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EXHIBIT 10.40
Flexible Standardized 401(k) Profit Sharing Plan
ADOPTION AGREEMENT
SECTION 1. EMPLOYER INFORMATION
Name of Employer: Alloy Designs, Inc.
Address: 000X. 00xx Xxxxxx, Xxxx #000
City: New York; State: NY; Zip: 10001
Telephone: 000-000-0000; Employer's Federal Tax Identification Number:
00-0000000
Type of Business (Check only one)
[ ] Sole Proprietorship
[ ] Partnership
[X] C Corporation
[ ] S Corporation
[ ] Other (Specify)
[ ] Check here if Related Employers may participate in this Plan and attach a
Related Employer Participation Agreement for each Related Employer who will
participate in this Plan.
Business Code:
Name of Plan: Alloy, Inc. 401(k) Savings Plan
Name of Trust (if different from Plan name):
Plan Sequence Number: 001 (Enter 001 if this is the first qualified plan the
Employer has ever maintained, enter 002 , if it is the second, etc.)
Trust Identification Number (if applicable): ; Account Number (Optional): 43281
SECTION 2. EFFECTIVE DATES Complete Parts A and B
Part A. General Effective Dates (Check and Complete Option 1 or 2):
Option 1: [X] This is the initial adoption of a profit sharing plan by the
Employer. The Effective Date of this Plan is 01/01/1999.
NOTE: The effective date is usually the first day of the Plan Year in which this
Adoption Agreement is signed.
Option 2: [ ] This is an amendment and restatement of an existing profit sharing
plan (a Prior Plan).
The Prior Plan was initially effective on: The Effective Date of this amendment
and restatement is:
NOTE: The effective date is usually the first day of the Plan Year in which this
Adoption Agreement is signed.
Part B. Commencement of Elective Deferrals:
Elective Deferrals may commence on: 04/01/1999.
NOTE: This date may be no earlier than the date this Adoption Agreement is
signed because Elective Deferrals cannot be made retroactively.
SECTION 3. RELEVANT TIME PERIODS Complete Parts A through C
Part A. Employer's Fiscal Year:
The Employer's fiscal year ends (Specify month and date):
Part B. Plan Year Means:
Option 1: [ ] The 12-consecutive month period which coincides with the
Employer's fiscal year.
Option 2: [X] The calendar year.
Option 3: [ ] Other 12-consecutive month period (Specify):
NOTE: If no option is selected, Option 1 will be deemed to be selected. If the
initial Plan Year is less than 12 months (a short Plan Year) specify such
Plan Year's beginning and ending dates
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Part C. Limitation Year Means:
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Option 1: [X] The Plan Year.
Option 2: [ ] The calendar year.
Option 3: [ ] Other 12-consecutive month period (Specify): .
NOTE: If no option is selected, Option 1 will be deemed to be selected.
SECTION 4. ELIGIBILITY REQUIREMENTS Complete Parts A through F
Part A. Years of Eligibility Service Requirement:
1. Elective Deferrals.
An Employee will be eligible to become a Contributing Participant in the Plan
(and thus be eligible to make Elective Deferrals) and receive Matching
Contributions (including Qualified Matching Contributions, if applicable) after
completing: [ ] (enter 0, 1 or any fraction less than 1) Years of Eligibility
Service.
2. Employer Profit Sharing Contributions.
An Employee will be eligible to become a Participant in the Plan for purposes of
receiving an allocation of any Employer Profit Sharing Contribution made
pursuant to Section 10 of the Adoption Agreement after completing: [ ] (enter 0,
1, 2 or any fraction less than 2) Years of Eligibility Service. NOTE: If more
than 1 year is selected for Item 2, the immediate 100% vesting schedule of
Section 12 will automatically apply for contributions described in such item. If
either item is left blank, the Years of Eligibility Service required for such
item will be deemed to be 0. If a fraction is selected, an Employee will not be
required to complete any specified number of Hours of Service to receive credit
for a fractional year. If a single Entry Date is selected in Section 4, Part F
for an item, the Years of Eligibility Service required for such item cannot
exceed 1.5 (.5 for Elective Deferrals).
Part B. Age Requirement:
1. Elective Deferrals.
An Employee will be eligible to become a Contributing Participant (and thus be
eligible to make Elective Deferrals) and receive Matching Contributions
(including Qualified Matching Contributions, if applicable) after attaining age
21 (no more than 21).
2. Employer Profit Sharing Contributions.
An Employee will be eligible to become a Participant in the Plan for purposes of
receiving an allocation of any Employer Profit Sharing Contribution made
pursuant to Section 10 of the Adoption Agreement after attaining age [ ] (no
more than 21). NOTE: If either of the above items in this Section 4, Part B is
left blank, it will be deemed there is no age requirement for such item. If a
single Entry Date is selected in Section 4, Part F for an item, no age
requirement can exceed 20.5 for such item.
Part C. Employees Employed As Of Effective Date:
Will all Employees employed as of the Effective Date of this Plan who have not
otherwise met the requirements of Part A or Part B above be considered to have
met those requirements as of the Effective Date? [ ] Yes [X] No
NOTE: If a box is not checked for any item in this Section 4, Part C, "No" will
be deemed to be selected.
Part D. Exclusion of Certain Classes of Employees:
All Employees will be eligible to become Participants in the Plan except:
a. [X] Those Employees included in a unit of Employees covered by a collective
bargaining agreement between the Employer and Employee representatives, if
retirement benefits were the
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subject of good faith bargaining and if two percent or less of the Employees who
are covered pursuant to that agreement are professionals as defined in Section
1.4l0(b)-9 of the regulations. For this purpose, the term "employee
representatives" does not include any organization more than half of whose
members are Employees who are owners, officers, or executives of the Employer.
b. [X] Those Employees who are non-resident aliens (within the meaning of
Section 7701(b)(l)(B) of the Code) and who received no earned income (within the
meaning of Section 911(d)(2) of the Code) from the Employer which constitutes
income from sources within the United States (within the meaning of Section
861(a)(3) of the Code).
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Part E. Hours Required For Eligibility Purposes:
_____1. Hours of Service (no more than 1,000) shall be required to constitute a
Year of Eligibility Service.
_____2. Hours of Service (no more than 500 but less than the number specified in
Section 4, Part E, Item 1, above) must be exceeded to avoid a Break in
Eligibility Service.
3. For purposes of determining Years of Eligibility Service, Employees shall
be given credit for Hours of Service with the following predecessor employer(s):
(Complete if applicable)
Part F. Entry Dates:
The Entry Dates for participation shall be (Choose one):
Option 1: [ ] The first day of the Plan Year and the first day of the seventh
month of the Plan Year.
Option 2: [X] Other (Specify): the first day of each month
NOTE: If no option is selected, Option 1 will be deemed to be selected. Option 2
can be selected for an item only if the eligibility requirements and Entry Dates
are coordinated such that each Employee will become a Participant in the Plan no
later than the earlier of: (1) the first day of the Plan Year beginning after
the date the Employee satisfies the age and service requirements of Section
410(a) of the Code; or (2) 6 months after the date the Employee satisfies such
requirements.
SECTION 5. METHOD OF DETERMINING SERVICE Complete Part A or B
Part A. Hours of Service Equivalencies:
Service will be determined on the basis of the method selected below. Only one
method may be selected. The method selected will be applied to all Employees
covered under the Plan. (Choose one):
Option 1: [X] On the basis of actual hours for which an Employee is paid or
entitled to payment.
Option 2: [ ] On the basis of days worked. An Employee will be credited with 10
Hours of Service if under Section 1.24 of the Plan such Employee would be
credited with at least 1 Hour of Service during the day.
Option 3: [ ] On the basis of weeks worked. An Employee will be credited with 45
Hours of Service if under Section 1.24 of the Plan such Employee would be
credited with at least 1 Hour of Service during the week.
Option 4: [ ] On the basis of months worked. An Employee will be credited with
190 Hours of Service if under Section 1.24 of the Plan such Employee would be
credited with at least 1 Hour of Service during the month.
NOTE: If no option is selected, Option 1 will be deemed to be selected. This
Section 5, Part A will not apply if the Elapsed Time Method of Section 5, Part B
is selected.
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Part B. Elapsed Time Method:
In lieu of tracking Hours of Service of Employees, will the elapsed time method
described in Section 2.07 of the Plan be used? (Choose one)
Option 1: [ ] No.
Option 2: [ ] Yes.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
SECTION 6. ELECTIVE DEFERRALS
Part A. Authorization of Elective Deferrals:
Will Elective Deferrals be permitted under this Plan? (Choose one)
Option 1: [X] Yes.
Option 2: [ ] No.
NOTE: If no option is selected, Option 1 will be deemed to be selected. Complete
the remainder of Section 6 only if Option 1 is selected.
Part B. Limits on Elective Deferrals:
If Elective Deferrals are permitted under the Plan, a Contributing Participant
may elect under a salary reduction agreement to have his or her Compensation
reduced by an amount as described below (Choose one):
Option 1: [X] An amount equal to a percentage of the Contributing Participant's
Compensation from 1 % to 15% in increments of 1%.
Option 2: [ ] An amount of the Contributing Participant's Compensation not less
than __ and not more than __.
The amount of such reduction shall be contributed to the Plan by the Employer on
behalf of the Contributing Participant. For any taxable year, a Contributing
Participant's Elective Deferrals shall not exceed the limit contained in Section
402(g) of the Code in effect at the beginning of such taxable year.
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Part C. Elective Deferrals Based on Bonuses:
Instead of or in addition to making Elective Deferrals through payroll
deduction, may a Contributing Participant elect to contribute to the Plan, as an
Elective Deferral, part or all of a bonus rather than receive such bonus in
cash? (Choose one)
Option 1: [ ] Yes.
Option 2: [X] No.
NOTE: If no option is selected, Option 2 will be deemed to be selected.
Part D. Return As A Contributing Participant After Ceasing Elective Deferrals:
A Participant who ceases Elective Deferrals by revoking a salary reduction
agreement may return as a Contributing Participant as of such times established
by the Plan Administrator in a uniform and nondiscriminatory manner.
Part E. Changing Elective Deferral Amounts:
A Contributing Participant may modify a salary reduction agreement to
prospectively increase or decrease the amount of his or her Elective Deferrals
as of such times established by the Plan Administrator in a uniform and
nondiscriminatory manner.
Part F. Claiming Excess Elective Deferrals:
Participants who claim Excess Elective Deferrals for the preceding calendar year
must submit their claims in writing to the Plan Administrator by (Choose one):
Option l: [X] March 1.
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Option 2: [ ] Other (Specify a date not later than April 15)
NOTE: If no option is selected, Option I will be deemed to be selected.
SECTION 7. MATCHING CONTRIBUTIONS
Part A. Authorization of Matching Contributions:
Will the Employer make Matching Contributions to the Plan on behalf of
Qualifying Contributing Participants?
(Choose one)
Option 1: [ ] Yes, but only with respect to a Contributing Participant's
Elective Deferrals.
Option 2: [ ] Yes, but only with respect to a Participant's Nondeductible
Employee Contributions.
Option 3: [ ] Yes, with respect to both Elective Deferrals and Nondeductible
Employee Contributions.
Option 4: [X] No.
NOTE: If no option is selected, Option 4 will be deemed to be selected. Complete
the remainder of Section 7 only if Option 1, 2 or 3 is selected.
Part B. Matching Contribution Formula:
If the Employer will make Matching Contributions, then the amount of such
Matching Contributions made on behalf of a Qualifying Contributing Participant
each Plan Year shall be (Choose one):
Option 1: [ ] An amount equal to ____% of such Contributing Participant's
Elective Deferral (and/or Nondeductible Employee Contribution, if applicable).
Option 2: [ ] An amount equal to the sum of __% of the portion of such
Contributing Participant's Elective Deferral (and/or Nondeductible Employee
Contribution, if applicable) which does not exceed __% of the Contributing
Participant's Compensation plus __% of the portion of such Contributing
Participant's Elective Deferral (and/or Nondeductible Employee Contribution, if
applicable) which exceeds __% of the Contributing Participant's Compensation.
Option 3: [ ] Such amount, if any, equal to that percentage of each Contributing
Participant's Elective Deferral (and/or Nondeductible Employee Contribution, if
applicable) which the Employer, in its sole discretion, determines from year to
year.
Option 4: [ ] Other Formula. (Specify)
NOTE: If Option 4 is selected, the formula specified can only allow Matching
Contributions to be made with respect to a Contributing Participant's Elective
Deferrals (and/or Nondeductible Employee Contribution, if applicable).
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Part C. Limit on Matching Contributions:
Notwithstanding the Matching Contribution formula specified above, no Matching
Contribution will be made with respect to a Contributing Participant's Elective
Deferrals (and/or Nondeductible Employee Contributions, if applicable) in excess
of __ or __% of such Contributing Participant's Compensation.
Part D. Qualifying Contributing Participants:
A Contributing Participant who satisfies the eligibility requirements described
in Section 4 will be a Qualifying Contributing Participant and thus entitled to
share in Matching Contributions for any Plan Year only if the Participant is a
Contributing Participant and satisfies the following additional conditions
(Check one or more Options):
Option 1: [ ] No Additional Conditions.
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Option 2: [ ] Hours of Service Requirement. The Contributing Participant
completes at least (not more than 500) Hours of Service during the Plan Year.
However, this condition will be waived for the following reasons (Check at least
one):
[ ] The Contributing Participant's Death.
[ ] The Contributing Participant's Termination of Employment after having
incurred a Disability.
[ ] The Contributing Participant's Termination of Employment after having
reached Normal Retirement Age.
[ ] This condition will not be waived.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
SECTION 8. QUALIFIED NONELECTIVE CONTRIBUTIONS
Part A. Authorization of Qualified Nonelective Contributions:
Will the Employer make Qualified Nonelective Contributions to the Plan? (Choose
One)
Option 1: [ ] Yes.
Option 2: [X] No.
If the Employer elects to make Qualified Nonelective Contributions, then the
amount, if any, of such contribution to the Plan for each Plan Year shall be an
amount determined by the Employer.
NOTE: If no option is selected, Option 1 will be deemed to be selected. Complete
the remainder of Section 8 only if Option 1 is selected.
Part B. Participants Entitled to Qualified Nonelective Contributions:
Allocation of Qualified Nonelective Contributions shall be made to the
Individual Accounts of (Choose one):
Option 1: [ ] Only Participants who are not Highly Compensated Employees.
Option 2: [ ] All Participants.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
Part C. Allocation of Qualified Nonelective Contributions:
Allocation of Qualified Nonelective Contributions to Participants entitled
thereto shall be made (Choose one):
Option 1: [ ] In the ratio which each Participant's Compensation for the Plan
Year bears to the total Compensation of all Participants for such Plan Year.
Option 2: [ ] In the ratio which each Participant's Compensation not in excess
of __for the Plan Year bears to the total Compensation of all Participants not
in excess of __ for such Plan Year.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
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SECTION 9. QUALIFIED MATCHING CONTRIBUTIONS
Part A. Authorization of Qualified Matching Contributions:
Will the Employer make Qualified Matching Contributions to the Plan on behalf of
Qualifying Contributing Participants? (Choose One)
Option 1: [ ] Yes, but only with respect to a Contributing Participant's
Elective Deferrals.
Option 2: [ ] Yes, but only with respect to a Participant's Nondeductible
Employee Contributions.
Option 3: [ ] Yes, with respect to both Elective Deferrals and Nondeductible
Employee Contributions.
Option 4: [X] No.
NOTE: If no option is selected, Option 3 will be deemed to be selected. Complete
the remainder
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of Section 9 only if Option 1, 2 or 3 is selected.
Part B. Qualified Matching Contribution Formula:
If the Employer will make Qualified Matching Contributions, then the amount of
such Qualified Matching Contributions made on behalf of a Qualifying
Contributing Participant each Plan Year shall be (Choose one):
Option 1: [ ] An amount equal to __% of such Contributing Participant's Elective
Deferral (and/or Nondeductible Employee Contribution, if applicable).
Option 2: [ ] An amount equal to the sum of __% of the portion of such
Contributing Participant's Elective Deferral (and/or Nondeductible Employee
Contribution, if applicable) which does not exceed ____% of the Contributing
Participant's Compensation plus __% of the portion of such Contributing
Participant's Elective Deferral (and/or Nondeductible Employee Contribution, if
applicable) which exceeds __% of the Contributing Participant's Compensation.
Option 3: [ ] Such amount, if any, as determined by the Employer in its sole
discretion, equal to that percentage of the Elective Deferrals (and/or
Nondeductible Employee Contribution, if applicable) of each Contributing
Participant entitled thereto which would be sufficient to cause the Plan to
satisfy the Actual Contribution Percentage tests (described in Section 11.402 of
the Plan) for the Plan Year.
Option 4: [ ] Other Formula. (Specify):
NOTE: If no option is selected, Option 3 will be deemed to be selected.
Part C. Participants Entitled to Qualified Matching Contributions: Qualified
Matching Contributions, if made to the Plan, will be made on behalf of (Choose
one):
Option 1: [ ] Only Contributing Participants who make Elective Deferrals who are
not Highly Compensated Employees.
Option 2: [ ] All Contributing Participants who make Elective Deferrals.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
Part D. Limit On Qualified Matching Contributions:
Notwithstanding the Qualified Matching Contribution formula specified above, the
Employer will not match a Contributing Participant's Elective Deferrals (and/or
Nondeductible Employee Contribution, if applicable) in excess of __ or __% of
such Contributing Participant's Compensation.
SECTION 10. EMPLOYER PROFIT SHARING CONTRIBUTIONS Complete Parts A, B and C
Part A. Contribution Formula:
For each Plan Year the Employer will contribute an Amount to be determined from
year to year.
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Part B. Allocation Formula (Choose one):
Option 1: [ ] Pro Rata Formula. Employer Profit Sharing Contributions shall be
allocated to the Individual Accounts of Qualifying Participants in the ratio
that each Qualifying Participant's Compensation for the Plan Year bears to the
total Compensation of all Qualifying Participants for the Plan Year.
Option 2: [ ] Integrated Formula. Employer Profit Sharing Contributions shall be
allocated as follows (Start with Step 3 if this Plan is not a Top-Heavy Plan):
Step 1. Employer Profit Sharing Contributions shall first be allocated pro rata
to Qualifying Participants in the manner described in Section 10, Part B, Option
1. The percent so allocated shall not exceed 3% of each Qualifying Participant's
Compensation.
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Step 2. Any Employer Profit Sharing Contributions remaining after the allocation
in Step 1 shall be allocated to each Qualifying Participant's Individual Account
in the ratio that each Qualifying Participant's Compensation for the Plan Year
in excess of the integration level bears to all Qualifying Participants'
Compensation in excess of the integration level, but not in excess of 3%.
Step 3. Any Employer Profit Sharing Contributions remaining after the allocation
in Step 2 shall be allocated to each Qualifying Participant's Individual Account
in the ratio that the sum of each Qualifying Participant's total Compensation
and Compensation in excess of the integration level bears to the sum of all
Qualifying Participants' total Compensation and Compensation in excess of the
integration level, but not in excess of the profit sharing maximum disparity
rate as described in Section 3.01 (B)(3) of the Plan.
Step 4. Any Employer Profit Sharing Contributions remaining after the allocation
in Step 3 shall be allocated pro rata to Qualifying Participants in the manner
described in Section 10, Part B, Option 1.
The integration level shall be (Choose one):
Suboption (a): [ ] The Taxable Wage Base.
Suboption (b): [ ] __________ (a dollar amount less than the Taxable Wage Base).
Suboption (c): [ ] ______% (not more than 100%) of the Taxable Wage Base.
NOTE: If no option is selected, Suboption (a) will be deemed to be selected.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
Part C. Qualifying Participants:
A Participant will be a Qualifying Participant and thus entitled to share in the
Employer Profit Sharing Contribution for any Plan Year only if the Participant
is a Participant on at least one day of such Plan Year and satisfies the
following additional conditions (Check one or more Options):
Option 1: [ ] No Additional Conditions.
Option 2: [ ] Hours of Service Requirement. The Participant completes at least
__ (not more than 500) Hours of Service during the Plan Year. However, this
condition will be waived for the following reasons (Check at lease one):
[ ] Participant's Death.
[ ] The Participant's Termination of Employment after having incurred a
Disability.
[ ] The Participant's Termination of Employment after having reached Normal
Retirement Age.
[ ] This condition will not be waived.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
SECTION 11. COMPENSATION Complete Parts A through D
Part A. Basic Definition:
Compensation will mean all of each Participant's (Choose one):
Option 1: [X] W-2 wages.
Option 2: [ ] Section 3401(a) wages.
Option 3: [ ] 415 safe-harbor compensation.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
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Part B. Measuring Period for Compensation:
Compensation shall be determined over the following applicable period (Choose
one):
Option 1: [X] The Plan Year.
Option 2: [ ] The calendar year ending with or within the Plan Year.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
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Part C. Inclusion of Elective Deferrals:
Does Compensation include Employer Contributions made pursuant to a salary
reduction agreement which are not includible in the gross income of the Employee
under Sections 125, 402(e)(3), 402(h)(1)(B), and 403(b) of the Code?
[X] Yes [ ] No
NOTE: If neither box is checked. "Yes" will be deemed to be selected.
Part D. Pre-Entry Date Compensation:
For the Plan Year in which an Employee enters the Plan, the Employee's
Compensation which shall be taken into account for purposes of the Plan shall be
(Choose one):
Option 1: [ ] The Employee's Compensation only from the time the Employee became
a Participant in the Plan.
Option 2: [X] The Employee's Compensation for the whole of such Plan Year. NOTE:
If no option is selected, Option 1 will be deemed to be selected.
SECTION 12. VESTING AND FORFEITURES Complete Parts A through G
Part A. Vesting Schedule For Employer Profit Sharing Contributions. A
Participant shall become Vested in his or her Individual Account derived from
Profit Sharing Contributions made pursuant to Section 10 of the Adoption
Agreement as follows (Choose one):
YEARS OF VESTING SERVICE VESTED PERCENTAGE
Option 1 [ ] Option 2 [ ] Option 3 [ ] Option 4 [ ] Option 5 [ ] (Complete if
Chosen)
1 0% 0% 100% 0% ___%
2 0% 20% 100% 0% ___%
3 0% 40% 100% 20% ___% (not less than 20%)
4 0% 60% 100% 40% ___% (not less than 40%)
5 100% 80% 100% 60% ___% (not less than 60%)
6 100% 100% 100% 80% ___% (not less than 80%)
7 100% 100% 100% 100% ___% (not less than 100%)
NOTE: If no option is selected, Option 3 will be deemed to be selected.
Part B. Vesting Schedule For Matching Contributions. A Participant shall become
Vested in his or her individual Account derived from Matching Contributions made
pursuant to Section 7 of the Adoption Agreement as follows (Choose one):
YEARS OF VESTING SERVICE VESTED PERCENTAGE
Option 1 [ ] Option 2 [ ] Option 3 [ ] Option 4 [ ] Option 5 [ ] (Complete if
Chosen)
1 0% 0% 100% 0% __%
2 0% 20% 100% 0% __%
3 0% 40% 100% 20% __% (not less than 20%)
4 0% 60% 100% 40% __% (not less than 40%)
5 100% 80% 100% 60% __% (not less than 60%)
6 100% 100% 100% 80% __% (not less than 80%)
7 100% 100% 100% 100% __% (not less than 100%)
NOTE: If no option is selected, Option 3 will be deemed to be selected.
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Part C. Hours Required For Vesting Purposes:
1. __ Hours of Service (no more than 1,000) shall be required to constitute a
Year of Vesting Service.
2. __ Hours of Service (no more than 500 but less than the number specified in
Section 12, Part
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C, Item 1, above) must be exceeded to avoid a Break in Vesting Service.
3. For purposes of determining Years of Vesting Service, Employees shall be
given credit for Hours of Service with the following predecessor employer(s):
(Complete if applicable)
Part D. Exclusion of Certain Years of Vesting Service:
All of an Employee's Years of Vesting Service with the Employer are counted to
determine the vesting percentage in the Participant's Individual Account except
(Check any that apply):
[ ] Years of Vesting Service before the Employee reaches age 18.
[ ] Years of Vesting Service before the Employer maintained this Plan or a
predecessor plan.
Part E. Allocation of Forfeitures of Employer Profit Sharing Contributions:
Forfeitures of Employer Profit Sharing Contributions shall be (Choose one):
Option 1: [ ] Allocated to the Individual Accounts of the Participants specified
below in the manner as described in Section 10, Part B (for Employer Profit
Sharing Contributions). The Participants entitled to receive allocations of such
Forfeitures shall be (Choose one):
Suboption (a): [ ] Only Qualifying Participants.
Suboption (b): [ ] All Participants.
Option 2: [ ] Applied to reduce Employer Profit Sharing Contributions (Choose
one):
Suboption (a): [ ] For the Plan Year for which the Forfeiture arises.
Suboption (b): [ ] For any Plan Year subsequent to the Plan Year for which the
Forfeiture arises.
Option 3: [ ] Applied first to the payment of the Plan's administrative expenses
and any excess applied to reduce Employer Profit Sharing Contributions (Choose
one):
Suboption (a): [ ] For the Plan Year for which the Forfeiture arises.
Suboption (b): [ ] For any Plan Year subsequent to the Plan Year for which the
Forfeitures arises.
NOTE: if no option is selected, Option 1 and Suboption (a) will be deemed to be
selected.
Part F. Allocation of Forfeitures of Matching Contributions:
Forfeitures of Matching Contributions shall be (Choose one):
Option 1: [ ] Allocated, after all other Forfeitures under the Plan, to each
Participant's Individual Account in the ratio which each Participant's
Compensation for the Plan Year bears to the total Compensation of all
Participants for such Plan Year.
The Participants entitled to receive allocations of such Forfeitures shall be
(Choose one):
Suboption (a): [ ] Only Qualifying Contributing Participants.
Suboption (b): [ ] Only Qualifying Participants.
Suboption (c): [ ] All Participants.
Option 2: [ ] Applied to reduce Matching Contributions (Choose one):
Suboption (a): [ ] For the Plan Year for which the Forfeiture arises.
Suboption (b): [ ] For any Plan Year subsequent to the Plan Year for which the
Forfeiture arises.
Option 3: [ ] Applied first to the payment of the Plan's administrative expenses
and any excess applied to reduce Matching Contributions (Choose one):
Suboption (a): [ ] For the Plan Year for which the Forfeiture arises.
Suboption (b): [ ] For any Plan Year subsequent to the Plan Year for which the
Forfeitures arises.
NOTE: If no option is selected, Option 1 and Suboption (a) will be deemed to be
selected.
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Part G. Allocation of Forfeitures of Excess Aggregate Contributions:
Forfeitures of Excess Aggregate Contributions shall be (Choose one):
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Option 1: [ ] Allocated, after all other Forfeitures under the Plan, to each
Contributing Participant's Matching Contribution account in the ratio which each
Contributing Participant's Compensation for the Plan Year bears to the total
Compensation of all Contributing Participants for such Plan Year. Such
Forfeitures will not be allocated to the account of any Highly Compensated
Employee.
Option 2: [ ] Applied to reduce Matching Contributions (Choose one):
Suboption (a): [ ] For the Plan Year for which the Forfeiture arises.
Suboption (b): [ ] For any Plan Year subsequent to the Plan Year for which the
Forfeiture arises.
Option 3: [ ] Applied first to the payment of the Plan's administrative expenses
and any excess applied to reduce Matching Contributions (Choose one):
Suboption (a): [ ] For the Plan Year for which the Forfeiture arises.
Suboption (b): [ ] For any Plan Year subsequent to the Plan Year for which the
Forfeitures arises.
NOTE: If no option is selected, Option 2 and Suboption (a) will be deemed to be
selected.
SECTION 13. NORMAL RETIREMENT AGE AND EARLY RETIREMENT AGE
Part A. The Normal Retirement Age under the Plan shall be (Check and complete
one option):
Option 1: [X] Age 65.
Option 2: [ ] Age __ (not to exceed 65).
Option 3: [ ] The later of age __ (not to exceed 65) or the __ (not to exceed
5th) anniversary of the first day of the first Plan Year in which the
Participant commenced participation in the Plan.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
Part B. Early Retirement Age (Choose one option):
Option 1: [X] An Early Retirement Age is not applicable under the Plan.
Option 2: [ ] Age______ (not less than 55 nor more than 65).
Option 3: [ ] A Participant satisfies the Plan's Early Retirement Age conditions
by attaining age __ (not less than 55) and completing __ Years of Vesting
Service.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
SECTION 14. DISTRIBUTIONS
Distributable Events. Answer each of the following items.
A. Termination of Employment Before Normal Retirement Age. May a Participant
who has not reached Normal Retirement Age request a distribution from the Plan
upon Termination of Employment? [X] Yes [ ] No
B. Disability. May a Participant who has incurred a Disability request a
distribution from the Plan? [X] Yes [ ] No
C. Attainment of Normal Retirement Age. May a Participant who has attained
Normal Retirement Age but has not incurred a Termination of Employment request a
distribution from the Plan? [X] Yes [ ] No
D. Attainment of Age 59 1/2. Will Participants who have attained age 59 1/2 be
permitted to withdraw Elective Deferrals while still employed by the Employer?
[X] Yes [ ] No
E. Hardship Withdrawals of Elective Deferrals. Will Participants be permitted
to withdraw Elective Deferrals on account of hardship pursuant to Section 11.503
of the Plan? [X] Yes [ ] No
F. In-Service Withdrawals. Will Participants be permitted to request a
distribution during service pursuant to Section 6.01(A)(3) of the Plan? [ ] Yes
[X] No
G. Hardship Withdrawals. Will Participants be permitted to make hardship
withdrawals pursuant to Section 6.0l(A)(4) of the Plan? [ ] Yes [X] No
12
H. Withdrawals of Rollover or Transfer Contributions. Will Employees be
permitted to withdraw their Rollover or Transfer Contributions at any time? [X]
Yes [ ] No
NOTE: If a box is not checked for an item, "Yes" will be deemed to be selected
for that item. Section 411(d)(6) of the Code prohibits the elimination of
protected benefits. In general, protected benefits include the forms and timing
of payout options. If the Plan is being adopted to amend and replace a Prior
Plan that permitted a distribution option described above, you must answer "Yes"
to that item.
Page 11
SECTION 15. JOINT AND SURVIVOR ANNUITY
Part A. Retirement Equity Act Safe Harbor:
Will the safe harbor provisions of Section 6.05(F) of the Plan apply? (Choose
only one option)
Option 1: [ ] Yes.
Option 2: [X] No.
NOTE: You must select "No" if you are adopting this Plan as an amendment and
restatement of a Prior Plan that was subject to the joint and survivor annuity
requirements.
Part B. Survivor Annuity Percentage: (Complete only if your answer in Section
15, Part A is "No.")
The survivor annuity portion of the Joint and Survivor Annuity shall be a
percentage equal to __ 50% (at least 50% but no more than 100%) of the amount
paid to the Participant prior to his or her death.
SECTION 16. OTHER OPTIONS
Answer "Yes" or "No" to each of the following questions by checking the
appropriate box.
If a box is not checked for a question, the answer will be deemed to be "No."
A. Loans: Will loans to Participants pursuant to Section 6.08 of the Plan be
permitted? [X] Yes [ ] No
B. Insurance: Will the Plan allow for the investment in insurance policies
pursuant to Section 5.13 of the Plan? [ ] Yes [X] No
C. Employer Securities: Will the Plan allow for the investment in qualifying
Employer securities or qualifying Employer real property? [ ] Yes [X] No
D. Rollover Contributions: Will Employees be permitted to make rollover
contributions to the Plan pursuant to Section 3.03 of the Plan? [X] Yes [ ] No
[ ] Yes, but only after becoming a Participant.
E. Transfer Contributions: Will Employees be permitted to make transfer
contributions to the Plan pursuant to Section 3.04 of the Plan? [ ] Yes [X] No
[ ] Yes, but only after becoming a Participant.
F. Nondeductible Employee Contributions: Will Employees be permitted to make
Nondeductible Employee Contributions pursuant to Section 11.305 of the Plan?
[ ] Yes [X] No
Check here if such contributions will be mandatory. [ ]
G. Will Participants be permitted to direct the investment of their Plan
assets pursuant to Section 5.14 of the Plan? [X] Yes [ ] No
SECTION 17. LIMITATION ON ALLOCATIONS
More Than One Plan
If you maintain or ever maintained another qualified plan (other than a paired
standardized money purchase pension plan using the same Basic Plan Document as
this Plan) in which any Participant in this Plan is (or was) a Participant or
could become a Participant, you must
13
complete this section. You must also complete this section if you maintain a
welfare benefit fund, as defined in Section 419(e) of the Code, or an individual
medical account, as defined in Section 415(l)(2) of the Code, under which
amounts are treated as annual additions with respect to any Participant in this
Plan.
Part A. Individually Designed Defined Contribution Plan:
If the Participant is covered under another qualified defined contribution plan
maintained by the Employer, other than a master or prototype plan:
1. [X] The provisions of Section 3.05(B)(l) through 3.05(B)(6) of the Plan
will apply as if the other plan were a master or prototype plan.
2. [ ] Other method. (Provide the method under which the plans will limit
total annual additions to the maximum permissible amount, and will properly
reduce any excess amounts, in a manner that precludes Employer discretion.)
Page 12
Part B. Defined Benefit Plan:
If the Participant is or has ever been a participant in a defined benefit plan
maintained by the Employer, the Employer will provide below the language which
will satisfy the 1.0 limitation of Section 415(e) of the Code.
1. [X] If the projected annual addition to this Plan to the account of a
Participant for any limitation year would cause the 1.0 limitation of Section
415(e) of the Code to be exceeded, the annual benefit of the defined benefit
plan for such limitation year shall be reduced so that the 1.0 limitation shall
be satisfied.
If it is not possible to reduce the annual benefit of the defined benefit plan
and the projected annual addition to this Plan to the account of a Participant
for a limitation year would cause the 1.0 limitation to be exceeded, the
Employer shall reduce the Employer Contribution which is to be allocated to this
Plan on behalf of such Participant so that the 1.0 limitation will be satisfied.
(The provisions of Section 4 15(e) of the Code are incorporated herein by
reference under the authority of Section 1106(h) of the Tax Reform Act of 1986.)
2. [ ] Other method. (Provide language describing another method. Such
language must preclude Employer discretion.)
SECTION 18. TOP-HEAVY MINIMUM
Complete Parts A and B
Part A. Minimum Allocation or Benefit:
For any Plan Year with respect to which this Plan is a Top-Heavy Plan, any
minimum allocation required pursuant to Section 3.0 1(E) of the Plan shall be
made (Choose one):
Option 1: [X] To this Plan.
Option 2: [ ] To the following other plan maintained by the Employer (Specify
name and plan number of plan)
Option 3: [ ] In accordance with the method described on an attachment to this
Adoption Agreement. (Attach language describing the method that will be used to
satisfy Section 416 of the Code. Such method must preclude Employer discretion.)
NOTE: If no option is selected, Option 1 will be deemed to be selected.
Part B. Top-Heavy Vesting Schedule:
Pursuant to Section 6.01(C) of the Plan, the vesting schedule that will apply
when this Plan is a Top-Heavy Plan (unless the Plan's regular vesting schedule
provides for more rapid vesting) shall be (Choose one):
14
Option 1: [ ] 6 Year Graded.
Option 2: [ ] 3 Year Cliff.
NOTE: If no option is selected, Option 1 will be deemed to be selected.
SECTION 19. PROTOTYPE SPONSOR
Name of Prototype Sponsor Travelers Insurance Company
Address Xxx Xxxxx Xxxxxx, Xxxxxxxx XX 00000
Telephone Number 000-000-0000
Permissible investments
The assets of the Plan shall be invested only in those investments described
below (To be completed by the Prototype Sponsor):
Variable Annuity Contract
Page 13
SECTION 20. TRUSTEE OR CUSTODIAN
Option A: [ ] Financial Organization as Trustee or Custodian
Check One: [ ] Custodian, [ ] Trustee without full trust powers, or [ ] Trustee
with full trust powers
Financial Organization
Signature
Type Name
Collective or Commingled Funds
List any collective or commingled funds maintained by the financial organization
Trustee in which assets of the Plan may be invested
(Complete if applicable).
Option B: [ ] Individual Trustee(s)
Signature Signature
Type Name Type Name
Signature Signature
Type Name Type Name
SECTION 21. RELIANCE
An Employer who has ever maintained or who later adopts any plan (including a
welfare benefit fund, as defined in Section 419(e) of the Code, which provides
post-retirement medical benefits allocated to separate accounts for key
employees, as defined in Section 9A(d)(3) of the Code, or an individual medical
account, as defined in Section 415(l)(2) of the Code) in addition to this Plan
(other a paired standardized money purchase pension plan using the same
Basic Plan Document as this Plan) may not rely on the opinion letter issued by
the National Office of the Internal Revenue Service as evidence that this Plan
is qualified under Section 401 of the Internal Revenue Code. If the Employer who
adopts or maintains multiple plans wishes to obtain reliance that his or her
plan(s) are qualified, application for a determination letter should be made to
the appropriate Key District Director of Internal Revenue.
The Employer may not rely on the opinion letter issued by the National Office of
the Internal Revenue Service as evidence that this Plan is qualified under
Section 401 of the Code unless the terms of the Plan, as herein adopted or
amended, that pertain to the requirements of Sections 401(a)(4), 401(a)(17),
401(1), 40l(a)(5), 410(b) and 414(s) of the Code, as amended by the Tax Reform
Act of 1986, or later laws, (a) are made effective retroactively to the first
day of the first Plan Year beginning after December 31, 1988 (or such later date
on which these requirements
15
first become effective with respect to this Plan); or (b) are made effective no
later than the first day on which the Employer is no longer entitled, under
regulations, to rely on a reasonable, good faith interpretation of these
requirements, and the prior provisions of the Plan constitute such an
interpretation.
This Adoption Agreement may be used only in conjunction with Basic Plan Document
No. 04.
SECTION 22. EMPLOYER SIGNATURE
Important: Please read before signing
I am an authorized representative of the Employer named above and I state the
following:
1. 1 acknowledge that I have relied upon my own advisors regarding the
completion of this Adoption Agreement and the legal tax implications of adopting
this Plan.
2. I understand that my failure to properly complete this Adoption Agreement
may result in disqualification of the Plan.
3. I understand that the Prototype Sponsor will inform me of any amendments
made to the Plan and will notify me should it discontinue or abandon the Plan.
I have received a copy of this Adoption Agreement and the corresponding Basic
Plan Document.
Signature for Employer Date Signed
Type Name Xxxxxx X. Xxxxxxx Title
BOARD RESOLUTION
Meeting of the Board of Directors of Alloy Designs, Inc. herein referred to as
"Corporation," was held on the day of , , in accordance with the Corporation's
bylaws. The Directors approved the establishment of the Alloy, Inc. 401(k)
Savings Plan for the benefit of the Corporation's employees.
The following resolutions were offered, seconded and unanimously adopted.
BE IT RESOLVED that the Corporation established the Alloy, Inc. 401(k) Savings
Plan (the "Plan") to cover the employee to be effective 01-01-1999. Employees
may commence elective deferrals into the Plan on or about 04-01-1999.
BE IT FURTHER RESOLVED, that the officers of the Corporation be authorized and
directed to execute any and all documents and do any and all acts which may be
necessary in connection with the adoption, maintenance and ongoing funding of
the Plan.
BE IT FURTHER RESOLVED, that the trustee(s) under the Plan are the following:
BE IT FURTHER RESOLVED, that the officers of the Corporation be authorized and
directed to retain any service providers they believe necessary or desirable in
connection with the Plan.
CERTIFICATION
I, the undersigned, Secretary of the Corporation do certify that the foregoing
is a true, exact, and correct copy of a resolution adopted at lawfully held
meeting of the Corporation's Board of Directors on the day of , .
(Signed)
Secretary
Page 2
LOAN PRINCIPAL LIMITATIONS
Loans from this plan shall be in a minimum amount of: $500.00 (may not exceed
$1,000.) maximum amount of all loans outstanding cannot exceed: [X] one-half of
your vested account
16
balance or $50,000
[ ] other (specify)
NOTE: If the "other" option is selected, the amount entered cannot exceed the
vested balance or $50,000.
INTEREST CALCULATION
Interest on loans from this plan will be computed on the following basis:
[ ] prime rate (as specified in the Wall Street Journal)
[ ] prime rate (as specified in the Wall Street Journal) plus percent
[X] other (specify) the prime rate as of the first day of each month plus 2%
NOTE: The interest rate must be comparable to that charged by commercial lenders
in a similar transaction. Any loan renewals are subject to interest rate
modification.
COLLATERAL PLEDGE
A percentage of your vested account balance equal to the amount borrowed divided
by your vested account balance is pledged as security for repayment of loans
under this program.
DEFAULT PROVISIONS
The following are deemed to be acts of default under your qualified plan/403(b)
loan program:
* failure to remit payment in a timely manner as required under the Loan
Agreement
* breach of any of your obligations or duties under the Loan Agreement
* termination of employment
* other (specify)
Upon default, your loan program administrator is entitled to foreclose its
security interest in your vested account balance pledged for repayment upon the
occurrence of an event which triggers a distribution of your benefits.
In addition, the loan program administrator will report as taxable any amounts
which are deemed distributed as a result of failing to make loan payments.
Qualified Retirement Plan/403(b)
LOAN DISCLOSURE
participant in the qualified retirement plan/403(b) adopted by your
employer, you may be able to borrow a portion of your vested account balance.
The loan program adopted by your employer is available on a uniform basis to all
parties in interest to the plan who meet loan qualification requirements. For
additional information about the loan program available under your employer's
plan, contact the loan program administrator listed below.
NOTE: This Loan Disclosure constitutes part of the Summary Plan Description
(SPD) of your Qualified Retirement Plan and should be kept with your other SPD
documents.
PLAN LOAN INFORMATION
Plan Name Alloy, Inc. 401(k) Saving Plan
Plan Number 001 Plan Year-End 12/31
EFFECTIVE DATE
The effective date of the plan loan program is 01-01-1999
LOAN PROGRAM ADMINISTRATOR
The person responsible for administering your loan program is Xxxxxx X. Xxxxxxx
Your loan program administrator may be reached at the following address and/or
telephone number:
000-000-0000
LOAN APPLICATION PROCEDURE
17
To apply for a loan under this plan, you must complete and return to the loan
program administrator a Loan Application Form, furnishing all information
requested and pay any required loan application processing fees. In addition,
you must follow the procedures described below. (specify)
LIMITATIONS ON TYPES OF LOANS
Loans from this plan may be used for the following purposes:
[X] all
[ ] purchase of your principal residence
[ ] post-secondary tuition for you or your immediate family
[ ] medical expenses for you or your immediate family
[ ] rent or mortgage payments to prevent eviction or foreclosure from your
principal residence
[ ] other (specify)
LOAN APPROVAL STANDARDS
Decisions approving or denying loans from this Plan will be based on the
following criteria:
[X] the value of your vested individual account balance
[ ] other (specify)
NOTE: Loan approval basis selected must not cause loans to be made available on
a discriminatory basis.
