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QUALIFIED RETIREMENT
PLAN AND TRUST
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Basic Plan Document
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TABLE OF CONTENTS
SECTION ONE DEFINITIONS
1.01 Adoption Agreement................................................ 1
1.02 Basic Plan Document............................................... 1
1.03 Beneficiary....................................................... 1
1.04 Break In Eligibility Service...................................... 1
1.05 Break In Vesting Service.......................................... 1
1.06 Code.............................................................. 1
1.07 Compensation...................................................... 1
1.08 Custodian......................................................... 2
1.09 Disability........................................................ 2
1.10 Early Retirement Age.............................................. 2
1.11 Earned Income..................................................... 2
1.12 Effective Date.................................................... 2
1.13 Eligibility Computation Period.................................... 2
1.14 Employee.......................................................... 2
1.15 Employer.......................................................... 2
1.16 Employer Contribution............................................. 3
1.17 Employment Commencement Date...................................... 3
1.18 Employer Profit Sharing Contribution.............................. 3
1.19 Entry Dates....................................................... 3
1.20 ERISA............................................................. 3
1.21 Forfeiture........................................................ 3
1.22 Fund.............................................................. 3
1.23 Highly Compensated Employee....................................... 3
1.24 Hours of Service - Means.......................................... 3
1.25 Individual Account................................................ 4
1.26 Investment Fund................................................... 4
1.27 Key Employee...................................................... 4
1.28 Leased Employee................................................... 4
1.29 Nondeductible Employee Contributions.............................. 4
1.30 Normal Retirement Age............................................. 4
1.31 Owner - Employee.................................................. 4
1.32 Participant....................................................... 4
1.33 Plan.............................................................. 4
1.34 Plan Administrator................................................ 4
1.35 Plan Year......................................................... 4
1.36 Prior Plan........................................................ 4
1.37 Prototype Sponsor................................................. 4
1.38 Qualifying Participant............................................ 4
1.39 Related Employer.................................................. 5
1.40 Related Employer Participation Agreement.......................... 5
1.41 Self-Employed Individual.......................................... 5
1.42 Separate Fund..................................................... 5
1.43 Taxable Wage Base................................................. 5
1.44 Termination of Employment......................................... 5
1.45 Top-Heavy Plan.................................................... 5
1.46 Trustee........................................................... 5
1.47 Valuation Date.................................................... 5
1.48 Vested............................................................ 5
1.49 Year Of Eligibility Service....................................... 5
1.50 Year Of Vesting Service........................................... 5
SECTION TWO ELIGIBILITY AND PARTICIPATION
2.01 Eligibility To Participate........................................ 6
2.02 Plan Entry........................................................ 6
2.03 Transfer To Or From Ineligible Class.............................. 6
2.04 Return As A Participant After Break In Eligibility Service........ 6
2.05 Determinations Under This Section................................. 6
2.06 Terms Of Employment............................................... 6
2.07 Special Rules Where Elapsed Time Method Is Being Used............. 6
2.08 Election Not To Participate....................................... 7
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SECTION THREE CONTRIBUTIONS
3.01 Employer Contributions............................................ 7
3.02 Nondeductible Employee Contributions.............................. 9
3.03 Rollover Contributions............................................ 9
3.04 Transfer Contributions............................................ 9
3.05 Limitation On Allocations......................................... 9
SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
4.01 Individual Accounts............................................... 12
4.02 Valuation Of Fund................................................. 12
4.03 Valuation Of Individual Accounts.................................. 12
4.04 Modification Of Method For Valuing Individual Accounts............ 12
4.05 Segregation Of Assets............................................. 12
4.06 Statement of Individual Accounts.................................. 12
SECTION FIVE TRUSTEE OR CUSTODIAN
5.01 Creation Of Fund.................................................. 13
5.02 Investment Authority.............................................. 13
5.03 Financial Organization Custodian Or Trustee
Without Full Trust Powers......................................... 13
5.04 Financial Organization Trustee With Full Trust Powers
And Individual Trustee............................................ 13
5.05 Division Of Fund Into Investment Funds............................ 14
5.06 Compensation And Expenses......................................... 14
5.07 Not Obligated To Question Data.................................... 14
5.08 Liability For Withholding On Distributions........................ 15
5.09 Resignation Or Removal Of Trustee (Or Custodian).................. 15
5.10 Degree Of Care - Limitations Of Liability......................... 15
5.11 Indemnification Of Prototype Sponsor And Trustee (Or Custodian)... 15
5.12 Investment Managers............................................... 15
5.13 Matters Relating To Insurance..................................... 16
5.14 Direction Of Investments By Participant........................... 16
SECTION SIX VESTING AND DISTRIBUTION
6.01 Distribution To Participant....................................... 16
6.02 Form Of Distribution To A Participant............................. 19
6.03 Distributions Upon The Death Of A Participant..................... 19
6.04 Form Of Distribution To Beneficiary............................... 20
6.05 Joint And Survivor Annuity Requirements........................... 20
6.06 Distribution Requirements......................................... 22
6.07 Annuity Contracts................................................. 24
6.08 Loans To Participants............................................. 24
6.09 Distribution In Kind.............................................. 25
6.10 Direct Rollovers Of Eligible Rollover Distributions............... 25
6.11 Procedure For Missing Participants Or Beneficiaries............... 26
SECTION SEVEN CLAIMS PROCEDURE
7.01 Filing A Claim For Plan Distributions............................. 26
7.02 Denial Of Claim................................................... 26
7.03 Remedies Available................................................ 26
SECTION EIGHT PLAN ADMINISTRATOR
8.01 Employer Is Plan Administrator.................................... 26
8.02 Powers And Duties Of The Plan Administrator....................... 26
8.03 Expenses And Compensation......................................... 27
8.04 Information From Employer......................................... 27
SECTION NINE AMENDMENT AND TERMINATION
9.01 Right Of Prototype Sponsor To Amend The Plan...................... 27
9.02 Right of Employer To Amend The Plan............................... 27
9.03 Limitation On Power To Amend...................................... 27
9.04 Amendment Of Vesting Schedule..................................... 28
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9.05 Permanency........................................................ 28
9.06 Method And Procedure For Termination.............................. 28
9.07 Continuance Of Plan by Successor Employer......................... 28
9.08 Failure Of Plan Qualification..................................... 28
SECTION TEN MISCELLANEOUS
10.01 State Community Property Laws..................................... 28
10.02 Headings.......................................................... 28
10.03 Gender And Number................................................. 28
10.04 Plan Merger Or Consolidation...................................... 28
10.05 Standard Of Fiduciary Conduct..................................... 28
10.06 General Undertaking Of All Parties................................ 29
10.07 Agreement Binds Heirs, Etc........................................ 29
10.08 Determination Of Top-Heavy Status................................. 29
10.09 Special Limitations For Owner-Employees........................... 30
10.10 Inalienability Of Benefits........................................ 30
10.11 Cannot Eliminate Protected Benefits............................... 30
SECTION ELEVEN 401(k) PROVISIONS
11.100 Definitions....................................................... 30
11.101 Actual Deferral Percentage (ADP).................................. 30
11.102 Aggregate Limit................................................... 31
11.103 Average Contribution Percentage (ACP)............................. 31
11.104 Contributing Participant.......................................... 31
11.105 Contribution Percentage........................................... 31
11.106 Contribution Percentage Amounts................................... 31
11.107 Elective Deferrals................................................ 31
11.108 Eligible Participant.............................................. 31
11.109 Excess Aggregate Contributions.................................... 31
11.110 Excess Contributions.............................................. 31
11.111 Excess Elective Deferrals......................................... 31
11.112 Matching Contribution............................................. 32
11.113 Qualified Nonelective Contributions............................... 32
11.114 Qualified Matching Contributions.................................. 32
11.115 Qualifying Contributing Participant............................... 32
11.200 Contributing Participant.......................................... 32
11.201 Requirements To Enroll As A Contributing Participant.............. 32
11.202 Changing Elective Deferral Amounts................................ 32
11.203 Ceasing Elective Deferrals........................................ 32
11.204 Return As A Contributing Participant
After Ceasing Elective Deferrals ............................. 32
11.205 Certain One-Time Irrevocable Elections............................ 32
11.300 Contributions..................................................... 32
11.301 Contributions By Employer......................................... 32
11.302 Matching Contributions............................................ 33
11.303 Qualified Nonelective Contributions............................... 33
11.304 Qualified Matching Contributions.................................. 33
11.305 Nondeductible Employee Contributions.............................. 33
11.400 Nondiscrimination Testing......................................... 33
11.401 Actual Deferral Percentage Test (ADP)............................. 33
11.402 Limits On Nondeductible Employee Contributions
And Matching Contributions........................................ 34
11.500 Distribution Provisions........................................... 35
11.501 General Rule...................................................... 35
11.502 Distribution Requirements......................................... 35
11.503 Hardship Distribution............................................. 35
11.504 Distribution Of Excess Elective Deferrals......................... 35
11.505 Distribution Of Excess Contributions.............................. 36
11.506 Distribution Of Excess Aggregate Contributions.................... 36
11.507 Recharacterization................................................ 36
11.508 Distribution Of Elective Deferrals If Excess Annual Additions..... 37
11.600 Vesting........................................................... 37
11.601 100% Vesting On Certain Contributions............................. 37
11.602 Forfeitures And Vesting Of Matching Contributions................. 37
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QUALIFIED RETIREMENT PLAN AND TRUST
Defined Contribution Basic Plan Document 04
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SECTION ONE DEFINITIONS
The following words and phrases when used in the Plan with initial
capital letters shall, for the purpose of this Plan, have the
meanings set forth below unless the context indicates that other
meanings are intended:
1.01 ADOPTION AGREEMENT
Means the document executed by the Employer through which it
adopts the Plan and Trust and thereby agrees to be bound by all
terms and conditions of the Plan and Trust.
1.02 BASIC PLAN DOCUMENT
Means this prototype Plan and Trust document.
1.03 BENEFICIARY
Means the individual or individuals designated pursuant to Section
6.03(A) of the Plan.
1.04 BREAK IN ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with an
Eligibility Computation Period during which an Employee fails to
complete more than 500 Hours of Service (or such lesser number of
Hours of Service specified in the Adoption Agreement for this
purpose).
1.05 BREAK IN VESTING SERVICE
Means a Plan Year (or other vesting computation period described
in Section 1.50) during which an Employee fails to complete more
than 500 Hours of Service (or such lesser number of Hours of
Service specified in the Adoption Agreement for this purpose).
1.06 CODE
Means the Internal Revenue Code of 1986 as amended from
time-to-time.
1.07 COMPENSATION
A. BASIC DEFINITION
For Plan Years beginning on or after January 1, 1989, the
following definition of Compensation shall apply:
As elected by the Employer in the Adoption Agreement (and if no
election is made, W-2 wages will be deemed to have been
selected), Compensation shall mean one of the following:
1. W-2 wages. Compensation is defined as information required
to be reported under Sections 6041 and 6051, and 6052 of the
Code (Wages, tips and other compensation as reported on Form
W-2). Compensation is defined as wages within the meaning of
Section 3401(a) of the Code and all other payments of
compensation to an Employee by the Employer (in the course
of the Employer's trade or business) for which the Employer
is required to furnish the Employee a written statement
under Sections 6041(d) and 6051(a)(3), and 6052 of the Code.
Compensation must be determined without regard to any rules
under Section 3401(a) that limit the remuneration included
in wages based on the nature or location of the employment
or the services performed (such as the exception for
agricultural labor in Section 3401(a)(2)).
2. Section 3401(a) wages. Compensation is defined as wages
within the meaning of Section 3401(a) of the Code, for the
purposes of income tax withholding at the source but
determined without regard to any rules that limit the
remuneration included in wages based on the nature or
location of the employment or the services performed (such
as the exception for agricultural labor in Section
3401(a)(2)).
3. 415 safe-harbor compensation. Compensation is defined as
wages, salaries, and fees for professional services and
other amounts received (without regard to whether or not an
amount is paid in cash) for personal services actually
rendered in the course of employment with the Employer
maintaining the Plan to the extent that the amounts are
includible in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, and reimbursements
or other expense allowances under a nonaccountable plan (as
described in 1.62-2(c)), and excluding the following:
a. Employer contributions to a plan of deferred
compensation which are not includible in the Employee's
gross income for the taxable year in which contributed,
or employer contributions under a simplified employee
pension plan to the extent such contributions are
deductible by the Employee, or any distributions from a
plan of deferred compensation;
b. Amounts realized from the exercise of a nonqualified
stock option, or when restricted stock (or property)
held by the Employee either becomes freely transferable
or is no longer subject to a substantial risk of
forfeiture;
c. Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
d. Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not
under a salary reduction agreement) towards the
purchase of an annuity contract described in Section
403(b) of the Code (whether or not the contributions
are actually excludable from the gross income of the
Employee).
For any Self-Employed Individual covered under the Plan,
Compensation will mean Earned Income.
B. DETERMINATION PERIOD AND OTHER RULES
Compensation shall include only that Compensation which is
actually paid to the Participant during the determination period.
Except as provided elsewhere in this Plan, the determination
period shall be the Plan Year unless the Employer has selected
another period in the Adoption Agreement. If the Employer makes
no election, the determination period shall be the Plan Year.
Unless otherwise indicated in the Adoption Agreement,
Compensation shall include any amount which is contributed by the
Employer pursuant to a salary reduction agreement and which is
not includible in the gross income of the Employee under Sections
125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code.
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Where this Plan is being adopted as an amendment and restatement
to bring a Prior Plan into compliance with the Tax Reform Act of
1986, such Prior Plan's definition of Compensation shall apply
for Plan Years beginning before January 1, 1989.
C. LIMITS ON COMPENSATION
For years beginning after December 31, 1988 and before January 1,
1994, the annual Compensation of each Participant taken into
account for determining all benefits provided under the Plan for
any determination period shall not exceed $200,000. This
limitation shall be adjusted by the Secretary at the same time
and in the same manner as under Section 415(d) of the Code,
except that the dollar increase in effect on January 1 of any
calendar year is effective for Plan Years beginning in such
calendar year and the first adjustment to the $200,000 limitation
is effective on January 1, 1990.
For Plan Years beginning on or after January 1, 1994, the annual
Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any Plan
Year shall not exceed $150,000, as adjusted for increases in the
cost-of-living in accordance with Section 401(a)(17)(B) of the
Internal Revenue Code. The cost-of-living adjustment in effect
for a calendar year applies to any determination period beginning
in such calendar year.
If the period for determining Compensation used in calculating an
Employee's allocation for a determination period is a short Plan
Year (i.e., shorter than 12 months), the annual Compensation
limit is an amount equal to the otherwise applicable annual
Compensation limit multiplied by a fraction, the numerator of
which is the number of months in the short Plan Year, and the
denominator of which is 12.
In determining the Compensation of a Participant for purposes of
this limitation, the rules of Section 414(q)(6) of the Code shall
apply, except in applying such rules, the term "family" shall
include only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19
before the close of the year. If, as a result of the application
of such rules the adjusted $200,000 limitation is exceeded, then
(except for purposes of determining the portion of Compensation
up to the integration level, if this Plan provides for permitted
disparity), the limitation shall be prorated among the affected
individuals in proportion to each such individual's Compensation
as determined under this Section prior to the application of this
limitation.
If Compensation for any prior determination period is taken into
account in determining an Employee's allocations or benefits for
the current determination period, the Compensation for such prior
determination period is subject to the applicable annual
Compensation limit in effect for that prior period. For this
purpose, in determining allocations in Plan Years beginning on or
after January 1, 1989, the annual Compensation limit in effect
for determination periods beginning before that date is $200,000.
In addition, in determining allocations in Plan Years beginning
on or after January 1, 1994, the annual Compensation limit in
effect for determination periods beginning before that date is
$150,000.
1.08 CUSTODIAN
Means an entity specified in the Adoption Agreement as Custodian or
any duly appointed successor as provided in Section 5.09.
1.09 DISABILITY
Unless the Employer has elected a different definition in the
Adoption Agreement, Disability means the inability to engage in any
substantial, gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to
result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months. The permanence and
degree of such impairment shall be supported by medical evidence.
1.10 EARLY RETIREMENT AGE
Means the age specified in the Adoption Agreement. The Plan will not
have an Early Retirement Age if none is specified in the Adoption
Agreement.
1.11 EARNED INCOME
Means the net earnings from self-employment in the trade or business
with respect to which the Plan is established, for which personal
services of the individual are a material income-producing factor.
Net earnings will be determined without regard to items not included
in gross income and the deductions allocable to such items. Net
earnings are reduced by contributions by the Employer to a qualified
plan to the extent deductible under Section 404 of the Code.
Net earnings shall be determined with regard to the deduction
allowed to the Employer by Section 164(f) of the Code for taxable
years beginning after December 31, 1989.
1.12 EFFECTIVE DATE
Means the date the Plan becomes effective as indicated in the
Adoption Agreement. However, as indicated in the Adoption Agreement,
certain provisions may have specific effective dates. Further, where
a separate date is stated in the Plan as of which a particular Plan
provision becomes effective, such date will control with respect to
that provision.
1.13 ELIGIBILITY COMPUTATION PERIOD
An Employee's initial Eligibility Computation Period shall be the 12
consecutive month period commencing on the Employee's Employment
Commencement Date. The Employee's subsequent Eligibility Computation
Periods shall be the 12 consecutive month periods commencing on the
anniversaries of his or her Employment Commencement Date; provided,
however, if pursuant to the Adoption Agreement, an Employee is
required to complete one or less Years of Eligibility Service to
become a Participant, then his or her subsequent Eligibility
Computation Periods shall be the Plan Years commencing with the Plan
Year beginning during his or her initial Eligibility Computation
Period. An Employee does not complete a Year of Eligibility Service
before the end of the 12 consecutive month period regardless of when
during such period the Employee completes the required number of
Hours of Service.
1.14 EMPLOYEE
Means any person employed by an Employer maintaining the Plan or of
any other employer required to be aggregated with such Employer
under Sections 414(b), (c), (m) or (o) of the Code.
The term Employee shall also include any Leased Employee deemed to
be an Employee of any Employer described in the previous paragraph
as provided in Section 414(n) or (o) of the Code.
1.15 EMPLOYER
Means any corporation, partnership, sole-proprietorship or other
entity named in the Adoption Agreement and any successor who by
merger, consolidation, purchase or otherwise assumes the obligations
of the Plan. A partnership is considered to be the Employer of each
of the partners and a sole-proprietorship is considered to be the
Employer of a sole proprietor. Where this Plan is being maintained
by a union or other entity that represents its member Employees in
the negotiation of collective bargaining agreements, the term
Employer shall mean such union or other entity.
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1.16 EMPLOYER CONTRIBUTION
Means the amount contributed by the Employer each year as determined
under this Plan.
1.17 EMPLOYMENT COMMENCEMENT DATE
An Employee's Employment Commencement date means the date the
Employee first performs an Hour of Service for the Employer.
1.18 EMPLOYER PROFIT SHARING CONTRIBUTION
Means an Employer Contribution made pursuant to the Section of the
Adoption Agreement titled "Employer Profit Sharing Contributions."
The Employer may make Employer Profit Sharing Contributions without
regard to current or accumulated earnings or profits.
1.19 ENTRY DATES
Means the first day of the Plan Year and the first day of the
seventh month of the Plan Year, unless the Employer has specified
different dates in the Adoption Agreement.
1.20 ERISA
Means the Employee Retirement Income Security Act of 1974 as amended
from time-to-time.
1.21 FORFEITURE
Means that portion of a Participant's Individual Account derived
from Employer Contributions which he or she is not entitled to
receive (i.e., the nonvested portion).
1.22 FUND
Means the Plan assets held by the Trustee for the Participants'
exclusive benefit.
1.23 HIGHLY COMPENSATED EMPLOYEE
The term Highly Compensated Employee includes highly compensated
active employees and highly compensated former employees.
A highly compensated active employee includes any Employee who
performs service for the Employer during the determination year and
who, during the look-back year: (a) received Compensation from the
Employer in excess of $75,000 (as adjusted pursuant to Section
415(d) of the Code); (b) received Compensation from the Employer in
excess of $50,000 (as adjusted pursuant to Section 415(d) of the
Code) and was a member of the top-paid group for such year; or (c)
was an officer of the Employer and received Compensation during such
year that is greater than 50% of the dollar limitation in effect
under Section 415(b)(1)(A) of the Code. The term Highly Compensated
Employee also includes: (a) Employees who are both described in the
preceding sentence if the term "determination year" is substituted
for the term "look-back year" and the Employee is one of the 100
Employees who received the most Compensation from the Employer
during the determination year; and (b) Employees who are 5% owners
at any time during the look-back year or determination year.
If no officer has satisfied the Compensation requirement of (c)
above during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a Highly
Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the 12 month period immediately preceding
the determination year.
A highly compensated former employee includes any Employee who
separated from service (or was deemed to have separated) prior to
the determination year, performs no service for the Employer during
the determination year, and was a highly compensated active employee
for either the separation year or any determination year ending on
or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a
family member of either a 5% owner who is an active or former
Employee or a Highly Compensated Employee who is one of the 10 most
Highly Compensated Employees ranked on the basis of Compensation
paid by the Employer during such year, then the family member and
the 5% owner or top 10 Highly Compensated Employee shall be
aggregated. In such case, the family member and 5% owner or top 10
Highly Compensated Employee shall be treated as a single Employee
receiving Compensation and Plan contributions or benefits equal to
the sum of such Compensation and contributions or benefits of the
family member and 5% owner or top 10 Highly Compensated Employee.
For purposes of this Section, family member includes the spouse,
lineal ascendants and descendants of the Employee or former Employee
and the spouses of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the
top-paid group, the top 100 Employees, the number of Employees
treated as officers and the Compensation that is considered, will be
made in accordance with Section 414(q) of the Code and the
regulations thereunder.
1.24 HOURS OF SERVICE - Means
A. Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer. These hours will
be credited to the Employee for the computation period in which
the duties are performed; and
B. Each hour for which an Employee is paid, or entitled to payment,
by the Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military
duty or leave of absence. No more than 501 Hours of Service will
be credited under this paragraph for any single continuous
period (whether or not such period occurs in a single
computation period). Hours under this paragraph shall be
calculated and credited pursuant to Section 2530.200b-2 of the
Department of Labor Regulations which is incorporated herein by
this reference; and
C. Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The
same Hours of Service will not be credited both under paragraph
(A) or paragraph (B), as the case may be, and under this
paragraph (C). These hours will be credited to the Employee for
the computation period or periods to which the award or
agreement pertains rather than the computation period in which
the award, agreement, or payment is made.
D. Solely for purposes of determining whether a Break in
Eligibility Service or a Break in Vesting Service has occurred
in a computation period (the computation period for purposes of
determining whether a Break in Vesting Service has occurred is
the Plan Year or other vesting computation period described in
Section 1.50), an individual who is absent from work for
maternity or paternity reasons shall receive credit for the
Hours of Service which would otherwise have been credited to
such individual but for such absence, or in any case in which
such hours cannot be determined, 8 Hours of Service per day of
such absence. For purposes of this paragraph, an absence from
work for maternity or paternity reasons means an
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absence (1) by reason of the pregnancy of the individual, (2) by
reason of a birth of a child of the individual, (3) by reason of
the placement of a child with the individual in connection with
the adoption of such child by such individual, or (4) for
purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of
Service credited under this paragraph shall be credited (1) in
the Eligibility Computation Period or Plan Year or other vesting
computation period described in Section 1.50 in which the
absence begins if the crediting is necessary to prevent a Break
in Eligibility Service or a Break in Vesting Service in the
applicable period, or (2) in all other cases, in the following
Eligibility Computation Period or Plan Year or other vesting
computation period described in Section 1.50.
E. Hours of Service will be credited for employment with other
members of an affiliated service group (under Section 414(m) of
the Code), a controlled group of corporations (under Section
414(b) of the Code), or a group of trades or businesses under
common control (under Section 414(c) of the Code) of which the
adopting Employer is a member, and any other entity required to
be aggregated with the Employer pursuant to Section 414(o) of
the Code and the regulations thereunder.
Hours of Service will also be credited for any individual
considered an Employee for purposes of this Plan under Code
Sections 414(n) or 414(o) and the regulations thereunder.
F. Where the Employer maintains the plan of a predecessor employer,
service for such predecessor employer shall be treated as
service for the Employer.
G. The above method for determining Hours of Service may be altered
as specified in the Adoption Agreement.
1.25 INDIVIDUAL ACCOUNT
Means the account established and maintained under this Plan for
each Participant in accordance with Section 4.01.
1.26 INVESTMENT FUND
Means a subdivision of the Fund established pursuant to Section
5.05.
1.27 KEY EMPLOYEE
Means any person who is determined to be a Key Employee under
Section 10.08.
1.28 LEASED EMPLOYEE
Means any person (other than an Employee of the recipient) who
pursuant to an agreement between the recipient and any other person
("leasing organization") has performed services for the recipient
(or for the recipient and related persons determined in accordance
with Section 414(n)(6) of the Code) on a substantially full time
basis for a period of at least one year, and such services are of a
type historically performed by Employees in the business field of
the recipient Employer. Contributions or benefits provided a Leased
Employee by the leasing organization which are attributable to
services performed for the recipient Employer shall be treated as
provided by the recipient Employer.
A Leased Employee shall not be considered an Employee of the
recipient if: (1) such employee is covered by a money purchase
pension plan providing: (a) a nonintegrated employer contribution
rate of at least 10% of compensation, as defined in Section
415(c)(3) of the Code, but including amounts contributed pursuant to
a salary reduction agreement which are excludable from the
employee's gross income under Section 125, Section 402(e)(3),
Section 402(h)(1)(B) or Section 403(b) of the Code, (b) immediate
participation, and (c) full and immediate vesting; and (2) Leased
Employees do not constitute more than 20% of the recipient's
nonhighly compensated work force.
1.29 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Means any contribution made to the Plan by or on behalf of a
Participant that is included in the Participant's gross income in
the year in which made and that is maintained under a separate
account to which earnings and losses are allocated.
1.30 NORMAL RETIREMENT AGE
Means the age specified in the Adoption Agreement. However, if the
Employer enforces a mandatory retirement age which is less than the
Normal Retirement Age, such mandatory age is deemed to be the Normal
Retirement Age. If no age is specified in the Adoption Agreement,
the Normal Retirement Age shall be age 65.
1.31 OWNER - EMPLOYEE
Means an individual who is a sole proprietor, or who is a partner
owning more than 10% of either the capital or profits interest of
the partnership.
1.32 PARTICIPANT
Means any Employee or former Employee of the Employer who has met
the Plan's eligibility requirements, has entered the Plan and who is
or may become eligible to receive a benefit of any type from this
Plan or whose Beneficiary may be eligible to receive any such
benefit.
1.33 PLAN
Means the prototype defined contribution plan adopted by the
Employer. The Plan consists of this Basic Plan Document plus the
corresponding Adoption Agreement as completed and signed by the
Employer.
1.34 PLAN ADMINISTRATOR
Means the person or persons determined to be the Plan Administrator
in accordance with Section 8.01.
1.35 PLAN YEAR
Means the 12 consecutive month period which coincides with the
Employer's fiscal year or such other 12 consecutive month period as
is designated in the Adoption Agreement.
1.36 PRIOR PLAN
Means a plan which was amended or replaced by adoption of this Plan
document as indicated in the Adoption Agreement.
1.37 PROTOTYPE SPONSOR
Means the entity specified in the Adoption Agreement that makes this
prototype plan available to employers for adoption.
1.38 QUALIFYING PARTICIPANT
Means a Participant who has satisfied the requirements described in
Section 3.01(B)(2) to be entitled to share in any Employer
Contribution (and Forfeitures, if applicable) for a Plan Year.
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1.39 RELATED EMPLOYER
Means an employer that may be required to be aggregated with the
Employer adopting this Plan for certain qualification requirements
under Sections 414(b), (c), (m) or (o) of the Code (or any other
employer that has ownership in common with the Employer). A Related
Employer may participate in this Plan if so indicated in the Section
of the Adoption Agreement titled "Employer Information" or if such
Related Employer executes a Related Employer Participation
Agreement.
1.40 RELATED EMPLOYER PARTICIPATION AGREEMENT
Means the agreement under this prototype Plan that a Related
Employer may execute to participate in this Plan.
1.41 SELF-EMPLOYED INDIVIDUAL
Means an individual who has Earned Income for the taxable year from
the trade or business for which the Plan is established; also, an
individual who would have had Earned Income but for the fact that
the trade or business had no net profits for the taxable year.
1.42 SEPARATE FUND
Means a subdivision of the Fund held in the name of a particular
Participant representing certain assets held for that Participant.
The assets which comprise a Participant's Separate Fund are those
assets earmarked for him or her and those assets subject to the
Participant's individual direction pursuant to Section 5.14.
1.43 TAXABLE WAGE BASE
Means, with respect to any taxable year, the contribution and
benefit base in effect under Section 230 of the Social Security Act
at the beginning of the Plan Year.
1.44 TERMINATION OF EMPLOYMENT
A Termination of Employment of an Employee of an Employer shall
occur whenever his or her status as an Employee of such Employer
ceases for any reason other than death. An Employee who does not
return to work for the Employer on or before the expiration of an
authorized leave of absence from such Employer shall be deemed to
have incurred a Termination of Employment when such leave ends.
1.45 TOP-HEAVY PLAN
This Plan is a Top-Heavy Plan for any Plan Year if it is determined
to be such pursuant to Section 10.08.
1.46 TRUSTEE
Means an individual, individuals or corporation specified in the
Adoption Agreement as Trustee or any duly appointed successor as
provided in Section 5.09. Trustee shall mean Custodian in the event
the financial organization named as Trustee does not have full trust
powers.
1.47 VALUATION DATE
Means the date or dates as specified in the Adoption Agreement. If
no date is specified in the Adoption Agreement, the Valuation Date
shall be the last day of the Plan Year and each other date
designated by the Plan Administrator which is selected in a uniform
and nondiscriminatory manner when the assets of the Fund are valued
at their then fair market value.
1.48 VESTED
Means nonforfeitable, that is, a claim which is unconditional and
legally enforceable against the Plan obtained by a Participant or
the Participant's Beneficiary to that part of an immediate or
deferred benefit under the Plan which arises from a Participant's
Years of Vesting Service.
1.49 YEAR OF ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with an
Eligibility Computation Period during which an Employee completes at
least 1,000 Hours of Service (or such lesser number of Hours of
Service specified in the Adoption Agreement for this purpose). An
Employee does not complete a Year of Eligibility Service before the
end of the 12 consecutive month period regardless of when during
such period the Employee completes the required number of Hours of
Service.
1.50 YEAR OF VESTING SERVICE
Means a Plan Year during which an Employee completes at least 1,000
Hours of Service (or such lesser number of Hours of Service
specified in the Adoption Agreement for this purpose).
Notwithstanding the preceding sentence, where the Employer so
indicates in the Adoption Agreement, vesting shall be computed by
reference to the 12 consecutive month period beginning with the
Employee's Employment Commencement Date and each successive 12 month
period commencing on the anniversaries thereof.
In the case of a Participant who has 5 or more consecutive Breaks in
Vesting Service, all Years of Vesting Service after such Breaks in
Vesting Service will be disregarded for the purpose of determining
the Vested portion of his or her Individual Account derived from
Employer Contributions that accrued before such breaks. Such
Participant's prebreak service will count in vesting the postbreak
Individual Account derived from Employer Contributions only if
either:
(A) such Participant had any Vested right to any portion of his or
her Individual Account derived from Employer Contributions at
the time of his or her Termination of Employment; or
(B) upon returning to service, the number of consecutive Breaks in
Vesting Service is less than his or her number of Years of
Vesting Service before such breaks.
Separate subaccounts will be maintained for the Participant's
prebreak and postbreak portions of his or her Individual Account
derived from Employer Contributions. Both subaccounts will share in
the gains and losses of the Fund.
Years of Vesting Service shall not include any period of time
excluded from Years of Vesting Service in the Adoption Agreement.
In the event the Plan Year is changed to a new 12-month period,
Employees shall receive credit for Years of Vesting Service, in
accordance with the preceding provisions of this definition, for
each of the Plan Years (the old and new Plan Years) which overlap as
a result of such change.
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SECTION TWO ELIGIBILITY AND PARTICIPATION
2.01 ELIGIBILITY TO PARTICIPATE
Each Employee of the Employer, except those Employees who belong
to a class of Employees which is excluded from participation as
indicated in the Adoption Agreement, shall be eligible to
participate in this Plan upon the satisfaction of the age and
Years of Eligibility Service requirements specified in the
Adoption Agreement.
2.02 PLAN ENTRY
A. If this Plan is a replacement of a Prior Plan by amendment
or restatement, each Employee of the Employer who was a
Participant in said Prior Plan before the Effective Date
shall continue to be a Participant in this Plan.
B. An Employee will become a Participant in the Plan as of the
Effective Date if the Employee has met the eligibility
requirements of Section 2.01 as of such date. After the
Effective Date, each Employee shall become a Participant on
the first Entry Date following the date the Employee
satisfies the eligibility requirements of Section 2.01
unless otherwise indicated in the Adoption Agreement.
C. The Plan Administrator shall notify each Employee who
becomes eligible to be a Participant under this Plan and
shall furnish the Employee with the application form,
enrollment forms or other documents which are required of
Participants. The eligible Employee shall execute such forms
or documents and make available such information as may be
required in the administration of the Plan.
2.03 TRANSFER TO OR FROM INELIGIBLE CLASS
If an Employee who had been a Participant becomes ineligible to
participate because he or she is no longer a member of an
eligible class of Employees, but has not incurred a Break in
Eligibility Service, such Employee shall participate immediately
upon his or her return to an eligible class of Employees. If such
Employee incurs a Break in Eligibility Service, his or her
eligibility to participate shall be determined by Section 2.04.
An Employee who is not a member of the eligible class of
Employees will become a Participant immediately upon becoming a
member of the eligible class provided such Employee has satisfied
the age and Years of Eligibility Service requirements. If such
Employee has not satisfied the age and Years of Eligibility
Service requirements as of the date he or she becomes a member of
the eligible class, such Employee shall become a Participant on
the first Entry Date following the date he or she satisfies those
requirements unless otherwise indicated in the Adoption
Agreement.
2.04 RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILITY SERVICE
A. EMPLOYEE NOT PARTICIPANT BEFORE BREAK - If an Employee
incurs a Break in Eligibility Service before satisfying the
Plan's eligibility requirements, such Employee's Years of
Eligibility Service before such Break in Eligibility Service
will not be taken into account.
B. NONVESTED PARTICIPANTS - In the case of a Participant who
does not have a Vested interest in his or her Individual
Account derived from Employer Contributions, Years of
Eligibility Service before a period of consecutive Breaks in
Eligibility Service will not be taken into account for
eligibility purposes if the number of consecutive Breaks in
Eligibility Service in such period equals or exceeds the
greater of 5 or the aggregate number of Years of Eligibility
Service before such break. Such aggregate number of Years of
Eligibility Service will not include any Years of
Eligibility Service disregarded under the preceding sentence
by reason of prior breaks.
If a Participant's Years of Eligibility Service are
disregarded pursuant to the preceding paragraph, such
Participant will be treated as a new Employee for
eligibility purposes. If a Participant's Years of
Eligibility Service may not be disregarded pursuant to the
preceding paragraph, such Participant shall continue to
participate in the Plan, or, if terminated, shall
participate immediately upon reemployment.
C. VESTED PARTICIPANTS - A Participant who has sustained a
Break in Eligibility Service and who had a Vested interest
in all or a portion of his or her Individual Account derived
from Employer Contributions shall continue to participate in
the Plan, or, if terminated, shall participate immediately
upon reemployment.
2.05 DETERMINATIONS UNDER THIS SECTION
The Plan Administrator shall determine the eligibility of each
Employee to be a Participant. This determination shall be
conclusive and binding upon all persons except as otherwise
provided herein or by law.
2.06 TERMS OF EMPLOYMENT
Neither the fact of the establishment of the Plan nor the fact
that a common law Employee has become a Participant shall give to
that common law Employee any right to continued employment; nor
shall either fact limit the right of the Employer to discharge or
to deal otherwise with a common law Employee without regard to
the effect such treatment may have upon the Employee's rights
under the Plan.
2.07 SPECIAL RULES WHERE ELAPSED TIME METHOD IS BEING USED
This Section 2.07 shall apply where the Employer has indicated in
the Adoption Agreement that the elapsed time method will be used.
When this Section applies, the definitions of year of service,
break in service and hour of service in this Section will replace
the definitions of Year of Eligibility Service, Year of Vesting
Service, Break in Eligibility Service, Break in Vesting Service
and Hours of Service found in the Definitions Section of the Plan
(Section One).
For purposes of determining an Employee's initial or continued
eligibility to participate in the Plan or the Vested interest in
the Participant's Individual Account balance derived from
Employer Contributions, (except for periods of service which may
be disregarded on account of the "rule of parity" described in
Sections 1.50 and 2.04) an Employee will receive credit for the
aggregate of all time period(s) commencing with the Employee's
first day of employment or reemployment and ending on the date a
break in service begins. The first day of employment or
reemployment is the first day the Employee performs an hour of
service. An Employee will also receive credit for any period of
severance of less than 12 consecutive months. Fractional periods
of a year will be expressed in terms of days.
For purposes of this Section, hour of service will mean each hour
for which an Employee is paid or entitled to payment for the
performance of duties for the Employer. Break in service is a
period of severance of at least 12 consecutive months. Period of
severance is a continuous period of time during which the
Employee is not employed by the Employer. Such period begins on
the date the Employee retires, quits or is discharged, or if
earlier, the 12 month anniversary of the date on which the
Employee was otherwise first absent from service.
In the case of an individual who is absent from work for
maternity or paternity reasons, the 12 consecutive month period
beginning on the first anniversary of the first date of such
absence shall not constitute a break in service. For purposes of
this
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paragraph, an absence from work for maternity or paternity
reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of the birth of a child of the
individual, (3) by reason of the placement of a child with the
individual in connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement.
Each Employee will share in Employer Contributions for the period
beginning on the date the Employee commences participation under
the Plan and ending on the date on which such Employee xxxxxx
employment with the Employer or is no longer a member of an
eligible class of Employees.
If the Employer is a member of an affiliated service group (under
Section 414(m) of the Code), a controlled group of corporations
(under Section 414(b) of the Code), a group of trades or
businesses under common control (under Section 414(c) of the
Code), or any other entity required to be aggregated with the
Employer pursuant to Section 414(o) of the Code, service will be
credited for any employment for any period of time for any other
member of such group. Service will also be credited for any
individual required under Section 414(n) or Section 414(o) to be
considered an Employee of any Employer aggregated under Section
414(b), (c), or (m) of the Code.
2.08 ELECTION NOT TO PARTICIPATE
This Section 2.08 will apply if this Plan is a nonstandardized
plan and the Adoption Agreement so provides. If this Section
applies, then an Employee or a Participant may elect not to
participate in the Plan for one or more Plan Years. The Employer
may not contribute for an Employee or Participant for any Plan
Year during which such Employee's or Participant's election not
to participate is in effect. Any election not to participate must
be in writing and filed with the Plan Administrator.
The Plan Administrator shall establish such uniform and
nondiscriminatory rules as it deems necessary or advisable to
carry out the terms of this Section, including, but not limited
to, rules prescribing the timing of the filing of elections not
to participate and the procedures for electing to re-participate
in the Plan.
An Employee or Participant continues to earn credit for vesting
and eligibility purposes for each Year of Vesting Service or Year
of Eligibility Service he or she completes and his or her
Individual Account (if any) will share in the gains or losses of
the Fund during the periods he or she elects not to participate.
SECTION THREE CONTRIBUTIONS
3.01 EMPLOYER CONTRIBUTIONS
A. OBLIGATION TO CONTRIBUTE - The Employer shall make
contributions to the Plan in accordance with the
contribution formula specified in the Adoption Agreement. If
this Plan is a profit sharing plan, the Employer shall, in
its sole discretion, make contributions without regard to
current or accumulated earnings or profits.
B. ALLOCATION FORMULA AND THE RIGHT TO SHARE IN THE EMPLOYER
CONTRIBUTION -
1. General - The Employer Contribution for any Plan Year
will be allocated or contributed to the Individual
Accounts of Qualifying Participants in accordance with
the allocation or contribution formula specified in the
Adoption Agreement. The Employer Contribution for any
Plan Year will be allocated to each Participant's
Individual Account as of the last day of that Plan
Year.
Any Employer Contribution for a Plan Year must
satisfy Section 401(a)(4) and the regulations
thereunder for such Plan Year.
2. Qualifying Participants - A Participant is a Qualifying
Participant and is entitled to share in the Employer
Contribution for any Plan Year if the Participant was a
Participant on at least one day during the Plan Year
and satisfies any additional conditions specified in
the Adoption Agreement. If this Plan is a standardized
plan, unless the Employer specifies more favorable
conditions in the Adoption Agreement, a Participant
will not be a qualifying Participant for a Plan Year if
he or she incurs a Termination of Employment during
such Plan Year with not more than 500 Hours of Service
if he or she is not an Employee on the last day of the
Plan Year. The determination of whether a Participant
is entitled to share in the Employer Contribution shall
be made as of the last day of each Plan Year.
3. Special Rules for Integrated Plans - This Plan may not
allocate contributions based on an integrated formula
if the Employer maintains any other plan that provides
for allocation of contributions based on an integrated
formula that benefits any of the same Participants. If
the Employer has selected the integrated contribution
or allocation formula in the Adoption Agreement, then
the maximum disparity rate shall be determined in
accordance with the following table.
MAXIMUM DISPARITY RATE
Top-Heavy Nonstandardized and
Integration Level Money Purchase Profit Sharing Non-Top-Heavy Profit Sharing
---------------------------------------------------------------------------------------------------------
Taxable Wage Base (TWB) 5.7% 2.7% 5.7%
More than $0 but not more
than 20% of TWB 5.7% 2.7% 5.7%
More than 20% of TWB but
not more than 80% of TWB 4.3% 1.3% 4.3%
More than 80% of TWB but
not more than TWB 5.4% 2.4% 5.4%
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8
C. ALLOCATION OF FORFEITURES - Forfeitures for a Plan Year
which arise as a result of the application of Section
6.01(D) shall be allocated as follows:
1. Profit Sharing Plan - If this is a profit sharing plan,
unless the Adoption Agreement indicates otherwise,
Forfeitures shall be allocated in the manner provided
in Section 3.01(B) (for Employer Contributions) to the
Individual Accounts of Qualifying Participants who are
entitled to share in the Employer Contribution for such
Plan Year. Forfeitures shall be allocated as of the
last day of the Plan Year during which the Forfeiture
arose (or any subsequent Plan Year if indicated in the
Adoption Agreement).
2. Money Purchase Pension and Target Benefit Plan - If
this Plan is a money purchase plan or a target benefit
plan, unless the Adoption Agreement indicates
otherwise, Forfeitures shall be applied towards the
reduction of Employer Contributions to the Plan.
Forfeitures shall be allocated as of the last day of
the Plan Year during which the Forfeiture arose (or any
subsequent Plan Year if indicated in the Adoption
Agreement).
D. TIMING OF EMPLOYER CONTRIBUTION - The Employer Contribution
for each Plan Year shall be delivered to the Trustee (or
Custodian, if applicable) not later than the due date for
filing the Employer's income tax return for its fiscal year
in which the Plan Year ends, including extensions thereof.
E. MINIMUM ALLOCATION FOR TOP-HEAVY PLANS - The contribution
and allocation provisions of this Section 3.01(E) shall
apply for any Plan Year with respect to which this Plan is a
Top-Heavy Plan.
1. Except as otherwise provided in (3) and (4) below, the
Employer Contributions and Forfeitures allocated on
behalf of any Participant who is not a Key Employee
shall not be less than the lesser of 3% of such
Participant's Compensation or (in the case where the
Employer has no defined benefit plan which designates
this Plan to satisfy Section 401 of the Code) the
largest percentage of Employer Contributions and
Forfeitures, as a percentage of the first $200,000
($150,000 for Plan Years beginning after December 31,
1993), (increased by any cost of living adjustment made
by the Secretary of Treasury or the Secretary's
delegate) of the Key Employee's Compensation, allocated
on behalf of any Key Employee for that year. The
minimum allocation is determined without regard to any
Social Security contribution. The Employer may, in the
Adoption Agreement, limit the Participants who are
entitled to receive the minimum allocation. This
minimum allocation shall be made even though under
other Plan provisions, the Participant would not
otherwise be entitled to receive an allocation, or
would have received a lesser allocation for the year
because of (a) the Participant's failure to complete
1,000 Hours of Service (or any equivalent provided in
the Plan), or (b) the Participant's failure to make
mandatory Nondeductible Employee Contributions to the
Plan, or (c) Compensation less than a stated amount.
2. For purposes of computing the minimum allocation,
Compensation shall mean Compensation as defined in
Section 1.07 of the Plan and shall include any amounts
contributed by the Employer pursuant to a salary
reduction agreement and which is not includible in the
gross income of the Employee under Sections 125,
402(e)(3), 402(h)(1)(B) or 403(b) of the Code even if
the Employer has elected to exclude such contributions
in the definition of Compensation used for other
purposes under the Plan.
3. The provision in (1) above shall not apply to any
Participant who was not employed by the Employer on the
last day of the Plan Year.
4. The provision in (1) above shall not apply to any
Participant to the extent the Participant is covered
under any other plan or plans of the Employer and the
Employer has provided in the adoption agreement that
the minimum allocation or benefit requirement
applicable to Top-Heavy Plans will be met in the other
plan or plans.
5. The minimum allocation required under this Section
3.01(E) and Section 3.01(F)(1) (to the extent required
to be nonforfeitable under Code Section 416(b)) may not
be forfeited under Code Section 411(a)(3)(B) or
411(a)(3)(D).
F. SPECIAL REQUIREMENTS FOR PAIRED PLANS - The Employer
maintains paired plans if the Employer has adopted both a
standardized profit sharing plan and a standardized money
purchase pension plan using this Basic Plan Document.
1. Minimum Allocation - When the paired plans are
top-heavy, the top-heavy requirements set forth in
Section 3.01(E)(1) of the Plan shall apply.
a. Same eligibility requirements. In satisfying the
top-heavy minimum allocation requirements set
forth in Section 3.01(E) of the Plan, if the
Employees benefiting under each of the paired
plans are identical, the top-heavy minimum
allocation shall be made to the money purchase
pension plan.
b. Different eligibility requirements. In satisfying
the top-heavy minimum allocation requirements set
forth in Section 3.01(E) of the Plan, if the
Employees benefiting under each of the paired
plans are not identical, the top-heavy minimum
allocation will be made to both of the paired
plans.
A Participant is treated as benefiting under the
Plan for any Plan Year during which the
Participant received or is deemed to receive an
allocation in accordance with Section
1.410(b)-3(a).
2. Only One Plan Can Be Integrated - If the Employer
maintains paired plans, only one of the Plans may
provide for the disparity in contributions which is
permitted under Section 401(l) of the Code. In the
event that both Adoption Agreements provide for such
integration, only the money purchase pension plan shall
be deemed to be integrated.
G. RETURN OF THE EMPLOYER CONTRIBUTION TO THE EMPLOYER UNDER
SPECIAL CIRCUMSTANCES - Any contribution made by the
Employer because of a mistake of fact must be returned to
the Employer within one year of the contribution.
In the event that the Commissioner of Internal Revenue
determines that the Plan is not initially qualified under
the Code, any contributions made incident to that initial
qualification by the Employer must be returned to the
Employer within one year after the date the initial
qualification is denied, but only if the application for
qualification is made by the time prescribed by law for
filing the Employer's return for the taxable year in which
the Plan is adopted, or such later date as the Secretary of
the Treasury may prescribe.
In the event that a contribution made by the Employer under
this Plan is conditioned on deductibility and is not
deductible under Code Section 404, the contribution, to the
extent of the amount disallowed, must be returned to the
Employer within one year after the deduction is disallowed.
H. OMISSION OF PARTICIPANT
1. If the Plan is a money purchase plan or a target
benefit plan and, if in any Plan Year, any Employee who
should be included as a Participant is erroneously
omitted and discovery of such omission is not made
until after a contribution by the Employer for the year
has been made and allocated, the Employer shall make a
subsequent contribution to
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9
include earnings thereon, with respect to the omitted
Employee in the amount which the Employer would have
contributed with respect to that Employee had he or she
not been omitted.
2. If the Plan is a profit sharing plan, and if in any Plan
Year, any Employee who should be included as a
Participant is erroneously omitted and discovery of such
omission is not made until after the Employer
Contribution has been made and allocated, then the Plan
Administrator must re-do the allocation (if a correction
can be made) and inform the Employee. Alternatively, the
Employer may choose to contribute for the omitted
Employee the amount to include earnings thereon, which
the Employer would have contributed for the Employee.
3.02 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
This Plan will not accept Nondeductible Employee Contributions
and matching contributions for Plan Years beginning after the
Plan Year in which this Plan is adopted by the Employer.
Nondeductible Employee Contributions for Plan Years beginning
after December 31, 1986, together with any matching contributions
as defined in Section 401(m) of the Code, will be limited so as
to meet the nondiscrimination test of Section 401(m) of the Code.
A separate account will be maintained by the Plan Administrator
for the Nondeductible Employee Contributions of each Participant.
A Participant may, upon a written request submitted to the Plan
Administrator withdraw the lesser of the portion of his or her
Individual Account attributable to his or her Nondeductible
Employee Contributions or the amount he or she contributed as
Nondeductible Employee Contributions.
Nondeductible Employee Contributions and earnings thereon will be
nonforfeitable at all times. No Forfeiture will occur solely as a
result of an Employee's withdrawal of Nondeductible Employee
Contributions.
The Plan Administrator will not accept deductible employee
contributions which are made for a taxable year beginning after
December 31, 1986. Contributions made prior to that date will be
maintained in a separate account which will be nonforfeitable at
all times. The account will share in the gains and losses of the
Fund in the same manner as described in Section 4.03 of the Plan.
No part of the deductible employee contribution account will be
used to purchase life insurance. Subject to Section 6.05, joint
and survivor annuity requirements (if applicable), the
Participant may withdraw any part of the deductible employee
contribution account by making a written application to the Plan
Administrator.
3.03 ROLLOVER CONTRIBUTIONS
If so indicated in the Adoption Agreement, an Employee may
contribute a rollover contribution to the Plan. The Plan
Administrator may require the Employee to submit a written
certification that the contribution qualifies as a rollover
contribution under the applicable provisions of the Code. If it
is later determined that all or part of a rollover contribution
was ineligible to be rolled into the Plan, the Plan Administrator
shall direct that any ineligible amounts, plus earnings
attributable thereto, be distributed from the Plan to the
Employee as soon as administratively feasible.
A separate account shall be maintained by the Plan Administrator
for each Employee's rollover contributions which will be
nonforfeitable at all times. Such account will share in the
income and gains and losses of the Fund in the manner described
in Section 4.03 and shall be subject to the Plan's provisions
governing distributions.
The Employer may, in a uniform and nondiscriminatory manner, only
allow Employees who have become Participants in the Plan to make
rollover contributions.
3.04 TRANSFER CONTRIBUTIONS
If so indicated in the Adoption Agreement, the Trustee (or
Custodian, if applicable) may receive any amounts transferred to
it from the trustee or custodian of another plan qualified under
Code Section 401(a). If it is later determined that all or part
of a transfer contribution was ineligible to be transferred into
the Plan, the Plan Administrator shall direct that any ineligible
amounts, plus earnings attributable thereto, be distributed from
the Plan to the Employee as soon as administratively feasible.
A separate account shall be maintained by the Plan Administrator
for each Employee's transfer contributions which will be
nonforfeitable at all times. Such account will share in the
income and gains and losses of the Fund in the manner described
in Section 4.03 and shall be subject to the Plan's provisions
governing distributions.
The Employer may, in a uniform and nondiscriminatory manner, only
allow Employees who have become Participants in the Plan to make
transfer contributions.
3.05 LIMITATION ON ALLOCATIONS
A. If the Participant does not participate in, and has never
participated in another qualified plan maintained by the
Employer or a welfare benefit fund, as defined in Section
419(e) of the Code maintained by the Employer, or an
individual medical account, as defined in Section 415(l)(2)
of the Code, or a simplified employee pension plan, as
defined in Section 408(k) of the Code, maintained by the
Employer, which provides an annual addition as defined in
Section 3.08(E)(1), the following rules shall apply:
1. The amount of annual additions which may be credited to
the Participant's Individual Account for any limitation
year will not exceed the lesser of the maximum
permissible amount or any other limitation contained in
this Plan. If the Employer Contribution that would
otherwise be contributed or allocated to the
Participant's Individual Account would cause the annual
additions for the limitation year to exceed the maximum
permissible amount, the amount contributed or allocated
will be reduced so that the annual additions for the
limitation year will equal the maximum permissible
amount.
2. Prior to determining the Participant's actual
Compensation for the limitation year, the Employer may
determine the maximum permissible amount for a
Participant on the basis of a reasonable estimation of
the Participant's Compensation for the limitation year,
uniformly determined for all Participants similarly
situated.
3. As soon as is administratively feasible after the end
of the limitation year, the maximum permissible amount
for the limitation year will be determined on the basis
of the Participant's actual Compensation for the
limitation year.
4. If pursuant to Section 3.05(A)(3) or as a result of the
allocation of Forfeitures there is an excess amount,
the excess will be disposed of as follows:
a. Any Nondeductible Employee Contributions, to the
extent they would reduce the excess amount, will
be returned to the Participant;
b. If after the application of paragraph (a) an
excess amount still exists, and the Participant is
covered by the Plan at the end of the limitation
year, the excess amount in the Participant's
Individual Account will be used to reduce
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Employer Contributions (including any allocation
of Forfeitures) for such Participant in the next
limitation year, and each succeeding limitation
year if necessary;
c. If after the application of paragraph (b) an
excess amount still exists, and the Participant is
not covered by the Plan at the end of a limitation
year, the excess amount will be held unallocated
in a suspense account. The suspense account will
be applied to reduce future Employer Contributions
(including allocation of any Forfeitures) for all
remaining Participants in the next limitation
year, and each succeeding limitation year if
necessary;
d. If a suspense account is in existence at any time
during a limitation year pursuant to this Section,
it will not participate in the allocation of the
Fund's investment gains and losses. If a suspense
account is in existence at any time during a
particular limitation year, all amounts in the
suspense account must be allocated and reallocated
to Participants' Individual Accounts before any
Employer Contributions or any Nondeductible
Employee Contributions may be made to the Plan for
that limitation year. Excess amounts may not be
distributed to Participants or former
Participants.
B. If, in addition to this Plan, the Participant is covered
under another qualified master or prototype defined
contribution plan maintained by the Employer, a welfare
benefit fund maintained by the Employer, an individual
medical account maintained by the Employer, or a simplified
employee pension maintained by the Employer that provides an
annual addition as defined in Section 3.05(E)(1), during any
limitation year, the following rules apply:
1. The annual additions which may be credited to a
Participant's Individual Account under this Plan for
any such limitation year will not exceed the maximum
permissible amount reduced by the annual additions
credited to a Participant's Individual Account under
the other qualified master or prototype plans, welfare
benefit funds, individual medical accounts and
simplified employee pensions for the same limitation
year. If the annual additions with respect to the
Participant under other qualified master or prototype
defined contribution plans, welfare benefit funds,
individual medical accounts and simplified employee
pensions maintained by the Employer are less than the
maximum permissible amount and the Employer
Contribution that would otherwise be contributed or
allocated to the Participant's Individual Account under
this Plan would cause the annual additions for the
limitation year to exceed this limitation, the amount
contributed or allocated will be reduced so that the
annual additions under all such plans and funds for the
limitation year will equal the maximum permissible
amount. If the annual additions with respect to the
Participant under such other qualified master or
prototype defined contribution plans, welfare benefit
funds, individual medical accounts and simplified
employee pensions in the aggregate are equal to or
greater than the maximum permissible amount, no amount
will be contributed or allocated to the Participant's
Individual Account under this Plan for the limitation
year.
2. Prior to determining the Participant's actual
Compensation for the limitation year, the Employer may
determine the maximum permissible amount for a
Participant in the manner described in Section
3.05(A)(2).
3. As soon as is administratively feasible after the end
of the limitation year, the maximum permissible amount
for the limitation year will be determined on the basis
of the Participant's actual Compensation for the
limitation year.
4. If, pursuant to Section 3.05(B)(3) or as a result of
the allocation of Forfeitures a Participant's annual
additions under this Plan and such other plans would
result in an excess amount for a limitation year, the
excess amount will be deemed to consist of the annual
additions last allocated, except that annual additions
attributable to a simplified employee pension will be
deemed to have been allocated first, followed by annual
additions to a welfare benefit fund or individual
medical account, regardless of the actual allocation
date.
5. If an excess amount was allocated to a Participant on
an allocation date of this Plan which coincides with an
allocation date of another plan, the excess amount
attributed to this Plan will be the product of,
a. the total excess amount allocated as of such date,
times
b. the ratio of (i) the annual additions allocated to
the Participant for the limitation year as of such
date under this Plan to (ii) the total annual
additions allocated to the Participant for the
limitation year as of such date under this and all
the other qualified prototype defined contribution
plans.
6. Any excess amount attributed to this Plan will be
disposed in the manner described in Section 3.05(A)(4).
C. If the Participant is covered under another qualified
defined contribution plan maintained by the Employer which
is not a master or prototype plan, annual additions which
may be credited to the Participant's Individual Account
under this Plan for any limitation year will be limited in
accordance with Sections 3.05(B)(1) through 3.05(B)(6) as
though the other plan were a master or prototype plan unless
the Employer provides other limitations in the Section of
the Adoption Agreement titled "Limitation on Allocation -
More Than One Plan."
D. If the Employer maintains, or at any time maintained, a
qualified defined benefit plan covering any Participant in
this Plan, the sum of the Participant's defined benefit plan
fraction and defined contribution plan fraction will not
exceed 1.0 in any limitation year. The annual additions
which may be credited to the Participant's Individual
Account under this Plan for any limitation year will be
limited in accordance with the Section of the Adoption
Agreement titled "Limitation on Allocation - More Than One
Plan."
E. The following terms shall have the following meanings when
used in this Section 3.05:
1. Annual additions: The sum of the following amounts
credited to a Participant's Individual Account for the
limitation year:
a. Employer Contributions,
b. Nondeductible Employee Contributions,
c. Forfeitures,
d. amounts allocated, after March 31, 1984, to an
individual medical account, as defined in Section
415(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, under a welfare benefit fund, as
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defined in Section 419(e) of the Code,
maintained by the Employer are treated as annual
additions to a defined contribution plan, and
e. allocations under a simplified employee pension.
For this purpose, any excess amount applied under
Section 3.05(A)(4) or 3.05(B)(6) in the limitation year
to reduce Employer Contributions will be considered
annual additions for such limitation year.
2. Compensation: Means Compensation as defined in Section
1.07 of the Plan except that Compensation for purposes
of this Section 3.05 shall not include any amounts
contributed by the Employer pursuant to a salary
reduction agreement and which is not includible in the
gross income of the Employee under Sections 125,
402(e)(3), 402(h)(1)(B) or 403(b) of the Code even if
the Employer has elected to include such contributions
in the definition of Compensation used for other
purposes under the Plan. Further, any other exclusion
the Employer has elected (such as the exclusion of
certain types of pay or pay earned before the Employee
enters the Plan) will not apply for purposes of this
Section.
Notwithstanding the preceding sentence, Compensation for
a Participant in a defined contribution plan who is
permanently and totally disabled (as defined in Section
22(e)(3) of the Code) is the Compensation such
Participant would have received for the limitation year
if the Participant had been paid at the rate of
Compensation paid immediately before becoming
permanently and totally disabled; such imputed
Compensation for the disabled Participant may be taken
into account only if the Participant is not a Highly
Compensated Employee (as defined in Section 414(q) of
the Code) and contributions made on behalf of such
Participant are nonforfeitable when made.
3. Defined benefit fraction: A fraction, the numerator of
which is the sum of the Participant's projected annual
benefits under all the defined benefit plans (whether or
not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125% of the dollar
limitation determined for the limitation year under
Section 415(b) and (d) of the Code or 140% of the
highest average compensation, including any adjustments
under Section 415(b) of the Code.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first limitation
year beginning after December 31, 1986, in one or more
defined benefit plans maintained by the Employer which
were in existence on May 6, 1986, the denominator of
this fraction will not be less than 125% of the sum of
the annual benefits under such plans which the
Participant had accrued as of the close of the last
limitation year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of
the plan after May 5, 1986. The preceding sentence
applies only if the defined benefit plans individually
and in the aggregate satisfied the requirements of
Section 415 of the Code for all limitation years
beginning before January 1, 1987.
4. Defined contribution dollar limitation: $30,000 or if
greater, one-fourth of the defined benefit dollar
limitation set forth in Section 415(b)(1) of the Code as
in effect for the limitation year.
5. Defined contribution fraction: A fraction, the numerator
of which is the sum of the annual additions to the
Participant's account under all the defined contribution
plans (whether or not terminated) maintained by the
Employer for the current and all prior limitation years
(including the annual additions attributable to the
Participant's nondeductible employee contributions to
all defined benefit plans, whether or not terminated,
maintained by the Employer, and the annual additions
attributable to all welfare benefit funds, as defined in
Section 419(e) of the Code, individual medical accounts,
and simplified employee pensions, maintained by the
Employer), and the denominator of which is the sum of
the maximum aggregate amounts for the current and all
prior limitation years of service with the Employer
(regardless of whether a defined contribution plan was
maintained by the Employer). The maximum aggregate
amount in any limitation year is the lesser of 125% of
the dollar limitation determined under Section 415(b)
and (d) of the Code in effect under Section 415(c)(1)(A)
of the Code or 35% of the Participant's Compensation for
such year.
If the Employee was a Participant as of the end of the
first day of the first limitation year beginning after
December 31, 1986, in one or more defined contribution
plans maintained by the Employer which were in existence
on May 6, 1986, the numerator of this fraction will be
adjusted if the sum of this fraction and the defined
benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount
equal to the product of (1) the excess of the sum of the
fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the
numerator of this fraction. The adjustment is calculated
using the fractions as they would be computed as of the
end of the last limitation year beginning before January
1, 1987, and disregarding any changes in the terms and
conditions of the Plan made after May 5, 1986, but using
the Section 415 limitation applicable to the first
limitation year beginning on or after January 1, 1987.
The annual addition for any limitation year beginning
before January 1, 1987, shall not be recomputed to treat
all Nondeductible Employee Contributions as annual
additions.
6. Employer: For purposes of this Section 3.05, Employer
shall mean the Employer that adopts this Plan, and all
members of a controlled group of corporations (as
defined in Section 414(b) of the Code as modified by
Section 415(h)), all commonly controlled trades or
businesses (as defined in Section 414(c) as modified by
Section 415(h)) or affiliated service groups (as defined
in Section 414(m)) of which the adopting Employer is a
part, and any other entity required to be aggregated
with the Employer pursuant to regulations under Section
414(o) of the Code.
7. Excess amount: The excess of the Participant's annual
additions for the limitation year over the maximum
permissible amount.
8. Highest average compensation: The average compensation
for the three consecutive years of service with the
Employer that produces the highest average.
9. Limitation year: A calendar year, or the 12-consecutive
month period elected by the Employer in the Adoption
Agreement. All qualified plans maintained by the
Employer must use the same limitation year. If the
limitation year is amended to a different 12-consecutive
month period, the new limitation year must begin on a
date within the limitation year in which the amendment
is made.
10. Master or prototype plan: A plan the form of which is
the subject of a favorable opinion letter from the
Internal Revenue Service.
11. Maximum permissible amount: The maximum annual addition
that may be contributed or allocated to a Participant's
Individual Account under the Plan for any limitation
year shall not exceed the lesser of:
a. the defined contribution dollar limitation, or
b. 25% of the Participant's Compensation for the
limitation year.
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The compensation limitation referred to in (b) shall
not apply to any contribution for medical benefits
(within the meaning of Section 401(h) or Section
419A(f)(2) of the Code) which is otherwise treated
as an annual addition under Section 415(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 will not exceed the defined
contribution dollar limitation multiplied by the
following fraction:
Number of months in the short limitation year
---------------------------------------------
12
12. Projected annual benefit: The annual retirement benefit
(adjusted to an actuarially equivalent straight life
annuity if such benefit is expressed in a form other
than a straight life annuity or qualified joint and
survivor annuity) to which the Participant would be
entitled under the terms of the Plan assuming:
a. the Participant will continue employment until
Normal Retirement Age under the Plan (or current
age, if later), and
b. the Participant's Compensation for the current
limitation year and all other relevant factors
used to determine benefits under the Plan will
remain constant for all future limitation years.
Straight life annuity means an annuity payable
in equal installments for the life of the
Participant that terminates upon the
Participants's death.
SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
4.01 INDIVIDUAL ACCOUNTS
A. The Plan Administrator shall establish and maintain an
Individual Account in the name of each Participant to
reflect the total value of his or her interest in the Fund.
Each Individual Account established hereunder shall consist
of such subaccounts as may be needed for each Participant
including:
1. a subaccount to reflect Employer Contributions and
Forfeitures allocated on behalf of a Participant;
2. a subaccount to reflect a Participant's rollover
contributions;
3. a subaccount to reflect a Participant's transfer
contributions;
4. a subaccount to reflect a Participant's Nondeductible
Employee Contributions; and
5. a subaccount to reflect a Participant's deductible
employee contributions.
B. The Plan Administrator may establish additional accounts as
it may deem necessary for the proper administration of the
Plan, including, but not limited to, a suspense account for
Forfeitures as required pursuant to Section 6.01(D).
4.02 VALUATION OF FUND
The Fund will be valued each Valuation Date at fair market value.
4.03 VALUATION OF INDIVIDUAL ACCOUNTS
A. Where all or a portion of the assets of a Participant's
Individual Account are invested in a Separate Fund for the
Participant, then the value of that portion of such
Participant's Individual Account at any relevant time equals
the sum of the fair market values of the assets in such
Separate Fund, less any applicable charges or penalties.
B. The fair market value of the remainder of each Individual
Account is determined in the following manner:
1. First, the portion of the Individual Account invested
in each Investment Fund as of the previous Valuation
Date is determined. Each such portion is reduced by any
withdrawal made from the applicable Investment Fund to
or for the benefit of a Participant or the
Participant's Beneficiary, further reduced by any
amounts forfeited by the Participant pursuant to
Section 6.01(D) and further reduced by any transfer to
another Investment Fund since the previous Valuation
Date and is increased by any amount transferred from
another Investment Fund since the previous Valuation
Date. The resulting amounts are the net Individual
Account portions invested in the Investment Funds.
2. Secondly, the net Individual Account portions invested
in each Investment Fund are adjusted upwards or
downwards, pro rata (i.e., ratio of each net Individual
Account portion to the sum of all net Individual
Account portions) so that the sum of all the net
Individual Account portions invested in an Investment
Fund will equal the then fair market value of the
Investment Fund. Notwithstanding the previous sentence,
for the first Plan Year only, the net Individual
Account portions shall be the sum of all contributions
made to each Participant's Individual Account during
the first Plan Year.
3. Thirdly, any contributions to the Plan and Forfeitures
are allocated in accordance with the appropriate
allocation provisions of Section 3. For purposes of
Section 4, contributions made by the Employer for any
Plan Year but after that Plan Year will be considered
to have been made on the last day of that Plan Year
regardless of when paid to the Trustee (or Custodian,
if applicable).
Amounts contributed between Valuation Dates will not
be credited with investment gains or losses until
the next following Valuation Date.
4. Finally, the portions of the Individual Account
invested in each Investment Fund (determined in
accordance with (1), (2) and (3) above) are added
together.
4.04 MODIFICATION OF METHOD FOR VALUING INDIVIDUAL ACCOUNTS
If necessary or appropriate, the Plan Administrator may establish
different or additional procedures (which shall be uniform and
nondiscriminatory) for determining the fair market value of the
Individual Accounts.
4.05 SEGREGATION OF ASSETS
If a Participant elects a mode of distribution other than a lump
sum, the Plan Administrator may place that Participant's account
balance into a segregated Investment Fund for the purpose of
maintaining the necessary liquidity to provide benefit
installments on a periodic basis.
4.06 STATEMENT OF INDIVIDUAL ACCOUNTS
No later than 270 days after the close of each Plan Year, the
Plan Administrator shall furnish a statement to each Participant
indicating the Individual Account balances of such Participant as
of the last Valuation Date in such Plan Year.
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SECTION FIVE TRUSTEE OR CUSTODIAN
5.01 CREATION OF FUND
By adopting this Plan, the Employer establishes the Fund which
shall consist of the assets of the Plan held by the Trustee (or
Custodian, if applicable) pursuant to this Section 5. Assets
within the Fund may be pooled on behalf of all Participants,
earmarked on behalf of each Participant or be a combination of
pooled and earmarked. To the extent that assets are earmarked for
a particular Participant, they will be held in a Separate Fund
for that Participant.
No part of the corpus or income of the Fund may be used for, or
diverted to, purposes other than for the exclusive benefit of
Participants or their Beneficiaries.
5.02 INVESTMENT AUTHORITY
Except as provided in Section 5.14 (relating to individual
direction of investments by Participants), the Employer, not the
Trustee (or Custodian, if applicable), shall have exclusive
management and control over the investment of the Fund into any
permitted investment. Notwithstanding the preceding sentence, a
Trustee may make an agreement with the Employer whereby the
Trustee will manage the investment of all or a portion of the
Fund. Any such agreement shall be in writing and set forth such
matters as the Trustee deems necessary or desirable.
5.03 FINANCIAL ORGANIZATION CUSTODIAN OR TRUSTEE WITHOUT FULL TRUST
POWERS
This Section 5.03 applies where a financial organization has
indicated in the Adoption Agreement that it will serve, with
respect to this Plan, as Custodian or as Trustee without full
trust powers (under applicable law). Hereinafter, a financial
organization Trustee without full trust powers (under applicable
law) shall be referred to as a Custodian. The Custodian shall
have no discretionary authority with respect to the management of
the Plan or the Fund but will act only as directed by the entity
who has such authority.
A. PERMISSIBLE INVESTMENTS - The assets of the Plan shall be
invested only in those investments which are available
through the Custodian in the ordinary course of business
which the Custodian may legally hold in a qualified plan and
which the Custodian chooses to make available to Employers
for qualified plan investments. Notwithstanding the
preceding sentence, the Prototype Sponsor may, as a
condition of making the Plan available to the Employer,
limit the types of property in which the assets of the Plan
may be invested.
B. RESPONSIBILITIES OF THE CUSTODIAN - The responsibilities of
the Custodian shall be limited to the following:
1. To receive Plan contributions and to hold, invest and
reinvest the Fund without distinction between principal
and interest; provided, however, that nothing in this
Plan shall require the Custodian to maintain physical
custody of stock certificates (or other indicia of
ownership of any type of asset) representing assets
within the Fund;
2. To maintain accurate records of contributions,
earnings, withdrawals and other information the
Custodian deems relevant with respect to the Plan;
3. To make disbursements from the Fund to Participants or
Beneficiaries upon the proper authorization of the Plan
Administrator; and
4. To furnish to the Plan Administrator a statement which
reflects the value of the investments in the hands of
the Custodian as of the end of each Plan Year and as of
any other times as the Custodian and Plan Administrator
may agree.
X. XXXXXX OF THE CUSTODIAN - Except as otherwise provided in
this Plan, the Custodian shall have the power to take any
action with respect to the Fund which it deems necessary or
advisable to discharge its responsibilities under this Plan
including, but not limited to, the following powers:
1. To invest all or a portion of the Fund (including idle
cash balances) in time deposits, savings accounts,
money market accounts or similar investments bearing a
reasonable rate of interest in the Custodian's own
savings department or the savings department of another
financial organization;
2. To vote upon any stocks, bonds, or other securities; to
give general or special proxies or powers of attorney
with or without power of substitution; to exercise any
conversion privileges or subscription rights and to
make any payments incidental thereto; to oppose, or to
consent to, or otherwise participate in, corporate
reorganizations or other changes affecting corporate
securities, and to pay any assessment or charges in
connection therewith; and generally to exercise any of
the powers of an owner with respect to stocks, bonds,
securities or other property;
3. To hold securities or other property of the Fund in its
own name, in the name of its nominee or in bearer form;
and
4. To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all
other instruments that may be necessary or appropriate
to carry out the powers herein granted.
5.04 FINANCIAL ORGANIZATION TRUSTEE WITH FULL TRUST POWERS AND
INDIVIDUAL TRUSTEE
This Section 5.04 applies where a financial organization has
indicated in the Adoption Agreement that it will serve as Trustee
with full trust powers. This Section also applies where one or
more individuals are named in the Adoption Agreement to serve as
Trustee(s).
A. PERMISSIBLE INVESTMENTS - The Trustee may invest the assets
of the Plan in property of any character, real or personal,
including, but not limited to the following: stocks,
including shares of open-end investment companies (mutual
funds); bonds; notes; debentures; options; limited
partnership interests; mortgages; real estate or any
interests therein; unit investment trusts; Treasury Bills,
and other U.S. Government obligations; common trust funds,
combined investment trusts, collective trust funds or
commingled funds maintained by a bank or similar financial
organization (whether or not the Trustee hereunder); savings
accounts, time deposits or money market accounts of a bank
or similar financial organization (whether or not the
Trustee hereunder); annuity contracts; life insurance
policies; or in such other investments as is deemed proper
without regard to investments authorized by statute or rule
of law governing the investment of trust funds but with
regard to ERISA and this Plan.
Notwithstanding the preceding sentence, the Prototype
Sponsor may, as a condition of making the Plan available to
the Employer, limit the types of property in which the
assets of the Plan may be invested.
B. RESPONSIBILITIES OF THE TRUSTEE - The responsibilities of
the Trustee shall be limited to the following:
1. To receive Plan contributions and to hold, invest and
reinvest the Fund without distinction between principal and
interest; provided, however, that nothing in this Plan shall
require the Trustee to maintain physical custody of stock
certificates (or other indicia of ownership) representing
assets within the Fund;
18
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14
2. To maintain accurate records of contributions, earnings,
withdrawals and other information the Trustee deems relevant
with respect to the Plan;
3. To make disbursements from the Fund to Participants or
Beneficiaries upon the proper authorization of the Plan
Administrator; and
4. To furnish to the Plan Administrator a statement which
reflects the value of the investments in the hands of the
Trustee as of the end of each Plan Year and as of any other
times as the Trustee and Plan Administrator may agree.
X. XXXXXX OF THE TRUSTEE - Except as otherwise provided in this
Plan, the Trustee shall have the power to take any action
with respect to the Fund which it deems necessary or
advisable to discharge its responsibilities under this Plan
including, but not limited to, the following powers:
1. To hold any securities or other property of the Fund in its
own name, in the name of its nominee or in bearer form;
2. To purchase or subscribe for securities issued, or real
property owned, by the Employer or any trade or business
under common control with the Employer but only if the
prudent investment and diversification requirements of ERISA
are satisfied;
3. To sell, exchange, convey, transfer or otherwise dispose of
any securities or other property held by the Trustee, by
private contract or at public auction. No person dealing
with the Trustee shall be bound to see to the application of
the purchase money or to inquire into the validity,
expediency, or propriety of any such sale or other
disposition, with or without advertisement;
4. To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or
without power of substitution; to exercise any conversion
privileges or subscription rights and to make any payments
incidental thereto; to oppose, or to consent to, or
otherwise participate in, corporate reorganizations or other
changes affecting corporate securities, and to delegate
discretionary powers, and to pay any assessments or charges
in connection therewith; and generally to exercise any of
the powers of an owner with respect to stocks, bonds,
securities or other property;
5. To invest any part or all of the Fund (including idle cash
balances) in certificates of deposit, demand or time
deposits, savings accounts, money market accounts or similar
investments of the Trustee (if the Trustee is a bank or
similar financial organization), the Prototype Sponsor or
any affiliate of such Trustee or Prototype Sponsor, which
bear a reasonable rate of interest;
6. To provide sweep services without the receipt by the Trustee
of additional compensation or other consideration (other
than reimbursement of direct expenses properly and actually
incurred in the performance of such services);
7. To hold in the form of cash for distribution or investment
such portion of the Fund as, at any time and from
time-to-time, the Trustee shall deem prudent and deposit
such cash in interest bearing or noninterest bearing
accounts;
8. To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry
out the powers herein granted;
9. To settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Plan, to
commence or defend suits or legal or administrative
proceedings, and to represent the Plan in all suits and
legal and administrative proceedings;
10. To employ suitable agents and counsel, to contract with
agents to perform administrative and recordkeeping duties
and to pay their reasonable expenses, fees and compensation,
and such agent or counsel may or may not be agent or counsel
for the Employer;
11. To cause any part or all of the Fund, without limitation as
to amount, to be commingled with the funds of other trusts
(including trusts for qualified employee benefit plans) by
causing such money to be invested as a part of any pooled,
common, collective or commingled trust fund (including any
such fund described in the Adoption Agreement) heretofore or
hereafter created by any Trustee (if the Trustee is a bank),
by the Prototype Sponsor, by any affiliate bank of such a
Trustee or by such a Trustee or the Prototype Sponsor, or by
such an affiliate in participation with others; the
instrument or instruments establishing such trust fund or
funds, as amended, being made part of this Plan and trust so
long as any portion of the Fund shall be invested through
the medium thereof; and
12. Generally to do all such acts, execute all such instruments,
initiate such proceedings, and exercise all such rights and
privileges with relation to property constituting the Fund
as if the Trustee were the absolute owner thereof.
5.05 DIVISION OF FUND INTO INVESTMENT FUNDS
The Employer may direct the Trustee (or Custodian) from
time-to-time to divide and redivide the Fund into one or more
Investment Funds. Such Investment Funds may include, but not be
limited to, Investment Funds representing the assets under the
control of an investment manager pursuant to Section 5.12 and
Investment Funds representing investment options available for
individual direction by Participants pursuant to Section 5.14.
Upon each division or redivision, the Employer may specify the
part of the Fund to be allocated to each such Investment Fund and
the terms and conditions, if any, under which the assets in such
Investment Fund shall be invested.
5.06 COMPENSATION AND EXPENSES
The Trustee (or Custodian, if applicable) shall receive such
reasonable compensation as may be agreed upon by the Trustee (or
Custodian) and the Employer. The Trustee (or Custodian) shall be
entitled to reimbursement by the Employer for all proper expenses
incurred in carrying out his or her duties under this Plan,
including reasonable legal, accounting and actuarial expenses. If
not paid by the Employer, such compensation and expenses may be
charged against the Fund.
All taxes of any kind that may be levied or assessed under
existing or future laws upon, or in respect of, the Fund or the
income thereof shall be paid from the Fund.
5.07 NOT OBLIGATED TO QUESTION DATA
The Employer shall furnish the Trustee (or Custodian, if
applicable) and Plan Administrator the information which each
party deems necessary for the administration of the Plan
including, but not limited to, changes in a Participant's status,
eligibility, mailing addresses and other such data as may be
required. The Trustee (or Custodian) and Plan Administrator shall
be entitled to act on such information as is supplied them and
shall have no duty or responsibility to further verify or
question such information.
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5.08 LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS
The Plan Administrator shall be responsible for withholding
federal income taxes from distributions from the Plan, unless the
Participant (or Beneficiary, where applicable) elects not to have
such taxes withheld. The Trustee (or Custodian) or other payor
may act as agent for the Plan Administrator to withhold such
taxes and to make the appropriate distribution reports, if the
Plan Administrator furnishes all the information to the Trustee
(or Custodian) or other payor it may need to do withholding and
reporting.
5.09 RESIGNATION OR REMOVAL OF TRUSTEE (OR CUSTODIAN)
The Trustee (or Custodian, if applicable) may resign at any time
by giving 30 days advance written notice to the Employer. The
resignation shall become effective 30 days after receipt of such
notice unless a shorter period is agreed upon.
The Employer may remove any Trustee (or Custodian) at any time by
giving written notice to such Trustee (or Custodian) and such
removal shall be effective 30 days after receipt of such notice
unless a shorter period is agreed upon. The Employer shall have
the power to appoint a successor Trustee (or Custodian).
Upon such resignation or removal, if the resigning or removed
Trustee (or Custodian) is the sole Trustee (or Custodian), he or
she shall transfer all of the assets of the Fund then held by
such Trustee (or Custodian) as expeditiously as possible to the
successor Trustee (or Custodian) after paying or reserving such
reasonable amount as he or she shall deem necessary to provide
for the expense in the settlement of the accounts and the amount
of any compensation due him or her and any sums chargeable
against the Fund for which he or she may be liable. If the Funds
as reserved are not sufficient for such purpose, then he or she
shall be entitled to reimbursement from the successor Trustee (or
Custodian) out of the assets in the successor Trustee's (or
Custodian's) hands under this Plan. If the amount reserved shall
be in excess of the amount actually needed, the former Trustee
(or Custodian) shall return such excess to the successor Trustee
(or Custodian).
Upon receipt of the transferred assets, the successor Trustee (or
Custodian) shall thereupon succeed to all of the powers and
responsibilities given to the Trustee (or Custodian) by this
Plan.
The resigning or removed Trustee (or Custodian) shall render an
accounting to the Employer and unless objected to by the Employer
within 30 days of its receipt, the accounting shall be deemed to
have been approved and the resigning or removed Trustee (or
Custodian) shall be released and discharged as to all matters set
forth in the accounting. Where a financial organization is
serving as Trustee (or Custodian) and it is merged with or bought
by another organization (or comes under the control of any
federal or state agency), that organization shall serve as the
successor Trustee (or Custodian) of this Plan, but only if it is
the type of organization that can so serve under applicable law.
Where the Trustee or Custodian is serving as a nonbank trustee or
custodian pursuant to Section 1.401-12(n) of the Income Tax
Regulations, the Employer will appoint a successor Trustee (or
Custodian) upon notification by the Commissioner of Internal
Revenue that such substitution is required because the Trustee
(or Custodian) has failed to comply with the requirements of
Section 1.401-12(n) or is not keeping such records or making such
returns or rendering such statements as are required by forms or
regulations.
5.10 DEGREE OF CARE - LIMITATIONS OF LIABILITY
The Trustee (or Custodian) shall not be liable for any losses
incurred by the Fund by any direction to invest communicated by
the Employer, Plan Administrator, investment manager appointed
pursuant to Section 5.12 or any Participant or Beneficiary. The
Trustee (or Custodian) shall be under no liability for
distributions made or other action taken or not taken at the
written direction of the Plan Administrator. It is specifically
understood that the Trustee (or Custodian) shall have no duty or
responsibility with respect to the determination of matters
pertaining to the eligibility of any Employee to become a
Participant or remain a Participant hereunder, the amount of
benefit to which a Participant or Beneficiary shall be entitled
to receive hereunder, whether a distribution to Participant or
Beneficiary is appropriate under the terms of the Plan or the
size and type of any policy to be purchased from any insurer for
any Participant hereunder or similar matters; it being understood
that all such responsibilities under the Plan are vested in the
Plan Administrator.
5.11 INDEMNIFICATION OF PROTOTYPE SPONSOR AND TRUSTEE (OR CUSTODIAN)
Notwithstanding any other provision herein, and except as may be
otherwise provided by ERISA, the Employer shall indemnify and
hold harmless the Trustee (or Custodian, if applicable) and the
Prototype Sponsor, their officers, directors, employees, agents,
their heirs, executors, successors and assigns, from and against
any and all liabilities, damages, judgments, settlements, losses,
costs, charges, or expenses (including legal expenses) at any
time arising out of or incurred in connection with any action
taken by such parties in the performance of their duties with
respect to this Plan, unless there has been a final adjudication
of gross negligence or willful misconduct in the performance of
such duties.
Further, except as may be otherwise provided by ERISA, the
Employer will indemnify the Trustee (or Custodian) and Prototype
Sponsor from any liability, claim or expense (including legal
expense) which the Trustee (or Custodian) and Prototype Sponsor
shall incur by reason of or which results, in whole or in part,
from the Trustee's (or Custodian's) or Prototype Sponsor's
reliance on the facts and other directions and elections the
Employer communicates or fails to communicate.
5.12 INVESTMENT MANAGERS
A. DEFINITION OF INVESTMENT MANAGER - The Employer may appoint
one or more investment managers to make investment decisions
with respect to all or a portion of the Fund. The investment
manager shall be any firm or individual registered as an
investment adviser under the Investment Advisers Act of
1940, a bank as defined in said Act or an insurance company
qualified under the laws of more than one state to perform
services consisting of the management, acquisition or
disposition of any assets of the Plan.
B. INVESTMENT MANAGER'S AUTHORITY - A separate Investment Fund
shall be established representing the assets of the Fund
invested at the direction of the investment manager. The
investment manager so appointed shall direct the Trustee (or
Custodian, if applicable ) with respect to the investment of
such Investment Fund. The investments which may be acquired
at the direction of the investment manager are those
described in Section 5.03(A) (for Custodians) or Section
5.04(A) (for Trustees).
C. WRITTEN AGREEMENT - The appointment of any investment
manager shall be by written agreement between the Employer
and the investment manager and a copy of such agreement (and
any modification or termination thereof) must be given to
the Trustee (or Custodian).
The agreement shall set forth, among other matters, the
effective date of the investment manager's appointment and
an acknowledgement by the investment manager that it is a
fiduciary of the Plan under ERISA.
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D. CONCERNING THE TRUSTEE (OR CUSTODIAN) - Written notice of
each appointment of an investment manager shall be given to
the Trustee (or Custodian) in advance of the effective date
of such appointment. Such notice shall specify which portion
of the Fund will constitute the Investment Fund subject to
the investment manager's direction. The Trustee (or
Custodian) shall comply with the investment direction given
to it by the investment manager and will not be liable for
any loss which may result by reason of any action (or
inaction) it takes at the direction of the investment
manager.
5.13 MATTERS RELATING TO INSURANCE
A. If a life insurance policy is to be purchased for a
Participant, the aggregate premium for certain life
insurance for each Participant must be less than a certain
percentage of the aggregate Employer Contributions and
Forfeitures allocated to a Participant's Individual Account
at any particular time as follows:
1. Ordinary Life Insurance - For purposes of these
incidental insurance provisions, ordinary life
insurance contracts are contracts with both
nondecreasing death benefits and nonincreasing
premiums. If such contracts are purchased, less than
50% of the aggregate Employer Contributions and
Forfeitures allocated to any Participant's Individual
Account will be used to pay the premiums attributable
to them.
2. Term and Universal Life Insurance - No more than 25% of
the aggregate Employer Contributions and Forfeitures
allocated to any Participant's Individual Account will
be used to pay the premiums on term life insurance
contracts, universal life insurance contracts, and all
other life insurance contracts which are not ordinary
life.
3. Combination - The sum of 50% of the ordinary life
insurance premiums and all other life insurance
premiums will not exceed 25% of the aggregate Employer
Contributions and Forfeitures allocated to any
Participant's Individual Account.
If this Plan is a profit sharing plan, the above
incidental benefits limits do not apply to life
insurance contracts purchased with Employer
Contributions and Forfeitures that have been in the
Participant's Individual Account for at least 2 full
Plan Years, measured from the date such
contributions were allocated.
B. Any dividends or credits earned on insurance contracts for a
Participant shall be allocated to such Participant's
Individual Account.
C. Subject to Section 6.05, the contracts on a Participant's
life will be converted to cash or an annuity or distributed
to the Participant upon commencement of benefits.
D. The Trustee (or Custodian, if applicable) shall apply for
and will be the owner of any insurance contract(s) purchased
under the terms of this Plan. The insurance contract(s) must
provide that proceeds will be payable to the Trustee (or
Custodian), however, the Trustee (or Custodian) shall be
required to pay over all proceeds of the contract(s) to the
Participant's designated Beneficiary in accordance with the
distribution provisions of this Plan. A Participant's spouse
will be the designated Beneficiary of the proceeds in all
circumstances unless a qualified election has been made in
accordance with Section 6.05. Under no circumstances shall
the Fund retain any part of the proceeds. In the event of
any conflict between the terms of this Plan and the terms of
any insurance contract purchased hereunder, the Plan
provisions shall control.
E. The Plan Administrator may direct the Trustee (or Custodian)
to sell and distribute insurance or annuity contracts to a
Participant (or other party as may be permitted) in
accordance with applicable law or regulations.
5.14 DIRECTION OF INVESTMENTS BY PARTICIPANT
If so indicated in the Adoption Agreement, each Participant may
individually direct the Trustee (or Custodian, if applicable)
regarding the investment of part or all of his or her Individual
Account. To the extent so directed, the Employer, Plan
Administrator, Trustee (or Custodian) and all other fiduciaries
are relieved of their fiduciary responsibility under Section 404
of ERISA.
The Plan Administrator shall direct that a Separate Fund be
established in the name of each Participant who directs the
investment of part or all of his or her Individual Account. Each
Separate Fund shall be charged or credited (as appropriate) with
the earnings, gains, losses or expenses attributable to such
Separate Fund. No fiduciary shall be liable for any loss which
results from a Participant's individual direction. The assets
subject to individual direction shall not be invested in
collectibles as that term is defined in Section 408(m) of the
Code.
The Plan Administrator shall establish such uniform and
nondiscriminatory rules relating to individual direction as it
deems necessary or advisable including, but not limited to, rules
describing (1) which portions of Participant's Individual Account
can be individually directed; (2) the frequency of investment
changes; (3) the forms and procedures for making investment
changes; and (4) the effect of a Participant's failure to make a
valid direction.
The Plan Administrator may, in a uniform and nondiscriminatory
manner, limit the available investments for Participants'
individual direction to certain specified investment options
(including, but not limited to, certain mutual funds, investment
contracts, deposit accounts and group trusts). The Plan
Administrator may permit, in a uniform and nondiscriminatory
manner, a Beneficiary of a deceased Participant or the alternate
payee under a qualified domestic relations order (as defined in
Section 414(p) of the Code) to individually direct in accordance
with this Section.
SECTION SIX VESTING AND DISTRIBUTION
6.01 DISTRIBUTION TO PARTICIPANT
A. DISTRIBUTABLE EVENTS
1. Entitlement to Distribution - The Vested portion of a
Participant's Individual Account shall be distributable
to the Participant upon (1) the occurrence of any of
the distributable events specified in the Adoption
Agreement; (2) the Participant's Termination of
Employment after attaining Normal Retirement Age; (3)
the termination of the Plan; and (4) the Participant's
Termination of Employment after satisfying any Early
Retirement Age conditions.
If a Participant separates from service before
satisfying the Early Retirement Age requirement, but
has satisfied the service requirement, the
Participant will be entitled to elect an early
retirement benefit upon satisfaction of such age
requirement.
2. Written Request: When Distributed - A Participant
entitled to distribution who wishes to receive a
distribution must submit a written request to the Plan
Administrator. Such request shall be made upon a form
provided by the Plan Administrator. Upon a valid
request, the Plan Administrator shall direct the
Trustee (or Custodian, if applicable) to commence
distribution no later than the time specified in the
Adoption Agreement for this purpose and, if not
specified in the Adoption Agreement, then no later than
90 days following the later of:
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a. the close of the Plan Year within which the event
occurs which entitles the Participant to
distribution; or
b. the close of the Plan Year in which the request is
received.
3. Special Rules for Withdrawals During Service - If this
is a profit sharing plan and the Adoption Agreement so
provides, a Participant may elect to receive a
distribution of all or part of the Vested portion of his
or her Individual Account, subject to the requirements
of Section 6.05 and further subject to the following
limits:
a. Participant for 5 or more years. An Employee who
has been a Participant in the Plan for 5 or more
years may withdraw up to the entire Vested portion
of his or her Individual Account.
b. Participant for less than 5 years. An Employee who
has been a Participant in the Plan for less than 5
years may withdraw only the amount which has been
in his or her Individual Account attributable to
Employer Contributions for at least 2 full Plan
Years, measured from the date such contributions
were allocated. However, if the distribution is on
account of hardship, the Participant may withdraw
up to his or her entire Vested portion of the
Participant's Individual Account. For this
purpose, hardship shall have the meaning set forth
in Section 6.01(A)(4) of the Code.
4. Special Rules for Hardship Withdrawals - If this is a
profit sharing plan and the Adoption Agreement so
provides, a Participant may elect to receive a hardship
distribution of all or part of the Vested portion of his
or her Individual Account, subject to the requirements
of Section 6.05 and further subject to the following
limits:
a. Participant for 5 or more years. An Employee who
has been a Participant in the Plan for 5 or more
years may withdraw up to the entire Vested portion
of his or her Individual Account.
b. Participant for less than 5 years. An Employee who
has been a Participant in the Plan for less than 5
years may withdraw only the amount which has been
in his or her Individual Account attributable to
Employer Contributions for at least 2 full Plan
Years, measured from the date such contributions
were allocated.
For purposes of this Section 6.01(A)(4) and
Section 6.01(A)(3) hardship is defined as an
immediate and heavy financial need of the
Participant where such Participant lacks other
available resources. The following are the only
financial needs considered immediate and heavy:
expenses incurred or necessary for medical care,
described in Section 213(d) of the Code, of the
Employee, the Employee's spouse or dependents;
the purchase (excluding mortgage payments) of a
principal residence for the Employee; payment of
tuition and related educational fees for the
next 12 months of post-secondary education for
the Employee, the Employee's spouse, children or
dependents; or the need to prevent the eviction
of the Employee from, or a foreclosure on the
mortgage of, the Employee's principal residence.
A distribution will be considered as necessary
to satisfy an immediate and heavy financial need
of the Employee only if:
1) The employee has obtained all
distributions, other than hardship
distributions, and all nontaxable loans
under all plans maintained by the
Employer;
2) The distribution is not in excess of the
amount of an immediate and heavy
financial need (including amounts
necessary to pay any federal, state or
local income taxes or penalties
reasonably anticipated to result from
the distribution).
5. One-Time In-Service Withdrawal Option - If this is a
profit sharing plan and the Employer has elected the
one-time in-service withdrawal option in the Adoption
Agreement, then Participants will be permitted only one
in-service withdrawal during the course of such
Participants employment with the Employer. The amount
which the Participant can withdraw will be limited to
the lesser of the amount determined under the limits set
forth in Section 6.01(A)(3) or the percentage of the
Participant's Individual Account specified by the
Employer in the Adoption Agreement. Distributions under
this Section will be subject to the requirements of
Section 6.05.
6. Commencement of Benefits - Notwithstanding any other
provision, unless the Participant elects otherwise,
distribution of benefits will begin no later than the
60th day after the latest of the close of the Plan Year
in which:
a. the Participant attains Normal Retirement Age;
b. occurs the 10th anniversary of the year in which
the Participant commenced participation in the
Plan; or
c. the Participant incurs a Termination of
Employment.
Notwithstanding the foregoing, the failure of a
Participant and spouse to consent to a
distribution while a benefit is immediately
distributable, within the meaning of Section
6.02(B) of the Plan, shall be deemed to be an
election to defer commencement of payment of any
benefit sufficient to satisfy this Section.
B. DETERMINING THE VESTED PORTION - In determining the Vested
portion of a Participant's Individual Account, the following
rules apply:
1. Employer Contributions and Forfeitures - The Vested
portion of a Participant's Individual Account derived
from Employer Contributions and Forfeitures is
determined by applying the vesting schedule selected in
the Adoption Agreement (or the vesting schedule
described in Section 6.01(C) if the Plan is a Top-Heavy
Plan).
2. Rollover and Transfer Contributions - A Participant is
fully Vested in his or her rollover contributions and
transfer contributions.
3. Fully Vested Under Certain Circumstances - A Participant
is fully Vested in his or her Individual Account if any
of the following occurs:
a. the Participant reaches Normal Retirement Age;
b. the Plan is terminated or partially terminated; or
c. there exists a complete discontinuance of
contributions under the Plan.
Further, unless otherwise indicated in the Adoption Agreement,
a Participant is fully Vested if the Participant dies, incurs
a Disability, or satisfies the conditions for Early Retirement
Age (if applicable).
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4. Participants in a Prior Plan - If a Participant was a
participant in a Prior Plan on the Effective Date, his
or her Vested percentage shall not be less than it would
have been under such Prior Plan as computed on the
Effective Date.
C. MINIMUM VESTING SCHEDULE FOR TOP-HEAVY PLANS - The following
vesting provisions apply for any Plan Year in which this Plan
is a Top-Heavy Plan.
Notwithstanding the other provisions of this Section 6.01 or
the vesting schedule selected in the Adoption Agreement
(unless those provisions or that schedule provide for more
rapid vesting), a Participant's Vested portion of his or her
Individual Account attributable to Employer Contributions and
Forfeitures shall be determined in accordance with the vesting
schedule elected by the Employer in the Adoption Agreement
(and if no election is made the 6 year graded schedule will be
deemed to have been elected) as described below:
6 YEAR GRADED 3 YEAR CLIFF
YEARS OF VESTING SERVICE VESTED PERCENTAGE YEARS OF VESTING SERVICE VESTED PERCENTAGE
1 0 1 0
2 20 2 0
3 40 3 100
4 60
5 80
6 100
This minimum vesting schedule applies to all benefits within
the meaning of Section 411(a)(7) of the Code, except those
attributable to Nondeductible Employee Contributions including
benefits accrued before the effective date of Section 416 of
the Code and benefits accrued before the Plan became a
Top-Heavy Plan. Further, no decrease in a Participant's Vested
percentage may occur in the event the Plan's status as a
Top-Heavy Plan changes for any Plan Year. However, this
Section 6.01(C) does not apply to the Individual Account of
any Employee who does not have an Hour of Service after the
Plan has initially become a Top-Heavy Plan and such Employee's
Individual Account attributable to Employer Contributions and
Forfeitures will be determined without regard to this Section.
If this Plan ceases to be a Top-Heavy Plan, then in accordance
with the above restrictions, the vesting schedule as selected
in the Adoption Agreement will govern. If the vesting schedule
under the Plan shifts in or out of top-heavy status, such
shift is an amendment to the vesting schedule and the election
in Section 9.04 applies.
D. BREAK IN VESTING SERVICE AND FORFEITURES - If a Participant
incurs a Termination of Employment, any portion of his or her
Individual Account which is not Vested shall be held in a
suspense account. Such suspense account shall share in any
increase or decrease in the fair market value of the assets of
the Fund in accordance with Section 4 of the Plan. The
disposition of such suspense account shall be as follows:
1. Breaks in Vesting Service - If a Participant neither
receives nor is deemed to receive a distribution
pursuant to Section 6.01(D)(3) or (4) and the
Participant returns to the service of the Employer
before incurring 5 consecutive Breaks in Vesting
Service, there shall be no Forfeiture and the amount in
such suspense account shall be recredited to such
Participant's Individual Account.
2. Five Consecutive Breaks in Vesting Service - If a
Participant neither receives nor is deemed to receive a
distribution pursuant to Section 6.01(D)(3) or (4) and
the Participant does not return to the service of the
Employer before incurring 5 consecutive Breaks in
Vesting Service, the portion of the Participant's
Individual Account which is not Vested shall be treated
as a Forfeiture and allocated in accordance with Section
3.01(C).
3. Cash-out of Certain Participants - If the value of the
Vested portion of such Participant's Individual Account
derived from Nondeductible Employee Contributions and
Employer Contributions does not exceed $3,500, the
Participant shall receive a distribution of the entire
Vested portion of such Individual Account and the
portion which is not Vested shall be treated as a
Forfeiture and allocated in accordance with Section
3.01(C). For purposes of this Section, if the value of
the Vested portion of a Participant's Individual Account
is zero, the Participant shall be deemed to have
received a distribution of such Vested Individual
Account. A Participant's Vested Individual Account
balance shall not include accumulated deductible
employee contributions within the meaning of Section
72(o)(5)(B) of the Code for Plan Years beginning prior
to January 1, 1989.
4. Participants Who Elect to Receive Distributions - If
such Participant elects to receive a distribution, in
accordance with Section 6.02(B), of the value of the
Vested portion of his or her Individual Account derived
from Nondeductible Employee Contributions and Employer
Contributions, the portion which is not Vested shall be
treated as a Forfeiture and allocated in accordance with
Section 3.01(C).
5. Re-employed Participants - If a Participant receives or
is deemed to receive a distribution pursuant to Section
6.01(D)(3) or (4) above and the Participant resumes
employment covered under this Plan, the Participant's
Employer-derived Individual Account balance will be
restored to the amount on the date of distribution if
the Participant repays to the Plan the full amount of
the distribution attributable to Employer Contributions
before the earlier of 5 years after the first date on
which the Participant is subsequently re-employed by the
Employer, or the date the Participant incurs 5
consecutive Breaks in Vesting Service following the date
of the distribution.
Any restoration of a Participant's Individual Account
pursuant to Section 6.01(D)(5) shall be made from other
Forfeitures, income or gain to the Fund or contributions
made by the Employer.
E. DISTRIBUTION PRIOR TO FULL VESTING - If a distribution is made
to a Participant who was not then fully Vested in his or her
Individual Account derived from Employer Contributions and the
Participant may increase his or her Vested percentage in his
or her Individual Account, then the following rules shall
apply:
1. a separate account will be established for the
Participant's interest in the Plan as of the time of the
distribution, and
2. at any relevant time the Participant's Vested portion of
the separate account will be equal to an amount ("X")
determined by the formula: X=P (AB + (R x D)) - (R x D)
where "P" is the Vested percentage at the relevant time,
"AB" is the separate account balance at the relevant
time; "D" is the amount of the distribution; and "R" is
the ratio of the separate account balance at the
relevant time to the separate account balance after
distribution.
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6.02 FORM OF DISTRIBUTION TO A PARTICIPANT
A. VALUE OF INDIVIDUAL ACCOUNT DOES NOT EXCEED $3,500 - If the
value of the Vested portion of a Participant's Individual
Account derived from Nondeductible Employee Contributions
and Employer Contributions does not exceed $3,500,
distribution from the Plan shall be made to the Participant
in a single lump sum in lieu of all other forms of
distribution from the Plan as soon as administratively
feasible.
B. VALUE OF INDIVIDUAL ACCOUNT EXCEEDS $3,500
1. If the value of the Vested portion of a Participant's
Individual Account derived from Nondeductible Employee
Contributions and Employer Contributions exceeds (or at
the time of any prior distribution exceeded) $3,500,
and the Individual Account is immediately
distributable, the Participant and the Participant's
spouse (or where either the Participant or the spouse
died, the survivor) must consent to any distribution of
such Individual Account. The consent of the Participant
and the Participant's spouse shall be obtained in
writing within the 90-day period ending on the annuity
starting date. The annuity starting date is the first
day of the first period for which an amount is paid as
an annuity or any other form. The Plan Administrator
shall notify the Participant and the Participant's
spouse of the right to defer any distribution until the
Participant's Individual Account is no longer
immediately distributable. Such notification shall
include a general description of the material features,
and an explanation of the relative values of, the
optional forms of benefit available under the Plan in a
manner that would satisfy the notice requirements of
Section 417(a)(3) of the Code, and shall be provided no
less than 30 days and no more than 90 days prior to the
annuity starting date.
If a distribution is one to which Sections
401(a)(11) and 417 of the Internal Revenue Code do
not apply, such distribution may commence less than
30 days after the notice required under Section
1.411(a)-11(c) of the Income Tax Regulations is
given, provided that:
a. the Plan Administrator clearly informs the
Participant that the Participant has a right to a
period of at least 30 days after receiving the
notice to consider the decision of whether or not
to elect a distribution (and, if applicable, a
particular distribution option), and
b. the Participant, after receiving the notice,
affirmatively elects a distribution.
Notwithstanding the foregoing, only the
Participant need consent to the commencement of
a distribution in the form of a qualified joint
and survivor annuity while the Individual
Account is immediately distributable. Neither
the consent of the Participant nor the
Participant's spouse shall be required to the
extent that a distribution is required to
satisfy Section 401(a)(9) or Section 415 of the
Code. In addition, upon termination of this Plan
if the Plan does not offer an annuity option
(purchased from a commercial provider), the
Participant's Individual Account may, without
the Participant's consent, be distributed to the
Participant or transferred to another defined
contribution plan (other than an employee stock
ownership plan as defined in Section 4975(e)(7)
of the Code) within the same controlled group.
An Individual Account is immediately
distributable if any part of the Individual
Account could be distributed to the Participant
(or surviving spouse) before the Participant
attains or would have attained (if not deceased)
the later of Normal Retirement Age or age 62.
2. For purposes of determining the applicability of the
foregoing consent requirements to distributions made
before the first day of the first Plan Year beginning
after December 31, 1988, the Vested portion of a
Participant's Individual Account shall not include
amounts attributable to accumulated deductible employee
contributions within the meaning of Section 72(o)(5)(B)
of the Code.
C. OTHER FORMS OF DISTRIBUTION TO PARTICIPANT - If the value of
the Vested portion of a Participant's Individual Account
exceeds $3,500 and the Participant has properly waived the
joint and survivor annuity, as described in Section 6.05,
the Participant may request in writing that the Vested
portion of his or her Individual Account be paid to him or
her in one or more of the following forms of payment: (1) in
a lump sum; (2) in installment payments over a period not to
exceed the life expectancy of the Participant or the joint
and last survivor life expectancy of the Participant and his
or her designated Beneficiary; or (3) applied to the
purchase of an annuity contract.
Notwithstanding anything in this Section 6.02 to the
contrary, a Participant cannot elect payments in the form of
an annuity if the Retirement Equity Act safe harbor rules of
Section 6.05(F) apply.
6.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT
A. DESIGNATION OF BENEFICIARY - SPOUSAL CONSENT - Each
Participant may designate, upon a form provided by and
delivered to the Plan Administrator, one or more primary and
contingent Beneficiaries to receive all or a specified
portion of the Participant's Individual Account in the event
of his or her death. A Participant may change or revoke such
Beneficiary designation from time to time by completing and
delivering the proper form to the Plan Administrator.
In the event that a Participant wishes to designate a
primary Beneficiary who is not his or her spouse, his or her
spouse must consent in writing to such designation, and the
spouse's consent must acknowledge the effect of such
designation and be witnessed by a notary public or plan
representative. Notwithstanding this consent requirement, if
the Participant establishes to the satisfaction of the Plan
Administrator that such written consent may not be obtained
because there is no spouse or the spouse cannot be located,
no consent shall be required. Any change of Beneficiary will
require a new spousal consent.
B. PAYMENT TO BENEFICIARY - If a Participant dies before the
Participant's entire Individual Account has been paid to him
or her, such deceased Participant's Individual Account shall
be payable to any surviving Beneficiary designated by the
Participant, or, if no Beneficiary survives the Participant,
to the Participant's estate.
C. WRITTEN REQUEST: WHEN DISTRIBUTED - A Beneficiary of a
deceased Participant entitled to a distribution who wishes
to receive a distribution must submit a written request to
the Plan Administrator. Such request shall be made upon a
form provided by the Plan Administrator. Upon a valid
request, the Plan Administrator shall direct the Trustee (or
Custodian) to commence distribution no later than the time
specified in the Adoption Agreement for this purpose and if
not specified in the Adoption Agreement, then no later than
90 days following the later of:
1. the close of the Plan Year within which the Participant
dies; or
2. the close of the Plan Year in which the request is
received.
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6.04 FORM OF DISTRIBUTION TO BENEFICIARY
A. VALUE OF INDIVIDUAL ACCOUNT DOES NOT EXCEED $3,500 - If the
value of the Participant's Individual Account derived from
Nondeductible Employee Contributions and Employer
Contributions does not exceed $3,500, the Plan Administrator
shall direct the Trustee (or Custodian, if applicable) to
make a distribution to the Beneficiary in a single lump sum
in lieu of all other forms of distribution from the Plan.
B. VALUE OF INDIVIDUAL ACCOUNT EXCEEDS $3,500 - If the value of
a Participant's Individual Account derived from
Nondeductible Employee Contributions and Employer
Contributions exceeds $3,500 the preretirement survivor
annuity requirements of Section 6.05 shall apply unless
waived in accordance with that Section or unless the
Retirement Equity Act safe harbor rules of Section 6.05(F)
apply. However, a surviving spouse Beneficiary may elect any
form of payment allowable under the Plan in lieu of the
preretirement survivor annuity. Any such payment to the
surviving spouse must meet the requirements of Section 6.06.
C. OTHER FORMS OF DISTRIBUTION TO BENEFICIARY - If the value of
a Participant's Individual Account exceeds $3,500 and the
Participant has properly waived the preretirement survivor
annuity, as described in Section 6.05 (if applicable) or if
the Beneficiary is the Participant's surviving spouse, the
Beneficiary may, subject to the requirements of Section
6.06, request in writing that the Participant's Individual
Account be paid as follows: (1) in a lump sum; or (2) in
installment payments over a period not to exceed the life
expectancy of such Beneficiary.
6.05 JOINT AND SURVIVOR ANNUITY REQUIREMENTS
A. The provisions of this Section shall apply to any
Participant who is credited with at least one Hour of
Eligibility Service with the Employer on or after August 23,
1984, and such other Participants as provided in Section
6.05(G).
B. QUALIFIED JOINT AND SURVIVOR ANNUITY - Unless an optional
form of benefit is selected pursuant to a qualified election
within the 90-day period ending on the annuity starting
date, a married Participant's Vested account balance will be
paid in the form of a qualified joint and survivor annuity
and an unmarried Participant's Vested account balance will
be paid in the form of a life annuity. The Participant may
elect to have such annuity distributed upon attainment of
the earliest retirement age under the Plan.
C. QUALIFIED PRERETIREMENT SURVIVOR ANNUITY - Unless an
optional form of benefit has been selected within the
election period pursuant to a qualified election, if a
Participant dies before the annuity starting date then the
Participant's Vested account balance shall be applied toward
the purchase of an annuity for the life of the surviving
spouse. The surviving spouse may elect to have such annuity
distributed within a reasonable period after the
Participant's death.
D. DEFINITIONS
1. Election Period - The period which begins on the first
day of the Plan Year in which the Participant attains
age 35 and ends on the date of the Participant's death.
If a Participant separates from service prior to the
first day of the Plan Year in which age 35 is attained,
with respect to the account balance as of the date of
separation, the election period shall begin on the date
of separation.
Pre-age 35 waiver - A Participant who will not yet
attain age 35 as of the end of any current Plan Year
may make special qualified election to waive the
qualified preretirement survivor annuity for the
period beginning on the date of such election and
ending on the first day of the Plan Year in which
the Participant will attain age 35. Such election
shall not be valid unless the Participant receives a
written explanation of the qualified preretirement
survivor annuity in such terms as are comparable to
the explanation required under Section 6.05(E)(1).
Qualified preretirement survivor annuity coverage
will be automatically reinstated as of the first day
of the Plan Year in which the Participant attains
age 35. Any new waiver on or after such date shall
be subject to the full requirements of this Section
6.05.
2. Earliest Retirement Age - The earliest date on which,
under the Plan, the Participant could elect to receive
retirement benefits.
3. Qualified Election - A waiver of a qualified joint and
survivor annuity or a qualified preretirement survivor
annuity. Any waiver of a qualified joint and survivor
annuity or a qualified preretirement survivor annuity
shall not be effective unless: (a) the Participant's
spouse consents in writing to the election, (b) the
election designates a specific Beneficiary, including
any class of beneficiaries or any contingent
beneficiaries, which may not be changed without spousal
consent (or the spouse expressly permits designations
by the Participant without any further spousal
consent); (c) the spouse's consent acknowledges the
effect of the election; and (d) the spouse's consent is
witnessed by a plan representative or notary public.
Additionally, a Participant's waiver of the qualified
joint and survivor annuity shall not be effective
unless the election designates a form of benefit
payment which may not be changed without spousal
consent (or the spouse expressly permits designations
by the Participant without any further spousal
consent). If it is established to the satisfaction of a
plan representative that there is no spouse or that the
spouse cannot be located, a waiver will be deemed a
qualified election.
Any consent by a spouse obtained under this
provision (or establishment that the consent of a
spouse may not be obtained) shall be effective only
with respect to such spouse. A consent that permits
designations by the Participant without any
requirement of further consent by such spouse must
acknowledge that the spouse has the right to limit
consent to a specific Beneficiary, and a specific
form of benefit where applicable, and that the
spouse voluntarily elects to relinquish either or
both of such rights. A revocation of a prior waiver
may be made by a Participant without the consent of
the spouse at any time before the commencement of
benefits. The number of revocations shall not be
limited. No consent obtained under this provision
shall be valid unless the Participant has received
notice as provided in Section 6.05(E) below.
4. Qualified Joint and Survivor Annuity - An immediate
annuity for the life of the Participant with a survivor
annuity for the life of the spouse which is not less
than 50% and not more than 100% of the amount of the
annuity which is payable during the joint lives of the
Participant and the spouse and which is the amount of
benefit which can be purchased with the Participant's
vested account balance. The percentage of the survivor
annuity under the Plan shall be 50% (unless a different
percentage is elected by the Employer in the Adoption
Agreement).
5. Spouse (surviving spouse) - The spouse or surviving
spouse of the Participant, provided that a former
spouse will be treated as the spouse or surviving
spouse and a current spouse will not be treated as the
spouse or surviving spouse to the extent provided under
a qualified domestic relations order as described in
Section 414(p) of the Code.
6. Annuity Starting Date - The first day of the first
period for which an amount is paid as an annuity or any
other form.
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7. Vested Account Balance - The aggregate value of the
Participant's Vested account balances derived from
Employer and Nondeductible Employee Contributions
(including rollovers), whether Vested before or upon
death, including the proceeds of insurance contracts,
if any, on the Participant's life. The provisions of
this Section 6.05 shall apply to a Participant who is
Vested in amounts attributable to Employer
Contributions, Nondeductible Employee Contributions (or
both) at the time of death or distribution.
E. NOTICE REQUIREMENTS
1. In the case of a qualified joint and survivor annuity,
the Plan Administrator shall no less than 30 days and
not more than 90 days prior to the annuity starting
date provide each Participant a written explanation of:
(a) the terms and conditions of a qualified joint and
survivor annuity; (b) the Participant's right to make
and the effect of an election to waive the qualified
joint and survivor annuity form of benefit; (c) the
rights of a Participant's spouse; and (d) the right to
make, and the effect of, a revocation of a previous
election to waive the qualified joint and survivor
annuity.
2. In the case of a qualified preretirement annuity as
described in Section 6.05(C), the Plan Administrator
shall provide each Participant within the applicable
period for such Participant a written explanation of
the qualified preretirement survivor annuity in such
terms and in such manner as would be comparable to the
explanation provided for meeting the requirements of
Section 6.05(E)(1) applicable to a qualified joint and
survivor annuity.
The applicable period for a Participant is whichever
of the following periods ends last: (a) the period
beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with
the close of the Plan Year preceding the Plan Year
in which the Participant attains age 35; (b) a
reasonable period ending after the individual
becomes a Participant; (c) a reasonable period
ending after Section 6.05(E)(3) ceases to apply to
the Participant; and (d) a reasonable period ending
after this Section 6.05 first applies to the
Participant. Notwithstanding the foregoing, notice
must be provided within a reasonable period ending
after separation from service in the case of a
Participant who separates from service before
attaining age 35.
For purposes of applying the preceding paragraph, a
reasonable period ending after the enumerated events
described in (b), (c) and (d) is the end of the
two-year period beginning one year prior to the date
the applicable event occurs, and ending one year
after that date. In the case of a Participant who
separates from service before the Plan Year in which
age 35 is attained, notice shall be provided within
the two-year period beginning one year prior to
separation and ending one year after separation. If
such a Participant thereafter returns to employment
with the Employer, the applicable period for such
Participant shall be redetermined.
3. Notwithstanding the other requirements of this Section
6.05(E), the respective notices prescribed by this
Section 6.05(E), need not be given to a Participant if
(a) the Plan "fully subsidizes" the costs of a
qualified joint and survivor annuity or qualified
preretirement survivor annuity, and (b) the Plan does
not allow the Participant to waive the qualified joint
and survivor annuity or qualified preretirement
survivor annuity and does not allow a married
Participant to designate a nonspouse beneficiary. For
purposes of this Section 6.05(E)(3), a plan fully
subsidizes the costs of a benefit if no increase in
cost, or decrease in benefits to the Participant may
result from the Participant's failure to elect another
benefit.
F. RETIREMENT EQUITY ACT SAFE HARBOR RULES
1. If the Employer so indicates in the Adoption Agreement,
this Section 6.05(F) shall apply to a Participant in a
profit sharing plan, and shall always apply to any
distribution, made on or after the first day of the
first Plan Year beginning after December 31, 1988, from
or under a separate account attributable solely to
accumulated deductible employee contributions, as
defined in Section 72(o)(5)(B) of the Code, and
maintained on behalf of a Participant in a money
purchase pension plan, (including a target benefit
plan) if the following conditions are satisfied:
a. the Participant does not or cannot elect payments
in the form of a life annuity; and
b. on the death of a Participant, the Participant's
Vested account balance will be paid to the
Participant's surviving spouse, but if there is no
surviving spouse, or if the surviving spouse has
consented in a manner conforming to a qualified
election, then to the Participant's designated
Beneficiary. The surviving spouse may elect to
have distribution of the Vested account balance
commence within the 90-day period following the
date of the Participant's death. The account
balance shall be adjusted for gains or losses
occurring after the Participant's death in
accordance with the provisions of the Plan
governing the adjustment of account balances for
other types of distributions. This Section 6.05(F)
shall not be operative with respect to a
Participant in a profit sharing plan if the plan
is a direct or indirect transferee of a defined
benefit plan, money purchase plan, a target
benefit plan, stock bonus, or profit sharing plan
which is subject to the survivor annuity
requirements of Section 401(a)(11) and Section 417
of the code. If this Section 6.05(F) is operative,
then the provisions of this Section 6.05 other
than Section 6.05(G) shall be inoperative.
2. The Participant may waive the spousal death benefit
described in this Section 6.05(F) at any time provided
that no such waiver shall be effective unless it
satisfies the conditions of Section 6.05(D)(3) (other
than the notification requirement referred to therein)
that would apply to the Participant's waiver of the
qualified preretirement survivor annuity.
3. For purposes of this Section 6.05(F), Vested account
balance shall mean, in the case of a money purchase
pension plan or a target benefit plan, the
Participant's separate account balance attributable
solely to accumulated deductible employee contributions
within the meaning of Section 72(o)(5)(B) of the Code.
In the case of a profit sharing plan, Vested account
balance shall have the same meaning as provided in
Section 6.05(D)(7).
G. TRANSITIONAL RULES
1. Any living Participant not receiving benefits on August
23, 1984, who would otherwise not receive the benefits
prescribed by the previous subsections of this Section
6.05 must be given the opportunity to elect to have the
prior subsections of this Section apply if such
Participant is credited with at least one Hour of
Service under this Plan or a predecessor plan in a Plan
Year beginning on or after January 1, 1976, and such
Participant had at least 10 Years of Vesting Service
when he or she separated from service.
2. Any living Participant not receiving benefits on August
23, 1984, who was credited with at least one Hour of
Service under this Plan or a predecessor plan on or
after September 2, 1974, and who is not otherwise
credited with any service in a Plan Year beginning on
or after January 1, 1976, must be given the opportunity
to have his or her benefits paid in accordance with
Section 6.05(G)(4).
3. The respective opportunities to elect (as described in
Section 6.05(G)(1) and (2) above) must be afforded to
the appropriate Participants during the period
commencing on August 23, 1984, and ending on the date
benefits would otherwise commence to said Participants.
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4. Any Participant who has elected pursuant to Section
6.05(G)(2) and any Participant who does not elect under
Section 6.05(G)(1) or who meets the requirements of
Section 6.05(G)(1) except that such Participant does
not have at least 10 Years of Vesting Service when he
or she separates from service, shall have his or her
benefits distributed in accordance with all of the
following requirements if benefits would have been
payable in the form of a life annuity:
a. Automatic Joint and Survivor Annuity - If benefits
in the form of a life annuity become payable to a
married Participant who:
(1) begins to receive payments under the Plan on
or after Normal Retirement Age; or
(2) dies on or after Normal Retirement Age while
still working for the Employer; or
(3) begins to receive payments on or after the
qualified early retirement age; or
(4) separates from service on or after attaining
Normal Retirement Age (or the qualified early
retirement age) and after satisfying the
eligibility requirements for the payment of
benefits under the Plan and thereafter dies
before beginning to receive such benefits;
then such benefits will be received under
this Plan in the form of a qualified joint
and survivor annuity, unless the Participant
has elected otherwise during the election
period. The election period must begin at
least 6 months before the Participant
attains qualified early retirement age and
ends not more than 90 days before the
commencement of benefits. Any election
hereunder will be in writing and may be
changed by the Participant at any time.
b. Election of Early Survivor Annuity - A Participant
who is employed after attaining the qualified
early retirement age will be given the opportunity
to elect, during the election period, to have a
survivor annuity payable on death. If the
Participant elects the survivor annuity, payments
under such annuity must not be less than the
payments which would have been made to the spouse
under the qualified joint and survivor annuity if
the Participant had retired on the day before his
or her death. Any election under this provision
will be in writing and may be changed by the
Participant at any time. The election period
begins on the later of (1) the 90th day before the
Participant attains the qualified early retirement
age, or (2) the date on which participation
begins, and ends on the date the Participant
terminates employment.
c. For purposes of Section 6.05(G)(4):
1. Qualified early retirement age is the latest
of:
a. the earliest date, under the Plan, on
which the Participant may elect to
receive retirement benefits,
b. the first day of the 120th month
beginning before the Participant reaches
Normal Retirement Age, or
c. the date the Participant begins
participation.
2. Qualified joint and survivor annuity is an
annuity for the life of the Participant with
a survivor annuity for the life of the spouse
as described in Section 6.05(D)(4) of this
Plan.
6.06 DISTRIBUTION REQUIREMENTS
A. GENERAL RULES
1. Subject to Section 6.05 Joint and Survivor Annuity
Requirements, the requirements of this Section shall
apply to any distribution of a Participant's interest
and will take precedence over any inconsistent
provisions of this Plan. Unless otherwise specified,
the provisions of this Section 6.06 apply to calendar
years beginning after December 31, 1984.
2. All distributions required under this Section 6.06
shall be determined and made in accordance with the
Income Tax Regulations under Section 401(a)(9),
including the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the proposed
regulations.
B. REQUIRED BEGINNING DATE - The entire interest of a
Participant must be distributed or begin to be distributed
no later than the Participant's required beginning date.
C. LIMITS ON DISTRIBUTION PERIODS - As of the first
distribution calendar year, distributions, if not made in a
single sum, may only be made over one of the following
periods (or a combination thereof):
1. the life of the Participant,
2. the life of the Participant and a designated
Beneficiary,
3. a period certain not extending beyond the life
expectancy of the Participant, or
4. a period certain not extending beyond the joint and
last survivor expectancy of the Participant and a
designated Beneficiary.
D. DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR - If the
Participant's interest is to be distributed in other than a
single sum, the following minimum distribution rules shall
apply on or after the required beginning date:
1. Individual Account
a. If a Participant's benefit is to be distributed
over (1) a period not extending beyond the life
expectancy of the Participant or the joint life
and last survivor expectancy of the Participant
and the Participant's designated Beneficiary or
(2) a period not extending beyond the 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.
b. For calendar years beginning before January 1,
1989, if the Participant's spouse is not the
designated Beneficiary, the method of distribution
selected must assure that at least 50% of the
present value of the amount available for
distribution is paid within the life expectancy of
the Participant.
c. For calendar years beginning after December 31,
1988, the amount to be distributed each year,
beginning with distributions for the first
distribution calendar year shall not be less than
the quotient obtained by dividing the
Participant's benefit by the lesser of (1) the
applicable life expectancy or (2) if the
Participant's spouse is not the
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23
designated Beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of
Section 1.401(a)(9)-2 of the Proposed Income Tax
Regulations. Distributions after the death of
the Participant shall be distributed using the
applicable life expectancy in Section
6.05(D)(1)(a) above as the relevant divisor
without regard to proposed regulations
1.401(a)(9)-2.
d. The minimum distribution required for the
Participant's first distribution calendar year
must be made on or before the Participant's
required beginning date. The minimum distribution
for other calendar years, including the minimum
distribution for the distribution calendar year in
which the Employee's required beginning date
occurs, must be made on or before December 31 of
that distribution calendar year.
2. Other Forms - If the Participant's benefit is
distributed in the form of an annuity purchased from an
insurance company, distributions thereunder shall be
made in accordance with the requirements of Section
401(a)(9) of the Code and the regulations thereunder.
E. DEATH DISTRIBUTION PROVISIONS
1. Distribution Beginning Before Death - If the Participant
dies after distribution of his or her interest has
begun, the remaining portion of such interest will
continue to be distributed at least as rapidly as under
the method of distribution being used prior to the
Participant's death.
2. Distribution Beginning After Death - If the Participant
dies before distribution of his or her interest begins,
distribution of the Participant's entire interest shall
be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's
death except to the extent that an election is made to
receive distributions in accordance with (a) or (b)
below:
a. if any portion of the Participant's interest is
payable to a designated Beneficiary, distributions
may be made over the life or over a period certain
not greater than the life expectancy of the
designated Beneficiary commencing on or before
December 31 of the calendar year immediately
following the calendar year in which the
Participant died;
b. if the designated Beneficiary is the Participant's
surviving spouse, the date distributions are
required to begin in accordance with (a) above
shall not be earlier than the later of (1)
December 31 of the calendar year immediately
following the calendar year in which the
Participant dies or (2) December 31 of the
calendar year in which the Participant would have
attained age 70 1/2.
If the Participant has not made an election
pursuant to this Section 6.05(E)(2) by the time
of his or her death, the Participant's
designated Beneficiary must elect the method of
distribution no later than the earlier of (1)
December 31 of the calendar year in which
distributions would be required to begin under
this Section 6.05(E)(2), or (2) December 31 of
the calendar year which contains the fifth
anniversary of the date of death of the
Participant. If the Participant has no
designated Beneficiary, or if the designated
Beneficiary does not elect a method of
distribution, distribution of the Participant's
entire interest must be completed by December
31 of the calendar year containing the fifth
anniversary of the Participant's death.
3. For purposes of Section 6.06(E)(2) above, if the
surviving spouse dies after the Participant, but
before payments to such spouse begin, the
provisions of Section 6.06(E)(2), with the
exception of paragraph (b) therein, shall be
applied as if the surviving spouse were the
Participant.
4. For purposes of this Section 6.06(E), any amount
paid to a child of the Participant will be treated
as if it had been paid to the surviving spouse if
the amount becomes payable to the surviving spouse
when the child reaches the age of majority.
5. For purposes of this Section 6.06(E), distribution
of a Participant's interest is considered to begin
on the Participant's required beginning date (or,
if Section 6.06(E)(3) above is applicable, the
date distribution is required to begin to the
surviving spouse pursuant to Section 6.06(E)(2)
above). If distribution in the form of an annuity
irrevocably commences to the Participant before
the required beginning date, the date distribution
is considered to begin is the date distribution
actually commences.
F. DEFINITIONS
1. Applicable Life Expectancy - The life expectancy
(or joint and last survivor expectancy) calculated
using the attained age of the Participant (or
designated Beneficiary) as of the Participant's
(or designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each
calendar year which has elapsed since the date
life expectancy was first calculated. If life
expectancy is being recalculated, the applicable
life expectancy shall be the life expectancy as so
recalculated. The applicable calendar year shall
be the first distribution calendar year, and if
life expectancy is being recalculated such
succeeding calendar year.
2. Designated Beneficiary - The individual who is
designated as the Beneficiary under the Plan in
accordance with Section 401(a)(9) of the Code and
the regulations thereunder.
3. Distribution Calendar Year - A calendar year for
which a minimum distribution is required. For
distributions beginning before the Participant's
death, the first distribution calendar year is the
calendar year immediately preceding the calendar
year which contains the Participant's required
beginning date. For distributions beginning after
the Participant's death, the first distribution
calendar year is the calendar year in which
distributions are required to begin pursuant to
Section 6.05(E) above.
4. Life Expectancy - Life expectancy and joint and
last survivor expectancy are computed by use of
the expected return multiples in Tables V and VI
of Section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or
spouse, in the case of distributions described
in Section 6.05(E)(2)(b) above) by the time
distributions are required to begin, life
expectancies shall be recalculated annually.
Such election shall be irrevocable as to the
Participant (or spouse) and shall apply to all
subsequent years. The life expectancy of a
nonspouse Beneficiary may not be recalculated.
5. Participant's Benefit
a. The account balance as of the last valuation
date in the valuation calendar year (the
calendar year immediately preceding the
distribution calendar year) increased by the
amount of any Contributions or Forfeitures
allocated to the account balance as of dates
in the valuation calendar year after the
valuation date and decreased by distributions
made in the valuation calendar year after the
valuation date.
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24
b. Exception for second distribution calendar
year. For purposes of paragraph (a) above, if
any portion of the minimum distribution for
the first distribution calendar year is made
in the second distribution calendar year on
or before the required beginning date, the
amount of the minimum distribution made in
the second distribution calendar year shall
be treated as if it had been made in the
immediately preceding distribution calendar
year.
6. Required Beginning Date
a. General Rule - The required beginning date of
a Participant is the first day of April of
the calendar year following the calendar year
in which the Participant attains age 70 1/2.
b. Transitional Rules - The required beginning
date of a Participant who attains age 70 1/2
before January 1, 1988, shall be determined
in accordance with (1) or (2) below:
(1) Non 5% Owners - The required beginning
date of a Participant who is not a 5%
owner is the first day of April of the
calendar year following the calendar
year in which the later of retirement or
attainment of age 70 1/2 occurs.
(2) 5% Owners - The required beginning date
of a Participant who is a 5% owner
during any year beginning after December
31, 1979, is the first day of April
following the later of:
(a) the calendar year in which the
Participant attains age 70 1/2, or
(b) the earlier of the calendar year
with or within which ends the Plan
Year in which the Participant
becomes a 5% owner, or the calendar
year in which the Participant
retires.
The required beginning date of a
Participant who is not a 5% owner
who attains age 70 1/2 during 1988
and who has not retired as of
January 1, 1989, is April 1, 1990.
c. 5% Owner - A Participant is treated as a 5%
owner for purposes of this Section 6.06(F)(6)
if such Participant is a 5% owner as defined
in Section 416(i) of the Code (determined in
accordance with Section 416 but without
regard to whether the Plan is top-heavy) at
any time during the Plan Year ending with or
within the calendar year in which such owner
attains age 66 1/2 or any subsequent Plan
Year.
d. Once distributions have begun to a 5% owner
under this Section 6.06(F)(6) they must
continue to be distributed, even if the
Participant ceases to be a 5% owner in a
subsequent year.
G. TRANSITIONAL RULE
1. Notwithstanding the other requirements of this
Section 6.06 and subject to the requirements of
Section 6.05, Joint and Survivor Annuity
Requirements, distribution on behalf of any
Employee, including a 5% owner, may be made in
accordance with all of the following requirements
(regardless of when such distribution commences):
a. The distribution by the Fund is one which
would not have qualified such Fund under
Section 401(a)(9) of the Code as in effect
prior to amendment by the Deficit Reduction
Act of 1984.
b. The distribution is in accordance with a
method of distribution designated by the
Employee whose interest in the Fund is being
distributed or, if the Employee is deceased,
by a Beneficiary of such Employee.
c. Such designation was in writing, was signed
by the Employee or the Beneficiary, and was
made before January 1, 1984.
d. The Employee had accrued a benefit under the
Plan as of December 31, 1983.
e. The method of distribution designated by the
Employee or the Beneficiary specifies the
time at which distribution will commence, the
period over which distributions will be made,
and in the case of any distribution upon the
Employee's death, the Beneficiaries of the
Employee listed in order of priority.
2. A distribution upon death will not be covered by
this transitional rule unless the information in
the designation contains the required information
described above with respect to the distributions
to be made upon the death of the Employee.
3. For any distribution which commences before
January 1, 1984, but continues after December 31,
1983, the Employee, or the Beneficiary, to whom
such distribution is being made, will be presumed
to have designated the method of distribution
under which the distribution is being made if the
method of distribution was specified in writing
and the distribution satisfies the requirements in
Sections 6.06(G)(1)(a) and (e).
4. If a designation is revoked, any subsequent
distribution must satisfy the requirements of
Section 401(a)(9) of the Code and the regulations
thereunder. If a designation is revoked subsequent
to the date distributions are required to begin,
the Plan must distribute by the end of the
calendar year following the calendar year in which
the revocation occurs the total amount not yet
distributed which would have been required to have
been distributed to satisfy Section 401(a)(9) of
the Code and the regulations thereunder, but for
the Section 242(b)(2) election. For calendar years
beginning after December 31, 1988, such
distributions must meet the minimum distribution
incidental benefit requirements in Section
1.401(a)(9)-2 of the Proposed Income Tax
Regulations. Any changes in the designation will
be considered to be a revocation of the
designation. However, the mere substitution or
addition of another Beneficiary (one not named in
the designation) under the designation will not be
considered to be a revocation of the designation,
so long as such substitution or addition does not
alter the period over which distributions are to
be made under the designation, directly or
indirectly (for example, by altering the relevant
measuring life). In the case in which an amount is
transferred or rolled over from one plan to
another plan, the rules in Q&A J-2 and Q&A J-3
shall apply.
6.07 ANNUITY CONTRACTS
Any annuity contract distributed under the Plan (if permitted or
required by this Section 6) must be nontransferable. The terms of
any annuity contract purchased and distributed by the Plan to a
Participant or spouse shall comply with the requirements of the
Plan.
6.08 LOANS TO PARTICIPANTS
If the Adoption Agreement so indicates, a Participant may receive
a loan from the Fund, subject to the following rules:
A. Loans shall be made available to all Participants on a
reasonably equivalent basis.
B. Loans shall not be made available to Highly Compensated
Employees (as defined in Section 414(q) of the Code) in an
amount greater than the amount made available to other
Employees.
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C. Loans must be adequately secured and bear a reasonable
interest rate.
D. No Participant loan shall exceed the present value of the
Vested portion of a Participant's Individual Account.
E. A Participant must obtain the consent of his or her spouse,
if any, to the use of the Individual Account as security for
the loan. Spousal consent shall be obtained no earlier than
the beginning of the 90 day period that ends on the date on
which the loan is to be so secured. The consent must be in
writing, must acknowledge the effect of the loan, and must
be witnessed by a plan representative or notary public. Such
consent shall thereafter be binding with respect to the
consenting spouse or any subsequent spouse with respect to
that loan. A new consent shall be required if the account
balance is used for renegotiation, extension, renewal, or
other revision of the loan. Notwithstanding the foregoing,
no spousal consent is necessary if, at the time the loan is
secured, no consent would be required for a distribution
under Section 417(a)(2)(B). In addition, spousal consent is
not required if the Plan or the Participant is not subject
to Section 401(a)(11) at the time the Individual Account is
used as security, or if the total Individual Account subject
to the security is less than or equal to $3,500.
F. In the event of default, foreclosure on the note and
attachment of security will not occur until a distributable
event occurs in the Plan. Notwithstanding the preceding
sentence, a Participant's default on a loan will be treated
as a distributable event and as soon as administratively
feasible after the default, the Participant's Vested
Individual Account will be reduced by the lesser of the
amount in default (plus accrued interest) or the amount
secured. If this Plan is a 401(k) plan, then to the extent
the loan is attributable to a Participant's Elective
Deferrals, Qualified Nonelective Contributions or Qualified
Matching Contributions, the Participant's Individual Account
will not be reduced unless the Participant has attained age
59 1/2 or has another distributable event. A
Participant will be deemed to have consented to the
provision at the time the loan is made to the Participant.
G. No loans will be made to any shareholder-employee or
Owner-Employee. For purposes of this requirement, a
shareholder-employee means an employee or officer of an
electing small business (Subchapter S) corporation who owns
(or is considered as owning within the meaning of Section
318(a)(1) of the Code), on any day during the taxable year
of such corporation, more than 5% of the outstanding stock
of the corporation.
If a valid spousal consent has been obtained in accordance
with 6.08(E), then, notwithstanding any other provisions of
this Plan, the portion of the Participant's Vested
Individual Account used as a security interest held by the
Plan by reason of a loan outstanding to the Participant
shall be taken into account for purposes of determining the
amount of the account balance payable at the time of death
or distribution, but only if the reduction is used as
repayment of the loan. If less than 100% of the
Participant's Vested Individual Account (determined without
regard to the preceding sentence) is payable to the
surviving spouse, then the account balance shall be adjusted
by first reducing the Vested Individual Account by the
amount of the security used as repayment of the loan, and
then determining the benefit payable to the surviving
spouse.
To avoid taxation to the Participant, no loan to any
Participant can be made to the extent that such loan when
added to the outstanding balance of all other loans to the
Participant would exceed the lesser of (a) $50,000 reduced
by the excess (if any) of the highest outstanding balance of
loans during the one year period ending on the day before
the loan is made, over the outstanding balance of loans from
the Plan on the date the loan is made, or (b) 50% of the
present value of the nonforfeitable Individual Account of
the Participant or, if greater, the total Individual Account
up to $10,000. For the purpose of the above limitation, all
loans from all plans of the Employer and other members of a
group of employers described in Sections 414(b), 414(c), and
414(m) of the Code are aggregated. Furthermore, any loan
shall by its terms require that repayment (principal and
interest) be amortized in level payments, not less
frequently than quarterly, over a period not extending
beyond 5 years from the date of the loan, unless such loan
is used to acquire a dwelling unit which within a reasonable
time (determined at the time the loan is made) will be used
as the principal residence of the Participant. An assignment
or pledge of any portion of the Participant's interest in
the Plan and a loan, pledge, or assignment with respect to
any insurance contract purchased under the Plan, will be
treated as a loan under this paragraph.
The Plan Administrator shall administer the loan program in
accordance with a written document. Such written document
shall include, at a minimum, the following: (i) the identity
of the person or positions authorized to administer the
Participant loan program; (ii) the procedure for applying
for loans; (iii) the basis on which loans will be approved
or denied; (iv) limitations (if any) on the types and
amounts of loans offered; (v) the procedure under the
program for determining a reasonable rate of interest; (vi)
the types of collateral which may secure a Participant loan;
and (vii) the events constituting default and the steps that
will be taken to preserve Plan assets in the event of such
default.
6.09 DISTRIBUTION IN KIND
The Plan Administrator may cause any distribution under this Plan
to be made either in a form actually held in the Fund, or in cash
by converting assets other than cash into cash, or in any
combination of the two foregoing ways.
6.10 DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS
A. DIRECT ROLLOVER OPTION
This Section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan
to the contrary that would otherwise limit a distributee's
election under this Section, a distributee may elect, at the
time and in the manner prescribed by the Plan Administrator,
to have any portion of an eligible rollover distribution
that is equal to at least $500 paid directly to an eligible
retirement plan specified by the distributee in a direct
rollover.
B. DEFINITIONS
1. Eligible rollover distribution - An eligible rollover
distribution is any distribution of all or any portion
of the balance to the credit of the distributee, except
that an eligible rollover distribution does not
include:
a. any distribution that is one of a series of
substantially equal periodic payments (not less
frequently than annually) made for the life (or
life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the
distributee and the distributee's designated
Beneficiary, or for a specified period of ten
years or more;
b. any distribution to the extent such distribution
is required under Section 401(a)(9) of the Code;
c. the portion of any other distribution that is not
includible in gross income (determined without
regard to the exclusion for net unrealized
appreciation with respect to employer securities);
and
d. any other distribution(s) that is reasonably
expected to total less than $200 during a year.
2. Eligible retirement plan - An eligible retirement plan
is an individual retirement account described in
Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an
annuity plan described in Section
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26
403(a) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution. However,
in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement
annuity.
3. Distributee - A distributee includes an Employee or
former Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or former
Employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as
defined in Section 414(p) of the Code, are distributees
with regard to the interest of the spouse or former
spouse.
4. Direct rollover - A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the
distributee.
6.11 PROCEDURE FOR MISSING PARTICIPANTS OR BENEFICIARIES
The Plan Administrator must use all reasonable measures to locate
Participants or Beneficiaries who are entitled to distributions
from the Plan. In the event that the Plan Administrator cannot
locate a Participant or Beneficiary who is entitled to a
distribution from the Plan after using all reasonable measures to
locate him or her, the Plan Administrator may, consistent with
applicable laws, regulations and other pronouncements under
ERISA, use any reasonable procedure to dispose of distributable
plan assets, including any of the following: (1) establish a bank
account for and in the name of the Participant or Beneficiary and
transfer the assets to such bank account, (2) purchase an annuity
contract with the assets in the name of the Participant or
Beneficiary, or (3) after the expiration of 5 years after the
benefit becomes payable, treat the amount distributable as a
Forfeiture and allocate it in accordance with the terms of the
Plan and if the Participant or Beneficiary is later located,
restore such benefit to the Plan.
SECTION SEVEN CLAIMS PROCEDURE
7.01 FILING A CLAIM FOR PLAN DISTRIBUTIONS
A Participant or Beneficiary who desires to make a claim for the
Vested portion of the Participant's Individual Account shall file
a written request with the Plan Administrator on a form to be
furnished to him or her by the Plan Administrator for such
purpose. The request shall set forth the basis of the claim. The
Plan Administrator is authorized to conduct such examinations as
may be necessary to facilitate the payment of any benefits to
which the Participant or Beneficiary may be entitled under the
terms of the Plan.
7.02 DENIAL OF CLAIM
Whenever a claim for a Plan distribution by any Participant or
Beneficiary has been wholly or partially denied, the Plan
Administrator must furnish such Participant or Beneficiary
written notice of the denial within 60 days of the date the
original claim was filed. This notice shall set forth the
specific reasons for the denial, specific reference to pertinent
Plan provisions on which the denial is based, a description of
any additional information or material needed to perfect the
claim, an explanation of why such additional information or
material is necessary and an explanation of the procedures for
appeal.
7.03 REMEDIES AVAILABLE
The Participant or Beneficiary shall have 60 days from receipt of
the denial notice in which to make written application for review
by the Plan Administrator. The Participant or Beneficiary may
request that the review be in the nature of a hearing. The
Participant or Beneficiary shall have the right to
representation, to review pertinent documents and to submit
comments in writing. The Plan Administrator shall issue a
decision on such review within 60 days after receipt of an
application for review as provided for in Section 7.02. Upon a
decision unfavorable to the Participant or Beneficiary, such
Participant or Beneficiary shall be entitled to bring such
actions in law or equity as may be necessary or appropriate to
protect or clarify his or her right to benefits under this Plan.
SECTION EIGHT PLAN ADMINISTRATOR
8.01 EMPLOYER IS PLAN ADMINISTRATOR
A. The Employer shall be the Plan Administrator unless the
managing body of the Employer designates a person or persons
other than the Employer as the Plan Administrator and so
notifies the Trustee (or Custodian, if applicable). The
Employer shall also be the Plan Administrator if the person
or persons so designated cease to be the Plan Administrator.
The Employer may establish an administrative committee that
will carry out the Plan Administrator's duties. Members of
the administrative committee may allocate the Plan
Administrator's duties among themselves.
B. If the managing body of the Employer designates a person or
persons other than the Employer as Plan Administrator, such
person or persons shall serve at the pleasure of the
Employer and shall serve pursuant to such procedures as such
managing body may provide. Each such person shall be bonded
as may be required by law.
8.02 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR
A. The Plan Administrator may, by appointment, allocate the
duties of the Plan Administrator among several individuals
or entities. Such appointments shall not be effective until
the party designated accepts such appointment in writing.
B. The Plan Administrator shall have the authority to control
and manage the operation and administration of the Plan. The
Plan Administrator shall administer the Plan for the
exclusive benefit of the Participants and their
Beneficiaries in accordance with the specific terms of the
Plan.
C. The Plan Administrator shall be charged with the duties of
the general administration of the Plan, including, but not
limited to the following:
1. To determine all questions of interpretation or policy
in a manner consistent with the Plan's documents and
the Plan Administrator's construction or determination
in good faith shall be conclusive and binding on all
persons except as otherwise provided herein or by law.
Any interpretation or construction shall be done in a
nondiscriminatory manner and shall be consistent with
the intent that the Plan shall continue to be deemed a
qualified plan under the terms of Section 401(a) of the
Code, as amended from time-to-time, and shall comply
with the terms of ERISA, as amended from time-to-time;
2. To determine all questions relating to the eligibility
of Employees to become or remain Participants
hereunder;
3. To compute the amounts necessary or desirable to be
contributed to the Plan;
4. To compute the amount and kind of benefits to which a
Participant or Beneficiary shall be entitled under the
Plan and to direct the Trustee (or Custodian, if
applicable) with respect to all disbursements under the
Plan, and, when requested by
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the Trustee (or Custodian), to furnish the Trustee
(or Custodian) with instructions, in writing, on
matters pertaining to the Plan and the Trustee (or
Custodian) may rely and act thereon;
5. To maintain all records necessary for the
administration of the Plan;
6. To be responsible for preparing and filing such
disclosure and tax forms as may be required from
time-to-time by the Secretary of Labor or the Secretary
of the Treasury; and
7. To furnish each Employee, Participant or Beneficiary
such notices, information and reports under such
circumstances as may be required by law.
D. The Plan Administrator shall have all of the powers
necessary or appropriate to accomplish his or her duties
under the Plan, including, but not limited to, the
following:
1. To appoint and retain such persons as may be necessary
to carry out the functions of the Plan Administrator;
2. To appoint and retain counsel, specialists or other
persons as the Plan Administrator deems necessary or
advisable in the administration of the Plan;
3. To resolve all questions of administration of the Plan;
4. To establish such uniform and nondiscriminatory rules
which it deems necessary to carry out the terms of the
Plan;
5. To make any adjustments in a uniform and
nondiscriminatory manner which it deems necessary to
correct any arithmetical or accounting errors which may
have been made for any Plan Year; and
6. To correct any defect, supply any omission or reconcile
any inconsistency in such manner and to such extent as
shall be deemed necessary or advisable to carry out the
purpose of the Plan.
8.03 EXPENSES AND COMPENSATION
All reasonable expenses of administration including, but not
limited to, those involved in retaining necessary professional
assistance may be paid from the assets of the Fund.
Alternatively, the Employer may, in its discretion, pay any or
all such expenses. Pursuant to uniform and nondiscriminatory
rules that the Plan Administrator may establish from
time-to-time, administrative expenses and expenses unique to a
particular Participant may be charged to a Participant's
Individual Account or the Plan Administrator may allow
Participants to pay such fees outside of the Plan. The Employer
shall furnish the Plan Administrator with such clerical and other
assistance as the Plan Administrator may need in the performance
of his or her duties.
8.04 INFORMATION FROM EMPLOYER
To enable the Plan Administrator to perform his or her duties,
the Employer shall supply full and timely information to the Plan
Administrator (or his or her designated agents) on all matters
relating to the Compensation of all Participants, their regular
employment, retirement, death, Disability or Termination of
Employment, and such other pertinent facts as the Plan
Administrator (or his or her agents) may require. The Plan
Administrator shall advise the Trustee (or Custodian, if
applicable) of such of the foregoing facts as may be pertinent to
the Trustee's (or Custodian's) duties under the Plan. The Plan
Administrator (or his or her agents) is entitled to rely on such
information as is supplied by the Employer and shall have no duty
or responsibility to verify such information.
SECTION NINE AMENDMENT AND TERMINATION
9.01 RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN
A. The Employer, by adopting the Plan, expressly delegates to the
Prototype Sponsor the power, but not the duty, to amend the Plan
without any further action or consent of the Employer as the
Prototype Sponsor deems necessary for the purpose of adjusting
the Plan to comply with all laws and regulations governing
pension or profit sharing plans. Specifically, it is understood
that the amendments may be made unilaterally by the Prototype
Sponsor. However, it shall be understood that the Prototype
Sponsor shall be under no obligation to amend the Plan documents
and the Employer expressly waives any rights or claims against
the Prototype Sponsor for not exercising this power to amend. For
purposes of Prototype Sponsor amendments, the mass submitter
shall be recognized as the agent of the Prototype Sponsor. If the
Prototype Sponsor does not adopt the amendments made by the mass
submitter, it will no longer be identical to or a minor modifier
of the mass submitter plan.
B. An amendment by the Prototype Sponsor shall be accomplished by
giving written notice to the Employer of the amendment to be
made. The notice shall set forth the text of such amendment and
the date such amendment is to be effective. Such amendment shall
take effect unless within the 30 day period after such notice is
provided, or within such shorter period as the notice may
specify, the Employer gives the Prototype Sponsor written notice
of refusal to consent to the amendment. Such written notice of
refusal shall have the effect of withdrawing the Plan as a
prototype plan and shall cause the Plan to be considered an
individually designed plan. The right of the Prototype Sponsor to
cause the Plan to be amended shall terminate should the Plan
cease to conform as a prototype plan as provided in this or any
other section.
9.02 RIGHT OF EMPLOYER TO AMEND THE PLAN
The Employer may (1) change the choice of options in the Adoption
Agreement; (2) add overriding language in the Adoption Agreement
when such language is necessary to satisfy Section 415 or Section
416 of the Code because of the required aggregation of multiple
plans; and (3) add certain model amendments published by the
Internal Revenue Service which specifically provide that their
adoption will not cause the Plan to be treated as individually
designed. An Employer that amends the Plan for any other reason,
including a waiver of the minimum funding requirement under
Section 412(d) of the Code, will no longer participate in this
prototype plan and will be considered to have an individually
designed plan.
An Employer who wishes to amend the Plan to change the options it
has chosen in the Adoption Agreement must complete and deliver a
new Adoption Agreement to the Prototype Sponsor and Trustee (or
Custodian, if applicable). Such amendment shall become effective
upon execution by the Employer and Trustee (or Custodian).
The Employer further reserves the right to replace the Plan in
its entirety by adopting another retirement plan which the
Employer designates as a replacement plan.
9.03 LIMITATION ON POWER TO AMEND
No amendment to the Plan shall be effective to the extent that it
has the effect of decreasing a Participant's accrued benefit.
Notwithstanding the preceding sentence, a Participant's
Individual Account may be reduced to the extent permitted under
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Section 412(c)(8) of the Code. For purposes of this paragraph, a
plan amendment which has the effect of decreasing a Participant's
Individual Account or eliminating an optional form of benefit
with respect to benefits attributable to service before the
amendment shall be treated as reducing an accrued benefit.
Furthermore, if the vesting schedule of a Plan is amended, in the
case of an Employee who is a Participant as of the later of the
date such amendment is adopted or the date it becomes effective,
the Vested percentage (determined as of such date) of such
Employee's Individual Account derived from Employer Contributions
will not be less than the percentage computed under the Plan
without regard to such amendment.
9.04 AMENDMENT OF VESTING SCHEDULE
If the Plan's vesting schedule is amended, or the Plan is amended
in any way that directly or indirectly affects the computation of
the Participant's Vested percentage, or if the Plan is deemed
amended by an automatic change to or from a top-heavy vesting
schedule, each Participant with at least 3 Years of Vesting
Service with the Employer may elect, within the time set forth
below, to have the Vested percentage computed under the Plan
without regard to such amendment.
For Participants who do not have at least 1 Hour of Service in
any Plan Year beginning after December 31, 1988, the preceding
sentence shall be applied by substituting "5 Years of Vesting
Service" for "3 Years of Vesting Service" where such language
appears.
The Period during which the election may be made shall commence
with the date the amendment is adopted or deemed to be made and
shall end the later of:
A. 60 days after the amendment is adopted;
B. 60 days after the amendment becomes effective; or
C. 60 days after the Participant is issued written notice of
the amendment by the Employer or Plan Administrator.
9.05 PERMANENCY
The Employer expects to continue this Plan and make the necessary
contributions thereto indefinitely, but such continuance and
payment is not assumed as a contractual obligation. Neither the
Adoption Agreement nor the Plan nor any amendment or modification
thereof nor the making of contributions hereunder shall be
construed as giving any Participant or any person whomsoever any
legal or equitable right against the Employer, the Trustee (or
Custodian, if applicable) the Plan Administrator or the Prototype
Sponsor except as specifically provided herein, or as provided by
law.
9.06 METHOD AND PROCEDURE FOR TERMINATION
The Plan may be terminated by the Employer at any time by
appropriate action of its managing body. Such termination shall
be effective on the date specified by the Employer. The Plan
shall terminate if the Employer shall be dissolved, terminated,
or declared bankrupt. Written notice of the termination and
effective date thereof shall be given to the Trustee (or
Custodian), Plan Administrator, Prototype Sponsor, Participants
and Beneficiaries of deceased Participants, and the required
filings (such as the Form 5500 series and others) must be made
with the Internal Revenue Service and any other regulatory body
as required by current laws and regulations. Until all of the
assets have been distributed from the Fund, the Employer must
keep the Plan in compliance with current laws and regulations by
(a) making appropriate amendments to the Plan and (b) taking such
other measures as may be required.
9.07 CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER
Notwithstanding the preceding Section 9.06, a successor of the
Employer may continue the Plan and be substituted in the place of
the present Employer. The successor and the present Employer (or,
if deceased, the executor of the estate of a deceased
Self-Employed Individual who was the Employer) must execute a
written instrument authorizing such substitution and the
successor must complete and sign a new plan document.
9.08 FAILURE OF PLAN QUALIFICATION
If the Plan fails to retain its qualified status, the Plan will
no longer be considered to be part of a prototype plan, and such
Employer can no longer participate under this prototype. In such
event, the Plan will be considered an individually designed plan.
SECTION TEN MISCELLANEOUS
10.01 STATE COMMUNITY PROPERTY LAWS
The terms and conditions of this Plan shall be applicable without
regard to the community property laws of any state.
10.02 HEADINGS
The headings of the Plan have been inserted for convenience of
reference only and are to be ignored in any construction of the
provisions hereof.
10.03 GENDER AND NUMBER
Whenever any words are used herein in the masculine gender they
shall be construed as though they were also used in the feminine
gender in all cases where they would so apply, and whenever any
words are used herein in the singular form they shall be
construed as though they were also used in the plural form in all
cases where they would so apply.
10.04 PLAN MERGER OR CONSOLIDATION
In the case of any merger or consolidation of the Plan with, or
transfer of assets or liabilities of such Plan to, any other
plan, each Participant shall be entitled to receive benefits
immediately after the merger, consolidation, or transfer (if the
Plan had then terminated) which are equal to or greater than the
benefits he or she would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the
Plan had then terminated). The Trustee (or Custodian) has the
authority to enter into merger agreements or agreements to
directly transfer the assets of this Plan but only if such
agreements are made with trustees or custodians of other
retirement plans described in Section 401(a) of the Code.
10.05 STANDARD OF FIDUCIARY CONDUCT
The Employer, Plan Administrator, Trustee and any other fiduciary
under this Plan shall discharge their duties with respect to this
Plan solely in the interests of Participants and their
Beneficiaries and with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent man acting
in like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims.
No fiduciary shall cause the Plan to engage in any transaction
known as a "prohibited transaction" under ERISA.
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10.06 GENERAL UNDERTAKING OF ALL PARTIES
All parties to this Plan and all persons claiming any interest
whatsoever hereunder agree to perform any and all acts and
execute any and all documents and papers which may be necessary
or desirable for the carrying out of this Plan and any of its
provisions.
10.07 AGREEMENT BINDS HEIRS, ETC.
This Plan shall be binding upon the heirs, executors,
administrators, successors and assigns, as those terms shall
apply to any and all parties hereto, present and future.
10.08 DETERMINATION OF TOP-HEAVY STATUS
A. For any Plan Year beginning after December 31, 1983, this
Plan is a Top-Heavy Plan if any of the following conditions
exist:
1. If the top-heavy ratio for this Plan exceeds 60% and
this Plan is not part of any required aggregation group
or permissive aggregation group of plans.
2. If this Plan is part of a required aggregation group of
plans but not part of a permissive aggregation group
and the top-heavy ratio for the group of plans exceeds
60%.
3. If this Plan is a part of a required aggregation group
and part of a permissive aggregation group of plans and
the top-heavy ratio for the permissive aggregation
group exceeds 60%.
For purposes of this Section 10.08, the following
terms shall have the meanings indicated below:
B. KEY EMPLOYEE - Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the
determination period was an officer of the Employer if such
individual's annual compensation exceeds 50% of the dollar
limitation under Section 415(b)(1)(A) of the Code, an owner
(or considered an owner under Section 318 of the Code) of
one of the 10 largest interests in the Employer if such
individual's compensation exceeds 100% of the dollar
limitation under Section 415(c)(1)(A) of the Code, a 5%
owner of the Employer, or a 1% owner of the Employer who has
an annual compensation of more than $150,000. Annual
compensation means compensation as defined in Section
415(c)(3) of the Code, but including amounts contributed by
the Employer pursuant to a salary reduction agreement which
are excludable from the Employee's gross income under
Section 125, Section 402(e)(3), Section 402(h)(1)(B) or
Section 403(b) of the Code. The determination period is the
Plan Year containing the determination date and the 4
preceding Plan Years.
The determination of who is a Key Employee will be made in
accordance with Section 416(i)(1) of the Code and the
regulations thereunder.
C. TOP-HEAVY RATIO
1. If the Employer maintains one or more defined
contribution plans (including any simplified employee
pension plan) and the Employer has not maintained any
defined benefit plan which during the 5-year period
ending on the determination date(s) has or has had
accrued benefits, the top-heavy ratio for this Plan
alone or for the required or permissive aggregation
group as appropriate is a fraction, the numerator of
which is the sum of the account balances of all Key
Employees as of the determination date(s) (including
any part of any account balance distributed in the
5-year period ending on the determination date(s)), and
the denominator of which is the sum of all account
balances (including any part of any account balance
distributed in the 5-year period ending on the
determination date(s)), both computed in accordance
with Section 416 of the Code and the regulations
thereunder. Both the numerator and the denominator of
the top-heavy ratio are increased to reflect any
contribution not actually made as of the determination
date, but which is required to be taken into account on
that date under Section 416 of the Code and the
regulations thereunder.
2. If the Employer maintains one or more defined
contribution plans (including any simplified employee
pension plan) and the Employer maintains or has
maintained one or more defined benefit plans which
during the 5-year period ending on the determination
date(s) has or has had any accrued benefits, the
top-heavy ratio for any required or permissive
aggregation group as appropriate is a fraction, the
numerator of which is the sum of account balances under
the aggregated defined contribution plan or plans for
all Key Employees, determined in accordance with (1)
above, and the present value of accrued benefits under
the aggregated defined benefit plan or plans for all
Key Employees as of the determination date(s), and the
denominator of which is the sum of the account balances
under the aggregated defined contribution plan or plans
for all Participants, determined in accordance with (1)
above, and the present value of accrued benefits under
the defined benefit plan or plans for all Participants
as of the determination date(s), all determined in
accordance with Section 416 of the Code and the
regulations thereunder. The accrued benefits under a
defined benefit plan in both the numerator and
denominator of the top-heavy ratio are increased for
any distribution of an accrued benefit made in the
5-year period ending on the determination date.
3. For purposes of (1) and (2) above, the value of account
balances and the present value of accrued benefits will
be determined as of the most recent valuation date that
falls within or ends with the 12-month period ending on
the determination date, except as provided in Section
416 of the Code and the regulations thereunder for the
first and second plan years of a defined benefit plan.
The account balances and accrued benefits of a
Participant (a) who is not a Key Employee but who was a
Key Employee in a Prior Year, or (b) who has not been
credited with at least one Hour of Service with any
employer maintaining the plan at any time during the
5-year period ending on the determination date will be
disregarded. The calculation of the top-heavy ratio,
and the extent to which distributions, rollovers, and
transfers are taken into account will be made in
accordance with Section 416 of the Code and the
regulations thereunder. Deductible employee
contributions will not be taken into account for
purposes of computing the top-heavy ratio. When
aggregating plans the value of account balances and
accrued benefits will be calculated with reference to
the determination dates that fall within the same
calendar year.
The accrued benefit of a Participant other than a
Key Employee shall be determined under (a) the
method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained
by the Employer, or (b) if there is no such method,
as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional
rule of Section 411(b)(1)(C) of the Code.
4. Permissive aggregation group: The required aggregation
group of plans plus any other plan or plans of the
Employer which, when considered as a group with the
required aggregation group, would continue to satisfy
the requirements of Sections 401(a)(4) and 410 of the
Code.
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5. Required aggregation group: (a) 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 (b) any other qualified plan of
the Employer which enables a plan described in (a) to
meet the requirements of Sections 401(a)(4) or 410 of
the Code.
6. Determination date: For any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan
Year. For the first Plan Year of the Plan, the last day
of that year.
7. Valuation date: For purposes of calculating the
top-heavy ratio, the valuation date shall be the last
day of each Plan Year.
8. Present value: For purposes of establishing the
"present value" of benefits under a defined benefit
plan to compute the top-heavy ratio, any benefit shall
be discounted only for mortality and interest based on
the interest rate and mortality table specified for
this purpose in the defined benefit plan, unless
otherwise indicated in the Adoption Agreement.
10.09 SPECIAL LIMITATIONS FOR OWNER-EMPLOYEES
If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the business for which this Plan
is established and one or more other trades or businesses, this
Plan and the plan established for other trades or businesses
must, when looked at as a single plan, satisfy Sections 401(a)
and (d) of the Code for the employees of those trades or
businesses.
If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or
businesses, the employees of the other trades or businesses must
be included in a plan which satisfies Sections 401(a) and (d) of
the Code and which provides contributions and benefits not less
favorable than provided for Owner-Employees under this Plan.
If an individual is covered as an Owner-Employee under the plans
of two or more trades or businesses which are not controlled and
the individual controls a trade or business, then the
contributions or benefits of the employees under the plan of the
trade or business which is controlled must be as favorable as
those provided for him or her under the most favorable plan of
the trade or business which is not controlled.
For purposes of the preceding paragraphs, an Owner-Employee, or
two or more Owner-Employees, will be considered to control a
trade or business if the Owner-Employee, or two or more
Owner-Employees, together:
A. own the entire interest in a unincorporated trade or
business, or
B. in the case of a partnership, own more than 50% of either
the capital interest or the profit interest in the
partnership.
For purposes of the preceding sentence, an Owner-Employee, or two
or more Owner-Employees, shall be treated as owning any interest
in a partnership which is owned, directly or indirectly, by a
partnership which such Owner-Employee, or such two or more
Owner-Employees, are considered to control within the meaning of
the preceding sentence.
10.10 INALIENABILITY OF BENEFITS
No benefit or interest available hereunder will be subject to
assignment or alienation, either voluntarily or involuntarily.
The preceding sentence shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with
respect to a Participant pursuant to a domestic relations order,
unless such order is determined to be a qualified domestic
relations order, as defined in Section 414(p) of the Code.
Generally, a domestic relations order cannot be a qualified
domestic relations order until January 1, 1985. However, in the
case of a domestic relations order entered before such date, the
Plan Administrator:
(1) shall treat such order as a qualified domestic relations
order if such Plan Administrator is paying benefits pursuant
to such order on such date, and
(2) may treat any other such order entered before such date as a
qualified domestic relations order even if such order does
not meet the requirements of Section 414(p) of the Code.
Notwithstanding any provision of the Plan to the contrary, a
distribution to an alternate payee under a qualified domestic
relations order shall be permitted even if the Participant
affected by such order is not otherwise entitled to a
distribution and even if such Participant has not attained
earliest retirement age as defined in Section 414(p) of the Code.
10.11 CANNOT ELIMINATE PROTECTED BENEFITS
Pursuant to Section 411(d)(6) of the Code, and the regulations
thereunder, the Employer cannot reduce, eliminate or make subject
to Employer discretion any Section 411(d)(6) protected benefit.
Where this Plan document is being adopted to amend another plan
that contains a protected benefit not provided for in this
document, the Employer may attach a supplement to the Adoption
Agreement that describes such protected benefit which shall
become part of the Plan.
SECTION ELEVEN 401(k) PROVISIONS
In addition to Sections 1 through 10, the provisions of this
Section 11 shall apply if the Employer has established a 401(k)
cash or deferred arrangement (CODA) by completing and signing the
appropriate Adoption Agreement.
11.100 DEFINITIONS
The following words and phrases when used in the Plan with
initial capital letters shall, for the purposes of this Plan,
have the meanings set forth below unless the context indicates
that other meanings are intended.
11.101 ACTUAL DEFERRAL PERCENTAGE (ADP)
Means, for a specified group of Participants for a Plan Year, the
average of the ratios (calculated separately for each Participant
in such group) of (1) the amount of Employer Contributions
actually paid over to the Fund on behalf of such Participant for
the Plan Year to (2) the Participant's Compensation for such Plan
Year (taking into account only that Compensation paid to the
Employee during the portion of the Plan Year he or she was an
eligible Participant, unless otherwise indicated in the Adoption
Agreement). For purposes of calculating the ADP, Employer
Contributions on behalf of any Participant shall include: (1) any
Elective Deferrals made pursuant to the Participant's deferral
election, (including Excess Elective Deferrals of Highly
Compensated Employees), but excluding (a) Excess Elective
Deferrals of Non-highly Compensated Employees that arise solely
from Elective Deferrals made under the Plan or plans of this
Employer and (b) Elective Deferrals that are taken into account
in the Contribution Percentage test (provided the ADP test is
satisfied both with and without exclusion of these Elective
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Deferrals); and (2) at the election of the Employer, Qualified
Nonelective Contributions and Qualified Matching Contributions.
For purposes of computing Actual Deferral Percentages, an
Employee who would be a Participant but for the failure to make
Elective Deferrals shall be treated as a Participant on whose
behalf no Elective Deferrals are made.
11.102 AGGREGATE LIMIT
Means the sum of (1) 125% of the greater of the ADP of the
Participants who are not Highly Compensated Employees for the
Plan Year or the ACP of the Participants who are not Highly
Compensated Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within the Plan Year
of the CODA; and (2) the lesser of 200% or two plus the lesser of
such ADP or ACP. "Lesser" is substituted for "greater" in "(1)"
above, and "greater" is substituted for "lesser" after "two plus
the" in "(2)" if it would result in a larger Aggregate Limit.
11.103 AVERAGE CONTRIBUTION PERCENTAGE (ACP)
Means the average of the Contribution Percentages of the Eligible
Participants in a group.
11.104 CONTRIBUTING PARTICIPANT
Means a Participant who has enrolled as a Contributing
Participant pursuant to Section 11.201 and on whose behalf the
Employer is contributing Elective Deferrals to the Plan (or is
making Nondeductible Employee Contributions).
11.105 CONTRIBUTION PERCENTAGE
Means the ratio (expressed as a percentage) of the Participant's
Contribution Percentage Amounts to the Participant's Compensation
for the Plan Year (taking into account only the Compensation paid
to the Employee during the portion of the Plan Year he or she was
an eligible Participant, unless otherwise indicated in the
Adoption Agreement).
11.106 CONTRIBUTION PERCENTAGE AMOUNTS
Means the sum of the Nondeductible Employee Contributions,
Matching Contributions, and Qualified Matching Contributions made
under the Plan on behalf of the Participant for the Plan Year.
Such Contribution Percentage Amounts shall not include Matching
Contributions that are forfeited either to correct Excess
Aggregate Contributions or because the contributions to which
they relate are Excess Deferrals, Excess Contributions, Excess
Aggregate Contributions or excess annual additions which are
distributed pursuant to Section 11.508. If so elected in the
Adoption Agreement, the Employer may include Qualified
Nonelective Contributions in the Contribution Percentage Amount.
The Employer also may elect to use Elective Deferrals in the
Contribution Percentage Amounts so long as the ADP test is met
before the Elective Deferrals are used in the ACP test and
continues to be met following the exclusion of those Elective
Deferrals that are used to meet the ACP test.
11.107 ELECTIVE DEFERRALS
Means any Employer Contributions made to the Plan at the election
of the Participant, in lieu of cash compensation, and shall
include contributions made pursuant to a salary reduction
agreement or other deferral mechanism. With respect to any
taxable year, a Participant's Elective Deferral is the sum of all
Employer contributions made on behalf of such Participant
pursuant to an election to defer under any qualified CODA as
described in Section 401(k) of the Code, any simplified employee
pension cash or deferred arrangement as described in Section
402(h)(1)(B), any eligible deferred compensation plan under
Section 457, any plan as described under Section 501(c)(18), and
any Employer contributions made on the behalf of a Participant
for the purchase of an annuity contract under Section 403(b)
pursuant to a salary reduction agreement. Elective Deferrals
shall not include any deferrals properly distributed as excess
annual additions.
No Participant shall be permitted to have Elective Deferrals made
under this Plan, or any other qualified plan maintained by the
Employer, during any taxable year, in excess of the dollar
limitation contained in Section 402(g) of the Code in effect at
the beginning of such taxable year.
Elective Deferrals may not be taken into account for purposes of
satisfying the minimum allocation requirement applicable to
Top-Heavy Plans described in Section 3.01(E).
11.108 ELIGIBLE PARTICIPANT
Means any Employee who is eligible to make a Nondeductible
Employee Contribution or an Elective Deferral (if the Employer
takes such contributions into account in the calculation of the
Contribution Percentage), or to receive a Matching Contribution
(including Forfeitures thereof) or a Qualified Matching
Contribution.
If a Nondeductible Employee Contribution is required as a
condition of participation in the Plan, any Employee who would be
a Participant in the Plan if such Employee made such a
contribution shall be treated as an Eligible Participant on
behalf of whom no Nondeductible Employee Contributions are made.
11.109 EXCESS AGGREGATE CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution
Percentage actually made on behalf of Highly Compensated
Employees for such Plan Year, over
B. The maximum Contribution Percentage Amounts permitted by the
ACP test (determined by reducing contributions made on
behalf of Highly Compensated Employees in order of their
Contribution Percentages beginning with the highest of such
percentages).
Such determination shall be made after first determining
Excess Elective Deferrals pursuant to Section 11.111 and
then determining Excess Contributions pursuant to Section
11.110.
11.110 EXCESS CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate amount of Employer Contributions actually
taken into account in computing the ADP of Highly
Compensated Employees for such Plan Year, over
B. The maximum amount of such contributions permitted by the
ADP test (determined by reducing contributions made on
behalf of Highly Compensated Employees in order of the ADPs,
beginning with the highest of such percentages).
11.111 EXCESS ELECTIVE DEFERRALS
Means those Elective Deferrals that are includible in a
Participant's gross income under Section 402(g) of the Code to
the extent such Participant's Elective Deferrals for a taxable
year exceed the dollar limitation under such Code section. Excess
Elective Deferrals shall be treated as annual additions under the
Plan, unless such amounts are distributed no later than the first
April 15 following the close of the Participant's taxable year.
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11.112 MATCHING CONTRIBUTION
Means an Employer Contribution made to this or any other defined
contribution plan on behalf of a Participant on account of an
Elective Deferral or a Nondeductible Employee Contribution made
by such Participant under a plan maintained by the Employer.
Matching Contributions may not be taken into account for purposes
of satisfying the minimum allocation requirement applicable to
Top-Heavy Plans described in Section 3.01(E).
11.113 QUALIFIED NONELECTIVE CONTRIBUTIONS
Means contributions (other than Matching Contributions or
Qualified Matching Contributions) made by the Employer and
allocated to Participants' Individual Accounts that the
Participants may not elect to receive in cash until distributed
from the Plan; that are nonforfeitable when made; and that are
distributable only in accordance with the distribution provisions
that are applicable to Elective Deferrals and Qualified Matching
Contributions.
Qualified Nonelective Contribution may be taken into account for
purposes of satisfying the minimum allocation requirement
applicable to Top-Heavy Plans described in Section 3.01(E).
11.114 QUALIFIED MATCHING CONTRIBUTIONS
Means Matching Contributions which are subject to the
distribution and nonforfeitability requirements under Section
401(k) of the Code when made.
11.115 QUALIFYING CONTRIBUTING PARTICIPANT
Means a Contributing Participant who satisfies the requirements
described in Section 11.302 to be entitled to receive a Matching
Contribution (and Forfeitures, if applicable) for a Plan Year.
11.200 CONTRIBUTING PARTICIPANT
11.201 REQUIREMENTS TO ENROLL AS A CONTRIBUTING PARTICIPANT
A. Each Employee who satisfies the eligibility requirements
specified in the Adoption Agreement may enroll as a
Contributing Participant as of any subsequent Entry Date (or
earlier if required by Section 2.03) specified in the
Adoption Agreement for this purpose. A Participant who
wishes to enroll as a Contributing Participant must
complete, sign and file a salary reduction agreement (or
agreement to make Nondeductible Employee Contributions) with
the Plan Administrator.
B. Notwithstanding the times set forth in Section 11.201(A) as
of which a Participant may enroll as a Contributing
Participant, the Plan Administrator shall have the authority
to designate, in a nondiscriminatory manner, additional
enrollment times during the 12 month period beginning on the
Effective Date (or the date that Elective Deferrals may
commence, if later) in order that an orderly first
enrollment might be completed. In addition, if the Employer
has indicated in the Adoption Agreement that Elective
Deferrals may be based on bonuses, then Participants shall
be afforded a reasonable period of time prior to the
issuance of such bonuses to elect to defer them into the
Plan.
11.202 CHANGING ELECTIVE DEFERRAL AMOUNTS
A Contributing Participant may modify his or her salary reduction
agreement (or agreement to make Nondeductible Employee
Contributions) to increase or decrease (within the limits placed
on Elective Deferrals (or Nondeductible Employee Contributions)
in the Adoption Agreement) the amount of his or her Compensation
deferred into the Plan. Such modification may only be made as of
the dates specified in the Adoption Agreement for this purpose,
or as of any other more frequent date(s) if the Plan
Administrator permits in a uniform and nondiscriminatory manner.
A Contributing Participant who desires to make such a
modification shall complete, sign and file a new salary reduction
agreement (or agreement to make Nondeductible Employee
Contribution) with the Plan Administrator. The Plan Administrator
may prescribe such uniform and nondiscriminatory rules it deems
appropriate to carry out the terms of this Section.
11.203 CEASING ELECTIVE DEFERRALS
A Participant may cease Elective Deferrals (or Nondeductible
Employee Contributions) and thus withdraw as a Contributing
Participant as of the dates specified in the Adoption Agreement
for this purpose (or as of any other date if the Plan
Administrator so permits in a uniform and nondiscriminatory
manner) by revoking the authorization to the Employer to make
Elective Deferrals (or Nondeductible Employee Contributions) on
his or her behalf. A Participant who desires to withdraw as a
Contributing Participant shall give written notice of withdrawal
to the Plan Administrator at least thirty days (or such lesser
period of days as the Plan Administrator shall permit in a
uniform and nondiscriminatory manner) before the effective date
of withdrawal. A Participant shall cease to be a Contributing
Participant upon his or her Termination of Employment, or an
account of termination of the Plan.
11.204 RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE
DEFERRALS
A Participant who has withdrawn as a Contributing Participant
under Section 11.203 (or because the Participant has taken a
hardship withdrawal pursuant to Section 11.503) may not again
become a Contributing Participant until the dates set forth in
the Adoption Agreement for this purpose, unless the Plan
Administrator, in a uniform and nondiscriminatory manner, permits
withdrawing Participants to resume their status as Contributing
Participants sooner.
11.205 CERTAIN ONE-TIME IRREVOCABLE ELECTIONS
This Section 11.205 applies where the Employer has indicated in
the Adoption Agreement that an Employee may make a one-time
irrevocable election to have the Employer make contributions to
the Plan on such Employee's behalf. In such event, an Employee
may elect, upon the Employee's first becoming eligible to
participate in the Plan, to have contributions equal to a
specified amount or percentage of the Employee's Compensation
(including no amount of Compensation) made by the Employer on the
Employee's behalf to the Plan (and to any other plan of the
Employer) for the duration of the Employee's employment with the
Employer. Any contributions made pursuant to a one-time
irrevocable election described in this Section are not treated as
made pursuant to a cash or deferred election, are not Elective
Deferrals and are not includible in an Employee's gross income.
The Plan Administrator shall establish such uniform and
nondiscriminatory procedures as it deems necessary or advisable
to administer this provision.
11.300 CONTRIBUTIONS
11.301 CONTRIBUTIONS BY EMPLOYER
The Employer shall make contributions to the Plan in accordance
with the contribution formulas specified in the Adoption
Agreement.
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11.302 MATCHING CONTRIBUTIONS
The Employer may elect to make Matching Contributions under the
Plan on behalf of Qualifying Contributing Participants as
provided in the Adoption Agreement. To be a Qualifying
Contributing Participant for a Plan Year, the Participant must
make Elective Deferrals (or Nondeductible Employee Contributions,
if the Employer has agreed to match such contributions) for the
Plan Year, satisfy any age and Years of Eligibility Service
requirements that are specified for Matching Contributions in the
Adoption Agreement and also satisfy any additional conditions set
forth in the Adoption Agreement for this purpose. In a uniform
and nondiscriminatory manner, the Employer may make Matching
Contributions at the same time as it contributes Elective
Deferrals or at any other time as permitted by laws and
regulations.
11.303 QUALIFIED NONELECTIVE CONTRIBUTIONS
The Employer may elect to make Qualified Nonelective
Contributions under the Plan on behalf of Participants as
provided in the Adoption Agreement.
In addition, in lieu of distributing Excess Contributions as
provided in Section 11.505 of the Plan, or Excess Aggregate
Contributions as provided in Section 11.506 of the Plan, and to
the extent elected by the Employer in the Adoption Agreement, the
Employer may make Qualified Nonelective Contributions on behalf
of Participants who are not Highly Compensated Employees that are
sufficient to satisfy either the Actual Deferral Percentage test
or the Average Contribution Percentage test, or both, pursuant to
regulations under the Code.
11.304 QUALIFIED MATCHING CONTRIBUTIONS
The Employer may elect to make Qualified Matching Contributions
under the Plan on behalf of Participants as provided in the
Adoption Agreement.
11.305 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Notwithstanding Section 3.02, if the Employer so allows in the
Adoption Agreement, a Participant may contribute Nondeductible
Employee Contributions to the Plan.
If the Employer has indicated in the Adoption Agreement that
Nondeductible Employee Contributions will be mandatory, then the
Employer shall establish uniform and nondiscriminatory rules and
procedures for Nondeductible Employee Contributions as it deems
necessary and advisable including, but not limited to, rules
describing in amounts or percentages of Compensation Participants
may or must contribute to the Plan.
A separate account will be maintained by the Plan Administrator
for the Nondeductible Employee Contributions for each
Participant.
A Participant may, upon a written request submitted to the Plan
Administrator, withdraw the lesser of the portion of his or her
Individual Account attributable to his or her Nondeductible
Employee Contributions or the amount he or she contributed as
Nondeductible Employee Contributions.
Nondeductible Employee Contributions and earnings thereon will be
nonforfeitable at all times. No Forfeiture will occur solely as a
result of an Employee's withdrawal of Nondeductible Employee
Contributions.
11.400 NONDISCRIMINATION TESTING
11.401 ACTUAL DEFERRAL PERCENTAGE TEST (ADP)
A. LIMITS ON HIGHLY COMPENSATED EMPLOYEES - The Actual Deferral
Percentage (hereinafter "ADP") for Participants who are
Highly Compensated Employees for each Plan Year and the ADP
for Participants who are not Highly Compensated Employees
for the same Plan Year must satisfy one of the following
tests:
1. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP
for Participants who are not Highly Compensated
Employees for the same Plan Year multiplied by 1.25; or
2. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP
for Participants who are not Highly Compensated
Employees for the same Plan Year multiplied by 2.0
provided that the ADP for Participants who are Highly
Compensated Employees does not exceed the ADP for
Participants who are not Highly Compensated Employees
by more than 2 percentage points.
B. SPECIAL RULES
1. The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have
Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or
both, if treated as Elective Deferrals for purposes of
the ADP test) allocated to his or her Individual
Accounts under two or more arrangements described in
Section 401(k) of the Code, that are maintained by the
Employer, shall be determined as if such Elective
Deferrals (and, if applicable, such Qualified
Nonelective Contributions or Qualified Matching
Contributions, or both) were made under a single
arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred
arrangements that have different Plan Years, all cash
or deferred arrangements ending with or within the same
calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated under
regulations under Section 401(k) of the Code.
2. In the event that this Plan satisfies the requirements
of Sections 401(k), 401(a)(4), or 410(b) of the Code
only if aggregated with one or more other plans, or if
one or more other plans satisfy the requirements of
such sections of the Code only if aggregated with this
Plan, then this Section 11.401 shall be applied by
determining the ADP of Employees as if all such plans
were a single plan. For Plan Years beginning after
December 31, 1989, plans may be aggregated in order to
satisfy Section 401(k) of the Code only if they have
the same Plan Year.
3. For purposes of determining the ADP of a Participant
who is a 5% owner or one of the 10 most highly paid
Highly Compensated Employees, the Elective Deferrals
(and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if treated as Elective
Deferrals for purposes of the ADP test) and
Compensation of such Participant shall include the
Elective Deferrals (and, if applicable, Qualified
Nonelective Contributions and Qualified Matching
Contributions, or both) and Compensation for the Plan
Year of family members (as defined in Section 414(q)(6)
of the Code). Family members, with respect to such
Highly Compensated Employees, shall be disregarded as
separate Employees in determining the ADP both for
Participants who are not Highly Compensated Employees
and for Participants who are Highly Compensated
Employees.
4. For purposes of determining the ADP test, Elective
Deferrals, Qualified Nonelective Contributions and
Qualified Matching Contributions must be made before
the last day of the 12 month period immediately
following the Plan Year to which contributions relate.
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5. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount
of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.
6. The determination and treatment of the ADP amounts of
any Participant shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
7. If the Employer elects to take Qualified Matching
Contributions into account as Elective Deferrals for
purposes of the ADP test, then (subject to such other
requirements as may be prescribed by the Secretary of
the Treasury) unless otherwise indicated in the
Adoption Agreement, only the amount of such Qualified
Matching Contributions that are needed to meet the ADP
test shall be taken into account.
8. In the event that the Plan Administrator determines
that it is not likely that the ADP test will be
satisfied for a particular Plan Year unless certain
steps are taken prior to the end of such Plan Year, the
Plan Administrator may require Contributing
Participants who are Highly Compensated Employees to
reduce their Elective Deferrals for such Plan Year in
order to satisfy that requirement. Said reduction shall
also be required by the Plan Administrator in the event
that the Plan Administrator anticipates that the
Employer will not be able to deduct all Employer
Contributions from its income for Federal income tax
purposes.
11.402 LIMITS ON NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS AND MATCHING
CONTRIBUTIONS
A. LIMITS ON HIGHLY COMPENSATED EMPLOYEES - The Average
Contribution Percentage (hereinafter "ACP") for Participants
who are Highly Compensated Employees for each Plan Year and
the ACP for Participants who are not Highly Compensated
Employees for the same Plan Year must satisfy one of the
following tests:
1. The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP
for Participants who are not Highly Compensated
Employees for the same Plan Year multiplied by 1.25; or
2. The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP
for Participants who are not Highly Compensated
Employees for the same Plan Year multiplied by 2,
provided that the ACP for the Participants who are
Highly Compensated Employees does not exceed the ACP
for Participants who are not Highly Compensated
Employees by more than 2 percentage points.
B. SPECIAL RULES
1. Multiple Use - If one or more Highly Compensated
Employees participate in both a CODA and a plan subject
to the ACP test maintained by the Employer and the sum
of the ADP and ACP of those Highly Compensated
Employees subject to either or both tests exceeds the
Aggregate Limit, then, as elected in the Adoption
Agreement, the ACP or the ADP of those Highly
Compensated Employees who also participate in a CODA
will be reduced (beginning with such Highly Compensated
Employee whose ACP (or ADP, if elected) is the highest)
so that the limit is not exceeded. The amount by which
each Highly Compensated Employee's Contribution
Percentage Amounts (or ADP, if elected) is reduced
shall be treated as an Excess Aggregate Contribution
(or Excess Contribution, if elected). The ADP and ACP
of the Highly Compensated Employees are determined
after any corrections required to meet the ADP and ACP
tests. Multiple use does not occur if the ADP and ACP
of the Highly Compensated Employees does not exceed
1.25 multiplied by the ADP and ACP of the Participants
who are not Highly Compensated Employees.
2. For purposes of this Section 11.402, the Contribution
Percentage for any Participant who is a Highly
Compensated Employee and who is eligible to have
Contribution Percentage Amounts allocated to his or her
Individual Account under two or more plans described in
Section 401(a) of the Code, or arrangements described
in Section 401(k) of the Code that are maintained by
the Employer, shall be determined as if the total of
such Contribution Percentage Amounts was made under
each plan. If a Highly Compensated Employee
participates in two or more cash or deferred
arrangements that have different plan years, all cash
or deferred arrangements ending with or within the same
calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated under
regulations under Section 401(m) of the Code.
3. In the event that this Plan satisfies the requirements
of Sections 401(m), 401(a)(4) or 410(b) of the Code
only if aggregated with one or more other plans, or if
one or more other plans satisfy the requirements of
such Sections of the Code only if aggregated with this
Plan, then this Section shall be applied by determining
the Contribution Percentage of Employees as if all such
plans were a single plan. For Plan Years beginning
after December 31, 1989, plans may be aggregated in
order to satisfy Section 401(m) of the Code only if
they have the same Plan Year.
4. For purposes of determining the Contribution Percentage
of a Participant who is a 5% owner or one of the 10
most highly paid Highly Compensated Employees, the
Contribution Percentage Amounts and Compensation of
such Participant shall include the Contribution
Percentage Amounts and Compensation for the Plan Year
of family members, (as defined in Section 414(q)(6) of
the Code). Family members, with respect to Highly
Compensated Employees, shall be disregarded as separate
Employees in determining the Contribution Percentage
both for Participants who are not Highly Compensated
Employees and for Participants who are Highly
Compensated Employees.
5. For purposes of determining the Contribution Percentage
test, Nondeductible Employee Contributions are
considered to have been made in the Plan Year in which
contributed to the Fund. Matching Contributions and
Qualified Nonelective Contributions will be considered
made for a Plan Year if made no later than the end of
the 12 month period beginning on the day after the
close of the Plan Year.
6. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the amount
of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.
7. The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of
the Treasury.
8. If the Employer elects to take Qualified Nonelective
Contributions into account as Contribution Percentage
Amounts for purposes of the ACP test, then (subject to
such other requirements as may be prescribed by the
Secretary of the Treasury) unless otherwise indicated
in the Adoption Agreement, only the amount of such
Qualified Nonelective Contributions that are needed to
meet the ACP test shall be taken into account.
9. If the Employer elects to take Elective Deferrals into
account as Contribution Percentage Amounts for purposes
of the ACP test, then (subject to such other
requirements as may be prescribed by the Secretary of
the Treasury) unless otherwise indicated in the
Adoption Agreement, only the amount of such Elective
Deferrals that are needed to meet the ACP test shall be
taken into account.
39
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35
11.500 DISTRIBUTION PROVISIONS
11.501 GENERAL RULE
Distributions from the Plan are subject to the provisions of
Section 6 and the provisions of this Section 11. In the event of
a conflict between the provisions of Section 6 and Section 11,
the provisions of Section 11 shall control.
11.502 DISTRIBUTION REQUIREMENTS
Elective Deferrals, Qualified Nonelective Contributions, and
Qualified Matching Contributions, and income allocable to each
are not distributable to a Participant or his or her Beneficiary
or Beneficiaries, in accordance with such Participant's or
Beneficiary or Beneficiaries' election, earlier than upon
separation from service, death or disability.
Such amounts may also be distributed upon:
A. Termination of the Plan without the establishment of another
defined contribution plan, other than an employee stock
ownership plan (as defined in Section 4975(e) or Section 409
of the Code) or a simplified employee pension plan as
defined in Section 408(k).
B. The disposition by a corporation to an unrelated corporation
of substantially all of the assets (within the meaning of
Section 409(d)(2) of the Code used in a trade or business of
such corporation if such corporation continues to maintain
this Plan after the disposition, but only with respect to
Employees who continue employment with the corporation
acquiring such assets.
C. The disposition by a corporation to an unrelated entity of
such corporation's interest in a subsidiary (within the
meaning of Section 409(d)(3) of the Code) if such
corporation continues to maintain this Plan, but only with
respect to Employees who continue employment with such
subsidiary.
D. The attainment of age 59 1/2 in the case of a profit sharing
plan.
E. If the Employer has so elected in the Adoption Agreement,
the hardship of the Participant as described in Section
11.503.
All distributions that may be made pursuant to one or more
of the foregoing distributable events are subject to the
spousal and Participant consent requirements (if applicable)
contained in Section 401(a)(11) and 417 of the Code. In
addition, distributions after March 31, 1988, that are
triggered by any of the first three events enumerated above
must be made in a lump sum.
11.503 HARDSHIP DISTRIBUTION
A. GENERAL - If the Employer has so elected in the Adoption
Agreement, distribution of Elective Deferrals (and any
earnings credited to a Participant's account as of the end
of the last Plan Year, ending before July 1, 1989) may be
made to a Participant in the event of hardship. For the
purposes of this Section, hardship is defined as an
immediate and heavy financial need of the Employee where
such Employee lacks other available resources. Hardship
distributions are subject to the spousal consent
requirements contained in Sections 401(a)(11) and 417 of the
Code.
B. SPECIAL RULES
1. The following are the only financial needs considered
immediate and heavy: expenses incurred or necessary for
medical care, described in Section 213(d) of the Code,
of the Employee, the Employee's spouse or dependents;
the purchase (excluding mortgage payments) of a
principal residence for the Employee; payment of
tuition and related educational fees for the next 12
months of post-secondary education for the Employee,
the Employee's spouse, children or dependents; or the
need to prevent the eviction of the Employee from, or a
foreclosure on the mortgage of, the Employee's
principal residence.
2. A distribution will be considered as necessary to
satisfy an immediate and heavy financial need of the
Employee only if:
a. The Employee has obtained all distributions, other
than hardship distributions, and all nontaxable
loans under all plans maintained by the Employer;
b. All plans maintained by the Employer provide that
the Employee's Elective Deferrals (and
Nondeductible Employee Contributions) will be
suspended for 12 months after the receipt of the
hardship distribution;
c. The distribution is not in excess of the amount of
an immediate and heavy financial need (including
amounts necessary to pay any Federal, state or
local income taxes or penalties reasonably
anticipated to result from the distribution); and
d. All plans maintained by the Employer provide that
the Employee may not make Elective Deferrals for
the Employee's taxable year immediately following
the taxable year of the hardship distribution in
excess of the applicable limit under Section
402(g) of the Code for such taxable year less the
amount of such Employee's Elective Deferrals for
the taxable year of the hardship distribution.
11.504 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
A. GENERAL RULE - A Participant may assign to this Plan any
Excess Elective Deferrals made during a taxable year of the
Participant by notifying the Plan Administrator on or before
the date specified in the Adoption Agreement of the amount
of the Excess Elective Deferrals to be assigned to the Plan.
A Participant is deemed to notify the Plan Administrator of
any Excess Elective Deferrals that arise by taking into
account only those Elective Deferrals made to this Plan and
any other plans of the Employer.
Notwithstanding any other provision of the Plan, Excess
Elective Deferrals, plus any income and minus any loss
allocable thereto, shall be distributed no later than April
15 to any Participant to whose Individual Account Excess
Elective Deferrals were assigned for the preceding year and
who claims Excess Elective Deferrals for such taxable year.
B. DETERMINATION OF INCOME OR LOSS - Excess Elective Deferrals
shall be adjusted for any income or loss up to the date of
distribution. The income of loss allocable to Excess
Elective Deferrals is the sum of: (1) income or loss
allocable to the Participant's Elective Deferral account for
the taxable year multiplied by a fraction, the numerator of
which is such Participant's Elective Deferrals for the year
and the denominator is the Participant's Individual Account
balance attributable to Elective Deferrals without regard to
any income or loss occurring during such taxable year; and
(2) 10% of the amount determined under (1) multiplied by the
number of whole calendar months between the end of the
Participant's taxable year and the date of distribution,
counting the month of distribution if distribution occurs
after the 15th of such month. Notwithstanding the preceding
sentence, the Plan Administrator may compute the income or
loss allocable to
40
================================================================================
36
Excess Elective Deferrals in the manner described in Section
4 (i.e., the usual manner used by the Plan for allocating
income or loss to Participants' Individual Accounts),
provided such method is used consistently for all
Participants and for all corrective distributions under the
Plan for the Plan Year.
11.505 DISTRIBUTION OF EXCESS CONTRIBUTIONS
A. GENERAL RULE - Notwithstanding any other provision of this
Plan, Excess Contributions, plus any income and minus any
loss allocable thereto, shall be distributed no later than
the last day of each Plan Year to Participants to whose
Individual Accounts such Excess Contributions were allocated
for the preceding Plan Year. If such excess amounts are
distributed more than 2 1/2 months after the last day of the
Plan Year in which such excess amounts arose, a 10% excise
tax will be imposed on the Employer maintaining the Plan
with respect to such amounts. Such distributions shall be
made to Highly Compensated Employees on the basis of the
respective portions of the Excess Contributions attributable
to each of such Employees. Excess Contributions of
Participants who are subject to the family member
aggregation rules shall be allocated among the family
members in proportion to the Elective Deferrals (and amounts
treated as Elective Deferrals) of each family member that is
combined to determine the combined ADP.
Excess Contributions (including the amounts recharacterized)
shall be treated as annual additions under the Plan.
B. DETERMINATION OF INCOME OR LOSS - Excess Contributions shall
be adjusted for any income or loss up to the date of
distribution. The income or loss allocable to Excess
Contributions is the sum of: (1) income or loss allocable to
Participant's Elective Deferral account (and, if applicable,
the Qualified Nonelective Contribution account or the
Qualified Matching Contributions account or both) for the
Plan Year multiplied by a fraction, the numerator of which
is such Participant's Excess Contributions for the year and
the denominator is the Participant's Individual Account
balance attributable to Elective Deferrals (and Qualified
Nonelective Contributions or Qualified Matching
Contributions, or both, if any of such contributions are
included in the ADP test) without regard to any income or
loss occurring during such Plan Year; and (2) 10% of the
amount determined under (1) multiplied by the number of
whole calendar months between the end of the Plan Year and
the date of distribution, counting the month of distribution
if distribution occurs after the 15th of such month.
Notwithstanding the preceding sentence, the Plan
Administrator may compute the income or loss allocable to
Excess Contributions in the manner described in Section 4
(i.e., the usual manner used by the Plan for allocating
income or loss to Participants' Individual Accounts),
provided such method is used consistently for all
Participants and for all corrective distributions under the
Plan for the Plan Year.
C. ACCOUNTING FOR EXCESS CONTRIBUTIONS - Excess Contributions
shall be distributed from the Participant's Elective
Deferral account and Qualified Matching Contribution account
(if applicable) in proportion to the Participant's Elective
Deferrals and Qualified Matching Contributions (to the
extent used in the ADP test) for the Plan Year. Excess
Contributions shall be distributed from the Participant's
Qualified Nonelective Contribution account only to the
extent that such Excess Contributions exceed the balance in
the Participant's Elective Deferral account and Qualified
Matching Contribution account.
11.506 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
A. GENERAL RULE - Notwithstanding any other provision of this
Plan, Excess Aggregate Contributions, plus any income and
minus any loss allocable thereto, shall be forfeited, if
forfeitable, or if not forfeitable, distributed no later
than the last day of each Plan Year to Participants to whose
accounts such Excess Aggregate Contributions were allocated
for the preceding Plan Year. Excess Aggregate Contributions
of Participants who are subject to the family member
aggregation rules shall be allocated among the family
members in proportion to the Employee and Matching
Contributions (or amounts treated as Matching Contributions)
of each family member that is combined to determine the
combined ACP. If such Excess Aggregate Contributions are
distributed more than 2 1/2 months after the last day of the
Plan Year in which such excess amounts arose, a 10% excise
tax will be imposed on the Employer maintaining the Plan
with respect to those amounts.
Excess Aggregate Contributions shall be treated as annual
additions under the Plan.
B. DETERMINATION OF INCOME OR LOSS - Excess Aggregate
Contributions shall be adjusted for any income or loss up to
the date of distribution. The income or loss allocable to
Excess Aggregate Contributions is the sum of: (1) income or
loss allocable to the Participant's Nondeductible Employee
Contribution account, Matching Contribution account (if any,
and if all amounts therein are not used in the ADP test)
and, if applicable, Qualified Nonelective Contribution
account and Elective Deferral account for the Plan Year
multiplied by a fraction, the numerator of which is such
Participant's Excess Aggregate Contributions for the year
and the denominator is the Participant's Individual Account
balance(s) attributable to Contribution Percentage Amounts
without regard to any income or loss occurring during such
Plan Year; and (2) 10% of the amount determined under (1)
multiplied by the number of whole calendar months between
the end of the Plan Year and the date of distribution,
counting the month of distribution if distribution occurs
after the 15th of such month. Notwithstanding the preceding
sentence, the Plan Administrator may compute the income or
loss allocable to Excess Aggregate Contributions in the
manner described in Section 4 (i.e., the usual manner used
by the Plan for allocating income or loss to Participants'
Individual Accounts), provided such method is used
consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year.
C. FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS - Forfeitures
of Excess Aggregate Contributions may either be reallocated
to the accounts of Contributing Participants who are not
Highly Compensated Employees or applied to reduce Employer
Contributions, as elected by the Employer in the Adoption
Agreement.
D. ACCOUNTING FOR EXCESS AGGREGATE CONTRIBUTIONS - Excess
Aggregate Contributions shall be forfeited, if forfeitable
or distributed on a pro rata basis from the Participant's
Nondeductible Employee Contribution account, Matching
Contribution account, and Qualified Matching Contribution
account (and, if applicable, the Participant's Qualified
Nonelective Contribution account or Elective Deferral
account, or both).
11.507 RECHARACTERIZATION
A Participant may treat his or her Excess Contributions as an
amount distributed to the Participant and then contributed by the
Participant to the Plan. Recharacterized amounts will remain
nonforfeitable and subject to the same distribution requirements
as Elective Deferrals. Amounts may not be recharacterized by a
Highly Compensated Employee to the extent that such amount in
combination with other Nondeductible Employee Contributions made
by that Employee would exceed any stated limit under the Plan on
Nondeductible Employee Contributions.
Recharacterization must occur no later than two and one-half
months after the last day of the Plan Year in which such Excess
Contributions arose and is deemed to occur no earlier than the
date the last Highly Compensated Employee is informed in writing
of the amount recharacterized and the consequences thereof.
Recharacterized amounts will be taxable to the Participant for
the Participant's tax year in which the Participant would have
received them in cash.
41
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37
11.508 DISTRIBUTION OF ELECTIVE DEFERRALS IF EXCESS ANNUAL ADDITIONS
Notwithstanding any other provision of the Plan, a Participant's
Elective Deferrals shall be distributed to him or her to the
extent that the distribution will reduce an excess annual
addition (as that term is described in Section 3.05 of the Plan).
11.600 VESTING
11.601 100% VESTING ON CERTAIN CONTRIBUTIONS
The Participant's accrued benefit derived from Elective
Deferrals, Qualified Nonelective Contributions, Nondeductible
Employee Contributions , and Qualified Matching Contributions is
nonforfeitable. Separate accounts for Elective Deferrals,
Qualified Nonelective Contributions, Nondeductible Employee
Contributions, Matching Contributions, and Qualified Matching
Contributions will be maintained for each Participant. Each
account will be credited with the applicable contributions and
earnings thereon.
11.602 FORFEITURES AND VESTING OF MATCHING CONTRIBUTIONS
Matching Contributions shall be Vested in accordance with the
vesting schedule for Matching Contributions in the Adoption
Agreement. In any event, Matching Contributions shall be fully
Vested at Normal Retirement Age, upon the complete or partial
termination of the profit sharing plan, or upon the complete
discontinuance of Employer Contributions. Notwithstanding any
other provisions of the Plan, Matching Contributions or Qualified
Matching Contributions must be forfeited if the contributions to
which they relate are Excess Elective Deferrals, Excess
Contributions, Excess Aggregate Contributions or excess annual
additions which are distributed pursuant to Section 11.508. Such
Forfeitures shall be allocated in accordance with Section
3.01(C).
When a Participant incurs a Termination of Employment, whether a
Forfeiture arises with respect to Matching Contributions shall be
determined in accordance with Section 6.01(D).
42
COMPREHENSIVE NONSTANDARDIZED SAFE HARBOR 401(k) PROFIT SHARING PLAN
ADOPTION AGREEMENT
--------------------------------------------------------------------------------
SECTION 1. EMPLOYER INFORMATION
--------------------------------------------------------------------------------
Name of Employer: MERITAGE HOSPITALITY GROUP INC.
-------------------------------------------------------------
Address 00 XXXXX XXXXXX, XX, XXXXX 000
---------------------------------------------------------------------
City: GRAND RAPIDS State: MI Zip: 49503
------------------------- -------------- --------------
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):_________________________________
[X] 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: MERITAGE HOSPITALITY GROUP 401(k) 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)____________________________________________________
-------------------------------------------------------------------------------
SECTION 2. EFFECTIVE DATES
Complete parts A and B
--------------------------------------------------------------------------------
PART A. GENERAL EFFECTIVE DATES (Check and Complete Option 1 or 2):
OPTION 1: [ ] This is the initial adoption of a
profit sharing plan by the Employer.
The Effective Date of this Plan is
_____________, 19____.
NOTE: The effective date is usually the first day of the Plan Year
in which this Adoption Agreement is signed.
OPTION 2: [X] This is an amendment and restatement of an
existing profit sharing plan (a Prior Plan).
The Prior Plan was initially effective on
01-01, 1994. The Effective Date of this
----- ----
amendment and restatement is 03-01, 1997.
----- ----
NOTE: The effective date is usually the first day of the Plan Year
in which this Adoption Agreement is signed.
43
PART B. SPECIFIC EFFECTIVE DATES:
The provisions of the Plan will generally be effective as of the
Effective Date specified in Section 2, Part A. However, the following
provisions will be effective on the dates indicated below. (Specify
effective date only if later than the general Effective Date
described in Section 2, Part A):
Provision Effective Date
--------- --------------
1. Commencement of Elective Deferrals* ______________
2. Matching Contributions (Section 7) ______________
3. Qualified Nonelective Contributions (Section 8) ______________
4. Qualified Matching Contributions (Section 9) ______________
5. In-Service Withdrawals (Section 15, Part A, Item 6) ______________
6. Hardship Withdrawals of Elective Deferrals (Section ______________
15, Part A, Item 5)
7. Hardship Withdrawals (Section 15, Part A, Item 8) ______________
8. Loans (Section 17, Item A)
9. Participant Direction of Investments (Section 18) ______________
*NOTE: Elective Deferrals may commence 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 D
--------------------------------------------------------------------------------
PART A. EMPLOYER'S FISCAL YEAR:
The Employer's Fiscal year ends (Specify month and day): 11-30
-----
PART B. PLAN YEAR MEANS:
OPTION 1: [X] The 12-consecutive month period
which coincides with the Employer's
fiscal year.
OPTION 2: [ ] The calendar year.
OPTION 3: [ ] Other (Specify):__________________________
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
If the initial Plan Year is less than 12 months (a short Plan
Year) specify such Plan Year's beginning and ending dates:
PART C. LIMITATION YEAR MEANS:
OPTION 1: [X] The Plan Year.
OPTION 2: [ ] The calendar year.
OPTION 3: [ ] Other (Specify):__________________________
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
2
44
PART D. MEASURING PERIOD FOR VESTING:
Years of Vesting Service shall be measured over the following 12 -
consecutive month period:
OPTION 1: [X] The Plan Year.
OPTION 2: [ ] The 12 - consecutive month period
commencing with the Employee's
Employment Commencement Date and
each successive 12-month period
commencing on the anniversaries of
the Employee's Employment
Commencement Date.
OPTION 3: [ ] Other (Specify):_________________________
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
--------------------------------------------------------------------------------
SECTION 4. ELIGIBILITY REQUIREMENTS
Complete Parts A through G
--------------------------------------------------------------------------------
PART A. YEARS OF ELIGIBILITY SERVICE 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) after completing 1 (enter 0, 1 or any fraction less
than 1) Years of Eligibility Service.
2. MATCHING CONTRIBUTIONS.
If Matching Contributions (or Qualified Matching Contributions,
if applicable) will be made to the Plan, a Contributing
Participant will be eligible to receive Matching Contributions
(or Qualified Matching Contributions, if applicable) after
completing 1 (enter 0,1,2 or any fraction less than 2) Years of
Eligibility Service.
3. 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 11 of the Adoption
Agreement after completing 1 (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 or Item 3,
the immediate 100% vesting schedule of Section 13 will
automatically apply for contributions described in such
item. If any item is left blank, the Years of
Eligibility Service required for such item will be
deemed to be 0. If a fraction is selected, an Employee
will not be required to complete any specified number of
Hours of Service to receive credit for a fractional
year. If a single Entry Date is selected in Section 4,
Part G for an item, the Years of Eligibility Service
required for such item cannot exceed 1 1/2 (1/2 for
Elective Deferrals).
3
45
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)
after attaining age 21.0 (no more than 21).
2. MATCHING CONTRIBUTIONS.
If Matching Contributions (or Qualified Matching Contributions
if applicable) will be made to the Plan, a Contributing
Participant will be eligible to receive Matching Contributions
(or Qualified Matching Contributions, if applicable) after
attaining age (no more than 21).
3. 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 11 of the Adoption
Agreement after attaining age 21.0 (no more than 21).
NOTE: If any of the above items in this Section 4, Part B
is left blank, it will be deemed there is no age
requirement for such item. If a single Entry Date is
selected in Section 4, Part G for an item, no age
requirement can exceed 20 1/2 for such item.
PART C. EMPLOYEES EMPLOYED AS OF EFFECTIVE DATE:
1. ELECTIVE DEFERRALS.
Will all Employees employed as of the date that Elective
Deferrals may commence as specified in Section 2, Part B who
have not otherwise met the Years of Eligibility Service and age
requirements specified above for Elective Deferrals be
considered to have met those requirements as of the Elective
Deferral commencement date? [ ] Yes [X] No
2. MATCHING CONTRIBUTIONS.
If Matching Contributions (or Qualified Matching Contributions,
if applicable) will be made to the Plan, will all Employees
employed as of the date that Elective Deferrals may commence as
specified in Section 2, Part B who have not otherwise met the
Years of Eligibility Service and age requirements specified
above for Matching Contributions be considered to have met those
requirements as of the Elective Deferral commencement date?
[ ] Yes [X] No
3. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
Will all Employees employed as of the Effective Date of this
Plan who have not otherwise met the Years of Eligibility Service
and age requirements specified above for Employer Profit Sharing
Contributions 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 for that
item.
4
46
PART D. EXCLUSION OF CERTAIN CLASSES OF EMPLOYEES:
1. ELECTIVE DEFERRALS.
All Employees will be eligible to become Contributing
Participants (and thus eligible to make Elective Deferrals
except:
a. [ ] Those Employees included in a unit of Employees
covered by a collective bargaining agreement between
the Employer and Employee representatives, if
retirement benefits were the subject of good faith
bargaining and if two percent or less the Employees
who are covered pursuant to that agreement are
professionals as defined in Section 1.410(b)-9 of
the regulations. For this purpose, the term
"employee representatives" does not include any
organization more than half of whose members are
Employees who are owners, officers, or executives of
the Employer.
b. [X] Those Employees who are non-resident aliens
(within the meaning of Section 7701(b)(1)(B) of the
Code) and who received no earned income (within the
meaning of Section 911(d)(2) of the Code) from the
Employer which constitutes income from sources
within the United States (within the meaning of
Section 861 (a)(3) of the Code).
c. [ ] Those Employees of a Related Employer that has
not executed a Related Employer Participation
Agreement.
d. Other (Define):____________________________________
2. MATCHING CONTRIBUTIONS.
All Contributing Participants will be eligible to receive
Matching Contributions (or Qualified Matching Contributions) if
applicable, except:
a. [ ] Those Employees included in a unit of Employees
covered by a collective bargaining agreement between
the Employer and Employee representatives, if
retirement benefits were the subject of good faith
bargaining and if two percentor less of the
Employees who are covered pursuant to that agreement
are professionals as defined in Section 1.410(b)-9
of the regulations. For the 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)(1)(B) of the
Code) and who received no earned income (within the
meaning of Section 911(d)(2) of the Code) from the
Employer which constitutes income from sources
within the United States (within the meaning of
Section 861(a)(3) of the Code).
c. [ ] Those Employees of a Related Employer that has
not executed a Related Employer Participation
Agreement.
d. Other (Define):____________________________________
5
47
3. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
All Employees 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 11 of the
Adoption Agreement except:
a. [ ] Those Employees include in a unit of Employees
covered by a collective bargaining agreement between
the Employer and Employee representatives, if
retirement benefits were the subject of good faith
bargaining and if two percent or less of the
Employees who are covered pursuant to that agreement
are professionals as defined in Section 1.410(b)-9
of the regulations. For this purpose, the term
"employee representatives" does not include any
organization more than half of whose members are
Employees who are owners, officers, or executives of
the Employer.
b. [X] Those Employees who are non-resident aliens
(within the meaning of Section 7701(b)(1)(B) of the
Code) and who received no earned income (within the
meaning of Section 911(d)(2) of the Code) from the
Employer which constitutes income from sources
within the United States (within the meaning of
Section 861(a)(3) of the Code).
c. [ ] Those Employees of a Related Employer that has
not executed a Related Employer Participation
Agreement.
d. Other (Define):____________________________________
PART E. ELECTION NOT TO PARTICIPATE:
May an Employee or a Participant elect not to participate in this
Plan pursuant to Section 2.08 of the Plan?
OPTION 1: [ ] Yes.
OPTION 2: [X] No.
NOTE: If no option is selected, Option 2 will be deemed to be
selected.
PART F. HOURS REQUIRED FOR ELIGIBILITY PURPOSES:
1. 1000 Hours of Service (no more than 1,000) shall be required to
constitute a Year of Eligibility Service.
2. 500 Hours of Service (no more than 500 but less than the
number specified in Section 4, Part F, 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):____________________________________________________
6
48
PART G. ENTRY DATES:
1. ELECTIVE DEFERRALS.
The Entry Dates for purposes of making Elective Deferrals shall be
(Choose one):
OPTION 1: [X] The first day of the Plan Year
and the first day of the seventh
month of the Plan Year.
OPTION 2: [ ] The first day of the Plan Year
and the first day of the fourth,
seventh and tenth months of the Plan
Year.
OPTION 3: [ ] The first day of the Plan Year.
OPTION 4: [ ] Other (Specify):________________________
2. MATCHING CONTRIBUTIONS.
If Matching Contributions (or Qualified Matching Contributions)
will be made to the Plan, the Entry Dates for purposes of
Matching Contributions (or Qualified Matching Contributions, if
applicable) shall be (Choose one):
OPTION 1: [X] The first day of the Plan Year
and the first day of the seventh
month of the Plan Year.
OPTION 2: [ ] The first day of the Plan Year
and the first day of the fourth,
seventh and tenth months of the Plan
Year.
OPTION 3: [ ] The first day of the Plan Year.
OPTION 4: [ ] Other (Specify):____________________
3. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
The Entry Dates for purposes of Employer Profit Sharing
Contributions shall be (Choose one):
OPTION 1: [X] The first day of the Plan Year
and the first day of the seventh
month of the Plan Year.
OPTION 2: [ ] The first day of the Plan Year
and the first day of the fourth,
seventh and tenth months of the Plan
Year.
OPTION 3: [ ] The first day of the Plan Year.
OPTION 4: [ ] Other (Specify):___________________
NOTE: If no option is selected for an item, Option 1 will
be deemed to be selected for that item. Option 3 or
Option 4 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.
7
49
--------------------------------------------------------------------------------
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 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.
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: [X] 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.
8
50
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 2% 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.
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. CEASING ELECTIVE DEFERRALS:
A Contributing Participant may prospectively revoke a salary
reduction agreement to cease Elective Deferrals (Choose one):
OPTION 1: [ ] As of the first day of any payroll
period.
OPTION 2: [ ] As of the first day of any month.
OPTION 3: [ ] As of the first day of any quarter.
OPTION 4: [X] As of any Entry Date.
OPTION 5: [ ] As of such times established by
the Plan Administrator in a uniform
and nondiscriminatory manner.
OPTION 6: [ ] Other (Specify. Must be at least
once per year.)_____________________
NOTE: If no option is selected, Option 3 will be deemed to be
selected.
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51
PART E. RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE
DEFERRALS:
A Participant who ceases Elective Deferrals by revoking a salary
agreement may return as a Contributing Participant (Choose one):
OPTION 1: [ ] No sooner than as of the first day
of the Plan Year.
OPTION 2: [X] As of any subsequent Entry Date.
OPTION 3: [ ] As of the first day of any
subsequent quarter.
OPTION 4: [ ] As of such times established by
the Plan Administrator in a uniform
and nondiscriminatory manner.
OPTION 5: [ ] Other (Specify. Must be at least
once per year.)_____________________
NOTE: If no option is selected. Option 1 will be deemed to be
selected.
PART F. 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 (Choose one):
OPTION 1: [ ] As of the first day of any payroll
period.
OPTION 2: [ ] As of the first day of any month.
OPTION 3: [ ] As of the first day of any quarter.
OPTION 4: [X] As of any Entry Date.
OPTION 5: [ ] As of such times established by
the Plan Administrator in a uniform
and nondiscriminatory manner.
OPTION 6: [ ] Other (Specify)_________________________
NOTE: If no option is selected, Option 3 will be deemed to be
selected.
PART G: CLAIMING EXCESS ELECTIVE DEFERRALS:
Participants who claim Excess Elective Deferrals for the preceding
calendar year must submit their claims in writing to the Plan
Administrator by (Choose one):
OPTION 1: [X] March 1.
OPTION 2: [ ] Other (Specify a date not later than
April 15)________________________________
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
10
52
PART H: ONE-TIME IRREVOCABLE ELECTIONS:
May an Employee make a one-time irrevocable election, as described
in Section 11.205 of the Plan, upon first becoming eligible to
participate in the Plan to have the Employer make contributions to
the Plan on such Employee's behalf? (Choose one)
OPTION 1: [ ] Yes.
OPTION 2: [X] No.
NOTE: If no option is selected, Option 2 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: [X] Yes, but only with respect to a
Contributing Participant's Elective
Deferrals.
OPTION 2: [ ] Yes, but only with respect to a
Participant's Nondeductible Employee
Contributions.
OPTION 3: [ ] Yes, with respect to both Elective
Deferrals and Nondeductible Employee
Contributions.
OPTION 4: [ ] No.
NOTE: If no option is selected, Option 4 will be deemed to be
selected. Complete the remainder of Section 7 only if
Option 1, 2 or 3 is selected.
PART B. MATCHING CONTRIBUTION FORMULA:
If the Employer will make Matching Contributions, then the amount of
such Matching Contributions made on behalf of a Qualifying
Contributing Participant each Plan Year shall be (Choose one):
OPTION 1: [ ] An amount equal to ___% of such
Contributing Participant's Elective
Deferral (and/or Nondeductible Employee
Contribution, if applicable).
OPTION 2: [ ] An amount equal to the sum of ___%
of the portion of such Contributing
Participant's Elective Deferral (and/or
Nondeductible Employee Contribution, if
applicable) which does not exceed ____% of
the Contributing Participant's
Compensation plus ____% of the portion of
such Contributing Participant's Elective
Deferral (and/or Nondeductible Employee
Contribution, if applicable) which exceeds
____% of the Contributing Participant's
Compensation.
11
53
OPTION 3: [X] Such amount, if any, equal to that
percentage of each Contributing
Participant's Elective Deferral (and/or
Nondeductible Employee Contribution, if
applicable) which the Employer, in its
sole discretion, determines from year to
year.
OPTION 4: [ ] Other Formula. (Specify):
NOTE: If Option 4 is selected, the formula specified can only
allow Matching Contributions to be made with respect to a
Contributing Participant's Elective Deferrals (and/or
Nondeductible Employee Contribution, if applicable).
PART C. LIMIT ON MATCHING CONTRIBUTIONS:
Notwithstanding the Matching Contribution formula specified above,
no Matching Contribution will be made with respect to a Contributing
Participant's Elective Deferrals (and/or Nondeductible Employee
Contributions, if applicable) in excess of ________ or ________% of
such Contributing Participant's Compensation.
PART D. QUALIFYING CONTRIBUTING PARTICIPANTS:
A Contributing Participant who satisfies the eligibility
requirements described in Section 4 will be a Qualifying
Contributing Participant and thus entitled to share in Matching
Contributions for any Plan Year only if the Participant is a
Contributing Participant and satisfies the following additional
conditions (Check one or more Options):
OPTION 1: [ ] No Additional Conditions.
OPTION 2: [X] Hours of Service Requirement. The
Contributing Participant completes at
least 501 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.
[X] This condition will not be waived.
OPTION 3: [ ] Last Day Requirement: The
Participant is an Employee of the Employer
on the last day of 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.
12
54
[ ] 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: [X] Yes.
OPTION 2: [ ] No.
If the Employer elects to make Qualified Nonelective Contributions,
then the amount, if any, of such contribution to the Plan for each
Plan Year shall be an amount determined by the Employer.
NOTE: If no option is selected, Option 1 will be deemed to be
selected. Complete the remainder of Section 8 only if
Option 1 is selected.
PART B. PARTICIPANTS ENTITLED TO QUALIFIED NONELECTIVE CONTRIBUTIONS:
Allocation of Qualified Nonelective Contributions shall be made to
the Individual Accounts of (Choose one):
OPTION 1: [X] 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: [X] In the ratio which each
Participant's Compensation for the Plan
Year bears to the total Compensation of
all Participants for such Plan Year.
OPTION 2: [ ] In the ratio which each
Participant's Compensation not in excess
of ________ for the Plan Year bears to the
total Compensation of all Participants not
in excess of ___________ for such Plan
Year.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
--------------------------------------------------------------------------------
SECTION 9. QUALIFIED MATCHING CONTRIBUTIONS
--------------------------------------------------------------------------------
PART A. AUTHORIZATION OF QUALIFIED MATCHING CONTRIBUTIONS:
Will the Employer make Qualified Matching Contributions to the Plan
on behalf of Qualifying Contributing Participants? (Choose one):
13
55
OPTION 1. [X] Yes, but only with respect to a
Contributing Participant's Elective
Deferrals.
OPTION 2. [ ] Yes, but only with respect to a
Participant's Nondeductible Employee
Contributions.
OPTION 3. [ ] Yes, with respect to both Elective
Deferrals and Nondeductible Employee
Contributions.
OPTION 4. [ ] No.
NOTE: If no option is selected, Option 3 will be deemed to be
selected. Complete the remainder of Section 9 only if
Option 1,2 or 3 is selected.
PART B. QUALIFIED MATCHING CONTRIBUTION FORMULA:
If the Employer will make Qualified Matching Contributions, then the
amount of such Qualified Matching Contributions made on behalf of a
Qualifying Contributing Participant each Plan Year shall be (Choose
one):
OPTION 1. [ ] An amount equal to _____% of such
Contributing Participant's Elective
Deferral (and/or Nondeductible Employee
Contribution, if applicable).
OPTION 2. [ ] An amount equal to the sum of
_____% of the portion of such Contributing
Participant's Elective Deferral (and/or
Nondeductible Employee Contribution, if
applicable) which does not exceed _____%
of the Contributing Participant's
Compensation plus _____% of the portion of
such Contributing Participant's Elective
Deferral (and/or Nondeductible Employee
Contribution, if applicable) which exceeds
_____% of the Contributing Participant's
Compensation.
OPTION 3. [X] 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. [X] 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.
14
56
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. ADP AND ACP TESTING OPTIONS
--------------------------------------------------------------------------------
PART A. ACP TEST AND ELECTIVE DEFERRALS:
Will Elective Deferrals under this Plan (and any other plan of the
Employer, as provided by regulations) be taken into account, and
included as Contribution Percentage Amounts for purposes of
performing the Average Contribution percentage (ACP) test? (Choose
one):
OPTION 1. [ ] No.
OPTION 2. [X] Yes, in the following amounts
(Choose one):
SUBOPTION (a): [X] Only such Elective
Deferrals that are needed to
meet the Average Contribution
Percentage test.
SUBOPTION (b): [ ] All Elective Deferrals.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART B. ADP TEST AND QUALIFIED NONELECTIVE CONTRIBUTIONS:
Will Qualified Nonelective Contributions under this Plan (and any
other plan of the Employer, as provided by regulations) be taken
into account, and included as Contribution Percentage Amounts for
purposes of performing the Average Contribution Percentage (ACP)
test? (Choose one):
OPTION 1. [ ] No.
OPTION 2. [X] Yes, in the following amounts
(Choose one):
SUBOPTION (a): [X] Only such Qualified
Nonelective Contributions that
are needed to meet the Average
Contribution Percentage test.
SUBOPTION (b): [ ] All Qualified Nonelective
Contributions.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART C. ACP TEST AND QUALIFIED MATCHING CONTRIBUTIONS:
Will Qualified Matching Contributions under this Plan (and any other
plan of the Employer, as provided by regulations) be taken into
account as Elective Deferrals for purposes of calculating Actual
Deferral Percentages when performing the Actual Deferral Percentage
(ADP) test? (Choose one):
OPTION 1. [ ] No.
15
57
OPTION 2. [X] Yes, in the following amounts
(Choose one):
SUBOPTION (a): [X] Only such Qualified
Matching Contributions that are
needed to meet the ADP test.
SUBOPTION (b): [ ] All such Qualified
Nonelective Contributions.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART D. CORRECTION OF AGGREGATE LIMIT:
If the Aggregate Limit described in Section 11.102 of the Plan is
exceeded, the following adjustments will be made in accordance with
Section 11.402(B)(1) of the Plan (Choose one):
OPTION 1. [X] The ACP of Highly Compensated
Employees will be reduced.
OPTION 2. [ ] The ADP of Highly Compensated
Employees will be reduced.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
--------------------------------------------------------------------------------
SECTION 11. EMPLOYER PROFIT SHARING CONTRIBUTIONS
Complete Parts A, B and C
--------------------------------------------------------------------------------
PART A. CONTRIBUTION FORMULA (Choose one):
OPTION 1. [X] Discretionary Formula. For each
Plan Year the Employer will contribute an
amount to be determined from year to year.
OPTION 2. [ ] Fixed Formula. ______% of the
Compensation of all Qualified Participants
under the Plan for the Plan Year.
OPTION 3. [ ] Fixed Percent of Profits Formula.
_____% of the Employer's profits that are
in excess of _____________.
OPTION 4. [ ] Frozen Plan. This Plan is frozen
effective _____________ and the Employer
will not make additional contributions to
the Plan after such date.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
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 total Compensation
of all Qualifying Participants for the
Plan Year.
OPTION 2. [ ] Flat Dollar Formula. Employer
Profit Sharing Contributions allocated to
the Individual Accounts of Qualifying
Participants for each Plan Year shall be
the same dollar amount for each Qualifying
Participant.
16
58
OPTION 3. [X] Integrated Formula. Employer Profit
Sharing Contribution 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 11,
Part B, Option 1. The percent so allocated shall
not exceed 3% of each Qualifying Participant's
Compensation.
Step 2. Any Employer Profit Sharing Contributions
remaining after the allocation in Step 1 shall be
allocated to each Qualifying Participant's
Individual Account in the ratio that each
Qualifying Participant's Compensation for the Plan
Year in excess of the integration level bears to
all Qualifying Participant's 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 11, Part B, Option
1.
The integration level shall be (Choose one):
SUBOPTION (a): [X] The Taxable Wage Base.
SUBOPTION (b): [ ] ______ (a dollar amount less
than the Taxable Wage Base).
SUBOPTION (c): [ ] ______% (not more than 100%)
of the Taxable Wage Base.
NOTE: If no option is selected, Suboption (a)
will be deemed to be selected.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART C. QUALIFYING PARTICIPANTS:
A Participant will be a Qualifying Participant and thus entitled to
share in the Employer Profit Sharing Contribution for any Plan Year
only if the Participant is a Participant on at least one day of such
Plan Year and satisfies the following additional conditions (Check
one or more Options):
OPTION 1. [ ] No Additional Conditions.
OPTION 2. [ ] Hours of Service Requirement. The
Participant completes at least _______
Hours of Service during the Plan Year.
However, this condition will be waived for
the following reasons (Check at least
one):
17
59
[ ] The Participant's Death.
[ ] The Participant's Termination of
Employment after having incurred a
Disability.
[ ] The Participant's Termination of
Employment after having reached Normal
Retirement Age.
[ ] This condition will not be waived.
OPTION 3. [X] Last Day Requirement. The Participant is
an Employee of the Employer on the last
day of the Plan Year. However, this
condition will be waived for the following
reasons (Check at least one):
[X] The Participant's Death.
[X] The Participant's Termination of
Employment after having incurred a
Disability.
[X] 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 12. COMPENSATION
Complete Parts A through E
--------------------------------------------------------------------------------
PART A. BASIC DEFINITION:
1. ELECTIVE DEFERRALS.
For purposes of Elective Deferrals, 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.
2. MATCHING CONTRIBUTIONS.
For purposes of Matching Contributions, Compensation will mean all
of each Participant's (Choose one):
OPTION 1: [X] W-2 wages.
OPTION 2: [ ] Section 3401(a) wages.
18
60
OPTION 3: [ ] 415 safe-harbor compensation.
3. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
For purposes of Employer Profit Sharing Contributions, 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 for an item, Option 1 will be
deemed to be selected for that item.
PART B. MEASURING PERIOD FOR COMPENSATION:
1. ELECTIVE DEFERRALS.
For purposes of Elective Deferrals, 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.
2. MATCHING CONTRIBUTIONS.
For purposes of Matching Contributions, 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.
3. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
For purposes of Employer Profit Sharing Contributions, 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 for an item, Option 1 will be
deemed to be selected for that item.
PART C. INCLUSION OF ELECTIVE DEFERRALS:
1. ELECTIVE DEFERRALS.
For purposes 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
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Employee under any of the following Sections of the Code? (Answer
"Included" or "Excluded" for each of the following items.):
Section 125 (cafeteria plans) [X] Included [ ] Excluded
Section 402(e)(3)(401(k) plans) [X] Included [ ] Excluded
Section 402(h)(1)(B)(salary deferral SEP plans) [X] Included [ ] Excluded
Section 403(b)(tax-sheltered plans) [X] Included [ ] Excluded
NOTE: If a box is not checked for an item, "Included" will be
deemed to be selected for that item.
2. MATCHING CONTRIBUTIONS.
For purposes of Matching Contributions, does Compensation include
Employer Contributions made pursuant to a salary reduction agreement
which are not includible in the gross income of the Employee under
any of the following Sections of the Code? (Answer "Included" or
"Excluded" for each of the following items.):
Section 125 (cafeteria plans) [X] Included [ ] Excluded
Section 402(e)(3)(401(k) plans) [X] Included [ ] Excluded
Section 402(h)(1)(B)(salary deferral SEP plans) [X] Included [ ] Excluded
Section 403(b)(tax-sheltered plans) [X] Included [ ] Excluded
NOTE: If a box is not checked for an item, "Included" will be
deemed to be selected for that item.
3. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
For purposes of Employer Profit Sharing Contributions, does
Compensation include Employer Contributions made pursuant to a
salary reduction agreement which are not includible in the gross
income of the Employee under any of the following Sections of the
Code? (Answer "Included" or "Excluded" for each of the following
items.):
Section 125 (cafeteria plans) [X] Included [ ] Excluded
Section 402(e)(3)(401(k) plans) [X] Included [ ] Excluded
Section 402(h)(1)(B)(salary deferral SEP plans) [X] Included [ ] Excluded
Section 403(b)(tax-sheltered plans) [X] Included [ ] Excluded
NOTE: If a box is not checked for an item, "Included" will be
deemed to be selected for that item.
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PART D. PRE-ENTRY DATE COMPENSATION:
1. ADP AND ACP TESTING PURPOSES.
For the Plan Year in which an Employee enters the Plan, the
Employee's Compensation which shall be taken into account for
purposes of Actual Deferral Percentage (ADP) and Actual Contribution
Percentage (ACP) testing shall be (Choose one):
OPTION 1: [X] The Employee's Compensation only from
the time the Employee became a Participant in
the Plan.
OPTION 2: [ ] The Employee's Compensation for the
whole of such Plan Year.
NOTE: If no option is selected for an item, Option 1 will be
deemed to be selected.
2. OTHER PURPOSES.
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 (other than ADP or ACP testing) shall be
(Choose one):
OPTION 1: [X] The Employee's Compensation only from
the time the Employee became a Participant in
the Plan.
OPTION 2: [ ] The Employee's Compensation for the
whole of such Plan Year.
NOTE: If no option is selected for an item, Option 1 will be
deemed to be selected.
PART E. EXCLUSIONS FROM COMPENSATION:
1. ELECTIVE DEFERRALS.
For purposes of Elective Deferrals, Compensation shall not include
the following (Check any that apply):
[ ] Bonuses [ ] Commissions
[ ] Overtime [ ] Other (Specify): _____________________________
NOTE: No exclusions from Compensation are permitted if the
integrated allocation formula in Section 11, Part B is
selected.
2. MATCHING CONTRIBUTIONS.
For purposes of Matching Contributions, Compensation shall not
include the following (Check any that apply):
[ ] Bonuses [ ] Commissions
[ ] Overtime [ ] Other (Specify): _____________________________
NOTE: No exclusions from Compensation are permitted if the
integrated allocation formula in Section 11, Part B is
selected.
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3. EMPLOYER PROFIT SHARING CONTRIBUTIONS.
For purposes of Employer Profit Sharing Contributions, Compensation
shall not include the following (Check any that apply):
[ ] Bonuses [ ] Commissions
[ ] Overtime [ ] Other (Specify): _____________________________
NOTE: No exclusions from Compensation are permitted if the
integrated allocation formula in Section 11, Part B is
selected.
--------------------------------------------------------------------------------
SECTION 13. VESTING AND FORFEITURES
Complete Parts A through H
--------------------------------------------------------------------------------
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
11 of the Adoption Agreement as follows (choose one):
--------------------------------------------------------------------------------
VESTED PERCENTAGE
YEARS OF
VESTING SERVICE
Option 1 [ ] Option 2 [ ] Option 3 [ ] Option 4 [ ] Option 5 [X] (Complete if Chosen)
--------------------------------------------------------------------------------------------------------------
1 0% 0% 100% 0% 50 %
-----------
2 0% 20% 100% 0% 75 %
-----------
3 0% 40% 100% 20% 100 % (not less than 20%)
-----------
4 0% 60% 100% 40% 100 % (not less than 40%)
-----------
5 100% 80% 100% 60% 100 % (not less than 60%)
-----------
6 100% 100% 100% 80% 100 % (not less than 80%)
-----------
7 100% 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):
--------------------------------------------------------------------------------
VESTED PERCENTAGE
YEARS OF
VESTING SERVICE
Option 1 [ ] Option 2 [ ] Option 3 [ ] Option 4 [ ] Option 5 [X] (Complete if Chosen)
-------------------------------------------------------------------------------------------------------------
1 0% 0% 100% 0% 50 %
---------
2 0% 20% 100% 0 75 %
---------
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3 0% 40% 100% 20% 100 % (not less than 20%)
---------
4 0% 60% 100% 40% 100 % (not less than 40%)
---------
5 100% 80% 100% 60% 100 % (not less than 60%)
---------
6 100% 100% 100% 80% 100 % (not less than 80%)
---------
7 100% 100% 100% 100% 100 % (not less than 100%)
---------
NOTE: If no option is selected, Option 3 will be deemed to be selected.
--------------------------------------------------------------------------------
PART C. HOURS REQUIRED FOR VESTING PURPOSES:
1. 1000 Hours of Service (no more than 1,000) shall be required to
constitute a Year of Vesting Service.
2. 500 Hours of Service (no more than 500 but less than the number
specified in Section 13, Part C, Item 1, above) must be exceeded
to avoid a Break in Vesting Service.
3. For purpose 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):
[X] 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. FULLY VESTED UNDER CERTAIN CIRCUMSTANCES:
Will a Participant be fully Vested under the following
circumstances? (Answer "Yes" or "No" to each of the following items
by checking the appropriate box)
1. The Participant dies. [X] Yes [ ] No
2. The Participant incurs a Disability. [X] Yes [ ] No
3. The Participant satisfies the conditions for
Early Retirement Age (if applicable). [X] Yes [ ] No
NOTE: If a box is not checked for an item, "Yes" will be deemed
to be selected for that item.
PART F. 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 on
the Participants specified below in the
manner as described in Section 11, Part B
(for Employer Profit Sharing
Contributions).
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65
The Participant entitled to receive
allocations of such Forfeitures shall be
(Choose one):
SUBOPTION (a): [ ] Only Qualifying
Participants.
SUBOPTION (b): [ ] All Participants.
OPTION 2: [X] Applied to reduce Employer Profit
Sharing Contributions (Choose one):
SUBOPTION (a): [X] For the Plan
Year for which the
Forfeitures 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): [X] For the Plan
Year for which the
Forfeitures arises.
SUBOPTION (b): [ ] For any Plan
Year subsequent to the
Plan Year for which the
Forfeiture arises.
NOTE: If no option is selected, Option 1 and Suboption (a) will
be deemed to be selected.
PART G. 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 Participant 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: [X] Applied to reduce Matching
Contributions (Choose one):
SUBOPTION (a): [X] For the Plan Year
for which the
Forfeitures 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):
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66
SUBOPTION (a): [ ] For the Plan Year
for which the
Forfeitures arises.
SUBOPTION (b): [ ] For any Plan Year
subsequent to the Plan
Year for which the
Forfeiture arises.
NOTE: If no option is selected, Option 1 and Suboption (a) will
be deemed to be selected.
PART H. ALLOCATION OF FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS:
Forfeitures of Excess Aggregate Contributions shall be (Choose one):
OPTION 1: [ ] Allocated, after all other Forfeitures
under the Plan, to each Contributing
Participant's Matching Contribution
account in the ratio which each
Contributing Participant's Compensation
for the Plan Year bears to the total
Compensation of all Contributing
Participants for each such Plan Year. Such
Forfeitures will not be allocated to the
account of any Highly Compensated
Employee.
OPTION 2: [X] Applied to reduce Matching Contributions
(Choose one):
SUBOPTION (a): [X] For the Plan Year
for which the
Forfeitures 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
Forfeitures arises.
SUBOPTION (b): [ ] For any Plan Year
subsequent to the Plan
Year for which the
Forfeiture arises.
NOTE: If no option is selected, Option 2 and Suboption (a) will
be deemed to be selected.
--------------------------------------------------------------------------------
SECTION 14. 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.
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67
PART B. EARLY RETIREMENT AGE (Choose one option):
OPTION 1: [ ] An Early Retirement Age is not
applicable under the Plan.
OPTION 2: [ ] Age ______ (not less than 55 nor more
than 65).
OPTION 3: [X] A Participant satisfies the Plan's
Early Retirement Age conditions by
attaining age 55 (note less than 55) and
completing 5 Years of Vesting Service.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
--------------------------------------------------------------------------------
SECTION 15. DISTRIBUTIONS
Complete Parts A and B
-------------------------------------------------------------------------------
PART A. DISTRIBUTABLE EVENTS. ANSWER EACH OF THE FOLLOWING ITEMS.
1. Termination of Employment Before Normal Retirement Age. May a
Participant who has not reached Normal Retirement Age request a
distribution from the Plan of that portion of the Participant
Individual Account attributable to the following types of
contributions upon Termination of Employment?
Elective Deferrals [X] Yes [ ] No
Matching Contributions (if made) [X] Yes [ ] No
Employer Profit Sharing Contributions [X] Yes [ ] No
2. Disability. May a Participant who has incurred a Disability
request a distribution from the Plan of that portion of the
Participant's Individual Account attributable to the following
types of contributions?
Elective Deferrals [X] Yes [ ] No
Matching Contributions (if made) [X] Yes [ ] No
Employer Profit Sharing Contributions [X] Yes [ ] No
3. 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
of that portion of the Participant's Individual Account
attributable to the following types of contributions?
Elective Deferrals [X] Yes [ ] No
Matching Contributions (if made) [X] Yes [ ] No
Employer Profit Sharing Contributions [X] Yes [ ] No
4. Attainment of Age 59 1/2. Will Participants who have attained
age 59 1/2 be permitted to withdraw Elective Deferrals wile
still employed by the Employer?
[X] Yes [ ] No
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68
5. 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
6. In-Service Withdrawals. Will Participants be permitted to
request a distribution of that portion of the Participant's
Individual Account attributable to the following types of
contributions during service pursuant to Section 6.01(A)(3) of
the Plan?
Matching Contributions (if made) [X] Yes [ ] No
Employer Profit Sharing Contributions [X] Yes [ ] No
7. One-Time In-Service Withdrawal Option. Will the one-time
in-service withdrawal provisions described in Section 6.01
(A)(5) of the Plan apply to the following types of
contributions?
Matching Contributions (if made) [X] Yes [ ] No
Employer Profit Sharing Contributions [X] Yes [ ] No
If the answer is "Yes," specify percentage that a Participant
may withdraw: _________%
8. Hardship Withdrawals. Will Participants be permitted to make
hardship withdrawals of that portion of the Participant's
Individual Account attributable to the following types of
contributions pursuant to Section 6.01(A)(4) of the
Matching Contributions (if made) [X] Yes [ ] No
Employer Profit Sharing Contributions [X] Yes [ ] No
9. 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.
PART B. TIMING OF DISTRIBUTIONS:
1. Termination of Employment. Where a Participant who is entitled
to a distribution under the Plan has a Termination of Employment
(for reasons other than death, Disability or attainment of
Normal Retirement Age), distributions shall commence (Check
one):
OPTION (a): [X] As soon as administratively feasible
following the date the Participant
requests a distribution.
OPTION (b): [ ] As soon as administratively feasible
following the close of the Plan Year
within which the Participant requests a
distribution.
27
69
OPTION (c): [ ] As soon as administratively feasible
following the close of the Plan Year
within which the Participant requests a
distribution or the Participant incurs
____ (not more than 5) consecutive
one-year Breaks in Vesting Service,
whichever is later.
NOTE: If no option is selected, Option (a) will be deemed to
be selected.
2. Death, Disability or Attainment of Normal Retirement Age. Where
a Participant dies, incurs a Disability or attains Normal
Retirement Age, and a distributable event has occurred,
distributions shall commence (Check one):
OPTION (a): [X] As soon as administratively feasible
following the date the Participant (or
Beneficiary of a deceased Participant)
requests a distribution.
OPTION (b): [ ] As soon as administratively feasible
following the close of the Plan Year
within which the Participant (or
Beneficiary of a deceased Participant)
requests a distribution.
OPTION (c): [ ] As soon as administratively feasible
following the close of the Plan Year
within which the Participant (or
Beneficiary of a deceased Participant)
requests a distribution or the Participant
incurs ____ (not more than 5) consecutive
one-year Breaks in Vesting Service,
whichever is later.
NOTE: If no option is selected, Option (a) will be deemed to
be selected.
--------------------------------------------------------------------------------
SECTION 16. 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: [X] Yes.
OPTION 2: [ ] No.
NOTE: You must select "No" if you are adopting this Plan as an
amendment and restatement of a Prior Plan that was subject
to the joint and survivor annuity requirements.
PART B. SURVIVOR ANNUITY PERCENTAGE: (Complete only if your answer in
Section 16, Part A is "No.")
The survivor annuity portion of the Joint and Survivor Annuity
shall be a percentage equal to _____% (at least 50% but no more
than 100%) of the amount paid to the Participant prior to his or
her death.
--------------------------------------------------------------------------------
SECTION 17. OTHER OPTIONS
Answer "Yes" or "No" to each of the following question 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?
[ ] Yes [X] No
28
70
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? [X] Yes [ ] 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
* As long as consistent with distribution
options in this plan. [ ] 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? [X] Yes *[ ] No
* As long as consistent with distribution
options in this plan. [ ] 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. [ ]
--------------------------------------------------------------------------------
SECTION 18. PARTICIPANT DIRECTION OF INVESTMENTS
--------------------------------------------------------------------------------
PART A. AUTHORIZATION.
Will Participants be permitted to direct the investment of their
Plan assets pursuant to Section 5.14 of the Plan? (Choose one)
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 2 will be deemed to be
selected. Complete the remainder of Section 18 only if
Option 1 is selected.
PART B. INVESTMENT OPTIONS.
Participants can direct the investment of their Plan assets among
the following investments (Choose one)
OPTION 1: [X] Only those investment options
designated by the Plan Administrator or
other fiduciary.
OPTION 2: [ ] Any allowable investment.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
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71
PART C. ACCOUNTS SUBJECT TO PARTICIPANT DIRECTION.
Participants can direct the following portions of their Individual
Accounts (Choose one):
OPTION 1: [X] Those accounts that the Plan
Administrator may designate from time to
time in a uniform and nondiscriminatory
manner.
OPTION 2: [ ] Entire Individual Account.
OPTION 3: [ ] The following accounts (Check all that
apply):
[ ] Elective Deferral Account.
[ ] Matching Contribution Account.
[ ] Employer Profit Sharing Account.
[ ] Rollover Contribution Account.
[ ] Transfer Contribution Account.
[ ] Other (Specify)____________________
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART D. FREQUENCY OF INVESTMENT CHANGES.
Participants may make changes to the investments within their
Individual Accounts with the following frequency (Choose one):
OPTION 1: [X] In accordance with uniform and
nondiscriminatory rules established by the
Plan Administrator or other fiduciary.
OPTION 2: [ ] Daily.
OPTION 3: [ ] Monthly.
OPTION 4: [ ] Quarterly.
OPTION 5: [ ] Other (Specify)
NOTE: If no option is selected, Option 1 will be deemed to be
selected. Also note that the Plan's Valuation Dates must
be at least as often as the frequency chose here.
--------------------------------------------------------------------------------
SECTION 19. MISCELLANEOUS DEFINITIONS
Complete Parts A and B
--------------------------------------------------------------------------------
PART A. VALUATION DATE:
The Plan Valuation Date shall be (Choose one):
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72
OPTION 1: [X] The last day of the Plan Year and each
other date designated by the Plan
Administrator which is selected in a
uniform and nondiscriminatory manner.
OPTION 2: [ ] Daily.
OPTION 3: [ ] The last day of the Plan quarter.
OPTION 4: [ ] The last day of each month.
OPTION 5: [ ] Other (Specify)________________________
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
PART B. DISABILITY:
For purposes of this Plan, Disability shall mean (Choose one):
OPTION 1: [X] The inability to engage in any
substantial, gainful activity by reason of
any medically determinable physical or
mental impairment that can be expected to
result in death or which has lasted or can
be expected to last for a continuous
period of not less than 12 months.
OPTION 2: [ ] The inability to engage in any
substantial, gainful activity in the
Employee's trade or profession for which
the Employee is best qualified through
training or experience.
OPTION 3: [ ] Other (Specify)________________________
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
--------------------------------------------------------------------------------
SECTION 20. LIMITATION ON ALLOCATIONS
More Than One Plan
--------------------------------------------------------------------------------
If you maintain or ever maintained another qualified plan in which any
Participant in this Plan is (or was) a Participant or could become a
Participant, you must complete this section. You must also complete
this section if you maintain a welfare benefit fund, as defined in
Section 419(e) of the Code, or an individual medical account, as
defined in Section 415(1)(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)(1) through 3.05(B)(6)
of the Plan will apply as if the other plan were a master
or prototype plan.
2. [ ] Other Method. (Provide the method under which the plans
will limit total annual additions to the maximum
permissible amount, and will properly reduce any excess
amounts, in a manner that precludes Employer discretion.)
______________________________
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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 415(e) of the Code are incorporated herein by
reference under the authority of Section 1106(h) of the Tax
Reform Act of 1986.)
2.[ ] Other method. (Provide language describing another method.
Such language must preclude Employer discretion.)_____________
--------------------------------------------------------------------------------
SECTION 21. TOP-HEAVY ISSUES
Complete Parts A, B, C and D
--------------------------------------------------------------------------------
PART A. MINIMUM ALLOCATION OR BENEFIT:
For any Plan Year with respect to which this Plan is a Top-Heavy
Plan, any minimum allocation required pursuant to Section 3.01(E) of
the Plan shall be made (Choose one):
OPTION 1: [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 specify
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. PARTICIPANTS ENTITLED TO RECEIVE MINIMUM ALLOCATION:
Any minimum allocation required pursuant to Section 3.01(E) of the
Plan shall be allocated to the Individual Accounts of (Choose one):
OPTION 1: [ ] Only Participants who are not Key
Employees.
OPTION 2: [X] All Participants.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
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74
PART C. TOP-HEAVY RATIO:
For purposes of establishing the present value of benefits under a
defined benefit plan to compute the top-heavy ratio as described in
Section 10.08(C) of the Plan, any benefit shall be discounted only
for mortality and interest based on the following (Choose one):
OPTION 1: [X] Not applicable because the Employer has
not maintained a defined benefit plan.
OPTION 2: [ ] The interest rate and mortality table
specified for this purpose of the defined
benefit plan.
OPTION 3: [ ] Interest rate of ________% and the
following mortality table (Specify)
__________________________________________
NOTE: If no option is selected, Option 2 will be deemed to be
selected.
PART D. TOP-HEAVY VESTING SCHEDULE:
Pursuant to Section 6.01(C) of the Plan, the vesting schedule that
will apply when this Plan is a Top-Heavy Plan (unless the Plan's
regular vesting schedule provides for more rapid vesting) shall be
(Choose one):
OPTION 1: [X] 6 Year Graded.
OPTION 2: [ ] 3 Year Cliff.
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
--------------------------------------------------------------------------------
SECTION 22. PROTOTYPE SPONSOR
--------------------------------------------------------------------------------
Name of Prototype Sponsor XXXXXX X. XXXXX & CO. INC.
------------------------------------------
Address 000 XXXX XXXXXXXXX XXXXXX, XXXXXXXXX, 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):_________
--------------------------------------------------------------------------------
SECTION 23. 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
----------------------------------------------------------
33
75
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: X Individual Trustee(s)
---
Signature /s/ Xxxxxxx X. Xxxxxxxx Signature /s/ Xxxxx X. Xxxxxxxx
--------------------------- ---------------------------
Type Name Xxxxxxx X. Xxxxxxxx Type Name Xxxxx X. Xxxxxxxx
--------------------------- ---------------------------
Signature /s/ Xxxxxxxxxxx X. Xxxxxx Signature /s/ Xxxxxx X. Xxxxxxxx, Xx.
--------------------------- ---------------------------
Type Name Xxxxxxxxxxx X. Xxxxxx Type Name Xxxxxx X. Xxxxxxxx, Xx.
--------------------------- ---------------------------
--------------------------------------------------------------------------------
SECTION 24. RELIANCE
--------------------------------------------------------------------------------
The Employer may not rely on an opinion letter issued by the
National Office of the Internal Revenue Service as evidence that the
Plan is qualified under Section 401 of the Internal Revenue Code. In
order to obtain reliance with respect to plan qualification, the
Employer must apply to the appropriate Key District office for a
determination letter.
This Adoption Agreement may be used only in conjunction with Basic
Plan Document No. 04.
--------------------------------------------------------------------------------
SECTION 25. EMPLOYER SIGNATURE
IMPORTANT: PLEASE READ BEFORE SIGNING
--------------------------------------------------------------------------------
I am an authorized representative of the Employer named above and I
state the following:
1. I acknowledge that I have relied upon my own advisors regarding
the completion of this Adoption Agreement and the legal tax
implications of adopting this Plan.
2. I understand that my failure to properly complete this Adoption
Agreement may result in disqualification of the Plan.
3. I understand that the Prototype Sponsor will inform me of any
amendments made to the Plan and will notify me should it
discontinue or abandon the Plan.
4. I have received a copy of this Adoption Agreement and the
corresponding Basic Plan Document.
Signature for Employer /s/ Xxxxxxx X. Xxxxxxxx Date Signed 1/15/97
----------------------- --------
Type Name Xxxxxxx X. Xxxxxxxx Title Vice President & Treasurer
---------------------- ----------------------------
34
