1
EXHIBIT 14E
▇.▇. ▇▇▇▇▇▇▇▇ & Co. Flexible Standardized 401(k) Profit Sharing Plan
ADOPTION AGREEMENT
_______________________________________________________________________________
_______________________________________________________________________________
SECTION 1. EMPLOYER INFORMATION
_______________________________________________________________________________
Name of Employer_____________________________________________________________
Address______________________________________________________________________
City_________________________ State____________________ Zip__________________
Telephone______________ Employer's Federal Tax Identification Number_________
Type of Business (Check only one) __ Sole Proprietorship __ Partnership
__ C Corporation __ S Corporation
__ Other (Specify)___________________________________________________________
__ Check here if Related Employers may participate in this Plan and attach a
Related Employer Participation Agreement for each Related Employer who will
participate in this Plan.
Business Code________________
Name of Plan_________________________________________________________________
Name of Trust (if different from Plan name)__________________________________
Plan Sequence Number ___ (Enter 001 if this is the first qualified plan the
Employer has ever maintained, enter 002 if it is the
second, etc.)
Trust Identification Number (if applicable)_____________
Account Number (Optional)_____________
_______________________________________________________________________________
SECTION 2. EFFECTIVE DATES
Complete Parts A and B
_______________________________________________________________________________
PART A. GENERAL EFFECTIVE DATES (Check and Complete Option 1 or 2):
OPTION 1: __ This is the initial adoption of a profit sharing plan by
the Employer.
The Effective Date of this Plan is _________, 19 ___.
NOTE: The effective date is usually the first day of the
Plan Year in which this Adoption Agreement is signed.
OPTION 2: __ This is an amendment and restatement of an existing
profit sharing plan (a Prior Plan).
The Prior Plan was initially effective on _____, 19 ___.
The Effective Date of this amendment and restatement is
_______, 19 ___.
NOTE: The effective date is usually the first day of the
Plan Year in which this Adoption Agreement is signed.
PART B. COMMENCEMENT OF ELECTIVE DEFERRALS:
Elective Deferrals may commence on_________________________________
NOTE: This date may be no earlier than the date this Adoption
Agreement is signed because Elective Deferrals cannot be made
retroactively.
_______________________________________________________________________________
SECTION 3. RELEVANT TIME PERIODS
Complete Parts A through C
_______________________________________________________________________________
PART A. EMPLOYER'S FISCAL YEAR:
The Employer's fiscal year ends (Specify month and date)___________
2
Page 2
PART B. PLAN YEAR MEANS:
OPTION 1: __ The 12-consecutive month period which coincides with the
Employer's fiscal year.
OPTION 2: __ The calendar year.
OPTION 3: __ Other 12-consecutive month period (Specify)_______________
NOTE: If no option is selected, Option 1 will be deemed to be selected.
If the initial Plan Year is less than 12 months (a short Plan Year)
specify such Plan Year's beginning and ending dates____________________
PART C. LIMITATION YEAR MEANS:
OPTION 1: __ The Plan Year.
OPTION 2: __ The calendar year.
OPTION 3: __ Other 12-consecutive month period (Specify) ______________
NOTE: If no option is selected, Option 1 will be deemed to be selected.
_______________________________________________________________________________
SECTION 4. ELIGIBILITY REQUIREMENTS
Complete Parts A through F
_______________________________________________________________________________
PART A. YEARS OF ELIGIBILITY SERVICE REQUIREMENTS:
1. ELECTIVE DEFERRALS.
An Employee will be eligible to become a Contributing Participant in
the Plan (and thus be eligible to make Elective Deferrals) and
receive Matching Contributions (including Qualified Matching
Contributions, if applicable) after completing_____(enter 0, 1 or
any fraction less than 1) Years of Eligibility Service.
2. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
An Employee will be eligible to become a Participant in the Plan for
purposes of receiving an allocation of any Employer Profit Sharing
Contribution made pursuant to Section 10 of the Adoption Agreement
after completing______(enter 0, 1, 2 or any fraction less than 2)
Years of Eligibility Service.
NOTE: If more than 1 year is selected for Item 2, the immediate 100%
vesting schedule of Section 12 will automatically apply for
contributions described in such item. If either item is left blank,
the Years of Eligibility Service required for such item will be deemed
to be 0. If a fraction is selected, an Employee will not be required
to complete any specified number of Hours of Service to receive credit
for a fractional year. If a single Entry Date is selected in
Section 4, Part F for an item, the Years of Eligibility Service
required for such item cannot exceed 1 1/2 (1/2 for Elective Deferrals).
PART B. AGE REQUIREMENTS:
1. ELECTIVE DEFERRALS.
An Employee will be eligible to become a Contributing Participant
(and thus be eligible to make Elective Deferrals) and receive
Matching Contributions, if applicable) after attaining age _____
(no more than 21).
2. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
An Employee will be eligible to become a Participant in the Plan for
purposes of receiving an allocation of any Employer Profit Sharing
Contribution made pursuant to Section 10 of the Adoption Agreement
after attaining age____(no more than 21).
NOTE: If either of the above items in this Section 4, Part B is left
blank, it will be deemed there is no age requirement for such item. If
a single Entry Date is selected in Section 4, Part F for an item, no age
requirement can exceed 20 1/2 for such item.
PART C. EMPLOYEES EMPLOYED AS OF EFFECTIVE DATE:
Will all Employees employed as of the Effective Date of this Plan who
have not otherwise met the requirements of Part A or Part B above be
considered to have met those requirements as of the Effective Date?
__ Yes __ No
NOTE: If a box is not checked for any item in this Section 4, Part C,
"No" will be deemed to be selected.
3
Page 3
PART D. EXCLUSION OF CERTAIN CLASSES OF EMPLOYEES:
All Employees will be eligible to become Participants in the Plan
except:
a. __ Those Employees included in a unit of Employees covered by a
collective bargaining agreement between the Employer and the
Employee representatives, if retirement benefits were the subject
of good faith bargaining and if two percent or less of the
Employees who are covered pursuant to that agreement are
professionals as defined in Section 1.410(b)-9 of the
regulations. For this purpose, the term "employee
representatives" does not include any organization more than half
of whose members are Employees who are owners, officers, or
executives of the Employer.
b. __ Those Employees who are non-resident aliens (within the meaning
of Section 7701(b)(1)(B) of the Code) and who received no earned
income (within the meaning of Section 911(d)(2) of the Code) from
the Employer which constitutes income from sources within the
United States (within the meaning of Section 861(a)(3) of the
Code).
PART E. HOURS REQUIRED FOR ELIGIBILITY PURPOSES:
1. ________Hours of Service (no more than 1,000) shall be required to
constitute a Year of Eligibility Service.
2. ________Hours of Service (no more than 500 but less than the number
specified in Section 4, Part E, Item 1, above) must be exceeded to
avoid a Break in Eligibility Service.
3. For purposes of determining Years of Eligibility Service, Employees
shall be given credit for Hours of Service with the following
predecessor employer(s): (Complete if applicable)
____________________________________________________________________
PART F. ENTRY DATES:
The Entry Dates for participation shall be (Choose one):
OPTION 1: __ The first day of the Plan Year and the first day of the
seventh month of the Plan Year.
OPTION 2: __ Other (Specify)___________________________________________
NOTE: If no option is selected, Option 1 will be deemed to be selected.
Option 2 can be selected for an item only if the eligibility
requirements and Entry Dates are coordinated such that each Employee
will become a Participant in the Plan no later than the earlier of:
(1) the first day of the Plan Year beginning after the date the
Employee satisfies the age and service requirements of Section 410(a)
of the Code; or (2) 6 months after the date the Employee satisfies such
requirements.
_______________________________________________________________________________
SECTION 5. METHOD OF DETERMINING SERVICE
Complete Part A or B
_______________________________________________________________________________
PART A. HOURS OF SERVICE EQUIVALENCIES:
Service will be determined on the basis of the method selected below.
Only one method may be selected. The method selected will be applied
to all Employees covered under the Plan. (Choose one):
OPTION 1: __ On the basis of actual hours for which an Employee is paid
or entitled to payment.
OPTION 2: __ One the basis of days worked. An Employee will be
credited with 10 Hours of Service if under Section 1.24 of
the Plan such Employee would be credited with at least
1 Hour of Service during the day.
OPTION 3: __ On the basis of weeks worked. An Employee will be credited
with 45 Hours of Service if under Section 1.24 of the Plan
such Employee would be credited with at least 1 Hour of
Service during the week.
OPTION 4: __ On the basis of months worked. An Employee will be
credited with 190 Hours of Service if under Section 1.24
of the Plan such Employee would be credited with at least
1 Hour of Service during the month.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
This Section 5, Part A will not apply if the Elapsed Time Method of
Section 5, Part B is selected.
4
Page 4
PART B. ELAPSED TIME METHOD:
In lieu of tracking Hours of Service of Employees, will the elapsed
time method described in Section 2.07 of the Plan be used? (Choose one)
OPTION 1: __ Yes.
OPTION 2: __ No.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
_______________________________________________________________________________
SECTION 6. ELECTIVE DEFERRALS
_______________________________________________________________________________
PART A: AUTHORIZATION OF ELECTIVE DEFERRALS:
Will Elective Deferrals be permitted under this Plan? (Choose one)
OPTION 1: __ Yes.
OPTION 2: __ No.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
Complete the remainder of Section 6 only if Option 1 is selected.
PART B: LIMITS ON ELECTIVE DEFERRALS:
If Elective Deferrals are permitted under the Plan, a Contributing
Participant may elect under a salary reduction agreement to have his or
her Compensation reduced by an amount as described below (Choose one):
OPTION 1: __ An amount equal to a percentage of the Contributing
Participant's Compensation from ___% to ___% in increments of ___%.
OPTION 2: __ An amount of the Contributing Participant's Compensation
not less than ____________ and not more than _________.
The amount of such reduction shall be contributed to the Plan by the
Employer on behalf of the Contributing Participant. For any taxable
year, a Contributing Participant's Elective Deferrals shall not exceed
the limit contained in Section 402(g) of the Code in effect at the
beginning of such taxable year.
PART C. ELECTIVE DEFERRALS BASED ON BONUSES:
Instead of or in addition to making Elective Deferrals through payroll
deduction, may a Contributing Participant elect to contribute to the
Plan, as an Elective Deferral, part or all of a bonus rather than
receive such bonus in cash? (Choose one)
OPTION 1: __ Yes.
OPTION 2: __ No.
NOTE: If no option is selected, Option 2 will be deemed to be selected.
PART D. RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE DEFERRALS:
A Participant who ceases Elective Deferrals by revoking a salary
reduction agreement may return as a Contributing Participant as of such
times established by the Plan Administrator in a uniform and
nondiscriminatory manner.
PART E. CHANGING ELECTIVE DEFERRAL AMOUNTS:
A Contributing Participant may modify a salary reduction agreement to
prospectively increased or decrease the amount of his or her Elective
Deferrals as of such times established by the Plan Administrator in a
uniform and nondiscriminatory manner.
PART F. CLAIMING EXCESS ELECTIVE DEFERRALS:
Participants who claim Excess Elective Deferrals for the preceding
calendar year must submit their claims in writing to the Plan
Administrator by (Choose one):
OPTION 1: __ March 1.
OPTION 2: __ Other (Specify a date not later than April 15) ___________
NOTE: If no option is selected, Option 1 will be deemed to be selected.
5
Page 5
SECTION 7. MATCHING CONTRIBUTIONS
PART A. AUTHORIZATION OF MATCHING CONTRIBUTIONS:
Will the Employer make Matching Contributions to the Plan on
behalf of Qualifying Contributing Participants? (Choose one)
OPTION 1: / / Yes, but only with respect to a Contributing
Participant's Elective Deferrals.
OPTION 2: / / Yes, but only with respect to a Participant's
Nondeductible Employee Contributions.
OPTION 3: / / Yes, with respect to both Elective Deferrals and
Nondeductible Employee Contributions.
OPTION 4: / / No.
NOTE: If no option is selected, Option 4 will be deemed to be
selected. Complete the remainder of Section 7 only if Option 1,
2 or 3 is selected.
PART B. MATCHING CONTRIBUTION FORMULA:
If the Employer will make Matching Contributions, then the amount
of such Matching Contributions made on behalf of a Qualifying
Contributing Participant each Plan Year shall be (Choose one):
OPTION 1: / / An amount equal to _______% of such Contributing
Participant's Elective Deferral (and/or
Nondeductible Employee Contribution, if
applicable).
OPTION 2: / / An amount equal to the sum of ________% of the
portion of such Contributing Participant's
Elective Deferral (and/or Nondeductible Employee
Contribution, if applicable) which does not
exceed _______% of the Contributing
Participant's Compensation plus ________% of the
portion of such Contributing Participant's
Elective Deferral (and/or Nondeductible Employee
Contribution, if applicable) which exceeds
_______% of the Contributing Participant's
Compensation.
OPTION 3: / / Such amount, if any, equal to that percentage of
each Contributing Participant's Elective
Deferral (and/or Nondeductible Employee
Contribution, if applicable) which the Employer,
in its sole discretion, determines from year to
year.
OPTION 4: / / Other Formula. (Specify) _____________________
NOTE: If Option 4 is selected, the formula specified can only
allow Matching Contributions to be made with respect to a
Contributing Participant's Elective Deferrals (and/or
Nondeductible Employee Contribution, if applicable).
PART C. LIMIT ON MATCHING CONTRIBUTIONS:
Notwithstanding the Matching Contribution formula specified
above, no Matching Contribution will be made with respect to a
Contributing Participant's Elective Deferrals (and/or
Nondeductible Employee Contributions, if applicable) in excess of
__________ or ___________% of such Contributing Participant's
Compensation.
PART D. QUALIFYING CONTRIBUTING PARTICIPANTS:
A Contributing Participant who satisfies the eligibility
requirements described in Section 4 will be a Qualifying
Contributing Participant and thus entitled to share in Matching
Contributions for any Plan Year only if the Participant is a
Contributing Participant and satisfies the following additional
conditions (Check one or more Options):
OPTION 1: / / No Additional Conditions.
OPTION 2: / / Hours of Service Requirement. The Contributing
Participant completes at least ____________ (not
more than 500) Hours of Service during the Plan
Year. However, this condition will be waived
for the following reasons (Check at least one):
/ / The Contributing Participant's Death.
/ / The Contributing Participant's
Termination of Employment after having
incurred a Disability.
/ / The Contributing Participant's
Termination of Employment after having
reached Normal Retirement Age.
/ / This condition will not be waived.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
6
Page 6
SECTION 8. QUALIFIED NONELECTIVE CONTRIBUTIONS
PART A. AUTHORIZATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS:
Will the Employer make Qualified Nonelective Contributions to the
Plan? (Choose One)
OPTION 1: / / Yes.
OPTION 2: / / No.
If the Employer elects to make Qualified Nonelective
Contributions, then the amount, if any, of such contribution to
the Plan for each Plan Year shall be an amount determined by the
Employer.
NOTE: If no option is selected, Option 1 will be deemed to be
selected. Complete the remainder of Section 8 only if Option 1
is selected.
PART B. PARTICIPANTS ENTITLED TO QUALIFIED NONELECTIVE CONTRIBUTIONS:
Allocation of Qualified Nonelective Contributions shall be made
to the Individual Accounts of (Choose one):
OPTION 1: / / Only Participants who are not Highly Compensated
Employees.
OPTION 2. / / All Participants.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART C. ALLOCATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS:
Allocation of Qualified Nonelective Contributions to Participants
entitled thereto shall be made (Choose one):
OPTION 1: / / In the ratio which each Participant's
Compensation for the Plan Year bears to the
total Compensation of all Participants for such
Plan Year.
OPTION 2: / / In the ratio which each Participant's
Compensation not in excess of ___________ for
the Plan Year bears to the total Compensation of
all Participants not in excess of _____________
for such Plan Year.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
SECTION 9. QUALIFIED MATCHING CONTRIBUTIONS
PART A. AUTHORIZATION OF QUALIFIED MATCHING CONTRIBUTIONS:
Will the Employer make Qualified Matching Contributions to the
Plan on behalf of Qualifying Contributing Participants? (Choose
One)
OPTION 1: / / Yes, but only with respect to a Contributing
Participant's Elective Deferrals.
OPTION 2: / / Yes, but only with respect to a Participant's
Nondeductible Employee Contributions.
OPTION 3: / / Yes, with respect to both Elective Deferrals and
Nondeductible Employee Contributions.
OPTION 4: / / No.
NOTE: If no option is selected, Option 3 will be deemed to be
selected. Complete the remainder of Section 9 only if Option 1,
2 or 3 is selected.
PART B. QUALIFIED MATCHING CONTRIBUTION FORMULA:
If the Employer will make Qualified Matching Contributions, then
the amount of such Qualified Matching Contributions made on
behalf of a Qualifying Contributing Participant each Plan Year
shall be (Choose one):
OPTION 1: / / An amount equal to ________% of such
Contributing Participant's Elective Deferral
(and/or Nondeductible Employee Contribution, if
applicable).
OPTION 2: / / An amount equal to the sum of ________% of the
portion of such Contributing Participant's
Elective Deferral (and/or Nondeductible Employee
Contribution, if applicable) which does not
exceed _________% of the Contributing
Participant's Compensation plus _________% of
the portion of such Contributing Participant's
Elective Deferral (and/or Nondeductible Employee
Contribution, if applicable) which exceeds _____%
of the Contributing Participant's Compensation.
7
Page 7
OPTION 3: / / Such amount, if any, as determined by the
Employer in its sole discretion, equal to that
percentage of the Elective Deferrals (and/or
Nondeductible Employee Contribution, if
applicable) of each Contributing Participant
entitled thereto which would be sufficient to
cause the Plan to satisfy the Actual
Contribution Percentage tests (described in
Section 11.402 of the Plan) for the Plan Year.
OPTION 4: / / Other Formula. (Specify) _____________________
NOTE: If no option is selected, Option 3 will be deemed to be
selected.
PART C. PARTICIPANTS ENTITLED TO QUALIFIED MATCHING CONTRIBUTIONS:
Qualified Matching Contributions, if made to the Plan, will be
made on behalf of (Choose one):
OPTION 1: / / Only Contributing Participants who make Elective
Deferrals who are not Highly Compensated
Employees.
OPTION 2: / / All Contributing Participants who make Elective
Deferrals.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART D. LIMIT ON QUALIFIED MATCHING CONTRIBUTIONS:
Notwithstanding the Qualified Matching Contribution formula
specified above, the Employer will not match a Contributing
Participant's Elective Deferrals (and/or Nondeductible Employee
Contribution, if applicable) in excess of _____________ or
__________% of such Contributing Participant's Compensation.
SECTION 10. EMPLOYER PROFIT SHARING CONTRIBUTIONS
Complete Parts A, B and C
PART A. CONTRIBUTION FORMULA:
For each Plan Year the Employer will contribute an Amount to be
determined from year to year.
PART B. ALLOCATION FORMULA (Choose one):
OPTION 1: / / Pro Rata Formula. Employer Profit Sharing
Contributions shall be allocated to the
Individual Accounts of Qualifying Participants
in the ratio that each Qualifying Participant's
Compensation for the Plan Year bears to the
total Compensation of all Qualifying
Participants for the Plan Year.
OPTION 2: / / Integrated Formula. Employer Profit Sharing
Contributions shall be allocated as follows
(Start with Step 3 if this Plan is not a
Top-Heavy Plan):
Step 1. Employer Profit Sharing Contributions
shall first be allocated pro rata to
Qualifying Participants in the manner
described in Section 10, Part B, Option
1. The percent so allocated shall not
exceed 3% of each Qualifying
Participant's Compensation.
Step 2. Any Employer Profit Sharing
Contributions remaining after the
allocation in Step 1 shall be allocated
to each Qualifying Participant's
Individual Account in the ratio that
each Qualifying Participant's
Compensation for the Plan Year in excess
of the integration level bears to all
Qualifying Participants' Compensation in
excess of the integration level, but not
in excess of 3%.
Step 3. Any Employer Profit Sharing
Contributions remaining after the
allocation in Step 2 shall be allocated
to each Qualifying Participant's
Individual Account in the ratio that the
sum of each Qualifying Participant's
total Compensation and Compensation in
excess of the integration level bears to
the sum of all Qualifying Participants'
total Compensation and Compensation in
excess of the integration level, but not
in excess of the profit sharing maximum
disparity rate as described in Section
3.01 (B)(3) of the Plan.
Step 4. Any Employer Profit Sharing
Contributions remaining after the
allocation in Step 3 shall be allocated
pro rata to Qualifying Participants in
the manner described in Section 10, Part
B, Option 1.
8
Page 8
The integration level shall be (Choose one):
SUBOPTION (A): / / The Taxable Wage Base.
SUBOPTION (B): / / __________________ (a dollar amount less
than the Taxable Wage Base).
SUBOPTION (C): / / ___________% (not more than 100%) of the
Taxable Wage Base.
NOTE: If no option is selected, Suboption (a) will be
deemed to be selected,
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART C. QUALIFYING PARTICIPANTS:
A Participant will be a Qualifying Participant and thus entitled
to share in the Employer Profit Sharing Contribution for any Plan
Year only if the Participant is a Participant on at least one day
of such Plan Year and satisfies the following additional
conditions (Check one or more Options):
OPTION 1: / / No Additional Conditions.
OPTION 2: / / Hours of Service Requirement. The Participant
completes at least ________ (not more than 500)
Hours of Service during the Plan Year. However,
this condition will be waived for the following
reasons (Check at least one):
/ / The Participant's Death.
/ / The Participant's Termination of
Employment after having incurred a
Disability.
/ / The Participant's Termination of
Employment after having reached Normal
Retirement Age.
/ / This condition will not be waived.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
SECTION 11. COMPENSATION
Complete Parts A through D
PART A. BASIC DEFINITION:
Compensation will mean all of each Participant's (Choose one):
Option 1: / / W-2 wages.
Option 2: / / Section 3401(a) wages.
Option 3: / / 415 safe-harbor compensation.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART B. MEASURING PERIOD FOR COMPENSATION:
Compensation shall be determined over the following applicable
period (Choose one):
Option 1: / / The Plan Year.
Option 2: / / The calendar year ending with or within the Plan
Year.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART C. INCLUSION OF ELECTIVE DEFERRALS:
Does Compensation include Employer Contributions made pursuant to
a salary reduction agreement which are not includible in the
gross income of the Employee under Sections 125, 402(e)(3),
402(h)(1)(B), and 403(b) of the Code? / / Yes / / No
NOTE: If neither box is checked, "Yes' will be deemed to be
selected.
PART D. PRE-ENTRY DATE COMPENSATION:
For the Plan Year in which an Employee enters the Plan, the
Employee's Compensation which shall be taken into account for
purposes of the Plan shall be (Choose one):
OPTION 1: / / The Employee's Compensation only from the time
the Employee became a Participant in the Plan.
OPTION 2: / / The Employee's Compensation for the whole of
such Plan Year.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
9
Page 9
SECTION 12. VESTING AND FORFEITURES
Complete Parts A through G
PART A. VESTING SCHEDULE FOR EMPLOYER PROFIT SHARING CONTRIBUTIONS. A
Participant shall become Vested in his or her Individual Account
derived from Profit Sharing Contributions made pursuant to
Section 10 of the Adoption Agreement as follows (Choose one):
YEARS OF VESTED PERCENTAGE
VESTING SERVICE Option 1 / / Option 2 / / Option 3 / / Option 4 / / Option 5 / / (Complete if Chosen)
1 0% 0% 100% 0% ___%
2 0% 20% 100% 0% ___%
3 0% 40% 100% 20% ___% (not less than 20%)
4 0% 60% 100% 40% ___% (not less than 40%)
5 100% 80% 100% 60% ___% (not less than 60%)
6 100% 100% 100% 80% ___% (not less than 80%)
7 100% 100% 100% 100% ___% (not less than 100%)
NOTE: If no option is selected, Option 3 will be deemed to be selected.
PART B. VESTING SCHEDULE FOR MATCHING CONTRIBUTIONS. A Participant shall
become Vested in his or her Individual Account derived from
Matching Contributions made pursuant to Section 7 of the Adoption
Agreement as follows (Choose one):
YEARS OF VESTED PERCENTAGE
VESTING SERVICE Option 1 / / Option 2 / / Option 3 / / Option 4 / / Option 5 / / (Complete if Chosen)
1 0% 0% 100% 0% ___%
2 0% 20% 100% 0% ___%
3 0% 40% 100% 20% ___% (not less than 20%)
4 0% 60% 100% 40% ___% (not less than 40%)
5 100% 80% 100% 60% ___% (not less than 60%)
6 100% 100% 100% 80% ___% (not less than 80 %)
7 100% 100% 100% 100% ___% (not less than 100 %)
NOTE: If no option is selected, Option 3 will be deemed to be selected.
PART C. HOURS REQUIRED FOR VESTING PURPOSES:
1. _______ Hours of Service (no more than 1,000) shall be
required to constitute a Year of Vesting Service.
2. _______ Hours of Service (no more than 500 but less than
the number specified in Section 12, Part C, Item 1, above)
must be exceeded to avoid a Break in Vesting Service.
3. For purposes of determining Years of Vesting Service,
Employees shall be given credit for Hours of Service with
the following predecessor employer(s): (Complete if
applicable)
PART D. EXCLUSION OF CERTAIN YEARS OF VESTING SERVICE:
All of an Employee's Years of Vesting Service with the Employer
are counted to determine the vesting percentage in the
Participant's Individual Account except (Check any that apply):
/ / Years of Vesting Service before the Employee reaches age
18.
/ / Years of Vesting Service before the Employer maintained
this Plan or a predecessor plan.
10
Page 10
PART E. ALLOCATION OF FORFEITURES OF EMPLOYER PROFIT SHARING
CONTRIBUTIONS:
Forfeitures of Employer Profit Sharing Contributions shall be
(Choose one):
OPTION 1: / / Allocated to the Individual Accounts of the
Participants specified below in the manner as
described in Section 10, Part B (for Employer
Profit Sharing Contributions).
The Participants entitled to receive allocations
of such Forfeitures shall be (Choose one):
SUBOPTION (A): / / Only Qualifying
Participants.
SUBOPTION (B): / / All Participants.
OPTION 2: / / Applied to reduce Employer Profit Sharing
Contributions (Choose one):
SUBOPTION (A): / / For the Plan Year for
which the Forfeiture
arises.
SUBOPTION (B): / / For any Plan Year
subsequent to the Plan Year
for which the Forfeiture
arises.
OPTION 3: / / Applied first to the payment of the Plan's
administrative expenses and any excess applied to
reduce Employer Profit Sharing Contributions
(Choose one):
SUBOPTION (A): / / For the Plan Year for
which the Forfeiture
arises.
SUBOPTION (B): / / For any Plan Year
subsequent to the Plan Year
for which the Forfeitures
arises.
NOTE: If no option is selected, Option 1 and Suboption (a) will
be deemed to be selected.
PART F. ALLOCATION OF FORFEITURES OF MATCHING CONTRIBUTIONS:
Forfeitures of Matching Contributions shall be (Choose one):
OPTION 1: / / Allocated, after all other Forfeitures under the
Plan, to each Participant's Individual Account
in the ratio which each Participant's
Compensation for the Plan Year bears to the
total Compensation of all Participants for such
Plan Year.
The Participants entitled to receive allocations
of such Forfeitures shall be (Choose one):
SUBOPTION (A): / / Only Qualifying
Contributing Participants.
SUBOPTION (B): / / Only Qualifying
Participants.
SUBOPTION (C): / / All Participants.
OPTION 2: / / Applied to reduce Matching Contributions (Choose
one):
SUBOPTION (A): / / For the Plan Year for
which the Forfeiture
arises.
SUBOPTION (B): / / For any Plan Year
subsequent to the Plan Year
for which the Forfeiture
arises.
OPTION 3: / / Applied first to the payment of the Plan's
administrative expenses and any excess applied
to reduce Matching Contributions (Choose one):
SUBOPTION (A): / / For the Plan Year for
which the Forfeiture
arises.
SUBOPTION (B): / / For any Plan Year
subsequent to the Plan Year
for which the Forfeitures
arises.
NOTE: If no option is selected, Option 1 and Suboption (a) will
be deemed to be selected.
PART G. ALLOCATION OF FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS:
Forfeitures of Excess Aggregate Contributions shall be (Choose
one):
OPTION 1: / / Allocated, after all other Forfeitures under the
Plan, to each Contributing Participant's
Matching Contribution account in the ratio which
each Contributing Participant's Compensation for
the Plan Year bears to the total Compensation of
all Contributing Participants for such Plan
Year. Such Forfeitures will not be allocated to
the account of any Highly Compensated Employee.
OPTION 2: / / Applied to reduce Matching Contributions (Choose
one):
SUBOPTION (A) / / For the Plan Year for
which the Forfeiture
arises.
SUBOPTION (B): / / For any Plan Year
subsequent to the Plan Year
for which the Forfeiture
arises.
11
Page 11
OPTION 3: / / Applied first to the payment of the Plan's
administrative expenses and any excess applied to reduce
Matching Contributions (Choose one):
SUBOPTION (A): / / For the Plan Year for which the
Forfeiture arises.
SUBOPTION (B): / / For any Plan Year subsequent to the
Plan Year for which the Forfeitures
arises.
NOTE: If no option is selected, Option 2 and Suboption (a) will be
deemed to be selected.
--------------------------------------------------------------------------------
SECTION 13. NORMAL RETIREMENT AGE AND EARLY RETIREMENT AGE
--------------------------------------------------------------------------------
Part A. THE NORMAL RETIREMENT AGE UNDER THE PLAN SHALL BE (Check and complete
one option):
OPTION 1: / / Age 65.
OPTION 2: / / Age _______ (not to exceed 65).
OPTION 3: / / The later of age ______ (not to exceed 65) or the
______ (not to exceed 5th) anniversary of the first day
of the first Plan Year in which the Participant
commenced participation in the Plan.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
PART B. EARLY RETIREMENT AGE (Choose one option):
OPTION 1: / / An Early Retirement Age is not applicable under the
Plan.
OPTION 2: / / Age _______ (not less than 55 nor more than 65).
OPTION 3: / / A Participant satisfies the Plan's Early Retirement
Age conditions by ________ attaining age _______ (not
less than 55) and completing Years of Vesting Service.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
--------------------------------------------------------------------------------
SECTION 14. DISTRIBUTIONS
--------------------------------------------------------------------------------
DISTRIBUTABLE EVENTS. Answer each of the following items.
A. Termination of Employment Before Normal Retirement Age. May a Participant
who has not reached Normal Retirement Age request a distribution from the Plan / / Yes / / No
upon Termination of Employment?
B. Disability. May a Participant who has incurred a Disability request a distribution
from the Plan? / / Yes / / No
C. Attainment of Normal Retirement Age. May a Participant who has attained
Normal Retirement Age but has not incurred a Termination of Employment request
distribution from the Plan? / / Yes / / No
D. Attainment of Age 59 1/2. Will Participants who have attained age 59 1/2 be
permitted to withdraw Elective Deferrals while still employed by the Employer? / / Yes / / No
E. Hardship Withdrawals of Elective Deferrals. Will Participants be permitted to
withdraw Elective Deferrals on account of hardship pursuant to Section 11.503 of
the Plan? / / Yes / / No
F. In-Service Withdrawals. Will Participants be permitted to request a distribution
during service pursuant to Section 6.01(A)(3) of the Plan? / / Yes / / No
G. Hardship Withdrawals. Will Participants be permitted to make hardship
withdrawals pursuant to Section 6.01(A)(4) of the Plan? / / Yes / / No
H. Withdrawals of Rollover or Transfer Contributions. Will Employees be permitted
to withdraw their Rollover or Transfer Contributions at any time? / / Yes / / No
NOTE: If a box is not checked for an item, "Yes" will be deemed to be
selected for that item. Section 411(d)(6) of the Code prohibits the
elimination of protected benefits. In general, protected benefits
include the forms and timing of payout options. If the Plan is being
adopted to amend and replace a Prior Plan that permitted a distribution
option described above, you must answer "Yes" to that item.
12
Page 12
--------------------------------------------------------------------------------
SECTION 15. JOINT AND SURVIVOR ANNUITY
--------------------------------------------------------------------------------
Part A. Retirement Equity Act Safe Harbor:
Will the safe harbor provisions of Section 6.05(F) of the Plan apply?
(Choose only one option)
OPTION 1: / / Yes.
OPTION 2: / / No.
NOTE: You must select "No" if you are adopting this Plan as an
amendment and restatement of a Prior Plan that was subject to the joint
and survivor annuity requirements.
Part B. Survivor Annuity Percentage: (Complete only if your answer in Section
15, Part A is "No".
The survivor annuity portion of the Joint and Survivor Annuity shall be
a percentage equal to ____% (at least 50% but no more than 100%) of the
amount paid to the Participant prior to his or her death.
--------------------------------------------------------------------------------
SECTION 16. OTHER OPTIONS
Answer "Yes" or "No" to each of the following questions by checking the
appropriate box.
--------------------------------------------------------------------------------
If a box is not checked for a question, the answer will be deemed to be "No."
A. Loans: Will loans to Participants pursuant to Section 6.08 of the / / Yes / / No
Plan be permitted?
B. Insurance: Will the Plan allow for the investment in insurance
policies pursuant to Section 5.13 of the Plan? / / Yes / / No
C. Employer Securities: Will the Plan allow for the investment in
qualifying Employer securities or qualifying Employer real property? / / Yes / / No
D. Rollover Contributions: Will Employees be permitted to make rollover
contributions to the Plan pursuant to Section 3.03 of the Plan? / / Yes / / No
/ / Yes, but only after
becoming a
Participant.
E. Transfer Contributions: Will Employees be permitted to make transfer
contributions to the Plan pursuant to Section 3.04 of the Plan? / / Yes / / No
/ / Yes, but only after
becoming a
Participant.
F. Nondeductible Employee Contributions: Will Employees be permitted to
make Nondeductible Employee Contributions pursuant to Section 11.305
of the Plan? / / Yes / / No
Check here if such contributions will be mandatory. / /
G. Will Participants be permitted to direct the investment of their
Plan assets pursuant to Section 5.14 of the Plan? / / Yes / / No
--------------------------------------------------------------------------------
SECTION 17. LIMITATION ON ALLOCATIONS
More Than One Plan
--------------------------------------------------------------------------------
If you maintain or ever maintained another qualified plan (other than a
paired standardized money purchase pension plan using the same Basic Plan
Document as this Plan) in which any Participant in this Plan is (or was) a
Participant or could become a Participant, you must complete this section.
You must also complete this section if you maintain a welfare benefit
fund, as defined in Section 419(e) of the Code, or an individual medical
account, as defined in Section 415(l)(2) of the Code, under which amounts
are treated as annual additions with respect to any Participant in this
Plan.
PART A. INDIVIDUALLY DESIGNED DEFINED CONTRIBUTION PLAN:
If the Participant is covered under another qualified defined contribution
plan maintained by the Employer, other than a master or prototype plan:
1. / / The provisions of Section 3.05(B)(1) through 3.05(B)(6) of the Plan
will apply as if the other plan were a master or prototype plan.
13
Page 13
2. / / Other method. (Provide the method under which the plans will limit
total annual additions to the maximum permissible amount, and will
properly reduce any excess amounts, in a manner that precludes
Employer discretion.) ___________________________________
PART B. DEFINED BENEFIT PLAN:
If the Participant is or has ever been a participant in a defined benefit
plan maintained by the Employer, the Employer will provide below the
language which will satisfy the 1.0 limitation of Section 415(e) of the
Code.
1. / / If the projected annual addition to this Plan to the account of a
Participant for any limitation year would cause the 1.0
limitation of Section 415(e) of the Code to be exceeded, the
annual benefit of the defined benefit plan for such limitation
year shall be reduced so that the 1.0 limitation shall be
satisfied.
If it is not possible to reduce the annual benefit of the defined
benefit plan and the projected annual addition to this Plan to
the account of a Participant for a limitation year would cause
the 1.0 limitation to be exceeded, the Employer shall reduce the
Employer Contribution which is to be allocated to this Plan on
behalf of such Participant so that the 1.0 limitation will be
satisfied. (The provisions of Section 415(e) of the Code are
incorporated herein by reference under the authority of Section
1106(h) of the Tax Reform Act of 1986.)
2. / / Other method. (Provide language describing another method. Such
language must preclude Employer discretion.)
SECTION 18. TOP-HEAVY ISSUES
Complete Parts A and B
PART A. MINIMUM ALLOCATION OR BENEFIT:
For any Plan Year with respect to which this Plan is a Top-Heavy
Plan, any minimum allocation required pursuant to Section 3.01(E)
of the Plan shall be made (Choose one):
OPTION 1: / / To this Plan.
OPTION 2: / / To the following other plan maintained by the
Employer (Specify name and plan number of
plan) __________________________________________
OPTION 3: In accordance with the method described on an
attachment to this Adoption Agreement. (Attach
language describing the method that will be used
to satisfy Section 416 of the Code. Such method
must preclude Employer discretion.)
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART B. TOP-HEAVY VESTING SCHEDULE:
Pursuant to Section 6.01(C) of the Plan, the vesting schedule
that will apply when this Plan is a Top-Heavy Plan (unless the
Plan's regular vesting schedule provides for more rapid vesting)
shall be (Choose one):
OPTION 1: / / 6 Year Graded.
OPTION 2: / / 3 Year Cliff.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
SECTION 19. PROTOTYPE SPONSOR
Name of Prototype Sponsor ____________________________________
Address _______________________________________________________
Telephone Number ______________________________________________
PERMISSIBLE INVESTMENTS
The assets of the Plan shall be invested only in those
investments described below (To be completed by the Prototype
Sponsor): _____________________________________________________
14
Page 14
SECTION 20. TRUSTEE OR CUSTODIAN
OPTION A: / / Financial Organization as Trustee or Custodian
CHECK ONE: / / Custodian, / / Trustee without full trust powers, or
/ / Trustee with full trust powers
Financial Organization___________________________________________________
Signature _______________________________________________________________
Type Name _______________________________________________________________
COLLECTIVE OR COMMINGLED FUNDS
List any collective or commingled funds maintained by the financial
organization Trustee in which assets of the Plan may be invested (Complete
if applicable).___________________________________________________________
OPTION B: / / Individual Trustee(s)
Signature ____________________________ Signature ___________________________
Type Name ____________________________ Type Name ___________________________
Signature ____________________________ Signature ___________________________
Type Name ____________________________ Type Name ___________________________
SECTION 21. RELIANCE
An Employer who has ever maintained or who later adopts any plan (including a
welfare benefit fund, as defined in Section 419(e) of the Code, which provides
post-retirement medical benefits allocated to separate accounts for key
employees, as defined in Section 419A(d)(3) of the Code, or an individual
medical account, as defined in Section 415(l)(2) of the Code) in addition to
this Plan (other than a paired standardized money purchase pension plan using
the same Basic Plan Document as this Plan) may not rely on the opinion letter
issued by the National Office of the Internal Revenue Service as evidence that
this Plan is qualified under Section 401 of the Internal Revenue Code. If the
Employer who adopts or maintains multiple plans wishes to obtain reliance that
his or her plan(s) are qualified, application for a determination letter should
be made to the appropriate Key District Director of Internal Revenue.
The Employer may not rely on the opinion letter issued by the National Office
of the Internal Revenue Service as evidence that this Plan is qualified under
Section 401 of the Code unless the terms of the Plan, as herein adopted or
amended, that pertain to the requirements of Sections 401(a)(4), 401(a)(17),
401(l), 401(a)(5), 410(b) and 414(s) of the Code, as amended by the Tax Reform
Act of 1986, or later laws, (a) are made effective retroactively to the first
day of the first Plan Year beginning after December 31, 1988 (or such later
date on which these requirements first become effective with respect to this
Plan); or (b) are made effective no later than the first day on which the
Employer is no longer entitled, under regulations, to rely on a reasonable,
good faith interpretation of these requirements, and the prior provisions of
the Plan constitute such an interpretation.
This Adoption Agreement may be used only in conjunction with Basic Plan
Document No. 04.
SECTION 22. EMPLOYER SIGNATURE
Important: Please read before signing
I am an authorized representative of the Employer named above and I
state the following:
1. I acknowledge that I have relied upon my own advisors regarding
the completion of this Adoption Agreement and the legal tax
implications of adopting this Plan.
2. I understand that my failure to properly complete this Adoption
Agreement may result in disqualification of the Plan.
3. I understand that the Prototype Sponsor will inform me of any
amendments made to the Plan and will notify me should it
discontinue or abandon the Plan.
4. I have received a copy of this Adoption Agreement and the
corresponding Basic Plan Document.
Signature for Employer_________________________ Date Signed ______________
Type Name______________________________ Title ____________________________
15
▇.▇. ▇▇▇▇▇▇▇▇ & CO. FLEXIBLE NONSTANDARDIZED SAFE HARBOR 401(K) PROFIT
SHARING PLAN ADOPTION AGREEMENT
_______________________________________________________________________________
SECTION 1. EMPLOYER INFORMATION
Name of Employer_____________________________________________________________
Address______________________________________________________________________
City_________________________ State____________________ Zip__________________
Telephone______________ Employer's Federal Tax Identification Number_________
Type of Business (Check only one) / / Sole Proprietorship / / Partnership
/ / C Corporation / / S Corporation
/ / Other (Specify)___________________________________________________________
/ / Check here if Related Employers may participate in this Plan and attach a
Related Employer Participation Agreement for each Related Employer who will
participate in this Plan.
Business Code________________
Name of Plan_________________________________________________________________
Name of Trust (if different from Plan name)__________________________________
Plan Sequence Number ___ (Enter 001 if this is the first qualified plan the
Employer has ever maintained, enter 002 if it is the
second, etc.)
Trust Identification Number (if applicable)_____________
Account Number (Optional)_____________
SECTION 2. EFFECTIVE DATES
Complete Parts A and B
PART A. GENERAL EFFECTIVE DATES (Check and Complete Option 1 or 2):
OPTION 1: / / This is the initial adoption of a profit sharing plan by
the Employer.
The Effective Date of this Plan is _________, 19 ___.
NOTE: The effective date is usually the first day of the
Plan Year in which this Adoption Agreement is signed.
OPTION 2: / / This is an amendment and restatement of an existing
profit sharing plan (a Prior Plan).
The Prior Plan was initially effective on _____, 19 ___.
The Effective Date of this amendment and restatement is
_______, 19 ___.
NOTE: The effective date is usually the first day of the
Plan Year in which this Adoption Agreement is signed.
PART B. COMMENCEMENT OF ELECTIVE DEFERRALS:
Elective Deferrals may commence on_________________________________
NOTE: This date may be no earlier than the date this Adoption
Agreement is signed because Elective Deferrals cannot be made
retroactively.
SECTION 3. RELEVANT TIME PERIODS
Complete Parts A through C
PART A. EMPLOYER'S FISCAL YEAR:
The Employer's fiscal year ends (Specify month and date)___________
16
Page 2
PART B. PLAN YEAR MEANS:
OPTION 1: / / The 12-consecutive month period which coincides with the
Employer's fiscal year.
OPTION 2: / / The calendar year.
OPTION 3: / / Other 12-consecutive month period (Specify)_______________
NOTE: If no option is selected, Option 1 will be deemed to be selected.
If the initial Plan Year is less than 12 months (a short Plan Year)
specify such Plan Year's beginning and ending dates____________________
PART C. LIMITATION YEAR MEANS:
OPTION 1: / / The Plan Year.
OPTION 2: / / The calendar year.
OPTION 3: / / Other 12-consecutive month period (Specify) ______________
NOTE: If no option is selected, Option 1 will be deemed to be selected.
SECTION 4. ELIGIBILITY REQUIREMENTS
Complete Parts A through G
PART A. YEARS OF ELIGIBILITY SERVICE REQUIREMENTS:
1. ELECTIVE DEFERRALS.
An Employee will be eligible to become a Contributing Participant in
the Plan (and thus be eligible to make Elective Deferrals) and
receive Matching Contributions (including Qualified Matching
Contributions, if applicable) after completing_____(enter 0, 1 or
any fraction less than 1) Years of Eligibility Service.
2. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
An Employee will be eligible to become a Participant in the Plan for
purposes of receiving an allocation of any Employer Profit Sharing
Contribution made pursuant to Section 10 of the Adoption Agreement
after completing______(enter 0, 1, 2 or any fraction less than 2)
Years of Eligibility Service.
NOTE: If more than 1 year is selected for Item 2, the immediate 100%
vesting schedule of Section 12 will automatically apply for
contributions described in such item. If either item is left blank,
the Years of Eligibility Service required for such item will be deemed
to be 0. If a fraction is selected, an Employee will not be required
to complete any specified number of Hours of Service to receive credit
for a fractional year. If a single Entry Date is selected in
Section 4, Part G for an item, the Years of Eligibility Service
required for such item cannot exceed 1 1/2 (1/2 for Elective Deferrals).
PART B. AGE REQUIREMENTS:
1. ELECTIVE DEFERRALS.
An Employee will be eligible to become a Contributing Participant
(and thus be eligible to make Elective Deferrals) and receive
Matching Contributions (including Qualified Matching Contributions,
if applicable) after attaining age _____ (no more than 21).
2. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
An Employee will be eligible to become a Participant in the Plan for
purposes of receiving an allocation of any Employer Profit Sharing
Contribution made pursuant to Section 10 of the Adoption Agreement
after attaining age____(no more than 21).
NOTE: If either of the above items in this Section 4, Part B is left
blank, it will be deemed there is no age requirement for such item. If
a single Entry Date is selected in Section 4, Part G for an item, no age
requirement can exceed 20 1/2 for such item.
PART C. EMPLOYEES EMPLOYED AS OF EFFECTIVE DATE:
Will all Employees employed as of the Effective Date of this Plan who
have not otherwise met the requirements of Part A or Part B above be
considered to have met those requirements as of the Effective Date?
/ / Yes / / No
NOTE: If a box is not checked for any item in this Section 4, Part C,
"No" will be deemed to be selected.
17
Page 3
PART D. EXCLUSION OF CERTAIN CLASSES OF EMPLOYEES:
All Employees will be eligible to become Participants in the Plan
except:
a. / / Those Employees included in a unit of Employees covered by a
collective bargaining agreement between the Employer and
Employee representatives, if retirement benefits were the subject
of good faith bargaining and if two percent or less of the
Employees who are covered pursuant to that agreement are
professionals as defined in Section 1.410(b)-9 of the
regulations. For this purpose, the term "employee
representatives" does not include any organization more than half
of whose members are Employees who are owners, officers, or
executives of the Employer.
b. / / Those Employees who are non-resident aliens (within the meaning
of Section 7701(b)(1)(B) of the Code) and who received no earned
income (within the meaning of Section 911(d)(2) of the Code) from
the Employer which constitutes income from sources within the
United States (within the meaning of Section 861(a)(3) of the
Code).
c. / / Those Employees of a Related Employer that has not excuted a
Related Employer Participation Agreement
d. / / Other (Define)___________________________________________________
PART E. ELECTION NOT TO PARTICIPATE:
May an Employee or a Paticipant elect not to participate in this Plan
pursuant to Dection 2.08 of the Plan?
OPTION 1: / / Yes.
OPTION 2: / / No.
NOTE: If no option is selected, Option 2 will be deemed to be selected.
PART F. HOURS REQUIRED FOR ELIGIBILITY PURPOSES:
1. ________Hours of Service (no more than 1,000) shall be required to
constitute a Year of Eligibility Service.
2. ________Hours of Service (no more than 500 but less than the number
specified in Section 4, Part E, Item 1, above) must be exceeded to
avoid a Break in Eligibility Service.
3. For purposes of determining Years of Eligibility Service, Employees
shall be given credit for Hours of Service with the following
predecessor employer(s): (Complete if applicable)
_____________________________________________________________________
PART G. ENTRY DATES:
The Entry Dates for participation shall be (Choose one):
/ / OPTION 1: / / The first day of the Plan Year and the first day of the
seventh month of the Plan Year.
/ / OPTION 2: / / Other (Specify)___________________________________________
NOTE: If no option is selected, Option 1 will be deemed to be selected.
Option 2 can be selected for an item only if the eligibility
requirements and Entry Dates are coordinated such that each Employee
will become a Participant in the Plan no later than the earlier of:
(1) the first day of the Plan Year beginning after the date the
Employee satisfies the age and service requirements of Section 410(a)
of the Code; or (2) 6 months after the date the Employee satisfies such
requirements.
SECTION 5. METHOD OF DETERMINING SERVICE
Complete Part A or B
PART A. HOURS OF SERVICE EQUIVALENCIES:
Service will be determined on the basis of the method selected below.
Only one method may be selected. The method selected will be applied
to all Employees covered under the Plan. (Choose one):
/ / OPTION 1: / / On the basis of actual hours for which an Employee is paid
or entitled to payment.
/ / OPTION 2: / / On the basis of days worked. An Employee will be
credited with 10 Hours of Service if under Section 1.24
of the Plan such Employee would be credited with at least
1 Hour of Service during the day.
18
Page 4
OPTION 3: / / On the basis of weeks worked. An Employee will be
credited with 45 Hours of Service if under Section 1.24
of the Plan such Employee would be credited with at
least 1 Hour of Service during the week.
OPTION 4: / / On the basis of months worked. An Employee will be
credited with 190 Hours of Service if under Section 1.24
of the Plan such Employee would be credited with at least
1 Hour of Service during the month.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
This Section 5, Part A will not apply if the Elapsed Time Method of
Section 5, Part B is selected.
PART B. ELAPSED TIME METHOD:
In lieu of tracking Hours of Service of Employees, will the elapsed
time method described in Section 2.07 of the Plan be used? (Choose one)
OPTION 1: / / No.
OPTION 2: / / Yes.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
SECTION 6. ELECTIVE DEFERRALS
PART A: AUTHORIZATION OF ELECTIVE DEFERRALS:
Will Elective Deferrals be permitted under this Plan? (Choose one)
OPTION 1: / / Yes.
OPTION 2: / / No.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
Complete the remainder of Section 6 only if Option 1 is selected.
PART B: LIMITS ON ELECTIVE DEFERRALS:
If Elective Deferrals are permitted under the Plan, a Contributing
Participant may elect under a salary reduction agreement to have his or
her Compensation reduced by an amount as described below (Choose one):
OPTION 1: / / An amount equal to a percentage of the Contributing
Participant's Compensation from ___% to ___% in increments of ___%.
OPTION 2: / / An amount of the Contributing Participant's Compensation
not less than ____________ and not more than _________.
The amount of such reduction shall be contributed to the Plan by the
Employer on behalf of the Contributing Participant. For any taxable
year, a Contributing Participant's Elective Deferrals shall not exceed
the limit contained in Section 402(g) of the Code in effect at the
beginning of such taxable year.
PART C. ELECTIVE DEFERRALS BASED ON BONUSES:
Instead of or in addition to making Elective Deferrals through payroll
deduction, may a Contributing Participant elect to contribute to the
Plan, as an Elective Deferral, part or all of a bonus rather than
receive such bonus in cash? (Choose one)
OPTION 1: / / Yes.
OPTION 2: / / No.
NOTE: If no option is selected, Option 2 will be deemed to be selected.
PART D. RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE DEFERRALS:
A Participant who ceases Elective Deferrals by revoking a salary
reduction agreement may return as a Contributing Participant as of such
times established by the Plan Administrator in a uniform and
nondiscriminatory manner.
19
Page 5
PART E. CHANGING ELECTIVE DEFERRAL AMOUNTS:
A Contributing Participant may modify a salary reduction agreement to
prospectively increased or decrease the amount of his or her Elective
Deferrals as of such times established by the Plan Administrator in a
uniform and nondiscriminatory manner.
PART F. CLAIMING EXCESS ELECTIVE DEFERRALS:
Participants who claim Excess Elective Deferrals for the preceding
calendar year must submit their claims in writing to the Plan
Administrator by (Choose one):
OPTION 1: / / March 1.
OPTION 2: / / Other (Specify a date not later than April 15) ___________
NOTE: If no option is selected, Option 1 will be deemed to be selected.
SECTION 7. MATCHING CONTRIBUTIONS
PART A. AUTHORIZATION OF MATCHING CONTRIBUTIONS:
Will the Employer make Matching Contributions to the Plan on
behalf of Qualifying Contributing Participants? (Choose one)
OPTION 1: / / Yes, but only with respect to a Contributing
Participant's Elective Deferrals.
OPTION 2: / / Yes, but only with respect to a Participant's
Nondeductible Employee Contributions.
OPTION 3: / / Yes, with respect to both Elective Deferrals and
Nondeductible Employee Contributions.
OPTION 4: / / No.
NOTE: If no option is selected, Option 4 will be deemed to be
selected. Complete the remainder of Section 7 only if Option 1,
2 or 3 is selected.
PART B. MATCHING CONTRIBUTION FORMULA:
If the Employer will make Matching Contributions, then the amount
of such Matching Contributions made on behalf of a Qualifying
Contributing Participant each Plan Year shall be (Choose one):
OPTION 1: / / An amount equal to _______% of such Contributing
Participant's Elective Deferral (and/or
Nondeductible Employee Contribution, if
applicable).
OPTION 2: / / An amount equal to the sum of ________% of the
portion of such Contributing Participant's
Elective Deferral (and/or Nondeductible Employee
Contribution, if applicable) which does not
exceed _______% of the Contributing
Participant's Compensation plus ________% of the
portion of such Contributing Participant's
Elective Deferral (and/or Nondeductible Employee
Contribution, if applicable) which exceeds
_______% of the Contributing Participant's
Compensation.
OPTION 3: / / Such amount, if any, equal to that percentage of
each Contributing Participant's Elective
Deferral (and/or Nondeductible Employee
Contribution, if applicable) which the Employer,
in its sole discretion, determines from year to
year.
OPTION 4: / / Other Formula. (Specify) _____________________
NOTE: If Option 4 is selected, the formula specified can only
allow Matching Contributions to be made with respect to a
Contributing Participant's Elective Deferrals (and/or
Nondeductible Employee Contribution, if applicable).
PART C. LIMIT ON MATCHING CONTRIBUTIONS:
Notwithstanding the Matching Contribution formula specified
above, no Matching Contribution will be made with respect to a
Contributing Participant's Elective Deferrals (and/or
Nondeductible Employee Contributions, if applicable) in excess of
__________ or ___________% of such Contributing Participant's
Compensation.
20
Page 6
PART D. QUALIFYING CONTRIBUTING PARTICIPANTS:
A Contributing Participant who satisfies the eligibility
requirements described in Section 4 will be a Qualifying
Contributing Participant and thus entitled to share in Matching
Contributions for any Plan Year only if the Participant is a
Contributing Participant and satisfies the following additional
conditions (Check one or more Options):
OPTION 1: / / No Additional Conditions.
OPTION 2: / / Hours of Service Requirement. The Contributing
Participant completes at least ____________
Hours of Service during the Plan Year.
However, this condition will be waived for
the following reasons (Check at least one):
/ / The Contributing Participant's Death.
/ / The Contributing Participant's
Termination of Employment after having
incurred a Disability.
/ / The Contributing Participant's
Termination of Employment after having
reached Normal Retirement Age.
/ / This condition will not be waived.
OPTION 3: / / Last Day Requirement. The Participant is an
Employee of the Employer on the last day of the
Plan Year. However, this condition will be
waived for the following reasons
(Check at least one):
/ / The Contributing Participant's Death.
/ / The Contributing Participant's
Termination of Employment after having
incurred a Disability.
/ / The Contributing Participant's
Termination of Employment after having
reached Normal Retirement Age.
/ / This condition will not be waived.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
SECTION 8. QUALIFIED NONELECTIVE CONTRIBUTIONS
PART A. AUTHORIZATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS:
Will the Employer make Qualified Nonelective Contributions to the
Plan? (Choose One)
OPTION 1: / / Yes.
OPTION 2: / / No.
If the Employer elects to make Qualified Nonelective
Contributions, then the amount, if any, of such contribution to
the Plan for each Plan Year shall be an amount determined by the
Employer.
NOTE: If no option is selected, Option 1 will be deemed to be
selected. Complete the remainder of Section 8 only if Option 1
is selected.
PART B. PARTICIPANTS ENTITLED TO QUALIFIED NONELECTIVE CONTRIBUTIONS:
Allocation of Qualified Nonelective Contributions shall be made
to the Individual Accounts of (Choose one):
OPTION 1: / / Only Participants who are not Highly Compensated
Employees.
OPTION 2. / / All Participants.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART C. ALLOCATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS:
Allocation of Qualified Nonelective Contributions to Participants
entitled thereto shall be made (Choose one):
OPTION 1: / / In the ratio which each Participant's
Compensation for the Plan Year bears to the
total Compensation of all Participants for such
Plan Year.
OPTION 2: / / In the ratio which each Participant's
Compensation not in excess of ___________ for
the Plan Year bears to the total Compensation of
all Participants not in excess of _____________
for such Plan Year.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
21
Page 7
SECTION 9. QUALIFIED MATCHING CONTRIBUTIONS
PART A. AUTHORIZATION OF QUALIFIED MATCHING CONTRIBUTIONS:
Will the Employer make Qualified Matching Contributions to the
Plan on behalf of Qualifying Contributing Participants? (Choose
One)
OPTION 1: / / Yes, but only with respect to a Contributing
Participant's Elective Deferrals.
OPTION 2: / / Yes, but only with respect to a Participant's
Nondeductible Employee Contributions.
OPTION 3: / / Yes, with respect to both Elective Deferrals and
Nondeductible Employee Contributions.
OPTION 4: / / No.
NOTE: If no option is selected, Option 3 will be deemed to be
selected. Complete the remainder of Section 9 only if Option 1,
2 or 3 is selected.
PART B. QUALIFIED MATCHING CONTRIBUTION FORMULA:
If the Employer will make Qualified Matching Contributions, then
the amount of such Qualified Matching Contributions made on
behalf of a Qualifying Contributing Participant each Plan Year
shall be (Choose one):
OPTION 1: / / An amount equal to ________% of such
Contributing Participant's Elective Deferral
(and/or Nondeductible Employee Contribution, if
applicable).
OPTION 2: / / An amount equal to the sum of ________% of the
portion of such Contributing Participant's
Elective Deferral (and/or Nondeductible Employee
Contribution, if applicable) which does not
exceed _________% of the Contributing
Participant's Compensation plus _________% of
the portion of such Contributing Participant's
Elective Deferral (and/or Nondeductible Employee
Contribution, if applicable) which exceeds ____%
of the Contributing Participant's Compensation.
OPTION 3: / / Such amount, if any, as determined by the
Employer in its sole discretion, equal to that
percentage of the Elective Deferrals (and/or
Nondeductible Employee Contribution, if
applicable) of each Contributing Participant
entitled thereto which would be sufficient to
cause the Plan to satisfy the Actual
Contribution Percentage tests (described in
Section 11.402 of the Plan) for the Plan Year.
OPTION 4: / / Other Formula. (Specify) _____________________
NOTE: If no option is selected, Option 3 will be deemed to be
selected.
PART C. PARTICIPANTS ENTITLED TO QUALIFIED MATCHING CONTRIBUTIONS:
Qualified Matching Contributions, if made to the Plan, will be
made on behalf of (Choose one):
OPTION 1: / / Only Contributing Participants who make Elective
Deferrals who are not Highly Compensated
Employees.
OPTION 2: / / All Contributing Participants who make Elective
Deferrals.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART D. LIMIT ON QUALIFIED MATCHING CONTRIBUTIONS:
Notwithstanding the Qualified Matching Contribution formula
specified above, the Employer will not match a Contributing
Participant's Elective Deferrals (and/or Nondeductible Employee
Contribution, if applicable) in excess of _____________ or
__________% of such Contributing Participant's Compensation.
SECTION 10. EMPLOYER PROFIT SHARING CONTRIBUTIONS
Complete Parts A, B and C
PART A. CONTRIBUTION FORMULA:
For each Plan Year the Employer will contribute an Amount to be
determined from year to year.
PART B. ALLOCATION FORMULA (Choose one):
OPTION 1: / / Pro Rata Formula. Employer Profit Sharing
Contributions shall be allocated to the
Individual Accounts of Qualifying Participants
in the ratio that each Qualifying Participant's
Compensation for the Plan Year bears to the
total Compensation of all Qualifying
Participants for the Plan Year.
22
Page 8
OPTION 2: / / Integrated Formula. Employer Profit Sharing
Contributions shall be allocated as follows
(Start with Step 3 if this Plan is not a
Top-Heavy Plan):
Step 1. Employer Profit Sharing Contributions
shall first be allocated pro rata to
Qualifying Participants in the manner
described in Section 10, Part B, Option
1. The percent so allocated shall not
exceed 3% of each Qualifying
Participant's Compensation.
Step 2. Any Employer Profit Sharing
Contributions remaining after the
allocation in Step 1 shall be allocated
to each Qualifying Participant's
Individual Account in the ratio that
each Qualifying Participant's
Compensation for the Plan Year in excess
of the integration level bears to all
Qualifying Participants' Compensation in
excess of the integration level, but not
in excess of 3%.
Step 3. Any Employer Profit Sharing
Contributions remaining after the
allocation in Step 2 shall be allocated
to each Qualifying Participant's
Individual Account in the ratio that the
sum of each Qualifying Participant's
total Compensation and Compensation in
excess of the integration level bears to
the sum of all Qualifying Participants'
total Compensation and Compensation in
excess of the integration level, but not
in excess of the profit sharing maximum
disparity rate as described in Section
3.01 (B)(3) of the Plan.
Step 4. Any Employer Profit Sharing
Contributions remaining after the
allocation in Step 3 shall be allocated
pro rata to Qualifying Participants in
the manner described in Section 10, Part
B, Option 1.
The integration level shall be (Choose one):
SUBOPTION (A): / / The Taxable Wage Base.
SUBOPTION (B): / / __________________ (a dollar amount less
than the Taxable Wage Base).
SUBOPTION (C): / / ___________% (not more than 100%) of the
Taxable Wage Base.
NOTE: If no option is selected, Suboption (a) will be deemed
to be selected,
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART C. QUALIFYING PARTICIPANTS:
A Participant will be a Qualifying Participant and thus entitled
to share in the Employer Profit Sharing Contribution for any Plan
Year only if the Participant is a Participant on at least one day
of such Plan Year and satisfies the following additional
conditions (Check one or more Options):
OPTION 1: / / No Additional Conditions.
OPTION 2: / / Hours of Service Requirement. The Participant
completes at least ________ Hours of Service
during the Plan Year. However, this condition
will be waived for the following reasons
(Check at least one):
/ / The Participant's Death.
/ / The Participant's Termination of
Employment after having incurred a
Disability.
/ / The Participant's Termination of
Employment after having reached Normal
Retirement Age.
/ / This condition will not be waived.
OPTION 3: / / Last Day Requirement. The Participant is an
Employee on the last day of the Plan Year.
However, this condition will be waived for the
following reasons
(Check at least one):
/ / The Participant's Death.
/ / The Participant's Termination of
Employment after having incurred a
Disability.
/ / The Participant's Termination of
Employment after having reached Normal
Retirement Age.
/ / This condition will not be waived.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
23
Page 9
SECTION 11. COMPENSATION
Complete Parts A through E
PART A. BASIC DEFINITION:
Compensation will mean all of each Participant's (Choose one):
Option 1: / / W-2 wages.
Option 2: / / Section 3401(a) wages.
Option 3: / / 415 safe-harbor compensation.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART B. MEASURING PERIOD FOR COMPENSATION:
Compensation shall be determined over the following applicable
period (Choose one):
Option 1: / / The Plan Year.
Option 2: / / The calendar year ending with or within the Plan
Year.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART C. INCLUSION OF ELECTIVE DEFERRALS:
Does Compensation include Employer Contributions made pursuant to
a salary reduction agreement which are not includible in the
gross income of the Employee under Sections 125, 402(e)(3),
402(h)(1)(B), and 403(b) of the Code? / / Yes / / No
NOTE: If neither box is checked, "Yes" will be deemed to be
selected.
PART D. PRE-ENTRY DATE COMPENSATION:
For the Plan Year in which an Employee enters the Plan, the
Employee's Compensation which shall be taken into account for
purposes of the Plan shall be (Choose one):
OPTION 1: / / The Employee's Compensation only from the time
the Employee became a Participant in the Plan.
OPTION 2: / / The Employee's Compensation for the whole of
such Plan Year.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART E. EXCLUSIONS FROM COMPENSATION:
Compensation shall not include the following (Check any that
apply):
/ / Bonuses / / Commissions
/ / Overtime / / Other (Specify) _____________________________
NOTE: No exclusions from Compensation are permitted if the
integrated allocation formula in Section 10, Part B is selected.
SECTION 12. VESTING AND FORFEITURES
Complete Parts A through G
PART A. VESTING SCHEDULE FOR EMPLOYER PROFIT SHARING CONTRIBUTIONS. A
Participant shall become Vested in his or her Individual Account
derived from Profit Sharing Contributions made pursuant to
Section 10 of the Adoption Agreement as follows (Choose one):
YEARS OF VESTED PERCENTAGE
VESTING SERVICE Option 1 / / Option 2 / / Option 3 / / Option 4 / / Option 5 / / (Complete if Chosen)
1 0% 0% 100% 0% ___%
2 0% 20% 100% 0% ___%
3 0% 40% 100% 20% ___% (not less than 20%)
4 0% 60% 100% 40% ___% (not less than 40%)
5 100% 80% 100% 60% ___% (not less than 60%)
6 100% 100% 100% 80% ___% (not less than 80%)
7 100% 100% 100% 100% ___% (not less than 100%)
NOTE: If no option is selected, Option 3 will be deemed to be selected.
24
Page 10
PART B. VESTING SCHEDULE FOR MATCHING CONTRIBUTIONS. A Participant shall
become Vested in his or her Individual Account derived from
Matching Contributions made pursuant to Section 7 of the Adoption
Agreement as follows (Choose one):
YEARS OF VESTED PERCENTAGE
VESTING SERVICE Option 1 / / Option 2 / / Option 3 / / Option 4 / / Option 5 / / (Complete if Chosen)
1 0% 0% 100% 0% ___%
2 0% 20% 100% 0% ___%
3 0% 40% 100% 20% ___% (not less than 20%)
4 0% 60% 100% 40% ___% (not less than 40%)
5 100% 80% 100% 60% ___% (not less than 60%)
6 100% 100% 100% 80% ___% (not less than 80 %)
7 100% 100% 100% 100% ___% (not less than 100 %)
NOTE: If no option is selected, Option 3 will be deemed to be selected.
PART C. HOURS REQUIRED FOR VESTING PURPOSES:
1. _______ Hours of Service (no more than 1,000) shall be
required to constitute a Year of Vesting Service.
2. _______ Hours of Service (no more than 500 but less than
the number specified in Section 12, Part C, Item 1, above)
must be exceeded to avoid a Break in Vesting Service.
3. For purposes of determining Years of Vesting Service,
Employees shall be given credit for Hours of Service with
the following predecessor employer(s): (Complete if
applicable)
PART D. EXCLUSION OF CERTAIN YEARS OF VESTING SERVICE:
All of an Employee's Years of Vesting Service with the Employer
are counted to determine the vesting percentage in the
Participant's Individual Account except (Check any that apply):
/ / Years of Vesting Service before the Employee reaches age
18.
/ / Years of Vesting Service before the Employer maintained
this Plan or a predecessor plan.
PART E. ALLOCATION OF FORFEITURES OF EMPLOYER PROFIT SHARING
CONTRIBUTIONS:
Forfeitures of Employer Profit Sharing Contributions shall be
(Choose one):
OPTION 1: / / Allocated to the Individual Accounts of the
Participants specified below in the manner as
described in Section 10, Part B (for Employer
Profit Sharing Contributions).
The Participants entitled to receive allocations
of such Forfeitures shall be (Choose one):
SUBOPTION (A): / / Only Qualifying
Participants.
SUBOPTION (B): / / All Participants.
OPTION 2: / / Applied to reduce Employer Profit Sharing
Contributions (Choose one):
SUBOPTION (A): / / For the Plan Year for
which the Forfeiture
arises.
SUBOPTION (B): / / For any Plan Year
subsequent to the Plan Year
for which the Forfeiture
arises.
OPTION 3: / / Applied first to the payment of the Plan's
administrative expenses and any excess applied to
reduce Employer Profit Sharing Contributions
(Choose one):
SUBOPTION (A): / / For the Plan Year for
which the Forfeiture
arises.
SUBOPTION (B): / / For any Plan Year
subsequent to the Plan Year
for which the Forfeitures
arises.
NOTE: If no option is selected, Option 1 and Suboption (a) will
be deemed to be selected.
25
Page 11
PART F. ALLOCATION OF FORFEITURES OF MATCHING CONTRIBUTIONS:
Forfeitures of Matching Contributions shall be (Choose one):
OPTION 1: / / Allocated, after all other Forfeitures under the
Plan, to each Participant's Individual Account
in the ratio which each Participant's
Compensation for the Plan Year bears to the
total Compensation of all Participants for such
Plan Year.
The Participants entitled to receive allocations
of such Forfeitures shall be (Choose one):
SUBOPTION (A): / / Only Qualifying
Contributing Participants.
SUBOPTION (B): / / Only Qualifying
Participants.
SUBOPTION (C): / / All Participants.
OPTION 2: / / Applied to reduce Matching Contributions (Choose
one):
SUBOPTION (A): / / For the Plan Year for
which the Forfeiture
arises.
SUBOPTION (B): / / For any Plan Year
subsequent to the Plan Year
for which the Forfeiture
arises.
OPTION 3: / / Applied first to the payment of the Plan's
administrative expenses and any excess applied
to reduce Matching Contributions (Choose one):
SUBOPTION (A): / / For the Plan Year for
which the Forfeiture
arises.
SUBOPTION (B): / / For any Plan Year
subsequent to the Plan Year
for which the Forfeitures
arises.
NOTE: If no option is selected, Option 1 and Suboption (a) will
be deemed to be selected.
PART G. ALLOCATION OF FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS:
Forfeitures of Excess Aggregate Contributions shall be (Choose
one):
OPTION 1: / / Allocated, after all other Forfeitures under the
Plan, to each Contributing Participant's
Matching Contribution account in the ratio which
each Contributing Participant's Compensation for
the Plan Year bears to the total Compensation of
all Contributing Participants for such Plan
Year. Such Forfeitures will not be allocated to
the account of any Highly Compensated Employee.
OPTION 2: / / Applied to reduce Matching Contributions (Choose
one):
SUBOPTION (A) / / For the Plan Year for
which the Forfeiture
arises.
SUBOPTION (B): / / For any Plan Year
subsequent to the Plan Year
for which the Forfeiture
arises.
OPTION 3: / / Applied first to the payment of the Plan's
administrative expenses and any excess applied
to reduce Matching Contributions (Choose one):
SUBOPTION (A): / / For the Plan Year for
which the Forfeiture
arises.
SUBOPTION (B): / / For any Plan Year
subsequent to the Plan
Year for which the
Forfeitures arises.
NOTE: If no option is selected, Option 2 and Suboption (a) will be
deemed to be selected.
SECTION 13. NORMAL RETIREMENT AGE AND EARLY RETIREMENT AGE
Part A. THE NORMAL RETIREMENT AGE UNDER THE PLAN SHALL BE (Check and complete
one option):
OPTION 1: / / Age 65.
OPTION 2: / / Age _______ (not to exceed 65).
OPTION 3: / / The later of age ______ (not to exceed 65) or
the ______ (not to exceed 5th) anniversary of
the first day of the first Plan Year in which
the Participant commenced participation in the
Plan.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
26
Page 12
PART B. EARLY RETIREMENT AGE (Choose one option):
OPTION 1: / / An Early Retirement Age is not applicable under the
Plan.
OPTION 2: / / Age _______ (not less than 55 nor more than 65).
OPTION 3: / / A Participant satisfies the Plan's Early Retirement
Age conditions by attaining age _______ (not less than
55) and completing _______ Years of Vesting Service.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
SECTION 14. DISTRIBUTIONS
DISTRIBUTABLE EVENTS. Answer each of the following items.
A. Termination of Employment Before Normal Retirement Age. May a Participant
who has not reached Normal Retirement Age request a distribution from the Plan? / / Yes / / No
B. Disability. May a Participant who has incurred a Disability request a distribution
from the Plan? / / Yes / / No
C. Attainment of Normal Retirement Age. May a Participant who has attained
Normal Retirement Age but has not incurred a Termination of Employment request
distribution from the Plan? / / Yes / / No
D. Attainment of Age 59 1/2. Will Participants who have attained age 59 1/2 be
permitted to withdraw Elective Deferrals while still employed by the Employer? / / Yes / / No
E. Hardship Withdrawals of Elective Deferrals. Will Participants be permitted to
withdraw Elective Deferrals on account of hardship pursuant to Section 11.503 of
the Plan? / / Yes / / No
F. In-Service Withdrawals. Will Participants be permitted to request a distribution
during service pursuant to Section 6.01(A)(3) of the Plan? / / Yes / / No
G. Hardship Withdrawals. Will Participants be permitted to make hardship
withdrawals pursuant to Section 6.01(A)(4) of the Plan? / / Yes / / No
H. Withdrawals of Rollover or Transfer Contributions. Will Employees be permitted
to withdraw their Rollover or Transfer Contributions at any time? / / Yes / / No
NOTE: If a box is not checked for an item, "Yes" will be deemed to be
selected for that item. Section 411(d)(6) of the Code prohibits the
elimination of protected benefits. In general, protected benefits
include the forms and timing of payout options. If the Plan is being
adopted to amend and replace a Prior Plan that permitted a distribution
option described above, you must answer "Yes" to that item.
SECTION 15. JOINT AND SURVIVOR ANNUITY
Part A. Retirement Equity Act Safe Harbor:
Will the safe harbor provisions of Section 6.05(F) of the Plan apply?
(Choose only one option)
OPTION 1: / / Yes.
OPTION 2: / / No.
NOTE: You must select "No" if you are adopting this Plan as an
amendment and restatement of a Prior Plan that was subject to the joint
and survivor annuity requirements.
Part B. Survivor Annuity Percentage: (Complete only if your answer in Section
15, Part A is "No").
The survivor annuity portion of the Joint and Survivor Annuity shall be
a percentage equal to _____% (at least 50% but no more than 100%) of
the amount paid to the Participant prior to his or her death.
27
Page 13
SECTION 16. OTHER OPTIONS
Answer "Yes" or "No" to each of the following questions by checking the
appropriate box. If a box is not checked for a question, the answer will be
deemed to be "No."
A. Loans: Will loans to Participants pursuant to Section 6.08 of the / / Yes / / No
Plan be permitted?
B. Insurance: Will the Plan allow for the investment in insurance
policies pursuant to Section 5.13 of the Plan? / / Yes / / No
C. Employer Securities: Will the Plan allow for the investment in
qualifying Employer securities or qualifying Employer real property? / / Yes / / No
D. Rollover Contributions: Will Employees be permitted to make rollover
contributions to the Plan pursuant to Section 3.03 of the Plan? / / Yes / / No
/ / Yes, but only after
becoming a
Participant.
E. Transfer Contributions: Will Employees be permitted to make transfer
contributions to the Plan pursuant to Section 3.04 of the Plan? / / Yes / / No
/ / Yes, but only after
becoming a
Participant.
F. Nondeductible Employee Contributions: Will Employees be permitted to
make Nondeductible Employee Contributions pursuant to Section 11.305
of the Plan? / / Yes / / No
Check here if such contributions will be mandatory. / /
G. Will Participants be permitted to direct the investment of their
Plan assets pursuant to Section 5.14 of the Plan? / / Yes / / No
SECTION 17. LIMITATION ON ALLOCATIONS
More Than One Plan
If you maintain or ever maintained another qualified plan (other than a
paired standardized money purchase pension plan using the same Basic Plan
Document as this Plan) in which any Participant in this Plan is (or was) a
Participant or could become a Participant, you must complete this section.
You must also complete this section if you maintain a welfare benefit
fund, as defined in Section 419(e) of the Code, or an individual medical
account, as defined in Section 415(l)(2) of the Code, under which amounts
are treated as annual additions with respect to any Participant in this
Plan.
PART A. INDIVIDUALLY DESIGNED DEFINED CONTRIBUTION PLAN:
If the Participant is covered under another qualified defined contribution
plan maintained by the Employer, other than a master or prototype plan:
1. / / The provisions of Section 3.05(B)(1) through 3.05(B)(6) of the
Plan will apply as if the other plan were a master or prototype
plan.
2. / / Other method. (Provide the method under which the plans will limit
total annual additions to the maximum permissible amount, and will
properly reduce any excess amounts, in a manner that precludes
Employer discretion.) ___________________________________
PART B. DEFINED BENEFIT PLAN:
If the Participant is or has ever been a participant in a defined benefit
plan maintained by the Employer, the Employer will provide below the
language which will satisfy the 1.0 limitation of Section 415(e) of the
Code.
1. / / If the projected annual addition to this Plan to the account of a
Participant for any limitation year would cause the 1.0
limitation of Section 415(e) of the Code to be exceeded, the
annual benefit of the defined benefit plan for such limitation
year shall be reduced so that the 1.0 limitation shall be
satisfied.
If it is not possible to reduce the annual benefit of the defined
benefit plan and the projected annual addition to this Plan to
the account of a Participant for a limitation year would cause
the 1.0 limitation to be exceeded, the Employer shall reduce the
Employer Contribution which is to be allocated to this Plan on
behalf of such Participant so that the 1.0 limitation will be
satisfied. (The provisions of Section 415(e) of the Code are
incorporated herein by reference under the authority of Section
1106(h) of the Tax Reform Act of 1986.)
2. / / Other method. (Provide language describing another method. Such
language must preclude Employer discretion.) ____________________
28
Page 14
SECTION 18. TOP-HEAVY ISSUES
Complete Parts A and B
PART A. MINIMUM ALLOCATION OR BENEFIT:
For any Plan Year with respect to which this Plan is a Top-Heavy
Plan, any minimum allocation required pursuant to Section 3.01(E)
of the Plan shall be made (Choose one):
OPTION 1: / / To this Plan.
OPTION 2: / / To the following other plan maintained by the
Employer (Specify name and plan number of
plan) __________________________________________
OPTION 3: / / In accordance with the method described on an
attachment to this Adoption Agreement. (Attach
language describing the method that will be used
to satisfy Section 416 of the Code. Such method
must preclude Employer discretion.)
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART B. TOP-HEAVY VESTING SCHEDULE:
Pursuant to Section 6.01(C) of the Plan, the vesting schedule
that will apply when this Plan is a Top-Heavy Plan (unless the
Plan's regular vesting schedule provides for more rapid vesting)
shall be (Choose one):
OPTION 1: / / 6 Year Graded.
OPTION 2: / / 3 Year Cliff.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
SECTION 19. PROTOTYPE SPONSOR
Name of Prototype Sponsor ____________________________________
Address _______________________________________________________
Telephone Number ______________________________________________
PERMISSIBLE INVESTMENTS
The assets of the Plan shall be invested only in those
investments described below (To be completed by the Prototype
Sponsor): _____________________________________________________
SECTION 20. TRUSTEE OR CUSTODIAN
OPTION A: / / Financial Organization as Trustee or Custodian
CHECK ONE: / / Custodian, / / Trustee without full trust powers, or
/ / Trustee with full trust powers
Financial Organization___________________________________________________
Signature _______________________________________________________________
Type Name _______________________________________________________________
COLLECTIVE OR COMMINGLED FUNDS
List any collective or commingled funds maintained by the financial
organization Trustee in which assets of the Plan may be invested (Complete
if applicable).___________________________________________________________
OPTION B: / / Individual Trustee(s)
Signature ____________________________ Signature ___________________________
Type Name ____________________________ Type Name ___________________________
Signature ____________________________ Signature ___________________________
Type Name ____________________________ Type Name ___________________________
29
Page 15
SECTION 21. RELIANCE
The Employer may not rely on the opinion letter issued by the National Office
of the Internal Revenue Service as evidence that this Plan is qualified under
Section 401 of the Internal Revenue Code. In Order to obtain reliance with
respect to plan qualification, the Employer must apply to the appropriate Key
District office for a determination letter.
This Adoption Agreement may be used only in conjunction with Basic Plan
Document No. 04.
SECTION 22. EMPLOYER SIGNATURE
Important: Please read before signing
I am an authorized representative of the Employer named above and I
state the following:
1. I acknowledge that I have relied upon my own advisors regarding
the completion of this Adoption Agreement and the legal tax
implications of adopting this Plan.
2. I understand that my failure to properly complete this Adoption
Agreement may result in disqualification of the Plan.
3. I understand that the Prototype Sponsor will inform me of any
amendments made to the Plan and will notify me should it
discontinue or abandon the Plan.
4. I have received a copy of this Adoption Agreement and the
corresponding Basic Plan Document.
Signature for Employer_________________________ Date Signed ______________
Type Name______________________________ Title ____________________________
30
IRS Approved
Prototype Plan Document
FOR
Qualified
Retirement Plans
(401(K) PROFIT SHARING)
▇.▇. ▇▇▇▇▇▇▇▇ & CO.
31
===============================
QUALIFIED
RETIREMENT
PLAN
BASIC PLAN
DOCUMENT
===============================
32
TABLE OF CONTENTS
SECTION ONE DEFINITIONS
1.01 Adoption Agreement .............................................. 1
1.02 Basic Plan Document ............................................. 1
1.03 Beneficiary ..................................................... 1
1.04 Break In Eligibility Service .................................... 1
1.05 Break In Vesting Service ........................................ 1
1.06 Code ............................................................ 1
1.07 Compensation .................................................... 1
1.08 Custodian ....................................................... 2
1.09 Disability ...................................................... 2
1.10 Early Retirement Age ............................................ 2
1.11 Earned Income ................................................... 2
1.12 Effective Date .................................................. 2
1.13 Eligibility Computation Period .................................. 2
1.14 Employee ........................................................ 2
1.15 Employer ........................................................ 2
1.16 Employer Contribution ........................................... 3
1.17 Employment Commencement Date .................................... 3
1.18 Employer Profit Sharing Contribution ............................ 3
1.19 Entry Dates ..................................................... 3
1.20 ERISA ........................................................... 3
1.21 Forfeiture ...................................................... 3
1.22 Fund ............................................................ 3
1.23 Highly Compensated Employee ..................................... 3
1.24 Hours of Service - Means ........................................ 3
1.25 Individual Account .............................................. 4
1.26 Investment Fund ................................................. 4
1.27 Key Employee .................................................... 4
1.28 Leased Employee ................................................. 4
1.29 Nondeductible Employee Contributions: ........................... 4
1.30 Normal Retirement Age ........................................... 4
1.31 Owner - Employee ................................................ 4
1.32 Participant ..................................................... 4
1.33 Plan ............................................................ 4
1.34 Plan Administrator .............................................. 4
1.35 Plan Year ....................................................... 4
1.36 Prior Plan ...................................................... 4
1.37 Prototype Plan .................................................. 4
1.38 Qualifying Participant .......................................... 4
1.39 Related Employer ................................................ 5
1.40 Related Employer Participation Agreement ........................ 5
1.41 Self-Employed Individual ........................................ 5
1.42 Separate Fund ................................................... 5
1.43 Taxable Wage Base ............................................... 5
1.44 Termination of Employment ....................................... 5
1.45 Top-Heavy Plan .................................................. 5
1.46 Trustee ......................................................... 5
1.47 Valuation Date .................................................. 5
1.48 Vested .......................................................... 5
1.49 Year Of Eligibility Service ..................................... 5
1.50 Year Of Vesting Service ......................................... 5
SECTION TWO ELIGIBILITY AND PARTICIPATION
2.01 Eligibility To Participate ...................................... 6
2.02 Plan Entry ...................................................... 6
2.03 Transfer To Or From Ineligible Class ............................ 6
2.04 Return As A Participant After Break In Eligibility Service ...... 6
2.05 Determinations Under This Section ............................... 6
2.06 Terms Of Employment ............................................. 6
2.07 Special Rules Where Elapsed Time Method Is Being Used ........... 6
2.08 Election Not To Participate ..................................... 7
33
SECTION THREE CONTRIBUTIONS
3.01 Employer Contributions .......................................... 7
3.02 Nondeductible Employee Contributions ............................ 9
3.03 Rollover Contributions .......................................... 9
3.04 Transfer Contributions .......................................... 9
3.05 Limitation On Allocations ....................................... 9
SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
4.01 Individual Accounts ............................................. 12
4.02 Valuation Of Fund ............................................... 12
4.03 Valuation Of Individual Accounts ................................ 12
4.04 Modification Of Method For Valuing Individual Accounts .......... 12
4.05 Segregation Of Assets ........................................... 12
4.06 Statement of Individual Accounts ................................ 12
SECTION FIVE
5.01 Creation Of Fund ................................................ 13
5.02 Investment Authority ............................................ 13
5.03 Financial Organization Custodian Or Trustee
Without Full Trust Powers ....................................... 13
5.04 Financial Organization Trustee With Full Trust Powers
And Individual Trustee .......................................... 13
5.05 Division Of Fund Into Investment Funds .......................... 14
5.06 Compensation And Expenses ....................................... 14
5.07 Not Obligated To Question Data .................................. 14
5.08 Liability For Withholding On Distributions ...................... 15
5.09 Resignation Or Removal Of Trustee (Or Custodian) ................ 15
5.10 Degree Of Care - Limitations Of Liability ....................... 15
5.11 Indemnification Of Prototype Sponsor And Trustee (Or Custodian).. 15
5.12 Investment Managers ............................................. 15
5.13 Matters Relating To Insurance ................................... 16
5.14 Direction Of Investments By Participant ......................... 16
SECTION SIX VESTING AND DISTRIBUTION
6.01 Distribution To Participant ..................................... 16
6.02 Form Of Distribution To A Participant ........................... 19
6.03 Distributions Upon The Death Of A Participant ................... 19
6.04 Form Of Distribution To Beneficiary ............................. 20
6.05 Joint And Survivor Annuity Requirements ......................... 20
6.06 Distribution Requirements ....................................... 22
6.07 Annuity Contracts ............................................... 24
6.08 Loans To Participants ........................................... 24
6.09 Distribution In Kind ............................................ 25
6.10 Direct Rollovers Of Eligible Rollover Distributions ............. 25
6.11 Procedure For Missing Participants Or Beneficiaries ............. 26
SECTION SEVEN CLAIMS PROCEDURE
7.01 Filing A Claim For Plan Distributions ........................... 26
7.02 Denial Of Claim ................................................. 26
7.03 Remedies Available .............................................. 26
SECTION EIGHT PLAN ADMINISTRATOR
8.01 Employer Is Plan Administrator .................................. 26
8.02 Powers And Duties Of The Plan Administrator ..................... 26
8.03 Expenses And Compensation ....................................... 27
8.04 Information From Employer ....................................... 27
SECTION NINE AMENDMENT AND TERMINATION
9.01 Right Of Prototype Sponsor To Amend The Plan .................... 27
9.02 Right Of Employer To Amend The Plan ............................. 27
9.03 Limitation On Power To Amend .................................... 27
9.04 Amendment Of Vesting Schedule ................................... 28
34
9.05 Permanency ...................................................... 28
9.06 Method And Procedure For Termination ............................ 28
9.07 Continuance Of Plan by Successor Employer ....................... 28
9.08 Failure Of Plan Qualification ................................... 28
SECTION TEN MISCELLANEOUS
10.01 State Community Property Laws ................................... 28
10.02 Headings ........................................................ 28
10.03 Gender And Number ............................................... 28
10.04 Plan Merger Or Consolidation .................................... 28
10.05 Standard Of Fiduciary Conduct ................................... 28
10.06 General Undertaking Of All Parties .............................. 29
10.07 Agreement Binds Heirs, Etc ...................................... 29
10.08 Determination Of Top-Heavy Status ............................... 29
10.09 Special Limitations For Owner-Employees ......................... 30
10.10 Inalienability Of Benefits ...................................... 30
10.11 Cannot Eliminate Protected Benefits ............................. 30
SECTION ELEVEN 401(k) PROVISIONS
11.100 Definitions ..................................................... 30
11.101 Actual Deferral Percentage (ADP) ................................ 30
11.102 Aggregate Limit ................................................. 31
11.103 Average Contribution Percentage (ACP) ........................... 31
11.104 Contributing Participant ........................................ 31
11.105 Contribution Percentage ......................................... 31
11.106 Contribution Percentage Amounts ................................. 31
11.107 Elective Deferrals .............................................. 31
11.108 Eligible Participant ............................................ 31
11.109 Excess Aggregate Contributions .................................. 31
11.110 Excess Contributions ............................................ 31
11.111 Excess Elective Deferrals ....................................... 31
11.112 Matching Contribution ........................................... 32
11.113 Qualified Nonelective Contributions ............................. 32
11.114 Qualified Matching Contributions ................................ 32
11.115 Qualifying Contributing Participant ............................. 32
11.201 Requirements To Enroll As A Contributing Participant ............ 32
11.202 Changing Elective Deferral Amounts .............................. 32
11.203 Ceasing Elective Deferrals ...................................... 32
11.204 Return As A Contributing Participant After Ceasing
Elective Deferrals .............................................. 32
11.205 Certain One-Time Irrevocable Elections .......................... 32
11.300 Contributions ................................................... 32
11.301 Contributions By Employer ....................................... 32
11.302 Matching Contributions .......................................... 33
11.303 Qualified Nonelective Contributions ............................. 33
11.304 Qualified Matching Contributions ................................ 33
11.305 Nondeductible Employee Contributions ............................ 33
11.400 Nondiscrimination testing ....................................... 33
11.401 Actual Deferral Percentage Test (ADP) ........................... 33
11.402 Limits On Nondeductible Employee Contributions
And Matching Contributions ...................................... 34
11.500 Distribution Provisions ......................................... 35
11.501 General Rule .................................................... 35
11.502 Distribution Requirements ....................................... 35
11.503 Hardship Distribution ........................................... 35
11.504 Distribution Of Excess Elective Deferrals ....................... 35
11.505 Distribution Of Excess Contributions ............................ 36
11.506 Distribution Of Excess Aggregate Contributions .................. 36
11.507 Recharacterization .............................................. 36
11.508 Distribution Of Elective Deferrals If Excess Annual Additions ... 37
11.600 Vesting ......................................................... 37
11.601 100% Vesting On Certain Contributions ........................... 37
11.602 Forfeitures And Vesting Of Matching Contributions ............... 37
35
QUALIFIED RETIREMENT PLAN AND TRUST
Defined Contribution Basic Plan Document 04
SECTION ONE DEFINITIONS
The following words and phrases when used in the Plan with
initial capital letters shall, for the purpose of this Plan,
have the meanings set forth below unless the context indicates
that other meanings are intended:
1.01 ADOPTION AGREEMENT
Means the document executed by the Employer through which it
adopts the Plan and Trust and thereby agrees to be bound by
all terms and conditions of the Plan and Trust.
1.02 BASIC PLAN DOCUMENT
Means this prototype Plan and Trust document.
1.03 BENEFICIARY
Means the individual or individuals designated pursuant to
Section 6.03(A) of the Plan.
1.04 BREAK IN ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with an
Eligibility Computation Period during which an Employee fails
to complete more than 500 Hours of Service (or such lesser
number of Hours of Service specified in the Adoption Agreement
for this purpose).
1.05 BREAK IN VESTING SERVICE
Means a Plan Year (or other vesting computation period described
in Section 1.50) during which an Employee fails to complete more
than 500 Hours of Service (or such lesser number of Hours of
Service specified in the Adoption Agreement for this purpose).
1.06 CODE
Means the Internal Revenue Code of 1986 as amended from
time-to-time.
1.07 COMPENSATION
A. BASIC DEFINITION
For Plan Years beginning on or after January 1, 1989, the
following definition of Compensation shall apply:
As elected by the Employer in the Adoption Agreement (and if
no election is made, W-2 wages will be deemed to have been
selected), Compensation shall mean one of the following:
1. W-2 wages. Compensation is defined as information
required to be reported under Sections 6041 and 6051,
and 6052 of the Code (Wages, tips and other
compensation as reported on Form W-2). Compensation
is defined as wages within the meaning of Section
3401(a) of the Code and all other payments of
compensation to an Employee by the Employer (in the
course of the Employer's trade or business) for which
the Employer is required to furnish the Employee a
written statement under Sections 6041(d) and
6051(a)(3), and 6052 of the Code. Compensation must
be determined without regard to any rules under
Section 3401(a) that limit the remuneration included
in wages based on the nature or location of the
employment or the services performed (such as the
exception for agricultural labor in Section
3401(a)(2)).
2. Section 3401(a) wages. Compensation is defined as
wages within the meaning of Section 3401(a) of the
Code, for the purposes of income tax withholding at
the source but determined without regard to any rules
that limit the remuneration included in wages based
on the nature or location of the employment or the
services performed (such as the exception for
agricultural labor in Section 3401(a)(2)).
3. 415 safe-harbor compensation. Compensation is defined
as wages, salaries, and fees for professional
services and other amounts received (without regard
to whether or not an amount is paid in cash) for
personal services actually rendered in the course of
employment with the Employer maintaining the Plan to
the extent that the amounts are includable in gross
income (including, but not limited to, commissions
paid salesmen, compensation for services on the basis
of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a
nonaccountable plan (as described in 1.62-2(c)), and
excluding the following:
a. Employer contributions to a plan of deferred
compensation which are not includible in the
Employee's gross income for the taxable year
in which contributed, or employer
contributions under a simplified employee
pension plan to the extent such
contributions are deductible by the
Employee, or any distributions from a plan
of deferred compensation;
b. Amounts realized from the exercise of a
nonqualified stock option, or when
restricted stock (or property) held by the
Employee either becomes freely transferable
or is no longer subject to a substantial
risk of forfeiture;
c. Amounts realized from the sale, exchange or
other disposition of stock acquired under a
qualified stock option; and
d. Other amounts which received special tax
benefits, or contributions made by the
Employer (whether or not under a salary
reduction agreement) towards the purchase of
an annuity contract described in Section
403(b) of the Code (whether or not the
contributions are actually excludable from
the gross income of the Employee).
For any Self-Employed Individual covered under the Plan,
Compensation will mean Earned Income.
B. DETERMINATION PERIOD AND OTHER RULES
Compensation shall include only that Compensation which is
actually paid to the Participant during the determination
period. Except as provided elsewhere in this Plan, the
determination period shall be the Plan Year unless the
Employer has selected another period in the Adoption
Agreement. If the Employer makes no election, the
determination period shall be the Plan Year.
Unless otherwise indicated in the Adoption Agreement,
Compensation shall include any amount which is contributed by
the Employer pursuant to a salary reduction agreement and
which is not includible in the gross income of the Employee
under Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the
Code.
36
2
Where this Plan is being adopted as an amendment and
restatement to bring a Prior Plan into compliance with the Tax
Reform Act of 1986, such Prior Plan's definition of
Compensation shall apply for Plan Years beginning before
January 1, 1989.
C. LIMITS ON COMPENSATION
For years beginning after December 31, 1988 and before January
1, 1994, the annual Compensation of each Participant taken
into account for determining all benefits provided under the
Plan for any determination period shall not exceed $200,000.
This limitation shall be adjusted by the Secretary at the same
time and in the same manner as under Section 415(d) of the
Code, except that the dollar increase in effect on January 1
of any calendar year is effective for Plan Years beginning in
such calendar year and the first adjustment to the $200,000
limitation is effective on January 1, 1990.
For Plan Years beginning on or after January 1, 1994, the
annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any Plan
Year shall not exceed $150,000, as adjusted for increases in
the cost-of-living in accordance with Section 401(a)(17)(B) of
the Internal Revenue Code. The cost-of-living adjustment in
effect for a calendar year applies to any determination period
beginning in such calendar year.
If the period for determining Compensation used in calculating
an Employee's allocation for a determination period is a short
Plan Year (i.e., shorter than 12 months), the annual
Compensation limit is an amount equal to the otherwise
applicable annual Compensation limit multiplied by a fraction,
the numerator of which is the number of months in the short
Plan Year, and the denominator of which is 12.
In determining the Compensation of a Participant for purposes
of this limitation, the rules of Section 414(q)(6) of the Code
shall apply, except in applying such rules, the term "family"
shall include only the spouse of the Participant and any
lineal descendants of the Participant who have not attained
age 19 before the close of the year. If, as a result of the
application of such rules the adjusted $200,000 limitation is
exceeded, then (except for purposes of determining the portion
of Compensation up to the integration level, if this Plan
provides for permitted disparity), the limitation shall be
prorated among the affected individuals in proportion to
each such individual's Compensation as determined under this
Section prior to the application of this limitation.
If Compensation for any prior determination period is taken
into account in determining an Employee's allocations or
benefits for the current determination period, the
Compensation for such prior determination period is subject to
the applicable annual Compensation limit in effect for that
prior period. For this purpose, in determining allocations in
Plan Years beginning on or after January 1, 1989, the annual
Compensation limit in effect for determination periods
beginning before that date is $200,000. In addition, in
determining allocations in Plan Years beginning on or after
January l, 1994, the annual Compensation limit in effect for
determination periods beginning before that date is $150,000
1.08 CUSTODIAN
Means an entity specified in the Adoption Agreement as Custodian
or any duly appointed successor as provided in Section 5.09.
1.09 DISABILITY
Unless the Employer has elected a different definition in the
Adoption Agreement, Disability means the inability to engage in
any substantial, gainful activity by reason of any medically
determinable physical or mental impairment that can be expected
to result in death or which has lasted or can be expected to last
for a continuous period of not less than 12 months. The
permanence and degree of such impairment shall be supported by
medical evidence.
1.10 EARLY RETIREMENT AGE
Means the age specified in the Adoption Agreement. The Plan will
not have an Early Retirement Age if none is specified in the
Adoption Agreement.
1.11 EARNED INCOME
Means the net earnings from self-employment in the trade or
business with respect to which the Plan is established, for
which personal services of the individual are a material
income-producing factor. Net earnings will be determined
without regard to items not included in gross income and the
deductions allocable to such items. Net earnings are reduced
by contributions by the Employer to a qualified plan to the
extent deductible under Section 404 of the Code.
Net earnings shall be determined with regard to the deduction
allowed to the Employer by Section 164(f) of the Code for taxable
years beginning after December 31, 1989.
1.12 EFFECTIVE DATE
Means the date the Plan becomes effective as indicated in the
Adoption Agreement. However, as indicated in the Adoption
Agreement, certain provisions may have specific effective dates.
Further, where a separate date is stated in the Plan as of which
a particular Plan provision becomes effective, such date will
control with respect to that provision.
1.13 ELIGIBILITY COMPUTATION PERIOD
An Employee's initial Eligibility Computation Period shall be the
12 consecutive month period commencing on the Employee's
Employment Commencement Date. The Employee's subsequent
Eligibility Computation Periods shall be the 12 consecutive month
periods commencing on the anniversaries of his or her Employment
Commencement Date; provided, however, if pursuant to the Adoption
Agreement, an Employee is required to complete one or less Years
of Eligibility Service to become a Participant, then his or her
subsequent Eligibility Computation Periods shall be the Plan
Years commencing with the Plan Year beginning during his or her
initial Eligibility Computation Period. An Employee does not
complete a Year of Eligibility Service before the end of the 12
consecutive month period regardless of when during such period
the Employee completes the required number of Hours of Service.
1.14 EMPLOYEE
Means any person employed by an Employer maintaining the Plan or
of any other employer required to be aggregated with such
Employer under Sections 414(b), (c), (m) or (o) of the Code.
The term Employee shall also include any Leased Employee deemed
to be an Employee of any Employer described in the previous
paragraph as provided in Section 414(n) or (o) of the Code.
1.15 EMPLOYER
Means any corporation, partnership, sole-proprietorship or other
entity named in the Adoption Agreement and any successor who by
merger, consolidation, purchase or otherwise assumes the
obligations of the Plan. A partnership is considered to be the
Employer of each of the partners and a sole-proprietorship is
considered to be the Employer of a sole proprietor. Where this
Plan is being maintained by a union or other entity that
represents its member Employees in the negotiation of collective
bargaining agreements, the term Employer shall mean such union or
other entity.
37
3
1.16 EMPLOYER CONTRIBUTION
Means the amount contributed by the Employer each year as
determined under this Plan.
1.17 EMPLOYMENT COMMENCEMENT DATE
An Employee's Employment Commencement date means the date the
Employee first performs an Hour of Service for the Employer.
1.18 EMPLOYER PROFIT SHARING CONTRIBUTION
Means an Employer Contribution made pursuant to the Section of
the Adoption Agreement titled "Employer Profit Sharing
Contributions." The Employer may make Employer Profit Sharing
Contributions without regard to current or accumulated earnings
or profits.
1.19 ENTRY DATES
Means the first day of the Plan Year and the first day of the
seventh month of the Plan Year, unless the Employer has specified
different dates in the Adoption Agreement.
1.20 ERISA
Means the Employee Retirement Income Security Act of 1974 as
amended from time-to-time.
1.21 FORFEITURE
Means that portion of a Participant's Individual Account derived
from Employer Contributions which he or she is not entitled to
receive (i.e., the nonvested portion).
1.22 FUND
Means the Plan assets held by the Trustee for the Participants'
exclusive benefit.
1.23 HIGHLY COMPENSATED EMPLOYEE
The term Highly Compensated Employee includes highly compensated
active employees and highly compensated former employees.
A highly compensated active employee includes any Employee who
performs service for the Employer during the determination year
and who, during the look-back year (a) received Compensation from
the Employer in excess of $75,000 (as adjusted pursuant to
Section 415(d) of the Code); (b) received Compensation from the
Employer in excess of $50,000 (as adjusted pursuant to Section
415(d) of the Code) and was a member of the top-paid group for
such year; or (c) was an officer of the Employer and received
Compensation during such year that is greater than 50% of the
dollar limitation in effect under Section 415(b)(1)(A) of the
Code. The term Highly Compensated Employee also includes: (a)
Employees who are both described in the preceding sentence if the
term "determination year" is substituted for the term "look-back
year" and the Employee is one of the 100 Employees who received
the most Compensation from the Employer during the determination
year; and (b) Employees who are 5% owners at any time during the
look-back year or determination year.
If no officer has satisfied the Compensation requirement of (c)
above during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a Highly
Compensated Employee.
For this purpose, the determination year shall be the Plan Year.
The look-back year shall be the 12 month period immediately
preceding the determination year.
A highly compensated former employee includes any Employee who
separated from service (or was deemed to have separated) prior to
the determination year, performs no service for the Employer
during the determination year, and was a highly compensated
active employee for either the separation year or any
determination year ending on or after the Employee's 55th
birthday.
If an Employee is, during a determination year or look-back year,
a family member of either a 5% owner who is an active or former
Employee or a Highly Compensated Employee who is one of the 10
most Highly Compensated Employees ranked on the basis of
Compensation paid by the Employer during such year, then the
family member and the 5% owner or top 10 Highly Compensated
Employee shall be aggregated. In such case, the family member and
5% owner or top 10 Highly Compensated Employee shall be treated
as a single Employee receiving Compensation and Plan
contributions or benefits equal to the sum of such Compensation
and contributions or benefits of the family member and 5% owner
or top 10 Highly Compensated Employee. For purposes of this
Section, family member includes the spouse, lineal ascendants and
descendants of the Employee or former Employee and the spouses of
such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of
Employees in the top-paid group, the top 100 Employees, the
number of Employees treated as officers and the Compensation that
is considered, will be made in accordance with Section 414(q) of
the Code and the regulations thereunder.
1.24 HOURS OF SERVICE - MEANS
A. Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. These
hours will be credited to the Employee for the computation
period in which the duties are performed; and
B. Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence. No more than 501
Hours of Service will be credited under this paragraph for any
single continuous period (whether or not such period occurs in
a single computation period). Hours under this paragraph shall
be calculated and credited pursuant to Section 2530.200b-2 of
the Department of Labor Regulations which is incorporated
herein by this reference; and
C. Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The
same Hours of Service will not be credited both under
paragraph (A) or paragraph (B), as the case may be, and under
this paragraph (C). These hours will be credited to the
Employee for the computation period or periods to which the
award or agreement pertains rather than the computation period
in which the award, agreement, or payment is made.
D. Solely for purposes of determining whether a Break in
Eligibility Service or a Break in Vesting Service has occurred
in a computation period (the computation period for purposes
of determining whether a Break in Vesting Service has occurred
is the Plan Year or other vesting computation period described
in Section 1.50), an individual who is absent from work for
maternity or paternity reasons shall receive credit for the
Hours of Service which would otherwise have been credited to
such individual but for such absence, or in any case in which
such hours cannot be determined, 8 Hours of Service per day of
such absence. For purposes of this paragraph, an absence from
work for maternity or paternity reasons means an
38
4
absence (1) by reason of the pregnancy of the individual, (2)
by reason of a birth of a child of the individual, (3) by
reason of the placement of a child with the individual in
connection with the adoption of such child by such individual,
or (4) for purposes of caring for such child for a period
beginning immediately following such birth or placement. The
Hours of Service credited under this paragraph shall be
credited (1) in the Eligibility Computation Period or Plan
Year or other vesting computation period described in Section
1.50 in which the absence begins if the crediting is necessary
to prevent a Break in Eligibility Service or a Break in
Vesting Service in the applicable period, or (2) in all other
cases, in tile following Eligibility Computation Period or
Plan Year or other vesting computation period described in
Section 1.50.
E. Hours of Service will be credited for employment with other
members of an affiliated service group (under Section 414(m)
of the Code), a controlled group of corporations (under
Section 414(b) of the Code), or a group of trades or
businesses under common control (under Section 414(c) of the
Code) of which the adopting Employer is a member, and any
other entity required to be aggregated with the Employer
pursuant to Section 414(o) of the Code and the regulations
thereunder.
Hours of Service will also be credited for any individual
considered an Employee for purposes of this Plan under Code
Sections 414(n) or 414(o) and the regulations thereunder.
F. Where the Employer maintains the plan of a predecessor
employer, service for such predecessor employer shall be
treated as service for the Employer.
G. The above method for determining Hours of Service may be
altered as specified in the Adoption Agreement,
1.25 INDIVIDUAL ACCOUNT
Means the account established and maintained under this Plan for
each Participant in accordance with Section 4.01.
1.26 INVESTMENT FUND
Means a subdivision of the Fund established pursuant to Section
5.05.
1.27 KEY EMPLOYEE
Means any person who is determined to be a Key Employee under
Section 10.08.
1.28 LEASED EMPLOYEE
Means any person (other than an Employee of the recipient) who
pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined in
accordance with Section 414(n)(6) of the Code) on a substantially
full time basis for a period of at least one year, and such
services are of a type historically performed by Employees in the
business field of the recipient Employer. Contributions or
benefits provided a Leased Employee by the leasing organization
which are attributable to services performed for the recipient
Employer shall be treated as provided by the recipient Employer.
A Leased Employee shall not be considered an Employee of the
recipient if: (1) such employee is covered by a money purchase
pension plan providing: (a) a nonintegrated employer contribution
rate of at least 10% of compensation, as defined in Section
413(c)(3) of the Code, but including amounts contributed pursuant
to a salary reduction agreement which are excludable from the
employee's gross income under Section 125, Section 402(e)(3),
Section 402(h)(1)(B) or Section 403(b) of the Code, (b) immediate
participation, and (c) full and immediate vesting; and (2) Leased
Employees do not constitute more than 20% of the recipient's
nonhighly compensated work force.
1.29 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Means any contribution made to the Plan by or on behalf of a
Participant that is included in the Participant's gross income in
the year in which made and that is maintained under a separate
account to which earnings and losses are allocated.
1.30 NORMAL RETIREMENT AGE
Means the age specified in the Adoption Agreement. However, if
the Employer enforces a mandatory retirement age which is less
than the Normal Retirement Age, such mandatory age is deemed to
be the Normal Retirement Age. If no age is specified in the
Adoption Agreement, the Normal Retirement Age shall be age 65.
1.31 OWNER-EMPLOYEE
Means an individual who is a sole proprietor, or who is a partner
owning more than 10% of either the capital or profits interest of
the partnership.
1.32 PARTICIPANT
Means any Employee or former Employee of the Employer who has met
the Plan's eligibility requirements, has entered the Plan and who
is or may become eligible to receive a benefit of any type from
this Plan or whose Beneficiary may be eligible to receive any
such benefit.
1.33 PLAN
Means the prototype defined contribution plan adopted by the
Employer. The Plan consists of this Basic Plan Document plus the
corresponding Adoption Agreement as completed and signed by the
Employer.
1.34 PLAN ADMINISTRATOR
Means the person or persons determined to be the Plan
Administrator in accordance with Section 8.01.
1.35 PLAN YEAR
Means the 12 consecutive month period which coincides with the
Employer's fiscal year or such other 12 consecutive month period
as is designated in the Adoption Agreement.
1.36 PRIOR PLAN
Means a plan which was amended or replaced by adoption of this
Plan document as indicated in the Adoption Agreement.
1.37 PROTOTYPE SPONSOR
Means the entity specified in the Adoption Agreement that makes
this prototype plan available to employers for adoption.
1.38 QUALIFYING PARTICIPANT
Means a Participant who has satisfied the requirements described
in Section 3.01(B)(2) to be entitled to share in any Employer
Contribution (and Forfeitures, if applicable) for a Plan Year.
39
5
1.39 RELATED EMPLOYER
Means an employer that may be required to be aggregated with the
Employer adopting this Plan for certain qualification
requirements under Sections 414(b), (c), (m) or (o) of the Code
(or any other employer that has ownership in common with the
Employer). A Related Employer may participate in this Plan if so
indicated in the Section of the Adoption Agreement titled
"Employer Information" or if such Related Employer executes a
Related Employer Participation Agreement.
1.40 RELATED EMPLOYER PARTICIPATION AGREEMENT
Means the agreement under this prototype Plan that a Related
Employer may execute to participate in this Plan.
1.41 SELF-EMPLOYED INDIVIDUAL
Means an individual who has Earned Income for the taxable year
from the trade or business for which the Plan is established;
also, an individual who would have had Earned Income but for the
fact that the trade or business had no net profits for the
taxable year.
1.42 SEPARATE FUND
Means a subdivision of the Fund held in the name of a particular
Participant representing certain assets held for that
Participant. The assets which comprise a Participant's Separate
Fund are those assets earmarked for him or her and those assets
subject to the Participant's individual direction pursuant to
Section 5.14.
1.43 TAXABLE WAGE BASE
Means, with respect to any taxable year, the contribution and
benefit base in effect under Section 230 of the Social Security
Act at the beginning of the Plan Year.
1.44 TERMINATION OF EMPLOYMENT
A Termination of Employment of an Employee of an Employer shall
occur whenever his or her status as an Employee of such Employer
ceases for any reason other than death. An Employee who does not
return to work for the Employer on or before the expiration of an
authorized leave of absence from such Employer shall be deemed to
have incurred a Termination of Employment when such leave ends.
1.45 TOP-HEAVY PLAN
This Plan is a Top-Heavy Plan for any Plan Year if it is
determined to be such pursuant to Section 10.08.
1.46 TRUSTEE
Means an individual, individuals or corporation specified in the
Adoption Agreement as Trustee or any duly appointed successor as
provided in Section 5.09. Trustee shall mean Custodian in the
event the financial organization named as Trustee does not have
full trust powers.
1.47 VALUATION DATE
Means the date or dates as specified in the Adoption Agreement.
If no date is specified in the Adoption Agreement, the Valuation
Date shall be the last day of the Plan Year and each other date
designated by the Plan Administrator which is selected in a
uniform and nondiscriminatory manner when the assets of the Fund
are valued at their then fair market value.
1.48 VESTED
Means nonforfeitable, that is, a claim which is unconditional and
legally enforceable against the Plan obtained by a Participant or
the Participant's Beneficiary to that part of an immediate or
deferred benefit under the Plan which arises from a Participant's
Years of Vesting Service.
1.49 YEAR OF ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with an
Eligibility Computation Period during which an Employee completes
at least 1,000 Hours of Service (or such lesser number of Hours
of Service specified in the Adoption Agreement for this purpose).
An Employee does not complete a Year of Eligibility Service
before the end of the 12 consecutive month period regardless of
when during such period the Employee completes the required
number of Hours of Service.
1.50 YEAR OF VESTING SERVICE
Means a Plan Year during which an Employee completes at least
1,000 Hours of Service (or such lesser number of Hours of Service
specified in the Adoption Agreement for this purpose).
Notwithstanding the preceding sentence, where the Employer so
indicates in the Adoption Agreement, vesting shall be computed by
reference to the 12 consecutive month period beginning with the
Employee's Employment Commencement Date and each successive 12
month period commencing on the anniversaries thereof.
In the case of a Participant who has 5 or more consecutive Breaks
in Vesting Service, all Years of Vesting Service after such
Breaks in Vesting Service will be disregarded for the purpose of
determining the Vested portion of his or her Individual Account
derived from Employer Contributions that accrued before such
breaks. Such Participant's prebreak service will count in vesting
the postbreak Individual Account derived from Employer
Contributions only if either:
(A) such Participant had any Vested right to any portion of his
or her Individual Account derived from Employer
Contributions at the time of his or her Termination of
Employment; or
(B) upon returning to service, the number of consecutive Breaks
in Vesting Service is less than his or her number of Years
of Vesting Service before such breaks.
Separate subaccounts will be maintained for the Participant's
prebreak and postbreak portions of his or her Individual Account
derived from Employer Contributions. Both subaccounts will share
in the gains and losses of the Fund.
Years of Vesting Service shall not include any period of time
excluded from Years of Vesting Service in the Adoption Agreement.
In the event the Plan Year is changed to a new 12-month period,
Employees shall receive credit for Years of Vesting Service, in
accordance with the preceding provisions of this definition, for
each of the Plan Years (the old and new Plan Years) which overlap
as a result of such change.
40
6
SECTION TWO ELIGIBILITY AND PARTICIPATION
2.01 ELIGIBILITY TO PARTICIPATE
Each Employee of the Employer, except those Employees who belong
to a class of Employees which is excluded from participation as
indicated in the Adoption Agreement, shall be eligible to
participate in this Plan upon the satisfaction of the age and
Years of Eligibility Service requirements specified in the
Adoption Agreement.
2.02 PLAN ENTRY
A. If this Plan is a replacement of a Prior Plan by amendment or
restatement, each Employee of the Employer who was a
Participant in said Prior Plan before the Effective Date shall
continue to be a Participant in this Plan.
B. An Employee will become a Participant in the Plan as of the
Effective Date if the Employee has met the eligibility
requirements of Section 2.01 as of such date. After the
Effective Date, each Employee shall become a Participant on
the first Entry Date following the date the Employee satisfies
the eligibility requirements of Section 2.01 unless otherwise
indicated in the Adoption Agreement.
C. The Plan Administrator shall notify each Employee who becomes
eligible to be a Participant under this Plan and shall furnish
the Employee with the application form, enrollment forms or
other documents which are required of Participants. The
eligible Employee shall execute such forms or documents and
make available such information as may be required in the
administration of the Plan.
2.03 TRANSFER TO OR FROM INELIGIBLE CLASS
If an Employee who had been a Participant becomes ineligible to
participate because he or she is no longer a member of an
eligible class of Employees, but has not incurred a Break in
Eligibility Service, such Employee shall participate immediately
upon his or her return to an eligible class of Employees. If such
Employee incurs a Break in Eligibility Service, his or her
eligibility to participate shall be determined by Section 2.04.
An Employee who is not a member of the eligible class of
Employees will become a Participant immediately upon becoming a
member of the eligible class provided such Employee has satisfied
the age and Years of Eligibility Service requirements. If such
Employee has not satisfied the age and Years of Eligibility
Service requirements as of the date he or she becomes a member of
the eligible class, such Employee shall become a Participant on
the first Entry Date following the date he or she satisfies those
requirements unless otherwise indicated in the Adoption
Agreement.
2.04 RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILITY SERVICE
A. EMPLOYEE NOT PARTICIPANT BEFORE BREAK - If an Employee incurs
a Break in Eligibility Service before satisfying the Plan's
eligibility requirements, such Employee's Years of Eligibility
Service before such Break in Eligibility Service will not be
taken into account.
B. NONVESTED PARTICIPANTS - In the case of a Participant who does
not have a Vested interest in his or her Individual Account
derived from Employer Contributions, Years of Eligibility
Service before a period of consecutive Breaks in Eligibility
Service will not be taken into account for eligibility
purposes if the number of consecutive Breaks in Eligibility
Service in such period equals or exceeds the greater of 5 or
the aggregate number of Years of Eligibility Service before
such break. Such aggregate number of Years of Eligibility
Service will not include any Years of Eligibility Service
disregarded under the preceding sentence by reason of prior
breaks.
If a Participant's Years of Eligibility Service are
disregarded pursuant to the preceding paragraph, such
Participant will be treated as a new Employee for eligibility
purposes. If a Participant's Years of Eligibility Service may
not be disregarded pursuant to the preceding paragraph, such
Participant shall continue to participate in the Plan, or, if
terminated, shall participate immediately upon reemployment.
C. VESTED PARTICIPANTS - A Participant who has sustained a Break
in Eligibility Service and who had a Vested interest in all or
a portion of his or her Individual Account derived from
Employer Contributions shall continue to participate in the
Plan, or, if terminated, shall participate immediately upon
reemployment.
2.05 DETERMINATIONS UNDER THIS SECTION
The Plan Administrator shall determine the eligibility of each
Employee to be a Participant. This determination shall be
conclusive and binding upon all persons except as otherwise
provided herein or by law.
2.06 TERMS OF EMPLOYMENT
Neither the fact of the establishment of the Plan nor the fact
that a common law Employee has become a Participant shall give to
that common law Employee any right to continued employment; nor
shall either fact limit the right of the Employer to discharge or
to deal otherwise with a common law Employee without regard to
the effect such treatment may have upon the Employee's rights
under the Plan.
2.07 SPECIAL RULES WHERE ELAPSED TIME METHOD IS BEING USED
This Section 2.07 shall apply where the Employer has indicated in
the Adoption Agreement that the elapsed time method will be used.
When this Section applies, the definitions of year of service,
break in service and hour of service in this Section will replace
the definitions of Year of Eligibility Service, Year of Vesting
Service, Break in Eligibility Service, Break in Vesting Service
and Hours of Service found in the Definitions Section of the Plan
(Section One).
For purposes of determining an Employee's initial or continued
eligibility to participate in the Plan or the Vested interest in
the Participant's Individual Account balance derived from
Employer Contributions, (except for periods of service which may
be disregarded on account of the "rule of parity" described in
Sections 1.50 and 2.04) an Employee will receive credit for the
aggregate of all time period(s) commencing with the Employee's
first day of employment or reemployment and ending on the date a
break in service begins. The first day of employment or
reemployment is the first day the Employee performs an hour of
service. An Employee will also receive credit for any period of
severance of less than 12 consecutive months. Fractional periods
of a year will be expressed in terms of days.
For purposes of this Section, hour of service will mean each hour
for which an Employee is paid or entitled to payment for the
performance of duties for the Employer. Break in service is a
period of severance of at least 12 consecutive months. Period of
severance is a continuous period of time during which the
Employee is not employed by the Employer. Such period begins on
the date the Employee retires, quits or is discharged, or if
earlier, the 12 month anniversary of the date on which the
Employee was otherwise first absent from service.
In the case of an individual who is absent from work for
maternity or paternity reasons, the 12 consecutive month period
beginning on the first anniversary of the first date of such
absence shall not constitute a break in service. For purposes of
this
41
7
paragraph, an absence from work for maternity or paternity
reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of the birth of a child of the
individual, (3) by reason of the placement of a child with the
individual in connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement.
Each Employee will share in Employer Contributions for the period
beginning on the date the Employee commences participation
under the Plan and ending on the date on which such Employee
▇▇▇▇▇▇ employment with the Employer or is no longer a member of
an eligible class of Employees.
If the Employer is a member of an affiliated service group (under
Section 414(m) of the Code), a controlled group of corporations
(under Section 414(b) of the Code), a group of trades or
businesses under common control (under Section 414(c) of the
Code), or any other entity required to be aggregated with the
Employer pursuant to Section 414(o) of the Code, service will be
credited for any employment for any period of time for any other
member of such group. Service will also be credited for any
individual required under Section 414(n) or Section 414(o) to be
considered an Employee of any Employer aggregated under Section
414(b), (c), or (m) of the Code.
2.08 ELECTION NOT TO PARTICIPATE
This Section 2.08 will apply if this Plan is a nonstandardized
plan and the Adoption Agreement so provides. If this Section
applies, then an Employee or a Participant may elect not to
participate in the Plan for one or more Plan Years. The Employer
may not contribute for an Employee or Participant for any Plan
Year during which such Employee's or Participant's election not
to participate is in effect. Any election not to participate must
be in writing and filed with the Plan Administrator.
The Plan Administrator shall establish such uniform and
nondiscriminatory rules as it deems necessary or advisable to
carry out the terms of this Section, including, but not limited
to, rules prescribing the timing of the filing of elections not
to participate and the procedures for electing to re-participate
in the Plan.
An Employee or Participant continues to earn credit for vesting
and eligibility purposes for each Year of Vesting Service or Year
of Eligibility Service he or she completes and his or her
Individual Account (if any) will share in the gains or losses of
the Fund during the periods he or she elects not to participate.
SECTION THREE CONTRIBUTIONS
3.01 EMPLOYER CONTRIBUTIONS
A. OBLIGATION TO CONTRIBUTE - The Employer shall make
contributions to the Plan in accordance with the contribution
formula specified in the Adoption Agreement. If this Plan is a
profit sharing plan, the Employer shall, in its sole
discretion, make contributions without regard to current or
accumulated earnings or profits.
B. ALLOCATION FORMULA AND THE RIGHT TO SHARE IN THE EMPLOYER
CONTRIBUTION
1. General - The Employer Contribution for any Plan Year will
be allocated or contributed to the Individual Accounts of
Qualifying Participants in accordance with the allocation
or contribution formula specified in the Adoption
Agreement. The Employer Contribution for any Plan Year
will be allocated to each Participant's Individual Account
as of the last day of that Plan Year.
Any Employer Contribution for a Plan Year must satisfy
Section 401(a)(4) and the regulations thereunder for such
Plan Year.
2. Qualifying Participants - A Participant is a Qualifying
Participant and is entitled to share in the Employer
Contribution for any Plan Year if the Participant was a
Participant on at least one day during the Plan Year and
satisfies any additional conditions specified in the
Adoption Agreement. If this Plan is a standardized plan,
unless the Employer specifies more favorable conditions in
the Adoption Agreement, a Participant will not be a
qualifying Participant for a Plan Year if he or she incurs
a Termination of Employment during such Plan Year with not
more than 500 Hours of Service if he or she is not an
Employee on the last day of the Plan Year. The
determination of whether a Participant is entitled to
share in the Employer Contribution shall be made as of the
last day of each Plan Year.
3. Special Rules for Integrated Plans - This Plan may not
allocate contributions based on an integrated formula if
the Employer maintains any other plan that provides for
allocation of contributions based on an integrated formula
that benefits any of the same Participants. If the
Employer has selected the integrated contribution or
allocation formula in the Adoption Agreement, then the
maximum disparity rate shall be determined in accordance
with the following table.
MAXIMUM DISPARITY RATE
Top-Heavy Nonstandardized and
Integration Level Money Purchase Profit Sharing Non-Top-Heavy Profit Sharing
---------------------------------------------------------------------------------------------------
Taxable Wage Base (TWB) 5.7% 2.7% 5.7%
More than $0 but not more
than 20% of TWB 5.7% 2.7% 5.7%
More than 20% of TWB but
not more than 80% of TWB 4.3% 1.3% 4.3%
More than 80% of TWB but
not more than TWB 5.4% 2.4% 5.4%
42
8
C. ALLOCATION OF FORFEITURES - Forfeitures for a Plan Year which
arise as a result of the application of Section 6.01(D) shall
be allocated as follows:
1. Profit Sharing Plan - If this is a profit sharing plan,
unless the Adoption Agreement indicates otherwise,
Forfeitures shall be allocated in the manner provided in
Section 3.01(B) (for Employer Contributions) to the
Individual Accounts of Qualifying Participants who are
entitled to share in the Employer Contribution for such
Plan Year. Forfeitures shall be allocated as of the last
day of the Plan Year during which the Forfeiture arose (or
any subsequent Plan Year if indicated in the Adoption
Agreement).
2. Money Purchase Pension and Target Benefit Plan - If this
Plan is a money purchase plan or a target benefit plan,
unless the Adoption Agreement indicates otherwise,
Forfeitures shall be applied towards the reduction of
Employer Contributions to the Plan. Forfeitures shall be
allocated as of the last day of the Plan Year during which
Forfeiture arose (or any subsequent Plan Year if indicated
in the Adoption Agreement).
D. TIMING OF EMPLOYER CONTRIBUTION - The Employer Contribution
for each Plan Year shall be delivered to the Trustee (or
Custodian, if applicable) not later than the due date for
filing the Employer's income tax return for its fiscal year in
which the Plan Year ends, including extensions thereof.
E. MINIMUM ALLOCATION FOR TOP-HEAVY PLANS - The contribution and
allocation provisions of this Section 3.01(E) shall apply for
any Plan Year with respect to which this Plan is a Top-Heavy
Plan.
1. Except as otherwise provided in (3) and (4) below, the
Employer Contributions and Forfeitures allocated on behalf
of any Participant who is not a Key Employee shall not be
less than the lesser of 3% of such Participant's
Compensation or (in the case where the Employer has no
defined benefit plan which designates this Plan to satisfy
Section 401 of the Code) the largest percentage of
Employer Contributions and Forfeitures, as a percentage of
the first $200,000 ($150,000 for Plan Years beginning
after December 31, 1993), (increased by any cost of living
adjustment made by the Secretary of Treasury or the
Secretary's delegate) of the Key Employee's Compensation,
allocated on behalf of any Key Employee for that year. The
minimum allocation is determined without regard to any
Social Security contribution. The Employer may, in the
Adoption Agreement, limit the Participants who are
entitled to receive the minimum allocation. This minimum
allocation shall be made even though under other Plan
provisions, the Participant would not otherwise be
entitled to receive an allocation, or would have
received a lesser allocation for the year because of (a)
the Participant's failure to complete 1,000 Hours of
Service (or any equivalent provided in the Plan), or (b)
the Participant's failure to make mandatory Nondeductible
Employee Contributions to the Plan, or (c) Compensation
less than a stated amount.
2. For purposes of computing the minimum allocation,
Compensation shall mean Compensation as defined in Section
1.07 of the Plan and shall include any amounts contributed
by the Employer pursuant to a salary reduction agreement
and which is not includible in the gross income of the
Employee under Sections 125, 402(e)(3), 402(h)(l)(B) or
403(b) of the Code even if the Employer has elected to
exclude such contributions in the definition of
Compensation used for other purposes under the Plan.
3. The provision in (1) above shall not apply to any
Participant who was not employed by the Employer on the
last day of the Plan Year.
4. The provision in (1) above shall not apply to any
Participant to the extent the Participant is covered under
any other plan or plans of the Employer and the Employer
has provided in the adoption agreement that the minimum
allocation or benefit requirement applicable to Top-Heavy
Plans will be met in the other plan or plans.
5. The minimum allocation required under this Section 3.01(E)
and Section 3.01(F)(1) (to the extent required to be
nonforfeitable under Code Section 416(b)) may not be
forfeited under Code Section 411(a)(3)(B) or 411(a)(3)(D).
F. SPECIAL REQUIREMENTS FOR PAIRED PLANS - The Employer maintains
paired plans if the Employer has adopted both a standardized
profit sharing plan and a standardized money purchase pension
plan using this Basic Plan Document.
1. Minimum Allocation - When the paired plans are top-heavy,
the top heavy requirements set forth in Section 3.01(E)(1)
of the Plan shall apply.
a. Same eligibility requirements. In satisfying the
top-heavy minimum allocation requirements set forth
in Section 3.01(E) of the Plan, if the Employees
benefiting under each of the paired plans are
identical, the top-heavy minimum allocation shall be
made to the money purchase pension plan.
b. Different eligibility requirements. In satisfying the
top-heavy minimum allocation requirements set forth
in Section 3.01(E) of the Plan, if the Employees
benefiting under each of the paired plans are not
identical, the top-heavy minimum allocation will be
made to both of the paired plans.
A Participant is treated as benefiting under the Plan
for any Plan Year during which the Participant
received or is deemed to receive an allocation in
accordance with Section 1.410(b)-3(a).
2. Only One Plan Can Be Integrated - If the Employer
maintains paired plans, only one of the Plans may
provide for the disparity in contributions which is
permitted under Section 401(1) of the Code. In the event
that both Adoption Agreements provide for such
integration, only the money purchase pension plan shall
be deemed to be integrated.
G. RETURN OF THE EMPLOYER CONTRIBUTION TO THE EMPLOYER UNDER
SPECIAL CIRCUMSTANCES - Any contribution made by the Employer
because of a mistake of fact must be returned to the Employer
within one year of the contribution.
In the event that the Commissioner of Internal Revenue
determines that the Plan is not initially qualified under the
Code, any contributions made incident to that initial
qualification by the Employer must be returned to the Employer
within one year after the date the initial qualification is
denied, but only if the application for qualification is made
by the time prescribed by law for filing the Employer's return
for the taxable year in which the Plan is adopted, or such
later date as the Secretary of the Treasury may prescribe.
In the event that a contribution made by the Employer under
this Plan is conditioned on deductibility and is not
deductible under Code Section 404, the contribution, to the
extent of the amount disallowed, must be returned to the
Employer within one year after the deduction is disallowed.
H. OMISSION OF PARTICIPANT
1. If the Plan is a money purchase plan or a target benefit
plan and, if in any Plan Year any Employee who should be
included as a Participant is erroneously omitted and
discovery of such omission is not made until after a
contribution by the Employer for the year has been made
and allocated, the Employer shall make a subsequent
contribution to
43
9
include earnings thereon, with respect to the omitted
Employee in the amount which the Employer would have
contributed with respect to that Employee had he or she
not been omitted.
2. If the Plan is a profit sharing plan, and if in any Plan
Year, any Employee who should be included as a Participant
is erroneously omitted and discovery of such omission is
not made until after the Employer Contribution has been
made and allocated, then the Plan Administrator must re-do
the allocation (if a correction can be made) and inform
the Employee. Alternatively, the Employer may choose to
contribute for the omitted Employee the amount to include
earnings thereon, which the Employer would have
contributed for the Employee.
3.02 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
This Plan will not accept Nondeductible Employee Contributions
and matching contributions for Plan Years beginning after the
Plan Year in which this Plan is adopted by the Employer.
Nondeductible Employee Contributions for Plan Years beginning
after December 31, 1986, together with any matching contributions
as defined in Section 401(m) of the Code, will be limited so as
to meet the nondiscrimination test of Section 401(m) of the
Code.
A separate account will be maintained by the Plan Administrator
for the Nondeductible Employee Contributions of each Participant.
A Participant may, upon a written request submitted to the Plan
Administrator withdraw the lesser of the portion of his or her
Individual Account attributable to his or her Nondeductible
Employee Contributions or the amount he or she contributed as
Nondeductible Employee Contributions.
Nondeductible Employee Contributions and earnings thereon will be
nonforfeitable at all times. No Forfeiture will occur solely as a
result of an Employee's withdrawal of Nondeductible Employee
Contributions.
The Plan Administrator will not accept deductible employee
contributions which are made for a taxable year beginning after
December 31, 1986. Contributions made prior to that date will be
maintained in a separate account which will be nonforfeitable at
all times. The account will share in the gains and losses of the
Fund in the same manner as described in Section 4.03 of the Plan.
No part of the deductible employee contribution account will be
used to purchase life insurance. Subject to Section 6.05, joint
and survivor annuity requirements (if applicable), the
Participant may withdraw any part of the deductible employee
contribution account by making a written application to the Plan
Administrator.
3.03 ROLLOVER CONTRIBUTIONS
If so indicated in the Adoption Agreement, an Employee may
contribute a rollover contribution to the Plan. The Plan
Administrator may require the Employee to submit a written
certification that the contribution qualifies as a rollover
contribution under the applicable provisions of the Code. If it
is later determined that all or part of a rollover contribution
was ineligible to be rolled into the Plan, the Plan Administrator
shall direct that any ineligible amounts, plus earnings
attributable thereto, be distributed from the Plan to the
Employee as soon as administratively feasible.
A separate account shall be maintained by the Plan Administrator
for each Employee's rollover contributions which will be
nonforfeitable at all times. Such account will share in the
income and gains and losses of the Fund in the manner described
in Section 4.03 and shall be subject to the Plan's provisions
governing distributions.
The Employer may, in a uniform and nondiscriminatory manner, only
allow Employees who have become Participants in the Plan to make
rollover contributions.
3.04 TRANSFER CONTRIBUTIONS
If so indicated in the Adoption Agreement, the Trustee (or
Custodian, if applicable) may receive any amounts transferred to
it from the trustee or custodian of another plan qualified under
Code Section 401(a). If it is later determined that all or part
of a transfer contribution was ineligible to be transferred into
the Plan, the Plan Administrator shall direct that any ineligible
amounts, plus earnings attributable thereto, be distributed from
the Plan to the Employee as soon as administratively feasible.
A separate account shall be maintained by the Plan Administrator
for each Employee's transfer contributions which will be
nonforfeitable at all times. Such account will share in the
income and gains and losses of the Fund in the manner described
in Section 4.03 and shall be subject to the Plan's provisions
governing distributions.
The Employer may, in a uniform and nondiscriminatory manner, only
allow Employees who have become Participants in the Plan to make
transfer contributions.
3.05 LIMITATION ON ALLOCATIONS
A. If the Participant does not participate in, and has never
participated in another qualified plan maintained by the
Employer or a welfare benefit fund, as defined in Section
419(e) of the Code maintained by the Employer, or an
individual medical account, as defined in Section 415(I)(2) of
the Code, or a simplified employee pension plan, as defined in
Section 408(k) of the Code, maintained by the Employer, which
provides an annual addition as defined in Section 3.08(E)(1),
the following rules shall apply:
1. The amount of annual additions which may be credited to
the Participant's Individual Account for any limitation
year will not exceed the lesser of the maximum permissible
amount or any other limitation contained in this Plan. If
the Employer Contribution that would otherwise be
contributed or allocated to the Participant's Individual
Account would cause the annual additions for the
limitation year to exceed the maximum permissible amount,
the amount contributed or allocated will be reduced so
that the annual additions for the limitation year will
equal the maximum permissible amount.
2. Prior to determining the Participant's actual Compensation
for the limitation year, the Employer may determine the
maximum permissible amount for a Participant on the basis
of a reasonable estimation of the Participant's
Compensation for the limitation year, uniformly determined
for all Participants similarly situated.
3. As soon as is administratively feasible after the end of
the limitation year, the maximum permissible amount for
the limitation year will be determined on the basis of the
Participant's actual Compensation for the limitation year.
4. If pursuant to Section 3.05(A)(3) or as a result of the
allocation of Forfeitures there is an excess amount, the
excess will be disposed of as follows:
a. Any Nondeductible Employee Contributions, to the
extent they would reduce the excess amount, will be
returned to the Participant;
b. If after the application of paragraph (a) an excess
amount still exists, and the Participant is covered
by the Plan at the end of the limitation year, the
excess amount in the Participant's Individual Account
will be used to reduce
44
10
Employer Contributions (including any allocation of
Forfeitures) for such Participant in the next
limitation year, and each succeeding limitation year
if necessary;
c. If after the application of paragraph (b) an excess
amount still exists and the Participant is not
covered by the Plan at the end of a limitation year,
the excess amount will be held unallocated in a
suspense account. The suspense account will be
applied to reduce future Employer Contributions
(including allocation of any Forfeitures) for all
remaining Participants in the next limitation year,
and each succeeding limitation year if necessary;
d. If a suspense account is in existence at any time
during a limitation year pursuant to this Section, it
will not participate in the allocation of the Fund's
investment gains and losses. If a suspense account is
in existence at any time during a particular
limitation year, all amounts in the suspense account
must be allocated and reallocated to Participants'
Individual Accounts before any Employer Contributions
or any Nondeductible Employee Contributions may be
made to the Plan for that limitation year. Excess
amounts may not be distributed to Participants or
former Participants.
B. If in addition to this Plan, the Participant is covered under
another qualified master or prototype defined contribution
plan maintained by the Employer, a welfare benefit fund
maintained by the Employer, an individual medical account
maintained by the Employer, or a simplified employee pension
maintained by the Employer that provides an annual addition as
defined in Section 3.05(E)(1), during any limitation year,
the following rules apply:
1. The annual additions which may be credited to a
Participant's Individual Account under this Plan for any
such limitation year will not exceed the maximum
permissible amount reduced by the annual additions
credited to a Participant's Individual Account under the
other qualified master or prototype plans, welfare benefit
funds, individual medical accounts and simplified employee
pensions for the same limitation year. If the annual
additions with respect to the Participant under other
qualified master or prototype defined contribution plans,
welfare benefit funds, individual medical accounts and
simplified employee pensions maintained by the Employer
are less than the maximum permissible amount and the
Employer Contribution that would otherwise be contributed
or allocated to the Participant's Individual Account under
this Plan would cause the annual additions for the
limitation year to exceed this limitation, the amount
contributed or allocated will be reduced so that the
annual additions under all such plans and funds for the
limitation year will equal the maximum permissible amount.
If the annual additions with respect to the Participant
under such other qualified master or prototype defined
contribution plans, welfare benefit funds, individual
medical accounts and simplified employee pensions in the
aggregate are equal to or greater than the maximum
permissible amount, no amount will be contributed or
allocated to the Participant's Individual Account under
this Plan for the limitation year.
2. Prior to determining the Participant's actual Compensation
for the limitation year, the Employer may determine the
maximum permissible amount for a Participant in the manner
described in Section 3.05(A)(2)
3. As soon as is administratively feasible after the end of
the limitation year, the maximum permissible amount for
the limitation year will be determined on the basis of the
Participant's actual Compensation for the limitation year.
4. If, pursuant to Section 3.05(B)(3) or as a result of the
allocation of Forfeitures a Participant's annual additions
under this Plan and such other plans would result in an
excess amount for a limitation year, the excess amount
will be deemed to consist of the annual additions last
allocated, except that annual additions attributable to a
simplified employee pension will be deemed to have been
allocated first, followed by annual additions to a welfare
benefit fund or individual medical account, regardless of
the actual allocation date.
5. If an excess amount was allocated to a Participant on an
allocation date of this Plan which coincides with an
allocation date of another plan, the excess amount
attributed to this Plan will be the product of,
a. the total excess amount allocated as of such date,
times
b. the ratio of (i) the annual additions allocated to
the Participant for the limitation year as of such
date under this Plan to (ii) the total annual
additions allocated to the Participant for the
limitation year as of such date under this and all
the other qualified prototype defined contribution
plans.
6. Any excess amount attributed to the Plan will be disposed
in the manner described in Section 3.05(A)(4).
C. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a
master or prototype plan, annual additions which may be
credited to the Participant's Individual Account under this
Plan for any limitation year will be limited in accordance
with Sections 3.05(B)(1) through 3.05(B)(6) as though the
other plan were a master or prototype plan unless the Employer
provides other limitations in the Section of the Adoption
Agreement titled "Limitation on Allocation - More Than One
Plan."
D. If the Employer maintains, or at any time maintained, a
qualified defined benefit plan covering any Participant in
this Plan, the sum of the Participant's defined benefit plan
fraction and defined contribution plan fraction will not
exceed 1.0 in any limitation year. The annual additions which
may be credited to the Participant's Individual Account under
this Plan for any limitation year will be limited in
accordance with the Section of the Adoption Agreement titled
"Limitation on Allocation - More Than One Plan."
E. The following terms shall have the following meanings when
used in this Section 3.05:
1. Annual additions: The sum of the following amounts
credited to a Participant's Individual Account for the
limitation year:
a. Employer Contributions,
b. Nondeductible Employee Contributions,
c. Forfeitures,
d. amounts allocated, after March 31, 1984, to an
individual medical account, as defined in Section
415(1)(2) of the Code, which is part of a pension or
annuity plan maintained by the Employer are treated
as annual additions to a defined contribution plan.
Also amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years
ending after such date, which are attributable to
post-retirement medical benefits, allocated to the
separate account of a key employee, as defined in
Section 419A(d)(3) of the Code, under a welfare
benefit fund, as
45
11
defined in Section 419(e) of the Code, maintained by
the Employer are treated as annual additions to a
defined contribution plan, and
e. allocations under a simplified employee pension.
For this purpose, any excess amount applied under Section
3.05(A)(4) or 3.05(B)(6) in the limitation year to reduce
Employer Contributions will be considered annual additions
for such limitation year.
2. Compensation: Means Compensation as defined in Section
1.07 of the Plan except that Compensation for purposes of
this Section 3.05 shall not include any amounts
contributed by the Employer pursuant to a salary reduction
agreement and which is not includible in the gross income
of the Employee under Sections 125, 402(e)(3),
402(h)(1)(B) or 403(b) of the Code even if the Employer
has elected to include such contributions in the
definition of Compensation used for other purposes under
the Plan. Further, any other exclusion the Employer has
elected (such as the exclusion of certain types of pay or
pay earned before the Employee enters the Plan) will not
apply for purposes of this Section.
Notwithstanding the preceding sentence, Compensation for a
Participant in a defined contribution plan who is
permanently and totally disabled (as defined in Section
22(e)(3) of the Code) is the Compensation such Participant
would have received for the limitation year if the
Participant had been paid at the rate of Compensation paid
immediately before becoming permanently and totally
disabled; such imputed Compensation for the disabled
Participant may be taken into account only if the
Participant is not a Highly Compensated Employee (as
defined in Section 414(q) of the Code) and contributions
made on behalf of such Participant are nonforfeitable when
made.
3. Defined benefit fraction: A fraction, the numerator of
which is the sum of the Participant's projected annual
benefits under all the defined benefit plans (whether or
not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125% of the dollar
limitation determined for the limitation year under
Section 415(b) and (d) of the Code or 140% of the highest
average compensation, including any adjustments under
Section 415(b) of the Code.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first limitation
year beginning after December 31, 1986, in one or more
defined benefit plans maintained by the Employer which
were in existence on May 6, 1986, the denominator of this
fraction will not be less than 125% of the sum of the
annual benefits under such plans which the Participant had
accrued as of the close of the last limitation year
beginning before January 1, 1987, disregarding any changes
in the terms and conditions of the plan after May 5, 1986.
The preceding sentence applies only if the defined benefit
plans individually and in the aggregate satisfied the
requirements of Section 415 of the Code for all limitation
years beginning before January 1, 1987.
4. Defined contribution dollar limitation: $30,000 or if
greater, one-fourth of the defined benefit dollar
limitation set forth in Section 415(b)(1) of the Code as
in effect for the limitation year.
5. Defined contribution fraction: A fraction, the numerator
of which is the sum of the annual additions to the
Participant's account under all the defined contribution
plans (whether or not terminated) maintained by the
Employer for the current and all prior limitation years
(including the annual additions attributable to the
Participant's nondeductible employee contributions to all
defined benefit plans, whether or not terminated,
maintained by the Employer, and the annual additions
attributable to all welfare benefit funds, as defined in
Section 419(e) of the Code, individual medical accounts,
and simplified employee pensions, maintained by the
Employer), and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior
limitation years of service with the Employer (regardless
of whether a defined contribution plan was maintained by
the Employer). The maximum aggregate amount in any
limitation year is the lesser of 125% of the dollar
limitation determined under Section 415(b) and (d) of the
Code in effect under Section 415(c)(1)(A) of the Code or
35% of the Participant's Compensation for such year.
If the Employee was a Participant as of the end of the
first day of the first limitation year beginning after
December 31, 1986, in one or more defined contribution
plans maintained by the Employer which were in existence
on May 6, 1986, the numerator of this fraction will be
adjusted if the sum of this fraction and the defined
benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal
to the product of (1) the excess of the sum of the
fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the
numerator of this fraction. The adjustment is calculated
using the fractions as they would be computed as of the
end of the last limitation year beginning before January
1, 1987, and disregarding any changes in the terms and
conditions of the Plan made after May 5, 1986, but using
the Section 415 limitation applicable to the first
limitation year beginning on or after January 1, 1987.
The annual addition for any limitation year beginning
before January 1, 1987, shall not be recomputed to treat
all Nondeductible Employee Contributions as annual
additions.
6. Employer: For purposes of this Section 3.05, Employer
shall mean the Employer that adopts this Plan, and all
members of a controlled group of corporations (as defined
in Section 414(b) of the Code as modified by Section
415(h)), all commonly controlled trades or businesses (as
defined in Section 414(c) as modified by Section 415(h))
or affiliated service groups (as defined in Section
414(m)) of which the adopting Employer is a part, and any
other entity required to be aggregated with the Employer
pursuant to regulations under Section 414(o) of the Code.
7. Excess amount: The excess of the Participant's annual
additions for the limitation year over the maximum
permissible amount.
8. Highest average compensation: The average compensation for
the three consecutive years of service with the Employer
that produces the highest average.
9. Limitations year A calendar year, or the 12-consecutive
month period elected by the Employer in the Adoption
Agreement. All qualified plans maintained by the Employer
must use the same limitation year. If the limitation year
is amended to a different 12-consecutive month period, the
new limitation year must begin on a date within the
limitation year in which the amendment is made.
10. Master or prototype plan: A plan the form of which is the
subject of a favorable opinion letter from the Internal
Revenue Service.
11. Maximum permissible amount: The maximum annual addition
that may be contributed or allocated to a Participant's
Individual Account under the Plan for any limitation year
shall not exceed the lesser of:
a. the defined contribution dollar limitation, or
b. 25% of the Participant's Compensation for the
limitation year.
46
12
The compensation limitation referred to in (b)
shall not apply to any contribution for medical
benefits (within the meaning of Section 401(h) or
Section 419A(f)(2) of the Code) which is otherwise
treated as an annual addition under Section
415(1)(1) or 419A(d)(2) of the Code.
If a short limitation year is created because
of an amendment changing the limitation year to a
different 12 - consecutive month period, the maximum
permissible amount will not exceed the defined
contribution dollar limitation multiplied by the
following fraction:
Number of months in the short limitation year
---------------------------------------------
12
12. Projected annual benefit: The annual retirement benefit
(adjusted to an actuarially equivalent straight life
annuity if such benefit is expressed in a form other than
a straight life annuity or qualified joint and survivor
annuity) to which the Participant would be entitled under
the terms of the Plan assuming:
a. the Participant will continue employment until
Normal Retirement Age under the Plan (or current
age, if later), and
b. the Participant's Compensation for the current
limitation year and all other relevant factors used
to determine benefits under the Plan will remain
constant for all future limitation years.
Straight life annuity means an annuity payable
in equal installments for the life of the
Participant that terminates upon the Participants's
death.
SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
4.01 INDIVIDUAL ACCOUNTS
A. The Plan Administrator shall establish and maintain
an Individual Account in the name of each Participant
to reflect the total value of his or her interest in the
Fund. Each Individual Account established hereunder shall
consist of such subaccounts as may be needed for each
Participant including:
1. a subaccount to reflect Employer Contributions and
Forfeitures allocated on behalf of a Participant;
2. a subaccount to reflect a Participant's rollover
contributions;
3. a subaccount to reflect a Participant's transfer
contributions;
4. a subaccount to reflect a Participant's Nondeductible
Employee Contributions; and
5. a subaccount to reflect a Participant's deductible
employee contributions.
B. The Plan Administrator may establish additional accounts
as it may deem necessary for the proper administration
of the Plan, including, but not limited to, a suspense
account for Forfeitures as required pursuant to Section
6.01(D).
4.02 VALUATION OF FUND
The Fund will be valued each Valuation Date at fair market value.
4.03 VALUATION OF INDIVIDUAL ACCOUNTS
A. Where all or a portion of the assets of a Participant's
Individual Account are invested in a Separate Fund for
the Participant, then the value of that portion of such
Participant's Individual Account at any relevant time equals
the sum of the fair market values of the assets in such
Separate Fund, less any applicable charges or penalties.
B. The fair market value of the remainder of each Individual
Account is determined in the following manner:
1. First, the portion of the Individual Account invested in
each Investment Fund as of the previous Valuation Date
is determined. Each such portion is reduced by any
withdrawal made from the applicable Investment Fund to or
for the benefit of a Participant or the Participant's
Beneficiary, further reduced by any amounts forfeited by
the Participant pursuant to Section 6.01(D) and further
reduced by any transfer to another Investment Fund since
the previous Valuation Date and is increased by any
amount transferred from another Investment Fund since the
previous Valuation Date. The resulting amounts are the
net Individual Account portions invested in the
Investment Funds.
2. Secondly, the net Individual Account portions invested
in each Investment Fund are adjusted upwards or
downwards, pro rata (i.e., ratio of each net Individual
Account portion to the sum of all net Individual Account
portions) so that the sum of all the net Individual
Account portions invested in an Investment Fund will
equal the then fair market value of the Investment Fund.
Notwithstanding the previous sentence, for the first Plan
Year only, the net Individual Account portions shall be
the sum of all contributions made to each Participant's
Individual Account during the first Plan Year.
3. Thirdly, any contributions to the Plan and Forfeitures
are allocated in accordance with the appropriate
allocation provisions of Section 3. For purposes of
Section 4, contributions made by the Employer for any
Plan Year but after that Plan Year will be considered to
have been made on the last day of that Plan Year
regardless of when paid to the Trustee (or Custodian, if
applicable).
Amounts contributed between Valuation Dates will not be
credited with investment gains or losses until the next
following Valuation Date.
4. Finally the portions of the Individual Account invested
in each Investment Fund (determined in accordance with
(1),(2) and (3) above) are added together.
4.04 MODIFICATION OF METHOD FOR VALUING INDIVIDUAL ACCOUNTS
If necessary or appropriate, the Plan Administrator may
establish different or additional procedures (which shall be
uniform and nondiscriminatory) for determining the fair market
value of the Individual Accounts.
4.05 SEGREGATION OF ASSETS
If a Participant elects a mode of distribution other than a
lump sum, the Plan Administrator may place that Participant's
account balance into a segregated Investment Fund for the
purpose of maintaining the necessary liquidity to provide
benefit installments on a periodic basis.
4.06 STATEMENT OF INDIVIDUAL ACCOUNTS
No later than 270 days after the close of each Plan Year, the
Plan Administrator shall furnish a statement to each Participant
indicating the Individual Account balances of such Participant
as of the last Valuation Date in such Plan Year.
47
13
SECTION FIVE TRUSTEE OR CUSTODIAN
5.01 CREATION OF FUND
By adopting this Plan, the Employer establishes the Fund which
shall consist of the assets of the Plan held by the Trustee (or
Custodian, if applicable) pursuant to this Section 5. Assets
within the Fund may be pooled on behalf of all Participants,
earmarked on behalf of each Participant or be a combination of
pooled and earmarked. To the extent that assets are earmarked
for a particular Participant, they will be held in a Separate
Fund for that Participant.
No part of the corpus or income of the Fund may be used for, or
diverted to, purposes other than for the exclusive benefit of
Participants or their Beneficiaries.
5.02 INVESTMENT AUTHORITY
Except as provided in Section 5.14 (relating to individual
direction of investments by Participants), the Employer, not the
Trustee (or Custodian, if applicable), shall have exclusive
management and control over the investment of the Fund into any
permitted investment. Notwithstanding the preceding sentence, a
Trustee may make an agreement with the Employer whereby the
Trustee will manage the investment of all or a portion of the
Fund. Any such agreement shall be in writing and set forth such
matters as the Trustee deems necessary or desirable.
5.03 FINANCIAL ORGANIZATION CUSTODIAN OR TRUSTEE WITHOUT
FULL TRUST POWERS
This Section 5.03 applies where a financial organization has
indicated in the Adoption Agreement that it will serve, with
respect to this Plan, as Custodian or as Trustee without full
trust powers (under applicable law). Hereinafter, a financial
organization Trustee without full trust powers (under applicable
law) shall be referred to as a Custodian. The Custodian shall
have no discretionary authority with respect to the management
of the Plan or the Fund but will act only as directed by the
entity who has such authority.
A. PERMISSIBLE INVESTMENTS - The assets of the Plan shall be
invested only in those investments which are available
through the Custodian in the ordinary course of
business which the Custodian may legally hold in a qualified
plan and which the Custodian chooses to make available to
Employers for qualified plan investments. Notwithstanding
the preceding sentence, the Prototype Sponsor may, as a
condition of making the Plan available to the Employer, limit
the types of property in which the assets of the Plan may be
invested.
B. RESPONSIBILITIES OF THE CUSTODIAN - The responsibilities of
the Custodian shall be limited to the following:
1. To receive Plan contributions and to hold, invest
and reinvest the Fund without distinction between
principal and interest; provided, however, that nothing
in this Plan shall require the Custodian to maintain
physical custody of stock certificates (or other indicia
of ownership of any type of asset) representing assets
within the Fund;
2. To maintain accurate records of contributions, earnings,
withdrawals and other information the Custodian deems
relevant with respect to the Plan;
3. To make disbursements from the Fund to Participants or
Beneficiaries upon the proper authorization of the Plan
Administrator; and
4. To furnish to the Plan Administrator a statement
which reflects the value of the investments in the
hands of the Custodian as of the end of each Plan Year
and as of any other times as the Custodian and Plan
Administrator may agree.
▇. ▇▇▇▇▇▇ OF THE CUSTODIAN - Except as otherwise provided in
this Plan, the Custodian shall have the power to take
any action with respect to the Fund which it deems necessary
or advisable to discharge its responsibilities under this
Plan including, but not limited to, the following powers:
1. To invest all or a portion of the Fund (including
idle cash balances) in time deposits, savings accounts,
money market accounts or similar investments bearing a
reasonable rate of interest in the Custodian's own
savings department or the savings department of another
financial organization;
2. To vote upon any stocks, bonds, or other securities; to
give general or special proxies or powers of attorney
with or without power of substitution; to exercise any
conversion privileges or subscription rights and to make
any payments incidental thereto; to oppose, or to consent
to, or otherwise participate in, corporate
reorganizations or other changes affecting corporate
securities, and to pay any assessment or charges in
connection therewith; and generally to exercise any of
the powers of an owner with respect to stocks, bonds,
securities or other property;
3. To hold securities or other property of the Fund in its
own name, in the name of its nominee or in bearer form;
and
4. To make, execute, acknowledge, and deliver any and
all documents of transfer and conveyance and any and
all other instruments that may be necessary or
appropriate to carry out the powers herein granted.
5.04 FINANCIAL ORGANIZATION TRUSTEE WITH FULL TRUST POWERS AND
INDIVIDUAL TRUSTEE
This Section 5.04 applies where a financial organization has
indicated in the Adoption Agreement that it will serve as
Trustee with full trust powers. This Section also applies where
one or more individuals are named in the Adoption Agreement to
serve as Trustee(s).
A. PERMISSIBLE INVESTMENTS - The Trustee may invest the
assets of the Plan in property of any character, real
or personal, including but not limited to the following:
stocks, including shares of open-end investment companies
(mutual funds); bonds; notes; debentures; options; limited
partnership interests; mortgages; real estate or any
interests therein; unit investment trusts; Treasury Bills,
and other U.S. Government obligations; common trust funds,
combined investment trusts, collective trust funds or
commingled funds maintained by a bank or similar financial
organization (whether or not the Trustee hereunder); savings
accounts, time deposits or money market accounts of a bank or
similar financial organization (whether or not the Trustee
hereunder); annuity contracts; life insurance policies; or in
such other investments as is deemed proper without regard to
investments authorized by statute or rule of law governing
the investment of trust funds but with regard to ERISA and
this Plan.
Notwithstanding the preceding sentence, the Prototype
Sponsor may, as a condition of making the Plan available to
the Employer, limit the types of property in which the assets
of the Plan may be invested.
B. RESPONSIBILITIES OF THE TRUSTEE - The responsibilities of
the Trustee shall be limited to the following:
1. To receive Plan contributions and to hold, invest
and reinvest the Fund without distinction between
principal and interest; provided, however, that nothing
in this Plan shall require the Trustee to maintain
physical custody of stock certificates (or other indicia
of ownership) representing assets within the Fund;
48
14
2. To maintain accurate records of contributions, earnings,
withdrawals and other information the Trustee deems
relevant with respect to the Plan;
3. To make disbursements from the Fund to Participants or
Beneficiaries upon the proper authorization of the Plan
Administrator; and
4. To furnish to the Plan Administrator a statement which
reflects the value of the investments in the hands of
the Trustee as of the end of each Plan Year and as of any
other times as the Trustee and Plan Administrator may
agree.
▇. ▇▇▇▇▇▇ OF THE TRUSTEE - Except as otherwise provided in
this Plan, the Trustee shall have the power to take any
action with respect to the Fund which it deems necessary
or advisable to discharge its responsibilities under this
Plan including, but not limited to, the following powers:
1. To hold any securities or other property of the Fund in
its own name, in the name of its nominee or in bearer
form;
2. To purchase or subscribe for securities issued, or real
property owned, by the Employer or any trade or
business under common control with the Employer but only
if the prudent investment and diversification
requirements of ERISA are satisfied;
3. To sell, exchange, convey, transfer or otherwise dispose
of any securities or other property held by the
Trustee, by private contract or at public auction. No
person dealing with the Trustee shall be bound to see to
the application of the purchase money or to inquire into
the validity, expediency, or propriety of any such sale
or other disposition, with or without advertisement;
4. To vote upon any stocks, bonds, or other securities; to
give general or special proxies or powers of attorney
with or without power of substitution; to exercise any
conversion privileges or subscription rights and to make
any payments incidental thereto; to oppose, or to consent
to, or otherwise participate in, corporate reorganizations
or other changes affecting corporate securities, and to
delegate discretionary powers, and to pay any assessments
or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to
stocks, bonds, securities or other property;
5. To invest any part or all of the Fund (including idle
cash balances) in certificates of deposit, demand or
time deposits, savings accounts, money market accounts or
similar investments of the Trustee (if the Trustee is a
bank or similar financial organization), the Prototype
Sponsor or any affiliate of such Trustee or Prototype
Sponsor, which bear a reasonable rate of interest;
6. To provide sweep services without the receipt by the
Trustee of additional compensation or other
consideration (other than reimbursement of direct
expenses properly and actually incurred in the
performance of such services);
7. To hold in the form of cash for distribution or
investment such portion of the Fund as, at any time and
from time-to time, the Trustee shall deem prudent and
deposit such cash in interest bearing or noninterest
bearing accounts;
8. To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all
other instruments that may be necessary or appropriate to
carry out the powers herein granted;
9. To settle, compromise, or submit to arbitration any
claims, debts, or damages due or owing to or from the
Plan, to commence or defend suits or legal or
administrative proceedings, and to represent the Plan in
all suits and legal and administrative proceedings;
10. To employ suitable agents and counsel, to contract with
agents to perform administrative and recordkeeping
duties and to pay their reasonable expenses, fees and
compensation, and such agent or counsel may or may not be
agent or counsel for the Employer;
11. To cause any part or all of the Fund, without limitation
as to amount, to be commingled with the funds of other
trusts (including trusts for qualified employee benefit
plans) by causing such money to be invested as a part of
any pooled, common, collective or commingled trust fund
(including any such fund described in the Adoption
Agreement) heretofore or hereafter created by any Trustee
(if the Trustee is a bank), by the Prototype Sponsor, by
any affiliate bank of such a Trustee or by such a Trustee
or the Prototype Sponsor, or by such an affiliate in
participation with others; the instrument or instruments
establishing such trust fund or funds, as amended, being
made part of this Plan and trust so long as any portion
of the Fund shall be invested through the medium thereof;
and
12. Generally to do all such acts, execute all such
instruments, initiate such proceedings, and exercise
all such rights and privileges with relation to property
constituting the Fund as if the Trustee were the absolute
owner thereof.
5.05 DIVISION OF FUND INTO INVESTMENT FUNDS
The Employer may direct the Trustee (or Custodian) from
time-to-time to divide and redivide the Fund into one or more
Investment Funds. Such Investment Funds may include, but not be
limited to, Investment Funds representing the assets under the
control of an investment manager pursuant to Section 5.12 and
Investment Funds representing investment options available for
individual direction by Participants pursuant to Section 5.14.
Upon each division or redivision, the Employer may specify the
part of the Fund to be allocated to each such Investment Fund
and the terms and conditions, if any, under which the
assets in such Investment Fund shall be invested.
5.06 COMPENSATION AND EXPENSES
The Trustee (or Custodian, if applicable) shall receive such
reasonable compensation as may be agreed upon by the Trustee (or
Custodian) and the Employer. The Trustee (or Custodian) shall be
entitled to reimbursement by the Employer for all proper
expenses incurred in carrying out his or her duties under this
Plan, including reasonable legal, accounting and actuarial
expenses. If not paid by the Employer, such compensation and
expenses may be charged against the Fund.
All taxes of any kind that may be levied or assessed under
existing or future laws upon, or in respect of, the Fund or
the income thereof shall be paid from the Fund.
5.07 NOT OBLIGATED TO QUESTION DATA
The Employer shall furnish the Trustee (or Custodian, if
applicable) and Plan Administrator the information which each
party deems necessary for the administration of the Plan
including, but not limited to, changes in a Participant's
status, eligibility, mailing addresses and other such data as
may be required. The Trustee (or Custodian) and Plan
Administrator shall be entitled to act on such information as is
supplied them and shall have no duty or responsibility to
further verify or question such information.
49
15
5.08 LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS
The Plan Administrator shall be responsible for withholding
federal income taxes from distributions from the Plan, unless
the Participant (or Beneficiary, where applicable) elects not to
have such taxes withheld. The Trustee (or Custodian) or other
payor may act as agent for the Plan Administrator to withhold
such taxes and to make the appropriate distribution reports, if
the Plan Administrator furnishes all the information to the
Trustee (or Custodian) or other payor it may need to do
withholding and reporting.
5.09 RESIGNATION OR REMOVAL OF TRUSTEE (OR CUSTODIAN)
The Trustee (or Custodian, if applicable) may resign at any
time by giving 30 days advance written notice to the Employer.
The resignation shall become effective 30 days after receipt of
such notice unless a shorter period is agreed upon.
The Employer may remove any Trustee (or Custodian) at any time
by giving written notice to such Trustee (or Custodian) and such
removal shall be effective 30 days after receipt of such notice
unless a shorter period is agreed upon. The Employer shall have
the power to appoint a successor Trustee (or Custodian).
Upon such resignation or removal, if the resigning or removed
Trustee (or Custodian) is the sole Trustee (or Custodian), he or
she shall transfer all of the assets of the Fund then held by
such Trustee (or Custodian) as expeditiously as possible to the
successor Trustee (or Custodian) after paying or reserving such
reasonable amount as he or she shall deem necessary to provide
for the expense in the settlement of the accounts and the amount
of any compensation due him or her and any sums chargeable
against the Fund for which he or she may be liable. If the Funds
as reserved are not sufficient for such purpose, then he or she
shall be entitled to reimbursement from the successor Trustee
(or Custodian) out of the assets in the successor Trustee's (or
Custodian's) hands under this Plan. If the amount reserved shall
be in excess of the amount actually needed, the former Trustee
(or Custodian) shall return such excess to the successor Trustee
(or Custodian).
Upon receipt of the transferred assets, the successor Trustee
(or Custodian) shall thereupon succeed to all of the powers
and responsibilities given to the Trustee (or Custodian) by this
Plan.
The resigning or removed Trustee (or Custodian) shall render an
accounting to the Employer and unless objected to by the
Employer within 30 days of its receipt, the accounting shall be
deemed to have been approved and the resigning or removed
Trustee (or Custodian) shall be released and discharged as to
all matters set forth in the accounting. Where a financial
organization is serving as Trustee (or Custodian) and it is
merged with or bought by another organization (or comes under
the control of any federal or state agency), that organization
shall serve as the successor Trustee (or Custodian) of this
Plan, but only if it is the type of organization that can so
serve under applicable law.
Where the Trustee or Custodian is serving as a nonbank trustee
or custodian pursuant to Section 1.401-12(n) of the Income
Tax Regulations, the Employer will appoint a successor Trustee
(or Custodian) upon notification by the Commissioner of Internal
Revenue that such substitution is required because the Trustee
(or Custodian) has failed to comply with the requirements of
Section 1.401-12(n) or is not keeping such records or making
such returns or rendering such statements as are required by
forms or regulations.
5.10 DEGREE OF CARE - LIMITATIONS OF LIABILITY
The Trustee (or Custodian) shall not be liable for any losses
incurred by the Fund by any direction to invest communicated by
the Employer, Plan Administrator, investment manager appointed
pursuant to Section 5.12 or any Participant or Beneficiary. The
Trustee (or Custodian) shall be under no liability for
distributions made or other action taken or not taken at the
written direction of the Plan Administrator. It is specifically
understood that the Trustee (or Custodian) shall have no duty or
responsibility with respect to the determination of matters
pertaining to the eligibility of any Employee to become a
Participant or remain a Participant hereunder, the amount of
benefit to which a Participant or Beneficiary shall be entitled
to receive hereunder, whether a distribution to Participant or
Beneficiary is appropriate under the terms of the Plan or the
size and type of any policy to be purchased from any insurer for
any Participant hereunder or similar matters; it being
understood that all such responsibilities under the Plan are
vested in the Plan Administrator.
5.11 INDEMNIFICATION OF PROTOTYPE SPONSOR AND TRUSTEE (OR CUSTODIAN)
Notwithstanding any other provision herein, and except as may be
otherwise provided by ERISA, the Employer shall indemnify and
hold harmless the Trustee (or Custodian, if applicable) and
the Prototype Sponsor, their officers, directors, employees,
agents, their heirs, executors, successors and assigns, from and
against any and all liabilities, damages, judgments,
settlements, losses, costs, charges, or expenses (including
legal expenses) at any time arising out of or incurred in
connection with any action taken by such parties in the
performance of their duties with respect to this Plan, unless
there has been a final adjudication of gross negligence or
willful misconduct in the performance of such duties.
Further, except as may be otherwise provided by ERISA, the
Employer will indemnify the Trustee (or Custodian) and Prototype
Sponsor from any liability, claim or expense (including legal
expense) which the Trustee (or Custodian) and Prototype Sponsor
shall incur by reason of or which results, in whole or in part,
from the Trustee's (or Custodian's) or Prototype Sponsor's
reliance on the facts and other directions and elections the
Employer communicates or fails to communicate.
5.12 INVESTMENT MANAGERS
A. DEFINITION OF INVESTMENT MANAGER - The Employer may appoint
one or more investment managers to make investment
decisions with respect to all or a portion of the Fund. The
investment manager shall be any firm or individual registered
as an investment adviser under the Investment Advisers Act of
1940, a bank as defined in said Act or an insurance company
qualified under the laws of more than one state to perform
services consisting of the management, acquisition or
disposition of any assets of the Plan.
B. INVESTMENT MANAGER'S AUTHORITY - A separate Investment Fund
shall be established representing the assets of the
Fund invested at the direction of the investment manager. The
investment manager so appointed shall direct the Trustee (or
Custodian, if applicable) with respect to the investment of
such Investment Fund. The investments which may be acquired
at the direction of the investment manager are those
described in Section 5.03(A) (for Custodians) or Section
5.04(A) (for Trustees).
C. WRITTEN AGREEMENT - The appointment of any investment
manager shall be by written agreement between the
Employer and the investment manager and a copy of such
agreement (and any modification or termination thereof) must
be given to the Trustee (or Custodian).
The agreement shall set forth, among other matters, the
effective date of the investment manager's appointment and an
acknowledgement by the investment manager that it is a
fiduciary of the Plan under ERISA.
50
16
D. CONCERNING THE TRUSTEE (OR CUSTODIAN) - Written notice
of each appointment of an investment manager shall be
given to the Trustee (or Custodian) in advance of the
effective date of such appointment. Such notice shall specify
which portion of the Fund will constitute the Investment Fund
subject to the investment manager's direction. The Trustee
(or Custodian) shall comply with the investment direction
given to it by the investment manager and will not be liable
for any loss which may result by reason of any action (or
inaction) it takes at the direction of the investment
manager.
5.13 MATTERS RELATING TO INSURANCE
A. If a life insurance policy is to be purchased for a
Participant, the aggregate premium for certain life
insurance for each Participant must be less than a certain
percentage of the aggregate Employer Contributions and
Forfeitures allocated to a Participant's Individual Account
at any particular time as follows:
1. Ordinary Life Insurance - For purposes of these
incidental insurance provisions, ordinary life
insurance contracts are contracts with both
non decreasing death benefits and nonincreasing premiums.
If such contracts are purchased, less than 50% of the
aggregate Employer Contributions and Forfeitures
allocated to any Participant's Individual Account will be
used to pay the premiums attributable to them.
2. Term and Universal Life Insurance - No more than
25% of the aggregate Employer Contributions and
Forfeitures allocated to any Participant's Individual
Account will be used to pay the premiums on term life
insurance contracts, universal life insurance contracts,
and all other life insurance contracts which are not
ordinary life.
3. Combination - The sum 50% of the ordinary life insurance
premiums and all other life insurance premiums will not
exceed 25% of the aggregate Employer Contributions and
Forfeitures allocated to any Participant's Individual
Account.
If this Plan is a profit sharing plan, the above
incidental benefits limits do not apply to life insurance
contracts purchased with Employer Contributions and
Forfeitures that have been in the Participant's
Individual Account for at least 2 full Plan Years,
measured from the date such contributions were allocated.
B. Any dividends or credits earned on insurance contracts for a
Participant shall be allocated to such Participant's
Individual Account.
C. Subject to Section 6.05, the contracts on a Participant's
life will be converted to cash or an annuity or
distributed to the Participant upon commencement of benefits.
D. The Trustee (or Custodian, if applicable) shall apply for
and will be the owner of any insurance contract(s)
purchased under the terms of this Plan. The insurance
contract(s) must provide that proceeds will be payable to the
Trustee (or Custodian), however, the Trustee (or Custodian)
shall be required to pay over all proceeds of the contract(s)
to the Participant's designated Beneficiary in accordance
with the distribution provisions of this Plan. A
Participant's spouse will be the designated Beneficiary of
the proceeds in all circumstances unless a qualified election
has been made in accordance with Section 6.05. Under no
circumstances shall the Fund retain any part of the proceeds.
In the event of any conflict between the terms of this Plan
and the terms of any insurance contract purchased hereunder,
the Plan provisions shall control.
E. The Plan Administrator may direct the Trustee (or Custodian)
to sell and distribute insurance or annuity contracts
to a Participant (or other party as may be permitted) in
accordance with applicable law or regulations.
5.14 DIRECTION OF INVESTMENTS BY PARTICIPANT
If so indicated in the Adoption Agreement, each Participant may
individually direct the Trustee (or Custodian, if applicable)
regarding the investment of part or all of his or her Individual
Account. To the extent so directed, the Employer, Plan
Administrator, Trustee (or Custodian) and all other fiduciaries
are relieved of their fiduciary responsibility under Section 404
of ERISA.
The Plan Administrator shall direct that a Separate Fund be
established in the name of each Participant who directs the
investment of part or all of his or her Individual Account. Each
Separate Fund shall be charged or credited (as appropriate) with
the earnings, gains, losses or expenses attributable to such
Separate Fund. No fiduciary shall be liable for any loss which
results from a Participant's individual direction. The assets
subject to individual direction shall not be invested in
collectibles as that term is defined in Section 408(m) of the
Code.
The Plan Administrator shall establish such uniform and
nondiscriminatory rules relating to individual direction as it
deems necessary or advisable including but not limited to, rules
describing (1) which portions of Participant's Individual
Account can be individually directed; (2) the frequency of
investment changes; (3) the forms and procedures for making
investment changes; and (4) the effect of a Participant's
failure to make a valid direction.
The Plan Administrator may, in a uniform and nondiscriminatory
manner, limit the available investments for Participants'
individual direction to certain specified investment options
(including, but not limited to, certain mutual funds, investment
contracts, deposit accounts and group trusts). The Plan
Administrator may permit, in a uniform and nondiscriminatory
manner, a Beneficiary of a deceased Participant or the alternate
payee under a qualified domestic relations order (as defined in
Section 414(p) of the Code) to individually direct in accordance
with this Section.
SECTION SIX VESTING AND DISTRIBUTION
6.01 DISTRIBUTION TO PARTICIPANT
A. DISTRIBUTABLE EVENTS
1. Entitlement to Distribution - The Vested portion
of a Participant's Individual Account shall be
distributable to the Participant upon (1) the occurrence
of any of the distributable events specified in the
Adoption Agreement; (2) the Participant's Termination of
Employment after attaining Normal Retirement Age; (3)
the termination of the Plan; and (4) the Participant's
Termination of Employment after satisfying any Early
Retirement Age conditions.
If a Participant separates from service before
satisfying the Early Retirement Age requirement, but has
satisfied the service requirement, the Participant will
be entitled to elect an early retirement benefit upon
satisfaction of such age requirement.
2. Written Request: When Distributed - A Participant
entitled to distribution who wishes to receive a
distribution must submit a written request to the Plan
Administrator. Such request shall be made upon a form
provided by the Plan Administrator. Upon a valid
request, the Plan Administrator shall direct the Trustee
(or Custodian, if applicable) to commence distribution no
later than the time specified in the Adoption Agreement
for this purpose and, if not specified in the Adoption
Agreement, then no later than 90 days following the later
of:
51
17
a. the close of the Plan Year within which the
event occurs which entitles the Participant
to distribution; or
b. the close of the Plan Year in which the request is
received.
3. Special Rules for Withdrawals During Service - If this
is a profit sharing plan and the Adoption Agreement so
provides, a Participant may elect to receive a
distribution of all or part of the Vested portion of his
or her Individual Account, subject to the requirements of
Section 6.05 and further subject to the following limits:
a. Participant for 5 or more years. An Employee who
has been a Participant in the Plan for 5 or
more years may withdraw up to the entire Vested
portion of his or her Individual Account.
b. Participant for less than 5 years. An Employee who
has been a Participant in the Plan for less
than 5 years may withdraw only the amount which has
been in his or her Individual Account attributable
to Employer Contributions for at least 2 full Plan
Years, measured from the date such contributions
were allocated. However, if the distribution is on
account of hardship, the Participant may withdraw up
to his or her entire Vested portion of the
Participant's Individual Account. For this purpose,
hardship shall have the meaning set forth in Section
6.01(A)(4) of the Code.
4. Special Rules for Hardship Withdrawals - If this is a
profit sharing plan and the Adoption Agreements so
provides, a Participant may elect to receive a hardship
distribution of all or part of the Vested portion of his
or her Individual Account, subject to the requirements of
Section 6.05 and further subject to the following limits:
a. Participant for 5 or more years. An Employee who
has been a Participant in the Plan for 5 or
more years may withdraw up to the entire Vested
portion of his or her Individual Account.
b. Participant for less than 5 years. An Employee who
has been a Participant in the Plan for less
than 5 years may withdraw only the amount which has
been in his or her Individual Account attributable
to Employer Contributions for at least 2 full Plan
Years, measured from the date such contributions
were allocated.
For purposes of this Section 6.01 (A)(4) and
Section 6.01(A)(3) hardship is defined as an
immediate and heavy financial need of the
Participant where such Participant lacks other
available resources. The following are the only
financial needs considered immediate and heavy:
expenses incurred or necessary for medical care,
described in Section 213(d) of the Code, of the
Employee, the Employee's spouse or dependents; the
purchase (excluding mortgage payments) of a
principal residence for the Employee; payment of
tuition and related educational fees for the next 12
months of post-secondary education for the Employee,
the Employee's spouse, children or dependents; or
the need to prevent the eviction of the Employee
from, or a foreclosure on the mortgage of, the
Employee's principal residence.
A distribution will be considered as necessary
to satisfy an immediate and heavy financial need of
the Employee only if:
1) The employee has obtained all distributions,
other than hardship distributions, and all
nontaxable loans under all plans maintained by
the Employer;
2) The distribution is not in excess of the amount
of an immediate and heavy financial need
(including amounts necessary to pay any federal,
state or local income taxes or penalties
reasonably anticipated to result from the
distribution).
5. One-Time In-Service Withdrawal Option - If this is a
profit sharing plan and the Employer has elected the
one-time in-service withdrawal option in the Adoption
Agreement, then Participants will be permitted only one
in-service withdrawal during the course of such
Participants employment with the Employer. The amount
which the Participant can withdraw will be limited to the
lesser of the amount determined under the limits set
forth in Section 6.01(A)(3) or the percentage of the
Participant's Individual Account specified by the
Employer in the Adoption Agreement. Distributions under
this Section will be subject to the requirements of
Section 6.05.
6. Commencement of Benefits - Notwithstanding any other
provision, unless the Participant elects otherwise,
distribution of benefits will begin no later than the
60th day after the latest of the close of the Plan Year
in which:
a. the Participant attains Normal Retirement Age;
b. occurs the 10th anniversary of the year in which
the Participant commenced participation in the
Plan; or
c. the Participant incurs a Termination of Employment.
Notwithstanding the foregoing, the failure of a
Participant and spouse to consent to a distribution
while a benefit is immediately distributable, within
the meaning of Section 6.02(B) of the Plan, shall be
deemed to be an election to defer commencement of
payment of any benefit sufficient to satisfy this
Section.
B. DETERMINING THE VESTED PORTION - In determining the Vested
portion of a Participant's Individual Account, the following
rules apply:
1. Employer Contributions and Forfeitures - The Vested
portion of a Participant's Individual Account derived
from Employer Contributions and Forfeitures is determined
by applying the vesting schedule selected in the Adoption
Agreement (or the vesting schedule described in Section
6.01(C) if the Plan is a Top-Heavy Plan).
2. Rollover and Transfer Contributions - A Participant is
fully Vested in his or her rollover contributions and
transfer contributions.
3. Fully Vested Under Certain Circumstances - A Participant
is fully Vested in his or her Individual Account if any
of the following occurs:
a. the Participant reaches Normal Retirement Age;
b. the Plan is terminated do partially terminated; or
c. there exists a complete discontinuance of
contributions under the Plan.
Further, unless otherwise indicated in the Adoption
Agreement, a Participant is fully Vested if the Participant
dies, incurs a Disability, or satisfies the conditions for
Early Retirement Age (if applicable).
52
18
4. Participants in a Prior Plan - if a Participant was a
participant in a Prior Plan on the Effective Date, his
or her Vested percentage shall not be less than it would
have been under such Prior Plan as computed on the
Effective Date.
C. MINIMUM VESTING SCHEDULE FOR TOP-HEAVY PLANS - The following
vesting provisions apply for any Plan Year in which this
Plan is a Top-Heavy Plan.
Notwithstanding the other provisions of this Section
6.01 or the vesting schedule selected in the Adoption
Agreement (unless those provisions or that schedule provide
for more rapid vesting), a Participant's Vested portion of
his or her Individual Account attributable to Employer
Contributions and Forfeitures shall be determined in
accordance with the vesting schedule elected by the Employer
in the Adoption Agreement (and if no election is made the 6
year graded schedule will be deemed to have been elected) as
described below:
6 YEAR GRADED 3 YEAR CLIFF
YEARS OF VESTING SERVICE VESTED PERCENTAGE YEARS OF VESTING SERVICE VESTED PERCENTAGE
1 0 1 0
2 20 2 0
3 40 3 100
4 60
5 80
6 100
This minimum vesting schedule applies to all benefits
within the meaning of Section 411(a)(7) of the Code, except
those attributable to Nondeductible Employee Contributions
including benefits accrued before the effective date of
Section 416 of the Code and benefits accrued before the Plan
became a Top-Heavy Plan. Further, no decrease in a
Participant's Vested percentage may occur in the event the
Plan's status as a Top-Heavy Plan changes for any Plan Year.
However, this Section 6.01 (C) does not apply to the
Individual Account of any Employee who does not have an Hour
of Service after the Plan has initially become a Top-Heavy
Plan and such Employee's Individual Account attributable to
Employer Contributions and Forfeitures will be determined
without regard to this Section.
If this Plan ceases to be a Top-Heavy Plan, then in
accordance with the above restrictions, the vesting schedule
as selected in the Adoption Agreement will govern. If the
vesting schedule under the Plan shifts in or out of top-heavy
status, such shift is an amendment to the vesting schedule and
the election in Section 9.04 applies.
D. BREAK IN VESTING SERVICE AND FORFEITURES - If a
Participant incurs a Termination of Employment, any portion
of his or her Individual Account which is not Vested shall
be held in a suspense account. Such suspense account shall
share in any increase or decrease in the fair market value
of the assets of the Fund in accordance with Section 4 of
the Plan. The disposition of such suspense account shall be
as follows:
1. Breaks in Vesting Service - If a Participant neither
receives nor is deemed to receive a distribution
pursuant to Section 6.01(D)(3) or (4) and the Participant
returns to the service of the Employer before incurring 5
consecutive Breaks in Vesting Service, there shall be no
Forfeiture and the amount in such suspense account shall
be recredited to such Participant's Individual Account.
2. Five Consecutive Breaks in Vesting Service - If a
Participant neither receives nor is deemed to receive a
distribution pursuant to Section 6.01(D)(3) or (4) and the
Participant does not return to the service of the Employer
before incurring 5 consecutive Breaks in Vesting Service,
the portion of the Participant's Individual Account which
is not Vested shall be treated as a Forfeiture and
allocated in accordance with Section 3.01(C).
3. Cash-out of Certain Participants - If the value of the
Vested portion of such Participant's Individual Account
derived from Nondeductible Employee Contributions and
Employer Contributions does not exceed $3,500, the
Participant shall receive a distribution of the entire
Vested portion of such Individual Account and the portion
which is not Vested shall be treated as a Forfeiture and
allocated in accordance with Section 3.01(C). For purposes
of this Section, if the value of the Vested portion of a
Participant's Individual Account is zero, the Participant
shall be deemed to have received a distribution of such
Vested Individual Account. A Participant's Vested
Individual Account balance shall not include accumulated
deductible employee contributions within the meaning of
Section 72(o)(5)(B) of the Code for Plan Years beginning
prior to January 1, 1989.
4. Participants Who Elect to Receive Distributions - If
such Participant elects to receive a distribution, in
accordance with Section 6.02(B), of the value of the
Vested portion of his or her Individual Account derived
from Nondeductible Employee Contributions and Employer
Contributions, the portion which is not Vested shall be
treated as a Forfeiture and allocated in accordance with
Section 3.01(C).
5. Re-employed Participants - If a Participant receives or
is deemed to receive a distribution pursuant to Section
6.01(D)(3) or (4) above and the Participant resumes
employment covered under this Plan, the Participant's
Employer-derived Individual Account balance will be
restored to the amount on the date of distribution if the
Participant repays to the Plan the full amount of the
distribution attributable to Employer Contributions before
the earlier of 5 years after the first date on which the
Participant is subsequently re-employed by the Employer,
or the date the Participant incurs 5 consecutive Breaks in
Vesting Service following the date of the distribution.
Any restoration of a Participant's Individual Account
pursuant to Section 6.01(D)(5) shall be made from other
Forfeitures, income or gain to the Fund or contributions
made by the Employer.
E. DISTRIBUTION PRIOR TO FULL VESTING - If a distribution is
made to a Participant who was not then fully Vested in
his or her Individual Account derived from Employer
Contributions and the Participant may increase his or her
Vested percentage in his or her Individual Account, then the
following rules shall apply:
1. a separate account will be established for the
Participant's interest in the Plan as of the time of the
distribution, and
2. at any relevant time the Participant's Vested portion of
the separate account will be equal to an amount ("X")
determined by the formula: X=P (AB + (R x D)) - (R x D)
where "P" is the Vested percentage at the relevant time,
"AB" is the separate account balance at the relevant time;
"D" is the amount of the distribution; and "R" is the
ratio of the separate account balance at the relevant time
to the separate account balance after distribution.
53
6.02 FORM OF DISTRIBUTION TO A PARTICIPANT
A. VALUE OF INDIVIDUAL ACCOUNT DOES NOT EXCEED $3,500 - If
the value of the Vested portion of a Participant's
Individual Account derived from Nondeductible Employee
Contributions and Employer Contributions does not exceed
$3,500, distribution from the Plan shall be made to the
Participant in a single lump sum in lieu of all other forms of
distribution from the Plan as soon as administratively
feasible.
B. VALUE OF INDIVIDUAL ACCOUNT EXCEEDS $3,500
1. If the value of the Vested portion of a Participant's
Individual Account derived from Nondeductible Employee
Contributions and Employer Contributions exceeds (or at
the time of any prior distribution exceeded) $3,500, and
the Individual Account is immediately distributable, the
Participant and the Participant's spouse (or where either
the Participant or the spouse died, the survivor) must
consent to any distribution of such Individual Account.
The consent of the Participant and the Participant's
spouse shall be obtained in writing within the 90-day
period ending on the annuity starting date. The annuity
starting date is the first day of the first period for
which an amount is paid as an annuity or any other form.
The Plan Administrator shall notify the Participant and
the Participant's spouse of the right to defer any
distribution until the Participant's Individual Account is
no longer immediately distributable. Such notification
shall include a general description of the material
features, and an explanation of the relative values of,
the optional forms of benefit available under the Plan in
a manner that would satisfy the notice requirements of
Section 417(a)(3) of the Code, and shall be provided no
less than 30 days and no more than 90 days prior to the
annuity starting date.
If a distribution is one to which Sections 401(a)(11)
and 417 of the Internal Revenue Code do not apply, such
distribution may commence less than 30 days after the
notice required under Section 1.411(a)-11(c) of the Income
Tax Regulations is given, provided that:
a. the Plan Administrator clearly informs the
Participant that the Participant has a right to
a period of at least 30 days after receiving the
notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a
particular distribution option), and
b. the Participant, after receiving the notice,
affirmatively elects a distribution.
Notwithstanding the foregoing, only the
Participant need consent to the commencement of a
distribution in the form of a qualified joint and
survivor annuity while the Individual Account is
immediately distributable. Neither the consent of the
Participant nor the Participant's spouse shall be
required to the extent that a distribution is
required to satisfy Section 401(a)(9) or Section 415
of the Code. In addition, upon termination of this
Plan if the Plan does not offer an annuity option
(purchased from a commercial provider), the
Participant's Individual Account may, without the
Participant's consent, be distributed to the
Participant or transferred to another defined
contribution plan (other than an employee stock
ownership plan as defined in Section 4975(e)(7) of
the Code) within the same controlled group.
An Individual Account is immediately
distributable if any part of the Individual Account
could be distributed to the Participant (or surviving
spouse) before the Participant attains or would have
attained (if not deceased) the later of Normal
Retirement Age or age 62.
2. For purposes of determining the applicability of the
foregoing consent requirements to distributions made
before the first day of the first Plan Year beginning
after December 31, 1988, the Vested portion of a
Participant's Individual Account shall not include amounts
attributable to accumulated deductible employee
contributions within the meaning of Section 72(o)(5)(B) of
the Code.
C. OTHER FORMS OF DISTRIBUTION TO PARTICIPANT - If the value of
the Vested portion of a Participant's Individual Account
exceeds $3,500 and the Participant has property waived
the joint and survivor annuity, as described in Section 6.05,
the Participant may request in writing that the Vested portion
of his or her Individual Account be paid to him or her in one
or more of the following forms of payment: (1) in a lump sum;
(2) in installment payments over a period not to exceed the
life expectancy of the Participant or the joint and last
survivor life expectancy of the Participant and his or her
designated Beneficiary; or (3) applied to the purchase of an
annuity contract.
Notwithstanding anything in this Section 6.02 to the
contrary, a Participant cannot elect payments in the form of
an annuity if the Retirement Equity Act safe harbor rules of
Section 6.05(F) apply.
6.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT
A. DESIGNATION OF BENEFICIARY - SPOUSAL CONSENT - Each
Participant may designate, upon a form provided by and
delivered to the Plan Administrator, one or more primary and
contingent Beneficiaries to receive all or a specified portion
of the Participant's Individual Account in the event of his or
her death. A Participant may change or revoke such Beneficiary
designation from time to time by completing and delivering the
proper form to the Plan Administrator.
In the event that a Participant wishes to designate a
primary Beneficiary who is not his or her spouse, his or her
spouse must consent in writing to such designation, and the
spouse's consent must acknowledge the effect of such
designation and be witnessed by a notary public or plan
representative. Notwithstanding this consent requirement, if
the Participant establishes to the satisfaction of the Plan
Administrator that such written consent may not be obtained
because there is no spouse or the spouse cannot be located, no
consent shall be required. Any change of Beneficiary will
require a new spousal consent.
B. PAYMENT TO BENEFICIARY - If a Participant dies before the
Participant's entire Individual Account has been paid to
him or her, such deceased Participant's Individual Account
shall be payable to any surviving Beneficiary designated by
the Participant, or, if no Beneficiary survives the
Participant, to the Participant's estate.
C. WRITTEN REQUEST WHEN DISTRIBUTED - A Beneficiary of a
deceased Participant entitled to a distribution who
wishes to receive a distribution must submit a written request
to the Plan Administrator. Such request shall be made upon a
form provided by the Plan Administrator. Upon a valid request,
the Plan Administrator shall direct the Trustee (or Custodian)
to commence distribution no later than the time specified in
the Adoption Agreement for this purpose and if not specified
in the Adoption Agreement, then no later than 90 days
following the later of:
1. the close of the Plan Year within which the Participant
dies; or
2. the close of the Plan Year in which the request is
received.
54
20
6.04 FORM OF DISTRIBUTION TO BENEFICIARY
A. VALUE OF INDIVIDUAL ACCOUNT DOES NOT EXCEED $3,500 - If the
value of the Participant's Individual Account derived
from Nondeductible Employee Contributions and Employer
Contributions does not exceed $3,500, the Plan Administrator
shall direct the Trustee (or Custodian, if applicable) to make
a distribution to the Beneficiary in a single lump sum in lieu
of all other forms of distribution from the Plan.
B. VALUE OF INDIVIDUAL ACCOUNT EXCEEDS $3,500 - If the value of
a Participant's Individual Account derived from
Nondeductible Employee Contributions and Employer
Contributions exceeds $3,500 the preretirement survivor
annuity requirements of Section 6.05 shall apply unless
waived in accordance with that Section or unless the
Retirement Equity Act safe harbor rules of Section 6.05(F)
apply. However, a surviving spouse Beneficiary may elect any
form of payment allowable under the Plan in lieu of the
preretirement survivor annuity. Any such payment to the
surviving spouse must meet the requirements of Section 6.06.
C. OTHER FORMS OF DISTRIBUTION TO BENEFICIARY - If the value of
a Participant's Individual Account exceeds $3,500 and
the Participant has properly waived the preretirement
survivor annuity, as described in Section 6.05 (if
applicable) or if the Beneficiary is the Participant's
surviving spouse, the Beneficiary may, subject to the
requirements of Section 6.06, request in writing that the
Participant's Individual Account be paid as follows: (1) in a
lump sum; or (2) in installment payments over a period not
to exceed the life expectancy of such Beneficiary.
6.05 JOINT AND SURVIVOR ANNUITY REQUIREMENTS
A. The provisions of this Section shall apply to any Participant
who is credited with at least one Hour of Eligibility Service
with the Employer on or after August 23, 1984, and such other
Participants as provided in Section 6.05(G).
B. QUALIFIED JOINT AND SURVIVOR ANNUITY - Unless an optional
form of benefit is selected pursuant to a qualified
election within the 90-day period ending on the annuity
starting date, a married Participant's Vested account balance
will be paid in the form of a qualified joint and survivor
annuity and an unmarried Participant's Vested account balance
will be paid in the form of a life annuity. The Participant
may elect to have such annuity distributed upon attainment of
the earliest retirement age under the Plan.
C. QUALIFIED PRERETIREMENT SURVIVOR ANNUITY - Unless an optional
form of benefit has been selected within the election
period pursuant to a qualified election, if a Participant
dies before the annuity starting date then the Participant's
Vested account balance shall be applied toward the purchase
of an annuity for the life of the surviving spouse. The
surviving spouse may elect to have such annuity distributed
within a reasonable period after the Participant's death.
D. DEFINITIONS
1. Election Period - The period which begins on the first
day of the Plan Year in which the Participant attains
age 35 and ends on the date of the Participant's death.
If a Participant separates from service prior to the
first day of the Plan Year in which age 35 is attained,
with respect to the account balance as of the date of
separation, the election period shall begin on the date
of separation.
Pre-age 35 waiver- A Participant who will not yet attain
age 35 as of the end of any current Plan Year may make
special qualified election to waive the qualified
preretirement survivor annuity for the period beginning
on the date of such election and ending on the first day
of the Plan Year in which the Participant will attain age
35. Such election shall not be valid unless the
Participant receives a written explanation of the
qualified preretirement survivor annuity in such terms as
are comparable to the explanation required under Section
6.05(E)(1). Qualified preretirement survivor annuity
coverage will be automatically reinstated as of the first
day of the Plan Year in which the Participant attains age
35. Any new waiver on or after such date shall be subject
to the full requirements of this Section 6.05.
2. Earliest Retirement Age - The earliest date on which,
under the Plan, the Participant could elect to receive
retirement benefits.
3. Qualified Election - A waiver of a qualified joint and
survivor annuity or a qualified preretirement survivor
annuity. Any waiver of a qualified joint and survivor
annuity or a qualified preretirement survivor annuity
shall not be effective unless: (a) the Participant's
spouse consents in writing to the election, (b) the
election designates a specific Beneficiary, including any
class of beneficiaries or any contingent beneficiaries,
which may not be changed without spousal consent (or the
spouse expressly permits designations by the Participant
without any further spousal consent); (c) the spouse's
consent acknowledges the effect of the election; and (d)
the spouse's consent is witnessed by a plan
representative or notary public. Additionally, a
Participant's waiver of the qualified joint and survivor
annuity shall not be effective unless the election
designates a form of benefit payment which may not be
changed without spousal consent (or the spouse expressly
permits designations by the Participant without any
further spousal consent). If it is established to the
satisfaction of a plan representative that there is no
spouse or that the spouse cannot be located, a waiver
will be deemed a qualified election.
Any consent by a spouse obtained under this provision
(or establishment that the consent of a spouse may not be
obtained) shall be effective only with respect to such
spouse. A consent that permits designations by the
Participant without any requirement of further consent by
such spouse must acknowledge that the spouse has the
right to limit consent to a specific Beneficiary, and a
specific form of benefit where applicable, and that the
spouse voluntarily elects to relinquish either or both of
such rights. A revocation of a prior waiver may be made
by a Participant without the consent of the spouse at any
time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained
under this provision shall be valid unless the
Participant has received notice as provided in Section
6.05(E) below.
4. Qualified Joint and Survivor Annuity - An immediate
annuity for the life of the Participant with a survivor
annuity for the life of the spouse which is not less than
50% and not more than 100% of the amount of the annuity
which is payable during the joint lives of the
Participant and the spouse and which is the amount of
benefit which can be purchased with the Participant's
vested account balance. The percentage of the survivor
annuity under the Plan shall be 50% (unless a different
percentage is elected by the Employer in the Adoption
Agreement).
5. Spouse (surviving spouse) - The spouse or surviving
spouse of the Participant, provided that a former
spouse will be treated as the spouse or surviving spouse
and a current spouse will not be treated as the spouse or
surviving spouse to the extent provided under a qualified
domestic relations order as described in Section 414(p)
of the Code.
6. Annuity Starting Date- The first day of the first period
for which an amount is paid as an annuity or any other
form.
55
21
7. Vested Account Balance - The aggregate value of the
Participant's Vested account balances derived from
Employer and Nondeductible Employee Contributions
(including rollovers), whether Vested before or upon
death, including the proceeds of insurance contracts, if
any, on the Participant's life. The provisions of this
Section 6.05 shall apply to a Participant who is Vested
in amounts attributable to Employer Contributions,
Nondeductible Employee Contributions (or both) at the
time of death or distribution.
E. NOTICE REQUIREMENTS
1. In the case of a qualified joint and survivor annuity,
the Plan Administrator shall no less than 30 days and
not more than 90 days prior to the annuity starting date
provide each Participant a written explanation of: (a)
the terms and conditions of a qualified joint and
survivor annuity; (b) the Participant's right to make and
the effect of an election to waive the qualified joint
and survivor annuity form of benefit; (c) the rights of a
Participant's spouse; and (d) the right to make, and the
effect of, a revocation of a previous election to waive
the qualified joint and survivor annuity.
2. In the case of a qualified preretirement annuity as
described in Section 6.05(C), the Plan Administrator
shall provide each Participant within the applicable
period for such Participant a written explanation of the
qualified preretirement survivor annuity in such terms
and in such manner as would be comparable to the
explanation provided for meeting the requirements of
Section 6.05(E)(3) applicable to a qualified joint and
survivor annuity
The applicable period for a Participant is whichever of
the following periods ends last: (a) the period beginning
with the first day of the Plan Year in which the
Participant attains age 32 and ending with the close of
the Plan Year preceding the Plan Year in which the
Participant attains age 35; (b) a reasonable period
ending after the individual becomes a Participant; (c) a
reasonable period ending after Section 6.05(E)(3) ceases
to apply to the Participant; and (d) a reasonable period
ending after this Section 6.05 first applies to the
Participant. Notwithstanding the foregoing, notice must
be provided within a reasonable period ending after
separation from service in the case of a Participant who
separates from service before attaining age 35.
For purposes of applying the preceding paragraph, a
reasonable period ending after the enumerated events
described in (b), (c) and (d) is the end of the two-year
period beginning one year prior to the date the
applicable event occurs, and ending one year after that
date. In the case of a Participant who separates from
service before the Plan Year in which age 35 is attained,
notice shall be provided within the two-year period
beginning one year prior to separation and ending one
year after separation. If such a Participant thereafter
returns to employment with the Employer, the applicable
period for such Participant shall be redetermined.
3. Notwithstanding the other requirements of this Section
6.05(E), the respective notices prescribed by this
Section 6.05(E), need not be given to a Participant if
(a) the Plan "fully subsidizes" the costs of a qualified
joint and survivor annuity or qualified preretirement
survivor annuity, and (b) the Plan does not allow the
Participant to waive the qualified joint and survivor
annuity or qualified preretirement survivor annuity and
does not allow a married Participant to designate a
nonspouse beneficiary. For purposes of this Section
6.05(E)(3), a plan fully subsidizes the costs of a
benefit if no increase in cost, or decrease in benefits
to the Participant may result from the Participant's
failure to elect another benefit.
F. RETIREMENT EQUITY ACT SAFE HARBOR RULES
1. If the Employer so indicates in the Adoption Agreement,
this Section 6.05(F) shall apply to a Participant in a
profit sharing plan, and shall always apply to any
distribution, made on or after the first day of the first
Plan Year beginning after December 31, 1988, from or
under a separate account attributable solely to
accumulated deductible employee contributions, as defined
in Section 72(o)(5)(B) of the Code, and maintained on
behalf of a Participant in a money purchase pension plan,
(including a target benefit plan) if the following
conditions are satisfied:
a. the Participant does not or cannot elect payments
in the form of a life annuity; and
b. on the death of a Participant, the Participant's
Vested account balance will be paid to the
Participant's surviving spouse, but if there is no
surviving spouse, or if the surviving spouse has
consented in a manner conforming to a qualified
election, then to the Participant's designated
Beneficiary. The surviving spouse may elect to have
distribution of the Vested account balance commence
within the 90-day period following the date of the
Participant's death. The account balance shall be
adjusted for gains or losses occurring after the
Participant's death in accordance with the
provisions of the Plan governing the adjustment of
account balances for other types of distributions.
This Section 6.05(F) shall not be operative with
respect to a Participant in a profit sharing plan if
the plan is a direct or indirect transferee of a
defined benefit plan, money purchase plan, a target
benefit plan, stock bonus, or profit sharing plan
which is subject to the survivor annuity
requirements of Section 401(a)(11) and Section 417
of the code. If this Section 6.05(F) is operative,
then the provisions of this Section 6.05 other than
Section 6.05(G) shall be inoperative.
2. The Participant may waive the spousal death benefit
described in this Section 6.05(F) at any time provided
that no such waiver shall be effective unless it
satisfies the conditions of Section 6.05(D)(3) (other
than the notification requirement referred to therein)
that would apply to the Participant's waiver of the
qualified preretirement survivor annuity.
3. For purposes of this Section 6.05(F), Vested account
balance shall mean, in the case of a money purchase
pension plan or a target benefit plan, the Participant's
separate account balance attributable solely to
accumulated deductible employee contributions within the
meaning of Section 72(o)(5)(B) of the Code. In the case
of a profit sharing plan, Vested account balance shall
have the same meaning as provided in Section 6.05(D)(7).
G. TRANSITIONAL RULES
1. Any living Participant not receiving benefits on August
23, 1984, who would otherwise not receive the benefits
prescribed by the previous subsections of this Section
6.05 must be given the opportunity to elect to have the
prior subsections of this Section apply if such
Participant is credited with at least one Hour of Service
under this Plan or a predecessor plan in a Plan Year
beginning on or after January 1, 1976, and such
Participant had at least 10 Years of Vesting Service when
he or she separated from service.
2. Any living Participant not receiving benefits on August
23, 1984, who was credited with at least one Hour of
Service under this Plan or a predecessor plan on or after
September 2, 1974, and who is not otherwise credited with
any service in a Plan Year be on or after January 1,
1976, must be given the opportunity to have his or her
benefits paid in accordance with Section 6.05(G)(4).
3. The respective opportunities to elect (as described in
Section 6.05(G)(1) and (2) above) must be afforded to
the appropriate Participants during the period commencing
on August 23, 1984, and ending on the date benefits would
otherwise commence to said Participants.
56
22
4. Any Participant who has elected pursuant to Section
6.05(G)(2) and any Participant who does not elect under
Section 6.05(G)(1) or who meets the requirements of
Section 6.05(G)(1) except that such Participant does not
have at least 10 Years of Vesting Service when he or she
separates from service, shall have his or her benefits
distributed in accordance with all of the following
requirements if benefits would have been payable in the
form of a life annuity:
a. Automatic Joint and Survivor Annuity - If benefits
in the form of a life annuity become payable to a
married Participant who:
(1) begins to receive payments under the Plan on or
after Normal Retirement Age; or
(2) dies on or after Normal Retirement Age while
still working for the Employer; or
(3) begins to receive payments on or after the
qualified early retirement age; or
(4) separates from service on or after attaining
Normal Retirement Age (or the qualified early
retirement age) and after satisfying the
eligibility requirements for the payment of
benefits under the Plan and thereafter dies
before beginning to receive such benefits;
then such benefits will be received under this
Plan in the form of a qualified joint and
survivor annuity, unless the Participant has
elected otherwise during the election period.
The election period must be at least 6 months
before the Participant attains qualified early
retirement age and ends not more than 90 days
before the commencement of benefits. Any
election hereunder will be in writing and may be
changed by the Participant at any time.
b. Election of Early Survivor Annuity - A Participant
who is employed after attaining the qualified
early retirement age will be given the opportunity
to elect, during the election period, to have a
survivor annuity payable on death. If the
Participant elects the survivor annuity, payments
under such annuity must not be less than the
payments which would have been made to the spouse
under the qualified joint and survivor annuity if
the Participant had retired on the day before his or
her death. Any election under this provision will
be in writing and may be changed by the Participant
at any time. The election period begins on the
later of (1) the 90th day before the Participant
attains the qualified early retirement age, or (2)
the date on which participation begins, and ends on
the date the Participant terminates employment.
c. For purposes of Section 6.05(G)(4):
1. Qualified early retirement age is the latest of:
a. the earliest date, under the Plan, on which
the Participant may elect to receive
retirement benefits,
b. the first day of the 120th month beginning
before the Participant reaches Normal
Retirement Age,or
c. the date the Participant begins
participation.
2. Qualified joint and survivor annuity is an
annuity for the life of the Participant with a
survivor annuity for the life of the spouse as
described in Section 6.05(D)(4) of this Plan.
6.06 DISTRIBUTION REQUIREMENTS
A. GENERAL RULES
1. Subject to Section 6.05 joint and Survivor Annuity
Requirements, the requirements of this Section shall
apply to any distribution of a Participant's interest and
will take precedence over any inconsistent provisions of
this Plan. Unless otherwise specified, the provisions of
this Section 6.06 apply to calendar years beginning after
December 31, 1984.
2. All distributions required under this Section 6.06 shall
be determined and made in accordance with the Income Tax
Regulations under Section 401(a)(9), including the minimum
distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the proposed regulations.
B. REQUIRED BEGINNING DATE - The entire interest of a
Participant must be distributed or begin to be distributed
no later than the Participant's required beginning date.
C. LIMITS ON DISTRIBUTION PERIODS - As of the first distribution
calendar year, distributions, if not made in a single sum,
may only be made over one of the following periods (or a
combination thereof):
1. the life of the Participant,
2. the life of the Participant and a designated Beneficiary,
3. a period certain not extending beyond the life
expectancy of the Participant, or
4. a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
Beneficiary.
D. DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR - If the
Participant's interest is to be distributed in other than
a single sum, the following minimum distribution rules
shall apply on or after the required beginning date:
1. Individual Account
a. If a Participant's benefit is to be distributed
over (1) a period not extending beyond the life
expectancy of the Participant or the joint life and
last survivor expectancy of the Participant and the
Participant's designated Beneficiary or (2) a period
not extending beyond the hie expectancy of the
designated Beneficiary, the amount required to be
distributed for each calendar year, beginning with
distributions for the first distribution calendar
year, must at least equal the quotient obtained by
dividing the Participant's benefit by the applicable
life expectancy.
b. For calendar years beginning before January 1, 1989,
if the Participant's spouse is not the designated
Beneficiary, the method of distribution selected
must assure that at least 50% of the present value
of the amount available for distribution is paid
within the life expectancy, of the Participant.
c. For calendar years beginning after December 31,
1988, the amount to be distributed each year,
beginning with distributions for the first
distribution calendar year shall not be less than
the quotient obtained by dividing the Participant's
benefit by the lesser of (1) the applicable life
expectancy or (2) if the Participant's spouse is not
the
57
23
designated Beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of
Section 1.401(a)(9)-2 of the Proposed Income Tax
Regulations. Distributions after the death of the
Participant shall be distributed using the
applicable life expectancy in Section 6.05(D)(1)(a)
above as the relevant divisor without regard to
proposed regulations 1.401(a)(9)-2.
d. The minimum distribution required for the
Participant's first distribution calendar year
must be made on or before the Participant's required
beginning date. The minimum distribution for other
calendar years,including the minimum distribution
for the distribution calendar year in which the
Employee's required beginning date occurs, must be
made on or before December 31 of that distribution
calendar year.
2. Other Forms-if the Participant's benefit is distributed
in the form of an annuity purchased from an insurance
company, distributions thereunder shall be made in
accordance with the requirements of Section 401(a)(9) of
the Code and the regulations thereunder.
E. Death Distribution Provisions
1. Distribution Beginning Before Death - If the Participant
dies after distribution of his or her interest has
begun, the remaining portion of such interest will
continue to be distributed at least as rapidly as under
the method of distribution being used prior to the
Participant's death.
2. Distribution Beginning After Death - If the Participant
dies before distribution of his or her interest begins,
distribution of the Participant's entire interest shall
be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's
death except to the extent that an election is made to
receive distributions in accordance with (a) or (b)
below:
a. if any portion of the Participant's interest is
payable to a designated Beneficiary,
distributions may be made over the life or over a
period certain not greater than the life expectancy
of the designated Beneficiary commencing on or
before December 31 of the calendar year immediately
following the calendar year in which the Participant
died;
b. if the designated Beneficiary is the Participant's
surviving spouse, the date distributions are
required to begin in accordance with (a) above shall
not be earlier than the later of (1) December 31 of
the calendar year immediately following the calendar
year in which the Participant dies or (2) December
31 of the calendar year in which the Participant
would have attained age 70 1/2.
If the Participant has not made an election
pursuant to this Section 6.05(E)(2) by the time of
his or her death, the Participant's designated
Beneficiary must elect the method of distribution no
later than the earlier of (1) December 31 of the
calendar year in which distributions would be
required to begin under this Section 6.05(E)(2), or
(2) December 31 of the calendar year which contains
the fifth anniversary of the date of death of the
Participant. If the Participant has no designated
Beneficiary, or if the designated Beneficiary does
not elect a method of distribution, distribution of
the Participant's entire interest must be completed
by December 31 of the calendar year containing the
fifth anniversary of the Participant's death.
3. For purposes of Section 6.06(E)(2) above, if the
surviving spouse dies after the Participant, but before
payments to such spouse begin, the provisions of Section
6.06(E)(2), with the exception of paragraph (b) therein,
shall be applied as if the surviving spouse were the
Participant.
4. For purposes of this Section 6.06(E), any amount paid to
a child of the Participant will be treated as if it had
been paid to the surviving spouse if the amount becomes
payable to the surviving spouse when the child reaches
the age of majority.
5. For purposes of this Section 6.06(E), distribution of a
Participant's interest is considered to begin on the
Participant's required beginning date (or, if Section
6.06(E)(3) above is applicable, the date distribution is
required to begin to the surviving spouse pursuant to
Section 6.06(E)(2) above). If Distribution in the form of
an annuity irrevocably commences to the Participant
before the required beginning date, the date distribution
is considered to begin is the date distribution actually
commences.
F. Definitions
1. Applicable Life Expectancy - The life expectancy (or
joint and last survivor expectancy) calculated using
the attained age of the Participant (or designated
Beneficiary) as of the Participant's (or designated
Beneficiary's) birthday in the applicable calendar year
reduced by one for each calendar year which has elapsed
since the date life expectancy was first calculated. If
life expectancy is being recalculated, the applicable
life expectancy shall be the life expectancy as so
recalculated. The applicable calendar year shall be the
first distribution calendar year, and if life expectancy
is being recalculated such succeeding calendar year.
2. Designated Beneficiary - The individual who is designated
as the Beneficiary under the Plan in accordance with
Section 401(a)(9) of the Code and the regulations
thereunder.
3. Distribution Calendar Year - A calendar year for which a
minimum distribution is required. For distributions
beginning before the Participant's death, the first
distribution calendar year is the calendar year
immediately preceding the calendar year which contains
the Participant's required beginning date. For
distributions beginning after the Participant's death,
the first distribution calendar year is the calendar year
in which distributions are required to begin pursuant to
Section 6.05(E) above.
4. Life Expectancy - Life expectancy and joint and last
survivor expectancy are computed by use of the expected
return multiples in Tables V and VI of Section 1.72-9 of
the Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse,
in the case of distributions described in Section
6.05(E)(2)(b) above) by the time distributions are
required to begin, life expectancies shall be
recalculated annually. Such election shall be
irrevocable as to the Participant (or spouse) and shall
apply to all subsequent years. The life expectancy of a
nonspouse Beneficiary may not be recalculated.
5. Participant's Benefit
a. The account balances of the last valuation date in
the valuation calendar year (the calendar year
immediately preceding the distribution calendar
year) increased by the amount of any Contributions
or Forfeitures allocated to the account balance as
of dates in the valuation calendar year after the
valuation date and decreased by distributions made
in the valuation calendar year after the valuation
date.
58
24
b. Exception for second distribution calendar year.
For purposes of paragraph (a) above, if any
portion of the minimum distribution for the first
distribution calendar year is made in the second
distribution calendar year on or before the required
beginning date, the amount of the minimum
distribution made in the second distribution
calendar year shall be treated as if it had been
made in the immediately preceding distribution
calendar year.
6. Required Beginning Date
a. General Rule - The required beginning date of a
Participant is the first day of April of the
calendar year following the calendar year in which
the Participant attains age 70 1/2.
b. Transitional Rules - The required beginning date of
a Participant who attains age 70 1/2 before
January 1, 1988, shall be determined in accordance
with (1) or (2) below:
(1) Non 5% Owners - The required beginning date of
a Participant who is not a 5% owner is the
first day of April of the calendar year
following the calendar year in which the later
of retirement or attainment of age 70 1/2
occurs.
(2) 5% Owners - The required beginning date of a
Participant who is a 5% owner during any year
beginning after December 31,1979, is the first
day of April following the later of:
(a) the calendar year in which the Participant
attains age 70 1/2, or
(b) the earlier of the calendar year with or
within which ends the Plan Year in
which the Participant becomes a 5% owner, or
the calendar year in which the Participant
retires.
The required beginning date of a
Participant who is not a 5% owner who
attains age 70 1/2 during 1988 and who has
not retired as of January 1, 1989, is April
1, 1990.
c. 5% Owner - A Participant is treated as a 5% owner
for purposes of this Section 6.06(F)(6) if such
Participant is a 5% owner as defined in Section
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.
d. Once distributions have begun to a 5% owner under
this Section 6.06(F)(6) they must continue to
be distributed, even if the Participant ceases to be
a 5% owner in a subsequent year.
G. TRANSITIONAL RULE
1. Notwithstanding the other requirements of this Section
6.06 and subject to the requirements of Section 6.05,
Joint and Survivor Annuity Requirements, distribution on
behalf of any Employee, including a 5% owner, may be made
in accordance with all of the following requirements
(regardless of when such distribution commences):
a. The distribution by the Fund is one which would not
have qualified such Fund under Section 401(a)(9) of
the Code as in effect prior to amendment by the
Deficit Reduction Act of 1984.
b. The distribution is in accordance with a method of
distribution designated by the Employee whose
interest in the Fund is being distributed or, if the
Employee is deceased, by a Beneficiary of such
Employee.
c. Such designation was in writing, was signed by the
Employee or the Beneficiary, and was made before
January 1, 1984.
d. The Employee had accrued a benefit under the Plan
as of December 31,1983.
e. The method of distribution designated by the
Employee or the Beneficiary specifies the time
at which distribution will commence, the period over
which distributions will be made, and in the case of
any distribution upon the Employee's death, the
Beneficiaries of the Employee listed in order of
priority.
2. A distribution upon death will not be covered by this
transitional rule unless the information in the
designation contains the required information described
above with respect to the distributions to be made upon
the death of the Employee.
3. For any distribution which commences before January 1,
1984, but continues after December 31,1983, the
Employee, or the Beneficiary, to whom such distribution
is being made, will be presumed to have designated the
method of distribution under which the distribution is
being made if the method of distribution was specified
in writing and the distribution satisfies the
requirements in Sections 6.06(G)(1)(a) and (e).
4. If a designation is revoked, any subsequent distribution
must satisfy the requirements of Section 401(a)(9) of
the Code and the regulations thereunder. If a
designation is revoked subsequent to the date
distributions are required to begin, the Plan must
distribute by the end of the calendar year following the
calendar year in which the revocation occurs the total
amount not yet distributed which would have been required
to have been distributed to satisfy Section 401(a)(9) of
the Code and the regulations thereunder, but for the
Section 242(b)(2) election. For calendar years beginning
after December 31, 1988, such distributions must meet the
minimum distribution incidental benefit requirements in
Section 1.401(a)(9)-2 of the Proposed Income Tax
Regulations. Any changes in the designation will be
considered to be a revocation of the designation.
However, the mere substitution or addition of another
Beneficiary (one not named in the designation) under the
designation will not be considered to be a revocation of
the designation, so long as such substitution or addition
does not alter the period over which distributions are to
be made under the designation, directly or indirectly
(for example, by altering the relevant measuring life).
In the case in which an amount is transferred or rolled
over from one plan to another plan, the rules in Q&A J-2
and Q&A J-3 shall apply.
6.07 ANNUITY CONTRACTS
Any annuity contract distributed under the Plan (if permitted
or required by this Section 6) must be nontransferable. The
terms of any annuity contract purchased and distributed by the
Plan to a Participant or spouse shall comply with the
requirements of the Plan.
6.08 LOANS TO PARTICIPANTS
If the Adoption Agreement so indicates, a Participant may
receive a loan from the Fund, subject to the following rules:
A. Loans shall be made available to all Participants on a
reasonably equivalent basis.
B. Loans shall not be made available to Highly Compensated
Employees (as defined in Section 414(q) of the Code) in
an amount greater than the amount made available to other
Employees.
59
25
C. Loans must be adequately secured and bear a reasonable
interest rate.
D. No Participant loan shall exceed the present value of the
Vested portion of a Participant's Individual Account.
E. A Participant must obtain the consent of his or her spouse,
if any, to the use of the Individual Account as security for
the loan. Spousal consent shall be obtained no earlier than
the beginning of the 90 day period that ends on the date on
which the loan is to be so secured. The consent must be in
writing, must acknowledge the effect of the loan, and must be
witnessed by a plan representative or notary public. Such
consent shall thereafter be binding with respect to the
consenting spouse or any subsequent spouse with respect to
that loan. A new consent shall be required if the account
balance is used for renegotiation, extension, renewal, or
other revision of the loan. Notwithstanding the foregoing,
no spousal consent is necessary if, at the time the loan is
secured, no consent would be required for a distribution
under Section 417(a)(2)(B). In addition, spousal consent is
not required if the Plan or the Participant is not subject to
Section 401(a)(11) at the time the Individual Account is used
as security, or if the total Individual Account subject to
the security is less than or equal to $3,500.
F. In the event of default, foreclosure on the note and
attachment of security will not occur until a
distributable event occurs in the Plan. Notwithstanding the
preceding sentence, a Participant's default on a loan will be
treated as a distributable event and as soon as
administratively feasible after the default, the
Participant's Vested Individual Account will be reduced by
the lesser of the amount in default (plus accrued interest)
or the amount secured. If this Plan is a 401(k) plan, then
to the extent the loan is attributable to a Participant's
Elective Deferrals, Qualified Nonelective Contributions or
Qualified Matching Contributions, the Participant's
Individual Account will not be reduced unless the Participant
has attained age 59 1/2 or has another distributable event.
A Participant will be deemed to have consented to the
provision at the time the loan is made to the Participant.
G. No loans will be made to any shareholder-employee or
Owner-Employee. For purposes of this requirement, a
shareholder-employee means an employee or officer of an
electing small business (Subchapter S) corporation who owns
(or is considered as owning within the meaning of Section
318(a)(1) of the Code), on any day during the taxable year of
such corporation, more than 5% of the outstanding stock of
the corporation.
If a valid spousal consent has been obtained in accordance
with 6.08E, then, notwithstanding any other provisions of
this Plan, the portion of the Participant's Vested Individual
Account used as a security interest held by the Plan by
reason of a loan outstanding to the Participant shall be
taken into account for purposes of determining the amount of
the account balance payable at the time of death or
distribution, but only if the reduction is used as repayment
of the loan. If less than 100% of the Participant's Vested
Individual Account (determined without regard to the
preceding sentence) is payable to the surviving spouse, then
the account balance shall be adjusted by first reducing the
Vested Individual Account by the amount of the security used
as repayment of the loan, and then determining the benefit
payable to the surviving spouse.
To avoid taxation to the Participant, no loan to any
Participant can be made to the extent that such loan when
added to the outstanding balance of all other loans to the
Participant would exceed the lesser of (a) $50,000 reduced by
the excess (if any) of the highest outstanding balance of
loans during the one year period ending on the day before the
loan is made, over the outstanding balance of loans from the
Plan on the date the loan is made, or (b) 50% of the present
value of the nonforfeitable Individual Account of the
Participant or, if greater, the total Individual Account up
to $10,000. For the purpose of the above limitation, all
loans from all plans of the Employer and other members of a
group of employers described in Sections 414(b), 414(c), and
414(m) of the Code are aggregated. Furthermore, any loan
shall by its terms require that repayment (principal and
interest) be amortized in level payments, not less frequently
than quarterly, over a period not extending beyond 5 years
from the date of the loan, unless such loan is used to
acquire a dwelling unit which within a reasonable time
(determined at the time the loan is made) will be used as the
principal residence of the Participant. An assignment or
pledge of any portion of the Participant's interest in the
Plan and a loan, pledge, or assignment with respect to any
insurance contract purchased under the Plan, will be treated
as a loan under this paragraph.
The Plan Administrator shall administer the loan
program in accordance with a written document. Such written
document shall include, at a minimum, the following: (i) the
identity of the person or positions authorized to administer
the Participant loan program; (ii) the procedure for applying
for loans; (iii) the basis on which loans will be approved or
denied; (iv) limitations (if any) on the types and amounts of
loans offered; (v) the procedure under the program for
determining a reasonable rate of interest; (vi) the types of
collateral which may secure a Participant loan; and (vii) the
events constituting default and the steps that will be taken
to preserve Plan assets in the event of such default.
6.09 DISTRIBUTION IN KIND
The Plan Administrator may cause any distribution under this
Plan to be made either in a form actually held in the Fund, or
in cash by converting assets other than cash into cash, or in
any combination of the two foregoing ways.
6.10 DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS
A. DIRECT ROLLOVER OPTION
This Section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a distributee's
election under this Section, a distributee may elect, at the
time and in the manner prescribed by the Plan Administrator,
to have any portion of an eligible rollover distribution that
is equal to at least $500 paid directly to an eligible
retirement plan specified by the distributee in a direct
rollover.
B. DEFINITIONS
1. Eligible rollover distribution - An eligible rollover
distribution is any distribution of all or any portion
of the balance to the credit of the distributee, except
that an eligible rollover distribution does not include:
a. any distribution that is one of a series of
substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives
(or joint life expectancies) of the distributee and
the distributee's designated Beneficiary, or for a
specified period of ten years or more;
b. any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code;
c. the portion of any other distribution that is not
includible in gross income (determined without
regard to the exclusion for net unrealized
appreciation with respect to employer securities);
and
d. any other distribution(s) that is reasonably
expected to total less than $200 during a year.
2. Eligible retirement plan- An eligible retirement plan is
an individual retirement account described in Section
408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan
described in Section
60
26
403(a) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution. However, in
the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement
annuity.
3. Distributee - A distributes includes an Employee
or former Employee. In addition, the Employee's or
former Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations
order, as defined in Section 414(p) of the Code, are
distributees with regard to the interest of the spouse or
former spouse.
4. Direct Rollover- A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the
distributee.
6.11 PROCEDURE FOR MISSING PARTICIPANTS OR BENEFICIARIES
The Plan Administrator must use all reasonable measures to
locate Participants or Beneficiaries who are entitled to
distributions from the Plan. In the event that the Plan
Administrator cannot locate a Participant or Beneficiary who is
entitled to a distribution from the Plan after using all
reasonable measures to locate him or her, the Plan Administrator
may, consistent with applicable laws, regulations and other
pronouncements under ERISA, use any reasonable procedure to
dispose of distributable plan assets, including any of the
following: (1) establish a bank account for and in the name of
the Participant or Beneficiary and transfer the assets to such
bank account, (2) purchase an annuity contract with the assets
in the name of the Participant or Beneficiary, or (3) after the
expiration of 5 years after the benefit becomes payable, treat
the amount distributable as a Forfeiture and allocate it in
accordance with the terms of the Plan and if the Participant or
Beneficiary is later located, restore such benefit to the Plan.
SECTION SEVEN CLAIMS PROCEDURE
7.01 FILING A CLAIM FOR PLAN DISTRIBUTIONS
A Participant or Beneficiary who desires to make a claim for
the Vested portion of the Participant's Individual Account shall
file a written request with the Plan Administrator on a form to
be furnished to him or her by the Plan Administrator for such
purpose. The request shall set forth the basis of the claim. The
Plan Administrator is authorized to conduct such examinations as
may be necessary to facilitate the payment of any benefits to
which the Participant or Beneficiary may be entitled under the
terms of the Plan.
7.02 DENIAL OF CLAIM
Whenever a claim for a Plan distribution by any Participant or
Beneficiary has been wholly or partially denied, the Plan
Administrator must furnish such Participant or Beneficiary
written notice of the denial within 60 days of the date the
original claim was filed. This notice shall set forth the
specific reasons for the denial, specific reference to pertinent
Plan provisions on which the denial is based, a description of
any additional information or material needed to perfect the
claim, an explanation of why such additional information or
material is necessary and an explanation of the procedures for
appeal.
7.03 REMEDIES AVAILABLE
The Participant or Beneficiary shall have 60 days from receipt
of the denial notice in which to make written application for
review by the Plan Administrator. The Participant or Beneficiary
may request that the review be in the nature of a hearing. The
Participant or Beneficiary shall have the right to
representation, to review pertinent documents and to submit
comments in writing. The Plan Administrator shall issue a
decision on such review within 60 days after receipt of an
application for review as provided for in Section 7.02. Upon a
decision unfavorable to the Participant or Beneficiary, such
Participant or Beneficiary shall be entitled to bring such
actions in law or equity as may be necessary or appropriate to
protect or clarify his or her right to benefits under this Plan.
SECTION EIGHT PLAN ADMINISTRATOR
8.01 EMPLOYER IS PLAN ADMINISTRATOR
A. The Employer shall be the Plan Administrator unless
the managing body of the Employer designates a person
or persons other than the Employer as the Plan Administrator
and so notifies the Trustee (or Custodian, if applicable).
The Employer shall also be the Plan Administrator if the
person or persons so designated cease to be the Plan
Administrator. The Employer may establish an administrative
committee that will carry out the Plan Administrator's
duties. Members of the administrative committee may allocate
the Plan Administrator's duties among themselves.
B. If the managing body of the Employer designates a person or
persons other than the Employer as Plan Administrator, such
person or persons shall serve at the pleasure of the Employer
and shall serve pursuant to such procedures as such managing
body may provide. Each such person shall be bonded as may be
required by law.
8.02 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR
A. The Plan Administrator may, by appointment, allocate the
duties of the Plan Administrator among several individuals or
entities. Such appointments shall not be effective until the
party designated accepts such appointment in writing.
B. The Plan Administrator shall have the authority to control
and manage the operation and administration of the Plan. The
Plan Administrator shall administer the Plan for the
exclusive benefit of the Participants and their Beneficiaries
in accordance with the specific terms of the Plan.
C. The Plan Administrator shall be charged with the duties of
the general administration of the Plan, including, but not
limited to the following:
1. To determine all questions of interpretation or policy in
a manner consistent with the Plan's documents and the
Plan Administrator's construction or determination in
good faith shall be conclusive and binding on all persons
except as otherwise provided herein or by law. Any
interpretation or construction shall be done in a
nondiscriminatory manner and shall be consistent with the
intent that the Plan shall continue to be deemed a
qualified plan under the terms of Section 401(a) of the
Code, as amended from time-to-time, and shall comply with
the terms of ERISA, as amended from time-to-time;
2. To determine all questions relating to the eligibility
of Employees to become or remain Participants hereunder;
3. To compute the amounts necessary or desirable to be
contributed to the Plan;
4. To compute the amount and kind of benefits to
which a Participant or Beneficiary shall be entitled
under the Plan and to direct the Trustee (or Custodian,
if applicable) with respect to all disbursements under
the Plan, and, when requested by
61
27
the Trustee (or Custodian), to furnish the Trustee (or
Custodian) with instructions, in writing, on matters
pertaining to the Plan and the Trustee (or Custodian) may
rely and act thereon;
5. To maintain all records necessary for the administration
of the Plan;
6. To be responsible for preparing and filing such
disclosure and tax forms as may be required from
time-to-time by the Secretary of Labor or the Secretary
of the Treasury; and
7. To furnish each Employee, Participant or Beneficiary
such notices, information and reports under such
circumstances as may be required by law.
D. The Plan Administrator shall have all of the powers necessary
or appropriate to accomplish his or her duties under the
Plan, including, but not limited to, the following:
1. To appoint and retain such persons as may be necessary
to carry out the functions of the Plan Administrator;
2. To appoint and retain counsel, specialists or other
persons as the Plan Administrator deems necessary or
advisable in the administration of the Plan,
3. To resolve all questions of administration of the Plan;
4. To establish such uniform and nondiscriminatory rules
which it deems necessary to carry out the terms of
the Plan;
5. To make any adjustments in a uniform and nondiscriminatory
manner which it deems necessary to correct any
arithmetical or accounting errors which may have been made
for any Plan Year; and
6. To correct any defect, supply any omission or reconcile
any inconsistency in such manner and to such extent as
shall be deemed necessary or advisable to carry out the
purpose of the Plan.
8.03 EXPENSES AND COMPENSATION
All reasonable expenses of administration including, but not
limited to, those involved in retaining necessary professional
assistance may be paid from the assets of the Fund.
Alternatively, the Employer may, in its discretion, pay any or
all such expenses. Pursuant to uniform and nondiscriminatory
rules that the Plan Administrator may establish from time to
time, administrative expenses and expenses unique to a
particular Participant may be charged to a Participant's
Individual Account or the Plan Administrator may allow
Participants to pay such fees outside of the Plan. The Employer
shall furnish the Plan Administrator with such clerical and
other assistance as the Plan Administrator may need in the
performance of his or her duties.
8.04 INFORMATION FROM EMPLOYER
To enable the Plan Administrator to perform his or her duties,
the Employer shall supply full and timely information to the
Plan Administrator (or his or her designated agents) on all
matters relating to the Compensation of all Participants, their
regular employment, retirement, death, Disability or Termination
of Employment, and such other pertinent facts as the Plan
Administrator (or his or her agents) may require. The Plan
Administrator shall advise the Trustee (or Custodian, if
applicable) of such of the foregoing facts as may be pertinent
to the Trustee's (or Custodian's) duties under the Plan. The
Plan Administrator (or his or her agents) is entitled to rely on
such information as is supplied by the Employer and shall have
no duty or responsibility to verify such information.
SECTION NINE AMENDMENT AND TERMINATION
9.01 RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN
A. The Employer, by adopting the Plan, expressly delegates to
the Prototype Sponsor the power, but not the duty, to
amend the Plan without any further action or consent of the
Employer as the Prototype Sponsor deems necessary for the
purpose of adjusting the Plan to comply with all laws and
regulations governing pension or profit sharing plans.
Specifically, it is understood that the amendments may be
made unilaterally by the Prototype Sponsor. However, it
shall be understood that the Prototype Sponsor shall be under
no obligation to amend the Plan documents and the Employer
expressly waives any rights or claims against the Prototype
Sponsor for not exercising this power to amend. For purposes
of Prototype Sponsor amendments, the mass submitter shall be
recognized as the agent of the Prototype Sponsor. If the
Prototype Sponsor does not adopt the amendments made by the
mass submitter, it will no longer be identical to or a minor
modifier of the mass submitter plan.
B. An amendment the Prototype Sponsor shall be accomplished
by giving written notice to the Employer of the
amendment to be made. The notice shall set forth the text of
such amendment and the date such amendment is to be
effective. Such amendment shall take effect unless within the
30 day period after such notice is provided, or within such
shorter period as the notice may specify, the Employer gives
the Prototype Sponsor written notice of refusal to consent to
the amendment. Such written notice of refusal shall have the
effect of withdrawing the Plan as a prototype plan and shall
cause the Plan to be considered an individually designed
plan. The right of the Prototype Sponsor to cause the Plan to
be amended shall terminate should the Plan cease to conform
as a prototype plan as provided in this or any other section.
9.02 RIGHT OF EMPLOYER TO AMEND THE PLAN
The Employer may (1) change the choice of options in the
Adoption Agreement; (2) add overriding language in the Adoption
Agreement when such language is necessary to satisfy Section
415 or Section 416 of the Code because of the required
aggregation of multiple plans; and (3) add certain model
amendments published by the Internal Revenue Service which
specifically provide that their adoption will not cause the
Plan to be treated as individually designed. An Employer that
amends the Plan for any other reason, including a waiver of the
minimum funding requirement under Section 412(d) of the Code,
will no longer participate in this prototype plan and will be
considered to have an individually designed plan.
An Employer who wishes to amend the Plan to change the options
it has chosen in the Adoption Agreement must complete and
deliver a new Adoption Agreement to the Prototype Sponsor and
Trustee (or Custodian, if applicable). Such amendment shall
become effective upon execution by the Employer and Trustee (or
Custodian).
The Employer further reserves the right to replace the Plan in
its entirety by adopting another retirement plan which the
Employer designates as a replacement plan.
9.03 LIMITATION ON POWER TO AMEND
No amendment to the Plan shall be effective to the extent that
it has the effect of decreasing a Participant's accrued
benefit. Notwithstanding the preceding sentence, a
Participant's Individual Account may be reduced to the extent
permitted under
62
28
Section 412(c)(8) of the Code. For purposes of this paragraph,
a plan amendment which has the effect of decreasing a
Participant's Individual Account or eliminating an optional form
of benefit with respect to benefits attributable to service
before the amendment shall be treated as reducing an accrued
benefit. Furthermore, if the vesting schedule of a Plan is
amended, in the case of an Employee who is a Participant as of
the later of the date such amendment is adopted or the date it
becomes effective, the Vested percentage (determined as of such
date) of such Employee's Individual Account derived from
Employer Contributions ▇▇▇▇ not be less than the percentage
computed under the Plan without regard to such amendment.
9.04 AMENDMENT OF VESTING SCHEDULE
If the Plan's vesting schedule is amended, or the Plan is
amended in any way that directly or indirectly affected the
computation of the Participant's Vested percentage, or if the
Plan is deemed amended by an automatic change to or from a
top-heavy vesting schedule, each Participant with at least 3
Years of Vesting Service with the Employer may elect, within the
time set forth below, to have the Vested percentage computed
under the Plan without regard to such amendment.
For Participants who do not have at least 1 Hour of Service in
any Plan Year beginning after December 31, 1988, the preceding
sentence shall be applied by substituting "5 Years of Vesting
Service" for "3 Years of Vesting Service" where such language
appears.
The Period during which the election may be made shall commence
with the date the amendment is adopted or deemed to be made and
shall end the later of:
A. 60 days after the amendment is adopted;
B. 60 days after the amendment becomes effective; or
C. 60 days after the Participant is issued written notice of
the amendment by the Employer or Plan Administrator.
9.05 PERMANENCY
The Employer expects to continue this Plan and make the
necessary contributions thereto indefinitely, but such
continuance and payment is not assumed as a contractual
obligation. Neither the Adoption Agreement nor the Plan nor any
amendment or modification thereof nor the making of
contributions hereunder shall be construed as giving any
Participant or any person whomsoever any legal or equitable
right against the Employer, the Trustee (or Custodian, if
applicable) the Plan Administrator or the Prototype Sponsor
except as specifically provided herein, or as provided by law.
9.06 METHOD AND PROCEDURE FOR TERMINATION
The Plan may be terminated by the Employer at any time by
appropriate action of its managing body. Such termination shall
be effective on the date specified by the Employer. The Plan
shall terminate if the Employer shall be dissolved, terminated,
or declared bankrupt. Written notice of the termination and
effective date thereof shall be given to the Trustee (or
Custodian), Plan Administrator, Prototype Sponsor, Participants
and Beneficiaries of deceased Participants, and the required
filings (such as the Form 5500 series and others) must be made
with the Internal Revenue Service and any the regulatory body as
required by current laws and regulations. Until all of the
assets have been distributed from the Fund, the Employer must
keep the Plan in compliance with current laws and regulations
by (a) making appropriate amendments to the Plan and (b) taking
such other measures as may be required.
9.07 CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER
Notwithstanding the preceding Section 9.06, a successor of the
Employer may continue the Plan and be substituted in the place
of the present Employer. The successor and the present Employer
(or, if deceased, the executor of the estate of a deceased
Self-Employed Individual who was the Employer) must execute a
written instrument authorizing such substitution and the
successor must complete and sign a new plan document.
9.08 FAILURE OF PLAN QUALIFICATION
If the Plan fails to retain its qualified status, the Plan will
no longer be considered to be part of a prototype plan, and such
Employer can no longer participate under this prototype. In such
event, the Plan will be considered an individually designed
plan.
SECTION TEN MISCELLANEOUS
10.01 STATE COMMUNITY PROPERTY LAWS
The terms and conditions of this Plan shall be applicable
without regard to the community property laws of any state.
10.02 HEADINGS
The headings of the Plan have been inserted for convenience of
reference only and are to be ignored in any construction of the
provisions hereof.
10.03 GENDER AND NUMBER
Whenever any words are used herein in the masculine gender they
shall be construed as though they were also used in the feminine
gender in all cases where they would so apply, and whenever any
words are used herein in the singular form they shall be
construed as though they were also used in the plural form in
all cases where they would so apply.
10.04 PLAN MERGER OR CONSOLIDATION
In the case of any merger or consolidation of the Plan with, or
transfer of assets or liabilities of such Plan to, any other
plan, each Participant shall be entitled to receive benefits
immediately after the merger, consolidation, or transfer (if the
Plan had then terminated) which are equal to or greater than the
benefits he or she would have been entitled to receive
immediately before the merger, consolidation, or transfer (if
the Plan had then terminated). The Trustee (or Custodian) has
the authority to enter into merger agreements or agreements to
directly transfer the assets of this Plan but only if such
agreements are made with trustees or custodians of other
retirement plans described in Section 401(a) of the Code.
10.05 STANDARD OF FIDUCIARY CONDUCT
The Employer, Plan Administrator, Trustee and any other
fiduciary under this Plan shall discharge their duties with
respect to this Plan solely in the interests of Participants and
their Beneficiaries and with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent
man acting in like capacity and familiar with such matters would
use in the conduct of an enterprise of a like character and with
like aims. No fiduciary shall cause the Plan to engage in any
transaction known as a "prohibited transaction" under ERISA.
63
29
10.06 GENERAL UNDERTAKING OF ALL PARTIES
All parties to this Plan and all persons claiming any interest
whatsoever hereunder agree to perform any and all acts and
execute any and all documents and papers which may be necessary
or desirable for the carrying out of this Plan and any of its
provisions.
10.07 AGREEMENT BINDS HEIRS, ETC.
This Plan shall be binding upon the heirs, executors,
administrators, successors and assigns, as those terms shall
apply to any and all parties hereto, present and future.
10.08 DETERMINATION OF TOP-HEAVY STATUS
A. For any Plan Year beginning after December 31,1983, this Plan
is a Top-Heavy Plan if any of the following conditions exist:
1. If the top-heavy ratio for this Plan exceeds 60% and
this Plan is not part of any required aggregation group
or permissive aggregation group of plans.
2. If this Plan is part of a required aggregation group of
plans but not part of a permissive aggregation group
and the top-heavy ratio for the group of plans exceeds
60%.
3. If this Plan is a part of a required aggregation group
the top- heavy ratio for the permissive aggregation
group exceeds 60%.
For purposes of this Section 10.08, the following terms
shall have the meanings indicated below:
B. Key Employee - Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during
the determination period was an officer of the Employer if
such individual's annual compensation exceeds 50% of the
dollar limitation under Section 415(b)(1)(A) of the Code, an
owner (or considered an owner under Section 318 of the Code)
of one of the 10 largest interests in the Employer if such
individual's compensation exceeds 100% of the dollar
limitation under Section 415(c)(1)(A) of the Code, a 5% owner
of the Employer, or a 1% owner of the Employer who has an
annual compensation of more than $150,000. Annual
compensation means compensation as defined in Section
415(c)(3) of the Code, but including amounts contributed by
the Employer pursuant to a salary reduction agreement which
are excludable from the Employee's gross income under Section
125, Section 402(e)(3), Section 402(h)(1)(B) or Section
403(b) of the Code. The determination period is the Plan
Year containing the determination date and the 4 preceding
Plan Years.
The determination of who is a Key Employee will be made
in accordance with Section 416(i)(1) of the Code and the
regulations thereunder.
C. Top-heavy ratio
1. If the Employer maintains one or more defined
contribution plans (including any simplified employee
pension plan) and the Employer has not maintained any
defined benefit plan which during the 5-year period
ending on the determination date(s) has or has had
accrued benefits, the top-heavy ratio for this Plan alone
or for the required or permissive aggregation group as
appropriate is a fraction, the numerator of which is the
sum of the account balances of all Key Employees as of
the determination date(s) (including any part of any
account balance distributed in the 5-year period ending
on the determination date(s)), and the denominator of
which is the sum of all account balances (including any
part of any account balance distributed in the 5-year
period ending on the determination date(s)), both
computed in accordance with Section 416 of the Code and
the regulations thereunder. Both the numerator and the
denominator of the top-heavy ratio are increased to
reflect any contribution not actually made as of the
determination date, but which is required to be taken
into account on that date under Section 416 of the Code
and the regulations thereunder.
2. If the Employer maintains one or more defined
contribution plans (including any simplified employee
pension plan) and the Employer maintains or has
maintained one or more defined benefit plans which during
the 5-year period ending on the determination date(s) has
or has had any accrued benefits, the top-heavy ratio for
any required or permissive aggregation group as
appropriate is a fraction, the numerator of which is the
sum of account balances under the aggregated defined
contribution plan or plans for all Key Employees,
determined in accordance with (1) above, and the present
value of accrued benefits under the aggregated defined
benefit plan or plans for all Key Employees as of the
determination date(s), and the denominator of which is
the sum of the account balances under the aggregated
defined contribution plan or plans for all Participants,
determined in accordance with (1) above, and the present
value of accrued benefits under the defined benefit plan
or plans for all Participants as of the determination
date(s), all determined in accordance with Section 416 of
the Code and the regulations thereunder. The accrued
benefits under a defined benefit plan in both the
numerator and denominator of the top-heavy ratio are
increased for any distribution of an accrued benefit made
in the 5-year period ending on the determination date.
3. For purposes of (1) and (2) above, the value of account
balances and the present value of accrued benefits will
be determined as of the most recent valuation date that
falls within or ends with the 12-month period ending on
the determination date, except as provided in Section 416
of the Code and the regulations thereunder for the first
and second plan years of a defined benefit plan. The
account balances and accrued benefits of a Participant
(a) who is not a Key Employee but who was a Key
Employee in a Prior Year, or (b) who has not been
credited with at least one Hour of Service with any
employer maintaining the plan at any time during the
5-year period ending on the determination date will be
disregarded. These calculation of the top-heavy ratio,
and the extent to which distributions, rollovers, and
transfers are taken into account will be made in
accordance with Section 416 of the Code and the
regulations thereunder. Deductible employee contributions
will not be taken into account for purposes of computing
the top-heavy ratio. When aggregating 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.
4. Permissive aggregation group: The required aggregation
group of plans plus any other plan or plans of the
Employer which, when considered as a group with the
required aggregation group, would continue to satisfy the
requirements of Sections 401(a)(4) and 410 of the Code.
64
30
5. Required aggregation group: (a) Each qualified plan of
the Employer in which at least one Key Employee
participates or at any time during the determination
period (regardless of whether the Plan has been
terminated), and (b) any other qualified plan of the
Employer which enables a plan described in (a) to meet
the requirements of Sections 401(a)(4) or 410 of the
Code.
6. Determination date: For any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan
Year. For the first Plan Year of the Plan, the last day
of that year.
7. Valuation date: For purposes of calculating the top-heavy
ratio, the valuation date shall be the last day of each
Plan Year.
8. Present value: For purposes of establishing the
"present value" of benefits under a defined benefit
plan to compute the top-heavy ratio, any benefit shall be
discounted only for mortality and interest based on the
interest rate and mortality table specified for this
purpose in the defined benefit plan,unless otherwise
indicated in the Adoption Agreement.
10.09 SPECIAL LIMITATIONS FOR OWNER-EMPLOYEES
If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the business for which this
Plan is established and one or more other trades or businesses,
this Plan and the plan established for other trades or
businesses must, when looked at as a single plan, satisfy
Sections 401(a) and (d) of the Code for the employees of those
trades or businesses.
If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or
businesses, the employees of the other trades or businesses must
be included in a plan which satisfies Sections 401(a) and (d) of
the Code and which provides contributions and benefits not less
favorable than provided for Owner-Employees under this Plan.
If an individual is covered as an Owner-Employee under the
plans of two or more trades or businesses which are not
controlled and the individual controls a trade or business, then
the contributions or benefits of the employees under the plan of
the trade or business which is controlled must be as favorable
as those provided for him or her under the most favorable plan
of the trade or business which is not controlled.
For purposes of the preceding paragraphs, an Owner-Employee, or
two or more Owner-Employees, will be considered to control a
trade or business if the Owner-Employee, or two or more
Owner-Employees, together:
A. own the entire interest in a unincorporated trade or
business, or
B. in the case of a partnership, own more than 50% of either
the capital interest or the profit interest in the
partnership.
For purposes of the preceding sentence, an Owner-Employee,
or two or more Owner-Employees, shall be treated as owning
any interest in a partnership which is owned, directly or
indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control
within the meaning of the preceding sentence.
10.10 INALIENABILITY OF BENEFITS
No benefit or interest available hereunder will be subject to
assignment or alienation, either voluntarily or involuntarily.
The preceding sentence shall also apply to the creation,
assignment, or recognition of a right to any benefit payable
with respect to a Participant pursuant to a domestic relations
order, unless such order is determined to be a qualified
domestic relations order, as defined in Section 414(p) of the
Code.
Generally, a domestic relations order cannot be a qualified
domestic relations order until January 1, 1985. However, in the
case of a domestic relations order entered before such date, the
Plan Administrator:
(1) shall treat such order as a qualified domestic relations
order if such Plan Administrator is paying benefits
pursuant to such order on such date, and
(2) may treat any other such order entered before such date as
a qualified domestic relations order even if such
order does not meet the requirements of Section 414(p) of
the Code.
Notwithstanding any provision of the Plan to the contrary, a
distribution to an alternate payee under a qualified domestic
relations order shall be permitted even if the Participant
affected by such order is not otherwise entitled to a
distribution and even if such Participant has not attained
earliest retirement age as defined in Section 414(p) of the
Code.
10.11 CANNOT ELIMINATE PROTECTED BENEFITS
Pursuant to Section 411(d)(6) of the Code, and the regulations
thereunder, the Employer cannot reduce, eliminate or make
subject to Employer discretion any Section 411(d)(6) protected
benefit. Where this Plan document is being adopted to amend
another plan that contains a protected benefit not provided for
in this document, the Employer may attach a supplement to the
Adoption Agreement that describes such protected benefit which
shall become part of the Plan.
SECTION ELEVEN 401(k) PROVISIONS
In addition to Sections 1 through 10, the provisions of this
Section 11 shall apply if the Employer has established a 401(k)
cash or deferred arrangement (CODA) by completing and signing
the appropriate Adoption Agreement.
11.100 DEFINITIONS
The following words and phrases when used in the Plan with
initial capital letters shall, for the purposes of this Plan,
have the meanings set forth below unless the context indicates
that other meanings are intended.
11.101 ACTUAL DEFERRAL PERCENTAGE (ADP)
Means, for a specified group of Participants for a Plan Year,
the average of the ratios (calculated separately for each
Participant in such group) of (1) the amount of Employer
Contributions actually paid over to the Fund on behalf of such
Participant for the Plan Year to (2) the Participant's
Compensation for such Plan Year (taking into account only that
Compensation paid to the Employee during the portion of the Plan
Year he or she was an eligible Participant, unless otherwise
indicated in the Adoption Agreement). For purposes of
calculating the ADP, Employer Contributions on behalf of any
Participant shall include: (1) any Elective Deferrals made
pursuant to the Participant's deferral election, (including
Excess Elective Deferrals of Highly Compensated Employees), but
excluding (a) Excess Elective Deferrals of Non-highly
Compensated Employees that arise solely from Elective Deferrals
made under the Plan or plans of this Employer and (b) Elective
Deferrals that are taken into account in the Contribution
Percentage test (provided the ADP test is satisfied both with
and without exclusion of these Elective
65
31
Deferrals); and (2) at the election of the Employer, Qualified
Nonelective Contributions and Qualified Matching Contributions.
For purposes of computing Actual Deferral Percentages, an
Employee who would be a Participant but for the failure to make
Elective Deferrals shall be treated as a Participant on whose
behalf no Elective Deferrals are made.
11.102 AGGREGATE LIMIT
Means the sum of (1)125% of the greater of the ADP of the
Participants who are not Highly Compensated Employees for the
Plan Year or the ACP of the Participants who are not Highly
Compensated Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within the Plan Year
of the CODA; and (2) the lesser of 200% or two plus the lesser
of such ADP or ACP. "Lesser" is substituted for "greater" in
"(1)" above, and "greater" is substituted for "lesser" after
"two plus the" in "(2)" if it would result in a larger Aggregate
Limit.
11.103 AVERAGE CONTRIBUTION PERCENTAGE (ACP)
Means the average of the Contribution Percentages of the
Eligible Participants in a group.
11.104 CONTRIBUTING PARTICIPANT
Means a Participant who has enrolled as a Contributing
Participant pursuant to Section 11.201 and on whose behalf the
Employer is contributing Elective Deferrals to the Plan (or is
making Nondeductible Employee Contributions).
11.105 CONTRIBUTION PERCENTAGE
Means the ratio (expressed as a percentage) of the
Participant's Contribution Percentage Amounts to the
Participant's Compensation for the Plan Year (taking into
account only the Compensation paid to the Employee during the
portion of the Plan Year he or she was an eligible Participant,
unless otherwise indicated in the Adoption Agreement).
11.106 CONTRIBUTION PERCENTAGE AMOUNTS
Means the sum of the Nondeductible Employee Contributions,
Matching Contributions, and Qualified Matching Contributions
made under the Plan on behalf of the Participant for the Plan
Year. Such Contribution Percentage Amounts shall not include
Matching Contributions that are forfeited either to correct
Excess Aggregate Contributions or because the contributions to
which they relate are Excess Deferrals, Excess Contributions,
Excess Aggregate Contributions or excess annual additions which
are distributed pursuant to Section 11.508. If so elected in the
Adoption Agreement, the Employer may include Qualified
Nonelective Contributions in the Contribution Percentage Amount.
The Employer also may elect to use Elective Deferrals in the
Contribution Percentage Amounts so long as the ADP test is met
before the Elective Deferrals are used in the ACP test and
continues to be met following the exclusion of those Elective
Deferrals that are used to meet the ACP test.
11.107 ELECTIVE DEFERRALS
Means any Employer Contributions made to the Plan at the
election of the Participant, in lieu of cash compensation, and
shall include contributions made pursuant to a salary reduction
agreement or other deferral mechanism. With respect to any
taxable year, a Participant's Elective Deferral is the sum of
all Employer contributions made on behalf of such Participant
pursuant to an election to defer under any qualified CODA as
described in Section 401(k) of the Code, any simplified employee
pension cash or deferred arrangement as described in Section
402(h)(1)(B), any eligible deferred compensation plan
under Section 457, any plan as described under Section
501(c)(18), and any Employer contributions made on the behalf of
a Participant for the purchase of an annuity contract under
Section 403(b) pursuant to a salary reduction agreement.
Elective Deferrals shall not include any deferrals properly
distributed as excess annual additions.
No Participant shall be permitted to have Elective Deferrals
made under this Plan, or any other qualified plan maintained by
the Employer, during any taxable year, in excess of the dollar
limitation contained in Section 402(g) of the Code in effect at
the beginning of such taxable years.
Elective Deferrals may not be taken into account for purposes
of satisfying the minimum allocation requirement applicable to
Top-Heavy Plans described in Section 3.01(E).
11.108 ELIGIBLE PARTICIPANT
Means any Employee who is eligible to make a Nondeductible
Employee Contribution or an Elective Deferral (if the Employer
takes such contributions into account in the calculation of the
Contribution Percentage), or to receive a Matching Contribution
(including Forfeitures thereof) or a Qualified Matching
Contribution.
If a Nondeductible Employee Contribution is required as a
condition of participation in the Plan, any Employee who would
be a Participant in the Plan if such Employee made such a
contribution shall be treated as an Eligible Participant on
behalf of whom no Nondeductible Employee Contributions are made.
11.109 EXCESS AGGREGATE CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of
A. The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution
Percentage actually made on behalf of Highly Compensated
Employees for such Plan Year, over
B. The maximum Contribution Percentage Amounts permitted by the
ACP test (determined by reducing contributions made on
behalf of Highly Compensated Employees in order of their
Contribution Percentages beginning with the highest of such
percentages).
Such determination shall be made after first determining
Excess Elective Deferrals pursuant to Section 11.112 and then
determining Excess Contributions pursuant to Section 11.111.
11.110 EXCESS CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate amount of Employer Contributions actually
taken into account in computing the ADP of Highly
Compensated Employees for such Plan Year, over
B. The maximum amount of such contributions permitted by
the ADP test (determined by reducing contributions made
on behalf of Highly Compensated Employees in order of the
ADPs, beginning with the highest of such percentages).
11.111 EXCESS ELECTIVE DEFERRALS
Means those Elective Deferrals that are includible in a
Participant's gross income under Section 402(g) of the Code to
the extent such Participant's Elective Deferrals for a taxable
year exceed the dollar limitation under such Code section.
Excess Elective Deferrals shall be treated as annual additions
under the Plan, unless such amounts are distributed no later
than the first April 15 following the close of the
Participant's taxable year.
66
32
11.112 MATCHING CONTRIBUTION
Means an Employer Contribution made to this or any other
defined contribution plan on behalf of a Participant on account
of an Elective Deferral or a Nondeductible Employee Contribution
made by such Participant under a plan maintained by the
Employer.
Matching Contributions may not be taken into account for
purposes of satisfying the minimum allocation requirement
applicable to Top-Heavy Plans described in Section 3.01(E).
11.113 QUALIFIED NONELECTIVE CONTRIBUTIONS
Means contributions (other than Matching Contributions or
Qualified Matching Contributions) made by the Employer and
allocated to Participants' Individual Accounts that the
Participants may not elect to receive in cash until distributed
from the Plan; that are nonforfeitable when made; and that are
distributable only in accordance with the distribution
provisions that are applicable to Elective Deferrals and
Qualified Matching Contributions.
Qualified Nonelective Contribution may be taken into account
for purposes of satisfying the minimum allocation requirement
applicable to Top-Heavy Plans described in Section 3.01(E).
11.114 QUALIFIED MATCHING CONTRIBUTIONS
Means Matching Contributions which are subject to the
distribution and nonforfeitability requirements under Section
401(k) of the Code when made.
11.115 QUALIFYING CONTRIBUTING PARTICIPANT
Means a Contributing Participant who satisfies the requirements
described in Section 11.302 to be entitled to receive a Matching
Contribution (and Forfeitures, if applicable) for a Plan Year.
11.200 CONTRIBUTING PARTICIPANT
11.201 REQUIREMENTS TO ENROLL AS A CONTRIBUTING PARTICIPANT
A. Each Employee who satisfies the eligibility requirements
specified in the Adoption Agreement may enroll as a
Contributing Participant as of any subsequent Entry Date
(or earlier if required by Section 2.03) specified in the
Adoption Agreement for this purpose. A Participant who wishes
to enroll as a Contributing Participant must complete, sign
and file a salary reduction agreement (or agreement to make
Nondeductible Employee Contributions) with the Plan
Administrator.
B. Notwithstanding the times set forth in Section 11.201(A) as
of which a Participant may enroll as a Contributing
Participant, the Plan Administrator shall have the authority
to designate, in a nondiscriminatory manner, additional
enrollment times during the 12 month period beginning on the
Effective Date (or the date that Elective Deferrals may
commence, if later) in order that an orderly first enrollment
might be completed. In addition, if the Employer has
indicated in the Adoption Agreement that Elective Deferrals
may be based on bonuses, then Participants shall be afforded
a reasonable period of time prior to the issuance of such
bonuses to elect to defer them into the Plan.
11.202 CHANGING ELECTIVE DEFERRAL AMOUNTS
A Contributing Participant may modify his or her salary
reduction agreement (or agreement to make Nondeductible Employee
Contributions) to increase or decrease (within the limits placed
on Elective Deferrals (or Nondeductible Employee Contributions)
in the Adoption Agreement) the amount of his or her Compensation
deferred into the Plan. Such modification may only be made as of
the dates specified in the Adoption Agreement for this purpose,
or as of any other more frequent date(s)if the Plan
Administrator permits in a uniform and nondiscriminatory manner.
A Contributing Participant who desires to make such a
modification shall complete, sign and file a new salary
reduction agreement (or agreement to make Nondeductible Employee
Contribution) with the Plan Administrator. The Plan
Administrator may prescribe such uniform and nondiscriminatory
rules it deems appropriate to carry out the terms of this
Section.
11.203 CEASING ELECTIVE DEFERRALS
A Participant may cease Elective Deferrals (or Nondeductible
Employee Contributions) and thus withdraw as a Contributing
Participant as of the dates specified in the Adoption Agreement
for this purpose (or as of any other date if the Plan
Administrator so permits in a uniform and nondiscriminatory
manner by revoking the authorization to the Employer to make
Elective Deferrals (or Nondeductible Employee Contributions) on
his or her behalf. A Participant who desires to withdraw as a
Contributing Participant shall give written notice of withdrawal
to the Plan Administrator at least thirty days (or such lesser
period of days as the Plan Administrator shall permit in a
uniform and nondiscriminatory manner) before the effective date
of withdrawal. A Participant shall cease to be a Contributing
Participant upon his or her Termination of Employment, or an
account of termination of the Plan.
11.204 RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE
DEFERRALS
A Participant who has withdrawn as a Contributing Participant
under Section 11.203 (or because the Participant has taken a
hardship withdrawal pursuant to Section 11.503) may not again
become a Contributing Participant until the dates set forth in
the Adoption Agreement for this purpose, unless the Plan
Administrator, in a uniform and nondiscriminatory manner,
permits withdrawing Participants to resume their status as
Contributing Participants sooner.
11.205 CERTAIN ONE-TIME IRREVOCABLE ELECTIONS
This Section 11.205 applies where the Employer has indicated in
the Adoption Agreement that an Employee may make a one-time
irrevocable election to have the Employer make contributions to
the Plan on such Employee's behalf. In such event, an Employee
may elect, upon the Employee's first becoming eligible to
participate in the Plan, to have contributions equal to a
specified amount or percentage of the Employee's Compensation
(including no amount of Compensation) made by the Employer on
the Employee's behalf to the Plan (and to any other plan of the
Employer) for the duration of the Employee's employment with the
Employer. Any contributions made pursuant to a one-time
irrevocable election described in the Section are not treated as
made pursuant to a cash or deferred election, are not Elective
Deferrals and are not includible in an Employee's gross income.
The Plan Administrator shall establish such uniform and
nondiscriminatory procedures as it deems necessary or advisable
to administer this provision.
11.300 CONTRIBUTIONS
11.301 CONTRIBUTIONS BY EMPLOYER
The Employer shall make contributions to the Plan in accordance
with the contribution formulas specified in the Adoption
Agreement.
67
33
11.302 MATCHING CONTRIBUTIONS
The Employer may elect to make Matching Contributions under the
Plan on behalf of Qualifying Contributing Participants as
provided in the Adoption Agreement. To be a Qualifying
Contributing Participant for a Plan Year, the Participant must
make Elective Deferrals (or Nondeductible Employee
Contributions, if the Employer has agreed to match such
contributions) for the Plan Year, satisfy any age and Years of
Eligibility Service requirements that are specified for Matching
Contributions in the Adoption Agreement and also satisfy any
additional conditions set forth in the Adoption Agreement for
this purpose. In a uniform and nondiscriminatory manner, the
Employer may make Matching Contributions at the same time as it
contributes Elective Deferrals or at any other time as permitted
laws and regulations.
11.303 QUALIFIED NONELECTIVE CONTRIBUTIONS
The Employer may elect to make Qualified Nonelective
Contributions under the Plan on behalf of Participants as
provided in the Adoption Agreement.
In addition, in lieu of distributing Excess Contributions as
provided in Section 11.505 of the Plan, or Excess Aggregate
Contributions as provided in Section 11.506 of the Plan, and to
the extent elected by the Employer in the Adoption Agreement,
the Employer may make Qualified Nonelective Contributions on
behalf of Participants who are not Highly Compensated Employees
that are sufficient to satisfy either the Actual Deferral
Percentage test or the Average Contribution Percentage test, or
both, pursuant to regulations under the Code.
11.304 QUALIFIED MATCHING CONTRIBUTIONS
The Employer may elect to make Qualified Matching Contributions
under the Plan on behalf of Participants as provided in the
Adoption Agreement.
11.305 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Notwithstanding Section 3.02, if the Employer so allows in the
Adoption Agreement, a Participant may contribute Nondeductible
Employee Contributions to the Plan.
If the Employer has indicated in the Adoption Agreement that
Nondeductible Employee Contributions will be mandatory, then the
Employer shall establish uniform and nondiscriminatory rules and
procedures for Nondeductible Employee Contributions as it deems
necessary and advisable including, but not limited to, rules
describing in amounts or percentages of Compensation
Participants may or must contribute to the Plan.
A separate account will be maintained by the Plan Administrator
for the Nondeductible Employee Contributions for each
Participant.
A Participant may, upon a written request submitted to the Plan
Administrator, withdraw the lesser of the portion of his or her
Individual Account attributable to his or her Nondeductible
Employee Contributions or the amount he or she contributed as
Nondeductible Employee Contributions.
Nondeductible Employee Contributions and earnings thereon will
be nonforfeitable at all times. No Forfeiture will occur solely
as a result of an Employee's withdrawal of Nondeductible
Employee Contributions.
11.400 NONDISCRIMINATION TESTING
11.401 ACTUAL DEFERRAL PERCENTAGE TEST (ADP)
A. LIMITS ON HIGHLY COMPENSATED EMPLOYEES - The Actual Deferral
Percentage (hereinafter "ADP") for Participants who are
Highly Compensated Employees for each Plan Year and the ADP
for Participants who are not Highly Compensated Employees for
the same Plan Year must satisfy one of the following tests:
1. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP
for Participants who are not Highly Compensated Employees
for the same Plan Year multiplied by 1.25; or
2. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP
for Participants who are not Highly Compensated Employees
for the same Plan Year multiplied by 2.0 provided that
the ADP for Participants who are Highly Compensated
Employees does not exceed the ADP for Participants who
are not Highly Compensated Employees by more than 2
percentage points.
B. SPECIAL RULES
1. The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have
Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or
both, if treated as Elective Deferrals for purposes of
the ADP test) allocated to his or her Individual Accounts
under two or more arrangements described in Section
401(k) of the Code, that are maintained by the Employer,
shall be determined as if such Elective Deferrals (and,
if applicable, such Qualified Nonelective Contributions
or Qualified. Matching Contributions, or both) were made
under a single arrangement. If a Highly Compensated
Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same
calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatory disaggregated under
regulations under Section 401(k) of the Code.
2. In the event that this Plan satisfies the requirements
of Sections 401(k), 401(a)(4), or 410(b) of the
Code only if aggregated with one or more other plans, or
if one or more other plans satisfy the requirements of
such sections of the Code only if aggregated with this
Plan, then this Section 11.401 shall be applied by
determining the ADP of Employees as if all such plans
were a single plan. For Plan Years beginning after
December 31, 1989, plans maybe aggregated in order to
satisfy Section 401(k) of the Code only if they have the
same Plan Year.
3. For purposes of determining the ADP of a Participant who
is a 5% owner or one of the 10 most highly paid Highly
Compensated Employees, the Elective Deferrals (and
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if treated as Elective Deferrals
for purposes of the ADP test) and Compensation of such
Participant shall include the Elective Deferrals (and, if
applicable, Qualified Nonelective Contributions and
Qualified Matching Contributions, or both) and
Compensation for the Plan Year of family members (as
defined in Section 414(q)(6)of the Code). Family
members, with respect to such Highly Compensated
Employees, shall be disregarded as separate Employees in
determining the ADP both for Participants who are not
Highly Compensated Employees and for Participants who are
Highly Compensated Employees.
4. For purposes of determining the ADP test, Elective
Deferrals, Qualified Nonelective Contributions and
Qualified Matching Contributions must be made before the
last day of the 12 month period immediately following the
Plan Year to which contributions relate.
68
34
5. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount
of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.
6. The determination and treatment of the ADP amounts of
any Participant shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
7. If the Employer elects to take Qualified Matching
Contributions into account as Elective Deferrals for
purposes of the ADP test, then (subject to such other
requirements as may be prescribed by the Secretary of the
Treasury) unless otherwise indicated in the Adoption
Agreement, only the amount of such Qualified Matching
Contributions that are needed to meet the ADP test shall
be taken into account.
8. In the event that the Plan Administrator determines that
it is not likely that the ADP test will be satisfied
for a particular Plan Year unless certain steps are taken
prior to the end of such Plan Year, the Plan
Administrator may require Contributing Participants who
are Highly Compensated Employees to reduce their Elective
Deferrals for such Plan Year in order to satisfy that
requirement. Said reduction shall also be required by the
Plan Administrator in the event that the Plan
Administrator anticipates that the Employer will not be
able to deduct all Employer Contributions from its income
for Federal income tax purposes.
11.402 LIMITS ON NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS AND MATCHING
CONTRIBUTIONS
A. LIMITS ON HIGHLY COMPENSATED EMPLOYEES - The Average
Contribution Percentage (hereinafter "ACP") for
Participants who are Highly Compensated Employees for each
Plan Year and the ACP for Participants who are not Highly
Compensated Employees for the same Plan Year must satisfy one
of the following tests:
1. The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP
for Participants who are not Highly Compensated Employees
for the same Plan Year multiplied by 1.25; or
2. The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP
for Participants who are not Highly Compensated Employees
for the same Plan Year multiplied by 2, provided that the
ACP for the Participants who are Highly Compensated
Employees does not exceed the ACP for Participants who
are not Highly Compensated Employees by more than 2
percentage points.
B. SPECIAL RULES
1. Multiple Use - If one or more Highly Compensated Employees
participate in both a CODA and a plan subject to the
ACP test maintained by the Employer and the sum of the
ADP and ACP of those Highly Compensated Employees subject
to either or both tests exceeds the Aggregate Limit,
then, as elected in the Adoption Agreement, the ACP or
the ADP of those Highly Compensated Employees who also
participate in a CODA will be reduced (beginning with
such Highly Compensated Employee whose ACP (or ADP, if
elected) is the highest) so that the limit is not
exceeded. The amount by which each Highly Compensated
Employee's Contribution Percentage Amounts (or ADP if
elected) is reduced shall be treated as an Excess
Aggregate Contribution (or Excess Contribution, if
elected). The ADP and ACP of the Highly Compensated
Employees are determined after any corrections required
to meet the ADP and ACP tests. Multiple use does not
occur if the ADP and ACP of the Highly Compensated
Employees does not exceed 1.25 multiplied by the ADP and
ACP of the Participants who are not Highly Compensated
Employees.
2. For purposes of this Section 11.402, the Contribution
Percentage for any Participant who is a Highly
compensated Employee and who is eligible to have
Contribution Percentage Amounts allocated to his or her
Individual Account under two or more plans described in
Section 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.
3. 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 Percentage of Employees as if all such plans
were a single plan. For Plan Years beginning after
December 31, 1989, plans maybe aggregated in order to
satisfy Section 401(m) of the Code only if they have the
same Plan Year.
4. For purposes of determining the Contribution Percentage
of a Participant who is a 5% owner or one of the 10
most highly paid Highly Compensated Employees, the
Contribution Percentage Amounts and Compensation of such
Participant shall include the Contribution Percentage
Amounts and Compensation for the Plan Year of family
members, (as defined in Section 414(q)(6) of the Code).
Family members, with respect to Highly Compensated
Employees, shall be disregarded as separate Employees in
determining the Contribution Percentage both for
Participants who are not Highly Compensated Employees and
for Participants who are Highly Compensated Employees.
5. For purposes of determining the Contribution Percentage
test, Nondeductible Employee Contributions are
considered to have been made in the Plan Year in which
contributed to the Fund. Matching Contributions and
Qualified Nonelective Contributions will be considered
made for a Plan Year if made no later than the end of the
12 month period beginning on the day after the close of
the Plan Year.
6. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the amount
of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.
7. The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
8. If the Employer elects to take Qualified Nonelective
Contributions into account as Contribution Percentage
Amounts for purposes of the ACP test, then (subject to
such other requirements as may be prescribed by the
Secretary of the Treasury) unless otherwise indicated in
the Adoption Agreement, only the amount of such Qualified
Nonelective Contributions that are needed to meet the ACP
test shall be taken into account.
9. If the Employer elects to take Elective Deferrals into
account as Contribution Percentage Amounts for purposes
of the ACP test, then (subject to such other requirements
as may be prescribed by the Secretary of the Treasury)
unless otherwise indicated in the Adoption Agreement,
only the amount of such Elective Deferrals that needed
to meet the ACP test shall be taken into account.
69
35
11.500 DISTRIBUTION PROVISIONS
11.501 GENERAL RULE
Distributions from the Plan are subject to the provisions of
Section 6 and the provisions of this Section 11. In the event
of a conflict between the provisions of Section 6 and Section
11, the provisions of Section 11 shall control.
11.502 DISTRIBUTION REQUIREMENTS
Elective Deferrals, Qualified Nonelective Contributions, and
Qualified Matching Contributions, and income allocable to each
are not distributable to a Participant or his or her Beneficiary
or Beneficiaries, in accordance with such Participant's or
Beneficiary or Beneficiaries' election, earlier than upon
separation from service, death or disability.
Such amounts may also be distributed upon:
A. Termination of the Plan without the establishment of another
defined contribution plan, other than an employee stock
ownership plan (as defined in Section 4975(e) or Section 409
of the Code) or a simplified employee pension plan as defined
in Section 408(k).
B. The disposition by a corporation to an unrelated corporation
of substantially all of the assets (within the meaning
of Section 409(d)(2) of the Code used in a trade or business
of such corporation if such corporation continues to maintain
this Plan after the disposition, but only with respect to
Employees who continue employment with the corporation
acquiring such assets.
C. The disposition by a corporation to an unrelated entity of
such corporation's interest in a subsidiary (within the
meaning of Section 409(d)(3) of the Code) if such corporation
continues to maintain this Plan, but only with respect to
Employees who continue employment with such subsidiary.
D. The attainment of age 59 1/2 in the case of a profit sharing
plan.
E. If the Employer has so elected in the Adoption Agreement,
the hardship of the Participant as described in Section
11.503.
All distributions that may be made pursuant to one or more of
the foregoing distributable events are subject to the spousal
and Participant consent requirements (if applicable)
contained in Section 401(a)(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.
11.503 HARDSHIP DISTRIBUTION
A. GENERAL - If the Employer has so elected in the Adoption
Agreement, distribution of Elective Deferrals (and any
earnings credited to a Participant's account as of the end of
the last Plan Year, ending before July 1, 1989) may be made
to a Participant in the event of hardship. For the purposes
of this Section, hardship is defined as an immediate and
heavy financial need of the Employee where such Employee
lacks other available resources. Hardship distributions are
subject to the spousal consent requirements contained in
Sections 401(a)(11) and 417 of the Code.
B. SPECIAL RULES
1. The following are the only financial needs considered
immediate and heavy: expenses incurred or necessary for
medical care, described Section 213(d) of the Code, of
the Employee, the Employee's spouse or dependent is; the
purchase (excluding mortgage payments) of a principal
residence for the Employee; payment of tuition and
related educational fees for the next 12 months of
post-secondary education for the Employee, the Employee's
spouse, children or dependents; or the need to prevent
the eviction of the Employee from, or a foreclosure on
the mortgage of, the Employee's principal residence.
2. A disposition will be considered as necessary to satisfy
an immediate and heavy financial need of the Employee
only if:
a. The Employee has obtained all distributions, other
than hardship distributions, and all nontaxable
loans under all plans maintained by the Employer;
b. All plans maintained by the Employer provide that
the Employee's Elective Deferrals (and
Nondeductible Employee Contributions) will be
suspended for 12 months after the receipt of the
hardship distribution;
c. The distribution is not in excess of the amount of
an immediate and heavy financial need
(including amounts necessary to pay any Federal,
state or local income taxes or penalties reasonably
anticipated to result from the distribution); and
d. All plans maintained by the Employer provide that
the Employee may not make Elective Deferrals
for the Employee's taxable year immediately
following the taxable year of the hardship
distribution in excess of the applicable limit under
Section 402(g) of the Code for such taxable year
less the amount of such Employee's Elective
Deferrals for the taxable year of the hardship
distribution.
11.504 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
A. GENERAL RULE - A Participant may assign to this Plan any
Excess Elective Deferrals made during a taxable
year of the Participant by notifying the Plan Administrator
on or before the date specified in the Adoption Agreement of
the amount of the Excess Elective Deferrals to be assigned to
the Plan. A Participant is deemed to notify the Plan
Administrator of any Excess Elective Deferrals that arise by
taking into account only those Elective Deferrals made to
this Plan and any other plans of the Employer.
Notwithstanding any other provision of the Plan, Excess
Elective Deferrals, plus any income and minus any loss
allocable thereto, shall be distributed no later than April
15 to any Participant to whose Individual Account Excess
Elective Deferrals were assigned for the preceding year and
who claims Excess Elective Deferrals for such taxable year.
B. DETERMINATION OF INCOME OR LOSS - Excess Elective Deferrals
shall be adjusted for any income or loss up to the date
of distribution. The income of loss allocable to Excess
Elective Deferrals is the sum of: (1) income or loss
allocable to the Participant's Elective Deferral account for
the taxable year multiplied by a fraction, the numerator of
which is such Participant's Elective Deferrals for the year
and the denominator is the Participant's Individual Account
balance attributable to Elective Deferrals without regard to
any income or loss occurring during such taxable year; and
(2) 10% of the amount determined under (1) multiplied by the
number of whole calendar months between the end of the
Participant's taxable year and the date of distribution,
counting the month of distribution if distribution occurs
after the 15th of such month. Notwithstanding the preceding
sentence, the Plan Administrator may compute the income or
loss allocable to
70
36
Excess Elective Deferrals in the manner described in
Section 4 (i.e., the usual manner used by the
Plan for allocating income or loss to Participants'
Individual Accounts), provided such method is used
consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year.
11.505 DISTRIBUTION OF EXCESS CONTRIBUTIONS
A. GENERAL RULE - Notwithstanding any other provision of this
Plan, Excess Contributions, plus any income and minus
any loss allocable thereto, shall be distributed no later
than the last day of each Plan Year to Participants to whose
Individual Accounts such Excess Contributions were allocated
for the preceding Plan Year. If such excess amounts are
distributed more than 2 1/2 months after the last day of the
Plan Year in which such excess amounts arose, a 10% excise
tax will be imposed on the Employer maintaining the Plan with
respect to such amounts. Such distributions shall be made to
Highly Compensated Employees on the basis of the respective
portions of the Excess Contributions attributable to each of
such Employees. Excess Contributions of Participants who are
subject to the family member aggregation rules shall be
allocated among the family members in proportion to the
Elective Deferrals (and amounts treated as Elective
Deferrals) of each family member that is combined to
determine the combined ADP.
Excess Contributions (including the amounts recharacterized)
shall be treated as annual additions under the Plan.
B. DETERMINATION OF INCOME OR LOSS - Excess Contributions shall
be adjusted for any income or loss up to the date of
distribution. The income or loss allocable to Excess
Contributions is the sum of: (1) income or loss allocable to
Participant's Elective Deferral account (and if applicable,
the Qualified Nonelective Contribution account or the
Qualified Matching Contributions account or both, for the
Plan Year multiplied by a fraction, the numerator of which is
such Participant's Excess Contributions for the year and the
denominator is the Participant's Individual Account balance
attributable to Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both,
if any of such contributions are included in the ADP test)
without regard to any income or loss occurring during such
Plan Year, and (2) 10% of the amount determined under (1)
multiplied by the number of whole calendar months between the
end of the Plan Year and the date of distribution, counting
the month of distribution if distribution occurs after the
15th of such month. Notwithstanding the preceding sentence,
the Plan Administrator may compute the income or loss
allocable to Excess Contributions in the manner described in
Section 4 (i.e., the usual manner used by the Plan for
allocating income or loss to Participants Individual
Accounts), provided such method is used consistently for all
Participants and for all corrective distributions under the
Plan for the Plan Year.
C. ACCOUNTING FOR EXCESS CONTRIBUTIONS - Excess Contributions
shall be distributed from the Participant's Elective
Deferral account and Qualified Matching Contribution account
(if applicable) in proportion to the Participant's Elective
Deferrals and Qualified Matching Contributions (to the extent
used in the ADP test)for the Plan Year. Excess Contributions
shall be distributed from the Participant's Qualified
Nonelective Contribution account only to the extent that such
Excess Contributions exceed the balance in the Participant's
Elective Deferral account and Qualified Matching Contribution
account.
11.506 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
A. GENERAL RULE - Notwithstanding any other provision of this
Plan, Excess Aggregate Contributions, plus any income
and minus any loss Allocable thereto, shall be forfeited, if
forfeitable, or if not forfeitable, distributed no later than
the last day of each Plan Year to Participants to whose
accounts such Excess Aggregate Contributions were allocated
for the preceding Plan Year. Excess Aggregate Contributors
of Participants who are subject to the family member
aggregation rules shall be allocated among the family members
in proportion to the Employee and Matching Contributions (or
amounts treated as Matching Contributions) of each family
member that is combined to determine the combined ACP. If
such Excess Aggregate Contributions are distributed more than
2 1/2 months after the last day of the Plan Year in which
such excess amounts arose, a 10% excise tax will be imposed
on the Employer maintaining the Plan with respect to those
amounts.
Excess Aggregate Contributions shall be treated as annual
additions under the Plan.
B. DETERMINATION OF INCOME OR LOSS - Excess Aggregate
Contributions shall be adjusted for any income or loss
up to the date of distribution. The income or loss allocable
to Excess Aggregate Contributions is the sum of: (1) income
or loss allocable to the Participant's Nondeductible Employee
Contribution account, Matching Contribution account (if any,
and if all amounts therein are not used in the ADP test) and,
if applicable, Qualified Nonelective Contribution account
and Elective Deferral account for the Plan Year multiplied by
a fraction, the numerator of which is such Participant's
Excess Aggregate Contributions for the year and the
denominator is the Participant's Individual Account
balance(s) attributable to Contribution Percentage Amounts
without regard to any income or loss occurring during such
Plan Year; and (2) 10% of the amount determined under (1)
multiplied by the number of whole calendar months between the
end of the Plan Year and the date of distribution, counting
the month of distribution if distribution occurs after the
15th of such month. Notwithstanding the preceding sentence,
the Plan Administrator may compute the income or loss
allocable to Excess Aggregate Contributions in the manner
described in Section 4 (i.e., the usual manner used by the
Plan for allocating income or loss to Participants'
Individual Accounts), provided such method is used
consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year.
C. FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS - Forfeitures
of Excess Aggregate Contributions may either be
reallocated to the accounts of Contributing Participants who
are not Highly Compensated Employees or applied to reduce
Employer Contributions, as elected by the Employer in the
Adoption Agreement.
D. ACCOUNTING FOR EXCESS AGGREGATE CONTRIBUTIONS - Excess
Aggregate Contributions shall be forfeited, if
forfeitable or distributed on a pro rata basis from the
Participant's Nondeductible Employee Contribution account,
Matching Contribution account, and Qualified Matching
Contribution account (and, if applicable, the Participant's
Qualified Nonelective Contribution account or Elective
Deferral account, or both).
11.507 RECHARACTERIZATION
A Participant may treat his or her Excess Contributions
as an amount distributed to the Participant and then contributed
by the Participant to the Plan. Recharacterized amounts will
remain nonforfeitable and subject to the same distribution
requirements as Elective Deferrals. Amounts may not be
recharacterized by a Highly Compensated Employee to the extent
that such amount in combination with other Nondeductible
Employee Contributions made by that Employee would exceed any
stated limit under the Plan on Nondeductible Employee
Contributions.
Recharacterization must occur no later than two and one-half
months after the last day of the Plan Year in which such Excess
Contributions arose and is deemed to occur no earlier than the
date the last Highly Compensated Employee is informed in writing
of the amount recharacterized and the consequences thereof.
Recharacterized amounts will be taxable to the Participant for
the Participant's tax year in which the Participant would have
received them in cash.
71
37
11.508 DISTRIBUTION OF ELECTIVE DEFERRALS IF EXCESS ANNUAL ADDITIONS
Notwithstanding any other provision of the Plan, a
Participant's Elective Deferrals shall be distributed to him or
her to the extent that the distribution will reduce an excess
annual addition (as that term is described in Section 3.05 of
the Plan).
11.600 VESTING
11.601 100% VESTING ON CERTAIN CONTRIBUTIONS
The Participant's accrued benefit derived from Elective
Deferrals, Qualified Nonelective Contributions, Nondeductible
Employee Contributions, and Qualified Matching Contributions is
nonforfeitable. Separate accounts for Elective Deferrals,
Qualified Nonelective Contributions, Nondeductible Employee
Contributions, Matching Contributions, and Qualified Matching
Contributions will be maintained for each Participant. Each
account will be credited with the applicable contributions and
earnings thereon.
11.602 FORFEITURES AND VESTING OF MATCHING CONTRIBUTIONS
Matching Contributions shall be Vested in accordance with the
vesting schedule for Matching Contributions in the Adoption
Agreement. In any event, Matching Contributions shall be fully
Vested at Normal Retirement Age, upon the complete or partial
termination of the profit sharing plan, or upon the complete
discontinuance of Employer Contributions. Notwithstanding any
other provisions of the Plan, Matching Contributions or
Qualified Matching Contributions must be forfeited if the
contributions to which they relate are Excess Elective
Deferrals, Excess Contributions, Excess Aggregate Contributions
or excess annual additions which are distributed pursuant to
Section 11.508. Such Forfeitures shall be allocated in
accordance with Section 3.01 (C).
When a Participant incurs a Termination of Employment, whether
a Forfeiture arises with respect to Matching Contributions shall
be determined in accordance with Section 6.01 (D).