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VOLUME SUBMITTER
PLAN AND TRUST AGREEMENT
SALARY REDUCTION 401(k) PROFIT SHARING
RETIREMENT PLAN
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TABLE OF CONTENTS
ARTICLE I
BASIC DEFINITIONS
1.01 ACCRUED BENEFIT
1.02 AFFILIATED BUSINESS
1.03 ADOPTION AGREEMENT
1.04 BENEFICIARY
1.05 BREAK IN SERVICE
1.06 CODE
1.07 COMPENSATION
1.08 COMPUTATION PERIOD
1.09 DEFINED CONTRIBUTION DOLLAR LIMITATION
1.10 DISABLED
1.11 EARLY RETIREMENT AGE
1.12 EARNED INCOME
1.13 EFFECTIVE DATE
1.14 ELECTION PERIOD
1.15 ELIGIBLE EMPLOYEE
1.16 EMPLOYEE
1.17 EMPLOYEE DEFERRAL CONTRIBUTIONS
1.18 EMPLOYER
1.19 EMPLOYER CONTRIBUTIONS
1.20 EMPLOYMENT DATE
1.21 ENTRY DATE
1.22 ERISA
1.23 FIDUCIARIES
1.24 HIGHLY COMPENSATED EMPLOYEE
1.25 HOUR OF SERVICE
1.26 INDIVIDUAL ACCOUNT (ACCOUNT BALANCE)
1.27 INSURANCE CONTRACT
1.28 INSURER
1.29 INVESTMENT FUND
1.30 LEASED EMPLOYEE
1.31 LIMITATION YEAR
1.32 MATCHING CONTRIBUTIONS
1.33 NET GAIN OR NET LOSS
1.34 NET PROFIT
1.35 NON-ELECTIVE EMPLOYER CONTRIBUTIONS
1.36 NORMAL RETIREMENT AGE
1.37 OWNER-EMPLOYEE
1.38 PARTICIPANT
1.39 PLAN OR PLAN AND TRUST
1.40 PLAN ADMINISTRATOR
1.41 PLAN YEAR
1.42 QUALIFIED NON-ELECTIVE CONTRIBUTIONS
1.43 QUALIFIED MATCHING CONTRIBUTIONS
1.44 SALARY REDUCTION AGREEMENT
1.45 SELF-EMPLOYED INDIVIDUAL
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ARTICLE I (Continued)
1.46 Sponsor
1.47 Spouse (Surviving Spouse)
1.48 Taxable Wage Base or TWB
1.49 Trustee
1.50 Trust Fund
1.51 Valuation Date(s)
1.52 Valuation Period
1.53 Vested Account Balance (Vested Interest)
1.54 Year of Service
ARTICLE II
Eligibility Requirements
2.01 Eligibility
2.02 Excluded Employees
2.03 Plan Information
2.04 Conditions of Continued Participation
2.05 Revocation of Election not to Participate
2.06 Rehired Participant
2.07 Owner-Employees
ARTICLE III
Contributions and Adjustments to Individual Accounts
3.01 Kinds of Contributions
3.02 Employee Deferral Contributions
3.03 Non-Elective Employer Contribution
3.04 Matching Contributions
3.05 Qualified Non-Elective and Qualified Matching Contributions
3.06 Adjustments of Individual Accounts
3.07 Allocation of Non-Elective Employer Contributions
3.08 Allocation of Profit and Loss of Trust Fund to Accounts
3.09 Allocation of Forfeitures
3.10 Allocation of Matching Contributions
3.11 Minimum Service and Employment on the Last Day of The Plan Year
ARTICLE IV
Nondiscrimination Testing and Limitations on Contributions
4.02 Limitations on Elective Deferrals
4.03 Limitations on Matching Contributions
4.04 Distribution of Excess Deferrals
4.05 Distribution of Excess Contributions
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ARTICLE IV (Continued)
4.06 Distribution of Excess Aggregate Contributions
4.07 Limitations on Annual Additions to Individual Accounts
4.08 Deduction Limitation
4.09 Overall Limitations
ARTICLE V
Retirement and Disability Benefits
5.01 Events Entitling Participant to Distribution
5.02 Methods of Benefit Payment
5.03 Cash Out Payment
5.04 Payment if Vested Account Balance exceeds $3,500
5.05 Nonforfeitability of Benefits
ARTICLE VI
DEATH BENEFITS
6.01 Amount of Death Benefit
6.02 Payment of Death Benefit
6.03 Beneficiary Designation
6.04 Selection by Beneficiary
ARTICLE VII
Termination Benefits
7.01 Vested Account Balance
7.02 Determination of Vested Benefit
7.03 Payment of Vested Interest
7.04 Rehired Participant
ARTICLE VIII
Joint and Survivor Annuity Requirements
ARTICLE IX
Distribution Requirements
9.01 General Rules
9.02 Required Beginning Date
9.03 Limits on Distribution Periods
9.04 Determination of Amount to be Distributed Each Year
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ARTICLE IX (Continued)
9.05 Death Distribution Provisions
9.06 Commencement of Benefits
9.07 Definitions
ARTICLE X
Loans to Participants
10.01 Loans to Participants
10.02 Maximum Loan Amount
10.03 Repayment of Loans
10.04 Terms
10.05 Loans to Beneficiaries
10.06 Prohibition on Loans to Owner-Employees and Shareholder-
Employees
ARTICLE XI
Plan Administration
11.01 Allocation of Fiduciary Powers
11.02 Plan Administration
11.03 Claim Procedure
11.04 Reporting and Disclosure
11.05 Plan Administrator's Duties and Powers
11.06 Administrative Rules
11.07 Directions to Trustee
11.08 Benefit Applications
11.09 Domestic Relations Order
ARTICLE XII
Top Heavy Rules
12.01 Effective Date
12.02 Determination of Top Heavy Status
12.03 Definitions and Special Rules
12.04 Effect of Top Heavy Status
ARTICLE XIII
The Trustee
13.01 Resignation and Removal
13.02 Information to be Furnished to Trustee
13.03 Accounting
13.04 Trustee's Right to Judicial Settlement
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ARTICLE XIII (Continued)
13.05 Trustee's Expenses
13.06 Payment of Benefits to Incompetent
13.07 Trustee's Investment Powers
13.08 Form of Plan Contributions
13.09 Payments Made at Direction of Plan Administrator
ARTICLE XIV
Fiduciary Responsibility
14.01 Fiduciary Standards
14.02 Situs of Plan Assets
ARTICLE XV
Purchase of Insurance Contracts
15.01 Purchase Permitted
ARTICLE XVI
Exclusive Benefit Requirements
16.01 Trustee Receipt of Funds
16.02 Plan Assets for Exclusive Benefit of Participants
16.03 Return of Employer Contributions
ARTICLE XVII
Plan Termination and Amendments
17.01 Termination or Partial Termination
17.02 Limitations on Amendments by Employer
17.03 Amendments Required for Qualification
17.04 Participant's Consent to Amendment
17.05 Amendment of Adoption Agreement
ARTICLE XVIII
Other Required Provisions
18.01 Plan Merger or Consolidation
18.02 Nonalienation of Benefits
18.03 Form of Benefit Payments
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ARTICLE XIX
Miscellaneous
19.01 Nonguarantee of Employment
19.02 Construction of Agreement
19.03 Duration of Plan
19.04 Illegality
19.05 Withdrawal by an Employer
19.06 Gender and Number
19.07 Successor Employer
19.08 Indemnification
19.09 Expenses of Administration
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PLAN AND TRUST AGREEMENT
SALARY REDUCTION 401(K) PROFIT SHARING RETIREMENT PLAN
THIS PLAN AND TRUST AGREEMENT (hereinafter referred to as the "Plan") is
entered into, as of the Effective Date, between the Employer and the Trustee
named in the Adoption Agreement, which is attached and made a part of this
Plan. It is established by the Employer and shall be effective on the date
reflected in the Adoption Agreement. Its purpose is to provide retirement and
other related benefits for the Employer's eligible employees.
ARTICLE I
BASIC DEFINITIONS
When used in this Plan, the following words and phrases shall have the
following meanings, unless the context clearly indicates otherwise. Under no
circumstances shall any of the following definitions be interpreted or
construed in a manner which shall be inconsistent with ERISA or the Code or any
valid regulations issued pursuant thereto
1.01 Accrued Benefit: The balance in a Participant's Individual
Account.
1.02 Affiliated Business: Each entity that, with the Employer,
constitutes a member of a controlled group of corporations (as
defined in Section 414(b) of the Code) a group of trades or
businesses under common control (as defined in Section 414(c)
of the Code) or an affiliated service group (as defined in
Section 414(m) of the Code), or any other entity required to be
aggregated with the Employer pursuant to Section 414(o) of the
Code. For purposes of applying the limitations of Sections
4.08 and 4.09, Sections 414(b) and 414(c) of the Code are
modified by Section 415(h) of the Code.
1.03 Adoption Agreement: The document containing the Employer's
elections and by which the Employer adopts this Plan and the
Trustee agrees to act as Trustee.
1.04 Beneficiary: A person or entity designated to receive the
benefits of a deceased Participant. If the Participant is
married as of the date of death, the Beneficiary shall be the
Participant's Spouse, unless the Spouse has consented in
writing to the designation of a different Beneficiary, and the
following conditions are met:
(a) the Beneficiary may not be changed without the consent
of the Spouse (unless the consent of the Spouse
expressly permits further designation by the Participant
without any requirement of further consent by the
Spouse);
(b) the Spouse's consent is witnessed by a Plan
representative or a Notary Public; and
(c) the consent of the Spouse is only valid with respect to
the Spouse who signs the consent.
1.05 Break in Service:
(a) Completed Hours of Service: If the Adoption
Agreement specifies the completed Hours of Service
method of counting Years of Service, "Break in Service"
means a Computation
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Period in which a Participant completes less than 500 Hours of
Service.
(b) Elapsed Time Method: If the Adoption Agreement specifies the
elapsed time method of counting Years of Service, then "Break in
Service" means a Severance Period (as defined in Section 1.54) of
at least 12 consecutive months.
(c) Maternity or Paternity Absences:
(1) The provisions of this subsection shall apply in the case
of an Employee who is absent from work for any period --
(A) because of the Employee's pregnancy,
(B) because of the birth of the Employee's child,
(C) because of the placement of a child with the
Employee in connection with the adoption of the
child by the Employee. or
(D) to care for such a child for a period beginning
immediately following birth or placement.
(2) If the completed Hours of Service method of counting
Years of Service is designated in the Adoption Agreement,
then Hours of Service described in subparagraph (A) shall be
counted as Hours of Service solely for the purpose of
determining whether a Break in Service has occurred.
(A) The Hours of Service described in this subparagraph
are:
(i) the Hours of Service which otherwise would
normally have been credited to the Employee
but for the absence described in paragraph
(1), or
(ii) if the Hours of Service described in
clause (i) cannot be determined, eight
Hours of Service for each normal workday of
absence.
(B) The Hours of Service described in subparagraph (A)
shall be treated as Hours of Service under this
subsection (c):
(i) only in the Computation Period in which the
absence begins, if an Employee would be
prevented from incurring a Break in Service
in that Computation Period solely because
the absence is treated as Hours of Service
under this paragraph; or
(ii) in any other case, in the immediately
following Computation Period.
(3) If (i) the elapsed time method of counting Years of
Service is designated in the Adoption Agreement,
(ii) an Employee is absent from work for any reason
described in paragraph (1), and (iii) the absence
extends beyond the first anniversary of the first
day of absence, the Employee shall not incur a
Severance Date as
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a result of the absence until the day after the
second anniversary of the first day of the absence.
The period between the first and second anniversary
of the first day of the absence is neither a period
of Service nor a Severance Period. (For this
purpose, "Service" and "Severance Period" shall
have the meanings specified in Section 1.54).
(4) No absence from work will be counted as an absence
described in paragraph (1) unless the Employee
furnishes to the Plan Administrator such timely
information the Plan Administrator may reasonably
require to establish
(A) that the absence is for the reasons
described in paragraph (1), and
(B) the number of days for which there was such
an absence.
1.06 Code: The Internal Revenue Code of 1986, as amended from
time to time. For this purpose, a reference to the Code shall
be deemed to incorporate a reference to regulations and
official interpretations promulgated thereunder.
1.07 Compensation: The amount of W-2 earnings which is actually
paid to the Participant by the Employer during the Plan Year,
plus any amount which is contributed by the Employer on behalf
of an Employee pursuant to a salary reduction agreement and
which is not includible in the gross income of the Employee
under Sections 12S,402(a)(8), 402(h) or 403(b) of the Code.
For any Self- Employed Individual, Compensation shall be
Earned Income derived from the trade or business carried on by
such individual.
(a) The annual Compensation of each Participant taken into
account under the Plan for any Plan Year shall not
exceed $200,000, as adjusted by the Secretary of the
Treasury at the same time and in the same manner as
under Section 415(d) of the Code. 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 Plan 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.
(b) Notwithstanding the above, for purposes of applying the
limitations of Section 4.07, and for purposes of
computing the top heavy minimum allocation under Section
12.04, Compensation includes only a Participant's Earned
Income, wages, salaries, and fees for professional
services and other amounts received for personal
services actually rendered in the course of employment
with the Employer (including, but not limited to,
commissions paid salesmen, compensation for services on
the basis of a percentage of profits, commissions on
insurance premiums, tips and bonuses).
1.08 Computation Period: The 12 consecutive month period specified
as the Computation Period in the Adoption Agreement.
1.09 Defined Contribution Dollar Limitation: $30,000, or if
greater, one-fourth of the defined benefit dollar limitation
set forth in Section 415(b)(1) of the Code as in effect for
the Limitation Year.
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1.10 Disabled: A disabled Participant is a Participant who meets
the qualifications for disability set forth in the Adoption
Agreement.
1.11 Early Retirement Age: The Early Retirement Age specified in
the Adoption Agreement. A Participant who satisfied the
service requirements (if any) for an early retirement benefit,
but separated from service (with any nonforfeitable right to
an accrued benefit) before satisfying the age requirement for
such early retirement benefit, is entitled upon satisfaction
of such age requirement to receive a benefit not less than the
benefit to which he would be entitled at the Normal Retirement
Age.
1.12 Earned Income: Net earnings from self-employment in the trade
or business with respect to which the Employer has established
the Plan, for which personal services of the individual are a
material income-producing factor. The Plan Administrator will
determine net earnings without regard to items not included in
gross income and deductions allocable to those items. Net
earnings are reduced by contributions by the Employer to a
qualified plan to the extent deductible under Section 404 of
the Code. In taxable years beginning after 1989, net earrings
shall be determined with regard to the deduction for one-half
of self-employment taxes allowed to the Employer by Section 1
64(f) of the Code.
1.13 Effective Date: The date specified as the Effective Date in
the Adoption Agreement, unless a particular provision of the
Plan specifies otherwise or is otherwise required by law. Any
provisions under the prior plan shall remain in effect until
the Effective Date. "Prior plan" for this purpose shall mean
the plan (if any) that this Plan restates, as in effect on the
day before the Effective Date.
1.14 Election Period: The period to which a Participant's Salary
Reduction Agreement applies as specified in the Adoption
Agreement.
1.15 Eligible Employee: An Employee who satisfies the eligibility
requirements set forth in the Adoption Agreement.
1.16 Employee:
(a) General Rule: Any person (including Self-Employed
Individuals) employed by the Employer.
(b) Termination: Employment shall not tee deemed to have
been terminated where an employee:
(1) is on leave of absence for a period not exceeding
two (2) years, if such leave of absence is
granted pursuant to uniform rules established by
the Employer and if all Employees in similar
circumstances are treated alike; or,
(2) is in the armed service of the United States
while any form of law requiring compulsory
military service shall be in effect, if the
person shall have directly entered such armed
forces, shall not have re-enlisted after the date
first entering the same, and shall have made
application for restoration to active employment
with the Employer within ninety (90) days after
discharge or release from the armed services or
from hospitalization continuing for a period of
not more than one (1) year after such discharge
or release from the armed services.
(c) Leased Employee: Except to the extent required by the
Code, Leased Employees shall not be treated as Employees
unless the Adoption Agreement specifies otherwise.
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1.17 Employee Deferral Contributions: Contributions made to the
Plan by Participants pursuant to Section 3.02.
1.18 Employer: The "Sponsor" named in the Adoption Agreement, any
succeeding entity and any other entity which assumes the
obligations of this Plan with respect to its Employees. For
purposes of applying the limitations of Sections 4.07 and
4.09, Employer shall mean the Employer and each Affiliated
Business.
1.19 Employer Contributions: Contributions made by the Employer to
the Plan pursuant to Sections 3.02, 3.03, 3.04 and 3.05.
1.20 Employment Date: The date on which an Employer first performs
an Hour of Service for the Employer.
1.21 Entry Date: The Entry Date or Entry Dates specified in the
Adoption Agreement.
1.22 ERISA: The Employee Retirement Income Security Act of 1974,
as amended from time to time.
1.23 Fiduciaries: The Employer, the Trustee and the Plan
Administrator, but only to the extent of the specific
responsibilities as provided under the Plan. Any person or
entity may serve in more than one fiduciary capacity.
1.24 Highly Compensated Employee: An Employee who is with respect
to the Employer, an individual described in Section 414(q) of
the Code, which generally shall include highly compensated
active employees and highly compensated former employees.
A highly compensated active employee generally includes any
Employee who performs service for the Employer during the
determination year and who, during the determination year or
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,
(c) was an officer of the Employer and received Compensation
during such year that is greater than 50 percent of the
dollar limitation in effect under Section 415(b)(1)(A)
of the Code; or
(d) Employees who are five percent (5%) owners at any time
during the look-back year or determination year.
However, an Employee not described in (i), (ii), or (iii)
above for the look-back year shall not be treated as described
in (i), (ii), or (iii) above for the determination year unless
the employee is one of the 100 employees who received the most
compensation from the Employer during the determination year.
The determination year shall be the Plan Year. The look-back
year shall be the twelve month period immediately preceding
the determination year.
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Former employees: A former employee generally shall be treated
as a highly compensated employee if -
(A) such employee was a highly compensated active Employee
when such employee separated from service, or
(B) such employee was a highly compensated active Employee
at any time after attaining age 55.
1.25 Hour of Service: An "Hour of Service" shall include:
(a) Each hour for which an Employee is paid or entitled to
payment by the Employer for the performance of duties
for the Employer. These hours shall be credited to the
Employee for the computation period in which the duties
were performed.
(b) Each hour for which an Employee is paid, or entitled to
payment by the Employer, either directly or indirectly,
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, maternity or paternity leave pursuant to paragraph
(c), military duty or leave of absence, but excluding
payments under a plan maintained solely for the purpose
of complying with workmen's compensation, unemployment
compensation, or disability insurance laws and also
excluding payments for medical or medically related
expenses. No more than 501 Hours of Service shall be
credited under this paragraph (b) for any single
continuous period (whether or not such period occurs in
a single computation period).
(c) Solely for purposes of determining whether a Break in
Service for purposes of eligibility and vesting purposes
has occurred in a computation period, an Employee 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 Employee but
for such absence. In any case in which such hours
cannot be determined, eight (8) Hours of Service shall
be credited per day of such absence. For purposes of
this paragraph, an absence from work for maternity or
paternity reasons means an absence by reason of:
(1) the pregnancy of the Employee;
(2) a birth of a child of the Employee;
(3) the placement of a child with the Employee in
connection with the adoption of such child by the
Employee; or,
4) caring for the child for a period beginning
immediately following the child's birth or
placement.
The Hours of Service credited under this paragraph (c)
shall be credited in the computation period in which the
absence begins if the crediting is necessary to prevent
a Break in Service for that computation period, or in
all other cases, in the following computation period.
The Hours of Service credited under this paragraph (c)
shall be credited only for purposes of determining
whether a Break in Service has occurred, and not for
purposes of determining whether the Participant is
entitled to share in the allocation of Employer
contributions for a given Plan Year.
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(d) 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 shall not be
credited both under either paragraph (a), (b) or (c), as
the case may be, and this paragraph (d). Further, no
more than 501 Hours of Service shall be credited for
payment of back pay to the extent it is agreed to or
awarded for a period of time during which an Employee
did not or would not have performed duties. These Hours
shall 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.
(e) Hours of Service under paragraphs (a), (b), (c) and (d)
shall be calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations,
which is incorporated herein by this reference. For the
purposes of determining an Employee's eligibility to
become a Participant in the Plan and a Participant's
Vested Account Balance, Hours of Service will be
credited for employment as an Employee, or as a Leased
Employee, of the Employer or an Affiliated Business.
(f) If the Employer maintains the plan of a predecessor
employer, service with such employer will be treated as
service for the Employer.
1.26 Individual Account (Account Balance): An account maintained
by the Plan Administrator on behalf of each Participant which
shall reflect the value of the Participant's interest in all
Employer and Employee Contributions and adjustments made to
such contributions.
1.27 Insurance Contract: Any one or more of the following issued
by an Insurer:
(a) A policy of ordinary life insurance;
(b) An endowment policy of life insurance;
(c) An annuity contract without life insurance protection in
which the obligations of the Insurer are fixed or
variable, including a participating interest in a group
annuity contract; and
(d) A policy of term life insurance.
1.28 Insurer: Any legal reserve life insurance company that may
issue Insurance Contracts under this Plan.
1.29 Investment Fund: Each portion of the Trust Fund designated
from time to time by the Plan Administrator, with the consent
of the Trustee, that is invested in such assets of the Trust
Fund (including, but not limited to, interests in common trust
funds, qualified pooled trusts or mutual funds) as (i) the
Plan Administrator, with the consent of the Trustee, selects
from time to time, or (ii) if permitted by the Plan
Administrator with the consent of the Trustee, as a
Participant or Beneficiary, with the consent of the Trustee,
selects from time to time, for the investment of the Accounts
of the Participant or Beneficiary.
1.30 Leased Employee: "Leased Employee" shall mean, with respect
to the Employer, a person who is not employed by the Employer,
but who, under an agreement between the Employer and any other
person (a "leasing organization") has performed services for
the Employer (or for the Employer and related persons
determined in accordance with Section 414(n)(6) of the
Internal Revenue Code) on a substantially full time basis for
a period of at least one year, and the services are of a type
historically performed by employees in the business field of
the Employer. However, for the purposes of this Section, the
following rules will apply.
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(a) If a person is a Leased Employee, then contributions or
benefits provided by the leasing organization which are
attributable to services performed for the Employer
shall be treated as provided by the Employer.
(b) A person will not be treated as a Leased Employee if--
(1) the person is covered by a money purchase pension
plan maintained by the leasing organization that
provides
(A) a nonintegrated employer contribution rate
of at least 10% of compensation (as defined
in Section 415(c)(3) of the Internal
Revenue Code, but including amounts
contributed to a salary reduction agreement
which are excludable from the person's
gross income under Section 125, 402(a)(8),
402(h) or 403(b) of the Internal Revenue
Code),
(B) immediate participation, and
(C) full and immediate vesting; and
(2) Leased Employees, determined without regard to
this subsection, do not constitute more than 20%
of the Employer's Nonhighly Compensated
Workforce.
(c) For the purposes of this Section, the term "Nonhighly
Compensated Workforce" shall mean the aggregate number
of individuals (other than Highly Compensated Employees)
who
(1) are employed by Employer (without regard to this
Section) and have performed services for the
Employer, or for the Employer and related persons
(as that term is defined in Section 144(a)(3) of
the Internal Revenue Code) on a substantially
full-time basis for at least one year, or
(2) are Leased Employees with respect to the Employer
(determined without regard to subsection (b)).
1.31 Limitation Year: The twelve (12) month period used for
computing the limitations imposed by Code Section 415. The
Employer hereby elects to use the Plan Year as the Limitation
Year.
1.32 Matching Contributions: Contributions to the Plan made by the
Employer pursuant to Section 3.04.
1.33 Net Gain or Net Loss: The increases and decreases,
respectively, in the value of the Trust Fund and each
Investment Fund between Valuation Dates.
1.34 Net Profit: The amount of net profit earned by the Employer
(or consolidated net profit for an affiliated group of
Employers) as determined in accordance with generally accepted
accounting principles.
1.35 Non-Elective Employer Contributions: Contributions to the
Plan made by the Employer under Section 3.03.
1.36 Normal Retirement Age: The Normal Retirement Age specified in
the Adoption Agreement.
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1.37 Owner-Employee: An individual who is a sole proprietor of the
Employer, or who is a partner of the Employer owning more than
10% of either the capital or profits interest of the
partnership.
1.38 Participant: An Employee who satisfies the eligibility
requirements set forth herein and participates in the Plan.
1.39 Plan or Plan and Trust: The Salary Reduction 401 (k) Profit
Sharing Plan and Trust evidenced by this agreement, including
the Adoption Agreement, as amended from time to time.
1.40 Plan Administrator: The Employer, or any person, committee or
entity to whom the Employer delegates its authority to
administer the Plan.
1.41 Plan Year: The Plan Year specified in the Adoption Agreement.
1.42 Qualified Non-Elective Contributions: Contributions made by
the Employer to the Plan and allocated to Participants'
Accounts that the Participants may not elect to receive in
cash until distributed from the Plan; that are nonforfeitable
when made; and that are distributable only in accordance with
the distribution provisions that are applicable to Employee
Deferral Contributions.
1.43 Qualified Matching Contributions: Non-Elective Matching
Contributions made by the Employer to the Plan which are
subject to the distribution and nonforfeitability requirements
applicable to Employee Deferral Contributions.
1.44 Salary Reduction Agreement: A Participant's election to make
Employee Deferral Contributions to the Plan, pursuant to the
requirements of Article In.
1.45 Self-Employed Individual: An individual who has Earned Income
(or who would have had Earned Income but for the fact that the
trade or business did not have Net Profits) for the taxable
year from the trade or business for which the Plan is
established.
1.46 Sponsor: The person or entity specified as the Plan Sponsor
in the Adoption Agreement.
1.47 Spouse (Surviving Spouse): The spouse or surviving spouse of a
Participant or a deceased Participant, respectively. A former
spouse will be treated as a Spouse or Surviving Spouse to the
extent provided under an order which constitutes a qualified
domestic relations order as described in Section 414(p) of the
Code.
1.48 Taxable Wage Base or TWB: The maximum amount of earnings
which may be considered wages for a Plan Year under Section
3121(a)(1) of the Code, as an effect on the first day of the
Plan Year. However, if the Adoption Agreement specifies that
a Participant's Compensation is not included for any pert of a
Plan Year in which he is not a Participant, then the Taxable
Wage Base for that Plan Year will be multiplied by the
fraction of the Plan Year for which the Participant's
Compensation is included.
1.49 Trustee: The person or entity named as Trustee in the
Adoption Agreement, and any successors to such person or
entity.
1.50 Trust Fund: The property held by the Trustee pursuant to this
Agreement, together with any income therefrom.
1.51 Valuation Date(s): The last day of each Plan Year, and any
other date that the Plan Administrator elects on a non-
discriminatory basis.
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1.52 Valuation Period: The period ending on a Valuation Date and
beginning on the preceding Valuation Date.
1.53 Vested Account Balance (Vested Interest): The portion of the
Accrued Benefit to which A Participant possesses a
nonforfeitable right.
1.54 Year of Service:
(a) Completed Hours of Service Method: If the completed
hours of service method is designated in the Adoption
Agreement, a "Year of Service" means a Computation
Period during which the Employee has not less than 1000
Hours of Service with the Employer.
(b) Elapsed Time Method:
(1) General Rule: If the elapsed time method of
counting service is designated in the Adoption
Agreement, a "Year of Service" means 12 months of
Service. To make this determination, periods of
Service that are not otherwise disregarded shall
be aggregated, periods of Service that do not
span a 12 consecutive month period (whether or
not successive) Shall be aggregated on the basis
that 12 months of service (30 days of service
constitute a month of service in the case of the
aggregation of fractional months of service) or
365 days of service equal one Year of Service.
(2) Definitions: For the purposes of this
subsection, the following terms shall have the
meanings indicated:
(A) "Reemployment Date" shall mean the date
following a Severance Period (which is not
a period of Service) on which an Employee
again performs an Hour of Service.
(B) "Service" shall mean, as of any date, the
aggregate number of an Employee's periods
of service. For this purpose, a period of
service means each period of time, measured
in completed months, beginning on an
Employment Date or any Reemployment Date
and ending on a Severance Date.
(C) "Severance Date" shall mean the first to
occur of (i) the date on which an
Employee's employment by the Employer ends,
or (ii) the first anniversary of the first
day of a period in which an Employee is
absent from employment with the Employer
(with or without pay) for any reason other
than quitting, retiring, discharge or
death; such as vacations, holiday,
sickness, disability, leave of absence or
layoff.
(D) "Severance Period" shall mean a period of
time, measured in years and completed
months, beginning on a Severance Date and
ending on a Reemployment Date.
(c) Service Prior To The Effective Date: Service or Hours
of Service for the Employer prior to the Effective Date
shall be included in determining Years of Service for
vesting purposes.
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ARTICLE II
ELIGIBILITY REQUIREMENTS
2.01 Eligibility: Unless an Eligible Employee elects in writing
not to become a Participant, an Eligible Employee not excluded
under Section 2.02 shall become A Participant as of the Entry
Date specified in the Adoption Agreement.
2.02 Excluded Employees: If an Employee who is not an eligible
Employee becomes an Eligible Employee, such Employee will
become a Participant on the Entry Date which coincides with or
immediately follows the date on which such Employee has
satisfied the eligibility requirements specified in the
Adoption Agreement.
2.03 Plan Information: To the extent required by ERISA, the Plan
Administrator shall make available to Participants information
concerning their rights under this Plan.
2.04 Conditions of Continued Participation: Each Participant
agrees to:
(a) look solely to the assets of the Plan for the payment of
any benefits to which such Participant is entitled
unless otherwise provided by law; and
(b) submit such evidence of insurability as may be required
by an Insurer.
2.05 Revocation of Election not to Participate: If an eligible
Employee elects not to participate in the Plan, such Employee
may elect to become a Participant as of any subsequent Entry
Date unless such Employee's election not to participate is
irrevocable.
2.06 Rehired Participant: A former Participant whose employment
with the Employer was terminated for any reason and who is
rehired by the Employer shall re-enter the Plan immediately
upon reemployment unless the former Participant makes a
written election not to participate.
2.07 Owner-Employees:
(a) If this Plan provides contributions or benefits for one
or more Owner-Employees who control both the Employer
and one or more other trades or businesses, this Plan
end the plan established for other trades or businesses
must, when looked at as a single plan, satisfy Sections
401(a) and (d) for the employees of the Employer and all
other such trades or businesses.
(b) If the Plan provides contributions or benefits for one
or more Owner-Employees who control one or more other
trades or businesses, the employees of the other trades
or businesses must be included in a plan which satisfies
Sections 401(a) and (d) and which provides contributions
and benefits not less favorable than provided for
Owner-Employees under this Plan.
(c) If an individual is covered as an Owner-Employee under
the plans of two or more trades or businesses which are
not controlled and the individual controls a trade or
business, then the contributions or benefits of the
employees under the plan of the trades or businesses
which are controlled must be as favorable as those
provided for him under the most favorable plan of the
trade or business which is not controlled.
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(d) 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:
(1) own the entire interest in an unincorporated
trade or business, or
(2) in the case of a partnership, own more than 50
percent of either the capital interest or the
profits interest in the partnership.
For purposes of the preceding sentence, an
Owner-Employee, or two or more Owner Employees shall be
treated as owning any interest in a partnership which is
owned, directly or indirectly, by a partnership which
such Owner-Employee, or such two or more Owner
Employees, are considered to control within the meaning
of the preceding sentence.
ARTICLE III
CONTRIBUTIONS AND ADJUSTMENTS TO INDIVIDUAL ACCOUNTS
3.01 Kinds of Contributions: The Plan permits five (5) kinds of
contributions: Employee Deferral Contributions, Non-Elective
Employer Contributions, Matching Contributions, Qualified
Non-Elective Contributions, and Qualified Non-Elective
Matching Contributions. All five (5) kinds of contributions
are considered Employer Contributions for purposes of the
other provisions of the Plan. The Trustee shall establish
Individual Accounts for each Participant. Each Participant's
Individual Account shall reflect and account for the five (5)
different kinds of contributions which may be made under this
Plan. The maintenance of Individual Accounts is only for
accounting purposes and segregation of the assets of the Plan
to such accounts shall not be required.
3.02 Employee Deferral Contributions:
(a) For each Election Period a Participant may choose to
enter into a written Salary Reduction Agreement with the
Employer, which will apply to all payroll periods within
an Election Period and to each subsequent Election
Period, unless revoked. The terms of the Salary
Reduction Agreement shall provide that the Participant
agrees to accept a reduction in salary from the
Employer, limited in accordance with the Adoption
Agreement and not to exceed the limitations set forth in
Article IV. The amount of this reduction shall be
designated as the Employee Deferral Contribution, which
shall be contributed by the Employer to the Plan on
behalf of the Participant for such Election Period. A
Participant shall at all times have a 100% Vested
Interest in his Employee Deferral Contributions and any
earnings thereon.
(b) A Participant's initial Salary Reduction Agreement, and
any subsequent Salary Reduction Agreement, must be filed
with the Plan Administrator on or before the fifteenth
day of the month (or such later date as determined by
the Plan Administrator) immediately preceding the
Election Period for which it is to become effective.
Except as provided in paragraphs (c), (d) or (e), the
Salary Reduction Agreement may not be changed for the
Election Period in which it becomes effective.
(c) A Participant may elect at any time to discontinue his
Salary Reduction Agreement for an Election Period by
filing a written notice of discontinuance with the Plan
Administrator on forms provided by the Plan
Administrator. The discontinuance shall be effective
for the first payroll period occurring on or after the
date that the election is received by the Plan
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Administrator. A Participant who has discontinued his
salary reduction agreement for an Election Period shall
not be permitted to enter into a new Salary Reduction
Agreement for that Election Period.
(d) The Plan Administrator or the Employer may amend or
revoke a salary reduction agreement with any Participant
at any time if either the Plan Administrator or the
Employer determines that such revocation or amendment is
necessary to satisfy the requirements of Article IV.
(e) At the request of a Participant, the Plan Administrator
or the Employer may amend its salary reduction agreement
with such Participant at any time to increase the
Participant's Employee Deferral Contributions, provided
such amendment does not cause the Participant's Employee
Deferral Contributions to exceed the limitations of
Article IV.
(f) If the Employer designates any bonus payable to a
Participant as a cash or defined bonus which maybe
contributed to the Plan, a Participant may designate any
portion, or the entire amount of any such bonus as an
Employee Deferral Contribution, without regard to the
terms of the Participant's Salary Reduction Agreement.
However, no such contribution may cause the limits
specified in Article IV to be exceeded.
(g) A Participant's Employee Deferral Contributions, and any
Net Gain attributable thereto, may not be distributed
before the occurrence of the earliest of the following
events;
(1) the Participant's separation from service, death
or Disability;
(2) the termination of the Plan without the
establishment of another defined contribution
plan;
(3) the disposition by the Employer to an unrelated
corporation of substantially all the assets
(within the meaning of Section 409(d)(2) of the
Code) used in a track or business of the
Employer, if the Employer continues to maintain
this Plan after the disposition, but only with
respect to Employees who become employed by the
corporation acquiring the assets;
(4) the disposition by the Employer to an unrelated
entity of its interest in a subsidiary (within
the meaning of Section 409(d)(3) of the Code) if
the Employer continues to maintain this Plan, but
only with respect to the Employees who continue
employment with the subsidiary;
(5) the Participant's attainment of age 59 1/2; or
(6) the Participant's hardship, as defined in
subsection (h), if permitted by the Adoption
Agreement.
(h) For purposes of this Section, a distribution is on
account of hardship only if the distribution both is (i)
made on account of an immediate and heavy financial need
of the Participant and (ii) does not exceed the amount
necessary to satisfy such financial need.
(1) Immediate and Heavy Need: The determination of
whether a Participant has an immediate and heavy
financial need is to be made by the Plan
Administrator on the basis of all relevant facts
and circumstances. A financial need shall not
fail to qualify as immediate and heavy merely
because such need was reasonably foreseeable or
voluntarily incurred by the Participant.
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Safe Harbor Rule: For Plan Years beginning after
1988, a distribution will be made on account of
an immediate and heavy financial need of the
employee only if the distribution is on account
of:
(A) medical expenses described in Code Section
213(d) incurred by the Participant, the
Participant's spouse, or any dependents of
the Participant (as defined in Code Section
152);
(B) purchase (excluding mortgage payments) of a
principal residence for the Participant; or
(C) payment of tuition for the next semester or
quarter of post-secondary education for the
Participant, his or her spouse, children,
or dependents;
(D) the need to prevent the eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the
Participant's principal residence;
(E) any other deemed immediate and heavy
financial need promulgated by the
Commissioner of Internal Revenue pursuant
to the authority granted by Section
1.401(k~1(d)(2)(ii)(B) of the Treasury
Regulations.
(2) Distribution Necessary: A distribution will not
be treated as necessary to satisfy an immediate
and heavy financial need of an employee to the
extent the amount of the distribution is in
excess of the amount required to relieve the
financial need or to the extent such need may be
satisfied from other resources that are
reasonably available to the employee. This
determination generally is to be made by the Plan
Administrator on the basis of all relevant facts
and circumstances. A distribution generally may
be treated as necessary to satisfy a financial
need if the Plan Administrator reasonably relies
upon the Participant's representation that the
need cannot be relieved:
(A) through reimbursement or compensation by
insurance or otherwise,
(B) by reasonable liquidation of the
Participant's assets, to the extent such
liquidation would not itself cause an
immediate and heavy financial need,
(C) by cessation of Participant's Deferral
Contributions under the Plan, or
(D) by other distributions or nontaxable (at
the time of the loan) loans to the
Participant from plans maintained by the
Employer or by any other employer, or by
borrowing from commercial sources on
reasonable commercial terms.
For purposes of the foregoing, the Participant's
resources shall be deemed to include those assets
of his Spouse end minor children that are
reasonably available to the Participant.
However, property held for the Participant's
child under an irrevocable trust or under the
Uniform Transfers to Minors Act (or any similar
or successor law which is applicable to the
Participant) will not be treated as a resource of
the Participant.
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Safe Harbor Rule: For Plan Years beginning after
1988, a distribution will be deemed to be
necessary to satisfy an immediate and heavy
financial need of a Participant if all of the
following requirements are satisfied:
(i) The distribution is not in excess of the
amount of the immediate and heavy
financial need of the Participant;
(ii) The Participant has obtained all
distributions, other than hardship
distributions, and all nontaxable loans
currently available under all plans
maintained by the Employer,
(iii) The Plan, and all other plans maintained
by the Employer, suspend the
Participant's elective contributions
(such as Employee Deferral
Contributions) and employee
contributions for at least 12 months
after receipt of the hardship
distribution; and
(iv) The Plan, and all other plans maintained
by the Employer, prohibit the
Participant from making elective
contributions for the Participant's
taxable year immediately following the
taxable year of the hardship
distribution in excess of the applicable
limit under Section 402(g) for such next
taxable year less the amount of such
employee's elective contributions for
the taxable year of the hardship
distributions.
An employee shall not fail to be treated as an
eligible Participant merely because his Elective
Deferral Contributions are suspended in
accordance with clause (iii) above.
(3) Amounts attributable to Elective Deferral
contributions may not be distributed on account
of any event not described in this Section, such
as completion of a stated period of plan
participation or the lapse of a fixed number of
years.
(4) A distribution based upon hardship may not be
made to a Participant more than once per Plan
Year.
(5) In the case of hardship distributions made after
December 31, 1988, amounts contributed by the
Employer pursuant to Section 3.05, shall not be
included as Employee Deferral Contributions
eligible for such distribution.
3.03 Non-Elective Employer Contribution: For each Plan Year the
Employer may make a Non-Elective Employer Contribution to the
Plan as specified in the Adoption Agreement. In no event,
however, shall the Employer contribute more than the maximum
amount for such Plan Year which may be contributed on a
deductible basis for federal income tax purposes. For
purposes of determining the maximum amount which may be
contributed for a Plan Year, Non-Elective Employer
Contributions, Matching Contributions, Qualified Non-Elective
Contributions, Qualified Matching Contributions and Employee
Deferral Contributions shall be considered together. The
Employer's determination of such contributions shall be
binding on all Participants, the Trustee and the Plan
Administrator. The Trustee shall have no right or duty to
inquire into the amount of any contribution to the Plan or the
method used in determining the amount of such contribution but
shall be accountable only for the funds actually received by
it.
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3.04 Matching Contributions:
(a) General Rule: If an election is made pursuant to the
Adoption Agreement to provide a Matching Contribution,
then for each Plan Year, the Employer may make a
Matching Contribution as specified in Section 8.2 of the
Adoption Agreement. The Matching Contribution shall be
allocated in accordance with Section 3.10, but subject
to the Limitations contained in Section 4.03, among the
Individual Accounts of Participants.
(b) Supplemental Matching Contributions: In order to
satisfy the requirements of Section 4.03, the Employer
may, in its discretion, make a Supplemental Matching
Contribution to the Plan in an amount determined by the
Employer. The Supplemental Matching Contribution will
be allocated in the manner described in Section 3.10
among the Individual Accounts of Participants who are
eligible to receive an allocation of Matching
Contributions, but who are not Highly Compensated
Employees.
3.05 Qualified Non-Elective and Qualified Matching Contributions:
The Employer may elect to make Qualified Non-Elective
Contributions or Qualified Matching Contributions, or both, to
Participants who are not Highly Compensated Employees, to the
extent necessary to satisfy the requirements of Article IV,
and to the extent authorized by Treasury Regulations. Subject
to such other requirements as may be prescribed by the
Secretary of the Treasury, the amount of such contributions
taken into account as Elective Deferrals shall be only those
amounts necessary to meet the requirements of Article IV.
3.06 Adjustments of Individual Accounts: As of the end of each
Plan Year the Trustee shall adjust each Participant's
Individual Account to reflect:
(a) Any Employee Deferral Contributions;
(b) Any Non-Elective Employer Contributions and Qualified
Non-Elective Contributions;
(c) Any allocation of Net Gains or Net Loss of the Trust
Fund for the Plan Year;
(d) Any distributions made to a Participant during such Plan
Year;
(e) Any Matching Contributions and Qualified Matching
Contributions; and
(f) Any forfeitures allocated to a Participant for the Plan
Year.
3.07 Allocation of Non-Elective Employer Contributions: For Plan
Years beginning after 1988:
(a) Integrated Formula: If an election is made in the
Adoption Agreement to permit integration of Non-Elective
Employer Contributions, then subject to any top heavy
minimum allocation required under Article XII, the total
Non-Elective Employer Contributions for each Plan Year
will be allocated to each Participant's Individual
Account as follows:
(l) First, an amount shall be allocated for each
Participant (including any amounts required to be
allocated under Article XII) which shall bear the
same ratio to the total amounts allocated for all
Participants as the sum of each Participant's
total Compensation and Excess Compensation bears
to the sum of all Participants' total
Compensation and Excess Compensation. However,
the amount allocated to any one Participant under
the preceding sentence (expressed as a percentage
of such
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Participant's Compensation and Excess
Compensation) may not exceed the maximum
profit-sharing disparity rate, or such lesser
rate as specified by the Employer from time to
time. Any remaining Contributions will be
allocated to each Participant's account in the
ratio that the Participant's total Compensation
for the Plan Year bears to all Participants'
total Compensation for that year.
(2) If the Integration Level for the Plan Year is
equal to the TWB, or if the Integration Level is
not greater than the greater of $10,000 or 20
percent of the TWB then the maximum
profit-sharing disparity rate is equal to the
greater of:
(1) 5.7% or
(2) The percentage (as specified by the
Secretary of the Treasury) equal to the
portion of the rate of tax under Section
311 l(a) of the Internal Revenue Code for
the calendar year in which such Plan Year
begins which is attributable to old-age
insurance.
However, if the Integration Level for a Plan Year
is established at any other level, then the
maximum profit-sharing disparity rate shall be
determined in accordance with the table below:
If the Integration Level
the maximum profit-sharing
is more than but not more than disparity rate is:
------------ ----------------- ------------------
X * 80% of TWB 4.3%
80% of TWB Y ** 5.4%
*X = the greater of $10,000 or 20 percent of the TWB
**Y = any amount more than 80% of the TWB but less than
100% of the TWB.
(3) For the purpose of this subsection, the
following definitions apply.
(A) Integration Level: An amount, not
to exceed the Taxable Wage Base as
in effect on the first day of the
Plan Year, specified as the
Integration Level in the Adoption
Agreement.
(B) Excess Compensation: The amount of
a Participant's Compensation for a
Plan Year which exceeds the
Integration Level.
(b) Non-Integrated Formula: If the Employer elects in the
Adoption Agreement not to adopt an integrated allocation
formula, then the total Non-Elective Employer
Contributions for each Plan Year shall be allocated
among the Individual Accounts of each Participant
according to the ratio that the Participant's
Compensation for the Plan Year bears to the total
Compensation earned by all Participants for the Plan
Year.
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3.08 Allocation of Profit and Loss of Trust Fund to Accounts:
(a) Date of Valuation - As of the close of business on the
last day of the Year and, if the Employer or the Plan
Administrator has designated a Valuation Date or
Valuation Dates in addition to the last day of the Year,
as of the close of business on each such Valuation Date,
the Trustee shall value the assets in the Trust Fund at
their then market value.
(b) Adjustment of Individual Accounts as of Valuation Dates
- The value of each Individual Account as of a Valuation
Date shall be equal to the value of the Individual
Account as of the preceding Valuation Date, and adjusted
in the following order and manner:
(1) Each Individual Account shall be reduced by the
amount of any distributions and withdrawals from
the Individual Account during the Valuation
Period.
(2) Each Individual Account shall be increased or
decreased by the Net Gain or Net Loss of the
Trust Fund allocated to the Individual Account
under paragraph (c).
(3) Each Individual Account shall be increased by the
amount of Employer Contributions allocated to the
Individual Accounts of Participants for the
Valuation Period.
(c) Allocation of Profit and Loss - As of each Valuation
Date, there shall be allocated to each Individual
Account its proportionate share of the Net Gain or Net
Loss incurred by the Trust Fund during the Valuation
Period.
(1) For the purpose of determining the Net Gain or
Net Loss as of any current Valuation Date for the
Valuation Period, the assets of the Trust Fund
attributable to the affected Individual Accounts
(excluding any Insurance Contracts) shall be
valued as of the current Valuation Date based on
the then fair market values, which shall give
effect to gains, earnings, losses and other items
of income and expense as of the current Valuation
Date. The Net Gain or Net Loss for the Valuation
Period shall be the amount by which the total net
value of all such assets determined as of the
current Valuation Date exceed the total net value
of all such assets determined as of the preceding
Valuation Date, reduced by the total of any
Employer Contributions made during the Valuation
Period, and increased by the total of (i) any
withdrawals and distributions and (ii) any
premiums or other amounts attributable to any
Insurance Contracts paid during the Valuation
Period.
(2) A fraction of the Net Gain or Net Loss shall be
allocated to the Individual Account of each
Participant. The fraction shall have a numerator
equal to the balance in the Participant's
Individual Account as of the preceding Valuation
Date, subject to the following adjustments:
(i) the balance shall be increased by
one-half of the Employee Deferral
Contributions allocated to the
Participant's Individual Account for
the Valuation Period;
(ii) the balance shall be increased by
one-half of the Matching Contributions
actually contributed by the Employer to
the Trust Fund during the Valuation
Period (without regard to Code Section
404(a)(6)) and allocated to the
Individual Account of the Participant
as of the Valuation Date; and
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(iii) the balance shall be decreased by any
withdrawals, distributions, or payments
of premiums or other amounts
attributable to any Insurance Contracts
during the Valuation Period which are
paid to or on behalf of the
Participant.
The denominator of the fraction shall equal the
sum of the numerators (determined under the
preceding sentence) attributable to each
Participant in the Plan.
(d) Use of Investment Funds:
(1) The Plan Administrator may from time to time
permit participants and Beneficiaries to direct
the investment of their Individual Accounts
between or among Investment Funds.
(2) Each Participant or Beneficiary otherwise
eligible to direct the investment of his
Individual Accounts as described in this Section
shall designate prior to the dates selected by
the Plan Administrator with the consent of the
Trustee -
(i) the percentage (consisting of integral
multiples determined by the Plan
Administrator with the consent of the
Trustee) of the Individual Account to
be invested in each Investment Fund.
If no election is made on time, the
affected Individual Accounts shall be
invested in the Investment Fund
designated from time to time by the
Plan Administrator for that purpose;
(ii) the portion of his Individual Account
invested in an Investment Fund
(consisting of integral multiples
determined by the Plan Administrator
with the consent of the Trustee) to be
reinvested in another Investment Fund;
(iii) the portion of any Employer
Contribution otherwise made (consisting
of integral multiples determined by the
Plan Administrator with the consent of
the Trustee) to be invested in each
Investment Fund. An election once made
shall continue to apply to all
subsequent Employer Contributions
unless and until changed by the
affected individual. If no election is
made on time, the affected Individual's
Account shall be invested in the
Investment Fund designated from time to
time by the Plan Administrator for that
purpose.
(3) If the provisions of this paragraph are in effect
at any time, then the previous provisions of this
Section shall instead apply to each Investment
Fund. Those provisions of this Section requiring
the valuation of the Trust Fund as of the last
day of the Year shall continue to apply to the
Trust Fund.
(e) Expenses incurred which relate to the Individual Account
of a particular Participant, such as expenses relating
to the self direction of investments, expenses relating
to a domestic relations order, and any other
extraordinary expenses deemed attributable by the Plan
Administrator to such Participant's Individual Account,
may be allocated to each Participant's Individual
Account based on the actual expenses incurred by such
Participant. Other expenses incurred by the Plan that
do not directly relate to an individual Participant
shall be allocated among all Participants' Individual
Accounts on a nondiscriminatory basis.
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3.09 Allocation of Forfeitures: As of each Valuation Date, the
amount of any forfeitures arising under Article VI or VII
during the Valuation Period shall be applied in the manner
specified in the Adoption Agreement.
3.10 Allocation of Matching Contributions: If the Adoption
Agreement permits Matching Contributions, then, subject to the
limitations set forth in Article IV and in the Adoption
Agreement, the Employer shall allocate the amount of the
Matching Contribution for each Plan Year to the Individual
Account of each Participant in the same proportion that each
Participant's Employee Deferral Contributions for the Plan
Year (not in excess of the percentage specified in Section 8.3
of the Adoption Agreement) bears to the total of all such
Employee Deferral Contributions for the Plan Year.
3.11 Minimum Service and Employment on the Last Day of the Plan
Year:
(a) Minimum Service: If so designated in the Adoption
Agreement, and subject to the provisions of Section
12.04, if a Participant is credited with less than
1000 Hours of Service during a Plan Year, such
Participant shall not be entitled to share in the
allocation of Non-Elective Employer Contributions,
Matching Contributions, or forfeitures for such Plan
Year.
(b) Employment on the Last Day of the Plan Year: If so
designated in the Adoption Agreement, and subject to
Section 12.04, if a Participant's employment by the
Employer terminates before the last day of the Plan
Year, such Participant shall not be entitled to share
in the allocation of Non-Elective Employer
Contributions, Matching Contributions and forfeitures
for such Plan Year.
ARTICLE IV
NONDISCRIMINATION TESTING AND LIMITATIONS ON CONTRIBUTIONS
4.01 Definitions: For purposes of this Article IV, the following
definitions shall apply:
(a) "Actual Deferral Percentage" shall mean, for a specified
group of Participants for a Plan Year, the average of
the ratios (calculated separately for each Participant
in the group) of (i) the amount of the ADP contributions
paid over to the Plan trust on behalf of such
Participant for the Plan Year, to (ii) the Participant's
compensation for the Plan Year. For the purposes of
this subsection, the following rules shall apply:
(1) "ADP" contributions shall include:
(A) Employee Deferral Contributions for the
Plan Year, including any Excess Deferral
Amounts of Highly Compensated Employees,
but excluding Employee Deferral
Contributions taken into account for the
purposes of Section 4.03 (provided that the
requirements of this Section are satisfied
both with and without regard to the
exclusion of these Employee Deferral
Contributions); and
(B) if elected by the Employer, Qualified
Non-elective Contributions and Qualified
Matching Contributions.
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(2) For the purposes of this subsection, an employee
who would be a Participant but for the failure to
make Employee Deferral Contributions shall be
treated as a Participant on whose behalf no
Employee Deferral Contributions are made.
(3) For each Plan Year beginning before the later of
(i) January 1, 1992, or (ii) the publication of
final Treasury Regulations under Section
1.401(k)-l(g)(9)(ii), "Compensation" shall
exclude any amount received during a period in
which an Employee is not a participant. For any
subsequent Plan Year this paragraph shall not
apply.
(b) "Adjustment Factor" shall mean the cost of living
adjustment factor prescribed by the Secretary of the
Treasury under Section 415(d) of the Code for years
beginning after December 31, 1987, as applied to such
items and in such manner as the Secretary shall provide.
(c) "Annual Additions" shall mean the sum of the following
amounts credited to a Participant's Individual Account
for the Limitation Year:
(1) Employer Contributions,
(2) Employee Contributions,
(3) forfeitures,
(4) amounts allocated, after March 31, 1984, to an
individual medical account, as defined in Section
415(1)(2) of the Code, which is part of a pension
or annuity plan maintained by the Employer, and
(5) 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 419(e) of the
Code) maintained by the Employer.
For this purpose any Excess Amount applied under
paragraph (d) in the Limitation Year to reduce Employer
Contributions will be considered Annual Additions for
the Limitation Year.
(d) "Average Actual Deferral Percentage" shall mean the
average (expressed as a percentage) of the Actual
Deferral Percentages of the Eligible Participants in a
group.
(e) "Average Contribution Percentage" shall mean the average
(expressed as percentage) of the Contribution
Percentages of the Eligible Participants in a group
(f) "Contribution Percentage" shall mean the ratio
(expressed as a percentage), of the Contribution
Percentage Amounts under the Plan on behalf of the
Eligible Participant for the Plan Year to the Eligible
Participant's Compensation for the Plan Year (whether or
not the Eligible Participant was a Participant for the
entire Plan Year.)
(1) For the purposes of this subsection,
"Contribution Percentage Amount" shall mean the
sum of the Matching Contributions and (to the
extent not taken into account for
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the purposes of Section 4.02) Qualified Matching
Contributions made under the Plan on behalf of
the Participant for the Plan Year. Such amounts
shall include any forfeitures, Excess Aggregate
Contributions or Matching Contributions allocated
to the Participant's Individual Account, which
shall be taken into account for the Plan Year in
which the forfeiture is allocated. Qualified
Non-elective Contributions (to the extent not
taken into account for the purposes of Section
4.02) may be included in the Contribution
Percentage amount. To the extent that the
requirements of Section 4.02 are met both before
and after the application of this sentence,
Employee Deferral Contributions may be included
in the Contribution Percentage Amount.
(g) "Defined Benefit Fraction" shall mean 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 percent of the dollar limitation determined for the
Limitation Year under Sections 415(b) and (d) of the
Code or 140 percent of the Participant's Highest Average
Compensation, including any adjustments under Section
415(b) of the Code. Notwithstanding the above, if the
Participant was a participant as of the first day of the
first Limitation Year beginning after December 31, 1986,
in one or more defined benefit plans maintained by the
Employer which were in existence on May 6,1986, the
denominator of this fraction will not be less than 125
percent of the sum of the annual benefits under such
plans which the Participant had accrued as of the close
of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and
conditions of the Plan after May 5, 1986. The preceding
sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the
requirements of Section 415 for all Limitation Years
beginning before January 1, 1987.
(h) "Defined Contribution Fraction" shall mean 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
Annual Additions attributable to all welfare benefit
funds, as defined in Section 419(e) of the Code, and
individual medical accounts, as defined in Section
415(1)(2) of the Code, 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 the Participant's 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 percent of the dollar limitation determined under
Sections 415(b) and (d) of the Code in effect under
Section 415(c)(1)(A) of the Code, or 35 percent of the
Participant's Compensation for such year.
If an 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
adjustment, an amount equal to the product of (i) the
excess of the sum of the fractions over 1.0 times (ii)
the denominator of this fraction, will be permanently
subtracted from the numerator of this fraction. The
adjustment is calculated using the
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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
limitation contained in Section 415 of the Code, as
applicable to the first Limitation Year beginning on or
after January 1, 1987.
The annual addition for any Limitation Year beginning
before January 1, 1987, shall not be recomputed to treat
all employee contributions as annual additions.
(i) "Eligible Participant" shall have the following
meanings:
(1) For purposes of the limitations on Elective
Deferrals contained in Section 4.02, "Eligible
Participant" shall mean any Employee of the
Employer who is otherwise authorized under the
terms of the Plan to have Employee Deferral
Contributions or Qualified Employer Deferral
Contributions allocated to his account for the
Plan Year.
(2) For purposes of the limitations on Matching
Contributions contained in Section 4.03,
"Eligible Participant" shall mean any employee of
the Employer who is otherwise authorized under
the terms of the plan to have Matching
Contributions allocated to his account for the
Plan Year.
(j) "Excess Aggregate Contributions" shall mean the amount
described in Section 401(m)(6)(B) of the Code.
(k) "Excess Amount" shall mean the excess of the
Participant's annual additions with respect to the Plan
for the Limitation Year over the Maximum Permissible
Amount.
(l) "Excess Contributions" shall mean, with respect to the
entire Plan Year, the excess of:
(1) The aggregate amount of Employer contributions
actually paid over to the trust on behalf of
Highly Compensated Employees for such plan year,
over
(2) The maximum amount of such contributions which
meets either of the following tests:
(A) The Actual Deferral Percentage for the
group of eligible highly compensated
employees is not more than the actual
deferral percentage of all other eligible
employees multiplied by 1.25.
(B) The excess of the Actual Deferral
Percentage for the group of eligible highly
compensated employees over that of all
other eligible employees is not more than 2
percentage points, and the actual deferral
percentage for the group of eligible highly
compensated employees is not more than the
actual deferral percentage of all other
eligible employees multiplied by 2.
Any distribution of the Excess
Contributions for any Plan Year shall be
made to highly compensated employees on the
basis of the respective portions of the
Excess Contributions attributable to each
of such employees.
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(m) "Excess Deferral Amount" shall mean the amount of
Employee Deferral Contributions for a calendar year that
the Participant allocates to this Plan pursuant to the
claim procedure set forth in paragraph (1).
(1) A Participant's claim of an Excess Deferral
Amount shall be in writing, shall be submitted to
the Plan Administrator no later than March 1 of
the calendar year following the year of the
Excess Deferral Amount; shall specify the
Participant's Excess Deferral Amount for the
preceding calendar year; and shall be accompanied
by the Participant's written statement that if
such amounts are not distributed, such Excess
Deferral Amount, when added to amounts deferred
under other plans or arrangements described in
Sections 401 (k), 408(k) or 403(b) of the Code,
exceeds the limit imposed on the Participant by
Section 402(g) of the Code for the year in which
the deferral occurred.
(n) "Family Member" shall mean an individual described in
Section 414(q)(6)(B) of the Code.
(o) "Highest Average Compensation" of a Participant shall
mean the average Compensation for the three consecutive
Years of Service with the Employer that produces the
highest average.
(p) "Maximum Permissible Amount" shall mean the lesser of:
(1) the Defined Contribution Dollar Limitation, or
(2) twenty-five percent (25%) of the Participant's
Compensation for the Limitation Year.
(q) "Non-Highly Compensated Employee" shall mean an Employee
of the Employer who is neither a Highly Compensated
Employee nor a Family Member.
(r) "Projected Annual Benefit" shall mean the annual
retirement benefit (adjusted to be an actuarially
equivalent straight life annuity if such benefit is
expressed in a form other than a straight life annuity)
to which the Participant would be entitled under the
terms of a defined benefit plan assuming:
(1) the Participant continued employment until normal
retirement age under the plan (or current age, if
later), and
(2) the Participant's compensation for the current
limitation year and all other relevant factors
used to determine benefits under the plan will
remain constant for all future Limitation Years.
4.02 Limitations on Elective Deferrals:
(a) No Employee shall be permitted to have Employee Deferral
Contributions made under this Plan during any calendar
year in excess of $7,000 multiplied by the Adjustment
Factor as provided by the Secretary of the Treasury.
(b) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for
the Plan Year shall not exceed:
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(1) the Average Actual Deferral Percentage for
Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year
multiplied by 1.25; or
(2) the Average Actual Deferral Percentage for
Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year
multiplied by 2, provided that the Average Actual
Deferral Percentage for Eligible Participants who
are Highly Compensated Employees does not exceed
the Average Actual Deferral Percentage for
Eligible Participants who are Non-highly
Compensated Employees by more than two (2)
percentage points or such lesser amount as the
Secretary of the Treasury shall prescribe to
prevent the multiple use of this alternative
limitation with respect to any Highly Compensated
Employee.
(c) Special Rules: For purposes of this Section 4.02:
(1) The Actual Deferral Percentage for any Highly
Compensated Employee for the Plan Year who is
eligible to participate in two or more plans
(described in Section 401(k)) of the Employer or
an Affiliated Business to which Employee Deferral
Contributions or Qualified Non-Elective
Contributions are allocated to his account shall
be determined as if all such Employee Deferral
Contributions and Qualified Non-Elective
Contributions were made under a single
arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred
arrangements which use different plan years, all
cash or deferred arrangements ending with or
within the same calendar year shall be treated as
a single arrangement.
If 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 only if aggregated
with this Plan, then this Section shall be
applied by determining the Actual Deferral
Percentage of Employees as if all such plans were
a single plan. For plan years beginning after
December 31, 1989, plans may be aggregated to
satisfy Section 401(k) of the Code only if they
use the same plan year.
(2) For purposes of determining the Actual Deferral
Percentage of a Participant who is a five percent
owner of the Employer or one of the ten most
highly paid Highly Compensated Employees, the
Employee Deferral Contributions, Qualified
Non-Elective Contributions and Compensation of
such Participant Shall include the Employee
Deferral Contributions, Qualified Non-Elective
Contributions and Compensation for the Plan Year
of Family Members, and such Family Members Shall
be disregarded in determining the Actual Deferral
Percentage for Participants who are Non-highly
Compensated Employees.
(3) The Employer shall maintain records sufficient to
demonstrate (i) the extent to which the
requirements of this section have been satisfied,
and (ii) the amount of any Qualified Non-
Elective Contributions or Qualified Matching
Contributions used to satisfy this Section.
(4) The determination and treatment of the Employee
Deferral Contributions, Qualified Non-Elective
Contributions and Actual Deferral Percentage of
any Participant shall satisfy such other
requirements as may be prescribed by the
Secretary of the Treasury.
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(d) Effective Date: The provisions of this Section shall be
effective as of the first day of the first Plan Year
beginning after December 31, 1986.
4.03 Limitations on Matching Contributions:
(a) The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for
the Plan Year shall not exceed:
(1) the Average Contribution Percentage for Eligible
Participants who are Non-highly Compensated
Employees for the Plan Year multiplied by 1.25;
or
(2) the Average Contribution Percentage for eligible
Participants who are Non-highly Compensated
Employees for the Plan Year multiplied by 2,
provided that the Average Contribution Percentage
for Eligible Participants who are Highly
Compensated Employees does not exceed the Average
Contribution Percentage for Eligible Participants
who are Non-highly Compensated Employees by more
than two (2) percentage points, or such lesser
amount as the Secretary of the Treasury shall
prescribe to prevent the multiple use of this
alternative limitation with respect to any Highly
Compensated Employee.
(b) Special Rules: For purposes of this Section 4.03:
(1) The Contribution Percentage for any Highly
Compensated Employee for the Plan Year and who is
eligible to participate in two or more plans of
the Employer or an Affiliated Business to which
Matching Contributions, Non-Elective Employer
Contributions, or Employee Deferral Contributions
are allocated to his account shall be determined
as if all such contributions and Employee
Deferral Contributions were made under a single
plan. If a Highly Compensated Employee
participants in two or more cash or deferred
arrangements which use different plan years, all
cash or deferred arrangements ending with or
within the same calendar year shall be treated as
a single arrangement.
(2) In the event that this plan satisfies the
requirements of Section 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 Section 410(b) of the Code only if aggregated
with this plan, then this Section shall be
applied by determining the Contribution
Percentages of Eligible Participants as if all
such plans were a single plan. However, for Plan
Years beginning after December 31, 1989, plans
may be aggregated for the purpose of satisfying
the requirements of subsection (a) only if they
use the same plan year.
(3) For purposes of determining the Contribution
Percentage of an Eligible Participant who is a
five percent owner of the Employer or one of the
ten most highly-paid Highly Compensated
Employees, the Matching Contributions and
Compensation of such Participant shall include
the Matching Contributions and Compensation for
the Plan Year of Family Members, and such Family
Members shall be disregarded in determining the
Contribution Percentage for Eligible Participants
who are Nonhighly Compensated Employees.
(4) 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.
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(5) Multiple Use Test
(A) General Rule If the sum of the Actual
Deferral Percentage and the Average
Contribution Percentage for any Highly
Compensated Employee exceeds the Aggregate
Limit, then the Average Contribution
Percentage of each such Highly Compensated
employee shall be reduced, beginning with
the Highly Compensated Employee whose
Average Contribution Percentage is the
highest, so that the Aggregate limit is not
exceeded. The amount of any such reduction
shall be treated as an Excess Aggregate
Contribution.
(B) Special Rules For purposes of this
aragraph, the following rules apply:
(i) "Aggregate Limit" shall mean the
sum of (I) 125 percent of the
greater of the Actual Deferral
Percentage or the Average
Contribution Percentage of
Non-highly Compensated Employees
for the Plan Year, and (II) the
lesser of 200% or two plus the
lesser of the Actual Deferral
Percentage or the Average
Contribution Percentage.
However, for the purposes of
this clause (i), if it would
produce a larger Aggregate
Limit, "lesser" shall be
substituted for "greater" in
subclause (I), and "greater"
shall be substituted for
"lesser" after the words "two
plus" in subclause II.
(ii) The Actual Deferral Percentage
and the Average Contribution
Percentage of a Highly
Compensated Employee shall be
determined after the application
of any corrections required to
meet the requirements of
Sections 4.02 or 4.03.
(iii) The requirements of this
paragraph (5) shall be deemed to
be satisfied if either the
Actual Deferral Percentage or
the Average Contribution
Percentage of the Highly
Compensated Employees does not
exceed either the Actual
Deferral Percentage or the
Average Contribution Percentage
of the Non-Highly Compensated
Employees multiplied by 1.25.
(6) The Employer shall maintain records sufficient to
demonstrate (i) the extent to which the Plan
satisfies the requirements of this Section, and
(ii) the amount of any Qualified Non-Elective
Contributions or Qualified Matching Contributions
used to satisfy this Section.
(7) Any Qualified Non-Elective Contributions or
Qualified Matching Contributions used to satisfy
the requirements of Section 4.02 may not be used
to satisfy the requirements of this Section.
(c) Effective Date: The provisions of this Section shall be
effective as of the first day of the first Plan Year
beginning after December 31, 1986.
4.04 Distribution of Excess Deferrals:
(a) Notwithstanding any other provision of the plan, Excess
Deferral Amounts and income allocable thereto shall be
distributed no later than April 15, 1988, and each April
15
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thereafter to Participants who claim such Allocable
Excess Deferral Amounts for the preceding calendar year.
(b) The Excess Deferral Amount distributed to a Participant
with respect to a calendar year Shall be adjusted for
income or loss up to the date of the distribution. The
income or loss allocable to a distribution of Excess
Deferral Amounts for a taxable year of a Participant is
equal to the sum of the Following amounts:
(1) The Net Gain or Net Loss Allocable to the portion
of the Participant's Individual Account
attributable to Employee Deferral Contributions
for the Plan Year ending with or within the
taxable year, multiplied by a fraction, the
numerator of which is the Participant's Excess
Deferral Amount, and the denominator of which is
portion of the Participant's Individual Account
attributable to Employee Deferral Contributions,
without regard to any Net Gain or Net Loss
occurring during the Plan Year.
(2) Ten percent of the amount determined under
paragraph (1) multiplied by the number of whole
calendar months between the end of the
Participant's taxable year and the date of the
distribution (counting the month of the
distribution if the distribution occurs after the
15th of the month.)
4.05 Distribution of Excess Contributions:
(a) Notwithstanding any other provision of the Plan, Excess
Contributions, adjusted for any Net Gain or Net Loss
allocable thereto, shall be distributed no later than
the last day of each Plan Year to Participants to whose
Individual Account such Excess Contributions were
allocated for the preceding Plan Year. A distribution
of Excess Contributions shall be made to a Highly
Compensated Employee on the basis of the portion of the
Excess Contributions attributable to the Highly
Compensated Employee.
(b) The Net Gain or Net Loss allocable to Excess
Contributions shall be the sum of:
(1) the Net Gain or Net Loss allocable to the
Participant's Employee Deferral Contributions
(and, if applicable, to the Participant's
Qualified Non-elective Contributions and
Qualified Matching Contributions) for the Plan
Year, multiplied by a fraction. The numerator of
the fraction is the Participant's Excess
Contributions for the Plan Year, and the
denominator of the fraction is the sum of the
Participant's Individual Account balance
attributable to Employee Deferral Contributions
(and Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both, if any
such contributions are taken into account for the
purposes of Section 4.02) on the last day of the
preceding Plan Year, reduced by the Net Gain
allocable to such amounts for the Plan Year and
increased by the Net Loss allocable to such
amounts for the Plan Year, and
2) ten percent (10%) of the amount determined in
paragraph (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.
The Plan Administrator may, in its discretion, use any
other method allowable under the Code to calculate
income allocable to Excess Contributions.
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(c) For the purposes of this Section, the following rules
shall apply:
(1) If any Excess Contribution is distributed more
than 2 1/2 months after the end of the Plan Year
in which the Excess Contribution arose, an excise
tax may be imposed on the Employer with respect
to such amounts.
(2) Excess Contributions shall be allocated to the
Family Members of Highly Compensated Employees in
the manner prescribed by the Treasury
Regulations.
(3) Excess Contributions shall be treated as Annual
Additions for the purpose of Section 4.07.
(d) The Excess Contributions which would otherwise be
distributed to the Participant shall be reduced, in
accordance with regulations, by the amount of Excess
Deferrals distributed to the Participant under Section
4.04. However, the amount distributed shall, if there
is a Net Loss allocable to the Excess Contributions, in
no event be less than the lesser of the Participant's
Individual Account under the Plan or the Participant's
Employee Deferral Contributions and Qualified
Non-Elective Contributions for the Plan Year.
(e) Amounts distributed under this Section shall first be
treated as distributable from the portion of the
Participant's Individual Account attributable to
Employee Deferral Contributions and shall be treated as
distributed from the portion of the Participant's
Individual Account attributable to Qualified
Non-Elective Contributions only to the extent such
Excess Contributions exceed the balance in the
Participant's Individual Account attributable to
Employee Deferral Contributions.
4.06 Distribution of Excess Aggregate Contributions:
(a) Excess Aggregate Contributions, adjusted for any Net
Gain or Net Loss allocable thereto, Shall be forfeited,
if otherwise forfeitable under the terms of this Plan,
or if not forfeitable, distributed no later than the
last day of each Plan Year to Participants to whose
Individual Accounts Matching Contributions were
allocated for the preceding Plan Year.
(b) The Net Gain or Net Loss allocable to Excess Aggregate
Contributions shall be determined by multiplying the Net
Gain or Net Loss allocable to the Participant's Matching
Contributions for the Plan Year by a fraction, the
numerator of which is the Excess Aggregate Contributions
on behalf of the Participant for the preceding Plan Year
and the denominator of which is the portion of the
Participant's Individual Account Balances attributable
to Matching Employer Contributions on the last day of
the preceding Plan Year.
The Plan Administrator may, in its discretion, use any
other method allowable under the Code to calculate Net
Gain or Net Loss allocated to Excess Aggregate
Contributions.
(c) The Excess Aggregate Contributions to be distributed to
a Participant shall in no event be less than the lesser
of the Participant's Individual Account under the Plan
or the Participant's Matching Contributions for the Plan
Year.
(d) Amounts forfeited by Highly Compensated Employees under
this Section shall be:
(1) Treated as Annual Additions under Section 4.07 of
this Plan and either,
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(2) Applied to reduce Employer Contributions if
forfeitures of Matching Contributions under the
Plan are applied to reduce Employer
Contributions; or
(3) Allocated, after all other forfeitures under the
plan, to the same Participants and in the same
manner as such other forfeitures are allocated to
other Participants under the Plan.
Notwithstanding the foregoing, no forfeitures arising
under this Section shall be allocated to the account of
any Highly Compensated Employee who was subject to
forfeitures under this paragraph.
4.07 Limitations on Annual Additions to Individual Accounts:
Notwithstanding anything in this Article IV to the contrary,
the Annual Additions which may be credited to a Participant's
Individual Account under this Plan with respect to any
Limitation Year will not exceed the Maximum Permissible
Amount, reduced by the Annual Additions credited to a
Participant's Individual Account for the same Limitation Year
under another qualified defined contribution plan maintained
by the Employer, a welfare benefit fund, as defined in Section
419(e) of the Code maintained by the Employer, or an
individual medical account, as defined in Section 415(1)(2) of
the Code maintained by the Employer.
(a) If, due to a reasonable error in estimating a
Participant's annual Compensation, or through an
allocation of forfeitures, or under such other facts and
circumstances as the Secretary of the Treasury or his
delegate finds justifies the availability of relief, any
Excess Amount which arises will be disposed of as
follows.
(1) Any nondeductible voluntary employee
contributions, to the extent they would reduce
the Excess Amount, will be resumed to the
Participant.
(2) If after the application of paragraph (1) 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.
(3) If after the application of paragraph (2) an
Excess Amount still exists, and the Participant
is not covered by the Plan at the end of a
Limitation Year, the Excess Amount will be held
unallocated in a suspense account. The suspense
account will be applied to reduce future Employer
Contributions for all remaining Participants in
the next Limitation Year and each succeeding
Limitation Year if necessary.
(4) 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 Net Gain or Net Loss for that Plan
Year. 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 may be
made to the Plan for that Limitation Year.
Except to the extent provided under paragraph
(1), excess Amounts may not be distributed to
Participants or former Participants.
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(b) If the Annual Additions with respect to the Participant
under other defined contribution plans and welfare
benefit funds maintained by the Employer are less than
the Maximum Permissible Amount, and the Employer
Contribution that would otherwise be contributed or a
Allocated to the Participant's Individual Account under
this Plan would cause the Annual Additions for the
Limitation Year to exceed the Maximum Permissible
Amount, the amount contributed or allocated under this
Plan will be reduced so that the Annual Additions under
all such plans and funds for the Limitation Year will
equal the Maximum Permissible Amount. If the Annual
Additions with respect to the Participant under such
other defined contribution plans and welfare benefit
funds in the aggregate are equal to or greater than the
Maximum Permissible Amount, no amount will be
contributed or allocated to the Participant's Individual
Account under this Plan for the Limitation Year.
(c) Effective Date: The provisions of this Section shall be
effective as of the first day of the first Plan Year
beginning after December 31, 1986.
4.08 Deduction Limitation: The Employer shall not make
contributions to this Plan for any taxable year which exceed
the limitations on deductions contained in Section 404 of the
Code. Any Employer Contributions to the Plan are hereby
expressly conditioned upon their deductibility under Section
404 of the Code. Any Employer Contributions which are not a
deductible expense of the Employer under Section 404 of the
Code shall be resumed to the Employer in accordance with the
procedures described in Article XVI.
4.09 Overall Limitations:
(a) General Rule: If the Employer maintains, or at any time
maintained, a qualified defined benefit plan covering
any Participant in this Plan, Annual Additions to the
Participant's Individual Account will be limited so that
the sum of the Participant's Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction will not
exceed 1.0 in any Limitation Year.
ARTICLE V
RETIREMENT AND DISABILITY BENEFITS
5.01 Events Entitling Participant to Distribution: A Participant
shall be entitled to distribution of his or her Accrued
Benefit upon the occurrence of any one of the following
events:
(a) Retirement from the service of the Employer after
attainment of Normal Retirement Age.
(b) Retirement from the service of the Employer as a result
of becoming Disabled, to the extent provided in the
Adoption Agreement.
(c) Retirement from service of the Employer after attainment
of Early Retirement Age.
A Participant who attains Normal Retirement Age and
continues to be an Employee shall continue to share in
the allocation of Non-Elective Employer Contributions
and Matching Contributions, and earnings and losses.
5.02 Methods of Benefit Payment: Subject to Section 5.03, if a
Participant's Accrued Benefit becomes payable under Section
5.01, the Accrued Benefit shall be paid in one of the
settlement options described in subsection (a), (b) or (c), as
the Participant shall elect:
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(a) in the form of a lump sum,
(b) in the form of monthly, quarterly, semi-annual or annual
installments over a period not to exceed the life
expectancy of the Participant and the Participant's
Beneficiary; or
(c) for any Participant who participated in the Plan during
a Plan Year beginning before January 1, 1989, in any
optional form of benefit provided under the Prior Plan.
The Accrued Benefit of a Participant who has elected
distribution in the form of installments shall be
credited with Net Gain and Net Loss on the Individual
Account at least once per year.
5.03 Cash Out Payment: If a Participant terminates employment with
the Employer, and the value of the Participant's Vested
Account Balance is not greater than $3,500, the Participant
will receive a distribution of the value of the entire Vested
Account Balance in the form of a lump sum as soon as
administratively feasible following the Valuation Date which
coincides with or immediately follows the date the Participant
terminates service. However, to the extent permitted by the
Adoption Agreement, if the Participant files a written
election with the Plan Administrator, such distribution may be
made at an earlier date. In that event, the Participant shall
not share in an allocation of Net Gain or Net Loss since the
Valuation Date preceding the date of the distribution.
Coincident with any such distribution, the non-vested portion
of the Participant's Accrued Benefit will be forfeited.
5.04 Payment if Vested Account Balance exceeds $3.500:
(a) Subject to the consent requirement contained in
paragraph (b), if a Participant is entitled to
distribution under Section 5.01, end the value of the
Participant's Vested Account Balance is greater than
$3,500, the Trustee Shall distribute the Participant's
Vested Accrued Benefit to the Participant as soon as
administratively feasible following the last day of the
Plan Year during which such Participant terminates
employment. However, if the Participant files a written
election with the Plan Administrator, such distribution
may be made at an earlier date. In that event, the
Participant Shall not share in an allocation of Net Gain
or Net Loss since the Valuation Date preceding the date
of the distribution.
(b) If the value of a Participant's Vested Account Balance
exceeds $3,500, the Trustee shall not distribute the
Participant's Vested Account Balance under paragraph (a)
without the written consent of the Participant.
5.05 Nonforfeitabilitv of Benefits: A Participant's right to his
or her Accrued Benefit shall be nonforfeitable upon attainment
of Normal or Early Retirement Age or upon becoming Disabled
while in the service of the Employer.
ARTICLE VL
DEATH BENEFITS
6.01 Amount of Death Benefit: The Beneficiary of a Participant who
dies prior to receiving benefits hereunder shall be entitled
to receive death benefits as provided in this Article A
Beneficiary shall be one hundred percent (100%) vested in a
deceased Participant's Accrued Benefit if the Participant dies
while in the service of the employer, or if a retired or
Disabled Participant dies after termination of employment but
before the commencement of any retirement or disability under
this Plan A
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Beneficiary of a Participant whose employment is terminated
for reasons other than death, disability or retirement and who
dies after termination of employment (but prior to payment of
benefits) shall be vested in the Accrued Benefit of such
Participant in the same percentage that the deceased
Participant was vested prior to his death.
6.02 Payment of Death Benefit: The amount of the Accrued Benefit
payable to a Beneficiary under this Article VI shall be
determined as of the Valuation Date immediately following the
date of death. The Trustee shall distribute a deceased
Participant's Vested Accrued Benefit to the Participant's
Beneficiary in the form of a lump sum as soon as
administratively feasible after the end of the Plan Year
during which the Participant died. However, to the extent
permitted by the Adoption Agreement, if the Beneficiary files
a written election with the Plan Administrator, such
distribution may be made at an earlier date. In that event,
the Participant's Individual Account shall not share in an
allocation of Net Gain or Net Loss since the Valuation Date
preceding the Participant's Individual Account shall not share
in an allocation of Net Gain or Net Loss since the Valuation
Date preceding the date of the Participant's Accrued Benefit
will be forfeited.
6.03 Beneficiary Designation: Each Participant shall have the right
to designate and change his or her Beneficiary or contingent
Beneficiary, subject to Section 1.04. The Participant shall
also have the right to designate for such Beneficiary any
settlement option or combination thereof provided in this
Plan, or to confer upon the Beneficiary the power to elect any
settlement options provided hereunder Such right shall be
exercised by an instruction signed by the Participant.
6.04 Selection by Beneficiary: Notwithstanding any contrary
provisions contained herein, unless a Participant has made an
irrevocable designation as to the settlement option to be
provided to a Beneficiary hereunder, a Beneficiary shall have
the power to elect any settlement option hereunder. This
election is intended to provide the Beneficiary with the
specific power to revoke a prior designation of a settlement
option by a Participant (unless such election was made
irrevocable by the Participant or unless otherwise required by
ERISA or the Code).
ARTICLE VII
TERMINATION BENEFITS
7.01 Vested Account Balance:
(a) Nonforfeitable rights
(1) Each Participant shall at all times have a
nonforfeitable right to the portion of his
Individual Account attributable to Employee
Deferral Contributions, Qualified Non-Elective
Contributions and Qualified Matching
Contributions.
(2) Each Participant shall have a nonforfeitable
interest in the entire balance of his Individual
Account as of the date the Participant satisfies
the earliest to occur of the following
requirements:
(A) the Participant reaches the Normal Retirement Age
specified in the Adoption Agreement.
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(B) the Participant reaches the Early
Retirement Age (if any) specified in
the Adoption Agreement;
(C) the Participant dies prior to the
termination of his employment by the
Employer;
(D) the Participant becomes Disabled; or
(E) the Participant reaches the later of (i)
his 65th birthday, or (ii) the fifth
anniversary of the date he becomes a
Participant in the Plan.
(3) Subject to paragraph (2), a Participant's
nonforfeitable interest in the Portion of his
Account attributable to Non-elective Employer
Contributions and Matching Contributions shall be
determined under the vesting schedule contained
in the Adoption Agreement.
7.02 Determination of Vested Benefit: The amount of the vested
Accrued Benefit shall be determined as of the last day of the
Plan Year during which the termination of the Participant's
employment takes place. In no event will the Participant's
individual Account be credited with earnings or losses which
occur after the Valuation Date immediately preceding the date
such Participant's benefits are actually distributed from the
Plan.
7.03 Payment of Vested Interest:
(a) Subject to the consent requirement contained in
paragraph (b), the Trustee shall distribute a
terminated Participant's Vested Accrued Benefit to
the Participant in the form of a lump sum as soon as
administratively feasible following the last day of
the Plan Year during which such Participant
terminates employment. However, to the extent
permitted by the Adoption Agreement, if the
Participant files a written election with the Plan
Administrator, such distribution may be made at an
earlier date. In that event, the Participant shall
not share in an allocation of Net Gain or Net Loss
since the Valuation Date preceding the date of the
distribution. Coincident with any such distribution,
the non- vested portion of the Participant's Accrued
Benefit will be forfeited.
(b) Consent Requirements:
(1) Payment of a Participant's Accrued Benefit
may not begin before the Participant reaches
the later of age 62 or Normal Retirement Age,
unless -
(i) prior to the Annuity Starting
Date, the Participant's Vested
Account Balance does not exceed
$3,500;
(ii) the Participant requests the
payment; or
(iii) the Participant is deceased.
(2) For purposes of this Section, the term
"Annuity Starting Date" means the first day
of the first period for which an amount of
the Participant's Accrued Benefit is paid in
any form.
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(c) If a terminated Participant does not receive a
distribution of his Vested Accrued Benefit pursuant
to this Section, no forfeiture of the Participant's
Accrued Benefit will occur until the Participant
incurs 5 consecutive 1-year Breaks in Service. For
purposes of this Section, if the value of a
Participant's Vested Account Balance is zero, the
Participant shall be deemed to have received a
distribution of such Vested Account Balance at the
time of termination of employment.
7.04 Rehired Participant:
(a) In the case of a terminated Participant who is
rehired by the Employer and who has incurred a 1-year
Break in Service, Years of Service before such Break
in Service will not be taken into account until the
Participant has completed a Year of Service after
such Break in Service.
(b) In the case of a terminated Participant who is
rehired by the Employer and who has 5 or more
consecutive 1-year Breaks in Service, all Years of
Service after such Breaks in Service will be
disregarded for the purpose of determining the
Participant's Vested Interest that accrued before
such Breaks in Service. Such Participant's pre-break
service will count in vesting the post-break Vested
Interest only if either
(1) Such Participant has any Vested Interest at
the time of separation from service; or
(2) upon returning to service of the Employer,
the number of consecutive 1-year Breaks in
Service is less than the number of Years of
Service.
Separate accounts will be maintained for the
Participant's pre-break and post-break
employer-derived Account Balance. Both accounts will
share in the earnings and losses of the Trust.
In the case of a Participant who does not have 5
consecutive 1-year Breaks in Service, both the
pre-break and post-break service will count in
vesting both the pre-break and post-break
employer-derived Account Balance.
(c) If a terminated Participant receives a distribution
of his Vested Interest pursuant to Section 7.03, and
the Participant resumes employment covered under this
Plan, any portion of the Participant's
employer-derived Account Balance which has been
forfeited will be restored 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 1-year Breaks in Service following the
date of the distribution. If a Participant is deemed
to receive a distribution pursuant to Section 7.03,
and the Participant resumes employment covered under
this Plan before the date the Participant incurs 5
consecutive 1-year Breaks in Service, upon the
reemployment of such Participant, any portion of the
employer-derived Account Balance of the Participant
which has been forfeited will be restored. The
Participant's employer-derived Account Balance shall
be restored by the Employer as of the last day of the
Plan Year in which repayment is received (or
reemployment occurs, if the Participant was deemed to
receive a distribution pursuant to Section 7.03), by
any one or combination of the following methods:
(1) through an allocation of forfeitures for such
Plan Year,
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(2) from earnings of the Trust Fund for such Plan
Year; or
(3) from an allocation of Employer Contributions
for such Plan Year, such allocation being
made prior to any allocation under Section
3.07.
(d) The employer-derived Account Balance means the
portion of the Participant's Account Balance derived
from Employer Contributions.
ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.01 The Plan shall not offer a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity.
ARTICLE IX
DISTRIBUTION REQUIREMENTS
9.01 General Rules:
(a) Subject to the Article VIII Joint and Survivor
Annuity Requirements, the requirements of this
Article shall apply to any distribution of a
Participant's interest and will take precedence over
any inconsistent provisions of this Plan. Unless
otherwise specified, the provisions of this Section
apply to Plan Years beginning after December 31,
l984.
(b) All distributions required under this Article shall
be determined and made in accordance with the
proposed regulations under Section 401(a)(9) of the
Code, including the minimum distribution incidental
benefit requirement of Section 1.401(a)(9~2 of the
proposed regulations.
9.02 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.
9.03 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):
(a) the life of the Participant;
(b) the life of the Participant and a designated
beneficiary;
(c) a period certain not extending beyond the life
expectancy of the Participant; or
(d) a period certain not extending beyond the joint and
last survivor expectancy of the Participant and a
designated beneficiary.
9.04 Determination of Amount to be Distributed Each Year: If the
Participant's Accrued Benefit is to be distributed in other
than a single sum, the following minimum distribution rules
shall apply on or after the Required Beginning Date:
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(a) If a Participant's Accrued Benefit is to be distributed over(l)
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 Accrued 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 Accrued Benefit 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 Accrued 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 - of Section
1.401(a)(9~2 of the Proposed Treasury Regulations.
Distributions after the death of the Participant shall be
distributed using the applicable life expectancy in Section
9.04(a) above as the relevant divisor without regard to
Proposed Treasury Regulations Section 1 .401 (a)(9)-2.
(d) (1) 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) For purposes of determining a Participant's minimum
distribution, 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.
9.05 Death Distribution Provisions:
(a) Distribution beginning before death: If the Participant dies
after distribution of his or her Accrued Benefit has begun, the
remaining portion of such Accrued Benefit will continue to be
distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
(b) Distribution beginning after death: If the Participant dies
before distribution of his or her Accrued Benefit begins,
distribution of the Participant's entire Accrued Benefit 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 (1) or (2) below.
(1) If any portion of the Participant's Accrued Benefit is
payable to a Beneficiary, distributions may be made
over the life or over a period certain not greater than
the
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life expectancy of the Beneficiary commencing
on or before December 31 of the calendar year
immediately following the calendar year in
which the Participant died;
(2) if the Beneficiary is the Participant's
Surviving Spouse, the date distributions are
required to begin in accordance with
subparagraph (1) above shall not be earlier
than the later of (i) December 31 of the
calendar year immediately following the
calendar year in which the Participant died
and (ii) December 31 of the calendar year in
which the Participant would have attained age
70 1/2.
If the Participant has not made an election pursuant
to this Section 9.05(b) by the time of his or her
death, the Participant's Beneficiary must elect the
method of distribution no later than the earlier of
(1) December 31 of the calendar year in which
distributions would be required to begin under this
Section, or (2) December 31 of the calendar year
which contains the fifth anniversary of the date of
death of the Participant. If the Participant has no
Beneficiary, or if the 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.
(c) For purposes of Section9.05(b) above, if the
Surviving Spouse dies after the Participant, but
before payments to such Spouse begin, the provisions
of Section9.05(b), with the exception of subparagraph
(2) therein, shall be applied as if the Surviving
Spouse were the Participant.
(d) For purposes of this Section 9.05, 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.
(e) For the purposes of this Section 9.05, distribution
of a Participant's interest is considered to begin on
the Participant's Required Beginning Date (or, if
Section 9.05(c) above is applicable, the date
distribution is required to begin to the Surviving
Spouse pursuant to Section 9.05(b) above).
9.06 Commencement of Benefits:
(a) Unless the Participant (or his or her Beneficiary in
case of death) otherwise elects by submitting to the
Plan Administrator a written statement, signed by the
Participant (or the Beneficiary in case of death)
which describes the benefit and the date on which the
payment of such benefit shall commence, payment of
benefits shall begin no later than the sixtieth
(60th) day after the close of the Plan Year in which
the Participant (or Beneficiary) became entitled to
distribution of benefits under Section 5.01
(retirement or disability) or under Article VI
(death), subject to the provisions of paragraph (b),
(c) and (d).
(b) In the event that the Trustee has not completed
valuations necessary for a determination of the exact
amount of benefits to be distributed as of a
Valuation Date, or the Plan Administrator has been
unable to locate the Participant after making
reasonable efforts to do so, to the extent not
prohibited by the Code or ERISA and valid regulations
thereunder, the beginning of such distribution may be
delayed until sixty (60) days after such valuation
has been completed or such Participant has been
located.
(c) In the event that a Participant has not been located
within seven (7) years from the date that such
Participant's benefit under this Plan first becomes
payable, the Participant's Individ
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ual Account shall be deemed abandoned and shall be
reallocated among the remaining Participants in a
nondiscriminatory manner. In the event that a
Participant, whose Individual Account was deemed
abandoned and reallocated, is later located, such
Participant's Individual Account shall be restored
and distribution of such benefit shall commence no
later than the sixtieth (60th) day after the close of
the Plan Year in which the Participant is located.
(d) In order to avoid hardship to a Participant (or
Beneficiary), the Trustee, upon a recommendation from
the Plan Administrator, may begin to make partial
payment to a Participant (or Beneficiary) at any time
after retirement, disability, or death even though
the precise amount of the Accrued Benefit has not yet
been determined.
9.07 Definitions:
(a) Applicable life expectancy: The life expectancy (or
joint and last survivor expectancy) shall be
calculated using the attained age of the Participant
(or Beneficiary) as of the Participant's (or
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 the life
expectancy is being recalculated such succeeding
calendar year.
(b) 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 9.05 above.
(c) 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 9.05(b)(2) above) by the time distributions
are required to begin, life expectancies shall be
recalculated annually. Such election shall be
irrevocable as to the Participant (or Spouse) and
shall apply to all subsequent years. The life
expectancy of a nonspouse beneficiary may not be
recalculated.
(d) Participant's benefit: The Account Balance as of the
last Valuation Date in the calendar year immediately
preceding the distribution calendar year (valuation
calendar year) increased by the amount of any
contributions or forfeitures allocated to the account
balance as of dates in the valuation calendar year
after the valuation date and decreased by
distributions made in the valuation calendar year
after the valuation date.
(e) Required Beginning Date:
(1) General Rule: The required beginning date of
a Participant is the first day of April of
the calendar year following the calendar year
in which the Participant attains age 70 1/2.
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(2) 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 (i) or (ii) below:
(i) Non-S-percent owners: The required
beginning date of a Participant who
is not a S-percent owner is the
first day of April of the calendar
year following the calendar year in
which the later of retirement or
attainment of age 70 1/2 occurs.
(ii) S-percent owners: The required
beginning date of a Participant who
is a S-percent 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
S-percent owner, or the
calendar year in which
the Participant retires.
The required beginning date of a
Participant who is not a S-percent
owner who attains age 70 1/2 during
1988 and who has not retired as of
January 1, 1989, is April 1, 1990.
(3) 5-percent owner A Participant is treated as a
S-percent owner for purposes of this Section
if such Participant is a S-percent owner as
defined in Section 416(i) of the Code
(determined in accordance with Section 416
but without regard to whether the Plan is top
heavy) at any time during the Plan Year
ending with or within the calendar year in
which such owner attains age 66 1/2 or any
subsequent Plan Year.
(4) Once distributions have begun to a S-percent
owner under this Section, they must continue
to be distributed even if the Participant
ceases to be a S-percent owner in a
subsequent year.
ARTICLE X
LOANS TO PARTICIPANTS
10.01 Loans to Participants:
(a) If permitted in the Adoption Agreement, the Plan
shall provide for Participant loans, and the
provisions of this Article X shall apply to any
Participant loans granted or renewed after October
18, 1989.
(b) Pursuant to a uniform written loan policy set forth
in this Article X and in Appendix A to the Adoption
Agreement Plan, the Plan Administrator may direct the
Trustee to make a loan or loans to Participants in
cases of necessity or when otherwise deemed warranted
by the Plan Administrator. Such loan or loans shall
be in an amount or amounts which do not in the
aggregate exceed the amount set forth in Section
10.02 below. A Participant's application to receive
a loan shall be made in writing and on forms provided
by the Plan Administrator, subject to Sections 10.03
and 10.04, and any other procedures established
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in Appendix A. In exercising its discretion to make
loans, the Plan Administrator shall not discriminate
in favor of or against any Participant or group of
Participants. The Plan Administrator shall approve
or deny loans based on the applicant's
creditworthiness, financial need, and such other
factors which would be considered in a normal
commercial setting by an entity in the business of
making similar types of loans, including any such
factors specified in Appendix A. Notwithstanding the
foregoing, a loan may not be made to a married
Participant unless such Participant's Spouse consents
to the use of the Participant's Individual Account as
security for the loan, and such consent is witnessed
by a Plan representative or Notary Public.
10.02 Maximum Loan Amount:
(a) In no evens shell any loan made to a Participant
pursuant to this Article be in an amount which shall
cause the outstanding aggregate balance of all loans
made to the Participant under this Plan and all other
qualified plans maintained by the Employer to exceed
the lesser of:
(1) $50,000, reduced by the excess (if any) of
the Participant's highest outstanding balance
of loans from such plans during the 1 -year
period ending on the day before the date on
which such loan was made, over the
outstanding balance of loans from such plans
on the date on which such loan was made, or
(2) one-half of the total of: (i) the
Participant's Vested Accrued Benefit; (ii)
the amount of the Participant's vested
interest in his account balances in each
other defined contribution plan maintained by
the Employer, and (iii) the present value of
the nonforfeitable accrued benefit of the
Participant in each defined benefit plan
maintained by the Employer.
(b) For purposes of this Article, the balances of the
Participant's accounts or a Participant's Accrued
Benefit in this Plan and each other qualified plan of
the Employer shall be determined as of the last
available valuation of such accounts or Accrued
Benefit made within the twelve (12) month period
preceding the date on which an application for a loan
under this Article is made, adjusted for
distributions or contributions made after the date of
such valuation but not for earnings, gains or losses
subsequent to the date of such valuation.
10.03 Repayment of Loans:
(a) Except as provided under paragraph (b) below, any
loan made under this Article shall mature and be
payable in full within five (5) years from the date
the loan is made.
(b) A loan used to acquire any dwelling unit which within
a reasonable time is to be used (determined at the
time the loan is made) as the principal residence of
the Participant shall mature and be payable in full
within thirty (30) years from the date such loan is
made.
10.04 Terms:
(a) Loans to Participants shall be made according to the
following terms:
(1) the security for such loans shall be up to
50% of the present value of the vested
Accrued Benefit of the borrowing Participant,
and such additional security as the Plan
Administrator may specify in Appendix A or
may from time to time demand to insure that
the loan remains adequately secured;
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(2) interest shall be charged on the loans at
rates the Plan Administrator shall determine
to be reasonable. (In order to determine
whether an interest rate is reasonable, the
Plan Administrator (i) shall contact persons
in the business of lending money to ensure
that the loan provides the Plan with a return
commensurate with the interest rates charged
by such persons for loans which would be made
under similar circumstances; or (ii) shall
follow such other procedures outlined in
Appendix A for determining a reasonable rate
of interest);
(3) the loans shall be evidenced by such forms of
obligations, and shall be made upon such
additional terms as to default, prepayment,
security and otherwise as the Plan
Administrator shall determine;
(4) the loans shall be repaid under a
substantially level amortization schedule,
with payments required not less frequently
than quarterly; and
(5) the minimum amount which a Participant or
Beneficiary may borrow shall be $1,000.
Larger amounts may only be borrowed in
increments of $250.
(b) The entire unpaid balance of any loan made under this
Article and all interest due thereon, including all
arrearages thereon, shall, at the option of the Plan
Administrator, immediately become due and payable
without further notice or demand, upon the
occurrence, with respect to the borrowing
Participant, of any of the following events of
default:
(1) if any payment of principal and accrued
interest on the loan remains due and unpaid
for a period often (10) days after the same
becomes due and payable under the terms of
the loan;
(2) the commencement of a proceeding in
bankruptcy, receivership or insolvency by or
against the borrowing Participant;
(3) the termination of the employment of the
borrowing Participant with the Employer for
any reason;
(4) the borrowing Participant attempts to make an
assignment for the benefit of creditors of
his Accrued Benefit under the Plan, or of any
other security for the loan; or
(5) if the Plan Administrator determines that the
security for the loan is inadequate.
Any payments of principal and interest on the loan
not paid when due shall bear interest thereafter, to
the extent permitted by law, at the rate specified by
the terms of the loan. The payment and acceptance of
any sum at any time on account of the loan after an
event of default, or any failure to act to enforce
the rights granted hereunder upon an event of
default, shall not be a waiver of the right of
acceleration set forth in this paragraph.
(c) If an event of default and an acceleration of the
unpaid balance of the loan and interest due thereon
shall occur, the Plan Administrator shall have the
right to direct the Trustee to pursue any remedies
available to a creditor under the terms of the loan,
including the right to execute on the security for
the loan, and to apply any amounts credited to the
accounts of the borrowing Participant at the time of
execution or at any time thereafter in satisfaction
of the unpaid balance of the loan and interest due
thereon.
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(d) A Participant's Accrued Benefit may be used to repay
any such loan if:
(1) any portion of a loan or loans shall be
outstanding; and
(2) an event occurs which entitles the Participant
or his estate or his Beneficiaries to receive
a distribution from the Plan, then such
distribution shall, to the extent necessary to
liquidate the unpaid portion of the loan or
loans, be made to the Trustee as payment on
the loan or loans. No distribution shall be
made to a Participant or his estate or his
Beneficiaries in an amount greater than the
excess of the portion of his Accrued Benefit
otherwise distributable over the aggregate of
the amounts owing with respect to such loan or
loans, plus interest, if any accrued thereon.
10.05 Loans to Beneficiaries: For purposes of this Section, a
Beneficiary of a deceased Participant who has not yet received
a distribution of the balance of the Participant's Individual
Account shall be eligible for a loan from the Plan to the same
extent that the Participant was eligible. Any reference to a
Participant in this Article shall be deemed to include a
reference to the Beneficiary of a deceased Participant.
10.06 Prohibition on Loans to Owner-Employees and
Shareholder-Employees
(a) Prohibition Unless such a loan would not constitute a
prohibited transaction (as defined in ERISA and the
Internal Revenue Code), no loans may be made to any
Participant who is a Shareholder-Employee or
Owner-Employee.
(b) Definition of Shareholder-Employee For the purpose of
this Section, "Shareholder-Employee" means a
shareholder- employee as defined in Section 1379 of
the Internal Revenue Code, as in effect on the date
before the date of the enactment of the Subchapter S
Revision Act of 1982.
ARTICLE XI
PLAN ADMINISTRATION
11.01 Allocation of Fiduciary Powers: Each of the Fiduciaries shall
have only those powers and responsibilities that are
specifically given to them under the Plan. The Employer Shall
have the exclusive responsibility for making the contributions
provided for herein. The Sponsor shall have the exclusive
power to appoint and remove the Trustee end the Plan
Administrator, end the exclusive power to amend or terminate
this Plan, but shall have no other exclusive authority,
discretion and responsibility to manage and control the assets
of the Plan. The Trustee shall have no other responsibilities
other than those provided in this Plan. The Plan
Administrator shall have the exclusive authority and
responsibility, in its sole and absolute discretion, to
interpret the provisions of the Plan, determine eligibility
for benefits under the Plan, to control and manage the
operation and administration of this Plan in accordance with
the terms and conditions described in this Plan, and to
exercise all Fiduciary functions provided in the Plan or
necessary to the operation of the Plan except such functions
as are assigned to other Fiduciaries pursuant to this Plan.
Each Fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with
the provisions of the Plan authorizing or providing such
direction, information or action. Furthermore, each Fiduciary
may rely upon such direction, information or action of another
Fiduciary as being proper under this Plan, and is not required
to inquire into the propriety of any such direction,
information or other action. It is intended under this Plan
that each Fiduciary shall be
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responsible for the proper exercise of its own powers, duties,
responsibilities and obligations. Each fiduciary shall not be
responsible for any act or failure to act of another Fiduciary
except in circumstances where ▇▇▇▇▇ imposes liability for the
breach of a co-Fiduciary. No Fiduciary guarantees the trust
fund in any manner against investment loss or depreciation in
asset value except in circumstances where ▇▇▇▇▇ imposes
liability for such loss or depreciation.
11.02 Plan Administration: The Plan shall be administered by the
Plan Administrator who shall be appointed by the Sponsor. All
usual and reasonable expenses of the Plan Administrator may be
paid in whole or in part by the Employer, and any expenses not
paid by the Employer shall be paid by the Trustee out of the
principal or income of the trust fund.
11.03 Claim Procedure: The Plan Administrator shall make all
determinations as to the right of any person to a benefit
under the Plan. In accordance with regulations of the
Secretary of Labor issued under Section 503 of ERISA, the Plan
Administrator shall provide adequate notice in writing to any
Participant or Beneficiary whose claim for benefits under the
Plan has been denied, setting forth the specific reasons for
denial, written in a manner calculated to be understood by the
Participant or Beneficiary, and afford a reasonable
opportunity to any Participant or Beneficiary whose claim for
benefits had been denied for a full and fair review by the
Plan Administrator of the decisions denying the claim. A
Participant or Beneficiary may claim any benefits due under
the Plan by mailing to the last known address of the Plan
Administrator a written application outlining to the best of
the Participant's knowledge or ability, the nature, amount and
form of such benefit.
11.04 Reporting and Disclosure: The Plan Administrator shall
exercise such authority and responsibility as it deems
necessary in order to comply with the reporting and disclosure
requirements of ERISA and any valid governmental regulations
issued thereunder relating to the preparation and filing of
All reports and registrations required to be filed by the Plan
with any governmental agency; compliance with all disclosure
requirements imposed by state or federal laws; maintenance of
all records of the Plan other than those required to be
maintained by other Fiduciaries; and the preparation and
delivery of all reports, information and notifications
required to be given to Participants or Beneficiaries in
accordance with state or federal laws.
11.05 Plan Administrator's Duties and Powers: The Plan
Administrator shall have any and all power and authority
(including discretion with respect to the exercise of that
power and authority) which shall be necessary, properly
advisable, desirable or convenient to enable it to carry out
its duties under the Plan. By way of illustration and not
limitation, the Plan Administrator is empowered and authorized
to make rules and regulations in respect of the Plan not
inconsistent with the Plan, the Code or ERISA; to determine,
consistently therewith, All questions that may arise as to the
eligibility, benefits, status and right of any person claiming
benefits under the Plan, including (without limitation)
Participants, former Participants, Surviving Spouses of
Participants and Beneficiaries; and subject to and consistent
with ERISA, to construe and interpret the Plan and correct any
defect, supply any omissions or reconcile any inconsistencies
in the Plan, such action to be final and conclusive on All
persons claiming benefits under the Plan.
In addition the Plan Administrator shall have any other duties
and powers as may be necessary to discharge its duties
hereunder, including, but not by way of limitation the
following:
(a) To prescribe procedures to be followed by
Participants or Beneficiaries filing applications
for benefits;
(b) To prepare and distribute, in such manner as the Plan
Administrator determines to be appropriate,
information explaining the Plan;
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(c) To receive from the employer and from Participants
such information as shall be necessary for the proper
administration of the Plan;
(d) To furnish the Employer, upon request, such annual
reports with respect to the administration of the
Plan as are reasonable and appropriate;
(e) To receive, review and keep on file (as it deems
convenient or proper) reports of the financial
condition, and of the receipts and disbursements, of
the trust fund from the Trustee;
(f) To appoint or employ individuals to assist in the
administration of the Plan and any other agents it
deems advisable, including legal and actuarial
counsel, and to pay such individuals reasonable fees
for the performance of services.
11.06 Administrative Rules: The Plan Administrator may adopt such
rules as it deems necessary, desirable, or appropriate. All
rules and decisions of the Plan Administrator shall be
uniformly and consistently applied to all Participants in
similar circumstances. Upon making a determination or
calculation, the Plan Administrator shall be entitled to rely
upon information furnished by a Participant or Beneficiary,
the Employer, the legal counsel of the Employer, or the
Trustee.
11.07 Directions to Trustee: The Plan Administrator shall issue
directions to the Trustee concerning all benefits which are to
be paid from the trust fund pursuant to the provisions of the
Plan.
11.08 Benefit Applications: The Plan Administrator may require a
Participant to complete and file an application for a benefit,
to complete all other forms furnished by the Plan
Administrator and to furnish all pertinent information
requested by the Plan Administrator.
11.09 Domestic Relations Order: The Plan Administrator shall develop
written procedures to determine whether a domestic relations
court order meets the requirements of a qualified domestic
relations order as defined in Code Section 414(p) and to
determine the method of distributing benefits in compliance
with the order. If the Plan Administrator determines that a
domestic relations order is qualified under Code Section
414(p), then the date of such determination shall be deemed
the "earliest retirement age" under Code Section 414(p) with
respect to the Participant against whom the domestic relations
order is entered, and the Plan Administrator may make an
immediate distribution only to the alternate payee(s) under
such order. A domestic relations order entered before January
1, 1985, will be treated as a qualified domestic relations
order if payment of benefits pursuant to the order has
commenced as of such date, and may be treated as a qualified
domestic relations order if payment of benefits has not
commenced as of such date, even though the order does not
satisfy the requirements of Section 414(p) of the Code.
ARTICLE X11
TOP HEAVY RULES
12.01 Effective Date: If the Plan is or becomes top heavy in any
Plan Year beginning after December 31, 1983, the provisions of
this Article will supersede any conflicting provisions in the
Plan.
12.02 Determination of Top Heavy Status: The Plan is top heavy for
a particular Plan Year if, as of the determination date, any
of the following conditions exists:
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(a) If the top heavy ratio for this Plan exceeds 60
percent and this Plan is not part of any Required
Aggregation Group or Permissive Aggregation Group of
plans.
(b) If the Plan is a part of a Required Aggregation Group
of plans but not part of a Permissive Aggregation
Group and the top heavy ratio for the group of plans
exceeds 60 percent.
(c) If the Plan is a part of a Required Aggregation Group
and part of a Permissive Aggregation Group of plans
and the top heavy ratio for the Permissive
Aggregation Group exceeds 60 percent.
In the case of a Required Aggregation Group, each
plan in the group will be considered to be top heavy
if the Required Aggregation Group is determined to be
top heavy. No plan in the Required Aggregation Group
will be considered to be top heavy if the Required
Aggregation Group is not top heavy. The Employer may
also include any other plan not required to be
included in the Required Aggregation Group, providing
the resulting group taken as a whole will continue to
satisfy the provisions of the Code Sections 401(a)(4)
and 410 of the Code. Such group hereinafter shall be
known as a Permissive Aggregation Group. In the case
of a Permissive Aggregation Group, only a plan that
is part of the Required Aggregation Group will be
considered top heavy if the Permissive Group is top
heavy. No plan in the Permissive Aggregation Group
will be considered top heavy if the Permissive
Aggregation Group is not top heavy. Only those plans
of the Employer in which the determination dates fall
within the same calendar year are aggregated in order
to determine whether such plans are top heavy. For
Plan Years beginning after December 31, 1984, the
Individual Account of a Participant who has not
performed any services for the Employer during the
five (5) year period ending on the determination date
shall be disregarded for purposes of making the
determination of top heavy status.
12.03 Definitions and Special Rules: The following definitions
shall apply for purposes of this Article:
(a) 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 Individual Account Balance
distributed in the 5-year period ending on
the determination date(s)), and the
denominator of which is the sum of the
Individual Account Balances of all
Participants (including any part of any
Individual Account Balance distributed in the
5-year period ending on the determination
date(s)), both computed in accordance with
Section 416 of the Code and the regulations
thereunder. Both the numerator and
denominator of the top heavy ratio are
increased to reflect any contribution not
actually made as of the determination date,
but which is required to be taken into
account on that date under Section 416 of the
Code and the regulations thereunder.
(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
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Required or Permissive Aggregation Group as
appropriate is a fraction, the numerator of
which is the sum of the 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 five-year period ending on the
determination date.
(3) For purposes of (1) and (2) above the value
of the 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 (1) who is not a Key Employee
but who was a Key Employee in a prior year,
or (2) who has not been credited with at
least one Hour of Service with any Employer
maintaining the Plan at any time during the
5-year period ending on the determination
date will be disregarded. The calculation of
the top-heavy ratio, and the extent to which
distributions, rollovers, and transfers are
taken into account will be made in accordance
with Section 416 of the Code and the
regulations thereunder.
(4) Deductible employee contributions will not be
taken into account for purposes of computing
the top heavy ratio. When aggregating plans
the value of Individual Account Balances and
Accrued Benefits will be calculated with
reference to the determination dates that
fall within the same calendar year.
(5) The accrued benefit of a Participant other
than a Key Employee shall be determined under
(i) the method, if any, that uniformly
applies for accrual purposes under all
defined benefit plans maintained by the
Employer, or (ii) 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 l(b)(l)(c)
of the Code.
(b) Key Employee: Any Employee or former Employee (and
the Beneficiaries of each such Employee) who, at any
time during the determination period was:
(1) 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;
(2) an owner (or considered an owner under
Section 318 of the Code of one of the ten
largest interests in the Employer if such
individual's Compensation exceeds 100 percent
of the dollar limitation under Section
415(c)(1)(A) of the Code;
(3) a five percent (5%) owner of the Employer; or
(4) a one percent ( 1 %) owner of the Employer
who has an annual Compensation of more than
$150,000.
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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(a)(8), Section 402(h) 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 Key Employee status will
be made in accordance with Code Section
416(i)(1) of the Code.
(c) 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.
(d) Present Value: For purposes of establishing present
value to compute the top heavy ratio, any benefit
shall be discounted only for mortality and interest
based on a 6% interest rate and the Unisex Pension
1984 Mortality Table.
(e) Valuation Date: For purposes of computing the top
heavy ratio, the valuation date shall be the last day
of each Plan Year.
(f) 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.
(g) Required Aggregation Group: (1) 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 (2) any other qualified plan of
the Employer which enables a plan described in (1) to
meet the requirements of Sections 401(a)(4) or 410 of
the Code.
12.04 Effect of Top Heavy Status: The following rules shall apply
to any Participant who earns an Hour of Service during any
Plan Year in which the Plan is determined to be top heavy:
(a) Minimum Allocation:
(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 three percent
of such Participant's Compensation or, in the
case where the Employer has no defined
benefit plan which designates this Plan to
satisfy Section 401 of the Code, the largest
percentage of Employer Contributions and
forfeitures, as a percentage of the first
$200,000 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. Also, elective
deferrals described in Section 401(k) of the
Code and matching contributions described in
Section 401(m) of the Code may not be treated
as Employer Contributions for purposes of
satisfying this 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 (i) the
Participant's failure to complete 1,000 Hours
of Service during the Plan Year (or any
equivalent provided
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56
in the plan), or (ii) the Participant's
failure to make mandatory employee
contributions to the Plan, or (iii) the
Participant earns Compensation less than a
stated amount.
(2) For purposes of computing the minimum
allocation, Compensation shall mean
Compensation as defined in Article I of the
Plan.
(3) Subparagraph (1) above shall not apply to any
Participant who was not employed by the
Employer on the last day of the Plan Year.
(4) For purposes of subparagraph (1) above,
Employer Contributions and forfeitures
allocated under any other defined
contribution plan of the Employer, in which
any Key Employee participates or which
enables another defined contribution plan to
meet the requirements of Code Section
401(a)(4) or 410, shall be considered
contributions and forfeitures allocated under
this Plan.
(5) In the case of any Participants who are not
Key Employees and who participate in both
this Plan and a defined benefit plan of the
Employer, the foregoing provisions of this
subsection (a) shall be inapplicable and the
Employer shall provide that each Non-Key
Employee eligible to participate in this Plan
has, at any time, a minimum accrued benefit
under the defined benefit plan, expressed as
a life annuity commencing at normal
retirement age, equal to at least the product
of (i) the Employee's average compensation
for the five consecutive years when the
Employee had the highest aggregate
compensation from the Employer and( ii) the
lesser of 2% per Year of Service or 20%. For
purposes of computing the product in the
foregoing sentence, compensation in years
before January 1,1984 and in years after the
close of the last Plan Year in which the Plan
is top heavy shall be disregarded, and
similarly, Years of Service shall exclude
Years of Service when the Plan was not top
heavy (for any Plan Year ending during such
Year of Service) and Years of Service
completed in a Plan Year beginning before
January 1, 1984. Although accruals of
Employer derived benefits, whether or not
attributable to years for which the Plan is
top heavy, may be used to satisfy the defined
benefit plan minimum, all accrued benefits
attributable to Employee Contributions and
for Plan Years beginning before January 1,
1985, Employer Contributions attributable to
a salary reduction or similar arrangement
made pursuant to Code Section 401(k)), shall
be ignored.
(6) To the extent required under Section 416(b)
of the Code the minimum allocation provided
by this paragraph (a) may not be forfeited
under Section 411(a)(3)(B) or 411(a)(3)(D) of
the Code.
(7) If an Employee is a Participant in this Plan
and another defined contribution plan
included in a Required Aggregation Group,
this Plan shall be the last defined
contribution plan to provide a minimum
allocation for such Non-Key Employee.
(b) Vesting: The Top Heavy vesting schedule specified in
the Adoption Agreement will apply.
(c) The portion of a Participant's Accrued Benefit to
which the vesting schedule of subsection (b) applies
shall include all benefits within the meaning of
Section 411(a)(7) of the Code except those
attributable to Employee Contributions, including
benefits accrued before the effective date of Section
416 and benefits accrued before the Plan became top
heavy. No decrease in a Participant's nonforfeitable
percentage may occur in the event the Plan's status
as top heavy changes for any Plan Year.
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(d) If the Plan is determined to be top heavy during any
Limitation Year, the Plan Administrator shall apply
the limitations of Section 4.09 to the Participant by
substituting 100 percent for 125 percent in each
place in which it appears in the fractions described
in such Section. Provided, however that the
foregoing sentence shall not apply if:
(1) the top heavy ratio is 0.90 or less, and
(2) each Non-Key Employee receives an additional
minimum contribution or benefit under a plan
of the Employer. In the case of a Non-Key
Employee participating only in a defined
benefit plan, the additional minimum benefit
for each Year of Service counted is one
percentage point, up to a maximum often
percentage points, of the Employee's average
compensation for the five consecutive years
when the Employee had the highest aggregate
compensation from the Employer. In the case
of a Non-Key Employee participating only in
this Plan or another defined contribution
plan, the additional minimum contribution is
one percent of the Employee's compensation.
In the case of a Non-Key employee
participating both in a defined benefit plan
and this or another defined contribution
plan, the minimum benefit shall be provided
in the defined benefit plan, and not in this
Plan.
ARTICLE XIII
THE TRUSTEE
13.01 Resignation and Removal: A Trustee may resign by written
instrument addressed to the Employer. The Employer may remove
the Trustee by a written instrument addressed to the Trustee.
Appointments to vacancies shall be made by the Employer and
any successor Trustee shall evidence its acceptance of such
appointment by written instrument addressed to the Employer.
Upon written acceptance of such appointment by the successor
Trustee, the Trustee shall assign, transfer and pay over to
such success or Trustee, the funds and properties then
constituting the trust fund together with the proper
accounting therefore. If such accounting is not objected to
within 60 days after the receipt thereof by the Employer or
the successor Trustee, the Trustee shall be deemed to be
discharged of all duties under the Plan except to the extent
otherwise provided by law.
13.02 Information to be Furnished to Trustee: The Employer and the
Plan Administrator shall furnish to the Trustee such
information as required or desirable for the purpose of
enabling the Trustee to carry out the provisions of the Plan,
and the Trustee may rely upon such information as being
correct.
13.03 Accounting: The Trustee shall keep accurate and detailed
accounts of investments, receipts, disbursements and other
transactions hereunder and all such accounts and other records
relating thereto shall be open to inspection and audit at all
reasonable times by any person designated by the Employer or
the Plan Administrator. Within ninety (90) days following the
close of the Plan Year and within ninety (90) days after the
removal or resignation of the Trustee as provided herein, the
Trustee shall file with the Employer a written account setting
forth all investments, receipts, disbursements and other
transactions effected by it during such Plan Year or during
the period from the close of the last Plan Year to the date of
such removal or resignation. Subject to any express provision
of applicable law as may be in effect from time to time to the
contrary, no person other than the Employer may require an
accounting or bring any action against the Trustee with
respect to the trust fund or its actions as Trustee.
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13.04 Trustee's Right to Judicial Settlement: Notwithstanding any
other provision of this Article, the Trustee shall have the
right to have a judicial settlement of its accounts. In any
proceeding for a judicial settlement of the Trustee's
accounts, or for instructions in connection with the trust
fund, the only necessary parties thereto in addition to the
Trustee shall be the Employer and the Plan Administrator. If
the Trustee so elects, it may bring in any other person or
persons as a party or parties defendant.
13.05 Trustee's Expenses: To the extent not paid by the Employer,
expenses incurred by the Trustee in the performance of its
duties under the Plan, including reasonable compensation for
agents and for the services of counsel rendered to the
Trustee, expenses related/hereto and all other proper charges
and disbursements of the Trustee including all taxes of any
kinds whatsoever that may be levied or assessed under existing
or future laws shall be paid by the Trustee out of the Plan,
and such expenses shall constitute a charge upon the Plan.
13.06 Payment of Benefits to Incompetent: In the ▇▇▇▇▇ that any
benefit under the Plan is payable to a minor or other legally
incompetent person, the Trustee shall not require the
appointment of a guardian but shall be authorized to pay the
same to any person having custody of such minor or incompetent
person, to pay to such minor or incompetent person without the
intervention of the guardian, or to pay the same to a legal
guardian of such minor or incompetent person if one has
already been appointed.
13.07 Trustee's Investment Powers: Subject to the fiduciary
responsibility provisions of ERISA, the Trustee may hold and
invest, all trust funds as follows:
(a) To receive, hold, manage, improve, repair, sell,
lease, pledge, mortgage, exchange or otherwise
dispose of all or any part of the Trust Assets upon
such terms, prices and conditions as it deems
advisable. To invest and reinvest the Trust Assets
in any property or undivided interest therein,
wherever located, including bonds, notes (secured or
unsecured), stock of corporations, real estate or any
interest therein, annuities and other policies of
insurance, and any collective or common trust fund or
qualified pooled investment trust, upon such terms,
prices and conditions as it deems advisable, without
being restricted by any statute or rule of law
governing the investments in which a trustee may
invest funds held by it, and without regard to the
proportion which an investment may bear to the entire
amount of the Trust Assets.
(b) To sell or exchange any part of the assets of the
Plan.
(c) To vote in person or by proxy the securities and
investment company shares which it holds as Trustee
and to delegate such power.
(d) To consent to or participate in dissolutions,
reorganizations, consolidations, mergers, sales,
transfers or other changes in securities and
investment company shares which it holds as Trustee,
and, in such connection, to delegate its powers, and
to pay all assessments, subscriptions and other
charges.
(e) To exercise all rights, privileges, options, and
elections in any Insurance Contracts and to pay the
premiums thereon.
(f) To retain in cash and keep unproductive of income
such amount as the Trustee may deem advisable in his
discretion and the Trustee shall not be required to
pay interest on such cash balances or on cash in its
hands pending investment.
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(g) To sell, exchange, convey or transfer any property at
any time held by the Trustee upon such terms as it
may deem advisable and no person dealing with the
Trustee shall be bound to see the application of the
purchase money or to inquire into the propriety of
any such transaction.
(h) To enter into, compromise, compound and settle any
debt or obligation due to or from the Trustee and to
reduce the rate of interest on, to extend or
otherwise modify, or to foreclose upon default or
otherwise enforce any such obligation.
(i) To cause any bonds, stocks or other securities held
by the Trustee to be registered in or transferred
into its name as Trustees or the name of its nominee
or nominees, or to hold them unregistered or in form
permitting transferability by delivery, but at all
times with full responsibility therefore as Trustee.
(j) To borrow money upon such terms and conditions as may
be deemed advisable to carry out the purposes of the
trust and to pledge securities or other property in
repayment of any such loan; provided, that loans or
advances may be made by the Trustee hereunder by way
of overdrafts or otherwise on a temporary basis on
which no interest is payable.
(k) To manage, administer, operate, repair, improve and
mortgage or lease for any number of years, regardless
of any restrictions on leases made by trustees or to
otherwise deal with any real property or interest
therein; to renew or extend or to participate in the
renewal or extension of any mortgage, and to agree to
the reduction in the interest on any mortgage or
other modification or change in terms of any mortgage
or guarantee thereof in any manner and upon such
terms as may be deemed advisable; to waive any
defaults whether in performance of any convenant or
condition of any mortgage or in the performance of
any guarantee or to enforce any such default in such
manner as may be deemed advisable, including the
exercise and enforcement of any and all rights of
foreclosure.
(l) To invest all or part of the trust fund in
interest-bearing deposits of the Trustee bank, which
is included, but is not limited to investments in
time deposits, savings deposits, certificates of
deposit or time accounts which bear a reasonable
interest rate.
(m) To employ suitable agents, accountants and counsel
and to pay their reasonable expenses and compensation.
(n) To transfer, et any time end from time to time, such
part or all of the trust fund as it shall deem
advisable to the trustees of any trust which has been
qualified under Section 401(a) and is exempt under
Section 501(a) of the Code, and which is maintained
by it as a medium for the collective investment of
funds of pension, profit sharing or other employee
benefit trust, and to withdraw any part or all of the
trust fund so transferred; in which event the
provisions of any such trust shall be deemed a part
of this Agreement to the extent that they shall not
be inconsistent with the provisions hereof.
(o) To make, execute and deliver as Trustee any and all
deeds, leases, mortgages, advances, contracts,
waivers, releases or other instruments in writing
necessary or proper in the employment of any of the
foregoing powers.
(p) To exercise, generally, any of the powers which an
individual owner might exercise in connection with
property either real, personal or mixed held by the
trust fund, and to do all
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other acts that the Trustee may deem necessary or
proper to carry out any of the powers set forth in
this Article or otherwise in the best interests of
the trust fund.
(q) To settle, compromise or abandon all claims and
demands in favor of or against the trust fund.
(r) To appoint and/or employ business entities and/or
individuals to act as investment advisers and/or
managers on behalf of this Plan in order to manage
any portion or all of the assets of this Plan.
However, the appointment of such an investment
adviser and/or manager (1) shall be subject to the
approval of the Employer, and (2) will render any
such investment adviser and/or manager who is
appointed a fiduciary under this Plan to the extent
of such adviser's and/or manager's investment duties
end responsibilities to the Plan, and(3) in no event
shall cause the assets of this Plan to be taken out
of Trust or cause the Trustee hereof to be
eliminated.
(s) Upon the election of the Employer, to approve, devise
and/or implement a system or policy to permit
Participants and/or Beneficiaries hereunder an
election, which shall be granted to all Participants
and/or Beneficiaries in a nondiscriminatory manner,
to execute investment control over a portion or all
of their Individual Accounts. In the event that a
Participant or Beneficiary does not choose to
exercise such investment control, the Trustee shall
continue to invest the Individual Account of such
Participant or Beneficiary. In the event that the
Participant or the Beneficiary directs the Trustee to
invest some or all of that portion of the
Participant's or Beneficiary's Individual Account in
an investment which is prohibited by the terms of the
Plan, the direction of the Participant or the
Beneficiary shall be deemed to control and the
Trustee shall have no liability for violating the
terms of the Plan by following the Participant's or
the Beneficiary's investment instructions. To the
extent provided by ▇▇▇▇▇, in the event that a
Participant or a Beneficiary exercises investment
control over the assets in such person's Individual
Account, no Fiduciary shall be subject to liability
for any loss or any breach of the fiduciary
responsibility standards of ERISA.
(t) Subject to subsection (u) below, to accept a rollover
contribution to be credited to an Employee's
Individual Account (which portion of such Individual
Account shall always be one hundred percent (100%)
vested) to the extent that such rollover contribution
is permitted under then existing provisions of the
Code.
(u) The Trustee may accept a transfer of amounts from
other qualified corporate or noncorporate plans. The
Plan shall not be a direct or indirect transferee (in
a transfer after December 31, 1984) of a pension plan
or any retirement plan that at any time provided for
benefits in the form of a life annuity.
(v) In the case of a Participant who either meets the
conditions of Section S.01 or has terminated
employment pursuant to Section 7.01, the vested
portion of the Accrued Benefit may be transferred to
another plan which was found by the appropriate
District Director of Internal Revenue to be tax
qualified under the relevant provisions of the Code.
The transfer must be at the request of the
Participant; and
(i) the transfer must be completed within 270
days of the valuation date;
(ii) the transferable amount, 60 days after the
close of such Plan Year may be held in a
separate account bearing a reasonable rate of
interest until transferred; and
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(iii) if 270 days after the Plan Year end the
transfer has not been completed for any
reason, the entire amount held in the
separate account is to be paid to the
Participant in a lump sum.
13.08 Form of Plan Contributions: The Trustee shall receive any
Employer Contributions paid to it in cash or in the form of
such other property as it may from time to time deem
acceptable and which shall have been delivered to it. The
Employer shall make contributions in such manner and at such
times as shall be appropriate. The Trustee shall not be
responsible for the calculation or collection of any Employer
Contribution under or required by the Plan but shall be
responsible only for property received by it pursuant to this
Plan.
13.09 Payments Made at Direction of Plan Administrator: The Trustee
shall, on the written directions of the Plan Administrator,
make payments out of the Trust fund to such persons, in such
amounts and or purposes as may be specified in the written
directions of the Plan Administrator. To the extent permitted
by law, the Trustee shall be under no liability for any
payment made pursuant to the direction of the Plan
Administrator. Any written direction of the Plan
Administrator shall constitute a certification that the
distribution or payment so directed is one which the Plan
Administrator is authorized to direct.
ARTICLE XIV
FIDUCIARY RESPONSIBILITY
14.01 Fiduciary Standards: Each Fiduciary shall discharge his
duties under the Plan solely in the interest of the
Participants and their Beneficiaries and (1) for the exclusive
purpose of providing benefits for such Participants and their
Beneficiaries and defraying reasonable expenses of
administering the Plan; (2) with the care, skill prudence, and
diligence under the circumstances then prevailing that a
prudent person acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of a
like character and with like aims; and (3) in accordance with
the Plan in so far as the Plan is consistent with the
provisions of ERISA. The Trustee shall diversify the
investments of the Plan so as to minimize the risk of large
losses, unless under the circumstances it is clearly prudent
not to do so. The requirements set forth above shall not be
deemed to be violated merely because the Trustee invests the
trust funds partly or wholly in (1) shares of a mutual fund,
or (2) shares of a pooled investment fund maintained by a bank
14.02 Situs of Plan Assets: Except as authorized by regulations
prescribed by the Secretary of Labor, the Trustee shall not
maintain ownership of any Plan assets outside the jurisdiction
of the District Courts of the United States.
ARTICLE XV
PURCHASE OF INSURANCE CONTRACTS
15.01 Purchase Permitted: If permitted by the Plan Administrator,
the Trustee may apply a percentage of the annual Employer
Contribution as elected in writing by the Participant toward
the purchase of Insurance Contracts on behalf of a
Participant, provided, however, that:
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(a) If ordinary life insurance is purchased on behalf of
a Participant, the aggregate amounts applied to the
payment of premiums on such ordinary life insurance
may not at any time exceed forty-nine and nine tenths
(49.9%) of the aggregate contributions made on behalf
of a Participant.
(b) If term life insurance or universal life insurance is
purchased on behalf of a Participant the aggregate
amounts applied to the payment of premiums on such
term life insurance may not at any time exceed twenty
four and nine tenths (24.9%) of the aggregate
contributions made to the plan on behalf of the
Participant.
(c) Further, the Trustee shall convert the entire value
of any such life insurance contracts at or before
retirement into one or more of the following:
(i) cash;
(ii) a form which provides periodic income to the
Participant so that no portion of such value
may be used to continue life insurance
protection prior to retirement;
(iii) a form which allows distribution of the
contract to the Participant. If any contract
is distributed to a Participant, the modes of
settlement contained in the contract shall be
limited to those provided under the Plan.
(d) If a Participant dies prior to the effective date of
any life insurance coverage, the face value of such
coverage shall be deemed to be the annual cost of
such coverage.
(e) No life insurance coverage shall be reduced because
of a decrease in a Participant's Compensation unless
(i) the decrease has been in effect for three (3)
years and results in a reduction in the life
insurance coverage of at least $1,000 or (ii) the
continuation of such coverage would exceed the
limitations set forth subsection (a).
(f) The Trustee shall not be liable for any delay in
purchasing life insurance coverage.
(g) In the event of any conflict between the terms of the
Plan and the provisions of any Insurance Contract
issued hereunder, the terms of the Plan shall
control.
ARTICLE XVI
EXCLUSIVE BENEFIT REQUIREMENTS
16.01 Trustee Receipt of Funds: All Contributions to the Plan shall
be transmitted directly or indirectly to the Trustee. All
Contributions so received by the Trustee shall constitute
trust funds and shall be held and managed and administered by
the Trustee pursuant to the terms of the Plan.
16.02 Plan Assets for exclusive Benefit of Participants: Except to
the extent permitted by Section 16.03, the assets of this Plan
shall never inure to the benefit of the Employer and shall be
held for the exclusive purposes of providing benefits to
Participants in the Plan and their Beneficiaries and defraying
reasonable expenses of administering the Plan.
16.03 Return of Employer Contributions: Notwithstanding Section
16.02, Employer Contributions to the Plan shall be resumed to
the Employer in the following circumstances:
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(a) If a Contribution is made by reason of a mistake of
fact, such Contribution shall, if requested by the
Employer, be resumed to the Employer within one ( 1 )
year after the payment thereof.
(b) In the event that the Commissioner of Internal
Revenue or his delegate determines that the Plan is
not initially qualified under the Internal Revenue
Code, any Employer Contribution (other than salary
deferrals under a cash or deferred arrangement) made
incident to that initial qualification by the
Employer (plus any earnings on such contributions)
shall be returned to the Employer within one year
after the date the initial qualification is denied,
but only if the application for the qualification is
made by the time prescribed by law for filing the
Employer's return for the taxable year in which the
Plan is adopted, or such later date as the Secretary
of the Treasury may prescribe. However, any employee
contributions or salary deferrals contributed by or
on behalf of Employees (plus any earnings on such
Contributions or deferrals) shall be resumed to such
Employees.
(c) Since any Employer Contribution under this Plan is
expressly conditioned upon its deductibility under
Section 404 of the Code, then, to the extent the
deduction is disallowed, such Contribution shall be
resumed to the Employer within one year after the
disallowance of the deduction.
(d) The amount which shall be resumed to the Employer
under paragraphs (a) or (c) is the excess of (1) the
amount contributed over (2) the amount that would
have been contributed had there not occurred a
mistake of factor a disallowance of the deduction.
Earnings attributable to the excess contribution may
not be resumed to the Employer, but losses
attributable thereto must reduce the amount to be so
resumed. Furthermore, if the return of any such
amount would cause the balance of the Individual
Account of any Participant to be reduced to less than
the balance which would have been in the Individual
Account had the mistaken amount not be contributed,
then the amount to be resumed to the Employer will be
limited so as to avoid such reduction.
ARTICLE XVII
PLAN TERMINATION AND AMENDMENTS
17.01 Termination or Partial Termination: While it is the intention
of the Employer that the Plan shall be permanent, the Employer
reserves the right to terminate it. Such termination shall
become effective upon receipt by the Trustee of a written
instrument of termination signed by the Employer. Upon
termination of the Plan or upon a partial termination of the
Plan within the meaning of Section 41 l(d)(3) of the Code, or
upon a complete discontinuance of Contributions under the
Plan, the rights of all affected Employees to their Accrued
Benefits shall become nonforfeitable. The Trustee shall
distribute such benefits in the form of a lump sum to the
Participants as soon as practicable following the termination
of the Plan.
17.02 Limitations on Amendments by Employer: This Plan may be
amended by the Employer in writing at any time, subject to the
following.
(a) Such amendment shall not increase the duties of the
Trustee without its written consent:
(b) (1) If the Plan's vesting schedule is amended, or
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the Plan is amended in any way that directly
or indirectly affects the computation of a
Participant's Vested Interest, 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 Service
may elect, within a reasonable period after
the adoption of the amendment or change, to
have the nonforfeitable percentage computed
under the Plan without regard to such
amendment or change. For Participants who do
not have at least 1 Hour of Service in any
Plan Year beginning after December 31, 1988,
the preceding sentence shall be applied by
substituting "5 Years of Service" for "3
Years of Service" where such language
appears.
(2) 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 on the latest of:
(i) 60 days after the amendment is adopted;
(ii) 60 days after the amendment becomes
effective; or
(iii) 60 days after the Participant is issued
written notice of the amendment by the
Employer or Plan Administrator.
(3) Notwithstanding the foregoing, a Participant
whose nonforfeitable percentage under the
Plan, as amended, at any time cannot be less
than such percentage determined without
regard to such amendment shall not be
entitled to any election under this
subparagraph (b).
(c) No amendment to the Plan shall be effective to the
extent that it has the effect of decreasing a Participant's
Accrued Benefit. For purposes of this paragraph, a plan
amendment which has the effect of decreasing a Participant's
Account Balance or eliminating an optional form of benefit,
with respect to benefits attributable to service before the
amendment shall be treated as reducing an Accrued Benefit.
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 Interest (determined as of such date) of
such Employee will not be less than his Vested Interest
computed under the Plan without regard to such amendment.
17.03 Amendments Required for Qualification: Any provision of this
Plan may be amended in any respect, without regard to the
limitations set forth in Section 17.02 above, if the amendment
is required for initial or continued qualification of the Plan
under Section 401(a) of the Code. Such amendment may be made
retroactive to the extent permitted by Section 401(b) of the
Code.
17.04 Participant's Consent to Amendment: Except as otherwise
provided in this Article, neither the consent of a Participant
nor that of any Beneficiary is required of any amendment to
the Plan consistent with the provisions of Sections 17.02 and
17.03.
17.05 Amendment of Adoption Agreement: The Employer may amend the
Adoption Agreement at any time.
The amendment shall be made by the Employer delivering signed
copies of an amended Adoption Agreement to the Trustee. Such
amendment shall be effective as of the date specified by the
Employer, or if no date is specified, then on the first day of
the next succeeding Plan Year.
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ARTICLE XVIII
OTHER REQUIRED PROVISIONS
18.01 Plan Merger or Consolidation: In the event of a merger or
consolidation with, or transfer of assets or liabilities to
any other plan, each Participant will be entitled to receive a
benefit immediately after such merger, etc. (determined as if
the plan then terminated) which is at least equal to the
benefit the Participant was entitled to receive immediately
before such merger, etc. (determined as if the Plan had then
terminated).
18.02 Nonalienation of Benefits: Unless otherwise required by law,
none of the benefits, payments, proceeds, claims or rights of
any Participant or Beneficiary hereunder shall be subject to
any claim of any creditor of any Participant or Beneficiary,
and in particular, the same shall not be subject to attachment
or garnishment or other legal process by any creditor or any
Participant or any Beneficiary, nor shall such Participant or
Beneficiary have any rights to alienate, anticipate, pledge,
encumber, or assign any of the benefits or payments or
proceeds which he may expect to receive, contingently or
otherwise, under the Plan.
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 by the Plan
Administrator, under Section 11.09, to be a qualified domestic
relations order, as defined in Section 414(p) of the Code.
18.03 Form of Benefit Payments: Benefits payable under the Plan may
be paid directly by the Trustee in cash or in kind, or
partially in each.
ARTICLE XIX
MISCELLANEOUS
19.01 Nonguarantee of Employment: No Employee of the Employer nor
anyone else shall have any rights whatsoever against the
Employer or the Trustee as a result of this agreement except
those expressly granted to them hereunder. Nothing herein
shall be construed to give any Participant the right to remain
an Employee of the Employer.
19.02 Construction of Agreement: This agreement may be executed
and/or conformed in any number of counterparts, each of which
shall be deemed an original and shall be construed and
enforced according to the laws of the state in which the
Employer named in Section 1.1 of the Adoption Agreement is
incorporated, to the extent not inconsistent with the
applicable provisions of the Code or ERISA.
19.03 Duration of Plan: Subject to the provisions herein contained
with respect to earlier termination, the trust created
hereunder shall continue in existence for the longest period
permitted by law.
19.04 Illegality: In case any provisions of this agreement shall be
held illegal or invalid for any reason, said illegal or
invalid provision shall not affect the remaining parts of this
agreement but this agreement shall be construed and enforced
as if said illegal or invalid provisions had never been
inserted therein.
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19.05 Withdrawal by en employer: Any Affiliated Business or other
participating Employer may withdraw from the Plan at any time
upon written notice to the Trustee.
19.06 Gender and Number: Pronouns and other similar words used in
the masculine gender shall be read as the feminine gender
where appropriate and the singular form of words shall be read
as the plural where appropriate.
19.07 Successor Employer: In the event of the merger,
consolidation, sale of assets, liquidation or other
reorganization of the Employer, under circumstances in which a
successor shall continue and carry on all or a substantial
part of the business of the Employer and shall elect to
continue this Plan, the successor shall be substituted for the
Employer under the terms and provisions of this Plan upon
filing its written election to that effect with the Trustee
and the Plan Administrator.
19.08 Indemnification: The Employer may indemnify, through
insurance or otherwise, any one or more of the fiduciaries
with respect to the Plan against any claims, losses, expenses,
damages or liabilities arising out of the performance (or
failure of performance) of their responsibilities under the
Plan.
19.09 Expenses of Administration: The Employer may, but does not
obligate itself to, pay all or pert of the expenses of
administration of the Plan, including the compensation and
expenses of the Trustee, the expenses of the Plan
Administrator and any other expenses incurred at the direction
of the Administrator. To the extent that any of these
expenses are not paid by the employer, these expenses shall be
paid by the Trustee out of the trust fund.
▇▇▇▇▇, ▇▇▇▇▇▇ & CO. VOLUME SUBMITTED - 59
67
FIRST AMENDMENT TO THE
ST. ▇▇▇▇▇▇ CAPITAL BANK 401(K) PLAN
WHEREAS, effective September 1, 1996, St. ▇▇▇▇▇▇ Capital Corporation
(hereinafter referred to as the "Employer") established the St. ▇▇▇▇▇▇ Capital
Bank 401(k) Plan (hereinafter referred to as the "Plan"); and
WHEREAS, as part of the establishment, the Employer wishes to amend the
Plan to comply with Section 401(a)(17) of the Internal Revenue Code as amended
by the Omnibus Budget Reconciliation Act of 1993 (OBRA '93), to comply with
Section 401(a)(31) of the Internal Revenue Code, and for other desired provision
changes; and
WHEREAS, to accomplish this, the Employer now wishes to adopt the
provisions of the amendments contained in Revenue Procedures 94-13 and 93-12, as
published by the Internal Revenue Service;
NOW THEREFORE, effective September 1, 1996, the Employer hereby amends the
Plan as follows:
I. Section 1.07(c) shall be added to the Plan to read as follows:
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual
Compensation of each Employee taken into account under the Plan shall
not exceed the OBRA '93 annual compensation limit. The OBRA '93 annual
compensation limit is $150,000, as adjusted by the Commissioner for
increases in the cost of living in accordance with section
401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not
exceeding 12 months, over which Compensation is determined
(Determination Period) beginning in such calendar year. If a
Determination Period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the Determination Period,
and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under section 401(a)(17) of the Code shall
mean the OBRA '93 annual compensation limit set forth in this
provision.
If Compensation for any prior Determination Period is taken into
account in determining an employee's benefits accruing in the current
Plan Year, the Compensation for that prior Determination Period is
subject to the OBRA '93 annual compensation limit in effect for that
prior Determination Period. For this purpose, for Determination
Periods beginning before the first day of the first Plan Year beginning
on or after January 1, 1994, the OBRA '93 annual compensation limit is
$150,000.
II. Section 4.01(a)(1) of the Plan shall be amended with the addition of
the following at the end of the section:
68
(C) "ADP" contributions shall not include Employee Deferral
Contributions distributed pursuant to Section 4.07(a) of the
Plan.
III. Section 4.07(a) of the Plan shall be amended in its entirety to read
as follows:
(a) If, for any Limitation Year, an Excess Amount arises with respect
to a Participant as a result of (i) a reasonable error in
determining the amount of Employee Deferral Contributions, (ii) a
reasonable error in estimating a Participant's annual
Compensation, or (iii) through an allocation of forfeitures, or
under such other facts and circumstances as the Secretary of the
Treasury or his delegate finds justifies the availability of
relief, any such Excess Amount will be disposed of as follows.
(1) Any nondeductible voluntary employee contributions and any
Net Gain thereon, to the extent they would reduce the Excess
Amount, will be returned to the Participant.
(2) Any Employee Deferral Contributions and any Net Gain
thereon, to the extent that they would reduce the Excess
Amount, will be returned to the Participant.
(3) If, after the application of paragraphs (1) and (2), an
Excess Amount still exists, and the Participant is covered
by the Plan at the end of the Limitation Year, the Excess
Amount in the Participant's 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.
(4) If, after the application of paragraphs (1), (2) and (3), 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 for all remaining Participants
in the next Limitation Year, and each succeeding Limitation
Year if necessary.
(5) If a suspense account is in existence at any time during a
Limitation Year pursuant to the Section, it will not
participate in the allocation of Net Gain or Net Loss for
the Plan Year. 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 may be made to the Plan for that Limitation
Year. Except to the extent provided under paragraphs (1)
and (2). Excess Amounts may not be distributed to
Participants or former Participants.
69
IV. Section 9.08 shall be added to the Plan to read as follows:
(a) This Section 9.08 applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a Distributees' election
under this Section, a Distributee may elect, at the time and in
the manner prescribed by the Plan Administrator, to have any
portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Distributee in a Direct
Rollover.
(b) Definitions:
(1) Eligible Rollover Distribution:
An Eligible Rollover Distribution is any distribution of all
or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution
does not include: any distribution that is one of a series
of substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint
life expectancies) of the Distributee and the Distributee's
designated Beneficiary, or for a specified period of ten
years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the
Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
(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 Distributees' Eligible Rollover
Distribution. However, in the case of an Eligible Rollover
Distribution to the Surviving Spouse, an Eligible Retirement
Plan is an individual retirement account or individual
retirement annuity.
(3) Distributee:
A Distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's Surviving
Spouse and the Employee's or former Employee's Spouse or
former Spouse who is the alternate payee under a qualified
domestic relations order, as defined in section 414(p) of
the Code, are Distributees with regard to the interest of
the Spouse or former Spouse.
(4) Direct Rollover:
A Direct Rollover is a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
70
(c) 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:
(1) The Plan Administrator clearly informs the Participant that
the Participant has a right to a period of at least 30 days
after receiving the notice to consider the decision of
whether or not to elect a distribution (and, if applicable,
a particular distribution option), and
(2) The Participant, after receiving the notice, affirmatively
elects a distribution.
V. In all other respects, the Plan shall remain unchanged.
IN WITNESS WHEREOF, the Employer and the Trustees affix their signatures
on this 26 day of August, 1996.
ST. ▇▇▇▇▇▇ CAPITAL CORPORATION (EMPLOYER)
By:
----------------------------------
Title: Chairman, President
-------------------------------
INDIANA TRUST & INVESTMENT MANAGEMENT
COMPANY (TRUSTEE)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Title: President
------------------------------
71
SECOND AMENDMENT TO THE
ST. ▇▇▇▇▇▇ CAPITAL BANK 401(K) PLAN
WHEREAS, effective September 1, 1996, the St. ▇▇▇▇▇▇ Capital Corporation
(hereinafter referred to as the "Employer") established the St. ▇▇▇▇▇▇ Capital
Bank 401(k) Plan (hereinafter referred to as the "Plan") to provide retirement
and other related benefits for the eligible employees; and
WHEREAS, the Employer wishes to further amend the Plan; and
NOW THEREFORE, effective September 1, 1996, the Employer hereby amends the
Plan as follows:
I. Section 13.07 of the Plan shall be amended by the addition of the
following subsections:
(w) It is intended that the Plan shall constitute an "eligible
individual account plan", as defined in Section 407(d)(3) of ERISA.
Therefore, in accordance with Section 408(e) of ERISA, the Trustee
may, on behalf of the Plan, acquire and hold up to 100% of the Plan's
assets in "Qualifying Employer Securities" (as defined in Section
407(d)(5) of ERISA) provided that such acquisition, holding or sale
is for adequate consideration and provided that no commission is
charged.
All voting, tender and similar rights with respect to Qualifying
Employer Securities held on behalf of the Plan will be passed through
to Participants and Beneficiaries with accounts holding such
Qualifying Employer Securities. All proxies will also be passed
through to Participants and Beneficiaries.
The Trustee may purchase Qualifying Employer Securities from an
established market to the extent necessary to comply with
Participant's direction of investments.
(x) In the event that a Participant or a Beneficiary directs the
Trustee to invest some or all of the Participant's or the
Beneficiary's Individual Account in Qualifying Employer Securities,
the portion which is invested in the Qualifying Employer Securities
will at all times be valued at fair market value as determined on an
established market. The Trustee shall furnish Participants with all
necessary information as required by ERISA to make informed decisions
of whether to invest all or a portion of their Individual Account in
Qualifying Employer Securities. Such information shall include, but
shall not be limited to, prospectuses, financial statements and
reports and other material which describe the risks associated with
such an investment and which is necessary for the Participant to make
an informed decision regarding the investment of his or her
Individual Account.
72
II. In all other respects, the Plan remains unchanged.
IN WITNESS WHEREOF, the Employer and the Trustee affix their signatures on
this day of , 1996.
ST. ▇▇▇▇▇▇ CAPITAL CORPORATION (EMPLOYER)
By:
--------------------------------------
Title:
--------------------------------------
INDIANA TRUST AND INVESTMENT MANAGEMENT COMPANY (TRUSTEE)
By:
--------------------------------------
Title:
--------------------------------------