EXHIBIT 4.1
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PROTOTYPE 401(k) ADOPTION AGREEMENT,
RETIREMENT PLAN, AND TRUST AGREEMENT
▇. ▇▇▇▇ Price Trust Company
[Graphic omitted]
▇. ▇▇▇▇ Price
Invest with Confidence
▇. ▇▇▇▇ PRICE TRUST COMPANY
PROTOTYPE 401(k) ADOPTION AGREEMENT, RETIREMENT PLAN, AND
TRUST AGREEMENT
TABLE OF CONTENTS
I. 401(k) Retirement Plan Adoption Agreement ...................1
11. GUST Transition Optional Supplement ........................22
111. EGTRRA Adoption Agreement ..................................25
IV. Prototype 401(k) Retirement Plan Document ..................29
V. EGTRRA Amendment ...........................................88
VI. 401(k) Retirement Plan Trust Agreement .....................92
VII. IRS Opinion Letter ........................................101
IMPORTANT INSTRUCTIONS:
Sections I - III need to be completed, signed, and returned to ▇. ▇▇▇▇
Price. Please keep a copy of the sections that you return to ▇. ▇▇▇▇ Price.
Sections IV - VII are for your reference and files.
▇. ▇▇▇▇ PRICE TRUST COMPANY
401(k) RETIREMENT PLAN
ADOPTION AGREEMENT
Name of Employer: Garmin International, Inc.
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Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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Phone No:
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Plan Contact: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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1 ▇. ▇▇▇▇ Price Plan # 105350
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▇. ▇▇▇▇ PRICE
TRUST COMPANY
401(k) RETIREMENT PLAN
ADOPTION AGREEMENT
This is the Adoption Agreement for defined contribution plan #001 of basic plan
document #03, which is a combined prototype section 401(k)/profit sharing
defined contribution plan. (Prior to the amendment and restatement of this plan
document and adoption agreement, the plan document was ▇. ▇▇▇▇ Price Trust
Company basic plan document #01.) This Adoption Agreement may be used only in
conjunction with basic plan document #03.
Note: Before executing this Adoption Agreement, the Employer should consult
with a tax adviser or attorney. This plan may not meet the Employer's
requirements for continued plan qualification. In addition, failure to
properly complete this Adoption Agreement may result in plan
disqualification.
The Employer hereby establishes a section 401(k) plan and a trust for such plan
upon the respective terms and conditions contained in the section 401(k)
prototype plan #03 and the Trust Agreement to the plan and appoints as
Trustee(s) of such trust the person(s) who has(have) executed this Adoption
Agreement evidencing his/her/its/their acceptance of such appointment.
The Plan and Trust Agreement shall be supplemented and modified by the terms and
conditions contained in the Adoption Agreement and any supplements thereto and
shall be effective on the date(s) specified herein.
After the Employer has notified ▇. ▇▇▇▇ Price Trust Company it has adopted the
prototype plan, ▇. ▇▇▇▇ Price Trust Company will inform the Employer of any
amendments made to the prototype plan or the discontinuance or abandonment of
the prototype plan after ▇. ▇▇▇▇ Price Trust Company receives such notice and
until the earlier of (i) the date the Employer notifies ▇. ▇▇▇▇ Price Trust
Company it has ceased to use this prototype plan or (ii) the date the Plan's
asset records are not kept by ▇. ▇▇▇▇ Price Trust Company or any affiliate of ▇.
▇▇▇▇ Price Trust Company.
1. Plan Data.
(Complete 1.1 or 1.2, and complete 1.3)
1.1 New Plan.
(a) Name of Plan:
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(Please print or type complete, legal name of the Plan)
(b) Effective Date of the Plan: --------------------------------------
(month/day/year)
(c) Plan Year End: ---------------------------------------------------
(month/day)
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1.2 If this is an amendment of existing plan, complete the following:
(a) Name of Existing Plan:
Garmin International, Inc. 401(k) and Pension Plan
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(Please print or type complete, legal name of the Plan)
(b) Initial Effective Date of Plan: 10/01/1990
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(c) Effective Date of Amended Plan (complete (1) or (2))
(1) If the plan is being amended and restated to comply with GUST
(the 1994-1998 laws - GATT, USERRA, SBJPA, TRA'97 and
IRSRRA - that require plan amendments):
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Effective Date of Amendment (month/day/year)
(If the Plan's initial effective date was on or before
January 1, 1997, enter the first day of the Plan Year
beginning in 1997. If the Plan's initial effective date was
after December 31, 1996, enter the Plan's initial effective
date.)
(2) If the Plan is not being amended to comply with GUST:
07/01/2002
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Effective Date of Amendment (month/day/year)
(Usually, this is the first day of the Plan Year in which
the amendment is effective.)
Note: The provisions of a cash or deferred arrangement may
be made effective as of the first day of the Plan Year in
which the cash or deferred arrangement is adopted, but a
salary deferral mechanism may not be adopted retroactively.
(d) Plan Year End: 12/31
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(month/day)
1.3 Plan Number: 001
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(3 digits)
2. Employer Data.
2.1 Employer: Garmin International, Inc.
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(Print or type complete legal name of business)
Employer shall also mean any Employer(s) associated with the
Employer named above under section 414(b), 414(c) or 414(m) of
the Code.
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Garmin USA, Inc. and Garmin AT, Inc.
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2.2 Employer's Taxable Year End: December 31
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2.3 Employer's Tax ID #: ▇▇-▇▇▇▇▇▇▇
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2.4 The Employer is: [x] a corporate entity.
[ ] a non-corporate entity.
[ ] a corporation electing Subchapter S treatment.
3. Crediting of Service.
3.1 For purposes of determining eligibility to participate, Early
Retirement Age (if applicable) and vesting, service shall be credited
based on the following method (Choose (a) or (b)):
(a) [ ] Elapsed Time. Under this method, service is measured from date
of employment with the Employer to date of termination of
employment with the Employer and a period of service shall
include any period of severance of less than 12 consecutive
months. (Plan Section 1.19)
(b) [x] Hours of Service. Under this method, a year of service is a 12
consecutive month period during which the Employee completes at
least 1,000 Hours of Service. (Plan Section 1.30) Complete (1)
and (2).
(1) Hours of 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.
(A) [ ] On the basis of actual hours for which an Employee
is paid or entitled to payment by the Employer.
(B) [ ] On the basis of days worked for the Employer. An
Employee will be credited with ten Hours of Service
if under Plan Section 1.30 such Employee would be
credited with at least one Hour of Service during
the day.
(C) [ ] On the basis of weeks worked for the Employer. An
Employee will be credited with 45 Hours of Service
if under Plan Section 1.30 such Employee would be
credited with at least one Hour of Service during
the week.
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(▇) [ ] On the basis of semimonthly payroll periods worked
for the Employer. An Employee will be credited with
95 Hours of Service if under Plan Section 1.30 such
Employee would be credited with at least one Hour of
Service during the semimonthly payroll period.
(E) [x] On the basis of months worked for the Employer. An
Employee will be credited with 190 Hours of Service
if under Plan Section 1.30 such Employee would be
credited with at least one Hour of Service during
the month.
(2) Twelve Consecutive Month Period.
(A) Vesting. For purposes of determining vesting, a Year of
Vesting Service is a Plan Year in which an Employee
completes at least 1,000 Hours of Service. (Plan
Section 1.59)
(B) Eligibility. For purposes of determining eligibility to
participate in the Plan (Years of Eligibility Service),
the initial eligibility computation period is the twelve
consecutive month period beginning on the day an Employee
first performs an Hour of Service for the Employer.(Plan
Section 1.58) The following twelve consecutive month
periods shall begin on (choose one):
[ ] The first anniversary of the date an Employee first
performs an Hour of Service for the Employer.
[ ] The first day of each Plan Year beginning after the
date the Employee first performs an Hour of Service
for the Employer.
3.2 Service with predecessor Employer. (Plan Section 2.3) Complete (a) or (b)
Note: If this is a continuation of a predecessor plan, service under the
predecessor plan must be counted.
(a) [ ] No credit will be given for service with a predecessor Employer.
(b) [x] Credit will be given for service with the following predecessor
Employer(s):
UPS Aviation Technologies, Inc
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Note: If this is not a continuation of a predecessor plan, service with a
predecessor employer must be limited as provided in accordance with
the provisions of regulation section 1.401(a)(4)-5(a)(3).
4. Eligibility.
Note: If the period of time selected is or includes a fractional year, an
Employee will not be required to complete any specified number of
Hours of Service to receive credit for such fractional year even if
the Employer elected in Section 3 of this Adoption Agreement to credit
service using the Hours of Service method.
4.1 Participation Requirements. All Employees shall be eligible to
participate in this Plan in accordance with the provisions of Article
II of the Plan, except the following (Plan Section 2.3):
[x] Employees who have not attained age 21 (cannot be later than 21);
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[x] Employees who have not completed 3 months (not to exceed 12 months)
of service; -----
[ ] Employees who have not completed one Year of Eligibility Service
(Hours of Service method);
[ ] Employees included in a unit of Employees covered by a collective
bargaining agreement, if retirement benefits were the subject of good
faith bargaining between the Employer and employee representatives.
Employee representatives do not include any organization more than
half of whose members are Employees who are owners, officers or
executives of the Employer;
[ ] Employees who are nonresident aliens and who receive no earned
income from the Employer which constitutes income from sources within
the United States;
[ ] Employees included in the following job classifications:
[ ] Hourly Employees;
[ ] Salaried Employees;
[ ] Leased Employees;
[ ] Other class or classes of Employees:
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(Note: that these classifications cannot be based on age or service
and must be based on specific objective criteria that are not subject
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to Employer discretion. An exclusion of "part-time" Employees is not
permissible.)
[ ] Employees of the following Employers aggregated under section
414(b), 414(c) or 414(m) of the Code.
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Note: If no entries are made above, all Employees shall be eligible to
participate in the Plan on the earlier of the Effective Date or
the Entry Date coincident with or next following the date of
employment.
4.2 The Entry Dates shall be (choose one): (Plan Section 1.25)
(a) [x] the first day of each Plan Year and the first day of the
seventh month in each Plan Year.
(b) [ ] the first day of each Plan Year and the first day of each
quarter thereafter.
(c) [ ] the first day of each Plan Year and the first day of each
month thereafter.
(d) [ ] the date on which the eligibility requirements of the Plan, if
any are applicable, are met.
5. Compensation. (Plan Section 1.13)
Note: Do not complete this Section 5 of this Adoption Agreement if the Plan
is intended to be a "safe harbor" cash or deferred arrangement. If the
Plan is a "safe harbor" cash or deferred arrangement, check this box
[ ] and complete Section 9 of this Adoption Agreement.
5.1 Subject to the following provisions of this Section of the Adoption
Agreement, for purposes of determining contributions and allocations
to a Participant's Account, Compensation will mean a Participant's
(choose one):
(a) [ ] W-2 earnings (including salary deferrals); or
(b) [ ] Compensation as that term is defined in section 415 of the
Code; or
(c) [x] Wages as defined in section 3401(a) of the Code.
For the Plan Year but excluding the following:
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Note: If this Plan has a Discretionary Profit Sharing Contribution
allocation formula that is integrated with Social Security (Plan
Section 5.1(b)), Compensation must be defined as W-2 earnings,
compensation as defined in section 415 of the Code or wages as defined
in section 3401(a) of the Code; no exclusions are allowed.
5.2 Compensation for a P1an Year will mean
(a) [x] Compensation paid to the Employee by the Employer during the
entire Plan Year.
(b) [ ] Compensation paid to the Employee by the Employer only during
that portion of the Plan Year during which the Employee was
eligible to participate in the Plan.
6. Participant Contributions.
6.1 Elective Deferrals. (Plan Section 3.2(b)) Complete (a) or (b).
(a) [ ] Elective Deferrals are not permitted.
(b) [x] A Participant may elect to defer an amount up to 50% of his
or her Compensation paid during a pay period. ---
Notwithstanding the foregoing, Elective Deferrals made on behalf of a
Participant for a Plan Year shall not exceed $______. (If the immediately
preceding sentence is not completed, only the percentage limit will apply to
Elective Deferrals.)
6.2 Employee After-Tax Contributions. (Plan Section 3.2(a))
Complete (a) or (b).
(a) [x] Employee After-Tax Contributions are not permitted.
(b) [ ] A Participant may make Employee After-Tax Contributions to the
Plan in an amount up to ____% of his or her Compensation paid
during a pay period.
Notwithstanding the foregoing, Employee After-Tax Contribution made on behalf of
a Participant for a Plan Year shall not exceed $_______. (If the immediately
preceding sentence is not completed, only the percentage limit will apply to
Employee After-Tax Contributions.)
Note:Even if this is a "safe harbor" cash or deferred arrangement, Employee
After-Tax Contributions are always subject to the ACP Test.
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6.3 Combined Limits on Participant Contributions
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If the Employer elects 6.1(b) and 6.2(b), above, a Participant's
aggregate Elective Deferrals and Employee After-Tax Contributions for
a pay period may not exceed _____% of his or her Compensation paid
during a pay period.
Note: If the Plan is intended to qualify as a "safe harbor" cash or
deferred arrangement, each Participant must be able to make Elective
Deferrals in an amount that is at least sufficient for the Participant
to receive the maximum amount of safe harbor matching contributions
available under the Plan. For instance, if the Employer elects the
Safe Harbor Matching Contribution in Section 9 of this Adoption
Agreement, a Participant must have the ability to make Elective
Deferrals up to at least 5% of Total Compensation as defined in
Section 9.1 of this Adoption Agreement.
6.4 Rollovers. (Plan Section 3.2(c)) Complete (a) or (b).
(a) [ ] The Plan does not accept rollovers.
(b) [x] The Plan accepts rollovers.
6.5 Participant-Directed Plan-to-Plan Transfers. (Plan Section 3.2(d))
Choose one.
(a) [ ] The Plan does not accept Participant-directed plan-to-plan
transfers.
(b) [x] The Plan accepts Participant-directed plan-to-plan transfers.
7. Employer Contributions.
Do not complete this Section 7 of this Adoption Agreement if this Plan
is intended to be a "safe harbor" cash or deferred arrangement. If
this Plan is intended to be a "safe harbor" cash or deferred
arrangement, check this box and complete Section 9 of this Adoption
Agreement.
7.1 Matching Contributions. (Plan Section 3.3(a))
(a) Matching Contributions. Complete (1) or (2)
(1) [x] shall be made to the Plan. The type of Matching
Contribution shall be (choose (A) or (B)):
(A) [x] Mandatory (Complete (b)(1)and (d) below)
(B) [ ] Discretionary (Complete (b)(2) and (d) below)
(2) [ ] shall not be made to Plan. (If this subparagraph (2)
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is elected, do not complete the following paragraphs
(b), (c) or (d)).
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(b) Matching Contribution Formula. (Complete (1) or (2))
(1) Mandatory Matching Contribution. (Complete (A) and/or (B).
If both (A) and (B) are completed, complete (C).)
(A) [X] Match on Elective Deferrals. The Employer shall
contribute and allocate to each eligible Participant's
Matching Contributions subaccount an amount equal to 75% of
the Participant's Elective Deferrals up to 10% of the
Participant's Compensation.
Notwithstanding the foregoing, the Matching Contribution
made on behalf of an eligible Participant for the Plan Year
with respect to Elective Deferrals shall not exceed $______.
(If the immediately preceding sentence is not completed.
only the percentage limitation will apply to Matching
Contributions.)
(B) [ ] Match on Employee After-Tax Contributions. The
Employer shall contribute and allocate to each eligible
Participant's Matching Contribution subaccount an
amount equal to ___% of the Participant's Employee
After-Tax Contributions up to ___% of the Participant's
Compensation.
Notwithstanding the foregoing, the Matching Contribution
made on behalf of an eligible Participant for the Plan Year
with respect to Employee After-Tax Contributions shall not
exceed $_______. (If the immediately preceding sentence is
not completed, only the percentage limitation will apply to
Matching Contributions.)
(C) [ ] Match on Elective Deferrals and Employee After-Tax
Contributions. If the Employer makes Matching
Contributions with respect to both Elective Deferrals
and Employee After-Tax Contributions, choose (i) or
(ii).
(i) [ ] Matching Contributions shall be limited only
as provided in (A) and (B) above.
(ii)[ ] In addition to any limitations on Matching
Contributions described above, for purposes
of calculating such Matching Contributions, the
total of an eligible Participant's Elective
Deferrals and Employee After-Tax Contributions
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shall be treated as not exceeding ____% of the
Participant's Compensation.
Notwithstanding the foregoing, the Matching Contribution
made on behalf of an eligible Participant with respect to
the Participant's total Elective Deferrals and Employee
After-Tax Contributions for the Plan Year shall not exceed
$_____. (If the immediately preceding sentence is not
completed, only the percentage limitation(s) will apply to
Matching Contributions made with respect to Elective
Deferrals and Employee After-Tax Contributions.)
(2) Discretionary Matching Contributions (Complete (A) and/or (B).
If both (A) and (B) are completed, complete (C).)
(A) [ ] Discretionary Match on Elective Deferrals. The Employer
may make discretionary Matching Contributions from Plan Year
to Plan Year as it deems advisable. Such discretionary
Matching Contributions, if made, shall be equal to a
specified percentage of each eligible Participant's Elective
Deferrals, except that the Employer may establish a limit
(expressed either as a uniform dollar amount or percentage
of Compensation) on the amount of Elective Deferrals which
shall be matched.
(B) [ ] Discretionary Match on Employee After-Tax Contributions.
The Employer may make discretionary Matching Contributions
from Plan Year to Plan Year as it deems advisable. Such
discretionary Matching Contributions, if made, shall be
equal to a specified percentage of each Participant's
Employee After-Tax Contributions, except that the Employer
may establish a limit (expressed either as a uniform dollar
amount or percentage of Compensation) on the amount of
Employee After-Tax Contributions which shall be matched.
(C) [ ] Discretionary Match on Elective Deferrals and Employee
After-Tax Contributions. If the Employer makes discretionary
Matching Contributions with respect to both Elective
Deferrals and Employee After-Tax Contributions, choose (i)
or (ii).
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(▇) [ ] Discretionary Matching Contributions shall be
limited only as provided in (A) and (B) above.
(ii) [ ] In addition to any limitations on discretionary
Matching Contributions described above, for
purposes of calculating the amount of
discretionary Matching Contributions, such
discretionary Matching Contributions, if made,
shall be equal to a specified percentage of the
total of a Participant's Elective Deferrals and
Employee After-Tax Contributions, which
may be treated as not exceeding a uniform dollar
amount or percentage of Compensation.
(c) Eligibility for Matching Employer Contributions. A Participant
shall be eligible to receive a Matching Contribution (whether
mandatory or discretionary) for a Plan Year only if (choose one):
(1) [ ] For a plan using the Hours of Service method of crediting
service, (i) his employment with the Employer terminates
during the Plan Year by reason of death, retirement on or
after Early Retirement Age, if applicable, or Normal
Retirement Age, or Total and Permanent Disability, or
(ii) he completes at least 1,000 Hours of Service during
the Plan Year and is employed by the Employer on the last
day of the Plan Year.
(2) [ ] For a plan using the Hours of Service method of crediting
service, he completes at least 1,000 Hours of Service
during the Plan Year.
(3) [ ] For a plan using the Hours of Service method of crediting
service, (i) his employment with the Employer terminates
during the Plan Year by reason of death, retirement on or
after Early Retirement Age, if applicable, or Normal
Retirement Age, or Total and Permanent Disability, or
(ii) he completes at least 1,000 Hours of Service during
the Plan Year.
(4) [ ] (i) His employment with the Employer terminates during
the Plan Year by reason of death, retirement on or after
Early Retirement Age, if applicable, or Normal Retirement
Age, or Total and Permanent Disability, or (ii) he is
employed by the Employer on the last day of the Plan
Year.
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(5) [ ] He is employed by the Employer on the last day of the
Plan Year.
(6) [x] He was a Participant in the Plan at any time during the
Plan Year.
Note: If the Employer selects (1), (4) or (5) above, the Employer
may not make any Matching Contribution for a Plan Year until
after the end of the Plan Year. If the Employer selects (2)
or (3) above, the Employer may not make a Matching
Contribution for a Plan Year until that Participant has
satisfied the requirements of (2) or (3), as applicable,
during such Plan Year.
(d) Period for Calculating Matching Contributions. For purposes of
calculating the amount of Matching Contributions, such
calculations shall be performed on the basis of a Participant's
Elective Deferrals and/or Employee After-Tax Contributions made
and Compensation paid (choose one):
(1) [x] During each payroll period.
(2) [ ] During the Plan Year (or, if 5.2(b) is elected above,
during that portion of the Plan Year during which the
Participant was eligible to participate in the Plan.
Note: If the Employer selects (2), the Employer may make Matching
Contributions on a per payroll period basis. After the end of
the Plan Year, the Employer must also perform the calculation
on a Plan Year basis to determine if additional Matching
Contributions must be made for the Plan Year.
7.2 Discretionary Profit Sharing Contributions. (Plan Section 3.3(b))
(a) Discretionary Profit Sharing Contributions (choose (1) or (2))
(1) [ ] Shall not be made to the Plan.
(2) [x] May be made to the Plan each Plan Year as determined
by the Employer.
Complete (b) and (c) only if the immediately preceding box is
selected.
(b) Eligibility for Discretionary Profit Sharing Contributions. A
Participant shall be eligible to share in the allocation of
Discretionary Profit Sharing Contributions for a Plan Year only
if (choose one):
(1) [ ] For a plan using the Hours of Service method of
crediting service, (i) his employment with the Employer
terminates during the Plan Year by reason of death,
retirement on or after Early Retirement Age, if
applicable, or Normal Retirement Age, or Total and
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Permanent Disability, or (ii) he completes at least
1,000 Hours of Service during the Plan Year and is
employed by the Employer on the last day of the Plan
Year.
(2) [ ] For a plan using the Hours of Service method of
crediting service, he completes at least 1,000 Hours
of Service during the Plan Year.
(3) [ ] For a plan using the Hours of Service method of
crediting service, (i) his employment with the Employer
terminates during the Plan Year by reason of death,
retirement on or after Early Retirement Age, if
applicable, or Normal Retirement Age, or Total and
Permanent Disability, or (ii) he completes at least
1,000 Hours of Service during the Plan Year.
(4) [ ] (i) His employment with the Employer terminates during
the Plan Year by reason of death, retirement on or
after Early Retirement Age, if applicable, or Normal
Retirement Age, or Total and Permanent Disability, or
(ii) he is employed by the Employer on the last day of
the Plan Year.
(5) [ ] He is employed by the Employer on the last day of the
Plan Year.
(6) [x] He was a Participant in the Plan at any time during the
Plan Year.
Note: The Employer may not allocate any Discretionary Profit Sharing
Contribution for a Plan Year until after the end of the Plan Year.
(c) Allocation of Discretionary Profit Sharing Contributions.
(Complete (1) or (2). If the Employer maintains any other plan in
addition to this Plan, only one plan may provide for permitted
disparity (i.e., integration with Social Security).)
(1) [ ] Nonintegrated -- Discretionary Profit Sharing
Contributions for a Plan Year shall be allocated
to the Discretionary Profit Sharing Contribution sub-
account of all Participants eligible for an alloca-
tion of such contribution in the ratio in which each
such eligible Participant's Compensation for such
Plan Year bears to the Compensation of all such
eligible Participants for such Plan Year.
(2) [x] Integrated -- Discretionary Profit Sharing Contribu-
tions for a Plan Year shall be integrated with Social
Security and allocated in accordance with the
provisions of Plan Section 5.1(b). The Plan's
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Integration Level shall be (choose (A) or (B)):
(A) [ ] The Social Security Taxable Wage Base.
(B) [x] 20% (not to exceed 100%) of the Social Security
Taxable Wage Base.
Note: If the Employer maintains any other plan in addition to this Plan,
only one plan may be integrated with Social Security.
8. ADP and ACP Nondiscrimination Testing.
Note: This Section does not apply in any Plan Year the Plan is a safe
harbor cash or deferred arrangement.
8.1 First Plan Year
(a) ADP Test -- The plan document provides that for the first Plan
Year the Plan permits any Participant to make Elective Deferrals,
the prior year's ADP of Non-Highly Compensated Employees shall be
3% unless the Employer checks the box below. (Plan Section
3.6(a))
[ ] If this box is checked, and if this is not a successor plan,
for the first Plan Year this Plan permits any Participant to make
Elective Deferrals, the ADP used in the ADP Test for Participants
who are Non-Highly Compensated Employees shall be such first Plan
Year's ADP of such Non-Highly Compensated Employees.
Note: The Employer may not check this box if the Employer has elected
Current Year Testing.
(b) ACP Test -- The plan document provides that for the first Plan Year
the Plan permits any Participant to make Employee After-Tax
Contributions or provides for Matching Contributions, the prior year's
ACP of Non-Highly Compensated Employees shall be 3% unless the
Employer checks the box below. (Plan Section 3.7(a))
[ ] If this box is checked, and if this is not a successor plan, for the
first Plan Year this Plan permits any Participant to make Employee
After-Tax Contributions, or provides for Matching Contributions, or
both, the ACP used in the ACP test for Participants who are Non-Highly
Compensated Employees shall be such first Plan Year's ACP for such
Non-Highly Compensated Employees.
Note: The Employer may not check this box if the Employer has elected
Current Year Testing.
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8.2 Current Year Testing. (Sections 3.6(a) and 3.7(a))
[ ] If this box is checked, the Plan is using Current Year Testing
for purposes of the ADP and ACP tests.
Note: Once the Employer has elected Current Year Testing, the Employer
cannot elect out of Current Year Testing unless (i) the Plan has been
using Current Year Testing for the preceding five Plan Years or, if
lesser, the number of Plan Years the Plan has been in existence, or
(ii) the Plan otherwise meets one of the conditions specified in IRS
Notice 98-1 (or superceding guidance) for changing from Current Year
Testing.
8.3 Determining Highly Compensated Employees.
(a) Top Paid Group Election. (Plan Section 1.29)
[ ] In determining who is a Highly Compensated Employee, the
Employer makes a top-paid group election by checking this box.
The effect of this election is that an Employee (who is not a
Five Percent Owner at any time during the determination year or
the look-back year) with compensation in excess of $80,000 (as
adjusted) for the look-back year is a Highly Compensated Employee
only if the Employee was in the top-paid group for the look-back
year.
(b) Calendar Year Data Election. (Plan Section 1.29)
[X] In determining who is a Highly Compensated Employee (other than a
Five Percent Owner), the Employer makes a calendar year data
election by checking this box. The effect of this election is
that the look-back year is the calendar year beginning with or
within the look-back year.
Note:If both of these elections are made, the look-back year in determining
the top-paid group must be the calendar year beginning with or within
the look-back year. If either election is made, the election(s) must
apply consistently to the determination years of all plans of the
Employer, except that (i) the consistency requirement does not apply
to determination years beginning in 1997, and (ii) for determination
years beginning in 1998 and 1999, satisfaction of the consistency
requirement is determined without regard to any nonretirement plan of
the Employer.
8.4 Testing Compensation. (Plan Section 3.1(j))
For purposes of applying the ADP and ACP Tests. Testing Compensation
will mean any definition of compensation permitted under section
414(s) of the Code and will mean (choose (a) or (b)):
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ # ▇▇▇▇▇▇
--------
(▇) [ ] Testing Compensation paid to the Employee by the Employer
during the entire Plan Year.
(b) [X] Testing Compensation paid to the Employee by the Employer
only during that portion of the Plan Year during which
the Employee was eligible to participate in the Plan.
9. Safe Harbor CODA Provisions.
Note: Complete this Article if the Plan is intended to be a "safe harbor"
cash or deferred arrangement.
9.1 Compensation. Complete both (a) and (b) below. (Plan Section 1.52)
For purposes of determining Safe Harbor Matching Contributions, Safe
Harbor Nonelective Contributions and ACP Test Only Safe Harbor
Matching Contributions, Total Compensation shall be used.
(a) Total Compensation will mean a Participant's (choose one):
(1) [ ] W-2 earnings (including salary deferrals).
(2) [ ] Compensation as that term is defined in section 415 of
the Code.
(3) [ ] Wages as defined in section 3401(a) of the Code.
(b) Total Compensation for a Plan Year will mean (choose one):
(1) [ ] Total Compensation paid to the Employee by the Employer
during the entire Plan Year.
(2) [ ] Total Compensation paid to the Employee by the Employer
only during that portion of the Plan Year during which
the Participant was eligible to participate in the Plan.
9.2 Type of Employer Safe Harbor Contribution. (Choose (a) or (b)) (Plan
Section 4.2)
Note:Formulas (a)(1) and (a)(2) automatically satisfy both the ADP and ACP
Tests for a Plan Year if no other Matching Contributions are made
during the Plan Year.
Formula (b) (Safe Harbor Nonelective Contribution) automatically
satisfies the ADP Test for a Plan Year. If the Employer would like to
make a matching contribution in addition to the Safe Harbor
Nonelective Contribution, the ACP Test Only Safe Harbor Matching
Contribution automatically satisfies the ACP test for the Plan Year if
no other matching contributions are made during the Plan Year.
17 ▇. ▇▇▇▇ Price Plan # 105350
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Regardless of what type of safe harbor contribution the Employer makes
to the Plan, Employee After-Tax Contributions are always subject to
the ACP Test. If the Employer makes any type of matching contributions
in addition to matching contributions in formulas (a) or (b), the
matching contributions are subject to the ACP Test using Current Year
Testing.
Safe Harbor Matching Contributions and Safe Harbor Nonelective
Contributions are immediately nonforfeitable. ACP Test Only Safe
Harbor Matching Contributions may be subject to a vesting schedule.
(a) Safe Harbor Matching Contribution. (Choose (1) or (2))
(1) [ ] Safe Harbor Basic Matching Contribution. The Employer
shall contribute and allocate to each Participant's Safe
Harbor Matching Contribution subaccount an amount equal
to 100% of the Participant's Elective Deferrals up to 3%
of the Participant's Total Compensation (as determined
in accordance with Section 9.1(a) above), plus 50%
of the Participant's Elective Deferrals from 3% to
5% of the Participant's Total Compensation.
(2) [ ] Safe Harbor Enhanced Matching Contribution. The Employer
shall contribute and allocate to each Participant's
Safe Harbor Matching Contribution subaccount an amount
equal to ___%(must be at least 100%)of the Participant's
Elective Deferrals up to ___% (must be at least 4% and
cannot be more than 6%) of the --- Participant's Total
Compensation.
(b) Safe Harbor Nonelective Contribution. If the Employer selects
(1), it may elect (2).
(1) [ ] Safe Harbor Nonelective Contribution. The Employer shall
contribute and allocate to each Participant's Safe
Harbor Nonelective Contribution subaccount an amount
equal to 3% of the Participant's Total Compensation
for the Plan Year, regardless of whether the Participant
has made contributions to the Plan during such Plan
Year.
(2) ACP Test Only Safe Harbor Matching Contribution. In addition
to the Safe Harbor Nonelective Contribution, the Employer
may elect to make the following ACP Test Only Safe Harbor
Matching Contribution (which automatically satisfies only
the ACP Test):
[ ] The Employer shall contribute and allocate to each
Participant's ACP Test Only Safe Harbor Matching
Contribution subaccount an amount equal to ___% of the
18 ▇. ▇▇▇▇ Price Plan # 105350
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Participant's Elective Deferrals up to ___% (cannot be
more than 6%) of the Participant's Total Compensation.
9.3 Calculation of Safe Harbor Matching Contributions and ACP Test Only
Safe Harbor Matching Contributions. For purposes of calculating the
amount of Safe Harbor Matching Contributions and ACP Test Only Safe
Harbor Matching Contributions, such calculations shall be performed on
the basis of a Participant's Elective Deferrals made and Total
Compensation paid (choose one):
(a) [ ] During each payroll period.
(b) [ ] During the Plan Year (or, if 9.1(b)(2) is elected above,
during the portion of the Plan Year during which the
Participant was eligible to participate in the Plan).
Note:Safe Harbor Nonelective Contributions must be calculated on the basis
of Total Compensation paid during the Plan Year (or, if 9.1(b)(2) is
elected above, during that portion of the Plan Year during which the
Participant was eligible to participate in the Plan).
10. Vesting and Forfeitures.
10.1 Vesting of Certain Employer Contribution Accounts. (Plan Section 7.2)
All Participant contribution subaccounts are 100% vested. Safe Harbor
Matching Contribution and Safe Harbor Nonelective Contribution
subaccounts are immediately 100% vested.
Matching Contribution (including ACP Test Only Safe Harbor Matching
Contribution) and Discretionary Profit Sharing Contribution
subaccounts are vested in accordance with the following schedule.
(Complete (a), (b) or (c)) If no schedule below is selected, a
Participant shall be immediately 100% vested in all portions of his
Account.
Matching Discretionary
Contributions Profit Sharing
Contributions
(a) 100% full and immediate [ ] [ ]
--------------------------------------------------------------------------------
(b) 5-year cliff (or graded) [x] [ ]
after 1 Year of Vesting Service 20% ___%
after 2 Years of Vesting Service 40% ___%
after 3 Years of Vesting Service 60% ___%
after 4 Years of Vesting Service 80% ___%
after 5 Years of Vesting Service 100% 100%
--------------------------------------------------------------------------------
19 ▇. ▇▇▇▇ Price Plan # 105350
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(c) 7-year graded [ ] [x]
after 1 Year of Vesting Service ___% 0%
after 2 Years of Vesting Service ___% 10%
(must be at least 20%) after 3 Years ___% 20%
of Vesting Service
(must be at least 40%) after 4 Years ___% 40%
of Vesting Service
(must be at least 60%) after 5 Years ___% 60%
of Vesting Service
(must be at least 80%) after 6 Years ___% 80%
of Vesting Service
After 7 Years of Vesting Service 100% 100%
Note: For purposes of vesting, Matching Contributions includes ACP
Test Only Safe Harbor Matching Contributions.
10.2 Forfeitures. Forfeitures shall be allocated in accordance with the
provisions of Section 5.5 of the Plan. To the extent provided in such
Section, forfeitures of unvested Employer Contributions shall be
(choose (a) or (b)):
(a) [X] used to reduce Matching Contributions and/or Safe Harbor
Contributions.
(b) [ ] allocated among other Participants in accordance with the
provisions of Section 5.5(f) of the Plan.
11. Loans. (Plan Article VIII)
11.1 [ ] will not be permitted.
11.2 [X] will be permitted up to 50% (not more than 50%) of the
Participant's vested account balance.
12. In-Service Withdrawals.
12.1 Hardship Distributions (Plan Section 9.3)
(a) Hardship distributions
(1) [ ] will not be permitted.
(2) [X] will be permitted.
(b) Hardship distributions may be made from
(1) [X] Elective Deferral subaccounts only.
20 ▇. ▇▇▇▇ Price Plan # 105350
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(2) [ ] Elective Deferral, vested Employer Matching Contribution
and vested Discretionary Profit Sharing Contribution
subaccounts.
Note:Hardship distributions of Qualified Non-Elective Contribution,
Qualified Matching Contribution and Safe Harbor Contribution
subaccounts are not allowed. For purposes of vesting, Matching
Contributions includes ACP Test Only Safe Harbor Matching
Contributions.
12.2 Age 59 1/2. In-service distributions after age 59 1/2 (Plan Section
9.4)
(a) [ ] will not be permitted.
(b) [X] will be permitted.
12.3 Retirement Age. In-service distributions to Participants who have
reached Early or Normal Retirement Age (Plan Section 9.2)
(a) [ ] shall not be permitted except to the extent hardship and/or
age 59 1/2 in-service distributions are elected above.
(b) [X] shall be permitted on and after the date the Participant has
reached age 65.0 (not less than 59 1/2).
13. Benefits.
A Participant shall be 100% vested in his Account if he is employed by the
Employer upon reaching Normal or Early Retirement Age under the Plan.
13.1 Normal Retirement Age. (Choose (a) or (b)) (Plan Section 1.35)
(a) [X] The date on which a Participant reaches age 65.0 (not more
than 65 or less than 55). If no age is indicated, Normal
Retirement Age shall be 65.
(b) [ ] The later of the date a Participant reaches age ___ (not more
than 65) or the ___ (not more than 5th) anniversary of the
day the Participant commenced participation in the Plan.
(The participation commencement date is the first day of
the first Plan Year in which the Participant commenced
participation in the Plan.)
13.2 Early Retirement Age. (Choose (a) or (b)) (Plan Section 1.16)
(a) [X] Early retirement will not be permitted under the Plan.
(b) [ ] The date on which a Participant reaches age ___ (not less than 55)
and completes ___ Years of Vesting Service (not more than 15).
21 ▇. ▇▇▇▇ Price Plan # 105350
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13.3 Method of Distribution. (Plan Section 10.7)
Subject to Article XI of the Plan, benefits under the Plan shall be paid
under the following method or methods (Choose (a), (b), and/or (c)):
(a) [X] Single sum payment;
(b) [X] Periodic installments;
(c) [X] A paid-up annuity contract.
Note:If this is a continuation of an existing plan, you may eliminate a
form of benefit previously offered only in accordance with section
411(d)(6) of the Code and the regulations thereunder.
13.4 Required Beginning Date.
The Plan provides that any Participant working for the Employer who reached
age 70 1/2 in years prior to 1997 (other than a Five Percent Owner) may
elect to stop his minimum required distributions and restart distributions
by the April 1 of the year after the year in which he retires from the
Employer. When the Participant's benefits restart, there will be a new
annuity starting date unless the following is elected (Plan Section
10.9(a)(vi)(B)(2)):
[ ] There will not be a new annuity starting date when benefits restart
after retirement.
14. Top Heavy Provisions.
In any Plan Year the Plan is determined to be top heavy, the following
provisions shall become effective.
14.1 Vesting. For any Plan Year in which this Plan is top heavy, the
following minimum vesting schedule will automatically apply to the
Plan (Choose (a), (b) or (c)) (Plan Section 12.4):
(a) [X] Years of Vesting Service Vested Percentage
1 year 0%
2 years 20% (must be at least 20%)
3 years 40% (must be at least 40%)
4 years 60% (must be at least 60%)
5 years 80% (must be at least 80%)
6 years 100%
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ # ▇▇▇▇▇▇
--------
(▇) [ ] Years of Vesting Service Vested Percentage
1 year ___%
2 years ___%
3 years 100%
--------------------------------------------------------------------------------
(c) [ ] See vesting schedule selected in Section 10 of this Adoption
Agreement.(This option may be selected only if the vesting
schedule(s) selected in Section 10 of this Adoption Agreement
is (are) at least as rapid as one of the top-heavy vesting
schedules shown in (a) and (b) above.) If the vesting
schedule under the Plan shifts in or out of the above
schedule for any Plan Year because of the Plan's top
heavy status, such shift is an amendment to the vesting
schedule and the election in Section 7.4 of the Plan applies.
14.2 Minimum Allocation. If the Participant also participates in another
qualified defined contribution plan maintained by the Employer, the
required minimum allocation shall be provided (Choose (a) or (b))
(Plan Section 12.3(d)):
(a) [ ] under this Plan.
(b) [ ] under the following qualified plan maintained by the
Employer:
-----------------------------------------------------------
15. Allocation Limitation.
All Employers must complete Section 15.1 of this Adoption Agreement.
If the Employer maintains or ever maintained another qualified plan in
which any Participant in this Plan is (or was) a Participant or could
become a Participant, the Employer may be required to complete
Sections 15.2 and 15.3 of this Adoption Agreement. If the Employer
does not maintain and never maintained any other qualified plan in
which any Participant in this Plan is (or was) a Participant or could
become a Participant, the Employer must check this box [ ] and it need
not complete Sections 15.2 and 15.3 of this Adoption Agreement.
15.1 Annual Additions Compensation. For purposes of determining Annual
Additions Limitations, Annual Additions Compensation shall be used.
Annual Additions Compensation shall mean the following type of
compensation paid to a Participant during the Plan Year (choose one)
(Plan Section 6.1(a)):
(a) [ ] W-2 earnings (including salary deferrals).
(b) [ ] Compensation as defined in section 415 of the Code.
(c) [X] Wages as defined in section 3401(a) of the Code.
23 ▇. ▇▇▇▇ Price Plan # 105350
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15.2 Multiple Defined Contribution Plans. If the Participant is covered
under another qualified defined contribution plan maintained by the
Employer other than a master or prototype plan (choose one) (Plan
Section 6.3(g)):
(a) [X] The provisions of (a) through (f) of Section 6.3 of the Plan
will apply as if the other plan were a master or prototype
plan.
(b) [ ] Provide below 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.
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
15.3 Defined Benefit Plan. For Limitation Years beginning before January 1,
2000, if the Participant is or has ever been a Participant in a
defined benefit plan maintained by the Employer, the Employer must
provide below the method it will use to satisfy the limitation for
defined contribution plans in section 415(c) of the Code and, for
Limitation Years beginning before January 1, 2000, the 1.0 limitation
of section 415(e) of the Code, in a manner that precludes Employer
discretion. (Plan Section 6.4)
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
16. Employer Securities. (Plan Sections 1.1 and 5.6) (Choose 16.1 or 16.2)
16.1 [ ] The Plan does not permit investment in qualifying employer
securities, within the meaning of section 407(d)(5) of ERISA.
16.2 [X] The Plan may invest in qualifying employer securities, within the
meaning of section 407(d)(5) of ERISA. Unless otherwise limited
by supplement to this Adoption Agreement, Accounts may be invested
in qualifying employer securities in the same manner as other
allowable Investment Options under the terms of the Plan
and the Trust Agreement.
17. Plan Administration. (Plan Article XIII)
24 ▇. ▇▇▇▇ Price Plan # 105350
--------
The Administrator of the Plan shall be (Choose 17.1, 17.2, 17.3 or
17.4):
Note:Neither ▇. ▇▇▇▇ Price Trust Company nor any of its affiliates may
be appointed Plan Administrator.
17.1 [ ] The Trustee;
17.2 [X] The Employer;
17.3 [ ] Retirement Plan Committee;
17.4 [ ] Other (complete the following).
Name: ----------------------------------------------------
Address: ----------------------------------------------------
----------------------------------------------------
Note:If no Plan Administrator is indicated above, the Employer shall be
deemed the Plan Administrator.
17. Supplements.
If additional space is required to specify an elective feature under the
Plan or to amend the Plan, please attach additional pages as needed. Each
additional page must reference the Section of the Adoption Agreement or the
Plan to which the amendment applies and must be signed by the Employer and
Trustee(s). In addition, each supplemental page must be numbered, and the
total number of pages in the Adoption Agreement and additional pages must
be indicated in the last Section of the Adoption Agreement.
18. The Trustee(s).
The Employer hereby appoints the following to serve as Trustee(s):
Name: ▇. ▇▇▇▇ Price Trust Company
--------------------------------------------------------------
(Print or type complete legal name)
Address: ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------
--------------------------- --------------------
Witness Signature of Trustee
25 ▇. ▇▇▇▇ Price Plan # 105350
--------
Dated: --------------------- (If the Trustee is a business entity,
the signature must be that of an
authorized individual for the
business. Also, please print below
the name and title of the
authorized individual:
-----------------------------------)
Name: ----------------------------------------------------------
Address: ----------------------------------------------------------
----------------------------------------------------------
-------------------------- ------------------------
Witness Signature of Trustee
Dated: -------------------------- (If the Trustee is a business entity,
the signature must be that of an
authorized individual for the
business. Also, please print below
the name and title of the
authorized individual:
------------------------------------)
Name: ----------------------------------------------------------
Address: ----------------------------------------------------------
----------------------------------------------------------
--------------------------- --------------------------
Witness Signature of Trustee
Dated: ------------------------- (If the Trustee is a business entity,
the signature must be that of an
authorized individual for the
business. Also, please print below
the name and title of the
authorized individual:
------------------------------------)
26 ▇. ▇▇▇▇ Price Plan # 105350
--------
19. Employer Signature.
The Employer represents that the information in this Adoption
Agreement shall become effective only when approved and countersigned
by the Trustee(s). The right to reject this Adoption Agreement for any
reason is reserved by the Trustee(s).
Note:The Employer may rely on an opinion letter issued by the Internal
Revenue Service as evidence that the Plan is qualified under Code
section 401 only to the extent provided in Announcement 2001-77,
2001-30 I.R.B. The Employer may not rely on the opinion letter in
certain other circumstances or with respect to certain
qualification requirements, which are specified in the opinion
letter issued with respect to the plan and in Announcement
2001-77. In order to have reliance in such circumstances or with
respect to such qualification requirements, application for a
determination letter must be made to Employer Plans
Determinations of the Internal Revenue Service.
Employers with inquiries regarding the adoption of the prototype plan
document, the sponsoring organization's intended meaning of any
prototype plan document provision or the effect of the Opinion Letter
should call:
▇. ▇▇▇▇ Price Trust Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
This Adoption Agreement consists of a total of ___ pages, which
consist of this Adoption Agreement and
[ ] If this box is checked, the Optional Supplement to this
Adoption Agreement. (The Optional Supplement may be used only by
an Employer retroactively restating its plan for GUST. It may not
be used after the GUST restatement period.)
[ ] If this box is checked, supplemental page(s) consisting of ___
page(s).
Also check one of the following:
[ ] Changes have been made to the plan document and/or trust
agreement that are not included in a supplemental page.
[ ] No changes have been made to the plan document and/or trust
agreement that are not included in a supplemental page.
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed by its duly authorized officers this 21st day of June, 2002.
Garmin International, Inc.
-------------------------------------------------------
Employer (Print or type complete legal name)
27 ▇. ▇▇▇▇ Price Plan # 105350
--------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
Authorized Signature of Employer
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Financial
---------------------------------------------
Name and Title (Please print or type)
June 21, 2002
---------------------------------------------
Date
Duplicate Signature Page
If ▇. ▇▇▇▇ Price is your Trustee, please sign and return both sets of signature
pages. If ▇. ▇▇▇▇ Price is not your Trustee, please sign and return only one set
of signature pages.
18. The Trustee(s).
The Employer hereby appoints the following to serve as Trustee(s):
Name: ▇. ▇▇▇▇ Price Trust Company
----------------------------------------------------------
(Print or type complete legal name)
Address: ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------------------
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------- -----------------------------
Witness Signature of Trustee
Dated: 6-25-02 (If the Trustee is a business
----------- entity, the signature must be
that of an authorized
individual for the business.
Also, please print below
the name and title of the
authorized individual:
---------------------------)
Name: -----------------------------------------------------------
Address: -----------------------------------------------------------
-----------------------------------------------------------
-------------------- -----------------------------
Witness Signature of Trustee
28 ▇. ▇▇▇▇ Price Plan # 105350
--------
Dated: ----------------- (If the Trustee is a business entity,
the signature must be that of an
authorized individual for the
business. Also, please print below
the name and title of the
authorized individual:
-----------------------------------)
Name: ----------------------------------------------------------
Address: ----------------------------------------------------------
----------------------------------------------------------
-------------------- ---------------------------
Witness Signature of Trustee
Dated: -------------------- If the Trustee is a business entity,
the signature must be that of an
authorized individual for the
business. Also, please print below
the name and title of the
authorized individual:
-----------------------------------)
Duplicate Signature Page
If ▇. ▇▇▇▇ Price is your Trustee, please sign and return both sets of signature
pages. If ▇. ▇▇▇▇ Price is not your Trustee, please sign and return only one set
of signature pages.
19. Employer Signature.
The Employer represents that the information in this Adoption
Agreement shall become effective only when approved and countersigned
by the Trustee(s). The right to reject this Adoption Agreement for any
reason is reserved by the Trustee(s).
Note: The Employer may rely on an opinion letter issued by the
Internal Revenue Service as evidence that the Plan is
qualified under Code section 401 only to the extent provided
in Announcement 2001-77, 2001-30 I.R.B. The Employer may not
rely on the opinion letter in certain other circumstances or
with respect to certain qualification requirements, which are
specified in the opinion letter issued with respect to the
plan and in Announcement 2001-77. In order to have reliance in
29 ▇. ▇▇▇▇ Price Plan # 105350
--------
such circumstances or with respect to such qualification
requirements, application for a determination letter must be
made to Employer Plans Determinations of the Internal Revenue
Service.
Employers with inquiries regarding the adoption of the prototype plan
document, the sponsoring organization's intended meaning of any
prototype plan document provision or the effect of the Opinion Letter
should call:
▇. ▇▇▇▇ Price Trust Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
This Adoption Agreement consists of a total of ---- pages, which
consist of this Adoption Agreement and
[ ] If this box is checked, the Optional Supplement to this
Adoption Agreement. (The Optional Supplement may be used only by
an Employer retroactively restating its plan for GUST. It may not
be used after the GUST restatement period.)
[ ] If this box is checked, supplemental page(s) consisting of ___
page(s).
Also check one of the following:
[ ] Changes have been made to the plan document and/or trust
agreement that are not included in a supplemental page.
[ ] No changes have been made to the plan document and/or trust
agreement that are not included in a supplemental page.
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed by its duly authorized officers this ---- day of -------, -------.
Garmin International, Inc.
-------------------------------------------------------
Employer (Print or type complete legal name)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
Authorized Signature of Employer
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Financial
---------------------------------------------
Name and Title (Please print or type)
June 21, 2002
---------------------------------------------
Date
30 ▇. ▇▇▇▇ Price Plan # 105350
--------
▇. ▇▇▇▇ PRICE TRUST COMPANY
PROTOTYPE 401(k)
RETIREMENT PLAN
▇. ▇▇▇▇ PRICE TRUST COMPANY
PROTOTYPE 401(k) RETIREMENT PLAN DOCUMENT
This is an amendment and restatement of the ▇. ▇▇▇▇ Price Trust Company basic
plan document #03 profit sharing plan with a cash or deferred arrangement. This
amendment and restatement incorporates the provisions of the Uruguay Round
Agreements Act ("GATT"), the Uniformed Services Employment and Re-employment
Rights Act of 1994 ("USERRA"), the Small Business Job Protection Act of 1996
("SBJPA"), the Taxpayer Relief Act of 1997 ("TRA '97") and the Internal Revenue
Service Restructuring and Reform Act of 1998 ("IRSRRA"), these acts collectively
being referred to as "GUST." (Prior to this amendment and restatement, this
document was ▇. ▇▇▇▇ Price Trust Company basic plan document #01.)
ARTICLE I - DEFINITIONS
1.1 Account Participant:
(a) ACP Test Only Safe Harbor Matching Contributions. An ACP
Test Only Safe Harbor Matching Contribution subaccount to
which shall be credited (or debited, as the case may be) (i)
ACP Test Only Safe Harbor Matching Contributions made to the
Plan on behalf of the Participant; (ii) the allocable
expenses and net earnings or net losses on the investment of
the assets of the subaccount; and (iii) distributions from
such subaccount.
(b) Discretionary Profit Sharing Contributions. A Discretionary
Profit Sharing Contribution subaccount to which shall be
credited (or debited, as the case may be) (i) the
Participant's share of Discretionary Profit Sharing
Contributions allocated under Section 5.1(b); (ii) the
allocable expenses and net earnings or net losses on the
investment of the assets of such subaccount; and (iii)
distributions from such subaccount.
(c) Elective Deferrals. An Elective Deferral subaccount to which
shall be credited (or debited, as the case may be) (i) the
Participant's Elective Deferrals made under this Plan; (ii)
the allocable expenses and net earnings or net losses on the
investment of the assets of the subaccount; and (iii)
distributions from such subaccount.
(d) Employee After-Tax Contributions. A nondeductible voluntary
contribution subaccount to which shall be credited (or
debited, as the case may be) (i) Employee After-Tax
Contributions made by the Participant to the Plan; (ii) the
allocable expenses and net earnings or net losses on the
investment of the assets of such subaccount; and (iii)
distributions from such subaccount.
(e) Matching Contributions. A Matching Contribution subaccount
to which shall be credited (or debited, as the case may be)
(i) Matching Contributions made by the Employer to the Plan
on behalf of the Participant; (ii) the allocable expenses
and net earnings or net losses on the investment of the
1
assets of such subaccount; and (iii) distributions from such
subaccount.
(f) Qualified Matching Contributions. A Qualified Matching
Contribution subaccount to which shall be credited (or
debited, as the case may be) (i) Qualified Matching
Contributions made to the Plan on behalf of the Participant;
(ii) the allocable expenses and net earnings or net losses
on the investment of assets in such subaccount; and (iii)
distributions from such subaccount.
(g) Qualified Nonelective Contributions. A Qualified Nonelective
Contribution subaccount to which shall be credited (or
debited, as the case may be) (i) Qualified Nonelective
Contributions made to the Plan on behalf of the Participant;
(ii) the allocable expenses and net earnings or net losses
on the investment of the assets of the subaccount; and (iii)
distributions from such subaccount.
(h) Participant-Directed Transfers. A Participant-Directed
Transfer subaccount to which shall be credited (or debited,
as the case may be) (i) plan-to-plan transfers made at the
request and on behalf of the Participant to the Plan; (ii)
the allocable expenses and net earnings or net losses on the
investment of the assets of the subaccount; and (iii)
distributions from such subaccount.
(i) Rollover Contributions. A Rollover Contribution subaccount
to which shall be credited (or debited, as the case may be)
(i) Rollover Contributions made by the Participant to the
Plan; (ii) the allocable expenses and net earnings or net
losses on the investment of the assets of such subaccount;
and (iii) distributions from such subaccount.
(j) Safe Harbor Matching Contributions. A Safe Harbor Matching
Contribution subaccount to which shall be credited (or
debited, as the case may be) (i) Safe Harbor Matching
Contributions made to the Plan on behalf of the Participant;
(ii) the allocable expenses and net earnings or net losses
on the investment of the assets of such subaccount; and
(iii) distributions from such subaccount.
(k) Safe Harbor Nonelective Contributions. A Safe Harbor
Nonelective Contribution subaccount to which shall be
credited (or debited, as the case may be) (i) Safe Harbor
Nonelective Contributions made to the Plan on behalf of the
Participant; (ii) the allocable expenses and net earnings or
net losses on the investment of the assets of the
subaccount; and (iii) distributions from such subaccount.
The Plan Administrator may also establish such other
Accounts, subaccounts and segregated accounts as may be
necessary to properly account for Plan assets.
2
1.2 ACP Test Only Safe Harbor Matching Contributions Agreement.
1.3 ACP Test7.
1.4 Administrator or Plan Administrator. The person, persons or entity
designated by the Employer in the Adoption Agreement to administer and
operate the Plan within the meaning of section 3(16)(A) of ERISA. If
no such designation is made, the Employer shall be the Plan
Administrator.
1.5 Adoption Agreement. The document executed by the Employer and the
Trustee(s) by which the Employer adopts this Plan and the Trust
Agreement forming a part thereof and wherein the Employer selects from
the options contained therein certain provisions relating to the
operation of the Plan. The Adoption Agreement shall be incorporated
into and deemed a part of the Plan and the Trust Agreement.
1.6 ADP Test. The actual deferral percentage test described in Section
3.6.
1.7 Affiliated Employer. The Employer and any trade or business which is a
member of a controlled group of corporations (as defined in section
414(b) of the Code) which includes the Employer, any trade or business
(whether or not incorporated) which is under common control (as
defined in section 414(c) of the Code) with the Employer, any
organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in section 414(m) of the Code)
which includes the Employer, and any other entity required to be
aggregated with the Employer pursuant to regulations under section
414(o) of the Code.
1.8 Annual Additions. Annual Additions for a Plan Year shall mean the sum
of:
(a) Employer contributions;
(b) Employee contributions;
(c) Forfeitures;
(d) Amounts allocated, after March 31, 1984, to an individual medical
benefit account, as defined in section 415(l)(2) of the Code,
which is part of a pension or annuity plan maintained by the
Employer, are treated as Annual Additions to a defined
contribution plan. Also amounts derived from contributions paid
or accrued after December 31, 1985, in taxable years ending after
such date, which are attributable to post-retirement medical
benefits, allocated to the separate account of a key employee, as
defined in section 419A(d)(3) of the Code, or under a welfare
benefit fund, as 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.
3
For this purpose, any excess amount applied under Section 6.2 or
6.3 in the Plan Year to reduce Employer contributions will be
considered Annual Additions for such Plan Year.
1.9 Benefiting. 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).
1.10 Beneficiary. The person or persons so designated by the Participant to
receive his benefits under the Plan in the event of his death, or if
the Participant fails to make such a designation or the designated
person(s) fail to survive the Participant, the person(s) determined in
accordance with Section 10.2(c).
1.11 Break in Service. A Break in Service shall be a Plan Year in which an
Employee fails to complete more than 500 Hours of Service with the
Employer; except that for purposes of determining Years of Eligibility
Service, a Break in Service shall be the 12-consecutive month period
designated by the Employer in the Adoption Agreement for determining
Years of Eligibility Service during which an Employee fails to
complete more than 500 Hours of Service. If the Employer elects the
Elapsed Time method of calculating service, a Break in Service shall
be determined as described in the definition of Elapsed Time.
1.12 Code. The Internal Revenue Code of 1986, as amended from time to time,
and any successor statute.
1.13 Compensation.
(a) Subject to the following provisions of this Section, Compensation
shall mean one of the following, as elected by the Employer in
the Adoption Agreement, paid during the period elected by the
Employer in the Adoption Agreement:
(i) W-2 Earnings - 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), 6051(a)(3) and 6052 of the
Code. Compensation must be determined without regard to any
rules under section 3401(a) of the Code that limit the
remuneration included in wages based on the nature or
location of employment or the services performed (such as
the exception for agricultural labor in section 3401(a)(2)
of the Code). Unless elected otherwise by the Employer 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 section 125,
4
402(e)(3), 402(h)(1)(B) or 403(b) of the Code, and, for
years beginning after December 31, 2000, elective amounts
that are not includible in the gross income of the Employee
under section 132(f)(4) of the Code.
(ii) Section 415 Compensation as defined in Section 1.49.
(iii)Section 3401(a) wages - Compensation is defined as wages
within the meaning of section 3401(a) of the Code for
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 exemption for agricultural labor in section
3401(a)(2) of the Code).
(b) Notwithstanding the foregoing provisions of subsection (a),
Compensation shall not include such amounts as the Employer may elect
to exclude in the Adoption Agreement.
(c) For any Self-Employed Individual covered under the Plan, Compensation
will mean Earned Income.
(d) Compensation shall include only that compensation which is actually
paid to the Participant during the Plan Year.
(e) For Plan Years beginning on and after January 1, 1989, and before
January 1, 1994, the annual Compensation of each Participant taken
into account under the Plan for any Plan Year shall not exceed
$200,000, as adjusted by the Secretary of Treasury at the same time
and in the same manner as under section 415(d) of the Code.
(f) For Plan Years beginning on or after January 1, 1994, the annual
Compensation of each Employee taken into account under the Plan shall
not exceed the OBRA '93 annual compensation limit. The OBRA '93 annual
compensation limit is $200,000 as adjusted by the Commissioner of the
Internal Revenue Service for increases in the cost of living in
accordance with section 401(a)(17)(B) of the Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not
exceeding 12 months, over which Compensation is determined
(determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination
period, and the denominator of which is 12. If Compensation for any
prior determination period is taken into account in determining an
Employee's benefits accruing in the then current Plan Year, the
Compensation for that prior determination period is subject to the
OBRA '93 annual compensation limit in effect for that prior
determination period. For this purpose, in determining allocations in
5
Plan Years beginning on or after January 1, 1989, the OBRA '93 annual
compensation limit is $200,000. In addition, in determining
allocations in Plan Years beginning on or after January 1, 1994, the
OBRA '93 annual compensation limit is $150,000, as adjusted.
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 applicable
annual compensation 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. This subsection shall be effective
in Plan Years beginning after December 31, 1988, and before January 1,
1997, unless the Employer elects a later year than 1997 in the
Optional Supplement.
1.14 Current Year Testing. Application of the ADP and ACP Tests using the
current year's ADP and ACP, respectively, of Participants who are
Highly Compensated Employees with the current year's ADP and ACP,
respectively, of Participants who are Non-Highly Compensated
Employees.
1.15 Discretionary Profit Sharing Contributions. Contributions of the
Employer to the Plan and Trust as described in Section 3.3(b) and the
Adoption Agreement.
1.16 Early Retirement Age. If the Employer elects in the Adoption
Agreement, the date on which a Participant satisfies the age and/or
service requirements specified by the Employer in the Adoption
Agreement.
1.17 Earned Income. The annual net earnings from self-employment in the
trade or business with respect to which the Plan is established,
provided that 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.
1.18 Effective Date. Except as otherwise specified herein, the effective
date of the Plan is the first day for which the Plan document is
effective as specified in the Adoption Agreement. If the Employer is
adopting this Plan as an amendment and restatement of an existing
plan, the provisions of the existing plan shall apply prior to the
effective date of the amendment and restatement unless an earlier date
6
is specified herein. The effective date of the amendment and
restatement shall be specified in the Adoption Agreement.
1.19 Elapsed Time. If an Employer elects in the Adoption Agreement to use
Elapsed Time for purposes of determining eligibility to participate,
vesting and Early Retirement Age (if applicable), the following
definitions shall replace the otherwise required Year of Eligibility
Service, Year of Vesting Service and Break in Service definitions. For
purposes of this Section, Hour of Service shall mean each hour for
which an Employee is paid or entitled to payment for the performance
of duties for the Employer.
(a) An Employee will receive credit for the aggregate of all time
period(s) commencing with the Employee's first day of employment
or reemployment with the Employer 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 be credited with a Year of Service for each
completed 365 days of service with the Employer, which service
need not be consecutive, regardless of the number of hours
worked. 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.
(b) A Break in Service is a Period of Severance of at least 12
consecutive months. 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 subsection, an absence from work for maternity
or paternity reasons means an absence (i) by reason of the
pregnancy of the individual, (ii) by reason of the birth of a
child of the individual, (iii) by reason of the placement of a
child with the individual in connection with the adoption of such
child by such individual, or (iv) for purposes of caring for such
child for a period beginning immediately following such birth or
placement.
(c) A Period of Severance is a continuous period of time during which
the Employee is not employed by the Employer. Such period begins
on the earlier of (i) the date on which the Employee's employment
with the Employer terminates by reason of retirement, death,
discharge or resignation, or (ii) the first anniversary of the
date on which the Employee was absent from work with the Employer
(with or without pay) for any other reason, other than an
approved leave of absence granted in writing by the Employer,
according to a uniform rule applied without discrimination,
provided the Employee returns to the employ of the Employer upon
completion of the leave.
(d) If the Employer is a member of an affiliated service group (under
section 414(m) of the Code), a controlled group of corporations
7
(under section 414(b) of the Code), or 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 and the
regulations thereunder, 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 (o) of the Code and the regulations
thereunder to be considered an Employee of any Employer
aggregated under section 414(b), (c) or (m) of the Code.
1.20 Elective Deferrals. Any Employer contributions made to the Plan
at the election of a Participant, in lieu of cash compensation,
pursuant to a salary reduction agreement or other deferral
mechanism. With respect to any taxable year, a Participant's
Elective Deferrals are the sum of all such employer contributions
made on behalf of such Participant pursuant to an election to
defer under any qualified cash or deferred arrangement as
described in section 401(k) of the Code, any salary reduction
simplified employee pension described in section 408(k)(6) of the
Code, any SIMPLE ▇▇▇ plan described in section 408(p) of the
Code, any eligible deferred compensation plan under section 457
of the Code, any plan as described in section 501(c)(18) of the
Code and any employer contributions made on behalf of a
Participant pursuant to a salary reduction agreement for the
purchase of an annuity contract under section 403(b) of the Code.
Elective Deferrals shall not include any deferrals properly
distributed as excess Annual Additions.
1.21 Employee. Any person, including a Self-Employed Individual,
employed by the Employer maintaining the Plan or of any other
employer required to be aggregated with such Employer under
section 414(b), (c), (m) or (o) of the Code and including Leased
Employees of such employers within the meaning of section
414(n)(2) or (o) of the Code. Notwithstanding the foregoing, if
such Leased Employees constitute twenty percent or less of the
Employer's non-highly compensated work force within the meaning
of section 414(n)(5)(C)(ii) of the Code, the term "Employee"
shall not include those Leased Employees covered by a plan
described in section 414(n)(5) of the Code unless otherwise
provided by the terms of the Plan.
1.22 Employee After-Tax Contributions. Any contribution made to the
Plan by or on behalf of a Participant that was included in the
Participant's gross income in the year in which made as described
in Section 3.2(a) and the Adoption Agreement.
1.23 Employer. The entity that adopts the Plan by execution of an
Adoption Agreement.
1.24 Employer Contribution Accounts. The portion of a Participant's
Account consisting of his Employer Matching Contributions,
Discretionary Profit Sharing Contributions, Qualified Nonelective
Contributions, Qualified Matching Contributions, Safe Harbor
9
Matching Contributions, Safe Harbor Nonelective Contributions and
ACP Test Only Safe Harbor Matching Contributions subaccounts.
1.25 Entry Date. The Effective Date shall be the first Entry Date;
thereafter, Entry Dates shall be the dates specified in the
Adoption Agreement.
1.26 ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
1.27 Family Member. An Employee's spouse and lineal ascendants or
descendants and the spouses of such lineal ascendants or
descendants.
1.28 Five Percent Owner. Any person who owns (or is considered to own
within the meaning of section 318 of the Code) more than 5% of
the interests in the Employer.
1.29 Highly Compensated Employee. For Plan Years beginning after
December 31, 1996, the term Highly Compensated Employee means any
Employee who during the Plan Year: (1) was a Five Percent Owner
at any time during the Plan Year or the look-back year, or (2)
for the look-back year had Section 415 Compensation from the
Employer in excess of $80,000 (adjusted at the same time and in
the same manner as under section 415(d) of the Code, except that
the base period is the calendar quarter ending September 30,
1996) and, if the Employer so elects in the Adoption Agreement,
was in the top-paid group (i.e., top 20% of Employees ranked by
compensation) for the look-back year.
For this purpose, the Plan Year of the Plan for which a
determination is being made is called a determination year and
the preceding 12-month period is called a look-back year. If the
Employer so elects in the Adoption Agreement, the look-back year
shall be the calendar year beginning with or within the look-back
year.
The determination of who is a highly compensated former employee
is based on the rules applicable to determining highly
compensated employee status as in effect for that determination
year, in accordance with section 1.414(q)-1T, A-4 of the
Temporary Income Tax Regulations and Notice 97-45.
In determining whether an Employee is a Highly Compensated
Employee for years beginning in 1997, (1) the amendments to Code
Section 414(q) stated above are treated as having been in effect
for the 1996 Plan Year, and (2) if the Employer so elects in the
Optional Supplement, the look-back year shall be the calendar
year ending with or within the determination year.
Effective for Plan Years beginning before January 1, 1997, or
such later year than 1997 that the Employer elects in the
Optional Supplement, if an Employee is, during a determination
year or look-back year, a Family Member of either a Five Percent
Owner who is an active or former Employee or a Highly Compensated
Employee who is one of the ten most Highly Compensated Employees
ranked on the basis of compensation paid by the Employer during
such year, then the Family Member and Five Percent Owner or top
9
ten Highly Compensated Employee shall be aggregated. In such
case, the Family Member and Five Percent Owner or top ten Highly
Compensated Employee shall be treated as a single Employee
receiving compensation and Plan contributions or benefits equal
to the sum of such compensation and contributions or benefits of
the Family Member and Five Percent Owner or top ten Highly
Compensated Employee.
1.30 Hour of Service.
(a) An Hour of Service shall mean and include each hour for
which an Employee is compensated by the Employer, or is
entitled to be so compensated, for services rendered by him
to the Employer. These hours will be credited to the
Employee for the computation period in which the duties are
performed.
(b) An Hour of Service shall also mean and include each hour for
which an Employee is compensated by the Employer, or is
entitled to be so compensated, on account of a period of
time during which no services are rendered by him to the
Employer (regardless of whether the Employee shall have
ceased to be an Employee) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty,
military duty or leave of absence. No more than 501 Hours of
Service shall be credited pursuant to this subsection (b) on
account of any single continuous period during which an
Employee renders no services to the Employer (whether or not
such period occurs in a single computation period). Hours
under this Section will be calculated and credited pursuant
to section 2530.200b-2 of the Department of Labor
Regulations which is incorporated herein by this reference.
(c) An Hour of Service shall also mean and include each hour for
which back pay, without regard to mitigation of damages, has
been awarded or agreed to by the Employer. The same Hours of
Service shall not be credited both under subsection (a) or
subsection (b), whichever shall be applicable, and also
under this subsection (c). The 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.
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.
10
Hours of Service will also be credited for any individual
considered an Employee under section 414(n) or 414(o) of the
Code, and regulations thereunder.
Solely for purposes of determining whether a Break in
Service for participation and vesting purposes has occurred
in a computation period, 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, eight Hours
of Service per day of such absence. For purposes of this
subsection, an absence from work for maternity or paternity
reasons means an absence (i) by reason of the pregnancy of
the individual, (ii) by reason of a birth of a child of the
individual, (iii) by reason of the placement of a child with
the individual in connection with the adoption of such child
by such individual, or (iv) 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 only (i) in the computation
period in which the absence begins if the crediting is
necessary to prevent a Break in Service in that period, or
(ii) in all other cases, in the following computation
period.
Hours of Service will be determined on the basis of the
method selected in the Adoption Agreement.
1.31 Investment Options. Any regulated investment company
registered under the Investment Company Act of 1940 the
investment adviser of which is ▇. ▇▇▇▇ Price Associates,
Inc. or any of its affiliates, any common trust funds or
collective investment funds of the Sponsor qualified under
sections 401 and 501 of the Code, and any other funding
vehicle (including, but not limited to, limited partnership
interests which receive investment advice from ▇. ▇▇▇▇ Price
Associates, Inc. or an affiliate) made available to the Plan
by ▇. ▇▇▇▇ Price Trust Company which the Employer selects
under the terms of the Plan.
1.32 Leased Employee. A Leased Employee is 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 performed under primary direction
and control of the recipient.
Any Leased Employee shall be treated as an employee of the
recipient employer. However, contributions or benefits
provided by the leasing organization which are attributable to
service performed for the recipient employer shall be treated
as provided by the recipient employer. The preceding sentence
shall not apply to any Leased Employee if Leased Employees do
not constitute more than twenty percent of the employer's
11
non-highly compensated force and, if such leased employee is
covered by a money purchase pension plan providing: (a) a
nonintegrated employer contribution rate of at least ten
percent of 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 excludible
from the employee's gross income under section 125, 402(e)(3),
402(h)(1)(B) or 403(b) of the Code, and, for years beginning
after December 31, 2000, elective amounts that are not
included in gross income of the Employee under section
132(f)(4) of the Code, (b) full and immediate vesting, and (c)
each employee of the leasing organization (other than
employees who perform substantially all of their services for
the leasing organization) immediately participate in the Plan.
1.33 Matching Contributions. A contribution by the Employer made
to this or any other defined contribution plan on behalf of
a Participant on account of a Participant's Elective
Deferrals or on account of a Participant's Employee
After-Tax Contributions under this or any other plan
maintained by the Employer as set forth in Section 3.3(a)
and the Adoption Agreement. Matching Contributions shall not
include Qualified Matching Contributions, Safe Harbor
Matching Contributions or ACP Test Only Safe Harbor Matching
Contributions.
1.34 Non-Highly Compensated Employee. An Employee of the Employer
who during the Plan Year is neither a Highly Compensated
Employee nor, for Plan Years beginning before January 1,
1997, a Family Member of a Highly Compensated Employee
during such Plan Year.
1.35 Normal Retirement Age. The date on which a Participant
attains age 65 unless otherwise specified in the Adoption
Agreement. If the Employer enforces a mandatory retirement
age, the Normal Retirement Age is the lesser of that
mandatory age or the age specified in the Adoption
Agreement.
1.36 Optional Supplement. A supplement to the Adoption Agreement
that may be executed by the Employer at the time it is
retroactively restating its plan to comply with GUST.
1.37 Owner-Employee. An individual who is sole proprietor, if the
Employer is a sole proprietorship, or a partner who owns
more than ten percent of either the capital or profits
interests of the partnership.
1.38 Participant. A person who has met the eligibility
requirements as specified in the Adoption Agreement and
whose Account hereunder has been neither completely
forfeited nor completely distributed.
1.39 Participant-Directed Transfer. A plan-to-plan transfer made
at the request of a Participant as described in Section
3.2(d).
1.40 Plan. The retirement plan set forth herein and in the
Adoption Agreement as amended from time to time.
12
1.41 Plan Year. The twelve consecutive month period designated by
the Employer in the Adoption Agreement.
1.42 Qualified Matching Contributions. Contributions made by the
Employer as described in Section 3.13 and allocated to the
Participant's Account that are subject to the distribution
and nonforfeitability requirements of section 401(k) of the
Code when made.
1.43 Qualified Nonelective Contributions. Contributions made by
the Employer as described in Section 3.12 and allocated to
the Participant's Account that the Participant 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 distribution provisions that are applicable
to Elective Deferrals and Qualified Matching Contributions.
1.44 Retirement. Termination of a Participant's employment with
the Employer on or after the Participant's Early Retirement
Age or Normal Retirement Age.
1.45 Rollover Contribution. A rollover contribution made to the
Plan by a Participant as described in Section 3.2(c).
1.46 Safe Harbor Contributions. Safe Harbor Matching
Contributions, Safe Harbor Nonelective Contributions and ACP
Test Only Safe Harbor Matching Contributions.
1.47 Safe Harbor Matching Contributions. Contributions of the
Employer to the Plan and Trust as described in Section 4.2
and in Section 9.2(a) of the Adoption Agreement, Safe Harbor
Matching Contributions do not include ACP Test Only Safe
Harbor Matching Contributions.
1.48 Safe Harbor Nonelective Contributions. Contributions of the
Employer to the Plan and Trust as described in Section 4.2
and in Section 9.2(b)(1) of the Adoption Agreement.
1.49 Section 415 Compensation. A Participant's Earned Income,
wages, salaries and fees for professional services and other
amounts received (without regard to whether an amount is
paid in cash) or made available for personal services
actually rendered in the course of employment with the
Employer maintaining the Plan (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 Treasury Regulation
1.62-2(c)), but 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
13
excluded from the Employee's gross income, 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 Plan Years beginning after December 31, 1998,
Section 415 Compensation for any Plan Year shall be
limited as provided in Section 1.13(f). Section 415
Compensation,(a) for years beginning after December 31,
1997, shall include any elective deferral (as defined
in section 402(g)(3) of the Code), and any amount
which is contributed or deferred by the Employer at the
election of the Employee and which is not includible
in the gross income of the Employee by reason of
section 125 or 457 of the Code, and (b) for years
beginning after December 31, 2000, shall include
elective amounts that are not included in the gross
income of the Employee under section 132(f)(4) of the
Code.
1.50 Self-Employed Individual. An individual who has Earned
Income for the taxable year from the trade, business or
partnership with respect to which the Plan is established;
also, an individual who would have had Earned Income but for
the fact the trade, business or partnership had no net
profits for the taxable year.
1.51 Sponsor. The Sponsor of this prototype plan document is ▇.
▇▇▇▇ Price Trust Company.
1.52 Total Compensation. Subject to the following provisions of
this Section, for purposes of determining the amount of Safe
Harbor Contributions, Total Compensation shall mean one of
the following, as elected by the Employer in the Adoption
Agreement, paid during the period elected by the Employer in
the Adoption Agreement:
(a) W-2 earnings as defined in Section 1.13(a)(i).
(b) Section 415 Compensation as defined in Section
1.13(a)(ii).
(c) Section 3401(a) wages as defined in Section
1.13(a)(iii).
14
For purposes of determining Total Compensation, W-2
earnings, Section 415 Compensation and section
3401(a) wages shall be determined in accordance with
the provisions of subsections (c) through (f) of
Section 1.13 as if the term "Total Compensation" were
substituted for the term "Compensation" in each place
the term "Compensation" appears in such subsections.
1.53 Total and Permanent Disability. The inability of an Employee
while employed by the Employer 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 to last for a continuous period of at least
twelve months.
1.54 Trust or Trust Fund. The fund maintained by the Trustee(s)
for the investment of Plan assets in accordance with the
terms and conditions of the Trust Agreement.
1.55 Trust Agreement. The agreement between the Employer and the
Trustee(s) under which the assets of the Plan are held,
administered and managed. The provisions of the Trust
Agreement shall be deemed a part of the Plan.
1.56 Trustee. The individual or corporate Trustee or Trustees
under the Trust Agreement as they may be constituted from
time to time. Such Trustee or Trustees shall be named in and
a party to the Adoption Agreement.
1.57 Valuation Date. The last day of the Plan Year and such other
dates as may be designated by the Plan Administrator from
time to time.
1.58 Year of Eligibility Service. Unless the Employer elects in
the Adoption Agreement to credit service under the Elapsed
Time method, a Year of Eligibility Service is an eligibility
computation period during which an Employee completes at
least 1,000 Hours of Service. For this purpose, the initial
eligibility computation period shall be the twelve
consecutive month period beginning with the day the Employee
first performs an Hour of Service for the Employer. The
succeeding twelve consecutive month periods shall commence
on one of the two following days as elected by the Employer
in the Adoption Agreement:
(a) The first anniversary of the date the Employee first
completes an Hour of Service for the Employer; or
(b) The first day of each Plan Year beginning after the
date on which the Employee first completes an Hour of
Service for the Employer.
If the Employer elects to credit service under the
Elapsed Time method, see the definition of Elapsed
Time for the applicable rules to calculate service.
1.59 Year of Vesting Service. Unless the Employer elects in the
Adoption Agreement to credit service under the Elapsed Time
method, a Year of Vesting Service is a Plan Year during
15
which an Employee completes at least 1,000 Hours of Service.
If the Employer elects to credit service under the Elapsed
Time method, see the definition of Elapsed Time for the
applicable rules to calculate service.
ARTICLE II - ELIGIBILITY AND PARTICIPATION
2.1 Active Participation. Subject to the following Sections of this
Article II, each Employee shall be eligible to participate in the Plan
on the Entry Date coincident with or next following the date on which
such Employee satisfies the eligibility requirements set forth in the
Adoption Agreement.
2.2 Exclusion of Certain Employees. To the extent provided in the Adoption
Agreement, the following Employees shall be excluded from
participation in the Plan;
(a) Employees not meeting the age and service requirements,
(b) Employees who are included in a unit of Employees covered by a
collective bargaining agreement between employee representatives
and one or more Employers, if there is evidence that retirement
benefits were the subject of good faith bargaining between such
employee representatives and such Employer or Employers. For this
purpose, the term "employee representatives" does not include any
organization where more than one half of the membership is
comprised of owners, officers and executives of the Employer,
(c) Employees who are nonresident aliens and who receive no earned
income from the Employer which constitutes income from sources
within the United States;
(d) Employees included in certain ineligible job classifications;
(e) Leased Employees; and
(f) Employees employed by certain members of the aggregated group of
employers including the Employer.
In the event an Employee who is not a member of the eligible
class of Employees becomes a member of the eligible class, such
Employee shall participate immediately if such Employee has
satisfied the minimum age and service requirements set forth in
the Adoption Agreement. In the event a Participant is no longer a
member of an eligible class of Employees and becomes ineligible
to participate, but has not incurred a Break in Service, such
Employee shall participate immediately upon returning to an
eligible class of Employees. If such Participant incurs a Break
in Service, eligibility to participate will be determined under
Section 2.4.
16
2.3 Predecessor Employers. To the extent provided in the Adoption
Agreement, service with a predecessor employer shall be deemed service
with the Employer for purposes of this Plan. If this Plan is a
continuation of a predecessor employer's plan, service with the
predecessor employer may not be disregarded for purposes of this Plan.
2.4 Re-employment.
(a) A former Participant shall become a Participant immediately upon
returning to the employ of the Employer if such former
Participant is a member of an eligible class of Employees and had
a nonforfeitable right to all or a portion of the Participants
Account derived from Employer contributions at the time of
termination from service.
(b) A former Participant who did not have a nonforfeitable right to
any portion of his Account derived from Employer contributions at
the time of termination from service shall be considered a new
Employee for eligibility purposes if the number of consecutive
1-year Breaks in Service equals or exceeds the greater of five or
the aggregate number of Years of Eligibility Service before such
Breaks in Service. If such former Participant's Years of
Eligibility Service prior to termination from service may not be
disregarded pursuant to the preceding sentence, such former
Participant shall participate immediately upon re-employment if
he is a member of an eligible class of Employees.
ARTICLE III - CONTRIBUTIONS
3.1 Definitions. For the purposes of this Article III, the following
definitions shall apply:
(a) Actual Deferral Percentage. For a specified group of Participants
for a Plan Year, "Actual Deferral Percentage" shall mean the
average of the ratios (calculated separately for each Participant
in such group) of (i) the amount of Employer deferral
contributions actually paid over to the Plan on behalf of such
Participant for the Plan Year to (ii) the Participant's Testing
Compensation for such Plan Year. Employer deferral contributions
made on behalf of any Participant shall include: (i) 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 ACP Test
(provided the ADP Test is satisfied both with and without
exclusion of these Elective Deferrals); and (ii) at the election
of the Plan Administrator, Qualified Nonelective Contributions
and Qualified Matching Contributions taken into account as
Elective Deferrals. For purposes of computing Actual Deferral
Percentages, an Employee who would be a Participant but for the
17
failure to make Elective Deferrals shall be treated as a
Participant on whose behalf no Elective Deferrals are made.
(b) Aggregate Limit. "Aggregate Limit" shall mean the sum of (i) 125%
of the greater of the ADP of the Non-Highly Compensated Employees
for the prior Plan Year or the ACP of Non-Highly Compensated
Employees under the Plan subject to section 401(m) of the Code
for the Plan Year beginning with or within the prior Plan Year of
the cash or deferred arrangement, and (ii) the lesser of 200% or
two plus the lesser of such ADP or ACP. "Lesser" is substituted
for "greater" in "(i)", above, and "greater" is substituted for
"lesser" after "two plus the" in "(ii)" if it would result in a
larger Aggregate Limit. If the Employer has elected in the
Adoption Agreement to use Current Year Testing, then, in
calculating the Aggregate Limit for a particular Plan Year, the
Non-Highly Compensated Employees' ADP and ACP for that Plan Year,
instead of the prior Plan Year, is used.
(c) Average Contribution Percentage. "Average Contribution
Percentage" is the average of the Contribution Percentages of the
eligible Participants in a group.
(d) Contribution Percentage. "Contribution Percentage" is the ratio
(expressed as a percentage) of an eligible Participant's
Contribution Percentage Amounts to such eligible Participant's
Testing Compensation for the Plan Year.
(e) Contribution Percentage Amounts. "Contribution Percentage
Amounts" is the sum of the Employee After-Tax Contributions,
Matching Contributions and Qualified Matching Contributions (to
the extent not taken into account for purposes of the ADP test)
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 Elective Deferrals, Excess
Contributions or Excess Aggregate Contributions. The Plan
Administrator may include Qualified Nonelective Contributions in
the Contribution Percentage Amounts. The Plan Administrator also
may elect to use Elective Deferrals in 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.
(f) Deferral Percentage. "Deferral Percentage" with respect to any
Plan Year is the ratio (expressed as a percentage) of a
Participant's Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if
treated as Elective Deferrals for purposes of the ADP Test) to
such Participant's Testing Compensation.
18
(g) Excess Aggregate Contributions. With respect to any Plan Year,
"Excess Aggregate Contributions" shall mean the excess of (i) 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 (ii) the maximum Contribution Percentage Amounts
permitted by the ACP Test (determined by hypothetically reducing
contributions made on behalf of Highly Compensated Employees in
order of their Contribution Percentages beginning with the
highest of such percentages).
(h) Excess Contribution. With respect to a Plan Year, "Excess
Contributions" shall mean the excess of (i) the aggregate amount
of Elective Deferrals and amounts treated as Elective Deferrals
actually taken into account in computing the ADP of Highly
Compensated Employees for such Plan Year, over (ii) the maximum
amount of such contributions permitted by the ADP Test
(determined by hypothetically reducing contributions made on
behalf of the Highly Compensated Employees in order of the ADPs,
beginning with the highest of such percentages).
(i) Excess Elective Deferrals. Those Elective Deferrals that are
includible in a Participant's gross income under section 402(g)
of the Code to the extent such Participant's Elective Deferrals
for a taxable year exceed the dollar limitation under such Code
section. Excess Elective Deferrals shall be treated as Annual
Additions under the Plan, unless such amounts are distributed no
later than the first April 15 following the close of the
Participant's taxable year in which such Excess Elective
Deferrals arose.
(j) Testing Compensation. "Testing Compensation" shall mean any
definition of compensation allowed under section 414(s) of the
Code and the regulations thereunder for that portion of the Plan
Year designated by the Employer in the ADP and ACP
Nondiscrimination Testing section of the Adoption Agreement.
Testing Compensation shall be determined in accordance with the
provisions of subsections (c) through (f) of Section 1.13 as if
the term "Testing Compensation" were substituted for the term
"Compensation" in each place the term "Compensation" appears in
such subsections.
3.2 Employee Contributions.
(a) Employee After-Tax Contributions. To the extent provided in the
Adoption Agreement and subject to any other applicable
limitations in this Plan, a Participant may make voluntary
after-tax Employee contributions to the Plan through payroll
deduction or in any other manner acceptable to the Employer. A
Participant shall at all times have a nonforfeitable interest in
his Employee After-Tax Contributions subaccount.
(b) Elective Deferrals.
19
(i) To the extent provided in the Adoption Agreement, a
Participant may make Elective Deferrals to the Trust in
amounts not to exceed the limitations specified in the
Adoption Agreement or any other limitations specified in
this Plan. A Participant's Elective Deferrals shall be made
by direct reduction of Compensation, with such reduction to
be accomplished through regular payroll reduction.
(ii) The Elective Deferrals of a Participant shall be limited in
accordance with the provisions of this subsection and any
other applicable provisions of the Plan. No Participant
shall be permitted to have Elective Deferrals made under
this Plan, or any other qualified plan maintained by the
Employer, during any taxable year, in excess of the dollar
limitation contained in section 402(g) of the Code in effect
at the beginning of such taxable year.
(iii)Participants may elect to commence Elective Deferrals at
least once each Plan Year during a period established by the
Employer. Such election may not be made retroactively, and
the election must remain in effect until modified or
terminated. Participants may terminate the election or
change the amounts designated to be deducted at any time by
the submission of such change of designation to the Plan
Administrator. The Plan Administrator shall establish a
uniform date on which such changes shall be effective.
(iv) No contributions or benefits (other than Matching
Contributions, Safe Harbor Matching Contributions, ACP Test
Only Safe Harbor Matching Contributions or Qualified
Matching Contributions) may be conditioned upon an
Employee's Elective Deferrals.
(c) Rollovers. If the Employer elects in the Adoption Agreement, a
Participant, or an Employee who would otherwise be eligible to
participate in the Plan but for the failure to satisfy any age or
service condition for eligibility to participate, who has participated
in any other qualified plan described in section 401 (a) of the Code
or in a qualified annuity plan described in section 403(a) of the Code
shall be permitted, subject to the approval of the Plan Administrator,
to make a rollover (or direct rollover) contribution to the Plan of
all or part of an amount received by such individual that is
attributable to participation in such other plan (reduced by any
nondeductible voluntary contributions the Participant made to the
plan), provided that the rollover contribution complies with all
requirements of section 402(c), 403(a)(4) or 408(d)(3)(A)(ii) of the
Code, whichever is applicable. Before approving such a rollover, the
Plan Administrator may request from the individual or the sponsor of
such other plan any documents that the Plan Administrator, in its
discretion, deems necessary to determine that such rollover meets the
preceding requirements.
20
(d) Participant-Directed Transfers. If the Employer elects in the Adoption
Agreement, the Plan may accept at the request of a Participant (or an
Employee who would otherwise be eligible to participate in the Plan
but for the failure to satisfy any age or service condition for
eligibility to participate), subject to the approval of the Plan
Administrator, a direct transfer of funds from a plan which the
Employer reasonably believes to be qualified under section 401(a) of
the Code. Any such transfer shall be accounted for separately and
shall be nonforfeitable at all times. Distribution from such
Participant-Directed Transfer subaccount shall not be available prior
to the Participant's death, Total and Permanent Disability,
termination of employment with the Employer or prior to Plan
termination if such assets are transferred (within the meaning of
section 414(1) of the Code) to this Plan from a money purchase pension
plan qualified under section 401(a) of the Code (other than any
portion of those assets attributable to nondeductible voluntary
contributions made to the plan).
(e) Rollovers or Participant-Directed Transfers.
(i) If a rollover contribution or a Participant-Directed Transfer is
made on behalf of an Employee who is not yet eligible to
participate in the Plan, his Rollover or Participant-Directed
Transfer subaccount shall constitute his entire interest in the
Plan, and he shall not be considered a Participant for any other
purpose of the Plan until he meets the eligibility requirements
for participation.
(ii) Unless otherwise approved by the Plan Administrator and the
Trustee, rollovers and Participant-Directed Transfers shall be
made in cash or cash equivalents.
3.3 Employer Contributions.
(a) Matching Contributions. If the Employer elects in the Adoption
Agreement to make Matching Contributions, for each Plan Year the
Employer shall contribute to the Trust an amount as shall be
determined by the Employer in accordance with the matching
contribution formula specified in the Adoption Agreement. Matching
Contributions shall be made on behalf of those Participants specified
by the Employer in the Adoption Agreement.
(b) Discretionary Profit Sharing Contributions. If the Employer elects in
the Adoption Agreement to make Discretionary Profit Sharing
Contributions, the Employer may contribute to the Trust an amount as
may be determined by the Employer for each Plan Year. Subject to the
minimum top-heavy allocation rules of Section 12.3 and the exclusions
specified in this subsection. Discretionary Profit Sharing
21
Contributions for a Plan Year shall be allocated to the Accounts of
those Participants specified by the Employer in the Adoption Agreement
and shall be allocated to Participants in accordance with the
provisions of Section 7.1(b) and the Adoption Agreement.
(c) Qualified Nonelective Contributions. In its discretion, the Employer
may make Qualified Nonelective Contributions as described in Section
3.12.
(d) Qualified Matching Contributions. In its discretion, the Employer may
make Qualified Matching Contributions as described in Section 3.13.
(e) Safe Harbor Matching Contributions. If the Employer elects in the
Adoption Agreement to make Safe Harbor Matching Contributions, for
each Plan Year the Employer shall contribute to the Trust on behalf of
each Participant who has made Elective Deferrals during such Plan Year
an amount as determined in accordance with the Safe Harbor Matching
Contribution formula specified in the Adoption Agreement.
(f) Safe Harbor Nonelective Contributions. If the Employer elects in the
Adoption Agreement to make Safe Harbor Nonelective Contributions, for
each Plan Year the Employer shall contribute to the Trust on behalf of
each Participant an amount equal to 3% of the Participant's Total
Compensation, as determined in accordance with the Safe Harbor CODA
section of the Adoption Agreement, for such Plan Year or, if the
Employer so elects in the Safe Harbor CODA section of the Adoption
Agreement, Total Compensation, as determined in accordance with the
Safe Harbor CODA section of the Adoption Agreement, for such period of
time during the Plan Year in which the Participant was eligible to
participate in the Plan.
(g) ACP Test Only Safe Harbor Matching Contributions. If the Employer
elects in the Adoption Agreement to make ACP Test Only Safe Harbor
Matching Contributions, for each Plan Year the Employer shall
contribute to the Trust on behalf of each Participant who has made
Elective Deferrals during such Plan Year an amount as determined by
the Employer in accordance with the ACP Test Only Safe Harbor Matching
Contribution formula specified in the Adoption Agreement.
3.4 Contribution Limitation. All contributions to the Plan shall be made
without regard to current or accumulated earnings and profits of the
Employer for the taxable year(s) ending with or within the Plan Year.
Notwithstanding the foregoing, the Plan shall be designed to qualify as a
profit sharing plan for purposes of the Code. In no event shall any
Employer contribution (plus any Elective Deferrals) exceed the maximum
amount deductible from the Employer's income under section 404 of the Code
22
or any amount allocated to the Account of a Participant exceed the maximum
limitations under section 415 of the Code provided in Article VI.
3.5 Excess Elective Deferrals.
(a) General. 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 March 1 following the close of the
Participant's taxable year 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 this Employer.) Notwithstanding any other provision of
the Plan, Excess Elective Deferrals, plus any income and minus any
loss allocable thereto, shall be distributed after the preceding
taxable year and no later than April 15 following the close of the
preceding taxable year to any Participant to whose Account Excess
Elective Deferrals were assigned for the preceding year and who claims
Excess Elective Deferrals for such taxable year.
(b) Calculation of Income or Loss. The income or loss allocable to Excess
Elective Deferrals is equal to the amount of income or loss allocable
to the Participant's Elective Deferral subaccount for the taxable year
multiplied by a fraction, the numerator of which is such Participant's
Excess Elective Deferrals for the year and the denominator of which is
the sum of (i) the Participant's account balance attributable to
Elective Deferrals as of the beginning of the year and (ii) the
Participant's Elective Deferrals for the year.
(c) Tax Treatment. Excess Elective Deferrals that are distributed after
April 15 are includible in the Participant's gross income in both the
taxable year in which deferred and the taxable year in which
distributed.
(d) Forfeiture of Certain Matching Contributions. All Matching
Contributions (whether or not vested) that were made on account of an
Excess Elective Deferral that has been distributed in accordance with
this Section 3.5 shall be forfeited before the last day of the
twelve-month period immediately following the close of the taxable
year in which such Excess Elective Deferrals were made.
3.6 Actual Deferral Percentage Test.
(a) Prior Year Testing. The Actual Deferral Percentage (hereinafter "ADP")
for a Plan Year for Participants who are Highly Compensated Employees
for each Plan Year and the prior year's ADP for Participants who were
Non-Highly Compensated Employees for the prior Plan Year must satisfy
one of the following tests:
23
(i) The ADP for a Plan Year for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the prior year's ADP for
Participants who were Non-Highly Compensated Employees for the prior
Plan Year multiplied by 1.25; or
(ii) The ADP for a Plan Year for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the prior year's ADP for
Participants who were Non-Highly Compensated Employees for the prior
Plan Year multiplied by 2.0, provided that the ADP for Participants
who were Highly Compensated Employees for the Plan Year does not
exceed the ADP for Participants who were Non-Highly Compensated
Employees in the prior Plan Year by more than two percentage points.
For the first Plan Year the Plan permits any Participant to make Elective
Deferrals and this is not a successor plan, for purposes of the foregoing
tests, the prior year's ADP of Non-Highly Compensated Employees shall be 3
percent unless the Employer has elected in the Adoption Agreement to use
the Plan Year's ADP for these Participants.
Current Year Testing. If elected by the Employer in the Adoption Agreement,
the ADP tests in (i) and (ii), above, will be applied by comparing the
current Plan Years ADP for Participants who are Highly Compensated
Employees with the current Plan Year's ADP for Participants who are
Non-Highly Compensated Employees. Once made, this election can be undone
only if the Plan meets the requirements for changing to Prior Year Testing
set forth in Notice 98-1 (or superseding guidance).
For Plan Years beginning before the Employer adopts this document for its
GUST-restated plan, the ADP Test in any such Plan Year will be performed
using Prior Year Testing or Current Year Testing as the Employer elects in
the Optional Supplement.
(b) Special Rules.
(i) The Deferral Percentage 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 Accounts under two or more cash or deferred 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
24
Qualified Matching Contributions, or both) were made under a
single arrangement. If a Highly Compensated Employee participates
in two or more cash or deferred arrangements that have different
plan years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall
be treated as separate if mandatorily disaggregated under
regulations under section 401(k) of the Code.
(ii) In the event that this Plan satisfies the requirements of section
401(k), 401(a)(4) or 410(b) of the Code only if aggregated with
one or more other plans, or if one or more other plans satisfy
the requirements of such sections of the Code only if aggregated
with this Plan, then this Section shall be applied by determining
the Deferral Percentage of Employees as if all such plans were a
single plan. Any adjustments to the Non-Highly Compensated
Employee ADP for the prior year will be made in accordance with
Notice 98-1 and any superseding guidance, unless the Employer has
elected in the Adoption Agreement to use the Current Year Testing
method. Plans may be aggregated in order to satisfy section
401(k) of the Code only if they have the same plan year and use
the same ADP testing method.
(iii)Effective for Plan Years beginning before January 1, 1997, for
purposes of determining the Deferral Percentage of a Participant
who is a Five Percent Owner or one of the ten 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 Testing Compensation of such
Participant shall include the Elective Deferrals (and, if
applicable, Qualified Nonelective Contributions and Qualified
Matching Contributions) and Testing Compensation for the Plan
Year of Family Members. Family Members, with respect to such
Highly Compensated Employees, shall be disregarded as separate
Employees in determining the ADP both for Participants who are
Non-Highly Compensated Employees and for Participants who are
Highly Compensated Employees.
(iv) For purposes of applying the ADP Test, Elective Deferrals,
Qualified Nonelective Contributions and Qualified Matching
Contributions must be made before the last day of the
twelve-month period immediately following the Plan Year to which
such contributions relate.
(v) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP Test and the amount of Qualified
25
Nonelective Contributions or Qualified Matching Contributions, or
both, used in such test.
(vi) If the Employer elects to apply section 410(b)(4)(B) of the Code
in determining whether the Plan meets the minimum coverage
requirements of section 410(b)(1) of the Code, the Employer may,
in determining whether the Plan satisfies the ADP Test, exclude
from consideration all eligible Employees (other than Highly
Compensated Employees) who have not met the minimum age and
service requirements of section 410(a)(1)(A) of the Code.
(c) Safe Harbor CODA.
(i) If the Employer has elected in the Adoption Agreement to make
Safe Harbor Matching Contributions or Safe Harbor Nonelective
Contributions during a Plan Year, the provisions of this Section
3.6 shall not apply.
(ii) If the Employer suspends making Safe Harbor Matching
Contributions or Safe Harbor Nonelective Contributions during a
Plan Year. the provisions of this Section 3.6 shall apply using
Current Year Testing.
(iii)If the Employer wants to maintain the option to amend the Plan
during a Plan Year to provide for Safe Harbor Nonelective
Contributions during such Plan Year, the ADP and ACP Tests must be
applied using Current Year Testing during such Plan Year.
3.7 Average Contribution Percentage Test.
(a) Prior Year Testing. The Average Contribution Percentage (hereinafter
"ACP") for a Plan Year for Participants who are Highly Compensated
Employees for each Plan Year and the prior year's ACP for Participants
who were Non-Highly Compensated Employees for the prior Plan Year must
satisfy one of the following tests:
(i) The ACP for a Plan Year for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
prior year's ACP for Participants who were Non-Highly Compensated
Employees for the prior Plan Year multiplied by 1.25; or
(ii) The ACP for a Plan Year for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
prior year's ACP for Participants who were Non-Highly Compensated
Employees for the prior Plan Year multiplied by 2.0, provided
that the ACP for Participants who are Highly Compensated
Employees does not exceed the ACP for Participants who were
26
Non-Highly Compensated Employees in the prior Plan Year by more
than two percentage points.
For the first Plan Year the Plan permits any Participant to make
Employee After-Tax Contributions, provides for Matching
Contributions, or both, and this is not a successor plan, for
purposes of the foregoing tests, the prior year's ACP of
Non-Highly Compensated Employees shall be 3 percent unless the
Employer has elected in the Adoption Agreement to use the Plan
Year's ACP for these Participants.
Current Year Testing. If elected by the Employer in the Adoption
Agreement, the ACP tests in (i) and (ii), above, will be applied
by comparing the current Plan Year's ACP for Participants who are
Highly Compensated Employees for each Plan Year with the current
Plan Year's ACP for Participants who are Non-Highly Compensated
Employees. Once made, this election can be undone only if the
Plan meets the requirements for changing to Prior Year Testing
set forth in Notice 98-1 (or superseding guidance).
For Plan Years beginning before the Employer adopts this document
for its GUST-restated plan, the ACP Test in any such Plan Year
will be performed using Prior Year Testing or Current Year
Testing as the Employer elects in the Optional Supplement.
(b) Special Rules.
(i) For purposes of this Section, 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 Account under two or more plans described in section
401(a) of the Code or cash or deferred 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 were made under a single plan. If Contribution
Percentage Amounts are made on behalf of a Highly Compensated
Employee in two or more plans that have different plan years, all
such plans that have plan years ending with or within the same
calendar year shall be treated as a single plan. Notwithstanding
the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations under section 410(b)
of the Code.
(ii) In the event that this Plan satisfies the requirements of section
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 ACP of Employees as if all such plans were a single plan. Any
27
adjustments to the Non-Highly Compensated Employee ACP for the
prior year will be made in accordance with Notice 98-1 and any
superseding guidance, unless the Employer has elected in the
Adoption Agreement to use the Current Year Testing method. Plans
may be aggregated in order to satisfy section 401(m) of the Code
only if they have the same plan year and use the same ACP testing
method.
(iii)Effective for Plan Years beginning before January 1, 1997, for
purposes of determining the Contribution Percentage of a
Participant who is a Five Percent Owner or one of the ten most
highly-paid Highly Compensated Employees, the Contribution
Percentage Amounts and Testing Compensation of such Participant
shall include the Contribution Percentage Amounts and Testing
Compensation for the Plan Year of Family Members. Family Members,
with respect to Highly Compensated Employees, shall be
disregarded as separate Employees in determining the Contribution
Percentage both for Participants who are Non-Highly Compensated
Employees and for Participants who are Highly Compensated
Employees.
(iv) For purposes of applying the ACP Test, Employee After-Tax
Contributions are considered to have been made in the Plan Year
in which contributed to the Trust. Qualified Matching
Contributions and Qualified Nonelective Contributions will be
considered made for a Plan Year if made no later than the end of
the twelve-month period beginning on the day after the close of
the Plan Year.
(v) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, used in such test.
(vi) If the Employer elects to apply section 410(b)(4)(B) of the Code
in determining whether the Plan meets the minimum coverage
requirements of section 410(b)(1) of the Code, the Employer may,
in determining whether the Plan satisfies the ACP Test, exclude
from consideration all eligible Employees (other than Highly
Compensated Employees) who have not met the minimum age and
service requirements of section 410(a)(1)(A) of the Code.
(c) Safe Harbor CODA.
(i) If the Employer has elected in the Adoption Agreement to make
Safe Harbor Matching Contributions or ACP Test Only Safe Harbor
28
Matching Contributions during a Plan Year, the provisions of this
Section 3.7 shall apply as follows:
(A) If only Safe Harbor Matching Contributions (or ACP Test Only
Safe Harbor Matching Contributions) or Elective Deferrals,
or both, are allowed, the provisions of this Section 3.7
shall not apply.
(B) If Employee After-Tax Contributions are allowed or if the
Employer makes any type of matching contribution other than
Safe Harbor Matching Contributions or ACP Test Only Safe
Harbor Matching Contributions under the Plan during a Plan
Year, the provisions of this Section 3.7 shall apply during
such Plan Year using Current Year Testing except that the
Employer may elect to disregard Safe Harbor Matching
Contributions and ACP Test Only Safe Harbor Matching
Contributions in performing such Current Year Testing.
(ii) If the Employer suspends making Safe Harbor Matching
Contributions or ACP Test Only Safe Harbor Matching Contributions
during a Plan Year, the provisions of this Section 3.7 shall
apply using Current Year Testing.
(iii)If the Employer wants to maintain the option to amend the Plan
during a Plan Year to provide for Safe Harbor Nonelective
Contributions during such Plan Year, the ADP and ACP Tests must
be applied using Current Year Testing during such Plan Year.
3.8 Multiple Use Test. If one or more Highly Compensated Employees participate
in both a cash or deferred arrangement and a plan subject to the ACP Test
maintained by the Employer and the sum of the ADP and ACP of those Highly
Compensated Employees subject to either or both tests exceeds the Aggregate
Limit, then the ADP or ACP, or both, of those Highly Compensated Employees
who also participate in a cash or deferred arrangement will be reduced in
the manner determined by the Plan Administrator so that the limit is not
exceeded. The amount by which each Highly Compensated Employee's Deferral
Percentage or Contribution Percentage Amount, or both, is reduced shall be
treated as an Excess Aggregate Contribution. The ADP and ACP of the Highly
Compensated Employees are determined after any corrections required to meet
the ADP and ACP Tests. Impermissible multiple use does not occur if either
the ADP or ACP of the Highly Compensated Employees does not exceed 1.25
multiplied by the ADP and ACP of the Non-Highly Compensated Employees.
3.9 Prevention or Cure of ADP Test Failures. The Plan Administrator may, in its
sole discretion, use any one or a combination of the following methods to
29
prevent or cure any ADP Test failure in accordance with section 401(k) of
the Code and the regulations thereunder:
(a) The Plan Administrator may refuse to accept any or all prospective
Elective Deferrals to be contributed by a Highly Compensated Employee.
(b) The Plan Administrator may distribute any or all Excess Contributions
in accordance with the provisions of Section 3.11.
(c) The Employer may, in its sole discretion, elect to contribute a
Qualified Nonelective Contribution in accordance with the provisions
of Section 3.12.
(d) Subject to the requirements of Section 3.13, the Plan Administrator
may, in its sole discretion, elect to treat Qualified Matching
Contributions as if they were Elective Deferrals for purposes of the
ADP test.
(e) The Plan Administrator may recharacterize Excess Contributions as
Employee After-Tax Contributions in accordance with the provisions of
Section 3.14.
(f) The Employer may, in its sole discretion, elect to make a Safe Harbor
Nonelective Contribution in accordance with the provisions of Section
3.15.
3.10 Prevention or Cure of ACP Test Failures. The Plan Administrator may, in its
sole discretion, use any one or a combination of the following methods to
prevent or cure any ACP Test failure in accordance with section 401(m) of
the Code and the regulations thereunder:
(a) The Plan Administrator may refuse to accept any or all prospective
Elective Deferrals or Employee After-Tax Contributions, or both, to be
contributed by a Highly Compensated Employee.
(b) The Plan Administrator may elect to contribute a Qualified Matching
Contribution in accordance with the provisions of Section 3.13.
(c) The Plan Administrator may forfeit, if forfeitable, or distribute, if
not forfeitable, Excess Aggregate Contributions in accordance with
Section 3.17.
(d) The Plan Administrator may elect to treat Qualified Nonelective
Contributions or Elective Deferrals, or both, as if they were Matching
Contributions in accordance with Sections 3.12 and 3.16, respectively,
subject to the requirements of Section 3.1(e).
(e) If the Employer has elected the Safe Harbor CODA in the Adoption
Agreement for a Plan Year, and if Employee After-Tax Contributions can
30
be made to the Plan in such Plan Year, the Plan Administrator may, in
its sole discretion, use any one or a combination of the following
methods to prevent or cure any ACP Test failure:
(i) The Plan Administrator may refuse to accept any or all
prospective Employee After-Tax Contributions to be contributed by
a Highly Compensated Employee.
(ii) The Plan Administrator may distribute Employee After-Tax
Contributions (and any income or loss allocable thereto) that are
Excess Aggregate Contributions.
3.11 Distribution of Excess Contributions to Cure ADP Test Failure.
(a) General Rule. Notwithstanding any other provision of this Plan, Excess
Contributions for a Plan Year, plus any income and minus any loss
allocable thereto, shall be distributed to Participants to whose
Accounts such Excess Contributions were allocated for the preceding
Plan Year no later than twelve months following the last day of such
preceding Plan Year. Excess Contributions are allocated to the Highly
Compensated Employees with the largest amounts of Elective Deferrals
and amounts treated as Elective Deferrals taken into account in
calculating the ADP Test for the year in which the excess arose,
beginning with the Highly Compensated Employee with the largest amount
of such Elective Deferrals and amounts treated as Elective Deferrals
and continuing in descending order until all Excess Contributions have
been allocated. For purposes of the preceding sentence, the "largest
amount" is determined after distribution of any Excess Elective
Deferrals. 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 on such amounts will be imposed on the
Employer.
For Plan Years beginning before January 1, 1997, Excess Contributions
of a Participant who is subject to the Family Member aggregation rules
shall be allocated among the Family Members of such Participant in
proportion to the Elective Deferrals (and amounts treated as Elective
Deferrals) of each Family Member that is combined to determine the
combined ADP of such Participant.
(b) Calculation of Income or Loss. The income or loss allocable to Excess
Contributions allocated to each Participant is equal to the amount of
income or loss allocable to the Participant's Elective Deferral
subaccount (and, if applicable, the Qualified Nonelective Contribution
subaccount or the Qualified Matching Contribution subaccount, or both)
for the Plan Year multiplied by a fraction, the numerator of which is
such Participant's Excess Contributions for the Plan Year and the
denominator of which is the sum of (i) the Participant's account
balance attributable to Elective Deferrals (and Qualified Nonelective
31
Contributions or Qualified Matching Contributions, or both, if any of
such contributions are included in the ADP Test) as of the beginning
of the Plan Year, and (ii) Elective Deferrals (and Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, if any such contributions are included in the ADP Test).
(c) Method of Distribution. Excess Contributions shall be distributed from
the Participant's Elective Deferral subaccount, Qualified Nonelective
Contribution subaccount (if applicable) or Qualified Matching
Contribution subaccount (if applicable), or any such subaccounts, in
the manner determined by the Plan Administrator.
(d) Forfeiture of Certain Matching Contributions. Any Matching
Contribution (whether or not vested) that was made on account of an
Excess Contribution that has been distributed in accordance with this
Section 3.11 shall be forfeited no later than twelve months after the
close of the Plan Year in which such Excess Contribution occurred.
(e) Annual Additions. Excess Contributions shall be treated as Annual
Additions under the Plan.
3.12 Qualified Nonelective Contributions to Prevent or Cure ADP and/or ACP Test
Failure. The Employer may, in its sole discretion, elect to contribute a
Qualified Nonelective Contribution in any amount to prevent or cure any ADP
Test and/or ACP Test failure for a Plan Year within twelve months after the
close of the Plan Year to which such contribution relates. Qualified
Nonelective Contributions for a Plan Year shall be allocated only to the
Accounts of Participants who are Non-Highly Compensated Employees in one of
the following methods selected by the Plan Administrator:
(a) In the ratio in which each such Non-Highly Compensated Employee's
Compensation as defined in the Adoption Agreement for the Plan Year
for which the Qualified Nonelective Contribution is being made bears
to the total such Compensation of all such Non-Highly Compensated
Employees for such Plan Year.
(b) Beginning with the Non-Highly Compensated Employee with the lowest
such Compensation for such Plan Year and continuing in ascending order
an amount no greater than the Maximum Permissible Amount, as defined
in Section 6.1(j), reduced by any Annual Additions credited to such
Non-Highly Compensated Employee under this Plan or any other plan of
the Employer as if such amount of the Qualified Nonelective
Contribution allocated to such Non-Highly Compensated Employee were
included as an Annual Addition for such Plan Year.
32
3.13 Qualified Matching Contribution to Prevent or Cure ADP and/or ACP Test
Failure. The Employer may, in its sole discretion, elect to contribute a
Qualified Matching Contribution in any amount to prevent or cure any ADP
Test and/or ACP Test failure for a Plan Year within twelve months after the
close of the Plan Year to which such contribution relates. Qualified
Matching Contributions for a Plan Year shall be allocated to the Accounts
of Participants who are Non-Highly Compensated Employees and who would be
eligible for an allocation of Matching Contributions in accordance with
Section 3.3(a) in accordance with one of the following methods:
(a) If the Employer makes Matching Contributions only on behalf of
Participants who make Elective Deferrals, in the ratio in which the
Elective Deferrals for such Plan Year of each Participant who is a
Non-Highly Compensated Employee and who is eligible for a Matching
Contribution for such Plan Year bear to the total Elective Deferrals
of all such Non-Highly Compensated Employees for such Plan Year.
(b) If the Employer makes Matching Contributions only on behalf of
Participants who make Employee After-Tax Contributions, in the ratio
in which the Employee After-Tax Contributions for such Plan Year of
each Participant who is a Non-Highly Compensated Employee and who is
eligible for a Matching Contribution for such Plan Year bear to the
total Employee After-Tax Contributions of all such Non-Highly
Compensated Employees for such Plan Year.
(c) If the Employer makes Matching Contributions on behalf of Participants
who make Elective Deferrals or Employee After-Tax Contributions, or
both, in the ratio in which the total Elective Deferrals and Employee
After-Tax Contributions for such Plan Year of each Participant who is
a Non-Highly Compensated Employee and is eligible for a Matching
Contribution for such Plan Year bear to the total Elective Deferrals
and Employee After-Tax Contributions of all such Non-Highly
Compensated Employees for such Plan Year.
3.14 Recharacterization of Excess Contributions to Cure ADP Test Failure. If the
Employer elects in the Adoption Agreement to allow Participants to make
Employee After-Tax Contributions to the Plan, the Plan Administrator, in
its sole discretion, may treat Excess Contributions allocated to a Highly
Compensated Employee as an amount distributed to him or her and then
contributed by him or her to the Plan as an Employee After-Tax
Contribution. Recharacterized Excess Contributions will remain
nonforfeitable. Excess Contributions may not be recharacterized to the
extent such amounts in combination with other Employee After-Tax
Contributions made by that Employee would exceed any stated limit under the
Plan on Employee After-Tax Contributions.
Recharacterization must occur no later than 2 1/2 months after the last day
of the Plan Year in which such Excess Contributions arose and is deemed to
33
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 taxable year in which the Participant would have received
them in cash.
3.15 Safe Harbor Nonelective Contribution to Prevent ADP Test Failure. The
Employer may elect to make a Safe Harbor Nonelective Contribution during a
Plan Year as described in Notice 2000-3 and any superceding guidance.
3.16 Elective Deferrals to Cure ACP Test Failure. The Plan Administrator may, in
its sole discretion, elect to treat Elective Deferrals as if they were
Matching Contributions for a Plan Year as 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.
3.17 Forfeiture and/or Distribution of Excess Aggregate Contributions to Cure
ACP Test Failure. Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions for a Plan Year. Plus any income and minus any loss
allocable thereto, may be forfeited, if forfeitable, or if not forfeitable,
distributed, no later than twelve months after the close of the Plan Year
to which such contributions relate, to Participants to whose Accounts such
Excess Aggregate Contributions were allocated for such Plan Year. Excess
Aggregate Contributions are allocated to the Highly Compensated Employees
with the largest Contribution Percentage Amounts taken into account in
calculating the ACP Test for the Plan Year in which the excess arose,
beginning with the Highly Compensated Employee with the largest amount of
such Contribution Percentage Amounts and continuing in descending order
until all the Excess Aggregate Contributions have been allocated. For
purposes of the preceding sentence, the "largest amount" is determined
after distribution of any Excess Contributions. For Plan Years beginning
before January 1, 1997, Excess Aggregate Contributions of a Participant who
is subject to the Family Member aggregation rules shall be allocated among
the Family Members of such Participant in proportion to the Matching
Contributions (or amounts treated as Matching Contributions) of each Family
Member that is combined to determine the combined ACP of such Participant.
Excess Aggregate Contributions shall be forfeited, if forfeitable, or
distributed, if not forfeitable, in the manner determined by the Plan
Administrator from the Participant's Matching Contribution subaccount
and/or Qualified Matching Contribution subaccount (and/or, if applicable,
the Participant's Qualified Nonelective Contribution subaccount or Elective
Deferral subaccount, or both).
If 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.
34
The income or loss allocable to Excess Aggregate Contributions allocated to
a Participant is equal to the amount of income or loss allocable to the
Participant's Employee After-Tax Contributions subaccount, Matching
Contribution subaccount, Qualified Matching Contribution subaccount (if
any, and if all amounts therein are not used in the ADP Test) and, if
applicable, Qualified Nonelective Contribution subaccount and Elective
Deferral subaccount for the Plan Year multiplied by a fraction, the
numerator of which is such Participant's Excess Aggregate Contributions for
the year and the denominator of which is the sum of (i) the Participant's
account balance(s) attributable to Contribution Percentage Amounts as of
the beginning of the Plan Year, and (ii) Contribution Percentage Amounts
made during the Plan Year.
Forfeitures of Excess Aggregate Contributions shall be reallocated to
Participants' Accounts as described in Section 5.5.
Any Matching Contribution (whether or not vested) that was made on account
of an Excess Aggregate Contribution that has been distributed in accordance
with this Section 3.17 shall be forfeited no later than twelve months after
the close of the Plan Year in which such Excess Aggregate Contribution
occurred.
ARTICLE IV - SAFE HARBOR CODA
4.1 Rules of Application.
(a) Except as specifically provided in this Article, if the Employer
has elected the safe harbor CODA option in the Adoption
Agreement, the provisions of this Article IV shall apply and any
provisions relating to the ADP Test described in Section 3.6 or
the ACP Test described in Section 3.7 do not apply.
Notwithstanding the foregoing,
(i) If the Employer has elected in the Adoption Agreement to
permit Employee After-Tax Contributions during a Plan Year
in which the Employer has elected the safe harbor CODA, such
Employee After-Tax Contributions shall be subject to the ACP
Test described in Section 3.7.
(ii) If the Employer has elected in the Adoption Agreement to
make Safe Harbor Nonelective Contributions and Matching
Contributions, such Matching Contributions shall be subject
to the ACP Test described in Section 3.7.
(b) To the extent that any other provision of the Plan is
inconsistent with the provisions of this Article, the provisions
of this Article shall govern.
4.2 Safe Harbor Contributions. If the Employer elects in the Adoption
Agreement to make Safe Harbor Contributions, for each Plan Year the
Employer shall contribute to the Trust an amount as shall be
determined by the Employer in accordance with the Safe Harbor
Contribution formula(s) specified in the Adoption Agreement. If the
35
payroll period method is used to determine Safe Harbor Matching
Contributions and/or ACP Test Only Safe Harbor Matching Contributions,
such contributions made with respect to any Plan Year quarter
beginning after May 1, 2000, must be contributed to the Plan by the
last day of the following Plan Year quarter.
4.3 Notice Requirement.
(a) At least 30 days, but not more than 90 days, before the beginning
of a Plan Year, the Employer will provide each Participant a
notice of the safe harbor matching and/or nonelective
contribution formula used under the Plan, how such contributions
are fully vested when made, how and when to make salary deferral
elections and how to obtain additional information about the
Plan, written in a manner calculated to be understood by the
average Participant. If an Employee becomes a Participant after
the 90th day before the beginning of the Plan Year and does not
receive the notice for that reason, the notice must be provided
no more than 90 days before the Employee becomes a Participant
but no later than the day the Employee becomes a Participant.
(b) In addition to any other election periods provided under the
Plan, each Participant may make or modify a salary deferral
election during the 30-day period immediately following receipt
of the notice described in subsection (a) above.
4.4 Special Rule. Notwithstanding the foregoing provisions of the Article,
the provisions of Notice 98-52 and Notice 2000-3 (and any superceding
guidance) shall govern the operation of a Plan that makes a safe
harbor CODA election in the Adoption Agreement.
ARTICLE V - ALLOCATION OF FUNDS
5.1 Allocation of Discretionary Profit Sharing Contributions.
(a) Definitions. For the purposes of this Section 5.1, the following
definitions shall apply.
(i) Integration Level. The Social Security Taxable Wage Base or
such lesser percentage of the Social Security Taxable Wage
Base elected by the Employer in the Adoption Agreement.
(ii) Maximum Profit Sharing Disparity Rate. The lesser of:
(A) 2.7% (5.7% if the Plan is not Top-Heavy);
(B) The applicable percentage determined in accordance with
the table below:
36
If the Integration Level is
More Than But Not More Than The Applicable Percentage Is:
Top-Heavy Not Top-Heavy
$0 20% of SSTWB 2.7% 5.7%
20% of SSTWB 80% OF SSTWB 1.3% 4.3%
80% OF SSTWB 100% OF SSTWB 2.4% 5.4%
If the Integration Level is equal to SSTWB, the applicable percentage
is 2.7% (5.7% if the Plan is not Top-Heavy).
(iii)SSTWB or Social Security Taxable Wage Base. The contribution and
benefit base in effect under section 230 of the Social Security
Act on the first day of the Plan Year.
(b) Formula. If the Employer elects in the Adoption Agreement to make
Discretionary Profit Sharing Contributions, all Discretionary Profit
Sharing Contributions it elects to make for any Plan Year shall be
allocated to the Account of each Participant eligible for such an
allocation, as designated by the Employer in the Adoption Agreement,
in the ratio that such Participant's Compensation bears to the
Compensation of all such Participants. However, if the Discretionary
Profit Sharing Contribution formula selected in the Adoption Agreement
provides for allocations under the permitted disparity rules,
Discretionary Profit Sharing Contributions for the Plan Year shall be
allocated to the Accounts of Participants eligible for such an
allocation as follows:
If the Plan is Top-Heavy (as defined in Article XII) for the Plan
Year, begin at Step One; if the Plan is not Top-Heavy for the Plan
Year, begin at Step Three.
Step One. Contributions (and forfeitures, if applicable) will be
allocated to each eligible Participant's Discretionary Profit Sharing
Contributions subaccount in the ratio that each eligible Participant's
Compensation bears to all such Participants' Compensation, but not in
excess of 3% of each Participant's Compensation.
Step Two. Any contributions (and forfeitures, if applicable) remaining
after the allocation in Step One will be allocated to each eligible
Participant's Discretionary Profit Sharing Contributions subaccount in
the ratio that each eligible Participant's Compensation for the Plan
Year in excess of the Integration Level (hereinafter "Excess
Compensation") bears to the Excess Compensation of all such
Participants, but not in excess of 3% of Compensation.
37
Step Three. Any contributions (and forfeitures, if applicable)
remaining after the allocation in Step Two if the Plan is Top-Heavy
will be allocated to each eligible Participant's Discretionary Profit
Sharing Contributions subaccount in the ratio that the sum of each
eligible Participant's Compensation and Excess Compensation bears to
the sum of all such Participants' Compensation and Excess
Compensation, but not in excess of the Maximum Profit Sharing
Disparity Rate.
Step Four. Any remaining contributions (and forfeitures, if
applicable) will be allocated to each eligible Participant's
Discretionary Profit Sharing Contributions subaccount in the ratio
that each such Participant's Compensation for the Plan Year bears to
the total of all such Participants' Compensation for that year.
If the Employer maintains any other plan that provides for permitted
disparity, and if any Participant in this Plan is eligible to
participate in such other plan, this Plan may not provide for
permitted disparity.
Effective for Plan Years beginning on or after January 1, 1995, the
cumulative permitted disparity limit for a Participant is 35 total
cumulative permitted disparity years. Total cumulative permitted
disparity years means the number of years credited to the Participant
for allocation or accrual purposes under this Plan or any other
qualified plan or simplified employee pension plan (whether or not
terminated) ever maintained by the Employer. For purposes of
determining the Participant's cumulative permitted disparity limit,
all years ending in the same calendar year are treated as the same
year. If the Participant has not benefited under a defined benefit or
target benefit plan for any year beginning on or after January 1,
1994, the Participant has no cumulative disparity limit.
5.2 Allocation of Net Earnings or Losses of the Trust. Earnings,
dividends, capital gain distributions, appreciation, depreciation,
losses and accrued but unpaid interest and any other earnings or
losses from assets in a specific Participant's Account or subaccount
or in a segregated account under the Plan shall be allocated to such
Account, subaccount, or segregated account.
5.3 Valuations. In determining the earnings or losses of the Trust, as of
each Valuation Date the Trust shall be valued in accordance with the
provisions of the Trust Agreement.
5.4 Accounting for Distributions. All distributions made to a Participant
or his Beneficiary and any transfers to another qualified plan shall
be charged to the appropriate subaccount of the Participant's Account
as of the date of the distribution or transfer.
5.5 Allocation of Forfeitures. Any forfeitures arising under the Plan,
including forfeitures of Excess Aggregate Contributions, shall be
allocated in the following order of priority as of the Plan Year in
which forfeitures occur:
38
(a) First, forfeitures shall be used to the extent necessary to
restore a returning Participant's Account as provided in Section
7.5 and to restore a formerly unlocatable Participant's or
Beneficiary's Account as provided in Section 7.6;
(b) Next, if the Employer so elects in the Adoption Agreement,
forfeitures shall be treated as an Employer contribution, shall
be used to reduce Matching Contributions and/or Safe Harbor
Contributions required under the Plan and shall be allocated to
the appropriate Matching Contribution subaccounts, Safe Harbor
Matching Contribution subaccounts, Safe Harbor Nonelective
Contribution subaccounts and/or ACP Test Only Safe Harbor
Matching Contribution subaccounts of the Participants on whose
behalf such contributions are to be made;
(c) Next, forfeitures shall be treated as Employer contributions and
shall be allocated to Participants' Accounts to the extent
necessary to satisfy the minimum allocation provisions of Section
12.3.
(d) Next, to the extent elected by the Plan Administrator,
forfeitures shall be treated as a Qualified Nonelective
Contribution or a Qualified Matching Contribution and shall be
allocated as provided in Sections 3.12 and 3.13, respectively;
(e) Next, to the extent elected by the Plan Administrator,
forfeitures shall be used to pay reasonable costs of
administering the Plan;
(f) Any remaining forfeitures shall be treated as Employer
contributions and shall be allocated as follows:
(i) If the Employer has elected in the Adoption Agreement that
it may make Discretionary Profit Sharing Contributions to
the Plan, such forfeitures shall be treated as Discretionary
Profit Sharing Contributions and allocated in accordance
with the provisions of Section 5.1(b):
(ii) If the Employer has not elected in the Adoption Agreement
that it may make Discretionary Profit Sharing Contributions
to the Plan, such forfeitures shall be allocated as follows:
(A) In any Plan Year in which the Plan is not a safe harbor
cash or deferred arrangement, such forfeiture shall be
treated as Matching Contributions and allocated to each
Participant's Matching Contribution subaccount in the
ratio that each Participant's Matching Contributions
for the Plan Year bear to the total of all
Participants' Matching Contributions for the Plan Year.
39
(B) In any Plan Year in which the Plan is a safe harbor
cash or deferred arrangement, such forfeitures shall be
treated as Discretionary Profit Sharing Contributions
and allocated to the Account of each Participant in the
ratio that each Participant's Compensation for the Plan
Year bears to the Compensation of all such Participants
for the Plan Year.
5.6 Investment of Funds.
(a) Investment Control. Subject to the provisions of subsection (c)
below, the management and control of the Trust shall be vested in
the Plan Administrator, and the Trustee shall be subject to the
directions of the Plan Administrator made in accordance with the
terms of the Plan and ERISA.
(b) Investment Limitations. The Trustee shall invest all funds
received from the Employer in the Investment Options in the
manner from time to time directed in writing by the Employer.
(c) Participant Directed Investments. Each Participant, subject to
such reasonable restrictions as the Employer, the Plan
Administrator or the Sponsor may impose for administrative
convenience, may direct the Plan Administrator on what percentage
of his or her Account will be invested in each Investment Option.
No person, including the Trustee and the Employer, shall be
responsible for any loss or for any breach of fiduciary duty
which results from a Participant's or Beneficiary's exercise of
investment control.
(d) Failure of a Participant to Make an Investment Election. If a
Participant does not make a designation of an Investment Option,
the Employer shall direct the Trustee to invest all amounts held
or received on account of such Participant in the Investment
Option(s) designated by the Employer.
(e) Employer Securities. If provided in the Adoption Agreement, the
Employer and/or Participants may direct that contributions will
be invested in qualifying employer securities (within the meaning
of section 407(d)(5) of ERISA), subject to such restrictions as
the Employer, the Administrator or the Sponsor may impose for
administrative convenience or legal compliance.
ARTICLE VI - LIMITATION ON ALLOCATIONS
6.1 Definitions. For purposes of this Article VI, the following
definitions shall apply:
(a) Annual Additions Compensation shall mean one of the following as
elected by the Employer in the Adoption Agreement, paid during the
period elected by the Employer in the Adoption Agreement:
40
(i) W-2 earnings as defined in Section 1.13(a)(i).
(ii) Section 415 Compensation as defined in Section 1.13(a)(ii).
(iii) Section 3401(a) wages as defined in Section 1.13(a)(iii).
For the purposes of determining Annual Additions Compensation, W-2
earnings, section 415 Compensation and section 3401(a) wages shall be
determined in accordance with the provisions of subsections (c)
through (f) of Section 1.13 as if the term "Annual Additions
Compensation" were substituted for the term "Compensation" in each
place the term "Compensation" appears in such subsections.
(b) Defined Benefit Fraction shall mean a fraction, the numerator of
which is the sum of the Participant's Projected Annual Benefits
under all 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 in effect 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.
(c) Defined Contribution Dollar Limitation shall mean $30,000, as
adjusted under section 415(d) of the Code.
(d) Defined Contribution Fraction shall mean a fraction, the
numerator of which is the sum of the Annual Additions to the
Participant's account under all 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, individual
medical accounts and simplified employee pensions maintained by
the Employer), and the denominator of which is the sum of the
maximum aggregate amount 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
41
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 Annual Additions 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 (i) the excess of the sum of the fractions over 1.0
times (ii) the denominator of this fraction, will be permanently
subtracted from the numerator of this fraction. The adjustment is
calculated using the 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.
Annual Additions for any Limitation Year beginning before January
1, 1987, shall not be recomputed to treat all Employee After-Tax
Contributions as an Annual Addition.
(e) 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) of the
Code), all commonly controlled trades or businesses (as defined
in section 414(c) of the Code as modified by section 415(h) of
the Code) or affiliated service groups (as defined in section
414(m) of the Code) 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.
(f) Excess Amount shall mean the excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible
Amount.
(g) Highest Average Compensation shall mean the average Annual
Additions Compensation of a Participant for the three consecutive
years of service (as measured by the Limitation Year) with the
Employer that produces the highest average.
(h) Limitation Year shall mean the Plan Year. 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.
42
(i) Master or Prototype Plan shall mean a plan the form of which is
the subject of a favorable opinion letter from the Internal
Revenue Service.
(j) Maximum Permissible Amount. The maximum Annual Additions that may
be contributed or allocated to a Participant's Account under this
Plan for any Limitation Year shall not exceed the lesser of:
(i) The Defined Contribution Dollar Limitation; or
(ii) Twenty-five percent of the Participant's Annual Additions
Compensation for the Limitation Year.
The Annual Additions Compensation limitation referred to in (ii)
above shall not apply to any contribution for medical benefits
(within the meaning of section 401(h) or 419A(f)(2) of the Code)
which is otherwise treated as an Annual Addition under section
415(l)(1) or 419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12 consecutive month
period, the Maximum Permissible Amount shall not exceed the
Defined Contribution Dollar Limitation, multiplied by the
following fraction:
Number of months in the short Limitation Year
-----------------------------------------------------------------
12
(k) Projected Annual Benefit shall mean 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 a
Participant would be entitled under the terms of the plan
assuming:
(i) the Participant will continue employment until the normal
retirement age under the plan (or current age if later); and
(ii) the Participant's compensation for the current Limitation
Year and all other relevant factors used to determine
benefits under the plan remain constant for all future
Limitation Years.
6.2 Participants Not Covered Under Other Plans.
(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(l)(2) of the Code) maintained
43
by the Employer, or a simplified employee pension (as defined in
Section 408(k) of the Code) maintained by the Employer, which
provides an Annual Addition, the amount of Annual Additions which
may be credited to the Account of the Participant for any
Limitation Year shall not exceed the lesser of the Maximum
Permissible Amount or any other limitation contained in this
Plan. If contributions for and/or allocations to the Account of
the Participant would cause the Annual Additions for the
Limitation Year to exceed the Maximum Permissible Amount, the
amount contributed or allocated will be reduced to the extent
that the Annual Additions for the Limitation Year will equal the
Maximum Permissible Amount.
(b) Prior to determining a Participant's Annual Additions
Compensation for the Limitation Year, the Employer may determine
the Maximum Permissible Amount for the Participant on the basis
of a reasonable estimation of the Participant's Annual Additions
Compensation for the Limitation Year, uniformly determined for
all Participants similarly situated.****
(c) 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 Annual Additions Compensation for the Limitation
Year.
(d) If, for any Limitation Year, the maximum Annual Additions is
exceeded by reason of allocation of forfeitures, a reasonable
error in estimating a Participant's Annual Additions
Compensation, a reasonable error in determining the amount of
Elective Deferrals or under other limited facts and circumstances
approved by the Internal Revenue Service, then, any such excess
shall be disposed of in the following order:
(i) Any Employee After-Tax Contributions, and any income
attributable thereto, to the extent they would reduce the
Excess Amount, shall be returned to the Participant;
(ii) Any Elective Deferrals, and any income attributable thereto,
to the extent they would reduce the Excess Amount, shall be
returned to the Participant;
(iii)If, after the application of paragraph (ii), an Excess
Amount still exists and the Participant is covered by the
Plan at the end of the Limitation Year, the Excess Amount in
the Participant's Account shall be used to reduce Employer
contributions (including any allocation of forfeitures) for
such Participant in the next Limitation Year, and each
succeeding Limitation Year, if necessary;
(iv) If, after the application of paragraph (ii), an Excess
Amount still exists and the Participant is not covered by
the Plan at the end of the Limitation Year, the Excess
Amount shall be held unallocated in a suspense account. The
44
suspense account shall be used to reduce future Employer
contributions for all remaining Participants in the next
Limitation Year, and each succeeding Limitation Year if
necessary;
(v) If a suspense account is in existence at any time during the
Limitation Year pursuant to this Section, amounts held in
the suspense account may not be distributed to the
Participants or Beneficiaries. Any balance which may be in
the suspense account upon termination of the Plan shall
revert to the Employer. If a suspense account is in
existence at any time during a particular Limitation Year,
all amounts in the suspense account must be allocated and
reallocated to Participants' Accounts before any Employer or
any Employee contributions may be made to the Plan for that
Limitation Year. Excess Amounts may not be distributed to
Participants or former Participants.
6.3 Participants Covered Under Other Defined Contribution Plans.
(a) This Section applies 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 (as defined in section 419(e) of the Code)
maintained by the Employer, an individual medical account (as
defined in section 415(l)(2) of the Code) maintained by the
Employer or a simplified employee pension (as defined in section
408(k) of the Code) maintained by the Employer, that provides an
Annual Addition during any Limitation Year. The Annual Additions
which may be credited to the Account of a Participant under this
Plan for any such Limitation Year shall not exceed the Maximum
Permissible Amount reduced by the Annual Additions credited to
the account of the Participant under the other plans and welfare
benefit funds for the same Limitation Year. If the Annual
Additions with respect to the Participant under other defined
contribution plans and welfare funds maintained by the Employer
are less than the Maximum Permissible Amount and the Employer
contributions that would otherwise be contributed or allocated to
the Account of the Participant under this Plan 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 under all plans and funds
for the Limitation Year shall equal the Maximum Permissible
Amount. If Annual Additions with respect to the Participant under
such other defined contribution plans and welfare benefit funds
in the aggregate are equal to or greater than the Maximum
Permissible Amount, no amount will be contributed or allocated to
the Account of the Participant under this Plan for the Limitation
Year.
45
(b) Prior to determining the Participant's Annual Additions
Compensation for the Limitation Year, the Employer may determine
the Maximum Permissible Amount for a Participant in the manner
described in Section 6.2(b).
(c) As soon as administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year shall be determined on the basis of the
Participant's Annual Additions Compensation for the Limitation
Year.
(d) If, pursuant to Section 6.3(a) 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 shall be deemed to consist of
the Annual Additions last allocated, except that Annual Additions
attributable to a simplified employer 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.
(e) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation
date of another plan, the Excess Amount attributed to this Plan
will be the product of:
(i) the total Excess Amount allocated as of such date,
(ii) the ratio of (1) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under
this Plan to (2) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date under
this and all the other qualified master or prototype defined
contribution plans.
(f) Any Excess Amount attributed to this Plan shall be disposed of in
the manner described in Section 6.2(d).
(g) 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 Account under this Plan for any Limitation
Year will be limited in accordance with subsections (a) through
(f) above as though the other plan were a master or prototype
plan unless the Employer provides other limitations in the
Adoption Agreement.
6.4 Participants Covered Under Both Defined Benefit and Defined
Contribution Plans. 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 Fraction
and Defined Contribution Fraction shall not exceed 1.0 in any
Limitation Year. The Annual Additions which may be credited to the
Account of a Participant under this Plan for any Limitation Year will
be limited in accordance with the Adoption Agreement. Unless otherwise
46
elected by the Employer in the Optional Supplement, this Section 6.4
shall not apply for Limitation Years beginning on or after January 1,
2000.
ARTICLE VII - VESTING
7.1 Employee After-Tax Contribution, Elective Deferral, Rollover
Contribution, Participant-Directed Transfer, Qualified Nonelective
Contribution, Qualified Matching Contribution, Safe Harbor Matching
Contribution and Safe Harbor Nonelective Contribution Subaccounts.
A Participant's Employee After-Tax Contribution subaccount,
Elective Deferral subaccount, Rollover Contribution
subaccount, Participant-Directed Transfer subaccount,
Qualified Nonelective Contribution subaccount, Qualified
Matching Contribution subaccount, Safe Harbor Matching
Contribution subaccount and Safe Harbor Nonelective
Contribution subaccount shall be fully vested and
nonforfeitable at all times.
7.2 Matching Contribution, Discretionary Profit Sharing Contribution and
ACP Test Only Safe Harbor Matching Contribution Subaccounts.
(a) General. Notwithstanding the vesting schedule selected by the
Employer in the Adoption Agreement, the Participant's Matching
Contribution subaccount, Discretionary Profit Sharing
Contribution subaccount and ACP Test Only Safe Harbor Matching
Contribution subaccount shall be fully vested and nonforfeitable
upon the Participant's death, Total and Permanent Disability or
attainment of Normal or Early Retirement Age while employed by
the Employer. In the absence of any of the preceding events, and
subject to the provisions of Sections 3.5(d), 3.11(d), 3.17, 12.4
and 14.2(b), the Participant's Matching Contribution subaccount,
Discretionary Profit Sharing Contribution subaccount and ACP Test
Only Safe Harbor Matching Contribution subaccount shall be vested
in accordance with the vesting schedule(s) specified in the
Adoption Agreement. The schedule(s) must be at least as favorable
to Participants as either schedule in (i) or (ii) below. If no
vesting schedule is selected in the Adoption Agreement, a
Participant shall be considered 100% vested in all portions of
his Account.
(i) Graduated vesting according to one of the following
schedules:
Years of Vesting Service Percent Vested
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
47
Years of Vesting Service Percent Vested
OR
Years of Vesting Service Percent Vested
5 or more 100%
(ii) 100% full and immediate.
For purposes of this Article, if the Employer elects in the
Adoption Agreement to calculate service using the Elapsed
Time method, "Year(s) of Service" as defined in Section 1.19
shall be substituted for "Year(s) of Vesting Service."
(b) In-Service Distributions When Not Fully Vested. If a distribution
is made from a Participant's Matching Contribution subaccount,
Discretionary Profit Sharing Contribution subaccount or ACP Test
Only Safe Harbor Matching Contribution subaccount at a time when
the Participant is not 100% vested in such subaccount and the
Participant's employment with the Employer has not terminated,
then
(i) A separate remainder subaccount will be established for the
Participant's interest in such Matching Contribution,
Discretionary Profit Sharing Contribution or ACP Test Only
Safe Harbor Matching Contribution subaccount at the time of
the distribution, and
(ii) At any subsequent time, the Participant's vested portion of
such separate subaccount will be equal to an amount "X"
determined under the formula:
X = P(AB + (RxD)) - (RxD)
Where
P = the Participant's vested percentage determined under
subsection (a) at the relevant time.
AB = the amount in such separate subaccount at the relevant
time.
R = the ratio of AB to the amount in the subaccount after
the distribution.
D = the amount of the distribution.
7.3 Determination of Years of Vesting Service. For purposes of determining
the vested and nonforfeitable percentage of the Participant's Matching
48
Contribution, Discretionary Profit Sharing Contribution and ACP Test
Only Safe Harbor Matching Contribution subaccounts, except as provided
in the following sentence, all of the Participant's Years of Vesting
Service with the Employer or an Affiliated Employer shall be taken
into account. In the case of a Participant who has five consecutive
1-year Breaks in Service, all Years of Vesting Service after such
Breaks in Service shall be disregarded for purposes of determining the
Participant's vested benefit derived from Employer contributions which
accrued before such breaks, but both pre-break and post-break service
shall count for purposes of determining the Participant's vested
benefit derived from Employer contributions accruing after such
breaks. If the Employer maintains the plan of a predecessor employer,
Years of Vesting Service with such employer will be treated as service
with the Employer.
7.4 Amendments to Vesting Schedule.
(a) Participants' Election Rights. If the Plan's vesting schedule is
amended, or the Plan is amended in any way that directly or
indirectly affects the computation of a Participant's
nonforfeitable percentage, each Participant with at least three
years of service, whether or not consecutive, with the Employer
may elect, within a reasonable period after the adoption of the
amendment or change, to have the nonforfeitable percentage
computed under the Plan without regard to such amendment or
change. For any Participants who do not have at least one Hour of
Service in any Plan Year beginning after December 31, 1988, the
preceding sentence shall be applied by substituting "five years
of service" for "three years of service" where such language
appears.
(b) Election Period. The period during which the election may be made
shall commence with the date the amendment is adopted or deemed
to be made and shall end on the latest of:
(i) 60 days after the amendment is adopted;
(ii) 60 days after the amendment becomes effective; or
(iii)60 days after the Participant is issued written notice of
the amendment by the Employer or Plan Administrator.
7.5 Forfeiture of Nonvested Amounts. For Plan Years beginning before 1985,
any portion of a Participant's Account that is not vested shall be
forfeited by him as of the last day of the Plan Year in which he
incurs a Break in Service. For Plan Years beginning after 1984, any
portion of a Participant's Account that is not vested shall be
forfeited in accordance with the following rules:
(a) Distribution in Full. If a Participant's service with the
Employer terminates and if the entire vested portion of the
Participant's Account is distributed to him at any time before
the end of the fifth Plan Year following the Plan Year in which
his employment terminated, the remaining portion of the
49
Participant's Account shall be forfeited as of the end of the
Plan Year in which such distribution occurs, as long as the
Participant has not resumed employment with the Employer by such
date. However, if the Participant has no vested interest in his
Account at the time of his termination of employment, the Plan
Administrator nonetheless shall treat the Participant as if he
had received a distribution on the date his employment terminated
and shall forfeit the Participant's entire Account as soon as
administratively feasible after the date his employment
terminated. If the Participant returns as an Employee before the
end of five consecutive Breaks in Service measured from the day
immediately after the date of his distribution (or measured from
the date his employment terminated in the case of a Participant
who had no vested interest in his Account) then his unvested
Account balance (determined as of the date of the distribution of
his vested interest, unadjusted by subsequent gains and losses,
or in the case of a Participant who had no vested interest in his
Account, determined as of the date his employment terminated)
shall be restored as of the end of the Plan Year in which he is
reemployed. In such case, the Participant's Account shall be
restored first out of the forfeitures for such Plan Year and, if
such forfeitures are insufficient to restore such Account, the
Employer shall make a special contribution to the Plan to the
extent necessary so that the Participant's Account is fully
restored.
(b) Partial or No Distributions. If a Participant's service with the
Employer terminates and if part of his entire vested interest in
his Account is distributed to him before he incurs five
consecutive Breaks in Service, a separate remainder subaccount
shall be established for that portion of the Participant's
Account that is not vested. Such separate subaccount shall be
forfeited at the earliest of (i) his date of death following
termination of employment, or (ii) the end of the Plan Year in
which the Participant incurs five consecutive Breaks in Service.
If a Participant's service with the Employer terminates and if no
part of his vested interest in his Account is distributed to him
before he incurs five consecutive Breaks in Service, that portion
of the Participant's Account that is not vested shall be
forfeited at the earlier of (i) his date of death following
termination of employment, or (ii) at the end of Plan Year in
which the Participant incurs five consecutive Breaks in Service.
If all or any portion of such a Participant's vested benefits are
distributed before a forfeiture is permitted and if the
Participant returns to work as an Employee after the distribution
and before he incurs five consecutive Breaks in Service, his
vested interest in such separate subaccount at any time shall be
determined by applying the formula in Section 7.2(b)(ii).
(c) No restoration made pursuant to subsection (a) or (b) shall be
deemed to be Annual Additions for purposes of Article VI.
7.6 Reinstatement of Benefit. If a vested benefit is forfeited because the
Participant or Beneficiary cannot be found, such benefit (determined
50
as of the date of forfeiture) will be reinstated if a claim is made by
the Participant or Beneficiary, or if the Participant or Beneficiary
is subsequently located by the Plan Administrator.
ARTICLE VIII - LOANS
8.1 General Provisions.
(a) Eligibility for Loans. If the Employer so elects in the Adoption
Agreement, loans shall be made available to any Participant or
Beneficiary who is a party-in-interest (as defined in section
3(14) of ERISA) on a reasonably equivalent basis. Loans will not
be made to any shareholder-employee, Owner-Employee or
Participant or Beneficiary who is not a party-in-interest (as
defined in section 3(14) of ERISA). 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.
(b) Spousal Consent Rules.
(i) For Plan Years beginning before January 1, 2002 (or such
earlier date elected by the Employer in the Optional
Supplement), a Participant must obtain the consent of his or
her spouse, if any, to use the Account as security for a
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 is
used for renegotiation, extension, renewal or other revision
of the loan.
(ii) Effective as of the first day of the Plan Year beginning on
or after January 1, 2002 (or such earlier date elected by
the Employer in the Optional Supplement), only if any
portion of a Participants Account used as security for a
loan is subject to the joint and survivor annuity
requirements of Article XI must the Participant obtain the
consent of his or her spouse, if any, to use such portion of
his or her 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
51
or any subsequent spouse with respect to that loan. A new
consent shall be required if the vested Account is used for
renegotiation, extension, renewal or other revision of the
loan.
If a valid spousal consent has been obtained in accordance
with subsection (b)(i) or (b)(ii), then, notwithstanding any
other provision of this Plan, the portion of the
Participant's vested Account used as a security interest
held by the Plan by reason of a loan outstanding to the
Participant shall be reduced by the amount of the
outstanding loan for purposes of determining the amount of
the Account 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 Account
(determined without regard to the preceding sentence) is
payable to the Participant's surviving spouse, then the
vested Account shall be adjusted by first reducing the
vested Account by the amount of the security used as
repayment of the loan, and then determining the benefit
payable to the surviving spouse.
8.2 Amount of Loan. Loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount made
available to other Employees. Loans to any Participant or Beneficiary
will not be made to the extent that such loan, when added to the
outstanding balance of all other loans to the Participant or
Beneficiary, 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) one-half of the vested Account of the Participant.
For the purpose of the above limitation, all loans from all plans of
the Employer and Affiliated Employers are aggregated.
8.3 Manner of Making Loans. The Plan's loan program will be administered
by the Plan Administrator. A request by a Participant for a loan shall
be made to the Plan Administrator and shall specify the amount of the
loan. The terms and conditions on which the Plan Administrator shall
approve loans under the Plan shall be applied on a uniform and
nondiscriminatory basis with respect to all Participants. If a
Participant's request for a loan is approved by the Plan
Administrator, the Plan Administrator shall furnish the Trustee with
written instructions directing the Trustee to make the loan in a
single sum payment of cash to the Participant. In making any loan
payment under this Article, the Trustee shall be fully entitled to
rely on the instructions furnished by the Plan Administrator and shall
be under no duty to make any inquiry or investigation with respect
thereto.
8.4 Terms of Loan. Loans shall be made on such terms and subject to such
limitations as the Plan Administrator may prescribe. Furthermore, any
52
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 five 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. The
rate of interest to be charged shall be determined by the Plan
Administrator.
8.5 Security for Loan. Any loan to a Participant under the Plan shall be
secured by the pledge of the Participant's vested interest in his
Account. Such pledge shall be evidenced by a promissory note by the
Participant which shall provide that, in the event of any default by
the Participant on a loan repayment. the Plan Administrator shall be
authorized (to the extent permitted by law) to take any and all other
actions necessary and appropriate to enforce collection of the unpaid
loan. An assignment or pledge of any portion of the Participant's
interest in the Plan will be treated as a loan under this Article.
8.6 Segregated Investment. Loans shall be considered a
Participant-directed investment.
8.7 Repayment of Loan. The Plan Administrator shall have the sole
responsibility for ensuring that a Participant timely makes all loan
payments and for notifying the Trustee in the event of any default by
the Participant on the loan. Each loan payment shall be paid to the
Trustee and shall be accompanied by instructions from the Plan
Administrator that identify the Participant on whose behalf the loan
payment is being made. Loan payments will be suspended under the Plan
as permitted under the terms and conditions of the loan program and
loan document.
8.8 Default on Loan. In the event of a default by a Participant on a loan
payment, all remaining payments on the loan shall be immediately due
and payable. The Plan Administrator shall take any and all actions
necessary and appropriate to enforce collection of the unpaid loan.
However, attachment of the Participant's Account pledged as security
will not occur until a distributable event occurs under the Plan.
ARTICLE IX - IN-SERVICE WITHDRAWALS
9.1 Withdrawal of Employee After-Tax Contributions, Rollover Contributions
and Participant Directed Transfer Contributions. Subject to any other
applicable requirements of this Plan, any Participant who has made
Employee After-Tax Contributions, Rollover Contributions or a
Participant-Directed Transfer may have paid to him as an in-service
withdrawal all or any portion of the value of his Employee After-Tax
Contribution subaccount, his Rollover Contributions subaccount or his
Participant-Directed Transfer subaccount in a single sum payment. No
forfeitures will occur solely as a result of withdrawals from such
subaccounts.
53
9.2 Withdrawal After Attainment of Early or Normal Retirement Age. If
elected by the Employer in the Section of the Adoption Agreement
containing election options for in-service withdrawals upon attaining
Early or Normal Retirement Age, a Participant shall be permitted to
withdraw all or a portion of his vested Account on or after the
attainment of age 59 1/2 (or such later age designated by the Employer
in such Section of the Adoption Agreement).
9.3 Hardship Withdrawals.
(a) General Rule. If the Employer so elects in the Adoption
Agreement, distribution in a single sum payment of Elective
Deferrals (and earnings thereon accrued as of the later of
December 31, 1988, and the end of the last Plan Year ending
before July 1, 1989) and/or the vested portion of Matching
Contribution and Discretionary Profit Sharing Contribution
subaccounts, as elected by the Employer in the Adoption
Agreement, may be made to a Participant in the event of hardship.
(Hardship distributions may not be made from Safe Harbor
Contribution subaccounts). For the purposes of this Section,
hardship is defined as an immediate and heavy financial need of
the Participant where such Participant lacks other available
resources.
(b) Needs Considered Immediate and Heavy. The only financial needs
considered immediate and heavy are the following:
(i) Expenses incurred or necessary for medical care (within the
meaning of section 213(d) of the Code) of the Employee, the
Employee's spouse, children or dependents (as described in
section 152 of the Code);
(ii) Costs directly related to the purchase (excluding mortgage
payments) of a principal residence for the Employee;
(iii)Payment of tuition, and related educational fees, and room
and board expenses, for the next twelve months of
post-secondary education for the Employee, the Employee's
spouse, children or dependents; or
(iv) The need to prevent the eviction of the Employee from, or a
foreclosure on the mortgage of, the Employee's principal
residence.
(c) Necessary to Satisfy Need. A distribution will be considered as
necessary to satisfy an immediate and heavy financial need of the
Employee only if:
(i) The Employee has obtained all distributions, other than hardship
distributions, and all nontaxable loans under all plans
maintained by the Employer;
54
(ii) All plans maintained by the Employer provide that the Employee's
Elective Deferrals (and Employee contributions) will be suspended
for twelve months after the receipt of the hardship distribution;
(iii)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
(iv) 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.
9.4 Age 59 1/2 Withdrawals. If elected by the Employer in the Adoption
Agreement, a Participant shall be permitted to withdraw all or a
portion of his vested Account balance on or after the attainment of
age 59 1/2.
9.5 Manner of Making Withdrawals. Any withdrawal by a Participant under
the Plan shall be made only after the Participant files a request with
the Plan Administrator specifying the nature of the withdrawal (and
the reasons therefore, if a hardship withdrawal) and the amount of
funds requested to be withdrawn and, if applicable, including the
spousal consent required under Article XI. Upon approving any
withdrawal, the Plan Administrator shall furnish the Trustee with
written instructions directing the Trustee to make the withdrawal in a
single sum payment of cash to the Participant; provided, however, that
in-service withdrawals after Early or Normal Retirement Age may be
made in any form of distribution selected by the Employer in the
Adoption Agreement. In making any withdrawal payment, the Trustee
shall be fully entitled to rely on the instructions furnished by the
Plan Administrator and shall be under no duty to make any inquiry or
investigation with respect thereto.
9.6 Limitations on Withdrawals. The Plan Administrator may prescribe
uniform and nondiscriminatory rules and procedures limiting the number
of times a Participant may make a withdrawal under the Plan during any
Plan Year and the minimum amount a Participant may withdraw on any
single occasion.
9.7 Special Circumstances. Elective Deferral, Qualified Nonelective
Contribution, Qualified Matching Contribution, Safe Harbor Matching
Contribution and Safe Harbor Nonelective Contribution subaccounts may
be distributed upon:
(a) Plan Termination. 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)(7)
of the Code) or a simplified employee pension plan (as defined in
55
section 408(k) of the Code) or a SIMPLE ▇▇▇ plan (as defined in
section 408(p) of the Code).
(b) Disposition of Assets. The disposition by a corporate Employer 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 corporate Employer if such corporate
Employer continues to maintain this Plan after the disposition.
but only with respect to Employees who continue employment with
the corporation acquiring such assets.
(c) Disposition of Subsidiary. The disposition by a corporate
Employer to an unrelated entity of such corporate Employer's
interest in a subsidiary (within the meaning of section 409(d)(3)
of the Code) if such corporate Employer continues to maintain
this Plan, but only with respect to Employees who continue
employment with such subsidiary.
Distributions that are triggered by any of the foregoing events must
be made in a single sum payment.
ARTICLE X - DISTRIBUTION PROVISIONS
10.1 Retirement Distributions. If a Participant's Normal or Early
Retirement Date should occur prior to the termination of his
employment with the Employer, all amounts then credited to such
Participant's Account shall become 100% vested regardless of the
number of the Participant's Years of Vesting Service. If a
Participant's employment with the Employer is terminated on or after
his Early or Normal Retirement Date, such termination shall be deemed
"Retirement," and the Plan Administrator shall direct the Trustee to
take such action as may be necessary to distribute to such
Participant, in one of the methods provided in Section 10.7, the value
of his Account.
(a) Deferred Retirement. If a Participant's employment continues
after his Early or Normal Retirement Date, his participation in
the Plan shall continue and, subject to Section 10.9, the
distribution of his benefits shall be postponed until the earlier
of (i) the date on which his Retirement becomes effective, or
(ii) subject to applicable provisions of the Plan regarding
in-service distribution. the date the Participant elects to
receive his benefits.
(b) Participant Status After Retirement. Upon a Participant's
Retirement, his participation as an active Participant hereunder
shall cease, subject to his right to share in contributions made
with respect to the Plan Year of his Retirement if he otherwise
qualifies for such contributions in such Plan Year.
10.2 Death Benefits. Upon the death of a Participant before Retirement or
before other termination of employment with the Employer, all amounts
then credited to his Account shall become 100% vested, regardless of
the number of his Years of Vesting Service. The Plan Administrator
56
shall direct the Trustee to distribute the value of the Participant's
Account, in one of the methods provided in Section 10.7, and at the
time provided in Section 10.6, to any surviving Beneficiary designated
by the Participant in accordance with the provisions of subsection (c)
below.
(a) Death of Former Employee. Upon the death of a former Employee
before distribution of his vested interest in his Account has
begun, the Trustee, in accordance with the instructions of the
Plan Administrator and in accordance with the provisions of this
Article, shall take such action as may be necessary to distribute
his vested interest in his Account. in one of the methods
provided in Section 10.7 hereof and commencing at such time
provided in Section 10.6, to any surviving Beneficiary designated
in accordance with the provisions of subsection (c) below. Upon
the death of a former Participant after distribution of his
benefits has begun and before the entire vested interest in his
Account has been distributed to him, the Plan Administrator shall
direct the Trustee to distribute the remaining portion of such
interest to any surviving Beneficiary designated in accordance
with the provisions of subsection (c) below at least as rapidly
as under the method of distribution being used as of the date of
his death.
(b) Proof of Death. The Plan Administrator may require such proper
proof of death and such evidence of the right of any person to
receive payment of the vested interest of a deceased Participant
or former Participant as it may deem desirable. The Plan
Administrator's determination of death and of the right of any
person to receive payment shall be conclusive.
(c) Beneficiary Designation. Each Participant may designate one or
more primary Beneficiaries and one or more secondary
Beneficiaries by filing written notice with the Plan
Administrator on a form acceptable to the Plan Administrator.
However, in the case of a married Participant, the Participant
shall be deemed to have designated his surviving spouse as his
sole primary Beneficiary, notwithstanding any contrary written
notice, unless such spouse filed a written voluntary consent with
the Plan Administrator irrevocably consenting to the
Participant's designation of a non-spouse Beneficiary, which
consent shall be notarized or witnessed by the Plan
Administrator, and shall acknowledge the effect of the
Participant's designation of Beneficiary. A married Participant
may not subsequently change the designated non-spouse Beneficiary
unless his spouse's voluntary consent acknowledges that the
spouse has a right to consent to a specific beneficiary and
expressly permits designations by the Participant without further
spousal consent or his spouse has filed a written consent with
the Plan Administrator, irrevocably consenting to such change,
which consent shall be notarized or witnessed by the Plan
Administrator, and shall acknowledge the effect of the change.
Subject to the two preceding sentences, a Participant may change
any designated Beneficiary by filing written notice of the change
with the Plan Administrator in the form prescribed by the Plan
57
Administrator. If any Participant fails to designate a
Beneficiary, or if his designated Beneficiary or Beneficiaries do
not survive the Participant, the Plan Administrator shall
designate a Beneficiary or Beneficiaries on his behalf, in the
following order:
(i) The Participant's spouse, if living at the time of the
Participant's death.
(ii) The Participant's issue, per stirpes.
(iii) The Participant's parents equally.
(iv) The estate of the Participant.
After a Participant's death, any actual Beneficiary of the deceased
Participant may designate one or more primary beneficiaries and one or
more secondary beneficiaries to receive the Beneficiary's interest in
the Plan attributable to the Participant's benefits after the
Beneficiary's death, to the extent such designation is not
inconsistent with the Participant's beneficiary designation. If the
Beneficiary fails to designate a beneficiary or if none of his
designated beneficiaries survive him, the Plan Administrator shall, to
the extent not inconsistent with the Participant's beneficiary
designation, designate a beneficiary or beneficiaries on the
Beneficiary's behalf, in the following order:
(i) The Beneficiary's spouse, if living at the time of the
Beneficiary's death.
(ii) The Beneficiary's issue, per stirpes.
(iii) The Beneficiary's parents equally.
(iv) The Beneficiary's estate.
10.3 Total and Permanent Disability Benefits. If, prior to his Retirement
or other termination of employment with the Employer, the Plan
Administrator determines that a Participant has incurred a Total and
Permanent Disability, the Participant shall be deemed to have retired
by reason of Total and Permanent Disability, and his Account shall
become 100% vested, regardless of the number of his Years of Vesting
Service. The Plan Administrator shall determine the date as of which
such Retirement shall become effective. The Trustee, in accordance
with the instructions of the Plan Administrator and in accordance with
the provisions of this Article, shall take such action as may be
necessary to distribute the value of the Participant's Account(s) to
the Participant commencing at such time, and in one of the methods,
provided in Sections 10.5 and 10.7 hereof.
10.4 Termination of Employment Prior to Retirement, Death or Total and
Permanent Disability. If a Participant's employment with the Employer
58
terminates for any reason other than Retirement, Total and Permanent
Disability or death, the Plan Administrator shall direct the Trustee
to take such action as may be needed to distribute to such Participant
the vested portion of his Account. as determined in accordance with
Article VII. Such distribution shall be made commencing at such time,
and in one of the methods, provided in Sections 10.5 and 10.7 hereof.
10.5 Commencement of Lifetime Distributions.
(a) Upon Retirement or Total and Permanent Disability. The
distribution of benefits payable to a Participant who retires by
reason of Retirement or Total and Permanent Disability shall
commence as soon as is administratively feasible after a date on
or after the Participant's Retirement as he elects, but in no
event later than his required beginning date. Notwithstanding the
foregoing provisions of this subsection (a), if such a
Participant's total vested benefits do not exceed $5,000, his
vested benefits shall be distributed to him in a single sum
payment as soon as administratively feasible after his Retirement
or termination of employment with the Employer by reason of Total
and Permanent Disability.
(b) Distribution Upon Termination of Employment and Restrictions on
Immediate Distribution. If the value of a Participant's vested
account balance derived from Employer and Employee contributions
exceeds $5,000, and the account balance is immediately
distributable, the Participant and the Participant's spouse (or
where either the Participant or the spouse has died, the
survivor) must consent to any distribution of such account
balance. 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 account balance 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. However, distribution may
commence less than 30 days after the notice described in the
preceding sentence is given provided 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 to elect distribution (and, if
applicable, a particular distribution option), and the
Participant, after receiving the notice, affirmatively elects a
distribution.
59
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 account balance is
immediately distributable. (Furthermore, if payment in the form
of a qualified joint and survivor annuity is not required with
respect to the Participant pursuant to Section 11.6 of the Plan,
only the Participant need consent to the distribution of an
account balance that 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 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
account balance will be distributed to the Participant or, if the
Participant does not consent to an immediate distribution,
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 account balance is immediately distributable if any part of
the account balance could be distributed to the Participant (or
surviving spouse) before the Participant attains (or would have
attained if not deceased) the later of Normal Retirement Age or
age 62.
For purposes of determining the applicability of the foregoing
consent requirements to distributions made before the first day
of the first Plan Year beginning after December 31, 1988, the
Participant's vested account balance shall not include amounts
attributable to accumulated deductible employee contributions
within the meaning of section 72(o)(5)(B) of the Code.
(c) Force-Outs. Notwithstanding the foregoing provisions of
subsections (a) and (b), a Participant's vested benefits shall be
distributed to him in a single sum payment as soon as is
administratively feasible after the date on which his employment
with the Employer terminated if his vested benefits:
(i) for Plan Years beginning before August 6, 1997, do not
exceed $3,500 (or did not exceed $3,500 at the time of any
prior distribution),
(ii) for Plan Years beginning after August 5, 1997, and for a
distribution made prior to March 22, 1999. did not exceed
$5,000 (or did not exceed $5,000 at the time of any prior
distribution), and
(iii)for a distribution made after March 21, 1999, that either
did not exceed $5,000 or is a remaining payment under a
selected optional form of payment that did not exceed $5,000
at the time the selected payment began.
60
If a Participant would have received a distribution under the
preceding sentence but for the fact that the Participant's vested
Account exceeded $5,000 after the Participant's employment terminated
and if at a later time such vested Account is reduced such that it is
not greater than $5,000, the Plan Administrator may direct that the
Participant will receive a distribution of such vested Account, and
the nonvested portion will be forfeited. For the purposes hereof, if
the value of a Participant's vested Account is zero, the Participant
shall be deemed to have received a distribution of such Account.
(d) Statutory Requirements. Unless the Participant elects otherwise,
distribution of his benefits shall commence during the sixty day
period immediately following the end of the Plan Year in which
occurs the latest of:
(i) the Participant's Normal Retirement Age,
(ii) the 10-year anniversary of the date on which the
Participant commenced participation in the Plan, and
(iii)the date the Participant's employment with the
Employer terminates.
Notwithstanding the foregoing, the failure of a Participant (and
spouse, if applicable) to consent to a distribution while a benefit is
immediately distributable, as defined in subsection (b), shall be
deemed to be an election to defer commencement of payment of any
benefit sufficient to satisfy this Section.
(e) In-Service Distributions. The distribution of a Participant's
vested benefits shall not commence prior to the time his
employment with the Employer terminates, except in the following
circumstances:
(i) Withdrawals made in accordance with the provisions of
Article IX,
(ii) Payments to an alternate payee pursuant to a qualified
domestic relations order as described in section 414(p)
of the Code, or
(iii)Minimum required distributions made on and after his
required beginning date.
10.6 Commencement of Death Benefits.
(a) Subject to Section 10.9, if a Participant dies before his benefit
payments have commenced, his death benefits, if any, shall be
payable beginning at such reasonable time after the Participant's
death as his Beneficiary elects, subject to and in accordance
with the following provisions:
61
(i) Non-Spouse Beneficiary. In the case of a Beneficiary other
than the Participant's surviving spouse, benefits must
commence no later than the December 31 that coincides with
or immediately follows the fifth anniversary of the
Participant's death. If the beginning date of such benefits
is after the December 31 that coincides with or immediately
follows the first anniversary of the Participant's death,
the Beneficiary's entire interest in the Participant's death
benefits must be distributed no later than the December 31
that coincides with or immediately follows the fifth
anniversary of the Participant's death.
(ii) Spouse Beneficiary. If the Participant's Beneficiary is the
Participant's surviving spouse, the surviving spouse may
elect to defer the commencement of benefits to the December
31 that coincides with or immediately follows the later of
(i) the first anniversary of the Participant's death, or
(ii) the date on which the Participant would have attained
age 70 1/2. If the Participant's Beneficiary is his
surviving spouse, and if his surviving spouse dies after the
Participant dies but prior to the time the Participant's
death benefits have commenced, the provisions of this
Section 10.6 shall apply as if the surviving spouse were the
Participant, except that the surviving spouse of the
deceased Participant's surviving spouse shall not qualify as
a surviving spouse.
(iii)Election Period. Any election made by a Beneficiary under
this Section must be made no later than the December 31 that
coincides with or immediately follows the first anniversary
of the Participant's death and must be irrevocable as of
such date, except that if the Participant's Beneficiary is
the Participant's surviving spouse, the surviving spouse may
defer making such election to the earlier of (i) the
December 31 that coincides with or immediately follows the
fifth anniversary of the Participant's death, or (ii) the
last date on which the surviving spouse could defer the
commencement of benefits under paragraph (ii). If a
Beneficiary fails to make a proper election hereunder, the
Plan Administrator shall direct the Trustee to distribute
the Beneficiary's interest in the Participant's death
benefits in full no later than the December 31 that
coincides with or immediately follows the fifth anniversary
of the Participant's death.
(b) If a 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 before the Participant's death.
10.7 Methods of Distribution.
62
(a) General Rule. Subject to Article XI, all benefits shall be
distributed in accordance with one of the following methods
selected by the Employer in the Adoption Agreement as the
Participant or Beneficiary, as the case may be, may elect during
the 90-day period before the date benefits commence:
(i) In monthly, quarterly, semi-annual or annual installments
over a period certain not to exceed the life expectancy of
the Participant (or Beneficiary in the case of a Participant
who dies prior to the time his benefits commenced) or the
joint and last survivor life expectancy of the Participant
and his Beneficiary so that the amount distributed in each
Plan Year equals the amount determined by dividing the
Participant's vested account balance on the last day of the
immediately preceding Plan Year by the period certain
determined in accordance with this paragraph (i) which shall
be reduced by one for each Plan Year after the Plan Year in
which the Participant's benefits commence.
(ii) Payment to the Participant or Beneficiary in a single sum
payment.
(iii)A paid-up, nontransferable annuity contract (selected by
the Plan Administrator) for the life of the Participant (or
Beneficiary in the case of a Participant who dies prior to
the time his benefits commenced) or the joint life of the
Participant and the Participant's Beneficiary that complies
with the requirements of the Plan.
Payment of benefits generally shall be in cash. To the extent a
Participant's vested Account is invested in qualifying employer
securities (within the meaning of section 407(d)(5) of ERISA) or
in a regulated investment company registered under the Investment
Company Act of 1940 whose investment adviser is ▇. ▇▇▇▇ Price
Associates, Inc. or any affiliate thereof or any successor
thereto, the Participant may elect to have such benefits
distributed in-kind.
(b) Direct Rollover. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election
under this Article X, for all distributions made on or after
January 1, 1993, a distributee may elect, at the time and in the
manner prescribed by the Plan Administrator, to have any portion
of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct
rollover. For purposes of this subsection, the following
definitions shall apply:
(i) An "eligible rollover distribution" is any distribution of
all or a portion of the balance to the credit of the
distributee, except that an eligible rollover distribution
does not include: any distribution that is one of a series
of substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint
63
life expectancies) of the distributee and the distributee's
designated Beneficiary, or for a specified period of ten
years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the
Code; any hardship distribution described in section
401(k)(2)(B)(i)(IV) of the Code received after December 31,
1998 (or, if elected by the Employer in the Optional
Supplement, December 31, 1999); and the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net
unrealized appreciation with respect to employer
securities).
(ii) An "eligible retirement plan" is an individual retirement
account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the
Code, or a qualified trust described in section 401(a) of
the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual
retirement annuity.
(iii)A "distributee" includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or
former spouse who is the alternate payee under a qualified
domestic retirement order, as described section 414(p) of
the Code, are distributees with regard to the interest of
the spouse or former spouse.
(iv) A "direct rollover" is a payment by the Plan to the eligible
retirement plan specified by the distributee.
10.8 Missing Participants and Beneficiaries. If the Plan Administrator is
unable to locate a Participant or Beneficiary entitled to vested
benefits hereunder after making reasonable efforts to do so, the Plan
Administrator may direct the Trustee to forfeit such vested benefits
or direct the Trustee to continue to hold such Participant's or
Beneficiary's Account. If the vested benefits are forfeited and if the
Participant or Beneficiary subsequently is found or makes a claim for
the benefits, the vested benefits will be reinstated in accordance
with the provisions of Section 7.6.
10.9 Minimum Required Distributions. If the Participant's interest is to be
distributed in other than a single sum before the required beginning
date, the following minimum distribution rules, which shall be
determined in accordance with proposed regulations under section
401(a)(9) of the Code, shall apply on or after the required beginning
date notwithstanding any other provision of the Plan to the contrary:
64
(a) Definitions. For the purposes of this Section 10.9. the following
definitions shall apply:
(i) Applicable Life Expectancy. The Life Expectancy (or joint
and last survivor expectancy) is 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(s). If annuity payments commence in accordance
with Section 10.9(c) before the Required Beginning Date, the
Applicable Calendar Year is the year such payments commence.
If distribution is in the form of an immediate annuity
purchased after the Participant's death with the
Participant's remaining interest, the Applicable Calendar
Year is the year of purchase.
(ii) Designated Beneficiary. The individual who is designated as
the Beneficiary under the Plan on the Required Beginning
Date in accordance with section 401(a)(9) of the Code and
the proposed regulations thereunder.
(iii)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 10.6 above.
(iv) 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 10.6(b)(ii)) 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 non-spouse Beneficiary may not be
recalculated.
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(v) Participant's Benefit.
(A) The Account balance as of the last Valuation Date in the
calendar year immediately preceding the Distribution
Calendar Year (valuation calendar year) increased by the
amount of any contributions or forfeitures allocated to the
Account balance as of dates in the calendar year after the
Valuation Date and decreased by distributions made in the
valuation calendar year after the Valuation Date.
(B) For purposes of subparagraph (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.
(vi) 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
later of the calendar year in which the Participant attains
age 70 1/2 or retires, except that benefit distributions to
a Five Percent Owner must commence by the first day of April
of the calendar year following the calendar year in which
the Five Percent Owner attains age 70 1/2.
(B) Transitional rules. Notwithstanding the foregoing:
(1) Any Participant attaining age 70 1/2 in 1996 may elect
by December 31, 1997, to defer distributions until the
calendar year following the calendar year in which the
Participant retires.
(2) Any Participant attaining age 70 1/2 in years prior to
1997 may elect to stop distributions and recommence
distributions by the April 1 of the calendar year
following the calendar year in which the Participant
retires. Unless the Employer elects otherwise in the
Adoption Agreement, there is a new annuity starting
date upon recommencement of distributions.
(C) Once distributions have begun to a Five Percent Owner under
this subsection, they must continue to be distributed even
66
if the Participant ceases to be a Five Percent Owner in a
subsequent year.
(b) Individual Account.
(i) If a Participant's benefit is to be distributed over (1) a period
not extending beyond the life expectancy of the Participant or
the joint life and last survivor expectancy of the Participant
and the Participant's Designated Beneficiary or (2) a period not
extending beyond the life expectancy of the Designated
Beneficiary, the amount required to be distributed for each
calendar year, beginning with distributions for the first
Distribution Calendar Year, must at least equal the quotient
obtained by dividing the Participant's benefit by the Applicable
Life Expectancy.
(ii) 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.
(iii)For calendar years beginning after December 31, 1988, the amount
to be distributed each year, beginning with distributions for the
first Distribution Calendar Year shall not be less than the
quotient obtained by dividing the Participant's benefit by the
lesser of (1) the Applicable Life Expectancy or (2) if the
Participant's spouse is not the Designated Beneficiary, the
applicable divisor determined from the table set forth in Q&A-4
of section 1.401(a)(9)-2 of the proposed regulations.
Distributions after the death of the Participant shall be
distributed using the Applicable Life Expectancy as the relevant
divisor without regard to proposed regulations section
1.401(a)(9)-2.
(iv) 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
the Distribution Calendar Year.
(c) 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 proposed regulations thereunder.
67
For purposes of this Section 10.9, 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.
For the purposes of this Section 10.9, distribution of a Participant's
interest is considered to begin on the Participant's Required
Beginning Date (or, if the last sentence of Section 10.6(a)(ii) is
applicable, the date distribution is required to begin to the
surviving spouse pursuant to the first sentence of Section
10.6(a)(ii). 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.
(d) Transitional Rule.
(i) Notwithstanding the other requirements of this Section and
subject to the requirements of Article XI, distribution on behalf
of any Employee, including a Five-Percent Owner, may be made in
accordance with all of the following requirements (regardless of
when such distribution commences):
(A) The distribution by the Plan is one which would not have
disqualified such Plan 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 Plan 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
priority.
(ii) A distribution upon death will not be covered by this
transitional rule unless the information in the designation
68
contains the required information described above with respect to
the distributions to be made upon the death of the Employee.
(iii)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 subparagraphs (d)(i)(A) and (E).
(iv) If a designation is revoked, any subsequent distribution must
satisfy the requirements of section 401(a)(9) of the Code and the
proposed 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
proposed regulations thereunder, but for the Code 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 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 of the proposed regulations shall apply.
ARTICLE XI - JOINT AND SURVIVOR ANNUITY REQUIREMENTS
The provisions of this Article shall take precedence over any conflicting
provisions of the Plan.
11.1 Applicability.
Except as provided with respect to certain profit sharing plans in
Section 11.6 of this Article, the provisions of this Article shall
apply to any Participant who is credited with at least one Hour of
Service with the Employer on or after August 23, 1984, and such other
Participants as provided in Section 11.7.
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11.2 Definitions.
For the purposes of this Article XI, the following definitions shall
apply:
(a) Annuity Starting Date. The first day of the first period for
which an amount is paid as an annuity or any other form.
(b) 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.
A Participant who has not yet attained age 35 as of the end of
any Plan Year may make a 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 attains 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 11.5. 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 Article.
(c) Earliest Retirement Age. The earliest date on which, under the
Plan, the Participant could elect to receive retirement benefits.
(d) 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: (i)
the Participant's Spouse consents in writing to the election;
(ii) 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); (iii) the Spouse's consent acknowledges
the effect of the election; and (iv) 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.
70
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 11.5 below.
(e) Qualified Joint and Survivor Annuity. An immediate
nontransferable annuity for the life of the Participant with a
survivor annuity for the life of the Spouse which is 50% 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.
(f) Qualified Preretirement Survivor Annuity. An immediate
nontransferable annuity for the life of the Participant's
surviving Spouse, in such amount as may be purchased with the
Participant's vested Account balance.
(g) 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.
11.3 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.
11.4 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 his 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 immediately after the Participant's death.
71
11.5 Notice Requirements.
(a) In the case of a Qualified Joint and Survivor Annuity as
described in Section 11.2(e), the Plan Administrator shall, no
less than 30 days and no more than 90 days prior to the Annuity
Starting Date, provide each Participant a written explanation of:
(i) the terms and conditions of a Qualified Joint and Survivor
Annuity; (ii) the Participant's right to make and the effect of
an election to waive the Qualified Joint and Survivor Annuity
form of benefit; (iii) the rights of a Participant's Spouse; and
(iv) the right to make, and the effect of, a revocation of a
previous election to waive the Qualified Joint and Survivor
Annuity. If a distribution is in a form other than a Qualified
Joint and Survivor Annuity, such distribution may commence less
than 30 days after the notice required under this Section 11.5(a)
is given, provided that:
(i) 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);
(ii) The Participant has a right to revoke any affirmative
distribution election at least until the Annuity Starting
Date or, if later, at any time prior to the expiration of
the 7-day period that begins the day after the notice is
provided to the Participant; and
(iii)The Annuity Starting Date is a day after the date that the
notice was provided to the Participant.
The Annuity Starting Date may be a date prior to the date the notice
is provided to the Participant if the distribution does not begin
until at least 30 days after such notice is provided, subject to the
waiver of the 30-day period as described in this Section 11.5(a).
(b) In the case of a Qualified Preretirement Survivor Annuity as
described in Section 11.4, the Plan Administrator shall provide
each Participant within the applicable notice period 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
11.5(a) applicable to a Qualified Joint and Survivor Annuity.
The applicable notice period means with respect to a Participant,
whichever of the following periods ends last:
(i) the period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the
close of the Plan Year preceding the Plan Year in which the
Participant attains age 35,
72
(ii) a reasonable period ending after the individual becomes a
Participant,
(iii)a reasonable period ending after notice is required because
of the cessation of a benefit subsidy as described in
subsection (c) below,
(iv) a reasonable period ending after this Article first applies
to the Participant,
(v) a reasonable period after separation from service in the
case of a Participant who separates before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in (ii),
(iii) and (iv) 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.
(c) Notwithstanding the other requirements of this Section 11.5, the
respective notices prescribed by this Section need not be given
to a Participant if (i) the Plan "fully subsidizes" the costs of
a Qualified Joint and Survivor Annuity or Qualified Preretirement
Survivor Annuity and (ii) 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 11.5(c), 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.
(d) Notwithstanding the foregoing, a Participant's vested benefits
shall not be distributed in the form of a Qualified Joint and
Survivor Annuity or a Qualified Preretirement Survivor Annuity
but shall be distributed to him in a single sum payment as soon
as is administratively feasible after the date on which his
employment terminated or the date of his death, respectively, if
the value of his vested Account derived from Employer and
Employee contributions does not exceed (or at the time of any
prior distribution (i) in Plan Years beginning before August 6,
1997, did not exceed $3,500, or (ii) made during the period
beginning on the first day of the Plan Year beginning after
August 5, 1997, and ending on March 21, 1999, did not exceed)
$5,000.
73
11.6 Special Rule for Profit Sharing Plans.
(a) This Section shall apply to a Participant in a profit sharing
plan, and 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)
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: (i) the Participant cannot or
does not elect payments in the form of a life annuity, and (ii)
on the death of the Participant, the Participant's vested Account
will be paid to the Participant's surviving Spouse, but if there
is no surviving Spouse, or, if the surviving Spouse has already
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 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. However, this Section
11.6 shall not be operative with respect to the Participant if it
is determined that this profit sharing plan is a direct or
indirect transferee of a defined benefit plan, money purchase
pension plan (including a target benefit plan), stock bonus or
profit sharing plan which is subject to the survivor annuity
requirement of sections 401(a)(11) and 417 of the Code. The
preceding sentence shall apply only with respect to asset
transfers completed after December 31, 1984, and if the
transferred assets and income thereon are accounted for
separately, then such sentence shall apply only with respect to
the transferred assets (and income thereon). If this Section is
operative, then except to the extent otherwise provided in
Section 11.7, the other provisions of this Article shall be
inoperative.
(b) The Participant may waive the spousal death benefit described in
this Section at any time provided that no such waiver shall be
effective unless it satisfies the conditions that would apply to
the Participant's waiver of the Qualified Preretirement Survivor
Annuity.
(c) For purposes of this Section 11.6, vested Account balances shall
mean, in the case of a money purchase pension plan or a target
benefit plan, the Participant's separate Account 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 otherwise provided in this plan document.
74
11.7 Transitional Rules.
(a) Any living Participant not receiving benefits on August 23, 1984,
who would otherwise not receive the benefits prescribed by the
previous Sections of this Article must be given the opportunity
to elect to have the prior Sections of this Article apply if such
Participant is credited with at least one Hour of Service under
this Plan or a predecessor plan in a Plan Year beginning on or
after January 1, 1976, and such Participant had at least 10 Years
of Vesting Service when he or she separated from service.
(b) Any living Participant not receiving benefits on August 23, 1984,
who was credited with at least one Hour of Service under this
Plan or a predecessor plan on or after September 2, 1974, and who
is not otherwise credited with any service in a Plan Year
beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance with
Section 11.7(d) of this Article.
(c) The respective opportunities to elect (as described in
subsections 11.7(a) and (b) 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.
(d) Any Participant who has elected pursuant to subsection 11.7(b) of
this Article and any Participant who does not elect under
subsection 11.7(a) or who meets the requirements of subsection
11.7(a) except that such Participant does not have at least 10
Years of Vesting Service when he or she separates from service.
shall have his or her benefits distributed in accordance with all
of the following requirements if benefits would have been payable
in the form of a life annuity.
(i) Automatic joint and survivor annuity. If benefits in the
form 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;
75
then such benefits will be received under this Plan in the
form of a Qualified Joint and Survivor Annuity, unless the
Participant has elected otherwise during the election
period. The election period must begin at least 6 months
before the Participant attains qualified early retirement
age and end not more than 90 days before the commencement of
benefits. Any election hereunder will be in writing and may
be changed by the Participant at any time.
(ii) Election of early survivor annuity. A Participant who is
employed after attaining the qualified early retirement age
will be given the opportunity to elect, during the election
period, to have a survivor annuity payable on death. If the
Participant elects the survivor annuity, payments under such
annuity must not be less than the payments which would have
been made to the spouse under the Qualified Joint and
Survivor Annuity if the Participant had retired on the day
before his or her death. Any election under this provision
will be in writing and may be changed by the Participant at
any time. The election period begins on the later of (1) the
90th day before the Participant attains the qualified early
retirement age, or (2) the date on which Participation
begins, and ends on the date the Participant terminates
employment.
(iii)Definitions. For purposes of this Section 11.7(d),
qualified early retirement age is the latest of:
(1) the earliest date, under the Plan, on which the
Participant may elect to receive retirement benefits,
(2) the first day of the 120th month beginning before the
Participant reaches Normal Retirement Age, or
(3) the date the Participant begins participation in the
Plan.
ARTICLE XII - TOP HEAVY PROVISIONS
12.1 Applicability. Notwithstanding any other provisions of the Plan or
Adoption Agreement to the contrary, if for any Plan Year the Plan
becomes a Top Heavy Plan, the requirements of this Article XII of the
Plan shall be applied for such Plan Year.
12.2 Definitions. The following terms shall have the following meanings in
the determination of whether the Plan is a Top Heavy Plan:
(a) Determination Date. For the first Plan Year of the Plan, the last
day of that Plan Year. For any Plan Year subsequent to the first
Plan Year, the last day of the preceding Plan Year.
76
(b) Employer. The Employer which adopted this Plan and any other
Employer some or all of whose Employees participate in this Plan
or in a retirement plan which is aggregated with this Plan as
part of a Permissive or Required Aggregation Group.
(c) 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
ten 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-percent owner of the Employer, or a
1-percent owner of the Employer who has annual compensation of
more than $150,000. Annual compensation means Annual Additions
Compensation as defined in Section 6.1(a). The determination
period is the Plan Year containing the Determination Date and the
four 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.
(d) Non-Key Employee. Any Employee or former Employee (or any
Beneficiary of such Employee) who is not considered to be a Key
Employee.
(e) 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.
(f) Present Value. Present value shall be based on the interest and
mortality rates specified in plan document.
(g) Required Aggregation Group. (i) Each qualified plan of the
Employer in which at least one Key Employee participates or
participated at any time during the determination period
(regardless of whether the plan has terminated), and (ii) any
other qualified plan of the Employer which enables a plan
described in (i) to meet the requirements of section 401(a)(4) or
410 of the Code.
(h) Top Heavy Plan. For any Plan Year beginning after December 31,
1983, this Plan is Top Heavy if any of the following conditions
exist:
(i) 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.
77
(ii) If this Plan is a part of a Required Aggregation Group of
plans but not part of a Permissive Aggregation Group and the
Top Heavy Ratio for the group of plans exceeds 60%.
(iii)If this Plan is a part of a Required Aggregation Group and
part of a Permissive Aggregation Group of plans and the Top
Heavy Ratio for the Permissive Aggregation Group exceeds
60%.
(i) Top Heavy Ratio.
(i) If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and
the Employer has not maintained any defined benefit plan
which during the 5-year period ending on the Determination
Date(s) has or has had accrued benefits, the Top Heavy Ratio
for this Plan alone or for the Required or Permissible
Aggregation Group, as appropriate, is a fraction, the
numerator of which is the sum of the account balances of all
Key Employees as of the Determination Date(s) (including any
part of any account balance distributed in the 5-year period
ending on the Determination Date(s)), and the denominator of
which is the sum of all account balances (including any part
of any account balance distributed in the 5-year period
ending on the Determination Date(s)), both computed in
accordance with section 416 of the Code and the regulations
thereunder. Both the numerator and denominator of the Top
Heavy Ratio are increased to reflect any contribution not
actually made as of the Determination Date, but which is
required to be taken into account on that date under section
416 of the Code and the regulations thereunder.
(ii) If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and
the Employer maintains or has maintained one or more defined
benefit plans which during the 5-year period ending on the
Determination Date(s) has or has had any accrued benefits,
the Top Heavy Ratio for any Required or Permissive
Aggregation Group, as appropriate, is a fraction, the
numerator of which is the sum of account balances under the
aggregated defined contribution plan or plans for all Key
Employees, determined in accordance with paragraph (i)(i)
above, and the Present Value of accrued benefits under the
aggregated defined benefit plan or plans for all Key
Employees as of the Determination Date(s), and the
denominator of which is the sum of the account balances
under the aggregated defined contribution plan or plans for
all Participants, determined in accordance with paragraph
(i)(i) above, and the Present Value of accrued benefits
under the defined benefit plan or plans for all Participants
as of the Determination Date(s), all determined in
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accordance with section 416 of the Code and the regulations
thereunder. The accrued benefits under a defined benefit
plan in both the numerator and denominator of the Top Heavy
Ratio are increased for any distribution of an accrued
benefit made in the five-year period ending on the
Determination Date.
(iii)For purposes of paragraphs (i)(i) and (i)(ii) above, the
value of account balances and the present value of accrued
benefits will be determined as of the most recent Valuation
Date that falls within or ends with the 12-month period
ending on the Determination Date, except as provided in
section 416 of the Code and the regulations thereunder for
the first and second plan years of a defined benefit plan.
The account balances and accrued benefits of a Participant
(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. The calculation of
the Top Heavy Ratio, and the extent to which distributions,
rollovers, nondeductible employee contributions and
transfers are taken into account will be made in accordance
with section 416(g) of the Code and the regulations
thereunder. 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.
12.3 Minimum Allocation.
(a) Except as otherwise provided in subsections (c) and (d) below,
the Employer contributions and forfeitures allocated on behalf of
any Participant who is not a Key Employee shall not be less than
the lesser of three percent of such Participant's Annual
Additions 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 Key
Employee's Annual Additions Compensation, as limited by section
401(a)(17) of the Code, allocated on behalf of any Key Employee
for that year. The minimum allocation is determined without
regard to any Social Security contribution. This minimum
allocation shall be made even though, under other plan
provisions, the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser allocation
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for the year because of (i) the Participant's failure to complete
1,000 Hours of Service (or any equivalent provided in the Plan),
(ii) the Participant's failure to make mandatory Employee
contributions to the Plan, or (iii) compensation less than a
stated amount. Neither Elective Deferrals, Matching
Contributions, Safe Harbor Matching Contributions nor ACP Test
Only Safe Harbor Matching Contributions may be taken into account
for the purpose of satisfying the minimum Top-Heavy contribution
requirements.
(b) For purposes of computing the minimum allocation, Annual
Additions Compensation will mean Annual Additions Compensation as
defined in Section 6.1(a) of the Plan, as limited by section
401(a)(17) of the Code.
(c) The provision in (a) above shall not apply to any Participant who
was not employed by the Employer on the last day of the Plan
Year.
(d) The provision in (a) 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.
(e) The minimum allocation or benefit requirement applicable to
Top-Heavy plans (to the extent required to be nonforfeitable
under section 416(b) of the Code) may not be forfeited under
section 411(a)(3)(B) or 411(a)(3)(D) of the Code.
(f) If Employees are covered under both a Top-Heavy defined benefit
plan and defined contribution plan of the Employer, the
denominators of the defined benefit and defined contribution
fractions (as described in Section 6.1 of the Plan) shall be
computed by substituting a factor of 1.0 for 1.25. However, if
the Top-Heavy Ratio does not exceed 90%, the Employer may use a
factor of 1.25 in the fractions provided one of the following is
used to satisfy the minimum contribution requirements:
(i) a minimum benefit of 3% per year of service (up to 30%) is
provided in the defined benefit plan;
(ii) a minimum contribution of 7 1/2% is provided in the defined
contribution plan; or
(iii)a minimum contribution of 4% is provided in the defined
contribution plan and a minimum benefit of 3% per year of
service (up to 30%) is provided in the defined benefit plan.
12.4 Vesting. For any Plan Year in which this Plan is Top-Heavy, one of the
minimum vesting schedules as elected by the Employer in the Adoption
Agreement will automatically apply to the Plan. The minimum vesting
schedule applies to all benefits within the meaning of section
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411(a)(7) of the Code except those attributable to Employee
contributions, including benefits accrued before the effective date of
section 416 of the Code and benefits accrued before the Plan became
Top-Heavy. Further, no decrease in a Participant's nonforfeitable
percentage may occur in the event the Plan's status as Top-Heavy
changes for any Plan Year. However, this Section does not apply to the
account balances of any Employee who does not have an Hour of Service
after the Plan has initially become Top-Heavy, and such Employee's
account balance attributable to Employer contributions and forfeitures
will be determined without regard to this Section.
ARTICLE XIII - ADMINISTRATION OF PLAN
13.1 Duties and Responsibility of Fiduciaries; Allocation of Fiduciary
Responsibility. A fiduciary to the Plan shall have only those specific
powers, duties, responsibilities and obligations as are explicitly
given him under the Plan and Trust Agreement. In general, the Employer
shall have the sole responsibility for making contributions to the
Plan required under Article III of the Plan, appointing the Trustee
and the Plan Administrator, and determining the Investment Options
available for investment under the Plan. The Plan Administrator shall
have the sole responsibility for the administration of the Plan, as
more fully described in Section 13.2. It is intended that each
fiduciary shall not be responsible for any act or failure to act of
another fiduciary. A fiduciary may serve in more than one fiduciary
capacity with respect to the Plan. When ▇. ▇▇▇▇ Price Trust Company
acts as Trustee of a plan, it acts solely as a directed trustee.
13.2 Powers and Responsibilities of the Plan Administrator.
(a) Administration of the Plan. The Plan Administrator shall have all
powers necessary to administer the Plan and total discretion in
interpreting and applying the provisions of the Plan, including,
but not limited to, the power to construe and interpret the Plan
documents; to decide all questions relating to an individual's
eligibility to participate in the Plan; to determine the amount,
manner and timing of any distribution of benefits or any
withdrawal under the Plan, to approve and ensure the repayment of
any loan to a Participant under the Plan; to resolve any claim
for benefits; and to appoint or employ advisors, including legal
counsel, to render advice with respect to any of the Plan
Administrator's responsibilities under the Plan. Any
construction, interpretation or application of the Plan by the
Plan Administrator shall be final, conclusive and binding. All
actions by the Plan Administrator shall be taken pursuant to
uniform standards applied to all persons similarly situated. The
Plan Administrator shall have no power to add to, subtract from
or modify any of the terms of the Plan, or to change or add to
any benefits provided by the Plan, or to waive or fail to apply
any requirements of eligibility for a benefit under the Plan.
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(b) Furnishing Trustee with Instructions. The Plan Administrator
shall be responsible for furnishing the Trustee with written
instructions regarding all contributions to the Trust, all
distributions to Participants and all loans to Participants. In
addition, the Plan Administrator shall be responsible for
furnishing the Trustee with any further information respecting
the Plan which the Trustee may request for the performance of its
duties or for the purpose of making any returns to the Internal
Revenue Service or Department of Labor as may be required of the
Trustee.
(c) Application and Forms for Benefits. The Plan Administrator may
require a Participant or Beneficiary to complete and file with it
an application for a benefit and to furnish all pertinent
information requested by it. The Plan Administrator may rely upon
all such information so furnished to it, including the
Participant's or Beneficiary's current mailing address.
13.3 Allocation of Duties and Responsibilities. The Plan Administrator may
by written instrument allocate among its members or Employees any of
its duties and responsibilities not already allocated under the Plan
or may designate persons other than members or Employees to carry out
any of the Plan Administrator's duties and responsibilities under the
Plan. Any such duties or responsibilities thus allocated must be
described in the written instrument. Such person must acknowledge in
writing his acceptance of the duties and responsibilities allocated to
him.
13.4 Appointment of the Plan Administrator. The Employer shall designate in
the Adoption Agreement the Plan Administrator which shall administer
the Employer's Plan. Such Plan Administrator may consist of an
individual, a committee of two or more individuals, whether or not, in
either such case, the individual or any of such individuals are
Employees of the Employer, a consulting firm or other independent
agent, the Trustee (with its written consent) or the Employer itself.
Except as the Employer shall otherwise expressly determine, the Plan
Administrator shall be charged with the full power and the
responsibility for administering the Plan in all its details. If no
Plan Administrator has been appointed by the Employer, or if the
person designated as Plan Administrator by the Employer is not serving
as such for any reason, the Employer shall be deemed to be the Plan
Administrator of the Plan. The Plan Administrator may be removed by
the Employer, or may resign by giving notice in writing to the
Employer, and in the event of the removal, resignation or death, or
other termination of service by the Plan Administrator, the Employer
shall, as soon as practicable, appoint a successor Plan Administrator,
such successor thereafter to have all of the rights, privileges,
duties and obligations of the predecessor Plan Administrator.
13.5 Expenses. All expenses of the Plan and Trust (including Trustee's
fees) shall, unless paid by the Employer, be paid from the Trust.
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13.6 Liabilities. The Plan Administrator and each person to whom duties and
responsibilities have been allocated pursuant to this Plan document
may be indemnified and held harmless by the Employer with respect to
any alleged breach of responsibilities performed or to be performed
hereunder. The Employer and each Affiliated Employer shall indemnify
and hold harmless the Sponsor against all claims, liabilities, fines
and penalties and all expenses reasonably incurred by or imposed upon
it (including, but not limited to, reasonable attorneys' fees) which
arise as a result of actions or failure to act in connection with the
operation and administration of the Plan.
13.7 Claims Procedure.
(a) Filing a Claim. Any Participant or Beneficiary under the Plan may
file a written claim for a Plan benefit with the Plan
Administrator or with a person named by the Plan Administrator to
receive claims under the Plan. The Plan Administrator shall have
sole and total discretion in resolving claims.
(b) Notice of Denial of Claim. In the event of a denial or limitation
of any benefit or payment due to or requested by any Participant
or Beneficiary under the Plan ("claimant"), claimant shall be
given a written notification containing specific reasons for the
denial or limitation of his benefit. The written notification
shall contain specific reference to the pertinent Plan provisions
on which the denial or limitation of his benefit is based. In
addition, it shall contain a description of any other material or
information necessary for the claimant to perfect a claim and an
explanation of why such material or information is necessary. The
notification shall further provide appropriate information as to
the steps to be taken if the claimant wishes to submit his claim
for review. This written notification shall be given to a
claimant within 90 days after receipt of his claim by the Plan
Administrator unless special circumstances require an extension
of time for processing the claim. If such an extension of time
for processing is required, written notice of the extension shall
be furnished to the claimant prior to the termination of said
90-day period, and such notice shall indicate the special
circumstances which make the postponement appropriate.
(c) Right of Review. In the event of a denial or limitation of his
benefit, the claimant or his duly authorized representative shall
be permitted to review pertinent documents and to submit to the
Plan Administrator issues and comments in writing. In addition,
the claimant or his duly authorized representative may make a
written request for a full and fair review of his claim and its
denial by the Plan Administrator; provided, however, that such
written request must be received by the Plan Administrator (or
its delegate to receive such requests) within 60 days after
receipt by the claimant of written notification of the denial or
limitation of the claim, or within 60 days after the claimant
83
knew (or should have known) of any other determination by the
Plan Administrator. The 60-day requirement may be waived by the
Plan Administrator in appropriate cases.
(d) Decision on Review. A decision shall be rendered by the Plan
Administrator within 60 days after the receipt of the request for
review, provided that where special circumstances require an
extension of time for processing the decision, it may be
postponed on written notice to the claimant (prior to the
expiration of the initial 60-day period) for an additional 60
days after the receipt of such request for review. Any decision
by the Plan Administrator shall be furnished to the claimant in
writing and shall set forth the specific reasons for the decision
and the specific Plan provisions on which the decision is based.
(e) Court Action. No Participant or Beneficiary shall have the right
to seek judicial review of a denial of benefit, or to bring any
action in any court to enforce a claim for benefits prior to
filing a claim for benefits or exhausting his rights to review
under this Section 13.7.
ARTICLE XIV - AMENDMENT, TERMINATION AND MERGER
14.1 Amendments.
(a) The Employer expressly recognizes the authority of the Sponsor to
amend this prototype plan and trust from time to time, except
with respect to elections of the Employer in the Adoption
Agreement and the Optional Supplement, and the Employer shall be
deemed to have consented to any such amendment. The Employer
shall receive a written instrument indicating the amendment of
the prototype plan and trust, and such amendment shall become
effective as of the effective date of such instrument. No such
amendment shall in any way impair, reduce or affect any
Participant's vested and nonforfeitable rights in the Trust.
(b) The Employer may (i) change the choice of options in the Adoption
Agreement, (ii) add overriding language in the Adoption Agreement
when such language is necessary to (A) satisfy section 415 or 416
of the Code because of the required aggregation of multiple
plans, or (B) preserve benefits protected under section 411(d)(6)
of the Code, and (iii) 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. If the Plan is amended by the Employer for
any other reason, including a waiver of the minimum funding
requirement under section 412(d) of the Code, or if the Plan
fails to attain or retain qualification, the Plan will no longer
participate in this master or prototype plan and will be
considered an individually designed plan.
(c) No amendment to the Plan shall be effective to the extent that it
has the effect of decreasing a Participant's accrued benefit.
84
Notwithstanding the preceding sentence, a Participant's Account
may be reduced to the extent permitted under section 412(c)(8) of
the Code. For purposes of this subsection, a Plan amendment which
has the effect of decreasing a Participant's Account with respect
to benefits attributable to service before the amendment shall be
treated as reducing an accrued benefit. Furthermore, if the
vesting schedule of the 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
nonforfeitable percentage (determined as of such date) of such
Employee's right to his Account will not be less than his
percentage computed under the Plan without regard to such
amendment. No amendment to the Plan shall be effective to
eliminate or restrict an optional form of benefit. The preceding
sentence shall not apply to a Plan amendment that eliminates or
restricts the ability of a Participant to receive payment of his
or her Account balance under a particular optional form of
benefit if the amendment satisfies the conditions in (i) and (ii)
below:
(i) The amendment provides a single-sum distribution form that
is otherwise identical to the optional form of benefit
eliminated or restricted. For purposes of this condition
(i), a single-sum distribution form is otherwise identical
only if it is identical in all respects to the eliminated or
restricted optional form of benefit (or would be identical
except that it provides greater rights to the Participant)
except with respect to the timing of payments after
commencement.
(ii) The amendment is not effective unless the amendment provides
that the amendment shall not apply to any distribution with
an annuity starting date earlier than the earlier of: (A)
the 90th day after the date the Participant receiving the
distribution has been furnished a summary that reflects the
amendment and that satisfies the ERISA requirements at 29
CFR 2520.104b-3 relating to a summary of material
modifications or (B) the first day of the second Plan Year
following the Plan Year in which the amendment is adopted.
In addition, the Employer may amend the Plan to eliminate or restrict
optional forms of benefit for in-kind distributions and/or elective
transfers in accordance with section 411(d)(6) of the Code and the
regulations thereunder.
14.2 Plan Termination; Discontinuance of Employer Contributions.
(a) The Employer may terminate the Plan at any time in whole or in
part. In the event of the dissolution, merger, consolidation or
reorganization of the Employer, the Plan shall automatically
terminate and the Trust shall be liquidated as provided in
subsection (b) below unless the Plan is continued by a successor
Employer in accordance with Section 14.3.
85
(b) Upon the complete or partial termination of the Plan or the
complete discontinuance of Employer contributions under the Plan,
the Account balances of all Participants affected thereby shall
become fully vested and nonforfeitable, and, after taking all
steps necessary to ensure qualification of the Plan upon
termination, the Plan Administrator shall direct the Trustee to
distribute assets remaining in the Trust, after payment of any
expenses properly chargeable thereto, to Participants or their
Beneficiaries.
14.3 Successor Employer. In the event of the dissolution, merger,
consolidation or reorganization of the Employer, provision may be made
by which the Plan and Trust shall be continued by the successor
employer, in which case such successor employer shall be substituted
for the Employer under the Plan. The substitution of the successor
employer shall constitute an assumption of Plan liabilities by the
successor employer, and the successor employer shall have all powers,
duties and responsibilities of the Employer under the Plan.
14.4 Merger, Consolidation or Transfer. In the event of a merger or
consolidation of the Plan with, or transfer of assets or liabilities
of the Plan to, any other plan, the transaction shall be structured so
that each Participant would (if the Plan then terminated) receive a
benefit immediately after the merger, consolidation or transfer which
is equal to or greater than the benefit the Participant would have
been entitled to receive immediately before the merger, consolidation
or transfer (if this Plan had then terminated).
ARTICLE XV - MISCELLANEOUS PROVISIONS
15.1 Exclusive Benefit of Participants and Beneficiaries.
(a) All assets of the Trust shall be retained for the exclusive
benefit of Participants and their Beneficiaries and shall be used
only to pay benefits to such persons or to pay reasonable fees
and expenses of the Trust and of the administration of the Plan.
The assets of the Trust shall not revert to the benefit of the
Employer, except as otherwise specifically provided in subsection
(b).
(b) Contributions to the Trust under this Plan are subject to the
following conditions:
(i) If a contribution or any part thereof is made to the Trust
by the Employer under a mistake of fact, such contribution
or part thereof shall be returned to the Employer within one
year after the date the contribution is made;
(ii) In the event that the Commissioner of Internal Revenue
determines that the Plan is not initially qualified under
the Code, any contribution made incident to that initial
qualification by the Employer must be returned to the
Employer within one year after the date the initial
86
qualification is denied, but only if the application for the
qualification is made by the time prescribed by law for
filing the Employer's return for the taxable year in which
the Plan is adopted, or such later date as the Secretary of
the Treasury may prescribe; and
(iii)Contributions to the Trust are specifically conditioned on
their deductibility under the Code and, to the extent a
deduction is disallowed for any such contribution. such
amount (to the extent so disallowed) shall be returned to
the Employer within one year after the date of the
disallowance of the deduction.
15.2 Nonguarantee of Employment. Nothing contained in this Plan shall be
construed as a contract of employment between the Employer and any
Employee, or as a right of any Employee to be continued in the
employment of the Employer, or as a limitation of the right of the
Employer to discharge any of its Employees, with or without cause.
15.3 Rights to Trust Assets. No Employee, Participant or Beneficiary shall
have any right to, or interest in, any assets of the trust upon
termination of employment or otherwise, except as provided under the
Plan. All payments of benefits under the Plan shall be made solely out
of the assets of the Trust.
15.4 Nonalienation of Benefits. Except as provided under Article VIII of
the Plan with respect to Plan loans, benefits payable under the Plan
shall not be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge, garnishment,
execution or levy of any kind, voluntary or involuntary; provided,
however, that the Plan Administrator shall not be precluded from
complying with a qualified domestic relations order described in
section 414(p) of the Code, or any domestic relations order entered
before January 1, 1985. Any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, charge or otherwise dispose of any
right to benefits payable hereunder shall be void. The Trust shall not
in any manner be liable for, or subject to, the debts, contracts,
liabilities, engagements or torts of any person entitled to benefits
hereunder.
15.5 Gender. The use of the masculine pronoun shall extend to and include
the feminine gender, and the use of the feminine pronoun shall extend
to and include the masculine gender, wherever appropriate; the use of
the singular shall include the plural, and the use of the plural shall
include the singular, wherever appropriate.
15.6 Titles and Headings. The titles or headings of the respective Articles
and Sections are inserted merely for convenience and shall be given no
legal effect.
87
15.7 Failure of Employer's Plan to Qualify. If the Employer's Plan fails to
attain or retain qualification, such Plan will no longer participate
in this prototype plan and will be considered an individually designed
plan.
15.8 Compliance with Laws, Rules and Regulations. If any of the provisions
of this Plan or of the Trust Agreement are at any time in any way
inconsistent with any laws of the United States of America or the laws
of any state if not preempted by ERISA, or any regulations of the
Internal Revenue Service, U.S. Department of Labor, or any other
Federal or state regulatory authority, in a manner that adversely
affects the qualified status of the Plan under section 401(a) of the
Code or the tax-exempt status of the Trust under section 501(a) of the
Code, or may result in any civil penalties under ERISA or any other
law, then the Employer, the Plan Administrator and the Trustee shall
comply with the requirements of such laws or regulations, rather than
with the provisions of the Plan and Trust which are inconsistent
therewith. The Employer, the Plan Administrator and the Trustee shall
incur no liability for following such laws, rules or regulations.
15.9 Military Service. Notwithstanding any provision of the Plan to the
contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with section
414(u) of the Code.
88
EGTRRA AMENDMENT TO THE
▇. ▇▇▇▇ PRICE TRUST COMPANY
PROTOTYPE 401(k) RETIREMENT PLAN
PREAMBLE
1. Adoption and effective date of amendment. This amendment of the
▇. ▇▇▇▇ Price Trust Company Prototype 401(k) Retirement Plan
basic plan document #03 ("plan") is adopted to reflect certain
provisions of the Economic Growth and Tax Relief Reconciliation
Act of 2001 ("EGTRRA"). This amendment is intended as good faith
compliance with the requirements of EGTRRA and is to be construed
in accordance with EGTRRA and guidance issued thereunder. Except
as otherwise provided, this amendment shall be effective as of
the first day of the first plan year beginning after December 31,
2001, but shall not apply to taxable, plan or limitation years
beginning after December 31, 2010.
2. Supersession of inconsistent provisions. This amendment shall
supersede the provisions of the plan to the extent those
provisions are inconsistent with the provisions of this
amendment.
ARTICLE I - PLAN LOANS FOR OWNER-EMPLOYEES AND SHAREHOLDER EMPLOYEES
Effective for plan loans made after December 31, 2001, plan provisions
prohibiting loans to any owner-employee or shareholder-employee shall
cease to apply.
ARTICLE II - LIMITATIONS ON CONTRIBUTIONS
2.1. Effective date. This article shall be effective for limitation years
beginning after December 31, 2001.
2.2. Maximum annual addition. Except to the extent permitted under article
IX of this amendment and section 414(v) of the Code, if applicable,
the annual addition that may be contributed or allocated to a
participant's account under the plan for any limitation year shall not
exceed the lesser of:
(a) $40,000, as adjusted for increases in the cost-of-living under
section 415(d) of the Code, or
(b) 100 percent of the participant's compensation, within the meaning
of section 415(c)(3) of the Code, for the limitation year.
The compensation limit referred to in (b) shall not apply to any
contribution for medical benefits after separation from service
(within the meaning of section 401(h) or section 419A(f)(2) of the
Code) which is otherwise treated as an annual addition.
89
ARTICLE III - INCREASE IN COMPENSATION LIMIT
The annual compensation of each participant taken into account in
determining allocations for any plan year beginning after December 31,
2001, shall not exceed $200,000, as adjusted for cost-of-living
increases in accordance with section 401(a)(17)(B) of the Code. Annual
compensation means compensation during the plan year or such other
consecutive 12-month period over which compensation is otherwise
determined under the plan (the determination period). The
cost-of-living adjustment in effect for a calendar year applies to
annual compensation for the determination period that begins with or
within such calendar year.
ARTICLE IV - MODIFICATION OF TOP-HEAVY RULES
4.1. Effective date. This article shall apply for purposes of
determining whether the plan is a top-heavy plan under section
416(q) of the Code for plan years beginning after December 31,
2001, and whether the plan satisfies the minimum benefits
requirements of section 416(c) of the Code for such years. This
section amends Article XII of the plan.
4.2. Determination of top-heavy status.
(a) Key employee. Key employee means any employee or former
employee (including any deceased employee) who at any time
during the plan year that includes the determination date
was an officer of the employer having annual compensation
greater than $130,000 (as adjusted under section 416(i)(1)
of the Code for plan years beginning after December 31,
2002), a 5-percent owner of the employer or a 1-percent
owner of the employer having annual compensation of more
than $150,000. For this purpose, annual compensation means
compensation within the meaning of section 415(c)(3) of the
Code. The determination of who is a key employee will be
made in accordance with section 416(i)(1) of the Code and
the applicable regulations and other guidance of general
applicability issued thereunder.
(b) Determination of present values and amounts. This section
4.2(b) shall apply for purposes of determining the present
values of accrued benefits and the amounts of account
balances of employees as of the determination date.
(i) Distributions during year ending on the determination
date. The present values of accrued benefits and the
amounts of account balances of an employee as of the
determination date shall be increased by the
distributions made with respect to the employee under
the plan and any plan aggregated with the plan under
section 416(g)(2) of the Code during the 1-year period
ending on the determination date. The preceding
sentence shall also apply to distributions under a
terminated plan which, had it not been terminated,
90
would have been aggregated with the plan under section
416(g)(2)(A)(i) of the Code. In the case of a
distribution made for a reason other than separation
from service, death or disability, this provision shall
be applied by substituting "5-year period" for "1-year
period."
(ii) Employees not performing services during year ending on
the determination date. The accrued benefits and
accounts of any individual who has not performed
services for the employer during the 1-year period
ending on the determination date shall not be taken
into account.
4.3. Minimum benefits.
(a) Matching contributions. Employer matching contributions shall be
taken into account for purposes of satisfying the minimum
contribution requirements of section 416(c)(2) of the Code and
the plan. The preceding sentence shall apply with respect to
matching contributions under the plan or, if the plan provides
that the minimum contribution requirement shall be met in another
plan, under such other plan. Employer matching contributions that
are used to satisfy the minimum contribution requirements shall
be treated as matching contributions for purposes of the actual
contribution percentage test and other requirements of section
401(m) of the Code.
(b) Contributions under other plans. The employer may provide in the
EGTRRA Adoption Agreement that the minimum benefit requirement
shall be met in another plan (including another plan that
consists solely of a cash or deferred arrangement which meets the
requirements of section 401(k)(12) of the Code and matching
contributions with respect to which the requirements of section
401(m)(11) of the Code are met).
4.4. Exception to top-heavy rules. The top-heavy requirements of section
416 of the Code and Article XII of the plan shall not apply in any
year beginning after December 31. 2001, in which the plan consists
solely of a cash or deferred arrangement which meets the requirements
of section 401(k)(12) of the Code and matching contributions with
respect to which the requirements of section 401(m)(11) of the Code
are met.
ARTICLE V - VESTING OF EMPLOYER MATCHING CONTRIBUTIONS
5.1. Applicability. This article shall apply to all participants with
accrued benefits derived from employer matching contributions.
5.2. Vesting schedule. A participant's accrued benefit derived from
employer matching contributions shall vest as provided by the employer
in the EGTRRA Adoption Agreement. If the vesting schedule for employer
matching contributions in Option 3 of Article II.A of the EGTRRA
Adoption Agreement is elected, the election in the section of the plan
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that provides for the election of the former vesting schedule under
ss. 411(a)(10) of the Code shall apply. If elected by the Employer in
the EGTRRA Adoption Agreement, the vesting schedule elected in the
EGTRRA Adoption Agreement shall apply to all employer contributions.
ARTICLE VI - DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS
6.1. Effective date. This article shall apply to distributions made after
December 31, 2001.
6.2. Modification of definition of eligible retirement plan. For purposes
of the direct rollover provisions in Article X of the plan, an
eligible retirement plan shall also mean an annuity contract described
in section 403(b) of the Code and an eligible plan under section
457(b) of the Code that is maintained by a state, political
subdivision of a state or any agency or instrumentality of a state or
political subdivision of a state and that agrees to separately account
for amounts transferred into such plan from this plan. The definition
of eligible retirement plan shall also apply in the case of a
distribution to a surviving spouse or to a spouse or former spouse who
is the alternate payee under a qualified domestic relations order as
defined in section 414(p) of the Code.
6.3. Modification of definition of eligible rollover distribution to
exclude hardship distributions. For purposes of the direct rollover
provisions in Article X of the plan, any amount that is distributed on
account of hardship shall not be an eligible rollover distribution,
and the distributee may not elect to have any portion of such a
distribution paid directly to an eligible retirement plan.
6.4. Modification of definition of eligible rollover distribution to
include after-tax employee contributions. For purposes of the direct
rollover provisions in Article X of the plan, a portion of a
distribution shall not fail to be an eligible rollover distribution
merely because the portion consists of after-tax employee
contributions which are not includible in gross income. However, such
portion may be transferred only to an individual retirement account or
annuity described in section 408(a) or (b) of the Code or to a
qualified defined contribution plan described in section 401(a) or
403(a) of the Code that agrees to separately account for amounts so
transferred, including separately accounting for the portion of such
distribution which is includible in gross income and the portion of
such distribution which is not so includible.
ARTICLE VII - ROLLOVERS FROM OTHER PLANS
If elected by the employer in the EGTRAA Adoption Agreement, the plan will
accept participant rollover contributions and/or direct rollovers of
distributions made after December 31, 2001, from the types of plans
specified in the EGTRAA Adoption Agreement, beginning on the effective date
specified in the EGTRAA Adoption Agreement.
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ARTICLE VIII - REPEAL OF MULTIPLE USE TEST
The multiple use test described in Treasury Regulation section 1.401(m)-2
and Article III of the plan shall not apply for plan years beginning after
December 31, 2001.
ARTICLE IX - CATCH-UP CONTRIBUTIONS
If elected by the employer in the EGTRRA Adoption Agreement, all employees
who are eligible to make elective deferrals under this plan and who have
attained age 50 before the close of the plan year shall be eligible to make
catch-up contributions in accordance with, and subject to the limitations
of, section 414(v) of the Code. Such catch-up contributions shall not be
taken into account for purposes of the provisions of the plan implementing
the required limitations of sections 402(g) and 415 of the Code. The plan
shall not be treated as failing to satisfy the provisions of the plan
implementing the requirements of section 401(k)(3), 401(k)(11), 401(k)(12),
410(b) or 416 of the Code, as applicable, by reason of the making of such
catch-up contributions. If elected by the Employer in the EGTRRA Adoption
Agreement, such catch-up contributions shall be counted in determining the
amount of a participant's employer matching contributions.
ARTICLE X - SUSPENSION PERIOD AND CODE SECTION 402(g) LIMIT FOLLOWING HARDSHIP
DISTRIBUTION
10.1.Suspension period. A participant who receives a distribution of
elective deferrals after December 31, 2001, on account of hardship
shall be prohibited from making elective deferrals and employee
contributions under this and all other plans of the employer for 6
months after receipt of the distribution. A participant who receives a
distribution of elective deferrals in calendar year 2001 on account of
hardship shall be prohibited from making elective deferrals and
employee contributions under this and all other plans of the employer
for the period specified in the provisions of the plan relating to
suspension of elective deferrals that were in effect prior to this
amendment.
10.2.Elimination of reduced Code section 402(g) limit after suspension
period ends. With respect to hardship distributions made after
December 31, 2001, the post-hardship suspension contribution limit in
Treasury regulation section 1.401(k)-1(d)(2)(iv)(B)(3) is eliminated.
ARTICLE XI - DISTRIBUTION UPON SEVERANCE FROM EMPLOYMENT
11.1.Effective date. If elected by the employer in the EGTRAA Adoption
Agreement. this section shall apply for distributions and severances
from employment occurring after the date specified in the EGTRAA
Adoption Agreement.
▇▇.▇.▇▇▇ distributable event. A participant's elective deferrals,
qualified nonelective contributions, qualified matching contributions
and earnings attributable to these contributions shall be distributed
on account of the participant's severance from employment. However,
such a distribution shall be subject to the other provisions of the
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plan regarding distributions, other than provisions that require a
separation from service before such amounts may be distributed.
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401(k) RETIREMENT PLAN
TRUST AGREEMENT
The Employer has established a Plan to provide retirement, death and disability
benefits for eligible Employees and their Beneficiaries pursuant to section 401
of the Internal Revenue Code of 1986, as amended. As part of the Plan, the
Employer has requested such person or persons (individual, corporate, or other
entity), as may be designated in the Adoption Agreement, to serve as Trustee
pursuant to the Trust established for the investment of contributions under the
Plan upon the terms and conditions set forth in this Trust Agreement.
Unless the context of this Trust Agreement clearly indicates otherwise, the
terms defined in Article I of the Plan entered into by the Employer, of which
this Trust Agreement forms a part, shall, when used herein, have the same
meaning as in said Plan.
ARTICLE I - THE TRUST FUND
1.1. Establishment of Trust Fund. The Employer hereby establishes with the
Trustee a trust fund consisting of such sums of U. S. currency and
such other property acceptable to the Trustee as shall from time to
time be paid to the Trustee pursuant to this Trust Agreement. All such
money and property, together with all investments and reinvestments
made therewith and proceeds thereof, less any payments or
distributions made by the Trustee pursuant to the terms of this Trust
Agreement, are referred to as the Trust Fund. The Trustee hereby
accepts the Trust Fund and agrees to hold it in accordance with the
express provisions of this instrument and the requirements of law.
1.2. Named Fiduciary. The Administrator, as set forth in the Adoption
Agreement, shall have exclusive authority with respect to the
management and control of the Trust Fund in accordance with the Plan
and this Trust Agreement and shall be acting as a "Named Fiduciary" of
the Plan in the performance of such activities. The term "Named
Fiduciary," as used throughout this Trust Agreement, is deemed to
refer to the Named Fiduciary of the Plan, as set forth in this Section
1.2, and its duly authorized representatives.
1.3. Nature of Trustee's Duties. In performing its duties hereunder, the
Trustee shall serve solely in the capacity of a directed trustee
within the meaning of section 403(a)(1) of ERISA. The Trustee shall
not be deemed to be the "administrator" as defined in ERISA section
3(16)(A), the "plan sponsor" as defined in ERISA section 3(16)(B), or
a trustee with discretion to perform more than the express ministerial
duties pursuant to the terms of this Trust Agreement.
1.4. Limitation of Trustee's Duties. The Trustee shall have no duty to: (a)
determine or enforce payment of any contribution due under the Plan;
(b) inquire whether any contribution made to the Trust Fund is in
accordance with the terms of the Plan or law; (c) determine the
adequacy of the funding policy adopted by the Employer or the Named
Fiduciary; (d) inquire as to the propriety of any investment or
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distribution made under the Plan; or (e) ensure the tax qualified
status of the Plan under the Code.
ARTICLE II - ACCOUNTS
2.1. Establishing Accounts. The Trustee shall open and maintain, as part of
the Trust Fund, Participant accounts for such individuals as the
Administrator shall, from time to time, give written notice to the
Trustee as being Participants in the Plan. At the direction of the
Administrator, the Trustee shall also open and maintain such other
accounts as may be appropriate or desirable to aid in the
administration of the Plan. A separate account shall be maintained for
each Participant and shall be credited with the contributions made and
any forfeitures allocated to each such Participant pursuant to the
Plan (and all earnings thereon).
2.2. Charges Against Accounts. Upon receipt of written instructions from
the Administrator, the Trustee shall charge the appropriate account of
the Participant for any withdrawals or distributions made under the
Plan and any forfeiture of unvested interests attributable to Employer
contributions which may be required under the Plan. The Administrator
will give written instructions to the Trustee specifying the manner in
which Employer contributions and any forfeiture of the nonvested
portion of accounts, as allocated by the Administrator in accordance
with the provisions of the Plan, are to be credited to the various
accounts maintained for Participants.
2.3. Receipt of Contributions. The Trustee shall accept and hold in the
Trust Fund contributions made by the Employer and Participants under
the Plan. The Administrator shall give written instructions to the
Trustee specifying the specific Participants' accounts to which
contributions are to be credited, the amount of each such credit which
is attributable to Employer contributions and the amount, if any,
which is attributable to the Participants' required or voluntary
contributions. If written instructions are not received by the
Trustee, or if such instructions are received but are deemed by the
Trustee to be unclear, upon notice to the Employer, the Trustee shall
hold such contribution in cash, without liability for rising security
prices or distributions made, pending receipt by it from the
Administrator of written instructions or other clarification. If any
contributions or earnings are less than any minimum which the then
current prospectus for the Investment Options require, the Trustee may
hold the specified portion of contribution or earnings in cash,
without interest, until such time as the proper amount has been
contributed or earned so that the investment in the Investment Options
required under the Plan may be made.
ARTICLE III - INVESTMENT OF THE TRUST FUND
3.1. Investment of the Trust Fund - In General. The Named Fiduciary shall
be solely responsible for directing the Trustee as to the investment
and disposition of the Trust Fund and shall have responsibility for
the overall diversification of the Trust Fund. The Trustee shall
invest and reinvest the Trust Fund only as directed and the Trustee is
96
specifically prohibited from having or exercising any discretion with
respect to the investment of the Trust Fund.
3.2. Investment Powers of the Trustee. Subject to the limitations of
Section 3.1, the Trustee shall invest and reinvest the Trust Fund as
directed, free from any limitations imposed by state law on
investments of trust funds and without distinction between income and
principal, in any investment approved by the Named Fiduciary,
including equity or debt securities, insurance policies and contracts,
savings and time deposits, investment contracts issued by a bank,
insurance company or other financial or similar institution,
short-term instruments of deposit, registered investment companies
(including any investment company, the advisor of which is an
affiliate of the Trustee), investment partnerships or other pooled
investments funds, common, collective or group trust funds (including
any such fund held or maintained by the Trustee or an affiliate of the
Trustee for commingling assets of participating trusts, including but
not limited to assets of retirement plans which are qualified under
section 401(a) of the Code (the instrument of trust creating any such
qualified common, collective or group trust fund, to the extent of the
Trust Fund's equitable share thereof, being adopted hereby). The
Trustee shall have the power to hold all or a portion of the Trust
Fund uninvested pending receipt of clear and proper investment
directions or pending receipt of a contribution amount which is
necessary to carry out an investment direction.
3.3. Investment Options. At the direction of the Named Fiduciary, the
Trustee shall establish one or more separate Investment Options within
the Trust Fund, Investment Options shall be established by direct
investment or through the medium of a bank, trust fund, insurance
contract or regulated investment company, as the Named Fiduciary shall
direct. Each Investment Option shall be held and administered as part
of the Trust Fund, but shall be separately invested and accounted for
on behalf of each Participant's Plan account. To the extent authorized
by the Plan and conditioned on the Trustee's acceptance of such
property pursuant to Section 1.1 hereof, the Named Fiduciary may
direct the Trustee to establish one or more Investment Options all or
a portion of the assets of which shall be invested in qualifying
employer securities within the meaning of section 407(d)(5) of ERISA
("Qualifying Employer Securities"). Any such direction shall be deemed
to include a certification by the Named Fiduciary that the acquisition
and holding of such Qualifying Employer Securities by the Plan does
not constitute a prohibited transaction under section 406 of ERISA or
section 4975 of the Code. The Employer shall be solely responsible for
complying with any securities laws that may apply to Qualifying
Employer Securities held in the Trust Fund.
3.4. Participant Instructions. The Named Fiduciary's investment direction
to the Trustee may represent the aggregate of investment instructions
of Participants with respect to the assets in each Participant's Plan
account. All references in this Trust Agreement to directions or
instructions provided by the Named Fiduciary shall be deemed to
include Participant instructions that are provided to the Named
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Fiduciary or its agent and delivered by the Named Fiduciary or its
agent to the Trustee. The Named Fiduciary shall have the duty to
select and monitor all Investment Options or other investment media
made available to Participants under the Plan. The Named Fiduciary or
its agent shall ensure that all Participants who are entitled to
direct the investment of assets in their Plan accounts previously
received or receive a copy of all material describing such Investment
Options that is required by law. If a Participant fails to direct the
investment of assets in the Participant's Plan accounts as permitted
by the Plan, the Named Fiduciary shall direct the Trustee as to the
investment of such assets.
3.5. Appointment of Investment Manager. The Named Fiduciary may appoint one
or more investment managers, as defined in section 3(38) of ERISA
("Investment Manager") to manage, acquire and dispose of all or a
portion of the Trust Fund or an Investment Option. The Named Fiduciary
shall provide the Trustee with written notice of the appointment of
each Investment Manager and of the termination of such appointment and
direct the segregation of that portion of the Trust Fund to be managed
by the Investment Manager. The Named Fiduciary also shall provide the
Trustee with a copy of the investment management agreement and an
acknowledgement by the Investment Manager that it is a fiduciary with
respect to the Plan within the meaning of section 3(21)(A) of ERISA.
The Trustee shall be entitled to rely on such documents until
otherwise notified in writing by the Named Fiduciary. The Trustee
shall invest and reinvest such portion of the Trust Fund under the
management of the Investment Manager as directed by the Investment
Manager. The Trustee shall be entitled to conclusively rely upon the
valuation of any securities or other property held in any portion of
the Trust Fund that is provided to it by such Investment Manager for
all purposes under this Trust Agreement.
3.6. Plan Loans. If provided in Article VIII of the Plan, and subject to
the limitations set forth therein, the Trustee shall invest assets of
the Trust Fund in loans to Participants or Beneficiaries. Any such
direction shall be deemed to include a certification by the Named
Fiduciary that such loan is in accordance with provisions of the Plan
and ERISA and does not constitute a "prohibited transaction" under
ERISA. The Trustee shall accept as collateral for each Participant
loan only the appropriate amount of the Participant's Plan account
designated by the Plan or established policies. The Trustee shall
invest all loan repayments in accordance with the directions of the
Named Fiduciary and shall make distributions of defaulted loans as
directed by the Named Fiduciary.
3.7. Investment and Insurance Contracts. In the event that insurance
policies or contracts or investment contracts issued by a bank,
insurance company or other financial or similar institution (including
structured or synthetic investment contracts) are held in the Trust
Fund at the direction of the Named Fiduciary or an Investment Manager
("Contracts"), the Trustee shall not be liable for the refusal or
inability of any insurance company, bank or other financial
institution to issue, change, pay proceeds or make payments due under
any Contract; for the form, terms, genuineness, validity or
98
sufficiency of any Contract; or for any delay in payment or proceeds
due under any Contract. The Trustee shall not be responsible for the
valuation of any Contract and the Trustee shall be entitled to
conclusively rely upon such valuation provided by the issuer of the
Contract for all purposes under this Trust Agreement. The Trustee
shall not be responsible for evaluating or monitoring the financial
condition or status of any financial institution or insurance company
issuing any such Contract which the Named Fiduciary or an Investment
Manager directs the Trustee to hold or to purchase with the Trust
Fund.
3.8. Trustee's Duty and Responsibility with Respect to the Trust Fund. The
Trustee shall have no duty to question any action or direction of the
Employer, the Named Fiduciary, an Investment Manager or a Participant
(pursuant to the provisions of Section 6.3) or the failure of the
Employer, the Named Fiduciary, an Investment Manager or a Participant
to give directions, or to review the securities or other investments
which are held pursuant to directions of the Employer, the Named
Fiduciary, an Investment Manager or a Participant as to the
investment, reinvestment, retention or disposition of any such assets.
The Trustee shall not have any responsibility for diversification of
such assets, for any loss to or depreciation of such assets resulting
from the purchase, retention or sale of assets in accordance with the
direction of the Employer, the Named Fiduciary, an Investment Manager
or a Participant. The Trustee shall not be responsible for any
investment action taken or omitted by the Trustee in accordance with
any direction of the Employer, the Named Fiduciary, an Investment
Manager or Participant; any investment inaction in the absence of an
investment direction from the Employer, the Named Fiduciary, an
Investment Manager or Participant; or any investment action taken by
the Trustee pursuant to an order to purchase or sell securities placed
by the Employer, the Named Fiduciary, an Investment Manager or
Participant directly with a broker, dealer or issuer.
3.9. Knowledge of the Trustee. When the Trustee is subject to the direction
of the Employer, the Named Fiduciary, or an Investment Manager in
performing its duties under this Trust Agreement, the Trustee's
responsibilities will be limited to certain ministerial duties with
respect to the portion of the Trust Fund subject to such direction,
which duties do not involve the exercise of any discretionary
authority to manage or control Trust Fund assets and which duties will
be performed in the normal course of business by employees of the
Trustee, its affiliates or agents who are unfamiliar with investment
management ("Ministerial Duties"). Except as required by section
403(a)(1) of ERISA, the Trustee is not undertaking any duty or
obligation, express or implied, to review, and will not be deemed to
have reviewed, any transaction involving the investment of the Trust
Fund which it is directed to perform by the Employer, the Named
Fiduciary or an Investment Manager except to the extent necessary to
perform these Ministerial Duties in accordance with such direction.
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ARTICLE IV - OTHER MINISTERIAL DUTIES OF THE TRUSTEE
4.1. Other Ministerial Duties of the Trustee. The Trustee is authorized and
empowered with respect to the Trust Fund to perform the following
Ministerial Duties necessary to effectuate the instructions and
directions of the Named Fiduciary, the Plan Administrator, an
Investment Manager or a Participant:
(a) 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.
(b) To register any investment held by it in the name of the Trustee
or in the name of any custodian or its nominee, with or without
words indicating that such securities are held in a fiduciary
capacity, but the books and records of the Trustee shall at all
times show that all such investments are part of the Trust Fund.
(c) To hold or to appoint an agent or custodian to hold any property
hereunder in bearer form or in its own name or the name of its
nominee and to deposit or arrange for the deposit of any
securities or other property in a securities depository or
clearing agency; provided, however, that the Trustee may not
serve as custodian or appoint or terminate a custodian for any
plan assets, as defined in ERISA and the regulations thereunder,
which are managed by an affiliate of the Trustee. Any agent or
custodian so appointed shall be paid fees as mutually agreed upon
by the Employer and the agent or custodian and paid in the same
manner as other expenses of the Trust Fund. The Trustee shall not
hold any property or securities hereunder in the same account as
any individual property of the Trustee.
(d) To retain custody of original executed documents evidencing loans
to Participants made after the effective date of this Trust
Agreement and, to the extent provided to the Trustee by the
Employer, original executed documents evidencing outstanding
loans to Participants made prior to the effective date of this
Trust Agreement.
(e) To employ suitable agents, counsel, financial consultants,
valuation experts or other professionals (who may also be agents,
counsel, consultants or experts for the Employer or the Named
Fiduciary) and to pay their reasonable expenses and compensation
out of the Trust Fund.
(f) To trade all securities held in the Trust Fund as soon as
possible after an order is received and processed by the Trustee
or its agent in accordance with directions of the Employer, the
Named Fiduciary or an Investment Manager, taking into account any
trade delays which may occur due to stock market constraints or
the liquidity of the security.
Each and all of the foregoing powers may be exercised without a
court order or approval.
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4.2. Valuation of Trust Fund. The Trustee, as of the Valuation Date set
forth in the Plan and at such other time or times as is necessary or
as the Trustee and the Named Fiduciary agree, shall determine the net
worth of the assets of the Trust Fund. The valuation shall be based
upon valuations provided by Investment Managers, trustees of common
trust funds, sponsors of registered investment companies, records of
securities exchanges or valuation services, market data providers or
qualified appraisers. Notwithstanding the foregoing, the Trustee shall
not be responsible for providing the value of any Contracts, as
described in Section 3.7, or for any asset which is not liquid or not
publicly traded, the value of which shall be provided by the Named
Fiduciary. The Trustee may obtain the opinions of qualified
appraisers, as necessary in the discretion of the Trustee, to
determine the fair market value of Qualifying Employer Securities, the
fees of which appraiser shall, unless paid by the Employer, be paid
from the Trust Fund.
4.3. Trust Records. The Trustee shall keep accurate and detailed records of
all receipts, investments, disbursements and other transactions
required to be performed hereunder with respect to the Trust Fund. The
Trustee agrees to treat as confidential all records and other
information relative to the Trust Fund. The Trustee shall not disclose
such records and other information to third parties except to the
extent required by law or as requested in writing by the Employer. The
Trustee agrees to permit the Employer to inspect the records of the
Trust Fund maintained by the Trustee during regular business hours and
to permit the Employer to audit the same upon the giving of reasonable
notice to the Trustee. The Trustee further agrees that it will provide
the Employer with information and records that the Employer may
reasonably require in order to perform audits of such records.
4.4. Confidentiality/Security of Records. Trustee and Employer agree to
treat as confidential and use only in connection with this Trust
Agreement all Plan data, records, computer programs and software,
reports and other documents, which are furnished to the other under
this Trust Agreement. Trustee and Employer will protect the security
of such records and will not disclose such records or other
information to third parties except as required by law or when
requested to do so by the other; provided, however, that the Trustee
and Employer may disclose such records or information to its agents in
the course of performing its duties under this Trust Agreement or to
take other reasonable actions required by the Employer with respect to
the Plan.
4.5. Accounting. Within 90 days after the close of the Plan's fiscal year
or such other period as the Employer and the Trustee may agree, and
within 90 days after the resignation or removal of the Trustee, as
provided herein, the Trustee shall file with the Employer a written
account setting forth all investments, receipts, disbursement and
other transactions effected by it during such fiscal year or during
the period from the close of the last fiscal year to the date of such
resignation or removal. Unless the Employer files written objections
to such account with the Trustee within 180 days after the filing of
such account with the Employer, the accounting shall be deemed to be
101
approved and the Trustee shall, to the maximum extent permitted by
applicable law, be released and forever discharged from all liability
for further accountability to the Employer for the accuracy of such
accounting and for the propriety of all acts and the transactions of
the Trustee reflected in such account. If written objections are
specified and the matters in controversy cannot be settled between the
Employer and the Trustee, the Trustee may apply for a judicial
settlement of the account, the costs of such settlement being allowed
as an expense of the Trust Fund. The only necessary party thereto in
addition to the Trustee shall be the Employer.
4.6. Distributions and Other Payments. As provided in the Plan, the Trustee
shall make payment to such persons, including the Employer, the
Trustee, the Named Fiduciary, the Plan recordkeeper and Participants,
as the Named Fiduciary may direct from time to time. The Named
Fiduciary shall be responsible for insuring that any distribution or
other payment from the Trust Fund conforms to the provisions of the
Plan and ERISA. Excluding those fees and expenses set forth in a
separate fee schedule and the Plan's recordkeeping agreement, which
may be paid from the Trust Fund if not paid directly by the Employer,
the Named Fiduciary may direct the Trustee to pay fees or expenses
relating to the administration of the Plan or Trust Fund by submitting
to the Trustee all expenses to be charged to the Trust Fund. Each
submission also shall include a certification executed by the Named
Fiduciary that all such expenses are proper and reasonable.
Notwithstanding any other provisions of this Trust Agreement, the
Trustee may condition any distribution or other payment of Trust Fund
assets upon receipt of satisfactory assurances that the approval of
appropriate governmental agencies or other authorities has been
secured and that all notice and other procedures required by
applicable law have been satisfied. The Trustee shall be entitled to
rely conclusively upon the Named Fiduciary's directions and shall not
be liable for any distribution or other payment made in reliance upon
the Named Fiduciary's directions.
4.7. Limitation of Duties. The Trustee is a party to this Trust Agreement
solely for the purposes set forth herein and neither the Trustee nor
any of its officers, directors, employees or agents shall have any
duties or obligations with respect to the Trust Fund, except as
expressly set forth herein. To the extent not prohibited by ERISA, the
Trustee shall not be responsible in any way for any action or omission
of the Employer or the Named Fiduciary with respect to the performance
of their respective duties and obligations set forth in this Trust
Agreement and in the Plan. The Trustee may rely upon such information,
direction, action or inaction of the Employer or the Named Fiduciary
as being proper under the Plan or the Trust Agreement and is not
required to inquire into the propriety of any such information,
direction, action or inaction.
ARTICLE V - DUTIES OF THE EMPLOYER
5.1. Duties of the Employer. In addition to any duties of the Employer
otherwise prescribed in this Trust Agreement, the Employer,
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individually or through the Named Fiduciary, shall be responsible for
performing the following functions with respect to the Trust Fund:
(a) Transmitting all Trust Fund contributions made by or on behalf of
each Participant to the Trustee at such times and in such manner
as is mutually agreed between the Employer and the Trustee;
(b) Providing the Trustee with such information and data relevant to
the Plan as is necessary for the Trustee to properly perform its
duties hereunder;
(c) Providing to the Trustee, on a timely basis, a copy of the Plan
including all amendments and restatements, and a copy of the
Plan's determination letter from the Internal Revenue Service;
(d) Determining that the contributions made by or on the behalf of
each Participant are in accordance with any applicable federal
and state law and regulations;
(e) Assuring that the Plan maintains qualified status under section
401(a) of the Code at all times while any Plan assets are held in
the Trust Fund;
(f) Providing the Trustee with the value of any Contracts;
(g) Determining the suitability of and selecting every investment
offered as an option under the Plan, including but not limited to
Qualifying Employer Securities;
(h) Determining that loans to Participants are made and administered
in accordance with the Plan, ERISA and the Code;
(i) Determining that all payments, including distributions to
Participants, are reasonable, proper and in accordance with the
Plan, ERISA and the Code;
(j) Determining whether any domestic relations order is "qualified"
in accordance with section 414(p) of the Code and directing the
Trustee as to how to effect any such order; and
(k) Ensuring that a Participant who makes a required or voluntary
contribution has previously received or receives a copy of the
then current prospectus relating to the Investment Option(s) to
which such contribution is invested.
(l) Meeting any U.S. securities laws that may apply with respect to
offering Qualifying Employer Securities as an investment option
under the Plan. This includes, but is not limited to, registering
such stock with the Securities and Exchange Commission ("SEC")
and other government agencies, filing reports with the SEC and
other government agencies, and preparing prospectuses, proxy
solicitations and other similar materials.
103
ARTICLE VI - VOTING, TENDER AND SIMILAR RIGHTS
6.1. General Provisions. Except to the extent otherwise provided in Section
6.3 of this Trust Agreement, the Named Fiduciary (or the Investment
Manager with respect to assets under its management) shall direct the
Trustee as to the manner in which it shall; (i) vote in person or by
proxy, general or special, any securities held in the Trust Fund; (ii)
exercise conversion privileges, subscription rights and other options;
and (iii) participate in or dissent from reorganizations, tender
offers or other changes in property rights.
6.2. Receipt of Notices. Upon receipt, the Trustee shall transmit to the
Named Fiduciary (or to the Investment Manager with the respect to
assets under its management) all notices of conversion, redemption,
tender, exchange, subscription, class action, claim in insolvency
proceedings or other rights or powers relating to any investment in
the Trust Fund, which notices are received by the Trustee from its
agents or custodian, from issuers of securities and from the party (or
its agents) extending such rights. The Trustee shall have no
obligation to determine the existence of any conversion, redemption,
tender, exchange, subscription, class action, claim in insolvency
proceedings or other right or power relating to any investments in the
Trust Fund.
6.3. Qualifying Employer Securities. If provided in Article V of the Plan,
the Trustee shall exercise all voting or tender offer rights with
respect to any Qualifying Employer Securities in the Trust Fund which
are allocated to the Plan accounts of Participants in accordance with
instructions from Participants. Each Participant shall be a named
fiduciary within the meaning of section 403(a)(1) of ERISA for the
purpose of directing the voting and tendering of Qualifying Employer
Securities allocated to his Plan account. Each Participant may direct
the Trustee, confidentially, how to vote or whether or not to tender
the Qualifying Employer Securities representing shares allocated to
his Plan account. Upon timely receipt of direction, the Trustee shall
vote or tender all such shares of Qualifying Employer Securities as
directed by the Participants. The Employer shall direct the Trustee as
to voting of shares of Qualifying Employer Securities for which no
Participant direction is received. The Trustee shall use reasonable
procedures to inform Participants as to what action will be taken in
the absence of such affirmative instructions. In the case of a tender
offer or other right or option with respect to Qualifying Employer
Securities, a Participant who does not issue valid directions to the
Trustee to sell, offer to sell, exchange or otherwise dispose of such
Qualifying Employer Securities shall be deemed to have directed the
Trustee that such shares allocated to his Participant Account remain
invested in Qualifying Employer Securities. The Employer shall provide
the Trustee with all information and assistance that the Trustee may
reasonably request in order for the Trustee to perform its duties
hereunder.
Notwithstanding the foregoing, the Trustee shall follow any directions
of the Employer or Participants in the performance of these functions
only to the extent that following such directions would not violate
the provisions of ERISA.
104
ARTICLE VII - RESIGNATION OR REMOVAL OF TRUSTEE
7.1. Resignation or Removal of Trustee. The Trustee may resign at any time
upon 60 days' prior written notice to the Employer and the Employer
may remove the Trustee at anytime upon 60 days' prior written notice
to the Trustee. If mutually agreed upon between the parties, the 60
days' notice may be waived or reduced. Upon resignation or removal of
the Trustee, the Employer shall appoint a successor trustee. Upon
receipt by the Trustee of written acceptance of such appointment by
the successor trustee, the Trustee shall transfer and pay over to the
successor the Trust Fund and all records (or copies) pertaining
thereto. The Trustee is authorized, however, to reserve such sum of
money or property as it may deem advisable for payment of any
liabilities constituting a charge against the Trust Fund or against
the Trustee, with any balance of such reserve remaining after payment
of all such items to be paid over to the successor trustee. Upon the
transfer and payment over the assets of the Trust Fund and upon the
settlement or approval of the account for the Trustee pursuant to
Section 4.5 herein, the Trustee shall be released and discharged from
any and all claims, demands, duties and obligations arising out of the
Trust Fund and its management thereof.
7.2. Employer's Failure to Appoint Successor Trustee. If the Employer has
not appointed a successor trustee which has accepted such appointment
as of the effective date of the Trustee's resignation or removal, the
Trustee shall have the right to apply to a court of competent
jurisdiction for the appointment of such successor or for a
determination of its rights and obligations, the costs of such action,
unless paid by the Employer, being paid from the Trust Fund.
ARTICLE VIII - AMENDMENT AND TERMINATION OF THE TRUST AGREEMENT
8.1. Amendment. As provided in Article XIV of the Plan, and subject to the
limitations set forth therein, the Plan and Trust Agreement may be
amended at any time, in whole or in part by the Employer. No such
amendment shall make it possible for any part of the corpus or income
of the Trust Fund to be used or diverted to purposes other than the
exclusive benefit of Participants and their Beneficiaries and
defraying reasonable expenses of administering the Plan and trust
created under this Trust Agreement.
8.2. Termination. As provided in Article XIV of the Plan, and subject to
the limitations set forth therein, this Trust Agreement and the trust
created hereunder shall terminate upon the termination of the Plan,
unless expressly extended by the Employer. The trust also shall
terminate upon the dissolution or liquidation of the Employer where no
successor has elected to continue the Plan and this Trust Agreement.
Termination of the trust shall be effected by distribution of all
Trust Fund assets to the Participants or other persons entitled
thereto pursuant to the direction of the Named Fiduciary, subject to
the Trustee's right to reserve funds as provided in Section 7.1
hereof. Upon the completion of such distribution, the Trustee shall be
relieved from all further liability with respect to all amounts so
paid.
105
ARTICLE IX - MISCELLANEOUS
9.1. Written Instruction. Any direction of the Employer or the Named
Fiduciary pursuant to any provisions of this Trust Agreement shall be
set forth in writing from the Employer or the Named Fiduciary to the
Trustee and the Trustee shall be fully protected in relying upon such
written direction of the Employer or Named Fiduciary. For purposes of
this Section 9.1, written instructions shall include the electronic or
telephonic transmission of information or data as mutually agreed upon
by the Trustee and the Employer. The Trustee shall be fully protected
in relying upon any communication that the Trustee reasonably believes
to have been given by the Employer or the Named Fiduciary or their
duly authorized representatives, or any individual having apparent
authority as such. The Trustee shall receive all directions or
instructions in writing provided that the Trustee may accept oral
directions for purchases or sales from the Named Fiduciary via
telephone or other electronic procedures as agreed to between the
Employer and the recordkeeper for the Plan.
9.2. Indemnification and Hold Harmless. The Employer shall indemnify and
hold harmless the Trustee (including its employees, representatives
and agents) from and against any liability, loss or expense (including
reasonable attorneys' fees) arising out of: (a) the Trustee's
performance of its duties or responsibilities under this Trust
Agreement, except to the extent that such loss or expense arises from
the Trustee's own willful misconduct or gross negligence, (b) any
action taken by the Trustee in accordance with the direction or
instructions of the Employer, the Named Fiduciary, an Investment
Manager, or a Participant or (c) any matter relating to the Plan for
which the Trustee has no responsibility, control or liability under
this Trust Agreement, and (d) the failure of the Named Fiduciary or
the Employer (including its employees, representatives and agents) to
perform its duties under this Trust Agreement or with respect to the
Plan; provided, however, that this Section 9.2 shall not be construed
to relieve the Trustee from responsibility or liability for any duty
imposed upon directed trustees under section 403(a)(1) of ERISA.
9.3. Trustee's Fees, Expenses and Taxes. The Trustee shall give 90 days
advance written notice to the Employer whenever its fees are changed.
Such fees, any taxes of any kind whatsoever which may be levied or
assessed upon the Trust Fund, and any expenses incurred by the Trustee
in the performance of its duties hereunder, including fees for legal
services rendered to the Trustee, shall, unless paid by the Employer,
be paid from the Trust Fund in the manner provided for in the Plan.
9.4. Merger, Consolidation or Transfer. As provided in Article XIV of the
Plan, and subject to the limitations set forth therein, in the event
of the merger, consolidation or transfer of any portion of the Trust
Fund to a trust fund held under any other plan, the Trustee shall
dispose of all or part, as the case may be, of the Trust Fund, in
accordance with the written directions of the Named Fiduciary, subject
106
to the right of the Trustee to reserve funds as provided in Section
7.1 hereof.
9.5. Conflict with the Plan. In the event of any conflict between the
provisions of the Plan and this Trust Agreement with respect to the
rights or obligations of the Trustee, the provisions of this Trust
Agreement shall prevail.
9.6. Severability. If any provision of this Trust Agreement is held invalid
or unenforceable, such invalidity or unenforceability shall not affect
any other provisions, and this Trust Agreement shall be construed and
enforced as if such provision had not been included.
9.7. Surviving Sections. Notwithstanding any Sections of this Trust
Agreement to the contrary, Sections 7.1. 7.2, 8.2, 9.2 and 9.3 shall
survive the termination of this Trust Agreement.
9.8. Law Governing. This Trust Agreement shall be administered, construed
and enforced according to the laws of the state where the Trustee has
its principal place of business and applicable federal law.
9.9. Predecessor and Successor Trustees. The Trustee shall not be
responsible and shall have no liability for the acts or omissions of
any of its predecessors or successors.
9.10.Successors and Assigns. This Trust Agreement shall be binding upon
the successors and assigns of the parties hereto.
9.11.Amendments. As provided in Article XIV of the Plan and subject to the
limitations set forth therein, the Plan and Trust Agreements may be
amended at any time, in whole or in part, by the Employer. No
amendment to the Plan or Trust Agreement shall place any greater
burden on the Trustee without the Trustee's written consent.
9.12.Multiple Trustees. In the event that there shall be 2 or more
Trustees serving hereunder, any action taken or decision made by any
such Trustees may be taken or made by a majority of them with the same
effect as if all had joined therein, if there be more than 2, or
unanimously if there be 2.
107
EXHIBIT A
FIRST AMENDMENT TO THE
GARMIN INTERNATIONAL, INC. 401(k) AND PENSION PLAN
(as amended and restated July 1, 2002)
The Garmin International, Inc. 401(k) and Pension Plan (as amended and restated
July 1, 2002) (hereinafter referred to as the "Plan") is amended as provided
herein. This amendment is made in accordance with Section 14.1(b) of the plan
document.
The intent of these changes is to
o permit immediate participation in the Plan by employees of Garmin AT,
Inc.; and
o provide service credit with UPS Aviation Technologies, Inc. under the
Plan for eligibility and vesting; and
o permit rollover of after tax contribution accounts from the UPS
Aviation Technologies, Inc. employees' prior plan to the Plan.
First
-----
Effective August 22, 2003, or the Closing Date set forth in that certain "Stock
Purchase Agreement By and Between United Parcel Service of America, Inc. and
Garmin International, Inc. Dated as of July 24, 2003," if later, the additional
item shown below is incorporated into the previous election made under section
2.1 of the adoption agreement.
Employer.
Employer shall also mean any Employer(s) associated with the Employer named
above under section 414(b), 414(c), or 414(m) of the Code.
Garmin USA, Inc. and Garmin AT, Inc.
------------------------------------
Second
------
Effective August 22, 2003, or the Closing Date set forth in that certain "Stock
Purchase Agreement By and Between United Parcel Service of America, Inc. and
Garmin International, Inc. Dated as of July 24, 2003," if later, section 3.2 of
the adoption agreement should read as follows:
Service with predecessor Employer.
(b) Credit will be given for service with the following predecessor
Employer(s): UPS Aviation Technologies, Inc.
-------------------------------
Third
-----
Effective August 22, 2003, or the Closing Date set forth in that certain "Stock
Purchase Agreement By and Between United Parcel Service of America, Inc. and
Garmin International, Inc. Dated as of July 24, 2003," if later, section 4.2 of
the adoption agreement is modified to establish a special, one-time Entry Date
for employees of Garmin AT, Inc., who have met the eligibility requirements of
the Plan.
Fourth
------
Section III of the EGTRRA Adoption Agreement is hereby amended by replacing the
current pages 26 and 27 of the Adoption Agreement with replacement pages 26 and
27. Such replacement pages are attached hereto as Exhibit A.
The above Amendment by Page Substitution is documented and made effective
pursuant to the Execution Page for Page Substitution Amendment attached hereto
as Exhibit B.
IN WITNESS WHEREOF and as evidence of its adoption of this First Amendment to
the Garmin International, Inc. 401(k) and Pension Plan (as amended and restated
July 1, 2002), Garmin International, Inc. has caused this First Amendment to be
executed by its duly authorized officer.
GARMIN INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Print Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Title: CFO and Treasurer
------------------------------------
Date: 8-28-03
--------------------------------------
The Trustee of the Plan hereby acknowledges receipt of the foregoing First
Amendment to the Plan.
TRUSTEE
Received By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Print Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Vice President
--------------------------------------
Date: 8-29-2003
--------------------------------------
Exhibit A
B. Vesting Schedule for Other Employer Contributions.
Check the following option if the vesting schedule selected in A above will
apply to all employer contributions in the same manner the vesting schedule
selected in A applies to employer matching contributions.
[ ] The vesting schedule selected in A shove will apply to all employer
contributions.
III. Rollovers From Other Plans (EGTRRA Amendment Article VII)
A. Rollovers. (Choose one)
[ ] 1. The plan does not accept any type of rollover. (If this option
is selected, skip to B below.)
[X] 2. The plan will accept participant rollover contributions and/or
direct rollovers of distributions made after December 31,
2001, from the types of plans specified below beginning
on the effective date specified in B, below. (Complete a, b
and c below)
a. Direct Rollovers. (rollovers made directly from another plan)
(Choose i or ii)
[ ] i. No, the plan will not accept a direct rollover of
an eligible rollover distribution from any type of plan.
[X] ii. Yes, the plan will accept a direct rollover of an
eligible rollover distribution from (check each one that
applies):
[X] a qualified plan described in section 401(a) or
403(a) of the Code, including after-tax
employee contributions.
[X] a qualified plan described in section 401(a) or
403(a) of the Code, excluding after-tax
employee contributions.
[ ] an annuity contract described in section 403(b)of
the Code, excluding after-tax employee
contributions.
[ ] an eligible plan under section 457(b) of the Code
which is maintained by a state, a political sub-
division of a state, or any agency or instrumental-
ity of a state or political subdivision of a state.
b. Indirect Rollovers. (participant rollover contributions from
other plans) (choose i or ii)
[ ] i. No, the plan will not accept a participant Indirect
rollover contribution of an eligible rollover
distribution from any type of plan.
[ ] ii. Yes, the plan will accept a participant indirect
rollover contribution of an eligible rollover
distribution from (check each one that applies):
[ ] a qualified plan described In section 4O1(a) or
403(a) of the Code.
[ ] an annuity contract described in section 403(b) of the
Code.
[ ] an eligible plan under section 457(b) of the Code which
is maintained by a state, a political subdivision of a
state, or any agency or instrumentality of a state or
political subdivision of a state.
Note: Under EGTRRA, indirect rollovers from a plan cannot
include after-tax employee contributions.
c. Participant Rollover Contributions from Traditional IRAs.
The plan (choose one):
[ ] will
[ ] will not
accept a participant rollover contribution of the portion of
a distribution from an individual retirement account or annuity
described in section 408(a) or 408(b) of the Code that is
eligible to be rolled over and would otherwise be includible in
gross income.
Note: Under EGTRRA, contributory and conduit Traditional IRAs
may be rolled over to a qualified 401(a) plan; however,
nondeductible contributions and after-tax contributions
in a Traditional ▇▇▇ are not eligible for rollover to a
qualified 401(a) plan.
B. Effective Date of Rollover Provision. The foregoing rollover election(s)
shall be effective August 22, 2003 (enter a date no earlier than January 1,
2002).
IV. CATCH-UP CONTRIBUTIONS (EGTRRA Amendment Article IX)
A. Eligibility to Make Catch-Up Contributions. (Choose one)
[ ] Catch-up contributions shall not be permitted.
[ ] Catch-up contributions shall be permitted after
---------------------
(insert a date no earlier than December 31, 2001).
B. Catch-Up Contributions and Matching Contributions. Complete this
section B only if catch-up contributions are permitted
In determining the amount of a participant's employer matching
contributions (choose one)
[ ] Catch-up contributions shall be counted.
[ ] Catch-up contributions shall not be counted.
V. Distributions Upon Severance From Employment (EGTRRA Amendment XI) (Choose
one)
[ ] The plan will not permit distributions upon a severance from
employment.
[ ] The plan will permit distributions upon a severance from
employment regardless of when the severance from employment
occurred.
This EGTRRA Adoption Agreement consists of ___ pages, which consist of this
EGTRRA Adoption Agreement and
[ ] If this box is checked, supplemental page(s) consisting of
----- page(s).
IN WITNESS WHEREOF the Employer has caused this EGTRRA Adoption Agreement to be
executed by its duly authorized officers this 14th day of
October, 2002.
Garmin International, Inc.
---------------------------
(Print Name of Employer)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Authorized Signature for Employer
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, CFO and Treasurer
-----------------------------------
Name and Title (please print)
Exhibit B
First Amendment to the Garmin International, Inc. 401(k) and Pension Plan
Execution Page for Page Substitution Only
Execution Page
IN WITNESS of its agreement, the Employer by its duly authorized officer, has
executed this First Amendment on this 28th day of August, 2003.
GARMIN INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Authorized Signature for Employer
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, CFO and Treasurer
---------------------------------
Name and Title (please print)
Execution for Page Substitution Amendment Only. If this paragraph is completed,
this Execution Page documents an amendment to Adoption Agreement pages 26 and 27
(EGTRRA Adoption Agreement) effective August 22, 2003, by substitute Adoption
Agreement pages number 26 and 27 (EGTRRA Adoption Agreement), copies of both
such substitution pages are attached hereto.
Exhibit A
GARMIN INTERNATIONAL, INC. 401(k) AND PENSION PLAN
--------------------------------------------------------------------------------
PARTICIPATION AGREEMENT
--------------------------------------------------------------------------------
The undersigned Employer, by executing this Participation Agreement, elects
to become a Participating Employer in the Garmin International, Inc. 401(k) and
Pension Plan ("Plan"), as if the Participating Employer were a signatory to that
Adoption Agreement. The Participating Employer accepts, and agrees to be bound
by, all of the elections granted under the provisions of the Prototype Plan as
made by the Signatory Employer to the Execution Page of the Adoption Agreement,
except the Effective Date of the Plan for the Participating Employer is: August
22, 2003.
Name of Participating Employer:
Garmin AT, Inc.
Signed: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, CFO and Treasurer
-----------------------------------------------
[Print Name/Title]
8-28-03
-----------------------------------------------
[Date]
Participating Employer's EN: ▇▇-▇▇▇▇▇▇▇
--------------------
Acceptance by the Signatory Employer to the Execution Page of the Adoption
Agreement and by the Trustee.
Name of Signatory Employer: Name(s) of Trustees:
GARMIN INTERNATIONAL, INC. ▇. ▇▇▇▇ PRICE TRUST COMPANY
Signed: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Signed: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------- --------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, CFO and Treasurer ▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
---------------------------------- ---------------------------------
[Print Name/Title] [Print Name/Title]
8/28/03 8/29/2003
---------------------------------- ---------------------------------
[Date] [Date]
SECOND AMENDMENT TO
THE GARMIN INTERNATIONAL, INC. 401(k) AND PENSION PLAN
Effective November 1, 2003, and except as otherwise specified herein, the Garmin
International, Inc. 401(k) and Pension Plan (hereinafter referred to as the
"Plan") is hereby amended as provided herein.
WHEREAS, Garmin International, Inc. (hereinafter referred to as the "Employer")
heretofore adopted the Plan effective October 1, 1990; and
WHEREAS, the Plan consists of the ▇. ▇▇▇▇ Price Trust Company 401(k) Prototype
Retirement Plan and Trust Agreement (hereinafter referred to as the "Basic Plan
Document") and the ▇. ▇▇▇▇ Price Trust Company 401(k) Retirement Plan Adoption
Agreement (hereinafter referred to as the "Adoption Agreement"); and
WHEREAS, Section 14.1(b) of the Basic Plan Document provides that the Employer
may change the choice of options in the Adoption Agreement at any time; and
WHEREAS, the Employer desires to change the options in the Adoption Agreement as
provided herein;
NOW, THEREFORE, the Plan is hereby amended as follows:
First Change
------------
Section 5.2 of the Plan Document, Allocation of Net Earnings or Losses of the
Trust, is hereby added as follows:
Any dividends, interest, property or increments of any sort deriving
from any of the investment funds shall be held and reinvested in the
same fund.
In all other respects, the Plan is hereby ratified and affirmed.
IN WITNESS WHEREOF, and as evidence of its adoption of this amendment to the
Garmin International, Inc. 401(k) and Pension Plan, the Employer has caused this
document to be executed by its duly authorized officers.
Garmin International, Inc.
Witness: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ Min ▇. ▇▇▇
------------------------ -------------------------------------
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Print Name: Min ▇. ▇▇▇
----------------------- ----------------------------
Title: President
---------------------------------
Date: 10/13/03
----------------------------------
The Trustees of the Plan hereby acknowledge receipt of the foregoing amendment
to the Garmin International, Inc. 401(k) and Pension Plan.
▇. ▇▇▇▇ Price Trust Company
Witness: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------- -----------------------------------
Print Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Print Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------- ----------------------------
Title: Vice President
--------------------------------
Date: 10-30-2003
---------------------------------
THIRD AMENDMENT TO
THE GARMIN INTERNATIONAL, INC. 401(k) AND PENSION PLAN
Effective January 1, 2004, and except as otherwise specified herein, the Garmin
International, Inc. 401(k) and Pension Plan (hereinafter referred to as the
"Plan") is hereby amended as provided herein.
WHEREAS, Garmin International, Inc. (hereinafter referred to as the "Employer")
heretofore adopted the Plan effective October 1, 1990; and amended the plan
effective July 1, 2002, and
WHEREAS, the Plan consists of the ▇. ▇▇▇▇ Price Trust Company 401(k) Prototype
Retirement Plan and Trust Agreement (hereinafter referred to as the "Basic Plan
Document") and the ▇. ▇▇▇▇ Price Trust Company 401(k) Retirement Plan Adoption
Agreement (hereinafter referred to as the "Adoption Agreement"); and
WHEREAS, Section 14.1(b) of the Basic Plan Document provides that the Employer
may change the choice of options in the Adoption Agreement at any time; and
WHEREAS, the Employer desires to change the options in the Adoption Agreement as
provided herein;
NOW, THEREFORE, the Plan is hereby amended as follows:
First Change
------------
Section 5.1(c) of the Adoption Agreement, Compensation, is hereby amended to add
the following:
(c) [X] Wages as defined in section 3401(a) of the Code.
For the Plan Year but excluding the following:
Holiday, Anniversary and Perfect Model Attendance bonuses.
Note: If this Plan has a Discretionary Profit Sharing Contribution allocation
formula that is integrated with Social Security (Plan Section 5.1(b)),
Compensation must be defined as W-2 earnings, compensation as defined
in section 415 of the Code or wages as defined in section 3401(a) of
the Code; no exclusions are allowed.
In all other respects, the Plan is hereby ratified and affirmed.
IN WITNESS WHEREOF, and as evidence of its adoption of this amendment to the
Garmin International, Inc. 401(k) and Pension Plan, the Employer has caused this
document to be executed by its duly authorized officers.
Garmin International, Inc.
Witness: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------- -------------------------------------
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Print Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------ -----------------------------
Title: CFO and Treasurer
----------------------------------
Date: 9-1-2004
-----------------------------------
The Trustees of the Plan hereby acknowledge receipt of the foregoing amendment
to the Garmin International, Inc. 401(k) and Pension Plan.
▇. ▇▇▇▇ Price Trust Company
Witness: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------- -------------------------------------
Print Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------- -----------------------------
Title: VP
----------------------------------
Date: 8 September 2004
-----------------------------------
SUMMARY OF MATERIAL MODIFICATIONS
TO: Plan Participants
FROM: Administrator of the Garmin International Inc. 401(k) and
Pension Plan
DATE: _________________
RE: The Garmin International Inc. 401(k) and Pension Plan
This Summary of Material Modifications ("SMM") describes certain changes made to
the Garmin International Inc. 401(k) and Pension Plan (the "Plan"), effective
January 1, 2004.
The "Compensation" provisions of the Plan have been changed to reflect the
following:
Compensation shall exclude Holiday, Anniversary and Perfect Model
Attendance bonuses.
Please staple this SMM to your copy of the Summary Plan Description for the
Plan. If you have any questions about this SMM, please contact the Plan
Administrator designated in the Summary Plan Description.