shall include a general
description of the material features, and an
explanation of the relative values of, the
optional forms of benefit available under
the Plan in a manner that would satisfy the
notice requirements of Section 417(a)(3) of
the Code, and shall be provided no less than
30 days and no more than 90 days prior to
the annuity starting date.
If a distribution is one to which Sections
401(a)(11) and 417 of the Internal Revenue
Code do not apply, such distribution may
commence less than 30 days after the notice
required under Section 1.411(a)-11(c) of the
Income Tax Regulations is given, provided
that:
a. the Plan Administrator clearly informs
the Participant that the Participant
has a right to a period of at least 30
days after receiving the notice to
consider the decision of whether or
not to elect a distribution (and, if
applicable, a particular distribution
option), and
b. the Participant, after receiving the
notice, affirmatively elects a
distribution.
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
Individual Account is immediately
distributable.
Neither the consent of the Participant nor
the Participant's spouse shall be required
to the extent that a distribution is
required to satisfy Section 40l(a)(9) or
Section 415 of the Code. In addition, upon
termination of this Plan if the Plan does
not offer an annuity option (purchased from
a commercial provider), the Participant's
Individual Account may, without the
Participant's consent, be distributed to the
Participant or transferred to another
defined contribution plan (other than an
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employee stock ownership plan as defined in
Section 4975(e)(7) of the Code) within the
same controlled group.
An Individual Account is immediately
distributable if any part of the Individual
Account could be distributed to the
Participant (or surviving spouse) before the
Participant attains or would have attained
(if not deceased) the later of Normal
Retirement Age or age 62.
2. 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
Vested portion of a Participant's Individual
Account shall not include amounts
attributable to accumulated deductible
employee contributions within the meaning of
Section 72(o)(5)(B) of the Code.
C. Other Forms of Distribution to Participant - If the
value of the Vested portion of a Participant's
Individual Account exceeds $3,500 and the Participant
has properly waived the joint and survivor annuity,
as described in Section 6.05, the Participant may
request in writing that the Vested portion of his or
her Individual Account be paid to him or her in one
or more of the following forms of payment: (1) in a
lump sum; (2) in installment payments over a period
not to exceed the life expectancy of the Participant
or the joint and last survivor life expectancy of the
Participant and his or her designated Beneficiary; or
(3) applied to the purchase of an annuity contract.
Notwithstanding anything in this Section 6.02 to the
contrary, a Participant cannot elect payments in the
form of an annuity if the Retirement Equity Act safe
harbor rules of Section 6.05(F) apply.
6.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT
A. Designation of Beneficiary - Spousal Consent - Each
Participant may designate, upon a form provided by
and delivered to the Plan Administrator, one or more
primary and contingent Beneficiaries to receive all
or a specified portion of the Participant's
Individual Account in the event of his or her death.
A Participant may change or revoke such Beneficiary
designation from time to time by completing and
delivering the proper form to the Plan Administrator.
In the event that a Participant wishes to designate a
primary Beneficiary who is not his or her spouse, his
or her spouse must consent in writing to such
designation, and the spouse's consent must
acknowledge the effect of such designation and be
witnessed by a notary public or plan representative.
Notwithstanding this consent requirement, if the
Participant establishes to the satisfaction of the
Plan Administrator that such written consent may not
be obtained because there is no spouse or the spouse
cannot be located, no consent shall be required. Any
change of Beneficiary will require a new spousal
consent.
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B. Payment to Beneficiary - If a Participant dies before
the Participant's entire Individual Account has been
paid to him or her, such deceased Participant's
Individual Account shall be payable to any surviving
Beneficiary designated by the Participant, or, if no
Beneficiary survives the Participant, to the
Participant's estate. C. Written Request: When
Distributed - A Beneficiary of a deceased Participant
entitled to a distribution who wishes to receive a
distribution must submit a written request to the
Plan Administrator. Such request shall be made upon a
form provided by the Plan Administrator, Upon a valid
request, the Plan Administrator shall direct the
Trustee (or Custodian) to commence distribution no
later than the time specified in the Adoption
Agreement for this purpose and if not specified in
the Adoption Agreement, then no later than 90 days
following the later of:
1. the close of the Plan Year within which the
Participant dies; or
2. the close of the Plan Year in which the
request is received.
6.04 FORM OF DISTRIBUTION TO BENEFICIARY
A. Value of Individual Account Does Not Exceed $3,500 -
If the value of the Participant's Individual Account
derived from Nondeductible Employee Contributions and
Employer Contributions does not exceed $3,500, the
Plan Administrator shall direct the Trustee (or
Custodian, if applicable) to make a distribution to
the Beneficiary in a single lump sum in lieu of all
other forms of distribution from the Plan.
B. Value of Individual Account Exceeds $3,500 - If the
value of a Participant's Individual Account derived
from Nondeductible Employee Contributions and
Employer Contributions exceeds $3,500 the
preretirement survivor annuity requirements of
Section 6.05 shall apply unless waived in accordance
with that Section or unless the Retirement Equity Act
safe harbor rules of Section 6.05(F) apply. However,
a surviving spouse Beneficiary may elect any form of
payment allowable under the Plan in lieu of the
preretirement survivor annuity. Any such payment to
the surviving spouse must meet the requirements of
Section 6.06.
C. Other Forms of Distribution to Beneficiary - If the
value of a Participant's Individual Account exceeds
$3,500 and the Participant has properly waived the
preretirement survivor annuity, as described in
Section 6.05 (if applicable) or if the Beneficiary is
the Participant's surviving spouse, the Beneficiary
may, subject to the requirements of Section 6.06,
request in writing that the Participant's Individual
Account be paid as follows: (1) in a lump sum; or (2)
in installment payments over a period not to exceed
the life expectancy of such Beneficiary.
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6.05 JOINT AND SURVIVOR ANNUITY REQUIREMENTS
A. The provisions of this Section shall apply to any
Participant who is credited with at least one Hour of
Eligibility Service with the Employer on or after
August 23, 1984, and such other Participants as
provided in Section 6.05(G).
B. Qualified Joint and Survivor Annuity - Unless an
optional form of benefit is selected pursuant to a
qualified election within the 90-day period ending on
the annuity starting date, a married Participant's
Vested account balance will be paid in the form of a
qualified joint and survivor annuity and an unmarried
Participant's Vested account balance will be paid in
the form of a life annuity. The Participant may elect
to have such annuity distributed upon attainment of
the earliest retirement age under the Plan.
C. Qualified Preretirement Survivor Annuity - Unless an
optional form of benefit has been selected within the
election period pursuant to a qualified election, if
a Participant dies before the annuity starting date
then the Participant's Vested account balance shall
be applied toward the purchase of an annuity for the
life of the surviving spouse. The surviving spouse
may elect to have such annuity distributed within a
reasonable period after the Participant's death.
D. Definitions
1. Election Period - The period which begins on
the first day of the Plan Year in which the
Participant attains age 35 and ends on the
date of the Participant's death. If a
Participant separates from service prior to
the first day of the Plan Year in which age
35 is attained, with respect to the account
balance as of the date of separation, the
election period shall begin on the date of
separation.
Pre-age 35 waiver - A Participant who will
not yet attain age 35 as of the end of any
current Plan Year may make special qualified
election to waive the qualified
preretirement survivor annuity for the
period beginning on the date of such
election and ending on the first day of the
Plan Year in which the Participant will
attain age 35. Such election shall not be
valid unless the Participant receives a
written explanation of the qualified
preretirement survivor annuity in such terms
as are comparable to the explanation
required under Section 6.05(E)(1). Qualified
preretirement survivor annuity coverage will
be automatically reinstated as of the first
day of the Plan Year in which the
Participant attains age 35. Any new waiver
on or after such date shall be subject to
the full requirements of this Section 6.05.
2. Earliest Retirement Age - The earliest date
on which, under the Plan, the Participant
could elect to receive retirement benefits.
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3. Qualified Election - A waiver of a qualified
joint and survivor annuity or a qualified
preretirement survivor annuity. Any waiver
of a qualified joint and survivor annuity or
a qualified preretirement survivor annuity
shall not be effective unless: (a) the
Participant's spouse consents in writing to
the election, (b) the election designates a
specific Beneficiary, including any class of
beneficiaries or any contingent
beneficiaries, which may not be changed
without spousal consent (or the spouse
expressly permits designations by the
Participant without any further spousal
consent); (c) the spouse's consent
acknowledges the effect of the election; and
(d) the spouse's consent is witnessed by a
plan representative or notary public.
Additionally, a Participant's waiver of the
qualified joint and survivor annuity shall
not be effective unless the election
designates a form of benefit payment which
may not be changed without spousal consent
(or the spouse expressly permits
designations by the Participant without any
further spousal consent). If it is
established to the satisfaction of a plan
representative that there is no spouse or
that the spouse cannot be located, a waiver
will be deemed a qualified election.
Any consent by a spouse obtained under this
provision (or establishment that the consent
of a spouse may not be obtained) shall be
effective only with respect to such spouse.
A consent that permits designations by the
Participant without any requirement of
further consent by such spouse must
acknowledge that the spouse has the right to
limit consent to a specific Beneficiary, and
a specific form of benefit where applicable,
and that the spouse voluntarily elects to
relinquish either or both of such rights. A
revocation of a prior waiver may be made by
a Participant without the consent of the
spouse at any time before the commencement
of benefits.
The number of revocations shall not be limited. No
consent obtained under this provision shall be valid
unless the Participant has received notice as
provided in Section 61)5(E) below.
4. Qualified Joint and Survivor Annuity - An
immediate annuity for the life of the
Participant with a survivor annuity for the
life of the spouse which is not less than
50% and not more than 100% of the amount of
the annuity which is payable during the
joint lives of the Participant and the
spouse and which is the amount of benefit
which can be purchased with the
Participant's vested account balance. The
percentage of the survivor annuity under the
Plan shall be 50% (unless a different
percentage is elected by the Employer in the
Adoption Agreement).
5. Spouse (surviving spouse) - The spouse or
surviving spouse of the Participant,
provided that a former spouse will be
treated as the spouse or surviving spouse
and a current spouse will not be treated as
the spouse or surviving spouse to the extent
provided
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under a qualified domestic relations order
as described in Section 414(p) of the Code.
6. Annuity Starting Date - The first day of the
first period for which an amount is paid as
an annuity or any other form.
7. Vested Account Balance - The aggregate value
of the Participant's Vested account balances
derived from Employer and Nondeductible
Employee Contributions (including
rollovers), whether Vested before or upon
death, including the proceeds of insurance
contracts, if any, on the Participant's
life. The provisions of this Section 6.05
shall apply to a Participant who is Vested
in amounts attributable to Employer
Contributions, Nondeductible Employee
Contributions (or both) at the time of death
or distribution.
E. Notice Requirements
1. In the case of a qualified joint and
survivor annuity, the Plan Administrator
shall no less than 30 days and not more than
90 days prior to the annuity starting date
provide each Participant a written
explanation of: (a) the terms and conditions
of a qualified joint and survivor annuity;
(b) the Participant's right to make and the
effect of an election to waive the qualified
joint and survivor annuity form of benefit;
(c) the rights of a Participant's spouse;
and (d) the right to make, and the effect
of, a revocation of a previous election to
waive the qualified joint and survivor
annuity.
2. In the case of a qualified preretirement
annuity as described in Section 6.05(C), the
Plan Administrator shall provide each
Participant within the applicable period for
such Participant a written explanation of
the qualified preretirement survivor annuity
in such terms and in such manner as would be
comparable to the explanation provided for
meeting the requirements of Section
6.05(E)(1) applicable to a qualified joint
and survivor annuity.
The applicable period for a Participant is
whichever of the following periods ends
last: (a) 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; (b) a reasonable period ending after
the individual becomes a Participant; (c) a
reasonable period ending after Section
6.05(E)(3) ceases to apply to the
Participant; and (d) a reasonable period
ending after this Section 6.05 first applies
to the Participant. Notwithstanding the
foregoing, notice must be provided within a
reasonable period ending after separation
from service in the case of a Participant
who separates from service before attaining
age 35.
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For purposes of applying the preceding
paragraph, a reasonable period ending after
the enumerated events described in (b), (c)
and (d) is the end of the two-year period
beginning one year prior to the date the
applicable event occurs, and ending one year
after that date. In the case of a
Participant who separates from service
before the Plan Year in which age 35 is
attained, notice shall be provided within
the two-year period beginning one year prior
to separation and ending one year after
separation. If such a Participant thereafter
returns to employment with the Employer, the
applicable period for such Participant shall
be redetermined.
3. Notwithstanding the other requirements of
this Section 6.05(E), the respective notices
prescribed by this Section 6.05(E), need not
be given to a Participant if (a) the Plan
"fully subsidizes" the costs of a qualified
joint and survivor annuity or qualified
preretirement survivor annuity, and (b) the
Plan does not allow the Participant to waive
the qualified joint and survivor annuity or
qualified preretirement survivor annuity and
does not allow a married Participant to
designate a nonspouse beneficiary. For
purposes of this Section 6.05(E)(3), a plan
fully subsidizes the costs of a benefit if
no increase in cost, or decrease in benefits
to the Participant may result from the
Participant's failure to elect another
benefit.
F. Retirement Equity Act Safe Harbor Rules
1. If the Employer so indicates in the Adoption
Agreement, this Section 6.05(F) shall apply
to a Participant in a profit sharing plan,
and shall always apply to any distribution,
made on or after the first day of the first
Plan Year beginning after December 31, 1988:
from or under a separate account
attributable solely to accumulated
deductible employee contributions, as
defined in Section 72(o)(5)(B) of the Code,
and maintained on behalf of a Participant in
a money purchase pension plan, (including a
target benefit plan) if the following
conditions are satisfied:
a. the Participant does not or cannot
elect payments in the form of a life
annuity; and
b. on the death of a Participant, the
Participant's Vested account balance
will be paid to the Participant's
surviving spouse, but if there is no
surviving spouse, or if the surviving
spouse has consented in a manner
conforming to a qualified election,
then to the Participant's designated
Beneficiary. The surviving spouse may
elect to have distribution of the
Vested account balance commence within
the 90-day period following the date
of the Participant's death. The
account balance shall be adjusted for
gains or losses occurring after the
Participant's death in accordance with
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the provisions of the Plan governing
the adjustment of account balances for
other types of distributions. This
Section 6.05(F) shall not be operative
with respect to a Participant in a
profit sharing plan if the plan is a
direct or indirect transferee of a
defined benefit plan, money purchase
plan, a target benefit plan, stock
bonus, or profit sharing plan which is
subject to the survivor annuity
requirements of Section 401(a)(11) and
Section 417 of the code. If this
Section 6.05(F) is operative, then the
provisions of this Section 6.05 other
than Section 6.05(G) shall be
inoperative.
2. The Participant may waive the spousal death
benefit described in this Section 6.05(F) at
any time provided that no such waiver shall
be effective unless it satisfies the
conditions of Section 6.05(D)(3) (other than
the notification requirement referred to
therein) that would apply to the
Participant's waiver of the qualified
preretirement survivor annuity.
3. For purposes of this Section 6.05(F), Vested
account balance shall mean, in the case of a
money purchase pension plan or a target
benefit plan, the Participant's separate
account balance attributable solely to
accumulated deductible employee
contributions within the meaning of Section
72(o)(5)(B) of the Code. In the case of a
profit sharing plan, Vested account balance
shall have the same meaning as provided in
Section 6.05(D)(7).
G. Transitional Rules
1. Any living Participant not receiving
benefits on August 23, 1984, who would
otherwise not receive the benefits
prescribed by the previous subsections of
this Section 6.05 must be given the
opportunity to elect to have the prior
subsections of this Section apply if such
Participant is credited with at least one
Hour of Service under this Plan or a
predecessor plan in a Plan Year beginning on
or after January 1, 1976, and such
Participant had at least 10 Years of Vesting
Service when he or she separated from
service.
2. Any living Participant not receiving
benefits on August 23, 1984, who was
credited with at least one Hour of Service
under this Plan or a predecessor plan on or
after September 2, 1974, and who is not
otherwise credited with any service in a
Plan Year beginning on or after January 1,
1976, must be given the opportunity to have
his or her benefits paid in accordance with
Section 6.05(G)(4).
3. The respective opportunities to elect (as
described in Section 6.05(G)(1) and (2)
above) must be afforded to the appropriate
Participants during the period commencing on
August 23, 1984,
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and ending on the date benefits would
otherwise commence to said Participants.
4. Any Participant who has elected pursuant to
Section 6.05(G)(2) and any Participant who
does not elect under Section 6.05(G)(I) or
who meets the requirements of Section
6.05(G)(1) except that such Participant does
not have at least 10 Years of Vesting
Service when he or she separates from
service, shall have his or her benefits
distributed in accordance with all of the
following requirements if benefits would
have been payable in the form of a life
annuity:
a. Automatic Joint and Survivor Annuity -
If benefits in the form of a life
annuity become payable to a married
Participant who:
(1) begins to receive payments
under the Plan on or after
Normal Retirement Age; or
(2) dies on or after Normal
Retirement Age while still
working for the Employer; or
(3) begins to receive payments on
or after the qualified early
retirement age; or
(4) separates from service on or
after attaining Normal
Retirement Age (or the
qualified early retirement
age) and after satisfying the
eligibility requirements for
the payment of benefits under
the Plan and thereafter dies
before beginning to receive
such benefits; then such
benefits will be received
under this Plan in the form
of a qualified joint and
survivor annuity, unless the
Participant has elected
otherwise during the election
period. The election period
must begin at least 6 months
before the Participant
attains qualified early
retirement age and ends not
more than 90 days before the
commencement of benefits. Any
election hereunder will be in
writing and may be changed by
the Participant at any time.
b. Election of Early Survivor Annuity - A
Participant who is employed after
attaining the qualified early
retirement age will be given the
opportunity to elect, during the
election period, to have a survivor
annuity payable on death. If the
Participant elects the survivor
annuity, payments under such annuity
must not be less than the payments
which would have been made to the
spouse under the qualified joint and
survivor annuity if the Participant
had retired on the day before his or
her death.
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Any election under this provision will
be in writing and may be changed by
the Participant at any time. The
election period begins on the later of
(1) the 90th day before the
Participant attains the qualified
early retirement age, or (2) the date
on which participation begins, and
ends on the date the Participant
terminates employment.
c. For purposes of Section 6.05(G)(4):
1. Qualified early retirement
age is the latest of:
a. the earliest date,
under the Plan, on
which the Participant
may elect to receive
retirement benefits,
b. the first day of the
120th month beginning
before the Participant
reaches Normal
Retirement Age, or
c. the date the
Participant begins
participation.
2. 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
6.05(D)(4) of this Plan.
6.06 DISTRIBUTION REQUIREMENTS
A. General Rules
1. Subject to Section 6.05 Joint and Survivor
Annuity Requirements, the requirements of
this Section 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 Section 6.06 apply to
calendar years beginning after December 31,
1984.
2. All distributions required under this
Section 6.06 shall be determined and made in
accordance with the Income Tax Regulations
under Section 401(a)(9), including the
minimum distribution incidental benefit
requirement of Section 1 .401(a)(9)-2 of the
proposed regulations.
B. Required Beginning Date - The entire interest of a
Participant must be distributed or begin to be
distributed no later than the Participant's required
beginning date.
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C. Limits on Distribution Periods - As of the first
distribution calendar year, distributions, if not
made in a single sum, may only be made over one of
the following periods (or a combination thereof):
1. the life of the Participant,
2. the life of the Participant and a designated
Beneficiary,
3. a period certain not extending beyond the
life expectancy of the Participant, or
4. a period certain not extending beyond the
joint and last survivor expectancy of the
Participant and a designated Beneficiary.
D. Determination of Amount to be Distributed Each Year -
If the Participant's interest is to be distributed in
other than a single sum, the following minimum
distribution rules shall apply on or after the
required beginning date:
1. Individual Account
a. If a Participant's benefit is to be
distributed over (1) a period not
extending beyond the life expectancy
of the Participant or the joint life
and last survivor expectancy of the
Participant and the Participant's
designated Beneficiary or (2) a period
not extending beyond the life
expectancy of the designated
Beneficiary, the amount required to be
distributed for each calendar year,
beginning with distributions for the
first distribution calendar year, must
at least equal the quotient obtained
by dividing the Participant's benefit
by the applicable life expectancy.
b. For calendar years beginning before
January 1, 1989, if the Participant's
spouse is not the designated
Beneficiary, the method of
distribution selected must assure that
at least 50% of the present value of
the amount available for distribution
is paid within the life expectancy of
the Participant.
c. For calendar years beginning after
December 31, 1988, the amount to be
distributed each year, beginning with
distributions for the first
distribution calendar year shall not
be less than the quotient obtained by
dividing the Participant's benefit by
the lesser of (1) the applicable life
expectancy or (2) if the Participant's
spouse is not the designated
Beneficiary, the applicable divisor
determined from the table set forth in
Q&A-4 of Section 1 .401(a)(9)-2 of the
Proposed Income Tax Regulations.
Distributions after the death of the
Participant shall be
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distributed using the applicable life
expectancy in Section 6.05(D)(1)(a)
above as the relevant divisor without
regard to proposed regulations 1
.401(a)(9)-2.
d. The minimum distribution required for
the Participant's first distribution
calendar year must be made on or
before the Participant's required
beginning date. The minimum
distribution for other calendar years,
including the minimum distribution for
the distribution calendar year in
which the Employee's required
beginning date occurs, must be made on
or before December 31 of that
distribution calendar year.
2. Other Forms - If the Participant's benefit
is distributed in the form of an annuity
purchased from an insurance company,
distributions thereunder shall be made in
accordance with the requirements of Section
401(a)(9) of the Code and the regulations
thereunder.
E. Death Distribution Provisions
1. Distribution Beginning Before Death - If the
Participant dies after distribution of his
or her interest has begun, the remaining
portion of such interest will continue to be
distributed at least as rapidly as under the
method of distribution being used prior to
the Participant's death.
2. Distribution Beginning After Death - If the
Participant dies before distribution of his
or her interest begins, distribution of the
Participant's entire interest shall be
completed by December 31 of the calendar
year containing the fifth anniversary of the
Participant's death except to the extent
that an election is made to receive
distributions in accordance with (a) or (b)
below:
a. if any portion of the Participant's
interest is payable to a designated
Beneficiary, distributions may be made
over the life or over a period certain
not greater than the life expectancy
of the designated Beneficiary
commencing on or before December 31 of
the calendar year immediately
following the calendar year in which
the Participant died;
b. if the designated Beneficiary is the
Participant's surviving spouse, the
date distributions are required to
begin in accordance with (a) above
shall not be earlier than the later of
(1) December 31 of the calendar year
immediately following the calendar
year in which the Participant dies or
(2) December 31 of the calendar year
in which the Participant would have
attained age 70 1/2.
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If the Participant has not made an
election pursuant to this Section
6.05(E)(2) by the time of his or her
death, the Participant's designated
Beneficiary must elect the method of
distribution no later than the earlier
of (1) December 31 of the calendar
year in which distributions would be
required to begin under this Section
6.05(E)(2), or (2) December 31 of the
calendar year which contains the fifth
anniversary of the date of death of
the Participant. If the Participant
has no designated Beneficiary, or if
the designated Beneficiary does not
elect a method of distribution,
distribution of the Participant's
entire interest must be completed by
December 31 of the calendar year
containing the fifth anniversary of
the Participant's death.
3. For purposes of Section 6.06(E)(2) above, if
the surviving spouse dies after the
Participant, but before payments to such
spouse begin, the provisions of Section
6.06(E)(2), with the exception of paragraph
(b) therein, shall be applied as if the
surviving spouse were the Participant.
4. For purposes of this Section 6.06(E), any
amount paid to a child of the Participant
will be treated as if it had been paid to
the surviving spouse if the amount becomes
payable to the surviving spouse when the
child reaches the age of majority.
5. For purposes of this Section 6.06(E),
distribution of a Participant's interest is
considered to begin on the Participant's
required beginning date (or, if Section
6.06(E)(3) above is applicable, the date
distribution is required to begin to the
surviving spouse pursuant to Section
6,06(E)(2) above). If distribution in the
form of an annuity irrevocably commences to
the Participant before the required
beginning date, the date distribution is
considered to begin is the date distribution
actually commences.
F. Definitions
1. 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 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.
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2. Designated Beneficiary - The individual who
is designated as the Beneficiary under the
Plan in accordance with Section 401(a)(9) of
the Code and the regulations thereunder.
3. Distribution Calendar Year - A calendar year
for which a minimum distribution is
required. For distributions beginning before
the Participant's death, the first
distribution calendar year is the calendar
year immediately preceding the calendar year
which contains the Participant's required
beginning date. For distributions beginning
after the Participant's death, the first
distribution calendar year is the calendar
year in which distributions are required to
begin pursuant to Section 6.05(E) above.
4. Life Expectancy - Life expectancy and joint
and last survivor expectancy are computed by
use of the expected return multiples in
Tables V and VI of Section 1.72-9 of the
Income Tax Regulations.
Unless otherwise elected by the Participant
(or spouse, in the case of distributions
described in Section 6.05(E)(2)(b) above) by
the time distributions are required to
begin, life expectancies shall be
recalculated annually. Such election shall
be irrevocable as to the Participant (or
spouse) and shall apply to all subsequent
years. The life expectancy of a nonspouse
Beneficiary may not be recalculated.
5. Participant's Benefit
a. The account balance as of the last
valuation date in the valuation
calendar year (the calendar year
immediately preceding the distribution
calendar year) increased by the amount
of any Contributions or Forfeitures
allocated to the account balance as of
dates in the valuation calendar year
after the valuation date and decreased
by distributions made in the valuation
calendar year after the valuation
date.
b. Exception for second distribution
calendar year. For purposes of
paragraph (a) above, if any portion of
the minimum distribution for the first
distribution calendar year is made in
the second distribution calendar year
on or before the required beginning
date, the amount of the minimum
distribution made in the second
distribution calendar year shall be
treated as if it had been made in the
immediately preceding distribution
calendar year.
6. Required Beginning Date
a. General Rule - The required beginning
date of a Participant is the first day
of April of the calendar year
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following the calendar year in which
the Participant attains age 70 1/2.
b. Transitional Rules - The required
beginning date of a Participant who
attains age 70 1/2 before January 1,
1988, shall be determined in
accordance with (1) or (2) below:
(1) Non 5% Owners - The required
beginning date of a
Participant who is not a 5%
owner is the first day of
April of the calendar year
following the calendar year
in which the later of
retirement or attainment of
age 70 1/2 occurs.
(2) 5% 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.
c. 5% Owner - A Participant is treated as
a 5% owner for purposes of this
Section 6.06(F)(6) if such Participant
is a 5% owner as defined in Section 4
16(i) of the Code (determined in
accordance with Section 416 but
without regard to whether the Plan is
top-heavy) at any time during the Plan
Year ending with or within the
calendar year in which such owner
attains age 66 1/2 or any subsequent
Plan Year.
d. Once distributions have begun to a 5%
owner under this Section 6.06(F)(6)
they must continue to be distributed,
even if the Participant ceases to be a
5% owner in-a subsequent year.
G. Transitional Rule
1. Notwithstanding the other requirements of
this Section 6.06 and subject to the
requirements of Section 6.05, Joint and
Survivor
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Annuity Requirements, 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 Fund is one
which would not have qualified such
Fund under Section 401(a)(9) of the
Code as in effect prior to amendment
by the Deficit Reduction Act of 1984.
b. The distribution is in accordance with
a method of distribution designated by
the Employee whose interest in the
Fund 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.
e. The method of distribution designated
by the Employee or the Beneficiary
specifies the time at which
distribution will commence, the period
over which distributions will be made,
and in the case of any distribution
upon the Employee's death, the
Beneficiaries of the Employee listed
in order of priority.
2. 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.
3. 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 Sections 6.06(G)(1)(a) and
(e).
4. If a designation is revoked, any subsequent
distribution must satisfy the requirements
of Section 401(a)(9) of the Code and the
regulations thereunder. If a designation is
revoked subsequent to the date distributions
are required to begin, the Plan must
distribute by the end of the calendar year
following the calendar year in which the
revocation occurs the total amount not yet
distributed which would have been required
to have been distributed to satisfy Section
401(a)(9) of the Code and the regulations
thereunder, but for the Section 242(b)(2)
election,
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For calendar years beginning after December
31, 1988, such distributions must meet the
minimum distribution incidental benefit
requirements in Section 1 .401(a)(9)-2 of
the Proposed Income Tax Regulations. Any
changes in the designation will be
considered to be a revocation of the
designation. However, the mere substitution
or addition of another Beneficiary (one not
named in the designation) under the
designation will not be considered to be a
revocation of the designation, so long as
such substitution or addition does not alter
the period over which distributions are to
be made under the designation, directly or
indirectly (for example, by altering the
relevant measuring life). In the case in
which an amount is transferred or rolled
over from one plan to another plan, the
rules in Q&A J-2 and Q&A J-3 shall apply.
6.07 ANNUITY CONTRACTS
Any annuity contract distributed under the Plan (if permitted
or required by this Section 6) must be nontransferable. The
terms of any annuity contract purchased and distributed by the
Plan to a Participant or spouse shall comply with the
requirements of the Plan.
6.08 LOANS TO PARTICIPANTS
If the Adoption Agreement so indicates, a Participant may
receive a loan from the Fund, subject to the following rules:
A. Loans shall be made available to all Participants on
a reasonably equivalent basis.
B. Loans shall not be made available to Highly
Compensated Employees (as defined in Section 414(q)
of the Code) in an amount greater than the amount
made available to other Employees.
C. Loans must be adequately secured and bear a
reasonable interest rate.
D. No Participant loan shall exceed the present value of
the Vested portion of a Participant's Individual
Account.
E. A Participant must obtain the consent of his or her
spouse, if any, to the use of the Individual Account
as security for the loan. Spousal consent shall be
obtained no earlier than the beginning of the 90 day
period that ends on the date on which the loan is to
be so secured. The consent must be in writing, must
acknowledge the effect of the loan, and must be
witnessed by a plan representative or notary public.
Such consent shall thereafter be binding with respect
to the consenting spouse or any subsequent spouse
with respect to that loan. A new consent shall be
required if the account balance is used for
renegotiations, extension, renewal, or other revision
of the loan. Notwithstanding the foregoing, no
spousal consent is necessary if, at the time the loan
is secured, no consent would be required for a
distribution under Section 417(a)(2)(B). In
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83
addition, spousal consent is not required if the Plan
or the Participant is not subject to Section
40l(a)(11) at the time the Individual Account is used
as security, or if the total Individual Account
subject to the security is less than or equal to
$3,500.
F. In the event of default, foreclosure on the note and
attachment of security will not occur until a
distributable event occurs in the Plan.
Notwithstanding the preceding sentence, a
Participant's default on a loan will be treated as a
distributable event and as soon as administratively
feasible after the default, the Participant's Vested
Individual Account will be reduced by the lesser of
the amount in default (plus accrued interest) or the
amount secured. If this Plan is a 401(k) plan, then
to the extent the loan is attributable to a
Participant's Elective Deferrals, Qualified
Nonelective Contributions or Qualified Matching
Contributions, the Participant's Individual Account
will not be reduced unless the Participant has
attained age 59 1/2 or has another distributable
event. A Participant will be deemed to have consented
to the provision at the time the loan is made to the
Participant.
G. No loans will be made to any shareholder-employee or
Owner-Employee. For purposes of this requirement, a
shareholder-employee means an employee or officer of
an electing small business (Subchapter S) corporation
who owns (or is considered as owning within the
meaning of Section 3l8(a)(1) of the Code), on any day
during the taxable year of such corporation, more
than 5% of the outstanding stock of the corporation.
If a valid spousal consent has been obtained in accordance
with 6.08(E), then, notwithstanding any other provisions of
this Plan, the portion of the Participant's Vested Individual
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 account
balance payable at the time of death or distribution, but only
if the reduction is used as repayment of the loan. If less
than 100% of the Participant's Vested Individual Account
(determined without regard to the preceding sentence) is
payable to the surviving spouse, then the account balance
shall be adjusted by first reducing the Vested Individual
Account by the amount of the security used as repayment of the
loan, and then determining the benefit payable to the
surviving spouse.
To avoid taxation to the Participant, no loan to any
Participant can be made to the extent that such loan when
added to the outstanding balance of all other loans to the
Participant would 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 present
value of the nonforfeitable Individual Account of the
Participant or, if greater, the total Individual Account up to
$10,000. For the purpose of the above limitation, all loans
from all plans of the Employer and other members of a group of
employers described in Sections 414(b), 414(c), and 414(m) of
the Code are aggregated. Furthermore, any loan shall by its
terms require that repayment (principal and interest) be
amortized in level payments, not less frequently than
quarterly, over a
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period not extending beyond 5 years from the date of the loan,
unless such loan is 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. 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
paragraph.
The Plan Administrator shall administer the loan program in
accordance with a written document. Such written document
shall include, at a minimum, the following: (i) the identity
of the person or positions authorized to administer the
Participant loan program; (ii) the procedure for applying for
loans; (iii) the basis on which loans will be approved or
denied; (iv) limitations (if any) on the types and amounts of
loans offered; (v) the procedure under the program for
determining a reasonable rate of interest; (vi) the types of
collateral which may secure a Participant loan; and (vii) the
events constituting default and the steps that will be taken
to preserve Plan assets in the event of such default.
6.09 DISTRIBUTION IN KIND
The Plan Administrator may cause any distribution under this
Plan to be made either in a form actually held in the Fund, or
in cash by converting assets other than cash into cash, or in
any combination of the two foregoing ways.
6.10 DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS
A. Direct Rollover Option
This Section applies to distributions made on or
after January 1, 1993. Notwithstanding any provision
of the Plan to the contrary that would otherwise
limit a distributee's election under this Section, a
distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any
portion of an eligible rollover distribution that is
equal to at least $500 paid directly to an eligible
retirement plan specified by the distributee in a
direct rollover.
B. Definitions
1. Eligible rollover distribution - An eligible
rollover distribution is any distribution of
all or any portion of the balance to the
credit of the distributee, except that an
eligible rollover distribution does not
include:
a. 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;
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b. any distribution to the extent such
distribution is required under Section
401(a)(9) of the Code;
c. the portion of any other distribution
that is not includible in gross income
(determined without regard to the
exclusion for net unrealized
appreciation with respect to employer
securities); and
d. any other distribution(s) that is
reasonably expected to total less than
$200 during a year.
2. Eligible retirement plan - An eligible
retirement plan is an individual retirement
account described in Section 408(a) of the
Code, an individual retirement annuity
described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of
the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the
distributee's eligible rollover
distribution. However, in the case of an
eligible rollover distribution to the
surviving spouse, an eligible retirement
plan is an individual retirement account or
individual retirement annuity.
3. Distributee - A distributee includes an
Employee or former Employee. In addition,
the Employee's or former Employee's
surviving spouse and the Employee's or
former Employee's spouse or former spouse
who is the alternate payee under a qualified
domestic relations order, as defined in
Section 4l4(p) of the Code, are distributees
with regard to the interest of the spouse or
former spouse.
4. Direct rollover - A direct rollover is a
payment by the Plan to the eligible
retirement plan specified by the
distributee.
6.11 PROCEDURE FOR MISSING PARTICIPANTS OR BENEFICIARIES
The Plan Administrator must use all reasonable measures to
locate Participants or Beneficiaries who are entitled to
distributions from the Plan. In the event that the Plan
Administrator cannot locate a Participant or Beneficiary who
is entitled to a distribution from the Plan after using all
reasonable measures to locate him or her, the Plan
Administrator may, consistent with applicable laws,
regulations and other pronouncements under ERISA, use any
reasonable procedure to dispose of distributable plan assets,
including any of the following: (1) establish a bank account
for and in the name of the Participant or Beneficiary and
transfer the assets to such bank account, (2) purchase an
annuity contract with the assets in the name of the
Participant or Beneficiary, or (3) after the expiration of 5
years after the benefit becomes payable, treat the amount
distributable as a Forfeiture and allocate it in accordance
with the terms of the Plan and if the Participant or
Beneficiary is later located, restore such benefit to the
Plan.
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SECTION SEVEN CLAIMS PROCEDURE
7.01 FILING A CLAIM FOR PLAN DISTRIBUTIONS
A Participant or Beneficiary who desires to make a claim for
the Vested portion of the Participant's Individual Account
shall file a written request with the Plan Administrator on a
form to be furnished to him or her by the Plan Administrator
for such purpose. The request shall set forth the basis of the
claim, The Plan Administrator is authorized to conduct such
examinations as may be necessary to facilitate the payment of
any benefits to which the Participant or Beneficiary may be
entitled under the terms of the Plan.
7.02 DENIAL OF CLAIM
Whenever a claim for a Plan distribution by any Participant or
Beneficiary has been wholly or partially denied, the Plan
Administrator must furnish such Participant or Beneficiary
written notice of the denial within 60 days of the date the
original claim was filed. This notice shall set forth the
specific reasons for the denial, specific reference to
pertinent Plan provisions on which the denial is based, a
description of any additional information or material needed
to perfect the claim, an explanation of why such additional
information or material is necessary and an explanation of the
procedures for appeal.
7.03 REMEDIES AVAILABLE
The Participant or Beneficiary shall have 60 days from receipt
of the denial notice in which to make written application for
review by the Plan Administrator. The Participant or
Beneficiary may request that the review be in the nature of a
hearing. The Participant or Beneficiary shall have the right
to representation, to review pertinent documents and to submit
comments in writing. The Plan Administrator shall issue a
decision on such review within 60 days after receipt of an
application for review as provided for in Section 7.02. Upon a
decision unfavorable to the Participant or Beneficiary, such
Participant or Beneficiary shall be entitled to bring such
actions in law or equity as may be necessary or appropriate to
protect or clarify his or her right to benefits under this
Plan.
SECTION EIGHT PLAN ADMINISTRATOR
8.01 EMPLOYER IS PLAN ADMINISTRATOR
A. The Employer shall be the Plan Administrator unless
the managing body of the Employer designates a person
or persons other than the Employer as the Plan
Administrator and so notifies the Trustee (or
Custodian, if applicable). The Employer shall also be
the Plan Administrator if the person or persons so
designated cease to be the Plan Administrator. The
Employer may establish an administrative committee
that will carry out the Plan Administrator's duties.
Members of the administrative committee may allocate
the Plan Administrator's duties among themselves.
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B. If the managing body of the Employer designates a
person or persons other than the Employer as Plan
Administrator, such person or persons shall serve at
the pleasure of the Employer and shall serve pursuant
to such procedures as such managing body may provide.
Each such person shall be bonded as may be required
by law.
8.02 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR
A. The Plan Administrator may, by appointment, allocate
the duties of the Plan Administrator among several
individuals or entities. Such appointments shall not
be effective until the party designated accepts such
appointment in writing.
B. The Plan Administrator shall have the authority to
control and manage the operation and administration
of the Plan. The Plan Administrator shall administer
the Plan for the exclusive benefit of the
Participants and their Beneficiaries in accordance
with the specific terms of the Plan.
C. The Plan Administrator shall be charged with the
duties of the general administration of the Plan,
including, but not limited to, the following:
1. To determine all questions of interpretation
or policy in a manner consistent with the
Plan's documents and the Plan
Administrator's construction or
determination in good faith shall be
conclusive and binding on all persons except
as otherwise provided herein or by law. Any
interpretation or construction shall be done
in a nondiscriminatory manner and shall be
consistent with the intent that the Plan
shall continue to be deemed a qualified plan
under the terms of Section 40 1(a) of the
Code, as amended from time-to-time, and
shall comply with the terms of ERISA, as
amended from time-to-time;
2. To determine all questions relating to the
eligibility of Employees to become or remain
Participants hereunder;
3. To compute the amounts necessary or
desirable to be contributed to the Plan;
4. To compute the amount and kind of benefits
to which a Participant or Beneficiary shall
be entitled under the Plan and to direct the
Trustee (or Custodian, if applicable) with
respect to all disbursements under the Plan,
and, when requested by the Trustee (or
Custodian), to furnish the Trustee (or
Custodian) with instructions, in writing, on
matters pertaining to the Plan and the
Trustee (or Custodian) may rely and act
thereon;
5. To maintain all records necessary for the
administration of the Plan;
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6. To be responsible for preparing and filing
such disclosure and tax forms as may be
required from time-to-time by the Secretary
of Labor or the Secretary of the Treasury;
and
7. To furnish each Employee, Participant or
Beneficiary such notices, information and
reports under such circumstances as may be
required by law.
D. The Plan Administrator shall have all of the powers
necessary or appropriate to accomplish his or her
duties under the Plan, including, but not limited to,
the following:
1. To appoint and retain such persons as may be
necessary to carry out the functions of the
Plan Administrator;
2. To appoint and retain counsel, specialists
or other persons as the Plan Administrator
deems necessary or advisable in the
administration of the Plan;
3. To resolve all questions of administration
of the Plan;
4. To establish such uniform and
nondiscriminatory rules which it deems
necessary to carry out the terms of the
Plan;
5. To make any adjustments in a uniform and
nondiscriminatory manner which it deems
necessary to correct any arithmetical or
accounting errors which may have been made
for any Plan Year; and
6. To correct any defect, supply any omission
or reconcile any inconsistency in such
manner and to such extent as shall be deemed
necessary or advisable to carry out the
purpose of the Plan.
8.03 EXPENSES AND COMPENSATION
All reasonable expenses of administration including, but not
limited to, those involved in retaining necessary professional
assistance may be paid from the assets of the Fund.
Alternatively, the Employer may, in its discretion, pay any or
all such expenses. Pursuant to uniform and nondiscriminatory
rules that the Plan Administrator may establish from
time-to-time, administrative expenses and expenses unique to a
particular Participant may be charged to a Participant's
Individual Account or the Plan Administrator may allow
Participants to pay such fees outside of the Plan. The
Employer shall furnish the Plan Administrator with such
clerical and other assistance as the Plan Administrator may
need in the performance of his or her duties.
8.04 INFORMATION FROM EMPLOYER
To enable the Plan Administrator to perform his or her duties,
the Employer shall supply full and timely information to the
Plan Administrator (or his or her
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designated agents) on all matters relating to the Compensation
of all Participants, their regular employment, retirement,
death, Disability or Termination of Employment, and such other
pertinent facts as the Plan Administrator (or his or her
agents) may require. The Plan Administrator shall advise the
Trustee (or Custodian, if applicable) of such of the foregoing
facts as may be pertinent to the Trustee's (or Custodian's)
duties under the Plan. The Plan Administrator (or his or her
agents) is entitled to rely on such information as is supplied
by the Employer and shall have no duty or responsibility to
verify such information.
SECTION NINE AMENDMENT AND TERMINATION
9.01 RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN
A. The Employer, by adopting the Plan, expressly
delegates to the Prototype Sponsor the power, but not
the duty, to amend the Plan without any further
action or consent of the Employer as the Prototype
Sponsor deems necessary for the purpose of adjusting
the Plan to comply with all laws and regulations
governing pension or profit sharing plans.
Specifically, it is understood that the amendments
may be made unilaterally by the Prototype Sponsor.
However, it shall be understood that the Prototype
Sponsor shall be under no obligation to amend the
Plan documents and the Employer expressly waives any
rights or claims against the Prototype Sponsor for
not exercising this power to amend. For purposes of
Prototype Sponsor amendments, the mass submitter
shall be recognized as the agent of the Prototype
Sponsor. If the Prototype Sponsor 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.
B. An amendment by the Prototype Sponsor shall be
accomplished by giving written notice to the Employer
of the amendment to be made. The notice shall set
forth the text of such amendment and the date such
amendment is to be effective. Such amendment shall
take effect unless within the 30 day period after
such notice is provided, or within such shorter
period as the notice may specify, the Employer gives
the Prototype Sponsor written notice of refusal to
consent to the amendment. Such written notice of
refusal shall have the effect of withdrawing the Plan
as a prototype plan and shall cause the Plan to be
considered an individually designed plan. The right
of the Prototype Sponsor to cause the Plan to be
amended shall terminate should the Plan cease to
conform as a prototype plan as provided in this or
any other section.
9.02 RIGHT OF EMPLOYER TO AMEND THE PLAN
The Employer may (1) change the choice of options in the
Adoption Agreement; (2) add overriding language in the
Adoption Agreement when such language is necessary to satisfy
Section 415 or Section 416 of the Code because of the required
aggregation of multiple plans; and (3) 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. An Employer that
amends the Plan for any other reason, including a waiver of
the
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minimum funding requirement under Section 4 12(d) of the Code,
will no longer participate in this prototype plan and will be
considered to have an individually designed plan.
An Employer who wishes to amend the Plan to change the options
it has chosen in the Adoption Agreement must complete and
deliver a new Adoption Agreement to the Prototype Sponsor and
Trustee (or Custodian, if applicable). Such amendment shall
become effective upon execution by the Employer and Trustee
(or Custodian).
The Employer further reserves the right to replace the Plan in
its entirety by adopting another retirement plan which the
Employer designates as a replacement plan.
9.03 LIMITATION ON POWER TO AMEND
No amendment to the Plan shall be effective to the extent that
it has the effect of decreasing a Participant's accrued
benefit. Notwithstanding the preceding sentence, a
Participant's Individual Account may be reduced to the extent
permitted under Section 412(c)(8) of the Code. For purposes of
this paragraph, a plan amendment which has the effect of
decreasing a Participant's Individual Account or eliminating
an optional form of benefit with respect to benefits
attributable to service before the amendment shall be treated
as reducing an accrued benefit. Furthermore, if the vesting
schedule of a Plan is amended, in the case of an Employee who
is a Participant as of the later of the date such amendment is
adopted or the date it becomes effective, the Vested
percentage (determined as of such date) of such Employee's
Individual Account derived from Employer Contributions will
not be less than the percentage computed under the Plan
without regard to such amendment.
9.04 AMENDMENT OF VESTING SCHEDULE
If the Plan's vesting schedule is amended, or the Plan is
amended in any way that directly or indirectly affects the
computation of the Participant's Vested percentage, or if the
Plan is deemed amended by an automatic change to or from a
top-heavy vesting schedule, each Participant with at least 3
Years of Vesting Service with the Employer may elect, within
the time set forth below, to have the Vested percentage
computed under the Plan without regard to such amendment.
For Participants who do not have at least 1 Hour of Service in
any Plan Year beginning after December 31, 1988, the preceding
sentence shall be applied by substituting "5 Years of 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 or deemed to
be made and shall end the later of:
A. 60 days after the amendment is adopted;
B. 60 days after the amendment becomes effective; or
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C. 60 days after the Participant is issued written
notice of the amendment by the Employer or Plan
Administrator.
9.05 PERMANENCY
The Employer expects to continue this Plan and make the
necessary contributions thereto indefinitely, but such
continuance and payment is not assumed as a contractual
obligation. Neither the Adoption Agreement nor the Plan nor
any amendment or modification thereof nor the making of
contributions hereunder shall be construed as giving any
Participant or any person whomsoever any legal or equitable
right against the Employer, the Trustee (or Custodian, if
applicable) the Plan Administrator or the Prototype Sponsor
except as specifically provided herein, or as provided by law,
9.06 METHOD AND PROCEDURE FOR TERMINATION
The Plan may be terminated by the Employer at any time by
appropriate action of its managing body. Such termination
shall be effective on the date specified by the Employer. The
Plan shall terminate if the Employer shall be dissolved,
terminated, or declared bankrupt. Written notice of the
termination and effective date thereof shall be given to the
Trustee (or Custodian), Plan Administrator, Prototype Sponsor,
Participants and Beneficiaries of deceased Participants, and
the required filings (such as the Form 5500 series and others)
must be made with the Internal Revenue Service and any other
regulatory body as required by current laws and regulations.
Until all of the assets have been distributed from the Fund,
the Employer must keep the Plan in compliance with current
laws and regulations by (a) making appropriate amendments to
the Plan and (b) taking such other measures as may be
required.
9.07 CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER
Notwithstanding the preceding Section 9.06, a successor of the
Employer may continue the Plan and be substituted in the place
of the present Employer. The successor and the present
Employer (or, if deceased, the executor of the estate of a
deceased Self-Employed Individual who was the Employer) must
execute a written instrument authorizing such substitution and
the successor must complete and sign a new plan document.
9.08 FAILURE OF PLAN QUALIFICATION
If the Plan fails to retain its qualified status, the Plan
will no longer be considered to be part of a prototype plan,
and such Employer can no longer participate under this
prototype. In such event, the Plan will be considered an
individually designed plan.
SECTION TEN MISCELLANEOUS
10.01 STATE COMMUNITY PROPERTY LAWS
The terms and conditions of this Plan shall be applicable
without regard to the community property laws of any state.
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10.02 READINGS
The headings of the Plan have been inserted for convenience of
reference only and are to be ignored in any construction of
the provisions hereof.
10.03 GENDER AND NUMBER
Whenever any words are used herein in the masculine gender
they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and
whenever any words are used herein in the singular form they
shall be construed as though they were also used in the plural
form in all cases where they would so apply.
10.04 PLAN MERGER OR CONSOLIDATION
In the case of any merger or consolidation of the Plan with,
or transfer of assets or liabilities of such Plan to any other
plan, each Participant shall be entitled to receive benefits
immediately after the merger, consolidation, or transfer (if
the Plan had then terminated) which are equal to or greater
than the benefits he or she would have been entitled to
receive immediately before the merger, consolidation, or
transfer (if the Plan had then terminated). The Trustee (or
Custodian) has the authority to enter into merger agreements
or agreements to directly transfer the assets of this Plan but
only if such agreements are made with trustees or custodians
of other retirement plans described in Section 401(a) of the
Code.
10.05 STANDARD OF FIDUCIARY CONDUCT
The Employer, Plan Administrator, Trustee and any other
fiduciary under this Plan shall discharge their duties with
respect to this Plan solely in the interests of Participants
and their Beneficiaries and with the care, skill, prudence and
diligence under the circumstances then prevailing that a
prudent man acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims. No fiduciary shall cause the
Plan to engage in any transaction known as a "prohibited
transaction" under ERISA.
10.06 GENERAL UNDERTAKING OF ALL PARTIES
All parties to this Plan and all persons claiming any interest
whatsoever hereunder agree to perform any and all acts and
execute any and all documents and papers which may be
necessary or desirable for the carrying out of this Plan and
any of its provisions.
10.07 AGREEMENT BINDS HEIRS, ETC.
This Plan shall be binding upon the heirs, executors,
administrators, successors and assigns, as those terms shall
apply to any and all parties hereto, present and future.
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10.08 DETERMINATION OF TOP-HEAVY STATUS
A. For any Plan Year beginning after December 31, 1983,
this Plan is a Top-Heavy Plan if any of the following
conditions exist:
1. If the top-heavy ratio for this Plan exceeds
60% and this Plan is not part of any
required aggregation group or permissive
aggregation group of plans.
2. If this Plan is 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%.
3. If this Plan is a part of a required
aggregation group and part of a permissive
aggregation group of plans and the top-heavy
ratio for the permissive aggregation group
exceeds 60%.
For purposes of this Section 10.08, the following
terms shall have the meanings indicated below:
B. Key Employee - Any Employee or former Employee (and
the Beneficiaries of such Employee) who at any time
during the determination period was an officer of the
Employer if such individual's annual compensation
exceeds 50% of the dollar limitation under Section
415(b)(1)(A) of the Code, an owner (or considered an
owner under Section 318 of the Code) of one of the 10
largest interests in the Employer if such
individual's compensation exceeds 100% of the dollar
limitation under Section 415(c)(1)(A) of the Code, a
5% owner of the Employer, or a 1% owner of the
Employer who has an annual compensation of more than
$150,000. Annual compensation means compensation as
defined in Section 415(c)(3) of the Code, but
including amounts contributed by the Employer
pursuant to a salary reduction agreement which are
excludable from the Employee's gross income under
Section 125, Section 402(e)(3), Section 402(h)(l)(B)
or Section 403(b) of the Code. The determination
period is the Plan Year containing the determination
date and the 4 preceding Plan Years.
The determination of who is a Key Employee will be
made in accordance with Section 416(i)(1) of the Code
and the regulations thereunder.
C. Top-heavy ratio
1. If the Employer maintains one or more
defined contribution plans (including any
simplified employee pension plan) and the
Employer has not maintained any defined
benefit plan which during the 5-year period
ending on the determination date(s) has or
has had accrued benefits, the top-heavy
ratio for this Plan alone or for the
required or permissive aggregation group as
appropriate is a fraction, the numerator of
which is the sum of the account balances of
all Key Employees as of the determination
date(s) (including any part of any account
balance
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distributed in the 5-year period ending on
the determination date(s)), and the
denominator of which is the sum of all
account balances (including any part of any
account balance distributed in the 5-year
period ending on the determination date(s)),
both computed in accordance with Section 416
of the Code and the regulations thereunder.
Both the numerator and the denominator of
the top-heavy ratio are increased to reflect
any contribution not actually made as of the
determination date, but which is required to
be taken into account on that date under
Section 416 of the Code and the regulations
thereunder.
2. If the Employer maintains one or more
defined contribution plans (including any
simplified employee pension plan) and the
Employer maintains or has maintained one or
more defined benefit plans which during the
5-year period ending on the determination
date(s) has or has had any accrued benefits,
the top-heavy ratio for any required or
permissive aggregation group as appropriate
is a fraction, the numerator of which is the
sum of account balances under the aggregated
defined contribution plan or plans for all
Key Employees, determined in accordance with
(1) above, and the present value of accrued
benefits under the aggregated defined
benefit plan or plans for all Key Employees
as of the determination date(s), and the
denominator of which is the sum of the
account balances under the aggregated
defined contribution plan or plans for all
Participants, determined in accordance with
(1) above, and the present value of accrued
benefits under the defined benefit plan or
plans for all Participants as of the
determination date(s), all determined in
accordance with Section 416 of the Code and
the regulations thereunder. The accrued
benefits under a defined benefit plan in
both the numerator and denominator of the
top-heavy ratio are increased for any
distribution of an accrued benefit made in
the S-year period ending on the
determination date.
3. For purposes of(l) and (2) 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 Section 416 of the Code and the
regulations thereunder for the first and
second plan years of a defined benefit plan.
The account balances and accrued benefits of
a Participant (a) who is not a Key Employee
but who was a Key Employee in a Prior Year,
or (b) who has not been credited with at
least one Hour of Service with any employer
maintaining the plan at any time during the
S-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 Section 416 of the Code and
the regulations thereunder. Deductible
employee contributions will not be taken
into account for purposes of computing the
top-heavy ratio. When aggregating
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plans the value of account balances and
accrued benefits will be calculated with
reference to the determination dates that
fall within the same calendar year.
The accrued benefit of a Participant other
than a Key Employee shall be determined
under (a) the method, if any, that uniformly
applies for accrual purposes under all
defined benefit plans maintained by the
Employer, or (b)if there is no such method,
as if such benefit accrued not more rapidly
than the slowest accrual rate permitted
under the fractional rule of Section 41
1(b)(l)(C) of the Code.
4. Permissive aggregation group: The required
aggregation group of plans plus any other
plan or plans of the Employer which, when
considered as a group with the required
aggregation group, would continue to satisfy
the requirements of Sections 401(a)(4) and
410 of the Code.
5. Required aggregation group: (a) Each
qualified plan of the Employer in which at
least one Key Employee participates or
participated at any time during the
determination period (regardless of whether
the Plan has terminated), and (b) any other
qualified plan of the Employer which enables
a plan described in (a) to meet the
requirements of Sections 401(a)(4) or 410 of
the Code.
6. Determination date: 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.
7. Valuation date: For purposes of calculating
the top-heavy ratio, the valuation date
shall be the last day of each Plan Year.
8. Present value: For purposes of establishing
the "present value" of benefits under a
defined benefit plan to compute the
top-heavy ratio, any benefit shall be
discounted only for mortality and interest
based on the interest rate and mortality
table specified for this purpose in the
defined benefit plan, unless otherwise
indicated in the Adoption Agreement.
10.09 SPECIAL LIMITATIONS FOR OWNER-EMPLOYEES
If this Plan provides contributions or benefits for one or
more Owner-Employees who control both the business for which
this Plan is established and one or more other trades or
businesses, this Plan and the plan established for other
trades or businesses must, when looked at as a single plan,
satisfy Sections 40 1(a) and (d) of the Code for the employees
of those trades or businesses.
If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or
businesses, the employees of the other trades or businesses
must be included in a plan which satisfies Sections 40 1(a)
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and (d) of the Code and which provides contributions and
benefits not less favorable than provided for Owner-Employees
under this Plan.
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 trade or business which is controlled must be as
favorable as those provided for him or her under the most
favorable plan of the trade or business which is not
controlled.
For purposes of the preceding paragraphs, 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 a unincorporated trade or
business, or
B. in the case of a partnership, own more than 50% of
either the capital interest or the profit 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.
10.10 INALIENABILITY OF BENEFITS
No benefit or interest available hereunder will be subject to
assignment or alienation, either voluntarily or involuntarily.
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, unless such order is determined to be a qualified
domestic relations order, as defined in Section 414(p) of the
Code.
Generally, a domestic relations order cannot be a qualified
domestic relations order until January 1, 1985. However, in
the case of a domestic relations order entered before such
date, the Plan Administrator:
(1) shall treat such order as a qualified domestic
relations order if such Plan Administrator is paying
benefits pursuant to such order on such date, and
(2) may treat any other such order entered before such
date as a qualified domestic relations order even if
such order does not meet the requirements of Section
414(p) of the Code.
Notwithstanding any provision of the Plan to the contrary, a
distribution to an alternate payee under a qualified domestic
relations order shall be permitted even if the Participant
affected by such order is not otherwise entitled to a
distribution and even if such Participant has not attained
earliest retirement age as defined in Section 414(p) of the
Code.
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10.11 CANNOT ELIMINATE PROTECTED BENEFITS
Pursuant to Section 41 1(d)(6) of the Code, and the
regulations thereunder, the Employer cannot reduce, eliminate
or make subject to Employer discretion any Section 411(d)(6)
protected benefit. Where this Plan document is being adopted
to amend another plan that contains a protected benefit not
provided for in this document, the Employer may attach a
supplement to the Adoption Agreement that describes such
protected benefit which shall become part of the Plan.
SECTION ELEVEN 401(K) PROVISIONS
In addition to Sections 1 through 10, the provisions of this
Section 11 shall apply if the Employer has established a
401(k) cash or deferred arrangement (CODA) by completing and
signing the appropriate Adoption Agreement.
11.100 DEFINITIONS
The following words and phrases when used in the Plan with
initial capital letters shall, for the purposes of this Plan,
have the meanings set forth below unless the context indicates
that other meanings are intended.
11.101 ACTUAL DEFERRAL PERCENTAGE (ADP)
Means, for a specified group of Participants for a Plan Year,
the average of the ratios (calculated separately for each
Participant in such group) of (1) the amount of Employer
Contributions actually paid over to the Fund on behalf of such
Participant for the Plan Year to (2) the Participant's
Compensation for such Plan Year (taking into account only that
Compensation paid to the Employee during the portion of the
Plan Year he or she was an eligible Participant, unless
otherwise indicated in the Adoption Agreement). For purposes
of calculating the ADP. Employer Contributions on behalf of
any Participant shall include: (1) any Elective Deferrals made
pursuant to the Participant's deferral election, (including
Excess Elective Deferrals of Highly Compensated Employees),
but excluding (a) Excess Elective Deferrals of Non-highly
Compensated Employees that arise solely from Elective
Deferrals made under the Plan or plans of this Employer and
(b) Elective Deferrals that are taken into account in the
Contribution Percentage test (provided the ADP test is
satisfied both with and without exclusion of these Elective
Deferrals); and (2) at the election of the Employer, Qualified
Nonelective Contributions and Qualified Matching
Contributions. For purposes of computing Actual Deferral
Percentages, an Employee who would be a Participant but for
the failure to make Elective Deferrals shall be treated as a
Participant on whose behalf no Elective Deferrals are made.
11.102 AGGREGATE LIMIT
Means the sum of (1) 125% of the greater of the ADP of the
Participants who are not Highly Compensated Employees for the
Plan Year or the ACP of the Participants who are not Highly
Compensated Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within the Plan
Year of the CODA; and (2) the lesser of 200% or two plus the
lesser of such ADP or ACP. "Lesser" is substituted for
"greater" in "(1)" above, and "greater" is
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substituted for "lesser" after "two plus the" in "(2)" if it
would result in a larger Aggregate Limit.
11.103 AVERAGE CONTRIBUTION PERCENTAGE (ACP)
Means the average of the Contribution Percentages of the
Eligible Participants in a group.
11.104 CONTRIBUTING PARTICIPANT
Means a Participant who has enrolled as a Contributing
Participant pursuant to Section 11.201 and on whose behalf the
Employer is contributing Elective Deferrals to the Plan (or is
making Nondeductible Employee Contributions).
11.105 CONTRIBUTION PERCENTAGE
Means the ratio (expressed as a percentage) of the
Participant's Contribution Percentage Amounts to the
Participant's Compensation for the Plan Year (taking into
account only the Compensation paid to the Employee during the
portion of the Plan Year he or she was an eligible
Participant, unless otherwise indicated in the Adoption
Agreement).
11.106 CONTRIBUTION PERCENTAGE AMOUNTS
Means the sum of the Nondeductible Employee Contributions,
Matching Contributions, and Qualified Matching Contributions
made under the Plan on behalf of the Participant for the Plan
Year. Such Contribution Percentage Amounts shall not include
Matching Contributions that are forfeited either to correct
Excess Aggregate Contributions or because the contributions to
which they relate are Excess Deferrals, Excess Contributions,
Excess Aggregate Contributions or excess annual additions
which are distributed pursuant to Section 11.508. If so
elected in the Adoption Agreement, the Employer may include
Qualified Nonelective Contributions in the Contribution
Percentage Amount. The Employer also may elect to use Elective
Deferrals 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.
11.107 ELECTIVE DEFERRALS
Means any Employer Contributions made to the Plan at the
election of the Participant, in lieu of cash compensation, and
shall include contributions made pursuant to a salary
reduction agreement or other deferral mechanism. With respect
to any taxable year, a Participant's Elective Deferral is the
sum of all Employer contributions made on behalf of such
Participant pursuant to an election to defer under any
qualified CODA as described in Section 401(k) of the Code, any
simplified employee pension cash or deferred arrangement as
described in Section 402(h)(1)(B), any eligible deferred
compensation plan under Section 457, any plan as described
under Section 501(c)(18), and any Employer contributions made
on the behalf of a Participant for the purchase of an annuity
contract under Section 403(b) pursuant to a salary reduction
agreement. Elective
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Deferrals shall not include any deferrals properly distributed
as excess annual additions.
No Participant shall be permitted to have Elective Deferrals
made under this Plan, or any other qualified plan maintained
by the Employer, during any taxable year, in excess of the
dollar limitation contained in Section 402(g) of the Code in
effect at the beginning of such taxable year.
Elective Deferrals may not be taken into account for purposes
of satisfying the minimum allocation requirement applicable to
Top-Heavy Plans described in Section 3.01(E).
11.108 ELIGIBLE PARTICIPANT
Means any Employee who is eligible to make a Nondeductible
Employee Contribution or an Elective Deferral (if the Employer
takes such contributions into account in the calculation of
the Contribution Percentage), or to receive a Matching
Contribution (including Forfeitures thereof) or a Qualified
Matching Contribution.
If a Nondeductible Employee Contribution is required as a
condition of participation in the Plan, any Employee who would
be a Participant in the Plan if such Employee made such a
contribution shall be treated as an Eligible Participant on
behalf of whom no Nondeductible Employee Contributions are
made.
11.109 EXCESS AGGREGATE CONTRIBUTIONS
Means, 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
order of their Contribution Percentages beginning
with the highest of such percentages).
Such determination shall be made after first
determining Excess Elective Deferrals pursuant to
Section 11.111 and then determining Excess
Contributions pursuant to Section 11.110.
11.110 EXCESS CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate amount of Employer Contributions
actually taken into account in computing the ADP of
Highly Compensated Employees for such Plan Year, over
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B. 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 ADPs, beginning with the highest of such
percentages).
11.111 EXCESS ELECTIVE DEFERRALS
Means those Elective Deferrals that are includible in a
Participant's gross income under Section 402(g) of the Code to
the extent such Participant's Elective Deferrals for a taxable
year exceed the dollar limitation under such Code section.
Excess Elective Deferrals shall be treated as annual additions
under the Plan, unless such amounts are distributed no later
than the first April 15 following the close of the
Participant's taxable year.
11.112 MATCHING CONTRIBUTION
Means an Employer Contribution made to this or any other
defined contribution plan on behalf of a Participant on
account of an Elective Deferral or a Nondeductible Employee
Contribution made by such Participant under a plan maintained
by the Employer.
Matching Contributions may not be taken into account for
purposes of satisfying the minimum allocation requirement
applicable to Top-Heavy Plans described in Section 3.01(E).
11.113 QUALIFIED NONELECTIVE CONTRIBUTIONS
Means contributions (other than Matching Contributions or
Qualified Matching Contributions) made by the Employer and
allocated to Participants' Individual Accounts that the
Participants may not elect to receive in cash until
distributed from the Plan; that are nonforfeitable when made;
and that are distributable only in accordance with the
distribution provisions that are applicable to Elective
Deferrals and Qualified Matching Contributions.
Qualified Nonelective Contribution may be taken into account
for purposes of satisfying the minimum allocation requirement
applicable to Top-Heavy Plans described in Section 3.01(E).
11.114 QUALIFIED MATCHING CONTRIBUTIONS
Means Matching Contributions which are subject to the
distribution and nonforfeitability requirements under Section
401(k) of the Code when made.
11.115 QUALIFYING CONTRIBUTING PARTICIPANT
Means a Contributing Participant who satisfies the
requirements described in Section 11.302 to be entitled to
receive a Matching Contribution (and Forfeitures, if
applicable) for a Plan Year.
11.200 CONTRIBUTING PARTICIPANT
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11.201 REQUIREMENTS TO ENROLL AS A CONTRIBUTING PARTICIPANT
A. Each Employee who satisfies the eligibility
requirements specified in the Adoption Agreement may
enroll as a Contributing Participant as of any
subsequent Entry Date (or earlier if required by
Section 2.03) specified in the Adoption Agreement for
this purpose. A Participant who wishes to enroll as a
Contributing Participant must complete, sign and file
a salary reduction agreement (or agreement to make
Nondeductible Employee Contributions) with the Plan
Administrator.
B. Notwithstanding the times set forth in Section
11.201(A) as of which a Participant may enroll as a
Contributing Participant, the Plan Administrator
shall have the authority to designate, in a
nondiscriminatory manner, additional enrollment times
during the 12 month period beginning on the Effective
Date (or the date that Elective Deferrals may
commence, if later) in order that an orderly first
enrollment might be completed. In addition, if the
Employer has indicated in the Adoption Agreement that
Elective Deferrals may be based on bonuses, then
Participants shall be afforded a reasonable period of
time prior to the issuance of such bonuses to elect
to defer them into the Plan.
11.202 CHANGING ELECTIVE DEFERRAL AMOUNTS
A Contributing Participant may modify his or her salary
reduction agreement (or agreement to make Nondeductible
Employee Contributions) to increase or decrease (within the
limits placed on Elective Deferrals (or Nondeductible Employee
Contributions) in the Adoption Agreement) the amount of his or
her Compensation deferred into the Plan. Such modification may
only be made as of the dates specified in the Adoption
Agreement for this purpose, or as of any other more frequent
date(s) if the Plan Administrator permits in a uniform and
nondiscriminatory manner. A Contributing Participant who
desires to make such a modification shall complete, sign and
file a new salary reduction agreement (or agreement to make
Nondeductible Employee Contribution) with the Plan
Administrator. The Plan Administrator may prescribe such
uniform and nondiscriminatory rules it deems appropriate to
carry out the terms of this Section.
11.203 CEASING ELECTIVE DEFERRALS
A Participant may cease Elective Deferrals (or Nondeductible
Employee Contributions) and thus withdraw as a Contributing
Participant as of the dates specified in the Adoption
Agreement for this purpose (or as of any other date if the
Plan Administrator so permits in a uniform and
nondiscriminatory manner) by revoking the authorization to the
Employer to make Elective Deferrals (or Nondeductible Employee
Contributions) on his or her behalf. A Participant who desires
to withdraw as a Contributing Participant shall give written
notice of withdrawal to the Plan Administrator at least thirty
days (or such lesser period of days as the Plan Administrator
shall permit in a uniform and nondiscriminatory manner) before
the effective date of withdrawal. A Participant shall cease to
be a
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Contributing Participant upon his or her Termination of
Employment, or an account of termination of the Plan.
11.204 RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE
DEFERRALS
A Participant who has withdrawn as a Contributing Participant
under Section 11.203 (or because the Participant has taken a
hardship withdrawal pursuant to Section 11.503) may not again
become a Contributing Participant until the dates set forth in
the Adoption Agreement for this purpose, unless the Plan
Administrator, in a uniform and nondiscriminatory manner,
permits withdrawing Participants to resume their status as
Contributing Participants sooner.
11.205 CERTAIN ONE-TIME IRREVOCABLE ELECTIONS
This Section 11.205 applies where the Employer has indicated
in the Adoption Agreement that an Employee may make a one-time
irrevocable election to have the Employer make contributions
to the Plan on such Employee's behalf. In such event, an
Employee may elect, upon the Employee's first becoming
eligible to participate in the Plan, to have contributions
equal to a specified amount or percentage of the Employee's
Compensation (including no amount of Compensation) made by the
Employer on the Employee's behalf to the Plan (and to any
other plan of the Employer) for the duration of the Employee's
employment with the Employer. Any contributions made pursuant
to a one-time irrevocable election described in this Section
are not treated as made pursuant to a cash or deferred
election, are not Elective Deferrals and are not includible in
an Employee's gross income.
The Plan Administrator shall establish such uniform and
nondiscriminatory procedures as it deems necessary or
advisable to administer this provision.
11.300 CONTRIBUTIONS
11.301 CONTRIBUTIONS BY EMPLOYER
The Employer shall make contributions to the Plan in
accordance with the contribution formulas specified in the
Adoption Agreement.
11.302 MATCHING CONTRIBUTIONS
The Employer may elect to make Matching Contributions under
the Plan on behalf of Qualifying Contributing Participants as
provided in the Adoption Agreement. To be a Qualifying
Contributing Participant for a Plan Year, the Participant must
make Elective Deferrals (or Nondeductible Employee
Contributions, if the Employer has agreed to match such
contributions) for the Plan Year, satisfy any age and Years of
Eligibility Service requirements that are specified for
Matching Contributions in the Adoption Agreement and also
satisfy any additional conditions set forth in the Adoption
Agreement for this purpose. In a uniform and nondiscriminatory
manner, the Employer may make Matching Contributions at the
same time as it contributes Elective Deferrals or at any other
time as permitted by laws and regulations.
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11.303 QUALIFIED NONELECTIVE CONTRIBUTIONS
The Employer may elect to make Qualified Nonelective
Contributions under the Plan on behalf of Participants as
provided in the Adoption Agreement.
In addition, in lieu of distributing Excess Contributions as
provided in Section 11.505 of the Plan, or Excess Aggregate
Contributions as provided in Section 11.506 of the Plan, and
to the extent elected by the Employer in the Adoption
Agreement, the Employer may make Qualified Nonelective
Contributions on behalf of Participants who are not Highly
Compensated Employees that are sufficient to satisfy either
the Actual Deferral Percentage test or the Average
Contribution Percentage test, or both, pursuant to regulations
under the Code.
11.304 QUALIFIED MATCHING CONTRIBUTIONS
The Employer may elect to make Qualified Matching
Contributions under the Plan on behalf of Participants as
provided in the Adoption Agreement.
11.305 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Notwithstanding Section 3.02, if the Employer so allows in the
Adoption Agreement, a Participant may contribute Nondeductible
Employee Contributions to the Plan.
If the Employer has indicated in the Adoption Agreement that
Nondeductible Employee Contributions will be mandatory, then
the Employer shall establish uniform and nondiscriminatory
rules and procedures for Nondeductible Employee Contributions
as it deems necessary and advisable including, but not limited
to, rules describing in amounts or percentages of Compensation
Participants may or must contribute to the Plan.
A separate account will be maintained by the Plan
Administrator for the Nondeductible Employee Contributions for
each Participant.
A Participant may, upon a written request submitted to the
Plan Administrator, withdraw the lesser of the portion of his
or her Individual Account attributable to his or her
Nondeductible Employee Contributions or the amount he or she
contributed as Nondeductible Employee Contributions.
Nondeductible Employee Contributions and earnings thereon will
be nonforfeitable at all times. No Forfeiture will occur
solely as a result of an Employee's withdrawal of
Nondeductible Employee Contributions.
11.400 NONDISCRIMINATION TESTING
11.401 ACTUAL DEFERRAL PERCENTAGE TEST (ADP)
A. Limits on Highly Compensated Employees - The Actual
Deferral Percentage (hereinafter "ADP") for
Participants who are Highly Compensated Employees for
each Plan Year and the ADP for
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Participants who are not Highly Compensated Employees
for the same Plan Year must satisfy one of the
following tests:
1. The ADP for Participants who are Highly
Compensated Employees for the Plan Year
shall not exceed the ADP for Participants
who are not Highly Compensated Employees for
the same Plan Year multiplied by 1.25; or
2. The ADP for Participants who are Highly
Compensated Employees for the Plan Year
shall not exceed the ADP for Participants
who are not Highly Compensated Employees for
the same Plan Year multiplied by 2.0
provided that the ADP for Participants who
are Highly Compensated Employees does not
exceed the ADP for Participants who are not
Highly Compensated Employees by more than 2
percentage points.
B. Special Rules
1. The ADP for any Participant who is a Highly
Compensated Employee for the Plan Year and
who is eligible to have Elective Deferrals
(and Qualified Nonelective Contributions or
Qualified Matching Contributions, or both,
if treated as Elective Deferrals for
purposes of the ADP test) allocated to his
or her Individual Accounts under two or more
arrangements described in Section 401(k) of
the Code, that are maintained by the
Employer, shall be determined as if such
Elective Deferrals (and, if applicable, such
Qualified Nonelective Contributions or
Qualified Matching Contributions, or both)
were made under a single arrangement. If a
Highly Compensated Employee participates in
two or more cash or deferred arrangements
that have different Plan Years, all cash or
deferred arrangements ending with or within
the same calendar year shall be treated as a
single arrangement. Notwithstanding the
foregoing, certain plans shall be treated as
separate if mandatorily disaggregated under
regulations under Section 401(k) of the
Code.
2. In the event that this Plan satisfies the
requirements of Sections 401(k), 401(a)(4),
or 410(b) of the Code only if aggregated
with one or more other plans, or if one or
more other plans satisfy the requirements of
such sections of the Code only if aggregated
with this Plan, then this Section 11.401
shall be applied by determining the ADP of
Employees as if all such plans were a single
plan. For Plan Years beginning after
December 31, 1989 plans may be aggregated in
order to satisfy Section 401(k) of the Code
only if they have the same Plan Year.
3. For purposes of determining the ADP of a
Participant who is a 5% owner or one of the
10 most highly paid Highly Compensated
Employees, the Elective Deferrals (and
Qualified Nonelective Contributions or
Qualified Matching Contributions, or both,
if treated as Elective Deferrals for
purposes of the ADP
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test) and Compensation of such Participant
shall include the Elective Deferrals (and,
if applicable, Qualified Nonelective
Contributions and Qualified Matching
Contributions, or both) and Compensation for
the Plan Year of family members (as defined
in Section 414(c)(6) of the Code). Family
members, with respect to such Highly
Compensated Employees, shall be disregarded
as separate Employees in determining the ADP
both for Participants who are not Highly
Compensated Employees and for Participants
who are Highly Compensated Employees.
4. For purposes of determining the ADP test,
Elective Deferrals, Qualified Nonelective
Contributions and Qualified Matching
Contributions must be made before the last
day of the 12 month period immediately
following the Plan Year to which
contributions relate.
5. The Employer shall maintain records
sufficient to demonstrate satisfaction of
the ADP test and the amount of Qualified
Nonelective Contributions or Qualified
Matching Contributions, or both, used in
such test.
6. The determination and treatment of the ADP
amounts of any Participant shall satisfy
such other requirements as may be prescribed
by the Secretary of the Treasury.
7. If the Employer elects to take Qualified
Matching Contributions into account as
Elective Deferrals for purposes of the ADP
test, then (subject to such other
requirements as may be prescribed by the
Secretary of the Treasury) unless otherwise
indicated in the Adoption Agreement, only
the amount of such Qualified Matching
Contributions that are needed to meet the
ADP test shall be taken into account.
8. In the event that the Plan Administrator
determines that it is not likely that the
ADP test will be satisfied for a particular
Plan Year unless certain steps are taken
prior to the end of such Plan Year, the Plan
Administrator may require Contributing
Participants who are Highly Compensated
Employees to reduce their Elective Deferrals
for such Plan Year in order to satisfy that
requirement. Said reduction shall also be
required by the Plan Administrator in the
event that the Plan Administrator
anticipates that the Employer will not be
able to deduct all Employer Contributions
from its income for Federal income tax
purposes.
11.402 LIMITS ON NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS AND MATCHING
CONTRIBUTIONS
A. Limits on Highly Compensated Employees - The Average
Contribution Percentage (hereinafter "ACP") for
Participants who are Highly Compensated Employees for
each Plan Year and the ACP for
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Participants who are not Highly Compensated Employees
for the same Plan Year must satisfy one of the
following tests:
1. The ACP for Participants who are Highly
Compensated Employees for the Plan Year
shall not exceed the ACP for Participants
who are not Highly Compensated Employees for
the same Plan Year multiplied by 1.25; or
2. The ACP for Participants who are Highly
Compensated Employees for the Plan Year
shall not exceed the ACP for Participants
who are not Highly Compensated Employees for
the same Plan Year multiplied by 2, provided
that the ACP for the Participants who are
Highly Compensated Employees does not exceed
the ACP for Participants who are not Highly
Compensated Employees by more than 2
percentage points.
B. Special Rules
1. Multiple Use - If one or more Highly
Compensated Employees participate in both a
CODA and a plan subject to the ACP test
maintained by the Employer and the sum of
the ADP and ACP of those Highly Compensated
Employees subject to either or both tests
exceeds the Aggregate Limit, then, as
elected in the Adoption Agreement, the AC?
or the ADP of those Highly Compensated
Employees who also participate in a CODA
will be reduced (beginning with such Highly
Compensated Employee whose ACP (or ADP, if
elected) is the highest) so that the limit
is not exceeded. The amount by which each
Highly Compensated Employee's Contribution
Percentage Amounts (or ADP, if elected) is
reduced shall be treated as an Excess
Aggregate Contribution (or Excess
Contribution, if elected). The ADP and ACP
of the Highly Compensated Employees are
determined after any corrections required to
meet the ADP and ACP tests. Multiple use
does not occur if the ADP and ACP of the
Highly Compensated Employees does not exceed
1.25 multiplied by the AD? and AC? of the
Participants who are not Highly Compensated
Employees.
2. For purposes of this Section 11.402, the
Contribution Percentage for any Participant
who is a Highly Compensated Employee and who
is eligible to have Contribution Percentage
Amounts allocated to his or her Individual
Account under two or more plans described in
Section 40 1(a) of the Code, or arrangements
described in Section 401(k) of the Code that
are maintained by the Employer, shall be
determined as if the total of such
Contribution Percentage Amounts was made
under each plan. 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. Notwithstanding the foregoing,
certain plans shall be treated as
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separate if mandatorily disaggregated under
regulations under Section 40 1(m) of the
Code.
3. In the event that this Plan satisfies the
requirements of Sections 40 1(m), 401(a)(4)
or 4 10(b) of the Code only if aggregated
with one or more other plans, or if one or
more other plans satisfy the requirements of
such Sections of the Code only if aggregated
with this Plan, then this Section shall be
applied by determining the Contribution
Percentage 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 Section
401(m) of the Code only if they have the
same Plan Year.
4. For purposes of determining the Contribution
Percentage of a Participant who is a 5%
owner or one of the 10 most highly paid
Highly Compensated Employees, the
Contribution Percentage Amounts and
Compensation of such Participant shall
include the Contribution Percentage Amounts
and Compensation for the Plan Year of family
members, (as defined in Section 414(q)(6) of
the Code). Family members, with respect to
Highly Compensated Employees, shall be
disregarded as separate Employees in
determining the Contribution Percentage both
for Participants who are not Highly
Compensated Employees and for Participants
who are Highly Compensated Employees.
5. For purposes of determining the Contribution
Percentage test, Nondeductible Employee
Contributions are considered to have been
made in the Plan Year in which contributed
to the Fund. Matching 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.
6. 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.
7. The determination and treatment of the
Contribution Percentage of any Participant
shall satisfy such other requirements as may
be prescribed by the Secretary of the
Treasury.
8. If the Employer elects to take Qualified
Nonelective Contributions into account as
Contribution Percentage Amounts for purposes
of the ACP test, then (subject to such other
requirements as may be prescribed by the
Secretary of the Treasury) unless otherwise
indicated in the Adoption Agreement, only
the amount of such Qualified Nonelective
Contributions that are needed to meet the
ACP test shall be taken into account.
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9. If the Employer elects to take Elective
Deferrals into account as Contribution
Percentage Amounts for purposes of the AC?
test, then (subject to such other
requirements as may be prescribed by the
Secretary of the Treasury) unless otherwise
indicated in the Adoption Agreement, only
the amount of such Elective Deferrals that
are needed to meet the ACP test shall be
taken into account.
11.500 DISTRIBUTION PROVISIONS
11.501 GENERAL RULE
Distributions from the Plan are subject to the provisions of
Section 6 and the provisions of this Section 11. In the event
of a conflict between the provisions of Section 6 and Section
11, the provisions of Section 11 shall control.
11.502 DISTRIBUTION REQUIREMENTS
Elective Deferrals, Qualified Nonelective Contributions, and
Qualified Matching Contributions, and income allocable to each
are not distributable to a Participant or his or her
Beneficiary or Beneficiaries, in accordance with such
Participant's or Beneficiary or Beneficiaries' election,
earlier than upon separation from service, death or
disability.
Such amounts may also be distributed upon:
A. Termination of the Plan without the establishment of
another defined contribution plan, other than an
employee stock ownership plan (as defined in Section
4975(e) or Section 409 of the Code) or a simplified
employee pension plan as defined in Section 408(k).
B. The disposition by a corporation to an unrelated
corporation of substantially all of the assets
(within the meaning of Section 409(d)(2) of the Code
used in a trade or business of such corporation if
such corporation continues to maintain this Plan
after the disposition, but only with respect to
Employees who continue employment with the
corporation acquiring such assets.
C. The disposition by a corporation to an unrelated
entity of such corporation's interest in a subsidiary
(within the meaning of Section 409(d)(3) of the Code)
if such corporation continues to maintain this Plan,
but only with respect to Employees who continue
employment with such subsidiary.
D. The attainment of age 59 1/2 in the case of a profit
sharing plan.
E. If the Employer has so elected in the Adoption
Agreement, the hardship of the Participant as
described in Section 11.503.
All distributions that may be made pursuant to one or
more of the foregoing distributable events are
subject to the spousal and Participant consent
requirements (if applicable) contained in Section
401(a)(1) and
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417 of the Code. In addition, distributions after
March 31, 1988, that are triggered by any of the
first three events enumerated above must be made in a
lump sum.
11.503 HARDSHIP DISTRIBUTION
A. General - If the Employer has so elected in the
Adoption Agreement, distribution of Elective
Deferrals (and any earnings credited to a
Participant's account as of the end of the last Plan
Year, ending before July 1, 1989) may be made to a
Participant in the event of hardship. For the
purposes of this Section, hardship is defined as an
immediate and heavy financial need of the Employee
where such Employee lacks other available resources.
Hardship distributions are subject to the spousal
consent requirements contained in Sections 401(a)(l
1) and 417 of the Code.
B. Special Rules
1. The following are the only financial needs
considered immediate and heavy: expenses
incurred or necessary for medical care,
described in Section 2 13(d) of the Code, of
the Employee, the Employee's spouse or
dependents; the purchase (excluding mortgage
payments) of a principal residence for the
Employee; payment of tuition and related
educational fees for the next 12 months of
post-secondary education for the Employee,
the Employee's spouse, children or
dependents; or the need to prevent the
eviction of the Employee from, or a
foreclosure on the mortgage of, the
Employee's principal residence.
2. A distribution will be considered as
necessary to satisfy an immediate and heavy
financial need of the Employee only if:
a. The Employee has obtained all
distributions, other than hardship
distributions, and all nontaxable
loans under all plans maintained by
the Employer;
b. All plans maintained by the Employer
provide that the Employee's Elective
Deferrals (and Nondeductible Employee
Contributions) will be suspended for
12 months after the receipt of the
hardship distribution;
c. The distribution is not in excess of
the amount of an immediate and heavy
financial need (including amounts
necessary to pay any Federal, state or
local income taxes or penalties
reasonably anticipated to result from
the distribution); and
d. All plans maintained by the Employer
provide that the Employee may not make
Elective Deferrals for the Employee's
taxable year immediately following the
taxable year of the hardship
distribution in excess of the
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applicable limit under Section 402(j)
of the Code for such taxable year less
the amount of such Employee's Elective
Deferrals for the taxable year of the
hardship distribution.
11.504 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
A. General Rule - A Participant may assign to this Plan
any Excess Elective Deferrals made during a taxable
year of the Participant by notifying the Plan
Administrator on or before the date specified in the
Adoption Agreement of the amount of the Excess
Elective Deferrals to be assigned to the Plan. A
Participant is deemed to notify the Plan
Administrator of any Excess Elective Deferrals that
arise by taking into account only those Elective
Deferrals made to this Plan and any other plans of
the Employer.
Notwithstanding any other provision of the Plan.
Excess Elective Deferrals, plus any income and minus
any loss allocable thereto, shall be distributed no
later than April 15 to any Participant to whose
Individual Account Excess Elective Deferrals were
assigned for the preceding year and who claims Excess
Elective Deferrals for such taxable year.
B. Determination of Income or Loss - Excess Elective
Deferrals shall be adjusted for any income or loss up
to the date of distribution. The income of loss
allocable to Excess Elective Deferrals is the sum of:
(1) income or loss allocable to the Participant's
Elective Deferral account for the taxable year
multiplied by a fraction, the numerator of which is
such Participant's Elective Deferrals for the year
and the denominator is the Participant's Individual
Account balance attributable to Elective Deferrals
without regard to any income or loss occurring during
such taxable year; and (2) 10% 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.
Notwithstanding the preceding sentence, the Plan
Administrator may compute the income or loss
allocable to Excess Elective Deferrals in the manner
described in Section 4 (i.e., the usual manner used
by the Plan for allocating income or loss to
Participants' Individual Accounts), provided such
method is used consistently for all Participants and
for all corrective distributions under the Plan for
the Plan Year.
11.504 DISTRIBUTION OF EXCESS CONTRIBUTIONS
A. General Rule - Notwithstanding any other provision of
this Plan, Excess Contributions, plus any income and
minus any loss allocable thereto, shall be
distributed no later than the last day of each Plan
Year to Participants to whose Individual Accounts
such Excess Contributions were allocated for the
preceding Plan Year. If such excess amounts are
distributed more than 2 1/2 months after the last day
of the Plan Year in which such excess amounts arose,
a 10% excise tax will be imposed on the Employer
maintaining the Plan with respect to such amounts.
Such distributions
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shall be made to Highly Compensated Employees on the
basis of the respective portions of the Excess
Contributions attributable to each of such Employees.
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 ADP.
Excess Contributions (including the amounts
recharacterized) shall be treated as annual additions
under the Plan.
B. 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) income or loss allocable to Participant's
Elective Deferral account (and, if applicable, the
Qualified Nonelective Contribution 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 is the Participant's
Individual Account balance attributable to Elective
Deferrals (and Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, if any of
such contributions are included in the ADP test)
without regard to any income or loss occurring during
such Plan Year; and (2) 10% of the amount determined
under (1) multiplied by the number of whole calendar
months between the end of the Plan Year and the date
of distribution, counting the month of distribution
if distribution occurs after the 15th of such month.
Notwithstanding the preceding sentence, the Plan
Administrator may compute the income or loss
allocable to Excess Contributions in the manner
described in Section 4 (i.e., the usual manner used
by the Plan for allocating income or loss to
Participants' Individual Accounts), provided such
method is used consistently for all Participants and
for all corrective distributions under the Plan for
the Plan Year.
C. Accounting for Excess Contributions - Excess
Contributions shall be distributed from the
Participant's Elective Deferral account and Qualified
Matching Contribution account (if applicable) in
proportion to the Participant's Elective Deferrals
and Qualified Matching Contributions (to the extent
used in the ADP test) for the Plan Year. Excess
Contributions shall be distributed from the
Participant's Qualified Nonelective Contribution
account only to the extent that such Excess
Contributions exceed the balance in the Participant's
Elective Deferral account and Qualified Matching
Contribution account.
11.506 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
A. General Rule - Notwithstanding any other provision of
this Plan, Excess Aggregate Contributions, plus any
income and minus any loss allocable thereto, shall be
forfeited, if forfeitable, or if not forfeitable,
distributed no later than the last day of each Plan
Year to Participants to whose accounts such Excess
Aggregate Contributions were allocated for the
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preceding Plan Year. Excess Aggregate Contributions
of Participants who are subject to the family member
aggregation rules shall be allocated among the family
members in proportion to the Employee and Matching
Contributions (or amounts treated as Matching
Contributions) of each family member that is combined
to determine the combined ACP. If such Excess
Aggregate Contributions are distributed more than 2
1/2 months after the last day of the Plan Year in
which such excess amounts arose, a 10% excise tax
will be imposed on the Employer maintaining the Plan
with respect to those amounts.
Excess Aggregate Contributions shall be treated as
annual additions under the Plan.
B. 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) income or loss allocable to the
Participant's Nondeductible Employee Contribution
account, Matching 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 Deferral 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 is the Participant's Individual 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. Notwithstanding the preceding
sentence, the Plan Administrator may compute the
income or loss allocable to Excess Aggregate
Contributions in the manner described in Section 4
(i.e., the usual manner used by the Plan for
allocating income or loss to Participants' Individual
Accounts), provided such method is used consistently
for all Participants and for all corrective
distributions under the Plan for the Plan Year.
B. Forfeitures of Excess Aggregate Contributions -
Forfeitures of Excess Aggregate Contributions may
either be reallocated to the accounts of Contributing
Participants who are not Highly Compensated Employees
or applied to reduce Employer Contributions, as
elected by the Employer in the Adoption Agreement.
C. Accounting for Excess Aggregate Contributions -
Excess Aggregate Contributions shall be forfeited, if
forfeitable or distributed on a pro rata basis from
the Participant's Nondeductible Employee Contribution
account, Matching Contribution account, and Qualified
Matching Contribution account (and, if applicable,
the Participant's Qualified Nonelective Contribution
account or Elective Deferral account, or both).
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11.506 RECHARACTERIZATION
A Participant may treat his or her Excess Contributions as an
amount distributed to the Participant and then contributed by
the Participant to the Plan. Recharacterized amounts will
remain nonforfeitable and subject to the same distribution
requirements as Elective Deferrals. Amounts may not be
recharacterized by a Highly Compensated Employee to the extent
that such amount in combination with other Nondeductible
Employee Contributions made by that Employee would exceed any
stated limit under the Plan on Nondeductible Employee
Contributions.
Recharacterization must occur no later than two and one-half
months after the last day of the Plan Year in which such
Excess Contributions arose and is deemed to occur no earlier
than the date the last Highly Compensated Employee is informed
in writing of the amount recharacterized and the consequences
thereof. Recharacterized amounts will be taxable to the
Participant for the Participant's tax year in which the
Participant would have received them in cash.
11.508 DISTRIBUTION OF ELECTIVE DEFERRALS IF EXCESS ANNUAL ADDITIONS
Notwithstanding any other provision of the Plan, a
Participant's Elective Deferrals shall be distributed to him
or her to the extent that the distribution will reduce an
excess annual addition (as that term is described in Section
3.05 of the Plan).
11.600 VESTING
11.601 100% VESTING ON CERTAIN CONTRIBUTIONS
The Participant's accrued benefit derived from Elective
Deferrals, Qualified Nonelective Contributions, Nondeductible
Employee Contributions, and Qualified Matching Contributions
is nonforfeitable. Separate accounts for Elective Deferrals,
Qualified Nonelective Contributions, Nondeductible Employee
Contributions, Matching Contributions, and Qualified Matching
Contributions will be maintained for each Participant. Each
account will be credited with the applicable contributions and
earnings thereon.
11.602 FORFEITURES AND VESTING OF MATCHING CONTRIBUTIONS
Matching Contributions shall be Vested in accordance with the
vesting schedule for Matching Contributions in the Adoption
Agreement. In any event, Matching Contributions shall be fully
Vested at Normal Retirement Age, upon the complete or partial
termination of the profit sharing plan, or upon the complete
discontinuance of Employer Contributions. Notwithstanding any
other provisions of the Plan, Matching Contributions or
Qualified Matching Contributions must be forfeited if the
contributions to which they relate are Excess Elective
Deferrals, Excess Contributions, Excess Aggregate
Contributions or excess annual additions which are distributed
pursuant to Section 11.508. Such Forfeitures shall be
allocated in accordance with Section 3.01(C).
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When a Participant incurs a Termination of Employment, whether
a Forfeiture arises with respect to Matching Contributions
shall be determined in accordance with Section 6.01(D).
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TABLE OF CONTENTS
PAGE
SECTION ONE DEFINITIONS..............................................1
1.01 ADOPTION AGREEMENT................................................1
1.02 BASIC PLAN DOCUMENT...............................................1
1.03 BENEFICIARY.......................................................1
1.04 BREAK IN ELIGIBILITY SERVICE......................................1
1.05 BREAK IN VESTING SERVICE..........................................1
1.06 CODE..............................................................1
1.07 COMPENSATION......................................................1
1.08 CUSTODIAN.........................................................4
1.09 DISABILITY........................................................4
1.10 EARLY RETIREMENT AGE..............................................5
1.11 EARNED INCOME.....................................................5
1.12 EFFECTIVE DATE....................................................5
1.13 ELIGIBILITY COMPUTATION PERIOD....................................5
1.14 EMPLOYEE..........................................................5
1.15 EMPLOYER..........................................................6
1.16 EMPLOYER CONTRIBUTION.............................................6
1.17 EMPLOYMENT COMMENCEMENT DATE......................................6
1.18 EMPLOYER PROFIT SHARING CONTRIBUTION..............................6
1.19 ENTRY DATES.......................................................6
1.20 ERISA.............................................................6
1.21 FORFEITURE........................................................6
1.22 FUND..............................................................6
1.23 HIGHLY COMPENSATED EMPLOYEE.......................................7
1.24 HOURS OF SERVICE - MEANS..........................................8
1.25 INDIVIDUAL ACCOUNT................................................9
1.26 INVESTMENT FUND...................................................9
1.27 KEY EMPLOYEE......................................................9
1.28 LEASED EMPLOYEE...................................................9
1.29 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS.............................10
1.30 NORMAL RETIREMENT AGE............................................10
1.31 OWNER - EMPLOYEE.................................................10
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1.32 PARTICIPANT......................................................10
1.33 PLAN.............................................................10
1.34 PLAN ADMINISTRATOR...............................................10
1.35 PLAN YEAR........................................................10
1.36 PRIOR PLAN.......................................................11
1.37 PROTOTYPE SPONSOR................................................11
1.38 QUALIFYING PARTICIPANT...........................................11
1.39 RELATED EMPLOYER.................................................11
1.40 RELATED EMPLOYER PARTICIPATION AGREEMENT.........................11
1.41 SELF-EMPLOYED INDIVIDUAL.........................................11
1.42 SEPARATE FUND....................................................11
1.43 TAXABLE WAGE BASE................................................11
1.44 TERMINATION OF EMPLOYMENT........................................12
1.45 TOP-HEAVY PLAN...................................................12
1.46 TRUSTEE..........................................................12
1.47 VALUATION DATE...................................................12
1.48 VESTED...........................................................12
1.49 YEAR OF ELIGIBILITY SERVICE......................................12
1.50 YEAR OF VESTING SERVICE..........................................12
SECTION TWO ELIGIBILITY AND PARTICIPATION...........................13
2.01 ELIGIBILITY TO PARTICIPATE.......................................13
2.02 PLAN ENTRY.......................................................13
2.03 TRANSFER TO OR FROM INELIGIBLE CLASS.............................14
2.04 RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILITY SERVICE.......14
2.05 DETERMINATIONS UNDER THIS SECTION................................15
2.06 TERMS OF EMPLOYMENT..............................................15
2.07 SPECIAL RULES WHERE ELAPSED TIME METHOD IS BEING USED............15
2.08 ELECTION NOT TO PARTICIPATE......................................16
SECTION THREE CONTRIBUTIONS...........................................17
3.01 EMPLOYER CONTRIBUTIONS...........................................17
3.02 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS.............................21
3.03 ROLLOVER CONTRIBUTIONS...........................................22
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3.04 TRANSFER CONTRIBUTIONS...........................................22
3.05 LIMITATION ON ALLOCATIONS........................................22
SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION.......29
4.01 INDIVIDUAL ACCOUNTS..............................................29
4.02 VALUATION OF FUND................................................30
4.03 VALUATION OF INDIVIDUAL ACCOUNTS.................................30
4.04 MODIFICATION OF METHOD FOR VALUING INDIVIDUAL ACCOUNTS...........31
4.05 SEGREGATION OF ASSETS............................................31
4.06 STATEMENT OF INDIVIDUAL ACCOUNTS.................................31
SECTION FIVE TRUSTEE OR CUSTODIAN....................................31
5.01 CREATION OF FUND.................................................31
5.02 INVESTMENT AUTHORITY.............................................32
5.03 FINANCIAL ORGANIZATION CUSTODIAN OR TRUSTEE WITHOUT FULL TRUST
POWERS...........................................................32
5.04 FINANCIAL ORGANIZATION TRUSTEE WITH FULL TRUST POWERS AND
INDIVIDUAL TRUSTEE...............................................33
5.05 DIVISION OF FUND INTO INVESTMENT FUNDS...........................36
5.06 COMPENSATION AND EXPENSES........................................36
5.07 NOT OBLIGATED TO QUESTION DATA...................................37
5.08 LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS.......................37
5.09 RESIGNATION OR REMOVAL OF TRUSTEE (OR CUSTODIAN).................37
5.10 DEGREE OF CARE - LIMITATIONS OF LIABILITY........................38
5.11 INDEMNIFICATION OF PROTOTYPE SPONSOR AND TRUSTEE
(OR CUSTODIAN)...................................................38
5.12 INVESTMENT MANAGERS..............................................39
5.13 MATTERS RELATING TO INSURANCE....................................39
5.14 DIRECTION OF INVESTMENTS BY PARTICIPANT..........................41
SECTION SIX VESTING AND DISTRIBUTION................................41
6.01 DISTRIBUTION TO PARTICIPANT......................................41
6.02 FORM OF DISTRIBUTION TO A PARTICIPANT............................47
6.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT....................49
6.04 FORM OF DISTRIBUTION TO BENEFICIARY..............................50
6.05 JOINT AND SURVIVOR ANNUITY REQUIREMENTS..........................50
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6.06 DISTRIBUTION REQUIREMENTS........................................57
6.07 ANNUITY CONTRACTS................................................64
6.08 LOANS TO PARTICIPANTS............................................64
6.09 DISTRIBUTION IN KIND.............................................66
6.10 DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS..............66
6.11 PROCEDURE FOR MISSING PARTICIPANTS OR BENEFICIARIES..............67
SECTION SEVEN CLAIMS PROCEDURE........................................67
7.01 FILING A CLAIM FOR PLAN DISTRIBUTIONS............................67
7.02 DENIAL OF CLAIM..................................................67
7.03 REMEDIES AVAILABLE...............................................68
SECTION EIGHT PLAN ADMINISTRATOR......................................68
8.01 EMPLOYER IS PLAN ADMINISTRATOR...................................68
8.02 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR......................68
8.03 EXPENSES AND COMPENSATION........................................70
8.04 INFORMATION FROM EMPLOYER........................................70
SECTION NINE AMENDMENT AND TERMINATION...............................70
9.01 RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN.....................70
9.02 RIGHT OF EMPLOYER TO AMEND THE PLAN..............................71
9.03 LIMITATION ON POWER TO AMEND.....................................71
9.04 AMENDMENT OF VESTING SCHEDULE....................................72
9.05 PERMANENCY.......................................................72
9.06 METHOD AND PROCEDURE FOR TERMINATION.............................72
9.07 CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER........................73
9.08 FAILURE OF PLAN QUALIFICATION....................................73
SECTION TEN MISCELLANEOUS...........................................73
10.01 STATE COMMUNITY PROPERTY LAWS....................................73
10.02 READINGS.........................................................73
10.03 GENDER AND NUMBER................................................73
10.04 PLAN MERGER OR CONSOLIDATION.....................................73
10.05 STANDARD OF FIDUCIARY CONDUCE....................................74
10.06 GENERAL UNDERTAKING OF ALL PARTIES...............................74
10.07 AGREEMENT BINDS HEIRS, ETC.......................................74
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10.08 DETERMINATION OF TOP-HEAVY STATUS................................74
10.09 SPECIAL LIMITATIONS FOR OWNER-EMPLOYEES..........................77
10.10 INALIENABILITY OF BENEFITS.......................................78
10.11 CANNOT ELIMINATE PROTECTED BENEFITS..............................78
SECTION ELEVEN 401(K) PROVISIONS.......................................78
11.100 DEFINITIONS..........................................................78
11.101 ACTUAL DEFERRAL PERCENTAGE (ADP).....................................79
11.102 AGGREGATE LIMIT......................................................79
11.103 AVERAGE CONTRIBUTION PERCENTAGE (ACP)................................79
11.104 CONTRIBUTING PARTICIPANT.............................................79
11.105 CONTRIBUTION PERCENTAGE..............................................79
11.106 CONTRIBUTION PERCENTAGE AMOUNTS......................................80
11.107 ELECTIVE DEFERRALS...................................................80
11.108 ELIGIBLE PARTICIPANT.................................................80
11.109 EXCESS AGGREGATE CONTRIBUTIONS.......................................81
11.110 EXCESS CONTRIBUTIONS.................................................81
11.111 EXCESS ELECTIVE DEFERRALS............................................81
11.112 MATCHING CONTRIBUTION................................................81
11.113 QUALIFIED NONELECTIVE CONTRIBUTIONS..................................82
11.114 QUALIFIED MATCHING CONTRIBUTIONS.....................................82
11.115 QUALIFYING CONTRIBUTING PARTICIPANT..................................82
11.200 CONTRIBUTING PARTICIPANT.............................................82
11.201 REQUIREMENTS TO ENROLL AS A CONTRIBUTING PARTICIPANT.................82
11.202 CHANGING ELECTIVE DEFERRAL AMOUNTS...................................83
11.203 CEASING ELECTIVE DEFERRALS...........................................83
11.204 RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE
DEFERRALS............................................................83
11.205 CERTAIN ONE-TIME IRREVOCABLE ELECTIONS...............................83
11.300 CONTRIBUTIONS........................................................84
11.301 CONTRIBUTIONS BY EMPLOYER............................................84
11.302 MATCHING CONTRIBUTIONS...............................................84
11.303 QUALIFIED NONELECTIVE CONTRIBUTIONS..................................84
11.304 QUALIFIED MATCHING CONTRIBUTIONS.....................................85
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11.305 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS.................................85
11.400 NONDISCRIMINATION TESTING............................................85
11.401 ACTUAL DEFERRAL PERCENTAGE TEST (ADP)................................85
11.402 LIMITS ON NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS AND MATCHING
CONTRIBUTIONS........................................................87
11.500 DISTRIBUTION PROVISIONS..............................................89
11.501 GENERAL RULE.........................................................89
11.502 DISTRIBUTION REQUIREMENTS............................................90
11.503 HARDSHIP DISTRIBUTION................................................90
11.504 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS............................91
11.504 DISTRIBUTION OF EXCESS CONTRIBUTIONS.................................92
11.506 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.......................93
11.506 RECHARACTERIZATION...................................................94
11.508 DISTRIBUTION OF ELECTIVE DEFERRALS IF EXCESS ANNUAL ADDITIONS........95
11.600 VESTING..............................................................95
11.601 100% VESTING ON CERTAIN CONTRIBUTIONS................................95
11.602 FORFEITURES AND VESTING OF MATCHING CONTRIBUTIONS....................95
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