EXHIBIT 10.2
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ADOPTION AGREEMENT
FOR THE BENEFIT CONSULTANTS &
ADMINISTRATORS,INC REGIONAL PROTOTYPE
NON-STANDARDIZED CASH OR DEFERRED PROFIT SHARING PLAN AND TRUST
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ADOPTION AGREEMENT
FOR THE BENEFIT CONSULTANTS &
ADMINISTRATORS,INC REGIONAL PROTOTYPE
NON-STANDARDIZED CASH OR DEFERRED PROFIT SHARING PLAN AND TRUST
The BENEFIT CONSULTANTS & ADMINISTRATORS,INC Regional Prototype Non-Standardized
Cash or Deferred Profit Sharing Plan and Trust ("the Plan and Trust") is hereby
adopted by PERPETUAL BANK (FSB) (hereinafter "the Employer") effective as of
April 1, 1989 ("the Effective Date"). The Plan and Trust as applicable to the
Employer shall be known as: THE PERPETUAL BANK, FSB, 401(k) PLAN.
( ) a. The Plan and Trust is an amendment of a preexisting Plan
which was originally effective as of ___/___/___.
(X) b. The Plan and Trust is an amendment and restatement of a
preexisting Plan which was originally effective as of April 1,
1985.
*** CAUTION ***
FAILURE TO FILL OUT THE ADOPTION AGREEMENT PROPERLY MAY
RESULT IN DISQUALIFICATION OF THE PLAN
PART I. The following identifying information pertains to the Employer and the
Plan and Trust:
1. Employer Address : ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. Employer Telephone : ▇▇▇-▇▇▇-▇▇▇▇
3. Employer Tax ID : ▇▇-▇▇▇▇▇▇▇
4. Employer Fiscal Year : October 1 to September 30
5. Three Digit Plan Number : 002
6. Trust ID Number : ▇▇-▇▇▇▇▇▇▇
7. Plan Fiscal Year (must : October 1 to September 30
be 12 consecutive mos.) (effective 10/1/90)
April 1 to March
31 (effective
4/1/85 to 3/31/90)
Short Plan Year
4/1/90 to 9/30/90
8. Short Initial Plan Year : N/A
9. Plan Agent : ▇▇▇▇▇▇ ▇. ▇▇▇
▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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10. Plan Administrator : PERPETUAL BANK (FSB);
▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
11. Plan Administrator : ▇▇-▇▇▇▇▇▇▇
ID Number
12. Plan Trustees : ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇
▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
13. IRS Determination : February 1, 1986
Letter Date
(Leave blank for a New Plan)
14. IRS File Folder Number : N/A
(Leave blank for a New Plan)
15. Legal Organization of Employer:
( ) a. Sole Proprietorship
( ) b. Partnership
(X) c. C Corporation
( ) d. S Corporation
( ) e. Not for Profit Corporation
( ) f. Personal Service Corporation
( ) g. Other - Explain:
16. Business Code : 6030
17. State of Legal Construction: SOUTH CAROLINA
18. Other Members of a Controlled Group or Affiliated Service Group:
(If any, each member should sign Adoption Agreement or otherwise
satisfy applicable participation requirements.
Leave blank if not applicable)
Controlled Group
(X) a. Not Applicable
( ) b. Other Members
Affiliated Service Group
(X) a. Not Applicable
( ) b. Other Members
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PART II. The Plan contains certain predetermined design features intended to
provide the statutory requirement or most commonly adopted feature but permits
the selection of alternative features. If an Employer desires to retain the
predetermined design feature, select the provision designated Plan Provision. If
an alternative design feature is desired, select the appropriate provision.
Unless specifically provided to the contrary, only one selection may be made for
each design category. Section references are to relevant Plan Sections. Defined
terms have the meanings provided in the Plan.
A. Eligibility and Service Provisions
1. Eligible Employees - Section 1.2.23 provides that all
employees, including employees of certain related businesses
and leased employees are eligible except for certain union
members and non-resident aliens. (Specify all applicable)
(X) a. Plan Provision
( ) b. Include members of collective bargaining unit
( ) c. Exclude self-employed persons
( ) d. Exclude Employees not employed by the Employer
( ) e. Exclude commissioned Employees
( ) f. Exclude hourly Employees
( ) g. Exclude salaried Employees
( ) h. Other - Specify. (Cannot discriminate in favor of
Highly Compensated Employees).
2. Eligibility Requirements (See Section 2.1.1) - An Employee is
eligible to participate in Non-Elective Contribution portions
of the Plan if he satisfies the following requirements during
the Eligibility Computation Period. (Specify one option or
any combination other than c and d. Selecting more than one
option means that an Employee must meet all indicated
requirements for eligibility, except for option e. Option e
overrides all other requirements):
(X) a. Date of hire, i.e. no age or service required (no
other choices may be selected)
( ) b. Minimum Age of years (Not to exceed 21, partial
years may be used)
( ) c. Minimum of months of service (Cannot require more
than 24 months, or more than 12 months if full
vesting after not more than 2 Years of Service is
not selected; if periods other than whole years are
selected an Employee cannot be required to complete
any specified number of Hours of Service to receive
credit for the fractional year)
( ) d. Hours of Service required during each 12 month
Eligibility Computation Period (cannot exceed 1000)
(X) e. Employed on April 1st, 1985. (For new plans only,
select an additional option if this provision is
selected)
( ) f. Not applicable. Non-Elective Contributions are not
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permitted.
3. For the purposes of having Elective Contributions made on the
Employee's behalf, Section 2.1.1 provides that, unless the
Employer specifies otherwise in the Adoption Agreement, an
Employee must complete 1000 Hours of Service during the
Eligibility Computation Period. For these purposes, an
Employee is eligible if he satisfies the following
requirements: (Select all applicable. Selecting more than
one option means that an Employee must meet all indicated
requirements for eligibility, except for option e. Option e
overrides all other requirements):
(X) a. Date of hire, i.e. no age or service requirement
(No other choices may be selected)
( ) b. Minimum Age of ____ years (Not to exceed 21,
partial years may be specified)
( ) c. Minimum of ____ months of service (Not
to-exceed-12, if other than full years are selected
hours may not be specified)
( ) d. ____ Hours of Service required during each 12 month
Eligibility Computation Period (cannot exceed 1000)
( ) e. Employed on ___/___/___. (For new plans only,
select an additional option if this provision is
selected)
4. Matching Eligibility Requirements (See Section 2.1.1) - An
Employee is eligible to participate in the Matching
Contributions portion of the Plan if he satisfies the
following requirements during the Eligibility Computation
Period. (Specify one option or any combination other than c
and d. Selecting more than one option means that an Employee
must meet all indicated requirements for eligibility, except
for option e. Option e overrides all other requirements):
(X) a. Date of hire, i.e. no age or service required (No
other choices may be selected)
( ) b. Minimum Age of ___ years (Not to exceed 21, partial
years may be used)
( ) c. Minimum of ___ months of service (Cannot require
more than 24 months, or more than 12 months if full
vesting after not more than 2 Years of Service is
not selected; if periods other than whole years are
selected an Employee cannot be required to complete
any specified number of Hours of Service to receive
credit for the fractional year)
( ) d. ____ Hours of Service required during each 12 month
Eligibility Computation Period (cannot exceed 1000)
( ) e. Employed on ___/___/___. (For new plans only,
select an additional option if this provision is
selected)
( ) f. Not applicable. Matching Contributions are not
permitted.
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5. Eligibility Computation Period - Section 1.2.22 provides that the
initial eligibility computation period begins on the date of hire and
the subsequent periods commence on each annual anniversary of such
date. (Select one)
(X) a. Plan Provision
( ) b. The eligibility computation periods subsequent to the initial
eligibility computation period are the Plan Year beginning with
the first Plan Year commencing prior to the first anniversary
of the employment commencement date.
6. Hour of Service - Section 1.2.35 provides that service will be
credited on the basis of actual hours for which the employee
is paid or entitled to payment. If records of actual hours
are not maintained, credit is given on the basis of: (Select
one)
(X) a. Plan Provision - Records are maintained
( ) b. Days Worked - An Employee will be credited with 10 Hours of
Service if he is credited with at least 1 Hour of Service
during the day
( ) c. Weeks Worked - An Employee will be credited with 45 Hours of
Service if he is credited with at least 1 Hour of Service
during the week
( ) d. Semi-Monthly Payroll Period - An Employee will be credited with
95 Hours of Service if he is credited with at least 1 Hour of
Service during the payroll period
( ) e. Months worked - An Employee will be credited with 190 Hours of
Service if he is credited with at least 1 Hour of Service
during the month
7. Service with Predecessor Employers - Section 1.2.35 provides that
service with predecessor employers is treated as service for the
Employer. Where applicable, identify the predecessor employer(s) and
any document(s) which provides for the crediting of service with such
predecessor(s):
(X) a. Not applicable.
( ) b. Service with the following entities shall be credited as
service under this plan:
----------------------------------------------------
Service with the above entities has been determined under the
terms of the following documents:
----------------------------------------------------
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8. Entry Date - Section 2.1.2 provides that an Employee who satisfies any
eligibility requirements enters the Plan on the Entry Date. For this
purpose the Entry Date is the: (Select one)
( ) a. First day of next Plan Year or ____ months (Not to exceed 6)
after satisfying the eligibility requirements, if earlier
( ) b. First day of ____ month (Not more than 6) after satisfying
eligibility requirements or the first day of the next Plan Year,
if earlier
( ) ▇. ▇▇▇▇ of satisfying the eligibility requirements
( ) d. First day of Plan Year in which the eligibility requirements are
satisfied
( ) e. First day of Plan Year nearest to the date the eligibility
requirements are satisfied
( ) f. Semiannual - ( ) first or ( ) last day of 6 month periods,
beginning with first of Plan Year, coincident with or after
satisfying eligibility requirements
( ) g. Quarterly - ( ) first or ( ) last day of 3 month periods,
beginning with first of Plan Year, coincident with or after
satisfying eligibility requirements
( ) h. Monthly - ( ) first or ( ) last day of each month of the Plan
Year, coincident with or after satisfying eligibility
requirements
(X) i. First day of the Plan Year coincident with or immediately
following the date the eligibility requirements are satisfied.
(May be selected only if eligibility requirements of Plan do not
require more than 6 months of service (18 months if 100%
immediate vesting) and attainment of age 20 1/2.)
( ) j. Last day of the Plan Year coincident with or after satisfying the
eligibility requirements. (May be selected only if eligibility
requirements of Plan do not require more than 6 months of service
(18 months if 100% immediate vesting) and attainment of age 20
1/2).
NOTE: The Entry Date should be coordinated with the Compensation
Computation Period.
9. Break in Service - Section 1.2.8 provides that a Break in Service occurs if
an Employee fails to complete more than 500 hours of service during the
applicable computation period unless a lesser number is specified. (Select
one)
(X) a. Plan Provision
( ) b. A Break will occur if the Employee fails to complete more than
____ (Not to exceed 500) Hours of Service
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B. Date Provisions
1. Anniversary Date - Section 1.2.5 provides that the Anniversary Date is the
last day of the Plan Year unless another date is specified. (Select one)
(X) a. Plan Provision - No other date is specified.
( ) b. The first day of the Plan Year.
( ) c. Other - Specify. (Must be at least annually)
2. Valuation Date - Section 1.2.63 provides that the Valuation Date is the
date or dates specified in the Adoption Agreement. (Select one)
( ) a. Anniversary Date
( ) b. Semiannually on the last day of each 6 month period
beginning with the first of the Plan Year
(X) c. Quarterly on the last day of each 3 month period
beginning with the first of the Plan Year
( ) d. Monthly on the last day of each month of the Plan
Year
( ) e. Last day of Plan Year (use option (a) if
Anniversary Date is last day of the Plan Year
( ) f. Other - Specify. (Must be at least annually)
3. Normal Retirement Date - Section 1.2.46 permits the adoption of a
Normal Retirement Date. (Select one)
( ) a. Date Normal Retirement Age is attained
( ) b. First day of month in which Normal Retirement Age
is attained
( ) c. First day of month nearest date Normal Retirement
Age is attained
( ) d. First day of month coincident with or next
following the date Normal Retirement Age is
attained
( ) e. Anniversary Date nearest date Normal Retirement Age
is attained
(X) f. Anniversary Date coincident with or next following
date Normal Retirement Age is attained
4. Normal Retirement Age - For each Participant the Normal Retirement Age is:
(X) a. Age 65 (not to exceed 65)
( ) b. The later of age ____ (not to exceed 65) or the ____ (not
to exceed the fifth (5th)) anniversary of the
participation commencement date, if later. The
participation commencement date is the first day of the
Plan Year in which a Participant commenced participation
in the Plan. Solely for Plan Years beginning before 1988,
if the normal retirement age was determined by reference
to the anniversary of the participation commencement
date, the anniversary for participants who first
commenced participation before
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the first Plan Year beginning on or after January 1, 1988 is the
earlier of the tenth anniversary of the date the participant
commenced participation in the Plan (or such anniversary as had
been elected by the Employer if less than ten) or the fifth
anniversary of the first day of the first Plan Year beginning on
or after January 1, 1988.
( ) c. Age ____ and the ____ anniversary of the participation
commencement date, if both requirements are met earlier than the
later age of 65 or the fifth (5th) anniversary of participation
5. Early Retirement Date - Section 1.2.17 permits the adoption of an Early
Retirement Date: (Select one)
( ) a. The Plan does not provide an early retirement date
( ) b. The actual date the Participant attains the Early Retirement Age
(X) c. The Anniversary Date coincident with or next following the date
the Participant attains the Early Retirement Age
( ) d. The Valuation Date coincident with or next following the date
the Participant attains the Early Retirement Age
( ) e. The ( ) first ( ) last day of the month coincident with or next
following the date the Participant attains the Early Retirement
Age
( ) f. Other - Specify. (Cannot discriminate in favor of Highly
Compensated Employees)
6. Early Retirement Age: (Select all applicable. If more than one option
is selected, Early Retirement Age is attained on the first date the
requirements of any option are met.)
( ) a. Age ____ (not to exceed 65)
(X) b. Age 55 and 10 Years of Service
( ) c. Age ____ and ____ Years of Service while a Participant
( ) d. ____ years prior to the Normal Retirement Age
( ) e. Sum of age and Years of Service equals ____
( ) f. Not Applicable
NOTE: Cannot discriminate in favor of Highly Compensated Employees.
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C. Compensation
1. Compensation - See Section 1.2.10. For purposes of the Plan a Participant's
compensation is based on the Compensation Computation Period and shall:
(Select a, b, or c and all of d and e which are applicable)
( ) a. Equal compensation as defined in Section 3401(a) except as
indicated below
( ) b. Equal compensation as defined in Section 415(c)(3) except as
indicated below
(X) c. Equal compensation as defined for the Wages, Tips, and Other
Compensation Box on Form W-2 except as indicated below
(X) d. Include compensation which is not includible in gross income by
reason of Section
(X) Sections 402(h)(1)(B)(SEP deferrals)
(X) 125 (Cafeteria Plan)
(X) 402(a)(8) (401(k) deferrals)
(X) 403(b)
(X) 457(b)
( ) e. Exclude compensation which is for
( ) overtime
( ) discretionary bonuses
( ) Bonuses
( ) taxable employee benefits
( ) in excess of $_____
( ) Other exclusion - Specify. (Cannot discriminate in
favor of Highly Compensated Employees)
NOTE: Exclusions are permissible if the Plan is not integrated with
Social Security. Exclusions may cause the Plan to be
impermissible discriminatory.
2. The Compensation Computation Period is:
(X) a. The Plan Year
( ) b. The calendar year ending with or within the Plan Year
3. Fly the initial Plan Year of participation, include
Compensation from: (Select one)
(X) a. Entry Date as a Participant
(X) b. First day of the Compensation Computation Period which ends
during the initial Plan Year of participation
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D. Contribution and Allocation
1. Non-Elective Contribution Formula - The Employer's
Non-Elective contribution to the Plan shall be: (Select one)
( ) a. Discretionary, out of profits
(X) b. Discretionary, but not limited to profits
( ) c. ____% of each Participant's Compensation. (not to exceed 15%)
( ) d. Not applicable. Non-Elective Contributions are not permitted.
2. Allocation Method - The Employer Non-Elective contribution is allocated
to Participants: (Select one)
(X) a. Proportionate to Salary. Based upon each Participant's Compensation in
proportion to the Compensation of all Participants.
( ) b. Integrated with Social Security. Based on each Participant's
Compensation to the extent of a base contribution percentage
multiplied by the Participant's Compensation plus the lesser of 5.7%.
or the base contribution percentage (the contribution rate on each
Participant's Compensation up to the Social Security Integration
Level) multiplied by the Participant's Compensation in excess of the
Social Security Integration Level and any remainder is allocated based
upon each Participant's Compensation in proportion to the Compensation
of all Participants. (Select d, e, f, g or h, below)
( ) c. Not applicable - No Non-Elective Contributions.
The Social Security Integration Level is equal to:
( ) d. The taxable wage base under Section 230 of the Social Security Act in
effect as of the first day of the Plan Year.
( ) e. $____ (Not to exceed the taxable wage base under Section 230 of the
Social Security Act in effect as of the first day of the Plan Year).
( ) f. ____% (Not to exceed 100) of the taxable wage base under Section 230
of the Social Security act in effect as of the first day of the Plan
Year.
( ) g. The greater of $10,000 or 20% of the taxable wage base under Section
230 of the Social Security Act in effect as of the first day of the
Plan Year.
( ) h. 80% of the taxable wage base under Section 230 of the Social Security
Act in effect as of the first day of the Plan Year plus $1.00.
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NOTE: The Employer Contribution allocable to Compensation in excess of the
Social Security Integration Level (SSIL) may not exceed 5.4% if the
SSIL is more than 80% but less than 100% of the taxable wage base
under Section 230 of the Social Security Act at the beginning of the
plan year (TWB), and may not exceed 4.3% if the SSIL is greater than
20% of the TWB, but not more than 80% of the TWB, and greater than
$10,000.
3. Requirement to Share in Non-Elective Contribution Allocation. In order
to share in the allocation of the Employer's Non-Elective Contribution
a Participant: (Select all applicable)
( ) a. must complete ____ Hours (cannot exceed 1000), but
( ) is eligible regardless of Hours if the Employee dies during the Plan
Year
( ) is eligible regardless of Hours of Service if the Employee retires
during the Plan Year
( ) is eligible regardless of Hours of Service if the Employee becomes
totally disabled during the Plan Year
(X) b. must complete 1,000 (cannot exceed 1000) Hours and be employed at
Plan Year end but
(X) is eligible if Employee dies during the plan year,
(X) regardless of Hours of Service.
( ) only if employee meets Hours requirement
(X) is eligible if Employee retires during the Plan Year,
(X) regardless of Hours of Service.
( ) only if Employee meets Hours requirement.
(X) is eligible if Employee becomes totally disabled during the Plan
Year
(X) regardless of the Hours of Service.
( ) only if Employee meets Hours requirement.
( ) c. Not applicable - No Non-Elective Contributions.
4. to Share in Matching Contribution Allocation - In order to share in the
allocation of the Employer's Matching Contribution for each respective
quarterly Valuation Date a Participant: (Select all applicable)
( ) a. must complete ____ Hours (cannot exceed 1000), but
( ) is eligible regardless of Hours if the Employee dies during the Plan
Year
( ) is eligible regardless of Hours of Service if the Employee retires
during the Plan Year
( ) is eligible regardless of Hours of Service if the Employee becomes
totally disabled during the Plan Year
(X) b. must complete N/A (cannot exceed 1000) Hours and be employed as of
the quarterly Valuation Date but
(X) is eligible if Employee dies during the plan year,
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(X) regardless of Hours of Service.
( ) only if employee meets Hours requirement
(X) is eligible if Employee retires during the Plan Year,
(X) regardless of Hours of Service.
( ) only if Employee meets Hours requirement.
(X) is eligible if Employee becomes totally disabled during the Plan Year
(X) regardless of the Hours of Service.
( ) only if Employee meets Hours requirement.
( ) c. Not Applicable
5. Matching Contributions - The Matching Contribution by the Employer for
the Plan Year in accordance with Section 2.2.1(a)(3)(ii) is
( ) a. Matching Contributions are not permitted
( ) b. Discretionary each Plan Year
(X) c. Based upon the Allocation Method set forth below
( ) d. Based upon the Allocation Method set forth below
plus a supplemental discretionary Matching contribution
6. Allocation Method for Matching Contributions - Matching
Contributions shall be allocated to eligible Participants in
an amount:
( ) a. Proportionate to the Elective Contributions made on behalf of a
Participant
(X) b. Equal to a percentage of Elective Contributions made of behalf of a
Participant which is determined by a formula adopted by the Board of
Directors of the sponsoring employer relating corporate earnings for
the quarterly Valuation Period to such percentage
( ) c. Graded based on the dollar amount of the Elective
Contribution of each Participant as follows:
_____% of the first $_____ plus
_____% of the next $_____ plus
_____% of the next $_____ plus
_____% of the next $_____.
( ) d. Graded based on the percentage of compensation of the Elective
Contribution of each Participant as follows:
_____% of the first _____% plus
_____% of the next _____% plus
_____% of the next _____% plus
_____% of the next% _____%.
( ) e. Graded based on the dollar amount of the Elective
Contribution of each Participant as follows:
_____% if contribution is $_____ or more;
_____% if contribution is $_____ or more;
_____% if contribution is $_____ or more;
_____% if contribution is $_____ or more.
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( ) f. Graded based on the percentage of compensation of the Elective
Contribution of each Participant as follows:
_____% if contribution is _____% or more
_____% if contribution is _____% or more
_____% if contribution is _____% or more
_____% if contribution is _____% or more
( ) g. Not applicable
NOTE: Graded percentages entered in c. through f. must decrease as
percentage or amount of compensation increases.
7. If a supplemental discretionary Matching Contribution is made,
Matching Contributions shall be allocated to eligible
Participants in an amount:
( ) a. Proportionate to the Elective Contributions made on
behalf of a Participant
( ) b. According to the method selected in 6b.- f. above
(X) c. Not applicable
8. Matching Contribution Allocation Date - Matching Contributions
are allocated as of the Anniversary Date unless an alternate
date is selected. For the purposes of this Plan the Matching
Contribution is allocated as of:
(Select one)
( ) a. Plan Provision - the Anniversary Date.
(X) b. The next Valuation Date.
( ) c. Other - Specify. (Must be allocated at least
annually)
( ) d. Not applicable
9. Limitations on Matching Contributions - The Employer shall not make
Matching Contributions: (Select all applicable)
(X) a. With respect to Elective Contributions in excess of
4.5 percent of a Participant's Compensation
( ) b. In excess of $_____ for any Participant
( ) c. To Key Employees
( ) d. Not applicable.
10. Allocation of Qualified Non-Elective Contributions - (Select
a or b. If a is selected, do not complete the remainder of
this section)
( ) a. Qualified Non-Elective Contributions are not
permitted.
(X) b. Qualified Non-Elective Contributions shall be made
at the Employer's discretion.
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Qualified Non-Elective Contributions shall be allocated
(complete c and d):
(X) c. On behalf of
( ) All Participants
( ) Solely on behalf of Participants who are not Highly
Compensated Employees
(X) Solely on behalf of Participants who are not Highly
Compensated Employees to the extent necessary to
satisfy the ACP or the ADP test
( ) d. Who are eligible to receive an allocation of
( ) Non-Elective Contributions
( ) Matching Contributions
Qualified Non-Elective Contributions shall be allocated:
(Select e or f; also select g, if applicable)
(X) e. In proportion to a Participant's Compensation.
( ) f. As a uniform dollar amount.
(X) g. To the extent necessary to satisfy the ACP test or the ADP test.
11. Limitation Year - Section 1.2.40 provides that unless otherwise
specified the Limitation Year for purposes of the limitation imposed by
IRC Section 415 is the Plan Year.
(Select one)
(X) a. Plan Provision
( ) b. Calendar year coinciding with or ending within the Plan Year
( ) c. Twelve consecutive month period ending ___/___.
E. Vesting Provisions
1. Years of Service - Section 1.2.65 provides that a Year of Service is the 12
consecutive month period specified in the Adoption Agreement in which at
least 1000 Hours of Service are performed unless a lesser number is
specified. (Select all applicable)
(X) a. Use the Plan Year as the computation period
( ) b. Use Eligibility Computation Period as the computation period
( ) c. Use ____ in lieu of 1000 Hours of Service (Not to exceed 1000 hours)
2. Excluded Years - Section 1.2.65 provides unless otherwise specified all
Years of Service are taken into account.
( ) a. Plan Provision - Include all Years of Service
(X) b. Exclude Plan Years prior to age 18
( ) c. Exclude Plan years prior to adoption of plan or predecessor plan.
Effective date of (prior) plan:
___/___/___
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3. Vesting Schedule - Section 2.4.2(f) provides that benefits will vest in
accordance with the method specified in the Adoption Agreement. (Select
one of a, b, c, d, f, or g. Also select e if applicable.)
Employer Accounts:
( ) a. At the rate of 20% each year after 3 Years of Service. (20% vested in
third year)
( ) b. At the rate of 20% each year after 2 Years of Service. (20% vested in
second year)
( ) c. 100% vesting upon participation.
(X) d. 100% vesting after 5 Year(s) of Service (Not to exceed 5)
(X) e. 100% vesting at Early Retirement Date (Must also select another
alternative)
( ) f. Other: (Optional vesting schedule must be at least as favorable as a.
or d.)
Year(s) of Service Percent Vesting
Less than 1
----------
1 but less than 2
----------
2 but less than 3
----------
3 but less than 4
----------
4 but less than 5
----------
5 but less than 6
----------
6 but less than 7
----------
7 or More
----------
( ) g. Not applicable - No Non-Elective Employer
Contributions
Matching Accounts:
( ) a. At the rate of 20% each year after 3 Years of
Service. (20% vested in third year)
( ) b. At the rate of 20% each year after 2 Years of
Service. (20% vested in second year)
(X) c. 100% vesting upon participation.
( ) d. 100% vesting after ____ Year(s) of Service (Not to
exceed 5)
( ) e. 100% vesting at Early Retirement Date (Must also
select another alternative)
Continued...
- 15 -
( ) f. Other: (Optional vesting schedule must be at least
as favorable as a. or d.)
Year(s) of Service Percent Vesting
Less than 1
----------
1 but less than 2
----------
2 but less than 3
----------
3 but less than 4
----------
4 but less than 5
----------
5 but less than 6
----------
6 but less than 7
----------
7 or More
----------
( ) g. Not applicable - No Matching Contributions
4. Prior Vesting Schedule - Section 3.10.3 provides that if the Vesting
schedule has been amended to a less favorable schedule, participants are
entitled to have their vested interest calculated under the prior schedule
under certain instances.
(X) a. Not applicable. Either not amended or new schedule is more favorable.
( ) b. The prior schedule was
Employer
Year(s) of Service Percent Vesting
Less than 1
----------
1 but less than 2
----------
2 but less than 3
----------
3 but less than 4
----------
4 but less than 5
----------
5 but less than 6
----------
6 but less than 7
----------
7 or More
----------
Matching
Year(s) of Service Percent Vesting
Less than 1
----------
1 but less than 2
----------
2 but less than 3
----------
3 but less than 4
----------
4 but less than 5
----------
5 but less than 6
----------
6 but less than 7
----------
7 or More
----------
- 16 -
5. Top Heavy Vesting Schedule - Section 2.6.1(c) provides that if the Plan
becomes Top Heavy, unless the Employer specifies otherwise, vesting will be
at a rate of 20% per year beginning with the second Year of Service.
Employer Accounts:
( ) a. Plan Provision
(X) b. 100% vested after 3 Year(s) of Service (Not to exceed 3)
( ) c. Same as non-Top Heavy vesting schedule (Must be at least as favorable
as a or b)
( ) d. Other: (Optional vesting schedule must be at least as favorable as a.
or b.)
Year(s) of Service Percent Vesting
Less than 1
----------
1 but less than 2
----------
2 but less than 3
----------
3 but less than 4
----------
4 but less than 5
----------
5 but less than 6
----------
6 or More
----------
( ) e. Not Applicable - No Employer Non-Elective Contributions
Matching Accounts:
( ) a. Plan Provision
( ) b. 100% vested after ____ Year(s) of Service (Not to exceed 3)
(X) c. Same as non-Top Heavy vesting schedule (Must be at least as favorable
as a or b)
( ) d. Other: (Optional vesting schedule must be at least as favorable as a.
or b.)
Year(s) of Service Percent Vesting
Less than 1
----------
1 but less than 2
----------
2 but less than 3
----------
3 but less than 4
----------
4 but less than 5
----------
5 but less than 6
----------
6 or More
----------
( ) e. Not Applicable - No Matching Contributions.
- 17 -
6. Re-employment - Section 2.4.4 provides that Years of Service completed
after a Break in Service are not counted for purposes of increasing the
vested percentage attributable to service before the Break unless
reemployed within 5 years.
(X) a. Plan Provision
( ) b. Count all service after the Break
( ) c. Not applicable - 100% immediate vesting
7. Forfeitures - Section 2.4.6 provides that forfeitures are determined as
of the last day of the Plan Year in which the Participant's entire
interest is distributed from the Plan.
( ) a. Plan Provision.
(X) b. Determine in Plan Year of 5th consecutive Break in Service.
( ) c. Determination as of the Valuation Date coincident with or next
following the Distribution Date
( ) d. Not applicable - All benefits are fully vested. Leave the
remaining items in this Section E blank.
8. Forfeitures of Non-Elective Contributions shall be applied to
(select all applicable):
( ) a. Supplement Non-Elective Contributions
(X) b. Reduce Non-Elective Contributions
(X) c. Reduce Qualified Non-Elective Contributions
( ) d. Supplement Matching Contributions
(X) e. Reduce Matching Contributions
9. Forfeitures of Non-Elective Contributions shall be reallocated to
participants:
( ) a. In the same manner as Non-Elective Contributions
( ) b. In proportion to each participant's Compensation
(X) c. Not applicable. Forfeitures are applied to reduce contributions.
NOTE: If the Plan provides for permitted disparity, forfeitures must
be allocated under the Plan's allocation formula.
10. Forfeitures of Matching Contributions shall be applied to:
(Select all applicable)
( ) a. Supplement matching Contributions
(X) b. Reduce Matching contributions
(X) c. Reduce Qualified Non-Elective contributions
( ) d. Supplement Non-Elective Contributions
(X) e. Reduce Non-Elective Contributions
- 18 -
11. Forfeitures of Matching Contributions shall be reallocated to participants:
( ) a. In the same manner as Non-Elective Contributions
( ) b. In proportion to each participant's Compensation
( ) c. In proportion to Matching Contributions
( ) d. In proportion to Elective Contributions
(X) e. Not applicable. Forfeitures are applied to reduce contributions.
12. Requirement to Share in Allocation of Forfeitures - In order to share
in the allocation of Forfeitures which supplement rather than reduce
other contributions, a Participant:
(Select all applicable).
( ) a. Must be eligible to receive an allocation of the respective type of
contribution, i.e. Matching or Non-elective
( ) b. Must be employed on the date the forfeiture is determined.
(X) c. Not applicable. Forfeitures reduce contributions.
13. Restoration of Forfeitures - If a Participant is entitled to a restoration
of a forfeiture, the amount to be restored shall be restored by:
( ) a. An additional contribution by the Employer specifically allocated to
the Participant's Account.
(X) b. Allocating other forfeitures arising in the year of restoration to
the Participant's Account to the extent thereof and an additional
contribution by the Employer specifically allocated to the
Participant's Account to the extent that allocable forfeitures are
insufficient.
F. CODA Limitation Provisions
1. Actual Deferral Percentages - Qualified Non-Elective Contributions may be
taken into account for purposes of calculating the ADP-Actual Deferral
Percentages. For purposes of the ADP test in Section 2.7.1, the amount taken
into account shall be:
( ) a. All Qualified Non-Elective Contributions.
(X) b. The Qualified Non-Elective Contributions that are needed to meet the
ADP test.
- 19 -
2. Average Contribution Percentage - The amount of Elective Deferrals and
Qualified Non-Elective Contributions taken into account as contribution
percentage amounts for the purpose of calculating the ACP-Average
Contribution Percentage, subject to such other requirements as may be
prescribed by the Secretary of the Treasury, shall be:
For elective deferrals:
( ) a. All such Elective Deferrals.
( ) b. Only those Elective Deferrals that are needed to meet the Average
Contribution Percentage test.
(X) c. Elective Deferrals are not to be included in the ACP test.
( ) d. Not applicable.
For Qualified Non-Elective Contributions:
( ) e. All such Qualified Non-Elective contributions.
(X) f. Only those Qualified Non-Elective Contributions that are needed to
meet the Average Contribution Percentage test.
( ) g. Qualified Non-Elective Contributions are not to be, included in
the ACP test.
( ) h. Not applicable.
3. Excess Aggregate Contributions - Forfeitures of Excess Aggregate
Contributions pursuant to Section 2.7.7 shall be:
(X) a. Applied to reduce Employer contributions.
( ) b. Allocated, after all other forfeitures under the Plan, to each
Participant's Matching Contribution Account in the ratio which
each Participant's Compensation for the Plan Year bears to the
total Compensation of all Participants for the Plan Year. Such
forfeitures will not be allocated to the Account of any Highly
Compensated Employee.
G. Distribution Provisions
** 1. Form of Distributions - Section 2.5.2 provides that the Employer may
elect to permit Plan distributions to be made in the form of: (Select all
applicable)
(X) a. Lump sum without regard to amount.
( ) b. Lump sum but not to exceed $____.
(X) c. Installments over 15 years payable: (Select one or more)
( ) c.1. annually
( ) c.2. quarterly
(X) c.3. monthly
- 20 -
( ) d. Installments over a period of years certain selected by the
Participant that is less than the life of the Participant
payable (Select one or more.)
( ) d.1. annually
( ) d.2. quarterly
( ) d.3. monthly
( ) e. An annuity for not more than ____ years
(X) f. An annuity for the life of: (Select one or more)
( ) f.1. the Participant
(X) f.2. the Participant and spouse
( ) f.3. the Participant and a designated beneficiary
( ) g. An annuity for ____ years certain and thereafter for the life
of: (Select one or more)
( ) g.1. the Participant
( ) g.2. the Participant and spouse
( ) the Participant and a designated beneficiary
( ) h. An annuity for a period certain selected by the Participant that
is less than the life of: (Select one or more)
( ) h.1. the Participant
( ) h.2. the Participant and spouse
( ) h.3. the Participant and a designated beneficiary
NOTE: Any number of options may be selected. Once selected, however,
any option may not thereafter be eliminated.
If an annuity option of life or longer is selected Qualified
Joint and Survivor Annuity provisions are required.
NOTE: The available forms of distribution shall also include any such
form which has been available under any previous document with
respect to this plan.
2. Survivor Annuity Percentage - If a Joint and Survivor Annuity is
payable, Section 1.2.37 provides that the normal survivor annuity is
50% of the amount payable during the joint lives of the participant and
spouse, unless the Employer elects a different percentage (Select one):
(X) a. Plan Provision - 50%
( ) b. Other Percentage - ____% (Not less than 50% nor more than 100%)
( ) c. Other Percentage selected by the Participant - (Not less than
50% nor more than 100%)
3. Time of Distribution - Section 2.5.1(b) provides that
distributions are deferred to Participants who resign or are
discharged prior to retirement until the retirement date
unless the employer elects to permit distributions in advance
of such date.
( ) a. Plan Provision without advance distribution election.
(X) b. Distributions may be made at the Participant's election within a
reasonable period following the Distribution Date.
- 21 -
4. Distribution Date - Section 2.4.5 provides that, subject to the
necessity of obtaining the consent of a Participant and spouse, for the
purposes of determining the amount to be distributed, the Distribution
Date:
For a Participant who is not fully vested, is
( ) a. The anniversary Date coinciding with or following
the date of termination.
(X) b. The Valuation Date coinciding with or following the
date of termination
( ) c. As soon as practical but prior to the Anniversary
Date coinciding with or following the date of
termination, based on the preceding Valuation Date.
( ) d. the ( ) Valuation Date ( ) Anniversary Date
following ____ consecutive Breaks in Service
( ) e. The Participant's Normal or Early Retirement Date
For a Participant who is fully vested but who terminates
employment prior to death, total and permanent disability or
retirement at his retirement date is:
( ) a. The Anniversary Date coinciding with or following
the date of termination
(X) b. The Valuation Date coinciding with or following the
date of termination
( ) c. As soon as practical but prior to the Anniversary
Date following the date of termination, based upon
the preceding Valuation Date
( ) d. The Participant's Normal or Early Retirement Date
For a Participant who terminates employment as a result of
death, total and permanent disability or retirement at his
retirement date, is:
( ) a. The anniversary Date coinciding with or following
the date of termination.
(X) b. The Valuation Date coinciding with or following the
date of termination
( ) c. As soon as practical but prior to the Anniversary
Date following the date of termination, based upon
the preceding Valuation Date
In the case of a Participant's interest in an Elective
Account, Voluntary Account or Segregated Account attributable
to a rollover contribution from another plan, notwithstanding
the foregoing, the Distribution Date, is:
( ) a. Not applicable - The Distribution Date is
determined in the manner indicated above for the
fully vested Participants
( ) b. The anniversary Date coinciding with or following
the date of termination
(X) c. The Valuation Date coinciding with or following the
date of termination
- 22 -
( ) d. As soon as practical but prior to the Anniversary
Date following the date of termination, based upon
the preceding Valuation Date.
5. Hardship Distributions - Section 2.5.5 provides that an
Employer may permit distributions to Participants while
employed in the event of financial hardship as specified in
the Plan:
(X) a. Hardship distributions are permitted.
( ) b. Hardship distributions are not permitted.
Hardship Distributions may be made from a Participants Account
as elected below in c and d, provided that Hardship
Distributions of earnings on elective Deferrals may only be
made on such earnings credited to the Participant's account as
of the end of the last Plan Year ending before July 1, 1989.
Therefore, subject to such limitation, Hardship Distributions
may be taken from:
( ) c. all of Participant's Accounts.
(X) d. only the Participant's Account balances
attributable to the following accounts:
( ) d.1. Employer Account
( ) d.2. Qualified Non-Elective Contribution
Account
(X) d.3. Elective Contribution Account
( ) d.4. Matching Account
( ) d.5. Segregated Account (attributable to a
rollover)
( ) d.6. Voluntary Account
6. In Service Distributions - Section 2.5.6 provides that an
Employer may permit distributions to fully vested Participants
over the age of 59-1/2 prior to termination of employment if
the amounts withdrawn have been allocated to the Participant
for two (2) or more years or the Participant has been a
Participant for at least five (5) years. (Select all
applicable)
( ) a. Plan Provision.
( ) b. Require that amounts have been allocated for ____
years. (Must be at least 2)
( ) c. Require participation for at least ____ years.
(Must be at least 5)
( ) d. In Service Distributions are permitted upon
reaching Normal Retirement Date
( ) e. In Service Distribution are permitted for amounts
attributable to a rollover from another plan
regardless of age or periods of participation
(X) f. In Service Distributions are not permitted.
- 23 -
7. Qualified Domestic Relations Orders - Section 3.12.9 provides that the
Employer may elect to permit distributions to an alternate payee
pursuant to the terms of a qualified domestic relations order even if
the Participant continues to be employed. (Select one)
( ) a. Distributions to an alternate payee are not
permitted while the Participant continues to be
employed.
(X) b. Distributions to an alternate payee are permitted
while the Participant continues to be employed.
H. Other Administrative Provisions
1. Earnings - Section 3.1.2 permits the Employer to specify the manner in
which earnings are allocated to Participants who receive distributions
on any date other than a Valuation Date.
Select any of the following:
( ) a. Earnings will be credited solely as of the
immediately preceding Valuation Date.
(X) b. Actual earnings will be credited to the date of
distribution.
( ) c. Earnings will be credited solely as of the
immediately preceding Valuation Date if distribution
is within ____ days of such Valuation Date and will
be credited to date of distribution otherwise.
( ) d. Earnings will be credited to the date of
distribution based upon an estimate of earnings
equal to ____% annually.
( ) e. Earnings will be credited to the date of
distribution based upon an estimate of earnings
equal to the average rate of earnings during the
preceding
( ) e.1. Valuation Period.
( ) e.2. Plan Year.
( ) e.3. ____ Valuation Periods.
2. Loans - Section 3.7.1 provides that the Employer may elect to permit
loans to Participants and Beneficiaries in accordance with a
participant loan program adopted by the Trustee.
( ) a. Loans are permitted.
(X) b. Loans are not permitted.
- 24 -
3. Rollovers - Section 3.11.3 authorizes the Employer to permit
the transfer of interests in other qualified plans to the
Plan.
( ) a. Rollover contributions are not permitted.
( ) b. Rollover contributions are permitted only from
other plans of the Employer
( ) c. Rollover contributions are permitted only by
Employees who have satisfied the conditions for
participation.
(X) d. Rollover contributions are permitted from any
employee even if-not otherwise eligible to be a
Participant.
4. Investment Control - Section 3.6.5 provides that the Employer
may elect to permit Participants to control the investment of
their Accounts.
( ) a. Participants may not control their investments.
( ) b. Participants may control the investment of their
Accounts if fully vested in the Account.
( ) c. Participants may control the investment of their
Accounts to the extent vested.
(X) d. Participants may control their investments without
regard to their vested interest.
( ) e. Participants may control their investments solely
with respect to amounts attributable to: (Select
all applicable)
( ) e.1. Non-Elective Contributions
( ) e.2. Qualified Non-Elective Contributions
( ) e.3. Elective Contributions
( ) e.4. Matching Contributions
( ) e.5. Voluntary Contributions
( ) e.6. Amounts rolled over and held in a
Segregated Account
5. (This question only applies if the Employer has a Defined Benefit plan)
The interest rate used to establish the Present Value of Accrued
Benefits in order to calculate the top heavy ratio under IRC Section
416 shall be ____% and the mortality tables used shall
be _______________________________.
6. Valuation Date - For purposes of computing the top heavy
ratio, the Valuation Date is (Select one):
(X) a. the first day of Plan Year.
( ) b. the last day of the Plan Year.
( ) c. Other - Specify. ___/___ (Must be at least
annually)
- 25 -
7. Single Plan Minimum Top-Heavy Allocation - For purposes of minimum
top-heavy allocations, contributions and forfeitures equal to the
following percentage of each non-Key Employee's compensation will be
allocated to the Employee's account when the Plan is top-heavy (Select
one):
(X) a. 3% or the highest percentage allocated to any Key
Employee if less.
( ) b. ____% (Must be at least 3).
8. Multiple Plans Provision - The Employer which maintains or ever
maintained another qualified defined benefit plan or welfare benefit
fund or individual medical account in which any participant in the Plan
is, was or could become a participant adds the following optional
provision which it deems necessary to satisfy Section 415 or 416 of the
Code because of the required aggregation of multiple plans:
(Select one)
( ) a. Not applicable (No other plan or other plan
terminated prior to the Effective Date of this
Adoption Agreement).
( ) b. A minimum contribution allocation of 5% of each
Non-Key Participant's total compensation shall be
provided in a defined contribution plan of the
Employer.
( ) c. A minimum contribution allocation of 7.5% of each
Non-Key Participant's total compensation shall be
provided in a defined contribution plan of the
Employer.
(X) d. A minimum benefit of 2% (must be at least the
lesser of 2% times years of service or 20%) of each
Non-Key Participant's total compensation shall be
provided in a defined benefit plan of the Employer.
( ) e. A minimum benefit of ____ (must be the lesser of 2%
times years of service or 20%) of each Non-Key
Participant's total compensation shall be provided
in a defined benefit plan of the Employer but
offset by the amount contributed on such
participant's behalf under any defined contribution
plan of the Employer.
( ) f. Other - Specify.
NOTE: The method selected must preclude Employer
discretion and the Employer must obtain a
determination letter in order to continue reliance
on the Plan's qualified status.
- 26 -
9. Multiple-Defined Contribution Plans - If the Participant is
covered under another qualified defined contribution plan
maintained by the Employer, other than a master or prototype
plan: (Select one)
( ) a. Not applicable.
(X) b. The provisions of this Plan limiting annual
additions will apply as if the other plan is a
master or prototype plan.
( ) c. Other - Specify.
NOTE: Specify the method under which the plans will limit
total annual additions to the maximum permissible
amount, and will properly reduce any excess amounts
in a manner that precludes Employer discretion.
10. Top Heavy Duplications - The Employer who maintains two or more Defined
Contribution plans makes the following election:
( ) a. Not applicable.
(X) b. A minimum non-integrated contribution of 3% of each
Non-Key Participant's Compensation shall be
provided by:
(X) b.1. this Plan.
( ) b.2. the following defined contribution
plan:
---------------------------------------
( ) c. Other - Specify.
NOTE: The method selected must preclude Employer discretion
and avoid inadvertent omissions, including any
adjustments required under Code Section 415(e). The
Employer must obtain a determination letter in order
to continue reliance on the Plan's qualified status.
11. Annual Addition Limitation - If a Participant is or has ever
been a participant in a defined benefit pension plan
maintained by the Employer, Section 3.2.1(c) provides that
Annual Additions shall be limited.
( ) a. Not applicable
(X) b. The contribution to the Plan allocable to the
Participant shall be reduced so that the limitations
are not exceeded.
( ) c. Other - Specify
----------------------------------------------------
NOTE: specify the method under which the plans will limit
total additions to the maximum permissible amount,
and will properly reduce any excess amounts in a
manner that precludes employer discretion.
- 27 -
12. Section 415 Compensation Definition. For purposes of calculating an
Employee's compensation pursuant to Section 3.2.1(h), relating to
limitations on contributions and benefits, Compensation means all of
each Participant's
(X) a. Wages as computed for Wages, Tips, and Other
Compensation Box on Form W-2.
( ) b. Section 3401(a) wages.
( ) c. Section 415 safe harbor compensation.
- 28 -
The name, address and telephone number of the Plan Sponsor is:
BENEFIT CONSULTANTS AND ADMINISTRATORS, INC.
▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
Applicable requirements mandate that the use of this Prototype Document be
registered by the Plan Sponsor with the Internal Revenue Service. Unregistered
use may cause the Plan to become disqualified because it may not be maintained
as required by law.
The Plan Sponsor will inform the Employer of any amendments made to the Plan or
of the discontinuance or abandonment of the Plan.
NOTE: An employer may not rely on a notification letter issued by the National
Office of the Internal Revenue Service as evidence that the plan as adopted is
qualified under Section 401 of the Internal Revenue Code. In order to obtain
reliance with respect to plan qualification, the employer must apply to the
appropriate key district for a determination letter. This Adoption Agreement
may be used only in conjunction with the BENEFIT CONSULTANTS & ADMINISTRATORS,
INC Regional Defined Contribution Plan and Trust, Revised 05/06/92.
* * *
The Employer and Trustee hereby adopt the Plan and Trust as evidenced by the
foregoing Adoption Agreement on this 28th day of June, 1994.
Employer: Trustee:
PERPETUAL BANK (FSB)
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇ /s/ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------- ---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
PRESIDENT Trustee
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇
Trustee
- 29 -
AMENDMENT NUMBER ONE TO
PERPETUAL BANK, FSB 401(K) PLAN
BY THIS AGREEMENT, the Perpetual Bank, FSB 401(k) Plan (the "401(k) Plan),
consisting of the DATAIR Standardized Cash or Deferred Profit Sharing Plan and
Trust (the "Plane) and the related Adoption Agreement dated June 28, 1994 (the
"Adoption Agreement"), is hereby amended as follows, effective as of October 1,
1995:
Part II(A) of the Adoption Agreement (and the related provisions of the
Plan) indicated therein are hereby amended as follows:
(a) As to Sections A(1) and (2) of the Adoption Agreement, any Employee of
the Employer hired on or after October 1, 1995 shall be eligible to participate
in the Plan only upon (x) the completion of 1,000 Hours of Service during a 12
month Eligibility Computation Period and (y) the attainment of age 21.
(b) As to Sections A(3) and (4) of the Adoption Agreement, any Employee of
the Employer hired on or after October 1, 1995 shall be eligible to participate
in the Elective Contribution and Matching Contribution portions of the Plan only
upon (x) the completion of 1,000 Hours of Service during a 12 month Eligibility
Computation Period and (y) the attainment of age 21.
(c) As to Section A(8) of the Adoption Agreement, the Entry Date of an
Employee who becomes eligible to participate in the Plan on or after October 1,
1995 shall be the January 1, April 1, July 1, or October 1 coincident with or
next following the date the Employee become eligible to participate in the Plan.
(d) In all other respects, the provisions of the 401(k) Plan, as contained
in the Plan and the Adoption Agreement, are hereby ratified and confirmed.
IN WITNESS WHEREOF, this Amendment has been executed this 20th day of
October 1995.
ATTEST: PERPETUAL BANK, FSB
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
---------------------------- -------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇
President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
-------------------------------
TRUSTEE
/s/ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
TRUSTEE
--------------------------------------------------------------------------------
BENEFIT CONSULTANTS & ADMINISTRATORS, INC. REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST
--------------------------------------------------------------------------------
BENEFIT CONSULTANTS & ADMINISTRATORS, INC. REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST
TABLE OF CONTENTS
PART I
ARTICLE DESCRIPTION PAGE
I INTRODUCTION 1
1.1.1 Creation and Title 1
1.1.2 Effective Date 1
1.1.3 Purpose 1
II DEFINITIONS 2
PART II
II PARTICIPATION 16
2.1.1 Eligibility Requirement 16
2.1.2 Commencement of Participation 16
2.1.3 Participation Upon Re-Employment 16
2.1.4 Termination of Participation 16
2.1.5 Employer's Determination 16
2.1.6 Omission of Eligible Employee 17
2.1.7 Inclusion of Ineligible Participant 17
2.1.8 Election Not to Participate 17
2.1.9 Change in Status 17
2.1.10 Existing Participants 18
II CONTRIBUTIONS 19
2.2.1 Employer Contributions 19
2.2.2 Elective Contribution by the Employer
on Behalf of Electing Employees 20
2.2.3 Employee Contributions 22
2.2.4 Return on Contributions 22
III ALLOCATIONS 24
2.3.1 Profit Sharing and Money Purchase
Pension Plans 24
2.3.2 Cash on Deferred Plans 24
2.3.3 Limitation 24
2.3.4 Minimum Allocation 25
2.3.5 Fail-Safe Allocation 25
ARTICLE DESCRIPTION PAGE
IV BENEFITS 27
2.4.1 Distributable Benefit 27
2.4.2 Vesting 27
2.4.3 Leave of Absence 28
2.4.4 Re-Employment 28
2.4.5 Distribution Date 29
2.4.6 Forfeitures 29
V DISTRIBUTIONS 31
2.5.1 Commencement of Distribution 31
2.5.2 Method of Distribution 38
2.5.3 Nature of Distributions 47
2.5.4 Advance Distributions 49
2.5.5 Hardship Distributions 49
2.5.6 In Service Distributions 51
VI CONTINGENT TOP HEAVY PROVISIONS 53
2.6.1 Top Heavy Requirements 53
2.6.2 Top Heavy Provisions 54
2.6.3 Pairing Requirements 59
VII SPECIAL CODA LIMITATIONS 60
2.7.1 Limitation on Deferral Percentage for
Highly Compensated Employees 60
2.7.2 Multiple Plan Limitations 61
2.7.3 Limitation on Matching Contributions 62
2.7.4 Special Rules 63
2.7.5 Distribution of Excess Elective
Deferrals 64
2.7.6 Distribution of Excess Contributions 65
2.7.7 Distribution of Excess Aggregate
Contributions 66
2.7.8 Limitation on Distributions 67
2.7.9 Limitation of Elective Deferrals 67
PART III
I ACCOUNTING 68
3.1.1 Accounts 68
3.1.2 Adjustments 68
II LIMITATIONS 71
3.2.1 Limitations on Annual Additions 71
3.2.2 Controlled Businesses 80
ARTICLE DESCRIPTION PAGE
III FIDUCIARIES 81
3.3.1 Standard of Conduct 81
3.3.2 Individual Fiduciaries 81
3.3.3 Disqualification from Service 81
3.3.4 Bonding 81
3.3.5 Prior Acts 81
3.3.6 Insurance and Indemnity 82
3.3.7 Expenses 82
3.3.8 Agents, Accountants, and Legal Counsel 83
3.3.9 Investment Manager 83
3.3.10 Finality of Decisions or Acts 83
3.3.11 Certain Custodial Accounts or Contracts 83
IV PLAN ADMINISTRATOR 84
3.4.1 Administration of Plan 84
3.4.2 Disclosure Requirements 85
3.4.3 Information Generally Available 86
3.4.4 Statement of Accrued Benefit 86
3.4.5 Explanation of Rollover Treatment 86
V TRUSTEE 87
3.5.1 Acceptance of Trust 87
3.5.2 Trustee Capacity - Co-Trustee 87
3.5.3 Resignation, Removal and Successors 87
3.5.4 Consultations 87
3.5.5 Rights, Powers and Duties 88
3.5.6 Trustee Indemnification 90
3.5.7 Changes in Trustee Authority 90
VI TRUST ASSETS 91
3.6.1 Trustee Exclusive Owner 91
3.6.2 Investments 91
3.6.3 Administration of Trust Assets 93
3.6.4 Segregated Funds 95
3.6.5 Investment Control Option 95
VII LOANS 98
3.7.1 Authorization 98
3.7.2 Spousal Consent 98
3.7.3 Limitations 99
3.7.4 Availability 99
3.7.5 Prohibitions 100
VIII BENEFICIARIES 101
3.8.1 Designation of Beneficiaries 101
3.8.2 Absence of Death of Beneficiaries 101
3.8.3 Surviving Spouse Election 102
ARTICLE DESCRIPTION PAGE
IX CLAIMS 103
3.9.1 Claim Procedure 103
3.9.2 Appeal 104
X AMENDMENT AND TERMINATION 105
3.10.1 Right to Amend 105
3.10.2 Manner of Amending 105
3.10.3 Limitations of Amendments 106
3.10.4 Voluntary Termination 107
3.10.5 Involuntary Termination 107
3.10.6 Withdrawal By Employer 107
3.10.7 Powers Pending Final Distribution 107
3.10.8 Delegation to Sponsor 108
XI PORTABILITY 109
3.11.1 Continuance by Successor 109
3.11.2 Merger With Other Plan 109
3.11.3 Transfer From Other Plans 109
3.11.4 Transfer to Other Plans 110
XII MISCELLANEOUS 111
3.12.1 No Reversion to Employer 111
3.12.2 Employer Actions 111
3.12.3 Execution of Receipts and Releases 111
3.12.4 Rights of Participant Limited 111
3.12.5 Persons Dealing With Trustee Protected 112
3.12.6 Protection of Insurer 112
3.12.7 No Responsibility for Act of Insurer 112
3.12.8 Inalienability 113
3.12.9 Domestic Relations Order 113
3.12.10 Authorization to Withhold Taxes 115
3.12.11 Missing Persons 115
3.12.12 Notices 116
3.12.13 Governing Law 116
3.12.14 Severability of Provisions 116
3.12.15 Gender and Number 116
3.12.16 Binding Effect 117
3.12.17 Qualification Under Internal Revenue
Laws 117
PART I
ARTICLE I
INTRODUCTION
1.1.1 Creation and Title. The parties hereby create a Plan and Trust
to be known by the name set forth in the Adoption Agreement.
1.1.2 Effective Date. The provisions of this Plan and Trust shall be
effective as of the Effective Date set forth in the Adoption Agreement.
1.1.3 Purpose. This Plan and Trust is established for the purpose of
providing retirement benefits to eligible employees in accordance with the Plan
and the Adoption Agreement. If the Employer designates the Plan as a Cash or
Deferred Profit Sharing Plan in the Adoption-Agreement, the Plan is also
intended to enable eligible Employees to supplement their retirement by electing
to have the Employer contribute amounts to the Plan and Trust in lieu of
payments to such Employees in cash and the Plan and Trust are intended to
satisfy the provisions of Section 401(k) of the Internal Revenue Code of 1986,
as amended.
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ARTICLE II
DEFINITIONS
As used in this Plan and the Adoption Agreement, the following terms
shall have the following meanings:
1.2.1 "Account": The Employer Account, Controlled Account, Elective
Contribution Account, Matching Account, Qualified Non-Elective Contribution
Account, Voluntary Account or Segregated Account of a Participant, as the
context requires, established and maintained for accounting purposes.
1.2.2 "ACP": The average contribution percentage determined in
accordance with the provisions of Part II, Article VII.
1.2.3 "Act": The Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.2.4 "ADP": The actual deferral percentage determined in accordance
with the provisions of Part II, Article VII.
1.2.5 "Anniversary Date": Unless otherwise specified in the Adoption
Agreement, the last day of each Plan Year.
1.2.6 "Beneficiary": The person or persons entitled hereunder to
receive the benefits which may be payable upon or after a Participant's death.
1.2.7 "Board of Directors": The board of directors of an incorporated
Employer.
1.2.8 "Break in Service": The failure of a Participant to complete
more than five hundred (500)-Hours of Service or such lesser number specified in
the Adoption Agreement during any 12 consecutive month computation period,
beginning with a Participant's first computation period after becoming a
Participant.
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A Year of Service and a Break in Service for vesting purposes shall be measured
on the same computation period. The Eligibility Computation Period and a Break
in Service for eligibility purposes shall be measured on the same computation
period.
1.2.9 "Code": The Internal Revenue Code of 1986, as amended from time
to time.
1.2.10 "Compensation": The compensation as defined in the Plan and as
specified in the Adoption Agreement (or Earned Income in the case of a self-
employed individual) which is actually paid to the Participant by the Employer
during the Compensation Computation Period; provided that if specified by
include any amount which is contributed by the Employer pursuant to a salary
reduction agreement and which is not includible in the gross income of the
Employee under Sections 125, 402(a)(8), 402(h), 403(b) or 457(b) of the Code;
provided further that for years beginning after December 31, 1988, the annual
gross compensation taken into account for purposes of the Plan shall not exceed
$200,000, as such amount may be adjusted by the Secretary of the Treasury at the
same time and in the same manner as under Section 415(d) of the Code, except
that the dollar increase in effect on January 1 of any calendar year is
effective for years beginning in such calendar-year and the first adjustment to
the $200,000 limitation is effected on January 1, 1990. If the plan determines
compensation on a period of time that contains less than twelve (12) calendar
months, then the annual compensation limit is an amount equal to the annual
compensation limit for the calendar year in which the compensation period begins
multiplied by the ratio obtained by dividing the number of full months in the
period by 12. For purposes of this dollar limitation, the rules of Section
414(q)(6) of the Code requiring the aggregation of the compensation of family
members shall apply, except that 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 nineteen (19) before the close of the
year. If, as a result of the application of such rules the adjusted $200,000
limitation is exceeded, then (except for purposes of determining the portion of
compensation up to the Social Security Integration Level if this Plan provides
for permitted disparity), the limitation shall be prorated among the affected
individuals in proportion to each such individual's compensation as determined
under this Section prior to the application of this limitation. If compensation
for any prior plan year is taken into account in determining an employee's
contributions or benefits for the current year,
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the compensation for such prior year is subject to the applicable annual
compensation limit in effect for that prior year. For this purpose, for years
beginning before January 1, 1990, the applicable annual compensation limit is
$200,000.
1.2.11 "Compensation Computation Period": The period specified as the
Compensation Computation Period in the Adoption Agreement.
1.2.12 "Controlled Account": An account established and maintained
for a Participant to account for his interest in a Segregated Fund over which he
exercises investment control.
1.2.13 "Date of Hire": The date an Employee first completes an Hour
of Service for the Employer.
1.2.14 "Distributable Benefit": The benefit to which a Participant is
entitled following termination of his employment.
1.2.15 "Distribution Date": The date as of which the Distributable
Benefit of a Participant is determined.
1.2.16 "Early Retirement Age": The age specified as the Early
Retirement Age, if any, in the Adoption Agreement.
1.2.17 "Early Retirement Date": The date specified as the Early
Retirement Date, if any, in the Adoption Agreement.
1.2.18 "Earned Income": The net earnings from self- employment in the
trade or business with respect to which the Plan is established for which
personal services of the Participant are a material income-producing factor. Net
earnings shall be determined without regard to items not included in gross
income and the deductions allocable to such items but, in the case of taxable
years beginning after 1989, with regard to the deduction allowed to the taxpayer
by Section 164(f) of the Code. Net earnings shall be reduced by contributions to
a qualified plan to the extent deductible under Section 404 of the Code.
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1.2.19 "Elective Contribution Account": An Account established and
maintained for a Participant to account for the Elective Contributions made on
his behalf.
1.2.20 "Elective Contribution": A contribution to a cash or deferred
profit sharing plan by the Employer on behalf of an electing Employee.
1.2.21 "Elective Deferrals": Any Employer contributions made to the
Plan at the election of the Participant, in lieu of cash compensation, including
contributions made pursuant to a salary reduction agreement or other deferral
mechanism. With respect to any taxable year, a Participant's Elective Deferral
is the sum of all Employer contributions made on behalf of the Participant
pursuant to an election to defer under any qualified CODA as described in
Section 401(k) of the Code, any simplified employee pension cash or deferred
arrangement as described in Section 402(h)(1)(B), any eligible deferred
compensation plan under Section 457, any plan as described under Section
501(c)(18), and any employer contributions made on the behalf of a participant
for the purchase of an annuity contract under Section 403(b) pursuant to a
salary reduction agreement. Elective Deferrals shall not include any deferrals
properly distributed as excess annual additions.
1.2.22 "Eligibility Computation Period": For purposes of determining
Years of Service and Breaks in Service for purposes of eligibility, the initial
eligibility computation period is the twelve (12) consecutive month period
beginning with the employment commencement date on which the Employee first
renders an Hour of Service for the Employer, and unless otherwise specified in
the Adoption Agreement, the subsequent eligibility computation periods are each
subsequent twelve (12) consecutive month period commencing on the annual
anniversary of such employment commencement date. If in accordance with the
election in the Adoption Agreement, the subsequent periods commence with the
first Plan Year which commences prior to the first anniversary of the Employee's
employment commencement date, an Employee who is credited with 1,000 Hours of
Service in both the initial eligibility computation period and the first Plan
Year which commences prior to the first anniversary of the Employee's initial
eligibility computation period shall be credited with two (2) years of service
for purposes of eligibility to participate.
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1.2.23 "Employee": A person who is currently or hereafter employed by
the Employer, or by any other employer aggregated under section 414(b), (c), (m)
or (o) of the Code and the regulations thereunder, including a Leased Employee
subject to section 414(n) of the Code and a self-employed owner of an
unincorporated Employer, but, unless otherwise provided in the Adoption
Agreement, excluding (a) an independent contractor; (b) an employee who is a
non-resident alien (within the meaning of section 7701(b)(1)(B) of the Code)
deriving no earned income (within the meaning of section 911(d)(2) of the Code)
from the Employer which constitutes income from sources within the United States
(within the meaning of section 861(a)(3) of the Code); and (c) employees who are
included in the unit of employees covered by a collective bargaining agreement
between the Employer and employee representatives, provided benefits were the
subject of good faith bargaining and two percent or less of the employees of the
Employer who are covered pursuant to that agreement are professionals as defined
in Treasury Regulation Section 1.410(b)- 9(g). For this purpose, the term
"employee representatives" does not include any organization more than half of
whose members are employees who are owners, officers, or executives of the
employer.
1.2.24 "Employer": The Employer that is a party to this Plan, or any
of its affiliates, successors or assigns which adopt the Plan; provided,
however, that no mere change in the identity, form or organization of the
Employer shall affect its status under the Plan in any manner, and, if the name
of the Employer is hereafter changed, a corresponding change shall be deemed to
have been made in the name of the Plan and references herein to the Employer
shall be deemed to refer to the Employer as it is then known.
1.2.25 "Employer Account": An Account established and maintained for
a Participant for accounting purposes to which his share of Employer
contributions and forfeitures are added.
1.2.26 "Employer Contribution": A contribution to a money purchase
pension plan or profit sharing plan other than a cash or deferred profit sharing
plan by the Employer.
1.2.27 "Entry Date": The date or dates specified as the Entry Date in
the Adoption Agreement.
- 6 -
1.2.28 "Excess Aggregate Contributions": With respect to any Plan
Year, the excess of:
(a) The aggregate contribution percentage amounts taken into account
in computing the numerator of the contribution percentage actually made on
behalf of Highly Compensated Employees for such Plan Year, over
(b) The maximum contribution percentage amounts permitted by the ACP
test (determined by reducing contributions made on behalf of Highly
Compensated Employees in order of their contribution percentages beginning
with the highest of such percentages). Such determination shall be made
after first determining Excess Elective Deferrals and then determining
Excess Contributions.
1.2.29 "Excess Contributions": With respect to any Plan Year, the
excess of:
(a) The aggregate amount of Employer Contributions actually taken into
account in computing the ADP of Highly Compensated Employees for such Plan
Year, over
(b) The maximum amount of such contributions permitted by the ADP test
(determined by reducing contributions made on behalf of Highly Compensated
Employees in order of the ADPs, beginning with the highest of such
percentages.
1.2.30 "Excess Elective Deferrals": Those Elective Deferrals that are
includible in a Participant's gross income under section 402(g) of the Code to
the extent such participant's Elective Deferrals for a taxable year exceed the
dollar limitation under such Code section. Excess Elective Deferrals shall be
treated as annual additions under the Plan, unless such amounts are distributed
no later than the first April 15 following the close of the Participant's
taxable year.
1.2.31 "Excessive Annual Addition": The portion of the allocation of
contributions and forfeitures that cannot be added to a Participant's Accounts
due to the limitations on annual additions contained in the Plan.
1.2.32 "Family": The spouse and lineal ascendants or descendants of
an Employee and the spouses of such lineal ascendants and descendants.
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1.2.33 "Fiduciary": The Plan Administrator, the Trustee and any other
person who has discretionary authority or control in the management of the Plan
or the disposition of Trust assets.
1.2.34 "Highly Compensated Employee": A highly compensated active
employee and a highly compensated former employee. A highly compensated active
employee includes: any Employee who performs service for the Employer during the
determination year and who, during the look-back year: (i) received compensation
from the Employer in excess of $75,000 (as adjusted pursuant to Section 415(d)
of the Code); (ii) received compensation from the Employer in excess of $50,000
(as adjusted pursuant to Section 415(d) of the Code) and was a member of the
top-paid group for such year; or (iii) was an officer of the Employer and
received compensation during such year that is greater than 50 percent of the
dollar limitation as in effect under Section 415(b)(1)(A) of the Code. The term
highly, compensated employee also includes: (i) employees who are both described
in the preceding sentence if the term "determination year" is substituted for
the term "look-back year" and the employee is one of the 100 employees who
received the most compensation from the Employer during the determination year;
and (ii) employees who are 5 percent owners at any time during the look-back
year or determination year. If no officer has satisfied the compensation
requirement of (iii) above during either a determination year or look-back year,
the highest paid officer for such year shall be treated as a highly compensated
employee.
For this purpose, the determination year shall be the Plan Year. The look-back
year shall be the twelve-month period immediately preceding the determination
year and compensation is as defined in Section 415(c)(3) of the Code including
amounts contributed by the Employer pursuant to a salary reduction agreement and
which is not includible in gross income under Sections 125, 402(a)(8), 402(h) or
403(b) of the Code.
A highly compensated former employee includes any employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for the employer during the determination year, and was a
highly compensated active employee for either the separation year or any
determination year ending on or after the employee's 55th birthday.
- 8 -
If an Employee is, during a Plan Year or the preceding Plan Year, a family
member of either a s percent owner who is an active or former employee or a
Highly Compensated Employee who is one of the 10 most highly compensated
employees ranked on the basis of compensation paid by the Employer during such
year, then the family member and the 5 percent owner or top-ten highly
compensated employee shall be aggregated. In such case, the family member and 5
percent owner or top-ten highly compensated employee shall be treated as a
single employee receiving compensation and plan contributions or benefits equal
to the sum of such compensation and contributions or benefits of the family
member and 5 percent owner or top-ten highly compensated employee. For purposes
of this section, family member includes the spouse, lineal ascendants and
descendants of the employee or former employee and the spouses of such lineal
ascendants and descendants.
An Employee is in the top-paid group of employees for any year if the Employee
is in the group consisting of the top twenty (20%) percent of the employees when
ranked on the basis of compensation paid during such year.
For purposes of determining whether an Employee is a highly compensated
employee, Sections 414(b), (c), (m), (n) and (o) of the Code shall be applied.
The determination of who is a highly compensated employee, including the
determination of the number and identity of employees in the top-paid group, the
top 100 employees, the number of employees treated as officers and the
compensation that is considered, will be made in accordance with Section 414(q)
of the Code and the regulations thereunder.
1.2.35 "Hour of Service": An hour for which (a) the Employee is paid,
or entitled to payment by the Employer for the performance of duties, (b) the
Employee is paid or entitled to payment by the Employer during which no duties
are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence, or (c) back
pay, irrespective of mitigation of damages, has been either awarded or agreed to
by the Employer. Hours of Service shall be credited to the Employee under (a),
above, for the period in which the duties are performed, under (b), above, in
the period in which the period during which no duties are performed occurs,
beginning with the first Hour of Service to which the payment relates, and under
(c), above, for the period to which the award or agreement pertains rather than
the period in which the award, agreement or payment is made; Provided, however,
that Hours of Service shall not be credited
- 9 -
under both (a) and (b), above, as the case may be, and under (c) above.
Notwithstanding the preceding sentences, (i) no more than five hundred one (501)
Hours of Service shall be credited under (b), above, on account of any single
continuous period during which the Employee performs no duties whether or not
such period occurs in a single computation period, (ii) no Hours of Service
shall be credited to the Employee by reason of a payment made or due under a
plan maintained solely for the purpose of complying with applicable worker's
compensation, or unemployment compensation or disability insurance laws, and
(iii) no Hours of Service shall be credited by reason of a payment which solely
reimburses an employee for medical or medically related expenses incurred by the
Employee. The determination of Hours of Service for reasons other than the
performance of duties and the crediting of Hours of Service to computation
periods shall be made in accord with the provisions of Labor Regulation Sections
2530.200b-2(b) and (c) which are incorporated herein by reference.
Solely for the purposes of determining whether an Employee has incurred a Break
in Service, an Employee shall be credited with the number of Hours of Service
which would otherwise have been credited to such individual but for the absence
or in any case in which such Hours cannot be determined with eight (8) Hours of
Service for any day that the Employee is absent from work by reason of the
Employee's pregnancy, the birth of a child of the Employee, the placement of a
child with the Employee in connection with the adoption of such child by the
Employee or for purposes of caring for such child for a period beginning
immediately following such birth or placement. Such Hours of Service shall be
credited only in the computation period in which the absence from work begins if
the Employee would be prevented from incurring a Break in Service in such
computation period solely because credit is given for such period of absence
and, in any other case, in the immediately following computation period.
Notwithstanding the foregoing, no credit shall be given for such service unless
the Employee furnishes to the Plan Administrator information to establish that
the absence from work is for the reasons indicated and the number of days for
which there was such an absence.
In the event the Employer does not maintain records of the actual hours for
which an Employee is paid or entitled to payment, credit for service shall be
given in accordance with the method selected in the Adoption Agreement.
Service with another business entity that is, along with the Employer, a member
of a controlled group of corporations under Section 414(b) of the Code, an
affiliated service group under Section 414(m) of the Code or trades or
businesses under common control under Section 414(c) of the Code,
- 10 -
or which is otherwise required to be aggregated with the Employer pursuant to
Section 414(o) of the Code and the regulations issued thereunder shall be
treated as service for the Employer. Hours of Service shall be credited for any
individual considered an employee for purposes of this Plan under Section 414(n)
or Section 414(o) of the Code and the regulations issued thereunder.
If the Employer maintains the plan of a predecessor employer, service with such
predecessor shall be treated as service for the Employer.
1.2.36 "Insurer": Any insurance company which has issued a Life
Insurance Policy.
1.2.37 "Joint and Survivor Annuity": An immediate annuity for the
life of the Participant with a survivor annuity for the life of the spouse which
is not less than fifty (50%) percent and not more than one hundred (100%)
percent of the amount of the annuity which is payable during the joint lives of
the Participant and the spouse and which is the amount of benefit which can be
purchased with the Participant's vested Account balances. The percentage of the
survivor annuity shall be fifty (50%) percent unless a different percentage is
elected by the Employer in the Adoption Agreement.
1.2.38 "Leased Employee": Any person (other than an employee of the
recipient) who pursuant to an agreement between the recipient and any other
person has performed services for the recipient (or for the recipient and
related persons determined in accordance with Section 414(n)(6) of the Code) on
a substantially full time basis for a period of at least one (1) year and such
services are of a type historically performed by employees in the business field
of the recipient employer; provided that any such person shall not be taken into
account if (a) such person is covered by a money purchase pension plan providing
(i) a nonintegrated employer contribution rate of at least ten (10%) percent of
compensation, as defined in Section 415(c)(3) of the Code and Section
3.2.1(h)(iii) of the Plan, but including amounts contributed by the employer
pursuant to a salary reduction agreement which are excludable from the person's
gross income under Sections 125, 402(a)(8), 402(h) or 403(b) of the Code; (ii)
immediate participation; and (iii) full and immediate vesting; and (b) leased
employees do not constitute more than twenty (20%) percent of the workforce of
the recipient who are not Highly Compensated Employees. Contributions or
benefits provided a leased employee by the leasing organization which are
attributable to services performed for the recipient employer shall be treated
as
- 11 -
provided by the recipient employer.
1.2.39 "Life Insurance Policy": A life insurance, annuity or
endowment policy or contract which is owned by the Trust and is on the life of a
Participant.
1.2.40 "Limitation Year": Unless otherwise specified in the Adoption
Agreement, the Plan Year; provided that all qualified plans maintained by the
Employer use the same Limitation Year.
1.2.41 "Mass Submitter": DATAIR Employee Benefits Systems Inc.
1.2.42 "Matching Account": An Account established and maintained for
a Participant for accounting purposes to which his share of Matching
Contributions are added.
1.2.43 "Matching Contribution": A contribution to the Plan by the
Employer which matches in whole or in part an Elective Contribution on behalf of
an electing Employee.
1.2.44 "Non-Elective Contribution": A contribution to a cash or
deferred profit sharing plan by the Employer which is neither a Qualified Non-
Elective Contribution, a Matching Contribution nor an Elective Contribution.
1.2.45 "Normal Retirement Age": The earlier of the date specified as
the Normal Retirement Age in the Adoption Agreement or the mandatory retirement
age enforced by the Employer.
1.2.46 "Normal Retirement Date": The date specified in the Adoption
Agreement as the Normal Retirement Date.
1.2.47 "Owner-Employee": An individual who is a sole proprietor or
who is a partner owning more than ten percent (10%) of either the capital or
profits interest of the partnership.
1.2.48 "Participant": Any eligible Employee who becomes entitled to
participate in the Plan.
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1.2.49 "Plan": The defined contribution plan for Employees as set
forth in this Agreement and the Adoption Agreement, together with any amendments
or supplements thereto.
1.2.50 "Plan Administrator": The person, persons or entity appointed
by the Employer to administer the Plan, or, if the Employer fails to make such
appointment, the Employer.
1.2.51 "Plan Sponsor": The Plan Sponsor specified in the Adoption
Agreement.
1.2.52 "Plan Year" or "Year": The 12 consecutive month period
designated by the Employer in the Adoption Agreement.
1.2.53 "Preretirement Survivor Annuity": A survivor annuity for the
life of the surviving spouse of the Participant, the actuarial equivalent of
which is equal to the portion of the Account balance of the Participant as of
the date of death to which the Participant had a vested and nonforfeitable
right, provided that any security interest held by the Plan by reason of a loan
outstanding to the Participant for which a valid spousal consent has been
obtained, if necessary, shall be taken into account.
1.2.54 "Qualified Non-Elective Contribution": A contribution to a
cash or deferred profit sharing plan by the Employer which is neither a Matching
Contribution nor an Elective Contribution, is one hundred percent (100%) vested
and nonforfeitable when made, which a Participant may not elect to have paid in
cash instead of being contributed to the Plan and which may not be distributed
from the Plan (except in the case of a hardship distribution) prior to the
termination of employment or death of the Participant, attainment of age 59-1/2
by the Participant or termination of the Plan without establishment of a
successor plan.
1.2.55 "Qualified Non-Elective Contribution Account": An Account
established and maintained for a Participant to account for the Qualified Non-
Elective Contributions made on his behalf.
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1.2.56 "Qualifying Employer Securities or Real Property": Securities
or real property of the Employer which the Trustee may acquire and hold pursuant
to the applicable provisions of the Code and the Act.
1.2.57 "Segregated Account": An Account established and maintained
for a Participant to account for his interest in a Segregated Fund.
1.2.58 "Segregated Fund": Assets held in the name of the Trustee
which have been segregated from the Trust Fund in accordance with any of the
provisions of the Plan.
1.2.59 "Self-Employed Individual": An individual who has Earned
Income for the taxable year from the trade or business for which the Plan is
established or who would have bad Earned Income but for the fact that the trade
or business had no net profits for the taxable year.
1.2.60 "Social Security Integration Level": The Social Security
Integration Level shall be equal to the taxable wage base or such lesser amount
specified in the Adoption Agreement. The "taxable wage base" is the contribution
and benefit base in effect under Section 230 of the Social Security Act on the
first day of the Plan Year for which allocations of Employer contributions and
forfeitures are made (referred to as the Social Security Wage Base). The Social
Security Integration Level shall be deemed to be the full amount of such Social
Security Integration Level, even though a Participant's Compensation may include
less than a full year's compensation because of either his participation
commencing after the first day of the Compensation Computation Period or his
service terminating prior to the end of the Compensation Computation Period.
1.2.61 "Trust Fund": All money and property of every kind and
character held by the Trustee pursuant to the Plan, excluding assets held in
Segregated Funds.
1.2.62 "Trustee": The persons, corporations, associations or
combination of them who shall at the time be acting as such from time to time
hereunder.
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1.2.63 "Valuation Date": The date or dates specified as the Valuation
Date in the Adoption Agreement.
1.2.64 "Voluntary Account": An Account established and maintained for
a Participant for accounting purposes to which his voluntary Employee
contributions made prior to Plan Years beginning after 1986 have been added.
1.2.65 "Year of Service": The 12-consecutive month period
(computation period) specified in the Adoption Agreement during which an
employee completes at least one thousand (1,000) Hours of Service or such lesser
number specified in the Adoption Agreement. Unless otherwise specified in the
Adoption Agreement, all Years of Service shall be taken into account.
- 15 -
PART II
ARTICLE I
PARTICIPATION
2.1.1 Eligibility Requirements. Each Employee shall be eligible to
participate in this Plan and receive an appropriate allocation of contributions
upon satisfying the eligibility requirements set forth in the Adoption
Agreement.
2.1.2 Commencement of Participation. An eligible Employee shall
become a Participant in the Plan on the applicable Entry Date selected in the
Adoption Agreement.
2.1.3 Participation Upon Re-Employment. A Participant whose
employment terminates and who is subsequently re-employed shall re-enter the
Plan as a Participant immediately on the date of his reemployment. In the event
that an Employee completes the eligibility requirements set forth in the
Adoption Agreement, his employment terminates prior to becoming a Participant
and he is subsequently re-employed, such Employee shall be deemed to have met
the eligibility requirements as of the date of his re-employment and shall
become a Participant on the date of his re-employment; provided, however, that
if he is re-employed prior to the date he would have become a Participant if his
employment had not terminated, he shall become a Participant as of the date he
would have become a Participant if his employment had not terminated. Any other
Employee whose employment terminates and who is subsequently reemployed shall
become a Participant in accordance with the provisions of Sections 2.1.1 and
2.1.2.
2.1.4 Termination of Participation. An Employee who has become a
Participant shall remain a Participant until the entire amount of his
Distributable Benefit is distributed to him or his Beneficiary in the event of
death.
2.1.5 Employer's Determination. In the event any question shall arise
as to the eligibility of any person to become a Participant or the commencement
of participation, the Employer shall determine such question and the Employer's
decision shall be conclusive and binding, except to the extent of a claimant's
right to appeal the denial of a claim.
- 16 -
2.1.6 Omission of Eligible Employee. If an Employee who should be
included as a Participant in the Plan is erroneously omitted and discovery of
the omission is made after the contribution by the Employer is made and
allocated, the Employer shall make an additional contribution on behalf of the
omitted Employee in the amount which the Employer would have contributed on his
behalf had he not been omitted.
2.1.7 Inclusion of Ineligible Participant. If any person is
erroneously included as a Participant in the Plan and discovery of the erroneous
inclusion is made after the contribution by the Employer is made and allocated,
the Employer may elect to treat the amount contributed on behalf of the
ineligible person plus any earnings thereon as a forfeiture for the Plan Year in
which the discovery is made and apply such amount in the manner specified in the
Adoption Agreement.
2.1.8 Election Not to Participate. With respect only to
nonstandardized plans and notwithstanding anything contained in the Plan to the
contrary, an Employee may elect with the approval of the Employer not to
participate in the Plan if the election does not jeopardize the qualified or
tax-exempt status of the Plan under sections 401(a) and 501(a) of the Code,
respectively. The Employee shall sign such documents as may be reasonably
required by the Employer to evidence the election. If it is subsequently
determined that either the qualified or the tax-exempt status of the Plan has
been jeopardized, the Employer may elect to treat such Employee as having been
erroneously omitted. An Employee may revoke the election only with respect to
any subsequent Plan Year by written notice of revocation to the Employer prior
to the end of the Plan Year for which the revocation is effective.
2.1.9 Change in Status. If any Participant continues in the employ of
the Employer or an affiliate for which service is required to be taken into
account but ceases to be an Employee for any reason (such as becoming covered by
a collective bargaining agreement unless the collective bargaining agreement
otherwise provides) the Participant shall continue to be a Participant until the
entire amount of his benefit is distributed but the individual shall be deemed
not to have completed any "Years of Service" for purposes of Article V
("Benefits") during the period that the Participant is not an Employee for such
reason.
- 17 -
Such Participant shall continue to receive credit for Years of Service completed
during the period for purposes of determining his vested and nonforfeitable
interest in his Accounts. In the event that the individual subsequently again
becomes a member of an eligible class of employees, the individual shall
participate immediately upon the date of such change in status. If such
Participant incurs a Break in Service and is subsequently reemployed,
eligibility to participate shall be determined in accordance with Section 2.1.3.
In the event that an individual who is not a member of an eligible class of
employees becomes a member of an eligible class, the individual shall
participate immediately if such individual has satisfied the eligibility
requirements and would have otherwise previously become a participant.
2.1.10 Existing Participants. An Employee who, on the Effective Date,
was a Participant under the provisions of the Plan as in effect immediately
prior to the Effective Date shall be a Participant on the Effective Date and the
provisions of, Sections 2.1.1 and 2.1.2, pertaining to participation, shall not
be applicable to such Employee. The rights of a Participant whose employment
terminated prior to the Effective Date shall be determined under the provisions
of the Plan as in effect at the time of such termination.
- 18 -
ARTICLE II
CONTRIBUTIONS
2.2.1 Employer Contributions.
(a) Amount of Contribution.
(1) Money Purchase Pension Plan. The Employer shall contribute
to the Trust Fund each Plan Year such amount, including any
forfeitures to be applied, set forth in the Adoption Agreement.
(2) Profit Sharing Plan. The Employer shall contribute to the
Trust Fund each Plan Year such amount as it may determine.
(3) Cash or Deferred Profit Sharing Plan.
(i) Amount of Non-Elective Contribution. The Employer shall
contribute to the Trust Fund each Plan Year such amount as a Non-
Elective Contribution as the Employer may determine.
(ii) Amount of Matching Contribution. Subject to applicable
limitations provided by the Plan, the Employer shall contribute
to the Trust Fund each Plan Year with respect to the amount of
Elective Contributions on behalf of each electing Employee a
Matching Contribution determined in the manner set forth in the
Adoption Agreement.
(iii) Amount of Qualified Non-Elective Contribution. The
Employer shall contribute to the Trust Fund each Plan Year such
amount as a Qualified Non-Elective Contribution as the Employer
may determine. In addition, in lieu of distributing Excess
Contributions or Excess Aggregate Contributions as provided in
Article VII, below, and to the extent elected by the Employer in
the Adoption Agreement, the Employer may make Qualified Non-
Elective Contributions on behalf of Employees who are not Highly
Compensated Employees that are sufficient to satisfy either the
ADP test or the ACP test, or both, pursuant to regulations under
the Code.
- 19 -
(b) Limitation. The contribution for any Plan Year by the Employer
shall not exceed the maximum amount deductible from the Employer's income
for such Year for federal income tax purposes under the applicable sections
of the Code.
(c) Time of Contribution. All contributions by the Employer shall be
delivered to the Trustee not later than the date fixed by law for the
filing of the Employer's federal income tax return for the Year for which
such contribution is made (including any extensions of time granted by the
Internal Revenue Service for filing such return).
(d) Determination of Amount to be Final. The determination by the
Employer as to the amount to be contributed by the Employer hereunder shall
be in all respects final, binding, and conclusive on all persons or parties
having or claiming any rights under this agreement or under the Plan and
Trust created hereby. Under no circumstances and in no event shall any
Participant, Beneficiary, or other person or party have any right to
examine the books or records of the Employer.
(e) Rights of Trustee as to Contributions. The Trustee shall have no
duty to report any contribution to be made or to determine whether
contributions delivered to the Trustee by the Employer comply with the
provisions of this Agreement. The Trustee shall be accountable only for
funds actually received by the Trustee.
2.2.2 Elective Contributions by the Employer on Behalf of Electing
Employees.
(a) Amount of Contribution. If the Plan is designated in the
Adoption Agreement as a Cash or Deferred Profit Sharing Plan, each Employee
may elect to have the Employer contribute to the Trust on his behalf for
any Plan Year during which he is a Participant such amounts expressed
either in dollars or in whole percentages of his Compensation as he may
elect which would otherwise be payable by the Employer as Compensation (but
not to exceed the dollar limitation provided by Section 402(g) of the Code
as in effect at the beginning of the taxable year); provided that the
Employer may impose reasonable limitations in a uniform, nondiscriminatory
manner on the amounts which may be so contributed in order to satisfy
applicable legal requirements and to assure the deductibility of amounts
contributed by the Employer to the Plan and any other qualified plan of
deferred compensation.
- 20 -
(b) Election. The Plan Administrator shall determine the manner in
which a Participant may elect to have Elective Contributions made to the
Plan on his behalf. The Plan Administrator shall establish reasonable
periods during which the election may be made, modified or revoked. Unless
the Plan Administrator establishes another period during which the election
may be made, modified or revoked, any such election may be made, modified
or revoked during the first and last months of the Plan Year. An election
by an Employee may not be made retroactively and once made shall remain in
effect until modified or terminated.
(c) Payment of Contribution. Elective Contributions shall be
remitted by the Employer within a reasonable period after such amount would
have otherwise been payable to the Participant. The Employer shall
designate, in accordance with the Participant's election, the Plan Year to
which any such contributions which are made after the end of the Plan Year
pertain.
(d) Segregated Fund. Unless an Elective Contribution on behalf of a
Participant is received by the Trustee within the time prescribed by the
Plan Administrator prior to a Valuation Date, the Plan Administrator shall
direct the Trustee to establish a Segregated Fund with respect to such
contribution. The funds contained in such Segregated Fund shall be
transferred to the Trust Fund in accordance with the instructions of the
Plan Administrator and such transfer shall be deemed to have been made as
of such next succeeding Valuation Date. If an Elective Contribution on
behalf of a Participant is received by the Trustee within the period
prescribed by the Plan Administrator, such contribution shall be added to
the Trust Fund. Notwithstanding the foregoing, if the Trust Fund is
invested in such a manner that the Plan Administrator can determine, with a
reasonable degree of certainty, that portion of the adjustment to fair
market value which is attributable to Elective Contributions received by
the Trustee other than within such period, then the Plan Administrator
shall direct the Trustee shall add any such Elective Contributions to the
Trust Fund at the time the Trustee receives such Elective Contributions.
(e) Hardship Distributions. An Employee may not have Elective
Contributions made on his or her behalf for the taxable year following the
taxable year of a hardship distribution in excess of the applicable limit
under Section 402(g) of the Code for such taxable year less the amount of
the Employee's Elective Deferrals for the taxable year of the hardship
distribution.
- 21 -
2.2.3 Employee Contributions.
(a) Amount of Contribution. An Employee is neither required nor
permitted to contribute to the Plan for any Plan Year beginning after the
Plan Year in which the prototype Plan is adopted by the Employer. Employee
contributions for Plan Years beginning after 1986 shall be limited so as to
meet the nondiscriminatory test of Section 401(m) of the Code. The Plan
Administrator shall not accept deductible employee contributions which are
made for a taxable year beginning after December 31, 1986. Contributions
made prior to that date will be maintained in a separate account which will
be nonforfeitable at all times. The account will share in the gains and
losses of the trust in the same manner as provided in Section 3.1.2 of the
Plan. No part of the deductible voluntary contribution account will be used
to purchase life insurance.
(b) Withdrawal of Contributions. In accordance with the provisions
of the Plan as in effect prior to Plan Years beginning after 1986, all or
any portion of an Employee's contributions may be withdrawn by giving to
the Plan Administrator written notice of any proposed withdrawal. The Plan
Administrator may adopt such procedures with respect to such withdrawals as
may be necessary or appropriate. At the Plan Administrator's direction, the
Trustee shall distribute any such withdrawal to the Participant in
accordance with the procedures adopted by the Plan Administrator. Except in
the case of the voluntary deductible contribution account, such withdrawals
shall not include any interest or other increment earned on such
contributions. No forfeitures shall occur as a result of withdrawal of an
Employee's contributions. Notwithstanding the foregoing, a withdrawal of an
Employee's contributions must be consented to in writing by the
Participant's spouse.
2.2.4 Return of Contributions. Contributions by the Employer,
including Employer, Qualified Non-Elective, Non-Elective and Matching
Contributions shall be returned to the Employer in the following instances:
(a) If a contribution by the Employer, including an Employer,
Qualified Non-Elective, Non-Elective or Matching Contribution is made by
the Employer by mistake of fact, then the contribution shall be returned
within one year after its payment upon the Employer's written request.
- 22 -
(b) If a contribution by the Employer, including an Employer,
Qualified Non-Elective, Non-Elective or Matching Contribution is
conditioned on initial qualification of the Plan under the applicable
sections of the Code, and the Commissioner of Internal Revenue determines
that the Plan does not qualify, then the contribution made incident to the
initial qualification by the Employer shall be returned within one year
after the date of denial of initial qualification of the Plan; provided
that the application for initial qualification is made by the time
prescribed by law for filing the Employer's tax return for the taxable year
in which the Plan is adopted, or such later date as the Secretary of the
Treasury may prescribe.
(c) Each contribution by the Employer, including an Employer,
Qualified Non-Elective, Non-Elective and Matching Contribution is
conditioned upon the deductibility of the contribution under the applicable
sections of the Code and to the extent of a disallowance of the deduction
for part or all of the contribution, the contribution shall be returned
within one year after such disallowance upon the Employer's written
request.
- 23 -
ARTICLE III
ALLOCATIONS
2.3.1 Profit Sharing and Money Purchase Pension Plans. As of each
Anniversary Date, the Employer Contributions made by the Employer with respect
to the preceding Plan Year, and forfeitures shall be allocated among the
Employer Accounts of Participants during the Plan Year in the manner set forth
in the Adoption Agreement.
2.3.2 Cash or Deferred Plans.
(a) Non-Elective Contributions. As of each Anniversary Date, the Non-
Elective Contributions made by the Employer with respect to the preceding
Plan Year, and forfeitures, shall be allocated among the Employer Accounts
of Participants during the Plan Year in the manner specified in the
Adoption Agreement.
(b) Matching Contributions. Unless otherwise specified in the
Adoption Agreement, as of each Anniversary Date, the Matching Contribution
made by the Employer with respect to the preceding Plan Year, and
forfeitures, shall be allocated to the Matching Accounts of Participants
for whom Elective Contributions were made in the manner specified in the
Adoption Agreement.
(c) Elective Contributions. The Elective Contributions by the
Employer on behalf of an electing Employee shall be allocated to the
Elective Contribution Account of such electing Employee as of each
Valuation Date of the Plan Year to which the Elective Contribution
pertains.
(d) Qualified Non-Elective Contributions. As of each Anniversary
Date, the Qualified Non-Elective Contributions made by the Employer with
respect to the preceding Plan Year shall be allocated to the Qualified Non-
Elective Contribution Account of Participants during the Plan Year in the
manner specified in the Adoption Agreement.
2.3.3 Limitation. The allocation of Employer contributions must
satisfy the requirements of Section 416 of the Code regardless of how the
Adoption Agreement is completed. Elective Contributions and Matching
Contributions allocated to key employees (as defined in Section 416(i) of the
Code) are
- 24 -
taken into account for the purpose of determining the minimum contribution under
Code Section 416. However, Elective Contributions and Matching Contributions
made on behalf of non-key employees (as defined in Code Section 416(i)) may not
be taken into account for the purpose of satisfying the minimum contribution
requirement under Code Section 416.
2.3.4 Minimum Allocation. In the event the Plan becomes a Top-Heavy
Plan during any Plan Year, the provisions of Section 2.6.1(a) shall apply.
2.3.5 Fail-Safe Allocation. With respect only to nonstandardized
plans and notwithstanding any provision of the Plan or Adoption Agreement to the
contrary, for Plan Years beginning after December 31, 1989, if the Plan would
otherwise fail to satisfy the requirements of Section 401(a)(26), 410(b)(1) or
410(b)(2)(A)(i) of the Code and the regulations thereunder because Employer
contributions have not been allocated to a sufficient number or percentage of
Participants for the Plan Year, an additional contribution shall be made by the
Employer and shall be allocated to the Employer Accounts of affected
Participants subject to the following provisions:
(a) The Participants eligible to share in the allocation of the
Employer's contribution shall be expanded to include the minimum number of
Participants who are not otherwise eligible to the extent necessary to
satisfy the applicable test under the relevant Section of the Code. The
specific Participant who shall become eligible are those Participants who
are actively employed on the last day of the Plan Year who have completed
the greatest number of Hours of Service during the Plan Year.
(b) If the applicable test is still not satisfied, the Participants
eligible to share in the allocation shall be further expanded to include
the minimum number of Participants who are not employed on the last day of
the Plan Year as are necessary to satisfy the applicable test. The specific
Participants who shall become eligible are those Participants who have
completed the greatest number of Hours of Service during the Plan Year.
- 25 -
(c) A Participant's accrued benefit shall not be reduced by any
reallocation of amounts that have previously been allocated. To the extent
necessary, the Employer shall make an additional contribution equal to the
amount such affected Participants would have received if they had
originally shared in the allocations without regard to the deductibility of
the contribution. Any adjustment to the allocations pursuant to this
paragraph shall be considered a retroactive amendment adopted by the last
day of the Plan Year.
- 26 -
ARTICLE IV
BENEFITS
2.4.1 Distributable Benefit. At such time that the employment of a
Participant terminates for any reason, he or his Beneficiary shall be entitled
to a benefit equal to the vested and nonforfeitable interest in his Accounts as
of the Distribution Date. Such Accounts shall include the allocable share of
contributions and forfeitures, if any, which may be allocated to said Accounts
as of such Distribution Date and shall be determined after making the
adjustments for which provision is made in the Plan.
2.4.2 Vesting. A Participant shall at all times be one hundred percent
(100%) vested and have a nonforfeitable interest in his Elective Contribution
Account, Qualified Non-Elective Contribution Account, Voluntary Account and
Segregated Account. The vested and nonforfeitable interest of the Participant in
his Controlled Account shall be determined by reference to the Account from
which the funds were originally transferred. The vested and nonforfeitable
interest in a Participant's Employer Account and Matching Account shall be
determined as hereinafter provided.
(a) Normal Retirement. If a Participant terminates employment at his
Normal Retirement Age, he shall be one hundred percent (100%) vested and
have a nonforfeitable interest in his Employer Account and Matching
Account.
(b) Deferred Retirement. If a Participant continues in active
employment following his Normal Retirement Age, he shall continue to
participate under the Plan. From and after his Normal Retirement Age, he
shall be one hundred percent (100%) vested and have a nonforfeitable
interest in his Employer Account and Matching Account.
(c) Disability. If the employment of a Participant is terminated
prior to his Normal Retirement Age as a result of a medically determinable
physical or mental impairment which may be expected to result in death or
to last for a continuous period of not less than twelve (12) months and
which renders him incapable of performing his duties, he shall be one
hundred percent (100%) vested and have a nonforfeitable interest in his
Employer Account and Matching Account. All determinations in connection
with the permanence and degree of such disability shall be made by the Plan
Administrator in a uniform, nondiscriminatory manner on the basis of
medical evidence.
- 27 -
(d) Death. In the event of the death of a Participant, he shall be
one hundred percent (100%) vested and have a nonforfeitable interest in his
Employer Account and Matching Account.
(e) Termination of Plan. In the event of termination of the Plan
(including termination resulting from a complete discontinuance of
contributions by the Employer), each Participant shall be one hundred
percent (100%) vested and have a nonforfeitable interest in his Employer
Account and Matching Account. In the event of a partial termination of the
Plan, each Participant with respect to whom such partial termination has
occurred shall be one hundred percent (100%) vested and have a
nonforfeitable interest in his Employer Account and Matching Account.
(f) Early Retirement, Resignation or Discharge. If the employment of
a Participant terminates by reason of early retirement, resignation or
discharge prior to his Normal Retirement Age, he shall be vested and have a
nonforfeitable interest in a percentage of his Employer Account and
Matching Account determined by, except as provided below, taking into
account all of his Years of Service as of such termination date in
accordance with the schedule set forth in the Adoption Agreement.
2.4.3 Leave of Absence. A temporary cessation from active employment
with the Employer pursuant to an authorized leave of absence in accordance with
the nondiscriminatory policy of the Employer, whether occasioned by illness,
military service or any other reason shall not be treated as either a
termination of employment or a Break in Service provided that the Employee
returns to employment prior to the end of the authorized leave of absence.
2.4.4 Re-Employment. Unless otherwise elected by the Employer in the
Adoption Agreement, in the case of a Participant who has five (5) or more
consecutive Breaks in Service, all Years of Service after such Breaks in Service
shall be disregarded for the purposes of vesting the employer-derived account
balance that accrued before such breaks, but both pre-break and post-break in
- 28 -
service shall count for the purposes of vesting the employer-derived account
balance that accrues after such breaks. Both accounts shall share in the
earnings and losses of the Trust Fund. In the case of a Participant who does
not have five (5) consecutive Breaks in Service, both the pre-break and post-
break service shall count in vesting both the pre-break and post-break employer-
derived account balance.
2.4.5 Distribution Date. The Distribution Date shall be determined as
hereinafter provided.
(a) General. For purposes of determining the amount to be
distributed, the Distribution Date shall be determined in the manner
specified in the Adoption Agreement.
(b) Termination of Plan. In the event of termination of the Plan
(including termination resulting from a complete discontinuance of
contributions by the Employer), the Distribution Date shall be the date of
such termination. In the event of a partial termination of the Plan, as to
each Participant with respect to whom such partial termination has
occurred, the Distribution Date shall be the Anniversary Date coinciding
with or immediately following the date of such partial termination.
(c) Distributions following Distribution Date. Subject to the
necessity, if any, of obtaining the consent of a Participant and spouse,
distribution of a Participant's Distributable Benefit shall commence within
a reasonable period after the Distribution Date, unless otherwise elected
by the Participant in accordance with the provisions of the Plan or as
required by the provisions of the Plan.
2.4.6 Forfeitures. If an Employee terminates service, and the value
of the Employee's vested account balance derived from employer and employee
contributions is not greater than $3,500 and the Employee receives a
distribution of the value of the entire vested portion of such account balance,
the nonvested portion shall be treated as a forfeiture as of the last day of the
Plan Year in which the Participant's entire vested interest is distributed from
the Plan. If the value of an Employee's vested account balance is zero, the
Employee shall be deemed to have received a distribution of such vested account
balance. A participant's vested account balance shall not include accumulated
deductible employee contributions within the meaning of Section 72(o)(5)(B) of
the Code for plan years beginning prior to January 1, 1989.
- 29 -
Unless otherwise elected in the Adoption Agreement, if an Employee terminates
service, and elects, in accordance with the provisions of the Plan, to receive
the value of the employee's vested account balance, the nonvested portion shall
be treated as a forfeiture. If the Employee elects to have distributed less
than the entire vested portion of the account balance derived from employer
contributions, the part of the nonvested portion that will be treated as a
forfeiture is the total nonvested portion multiplied by a fraction, the
numerator of which is the amount of the distribution attributable to employer
contributions and the denominator of which is the total value of the vested
employer derived account balance.
If an Employee receives a distribution and the Employee resumes employment
covered under the Plan, the Employee's employer-derived account balance shall be
restored to the amount on the date of distribution if the Employee repays to the
Plan the full amount of the distribution attributable to Employer contributions
before the earlier of five (5) years after the first date on which the
Participant is subsequently re-employed by the Employer, or the date the
Participant incurs five (5) consecutive Breaks in Service following the date of
the distribution. If an Employee is deemed to receive a distribution pursuant to
this section, and the Employee resumes employment covered under the Plan before
the date the Participant incurs five (5) consecutive Breaks in Service, upon the
reemployment of such Employee, the employer-derived account balance of the
Employee will be restored to the amount on the date of such deemed distribution.
Unless otherwise elected in the Adoption Agreement, such forfeiture shall be
allocated in the same manner as a contribution by the Employer for the Year in
which said forfeiture occurred. Notwithstanding any provision herein to the
contrary, forfeitures resulting from contributions by an Employer shall not be
reallocated for the benefit of another adopting Employer.
If a Participant is re-employed following a Break in Service and is entitled to
restoration of any amount of his Accounts which was forfeited as a result of
such Break in Service, such amount shall be restored in the manner specified in
the Adoption Agreement.
- 30 -
ARTICLE V
DISTRIBUTIONS
2.5.1 Commencement of Distribution.
(a) Immediate Distribution. A Participant whose employment is
terminated for any reason, other than resignation or discharge prior to his
Early Retirement Date or his Normal Retirement Date, may elect upon his
termination of employment to begin distribution of his Distributable Benefit
within a reasonable period after the Distribution Date as of which his
Distributable Benefit is determined, or as of the date determined under
subsection (b), below, if that date is earlier. If a Participant does not
so elect, distribution of the Participant's Distributable Benefit shall in
no event begin later than the date determined under subsection (b), below.
(b) Deferred Distribution. Except in the case of amounts subject to
Section 2.5.2(h) for which a Participant's consent is not required, unless
the Employer elects in the Adoption Agreement to permit the Employee to
elect earlier commencement and the Employee so elects or the Employee elects
to further defer distribution, if the employment of a Participant is
terminated by reason of resignation or discharge prior to either his Early
Retirement Date or his Normal Retirement Date, distribution of his
Distributable Benefit shall be deferred and commenced on the sixtieth (60th)
day after the close of the later of the following Plan Years:
(i) The Plan Year during which the Participant attains the
earlier of age sixty-five (65) or the Normal Retirement Age;
(ii) The Plan Year during which the tenth (lOth) anniversary of
the commencement of the Participant's participation in the Plan
occurs; or
(iii) The Plan Year during which the Participant terminates
service with the Employer.
- 31 -
If, however, the Employer selects an Early Retirement Date in the Adoption
Agreement, a Participant who terminates employment before satisfying the age
requirement for early retirement but has satisfied any service requirement
shall be entitled to a distribution of his Distributable Benefit in
accordance with subsection (a) above upon attaining such age. If
distribution is so deferred, unless otherwise determined by the Plan
Administrator, the Trustee at the Plan Administrator's direction shall
transfer the Distributable Benefit to a Segregated Fund from which
distribution shall thereafter be made. Such transfer shall be made as of
the Distribution Date. Notwithstanding the foregoing, the failure of a
Participant and spouse to consent to a distribution while a benefit is
immediately distributable, within the meaning of Section 2.5.2(j), shall be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this section.
(c) Required Distribution. Notwithstanding anything herein to the
contrary, unless the Participant has made an appropriate election by
December 31, 1983 to defer distribution which has not been revoked or
modified, the Participant's benefit shall be distributed to the Participant
not later than April 1 of the calendar year following the calendar year in
which he attains age 70-1/2 (the required beginning date) or shall be
distributed, commencing not later than April 1 of such calendar year in
accordance with regulations prescribed by the Secretary of the Treasury over
a period not extending beyond the life expectancy of the Participant or the
life expectancy of the Participant and a beneficiary designated by the
Participant. The amount required to be distributed for each calendar year,
beginning with distributions for the first distribution calendar year, must
at least equal the quotient obtained by dividing the Participant's benefit
by the applicable life expectancy. Unless otherwise elected by the
Participant (or spouse, if distributions begin after death and the spouse is
the designated beneficiary) by the time distributions are required to begin,
the life expectancy of the Participant and the Participant's spouse shall be
recalculated annually. Other than for a life annuity, such election shall
be irrevocable as to the Participant or spouse and shall apply to all
subsequent years. The life expectancy of a non-spouse beneficiary may not
be recalculated. Life expectancy and joint and last survivor expectancy
shall be computed by use of the expected return multiples in Tables V and VI
of Section 1.72-9 of the Treasury Regulations. For calendar years beginning
after
- 32 -
December 31, 1988, the amount to be distributed each year, beginning with
distributions for the first distribution calendar year shall not be less
than the quotient obtained by dividing the Participant's benefit by the
lesser of (1) the applicable life expectancy or (2) if the Participant's
spouse is not the designated beneficiary, the applicable divisor then
determined from the table set forth in Q&A-4 of Section 1.401(a)(9)-2 of the
proposed regulations. Distributions after the death of the Participant shall
be distributed using the applicable life expectancy as the relevant divisor
without regard to Proposed Regulations Section 1.401(a)(9)-2. The minimum
distribution for subsequent calendar years, including the minimum
distribution for the distribution calendar year in which the Participant's
required beginning date occurs, must be made on or before December 31 of
that distribution calendar year.
(d) Distribution After Death. Unless the Participant has made an
appropriate election by December 31, 1983 to extend the period of
distribution after his death and the, election has not been revoked or
modified, the following provisions shall apply. If distribution of the
Participant's benefit has begun and the Participant dies before his entire
benefit has been distributed to him, the remaining portion of such benefit
shall be distributed at least as rapidly as under the method of distribution
being used as of the date of the Participant's death.
If the Participant dies before the distribution of his benefit has begun,
the entire interest of the Participant shall be distributed by December 31
of the calendar year containing the fifth (5th) anniversary of the death of
such Participant, provided that if any portion of the Participant's benefit
is payable to or for the benefit of a designated beneficiary and such
portion is to be distributed in accordance with regulations issued by the
Secretary of the Treasury over the life of, or over a period not extending
beyond the life expectancy of such designated beneficiary, such
distributions shall begin not later than December 31 of the calendar year
immediately following the calendar year of the Participant's death or such
later date as may be provided by regulations issued by the Secretary of the
Treasury. If the designated beneficiary is the surviving spouse of the
Participant the date on which the distributions are required to begin shall
not be earlier than the later of December 31 of the calendar year
immediately following the calendar year in which the Participant had died
and December 31 of the calendar year in which the Participant would have
attained age 70-1/2.
- 33 -
If the surviving spouse thereafter dies before the distributions to such
spouse begin and any benefit is payable to a contingent beneficiary, the
date on which distributions are required to begin shall be determined as if
the surviving spouse were the Participant.
If the Participant has not specified the manner in which benefits are
payable by the time of his or her death, the Participant's designated
beneficiary must elect the method of distribution no later than the earlier
of (1) December 31 of the calendar year in which distributions would be
required to begin under this section, or (2) December 31 of the calendar
year which contains the fifth anniversary of the date of death of the
Participant. If the Participant has no designated beneficiary, or if the
designated beneficiary does not elect a method of distribution, distribution
of the Participant's entire interest must be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant's death.
(e) Payments to Children. In accordance with regulations issued by
the Secretary of the Treasury, any amount paid to a child shall be treated
as if it had been paid to the surviving spouse if such amount shall become
payable to the surviving spouse upon such child reaching majority (or other
designated event permitted under such regulations).
(f) Incidental Death Benefit Distributions. Any distribution required
by the rules applicable to incidental death benefits shall be treated as a
distribution required by this Section. All distributions required under
this Section 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.
(g) Distributions. For the purposes of this section, distribution of
a Participant's interest is considered to begin on the Participant's
required beginning date or the date distribution is required to begin to the
surviving spouse. If distribution in the form of an annuity irrevocably
commences to the Participant before the required beginning date, the date
distribution is considered to begin is the date distribution actually
commences.
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(h) Definitions.
(1) Applicable life expectancy. The life expectancy (or joint
and last survivor expectancy) calculated using the attained age of the
Participant (or designated beneficiary) as of the Participant's (or
designated beneficiary's) birthday in the applicable calendar year
reduced by one for each calendar year which has elapsed since the date
life expectancy was first calculated. If life expectancy is being
recalculated, the applicable life expectancy shall be the life
expectancy as so recalculated. The applicable calendar year shall be
the first distribution calendar year, and if life expectancy is being
recalculated such succeeding calendar year.
(2) Designated beneficiary. The individual who is designated as
the beneficiary under the Plan in accordance with Section 401(a)(9)
and the proposed regulations thereunder.
(3) Distribution calendar year. A calendar year for which a
minimum distribution is required. For distributions beginning before
the Participant's death, the first distribution calendar year is the
calendar year immediately preceding the calendar year which contains
the Participant's required beginning date. For distributions
beginning after the Participant's death, the first distribution
calendar year is the calendar year in which distributions are required
to begin.
(4) Participant's benefit.
(i) 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.
- 35 -
(ii) Exception for second distribution calendar year. For
purposes of paragraph (i) above, if any portion of the minimum
distribution for the first distribution calendar year is made in
the second distribution calendar year on or before the required
beginning date, the amount of the minimum distribution made in
the second distribution calendar year shall be treated as if it
had been made in the immediately preceding distribution calendar
year.
(5) Required beginning date.
(i) General rule. The required beginning date of a
Participant is the first day of April of the calendar year
following the calendar year in which the Participant attains age
70-1/2.
(ii) Transitional 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-5-percent owners. The required beginning date
of a Participant who is not a 5-percent owner is the first
day of April of the calendar year following the calendar
year in which the later of retirement or attainment of age
70-1/2 occurs.
(II) 5-percent owners. The required beginning date of
a Participant who is a 5-percent owner during any year
beginning after December 31, 1979, is the first day of April
following the later of:
(A) the calendar year in which the Participant
attains age 70-1/2, or
(B) the earlier of the calendar year with or
within which ends the Plan Year in which the
Participant becomes a 5-percent owner, or the calendar
year in which the Participant retires.
The required beginning date of a Participant who is not a 5-
percent owner who attains age 70-1/2 during 1988 and who has
not retired as of January 1, 1989, is April 1, 1990.
- 36 -
(iii) 5-percent owner. A Participant is treated as
a 5-percent owner for purposes of this section if such
Participant is a 5-percent owner as defined in Section
416(i) of the Code (determined in accordance with Section
416 but without regard to whether the Plan is top-heavy) at
any time during the Plan Year ending with or within the
calendar year in which such owner attains age 66-1/2 or any
subsequent Plan Year.
(iv) Once distributions have begun to a 5-percent
owner under this section, they must continue to be
distributed, even if the Participant ceases to be a 5-percent
owner in a subsequent year.
(i) Transitional rule.
(1) Notwithstanding the other requirements of this Section
and subject to the requirements of Section 2.5.2, distribution on
behalf of any employee, including a 5-percent owner, may be made
in accordance with all of the following requirements (regardless
of when such distribution commences):
(a) The distribution by the trust is one which would
not have disqualified such trust under Section 401(a)(9) of
the Internal Revenue Code as in effect prior to amendment by
the Deficit Reduction Act of 1984.
(b) The distribution is in accordance with a method of
distribution designated by the employee whose interest in
the trust is being distributed or, if the employee is
deceased, by a beneficiary of such employee.
(c) Such designation was in writing, was signed by the
employee or the beneficiary, and was made before January 1,
1984.
- 37 -
2.5.2 Method of Distribution. Subject to the provisions of Section
2.5.1 above and any security interest in a loan from the Plan for which any
necessary spousal consent has been obtained (to the extent such security
interest is used as repayment of the loan), distribution shall be made by one of
the following methods, as determined in accordance with the election of the
Participant (or in the case of death, his Beneficiary) with such spousal
consents as may be required by law:
(a) In a single distribution, as designated by the Employer in the
Adoption Agreement;
(b) In substantially equal annual, quarterly or monthly installments
over a period of more than one year but which does not exceed the period
designated in the Adoption Agreement, as selected by the Participant
(provided that such period is not greater than the Participant's life
expectancy as of the annuity starting date), plus accrued net income. If
distribution is to be so made in installments, the Plan Administrator shall
cause the undistributed portion of the Distributable Benefit to be
transferred to a Segregated Fund, from which installment payments shall
thereafter be withdrawn from time to time.
(c) By the purchase and delivery of a single premium, nontransferable,
fully refundable, annuity policy issued by a legal reserve life insurance
company providing for payments over such period as may be designated in the
Adoption Agreement as selected by the Participant; provided, however, unless
the Employer has designated a life annuity distribution option in the
Adoption Agreement, in the event of distribution of such an annuity policy
to a Participant, such duration shall be for a fixed duration which is less
than the Participant's life expectancy as of the annuity starting date. The
refund feature under such annuity policy following the death of the
Participant shall insure to the benefit of the person or persons designated
by the Participant as his Beneficiary.
(d) Any alternative method of equivalent value contained in the Plan
at any time on or after the first day of the first Plan Year beginning after
1988 to which the Participant consents.
- 38 -
(e) Annuity Payments
(1) Requirement of Annuity Payment. The provisions of this
Section 2.5.2(e) shall apply to any Participant who is credited with
at least one Hour of Service with the Employer on or after August 23,
1984, and such other Participants as provided in Section 2.5.2(k).
Unless an optional form of benefit is selected pursuant to a qualified
election within the 90-day period ending on the annuity starting date,
a married Participant's vested Account balance will be paid in the
form of a Joint and Survivor Annuity and an unmarried Participant's
vested Account balance will be paid in the form of a life annuity.
Unless an optional form of benefit has been selected within the
election period pursuant to a qualified election, if a Participant
dies before the annuity starting date then the Participant's vested
Account balance shall be applied toward the purchase of a
Preretirement Survivor Annuity.
Notwithstanding the other provisions of this Section 2.5.2(e), if the
Plan is designated in the Adoption Agreement as a Cash or Deferred
Profit Sharing Plan or a Profit Sharing Plan and the Employer does not
designate a life annuity distribution option in the Adoption
Agreement, the Qualified Joint and Survivor Annuity and Preretirement
Survivor Annuity forms of distribution shall not be available.
However, a Participant's surviving spouse shall be entitled to elect
distribution of the Participant's vested Account balance in the manner
provided by Section 3.8.3.
A Participant's vested Account balance is the aggregate value of the
Participant's vested account balances derived from employer and
employee contributions (including rollovers), whether vested before or
upon death, including the proceeds of insurance contracts, if any, on
the Participant's life. The provisions hereof shall apply to a
Participant who is vested in amounts attributable to employer
contributions, employee contributions (or both) at the time of death
or distribution.
- 39 -
The Participant may elect to have such annuity distributed upon
attainment of the earliest retirement age under the Plan. A surviving
spouse may elect to have such annuity distributed within the ninety
(90) day period commencing on the date of the Participant's death.
(2) Election to Waive Annuity Payment. A Participant may elect
at any time during the applicable election period to waive the Joint
and Survivor Annuity form of benefit or the Preretirement Survivor
Annuity form of benefit (or both) and may revoke any such election at
any time during the applicable election period.
(3) Spousal Consent Required. An election to waive any annuity
form of benefit shall not take effect unless the spouse of the
Participant consents in writing to the election, such election
designates a specific beneficiary, including any class of
beneficiaries or contingent beneficiaries, or, solely in the case of a
waiver of a Joint and Survivor Annuity, a form of benefits which may
not be changed without spousal consent (or the consent of the spouse
expressly permits designations by the Participant without any
requirement of further consent by the spouse), and the spouse's
consent acknowledges the effect of such election and is witnessed by a
Plan representative or a notary public, or it is established to the
satisfaction of the Plan Administrator that such consent cannot be
obtained because there is no spouse or because the spouse cannot be
located. A spouse may not revoke the consent without the approval of
the Participant.
Any consent by a spouse obtained under this provision (or
establishment that the consent of a spouse may not be obtained) shall
be effective only with respect to such spouse. A consent that permits
designations by the Participant without any requirement of further
consent by such spouse must acknowledge that the spouse has the right
to limit consent to a specific beneficiary, and a specific form of
benefit where applicable, and that the spouse voluntarily elects to
relinquish either or both of such rights. A revocation of a prior
waiver may be made by a Participant without the consent of the spouse
at any time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under this
provision shall be valid unless the Participant has received notice as
provided in subsection (4) below.
- 40 -
(4) Written Explanations. The Plan Administrator shall provide
each Participant no less than 30 days and no more than 90 days before
the annuity starting date a written explanation of -
(a) the terms and conditions of a Joint and Survivor
Annuity;
(b) the Participant's right to make and the effect of an
election to waive the Joint and Survivor Annuity form of benefit;
(c) the rights of the Participant's spouse to consent to a
Participant's election;
(d) the right to make and the effect of a revocation of an
election.
The Plan Administrator shall provide to each Participant within
the applicable period a written explanation of a Preretirement
Survivor Annuity comparable to that provided with respect to a
Joint and Survivor Annuity.
(5) Applicable Period. The applicable period means with respect
to a Participant, whichever of the following periods ends last:
(a) The period beginning with the first day of the Plan Year
in which the Participant attains age 32 and ending with the close
of the Plan Year preceding the Plan Year in which the Participant
attains age 35.
(b) A reasonable period ending after the individual becomes
a Participant.
(c) A reasonable period ending after the Plan ceases to
fully subsidize costs.
(d) A reasonable period ending after Section 401(a)(11) of
the Code first applies to the Participant.
(e) A reasonable period ending after separation from service
in case of a Participant who separates before attaining age 35.
- 41 -
For purposes of applying the foregoing, a reasonable period
ending after the enumerated events described in (b), (c) and (d)
is the end of the two-year period beginning one year prior to the
date the applicable event occurs and ending one year after that
date. In the case of a Participant who separates from service
before the Plan Year in which age 35 is attained, notice shall be
provided within the two-year period beginning prior to separation
and ending one year after separation. If such a Participant
there after returns to employment with the Employer, the
applicable period for such Participant shall be redetermined.
(6) Applicable Election Period. The applicable election period
means -
(a) in the case of an election to waive a Joint and Survivor
Annuity, the ninety (90) day period ending on the annuity
starting date; and
(b) in the case of an election to waive a Preretirement
Survivor Annuity, the period which begins on the first day of the
Plan Year in which the Participant attains age thirty-five (35)
and ends on the date of the Participant's death; provided that in
the case of a Participant who is separated from service, such
period shall not begin later than the date of such separation
from service.
A Participant who will not yet attain age 35 as of the end of any
current Plan Year may make a special qualified election to waive
the Preretirement Survivor Annuity for the period beginning on
the date of such election and ending on the first day of the Plan
Year in which the Participant will attain age 35. Such election
shall not be valid unless the Participant receives a written
explanation of the Preretirement Survivor Annuity in such terms
as are comparable to the explanation required under subsection
(4). Preretirement Survivor Annuity coverage will be
automatically reinstated as of the first day of the Plan Year in
which the Participant attains age 35. Any new waiver on or after
such date shall be subject to the full requirements of this
section.
- 42 -
(7) Annuity Starting Date. The annuity starting date means the
first day of the first period for which an amount is payable as an
annuity or any other form.
(8) Marriage Requirement. Notwithstanding the foregoing, the
benefits under the Plan shall not be provided in the form of a Joint
and Survivor Annuity or a Preretirement Survivor Annuity unless the
Participant and his spouse have been married throughout the one (1)
year period ending on the earlier of the Participant's annuity
starting date or the date of the Participant's death. If a
Participant marries within one (1) year before the annuity starting
date and the Participant and his spouse in such marriage have been
married for at least a one (1) year period ending on or before the
date of the Participant's death, the Participant and such spouse shall
be treated as having been married throughout the required period. A
former spouse shall be treated as the spouse or surviving spouse and a
current spouse will not be treated as the spouse or surviving spouse
to the extent provided under a qualified domestic relations order as
described in Section 414(p) of the Code.
(f) Terms of Annuity Contracts. Any annuity contract distributed from
the Plan must be nontransferable. The terms of any annuity contract
purchased and distributed by the Plan to a Participant or spouse shall
comply with the requirements of the Plan. If the Participant's benefit is
distributed in the form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with the requirements
of Section 401(a)(9) of the Code and the proposed regulations thereunder.
(g) Incidental Death Benefits. 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
fifty (50%) percent of the present value of the amount available for
distribution is paid within the life expectancy of the Participant.
- 43 -
(h) Consents. If the value of a Participant's vested account balance
derived from Employer and Employee contributions does not exceed (and at the
time of any prior distribution did not exceed) $3,500, the consent of the
Participant and his or her spouse shall not be required; provided that if
such value exceeds $3,500, the Participant and spouse (or where either has
died, the survivor) must consent to any distribution of such account
balance. The consent shall be obtained in writing within the 90 day period
ending on the annuity starting date. Neither the consent of the Participant
nor the Participant's spouse shall be required to the extent that a
distribution is required to satisfy Section 401(a)(9) or Section 415 of the
Code. In addition, upon termination of the Plan if the Plan does not offer
an annuity option (purchased from a commercial provider) and if the Employer
or any entity within the same controlled group does not maintain another
defined contribution plan (other than an employee stock ownership plan as
defined in Section 4975(e)(7) of the Code), the Participant's account
balance in the Plan will, without the Participant's consent, be distributed
to the Participant. However, if any entity within the same controlled group
as the Employer maintains another defined contribution plan (other than an
employee stock ownership plan as defined in Section 4975(e)(7) of the Code),
then the Participant's account balance will be transferred, without the
Participant's consent, to the other Plan if the Participant does not consent
to an immediate distribution.
(i) Zero Benefits. If the value of the Participant's vested and
nonforfeitable interest in the Plan at the time of his termination of
employment is zero, the Participant shall be deemed to have received a
distribution of such interest.
(j) Restrictions on Immediate Distributions. The Plan Administrator
shall notify the Participant and the Participant's spouse of the right to
defer any distribution until the Participant's account balance in the Plan
is no longer immediately distributable. Such notification shall include a
general description of the material features and an explanation of the
relative values of the optional forms of benefit available under the Plan in
a manner that would satisfy the notice requirements of Section 417(a)(3) of
the Code and shall be provided no less than 30 days and no more
- 44 -
than 90 days prior to the annuity starting date. Notwithstanding the
foregoing, only the Participant need consent to the commencement of a
distribution in the form of a qualified joint and survivor annuity while the
Participant's account balance in the Plan is immediately distributable.
Furthermore, if payment in the form of a qualified joint and survivor
annuity is not required with respect to the Participant pursuant to the
Plan, only the Participant need consent to the distribution of an account
balance that is immediately distributable. The Participant's account
balance is immediately distributable if any part of the Participant's
account balance could be distributed to the Participant (or surviving
spouse) before the Participant attains (or would have attained if not
deceased) the later of age 62 or the Normal Retirement Age.
(k) Transitional Rules.
(1) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive. the benefits prescribed by the
previous sections of the article must be given the opportunity to
elect to have the prior sections of this article apply if such
Participant is credited with at least one hour of service under this
Plan or a predecessor plan in a Plan Year beginning on or after
January 1, 1976, and such Participant has at least 10 years of vesting
service when he or she separated from service.
(2) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one hour of service under this
Plan or a predecessor plan on or after September 2, 1974, and who is
not otherwise credited with any service in a plan Year beginning on or
after January 1, 1976, must be given the opportunity to have his or
her benefits paid in accordance with Section (4) below.
(3) The respective opportunities to elect (as described above)
must be afforded to the appropriate Participants during the period
commencing on August 23, 1984, and ending on the date benefits would
otherwise commence to said Participants.
- 45 -
(4) Any Participant who has elected pursuant to Section (2)
above and any Participant who does not elect under Section (1) or who
meets the requirements of Section (1) except that such Participant
does not have at least 10 years of vesting service when he or she
separates from service, shall have his or her benefits distributed in
accordance with all of the following requirements if benefits would
have been payable in the form of a life annuity:
(i) Automatic joint and survivor annuity. If benefits in
the form a life annuity become payable to a married Participant
who:
(1) begins to receive payments under the Plan on or
after normal retirement age; or
(2) dies on or after normal retirement age while still
working for the Employer; or
(3) begins to receive payments on or after the
qualified early retirement age; or
(4) separates from service on or after attaining normal
retirement age (or the qualified early retirement age) and
after satisfying the eligibility requirements for the
payment of benefits under the plan and thereafter dies
before beginning to receive such benefits; then such
benefits will be received under this Plan in the form of a
qualified joint and survivor annuity, unless the Participant
has elected otherwise during the election period. The
election period must begin at least 6 months before the
Participant attains qualified early retirement age and end
not more than 90 days before the commencement of benefits.
Any election hereunder will be in writing and may be changed
by the Participant at any time.
- 46 -
(ii) Election of early survivor annuity. A Participant who
is employed after attaining the qualified early retirement age
will be given the opportunity to elect, during the election
period, to have a survivor annuity payable on death. If the
Participant elects the survivor annuity, payments under such
annuity must not be less than the payments which would have been
made to the spouse under the qualified joint and survivor annuity
if the Participant had retired on the day before his or her
death. Any election under this provision will be in writing and
may be changed by the Participant at any time. The election
period begins on the later of (1) the 90th day before the
Participant attains the qualified early retirement age, or (2)
the date on which participation begins, and ends on the date the
Participant terminates employment.
(iii) For purposes of this Section (4):
(1) Qualified early retirement age is the later of:
(i) the earliest date, under the Plan, on which
the Participant may elect to receive retirement
benefits,
(ii) the first day of the 120th month beginning
before the Participant reaches normal retirement age,
or
(iii) the date the Participant begins
participation.
(2) Qualified joint and survivor annuity is an annuity
for the life of the Participant with a survivor annuity for
the life of the spouse as otherwise described in the Plan.
2.5.3 Nature of Distributions. The nature of the distribution of a
Participant's Distributable Benefit shall be as hereinafter provided.
- 47 -
(a) Trust Fund and Segregated Funds. Subject to the Joint
and Survivor Annuity requirements, except as provided in subsection (b)
with regard to Life Insurance Policies, distribution of a Participant's
Distributable Benefit shall consist of cash or property, or an annuity
contract as provided in Section 2.5.2 above.
(b) Insurance Policies. In the event that the Trustee has
purchased Life Insurance Policies on the life of the Participant, the
values and benefits available with respect to each such Policy shall be
distributed as follows:
(i) If the Participant's employment terminates for any
reason other than death, then the Trustee shall either
surrender the Life Insurance Policy for its available cash
value and distribute the proceeds as provided in subsection
(a) above or, at the election of the Participant, distribute
the Life Insurance Policy to the Participant, provided the
Participant, has a vested and nonforfeitable interest in his
Accounts in an amount at least equal to the cash value
thereof.
(ii) If the Participant's employment terminates by
reason of death, the beneficiary designated by the
Participant in accordance with the terms of the Plan shall
be entitled to receive from the Trustee the full amount of
the proceeds thereof.
The Trustee shall apply for and be the owner of any Policies
purchased under the terms of the Plan. The Policies must
provide that the proceeds are payable to the Trustee subject
to the Trustee's obligation to pay over the proceeds to the
designated Beneficiary. A Participant's spouse will be the
designated beneficiary of the proceeds of such Policies
unless a qualified election has been made in accordance with
Section 2.5.2(e) of the Plan, if applicable. Under no
circumstances shall the trust retain any part of the
proceeds. In the event of any conflict between the terms of
the Plan and the terms of any Policies purchased hereunder,
the Plan provisions shall control.
- 48 -
2.5.4 Advance Distributions. If the Employer elects in the Adoption
Agreement to permit advance distribution to a Participant or his Beneficiary
after his employment has terminated and before he is otherwise entitled to
distribution of his Distributable Benefit but in no event earlier than a
reasonable period following the Distribution Date, the Trustee upon the request
of the Participant or Beneficiary shall make advance distributions to him or to
his Beneficiary. The aggregate of such an advance distribution shall not exceed
the sum of the vested and nonforfeitable interest in the Participant's Accounts.
If the Employer elects in the Adoption Agreement to forfeit nonvested
amounts immediately upon distribution of the Employee's entire vested account
balance on termination of service, an Employee who terminates service and elects
to receive the value of the Employee's vested account balance shall forfeit the
nonvested portion. If the Employee elects to have distributed less than the
entire vested portion of the account balance derived from Employer
contributions, the part of the nonvested portion that is treated as a forfeiture
is the total nonvested portion multiplied by a fraction, the numerator of which
is the amount of the distribution attributable to Employer contributions and the
denominator of which is the total value of the vested Employer derived account
balance.
Except as provided in the preceding paragraph, if a Participant receives a
distribution which reduces the balance in his Employer Account when he has less
than a one hundred percent (100%) vested and nonforfeitable interest in the
Account, the amount, if any, of the Participant's vested and nonforfeitable
interest in the undistributed balance of said Account on his Accrual Date shall
be transferred to a Segregated Account and shall not be less than an amount
("X") determined by the formula: X = P (AB + (R x D)) - (R x D). For purposes
of applying the formula: P is the vested percentage at the relevant time; AB is
the account balance at the relevant time; and D is the amount of the
distribution; and R is the ratio of the account balance at the relevant time to
the account balance after distribution.
2.5.5 Hardship Distributions. If the Plan is designated in the Adoption
Agreement as a Cash or Deferred Profit Sharing Plan or a Profit Sharing Plan and
the Employer elects in the Adoption Agreement to permit hardship distributions,
a Participant may request a distribution from the Plan as a result
- 49 -
of immediate and heavy financial needs of the Participant to the extent that the
distribution is necessary to satisfy such financial needs. Hardship
distributions are subject to the spousal consent requirements contained in
Sections 401(a)(11) and 417 of the Code. The determination of whether a
Participant has an immediate and heavy financial need shall be made by the Plan
Administrator on the basis of all relevant facts and circumstances. A
distribution shall be deemed to be made on account of an immediate and heavy
financial need if the distribution is on account of:
(a) Deductible medical expenses described in Section 213(d) of the
Code incurred or necessary for medical care of the Participant, his spouse
or dependents;
(b) Purchase (excluding mortgage payments) of a principal residence
for the Participant;
(c) Cost of tuition and related educational fees for the next 12
months of post-secondary education for the Participant, his spouse, children
or dependents; or
(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.
A distribution shall be considered as necessary to satisfy an immediate and
heavy financial need of the Participant only if:
(a) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans under all plans maintained
by the Employer;
(b) All plans maintained by the Employer provide that the
Participant's elective Deferrals and employee contributions shall be
suspended for twelve (12) months after the receipt of the hardship
distribution;
(c) The distribution is not in excess of the amount of an immediate
and heavy financial need (including amounts necessary to pay any federal,
state or local income taxes or penalties reasonably anticipated to result
from the distribution); and
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(d) All plans maintained by the Employer provide that the Participant
may not make Elective Deferrals for the Participant's taxable year
immediately following the taxable year of the hardship distribution in
excess of the applicable limit under Section 402(g) of the Code for such
taxable year less the amount of such Participant's Elective Deferrals for
the taxable year of the hardship distribution.
In the event of such distribution, when a Participant is less than one
hundred percent (100%) vested in his Employer Account or Matching Account,
the vested interest in the Employer Account or Matching Account shall
thereafter be determined in accordance with Section 2.5.4 of the Plan.
2.5.6 In Service Distributions.
(a) Cash or Deferred Profit Sharing Plans. If the Plan is designated
in the Adoption Agreement as a Cash or, Deferred Profit Sharing plan and if
the Employer elects in the Adoption Agreement to permit distributions to a
Participant after attaining age 59-1/2 but prior to his termination of
employment, a Participant shall be entitled to receive a distribution of all
or a part of his interest in the Plan upon filing a written request with the
Plan Administrator; provided that no distribution shall be made unless the
interest of the Participant in the Account from which the distribution is to
be made is fully vested and nonforfeitable and the balance in the Account to
be distributed has accumulated for at least two (2) years or the individual
has been a Participant for five (5) or more Plan Years; and the distribution
of Elective Deferrals and Qualified Non-Elective Contributions satisfy the
limitations imposed by Part II, Article VII. Any distribution shall be
subject to the written consent of the Participant's spouse.
(b) Profit Sharing Plans. If the Plan is designated in the Adoption
Agreement as a Profit Sharing Plan and if the Employer elects in the
Adoption Agreement to permit distributions to a Participant prior to his
termination of employment, a Participant shall be entitled to receive a
distribution of all or part of his interest in the Plan upon filing a
written request with the Plan Administrator; provided that no distribution
shall be made unless the interest of the Participant in the Account from
which the distribution
- 51 -
is to be made is fully vested and nonforfeitable and the balance in the
Account to be distributed has accumulated for at least two (2) years or the
individual has been a Participant for five (5) or more Plan Years; provided
further that in-service distributions shall be permitted subject to the
terms of Section 2.5.5 if the Employer elects in the Adoption Agreement to
have such provision apply. Any distribution shall be subject to the written
consent of the Participant's spouse.
(c) All Plans. Upon attainment of his Normal Retirement Date, a
Participant shall be entitled to receive a distribution of all or a part of
his interest in the Plan upon filing a written request with the Plan
Administrator. In service distributions are permitted at the election of the
Participant for amounts held in a Segregated Account attributable to a
rollover from another plan regardless of age or periods of participation.
Any distribution shall be subject to the written consent of the
Participant's spouse.
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ARTICLE VI
CONTINGENT TOP HEAVY PROVISIONS
2.6.1 Top Heavy Requirements. If the Plan becomes a Top Heavy Plan during
any Plan Year, the following provisions shall supersede any conflicting
provisions in the Plan or Adoption Agreement and apply for such Plan Year:
(a) Except as otherwise provided 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. 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 (or any equivalent provided in
the plan), or (ii) the Participant's failure to make mandatory employee
contributions to the plan, or (iii) compensation less than a stated amount.
Neither Elective Deferrals nor Matching Contributions may be taken into
account for the purpose of satisfying the minimum allocation.
For purposes of computing the minimum allocation, Compensation shall mean a
Participant's compensation as defined in Section 3.2.1(h) of the Plan.
The minimum allocation provided above shall not apply to any Participant who
was not employed by the Employer on the last day of the Plan Year.
The minimum allocation provided above shall not apply to any Participant to
the extent the Participant is covered under any other plan or plans of the
Employer and Employer has provided in the Adoption Agreement that the
minimum allocation or benefit requirement applicable to top-heavy plans will
be met in the other plan or plans.
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(b) References in Section 3.2.1(d), pertaining to combined plan
limitations, to "1.25" shall be applied by substituting "1.0" for "1.25"
therein. Reference in Section 3.2.1(e), pertaining to a special transition
rule, to "$51,875" shall be applied by substituting "$41,500" for "$51,875"
therein.
(c) The vested and nonforfeitable interest of each Participant shall
be equal to the percentage determined under the vesting schedule specified
in the Adoption Agreement if the Plan becomes a Top Heavy Plan, or if no
vesting schedule is specified, the percentage determined under the following
schedule:
Years of Service Percentage
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
The top-heavy minimum vesting schedule applies to all benefits within the
meaning of Section 411(a)(7) of the Code, except those attributable to
employee contributions, including benefits accrued before the effective date
of Section 416 of the Code and benefits accrued before the Plan becomes 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. Any minimum
allocation required (to the extent required to be nonforfeitable under
Section 416(b)) may not be forfeited under Section 411(a)(3)(B) or (D) of
the Code.
2.6.2 Top Heavy Definitions. The following terms, as used in this Plan,
shall have the following meaning:
(a) "Key Employee": An Employee or former employee who, at any time
during the Determination Period is either:
(i) an officer of the Employer having an Annual Compensation
greater than fifty (50%) percent of the amount in effect under Section
415(b)(1)(A) of the Code;
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(ii) an owner (or a person considered an owner under Section 318
of the Code) of one of the ten largest interests in the Employer if
such individual's Annual Compensation from the Employer is more than
the limitation in effect under Section 415(c)(1)(A) of the Code;
(iii) any person who owns directly or indirectly more than five
(5%) percent of the outstanding stock of the Employer or stock
possessing more than five (5%) percent of the total combined voting
power of all stock of the Employer or, in the case of an
unincorporated Employer, the capital or profits interest in the
Employer;
(iv) any person who owns directly or indirectly more than one
(1%) percent of the outstanding stock of the Employer or stock
possessing more than one (1%) percent of the total combined voting
power of all stock of the Employer or, in the case of an
unincorporated Employer, the capital or profits interest in the
Employer and having an Annual Compensation from the Employer of more
than $150,000; or
(v) any beneficiary of a Key Employee. The determination of who
is a Key Employee shall be made in accordance with Section 416(i)(1)
of the Code and the regulations thereunder.
(b) "Aggregation Group": Each qualified retirement plan of the
Employer in which a Key Employee is a participant and each other qualified
retirement plan of the Employer which enables any plan in which a Key
Employee is a participant to meet the requirements of Section 401(a)(4) or
Section 410 of the Code.
(c) "Annual Compensation": 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.
(d) "Top-Heavy Plan": For any Plan Year beginning after December 31,
1983, the plan is top-heavy if any of the following conditions exists:
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(i) If the top-heavy ratio for the plan exceeds 60 percent and
the plan is not part of any required aggregation group or permissive
aggregation group of plans.
(ii) 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.
(iii) If the plan is a part of a required aggregation group and
part of a permissive aggregation group of plans and the top-heavy
ratio for the permissive aggregation group exceeds 60 percent.
(e) "Top-Heavy Ratio":
(i) If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the
Employer has not maintained any defined benefit plan which during the
5-year period ending on the Determination Date(s) has or has had
accrued benefits, the top-heavy ratio for this plan alone or for the
required or permissive aggregation group as appropriate is a fraction,
the numerator of which is the sum of the account balances of all Key
Employees as of the Determination Date(s) (including any part of any
account balance distributed in the 5-year period ending on the
Determination Date(s)), and the denominator of which is the sum of all
account balances (including any part of any account balance
distributed in the 5-year period ending on the Determination Date(s)),
both computed in accordance with Section 416 of the Code and the
regulations thereunder. Both the numerator and denominator of the
top-heavy ratio are increased to reflect any contribution not actually
made as of the Determination Date, but which is required to be taken
into account on that date under Section 416 of the Code and the
regulations thereunder.
- 56 -
(ii) If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the
Employer maintains or has maintained one or more defined benefit plans
which during the 5-year period ending on the Determination Date(s) has
or has had any accrued benefits, the top-heavy ratio for any required
or permissive aggregation group as appropriate is a fraction, the
numerator of which is the sum of account balances under the aggregated
defined contribution plan or plans for all Key Employees, determined
in accordance with (i) above, and the present value of accrued
benefits under the aggregated defined benefit plan or plans for all
Key Employees as of the Determination Date(s), and the denominator of
which is the sum of the account balances under the aggregated defined
contribution plan or plans for all Participants, determined in
accordance with (i) above, and the present value of accrued benefits
under the 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.
(iii) For purposes of (i) and (ii) above, the value of account
balances and the present value of accrued benefits will be determined
as of the most recent valuation date that falls within or ends with
the 12-month period ending on the Determination Date, except as
provided in 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 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. Deductible
employee contributions will
- 57 -
not be taken into account for purposes of computing the top-heavy
ratio. When aggregating plans, the value of account balances and
accrued benefits will be calculated with reference to the
Determination Dates that fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee shall
be determined under (a) the method, if any, that uniformly applies for
accrual purposes under all defined benefit plans maintained by the
Employer, or (b) if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual rate permitted under
the fractional rule of Section 411(b) (1)(C) of the Code.
(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":
(i) Each qualified plan of the Employer in which at least one
Key Employee participates or participated at any time during the
Determination Period (regardless of whether the plan has terminated).
(ii) Any other qualified plan of the Employer which enables a
plan described in (i) to meet the requirements of Sections 401(a)(4)
or 410 of the Code.
(h) "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.
(i) "Valuation Date": The date elected by the Employer in the
Adoption Agreement as of which account balances or accrued benefits are
valued for purposes of calculating the top-heavy ratio.
(j) "Present Value": Present value shall be based only on the
interest and mortality rates specified in the Adoption Agreement.
(k) "Determination Period": The Plan Year containing the
Determination Date and the four (4) preceding Plan Year.
(l) "Non-Key Employee": An Employee who is not a Key Employee.
- 58 -
2.6.3 Pairing Requirements. If an Employer adopts two or more defined
contribution plans by executing Adoption Agreements pursuant to this Plan or
another prototype plan for which the Mass Submitter is the same, the following
provisions shall apply:
(a) Only one of the Adoption Agreements may provide for permitted
disparity by integration with Social Security.
(b) For each Plan Year in which the paired plans are top-heavy the
Employer shall provide a minimum contribution equal to three (3%) percent of
Compensation for each Non-Key Employee (i) under the paired plan designated
by the Employer in the Adoption Agreement if the plans benefit the same
Participants, or in the case of a plan subject to Code Section 401(k) or
401(m), the same Participants are eligible to make elective deferrals or
employee contributions, or (ii) under both paired plans if the plans benefit
the same participants. Note: The same eligibility requirements in Section
A of the Adoption Agreement must be selected.
(c) In any Plan Year in which the paired plans are top-heavy, i.e.
the top-heavy ratio exceeds sixty (60%) percent, the denominators of the
defined benefit fraction and defined contribution fraction in Section
3.2.1(d) shall be computed by multiplying the dollar limitation by 1.0
instead of by 1.25.
- 59 -
ARTICLE VII
SPECIAL CODA LIMITATIONS
2.7.1 Limitation on Deferral Percentage for Highly Compensated
Employees. Notwithstanding any provision herein to the contrary, the actual
deferral percentage for all Highly Compensated Employees for each Plan Year must
not exceed the actual deferral percentage for all other Employees eligible to
participate by more than the greater of:
(a) the actual deferral percentage of such other Employees multiplied
by 1.25; or
(b) the actual deferral percentage of such other Employees multiplied
by 2.0, but in no event more than two (2) percentage points greater than the
actual deferral percentage of such other Employees.
For purposes hereof, the actual deferral percentages for a Plan Year for all
Highly Compensated Employees and for all other Employees respectively are the
averages of the ratios, calculated separately for each Employee in the
respective group, of the amount of Elective Contributions and Qualified Non-
Elective Contributions paid under the Plan on behalf of each such Employee for
such Plan Year including Excess Elective Deferrals to the Employee's
Compensation for such Plan Year (whether or not the Employee was a Participant
for the entire Plan Year) but excluding Elective Deferrals that are taken into
account in the Contribution Percentage test (provided the ADP test is satisfied
both with and without exclusion of those Elective Deferrals). An Employee who
would be a Participant but for the failure to have Elective Contributions made
on his behalf shall be treated as a Participant on whose behalf no Elective
Contributions are made. For purposes of calculating the actual deferral
percentages of Highly Compensated Employees who are 5 percent owners or among
the ten most highly paid Employees, Elective Contributions and Qualified Non-
Elective Contributions on behalf of a member of the Family of such Highly
Compensated Employees shall be taken into account and Compensation of such
Employees shall include the Elective Deferrals and Qualified Non-Elective
Contributions and Compensation for the Plan Year of members of his Family (as
determined in Section 414(q)(6) of the Code). A member of the Family of such
Highly Compensated Employees shall be disregarded as a separate Employee in
determining the actual deferral percentage both for Participants who are Highly
Compensated Employees and for all other Employees.
- 60 -
For purposes of determining the actual deferral percentage test, Elective
Contributions and Qualified Non-Elective Contributions must be made before the
last day of the twelve month period immediately following the Plan Year to which
the contributions relate.
The Employer shall maintain records sufficient to demonstrate satisfaction of
the actual deferral percentage test and the amount of Qualified Non-Elective
Contributions used in such test.
The determination and treatment of the actual deferral percentage amounts of any
Participant shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
2.7.2 Multiple Plan Limitations.
(a) The actual deferral percentage for any Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have Elective
Contributions (and Qualified Non-Elective Contributions if treated as
Elective Deferrals for purposes of the actual deferral percentage test)
allocated to his or her Accounts under two or more arrangements described in
Section 401(k) of the Code, that are maintained by the Employer, shall be
determined as if such Elective Deferrals (and, if applicable, such Qualified
Non-Elective Contributions) were made under a single arrangement. If a
Highly Compensated Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all cash or deferred
arrangements ending with or within the same calendar year shall be treated
as a single arrangement. Notwithstanding the foregoing, certain plans shall
be treated as separate if mandatorily disaggregated under regulations under
Section 401(k) of the Code.
(b) In the event that this Plan satisfies the requirements of Section
401(k), 401(a)(4) or 410(b) of the Code only if aggregated with one or more
other plans, or if one or more other plans satisfy the requirements of such
sections of the Code 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 in order to satisfy Section
401(k) of the Code only if they have the same Plan Year.
- 61 -
2.7.3 Limitation on Matching Contributions. Notwithstanding any
provision herein to the contrary, the average contribution percentage for all
Highly Compensated Employees for each Plan Year must not exceed the average
contribution percentage for all other Employees eligible to participate by more
than the greater of:
(a) the average contribution percentage of such other Employees
multiplied by 1.25; or
(b) the average contribution percentage of such other Employees
multiplied by 2.0, but in no event more than two (2) percentage points
greater than the average contribution percentage of such other Employees.
For purposes hereof, the average contribution percentages for a Plan Year for
all Highly Compensated Employees and for all other Employees respectively are
the averages of the ratios, calculated separately for each Employee in the
respective group, of the amount of Matching Contributions paid under the Plan on
behalf of each such Employee for such Plan Year, to the Employee's Compensation
for such Plan Year whether or not the Employee was a Participant for the entire
Plan Year. Such contribution percentage amounts shall include forfeitures of
Excess Aggregate Contributions or Matching Contributions allocated to the
Participant's Accounts which shall be taken into account in the Plan Year in
which such forfeiture is allocated. Forfeitures of Matching Contributions shall
be included as contribution percentage amounts only to the extent arch
forfeitures are used to reduce or supplement the Matching Contributions, as
specified in the Adoption Agreement. If so elected in the Adoption Agreement,
the Employer may include Qualified Non-Elective Contributions in the
contribution percentage amounts. The Employer may also elect to use Elective
Deferrals in the contribution percentage amounts so long as the ADP test is met
before the Elective Deferrals are used in the ACP test and continues to be met
following the exclusion of those Elective Deferrals that are used to meet the
ACP test. If an Elective Contribution or other contribution by an Employee is
required as a condition of participation in the Plan, any Employee who would be
a Participant if such Employee made such a contribution shall be treated as an
eligible Participant on behalf of whom no such contributions are made.
The Employer shall maintain records sufficient to demonstrate satisfaction of
the average contribution percentage test and the amount of Qualified Non-
Elective Contributions used in such test.
- 62 -
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.
2.7.4 Special Rules.
(a) Multiple Use: If one or more Highly Compensated Employees
participate in both a CODA and a plan subject to the ACP test maintained by
the Employer and the sum of the ADP and ACP of those Highly Compensated
Employees subject to either or both tests exceeds the Aggregate Limit, then
the ACP of those Highly Compensated Employees who also participate in a CODA
shall be reduced (beginning with such Highly Compensated Employee whose ACP
is the highest) so that the limit is not exceeded. The amount by which each
Highly Compensated Employee's contribution percentage amounts is reduced
shall be treated as an Excess Aggregate Contribution. The ADP and ACP of
the Highly Compensated Employees are determined after any corrections
required to meet the ADP and ACP tests. Multiple use does not occur if
either the ADP or ACP of the Highly Compensated Employees does not exceed
1.25 multiplied by the ADP and ACP of the Employees who are not Highly
Compensated Employees.
(b) The contribution percentage for any Participant who is a Highly
Compensated Employee and who is eligible to have contribution percentage
amounts allocated to his or her Accounts under two or more plans described
in Section 401(a) of the Code, or arrangements described in Section 401(k)
of the Code that are maintained by the Employer, shall be determined as if
the total of such contribution percentage amounts was made under each plan.
If a Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different plan years, all cash or deferred
arrangements ending with or within the same calendar year shall be treated
as a single arrangement. Notwithstanding the foregoing, certain plans shall
be treated as separate if mandatorily disaggregated under regulations under
section 401(m) of the Code.
- 63 -
(c) In the event that this Plan satisfies the requirements of Sections
401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or more
other plans, or if one or more other plans satisfy the requirements of such
Sections of the Code only if aggregated with this plan, then this section
shall be applied by determining the contribution percentages of Employees as
if all such plans were a single plan. For Plan Years beginning after
December 31, 1989, plans may be aggregated in order to satisfy Section
401(m) of the Code only if they have the same Plan Year.
(d) For purposes of determining the contribution percentage of a
Participant who is a five-percent owner or one of the ten most highly-paid
Highly Compensated Employees, the contribution percentage amounts and
Compensation of such participant shall include the contribution percentage
amounts and Compensation for the Plan Year of members of the Family of such
Highly Compensated Employees. Family members, with respect to Highly
Compensated Employees, shall be disregarded as separate employees in
determining the contribution percentage both for Participants who are Highly
Compensated Employees and for all other Employees.
(e) For purposes of determining the contribution percentage test,
Employee Contributions are considered to have been made in the Plan Year in
which contributed to the trust. Matching Contributions and Qualified Non-
Elective Contributions shall be considered made for a Plan Year if made no
later than the end of the twelve month period beginning of the day after the
close of the Plan Year.
2.7.5 Distribution of Excess Elective Deferrals. A Participant may
assign to the Plan any Excess Elective Deferrals made during a taxable year of
the Participant by notifying the Plan Administrator on or before March 15 of
each calendar year of the amount of the Excess Elective Deferrals to be assigned
to the Plan. A Participant is deemed to notify the Plan Administrator of any
Excess Elective Deferrals that arise by taking into account only those Elective
Deferrals made to this Plan and any other plans of the Employer.
Notwithstanding any other provision of the Plan, Excess Elective Deferrals, plus
any income and minus any loss allocable thereto, shall be distributed no later
than April 15 to any Participant to whose account Excess Elective Deferrals were
assigned for the preceding year and who claims Excess Elective Deferrals for
such taxable year.
- 64 -
Excess Elective Deferrals distributed under this section shall be adjusted for
any income or loss based on a reasonable method of computing the allocable
income or loss. The method selected must be applied consistently to all
Participants and used for all corrective distributions under the Plan for the
Plan Year, and must be the same method that is used by the Plan for allocating
income or loss to Participants' Accounts. Income or loss allocable to the
period between the end of the taxable year and the date of distribution may be
disregarded in determining income or loss.
2.7.6 Distribution of Excess Contributions. Notwithstanding any other
provision of this Plan, Excess Contributions, plus any income and minus any loss
allocable thereto, shall be distributed no later than the last day of each Plan
Year to Participants to whose Accounts such Excess Contributions were allocated
for the preceding Plan Year. If such excess amounts are distributed more than
2-1/2 months after the last day of the Plan Year in which such excess amounts
arose, a ten (10) percent excise tax will be imposed on the Employer maintaining
the Plan with respect to such amounts. Such distributions shall be made to
Highly Compensated Employees on the basis of the respective portions of the
Excess Contributions attributable to each of such Employees. Excess
Contributions of Participants who are subject to the family member aggregation
rules shall be allocated among the family members in proportion to the Elective
Deferrals (and any amounts treated as Elective Deferrals) of each family member
that is combined to determine the combined ADP.
Excess Contributions distributed under this section shall be adjusted for any
income or loss based on a reasonable method of computing the allocable income or
loss. The method selected must be applied consistently to all Participants and
used for all corrective distributions under the Plan for the Plan Year, and must
be the same method that is used by the Plan for allocating income or loss to
Participants' Accounts. Income or loss allocable to the period between the end
of the taxable year and the date of distribution may be disregarded in
determining income or loss.
Excess Contributions shall be distributed from the Participant's Elective
Contribution Account in proportion to the Participant's Elective Deferrals for
the Plan Year. Excess Contributions attributable to Qualified Non-Elective
Contributions shall be distributed from the Participant's Qualified Non-Elective
Contribution Account only to the extent that such Excess Contributions exceed
the balance in the Participant's Elective Contribution Account.
- 65 -
2.7.7 Distribution of Excess Aggregate Contributions. Notwithstanding
any other provision of this Plan, Excess Aggregate Contributions, plus any
income and minus any loss allocable thereto, shall be forfeited, if forfeitable,
or if not forfeitable, distributed no later than the last day of each Plan Year
to Participants to whose accounts such Excess Aggregate Contributions were
allocated for the preceding Plan Year. Excess Aggregate Contributions of
Participants who are subject to the family member aggregation rules shall be
allocated among the family members in proportion to the Employee and Matching
Contributions (or amounts treated as Matching Contributions) of each family
member that is combined to determine the combined ACP. Such distributions shall
be made to Highly Compensated Employees on the basis of the respective portions
of the Excess Aggregate Contributions attributable to each of such Employees. If
such Excess Aggregate Contributions are distributed more than 2-1/2 months after
the last day of the Plan Year in which such excess amounts arose, a ten (10)
percent excise tax will be imposed on the Employer maintaining the Plan with
respect to those amounts.
Excess Aggregate Contributions distributed under this section shall be adjusted
for any income or loss based on a reasonable method of computing the allocable
income or loss. The method selected must be applied consistently to all
Participants and used for all corrective distributions under the Plan for the
Plan Year, and must be the same method that is used by the Plan for allocating
income or loss to Participants' Accounts. Income or loss allocable to the
period between the end of the taxable year and the date of distribution may be
disregarded in determining income or loss.
Forfeitures of Excess Aggregate Contributions may either be reallocated to the
accounts of Employees who are not Highly Compensated Employees or applied to
reduce Employer Contributions, as elected by the Employer in the Adoption
Agreement.
Excess Aggregate Contributions shall be forfeited, if forfeitable or distributed
on a pro-rata basis from the Participant's Matching Account and Voluntary
Account (and, if applicable, the Participant's Qualified Non-Elective
Contribution Account or Elective Contribution Account).
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2.7.8 Limitation on Distributions. Except as otherwise provided in
this Article, Elective Deferrals and Qualified Non-Elective Contributions and
income allocable thereto are not distributable to a Participant or his or her
Beneficiary in accordance with such Participant's or Beneficiary's election
prior to separation from service, death or disability. Such amounts may,
however, be distributed upon:
(a) Termination of the Plan without the establishment of another
defined contribution plan, other than an employee stock ownership plan (as
defined in Section 4975(e) or Section 409 of the Code) or a simplified
employee pension plan as defined in Section 408(k) of the Code.
(b) The disposition by a corporation to an unrelated corporation of
substantially all of the assets (within the meaning of Section 409(d)(2) of
the Code) used in a trade or business of such corporation if such
corporation continues to maintain this Plan after the disposition, but only
with respect to employees who continue employment with the corporation
acquiring such assets.
(c) The disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary (within the meaning of Section
409(d)(3) of the Code) if such corporation continues to maintain this Plan,
but only with respect to employees who continue employment with such
subsidiary.
(d) The attainment of age 59-1/2.
(e) The Hardship of a Participant in accordance with Section 2.5.5.
All such distributions are subject to the spousal and Participant consent
requirements, if applicable, contained in Sections 401(a)(11) and 417 of the
Code. In addition, distributions after March 31, 1988 that are triggered by any
of the first three events enumerated above must be made in a lump sum.
2.7.9 Limitation on Elective Deferrals. No Participant shall be
permitted to have Elective Deferrals made under this Plan, or any other
qualified plan maintained by the Employer, during any taxable year, in excess of
the dollar limitation contained in Section 402(g) of the Code in effect at the
beginning of such taxable year.
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PART III
ARTICLE I
ACCOUNTING
3.1.1 Accounts. All income, profits, recoveries, contributions and any
and all monies, securities and properties of any kind at any time received or
held by the Trustee shall be held as a commingled Trust Fund, except to the
extent such assets are transferred to a Segregated Fund. For accounting
purposes, the Plan Administrator shall establish and maintain certain Accounts
for each Participant. An Employer Account shall be established and maintained
for each Participant to which shall be added the Participant's share of Employer
or Non-Elective Contributions and forfeitures. A Matching Account shall be
established and maintained for each Participant to which shall be added the
Participant's share of Matching Contributions and forfeitures. A Qualified Non-
Elective Contribution Account shall be established and maintained for each
Participant to which shall be added the Participant's share of Qualified Non-
Elective Contributions. If a Participant has previously made voluntary
nondeductible employee contributions, the Plan Administrator shall establish and
maintain a Voluntary Account for the Participant. If, in accordance with any of
the provisions of the Plan, assets are either deposited initially or transferred
to a Segregated Fund for the benefit of a Participant, the Plan Administrator
shall establish and maintain a Segregated Account for the Participant. If a
Participant elects to exercise investment control over all or a portion of his
Accounts, the Plan Administrator shall establish and maintain a Controlled
Account for the Participant.
3.1.2 Adjustments. As of each Valuation Date, each Participant's
Accounts shall be adjusted in the following order and manner.
(a) Distributions. Any distribution made to or on behalf of a
Participant since the last preceding Valuation Date shall be deducted from
the Participant's Account from which the distribution was made.
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(b) Insurance Premiums. Payments made since the last preceding
Valuation Date for Life Insurance Policies on the life of a Participant
(including without limitation payments of premiums and interest on policy
loans) shall be deducted from the Account of the Participant from which the
payment was made.
(c) Adjustment to Fair Market Value. The value of all monies,
securities and other property in the Trust Fund, excluding Life Insurance
Policies, shall be appraised by the Trustee at the then fair market value.
In determining such value, all income and contributions, if any, received by
the Trustee from the Employer or Participants on account of such Year
calculated under the method of accounting of the Trust shall be included and
there shall be deducted all expenses determined in accordance with the
method of accounting adopted by the Plan Administrator.
If the total net value of the Trust Fund so determined exceeds (or is less
than) the total amount in the affected Accounts of all Participants, the
excess (or deficiency) shall be added to (or deducted from) the respective
Accounts of all Participants in the ratio that each such Participant's
Account bears to the total amount in all such Accounts.
(d) Adjustment of Segregated and Controlled Accounts. The value of all
monies, securities and other property in each Participant's Segregated
Account or Controlled Account, if any, but exclusive of Life Insurance
Policies, shall be appraised by the Trustee at the then fair market value.
In determining such value, all income calculated under the method of
accounting of the Trust shall be included and all expenses shall be
deducted.
If the total net value of a Participant's Segregated Account or Controlled
Account, as the case may be, so determined exceeds (or is less than) the
previous balance in such Account, the excess (or deficiency) shall be added
to (or deducted from) the Participant's respective Account.
(e) Insurance Dividends. Dividends or credits received since the last
preceding Valuation Date on any Life Insurance Policy on the life of a
Participant shall be added to the Account of the Participant from which the
premiums for such Life Insurance Policy have been paid.
(f) Contributions and Forfeitures. Each Participant's Account shall be
increased by that portion of the contribution and forfeitures which is
allocated to him.
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(g) Transfers to Segregated Funds. To the extent that funds in the
Trust Fund attributable to a Participant's Accounts were transferred since
the last preceding Valuation Date or are to be transferred to a Segregated
Fund pursuant to any of the provisions of the Plan, the Account from which
the funds were transferred shall be decreased and the Account to which the
funds were transferred shall be increased.
(h) Transfers From Segregated Funds. To the extent that funds are
transferred from a Segregated Fund of a Participant to the Trust Fund
pursuant to any of the provisions of the Plan, the Account from which the
funds were transferred shall be decreased and the Account to which the funds
were transferred shall be increased.
(i) Time of Adjustments. Every adjustment to be made pursuant to this
Section shall be considered as having been made as of the applicable
Valuation Date regardless of the actual dates of entries, receipt by the
Trustee of contributions by the Participant or the Employer for such Year,
or the transfers of funds to or from Segregated Funds. The Trustee's
determination as to valuation of trust assets and charges or credits to the
individual Accounts of the respective Participants shall be conclusive and
binding on all persons. If funds are transferred from the Trust Fund to a
Segregated Fund as of any date other than a Valuation Date pursuant to the
terms of the Plan, the adjustment to be made pursuant to this Section shall
be made as of the date as of which such transfer is made, as if such date is
a Valuation Date.
If any Participant receives a distribution pursuant to the terms of the Plan
as of any date other than a Valuation Date, then the adjustments to be made
pursuant to this Section shall be made in the manner specified in the
Adoption Agreement.
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ARTICLE II
LIMITATIONS
3.2.1 Limitations on Annual Additions. If the Participant does not
participate in, and has never participated in, another qualified plan maintained
by the Employer, or a welfare benefit fund, as defined in Section 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, which provides an
annual addition, then subject to the adjustments hereinafter set forth, the
amount of annual additions which may be credited to a Participant's Accounts
during any Limitation Year shall not exceed the maximum permissible amount,
which shall equal the lesser of: (a) thirty thousand dollars ($30,000.00) or,
if greater, one-fourth of the dollar limitation under Section 415(b) (1)(A) of
the Code as in effect for the Limitation Year, or (b) twenty-five percent (25%)
of the Participant's Compensation for the Plan Year. The compensation
limitation referred to in (b) shall not apply to any contribution for medical
benefits (within the meaning of Section 401(h) or Section 419A(f)(2) of the
Code) which is otherwise treated as an annual addition under Sections 415(1)(1)
or 419A(d)(2) of the Code.
If the Employer contribution that would otherwise be contributed or allocated to
the Participant's Account would cause the annual additions for the Limitation
Year to exceed the maximum permissible amount, the amount contributed or
allocated shall be reduced so that the annual additions for the Limitation Year
shall equal the maximum permissible amount.
(a) Annual Additions. The term "annual additions" shall mean the sum
of the following amounts credited to a Participant's Accounts for the
Limitation Year:
(i) Employer contributions;
(ii) Employee contributions;
(iii) Forfeitures;
(iv) Excess Elective Deferrals, Excess Contributions and Excess
Aggregate Contributions; and
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(v) Payments 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
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.
Any excess amounts applied under subsections (b) and (c) below to
reduce Employer contributions are considered annual additions for such
Limitation Year.
(b) Excessive Annual Additions. Prior to determining a Participant's
actual Compensation for a Limitation Year, the Employer may determine the
maximum permissible Annual Addition for the Participant on the basis of a
reasonable estimation of the Participant's Compensation for the Limitation
Year, uniformly determined for all Participants similarly situated. As soon
as is administratively feasible after the end of the Limitation Year, the
maximum permissible amount for the Limitation Year shall be determined on
the basis of the Participant's actual Compensation for the Limitation Year.
Any Excessive Annual Addition attributable to nondeductible voluntary
employee contributions made by a Participant to the extent they reduce the
excess amount shall be returned to the Participant before any other
adjustments are made. Any Excessive Annual Addition attributable to a
reasonable error in determining the amount of Elective Deferrals that may be
made on behalf of a Participant under the limits of Section 415 of the Code
shall next be returned to the Participant.
If an excess amount still exists, and the Participant is covered by the Plan
at the end of the Limitation Year, the excess amount in the Participant's
Account shall 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. If an excess amount
still exists, and the Participant is not covered by the Plan at the end of a
Limitation Year, the excess amount shall be held unallocated in a suspense
account. The suspense account shall be applied to reduce future Employer
contributions for all remaining Participants in the next Limitation Year,
and each succeeding Limitation Year, if necessary.
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If a suspense account is in existence at any time during a particular
Limitation Year, all amounts in the suspense account must be allocated and
reallocated to Participants' Accounts before any Employer or any Employee
contributions may be made to the Plan for that Limitation Year. Excess
amounts may not be distributed to Participants or former Participants. If a
suspense account is in existence at any time during a Limitation Year, it
shall not participate in the allocation of the Trust's investment gains and
losses.
(c) Participation in Certain Other Plans. If in addition to this
Plan, the Participant is covered under another qualified regional prototype
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, which provides an Annual Addition during
any Limitation Year, the annual additions which may be credited to a
Participant's account under this Plan for any such Limitation Year shall not
exceed the maximum permissible amount reduced by the Annual Additions
credited to a Participant's Account under the other plans and welfare
benefit funds for the same Limitation Year. 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 allocated to the Participant's Account under this Plan would
cause the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated shall be reduced so that the
Annual Additions under all such plans and funds for the Limitation Year
shall equal the maximum permissible amount. If the Annual Additions with
respect to the Participant under such other defined contribution plans and
welfare benefit funds in the aggregate are equal to or greater than the
maximum permissible amount, no amount will be contributed or allocated to
the Participant's Account under this Plan for the Limitation Year.
Prior to determining the Participant's actual Compensation for the
Limitation Year, the Employer may determine the maximum permissible amount
for a Participant in the manner described in subsection (b) above. As soon
as is administratively feasible after the end of the Limitation Year, the
maximum permissible amount for the Limitation Year shall be determined on
the basis of the Participant's actual Compensation for the Limitation Year.
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If a Participant's Annual Additions under this Plan and such other plans
would result in an excess amount for a Limitation Year, the excess amount
shall be deemed to consist of the Annual Additions last allocated, except
that Annual Additions attributable to a welfare benefit fund or individual
medical account will be deemed to have been allocated first regardless of
the actual allocation date.
If the excess amount was allocated to a Participant on an allocation date of
this Plan which coincides with an allocation date of another plan, the
excess amount attributed to this Plan will be the product of:
(i) the total excess amount allocated as of such date, times
(ii) the ratio of (I) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this Plan to
(II) the total Annual Additions allocated to the Participant for the
Limitation Year as of such date under this and all the other qualified
regional prototype defined contribution plans. Any excess amount
attributed to this Plan will be disposed in the manner described in
subsection (b), above
If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a regional
prototype plan, Annual Additions which may be credited to the
Participant's Account under this Plan for any Limitation Year shall be
limited as provided above as though the other plan were a regional
prototype plan unless the Employer specifies other limitations in the
Adoption Agreement.
For purposes hereof, the excess amount is the excess of the
Participant's annual additions for the Limitation Year over the
maximum permissible amount and a regional prototype plan is a plan the
form of which is the subject of a favorable opinion letter from the
Internal Revenue Service.
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If the Employer maintains, or at any time maintained, a qualified
defined benefit plan covering any Participant in this Plan, the sum of
the Participant's defined benefit plan fraction and defined
contribution plan fraction will not exceed 1.0 in any Limitation Year.
The Annual Additions which may be credited to the Participant's
account under this Plan for any Limitation Year shall be limited in
the manner specified in the Adoption Agreement.
(d) Combined Plan Limitation. In the event that a Participant in this
Plan participates in a defined benefit plan (as defined in the applicable
sections of the Code) maintained by the Employer, the sum of the "defined
benefit plan fraction" plus the "defined contribution plan fraction" shall
at no time exceed 1.0. The "defined benefit plan fraction" for any year is
a fraction (i) the numerator of which is the projected annual benefit of the
Participant under all the defined benefit plans (whether or not terminated)
maintained by the Employer (determined as of the close of the year), and
(ii) the denominator of which is the lesser of (A) the product of 1.25
multiplied by the dollar limitation determined for the Limitation Year under
Sections 415(b) and (d) of the Code, or (B) the product of 1.4 multiplied by
one hundred (100%) percent of the Participant's average compensation for the
three (3) consecutive Years of Service with the Employer that produces the
highest average, 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 shall 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. The "defined contribution fraction" for any year is
a fraction (i) the numerator of which is the sum of the annual additions to
the Participant's accounts under all 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
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by the Employer, and the annual additions attributable to all welfare
benefit funds and individual medical accounts (as defined in Sections 419(e)
and 415(1)(2) of the Code) maintained by the Employer, and (ii) the
denominator of which is the sum of the lesser of the following amounts
determined for the current year and for all prior limitation years of
service with the Employer, regardless of whether a defined contribution plan
was maintained by the Employer: (A) the product of 1.25 multiplied by 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 (B) thirty-five (35%)
percent of the Participant's compensation from the Employer for such plan
year. If the Employee was a Participant as of the end of the first day of
the first Limitation Year beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction will be adjusted if
the sum of this fraction and the defined benefit fraction would otherwise
exceed 1.0 under the terms of this Plan. Under the adjustment, an amount
equal to the product of (1) the excess of the sum of the fractions over 1.0
times (2) the denominator of this fraction, shall be permanently subtracted
from the numerator of this fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of the last Limitation
Year beginning before January 1, 1987, and disregarding any changes in the
terms and conditions of the Plan made after May 5, 1986, but using the
Section 415 limitation applicable to the first Limitation Year beginning on
or after January 1, 1987.
The annual addition for any Limitation Year beginning before January 1,
1987, shall not be recomputed to treat all employee contributions as annual
additions.
The projected annual benefits under a defined benefit plan is the annual
retirement benefit (adjusted to an actuarially equivalent straight life
annuity if such benefit is expressed in a form other than a straight life
annuity) or qualified joint and survivor annuity) to which the Participant
would be entitled under the terms of the Plan assuming the Participant
continues employment until normal retirement age under the plan (or current
age, if later), and the Participant Is compensation for the current
Limitation Year and all other relevant factors used to determine benefits
under the Plan remain constant for all future Limitation Years.
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(e) Special Transition Rule for Defined Contribution Fraction. At the
election of the Plan Administrator, in applying the provisions of subsection
(d) above with respect to the defined contribution plan fraction for any
year ending after December 31, 1982, the amount taken into account for the
denominator for each Participant for all years ending before January 1, 1983
shall be an amount equal to the product of the amount of the denominator
determined under subsection (d) above for the year ending in 1982,
multiplied by the "transition fraction". The "transition fraction" is a
fraction (i) the numerator of which is the lesser of (A) $51,875 or (B) 1.4
multiplied by twenty-five (25%) percent of the Participant's compensation
for the year ending in 1981, and (ii) the denominator of which is the lesser
of (A) $41,500 or (B) twenty-five (25%) percent of the Participant's
compensation for the year ending in 1981.
(f) Special Transition Rule for Excess Benefits. Provided that the
Plan satisfied the requirements of Section 415 of the Code for the last Plan
Year beginning before January 1, 1983, an amount shall be subtracted from
the numerator of the defined contribution plan fraction (not exceeding such
numerator) so that the sum of the defined benefit plan fraction and the
defined contribution fraction computed in accordance with Section 415(e)(1)
of the Code (as amended by the Tax Equity and Fiscal Responsibility Act of
1982) does not exceed 1.0 for such year, in accordance with regulations
issued by the Secretary of the Treasury pursuant to the applicable
provisions of the Code.
(g) Employer. For purposes of this Section, employer shall mean the
Employer that adopts this Plan and all members of a group of employers which
constitutes a controlled group of corporations or trades or businesses under
common control (as defined in Sections 414(b) and (c) of the Code, as
modified by Section 415(h) of the Code), or an affiliated service group (as
defined in Section 414(m) of the Code) of which the adopting employer is
part and any other entity required to be aggregated with the Employer under
Section 414(o) of the Code and the regulations issued thereunder.
(h) Compensation. For purposes of this Section as elected in the
Adoption Agreement by the Employer, Compensation shall mean all of a
Participant's:
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(i) Wages, Tips and Other Compensation Box on Form W-2. Wages as
defined in Section 3401(a) and all other payments of compensation to
an employee by the employer (in the course of the employer's trade or
business) for which the employer is required to furnish the employee a
written statement under Sections 6041(d) and 6051(a)(3) of the Code.
Compensation must be determined without regard to any rules under
Section 3401(a) that limit the remuneration included in wages based on
the nature or location of the employment or the services rendered
(such as the exception for agricultural labor in Section 3401(a)(2) of
the Code).
(ii) Section 3401(a) Wages. Wages as defined in section 3401(a)
of the Code for the purposes of income tax withholding at the source
but determined without regard to any rules that limit the remuneration
included in wages based on the nature or location of the employment or
the services performed (such as the exception for agricultural labor
in section 3401(a)(2) of the Code).
(iii) Section 415 Safe-Harbor Compensation. Wages, salaries and
fees for professional services and other amounts received without
regard to whether or not an amount is paid in cash for personal
services actually rendered in the course of employment for the
employer maintaining the Plan to the extent that the amounts are
includible in gross income (including but not limited to commissions
paid salesmen, compensation for services on the basis of a percentage
of profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, and reimbursements or other expense allowances under a
nonaccountable plan (as described in section 1.62-2(c) of the
Regulations), but excluding:
(I) Employer contributions to a plan of deferred
compensation which are not includible in the Employee's gross
income for the taxable year in which contributed, or employer
contributions under a simplified employee pension plan to the
extent such contributions are deductible by the Employee or any
distributions from a plan of deferred compensation;
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(II) Amounts realized from the exercise of a non-qualified
stock option or when restricted stock or property held by the
Employee is no longer subject to a substantial risk of forfeiture
or becomes freely transferable.
(III) Amounts realized from the sale, exchange or other
disposition of stock acquired under an incentive stock option;
and
(IV) Other amounts which received special tax benefits or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Section 403(b) of the Code (whether or not the
contributions are actually excludable from the gross income of
the Employee).
For any self-employed individual, Compensation shall mean earned
income. For limitation years beginning after December 31, 1991,
for purposes of applying the limitations of this Article,
Compensation for a Limitation Year is the Compensation actually
paid or made available during such Limitation Year.
Notwithstanding the preceding sentence, Compensation for a
Participant who is permanently and totally disabled (as defined
in section 22(e)(3) of the Code) is the compensation such
Participant would have received for the Limitation Year if the
Participant had been paid at the rate of compensation paid
immediately before becoming permanently and totally disabled;
such imputed compensation for the disabled Participant may be
taken into account only if the Participant is not a Highly
Compensated Employee and contributions made on behalf of such
Participant are nonforfeitable when made.
(i) Short Limitation Year. If the Limitation Year is amended to
a different twelve (12) consecutive month period, the new Limitation
Year must begin within the Limitation Year in which the amendment is
made. If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different twelve (12) consecutive
month period, the maximum annual addition shall not exceed the defined
contribution dollar limitation determined in accordance with Section
415(c)(1)(A) of the Code then in effect multiplied by a fraction, the
numerator of which is the number of months in the short Limitation
Year and the
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denominator of which is twelve (12).
3.2.2 Controlled Businesses. If this plan provides contributions or
benefits for one or more owner-employees who control both the business for which
this plan is established and one or more other trades or businesses, this plan
and the plan established for other trades or businesses must, when looked at as
a single plan, satisfy sections 401(a) and (d) for the employees of this and all
other trades or businesses.
If the plan provides contributions or benefits for one or more owner-employees
who control one or more other trades or businesses, the employees of the other
trades or businesses must be included in a plan which satisfies sections 401(a)
and (d) and which provides contributions and benefits not less favorable than
provided for owner-employees under this plan.
If an individual is covered as an owner-employee under the plans of two or more
trades or businesses which are not controlled And the individual controls a
trade or business, then the contributions or benefits of the employees under the
plan of the 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.
For purposes of the preceding paragraphs, an owner-employee, or two or more
owner-employees, will be considered to control a trade or business if the owner-
employee, or two or more owner-employees together:
(a) own the entire interest in an unincorporated trade or business, or
(b) 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.
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ARTICLE III
FIDUCIARIES
3.3.1 Standard of Conduct. The duties and responsibilities of the Plan
Administrator and the Trustee with respect to the Plan shall be discharged (a)
in a non-discriminatory manner; (b) for the exclusive benefit of Participants
and their Beneficiaries; (c) by defraying the reasonable expenses of
administering the Plan; (d) with the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent man acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims; (e) by diversifying the investments of the
Plan so as to minimize the risk of large losses, unless under the circumstances
it is clearly prudent not to do so; and (f) in accordance with the documents and
instruments governing the Plan insofar as such documents and instruments are
consistent with the provisions,of the Act.
3.3.2 Individual Fiduciaries. At any time that a group of individuals is
acting as Plan Administrator or Trustee, the number of such persons who shall
act in such capacity from time to time shall be determined by the Employer.
Such persons -- shall be appointed by the Employer and may or may not be
Participants or Employees of the Employer. Any action taken by a group of
individuals acting as either Plan Administrator or Trustee shall be taken at the
direction of a majority of such persons, or, if the number of such persons is
two (2), by unanimous consent.
3.3.3 Disqualification from Service. No person shall be permitted to serve
as a Fiduciary, custodian, counsel, agent or employee of the Plan or as a
consultant to the Plan who has been convicted of any of the criminal offenses
specified in the Act.
3.3.4 Bonding. Except as otherwise permitted by law, each Fiduciary or
person who handles funds or other property or assets of the Plan shall be bonded
in accordance with the requirements of the Act.
3.3.5 Prior Acts. No Fiduciary shall be liable for any acts occurring prior
to the period of time during which the Fiduciary was actually serving in such
capacity with respect to the Plan.
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3.3.6 Insurance and Indemnity. The Employer may purchase or cause the
Trustee to purchase and keep current as an authorized expense liability
insurance for the Plan, its Fiduciaries, and any other person to whom any
financial responsibility with respect to the Plan and Trust is allocated or
delegated, from and against any and all liabilities, costs and expenses incurred
by such persons as a result of any act or omission to act in connection with the
performance of the duties, responsibilities and obligations under the Plan and
under the Act; provided that any such insurance policy purchased with Plan
assets permits subrogation by the Insurer against the Fiduciary in the case of
breach by such Fiduciary. Unless otherwise determined and communicated to
affected parties by the Employer, the Employer shall indemnify and hold harmless
each such person, other than a corporate trustee, for and from any such
liabilities, costs and expenses which are not covered by any such insurance,
except to the extent that any such liabilities, costs or expenses are judicially
determined to be due to the gross negligence or willful misconduct of such
person. No Plan assets may be used for any such indemnification.
3.3.7 Expenses. Expenses incurred by the Plan Administrator or the Trustee
in the administration of the Plan and the Trust, including fees for legal
services rendered, such compensation to the Trustee as may be agreed upon in
writing from time to time between the Employer and the Trustee, and all other
proper charges and expenses of the Plan Administrator or the Trustee and of
their agents and counsel shall be paid by the Employer, or at its election at
any time or from time to time, lay be charged against the assets of the Trust,
but until so paid shall constitute a charge upon the assets of the Trust. The
Trustee shall have the authority to charge the Trust Fund for its compensation
and reasonable expenses unless paid or contested by written notice by the
Employer within sixty (60) days after mailing of the written billing by the
Trustee. All taxes of any and all kinds whatsoever which may be levied or
assessed under existing or future laws upon the assets of the Trust or the
income thereof shall be paid from such assets. Notwithstanding the foregoing,
no compensation shall be paid to any Employee for services rendered under the
Plan and Trust as a Trustee.
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3.3.8 Agents, Accountants and Legal Counsel. The Plan Administrator shall
have authority to employ suitable agents, custodians, investment counsel,
accountants and legal counsel who may, but need not be, legal counsel for the
Employer. The Plan Administrator and the Trustee shall be fully protected in
acting upon the advice of such persons. The Trustee shall at no time be obliged
to institute any legal action or to become a party to any legal action unless
the Trustee has been indemnified to the Trustee's satisfaction for any fees,
costs and expenses to be incurred in connection therewith.
3.3.9 Investment Manager. The Employer may employ as an investment manager
or managers to manage all or any part of the Trust Fund any (i) investment
advisor registered under the Investment Advisors Act of 1940; (ii) bank as
defined in said Act; or (iii) insurance company qualified to perform investment
management services in more than one state. Any investment manager shall have
all powers of the Trustee in the management of such part of the Trust Fund,
including the power to acquire or dispose of assets. In the event an investment
manager is so appointed, the Trustee shall not be liable for the acts or
omissions of such investment manager or be under any obligation to invest or
otherwise manage that part of the Trust Fund which is subject to the management
of the investment manager. The Employer shall notify the Trustee in writing of
any appointment of an investment manager, and shall provide the Trustee with the
investment manager's written acknowledgment that it is a fiduciary with respect
to the Plan.
3.3.10 Finality of Decisions or Acts. Except for the right of a Participant
or Beneficiary to appeal the denial of a claim, any decision or action of the
Plan Administrator or the Trustee made or done in good faith upon any matter
within the scope of authority and discretion of the Plan Administrator or the
Trustee shall be final and binding upon all persons. In the event of judicial
review of actions taken by any Fiduciary within the scope of his duties in
accordance with the terms of the Plan and Trust, such actions shall be upheld
unless determined to have been arbitrary and capricious.
3.3.11 Certain Custodial Accounts and Contracts. The term "Trustee"
as used herein will also include a person holding the assets of a custodial
account, an annuity contract or other contract which is treated as a qualified
trust pursuant to Section 401(f) of the Code and references to the Trust Fund
shall be construed to apply to such custodial account, annuity contract or other
contract.
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ARTICLE IV
PLAN ADMINISTRATOR
3.4.1 Administration of Plan. The Plan Administrator shall be designated by
the Employer from time to time. The primary responsibility of the Plan
Administrator is to administer the Plan for the exclusive benefit of the
Participants and their Beneficiaries, subject to the specific terms of the Plan.
The Plan Administrator shall administer the Plan and shall construe and
determine all questions of interpretation or policy in a manner consistent with
the Plan and the Adoption Agreement. The Plan Administrator may correct any
defect, supply any omission, or reconcile any inconsistency in such manner and
to such extent as he shall deem necessary or advisable to carry out the purpose
of the Plan; provided, however, that any interpretation or construction shall be
done in a nondiscriminatory manner and shall be consistent with the intent that
the Plan shall continue to be a qualified Plan pursuant to the Code, and shall
comply with the terms of the Act. The Plan Administrator shall have all powers
necessary or appropriate to accomplish his duties under the Plan.
(a) The Plan Administrator shall be charged with the duties of the
general administration of the Plan, including but not limited to the
following:
(1) To determine all questions relating to the eligibility of an
Employee to participate in the Plan or to remain a Participant
hereunder.
(2) To compute, certify and direct the Trustee with respect to
the amount and kind of benefits to which any Participant shall be
entitled hereunder.
(3) To authorize and direct the Trustee with respect to all
disbursements from the Trust Fund.
(4) To maintain all the necessary records for the administration
of the Plan.
(5) To interpret the provisions of the Plan and to make and
publish rules and regulations for the Plan as the Plan Administrator
may deem reasonably necessary for the proper and efficient
administration of the Plan and consistent with its terms.
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(6) To select the Insurer to provide any Life Insurance Policy to
be purchased for any Participant hereunder.
(7) To advise the Fiduciary with investment authority regarding
the short and long-term liquidity needs of the Plan in order that the
Fiduciary might direct its investment accordingly.
(8) To advise, counsel and assist any Participant regarding any
rights, benefits or elections available under the Plan.
(9) To instruct the Trustee as to the management, investment and
reinvestment of the Trust Fund unless the investment authority has
been delegated to the Trustee or an Investment Manager.
(b) The Plan Administrator shall also be responsible for preparing
and filing such annual disclosure reports and tax forms as may be required
from time to time by the Secretary of Labor, the Secretary of the Treasury
or other governmental authorities.
(c) Whenever it is determined by the Plan Administrator to be in the
best interest of the Plan and its Participants or Beneficiaries, the Plan
Administrator may request such variances, deferrals, extensions, or
exemptions or make such elections for the Plan as may be available under the
law.
(d) The Plan Administrator shall be responsible for procuring bonding
for all persons dealing with the Plan or its assets as may be required by
law.
(e) In the event this Plan is required to file reports or pay
premiums to the Pension Benefit Guaranty Corporation, the Plan Administrator
shall have the duty to prepare and make such filings, to pay any premiums
required, whether for basic or contingent liability coverage, and shall be
charged with the responsibility of notifying all necessary parties of such
events and under such circumstances as may be required by law.
3.4.2 Disclosure Requirements. Every Participant covered under the Plan
and every Beneficiary receiving benefits under the Plan shall receive from the
Plan Administrator a summary plan description, and such other information as may
be required by law or by the terms of the Plan.
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3.4.3 Information Generally Available. The Plan Administrator shall make
copies of this Plan and Trust, the Adoption Agreement, the summary plan
description, latest annual report, Life Insurance Policies, or other instruments
under which the Plan was established or is operated available for examination by
any Participant or Beneficiary in the principal office of the Plan Administrator
and such other locations as may be necessary to make such information reasonably
accessible to all interested parties. Subject to a reasonable charge to defray
the cost of furnishing such copies, the Plan Administrator shall, upon written
request of any Participant or Beneficiary, furnish a copy of any of the above
documents to the respective party.
3.4.4 Statement of Accrued Benefit. Upon written request to the Plan
Administrator once during any twelve (12) month period, a Participant or
Beneficiary shall be furnished with a written statement, based on the latest
available information, of his then vested accrued benefit and the earliest date
upon which the same will become fully vested and nonforfeitable. The statement
shall also include a notice to the Participant of any benefits which are
forfeitable if the Participant dies before a certain date.
3.4.5 Explanation of Rollover Treatment. The Plan Administrator shall, when
making a distribution eligible for rollover treatment, provide a written
explanation to the recipient of the provisions under which such distribution
will not be subject to tax if transferred to an eligible retirement plan within
sixty (60) days after the date on which the recipient received the distribution
and, if applicable, the provisions of law pertaining to the tax treatment of
lump sum distributions.
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ARTICLE V
TRUSTEE
3.5.1 Acceptance of Trust. The Trustee, by joining in the execution of the
Adoption Agreement to the Plan, agrees to act in accordance with the express
terms and conditions hereof.
3.5.2 Trustee Capacity - Co-Trustees. The Trustee may be a bank, trust
company or other corporation possessing trust powers under applicable state or
federal law or one or more individuals or any combination thereof. When there
are two or more Trustees, they may allocate specific responsibilities,
obligations or duties among themselves by their written agreement. An executed
copy of such written agreement shall be delivered to and retained by the Plan
Administrator.
3.5.3 Resignation, Removal, and Successors. Any Trustee may resign at any
time by delivering to the Employer a written notice of resignation to take
effect at a date specified therein, which shall not be less than thirty (30)
days after the delivery thereof; the Employer may waive such notice. The
Trustee may be removed by the Employer with or without cause, by tendering to
the Trustee a written notice of removal to take effect at a date specified
therein. Upon such removal or resignation of a Trustee, the Employer shall
either appoint a successor Trustee who shall have the same powers and duties as
those conferred upon the resigning or discharged Trustee, or, if a group of
individuals is acting as Trustee, determine that a successor shall not be
appointed and the number of Trustees shall be reduced by one (1).
3.5.4 Consultations. The Trustee shall be entitled to advice of counsel,
which may be counsel for the Plan or the Employer, in any case in which the
Trustee shall deem such advice necessary. The Trustee shall not be liable for
any action taken or omitted in good faith reliance upon the advice of such
counsel. With the exception of those powers and duties specifically allocated
to the Trustee by the express terms of the Plan, it shall not be the
responsibility of the Trustee to interpret the terms of the Plan and the Trustee
may request, and is entitled to receive, guidance and written direction from the
Plan Administrator on any point requiring construction or interpretation of the
Plan documents.
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3.5.5 Rights, Powers and Duties. The rights, powers and duties of the
Trustee shall be as follows:
(a) The Trustee shall be responsible for the safekeeping of the assets
of the Trust Fund in accordance with the provisions of the Plan and any
amendments hereto. The duties of the Trustee under the Plan shall be
determined solely by the express provisions hereof and no other further
duties or responsibilities shall be implied. Subject to the terms of this
Plan, the Trustee shall be fully protected and shall incur no liability in
acting in reliance upon the written instructions or directions of the
Employer, the Plan Administrator, a duly designated investment manager, or
any other named Fiduciary.
(b) The Trustee shall have all powers necessary or convenient for the
orderly and efficient performance of its duties hereunder, including but not
limited to those specified in this Section. The Trustee shall have the
power generally to do all acts, whether or not expressly authorized, which
the Trustee in the exercise of its fiduciary responsibility may deem
necessary or desirable for the protection of the Trust Fund and the assets
thereof.
(c) The Trustee shall have the power to collect and receive any and all
monies and other property due hereunder and to give full discharge and
release therefore; to settle, compromise or submit to arbitration any
claims, debts or damages due to or owing to or from the Trust Fund; to
commence or defend suits or legal proceedings wherever, in the Trustee's
judgment, any interest of the Trust Fund requires it; and to represent the
Trust Fund in all suits or legal proceedings in any court of law or equity
or before any other body or tribunal.
(d) The Trustee shall cause any Life Insurance Policies or assets of the
Trust Fund to be registered in its name as Trustee and shall be authorized
to exercise any and all ownership rights regarding these assets, subject to
the terms of the Plan.
(e) The Trustee may temporarily hold cash balances and shall be
entitled to deposit any funds received in a bank account in the name of the
Trust Fund in any bank selected by the Trustee, including the banking
department of a corporate Trustee, if any, pending disposition of such funds
in accordance with the Plan. Any such deposit may be made with or without
interest.
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(f) The Trustee shall pay the premiums and other charges due and
payable at any time on any Life Insurance Policies as it may be directed by
the Plan Administrator, provided funds for such payments are then available
in the Trust. The Trustee shall be responsible only for such funds and Life
Insurance Policies as shall actually be received by it as Trustee hereunder,
and shall have no obligation to make payments other than from such funds and
cash values of Life Insurance Policies.
(g) If the whole or any part of the Trust Fund shall become liable for
the payment of any estate, inheritance, income or other tax which the
Trustee shall be required to pay, the Trustee shall have full power and
authority to pay such tax out of any monies or other property in its hands
for the account of the person whose interest hereunder is so liable. Prior
to making any payment, the Trustee may require such releases or other
documents from any lawful taxing authority as it shall deem necessary. The
Trustee shall not be liable for any nonpayment of tax when it distributes an
interest hereunder on instructions from the Plan Administrator.
(h) The Trustee shall keep a full, accurate and detailed record of all
transactions of the Trust which the Employer and the Plan Administrator
shall have the right to examine at any time during the Trustee's regular
business hours. As of the close of each Plan Year, the Trustee shall furnish
the Plan Administrator with a statement of account setting forth all
receipts, disbursements and other transactions effected by the Trustee
during the year. The Plan Administrator shall promptly notify the Trustee
in writing of his approval or disapproval of the account. The Plan
Administrator's failure to disapprove the account within sixty (60) days
after receipt shall be considered an approval. Except as otherwise required
by law, the approval by the Plan Administrator shall be binding as to all
matters embraced in any statement to the same extent as if the account of
the Trustee had been settled by judgment or decree of a court of competent
jurisdiction under which the Trustee, Employer and all persons having or
claiming any interest in the Trust Fund were parties; provided, however,
that the Trustee may have its account judicially settled if it so desires.
(i) The Trustee is hereby authorized to execute all necessary receipts
and releases to any parties concerned.
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(j) If, at any time, as the result of the death of the Participant
there shall be a dispute as to the person to whom payment or delivery of
monies or property should be made by the Trustee, or regarding any action to
be taken by the Trustee, the Trustee may postpone such payment, delivery or
action, retaining the funds or property involved, until such dispute shall
have been resolved in a court of competent jurisdiction or the Trustee shall
have been indemnified to its satisfaction or until it has received written
direction from the Plan Administrator.
(k) Anything in this instrument to the contrary notwithstanding, the
Trustee shall have no duty or responsibility with respect to the
determination of matters pertaining to the eligibility of any Employee to
become or remain a Participant hereunder, the amount of benefit to which any
Participant or Beneficiary shall be entitled hereunder, or the size and type
of any Life Insurance Policy to be purchased from any Insurer for any
Participant hereunder; all such responsibilities being vested in the Plan
Administrator.
3.5.6 Trustee Indemnification. The Employer shall indemnify and hold
harmless the Trustee for and from the assertion or occurrence of any liability
to a Participant or Beneficiary for any action taken or omitted by the Trustee
pursuant to any written direction to the Trustee from the Employer or the Plan
Administrator. Such indemnification obligation of the Employer shall not be
applicable to the extent that any such liability is covered by insurance.
3.5.7 Changes in Trustee Authority. If a successor Trustee is
appointed, neither an Insurer nor any other person who has previously had
dealings with the Trustee shall be chargeable with knowledge of such appointment
or such change until furnished with notice thereof. Until such notice, the
Insurer and any other such party shall be fully protected in relying on any
action taken or signature presented which would have been proper in accordance
with that information previously received.
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ARTICLE VI
TRUST ASSETS
3.6.1 Trustee Exclusive Owner. All assets held by the Trustee, whether
in the Trust Fund or Segregated Funds, shall be owned exclusively by the Trustee
and no Participant or Beneficiary shall have any individual ownership thereof.
Participants and their Beneficiaries shall share in the assets of the Trust, its
net earnings, profits and losses, only as provided in this Plan.
3.6.2 Investments. The Trustee shall invest and reinvest the Trust
Fund without distinction between income or principal in one or more of the
following ways as the Trustee shall from time to time determine:
(a) The Trustee may invest the Trust Fund or any portion thereof in
obligations issued or guaranteed by the United States of America or of any
instrumentalities thereof, or in other bonds, notes, debentures, mortgages,
preferred or common stocks, options to buy or sell stocks or other
securities, mutual fund shares, limited partnership interests, commodities,
real estate or any interest therein, or in such other property, real or
personal, as the Trustee shall determine.
(b) The Trustee may cause the Trust Fund or any portion thereof to be
invested in a common trust fund established and maintained by a national or
other bank for the collective investment of fiduciary funds even though the
bank is acting as the Trustee or Investment Manager, providing such common
trust fund is a qualified trust under the applicable section of the Code, or
corresponding provisions of future federal internal revenue laws and is
exempt from income tax under the applicable section of the Code. In the
event any assets of the Trust Fund are invested in such a common trust fund,
the Declaration of Trust creating such common trust fund, as it may be
amended from time to time, shall be incorporated into this Plan by reference
and made a part hereof.
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(c) The Trustee may deposit any portion of the Trust Fund in savings
accounts in federally insured banks or savings and loan associations or
invest in certificates of deposit issued by any such bank or savings and
loan association. The Trustee may, without liability for interest, retain
any portion of the Trust Fund in cash balances pending investment thereof or
payment of expenses.
(d) The Trustee may buy and sell put and call options, covered or
uncovered, engage in spreads, straddles, ratio writing and other forms of
options trading, including sales of options against convertible bonds, and
sales of Standard & Poor futures contracts, and trade in and maintain a
brokerage account on a cash or margin basis.
(e) The Trustee may invest any portion or all of the assets of the
Trust Fund which are attributable to the vested and nonforfeitable interest
in the Accounts of a Participant in the purchase of group or individual
Life, Insurance Policies issued on the life of and for the benefit of the
Participant with the consent of the Participant, subject to the following
conditions:
(i) The aggregate premiums paid for ordinary whole Life
Insurance Policies with both nondecreasing death benefits and
nonincreasing premiums on the life of any Participant shall not at any
time exceed forty- nine percent (49%) of the aggregate amount of
Employer contributions which have been allocated to the Accounts of
such Participant.
(ii) The aggregate Premiums paid for Life Insurance Policies on
the life of any Participant which are either term, universal or any
other contracts which are not ordinary whole life Policies shall not
at any time exceed twenty-five percent (25%) of the aggregate amount
of Employer contributions which have been allocated to the Accounts of
such Participant.
(iii) The sum of one-half of the aggregate premiums for ordinary
whole Life Insurance Policies and all premiums for other Life
Insurance Policies shall not at any time exceed twenty-five percent
(25%) of the aggregate amount of Employer contributions which have
been allocated to the Accounts of such Participant.
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(iv) If the Plan permits in-service distributions to a
Participant prior to his Normal Retirement Date in accordance with
Section 2.5.6(a) or (b) and the Plan does not take into account
contributions to provide benefits under Social Security in the
allocation of contributions by the Employer, the amount which may be
distributed to the Participant may be applied to the purchase of Life
Insurance Policies.
(f) The Trustee may invest the Trust Fund or any portion thereof to
acquire or hold Qualifying Employer Securities or Real Property, provided
that the portion so invested shall not exceed the amount allowed as an
investment under the Act.
3.6.3 Administration of Trust Assets. Subject to the limitations
herein expressly set forth, the Trustee shall have the following powers and
authority in connection with the administration of the assets of the Trust:
(a) To hold and administer all contributions made by the Employer to
the Trust Fund and all income or other property derived therefrom as a
single Trust Fund, except as otherwise provided in the Plan.
(b) To manage, control, sell, convey, exchange, petition, divide,
subdivide, improve, repair, grant options, sell upon deferred payments,
lease without limit as determined for any purpose, compromise, arbitrate or
otherwise settle claims in favor of or against the Trust Fund, institute,
compromise and defend actions and proceedings, and to take any other action
necessary or desirable in connection with the administration of the Trust
Fund.
(c) To vote any stock, bonds, or other securities of any corporation
or other issuer; otherwise consent to or request any action on the part of
any such corporation or other issuer; to give general or special proxies or
powers of attorney, with or without power of substitution; to participate in
any reorganization, recapitalization, consolidation, merger or similar
transaction with respect to such securities; to deposit such stocks or other
securities in any voting trusts, or with any protective or like committee,
or
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with the trustee, or with the depositories designated thereby; to exercise
any subscription rights and conversion privileges or other options and to
make any payments incidental thereto; and generally to do all such acts,
execute all such instruments, take all such proceedings and exercise all
such rights, powers and privileges with respect to the stock or other
securities or property constituting the Trust Fund as if the Trustee were
the absolute owner thereof.
(d) To apply for and procure, at the election of any Participant, Life
Insurance Policies on the life of the Participant; to exercise whatever
rights and privileges may be granted to the Trustee under such Policies, and
to cash in, receive and collect such Policies or the proceeds therefrom as
and when entitled to do so under the provisions thereof;
(e) To make, execute, acknowledge and deliver any and all documents of
transfer and conveyance and any and all, other instruments that may be
necessary or appropriate to carry out the powers herein granted;
(f) To register any investment held in the Trust in the Trustee's own
name or in the name of a nominee and to hold any investment in bearer form,
but the books and records of the Trustee shall at all times show that all
such investments are part of the Trust;
(g) To borrow money for the purposes of the Plan in such amounts and
upon such terms and conditions as the Trustee deems appropriate;
(h) To commingle the assets of the Trust Fund with the assets of other
similar trusts which are exempt from income tax, whether sponsored by the
Employer, an affiliate of the Employer or an unrelated employer, provided
that the books and records of the Trustee shall at all times show the
portion of the commingled assets which are part of the Trust; and
(i) To do all acts whether or not expressly authorized which the
Trustee may deem necessary or proper for the protection of the property held
hereunder.
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3.6.4 Segregated Funds. Unless otherwise determined by the Trustee to
be prudent, the Trustee shall invest and reinvest each Segregated Fund without
distinction between income or principal in one or more appropriately identified
interest-bearing accounts or certificates of deposit in the name of the Trustee
and subject solely to the dominion of the Trustee in a banking institution
(which may or may not be the Trustee, if the Trustee is a banking institution)
or savings and loan association.
Any such account or certificate shall bear interest at a rate not less
than the rate of interest currently being paid upon regular savings accounts by
that banking corporation principally situated in the community in which the
Employer has its principal business location, which has capital, surplus and
undivided profits exceeding those of any other bank so situated. Such accounts
shall be held for the benefit of the Participant for whom such Segregated Fund
is established in accordance with the terms of the Plan and the Segregated
Account of the Participant shall be credited with any interest earned in
connection with such accounts. If the Trustee determines that an alternative
investment is appropriate, the Trustee may invest the Segregated Fund in any
manner permitted with respect to the Trust Fund and such Segregated Fund shall
be credited with the net income or loss or net appreciation or depreciation in
value of such investments. No Segregated Fund shall share in any Employer
contributions or forfeitures, any net income or loss from, or net appreciation
or depreciation in value of, any investments of the Trust Fund, or any
allocation for which provision is made in this Plan which is not specifically
attributable to the Segregated Fund.
3.6.5 Investment Control Option. If the Employer elects in the
Adoption Agreement to permit Participants to direct the investment of their
Accounts, each Participant may elect to have transferred to a Segregated Fund
and exercise investment control by appropriate direction to the Trustee with
respect to funds in the Trust Fund which do not exceed the balances in his
Accounts. To the extent that the balance in the Participant's Account with
respect to which a transfer is to be made includes his share of an Employer
contribution which has not been received
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by the Trustee, such transfer shall not be made until such contribution is
received by the Trustee. Funds so transferred to a Segregated Fund on behalf of
the Participant shall be thereafter invested by the Trustee in such bonds,
notes, debentures, commodities, mortgages, equipment trust certificates,
investment trust certificates, preferred or common stocks, partnership
interests, life insurance policies, including universal life insurance policies,
or in such other property, real or personal (other than collectibles), wherever
situated, as the Participant shall direct from time to time in writing;
provided, however, that the Participant may not direct the Trustee to make loans
to himself, nor to make loans to the Employer; and provided further that the
Trustee may limit the investment alternatives available to the Participant in a
uniform and nondiscriminatory manner but taking into account whether the
interest of the Participant is fully vested and nonforfeitable. Any such
election shall be made by the Participant giving notice thereof to the Trustee
as the Trustee deems necessary and such notice shall specify the amount of such
funds to be transferred and the Account from which the transfer is to be made.
Any such election shall be at the absolute discretion of the individual
Participant and shall be binding upon the Trustee. Upon any such election being
made, the amount of such funds to be transferred shall be deducted from his
Account as appropriate and added to a Controlled Account of the Participant. All
dividends and interest thereafter received with respect to such transferred
funds, as well as any appreciation or depreciation in his investments, shall be
added to or deducted from his Controlled Account.
If a Participant wishes to make such an election to transfer funds from the
Trust Fund to a Segregated Fund as of a date other than a Valuation Date, the
Trustee may defer such transfer until the next succeeding Valuation Date or, in
the Trustee's discretion, make such transfer, provided that the Trustee
determines that the nature of the assets in the Trust Fund is such that it is
feasible and practical to make, as of the date of such transfer, the adjustments
to Participants' Accounts for which provision is made in the Plan, as if such
date is a Valuation Date.
The Trustee shall not have any investment responsibility with respect to a
Participant's Segregated Fund. In the event that a Participant elects to have
any such funds transferred to a Segregated Fund and invested in particular
securities or assets pursuant to this Section, the Trustee shall not be liable
for any loss or damage resulting from the investment decision of the
Participant. As of any Valuation Date, the Participant may elect to have all or
any portion of any cash contained in his Segregated Fund transferred back to the
Trust Fund, in which case
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such cash shall be invested by the Trustee together with other assets held in
the Trust Fund. Any such election shall be made by giving notice thereof to the
Trustee as the Trustee deems necessary, and the notice shall specify the amount
of cash to be transferred.
As of the said Valuation Date, the amount of such funds to be so transferred
which is attributable to the balance in the Participant's Controlled Account
shall be deducted from such Account and added to the appropriate Account of the
Participant.
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ARTICLE VII
LOANS
3.7.1 Authorization. If the Employer elects in the Adoption Agreement
to permit loans to Participants or Beneficiaries, the Trustee shall establish a
participant loan program in compliance with Labor Regulation section 2550.408b.
The terms of such participant loan program shall be in writing and shall
constitute part of the Plan. Such terms shall include:
(a) The identity of the person or positions authorized to administer
the participant loan program;
(b) A procedure for applying for loans;
(c) The basis on which loans will be approved or denied;
(d) Limitations (if any) on the types and amount of loans offered;
(e) The procedure under the program for determining a reasonable rate
of interest;
(f) The types of collateral which may secure a participant loan; and
(g) The events constituting default and the steps that will be taken
to preserve plan assets in the event of default.
3.7.2 Spousal Consent. A Participant must obtain the written consent
of his spouse, if any, to the use of the Participant's interest in the Plan as
security for the loan within ninety (90) days before the date on which the loan
is to be so secured. A new consent must be obtained whenever the amount of the
loan is increased or if the loan is renegotiated, extended, renewed or otherwise
revised. The form of the consent must acknowledge the effect of such consent and
be witnessed by a Plan representative or a notary public but shall be deemed to
meet any such requirements relating to the consent of any subsequent spouse.
Such consent shall thereafter be binding with respect to the consenting spouse
or any subsequent spouse with respect to that loan.
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If a valid spousal consent has been obtained, then notwithstanding any other
provision of the Plan, the portion of the Participant's vested Account balance
used as a security interest held by the Plan by reason of a loan outstanding to
the Participant shall be taken into account for purposes of determining the
amount of the Account balance payable at the time of death or distribution but
only if the reduction is used as repayment of the loan. If less than the entire
amount of the Participant's vested Account balance (determined without regard to
the preceding sentence) is payable to the surviving spouse, the Account balance
shall be adjusted by first reducing the vested Account balance by the amount of
the security used as repayment of the loan and then determining the benefit
payable to the surviving spouse.
3.7.3 Limitations. Except to the extent provided in the participant
loan program, in no event shall the amount loaned to any Participant or
Beneficiary exceed the lesser of (a) fifty thousand dollars ($50,000.00)
(reduced by the excess, if any, of the highest outstanding balance of loans from
the Plan) during the one year period ending on the day before the date on which
the loan was made over the outstanding balance of loans from the Plan on the
date on which such loan was made) or (b) one-half of the sum of the vested and
nonforfeitable interest in his Accounts, determined as of the Valuation Date
coinciding with or immediately preceding such loan. For the purposes hereof, all
loans from all plans of the Employer and other members of a group of employers
described in Sections 414(b), (c), (m) and (o) of the Code shall be aggregated.
All loans must be adequately secured and bear a reasonable interest rate. No
Participant loan shall exceed the present value of the Participant's vested
Account balance. In the event of a default, foreclosure on the note evidencing
the loan and attachment of the security shall not occur until a distributable
event occurs.
3.7.4 Availability. Loans, if any, must be available to all
Participants and Beneficiaries without regard to any individual's race, color,
religion, sex, age or national origin. Loans shall be made available to all
Participants and Beneficiaries and loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount made available to
other employees.
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3.7.5 Prohibitions. A loan shall not be made to a five (5%) percent
or greater shareholder-employee of an S corporation, an owner of more than ten
(10%) percent of either the capital interest or the profits interest of an
unincorporated Employer, a family member (as defined in section 267(c)(4) of the
Code) of such persons, or a corporation controlled by such persons through the
ownership, directly or indirectly, of fifty (50%) percent or more of the total
voting power or value of all shares of all classes of stock of the corporation,
unless an exemption for the loan is obtained pursuant to section 408 of the Act.
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ARTICLE VIII
BENEFICIARIES
3.8.1 Designation of Beneficiaries. Each Participant shall have the
right to designate a Beneficiary or Beneficiaries and contingent or successive
Beneficiaries to receive any benefits provided by this Plan which become payable
upon the Participant's death. The Beneficiaries may be changed at any time or
times by the filing of a new designation with the Plan Administrator, and the
most recent designation shall govern. Notwithstanding the foregoing and subject
to the provisions of Section 2.5.2(e)(3), the designated Beneficiary shall be
the surviving spouse of the Participant, unless such surviving spouse consents
in writing to an alternate designation and the terms of such consent acknowledge
the effect of such alternate designation and the consent is witnessed by a
representative of the Plan or by a notary public. A spouse may not revoke the
consent without the approval of the Participant. The designation of a
Beneficiary other than the spouse of the Participant or a form of benefits with
the consent of such spouse may not be changed without the consent of such spouse
and any consent must acknowledge the specific non-spouse Beneficiary, including
any class of Beneficiaries or any contingent Beneficiaries.
3.8.2 Absence or Death of Beneficiaries. If a Participant dies
without having a beneficiary designation then in force, or if all of the
Beneficiaries designated by a Participant predecease him, his Beneficiary shall
be his surviving spouse, or if none, his surviving children, equally, or if
none, such other heirs or the executor or administrator of his estate as the
Plan Administrator shall select.
If a Participant dies survived by Beneficiaries designated by him and if all
such surviving Beneficiaries thereafter die before complete distribution of such
deceased Participant's interest, the estate of the last of such designated
Beneficiaries to survive shall be deemed to be the Beneficiary of the
undistributed portion of such interest.
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3.8.3 Surviving Spouse Election. If the Plan is designated in the
Adoption Agreement as a Cash or Deferred Profit Sharing Plan or a Profit Sharing
Plan and the Employer does not elect a life annuity form of distribution in the
Adoption Agreement, a surviving spouse, who has not consented to an alternate
designation under Section 3.8.1, above, may elect to have distribution of the
Participant's vested Account balance commence within the 90-day period following
the date of the Participant's death. The Account balance shall be adjusted for
gains or losses occurring after the Participant's death in accordance with the
provisions of the Plan governing the adjustment of account balances for other
types of distributions.
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ARTICLE IX
CLAIMS
3.9.1 Claim Procedure. Any Participant or Beneficiary who is entitled
to a payment of a benefit for which provision is made in this Plan shall file a
written claim with the Plan Administrator on such forms as shall be furnished to
him by the Plan Administrator and shall furnish such evidence of entitlement to
benefits as the Plan Administrator may reasonably require. The Plan
Administrator shall notify the Participant or Beneficiary in writing as to the
amount of benefit to which he is entitled, the duration of such benefit, the
time the benefit is to commence and other pertinent information concerning his
benefit. If a claim for benefit is denied by the Plan Administrator, in whole or
in part, the Plan Administrator shall provide adequate notice in writing to the
Participant or Beneficiary whose claim for benefit has been denied within ninety
(90) days after receipt of the claim unless special circumstances require an
extension of time for processing the claim. If such an extension of time for
processing is required, written notice indicating the special circumstances and
the date by which a final decision is expected to be rendered shall be furnished
to the Participant or Beneficiary. In no event shall the period of extension
exceed one hundred eighty (180) days after receipt of the claim. The notice of
denial of the claim shall set forth (a) the specific reason or reasons for the
denial; (b) specific reference to pertinent Plan provisions on which the denial
is based; (c) a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such material or
information is necessary; and (d) a statement that any appeal of the denial must
be made by giving to the Plan Administrator, within sixty (60) days after
receipt of the notice of the denial, written notice of such appeal, such notice
to include a full description of the pertinent issues and basis of the claim.
The Participant or Beneficiary (or his duly authorized representative) may
review pertinent documents and submit issues and comments in writing to the Plan
Administrator. If the Participant or Beneficiary fails to appeal such action to
the Plan Administrator in writing within the prescribed period of time, the Plan
Administrator's adverse determination shall be final, binding and conclusive.
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3.9.2 Appeal. If the Plan Administrator receives from a Participant
or a Beneficiary, within the prescribed period of time, a notice of an appeal of
the denial of a claim for benefit, such notice and all relevant materials shall
immediately be submitted to the Employer. The Employer may hold a hearing or
otherwise ascertain such facts as it deems necessary and shall render a decision
which shall be binding upon both parties. The decision of the Employer shall be
made within sixty (60) days after the receipt by the Plan Administrator of the
notice of appeal, unless special circumstances require an extension of time for
processing, in which case a decision of the Employer shall be rendered as soon
as possible but not later than one hundred twenty (120) days after receipt of
the request for review. If such an extension of time is required, written notice
of the extension shall be furnished to the claimant prior to the commencement of
the extension. The decision of the Employer shall be in writing, shall include
specific reasons for the decision, written in a manner calculated to be
understood by the claimant, as well as specific references to the pertinent Plan
provisions on which the decision is based and shall be promptly furnished to the
claimant.
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ARTICLE X
AMENDMENT AND TERMINATION
3.10.1 Right to Amend.
(a) The Employer may at any time or times amend the Plan and the
provisions of the Adoption Agreement, in whole or in part. Subject to
subsection (b), an Employer that amends the Plan shall no longer
participate in this prototype plan and shall be considered to have an
individually designed plan.
(b) The Employer may change the choice of options in the Adoption
Agreement, add overriding language in the Adoption Agreement when such
language is necessary to satisfy Section 415 or 416 of the Code because of
the required aggregation of multiple plans and add certain model amendments
published by the Internal Revenue Service which specifically provide that
their adoption shall not cause the Plan to be treated as individually
designed. An Employer that amends the Plan for any other reason, including
a waiver of the minimum funding requirements under Section 412(d) of the
Code, shall no longer participate in this prototype plan and shall be
considered to have an individually designed plan.
An Employer that has adopted a standardized regional prototype plan may
amend the trust or custodial account document provided such amendment
merely involves the specifications of the names of the Plan, Employer,
trustee or custodian, Plan Administrator or other fiduciaries, the trust
year, or the name of any pooled trust in which the Plan's trust will
participate.
An Employer that has adopted a non-standardized regional prototype plan
will not be considered to have an individually designed plan merely because
the Employer amends administrative provisions of the trust or custodial
account document (such as provisions relating to investments and duties of
trustees) so long as the amended provisions are not in conflict with any
other provision of the Plan and do not cause the Plan to fail to qualify
under Section 401(a) of the Code.
3.10.2 Manner of Amending. Each amendment of this Plan shall be made
by delivery to the Trustee of a copy of the resolution of the Employer which
sets forth such amendment.
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3.10.3 Limitations on Amendments. No amendment shall be made to this
Plan which shall:
(a) Directly or indirectly operate to give the Employer any interest
whatsoever in the assets of the Trust or to deprive any Participant or
Beneficiary of his vested and nonforfeitable interest in the assets of the
Trust as then constituted, or cause any part of the income or corpus of the
Trust to be used for, or diverted to purposes other than the exclusive
benefit of Employees or their Beneficiaries;
(b) Increase the duties or liabilities of the Trustee without the
Trustee's prior written consent;
(c) Change the vesting schedule under the Plan if the nonforfeitable
percentage of the accrued benefit derived from Employer contributions
(determined as of the later of the date such amendment is adopted or the
date such amendment becomes effective) of any Participant is less than such
forfeitable percentage computed without regard to such amendment; or
(d) Reduce the accrued benefit of the Participant within the meaning
of Section 411(d)(6) of the Code, except to the extent permitted under
Section 412(c)(8) of the Code. An 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.
If a Plan amendment changes the vesting schedule or the Plan is amended in
any way that directly or indirectly affects the computation of the
Participant's nonforfeitable percentage or if the Plan is deemed amended by
an automatic change to or from a top-heavy vesting schedule, each
Participant who has completed three (3) or, in the case of Participants who
do not have at least one (1) Hour of Service in any Plan Year beginning
after 1988, five (5) or more Years of Service may elect within a reasonable
period after the adoption of such amendment to have his nonforfeitable
percentage computed without regard to such amendment or change. 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
sixty (60) days after:
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(i) the amendment is adopted;
(ii) the amendment becomes effective; or
(iii) the Participant is issued written notice of the amendment
by the Employer or Plan Administrator.
3.10.4 Voluntary Termination. The Employer may terminate the Plan at
any time by delivering to the Trustee an instrument in writing which designates
such termination. Following termination of the Plan, the Trust will continue
until the Distributable Benefit of each Participant has been distributed.
3.10.5 Involuntary Termination. The Plan shall terminate if (a) the
Employer is dissolved or adjudicated bankrupt or insolvent in appropriate
proceedings, or if a general assignment is made by the Employer for the benefit
of creditors, or (b) the Employer loses its identity by consolidation or merger
into one or more corporations or organizations, unless within ninety (90) days
after such consolidation or merger, such corporations or organizations elect to
continue the Plan.
3.10.6 Withdrawal By Employer. The Employer may withdraw from
participation under the Plan without terminating the Trust upon making a
transfer of the Trust assets to another Plan which shall be deemed to constitute
an amendment in its entirety of the Trust.
3.10.7 Powers Pending Final Distribution. Until final distribution of
the assets of the Trust, the Plan Administrator and Trustee shall continue to
have all the powers provided under this Plan as are necessary for the orderly
administration, liquidation and distribution of the assets of the Trust.
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3.10.8 Delegation to Sponsor. The Employer expressly delegates
authority to the Plan Sponsor the right to amend any part of the Plan on its
behalf to the extent necessary to preserve the qualified status of the Plan. For
purposes of amendments by the Plan Sponsor, the Mass Submitter shall be
recognized as the agent of the Plan Sponsor. If the Plan Sponsor does not adopt
the amendments made by the Mass Submitter, the Plan shall no longer be identical
to or a minor modifier of the mass submitter plan. The Plan Sponsor shall submit
a copy of the amendment to each Employer who has adopted the Plan after first
having received a ruling or favorable determination from the Internal Revenue
Service that the Plan as amended satisfies the applicable requirements of the
Code. The Employer may revoke the authority of the Plan Sponsor to amend the
Plan on its behalf by written notice to the Plan Sponsor of such revocation.
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ARTICLE XI
PORTABILITY
3.11.1 Continuance by Successor. In the event of the dissolution,
consolidation or merger of the Employer, or the sale by the Employer of its
assets, the resulting successor person or persons, firm or corporations may
continue this Plan by (a) adopting the Plan by appropriate resolution; (b)
appointing a new Trustee as though the Trustee (including all members of a group
of individuals acting as Trustee) had resigned; and (c) executing a proper
agreement with the new Trustee. In such event, each Participant in this Plan
shall have an interest in the Plan after the dissolution, consolidation, merger,
or sale of assets, at least equal to the interest which he had in the Plan
immediately before the dissolution, consolidation, merger or sale of assets. Any
Participants who do not accept a position with such successor within a
reasonable time shall be deemed to be terminated. If, within ninety (90) days
from the effective date of such dissolution, consolidation, merger, or sale of
assets, such successor does not adopt this Plan, as provided herein, the Plan
shall automatically be terminated and deemed to be an involuntary termination.
3.11.2 Merger With Other Plan. In the event of the merger or
consolidation with, or transfer of assets or liabilities to, any other deferred
compensation plan and trust, each Participant shall have an interest in such
other plan which is equal to or greater than the interest which he had in this
Plan immediately before such merger, consolidation or transfer, and if such
other plan thereafter terminates, each Participant shall be entitled to a
Distributable Benefit which is equal to or greater than the Distributable
Benefit to which he would have been entitled immediately before such merger,
consolidation or transfer if this Plan had then been terminated.
3.11.3 Transfer From Other Plans. The Employer may cause all or any
of the assets held in connection with any other plan or trust which is
maintained by the Employer for the benefit of its employees and satisfies the
applicable requirements of the Code relating to qualified plans and trusts to be
transferred to the Trustee, whether such transfer is made pursuant to a merger
or consolidation of this Plan with such other plan or trust or for any other
allowable purpose. In addition, the Employer, by appropriate election in the
Adoption Agreement, may permit
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rollover to the Trustee of assets held for the benefit of an Employee in a
conduit Individual Retirement Account, a terminated plan of the Employer, or any
other plan or trust which is maintained by some other employer for the benefit
of its employees and satisfies the applicable requirements of the Code relating
to qualified plans and trusts. Any such assets so transferred to the Trustee
shall be accompanied by written instructions from the employer, or the trustee,
custodian or individual holding such assets, setting forth the name of each
Employee for whose benefit such assets have been transferred and showing
separately the respective contributions by the employer and by the Employee and
the current value of the assets attributable thereto. Upon receipt by the
Trustee of such assets, the Trustee shall place such assets in a Segregated Fund
for the Participant and the Employee shall be deemed to be one hundred percent
(100%) vested and have a nonforfeitable interest in any such assets.
Notwithstanding any provisions herein to the contrary, unless the Plan provides
a life annuity distribution option, the Plan shall not be a direct or indirect
transferee of a defined benefit pension plan, money purchase pension plan,
target benefit pension plan, stock bonus or profit sharing plan which is subject
to the survivor annuity requirements of Section 401(a)(11) and Section 417 of
the Code.
3.11.4 Transfer to Other Plans. The Trustee, upon written direction
by the Employer, shall transfer some or all of the assets held under the Trust
to another plan or trust of the Employer meeting the requirements of the Code
relating to qualified plans and trusts, whether such transfer is made pursuant
to a merger or consolidation of this Plan with such other plan or trust or for
any other allowable purpose. In addition, upon the termination of employment of
any Participant and receipt by the Plan Administrator of a request in writing,
the Participant may request that any distribution from the Trust to which he is
entitled shall be transferred to an Individual Retirement Account, an Individual
Retirement Annuity, or any other plan or trust which is maintained by some other
employer for the benefit of its employees and satisfies the applicable
requirements of the Code relating to qualified plans and trusts. Upon receipt of
any such written request, the Plan Administrator shall cause the Trustee to
transfer the assets so directed and, as appropriate, shall direct the Insurer to
transfer to the new trustee any applicable insurance policies issued by it.
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ARTICLE XII
MISCELLANEOUS
3.12.1 No Reversion to Employer. Except as specifically provided in
the Plan, no part of the corpus or income of the Trust shall revert to the
Employer or be used for, or diverted to purposes other than for the exclusive
benefit of Participants and their Beneficiaries.
3.12.2 Employer Actions. Any action by the Employer pursuant to the
provisions of the Plan shall be evidenced by appropriate resolution or by
written instrument executed by any person authorized by the Employer to take
such action.
3.12.3 Execution of Receipts and Releases. Any payment to any person
eligible to receive benefits under this Plan, in accordance with the provisions
of the Plan, shall, to the extent thereof, be in full satisfaction of all claims
hereunder. The Plan Administrator may require such person, as a condition
precedent to such payment, to execute a receipt and release therefore in such
form as he shall determine.
3.12.4 Rights of Participants Limited. Neither the creation of this
Plan and Trust nor anything contained in this Plan or the Adoption Agreement
shall be construed as giving any Participant, Beneficiary or Employee any equity
or other interest in the assets, business or affairs of the Employer, or the
right to complain about any action taken by or about any policy adopted or
pursued by, the Employer, or as giving any Employee the right to be retained in
the service of the Employer; and all Employees shall remain subject to discharge
to the same extent as if the Plan had never been executed. Prior to the time
that distributions are made in conformity with the provisions of the Plan,
neither the Participants, nor their spouses, Beneficiaries, heirs-at-law, or
legal representatives shall receive or be entitled to receive cash or any other
thing of current exchangeable value, from either the Employer or the Trustee as
a result of the Plan or the Trust.
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3.12.5 Persons Dealing With Trustee Protected. No person dealing with
the Trustee shall be required or entitled to see to the application of any money
paid or property delivered to the Trustee, or determine whether or not the
Trustee is acting pursuant to the authorities granted to the Trustee hereunder
or to authorizations or directions herein required. The certificate of the
Trustee that the Trustee is acting in accordance with the Plan shall protect any
person relying thereon.
3.12.6 Protection of the Insurer. An Insurer shall not be responsible
for the validity of the Plan or Trust and shall have no responsibility for
action taken or not taken by the Trustee, for determining the propriety of
accepting premium payments or other contributions, for making payments in
accordance with the direction of the Trustee, or for the application of such
payments. The Insurer shall be fully protected in dealing with any
representative of the Employer or any one of a group of individuals acting as
Trustee. Until written notice of a change of Trustee has been received by an
Insurer at its home office, the Insurer shall be fully protected in dealing with
any party acting as Trustee according to the latest information received by the
Insurer at its home office.
3.12.7 No Responsibility for Act of Insurer. Neither the Employer,
the Plan Administrator nor the Trustee shall be responsible for any of the
following, nor shall they be liable for instituting action in connection with:
(a) The validity of policies or policy provisions;
(b) Failure or refusal by the Insurer to provide benefits under a
policy;
(c) An act by a person which may render a policy invalid or
unenforceable; or
(d) Inability to perform or delay in performing an act, which
inability or delay is occasioned by a provision of a policy or a
restriction imposed by the Insurer.
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3.12.8 Inalienability. The right of any Participant or his
Beneficiary in any distribution hereunder or to any separate Account shall not
be subject to alienation, assignment or transfer, voluntarily or involuntarily,
by operation of law or otherwise, except as may be expressly permitted herein.
No Participant shall assign, transfer, or dispose of such right nor shall any
such right be subjected to attachment, execution, garnishment, sequestration, or
other legal, equitable, or other process. The preceding shall also apply to the
creation, assignment, or recognition of a right to any benefit payable with
respect to a Participant pursuant to a domestic relations order, unless such
order is determined to be a qualified domestic relations order, as defined in
Section 414(p) of the Code, or any domestic relations order entered before
January 1, 1985.
In the event a Participant's benefits are attached by order of any court, the
Plan Administrator may bring an action for a declaratory judgment in a court of
competent jurisdiction to determine the proper recipient of the benefits to be
paid by the Plan. During the pendency of the action, the Plan Administrator
shall cause any benefits payable to be paid to the court for distribution by the
court as it considers appropriate.
3.12.9 Domestic Relations Orders. The Plan Administrator shall adhere
to the terms of any judgment, decree or order (including approval of a property
settlement agreement) which relates to the provision of child support, alimony
payments, or marital property rights to a spouse, former spouse, child or other
dependent of a Participant and is made pursuant to a state domestic relations
law (including a community property law) and which creates or recognizes the
existence of an alternate payee's right to, or assigns to an alternate payee the
right to, receive all or a portion of the benefits payable with respect to a
Participant.
Any such domestic relations order must clearly specify the name and last known
mailing address of the Participant and the name and mailing address of each
alternate payee covered by the order, the amount or percentage of the
Participant's benefit to be paid by the Plan to each such alternate payee, or
the manner in which such amount or percentage is to be determined, the number of
payments or period to which such order applies, and each plan to which such
order applies.
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Any such domestic relations order shall not require the Plan to provide any type
or form of benefit, or any option not otherwise provided under the Plan, to
provide increased benefits determined on the basis of actuarial value) or the
payment of benefits to an alternate payee which are required to be paid to
another alternate payee under another order previously determined to be a
qualified domestic relations order. Notwithstanding the foregoing sentence, a
domestic relations order may require the payment of benefits to an alternate
payee before the Participant has separated from service on or after the date on
which the Participant attains or would have attained the earliest retirement age
under the Plan as if the Participant had retired on the date on which such
payment is to begin under such order (but taking into account only the present
value of the benefits actually accrued and not taking into account the present
value of any Employer subsidy for early retirement) and in any form in which
such benefits may be paid under the Plan to the Participant (other than the form
of a joint and survivor annuity with respect to the alternate payee and his or
her subsequent spouse). The interest rate assumption used in determining the
present value shall be five (5%) percent. For these purposes, the earliest
retirement age under the Plan means the earlier of: (a) the date on which the
Participant is entitled to a distribution under the Plan, or (b) the later of
the date the Participant attains age 50, or the earliest date on which the
Participant could begin receiving benefits under the Plan if the Participant
separated from service.
If the Employer so elects in the Adoption Agreement, distributions may be made
to an alternate payee even though the Participant may not receive a distribution
because he continues to be employed by the Employer.
To the extent provided in the qualified domestic relations order, the former
spouse of a Participant shall be treated as a surviving spouse of such
Participant for purposes of Sections 401(a)(11) and 417 of the Code (and any
spouse of the Participant shall not be treated as a spouse of the Participant
for such purposes) and if married for at least one (1) year, the surviving
former spouse shall be treated as meeting the requirements of Section 417(d) of
the Code.
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The Plan Administrator, shall promptly notify the Participant and each alternate
payee of the receipt of a domestic relations order by the Plan and the Plan's
procedures for determining the qualified status of domestic relations orders.
Within a reasonable period after receipt of a domestic relations order, the Plan
Administrator shall determine whether such order is a qualified domestic
relations order and shall notify the Participant and each alternate payee of
such determination. If the Participant or any affected alternate payee
disagrees with the determinations of the Plan Administrator, the disagreeing
party shall be treated as a claimant and the claims procedure of the Plan shall
be followed. The Plan Administrator may bring an action for a declaratory
judgment in a court of competent jurisdiction to determine the proper recipient
of the benefits to be paid by the Plan.
During any period in which the issue of whether a domestic relations order is a
qualified domestic relations order is being determined (by the Plan
Administrator, by a court of competent jurisdiction or otherwise), the Plan
Administrator shall separately account for the amounts which would have been
payable to the alternate payee during such period if the order had been
determined to be a qualified domestic relations order. If, within the eighteen
(18) month period beginning on the date on which the first payment would be
required to be made under the domestic relations order, the order (or
modification thereof) is determined to be a qualified domestic relations order,
the Plan Administrator shall pay the segregated amounts, including any interest
thereon, to the person or persons entitled thereto. If within such eighteen
(18) month period it is determined that the order is not a qualified domestic
relations order or the issue as to whether such order is a qualified domestic
relations order is not resolved, then the Plan Administrator shall pay the
segregated amounts, including any interest thereon, to the person or persons who
would have been entitled to such amounts if there had been no order. Any
determination that an order is a qualified domestic relations order which is
made after the close of the eighteen (18) month period shall be applied
prospectively only.
3.12.10 Authorization to Withhold Taxes. The Trustee is authorized in
accordance with applicable law to withhold from distribution to any payee such
sums as may be necessary to cover federal and state taxes which may be due with
respect to such distributions.
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3.12.11 Missing Persons. If the-Trustee mails by registered or
certified mail, postage prepaid, to the last knowing address of a Participant or
Beneficiary, a notification that them, Participant or Beneficiary is entitled to
a distribution and if (a) the notification is returned by the post office
because the addressee cannot be located at such address and if neither the
Employer, the Plan Administrator nor the Trustee shall have any knowledge of the
whereabouts of such Participant or Beneficiary within three (3) years from the
date such notification was mailed, or (b) within three (3) years after such
notification was mailed to such Participant or Beneficiary, he does not respond
thereto by informing the Trustee of his whereabouts, the ultimate disposition of
the then undistributed balance of the Distributable Benefit of such Participant
or Beneficiary shall be determined in accordance with the then applicable
Federal laws, rules and regulations. If any portion of the Distributable Benefit
is forfeited because the Participant or Beneficiary cannot be found, such
portion shall be reinstated if a claim is made by the Participant or
Beneficiary.
3.12.12 Notices. Any notice or direction to be given in accordance with the
Plan shall be deemed to have been effectively given if hand delivered to the
recipient or sent by certified mail, return receipt requested, to the recipient
at the recipient's last known address. At any time that a group of individuals
is acting as Trustee, notice to the Trustee may be given by giving notice to any
one or more of such individuals.
3.12.13 Governing Law. The provisions of this Plan shall be construed,
administered and enforced in accordance with the provisions of the Act and, to
the extent applicable, the laws of the state in which the Employer has its
principal place of business. All contributions to the Trust shall be deemed to
take place in such state.
3.12.14 Severability of Provisions. In the event that any provision of this
Plan shall be held to be illegal, invalid or unenforceable for any reason, said
illegality, invalidity or unenforceability shall not affect the remaining
provisions, but shall be fully severable and the Plan shall be construed and
enforced as if said illegal, invalid or unenforceable provisions had never been
inserted herein.
3.12.15 Gender and Number. Whenever appropriate, words used in the singular
shall include the plural, and the masculine gender shall include the feminine
gender.
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3.12.16 Binding Effect. The Plan and Adoption Agreement, and all actions and
decisions hereunder, shall be binding upon the heirs, executors, administrators,
successors and assigns of any and all parties hereto and Participants, present
and future.
3.12.17 Qualification Under Internal Revenue Laws. The Employer intends that
the Trust qualify under the applicable provisions of the Code. Until advised to
the contrary, the Trustee may assume that the Trust is so qualified and is
entitled to tax exemption under the Code. If the Plan of the Employer fails to
attain or retain qualification, the Plan of the Employer shall no longer
participate in this prototype and shall be considered an individually designed
plan.
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MODEL SECTION 401(A)(31) AMENDMENT TO THE
401(K) PROFIT SHARING PLAN AND TRUST
Section 1. This Article applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the plan to the contrary
that would otherwise limit distributee's election under this Article, a
distributee may elect, at the time and in the portion of an eligible
rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
Section 2. Definitions.
Section 2.1 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 join live
(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).
Section 2.2 Eligible retirement plan: An eligible retirement plan is
an individual retirement plan account described in section 408(a) of the
Code, an individual retirement annuity described in Section 408(b) of the
Code, an annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution. However, in the case of an
eligible retirement plan to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual retirement annuity.
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Section 2.3 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 the former employee's spouse or former spouse
who is the alternative 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.
Section 2.4 Direct rollover: A direct rollover is a payment by the
plan to the eligible retirement plan specified by the distributee.
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MODEL SECTION 401(A)(17) AMENDMENT TO THE
401(K) PROFIT SHARING PLAN AND TRUST
SECTION 401(a)(17) LIMITATION
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for plan
year beginning on or after January 1, 1994, the annual compensation of each
employee taken into account under the plan shall not exceed the OBRS '93
annual compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increased in the cost of
living in accordance with section 401(1)(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 consist 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 the 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 the 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.
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REVENUE PROCEDURE 93-47 AMENDMENT TO THE
401(K) PROFIT SHARING PLAN AND TRUST
The following language, applicable to distributions made on or after January 1,
1993, is hereby inserted following the final section of section 2.5.2(j) of the
BENEFITS CONSULTANTS AND ADMINISTRATORS, INC. Defined Contribution Plan and
Trust.
"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)-11c 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."
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