EXHIBIT 10.7
XXXXX XXXXXX SHEARSON
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XXXXX XXXXXX SHEARSON PROTOTYPE
STANDARDIZED 401(K) PLAN
ADOPTION AGREEMENT #003
Adoption of a qualified plan has important legal and tax implications.
Failure to properly fill out the Adoption Agreement may result in
disqualification of the Plan. Employers should consult with their counsel
concerning the adoption of this Plan. To obtain further information about the
Plan, contact Xxxxx Xxxxxx Shearson through your Financial Consultant.
NOTE: Under the terms of the Plan, options marked "STANDARD" AUTOMATICALLY
will apply unless another option is selected. If additional space is needed to
provide information requested in this Adoption Agreement, the information may be
provided in an addendum attached to this Adoption Agreement which contains a
reference to the appropriate Part(s) of the Adoption Agreement.
Adoption Agreement #003 may only be used in conjunction with the XXXXX
XXXXXX SHEARSON PROTOTYPE DEFINED CONTRIBUTION PLAN -- PLAN DOCUMENT #05.
Capitalized terms refer to defined terms in Plan Document #05. "(S)"
refers to sections of Plan Document #05; "Part" refers to provisions in this
Adoption Agreement. The instructions and descriptions in this Adoption
Agreement generally summarize the Plan Document provisions, but the Plan
Document terms will be controlling in the event of any conflict.
TO BE COMPLETED BY XXXXX XXXXXX SHEARSON
FINANCIAL CONSULTANTS: Xxxx Xxxxxx TELEPHONE NUMBER: (000) 000-0000
ADDRESS: 0000 Xxxxx Xxxxx Xxxx., Xxxxx 000 Xxxxx, Xxxxxxx, XX 00000
XXXXX XXXXXX SHEARSON INC. ACCOUNT # FOR PLAN: ______________________________
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I. EMPLOYER INFORMATION.
Name: Carrollton Federal Bank
Address: 000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Taxable Year: 12/31 EIN: 00-0000000
II. PLAN INFORMATION.
A. PLAN NAME: Xxxxxxxxxx Xxxxxxx Xxxx, X0X, 401(k) Plan
B. PLAN YEAR: the period which ends on December 31
C. CONSTRUCTION: Except as provided in (S) 1.2, the Plan and the Trust
Agreement will be subject to the laws of the State of
Georgia.
D. PLAN ADOPTION: The Plan is hereby adopted as [Check ONE. See (S)
14.1.]
1. [_] a new profit sharing plan (with cash or deferred
arrangement).
2. [X] an amendment and restatement of the Xxxxxxxxxx Xxxxxxx
Xxxx, X0X 401(k) Plan ("Pre-Existing Plan") which was originally effective
____________________, 19____.
E. EFFECTIVE DATE OF THIS ADOPTION AGREEMENT: January 1, 1997.
III. ELIGIBILITY AND PARTICIPATION. [If Employer maintains another defined
contribution Paired Plan, the eligibility and participation requirements
specified in this Part III for Plan Years beginning on and after the Final
Compliance Date must be the same as those specified in the Adoption Agreement
for such other Paired Plan.]
A. ELIGIBLE EMPLOYEES. All Employees of the Employer and all Employees
of all Affiliates who satisfy the Participation Requirement generally are
eligible to participate in the Plan except certain nonresidential aliens.
However, notwithstanding any contrary language, participation in this Plan by
Employees who are covered by a collective bargaining agreement and the extent of
such participation, if any, will be determined by collective bargaining. [See
(S) 2.19.]
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B. PARTICIPATION REQUIREMENTS. In order to participate in this Plan, an
Eligible Employee must [Check ONE. See (S) 2.46, (S) 4 and Part V. B.a. Enter
"N/A" if there will be no minimum age or no waiting period, as applicable.]
1. [_] STANDARD: Reach minimum age of 21 and complete waiting
period of 1 Year of Service.
2. [_] No minimum age or waiting period.
3. [X] Reach minimum age of 18 [not to exceed 21] and complete
waiting period of 1 Year of Service [not to exceed 1].
4. [_] Reach minimum age of ____ [not to exceed 21] and complete
waiting period of ____ Year of Service [not to exceed 1]; however, each
Employee who is an Eligible Employee on the Effective Date will be deemed
to satisfy the Participation Requirement on the Effective Date regardless
of such Employee's actual age or service.
C. ENTRY DATE. [Check ONE. See (S) 2.25 and (S) 4.]
1. [_] STANDARD: The first day of each Plan Year and the first
day of the seventh month of each Plan Year.
2. [_] The date on which the Participant satisfies the
Participation Requirement.
3. [X] Other: 1st Day of every month [Specify date(s). If a
single Entry Date is entered, the minimum age in Part III.B cannot exceed
20 1/2 and the maximum waiting period in Part III.B cannot exceed 1/2
year.]
IV. VESTING.
A. DEATH, DISABILITY OR RETIREMENT. [See (S) 8.1(b).]
1. [X] STANDARD: A Participant's Employer Account and Matching
Account will be 100% vested if, while an Employee, that Participant dies,
becomes Disabled, or reaches Normal Retirement Age or, if applicable, Early
Retirement Age.
2. [_] A Participant's Employer Account and Matching Account
will be 100% vested if, while an Employee, that Participant reaches Normal
Retirement Age or if the Participant satisfies the following condition:
[Check one or more only if desired.]
a. [_] dies while an Employee.
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b. [_] becomes Disabled while an Employee.
c. [_] reaches Early Retirement Age while an Employee.
B. GENERAL VESTING SCHEDULE. [See (S) 8.1 and (S) 14.3(c). Generally,
the vesting schedule under this Plan must be at least as favorable at the
completion of each year as they vesting schedule under the Pre-Existing Plan.
The Top-Heavy Vesting Schedule selected in Part XI.A will apply for all Plan
Years in which the Plan is a Top-Heavy Plan. See (S) 12.4.]
1. MATCHING ACCOUNT. [Check ONE. "Full and Immediate Vesting" must
be selected if the 2-year requirement for Matching Contributions is
selected in Part VII.A.2.b.3.]
a. [_] STANDARD: Full and Immediate Vesting. 100% at all
times.
b. [_] Cliff Vesting. 100% after completion of ______
Years of Service [not to exceed 5].
c. [X] Graded Vesting.
YEARS OF SERVICE NONFORFEITABLE PERCENTAGE
Less than 1 0%
1 0%
2 25%
3 50% [AT LEAST 20%]
4 75% [AT LEAST 40%]
5 100% [AT LEAST 60%]
6 100% [AT LEAST 80%]
7 or more 100%
d. [_] Top-Heavy. The Top-Heavy Vesting Schedule in Part
XI.A will apply for all Plan Years.
2. EMPLOYER ACCOUNT. [Check ONE. "Full and Immediate Vesting" must
be selected if the 2-year requirement for Employer Contributions is
selected in Part VII.D.2.b.2.]
a. [_] STANDARD: Full and Immediate Vesting. 100% at all
times.
b. [_] Cliff Vesting. 100% after completion of ______
Years of Service [not to exceed 5].
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c. [_] Graded Vesting.
YEARS OF SERVICE NONFORFEITABLE PERCENTAGE
Less than 1 ____%
1 ____%
2 ____%
3 ____% [AT LEAST 20%]
4 ____% [AT LEAST 40%]
5 ____% [AT LEAST 60%]
6 ____% [AT LEAST 80%]
7 or more 100%
d. [_] Top-Heavy. The Top-Heavy Vesting Schedule in Part
XI.A will apply for all Plan Years.
C. NORMAL RETIREMENT AGE: [Check ONE. See (S) 2.43 and Part XIII.B.]
1. [X] STANDARD: Age 65.
2. [_] Age _____ [not to exceed 65].
3. [_] The later of age ____ [not to exceed 65] or the _____
[not to exceed 5th] anniversary of the date on which the Participant
commenced participation in the Plan.
D. EARLY RETIREMENT AGE: [The designation of an Early Retirement Age may
accelerate vesting and distribution. Early Retirement Age cannot exceed Normal
Retirement Age. Check ONE. See (S) 2.13 and (S) 9.1.]
1. [X] STANDARD: No Early Retirement Age.
2. [_] Age _____ [not to exceed 65]
3. [_] The later of age ____ or the completion of _______ Years
of Service (for vesting purposes).
V. SERVICE FOR PARTICIPATION AND VESTING.
A. METHOD FOR CREDITING SERVICE. [Check one. See (S) 3.]
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1. [X] STANDARD: "Hour of Service" method. [See (S) 3.1.]
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a. Crediting Hours. Hours will be credited during each
Computation Period [Check one. See (S) 3.1(c).]
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(1) [X] STANDARD: By maintaining records of the actual
hours worked. [See (S) 3.1(c)(2)(i).]
(2) [_] By using the following equivalency [check ONE. See
(S) 3.1(c)(2)(ii).
[_] 10 Hours or Service for each day.
[_] 45 Hours or Service for each week.
[_] 95 Hours or Service for each semi-monthly
payroll period.
[_] 190 Hours or Service for each month.
b. Vesting Computation Period. The Computation Period for
vesting purposes will be [Check one. See (S) 3.1(b)(2).]
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(1) [X] STANDARD: The Plan Year.
(2) [_] The 12 month period beginning on the Participant's
hire date and each anniversary of that hire date.
c. Participation Computation Period. The initial Computation
Period for participation purposes will be the 12 month period
beginning on the Participant's hire date. Each subsequent Computation
Period after the initial 12 months of employment will be [Check one.
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See (S) 3.1(b)(3).]
(1) [X] STANDARD: Plan Years beginning after the
Participant's hire date.
(2) [_] Subsequent 12 month periods beginning on the
anniversaries of the Participant's hire date.
d. Year of Service for Vesting. For vesting purposes, an
Employee will be credited with a Year of Service if, during a
Computation Period, the Employee completes at least [Check one. See
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(S) 3.1(d).]
(1) [X] STANDARD: 1,000 Hours of Service.
(2) [_] _________ [not more than 1,000] Hours of Service.
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e. Year of Service for Participation. For participation
purposes, an Employee will be credited with a Year of Service [Check
one. See (S) 3.1(b)(3) and (S) 3.1(d).]
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(1) [X] STANDARD: At the end of the Computation Period in
which the Employee completes at least 1,000 Hours of Service.
(2) [_] On the date on which the Employee completes at
least ______ [not more than 1,000] Hours of Service.
(3) [_] At the end of the Computation Period on which the
Employee completes at least _____ [not more than 1,000] Hours of
Service.
Notwithstanding the foregoing, if a partial Year of Service
is selected in Part III.B, no minimum number of Hours of Service
will be required.
2. [X] "Elapse Time" method. [See (S) 3.2.]
For purposes of determining whether a Participant is entitled to an
allocation of contributions or forfeitures, the Participant will be deemed
to have completed more than 500 Hours of Service in a Plan Year if the
Participant completes the following period of employment in the Plan Year:
[Check one. See (S) 2.2(d) and Part VII.]
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a. [_] STANDARD: More than 91 consecutive calendar days.
b. [_] More than 3 consecutive months.
B. SPECIAL RULES.
1. VESTING SERVICE EXCLUSIONS. [See (S) 3.8.] In addition to any
service that is disregarded under the Break in Service rules described
below and in (S) 3.7(c), the following service will be excluded for vesting
purposes:
a. [_] STANDARD: No other exclusions.
b. [X] Years of Service before age 18.
c. [_] Years of Service before the Employer or an Affiliate
maintained this Plan or a predecessor plan.
d. [_] Years of Service during a period for which the Employee
made no mandatory contributions under a Pre-Existing Plan.
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2. PREDECESSOR EMPLOYER SERVICE (VESTING AND PARTICIPATION).
Generally, unless the Employer maintains the plan of a predecessor employer
(for example, an acquired company), service for a predecessor employer will
not be credited as service under this Plan. [Check and attach appropriate
addendum only if desires. See (S) 3.4.]
[_] Service Credit will be given under this Plan for certain
predecessor employers for participation and/or vesting purposes to the
extent provided in Addendum V.B.2.
3. BREAK IN SERVICE RULES. [See (S) 3.7 and (S) 8.2.] Generally,
all service completed before a Break in Service will be credited upon
reemployment. Certain service may be excluded under the following rules:
a. [_] STANDARD: No exclusions. [See (S) 3.7(a).]
b. [X] "Rule of Parity." [See (S) 3.7(b)(3).] This rule,
generally, disregards vesting and participation service completed
before 5 uninterrupted Breaks in Service.
c. [_] "Alternative maternity/Paternity Rule." [Not
applicable if "Elapsed Time" is selected. See (S) 3.7(b)(4).] This
rule, generally, increases the number of Breaks in Service form 5 to 6
for all Employees in lieu of crediting service for maternity/paternity
leave.
d. [_] Alternative to "Buy Back Rule." [See (S) 8.2(b).]
This rule, generally, does not require former participants (less than
100% vested) to pay back previous distributions upon reemployment
(vesting only). A rehired Participant's vested interest in restored
amounts will be determined under: [Check ONE. See (S) 8.2(a), (S)
8.2(c).]
(1) [_] STANDARD: Formula A
(2) [_] Formula B
VI. EMPLOYEE CONTRIBUTIONS.
A. ELECTIVE DEFERRALS. Elective Deferrals [See (S) 5.3(f). Check ONE.]
1. [X] STANDARD: Will be allowed. [Complete formula below;
enter "N/A" if not applicable.]
a. Minimum Amount. Not less than 1% of a Participant's
Compensation or $__________.
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b. Maximum Amount. For Plan Years ending on and before
____________________, not more than 15% of a Participant's
compensation or $__________, and for each Plan Year thereafter,
not more than ______% of a Participant's Compensation or
$__________.
2. [_] Will not be allowed.
B. EMPLOYEE CONTRIBUTIONS. Employee Contributions [See (S) 5.3(g). Check
ONE.]
1. [X] STANDARD: Will not be allowed.
2. [_] Will be allowed. [Complete formula below; enter "N/A"
if not applicable.]
a. Minimum Amount. Not less than _____% of a Participant's
Compensation or $__________.
b. Maximum Amount. For Plan Years ending on and before
____________________, not more than _____% of a Participant's
compensation or $__________, and for each Plan Year thereafter,
not more than ______% of a Participant's Compensation or
$__________.
C. ELECTION RULES. [Check ONE. See (S) 5.3(h).]
1. [X] STANDARD: If a Participant does not elect to begin
Elective Deferrals or Employee Contributions on the Participant's Entry
Date, the Participant may elect to begin such contributions as of any
following pay date. A Participant's election can be revised (prospectively
only) as of any pay date. A Participant who terminates contributions may
elect to resume contributions prospectively as of any pay date.
2. [_] Alternative to Standard: A Participant's elections may
be made as follows: [Must include at least one day in each calendar year.]
a. [_] COMMENCEMENT. [See (S) 5.3(h)(2).] effective
only as of any ____________________ following the Participant's
Entry Date.
b. [_] REVISION. [See (S) 5.3(h)(3).] effective only as
of any following ____________________ .
c. [_] RESUMPTION. [See (S) 5.3(h)(5).] effective only
as of any following ____________________.
D. ROLLOVER CONTRIBUTIONS. Rollover Contributions [Check ONE. See (S) 5.4.]
9
1. [X] STANDARD: Will be allowed and may be made by [Check
ONE.]
a. [X] STANDARD. Any Eligible Employee.
b. [_] Any Eligible Employee who is a Participant.
2. [_] Will not be allowed.
E. LIMITATIONS ON ELECTIVE DEFERRALS.
1. CLAIMS. Claims for a refund of Excess Elective Deferrals
must be made no later than [See (S) 5.3(f). Check ONE.]
a. [X] STANDARD. March 1.
b. [_] ____________________ [no earlier than March 1 and
no later than April 15.]
2. DEEMED CLAIMS. Corrections of Excess Elective Deferrals
will be made [See (S) 7.3(f)(2). Check ONE.]
a. [X] STANDARD: From this Plan.
b. [_] From the following plan(s):
____________________________.
3. "GAP PERIOD" INCOME. The income or loss allocable to the
"gap period" [Check ONE. See (S) 7.3(e), (S) 7.4(d)(2) and (S) 7.5(d)(2).]
a. [X] STANDARD: Shall not be distributed.
b. [_] Shall be distributed.
4. HIGHLY COMPENSATED EMPLOYEES. The following special rules
in the temporary Code (S) 414(q) regulations and in Code (S) 414(q)(12)
will apply: [Check ONE. See (S) 7.4(a)(5)(v).]
a. [X] STANDARD: No special rules.
b. [_] The special rules set forth in Addendum V.E.3.
5. RECHARACTERIZATION. Recharacterization of Excess
Contributions as Employee Contributions [See (S) 7.4(e). Check ONE.]
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a. [X] STANDARD: Will not be allowed.
b. [_] [Do not check this option 2 if Employee
contributions are not allowed in Part VI.B.] Will be allowed.
VII. EMPLOYER CONTRIBUTIONS.
A. MATCHING CONTRIBUTIONS. [See (S) 5.3(b) and Part VII.F.]
1. FORMULA. [Check ONE.]
a. [_] STANDARD: No Matching Contributions will be made.
b. [X] Matching Contributions will be made on account of:
[Check one or both.]
[X] Elective Deferrals
[_] Employee Contributions
under the following formula: [Check and complete ONE. Enter
"N/A" if not applicable. The formula selected and completed must
not provide a higher rate of Matching Contributions for
Participants who make a higher amount of contributions.]
[X] 50% of the Participant's contributions which do not
exceed
$ - or 6% of the Participant's Compensation plus - %
---------- -------
of the Participant's contributions which exceed $ - or
-------- ---
- % , but contributions in excess of $ - or - %
----- --------- --------
of the Participant's Compensation will not be matched.
[_] Such percentage of the Participant's contributions
as determined by the Employer in its discretion for each
Plan Year.
[_] In an amount equal to ________________
______________________________.
2. ELIGIBLE PARTICIPANT. The Matching Contribution for any
Allocation Date will be made only for each Participant who makes
Elective Deferrals or Employee Contributions, as applicable, during
the period ending on the Allocation Date and who satisfies all of the
following requirements: [Check ONE.]
a. [X] STANDARD: No additional requirements.
11
b. [_] Alternative: [Check one or more.]
(1) [_] The Participant is employed (or on an
authorized leave of absence) on the last day of the Plan
Year or (b) is not employed as of the last day of the Plan
Year but is credited with more than 500 Hours of Service in
such Plan Year. [Do not check if Allocation Date is not
Standard Option. Special Hour of Service equivalencies apply
if "Elapsed Time" is selected. See Part V.A.2.] However, a
Participant who died, retired or became disabled during the
Plan Year will be eligible: [Check ONE.]
[_] Without regard to the number of Hours
of Service.
[_] Only if the Participant completes the
Hours of Service specified above.
(2) [_] The Participant is a Non-Highly Compensated
Employee.
(3) [_] The Participant is credited with at least 2
Years of Service (for participation purposes) on such
Allocation Date.
(4) [_] For Plan Years beginning before the
____________________ [Not later than Final Compliance Date],
the Participant [Check one or more only if Allocation Date
is Standard Option.]
[_] Is employed (or on an authorized leave
of absence) on the last day of the Plan Year.
[_] Is not employed on the last day of the
Plan Year because the Participant died, retired or
became disabled during such Plan Year.
[_] If the "Hours of Service" method is
selected, is credited with more than 1,000 Hours
of Service during such Plan Year.
3. ALLOCATION DATE. Matching Contributions will be made and
allocated as of [Check ONE.]
a. [_] STANDARD: The last day of each Plan Year.
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b. [X] Each Month.
4. FORFEITURES. Forfeitures attributable to Matching Accounts
[Check ONE. See (S) 6.3(c)(2)(ii).]
a. [X] STANDARD: Will be applied to reduce Matching
Contributions as of the Allocation Date: [Check ONE. See (S)
8.2(e).]
(1) [X] STANDARD: Which immediately follows the date
the Forfeiture occurs.
(2) [_] Which immediately follows the last day of the
Plan Year in which the Forfeiture occurs.
b. [_] Will be reallocated to Active Participants as of
the last day of each Plan Year. [Complete Part VII.D.2 to specify
who is an Active participant for this purpose.]
B. QUALIFIED MATCHING CONTRIBUTIONS. [See (S) 5.3(c) and Part VII.F.]
1. FORMULA. [Check ONE.]
a. [X] STANDARD: No Qualified Matching Contributions
will be made.
b. [_] Qualified Matching Contributions will be made on
account of: [Check one or both.]
[X] Elective Deferrals
[_] Employee Contributions
under the following formula: [Check and complete ONE. Enter
"N/A" if not applicable. The formula selected and completed must
not provide a higher rate of Qualified Matching Contributions for
Participants who make a higher amount of contributions.]
[_] _____% of the Participant's contributions
which do not exceed $__________ or _____% of the
Participant's Compensation plus _____% of the Participant's
contributions which exceed $__________ or _____% , but
contributions in excess of $__________ or _____% of the
Participant's Compensation will not be matched.
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[_] Such percentage of the Participant's contributions
as determined by the Employer in its discretion for each
Plan Year.
[_] In an amount equal to ________________
______________________________.
2. ELIGIBLE PARTICIPANT. The Qualified Matching Contribution
for any Allocation Date will be made only for each Participant who
makes Elective Deferrals or Employee Contributions, as applicable,
during the period ending on the Allocation Date and who satisfies all
of the following requirements: [Check ONE.]
a. [_] STANDARD: No additional requirements.
b. [_] Alternative: [Check one or more.]
(1) [_] The Participant is employed (or on an
authorized leave of absence) on the last day of the Plan
Year or (b) is not employed as of the last day of the Plan
Year but is credited with more than 500 Hours of Service in
such Plan Year. [Do not check if Allocation Date is not
Standard Option. Special Hour of Service equivalencies apply
if "Elapsed Time" is selected. See Part V.A.2.] However, a
Participant who died, retired or became disabled during the
Plan Year will be eligible: [Check ONE.]
[_] Without regard to the number of Hours
of Service.
[_] Only if the Participant completes the
Hours of Service specified above.
(2) [_] The Participant is a Non-Highly Compensated
Employee.
(3) [_] The Participant is credited with at least 2
Years of Service (for participation purposes) on such
Allocation Date.
(4) [_] For Plan Years beginning before the
____________________ [Not later than Final Compliance Date],
the Participant [Check one or more only if Allocation Date
is Standard Option.]
[_] Is employed (or on an authorized leave
of absence) on the last day of the Plan Year.
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[_] Is not employed on the last day of the
Plan Year because the Participant died, retired or
became disabled during such Plan Year.
[_] If the "Hours of Service" method is
selected, is credited with more than 1,000 Hours
of Service during such Plan Year.
3. ALLOCATION DATE. Qualified Matching Contributions will be
made and allocated as of [Check ONE.]
a. [_] STANDARD: The last day of each Plan Year.
b. [_] Each __________.
C. QUALIFIED NONELECTIVE CONTRIBUTIONS. [See (S) 5.3(d) and Part VII.F.]
1. FORMULA. In addition to the Qualified Nonelective
Contributions which may be made for Non-Highly Compensated Employees
to satisfy the ADP or ACP limits, [Check ONE.]
a. [X] STANDARD: No Additional Qualified Nonelective
Contributions will be made.
b. [_] Additional Qualified Nonelective Contributions
will be made in an amount equal to: [Specify nondiscriminatory
formula that satisfies Code (S) 401(a)(4) safe harbors.]
______________________________
_________________________________________.
2. ELIGIBLE PARTICIPANT. The Additional Qualified Nonelective
Contribution described in this Part VII.C for any Allocation Date will
be made only for each Participant who is an Eligible Employee at any
time during the period ending ont he Allocation Date and who satisfies
all of the following requirements: [Check ONE.]
a. [_] STANDARD: No additional requirements.
b. [_] Alternative: [Check one or more.]
(1) [_] The Participant is employed (or on an
authorized leave of absence) on the last day of the Plan
Year or (b) is not employed as of the last day of the Plan
Year but is credited with more than 500 Hours of Service in
such Plan Year. [Do not check if Allocation Date is not
Standard Option. Special Hour of
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Service equivalencies apply if "Elapsed Time" is selected.
See Part V.A.2.] However, a Participant who died, retired or
became disabled during the Plan Year will be eligible:
[Check ONE.]
[_] Without regard to the number of Hours
of Service.
[_] Only if the Participant completes the
Hours of Service specified above.
(2) [_] The Participant is a Non-Highly Compensated
Employee.
(3) [_] The Participant is credited with at least 2
Years of Service (for participation purposes) on such
Allocation Date.
(4) [_] For Plan Years beginning before the
____________________ [Not later than Final Compliance Date],
the Participant [Check one or more only if Allocation Date
is Standard Option.]
[_] Is employed (or on an authorized leave
of absence) on the last day of the Plan Year.
[_] Is not employed on the last day of the
Plan Year because the Participant died, retired or
became disabled during such Plan Year.
[_] If the "Hours of Service" method is
selected, is credited with more than 1,000 Hours
of Service during such Plan Year.
3. ALLOCATION DATE. Qualified Nonelective Contributions
described in this Part VII.C will be made and allocated as of [Check
ONE.]
a. [_] STANDARD: The last day of each Plan Year.
b. [_] Each __________.
D. DISCRETIONARY EMPLOYER CONTRIBUTIONS.
1. ALLOCATION FORMULA. The Discretionary Employer Contributions
will be allocated among Active Participants as follows: [Check ONE.
See (S) 5.3(e), (S) 6.3(a), (S) 6.3(c)(4) and Part VII.F. Do not
select an integrated formula for Plan
16
Years beginning on and after the Final Compliance Date if the Employer
also maintains another integrated plan for such Plan Year.]
a. STANDARD: Nonintegrated. [See (S) 5.3(a)(1) and (S)
6.3(c)(4)(i)(A).]
b. Integrated. [See (S) 6.3(a)(2), (S) 6.3(c)(4)(i)(B) and
(S) 12.3(h).]
(1) Integration Percentage. [Check one. If the
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Integration Level is less than the Taxable Wage Base, the
Maximum Disparity Rate must be reduced. See (S) 2.39.]
[_] STANDARD: The Maximum Disparity Rate.
[_] _____% [not to exceed the Maximum Disparity
Rate.]
(2) Integration Level. [Check one. See (S) 2.35.]
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[_] STANDARD: The Taxable Wage Base.
[_] $__________ or _____% of the Taxable Wage
Base [not to exceed the Taxable Wage Base.]
2. ACTIVE PARTICIPANT.
a. GENERAL. The Discretionary Employer Contributions and
Forfeitures, if applicable, will only be allocated to: [if the
Employer maintains another defined contribution Paired Plan, the
allocation requirements specified in this Part VII.D.2 for Plan
Years beginning on and after the Final Compliance Date must be
the same as those specified in the Adoption Agreement for such
other Paired Plan. Check ONE. See (S) 2.2, (S) 5.3(e) and Part
VII.F.]
(1) [_] STANDARD: Each Participant who is an
Eligible Employee at any time during the Plan Year and who
(1) is employed (or on an authorized leave of absence) on
the last day of the Plan Year, (2) terminated Employment
during the Plan Year or (3) was not employed on the last day
of the Plan Year but was credited with more than 500 Hours
of Service during the Plan Year. [Special Hour of Service
equivalencies apply if "Elapsed Time" is selected.]
(2) [_] Alternatives to Standard: [Check one or
more.]
17
[_] The Participant must also be credited
with at least 2 Years of Service by the last day
of the Plan Year.
[_] The last day employment requirement
will not apply.
[_] The 500 hours requirement will not
apply.
[_] The exceptions for death, disability
and retirement will not apply.
b. Years Before Final Compliance Date. For Plan Years
beginning before ____________________ [Not later than the Final
Compliance Date], the discretionary Employer contributions and
Forfeitures will only be allocated to: [Complete only if
desired. See (S) 2.2. Check ONE.]
(1) [_] STANDARD: Each Participant who is an
Eligible Employee at any time during the Plan Year and who
(1) is employed (or on an authorized leave of absence) on
the last day of the Plan Year and (if the "Hours of Service"
method is selected) who is credited with 1,000 Hours of
Service during the Plan Year or (2) who died, retired or
became disabled during the Plan Year.
(2) [_] Alternatives to Standard: [Check one or
more.]
[_] The last day employment requirement will
not apply.
[_] The 1,000 hours requirement will not
apply. [Not applicable if "Elapsed Time" is
selected.]
[_] The Participant must also be credited
with at least 2 Years of Service by the last day
of the Plan Year.
[_] The exceptions for death, disability
and retirement will not apply.
3. FORFEITURES. Forfeitures attributable to Employer Accounts
[Check ONE. See (S) 5.3(i) and (S) 6.3(c)(4)(ii).]
18
a. [_] STANDARD: Will be reallocated as of the last day
of each Plan to Active participants Year in the same manner as
Employer Contributions.
b. [X] Will be applied to reduce Matching Contributions,
Qualified Matching Contributions and/or Qualified Nonelective
Contributions.
E. NET PROFITS.
1. GENERAL. [Check one. See (S) 5.3(a)]
a. [_] STANDARD: All Employer contributions other than
Elective Deferrals will be made out of Net Profits.
b. [_] Alternatives to Standard: In addition to Elective
Deferrals, the following contributions will be made without regard to Net
Profits: [Check one or more.]
(1) [_] Matching Contributions
(2) [_] Qualified Matching Contributions
(3) [_] Qualified Nonelective Contributions
(4) [_] Discretionary Employer Contributions
(5) DEFINITION. For this purpose, Net Profits will be as
defined [Check ONE. See (S) 2.41.]
c. [_] Standard: in (S) 2.41(a).
d. [_] In the attached Addendum VII.E.2.
F. MINIMUM ALLOCATIONS. Each Active Participant (determined without
regard to the Participant's completed Hours of Service) who is not a Key
Employee, generally, will receive the minimum top-heavy allocation if the Plan
is top-heavy. [See (S) 6.3(e) and (S) 12.]
VIII. COMPENSATION. Compensation for any Plan Year generally means total
compensation (not to exceed $200,000 indexed for inflation after 1989) actually
paid to a Participant during such Plan Year (unless another determination period
is selected). [See (S) 2.10.]
A. BASIC DEFINITION. Total compensation means: [Check one. See (S)
---
2.10(a).]
19
1. [_] STANDARD: Wages, tips and other compensation reportable
on Form W-2. [See 21 2.10(a)(1).]
2. [_] Wages subject to federal income tax withholding. [See
(S) 2.10(a)(2)(i).]
3. [X] General Code (S) 415 compensation. [See (S)
2.10(a)(2)(ii) and (S) 5.2(a)(2)(ii)(B).]
Reimbursements or other expense allowances, fringe benefits (cash
AND noncash), moving expenses, deferred compensation AND welfare benefits
(even if includible in gross income): [Check ONE. See (S) 2.10(a)(2)(iv).]
[_] STANDARD: will
[X] Will not
be included in Compensation as determined in accordance with the definition
selected above.
B. DETERMINATION PERIOD: [Check ONE. See (S) 2.10(d).]
1. [X] STANDARD: The Plan Year.
2. [_] The calendar year ending in the Plan Year.
3. [_] A period beginning each ____________________ [Enter the day
and month the period begins. The determination period must end with or
within the Plan Year, must be at least 12 consecutive months in duration
and must apply uniformly to all Employees in the Plan.]
C. SALARY REDUCTIONS. Participant salary reduction contributions (for
example, (S) 401(k) or benefit plan contributions) [Check ONE. See (S)
2.10(f).]
1. [X] STANDARD: will
2. [_] Will not
be included in total compensation.
D. SPECIAL RULES. [Complete only if desired. See (S) 2.10(g).]
1. [_] Compensation for periods ending before the Entry Date on
which an Eligible Employee becomes a Participant will be excluded. [See (S)
2.10(g)(1).]
20
2. [_] If this is an amendment to a Pre-Existing Plan, the
definition of Compensation will be effective as of ____________________ [No
later than the first day of the first Plan Year after this Plan is adopted.
See (S) 2.10(g)(2). The definition in the Pre-Existing Plan will continue
to apply until that date.]
IX. DISTRIBUTIONS.
A. TIMING. Vested Plan benefits, generally, will be distributed as
follows: [Check one. See (S) 9.1(a).]
---
1. [X] STANDARD: As soon as practical after the participant
separates from service subject to the Participant's consent, if required.
2. [_] No earlier than the Participant's Normal Retirement Age,
Early Retirement Age or Disability, whichever is earlier.
B. ELECTIONS TO DEFER. A Participant whose Account is more than that
$3,500 may elect that distribution of vested Plan benefits be deferred until:
[Check one. See (S) 9.1(e).]
1. [X] STANDARD: The Participant's Required Beginning Date
(generally age 70 1/2).
2. [_] The later of the Participant's Normal Retirement Age or age
62.
C. IN-SERVICE DISTRIBUTIONS. [See (S) 9.2(b).]
1. ELECTIVE DEFERRAL ACCOUNTS. In-service distributions from
Elective Deferral Accounts will be allowed as follows: [Check applicable
box(es).]
a. [] STANDARD: No distributions before separation from
service.
b. [] On or after age 59 1/2 [See (S) 9.2(b)(4).]
c. [X] For the following financial hardship(s): [See (S)
9.2(b)(3). Check one or more.]
(1) [X] Medical expenses [See (S) 9.2(b)(3)(ii)(A).]
(2) [X] Purchase of principal residence [See (S)
9.2(b)(3)(ii)(B).]
(3) [X] Tuition [See (S) 9.2(b)(3)(ii)(C).]
(4) [X] Foreclosure or eviction [See (S)
9.2(b)(3)(ii)(D).]
21
(5) [X] Other IRS "deemed" financial hardship [See
(S) 9.2(b)(3)(ii)(E).]
2. MATCHING ACCOUNTS. In-service distributions from Matching
Accounts will be allowed as follows: [Check applicable box(es).]
a. [X] STANDARD: No distributions before separation from
service.
b. [_] On or after age _____.
c. [_] After the __________ anniversary of Plan participation.
d. [_] For a financial hardship under the safe harbor tests.
[See (S) 9.2(b)(3).
e. [_] In accordance with the rules set forth in Addendum
IX.C.2. [See (S) 9.2(b)(5). The addendum should describe
nondiscriminatory objective standards from an in-service distribution
after a fixed number of years or upon the prior occurrence of some
event such as layoff, illness or hardship.]
3. EMPLOYER ACCOUNTS. In-service distributions from Employer
Accounts will be allowed as follows: [Check applicable box(es).]
a. [_] STANDARD: No distributions before separation from
service.
b. [_] On or after age _____.
c. [_] After the __________ anniversary of Plan participation.
d. [_] For a financial hardship under the safe harbor tests.
[See (S) 9.2(b)(3).
e. [_] In accordance with the rules set forth in Addendum
IX.C.3. [See (S) 9.2(b)(5). The addendum should describe
nondiscriminatory objective standards from an in-service distribution
after a fixed number of years or upon the prior occurrence of some
event such as layoff, illness or hardship.]
4. QUALIFIED NONELECTIVE AND QUALIFIED MATCHING ACCOUNTS. In-service
distributions from Qualified Nonelective and Qualified Matching Accounts
will be allowed as follows: [Check applicable box(es).]
a. [_] STANDARD: No distributions before separation from
service.
22
b. [_] On or after age 59 1/2.
c. [_] For financial hardship (pre-89 amounts only). [See (S)
9.2(b)(3).]
5. EMPLOYEE ACCOUNTS. Withdrawals from Employee Accounts [See (S)
9.2(d). Check ONE.]
a. [_] STANDARD: Will be allowed.
b. [_] Will not be allowed.
D. JOINT AND SURVIVOR ANNUITY RULES. [Check ONE. See (S) 10.]
1. [_] STANDARD: The entire vested balance will be paid (a) to
married Participants as a 50% joint and survivor annuity, (b) to single
Participants as a 100% life annuity and (c) to the surviving Spouse of a
married Participant who dies before retirement as a 100% preretirement
survivor annuity.
2. [_] The entire vested balance will be paid under the standard
joint and survivor annuity rules except the percentages will be:
[Percentages must not be less than 50% nor more than 100%.]
a. Qualified Joint and Survivor Annuity: _____% [See (S)
10.1(f).]
b. Qualified Preretirement Survivor Annuity: _____% [See (S)
10.1(g).]
3. [_] The standard joint and survivor annuity rules will not
apply. [Check only if the safe harbor rule described in (S) 10.5 will be
satisfied. This option generally is not available if this Plan or a Pre-
Existing Plan provides annuities and separate accounts are not maintained
for such Pre-Existing Plan balances. Under this option, the entire vested
balance eligible for the safe harbor will be paid to the surviving Spouse
of a married Participant who dies before retirement. See (S) 10.5.]
E. OPTIONAL DISTRIBUTION FORMS. [See (S) 10.6(c). In addition to single
sum distributions in cash, Participants may also request:
1. [_] Installments [See (S) 10.5(c)(2)(ii).]
2. [_] Annuity contracts [See (S) 10.6(c)(2)(iii).]
3. [_] The optional forms or in kind distribution offered under a
Pre-Existing Plan as described in Addendum XIII.A.
23
4. [_] Single sum distributions in kind [See (S) 10.6(e).]
X. INVESTMENT PROVISIONS.
A. INDIVIDUALLY DIRECTED INVESTMENTS. An individual's direction of the
investment of that individual's Account [Check one. See (S) 13.2.]
---
1. [_] STANDARD: Will not be allowed.
2. [X] Will be allowed and will apply: [Check ONE.]
a. [X] STANDARD: To the entire Account.
b. [_] Only to the following ____________________.
B. PARTICIPANT LOANS. Participant loans [Check one. See (S) 13.3.]
1. [_] STANDARD: Will not be allowed.
2. [X] Will be allowed.
a. Accounting. Loans will be treated as an asset of [See
(S) 13.3(e). Check ONE.]
(1) [X] STANDARD: The Participant's Account.
(2) [_] The Fund.
b. Amounts. The $10,000 exception for loans in excess of
50% of Account Value [Check ONE. See (S) 13.3(f)(2).]
(1) [X] STANDARD: Shall not apply.
(2) [_] Shall apply. [Note: Loans under this
exception must be secured by collateral in addition to the
Participant's vested Account.]
24
C. INSURANCE. A Participant's direction to purchase insurance contracts
[Check one. See (S) 13.1.]
1. [X] STANDARD: Will not be allowed.
2. [_] Will be allowed.
XI. TOP-HEAVY RULES. [See (S) 12.]
A. TOP-HEAVY VESTING SCHEDULE. The vesting schedule for any Plan Year in
which this Plan is a Top-Heavy Plan will be [Check one. See (S) 2.4.]
---
1. [_] STANDARD: Full and Immediate. 100% of all times.
2. [_] CLIFF. 100% after completion of _____ Years of Service [not
to exceed 3.]
3. [X] GRADED.
YEARS OF SERVICE NONFORFEITABLE PERCENTAGE
Less than 1 0%
1 0%
2 25% [AT LEAST 20%]
3 50% [AT LEAST 40%]
4 75% [AT LEAST 60%]
5 100% [AT LEAST 80%]
6 or more 100%
B. OTHER PAIRED PLAN. [Complete only if the Employer maintains another
Xxxxx Xxxxxx Shearson defined contribution Paired Plan. See (S) 2.45 and (S)
12.3(c).] The minimum top-heavy contributions or benefit, if any, will be
made under the following Paired Plans in the following order: [Check ONE.]
1. [_] STANDARD: Money Purchase Pension Plan, Target Benefit
Pension Plan, Profit Sharing Plan, 401(k) Plan.
2. [_] Other: ______________________________.
B. OTHER PLANS. [Complete only if the Employer maintains or has ever
maintained another plan that is not a Paired Plan.]
25
1. MINIMUM ALLOCATION. The minimum top-heavy contributions or any,
will be made under [Check ONE. benefit, if See (S) 12.3(d) and (g).]
a. [_] STANDARD: This Plan.
b. [_] The following plan(s): ______________________________.
2. PRESENT VALUE. [See (S) 12.2(f)(3)(iii). Complete only if
Employer maintains a defined benefit plan.] "Present value" will be
determined using an interest rate of _____% and the following mortality
table:
_____________________________________________.
3. VALUATION DATE. The Top-Heavy Valuation Date for each other plan
will be: [See (S) 12.2(g). Check ONE.]
a. [_] STANDARD: The most recent valuation date.
b. [_] Other: ______________________________.
XII. LIMITATIONS ON ALLOCATIONS (CODE (S) 415). [See (S) 7.2.
A. COMPENSATION. For Code (S) 415 purposes, Compensation means: [Check
ONE. See (S) 7.2(a)(2).]
1. [_] STANDARD: Wages, tips and other compensation reportable on
Form W-2. [See (S) 7.2(a)(2)(i).]
2. [X] Wages subject to federal income tax withholding. [See (S)
7.2(a)(2)(ii)(A) and (S) 2.10(a)(2)(i).]
3. [_] General Code (S) 415 compensation. [See (S)
7.2(a)(2)(ii)(B).]
B. LIMITATION YEAR. The Limitation Year will be: [Check ONE. See (S)
7.2(a)(9).]
1. [X] STANDARD: The Plan Year.
2. [_] The 12 consecutive month period which ends on each
____________________.
C. OTHER PAIRED PLAN. [Complete only if the Employer maintains another
Xxxxx Xxxxxx Shearson defined contribution Paired Plan. See (S) 2.45 and (S)
7.2(c)(1).] The allocation adjustment will be made under the following plans in
the following order: [Check ONE.]
26
1. [_] STANDARD: Profit Sharing Plan, Money Purchase Pension Plan,
Target Benefit Pension Plan, 401(k) Plan.
2. [_] Other: ______________________________.
D. OTHER PLANS. [Complete only if the Employer maintains or has ever
maintained another plan that is not a Paired Plan.]
1. OTHER DEFINED CONTRIBUTION PLAN. The Annual Additions
attributable to this Plan will be determined: [Check ONE. See (S) 7.2(d).]
a. [_] STANDARD: BY TREATING THE OTHER PLAN AS A MASTER OR
PROTOTYPE PLAN.
b. [_] BY USING THE METHOD DESCRIBED I ADDENDUM XII.D.1.B.
2. DEFINED BENEFIT PLAN. [Check and attach appropriate addendum only
if applicable. See (S) 7.2(a)(3), (S)7.2.(a)(3), (S) 7.2(a)(11), (S) 7.2(e)
and (S) 12.3(g).]
[_] The Annual Additions attributable to this Plan will be
limited by using the method described in Addendum XII.D.2.
XIII. SPECIAL PROVISIONS FOR AMENDMENT AND RESTATEMENT OF PRE-EXISTING PLAN,
MERGER OR TRANSFERS.
A. VESTING OR DISTRIBUTION RULES. [Check and attach appropriate
description only if applicable. See (S) 10.6, (S) 14.1(b) and (S) 14.5.]
[_] The special vesting or distribution rules which must be preserved
under Code (S) 411 are described in Addendum XIII.A.
B. NORMAL RETIREMENT AGE [Check only if the normal retirement age under
the Pre-Existing Plan was determined with reference to the participation
commencement date and the special transitional rule in (S) 2.43 is desired. See
(S) 2.43.]
[_] The Normal Retirement Age of a Participant who commenced
participation in the Pre-Existing Plan in a Plan Years beginning before 1988
will be determined under the transitional rule described in (S) 2.43.
C. EFFECTIVE DATES. [Check and attach appropriate addendum only if any of
the selections made in this Adoption Agreement will become effective as of a
date other than the Effective Date set forth in Part II.E. However, the
addendum shall in no event delay the effective date of any Plan
27
provisions beyond the latest effective date required for such provision under
TRA 86 or other applicable law or regulations.]
[_] Certain elections in this Adoption Agreement shall be effective
as of the date(s) specified in Addendum XIII.C. .
XIV. TRUSTEE APPOINTMENT AND TRUST AGREEMENT. [Check ONE. See (S) 2.66 and
(S) 2.68.]
A. [X] STANDARD TRUST AGREEMENT. The Standard Trust Agreement will apply
and the Trustee will be the following individual(s), bank(s) or other person(s)
who can serve as a fiduciary and trustee under the laws of the State shown in
Part II.C.
(SBSTC) Xxxxx Xxxxxx Shearson [CORPORATE???] Trust Company
[If Xxxxx Xxxxxx Shearson Trust Company ("SBSTC") will charge a fee and may
require the Employee to complete other documents prior to accepting its
appointment as Trustee. Further, SBSTC will act only as a nondiscretionary
Trustee and the investment of the Fund will be made as directed by the Plan
Administrator or the Employer. See (S) 15 and the Trust Agreement.]
B. [X] ALTERNATE TRUST AGREEMENT. The Alternate Trust Agreement for
401(k) Plans will apply and the Trustee will be ______________________________,
which is a bank or trust company organized under the laws of the State of
____________________ and which is authorized to serve as a fiduciary and trustee
under the laws of such State.
[The Trustee will charge a fee and will require the Employer to complete
other documents, including execution of the alternate Trust Agreement, prior to
accepting its appointment as Trustee. Except as described in the Trust
Agreement, the Trustee will act only as a nondiscretionary Trustee and will be
subject to the directions of the Plan Administrator as a named fiduciary under
the Plan in the control and management of the assets of the Fund. Such
directions will be communicated to t he Trustee by the Recordkeeper as described
in the Trust Agreement.]
XV. IRS APPROVAL.
This Plan is designed to operate as a "standardized" plan and an adopting
Employer may relay on the opinion letter issued to the Prototype Sponsor and may
not have to apply for a favorable determination letter on this Plan if the only
plans ever maintained (or later adopted) by the Employers are Paired Plans which
satisfy (S) 2.45.
Any Employer who has ever maintained or who later adopts any plan
(including, after December 31, 1985,a welfare benefit fund, as defined in Code
(S) 419(e), which provides post-retirement medical benefits allocated to
separate accounts for key employees as defined in Code (S) 419A(d)(3), or an
individual medical account as defined in Code (S) 4.15(l)(2) in addition to this
28
Plan(other than a Paired Plan which satisfies (S) 2.45) may not rely on the
opinion letter issued to the Prototype Sponsor by the National Office of the
Internal Revenue Service as evidence that this Plan is qualified under Code (S)
401.
Any Employer who adopts or maintains multiple plans (other than Paired
Plans) must apply to the appropriate Key District Office for a favorable
determination letter on th is Plan to obtain reliance that this Plan as adopted
by the Employer is qualified.
An Employer may not rely on the opinion letter issued by the National
Office of the Internal Revenue Service as evidenced that this Plan is qualified
under Code (S) 401 unless the terms of the plan, as herein adopted or amended,
that pertain to the requirements of Code (S) 401(a)(4), (S) 401(a)(17), (S)
401(l), (S) 401(a)(5), (S) 410(b) and (S) 414(s), as amended by the Tax Reform
Act of 1986, or later laws, (a) are made effective retroactively to the first
day of the first Plan Year beginning after December 31, 1988 (or such later date
on which these requirements first become effective with respect to this Plan) or
(b) are made effective no late than the first day on which the Employer is no
longer entitled, under regulations, to rely on a reasonable, good faith
interpretation of these requirements, and the prior provisions of the plan
constitute such an interpretation.
Xxxxx Xxxxxx Shearson will notify each adopting Employer of any amendments
that have been made to the Plan by Xxxxx Xxxxxx Shearson as Prototype Sponsor or
of any intention to discontinue or abandon its sponsorship of the Plan as a
prototype plan.
SIGNATURES
IMPORTANT:
In order to have a valid plan and trust, this Adoption Agreement must be
signed by individuals authorized to sign for the Employer and, if applicable,
the Trustee and each Participating Affiliate. If the alternate Trust Agreement
is specified in Part XIV.B., the Trust Agreement must be signed by the Employer,
the Trustee and, if applicable, each Participating Affiliate.
This Adoption Agreement will not become effective as a prototype plan
unless and until it is accepted by Xxxxx Xxxxxx Shearson as the Prototype
Sponsor but, upon such acceptance, will be effective a s prototype plan
retroactive to the Effective Date.
Each Affiliate (i.e., each member of a controlled group of corporations,
commonly controlled group of trades or businesses, or an affiliated service
group within the meaning of Code (S) 414) must adopt this Plan as a
Participating Affiliate.
EMPLOYER REPRESENTATIONS. The undersigned hereby certifies that the
adoption of the plan and the Trust Agreement is authorized by (1) a Board of
Directors' resolution for an Employer which is a corporation, or (2) a written
authorization by the person or persons duly authorized to act on behalf of an
Employer which is not a corporation. If this Adoption Agreement amends and
restates a Pre-Existing Plan, the undersigned hereby certifies that such
amendment is duly authorized by the Employer. The undersigned hereby
acknowledges that the Prototype Sponsor
29
(1) is not responsible for the elections made in this Adoption Agreement, (2)
shall have no responsibility whatsoever with respect to the Fund or the
operation and administration of this Plan, and (3) has advised the Employer to
consult with legal counsel for the Employer regarding the adoption and operation
of this Plan. The undersigned further acknowledges that the Employer is solely
responsible for the elections made in this Adoption Agreement and for the
operation and administration of this Plan. Finally, the undersigned acknowledges
that the Prototype Sponsor will charge an annual prototype maintenance fee and
hereby authorizes the Prototype Sponsor to charge such fees against any
brokerage account maintained for the Plan.
EMPLOYER EXECUTION. Subject to the terms and conditions of the Plan, the
Trust Agreement and this Adoption Agreement, the undersigned hereby ahs executed
this Adoption Agreement, to evidence its adoption or, if applicable, amendment)
of the Plan and the Trust Agreement.
Signature:/s/ Xxxx X. Xxxxxxxx
----------------------------------------------------------------
Title: President & CEO Date: 12/19/96
TRUSTEE EXECUTION. Subject to the terms and conditions of the Plan, the
Trust Agreement and this Adoption Agreement, the undersigned hereby accepts its
appointment as Trustee and has executed this Adoption Agreement, to evidence its
adoption of the Trust Agreement. [Attach additional signature pages if there
are more than three Trustees. If the alternate Trust Agreement is specified in
Part XIV.B., the Trustee should execute the alternate Trust Agreement in lieu of
executing the Adoption Agreement in this section.]
Signature: /s/ Date: 12/19/96
---------------------
Signature: /s/ Date: 12/19/96
---------------------
Signature: /s/ Date: 12/19/96
---------------------
Signature: /s/ Xxxx X. Xxxxxxxx Date: 12/19/96
---------------------
PARTICIPATING AFFILIATES EXECUTION. [Attach additional signature pages if
there are more than three Participating Affiliates. An organization which
becomes an Affiliate after this Adoption Agreement is executed should evidence
its adoption of this Plan by executing and attaching to this adoption Agreement
a signature page which includes the information set forth below.] Subject to
the terms and conditions of the Plan, the Trust Agreement and this Adoption
Agreement, the undersigned hereby has executed this Adoption Agreement to
evidence its adoption (or, if applicable, amendment) of the Plan and the Trust
Agreement.
AFFILIATE NAME: _____________________________________________
Signature: _____________________________________________ Date: ________
30
Effective Date of Adoption Plan by Affiliate (if different from the Effective
Date in Part II.E.): _____________________________________________.
AFFILIATE NAME: _____________________________________________
Signature: _____________________________________________ Date: ________
Effective Date of Adoption Plan by Affiliate (if different from the Effective
Date in Part II.E.): _____________________________________________.
AFFILIATE NAME: _____________________________________________
Signature: _____________________________________________ Date: ________
Effective Date of Adoption Plan by Affiliate (if different from the Effective
Date in Part II.E.): _____________________________________________.
PROTOTYPE SPONSOR ACCEPTANCE. Subject to the terms and conditions of the
Plan, the Trust Agreement and this Adoption Agreement, this Adoption Agreement
is accepted by the Prototype Sponsor.
Authorized Signature: _____________________________________________
Date: _____________________________________________________________
31
Part I
Xxxxx Xxxxxx Shearson
Prototype Defined Contribution
Plan Document
#05
TABLE OF CONTENTS
Page
----
SECTION 1. INTRODUCTION AND CONSTRUCTION................................... 1
1.1 Introduction...................................................... 1
1.2 Controlling Laws.................................................. 1
1.3 Construction...................................................... 1
1.4 TRA 86 Amendments................................................. 2
SECTION 2. DEFINITIONS...................................................... 2
2.1 Account........................................................... 2
2.2 Active Participant................................................ 2
2.3 Adoption Agreement................................................ 4
2.4 Affiliate......................................................... 4
2.5 Allocation Date................................................... 4
2.6 Average Annual Compensation....................................... 4
2.7 Beneficiary....................................................... 4
2.8 Board............................................................. 5
2.9 Code.............................................................. 5
2.10 Compensation...................................................... 5
2.11 Covered Compensation.............................................. 8
2.12 Disability or Disabled............................................ 8
2.13 Early Retirement Age.............................................. 8
2.14 Earned Income..................................................... 8
2.15 Effective Date.................................................... 9
2.16 Election Form..................................................... 9
2.17 Elective Deferral................................................. 9
2.18 Elective Deferral Account......................................... 9
2.19 Eligible Employee................................................. 9
2.20 Employee.......................................................... 10
2.21 Employee Account.................................................. 10
2.22 Employee Contribution............................................. 10
2.23 Employer.......................................................... 10
2.24 Employer Account.................................................. 10
2.25 Employer Contribution............................................. 10
i
2.26 Entry Date....................................................... 10
2.27 ERISA............................................................ 11
2.28 Family Members................................................... 11
2.29 Final Compliance Date............................................ 11
2.30 Forfeiture....................................................... 11
2.31 401(k) Plan...................................................... 11
2.32 Fund............................................................. 11
2.33 Fund Earnings.................................................... 11
2.34 Highly Compensated Employee...................................... 11
2.35 Integration Level................................................ 11
2.36 Leased Employee.................................................. 11
2.37 Matching Account................................................. 12
2.38 Matching Contribution............................................ 12
2.39 Maximum Disparity Rate........................................... 12
2.40 Money Purchase Pension Plan...................................... 12
2.41 Net Profits...................................................... 12
2.42 Nonhighly Compensated Employee................................... 13
2.43 Normal Retirement Age -.......................................... 13
2.44 Owner Employee................................................... 14
2.45 Paired Plans..................................................... 14
2.46 Participant...................................................... 14
2.47 Participating Affiliate.......................................... 14
2.48 Participation Requirements....................................... 14
2.49 Plan............................................................. 14
2.50 Plan Administrator............................................... 14
2.51 Plan Year........................................................ 15
2.52 Pre-Existing Plan................................................ 15
2.53 Profit Sharing Plan.............................................. 15
2.54 Prototype Sponsor................................................ 15
2.55 Qualified Matching Contribution.................................. 15
2.56 Qualified Matching Account....................................... 15
2.57 Qualified Nonelective Contribution............................... 15
2.58 Qualified Nonelective Account.................................... 15
2.59 Rollover Account................................................. 15
2.60 Rollover Contribution............................................ 15
2.61 Self-Employed Individual......................................... 16
ii
2.62 Spouse......................................................... 16
2.63 Target Benefit Pension Plan.................................... 16
2.64 Taxable Wage Base.............................................. 16
2.67 Trustee........................................................ 16
2.68 Valuation Date................................................. 16
SECTION 3. SERVICE DEFINITIONS AND RULES................................... 16
3.1 Hour of Service Method (Standard Option).................... 16
3.1(d) Year of Service............................................. 20
3.1(e) Changes in Service Calculation Method....................... 20
3.2 Elapsed Time Method (Alternative)........................... 20
3.2(a) Break in Service............................................ 20
3.2(a)(1) General..................................................... 20
3.2(a(2) Maternity/Paternity Rule.................................... 20
3.2(b) Hour of Service............................................. 21
3.2(c) Period of Severance......................................... 21
3.2(d) Period of Service........................................... 21
3.2(d)(1) General..................................................... 21
3.2(d)(2) Aggregation................................................. 21
3.2(e) Year of Service............................................. 21
3.2(f) Change in Service Calculation Method........................ 21
3.3 Service Before Effective Date............................... 22
3.4 Service with Predecessor Employer........................... 22
3.4(a) Standard Option -........................................... 22
3.4(b) Alternative -............................................... 22
3.5 Leased Employees............................................ 22
3.6 Service with Affiliates..................................... 22
3.7 Special Break in Service Rules.............................. 23
3.7(a) Standard Option............................................. 23
3.7(b) Alternative................................................. 23
3.7(b)(4) Alternative Maternity/Paternity Rule........................ 24
3.7(c) Vesting on Reemployment After Break in Service.............. 24
iii
3.8 Service Exclusions for Vesting Purposes..................... 25
3.8(a) Standard Option............................................. 25
3.8(b) Alternative................................................. 25
SECTION 4. PARTICIPATION................................................... 25
4.1 General Rule................................................ 25
4.2 Special Rules............................................... 25
4.2(a) Pre-Existing Plan........................................... 25
4.2(b) Reemployment Before Satisfying Participation Requirement.... 25
4.2(c) Reemployment After Satisfying Participation Requirement..... 26
4.2(d) Status Change............................................... 26
4.3 Participation Information................................... 26
4.4 No Employment Rights........................................ 26
SECTION 5. CONTRIBUTIONS................................................... 26
5.1 Profit Sharing Plan......................................... 26
5.1(a) Standard Option............................................. 26
5.1(b) Alternative................................................. 26
5.2 Money Purchase Pension Plan................................. 26
5.2(a) Standard Option............................................. 27
5.2(b) Alternative................................................. 27
5.3 401(k) Plan................................................. 27
5.3(a) General..................................................... 27
5.3(a)(1) Standard Option............................................. 27
5.3(a)(2) Alternative................................................. 27
5.3(b) Matching Contributions...................................... 27
5.3(c) Qualified Matching Contributions............................ 27
5.3(d) Qualified Nonelective Contribution.......................... 28
5.3(e) Discretionary Employer Contribution......................... 29
5.3(f) Elective Deferrals.......................................... 29
5.3(g) Employee Contributions...................................... 29
5.3(h) Election Rules and Limitations.............................. 29
5.3(i) Application of Forfeitures.................................. 31
5.4 Target Benefit Pension Plan................................. 31
iv
5.4(a) General.................................................... 31
5.4(b) Theoretical Reserve........................................ 32
5.4(c) Past Service Credits....................................... 33
5.4(d) TRA 86 Amendment........................................... 33
5.4(e) Special Definitions and Rules.............................. 33
5.5 Rollover Contributions..................................... 37
5.5(a) Standard Option............................................ 37
5.5(b) Alternative................................................ 37
5.6 No Employee or Matching Contributions...................... 37
5.7 No Deductible Voluntary Employee Contributions............. 38
5.8 General Rules Applicable to All Contributions.............. 38
5.8(a) Limitations on Contributions............................... 38
5.8(b) Code (S)415................................................ 38
5.8(c) Code (S)416................................................ 38
5.8(d) Leased Employees........................................... 38
5.8(e) Owner-Employees............................................ 38
SECTION 6. ALLOCATIONS TO ACCOUNTS........................................ 39
6.1 Establishment and Maintenance of Accounts.................. 39
6.2 Allocation of Fund Earnings................................ 39
6.2(a) General.................................................... 39
6.2(b) Allocation Procedures...................................... 40
6.3 Allocation of Contributions and Forfeitures................ 40
6.3(a) Profit Sharing Plan........................................ 40
6.3(b) Money Purchase Pension Plan................................ 41
6.3(c) 401(k) Plan................................................ 41
6.3(d) Target Benefit Pension Plan................................ 44
6.3(e) Top Heavy Minimum Allocation............................... 44
6.3(f) Rollover Contributions..................................... 44
6.4 Allocation Report.......................................... 44
6.5 Allocation Corrections..................................... 44
SECTION 7. STATUTORY LIMITATIONS ON ALLOCATIONS........................... 44
7.1 Effective Date............................................. 44
7.2 Limitations on Annual Additions Under Code (S)415.......... 44
7.2(a) Special Definitions........................................ 45
v
7.2(a)(3) Defined Benefit Fraction.................................... 47
7.2(a)(4) Defined Contribution Dollar Limitation...................... 48
7.2(a)(5) Defined Contribution Fraction............................... 48
7.2(a)(6) Employer -.................................................. 48
7.2(a)(7) Excess Amount -............................................. 48
7.2(a)(8) Highest Average Compensation................................ 49
7.2(a)(9) Limitation Year............................................. 49
7.2(a)(1) Master or Prototype Plan.................................... 49
7.2(a)(11) Maximum Aggregate Amount.................................... 49
7.2(a)(12) Maximum Permissible Amount.................................. 49
7.2(a)(13) Projected Annual Benefit.................................... 50
7.2(b) Limitation If No Other Plans................................ 50
7.2(b)(1) Profit Sharing Plan......................................... 50
7.2(b)(2) Money Purchase Pension Plan or Target Benefit Pension
Plan........................................................ 50
7.2(b)(3) 401(k) Plan................................................. 51
7.2(b)(4) Suspense Account............................................ 51
7.2(c) Limitation If Other Defined Contribution Master Prototype
Plan....... or............................................. 51
7.2(d) Limitation If Other Defined Contribution Plan............... 53
7.2(e) Limitation If Other Defined Benefit Plan.................... 53
7.3 Individual Limitation on Elective Deferrals Under Code (S)
402(g)...................................................... 54
7.3(a) General..................................................... 54
7.3(b) Elective Deferrals.......................................... 54
7.3(c) Excess Elective Deferrals................................... 54
7.3(d) Distribution of Excess Elective Deferrals................... 54
7.3(e) Determination of Income or Loss............................. 54
7.3(f) Claims Procedure............................................ 55
7.3(f)(1) General..................................................... 55
7.3(f)(2) Deemed Claim................................................ 55
7.4 Limitations on Elective Deferrals for Highly Compensated
Employees under Code (S)401(k).............................. 55
7.4(a) Special Definitions......................................... 55
7.4(a)(1) Actual Deferral Percentage.................................. 55
vi
7.4(a)(2) ADP (or Average Actual Deferral Percentage)................ 56
7.4(a)(3) Employer Contributions..................................... 56
7.4(a)(4) Excess contributions....................................... 56
7.4(a)(5) Highly Compensated Employee................................ 56
7.4(b) ADP Limit.................................................. 57
7.4(c) Special Rules.............................................. 58
7.4(c)(1) Other Plans................................................ 58
7.4(c)(2) Aggregation................................................ 58
7.4(c)(3) Family Members............................................. 58
7.4(c)(4) Timing..................................................... 58
7.4(c)(5) Records.................................................... 59
7.4(c)(6) Other Requirements......................................... 59
7.4(d) Distribution of Excess contributions....................... 59
7.4(d)(1) General.................................................... 59
7.4(d)(2) Determination of Income or Loss............................ 59
7.4(d)(3) Order for Determining Excess Contributions................. 59
7.4(d)(4) Accounting for Excess Contributions........................ 59
7.4(e) Recharacterization......................................... 60
7.5 Limitations on Employee Contributions and Matching
Contributions under Code (S)401(m)......................... 60
7.5(a) Special Definitions........................................ 60
7.5(a)(1) Aggregate Limit............................................ 60
7.5(a)(2) ACP (or Average Contribution Percentage)................... 61
7.5(a)(3) Contribution Percentage.................................... 61
7.5(a)(4) Contribution Percentage Amount............................. 61
7.5(a)(5) Employee Contribution...................................... 62
7.5(a)(6) Excess Aggregate Contribution.............................. 62
7.5(a)(7) Matching Contribution...................................... 62
7.5(b) ACP Limit.................................................. 62
7.5(c) Special Rules.............................................. 62
7.5(c)(1) Multiple Use............................................... 62
7.5(c)(2) Other Plans................................................ 63
7.5(c)(3) Aggregation................................................ 63
7.5(c)(4) Family Members............................................. 63
vii
7.5(c)(5) Timing..................................................... 64
7.5(c)(6) Records.................................................... 64
7.5(c)(7) Other Requirements......................................... 64
7.5(d) Distribution of Excess Aggregate Contributions............. 64
7.5(d)(1) General.................................................... 64
7.5(d)(2) Determination of Income or Loss............................ 64
7.5(d)(3) Order for Determining Excess Aggregate Contributions....... 65
7.5(d)(4) Accounting for Excess Aggregate Contributions.............. 65
7.5(d)(5) Allocation of Forfeitures.................................. 65
SECTION 8. VESTING AND FORFEITURES........................................ 65
8.1 Determination of Nonforfeitable Percentage................. 65
8.1(a) Fully Vested Accounts...................................... 65
8.1(b) Death, Disability and Retirement........................... 65
8.1(b)(1) Standard Option............................................ 66
8.1(b)(2) Alternative................................................ 66
8.1(c) Other Separation From Service.............................. 66
8.1(c)(1) Standard Option............................................ 66
8.1(c)(2) Alternative................................................ 66
8.1(d) Employee Contribution Withdrawals.......................... 66
8.2 Forfeiture and Special Reemployment Rules.................. 66
8.2(a) Buy Back Rule (Standard Option)............................ 66
8.2(a)(1) Forfeiture................................................. 66
8.2(a)(2) Reemployment............................................... 67
8.2(b) Automatic Restoration (Alternative)........................ 67
8.2(b)(1) Forfeiture................................................. 67
8.2(b)(2) Reemployment............................................... 68
8.2(c) Deemed Distribution........................................ 69
8.2(d) Restoration Sources........................................ 69
8.2(e) Date Forfeitures Applied or Allocated...................... 69
8.2(f) In-service Distributions................................... 69
viii
SECTION 9. ACCOUNT DISTRIBUTION - GENERAL RULES 70
9.1 After Separation From Service............................... 70
9.1(a) Timing...................................................... 70
9.1(a)(1) Standard Option............................................. 70
9.1(a)(2) Alternative................................................. 70
9.1(b) Reemployment................................................ 70
9.1(c) $3500 Cashout............................................... 70
9.1(d) Claim....................................................... 70
9.1(e) Election to Defer Payment................................... 71
9.1(e)(1) Standard Option............................................. 71
9.1(e)(2) Alternative................................................. 71
9.1(f) Early Retirement Age........................................ 71
9.1(g) Death....................................................... 71
9.2 Before Separation From Service.............................. 71
9.2(a) Money Purchase Pension Plan or Target Benefit Pension Plan.. 72
9.2(a)(1) Standard Option............................................. 72
9.2(a)(2) Alternative................................................. 72
9.2(b) 401(k) Plan................................................. 72
9.2(b)(1) Distribution Restrictions................................... 72
9.2(b)(2) Termination of Plan or Disposition of Assets or Subsidiary.. 72
9.2(b)(3) Hardship Distribution....................................... 73
9.2(b)(4) Distributions on or after Age 59 1/2........................ 75
9.2(c) Profit Sharing Plan......................................... 75
9.2(d) Withdrawals from Employee Account........................... 75
9.2(d)(1) Standard Option............................................. 75
9.2(d)(2) Alternative................................................. 75
9.2(e) Plan Termination............................................ 75
9.3 Consent..................................................... 75
9.3(a) General..................................................... 75
9.3(b) Exceptions.................................................. 76
9.3(c) Immediately Distributable................................... 76
9.3(d) Accumulated Deductible Employee Contributions............... 76
9.4 Form of Distribution........................................ 76
ix
9.5 Minimum Distributions........................................ 76
9.6 Missing Person............................................... 77
9.7 No Estoppel of Plan.......................................... 77
9.8 Administration............................................... 77
SECTION 10. BENEFIT PAYMENT FORMS - JOINT AND SURVIVOR ANNUITY REQUIREMENTS
10.1 Application and Special Definitions......................... 77
10.1(a) Annuity Starting Date....................................... 78
10.1(b) Earliest Retirement Age..................................... 78
10.1(c) Election Period............................................. 78
10.1(d) Life Annuity................................................ 78
10.1(e) Qualified Election.......................................... 78
10.1(f) Qualified Joint and Survivor Annuity........................ 79
10.1(f)(1) Standard Option............................................. 79
10.1(f)(2) Alternative................................................. 79
10.1(g) Qualified Preretirement Survivor Annuity.................... 79
10.1(g)(1) Standard Option............................................. 80
10.1(g)(2) Alternative................................................. 80
10.1(h) Vested Account Balance...................................... 80
10.2 Distribution to Participant................................. 80
10.3 Distribution to Surviving Spouse............................ 80
10.4 Notice Requirements......................................... 80
10.4(a) Qualified Joint and Survivor Annuity and Life Annuity....... 80
10.4(b) Qualified Preretirement Survivor Annuity.................... 81
10.5 Safe Harbor Rules........................................... 81
10.5(a) Application................................................. 81
10.5(b) Conditions.................................................. 81
10.5(c) Surviving Spouse............................................ 82
10.5(d) Waiver of Spousal Benefit................................... 82
10.5(e) Vested Account Balance...................................... 82
10.6 Optional Forms.............................................. 82
10.6(a) General..................................................... 82
10.6(b) Before Separation From Service.............................. 82
10.6(c) After Separation From Service............................... 82
x
10.6(c)(1) Standard Option........................................... 83
10.6(c)(2) Alternative............................................... 83
10.6(d) No Method Selected........................................ 83
10.6(e) Single Sum................................................ 83
10.6(f) In Kind Distributions..................................... 83
10.7 Annuity Contracts......................................... 84
10.8 Transitional Rules........................................ 84
10.9 Direct Rollovers.......................................... 85
10.9(a) General................................................... 85
10.9(b) Definitions............................................... 85
10.9(b)(1) Eligible Rollover Distribution............................ 85
10.9(b)(2) Eligible Retirement Plan.................................. 86
10.9(b)(3) Distributee............................................... 86
SECTION 11. MINIMUM DISTRIBUTION REQUIREMENTS............................ 86
11.1 General................................................... 86
11.2 Special Definitions....................................... 86
11.2(a) Applicable Calendar Year.................................. 86
11.2(b) Applicable Life Expectancy................................ 86
11.2(c) Designated Beneficiary.................................... 86
11.2(d) Distribution Calendar Year................................ 87
11.2(e) Life Expectancy........................................... 87
11.2(f) Participant's Benefit..................................... 87
11.2(g) Required Beginning Date................................... 87
11.2(g)(1) General Rule.............................................. 87
11.2(g)(2) Age 70 1/2 Before 1988.................................... 87
11.2(g)(3) Age 70 1/2 During 1988.................................... 88
11.3 Required Beginning Date................................... 88
11.4 Limits on Distribution Periods............................ 88
11.5 Determination of amount to be Distributed Each Year....... 89
11.6 Death Distribution Provisions............................. 89
11.7 Special Pre-TEFRA Distribution Election................... 91
SECTION 12. TOP-HEAVY PLAN RULES.......................................... 92
12.1 Application............................................... 92
xi
12.2 Special Definitions....................................... 92
12.4 Vesting Schedule.......................................... 98
12.5 401(k) Plan............................................... 99
SECTION 13. TOP-HEAVY PLAN RULES.......................................... 99
13.1 Insurance Contracts....................................... 99
13.2 Individually Directed Investments......................... 101
13.3 Participant Loans......................................... 102
SECTION 14. AND CONVERSION, MERGER, ASSET TRANSFERS AND ADOPTION,
AMENDMENT, WITHDRAWAL TERMINATION.................................... 106
14.1(b) Pre-Existing Plan......................................... 106
14.1(c) Participating Affiliates.................................. 106
14.2 Amendment................................................. 107
14.2(a) Prototype Sponsor......................................... 107
14.2(b) Employer.................................................. 107
14.3 Certain Amendment Restrictions............................ 107
14.3(a) General................................................... 107
14.4 Withdrawal as a Prototype and Conversion to Individually
Designed Plan............................................. 108
14.4(a) Voluntary Conversion...................................... 108
14.4(c) Effect of Withdrawal and Conversion....................... 109
14.5 Merger, Consolidation or Asset Transfers.................. 109
14.5(a) General................................................... 109
14.5(b) Authorization............................................. 109
SECTION 15. ADMINISTRATION................................................ 110
SECTION 16. MISCELLANEOUS................................................. 111
SECTION 1. INTRODUCTION AND CONSTRUCTION................................. 115
1.1 Introduction.............................................. 115
1.2 Definitions............................................... 115
1.3 Controlling Laws.......................................... 115
1.4 Construction.............................................. 115
xii
SECTION 2. General................................................... 116
SECTION 3. CONTRIBUTIONS AND TRUST FUND.................................. 116
SECTION 4. MANAGEMENT OF TRUST FUND...................................... 117
4.1 Plan Administrator........................................ 117
4.2 Trustee................................................... 117
4.3 Investment Manager........................................ 120
4.4 Plan Administrator or Employer Investment Directions...... 121
4.5 Participant Investment Directions......................... 121
4.7 Multiple Trustees......................................... 121
4.8 Communications............................................ 122
4.9 Prototype Sponsor......................................... 122
4.10 Voting of Proxies......................................... 122
SECTION 6. VALUATION AND ACCOUNTING BY TRUSTEE........................... 124
SECTION 8. RESIGNATION OR REMOVAL OF TRUSTEE............................. 125
SECTION 9. MERGERS, CONSOLIDATIONS AND ASSET TRANSFERS................... 125
SECTION 10. SINGLE TRUST - SEPARATE FUNDS................................. 125
SECTION 11. NAMED FIDUCIARIES AND ADMINISTRATION.......................... 126
SECTION 12. MISCELLANEOUS................................................. 127
12.1 Spendthrift Clause and Qualified Domestic Relations
Orders................................................... 127
12.2 Benefits Supported Only by Trust Fund..................... 127
12.3 Claims.................................................... 127
12.4 Nonreversion.............................................. 127
12.5 Exclusive Benefit......................................... 128
xiii
XXXXX XXXXXX SHEARSON
PLAN DOCUMENT
SECTION 1. INTRODUCTION AND CONSTRUCTION
1.1 INTRODUCTION. This Xxxxx Xxxxxx Shearson Prototype Defined Contribution
Plan is established and maintained as a prototype plan by the Prototype Sponsor
for its customers and the customers of its subsidiaries and affiliates. This
Plan shall be adopted as a prototype plan only with the consent of the Prototype
Sponsor or one of its subsidiaries or affiliates as set forth in the related
Adoption Agreements and shall be maintained as a prototype plan only in
accordance with the terms and conditions set forth in this Plan.
1.2 CONTROLLING LAWS. To the extent such laws are not preempted by federal
law, this Plan and the related Adoption Agreement and Trust Agreement shall be
construed and interpreted under the laws of the state specified in the Adoption
Agreement; provided, if Xxxxx Xxxxxx Shearson Trust Company has been appointed
as Trustee, the Trust Agreement shall be governed by and construed in accordance
with the laws of the State of [Delaware].
1.3 CONSTRUCTION. The headings and subheadings in this Plan have been inserted
for convenience of reference only and are to be ignored in the construction of
its provisions. Wherever appropriate, the masculine shall be read as the
feminine, the plural as the singular, and the singular as the plural.
References in this Plan to a section ((S)) shall be to a section in this Plan
unless otherwise indicated. References in this Plan to a section of the Code,
ERISA or any other federal law shall also refer to the regulations issued under
such section. Unless an alternative option is specified in the Adoption
Agreement, the option identified as the "Standard Option" will control.
The Employer intends that this Plan and the related Trust Agreement and Adoption
Agreement which are part of this Plan satisfy the requirements for tax exempt
status under Code (S)401(a), Code (S)501(a) and related Code sections and that
the provisions of this Plan, the Trust Agreement and the Adoption Agreement be
construed and interpreted in accordance with the requirements of the Code and
the regulations under the Code.
Further, except as expressly stated otherwise, no provision of this Plan or the
related Trust Agreement or Adoption Agreement is intended to nor shall grant any
rights to Participants or Beneficiaries or any interest in the Fund in addition
to those minimum rights or interests required to be provided under ERISA and the
Code and the regulations under ERISA and the Code.
Nothing in this Plan or the related Trust Agreement or Adoption Agreement shall
be construed to prohibit me adoption or the maintenance of this Plan or the
Trust Agreement as an individually designed plan or as a trust agreement with is
part of an individually designed plan, but in such event, the Employer may not
rely on the opinion letter issued to me Prototype Sponsor and me Prototype
Sponsor shall have absolutely no responsibility for such individually designed
plan.
Finally, in me event of any conflict between the terms of this Plan and the
terms of the Trust Agreement or the Adoption Agreement, the terms of this Plan
shall control.
1
1.4 TRA 86 AMENDMENTS. If this Plan is adopted as an amendment to a Pre-
Existing Plan in order to satisfy the requirements of TRA 86, the retroactive
effective date of any provision required under TRA 86 is intended solely to
comply with the Code and is not intended to grant any substantive rights under
ERISA to the extent that such provision is different from the Pre-Existing Plan
as in effect between me applicable effective date of TRA 86 and the effective
date in the final regulations ("transition years").
SECTION 2. DEFINITIONS
The capitalized terms in this Plan and the related Adoption Agreement and Trust
Agreement shall have the meanings shown oppose those terms in this (S)2 and in
(S)3 for purposes of this Plan.
2.1 ACCOUNT - means the bookkeeping account maintained under this Plan to show
as of any Valuation Date a Participant's interest in the Fund attributable to
the contributions made by or on behalf of such Participant and the Fund Earnings
on such contributions, and an Account shall cease to exist when exhausted
through forfeiture or distributions made in accordance with this Plan.
2.2 ACTIVE PARTICIPANT - means for purposes of eligibility to receive an
allocation of the Employer Contribution or Forfeitures for each Plan Year, each
Participant who is an Eligible Employee at any time during me Plan Year and who
satisfies me following conditions:
2.2(a) STANDARD OPTION.
2.2(a)(1) STANDARDIZED PLANS. If this Plan is adopted as a
standardized Plan, such Participant (i) is employed as an Eligible
Employee (or on an authorized leave of absence as an Eligible
Employee) on me last day of such Plan Year, (ii) terminated
employment as an Eligible Employee during such Plan Year on or after
Normal Retirement Age or Early Retirement Age or by reason of death
or Disability, or (iii) such Participant is not employed on the last
day of such Plan Year but completed more than 500 Hours of Service
during such Plan Year (or me equivalent period described in (S)2.2(d)
if the "Elapsed Time" method is specified in me Adoption Agreement).
Notwithstanding me foregoing, if me "Hours of Service" method is
specified in me Adoption Agreement for a Plan Year beginning before
me Final Compliance Date, (S)2.2(a)(1)(iii) shall not apply and a
Participant who satisfies the requirements of (S)2.2(a)(1)(i) shall
not be eligible to receive an allocation of me Employer Contribution
or Forfeitures for such Plan Year unless such Participant also is
credited with at least 1,000 Hours of Service in such Plan Year.
2.2(a)(2) NONSTANDARDIZED PLANS. If this Plan is adopted as a
nonstandardized Plan, such Participant (i) is employed as an Eligible
Employee (or on an authorized leave of absence as an Eligible
Employee) on me last day of such Plan Year and, if the "Hours of
Service" method is specified in the Adoption Agreement, is credited
with at least 1,000 Hours of Service in such Plan Year, or (ii)
terminated
2
employment as an Eligible Employee during Such Plan Year on or after
Normal Retirement Age or Early Retirement Age or by reason of death
or Disability.
2.2(b) ALTERNATIVE. Such Participant satisfies the alternative conditions
specified in the Adoption Agreement.
2.2(c) MINIMUM COVERAGE REQUIREMENT. If this Plan is adopted as a
nonstandardized Plan and fails to satisfy the minimum coverage and
participation requirements of Code (S)401(a)126) and (S)410(b) for any Plan
Year beginning on and after the Final Compliance Date as a result of the
application of the minimum hours or last day employment requirements in
this (S)2.2, such minimum participation and coverage requirements shall be
retroactively amended by executing a new Adoption Agreement within the
applicable retroactive correction period in the regulations or, if no such
amendment is made, shall be satisfied as follows:
2.2(c)(1) If the Plan utilizes both the minimum hours and last day
employment requirements:
(i) STEP 1 - Each Participant who completes at least 1,000 Hours of
Service without regard to whether such Participant is employed on the
last day of the Plan Year shall be deemed to be an Active Participant
for such Plan Year.
(ii) STEP 2 - If me minimum participation and coverage requirements
are not satisfied after the application of Step 1, men each
Participant who completes more than 500 Hours of Service and who is
employed on the last day of the Plan Year shall be deemed to be an
Active Participant for such Plan Year.
(iii) STEP 3 - If the minimum participation and coverage
requirements are not satisfied after me application of Step 1 and
Step 2, then each Participant who is not employed on the last day of
the Plan Year but who completed more than 500 Hours of Service in
such Plan Year also shall be deemed to be an Active Participant.
(iv) STEP 4 - If the minimum participation and coverage requirements
are not satisfied after the application of Steps 1 through 3, then
each Participant who satisfies the last day of employment requirement
also shall be deemed to be an Active Participant without regard to
the number of Hours of Service actually completed by such Participant
during such Plan Year.
2.2(c)(2) If the Plan utilizes only the last day employment requirement,
each Participant who is not employed on me last day of the Plan Year but
who completed more than 500 hours of Service in such Plan Year (or the
equivalent period described in (S)2.2(d) if the "Elapsed Time" method is
specified in the Adoption Agreement) also shall be deemed to be an Active
Participant.
3
(i) STEP 1 - Each Participant who completes more than 500 Hours of
Service without regard to whether such Participant is employed
on the last day of the Plan Year shall be deemed to be an Active
Participant.
(ii) STEP 2 - If the minimum participation and coverage requirements
are not satisfied after the application of Step 1, then each
Participant who is employed on the last day of the Plan Year
shall be deemed to be an Active Participant.
2.2(d) SPECIAL ELAPSED TIME EQUIVALENCY RULE. If the "Elapsed Time method
is specified in the Adoption Agreement, Participant shall be treated as
completing more than 500 Hours of Service during such Plan Year for
purposes of this (S)2.2 if, during such Plan year, the Participant
completes more than
(A) STANDARD OPTION - 91 consecutive calendar days of employment, or
(B) ALTERNATIVE - if so specified in the Adoption Agreement, 3
consecutive calendar months of employment.
2.3 ADOPTION AGREEMENT - means the agreement by which the Employer adopted this
Plan.
2.4 AFFILIATE - means at any time (a) any parent, subsidiary or sister
corporation which at such time is a member of a controlled group of corporations
(as defined in Code (S)414(b)) with the Employer, (b) any trade or business,
whether or not incorporated, which at such time is considered to be under common
control (as defined in Code (S)414(c)) with the Employer, (c) any person or
organization which at such time is a member of an affiliated service group (as
defined in Code (S)414(m)) with the Employer, and (d) any other organization
which at such time is required to be aggregated with the Employer under Code
(S)414(o).
2.5 ALLOCATION DATE - means for a 401(k) Plan the respective dates specified in
the Adoption Agreement as of which Matching Contributions, Qualified Matching
Contributions and Qualified Nonelective Contributions, as applicable, are made.
2.6 AVERAGE ANNUAL COMPENSATION - means for a Target Benefit Plan the average
of an Employee's Compensation for the consecutive Plan Year period specified in
the Adoption Agreement during which such average is the highest, or if such
Employers entire period of participation in the Plan is less than the number of
Plan Years so specified, the Employee's Average Annual Compensation shall be
determined by averaging (on an annual basis) the Employee's Compensation for his
or her actual period of participation. For purposes of determining a
Participant's Average Annual Compensation for any Plan Year beginning after the
Final Compliance Date the annual Compensation taken into account for any prior
Plan Year; shall not exceed (a) for Plan Years beginning before January 1,1990,
$200,000 and (b) for Plan Years beginning on or after January 1, 1990, the
annual compensation limit described in (S)2.10(e) in effect for such prior Plan
Year.
4
2.7 BENEFICIARY - means for each Participant the person or persons so
designated in writing by the Participant on a properly completed Election Form.
However, if no such designation is made, if no person so designated survives the
Participant, or if after checking the last known mailing address the whereabouts
of the person so designated is unknown and no death benefit claim is submitted
to the Plan Administrator by such person within one year after the Participant's
date of death, the Beneficiary shall be deemed to be (a) the Participant's
surviving Spouse, or if there is no surviving Spouse, (b) the personal
representative such Participant in his or her fiduciary capacity, if any has
qualified within one year from the date of the Participant's death, or it no
personal representative has so qualified or remains so qualified, (c) any person
determined by a court of competent jurisdiction to be the Participant's
Beneficiary for this purpose. If a Beneficiary is not identified and located
within 3 years of the Participant's date of death, (S)9.6, MISSING PERSON, shall
control the distribution of the Participant's Account.
2.8 BOARD - means (a) for any Employer which is a corporation, the Board of
Directors of such Employer and (b) for any Employer which is not a corporation,
the person or persons duly authorized to act on behalf of such Employer.
2.9 CODE - means the Internal Revenue Code, as amended.
2.10 COMPENSATION.
2.10(a) COMMON LAW EMPLOYEES. For an Employee who is not a Self-Employed
Individual or a Leased Employee, the term "Compensation" means for any
determination period
2.10(a)(1) STANDARD OPTION - the total compensation which is
actually paid (in cash or other benefits) by the Employer or any
Participating Affiliate to such Employee for such period and which is
reportable to the Internal Revenue Service on Form W-2 as wages
within the meaning of Code (S)3401(a) and all other payments of
compensation to such Employee from the Employer or Participating
Affiliate (in the course of its trade or business) for which a
written statement is required to be furnished to the Employee under
Code (S)6041(d), Code (S)6051(a)(3) and Code (S)6052. Such
Compensation shall be determined without regard to any rules under
Code (S)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 Code (S)3401(a)(2)),
or
2.10(a)(2) ALTERNATIVE - if so specified in the Adoption Agreement,
the total compensation which is actually paid (in cash or other
benefits) by the Employer or any Participating Affiliate to such
Employee for such period and which is
(i) considered as wages within the meaning of Code (S)3401 (a)
for the purposes of federal income tax withholding at the source
but determined without regard to any rules under Code (S)3401(a)
that limit the remuneration included in wages based on the nature
or location of the employment or the
5
services performed (such as the exception for agricultural labor
in Code (S)3401(a)(2)),
(ii) considered as compensation within the meaning of Code
(S)415(c)(3) as described in (S)7.2(a)(2)(ii)(B),
(iii) for a nonintegrated nonstandardized Plan (other than a
Target Benefit Pension Plan), compensation identified on the
payroll records of the Employer or Participating Affiliates as
regular or base salary or wages (whether hourly, weekly, monthly,
annually or otherwise) and, if so specified in the Adoption
Agreement, overtime, bonuses, commissions, and/or other specific
compensation, or
(iv) compensation as described in (S)2.10(a)(1),
(S)2.10(a)(2)(i) or (S)2.10(a)(2)(ii), reduced by all of the
following items (even if includable in gross income):
reimbursements or other expense allowances, fringe benefits (cash
and noncash), moving expenses, deferred compensation and welfare
benefits, or
2.10(b) SELF-EMPLOYED. For an Employee who is a Self-Employed
Individual, the term "Compensation" means the Employee's Earned
Income for such period.
2.10(c) LEASED EMPLOYEES. All compensation paid by a leasing
organization to a Leased Employee for personal services rendered to
the Employer or a Participating Affiliate for such period shall be
treated as Compensation to the extent required under Code (S)414(n).
2.10(d) DETERMINATION PERIOD. For purposes of this definition and
unless otherwise specified in this Plan or the Adoption Agreement,
the phrase "determination period" means
2.10(d)(1) STANDARD OPTION - the Plan Year or
2.10(d)(2) ALTERNATIVE - the calendar year or other 12
consecutive month period ending with or within the Plan Year
specified in the Adoption Agreement.
2.10(e) LIMITATION. No more than $200,000 (as adjusted in
accordance with Code (S)401 (a)(17)) shall be taken into account
under this Plan for any determination period beginning on or after
January 1,1989. The annual Compensation limit under this (S)2.10(e)
for any determination period shall be adjusted in accordance with
Code (S)401(a)(17) for the calendar year in which such determination
period begins.
6
If the determination period is less than 12 months as a result of a
short Plan Year, the annual Compensation limit under this (S)2.10(e)
shall equal the annual limit for such determination period multiplied
by a fraction, the numerator of which is the number of full months in
such period and the denominator of which is 12.
For purposes of this Compensation limit, the family aggregation rules
of Code (S)414(q)(6) shall be applied by aggregating only the
Participant's spouse and lineal descendants who have not reached age
19 before the end of such determination period. If the limit is
exceeded for any determination period as a result of the application
of the family aggregation rule, the limit shall be prorated among the
individuals affected by this limit in proportion to each such
individual's Compensation for such determination period as determined
under this (S)2.10 before the application of this (S)2.10(e).
However, if this Plan is adopted as an integrated plan, the preceding
sentence shall not apply for purposes of determining the portion of
Compensation which does not exceed the Integration Level.
2.10(f) SALARY REDUCTIONS. Any amount which is contributed by the
Employer or any Participation Affiliate pursuant to a salary
reduction agreement which is not currently includable in an
Employee's gross income under Code (S)125, (S)402(e)(3), (S)402(h) or
(S)403(b)
2.10(f)(1) STANDARD OPTION - shall be included in an Employee's
Compensation, or
2.10(f)(2) ALTERNATIVE - if so specified in the Adoption
Agreement, shall not be included in an Employee's Compensation.
2.10(g) SPECIAL RULES.
2.10(g)(1) If so specified in the Adoption Agreement, an
Employee's Compensation shall not include Compensation which is
paid to the Employee for periods ending before the Entry Date on
which the Employee becomes a Participant.
2.10(g)(2) If this Plan is adopted as an amendment and
restatement of a Pre-Existing Plan this-definition shall be
effective for Plan Years beginning on or after January 1, 1989
unless a later effective date is specified in the Adoption
Agreement, provided, the $200,000 limitation of (S)2.10(e) shall
not be effective later than the first day of the first Plan Year
beginning on or after January 1, 1989 and any such later
effective date specified in the Adoption Agreement for the other
provisions of this (S)2.10 shall not be later than the Final
Compliance Date.
2.10(9)(3) If so specified in the Adoption Agreement for a
nonstandardized Plan, a Participant's Compensation in excess of
the dollar
7
amount or percentage specified in the Adoption Agreement shall
not be taken into account for purposes of determining the amount
or allocation of any contributions made by or on behalf of such
Participant under this Plan.
2.10(9)(4) If so specified in the Adoption Agreement for a
nonstandardized Plan, the Compensation of a Participant who is a
Highly Compensated Employee shall not include the specific types
of Compensation specified in the Adoption Agreement.
2.11 COVERED COMPENSATION - means for each Participant for each Plan Year
beginning on or after January 1, 1989, the average (without indexing) of the
Taxable Wage Bases in effect under the Social Security Act for each calendar
year during the 35-year period ending with the last day of the calendar year in
which the Participant attains (or will attain) Social Security Retirement Age,
determined by assuming that the Taxable Wage Base for all future years shall be
the same as the Taxable Wage Base in effect as of the beginning of such Plan
Year.
A Participants Covered Compensation for a Plan Year beginning before the 35-year
period ending with the last day of the calendar year in which the Participant
attains Social Security Retirement Age is the Taxable Wage Base in effect as of
the beginning of the Plan Year. A Participant's Covered Compensation for a Plan
Year beginning after such 35-year period is the Participant's Covered
Compensation for the Plan Year during which the 35-year period ends.
However, a Participant's Covered Compensation shall automatically be adjusted
each Plan Year and any increase in a Participant's Covered Compensation shall
not result in a decrease in the Participant's accrued benefit which would be
impermissible under Code (S)411(b)(1)(G) or (S)411(d)(6).
For purposes of this (S)2.11, Social Security Retirement Age means (a) age 65 in
the case of a Participant who was born before January 1, 1938, (b) age 66 for a
Participant who was born after December 31, 1937, but before January 1, 1955,
and (c) age 67 for a Participant who was born after December 31, 1954.
2.12 DISABILITY OR DISABLED - means an individual's inability to engage in any
substantially gainful activity at the individual's customary level of
compensation or competence and responsibility as an Employee due to any
medically determinable physical or mental impairment or impairments which may be
expected to result in death or to last for a continuous period of at least 12
months as determined by a qualified physician or other medical practitioner
selected by the Plan Administrator for this purpose in accordance with uniform
and nondiscriminatory standards.
2.13 EARLY RETIREMENT AGE - means
2.13(a) STANDARD OPTION - the Normal Retirement Age or
2.13(b) ALTERNATIVE - the alternative Early Retirement Age specified in
the Adoption Agreement.
8
2.14 EARNED INCOME - means for any Self-Employed Individual for any period the
net earnings from self-employment (as defined in Code (S)1402(a)) for such
period from the Employer or any Participating Affiliate for which the personal
services of such Employee are a material income-producing factor, where such net
earnings are (a) determined without regard to items not included in gross income
for purposes of Chapter 1 of the Code and the deductions properly attributable
to such items, (b) determined with regard to the deduction allowed to the
SelfEmployed Individual under Code (S)164(f) for taxable years beginning after
December 31,1989, and (c) reduced by the contributions made on behalf of such
Employee to any qualified plan (as described in Code (S)401(a)) maintained by
the Employer or any Participating Affiliate to the extent such contributions are
deductible under Code (S)404.
2.15 EFFECTIVE DATE - means the effective date of the Employer's adoption or
amendment of this Plan as specified in the Adoption Agreement. However, if this
Plan is adopted as an amendment and restatement of a Pre-Existing Plan, certain
provisions of this Plan may be effective retroactive to Plan Years beginning
before such Effective Date or may be effective at a date later than such
Effective Date as specified in this Plan document or in the Adoption Agreement.
2.16 ELECTION FORM - means the form or forms provided by or acceptable to the
Plan Administrator for making the elections and designations called for under
this Plan and no such form shall become effective unless properly completed and
timely delivered to the Plan Administrator in accordance with the terms of this
Plan and such rules as the Plan Administrator shall adopt from time to time.
2.17 ELECTIVE DEFERRAL - means the nonforfeitable contribution made to the Fund
by the Employer or a Participating Affiliate on a Participant's behalf under
(S)5.3(f).
2.18 ELECTIVE DEFERRAL ACCOUNT - means the subaccount established as part of a
Participants Account to record the Participant's Elective Deferrals and the Fund
Earnings attributable to such contributions.
2.19 ELIGIBLE EMPLOYEE - means
2.19(a) STANDARD OPTION - each Employee of the Employer or a Participating
Affiliate other than
2.19(a)(1) an Employee who is included in a unit of employees
covered by a collective bargaining agreement between the Employer and
employee representatives which agreement does not provide for
participation in this Plan if retirement benefits under this Plan
were the subject of good faith bargaining; provided, however, that
(i) the term "employee representatives" shall not include an
organization more than half of whose members are employees who
are owners, officers or executives of the Employer, and
9
(ii) an Employee shall not be treated as covered under a
collective bargaining agreement if more than 2% of the Employees
covered under such agreement are "professionals" (as defined in
(S)1.410(b)-9(g) of the Federal Income Tax Regulations); and
2.19(a)(2) an Employee who is a nonresident alien (within the
meaning of Code (S)7701(b)(1)(B) and who receives no earned income
(within the meaning of Code (S)911(d)(2)) from the Employer or any
Participating Affiliate which constitutes income from sources within
the United States (within the meaning of Code (S)861(a)(3)).
2.19(b) ALTERNATIVE - If this Plan is adopted as a nonstandardized Plan,
the Employer may specify in the Adoption Agreement a category of Employees
who shall not be treated as Eligible Employees under this Plan. However,
the Plan must satisfy on a continuing basis the nondiscrimination rules
under Code (S)401(a)(4), the coverage rules under Code (S)410(b), and the
minimum participation rules under Code (S)401 (a)(26).
2.20 EMPLOYEE - means each person who is treated as an employee of the Employer
or an Affiliate which is required to be aggregated with the Employer under Code
(S)414(b), (S)414(c), (S)414(m) or (S)414(o) including (a) a common-law employee
(whether full-time, part-time, regular, temporarY or otherwise), (b) a Self-
Employed Individual, (c) an Owner-Employee, (d) a Leased Employee and (e) each
Person who is deemed to be an employee under Code (S)414(o).
2.21 EMPLOYEE ACCOUNT - means the subaccount established as part of a
Participant's Account to record (1) the Participant's Employee Contributions
under this Plan, (2) the Participants nondeductible employee contributions, if
any, under a Pre-Existing Plan or a plan which is merged into this Plan under
(S)14.5, and (3) the Fund Earnings attributable to such contributions. If a
separate account was not maintained for contributions under other plans as
described in clause (2) above, the account balance attributable to such
contributions shall be the Participants total account balance under such other
plans multiplied by a fraction, the numerator of which is the total amount of
the Participant's nondeductible employee contributions (less withdrawals) and
the denominator of which is the sum of the numerator and the total contributions
made by the Employer on behalf of the Participant (less withdrawals). For
purposes of calculating such fraction, contributed amounts used to provide
ancillary benefits shall be treated as contributions and only amounts actually
distributed to the Participant (but not amounts which reflect the cost of any
death benefits) shall be treated as withdrawals.
2.22 EMPLOYEE CONTRIBUTION - means any contribution made by or on behalf of a
Participant to the Fund under (S)5.3(g) that is includable in the Participant's
gross income for the year in which made.
2.23 EMPLOYER - means the sole proprietorship, partnership or corporation
identified as the Employer in the Adoption Agreement and any successor in
interest to such organization.
10
2.24 EMPLOYER ACCOUNT - means the subaccount established as part of a
Participant's Account to record the Participant's share of the Employer
Contributions and Forfeitures and the Fund Earnings attributable to such
amounts.
2.25 EMPLOYER CONTRIBUTION - means the contributions made by the Employer and by
any Participating Affiliate to the Fund under (S)5.1, (S)5.2, (S)5.3(e) or
(S)5.4.
2.26 ENTRY DATE - means
2.26(a) STANDARD OPTION - the first day of each Plan Year and the first
day of the 7th month in each Plan Year or
2.26(b) ALTERNATIVE - the alternative Entry Date specified in the Adoption
Agreement.
2.27 ERISA - means the Employee Retirement Income Security Act of 1974, as
amended.
2.28 FAMILY MEMBERS - means for any year, with respect to a Highly Compensated
Employee who is a 5% owner or who is in the group consisting of the 10 Highly
Compensated Employees paid the greatest Compensation during such year, (a) such
individual's spouse, (b) such individual's lineal descendants and (c) the
spouses of such lineal ascendants or descendants as determined under Code
(S)414(q)(6).
2.29 FINAL COMPLIANCE DATE - means the first day of the first Plan Year
beginning after December 31, 1993 or such other applicable effective date of the
final nondiscrimination and other TRA 36 regulations.
2.30 FORFEITURE - means the portion of an Account of a Participant which is
deducted from such Account in accordance with the terms of this Plan.
2.31 401(K) PLAN - means this Plan as adopted by entering into the Standardized
401(k) Plan Adoption Agreement or the Nonstandardized 401(k) Plan Adoption
Agreement.
2.32 FUND - means the trust fund created in accordance with this Plan and the
Trust Agreement which is a part of this Plan.
2.33 FUND EARNINGS - means for each period ending on a Valuation Date the
investment gains and losses (whether realized or unrealized), income and
expenses (other than expenses allocable directly to a specific Account) of the
Fund for such period as determined based on the fair - market value of the
assets of the Fund on such Valuation Date.
2.34 HIGHLY COMPENSATED EMPLOYEE - means a highly compensated employee within
the meaning of Code (S)414(q) (as described in (S)7.4(a)(5)).
2.35 INTEGRATION LEVEL - means the amount of Compensation specified in the
Adoption Agreement at or below which the rate of contributions or benefits
(expressed as a percentage of such
11
Compensation) provided under the Plan is less than the rate of contributions or
benefits (expressed as a percentage of such Compensation) provided under the
Plan with respect to Compensation above such amount. The Integration Level
for any Plan Year shall not exceed the Taxable Wage Base in effect at the
beginning of such Plan Year.
2.36 LEASED EMPLOYEE - means for each Plan Year beginning on or after January 1,
1987 each person who is not a common-law employee of the Employer or an
Affiliate but who, pursuant to an agreement between the Employer or an Affiliate
("recipient") and any other person ("leasing organization"), has performed
services for the recipient or the recipient and a related person (as determined
in accordance with Code (S)414(n)(6)) on a substantially full-time basis for a
period of at least one year, which services are of a type historically performed
by employees in the business field of the recipient or related person for whom
such services are being performed. However, subject to the rules set forth in
the regulations under Code (S)414(n), such person shall not be treated as Leased
Employee if (a) the total number of such persons does not constitute more than
20% of the total nonhighly compensated work force of the recipient and (b) such
person is covered by a money purchase pension plan which is maintained by the
leasing organization and which provides for (1) a nonintegrated employer
contribution rate of at least 10% of compensation (as defined in Code
(S)415(c)(3) but including amounts contributed pursuant to a salary reduction
agreement which are excludable from the individual's gross income under Code (S)
125, (S)402(e)(3), (S)402(h) or (S)403(b)), (2) immediate participation and (3)
full and immediate vesting.
2.37 MATCHING ACCOUNT - means the subaccount established as put of a
Participant's Account to record the Matching Contributions made on the
Participant's behalf under this Plan and the Fund Earnings attributable to such
contributions.
2.38 MATCHING CONTRIBUTION - means the contribution made by the Employer and by
any Participating Affiliate to the Fund under (S)5.3(b) by reason of a
Participant's Elective Deferrals or Employee Contributions.
2.39 MAXIMUM DISPARITY RATE - means
2.39(a) STANDARD OPTION - if the Integration Level is equal to the Taxable
Wage Base, the greater of 5.7% or the portion of the tax rate under Code
(S)3111(a) which is attributable to old-age insurance as in effect on the
first day of such Plan Year, and
2.39(b) ALTERNATIVE - if the Integration Level is less than the Taxable
Wage Base, the applicable percentage determined in accordance with the
following table, where
X = the greater of $10,000 or 20% of the Taxable Wage Base
TWB = the Taxable Wage Base
It the Integration Level
Is More Than But Not More Than Applicable Percentage
$0 X 5.7%
12
X 80% of TWB 4.3 %
80% of TWB 100% of TWB 5.4 %
or, if the portion of the tax rate under Code .63111(a) which is
attributable b old age insurance as in effect on the first day of such Plan
Year is greater than 5.7 %, the applicable percentage in the 5.7% amount in
the table above.
2.40 MONEY PURCHASE PENSION PLAN - means this Plan as adopted by entering into
the Standardized Money Purchase Pension Plan Adoption Agreement or the
Nonstandardized Money Purchase Pension Plan Adoption Agreement.
2.41 NET PROFITS
2.41(a) STANDARD OPTION. The term "Net Profits" means
2.41(a)(1) for an Employer or Participating Affiliate other than a
non-profit entity, the current or accumulated earnings for the
taxable year for which the Employer contribution is made as
determined before federal and state taxes and contributions to this
Plan or any other qualified plan, or
2.41(a)(2) for an Employer or Participating Affiliate which is a
nonprofit entity, the current or accumulated excess of receipts over
disbursements for the fiscal year for which the Employer contribution
is made.
2.41(b) ALTERNATIVE. The Employer may specify in an alternative
definition of Net Profits in the Adoption Agreement.
2.42 NONHIGHLY COMPENSATED EMPLOYEE - means each Employee who is neither a
Highly Compensated Employee nor a Family Member.
2.43 NORMAL RETIREMENT AGE -
2.43(a) GENERAL. The term "Normal Retirement Age" means
2.43(a)(1) Standard Option - age 65 or
2.43(a)(2) ALTERNATIVE - the alternative Normal Retirement Age
specified in the Adoption Agreement.
2.43(b) SPECIAL RULES.
2.43(b)(1) MANDATORY RETIREMENT AGE. If, consistent with
applicable age discrimination law, the Employer enforces a mandatory
retirement age, the Normal Retirement Age shall be the earlier of (1)
the date the Participant reaches such mandatory retirement age or (2)
the date the Participant reaches age 65 or, if an
13
alternative is specified in the Adoption Agreement, the date the
Participant reaches Normal Retirement Age as specified in the
Adoption Agreement.
2.43(b)(2) TRANSITIONAL RULE. If
(i) the normal retirement age under the terms of the Pre-Existing
Plan as in effect for Plan Years beginning before January 1, 1988
was determined with reference to an anniversary of the date on
which a Participant commenced participation in such plan
("participation commencement date"),
(ii) such anniversary was later than the 5th anniversary of the
participation commencement date,
(iii) the Normal Retirement Age specified in the Adoption
Agreement is determined with reference to an anniversary of the
participation commencement date, and
(iv) this transitional rule is specified in the Adoption
Agreement,
then the anniversary for any Participant whose participation
commencement date occurred in a Plan Year beginning before January 1,
1988 shall be the earlier of (A) the anniversary under the terms of
the Pre-Existing Plan, or (B) the 5th anniversary of the first day of
the first Plan Year beginning after December 31, 1987.
2.44 OWNER EMPLOYEE - means each Self-Employed Individual who is (a) a sole
proprietor of the Employer or a Participating Affiliate or (b) a partner owning
more than 10% of either the capital or profits interest of the Employer or a
Participating Affiliate.
2.45 PAIRED PLANS - means (a) a combination of two or more standardized defined
contribution Plans under this Xxxxx Xxxxxx Shearson Prototype Defined
Contribution Plan (Plan Document #05) or (b) a combination of one or more such
standardized defined contribution Plans with a standardized defined benefit plan
under the Xxxxx Xxxxxx Shearson Prototype Defined Benefit Plan (Plan Document
#06). However, such Plans shall be treated as Paired Plans only if (1) such
Paired Plans have the same Plan Year, and (2) no more than one such plan is
integrated with social security.
2.46 PARTICIPANT - means (a) an Eligible Employee who has satisfied the
Participation Requirement specified in the Adoption Agreement and has become a
Participant in accordance with (S)4, and (b) any individual for whom an Account
continues to exist under the Plan.
2.47 PARTICIPATING AFFILIATE - means (a) if this Plan is a standardized Plan,
each Affiliate of the Employer or (b) if this Plan is a nonstandardized Plan,
each Affiliate which participates in this Plan, as set forth in (S)14.1 (c) of
the Plan; provided, an Affiliate automatically shall cease to be a Participating
Affiliate if, and at the time, it ceases to be an Affiliate as set forth in
(S)14.6(a).
14
2.48 PARTICIPATION REQUIREMENTS - means
2.48(a) STANDARD OPTION - attainment of age 21 and completion of a waiting
period equal to one Year of Service or
2.48(b) ALTERNATIVE - the alternative minimum age and waiting period
requirement specified in the Adoption Agreement.
2.49 PLAN - means this Xxxxx Xxxxxx Shearson Prototype Defined Contribution
Plan, as adopted by the Employer in the form of a Profit Sharing Plan, a 401 (k)
Plan, a Money Purchase Pension Plan or a Target Benefit Pension Plan, and as
amended from time to time in accordance with (S)14.2.
2.50 PLAN ADMINISTRATOR - means
2.50(a) STANDARD OPTION - the Employer or
2.50(b) ALTERNATIVE - the person or persons designated in writing by the
Employer as the Plan Administrator for this Plan.
2.51 PLAN YEAR - means the 12 consecutive month period or the 52/53 week period
which ends on the date specified in the Adoption Agreement; provided, however,
if this Plan is adopted as a new Plan, the first Plan Year shall be the period
beginning on the Effective Date and ending on the date specified in Adoption
Agreement.
2.52 PRE-EXISTING PLAN - means the Employer's prior defined contribution plan
and the related trust agreement or other funding arrangement which is described
in the Adoption Agreement and which is amended and restated in the form of this
Plan.
2.53 PROFIT SHARING PLAN - means this Plan as adopted by entering into the
Standard Profit Sharing Plan Adoption Agreement or the Nonstandardized Profit
Sharing Plan Adoption Agreement.
2.54 PROTOTYPE SPONSOR - means Xxxxx Xxxxxx, Xxxxxx Xxxxx & Co., Incorporated
and any successor to such corporation.
2.55 QUALIFIED MATCHING CONTRIBUTION - means the contribution made by the
Employer and by any Participating Affiliate to the Fund under (S)5.3(c) by
reason of a Participant's Elective Deferrals or Employee Contributions.
2.56 QUALIFIED MATCHING ACCOUNT - means the subaccount established as part of a
Participant's Account to record the Qualified Matching Contributions made on the
Participant's behalf under this Plan and the Fund Earnings attributable to such
contributions.
2.57 QUALIFIED NONELECTIVE CONTRIBUTION - means the contribution (other than
Matching Contributions, Qualified Matching Contributions and Employer
Contributions) made by the Employer and by any Participating Affiliate to the
Fund under (S)6.3(d).
15
2.58 QUALIFIED NONELECTIVE ACCOUNT - means the subaccount established as part of
a Participant's Account to record the Qualified Nonelective Contributions made
on the Participant's behalf under this Plan and the Fund Earnings attributable
to such contributions.
2.59 ROLLOVER ACCOUNT - means the subaccount established as part of a
Participant's Account to record the Participant's Rollover Contributions and the
Fund Earnings attributable to such contributions.
2.60 ROLLOVER CONTRIBUTION - means (a) a contribution of an amount, or more than
one amount, which satisfies the applicable rollover requirements under Code
(S)402 or Code (S)408 made by a Participant to the Fund under (S)5.5 and (b)
effective January 1, 1993, an eligible rollover distribution which is directly
transferred to the Fund on or after such date pursuant to a Participant's
election under Code (S)401(a)(31).
2.61 SELF-EMPLOYED INDIVIDUAL - means an individual who is self-employed and who
receives Earned Income from the Employer or a Participating Affiliate did not
have Net Profits.
2.62 SPOUSE - means the person who is lawfully married to the Participant on the
date the Participant's Account becomes payable under this Plan or, if a
Participant dies before such date, the person who was lawfully married to such
Participant on the Participant's date of death. However, a former spouse shall
be treated as the Spouse and a current spouse shall not be treated as the Spouse
to the extent provided under a qualified domestic relations order as described
in Code (S)414(p).
2.63 TARGET BENEFIT PENSION PLAN - means this Plan as adopted by entering into
the Standardized Target Benefit Pension Plan Adoption Agreement or the
Nonstandardized Target Benefit Pension Plan Adoption Agreement.
2.64 TAXABLE WAGE BASE - means for any Plan Year the contribution and benefit
base in effect under (S)230 of the Social Security Act at the beginning of such
Plan Year.
2.65 TRA 86 - means the Tax Reform Act of 1986 ("Act") and any other legislation
and related regulations, notices or other guidance for which amendments are
required to be made at the same time as amendments for such Act.
2.66 TRUST AGREEMENT - means the bust agreement between the Employer and the
Trustee which is established as part of this Plan and which is set forth in the
attached Xxxxx Xxxxxx Shearson Prototype Defined Contribution Plan Trust
Agreement or, if so specified in the Adoption Agreement gor a 401(k) Plan, the
Xxxxx Xxxxxx Shearson Prototype Defined Contribution Plan Alternative Trust
Agreement for 401(k) Plans.
2.67 TRUSTEE - means the person or persons specified in the Adoption Agreement
who serve as the trustee for the Fund under the Trust Agreement and any
successor to such person or persons.
2.68 VALUATION DATE - means (a) the last day of each Plan Year and (b) each
other date, if any, agreed upon in advance by the Employer and the Trustee,
provided the selection of such other date
16
does not result in discrimination in favor of Highly Compensated Employees which
would be prohibited under Code (S)401(a).
SECTION 3. SERVICE DEFINITIONS AND RULES
The definitions and rules in this (S)3 shall apply for purposes of measuring an
Employee's service (a) for participation purposes - to determine when the
Employee has satisfied the Participation Requirement and (b) for vesting
purposes - to determine the nonforfeitable interest in his or her Account.
3.1 HOUR OF SERVICE METHOD (STANDARD OPTION). The definitions and rules in
this (S)3.1 shall apply unless the "Elapsed Time" method of crediting service is
specified in the Adoption Agreement.
3.1(a) BREAK IN SERVICE.
3.1(a)(1) GENERAL. The term "Break in Service" means each
Computation Period during which an Employee fails to complete
more than 500 Hours of Service.
3.1(a)(2) MATERNITY/PATERNITY RULE. Solely for purposes of
determining whether an Employee has a Break in Service, an
Employee who is absent from work for "maternity or paternity
reasons" and who timely furnishes proof of the reason for such
absence (in accordance with such nondiscriminatory rules as may
be established by the Plan Administrator and communicated to
Employees) shall be credited with each Hour of Service for which
the Employee would otherwise have been credited but for such
absence, or if such Hours of Service cannot be determined, with 8
Hours of Service for each day of such absence. However the total
number of Hours of Service so credited to such Employee shall not
exceed 501 Hours of Service. The Hours of Service so credited
shall be credited to the Computation Period in which such absence
begins if such credit is necessary, to prevent a Break in Service
in such Computation Period or, if such credit is unnecessary, in
the immediately following Computation Period. For purposes of
this special maternity/paternity rule, an absence for "maternity
or paternity reasons" means an absence (i) by reason of the
pregnancy of the Employee, (ii) by reason of the birth of a child
of the Employee, (iii) by reason of the placement of a child with
the Employee in connection with the adoption of such child by
such Employee, or (iv) for purposes of caring for such child for
a period beginning immediately following such birth or placement.
3.1(b) COMPUTATION PERIOD.
3.1(b)(1) GENERAL. The term "Computation Period" for purposes of
determining Years of Service and Breaks in Service means the
applicable period described in this (S)3.1(b).
17
3.1(b)(2) VESTING. The relevant Computation Period for measuring
Years of Service and Breaks in Service for vesting purposes shall
be
(i) STANDARD OPTION - the Plan Year or
(ii) ALTERNATIVE - if so specified in the Adoption
Agreement, (A) the 12 consecutive month period which begins
on the date the Employee first performs an Hour of Service
("hire date") and ends on the date immediately preceding the
first anniversary, of such hire date and (B) each 12
consecutive month period thereafter beginning on each
anniversary of such hire date and ending on the date
immediately preceding the next anniversary of such date.
3.1(b)(3) PARTICIPATION. The initial Computation Period for
measuring Years of Service and Breaks in Service for
participation purposes shall be the 12 consecutive month period
which begins on the first day an Employee first performs an Hour
of Service as an Employee ("hire date") and ends on the date
immediately preceding the first anniversary of such date. Each
subsequent Computation Period shall be
(i) STANDARD OPTION - each Plan Year, beginning with the
Plan Year which begins before the first anniversary, of the
Employee's hire date (regardless of whether the Employee is
credited with 1,000 Hours of Service in the Employee's
initial Computation Period). An Employee shall be credited
with two years of Service for participation purposes if the
Employee completes 1,000 or more Hours of Service in both
the initial Computation Period and the first Plan Year which
begins within such initial Computation Period, or
(ii) ALTERNATIVE - if so specified in the Adoption
Agreement, the 12 consecutive month period which begins on
each anniversary, of an Employee's hire date and ends on the
date immediately preceding the next anniversary, of the
Employee's hire date.
For participation purposes, an Employee shall be credited with a
Year of Service
(A) STANDARD OPTION - on the last day of the Computation
Period in which the Employee is credited with at least
1,000 Hours of Service (or such lesser number of hours
specified in the Adoption Agreement) or
(B) ALTERNATIVE - on the first date on which the Employee
is credited with at least 1,000 Hours of Service (or
such lesser number of hours specified in the Adoption
Agreement) provided the Employee
18
completes such specified number of Hours of Service in
one Computation Period.
Notwithstanding the foregoing, if the Participation Requirement
includes a partial Year of Service, no minimum number of Hours of
Service shall be required for such partial year and an Employee
shall be credited with such partial Year of Service on the date
on which such partial period of service is completed.
3.1(b)(4) CHANGE IN COMPUTATION PERIOD. If an amendment
results in a change in the Computation Period, the first
Computation Period established under such amendment shall
begin before the last day of the preceding Computation
Period and each Employee to whom both such Computation
Periods apply and who completes 1,000 or more Hours of
Service in both such Computation Periods shall be credited
with one Year of Service for each such Computation Period.
3.1(c)(1) HOW OF SERVICE.
3.1(c)(1) GENERAL. The term "Hour of Service" means
(i) each hour for which an Employee is paid, or entitled
to payment, by the Employer or an Affiliate for the
performance of duties as an Employee, which hours shall be
credited to the Employee for the relevant Computation Period
in which such duties are performed;
(ii) each hour for which an Employee is paid, or entitled
to payment, by the Employer or an Affiliate 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; provided (A) no more than 501 hours shall
be credited under this clause (ii) for any single continuous
period during which no duties are performed (whether or not
such period covers more than one relevant Computation
Period) and (B) hours under this clause (ii) shall be
calculated and credited pursuant to (S)2530.200b-2 of the
Department of Labor Regulations which are incorporated as
part of this Plan by this reference; and
(iii) each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the
Employer or an Affiliate; provided (A) no credit shall be
given for an hour described in this clause (iii) if credit
also is given for such hour under Clause (i) or clause (ii),
and (B) an hour described in this clause (iii) shall be
credited to the Employee for the relevant Computation Period
or Computation Periods to which the award or agreement
pertains rather than to the Computation Period in which the
award, agreement or payment is made.
19
3.1(c)(2) DETERMINATION. The Employer shall determine an
Employee's Hours of Service
(i) STANDARD OPTION - by actually counting hours and
maintaining records which reflect the actual hours worked,
or
(ii) ALTERNATIVE - if so specified in the Adoption
Agreement, by crediting each such Employee with
(A) 10 Hours of Service for each day,
(B) 45 Hours of Service for each week,
(C) 95 Hours of Service for each semi-monthly
payroll period, or
(D) 190 Hours of Service for each month
during which the Employee otherwise would be credited with
at least one Hour of Service.
3.1(d) YEAR OF SERVICE. The term "Year of Service" means each
Computation Period during which an Employee completes at least
3.1(d)(1) STANDARD OPTION - 1,000 Hours of Service or
3.1(d)(2) ALTERNATIVE - such lesser number of Hours of
Service specified in the Adoption Agreement.
Notwithstanding the foregoing, if the Participation Requirement
includes a partial Year of Service, no minimum number of Hours of
Service shall be required for such partial year.
3.1(e) CHANGES IN SERVICE CALCULATION METHOD. If an amendment changes
the method of crediting service from the "Elapsed Time" method to the
"Hours of Service" method, each Employee who was credited with service
under the "Elapsed Time" method shall be credited with service
3.1(e)(1) for the Employee's employment before the Computation
Period in which such amendment is adopted, as determined on
the basis that one Year of Service credited to the Employee
under the "Elapsed Time" method for such employment shall
equal one Year of Service under this (S)3.1,
3.1(e)(2) for the Employee's employee during the Computation
Period in which such amendment is adopted, for a number of
Hours of Service determined by uniformly applying one of the
equivalencies set forth in (S)3,1(c)(2)(ii) to any fractional
part of a year credited to the Employee under the "Elapsed
Time" method as of the effective date of the amendment, and
20
3.1(e)(3) for the Employee's employment on and after the
effective date of the amendment, as determined under the rules in
this (S)3.1.
3.2 ELAPSED TIME METHOD (ALTERNATIVE). If the "Elapsed Time" method of
crediting service is specified in the Adoption Agreement, the definitions and
rules in this (S)3.2 shall apply in lieu of the definitions and rules in (S)3.1.
3.2(a) BREAK IN SERVICE.
3.2(a)(1) GENERAL. The term "Break in Service" means a Period of
Severance of at least 12 consecutive months.
3.2(a(2) MATERNITY/PATERNITY RULE. If an Employee is absent from
service for "maternity or paternity reasons" and the Employee
timely furnishes proof of the reason for such absence (in
accordance with such nondiscriminatory rules as may be
established by the Plan Administrator and communicated to
Employees), the 12 consecutive month period beginning on the
first anniversary of the first date of such absence shall not
constitute a Break in Service. Such 12 consecutive month period
shall be neither a Period of Severance nor a period of Service.
For purposes of this special maternity/paternity rule, an absence
for "maternity or paternity reasons" means an absence (i) by
reason of the pregnancy of the Employee, (ii) by reason of the
birth of a child of the Employee, (iii) by reason of the
placement of a child with the Employee in connection with the
adoption of such child by the Employee, or (iv) for purposes of
caring for such child for a period beginning immediately
following such birth or placement.
3.2(b) HOUR OF SERVICE. The term "Hour of Service" means each hour for
which an Employee is paid, or entitled to payment, by the Employer or an
Affiliate for the performance of duties as an Employee during any period of
employment.
3.2(c) PERIOD OF SEVERANCE. The term "Period of Severance" means a
continuous period of time during which an Employee is not employed by the
Employer or an Affiliate beginning 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.
3.2(d) PERIOD OF SERVICE.
3.2(d)(1) GENERAL. For participation purposes and for vesting
purposes, the term "Period of Service" means an Employee's
employment completed as an Employee of the Employer and any
Affiliate beginning on such Employee's first day of employment or
reemployment and ending on the date a Break in Service begins. An
Employee's first day of employment or reemployment shall be the
first day the Employee performs an Hours of Service. A Period of
Service also shall include any Period of Severance of less than
12 consecutive months.
21
3.2(d)(2) AGGREGATION. An Employee's employment completed in all
Periods of Service shall be aggregated (to the extent that such
service is not disregarded under (S)3.7 or (S)3.8) and the number
of days in each Period of Service in excess of a whole year of
employment (or, if there is no whole year of employment in any
such period, the number of days in such period) shall be
aggregated into additional whole years of employment on the
assumption that 365 days equals one whole year of employment.
3.2(e) YEAR OF SERVICE. The term "Year of Service" means each 12
consecutive month period of employment completed in any Period of Service
beginning on the date an Employee first completes an Hour of Service ("hire
date") and ending on the date immediately preceding the anniversary of such
hire date. Subsequent Years of Service shall begin on each anniversary of
the Employee's hire date and end on the date immediately preceding the next
anniversary of such hire date.
3.2(f) CHANGE IN SERVICE CALCULATION METHOD. If an amendment changes the
method of crediting service from the "Hour of Service" method to the
"Elapsed Time" method, each Employee who had any service credit under the
"Hour of Service" method shall be credited with service.
3.2(f)(1) for the Employee's employment before the Computation
Period in which such amendment is adopted, as determined on the
basis that one Year of Service credited to the Employee under the
"Hour of Service" method for such employment shall equal one Year
of Service under this (S)3.2,
3.2(f)(2) for the Employee's employment during the Computation
Period in which such amendment is adopted, as determined under
the rules in this (S)3.2 or, if greater, as determined for such
period under the "Hour of Service" method as converted to Years
of Service under the assumption that 365 days equals one Year of
Service, and
3.2(f)(3) for the Employee's employment after the last day of the
Computation Period in which such amendment is adopted, as
determined under the rules in this (S)3.2.
3.3 SERVICE BEFORE EFFECTIVE DATE. For participation purposes all periods of
employment with the Employer or an Affiliate completed before the Employer
adopted this Plan or a predecessor plan ("pre-effective date employment") shall
be included (to the extent such service is not disregarded under (S)3.7). For
vesting purposes all periods of pre-effective date employment shall be included
unless such service is disregarded under (S)3.7 or (S)3.8. Notwithstanding the
foregoing, service credit for vesting purposes automatically shall be granted
for pre-effective date employment to the extent required by Code (S)411(a) for
periods during which the Employer or an Affiliate maintained a predecessor plan.
22
3.4 SERVICE WITH PREDECESSOR EMPLOYER. All periods of employment with a
predecessor employer or employers shall be included in calculating an Employee's
service to the extent required by Code (S)414(a) if the Employer or an Affiliate
maintains a plan of such predecessor employer. However, if the Employer or an
Affiliate does not maintain a plan of such predecessor employer, periods of
employment with such predecessor employer shall be included in calculating an
Employee's service
3.4(a) STANDARD OPTION - only to the extent required under regulations
under Code (S)414(a) or
3.4(b) ALTERNATIVE - only if so specified in the Adoption Agreement.
3.5 LEASED EMPLOYEES. A Leased Employee shall be credited with service as an
Employee of the Employer or an Affiliate in accordance with Code (S)414(n) or
(S)414(o).
3.6 SERVICE WITH AFFILIATES. An Employee shall be credited with all service
with any Affiliate and any other entity which is required to be aggregated with
the Employer under code (S)414(o).
3.7 SPECIAL BREAK IN SERVICE RULES.
3.7(a) STANDARD OPTION. Except as provided in (S)3.7 and (S)8.2, an
Employee who has a Break in Service shall be credited after such Break in
Service for both participation and vesting purposes with all Years of
Service completed before such Break in Service.
3.7(b) ALTERNATIVE. In addition to the exceptions in (S)3.7(c) and
(S)8.2, the Employer may specify in the Adoption Agreement that certain
service completed before a Break in Service may be disregarded under one or
more of the rules set forth in this (S)3.7(b).
3.7(b)(1) ONE YEAR HOLD-OUT RULE. If the "One Year Hold-Out Rule"
is specified in the Adoption Agreement for a nonstandardized
Plan, an Employee who has a Break in Service (two Breaks in
Service if the Alternative Maternity/Paternity Rule applies)
shall not be credited after such Break in Service for
participation purposes or vesting purposes with any Year of
Service complete before such Break in Service until the Employee
completes a Year of Service after such Break in Service.
In applying this rule for participation purposes, such Year of
Service shall be measured by the Computation Period which begins
on an Employee's "reemployment commencement date" and, if
necessary, subsequent Computation Periods beginning
(i) with the Plan Year which includes the first anniversary
of the "reemployment commencement date" if the standard
Computation Period in (S)3.1(b)(3)(i) is specified in the
Adoption Agreement, or
23
(ii) on anniversaries of the "reemployment commencement
date" if the alternative Computation Period in
(S)3.1(b)(3)(ii) is specified in the Adoption Agreement.
The "reemployment commencement date" shall be the first day on
which the Employee is credited with an Hour of Service for the
performance of duties after the first Computation Period in which
the Employee incurs a Break in Service. If an Employee who was a
Participant before his or her Break in Service completes a Year
of Service in accordance with this provision, such Employee's
participation shall be reinstated as of his or her reemployment
commencement date.
3.7(b)(2) PRE-PARTICIPATION RULE. If the "Pre-Participation
Rule" is specified in the Adoption Agreement, an Employee who has
a Break in Service (two Breaks in Service if the Alternative
Maternity/Paternity Rule applies) before the Employee satisfies
the Participation Requirement shall not be credited for
participation purposes with any Year of Service completed before
such Break in Service. However, this rule shall only apply if the
Participation Requirement for the Plan requires more than one
Year of Service and the vesting schedule specified in the
Adoption Agreement provides for full and immediate vesting.
3.7(b)(3) RULE OF PARITY. If the "Rule of Parity" is specified
in the Adoption Agreement, the following rules shall apply:
(iii) GENERAL. If an Employee does not have any
nonforfeitable interest in the portion of the Employee's
Account which is attributable to Employer contributions, the
Employee's Years of Service before a period of consecutive
Breaks in Service shall not be taken into account in
computing service for participation or vesting purposes if
the number of consecutive Breaks in Service in such period
equals or exceeds the greater of 5 (6 if the Alternative
Maternity/Paternity Rule applies) or the aggregate number of
Years of Service completed before such Breaks in Service
("pre-break service"). Such pre-break service shall not
include any pre-break service disregarded under the
preceding sentence by reason of prior Breaks in Service.
(iv) PARTICIPATION. If an Employee's Years of Service are
disregarded under this rule of parity, the Employee shall be
treated as a new Employee for participation purposes. If the
Employee's Years of Service are not disregarded under this
rule, the Employee shall continue to participate in the
Plan, or, if the Employee separated from service, shall
participate immediately upon the Employee's reemployment.
(v) VESTING. If a Participant's Years of Service are
disregarded under this rule of parity, the Participant's
pre-break Years of Service shall be disregarded for purposes
of determining the Participant's nonforfeitable interest in
the Participant's post-break Employer Account. If a
Participant's
24
pre-break Years of Service are not disregarded under this
rule of parity, the Participant's pre-break Years of Service
shall be counted for purposes of determining the
Participant's nonforfeitable interest in the Participant's
post-break Employer Account.
3.7(b)(4) ALTERNATIVE MATERNITY/PATERNITY RULE. If the
"Alternative Maternity/Paternity Rule" is specified in the
Adoption Agreement, the special Maternity/Paternity rule set
forth in (S)3.1(a)(2) shall not apply and the minimum period of
consecutive Breaks in Service required to disregard any service
or to deprive any Employee of any right under this Plan shall be
increased by one as specified in the parentheticals in this
(S)3.7 and in (S)8.2.
3.7(c) VESTING ON REEMPLOYMENT AFTER BREAK IN SERVICE. If a Participant
has 5 or more consecutive Breaks in Service (6 or more consecutive Breaks
in Service if the Alternative Maternity/Paternity Rule applies), all Years
of Service completed after such Breaks in Service shall be disregarded for
purposes of determining the Participant's nonforfeitable interest in the
Participation's Employer Account and Matching Account that accrued before
such Breaks in Service. Accordingly, as set forth in (S)8.2, the Employer
shall not be required to restore a Forfeiture upon such reemployment.
Unless the Adoption Agreement specifies the Rule of Parity, both the
Participant's pre-break service and post-break service shall count for
purposes of determining the nonforfeitable interest in the Participant's
post-break Employer Account and Matching Account. If the Adoption
Agreement specifies the Rule of Parity and the Participant's pre-break
Years of Service are disregarded under that rule, then the Participant's
pre-break Years of Service shall not count for purposes of determining the
nonforfeitable interest in the Participant's post-break Employer Account
and Matching Account. As provided in (S)8.2, separate accounts shall be
maintained for the Participant's pre-break and post-break Employer Account
and Matching Account and such accounts shall share in Fund Earnings.
If a Participant does not have 5 consecutive Breaks in Service (6 or more
consecutive Breaks in Service if the Alternative Maternity/Paternity Rule
applies), both the Participant's pre-break and post-break Years of Service
shall count in determining the nonforfeitable interest in both the pre-
break and post-break Employer Account and Matching Account balance.
However, unless the Adoption Agreement specifies the "Alternative to the
Buy Back Rule" (as described in (S)8.2(b)), a Participant's pre-break
Employer Account and Matching Account balance shall be zero unless the
Participant repays any distribution as provided in (S)8.2(a).
3.8 SERVICE EXCLUSIONS FOR VESTING PURPOSES.
3.8(a) STANDARD OPTION - An employee shall be credited with all Years of
Service for vesting purposes (to the extent such service is not disregarded
under (S)3.7 and (S)8.2).
3.8(b) ALTERNATIVE - The Employer may specify in the Adoption Agreement
service which is expressly excluded for vesting purposes.
25
SECTION 4. PARTICIPATION
4.1 GENERAL RULE. Each Eligible Employee shall become a Participant in this
Plan on the Entry Date which coincides with or immediately follows the date on
which the Eligible Employee satisfies the Participation Requirement (provided he
or she is an Eligible Employee on such Entry Date).
4.2 SPECIAL RULES.
4.2(a) PRE-EXISTING PLAN. Any Employee who was a participant in the Pre-
Existing Plan on the date immediately preceding the Effective Date or who
would have become a participant int he Pre-Existing Plan on the Effective
Date shall become a Participant under this Plan on such Effective Date.
However, no contributions shall be made by or on behalf of such Participant
unless the Participant is otherwise entitled to a contribution under (S)5.
4.2(b) REEMPLOYMENT BEFORE SATISFYING PARTICIPATION REQUIREMENT. If an
Employee separates from service prior to satisfying the Participation
Requirement and is thereafter reemployed, all employment completed by such
Employee prior to such separation shall be aggregated with such Employee's
employment completed after reemployment for purposes of satisfying the
Participation Requirement unless such prior employment is excluded under
the rules set forth in (S)3.
4.2(c) REEMPLOYMENT AFTER SATISFYING PARTICIPATION REQUIREMENT. If an
Employee satisfies the Participation Requirement before he or she
separates from service and the Employee thereafter is reemployed,
the Employee shall become a Participant on the later of (1) the
first day he or she completes an Hour of Service as an Eligible
Employee upon reemployment or (2) the first Entry Date following
the date on which he or she satisfies the Participation
Requirement. However, any such Employee whose prior service is
disregarded under (S)3 shall be treated as a new Employee for
participation purposes.
4.2(d) STATUS CHANGE. If the status of an Eligible Employee for whom no
Account is maintained changes to that of an Employee (other than
an Eligible Employee) and such person's status thereafter changes
back to that of an Eligible Employee, such person shall become a
Participant on the later of (1) the date the status changes back
to that of an Eligible Employee or (2) the first Entry Date which
coincides with or immediately follows the date on which he or she
satisfies the Participation Requirement.
4.3 PARTICIPATION INFORMATION. Each Participant shall file with the Plan
Administrator such personal information and data as the Plan Administrator deems
necessary for the orderly administration of this Plan.
4.4 NO EMPLOYMENT RIGHTS. This Plan is not a contract of employment and
participation in this Plan shall not give any Employee or former Employee the
right to be retained in the employ of the
26
Employer or any Affiliate or, upon termination of such employment, to have any
interest or right in the Fund other than as expressly provided in this Plan.
SECTION 5. CONTRIBUTIONS
5.1 PROFIT SHARING PLAN. If this Plan is adopted as a Profit Sharing Plan, the
Employer Contribution made by the Employer and each Participating Affiliate for
each Plan Year shall equal such amount, if any, as the Board determines in its
discretion that the Employer and each Participating Affiliate shall contribute
for such year. Employer Contributions under this (S)5.1 shall be made
5.1(a) STANDARD OPTION - from Net Profits or
5.1(b) ALTERNATIVE - if so specified in the Adoption Agreement, without
regard to Net Profits. Notwithstanding any such election, the Employer
intends that this Plan shall be a "profit-sharing plan" for purposes of the
Code and ERISA.
5.2 MONEY PURCHASE PENSION PLAN. If this Plan is adopted as a Money Purchase
Pension Plan, the Employer Contribution made by the Employer and each
Participating Affiliate for each Plan Year shall be an amount equal to the sum
of the contribution for each Active Participant as determined under the formula
specified in the Adoption Agreement. The Forfeitures for each Plan Year or
5.2(a) STANDARD OPTION - applied to reduce the Employer Contribution for
such Plan Year or
5.2(b) ALTERNATIVE - if so specified in the Adoption Agreement, allocated
to the Employer Account of each Active Participant in accordance with
(S)6.3(b). Notwithstanding any such election, the Employer intends that
this Plan shall be a "money purchased pension plan" for purposes of the
Code ERISA.
5.3 401(K) PLAN.
5.3(a) GENERAL. If this Plan is adopted as a 401(k) Plan, the contributions
made by the Employer and each Participating Affiliate shall be determined
in accordance with the elections made by the Employer in the Adoption
Agreement and the rules set forth in this (S)5.3. Contributions made under
this (S)5.3 other than Elective Deferrals and Employee Contributions shall
be made
5.3(a)(1) STANDARD OPTION - from Net Profits or
5.3(a)(2) ALTERNATIVE - if so specified in the Adoption Agreement,
without regard to Net Profits.
27
Elective Deferrals and Employee Contributions shall be made without regard
to Net Profits. Notwithstanding any such election, the Employer intends
that this Plan shall be a "profit-sharing plan" for purposes of the Code
and ERISA.
5.3(b) MATCHING CONTRIBUTIONS. If the Employer specifies in the Adoption
Agreement that Matching Contributions shall be made to that Plan, the
Employer and each Participating Affiliate shall make a Matching
Contribution for each eligible Participant based on the Employee
Contributions and Elective Deferrals made by or on behalf of such eligible
Participant in such amount and as of each Allocation Date as specified in
the Adoption Agreement. Notwithstanding the foregoing.
5.3(b)(1) for Plan Years beginning on or after the Final
Compliance Date, no Matching Contribution shall be made on
account of a Participant's Elective Deferrals or Employee
Contributions which are Excess Elective Deferrals under (S)7.3,
Excess Contributions under (S)7.4 or Excess Aggregate
Contributions under (S)7.5, and
5.3(b)(2) for Plan Years beginning before the Final Compliance
Date, no Matching Contribution shall be made on account of such
excess amounts unless specified in the formula for Matching
Contributions set forth in the Adoption Agreement.
5.3(c) QUALIFIED MATCHING CONTRIBUTIONS. If the Employer specifies in
the Adoption Agreement that Qualified Matching Contributions shall be made
to the Plan, the Employer and each Participating Affiliate shall make a
Qualified Matching Contribution for each eligible Participant based on the
Employee Contributions and Elective Deferrals made by or on behalf of such
eligible Participant in such amount and as of each Allocation Date as
specified in the Adoption Agreement. Qualified Matching Contributions shall
be subject to the following special rules:
5.3(c)(1) the Participant may not elect to receive such
contributions in cash until distribution from the Plan;
5.3(c)(2) such contributions shall be completely nonforfeitable
when made;
5.3(c)(3) such contributions shall be subject to the same
distribution and withdrawal restrictions applicable to Elective
Deferrals set forth in (S)9.2(b);
5.3(c)(4) for Plan Years beginning on and after the Final
Compliance Date, no Qualified Matching Contribution shall be made
on account of a Participant's Elective Deferrals or Employee
Contributions which are Excess Elective Deferrals under (S)7.3,
Excess Contributions under (S)7.4 or Excess Aggregate
Contributions under (S)7.5; and
28
5.3(c)(5) for Plan Years beginning before the Final Compliance
Date, no Qualified Matching Contribution shall be made on account
of such excess amounts unless specified in the formula for
Qualified Matching Contributions set forth in the Adoption
Agreement.
5.3(d) QUALIFIED NONELECTIVE CONTRIBUTION. If the Employer specifies in
the Adoption Agreement that Qualified Nonelective Contributions shall be
made to the Plan, the Employer and each Participating Affiliate shall make
Qualified Nonelective Contributions for each eligible Participant in such
amount and as of each Allocation Date specified in the Adoption Agreement.
In addition, in lieu of distributing Excess Contributions as provided in
(S)7.4(d) or Excess Aggregate Contributions as provided in (S)7.5(d), the
Employer and each Participating Affiliate may contribute on behalf of each
Participant who is a Nonhighly Compensated Employee on the last day of each
Plan Year such amount, if any, as the Employer and each Participating
Affiliate determine in their discretion to contribute for such Plan Year to
satisfy the ADP limit of (S)7.4(b) or the ACP limit of (S)7.5(b), or both,
pursuant to the regulations under the Code (S)401(k) and Code (S)491(m).
Qualified Nonelective Contributions shall be subject to the following
special rules:
5.3(d)(1) the Participant may not elect to receive such
contributions in cash until distributed from the Plan;
5.3(d)(2) such contributions shall be completely nonforfeitable
when made; and
5.3(d)(3) such contributions shall be subject to the same
distribution and withdrawal restrictions applicable to Elective
Deferrals set forth in (S)9.2(b).
5.3(e) DISCRETIONARY EMPLOYER CONTRIBUTION. If the Employer specifies in
the Adoption Agreement that discretionary Employer Contributions shall be
made, the Employer Contribution made by the Employer and each Participating
Affiliate for each Plan Year shall equal such amount, if any, as the Board
determines in its discretion that the Employer and each Participating
Affiliate shall contribute for such year.
5.3(f) ELECTIVE DEFERRALS. If the Employer specifies in the Adoption
Agreement that Elective Deferrals may be made, each Participant who is an
Eligible Employee may elect pursuant to a cash or deferred election that
the Employer and each Participating Affiliate make Elective Deferrals to
the Plan on the Participant's behalf in lieu of cash compensation for each
pay period ending on any date on or after he or she becomes a Participant
and on which he or she is an Eligible Employee in such amounts as specified
in the Adoption Agreement. All Elective Deferrals shall be made
exclusively through payroll withholding and shall be transferred by the
Employer or Participating Affiliate to the Trustee as soon as practicable
after the date such Elective Deferrals are withheld.
29
5.3(g) EMPLOYEE CONTRIBUTIONS. If the Employer specifies in the Adoption
Agreement that Employee Contributions may be made, each Participant who is
an Eligible Employee may elect to make Employee Contributions to the Plan
for each pay period ending on any date on or after he or she becomes a
Participant and on which he or she is an Eligible Employee in such amounts
as specified in the Adoption Agreement. All Employee Contributions shall be
made exclusively through payroll withholding and shall be transferred by
the Employer of Participating Affiliate to the Trustee as soon as
practicable after the date such Employee Contributions are withheld.
5.3(h) ELECTION RULES AND LIMITATIONS.
5.3(h)(1) GENERAL. The Plan Administrator from time to time
shall establish and shall communicate in writing to Participants
who are Eligible Employees such reasonable nondiscriminatory
deadlines, rules and procedures for making the elections
described in this (S)5.3 as the Plan Administrator deems
appropriate under the circumstances for the proper administration
of this Plan. A Participant's election shall be made on an
Election Form and no election shall be effective unless such
Election Form is properly completed and timely filed in
accordance with such established deadlines, rules and procedures.
The Plan Administrator shall have the right at any time
unilaterally to reduce the amount or percentage of Elective
Deferrals or Employee Contributions elected under this (S)5.3 if
the Plan Administrator determines that such reduction is
necessary to satisfy the limitations under (S)7 of the Plan.
5.3(h)(2) COMMENCEMENT OF ELECTION. A Participant's initial
election to make Elective Deferrals or Employee Contributions
under this (S)5.3 for any period of employment may be effective
as early as the Entry Date on which he or she becomes a
Participant in the Plan. If a Participant does not make a proper
election to make Elective Deferrals or Employee Contributions as
of such Entry Date, the Participant may thereafter make an
election
(i) STANDARD OPTION - effective on any date or
(ii) ALTERNATIVE - effective only as of the dates specified
in the Adoption Agreement.
A Participant's election shall remain in effect until revised or
terminated in accordance with this (S)5.3(h).
5.3(h)(3) REVISION OF ELECTION. An election, once effective, can
thereafter be revised by a Participant.
(iii) STANDARD OPTION - effective on any date or
30
(iv) ALTERNATIVE - effective only as of the dates specified
in the Adoption Agreement.
5.3(h)(4) TERMINATION OF ELECTION. A Participant shall have the
right to completely terminate an election under this (S)5.3 at
any time, and any such termination shall become effective as of
the first day of the first pay period following the date he or
she timely files a properly completed Election Form terminating
such election. Any Participant whose status as an Eligible
Employee terminates shall be deemed to have completely terminated
his or her election, if any, under this (S)5.3 as of the date the
Participant's status as such so terminates.
5.3(h)(5) RESUMPTION AFTER TERMINATION. A Participant whose
election terminates may thereafter elect to resume contributions
under this (S)5.3
(v) STANDARD OPTION - effective as of any date, or
(vi) ALTERNATIVE - effective only as of the dates specified
in the Adoption Agreement.
5.3(h)(6) EFFECTIVE DATES OF ELECTIONS. A Participant's
initial, revised or resumed election shall be effective only if
he or she is an Eligible Employee on the effective date of such
elections set forth in this (S)5.3(h). Elective Deferrals and
Employee Contributions made pursuant to a Participant's elections
shall be withheld from Compensation which otherwise would be paid
on or after the effective date of such election and while he or
she is an Eligible Employee. Under no circumstances shall a
Participant's Elective Deferral election apply to defer
Compensation which has been paid to the Participant or which he
or she is currently eligible to receive (in cash or otherwise) at
his or her discretion.
5.3(i) APPLICATION OF FORFEITURES. The Forfeitures attributable to
Matching Contributions and Employer Contributions shall be
5.3(i(1) STANDARD OPTION - applied to reduce the Matching
Contributions, Qualified Matching Contributions and Qualified
Nonelective Contributions, if any, in accordance with
(S)6.3(c)(2)(ii)(A) or
5.3(i)(2) ALTERNATIVE - if so specified in the Adoption
Agreement,
(vii) allocated to the Employer Account or Matching
Account, as applicable, of each active Participant in
accordance with (S)6.3(c)(2)(ii)(B)(1), or
(viii) for a nonstandardized Plan, allocated in accordance
with the formula specified in the Adoption Agreement.
31
5.4 TARGET BENEFIT PENSION PLAN.
5.4(a) GENERAL. If this Plan is adopted as a Target Benefit Pension
Plan, the Employer Contribution made by the Employer and each Participating
affiliate for each Plan Year shall be an amount equal to the sum of the
contributions required to fund each Active Participant's "Target Benefit"
specified in the Adoption Agreement. The Forfeitures for each Plan Year
shall be applied to reduce the Employer Contribution for such Plan Year.
Such Contribution shall be determined as of the last day of such Plan Year
under the individual level premium funding method, using the interest rate
and mortality table specified in the Adoption Agreement, the Participant's
age on his or her last birthday and the assumption of a constant rate of
future Compensation, in accordance with the following:
5.4(a)(1) STEP 1. If the Participant has not reached the Plan's
Normal Retirement Age, calculate the present value of the "Target
Benefit" specified in the Adoption Agreement by multiplying the
"Target Benefit" by the produce of (1) the applicable factor from
Table 1(a) or (b), whichever is appropriate, in Exhibit A to the
Adoption Agreement and (2) the applicable factor from Table
III(a) or (b), whichever is appropriate, in Exhibit A to the
Adoption Agreement. If the Participant is at or beyond the Plan's
Normal Retirement Age, calculate the present value of the "Target
Benefit" specified int he Adoption Agreement by multiplying the
"Target Benefit" by the applicable factor from Table IV(a) or
(b), whichever is appropriate, in Exhibit A to the Adoption
Agreement.
5.4(a)(2) STEP 2. Calculate the excess, if any, of the amount
determined in Step 1 over the theoretical reserve.
5.4(a)(3) STEP 3. Amortize the result in Step 2 by multiplying it
by the applicable factor from Table II in Exhibit A to the
Adoption Agreement. For the Plan Year in which the Participant
attains Normal Retirement Age and for Subsequent Plan Years, the
applicable factor is 1.0.
5.4(b) THEORETICAL RESERVE. For purposes of this (S)5.4, the theoretical
reserve is determined as follows:
5.4(b)(1) A Participant's theoretical reserve as of the last day
of the first Plan Year in which the Participant participant's int
he Plan, and as of the last day of the first Plan Year after any
Plan Year in which the Plan wither did not satisfy the safe
harbor in (S)1.401(a)(4)-8(b)(3) of the Federal Income Tax
Regulations or was not a Prior Safe Harbor Plan, is zero. In all
other cases, in the first Plan Year in which this theoretical
reserve provision is adopted or made effective, if later, as
specified in the Adoption Agreement ("year 1"), the initial
theoretical reserve is determined as follows:
(i) Calculate as of the last day of the Plan Year
immediately preceding year 1 the present value of the
"Target Benefit", using the actuarial
32
assumptions, the provisions of the Plan, and the
Participant's Average Annual Compensation as of such date;
provided, however, for a Participant who is beyond Normal
Retirement Age in year 1, the straight life annuity factor
used for such determination shall be in the factor
applicable for such Normal Retirement Age.
(ii) Calculate as of the last day of the Plan Year
immediately preceding year 1 the present value of future
Employer Contributions, i.e., the contributions due each
---
Plan Year using the actuarial assumptions, the provisions of
the Plan (disregarding those provisions of the Plan
providing for the limitations of Code (S)415 or the minimum
contributions under Code(S)416), and the Participant's
Average Annual Compensation as of such date, beginning with
year 1 through the end of the Plan Year in which the
Participant attains Normal Retirement Age.
(iii) Subtract the amount determine in clause (ii) from the
amount determined in clause (i).
5.4(b)(2) Accumulate the initial theoretical reserve in
(S)5.4(b)(1) and the Employer Contribution (as limited by Code
(S)415, but without regard to any required minimum contributions
under Code(S)416) for each Plan Year beginning in year 1 up
through the last day of the current Plan Year (excluding
contributions, if any, made for the current Plan Year) using the
Plan's interest assumption in effect for each such year. In any
Plan Year following the Plan Year in which the Participant
attains Normal Retirement Age, the accumulation is calculated
assuming an interest rate of 0%.
5.4(b)(3) The calculation is this (S)5.4(b) shall be made as of
the last day of each Plan Year, on the basis of the Participant's
age on his or her last birthday and the interest rate in effect
on the last day of the prior Plan Year.
5.4(c) PAST SERVICE CREDITS. If the Plan is adopted as a standardized
Plan, upon initial adoption of this Plan or upon a Plan amendment which
is effective on or after the Final Compliance Date, no more than 5 years
of credit shall be granted for service completed before the effective
date of such adoption or amendment, and any such past service credit
shall be granted on a uniform basis to all Participants in the Plan on
such effective date.
5.4(d) TRA 86 AMENDMENT. A Participant's Account balance shall not be
reduced as a result of an amendment to this Plan or a Pre-Existing Plan
to satisfy the requirements of TRA 86. To the extent that contributions
actually made on a Participant's behalf for Plan Years beginning after
December 31, 1998 exceed the contributions that would have been required
under the formula as effective for such years as a result of the
amendment of this Plan or a Pre-Existing Plan to satisfy TRA 86, such
excess shall be applied to offset contributions required to such
Participant's Account for Plan Years beginning after the date
33
such TRA 86 amendments is adopted or, if later, the date such TRA 86
amendment is effective consistent with ERISA (S)204(h).
5.4(e) SPECIAL DEFINITIONS AND RULES. The special definitions and rules
in this (S)5.4(e) shall apply for purposes of determining the Employer
Contributions under a Target Benefit Pension Plan.
5.4(e)(1) CUMULATIVE DISPARITY LIMIT. For a Plan with a Unit
Benefit Formula, a Participant's Cumulative Limit is equal to 35
minus (1) the number of the Participant's Years of Participation
under this Plan during which this Plan did not satisfy the safe
harbor for target benefit plans in (S)1.401(a)(4)-8(b)(3) of the
Federal Income Tax Regulations or was not a Prior Safe Harbor
Plan, and (2) the number of years during which the Participant
participated in one or more qualified plans or simplified
employee pension plans ever maintained by the Employer (other
than years counted in clause (1) or counted toward a
Participant's total Years of Projected Participation). The
Cumulative Disparity Limit shall be determined taking into
account only those Years of Participation in this Plan beginning
after December 31, 1988 when this Plan had an integrated benefit
formula and those years of participation in such other qualified
plans and simplified employee pension plans beginning after
December 31, 1988 during which the Participant actually received
an allocation under an integrated defined contribution plan
(other than a target benefit pension plan), during which the
Participant was eligible to receive a benefit under an integrated
defined benefit pension plan or an integrated target benefit
pension plan), or during which the Participant received an
allocation or accrued a benefit under a plan which imputed
permitted disparity pursuant to (S)1.401(a)-7 of the Federal
Income Tax Regulations.
5.4(e)(2) CUMULATIVE DISPARITY REDUCTION. For a Plan with a
Fixed Benefit Formula, the Excess Benefit Percentage will further
be reduced as set forth in this (S)5.4(e)(2) for a Participant
with more than 35 "cumulative disparity years." A Participant's
"cumulative disparity years" consist of the sum of (1) the
Participant's total Years of Projected Participation, (2) the
Participant's Years of Participation during which this Plan did
not satisfy the safe harbor for target benefit plans in
regulations (S)1.401(a)(4)-8(b)(3) of the Federal Income Tax
Regulations or was not a Prior Safe Harbor Plan, and (3) the
number of years during which the Participant participated in one
or more qualified plans or simplified employee pension plans ever
maintained by the Employer (other than years in clause (1) or (2)
above); provided that the cumulative disparity years shall be
determined taking into account only those years of Participation
in this Plan beginning after December 31, 1988 when this Plan had
an integrated benefit formula and those years of participation in
such other qualified plans and simplified employee pension plans
beginning after December 31, 1988 during which the Participant
actually received an allocation under an integrated defined
contribution plan (other than a target benefit pension plan),
during which the Participant was eligible to receive a benefit
under an integrated defined benefit pension plan (or an
integrated target benefit pension
34
plan), or during which the Participant received an allocation or
accrued a benefit under a plan which imputed permitted disparity
pursuant to (S)1.401(a)-7 of the Federal Income Tax Regulations.
If this Cumulative Disparity Reduction applies, the Excess Benefit
Percentage will be reduced as follows:
(A) Subtract the Participant's Base Benefit Percentage from the
Participant's Excess Benefit Percentage (after modification
as required in the Adoption Agreement for less than 35 Years
of Projected Participation).
(B) Multiply the results determined in (A) by a fraction (not
less than 0), the numerator of which is 35 minus the sum of
the years in clause (2) and (3) of this (S)5.4(e)2), and the
denominator of which is 35.
(C) The Participant's Excess Benefit Percentage is equal to the
sum of the result in (b) and the Participant's Base Benefit
Percentage, as otherwise modified in the Adoption Agreement.
5.4(e)(3) CURRENT STATED BENEFIT. Each Participant's Current Stated
Benefit will be the product of (1) the amount derived from the
formula specified in the Adoption Agreement,a nd (2) a fraction, the
numerator of which is the Participant's number of Years of
Participation from the latest Fresh-Start Date (if any) through and
including the later of the year in which the Participant attains
Normal Retirement Age or the current Plan Year, and the denominator
of which is the Participant's total Years of Projected Participation.
If this Plan has not had a Fresh-Start Date, such fraction will equal
1.0 for all Participants. In any event, for those Participants who
first participated in the Plan after the latest Fresh-Start Date,
such fraction will equal 1.0. For purposes of determining the
numerator of the fraction described in clause (2), only those current
and prior years during which a Participant was eligible to receive a
contribution under the Plan will be taken into account.
5.4(e)(4) FRESH-START DATE. Fresh-Start Date means the last day of
a Plan Year preceding a Plan Year for which provisions that would
affect the amount of the Current Stated Benefit are amended. If
applicable, the latest Fresh-Start Date of the Plan shall be
designated in the Adoption Agreement.
5.4(e)(5) FROZEN ACCRUED STATED BENEFIT. A Participant's Frozen
Accrued Stated Benefit is determined as of the Plan's latest Fresh-
Start Date as if the Participant terminated employment with the
Employer as of that date, without regard to any amendment made to the
Plan after that date except as permitted under regulations.
35
A Participant's Frozen Accrued Stated Benefit is equal to the amount
of the Current Stated Benefit in effect on the latest Fresh-Start
Date that a Participant has accrued as of that date, assuming that
such Current Stated Benefit accrues ratably from the year in which
the Participant first participated in this Plan (or, if later, the
immediately preceding Fresh-Start Date under this Plan) through and
including the Plan Year in which the Participant attains Normal
Retirement Age.
The amount of the Current Stated Benefit in effect on the latest
Fresh-Start Date that a Participant is assumed to have ratably
accrued is determined by multiplying the Plan's Current Stated
Benefit in effect on that date by a fraction, the numerator of which
is the number of Years of Participation from the later of the
Participant's first Year of Participation in this Plan or the
immediately preceding Fresh-Start Date (if any) through and including
the year that contains the latest Fresh-Start Date, and the
denominator of which is the number of Years of Participation from the
later of the Participant's first Year of Participation in this Plan
or the immediately preceding Fresh-Start Date (if any) through and
including the later of the year in which the Participant attains
Normal Retirement Age or the current Plan Year. For purposes of this
paragraph, only those Years of Participation during which a
Participant was eligible to receive a contribution under the Plan
will be taken into account.
If this Plan has had a preceding Fresh-Start Date, each Participant's
Frozen Accrued Stated Benefit as of the latest Fresh-Start Date will
equal the sum of the amount of the Current State Benefit in effect on
the latest Fresh-Start Date that a Participant is assumed to have
ratably accrued as of that date under the preceding paragraph, and
the Frozen Accrued Stated Benefit determined as of the preceding
Fresh-Start Date(s).
If (1) the Current Stated Benefit formula in effect on the latest
Fresh-Start Date was not express as a straight life annuity for all
Participants, and/or (2) the Normal Retirement Age for any
Participant on the latest Fresh-Start Date was greater than the
Normal Retirement Age for that Participant under the Current Stated
Benefit formula in effect after the latest Fresh-Start Date, the
Frozen Accrued Stated Benefit will be converted to an actuarially
equivalent straight life annuity commencing at the Participant's
Normal Retirement Age under the Current State Benefit formula in
effect after the latest Fresh-Start Date, using the actuarial
assumptions in effect under the Current State Benefit formula in
effect on the latest Fresh-Start Date.
Notwithstanding the above, if in the immediately preceding Plan Year this
Plan did not satisfy the safe harbor for target benefit plans in
(S)1.401(a)(4)-8(b)(3) of the Federal Income Tax Regulations or was not a
Prior Safe Harbor Plan, the Frozen Accrued Stated Benefit for any
Participant in the Plan, determined for the next Plan Year during which
(S)1.401(a)(4)-8(b)(3) of the Federal Income Tax Regulations is satisfied
until the year following the next Fresh-Start Date, if any, will be zero.
36
5.4(e)(6) MAXIMUM EXCESS ALLOWANCE. The Maximum Excess Allowance is
equal to the lesser of the Base Benefit Percentage or
(1) for a Plan with a Unit Benefit Formula, the Applicable
Factor determined from Table A or Table B in Exhibit B to the
Adoption Agreement, and
(2) for a Plan with a Fixed Benefit Formula, 35 times the
Applicable Factor determined from Table A or Table B in Exhibit B
to the Adoption Agreement.
5.4(e)(7) OVERALL PERMITTED DISPARITY LIMIT. If for any Plan Year
this Plan benefits any Participant who also benefits under another
qualified plan or simplified employee pension plan maintained by the
Employer that provides for permitted disparity (or imputes permitted
disparity), the Current State Benefit for all Participants under this
Plan will be equal to the Excess Benefit Percentage set forth in the
Adoption Agreement multiplied times
(1) for a Plan with a Unit Benefit Formula, the Participant's
total Average Annual Compensation times the Participant's total
Years of Projected Participation under the Plan up to the maximum
total Years of Projected Participation specified in the Adoption
Agreement, and
(2) for a Plan with a Fixed Benefit Formula, the Participant's
total Average Annual Compensation (prorated for years less than
35).
If this paragraph is applicable, this Plan will have a Fresh-Start
Date on the last day of the Plan Year preceding the Plan Year in
which this paragraph is first applicable. In addition, if in any
subsequent Plan Year this Plan no longer benefits any Participant who
also benefits under another plan of the Employer, this Plan will have
a Fresh-Start Date on the last day of the Plan Year preceding the
Plan Year in which this paragraph is no longer applicable.
5.4(e)(8) PRIOR SAFE HARBOR PLAN. Prior Safe Harbor Plan means a
Plan adopted and in effect on September 19, 1991, that satisfied the
applicable nondiscrimination requirements for target benefit plans on
that date and in all prior periods (taking into account no amendments
to the Plan after September 19, 1991, other than amendments necessary
to satisfy Code (S)401(1).
5.4(e)(9) YEAR OF PARTICIPATION - means each Year of Service (as
determined in the same manner as a Year of Service for vesting
purposes) completed after the Participant first becomes a Participant
in this Plan or the Pre-Existing Plan.
5.4(e)(10) YEARS OF PROJECTED PARTICIPATION. For purposes of
determining a Participant's Current Stated Benefit, a Participant's
total Years of Projected
37
Participation under the Plan is the sum of the Participant's total
number of Years of Participation under this Plan for the years this
Plan consecutively satisfies the safe harbor for target benefit plans
in (S)1.401(a)(4)-8(b)(3) of the Federal Income Tax Regulations or
was a Prior Safe Harbor Plan, if applicable, projected through the
later of the end of the Plan Year in which the Participant attains
Normal Retirement Age or the end of the current Plan Year. For
purposes of determining a Participant's total Years of Projected
Participation, only those current and prior years during which a
Participant was eligible to receive a contribution under the Plan
will be taken into account.
5.5 ROLLOVER CONTRIBUTIONS.
5.5(a) STANDARD OPTION - An Eligible Employee may contribute on his or her
own behalf (or elect a direct transfer of) a Rollover Contribution to the
Fund, provided (1) such contribution shall be made (or transferred) in cash
or in a form which is acceptable to the Trustee, (2) such contribution
shall be made in accordance with such rules as the Plan Administrator and
the Trustee deem appropriate under the circumstances, and (3) if so
specified in the Adoption Agreement, no Rollover Contribution may be made
prior to the Entry Date on which the Eligible Employee becomes a
Participant in this Plan.
5.5(b) ALTERNATIVE - The Employer may specify in the Adoption Agreement
that no Rollover Contributions may be made.
5.6 NO EMPLOYEE OR MATCHING CONTRIBUTIONS. Unless this Plan is adopted as a
401(k) Plan which permits Employee Contributions, no nondeductible employee
contributions or matching contributions (as defined in Code (S)401(m) shall be
made to this Plan after the Plan Year in which this Plan is adopted by the
Employer. Any nondeductible employee contributions and matching contributions
made under a Pre-Existing Plan or under this Plan (in accordance with the
preceding sentence) for Plan Years beginning after December 31, 1986 shall be
subject to the nondiscrimination limitations under Code (S)401(m) as set forth
in (S)7.5.
5.7 NO DEDUCTIBLE VOLUNTARY EMPLOYEE CONTRIBUTIONS. No voluntary deductible
employee contributions shall be made to this Plan for a taxable year beginning
after December 31, 1986. Any voluntary deductible employee contributions made
under a Pre-Existing Plan prior to such date shall be maintained in a separate
account under this Plan. Such account shall be nonforfeitable at all times and
shall share in the Fund Earnings in the same manner as described in (S)6.2. No
part of such account shall be used to purchase life insurance. Subject to
(S)10, JOINT AND SURVIVOR ANNUITY REQUIREMENTS (if applicable), a Participant
may withdraw any part of the Participant's voluntary deductible employee
contribution account by making a written application to the Plan Administrator.
5.8 GENERAL RULES APPLICABLE TO ALL CONTRIBUTIONS.
5.8(a) LIMITATIONS ON CONTRIBUTIONS. The contributions made under this
(S)5 and the allocation of those contributions under (S)6 shall be subject
to the limitations set forth in the Adoption Agreement, this (S)5 and (S)7.
38
5.8(b) CODE (S)415. The contributions for any Plan Year shall not (based on
the Employer's understanding of the facts at the time the contribution is
made) exceed the total amount allocable for such year among the Accounts of
all Participants in light of the restrictions in Code (S)415 as set forth
in (S)7.2. If a suspense account as described in (S)7.2(b) is in existence
at any time during a particular Limitation Year (1) no Employer
Contribution shall be made for such Limitation Year if (based on the
Employer's understanding of the facts at the time the contribution is made)
the allocation of the amount in such suspense account would be precluded by
Code (S)415 for such Limitation Year and (2) if this Plan is adopted as a
Money Purchase Pension Plan or a Target Benefit Plan, the Employer
Contribution required under this (S)5 shall be reduced by the amount in
such suspense account.
5.8(c) CODE (S)416. If this Plan is a To-Heavy Plan (as defined in (S)12)
for any Plan Year, the minimum allocation required under Code (S)416 shall
be made in accordance with (S)12.
5.8(d) LEASED EMPLOYEES. Contributions or benefits which are provided by
a leasing organization on behalf of a Participant who is a Leased Employee
and which are attributable to services performed by such Participant for
the Employer or a Participating Affiliate shall be credited against the
contribution, if any, due to be allocated to such Participant under this
Plan in accordance with Code (S)414(n).
5.8(e) OWNER-EMPLOYEES.
5.8(e)(1) GENERAL. If this Plan provides contributions or benefits
for one or more Owner-Employees who control the Employer or a
Participating Affiliate, then
(i) If such Owner-Employee, or Owner-Employees, also control
one or more of other trades or businesses,
(A) this Plan and the plans established for such other
trades or businesses shall, when viewed as a single plan,
satisfy the applicable requirements of Code (S)401(a) and
Code (S)401(d) for the employees of the Employer or the
Participating Affiliates and such other trades or
businesses, and
(B) the employees of such other trades or businesses shall
be included in a plan which satisfies the applicable
requirements of Code (S)401(a) and Code (S)401(d) and
which provides contributions and benefits which are at
least as favorable as those provided under this Plan for
such Owner-Employees, or
(ii) if such Owner-Employee is covered as an owner-employee
(within the meaning of Code (S)401(c)(3) under the plans of two
or more other trades or businesses which such Owner-Employee
does not control, then the contributions or benefits provided
under this Plan must be at least as
39
favorable as those provided for such Owner-Employee under the
most favorable plan of such other trade or business.
5.8(e)(2) CONTROL. For purposes of this (S)5.8(e), an Owner-
Employee, or two or more such Owner-Employees, shall be considered to
control a trade or business if such Owner-Employee, or such Owner-
Employees together,
(iii) own the entire interest in an unincorporated trade or
business, or
(iv) in the case of a partnership, own more than 50% of either
the capital interest or the profits interest in such partnership.
Such Owner-Employee, or such Owner-Employees, shall be treated as
owning any interest in a partnership which is owned, directly or
indirectly, by a partnership which is controlled by such Owner-
Employee, or such Owner-Employees, within the meaning of clause
(ii).
SECTION 6. ALLOCATIONS TO ACCOUNTS
6.1 ESTABLISHMENT AND MAINTENANCE OF ACCOUNTS. An Account shall be established
and maintained for each Participant under the Plan and the Plan Administrator
shall established reasonable and nondiscretionary procedures under which (a) any
Forfeitures, insurance premium payments, loans, withdrawals, distributions and
other charges properly allocable to such Account shall be debited from such
Account and (b) any insurance contract dividends, insurance contract surrender
proceeds, loan repayments and other amounts properly allocable to such Account
(other than amounts described in (S)6.2 and (S)6.3) shall be credited to such
Account.
6.2 ALLOCATION OF FUND EARNINGS.
6.2(a) GENERAL. As of each Valuation Date the fair market value of
the Fund and the Fund Earnings for the period which ends on such
Valuation Date shall be determined. Such Fund Earnings shall be
allocated (and posted) among all Accounts in the proportion that the
balance in each such Account (determined in accordance with
(S)6.2(b)) bears to the total balance in all such Accounts in order
that each Account shall proportionately benefit from any earnings or
appreciation in the value of the Fund assets in which such Account is
invested or proportionately suffer any losses or depreciation in the
value of the Fund assets in which such Account is invested. Subject
to (S)13, each Participant shall have a ratable interest in all
assets of the Fund.
6.2(b) ALLOCATION PROCEDURES. The Plan Administrator shall
establish nondiscretionary allocation procedures for purposes of the
allocation of Fund Earnings under (S)6.2(a), which procedure shall be
set forth in writing with the records of this Plan. If so specified
in such procedures, the balance in each Account shall be determined
after adjusting for all or a portion of the contributions
40
and other amounts credited to or debited from such Account since the
preceding Valuation Date. Further, if so provided in such allocation
procedures. Fund Earnings shall not be allocated to any Forfeiture
or to the balance in any suspense account described in (S)7.2(b).
6.3 ALLOCATION OF CONTRIBUTIONS AND FORFEITURES. Subject to the limitations in
(S)7, the Forfeitures (and any amount deemed to be a Forfeiture under the terms
of this Plan) and the contributions shall be allocated (and posted) in
accordance with the following rules:
6.3(a) PROFIT SHARING PLAN.
6.3(a)(1) NONINTEGRATED. If this Plan is adopted as a Profit
Sharing Plan and the nonintegrated allocation formula is
specified in the Adoption Agreement, the Forfeiture and the
Employer Contribution for each Plan Year shall be allocated (and
posted) as of the last day of such Plan Year to the Employer
Account of each Active Participant in the same ratio that each
Active Participant's Compensation for such Plan Year bears to the
total Compensation of all Active Participants for such Plan Year.
6.3(a)(2) INTEGRATED. If this Plan is adopted as a Profit Sharing
Plan and the integrated allocation formula is specified in the
Adoption Agreement, the Forfeitures and the Employer Contribution
shall be allocated (and posted) as of the last day of each Plan
Year to the Employer Account of each Active Participant in
accordance with the following:
(i) STEP ONE - First, the lesser of (A) the sum of the
Employer Contribution and Forfeitures for such Plan Year or
(B) the Integration Amount for such Plan Year shall be
allocated to the Employer Account of each Active Participant
in the same ratio that the sum of the total Compensation and
Excess Compensation of each Active Participant for such Plan
Year bears to the sum of the total Compensation and Excess
Compensation of all Active Participants for such Plan Year.
(ii) STEP TWO - Second, the remaining Employer Contribution
and the Forfeitures, if any, for such Plan Year shall be
allocated to the Employer Account of each Active Participant
(whether or not he or she had Excess Compensation) in the
same ratio that each Active Participant's total Compensation
for such Plan Year bears to the total Compensation of all
Active Participants for such Plan Year.
(iii) SPECIAL DEFINITIONS - For purpose of this
(S)6.3(a)(2).
(A) "Integration Amount" means the product of (1) the
total Compensation and the total Excess Compensation
of all Active Participants and (2) the Integration
Percentage specified in the
41
Adoption Agreement, but in no event shall the
Integration Percentage exceed the Maximum Disparity
Rate for any Plan Year beginning after December 31,
1988.
(B) "Excess Compensation" means the amount, if any, of
a Participant's Compensation for such Plan Year which
exceeds the Integration Level for such Plan Year.
(iv) TOO-HEAVY. If this Plan is a Top-Heavy for any Plan
Year, the allocation formula in (S)12.3(h)(1) shall apply in
lieu of the formula in this (S)6.3(a)(2) for such Plan Year.
6.3(b) MONEY PURCHASE PENSION PLAN. If this Plan is adopted as a Money
Purchase Pension Plan, the Forfeitures and the Employer Contribution
actually made under (S)5.2 (adjusted, if applicable, in accordance with
(S)12.3(h)(2) for a Top-Heavy Plan) shall be allocated (and posted) as of
the last day of each Plan Year to the Employer Account of each Active
Participant in accordance with the formula specified in the Adoption
Agreement. If Forfeitures are applied to reduce the Employer Contribution
and the Forfeitures available under (S)8.2(e) for any Plan Year exceed the
contribution specified in the Adoption Agreement for such Plan Year, such
excess shall be held in a separate account and shall be applied in full as
a Forfeiture to offset such contributions in the future until such account
is exhausted under this (S)6.3(b). If Forfeitures are to be allocated to
Active Participants, such Forfeitures shall be allocated (and posted) to
the Employer Account of each Active Participant in the same ratio that such
Active Participant's Compensation for such Plan Year bears to the total
Compensation of all such Active Participants for such Plan Year.
6.3(c) 401(K) PLAN. If this Plan is adopted as a 401(k) Plan, Forfeitures
and contributions made under (S)5.3 shall be allocated (and posted) in
accordance with the following:
6.3(c)(1) ELECTIVE DEFERRALS AND EMPLOYEE CONTRIBUTIONS. Elective
Deferrals made on a Participant's behalf for the period ending on
each Valuation Date shall be credited to the Participant's Elective
Deferral Account as of such Valuation Date and the Employee
Contributions made by a Participant for such period shall be
credited to the Participant's Employee Account as of such Valuation
Date.
6.3(c)(2) MATCHING CONTRIBUTIONS AND QUALIFIED MATCHING
CONTRIBUTIONS.
(v) ALLOCATION. Matching Contributions and Qualified
Matching Contributions made on a Participant's behalf shall
be credited to the Participant's Matching Account and
Qualified Matching Account, respectively,
(A) STANDARD OPTION - as of the last day of each Plan
Year or
42
(B) ALTERNATIVE - only as of each Allocation Date
specified in the Adoption Agreement.
(vi) FORFEITURES. Forfeitures attributable to Matching
Accounts shall be allocated or applied in accordance with the
following rules; provided, no Forfeitures attributable to
Excess Aggregate Contributions under (S)7.5(d) shall be
allocated to the Account of any Highly Compensated Employee:
(A) FORFEITURES TO REDUCE MATCHING CONTRIBUTION
(STANDARD OPTION). Forfeitures attributable to Matching
Accounts shall be applied to reduce the Matching
Contributions for the applicable Allocation Date (as
specified in (S)8.2 and the Adoption Agreement). If the
Forfeitures exceed the Matching Contribution specified
in the Adoption Agreement for any Allocation Date, such
excess shall be held in a separate account and shall be
applied in full as a Forfeiture to offset Matching
Contributions as of the next Allocation Date (and
succeeding Valuation Date) until such account is
exhausted under this (S)6.3(c)(2).
(B) FORFEITURES TO BE ALLOCATED (ALTERNATIVE). If so
specified in the Adoption Agreement, Forfeitures
attributable to Matching Accounts shall be allocated
(and posted)
(I) as of the last day of such Plan Year to the
Matching Account of each Active Participant in the
same ratio that such Active Participant's
Compensation for such Plan Year bears to the total
Compensation of all such Active Participants for
such Plan Year, or
(II) in accordance with the formula specified in the
Adoption Agreement for a nonstandardized Plan.
6.3(c)(3) QUALIFIED NONELECTIVE CONTRIBUTIONS. Qualified
Nonelective Contributions made on behalf of a Participant shall be
credited to the Participant's Qualified Nonelective Account
(vii) STANDARD OPTION - as of the last day of each Plan
Year or
(viii) ALTERNATIVE - only as of each Allocation Date
specified in the Adoption Agreement.
6.3(c)(4) DISCRETIONARY EMPLOYER CONTRIBUTION.
43
(ix) ALLOCATION. As of the last day of each Plan Year, the
Employer Contribution, if any, for such Plan Year shall be
allocated (and posted) to the Employer Account of each Active
Participant
(A) STANDARD OPTION - in the nonintegrated method
described in (S)6.3(a)(1).
(B) ALTERNATIVE - if so specified in the Adoption
Agreement, in the integrated method described in
(S)6.3(a)(2).
(x) FORFEITURES. Forfeitures attributable to Employer
Accounts shall be allocated or applied in accordance with the
following:
(A) STANDARD OPTION. Forfeitures attributable to
Employer Accounts shall be allocated (and posted) as
of the last day of each Plan Year to the Employer
Account of each Active Participant in the same manner
as the Employer Contribution under (S)6.3(c)(4)(i).
(B) ALTERNATIVE. If so specified in the Adoption
Agreement, Forfeitures attributable to Employer
Accounts shall be
(I) applied to reduce Matching Contributions,
Qualified Matching Contributions and
Qualified Nonelective Contributions for the
applicable Allocation Date (as specified in
(S)8.2 and the Adoption Agreement) and
succeeding Allocation Dates, if necessary, or
(II) allocated (and posted) in accordance with the
formula specified in the Adoption Agreement
for a nonstandardized Plan.
6.3(d) TARGET BENEFIT PENSION PLAN. If this Plan is adopted as a Target
Benefit Pension Plan, the Forfeitures and the Employer Contribution
actually made under (S)5.4 for each Plan Year shall be (and posted) as of
the last day of each Plan Year to the Employer Account of each Active
Participant as specified in the Adoption Agreement. The Forfeitures for
each Plan Year shall be applied to reduce the Employer Contribution for
such Plan Year. If Forfeitures for any Plan Year exceed the Employer
Contributions determined under (S)5.4 for such Plan Year, such excess shall
be held in a separate account and shall be applied in full to offset
Employer Contributions in the future until such account is exhausted under
this (S)6.3(d).
6.3(e) TOP HEAVY MINIMUM ALLOCATION. If this Plan is a Top-Heavy Plan (as
defined in (S)12), the minimum allocation required to be made under this
Plan under (S)12.3, if any, shall be allocated (and posted) as of the last
day of the Plan Year (1) to the Employer Account of each Participant who is
not an Active Participant but for whom a minimum
44
allocation is required under (S)12.3 and (2) to each Active Participant for
whom a minimum allocation is required to be made in this Plan under (S)12.3
to the extent such minimum allocation is not otherwise satisfied by the
allocation under this (S)6.3. If this Plan is adopted as a Profit Sharing
Plan, the minimum allocation may be made by reallocating the Employer
Contribution and Forfeitures allocated under (S)6.3(a) in a manner which
satisfies this (S)6.3(e) or by contributing an additional amount which will
be allocated in accordance with this (S)6.3(e). If this Plan is adopted as
a Money Purchase Pension Plan, a Target Benefit Pension Plan or a 401(k)
Plan, an additional Employer Contribution shall be made to satisfy this
(S)6.3(e).
6.3(f) ROLLOVER CONTRIBUTIONS. Rollover Contributions made by a
Participant during the period ending on each Valuation Date shall be
credited to the Participant's Rollover Contribution Account as of such
Valuation Date.
6.4 ALLOCATION REPORT. The Plan Administrator shall maintain records of the
allocations and adjustments made to Accounts under this (S)6 and shall at least
annually prepare and forward to each such Participant and Beneficiary a
statement which shows the new balance in such person's Account.
6.5 ALLOCATION CORRECTIONS. If an error or omission is discovered in any
Account, then as of the first Valuation Date in the Plan Year in which the error
or omission is discovered, the Plan Administrator shall make (and post) an
adjustment to such Account as the Plan Administrator deems necessary to remedy
in an equitable manner such error or omission.
SECTION 7. STATUTORY LIMITATIONS ON ALLOCATIONS
7.1 EFFECTIVE DATE. Except as otherwise expressly provided, this (S)7 shall be
effective retroactive to Plan Years beginning on or after January 1, 1987.
7.2 LIMITATIONS ON ANNUAL ADDITIONS UNDER CODE (S)415.
7.2(a) SPECIAL DEFINITIONS. For purposes of this (S)7.2, the terms
defined in this (S)7.2 shall have the meanings shown opposite such terms.
7.2(a)(1) ANNUAL ADDITIONS - means for each Participant for any
Limitation Year.
(i) the sum of the employer contributions, forfeitures, and
nondeductible employee contributions creditable (without
regard to the application of this (S)7.2) to the
Participant's account under this Plan or under any other
defined contribution plan (including a Master or Prototype
Plan and any defined benefit plan which provides for employee
contributions) maintained by the Employer for such Limitation
Year; and for this purpose, any Excess Amount allocated under
(S)7.2(b), any Excess Elective Deferrals under (S)7.3 (unless
such excess is distributed by the deadline set forth in
(S)7.3(d)), any Excess
45
Contributions under (S)7.4 and any Excess Aggregate
Contributions under (S)7.3 shall be considered Annual
Additions for such Limitation Year;
(ii) amounts allocated on behalf of such Participant after
March 31, 1984 to an individual medical account (as defined
in Code (S)415(1)(2) which is part of a pension or annuity
plan maintained by the Employer; and
(iii) 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 Code (S)419A(d)(3) under a welfare benefit
fund (as described in Code (S)419(e)) maintained by the
Employer; and
(iv) allocations under a simplified employee pension (as
defined in Code (S)408(k).
7.2(a)(2) COMPENSATION - means for a Self-Employed Individual,
such individual's Earned Income, and for each other Employee
(v) STANDARD OPTION - compensation reportable on Form W-2
as defined in (S)2.10(a)(1), or
(vi) ALTERNATIVE - if so specified in the Adoption
Agreement,
(A) compensation subject to withholding as defined in
(S)2.10(a)(2)(i), or
(B) the Employee's wages, salaries, fees for
professional services and other amounts received
(without regard to whether or not an amount is paid in
cash) for personal services actually rendered in the
course of employment with the Employer maintaining the
Plan to the extent that the amounts are includable in
gross income during the Limitation Year (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 reimbursement or other
expense allowances under a nonaccountable plan as
described in (S)1.62-2(c) of the Federal Income Tax
Regulations). Compensation shall not include the
following:
(I) Employer contributions to a plan of deferred
compensation which are not includable in the
Participant's gross income for the taxable year in
which contributed, or Employer contributions under
any simplified employee pension plan, or any
(II) amounts
46
realized from the exercise of a nonqualified
stock option, or when restricted stock (or
property) held by the Participant either become
s freely transferable or is no longer subject to
a substantial risk of forfeiture;
(III) amounts realized from the sale, exchange or
other disposition of stock acquired under a
qualified stock option; and
(IV) other amounts which receive 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 Code(S)403(b) (whether or
not the
47
contributions are actually excludable from the
gross income of the Participant).
For purposes or applying the limitations of this (S)7.2, an
Employee's Compensation for Limitation Years beginning on and after
the Final Compliance Date shall not include any Compensation which is
accrued for such Limitation Year.
However, for purposes of applying the limitations of this (S)7.2 to a
Participant in a defined contribution plan who is permanently and
totally disabled (as defined in Code (S)22(e)(3)), the term
"Compensation" shall mean the compensation such Participant would
have received for the Limitation Year if the Participant had been
paid at the Participant's rate of Compensation (as defined in this
(S)7.2(a)(2) paid immediately before becoming permanently and totally
disabled, and, further, such imputed compensation for the disabled
Participant may be taken into account only if the Participant is not
a Highly Compensated Employee and contributions made on behalf of
such Participant are nonforfeitable when made.
7.2(a)(3) DEFINED BENEFIT FRACTION - means a fraction, (i) the
numerator of which shall be the sum of the Participant's Projected
Annual Benefits under all defined benefit plans (whether or not
terminated) maintained by the Employer, and (ii) the denominator of
which shall be the lessor (A) 125% of the dollar limitation
determined for the Limitation year under Code (S)415(b) and (S)415(d)
or (B) 140% of the Participant's Highest Average Compensation,
including any adjustments under Code (S)415(b). However, 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 and which individually and in the aggregate
satisfied the requirements of Code (S)415 for all Limitation Years
beginning before January 1, 1987, the denominator of such fraction
shall be not less than 125% of the sum of the annual benefits under
such plans which the Participant had accrued as of the end of the
last Limitation Year beginning before January 1, 1987 disregarding
any changes in the terms and conditions in the plan after May 5,
1986. Notwithstanding the foregoing, "100%" shall be substituted for
"125%" in any Limitation Year for which this Plan is a Top-Heavy Plan
(as defined ins (S)12) unless otherwise specified in the Adoption
Agreement.
7.2(a)(4) DEFINED CONTRIBUTION DOLLAR LIMITATION - means for each
Limitation year the great of (i) $30,000 or (ii) one-fourth of the
defined benefit dollar limitation under Code (S)415(b)(1) as in
effect for such Limitation Year.
7.2(a)(5) DEFINED CONTRIBUTION FRACTION - means a fraction, (i) the
numerator of which shall (subject to the adjustment rules set forth
below) be the sum of the Annual Additions credited to the
Participant's accounts under all defined contribution plans (whether
or not terminated) maintained by the Employer for the current and all
prior Limitation Years (including the Annual Additions attributable
48
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 described in Code (S)419(e)) and all individual medical
accounts (as described in Code (S)415(l)(2)) maintained by the
Employer and (ii) the denominator of which shall be the sum of the
Maximum Aggregate Amounts for the current and all prior Limitation
Years of service with the Employer (without regard to whether a
defined contribution plan was maintained by the Employer). The
numerator of such fraction shall be adjusted 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 contribution
plans maintained by the Employer which were in existence on May 6,
1986 and the sum of this fraction and the Defined Benefit Fraction
would otherwise exceed 1.0 under the terms of this Plan. The
adjustment shall be made by taking an amount equal to the product of
(A) the excess of the sum of the fractions over 1.0, times (b) the
denominator of this fraction, and by permanently subtracting such
product from the numerator of this fraction. The adjustment shall be
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 Code (S)415 limitation applicable to
the first Limitation Year beginning on or after January 1, 1987. The
Annual Addition for any Limitation year beginning before January 1,
1987 shall not be recomputed to treat all employee contributions as
an Annual Addition.
7.2(a)(6) EMPLOYER - means the Employer that adopts this Plan and
all members of a controlled group of corporations (as defined in Code
(S)414(b) as modified by Code (S)415(h)), all commonly controlled
trades or businesses (as defined in Code (S)414(c) as modified by
Code (S)415(h)) or affiliated service groups (as defined in Code
(S)414(m)) of which the adopting Employer is a part and any other
entity required to be aggregated with the Employer pursuant to the
regulations under Code (S)414(o).
7.2(a)(7) EXCESS AMOUNT - means the excess of a Participant's Annual
additions for the Limitation Year over the Maximum Permissible
Amount.
7.2(a)(8) HIGHEST AVERAGE COMPENSATION - means the Participant's
average Compensation for the three consecutive Plan Years of
employment with the Employer (without regard to whether such Plan
Years were before the Effective Date) that produces the highest
average.
7.2(a)(9) LIMITATION YEAR - means
(vii) STANDARD OPTION - the Plan Year or
(viii) ALTERNATIVE - the alternative 12 consecutive month period
specified in the Adoption Agreement.
49
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 being on a
date within the Limitation Year in which the amendment is made.
7.2(a)(1) MASTER OR PROTOTYPE PLAN - means a plan the form of which
is the subject of a favorable opinion letter from the Internal
Revenue Service.
7.2(a)(11) MAXIMUM AGGREGATE AMOUNT - means for any Limitation Year
the lesser of (i) 125% of the dollar limitation determined under Code
(S)415(c)(1)(A) or (ii) 35% of the Participant's Compensation for
such year. Notwithstanding the foregoing. "100%" shall be
substituted for 125% in any Limitation Year for which this Plan is a
Top-Heavy Plan (as defined in (S)12) unless otherwise specified in
the Adoption Agreement.
7.2(a)(12) MAXIMUM PERMISSIBLE AMOUNT - means the lesser of (i) the
Defined Contribution Dollar Limitation or (ii) 25% of a Participant's
Compensation for the Limitation Year; provided,
(A) the compensation limitation referred to in clause (ii)
shall not apply to any contribution for medical benefits
(within the meaning of Code (S)401(h) or (S)419A(f)(20 which is
otherwise treated as an Annual Addition under Code (S)415(I)(I)
or (S)419(a)(d)(2); and
(B) if a short Limitation Year is created because of an
amendment changing the Limitation Year to a different 12
consecutive month period, the Maximum Permissible Amount shall
not exceed the Defined Contribution Dollar Limitation
multiplied by a fraction, the numerator of which shall be the
number of months in the short Limitation Year and the
denominator of which shall be 12.
7.2(a)(13) PROJECTED ANNUAL BENEFIT - means the annual retirement
benefit (adjusted to an actuarially equivalent straight life annuity
if such benefit is expressed in a form other than a straight life
annuity or qualified joint and survivor annuity) to which a
Participant would be entitled under the terms of a defined benefit
plan assuming:
(ix) the Participant will continue employment until
normal retirement age under the plan (or current age, if
later), and
(x) 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.
50
7.2(b) LIMITATION IF NO OTHER PLANS. If a Participant does not
participate in, and has never participated in, another qualified plan
maintained by the Employer or a welfare benefit fund (as described in Code
(S)419(e)) or individual medical account (as described in Code
(S)415(l)(2)) maintained by the Employer which provides an Annual Addition
as defined in (S)7.2(a)(1) or a simplified employee pension (as defined in
Code (S)408(k)) maintained by the Employer, the amount of Annual Additions
which actually may be credited to the Account of any Participant for any
Limitation Year shall not exceed the lesser of the Maximum Permissible
Amount or any other limitation set forth in this Plan. If the Employer
Contribution that would otherwise be credited to the Participant's Account
would cause the Annual Additions for the Limitation Year to exceed the
Maximum Permissible Amount, such amount shall be reduced so that the Annual
Additions actually credited for the Limitation Year shall equal the Maximum
Permissible Amount. If pursuant to (S)7.2(f) or as a result of the
allocation of Forfeitures a Participant's Annual Additions under this Plan
would result in an Excess Amount, such Excess Amount shall be disposed of
as follows:
7.2(b)(1) PROFIT SHARING PLAN. If this Plan is adopted as a Profit
Sharing Plan,
(xi) such Excess Amount shall be deemed a Forfeiture which
shall be allocated and reallocated as provided in (S)6.3(a)
subject to the restrictions of this (S)7.2 among the Employer
Accounts of the remaining Active Participants until such amount
has been allocated in its entirety; and
(xii) if the restrictions in this (S)7.2 apply before such
amount has been reallocated in its entirety, as the final
allocation step such unallowable Excess Amount shall be
transferred to a suspense account.
7.2(b)(2) MONEY PURCHASE PENSION PLAN OR TARGET BENEFIT PENSION
PLAN. If this Plan is adopted as a Money Purchase Pension Plan or
Target Benefit Pension Plan,
(xiii) STANDARD OPTION - such Excess Amount shall be held
unallocated in a suspense account which shall be applied to
offset future Employer Contributions for Active Participants in
the next Limitation Year (and in each succeeding Limitation Year
if necessary).
(xiv) ALTERNATIVE - if so specified in the Adoption Agreement,
(A) for any Participant who is an Active Participant
at the end of the Limitation Year, such Excess Amount
shall be held unallocated in a suspense account which
shall be applied to offset the Employer Contribution for
Such Active Participant in the next Limitation Year (and
in each succeeding Limitation Year if necessary); and
(B) for any Participant who is not an Active
Participant at the end of such Limitation Year, such
Excess Amount shall be held
51
unallocated in a suspense account which shall be applied
to offset future Employer Contributions for all
remaining Active Participants in the next Limitation
Year (and in each succeeding Limitation Year if
necessary).
7.2(b)(3) 401(K) PLAN. If this Plan is adopted as a 401(k) Plan,
any Elective Deferrals and Employee Contributions made by the
Participant during the Limitation Year (and, to the extent required
under regulations, gains attributable to such Employee Contributions)
shall be refunded to the extent such refund would reduce the Excess
Amount and, if an Excess Amount still exists after such refund.
(xv) any such Excess Amount which is attributable to
discretionary Employer Contributions shall be disposed in the
same manner as an Excess Amount under a Profit Sharing Plan as
described in (S)7.2(b)(1), and
(xvi) any such Excess Amount which is attributable to a
Matching Contribution, Qualified Nonelective Contribution or
Qualified Matching Contribution shall be held unallocated in a
suspense account which shall be used to offset future Matching
Contributions, Qualified Nonelective Contributions or Qualified
Matching Contributions in the next Limitation Year (and in each
succeeding Limitation Year if necessary).
7.2(b)(4) SUSPENSE ACCOUNT. A suspense account established
pursuant to this (S)7.2(b) shall not be subject to any allocation of
Fund Earnings under (S)6.2, and the balance of such account shall be
returned to the Employer in the event this Plan is terminated prior
to the date such account has been allocated in its entirety as a
Forfeiture. In no event shall Excess Amounts be distributed to
Participants or former Participants.
7.2(c) LIMITATION IF OTHER DEFINED CONTRIBUTION MASTER OR PROTOTYPE PLAN.
This (S)7.2(c) applies if, in addition to this Plan, a Participant is
covered under another defined contributed Master or Prototype Plan
maintained by the Employer or a welfare benefit fund (as described in Code
(S)419(e)) or an individual medical account (as described in Code
(S)415(l)(2) maintained by the Employer which provides for an Annual
Addition as defined in (S)7.2(a)(1) or a simplified employee pension (as
defined in Code (S)408(k)) maintained by the Employer during any Limitation
Year. The Annual Additions which may be credited to a Participant's
Account under this Plan for any such Limitation Year shall not exceed the
Maximum Permissible Amount reduced by the Annual Additions credited to a
Participant's account under such other defined contribution Master or
Prototype Plan and welfare benefit funds for the same Limitation Year.
7.2(c)(1) If for any Limitation Year (1) the Employer also
maintains another defined contribution Paired Plan, (2) the
Employer does not maintain any other defined contribution Master or
Prototype Plan (other than such Paired Plan) and (3) a
Participant's Annual Additions under such Paired Plans would result
in an
52
Excess Amount for such Limitation Year, the allocation adjustment
required to satisfy the limitations of Code (S)415 shall be made
under such Plans in the following order:
(xvii) STANDARD OPTION - first, under the Profit Sharing Plan,
if any; second under the Money Purchase Pension Plan, if any;
third under the Target Benefit Pension Plan, if any; and finally,
under the 401(k) Plan, if any; or
(xviii) ALTERNATIVE - in the alternative order specified in the
Adoption Agreement.
7.2(c)(2) If the Annual Additions with respect to any Participant
under such other defined contribution Master or Prototype Plan
(other than a defined contribution Paired Plan) and welfare benefit
funds maintained by the Employer are less than the Maximum
Permissible Amount and the Employer Contribution that would
otherwise be contributed or allocated to the Participant's Account
under this Plan would cause the Annual Additions for the Limitation
year to exceed this limitation, the amount contributed or allocated
shall be reduced so that the Annual Additions under all such plans
and funds for the Limitation Year shall equal the Maximum
Permissible Amount.
7.2(c)(3) If the Annual Additions with respect to the Participant
under such other defined contribution Master and Prototype Plan
(other than a defined contribution Paired Plan) and welfare benefit
funds in the aggregate are equal to or greater than the Maximum
Permissible Amount, no amount shall be credited to the
Participant's Account under this Plan for the Limitation Year.
7.2(c)(4) If pursuant to (S)7.2(f) or as a result of the allocation
of Forfeitures a Participant's Annual Additions under this Plan and
such other defined contribution Master or Prototype Plan (other
than a Paired Plan) and welfare benefit funds would result in an
Excess Amount for any Limitation Year,
(xix) the Excess Amount shall be deemed to consist of the Annual
Additions last allocated and the Annual Additions attributable to
a welfare benefit fund or an individual medical account shall be
deemed to have been allocated prior to all other Annual
Additions, and
(xx) if an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation
date of such other Master or Prototype Plan, then the Excess
Amount attributed to this Plan shall be the product of
(A) the total Excess Amount allocated as of such date, time
53
(B) a fraction, the numerator of which shall be the Annual
Additions allocated to the Participant for the Limitation
Year as of such date under this Plan and the denominator of
which is the total Annual Additions allocated to the
Participant for the Limitation Year as of such date under
this and all such other defined contribution Master or
Prototype Plans.
7.2(c)(5) Any Excess Amount attributed to this Plan will be
disposed of in the manner described in (S)7.2(b).
7.2(c)(5) Any Excess Amount attributed to this Plan will be disposed
of in the manner described in (S)7.2(b).
7.2(d) LIMITATION IF OTHER DEFINED CONTRIBUTION PLAN. If any Participant
is covered under another qualified defined contribution plan maintained by
the Employer which is not a Master or Prototype Plan, the Annual Additions
which may be credited to the Participant's Account under this Plan for any
Limitation Year shall be limited
7.2(d)(1) STANDARD OPTION - as specified in (S)7.2(c) as though the
other plan was a Master or Prototype Plan or
7.2(d)(2) ALTERNATIVE - under the alternative method specified in
the Adoption Agreement for limiting the Annual Additions under this
Plan.
7.2(e) LIMITATION IF OTHER DEFINED BENEFIT PLAN. If the Employer
maintains, or at any time maintained a qualified defined benefit plan
(other than a defined benefit Paired Plan) covering any Participant in this
Plan, the sum of the Participant's Defined Benefit Fraction and Defined
Contribution Fraction shall not exceed 1.0 in any Limitation Year. The
Annual Additions which may be credited to any Participant's Account under
this Plan for any Limitation Year shall be limited as specified in the
Adoption Agreement. If the Employer maintains a defined benefit Paired
Plan, any adjustment to satisfy the requirements of Code (S)415(e) shall be
made only under such defined benefit Paired Plan.
7.2(f) COMPENSATION FOR DETERMINATION OF MAXIMUM PERMISSIBLE AMOUNT.
Prior to determining a 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, and, if applicable, a reasonable
estimation of the amount of elective deferrals (within the meaning of Code
(S)402(g)(3)) that the Participant may make for the Limitation year,
uniformly determined for all similarly situated participants. As soon as
is administratively feasible after the end of the Limitation Year, the
Maximum Permissible Amount for the Limitation Year shall be determined on
the basis of the Participant's actual Compensation for the Limitation Year.
7.3 INDIVIDUAL LIMITATION ON ELECTIVE DEFERRALS UNDER CODE (S) 402(G).
54
7.3(a) GENERAL. A Participant's Elective Deferrals under this Plan and
all other qualified plans, contracts and arrangements maintained by the
Employer or an Affiliate during any taxable year of the Participant shall
not exceed the dollar limitation under Code (S) 402(g) in effect at the
beginning of such taxable year.
7.3(b) ELECTIVE DEFERRALS. For purposes of the dollar limitation under
Code (S)402(g) and this (S)7.3, the term "Elective Deferrals" shall include
all employer contributions made on behalf of a Participant pursuant to an
election to defer under any qualified cash or deferred arrangement as
described in Code (S)401(k), any simplified employee pension cash or
deferred arrangement as described in Code (S)402(h)(1)(B), any plan
described under Code (S)501(c)(18), and any salary reduction agreement for
the purchase of an annuity contract under Code (S)403(b). However, the
term shall not include Elective Deferrals which are properly distributed to
the Participant from this Plan under (S)7.2 or such other plans or
arrangements to correct for excess annual additions.
7.3(c) EXCESS ELECTIVE DEFERRALS. For purposes of this (S)7.3, the term
"Excess Elective Deferrals" means for each Participant the Elective
Deferrals that are includable in gross income under Code (S)402(g) to the
extent the Participant's Elective Deferrals for a taxable year exceed the
dollar limitations under Code (S)402(g) for such taxable year.
7.3(d) DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS. Notwithstanding any
other provision of this Plan restricting the timing of distributions,
Excess Elective Deferrals, plus any income and minus any loss allocable
thereto, shall be distributed no later than April 15 of any calendar year
to Participants (1) whose Excess Elective Deferrals for the preceding
taxable year were assignee to this Plan and (2) who claim (or are deemed to
have claimed) such allocable Excess Elective Deferrals for such taxable
year in accordance with the claims procedure set forth in (S)7.3(f).
7.3(e) DETERMINATION OF INCOME OR LOSS. A corrective distribution of
Excess Elective Deferrals under this (S)7.3 shall include the income or
loss allocable to such Excess Elective Deferrals for the Participant's
taxable year in which such excess occurred and, if so specified in the
Adoption Agreement, for the period between the end of such taxable year and
the date of distribution ("gap period"). The income or loss for such
taxable year and gap period, if applicable, shall be determined in
accordance with the regulations under Code (S)402(g). In lieu of using the
safe harbor method or the alternative method in the regulations for
allocating such income or loss, the Plan Administrator may use any
reasonable method for computing such income or loss, provided that such
method does not violate Code (S)401(a)(4), is used consistently for all
Participants and for all corrective distributions under the Plan for the
Plan Year, and is used by the Plan for allocating income or loss to
Participant's Accounts.
7.3(f) CLAIMS PROCEDURE.
7.3(f)(1) GENERAL. A Participant may assign to this Plan any Excess
Elective Deferral made during a taxable year by filing a claim with
the Plan Administrator on or before
55
(i) STANDARD OPTION - March 1 or
(ii) ALTERNATIVE - the alternative date for filing such claims
specified in the Adoption Agreement.
Unless otherwise provided in administrative procedures established by
the Plan Administrator, such claim shall be in writing, shall specify
the dollar amount of the Participant's Excess Elective Deferrals
assigned to this Plan for such taxable year, and shall be accompanied
by the Participant's written statement that such amounts, if not
distributed to such Participant, will exceed the limit imposed on the
Participant by Code (S)402(g) for the taxable year in which the
deferral occurred.
7.3(f)(2) DEEMED CLAIM. A Participant automatically shall be deemed
to have filed a claim under this (S)7.3(f) to the extent that such
Excess Elective Deferrals occurred solely as a result of Elective
Deferrals under this Plan and any other plans of the Employer and the
Affiliates, unless the Employer specifies in the Adoption Agreement
that such Excess Elective Deferrals shall be distributed from one or
more of such other plans.
7.4 LIMITATIONS ON ELECTIVE DEFERRALS FOR HIGHLY COMPENSATED EMPLOYEES UNDER
CODE (S)401(K).
7.4(a) SPECIAL DEFINITIONS. For purposes of this (S)7.4, the terms
defined in this (S)7.4(a) shall have the meanings shown opposite such
terms.
7.4(a)(1) ACTUAL DEFERRAL PERCENTAGE - means for each Plan Year for
each Participant who is an Eligible Employee at any time during such
Plan Year the ratio (expressed as a percentage and determined in
accordance with (S)7.4(c) of Employer Contributions made on behalf of
such Participant for such Plan Year to such Participant's
Compensation for such Plan Year. The Actual Deferral Percentage of a
Participant who is an Eligible Employee, but does not make an
Elective Deferral and does not receive an allocation of a Qualified
Nonelective Contribution or a Qualified Matching Contribution, shall
be zero.
7.4(a)(2) ADP (OR AVERAGE ACTUAL DEFERRAL PERCENTAGE) - means for
each Plan year separately for the group of Participants who are
Highly Compensated Employees during such Plan Year and for the group
of Participants who are Nonhighly Compensated Employees during such
Plan Year, the average (expressed as a percentage) of the Actual
Deferral Percentages of the Participants in each such group who are
Eligible Employees at any time during such Plan Year.
7.4(a)(3) EMPLOYER CONTRIBUTIONS - means for purposes of determining
a Participant's Actual Deferral Percentage for each Plan Year, the
sum of (i) the Elective Deferrals made pursuant to the Participant's
deferral election, including Excess Elective Deferrals (as defined in
(S)7.3(c)) of Highly Compensated
56
Employees, but excluding Excess Elective Deferrals of Nonhighly
Compensated Employees that arise solely from Elective Deferrals made
under this Plan or any other plans of the Employer and the
Affiliates, and excluding Elective Deferrals that are taken into
account in the ACP test described in (S)7.5(b) (provided the ADP test
is satisfied both with and without exclusion of such Elective
Deferrals), and (ii) at the election of the Employer, Qualified
Nonelective Contributions and Qualified Matching Contributions.
7.4(a)(4) EXCESS CONTRIBUTIONS - means for each Plan Year for each
Highly Compensated Employee the excess of the aggregate amount of
Employer Contributions actually taken into account in computing the
Average Deferral Percentage of such Highly Compensated Employee for
such Plan Year over the maximum amount of such contributions
permitted for such Plan Year under the ADP limit as set forth in
(S)7.4(b) (determined by reducing Elective Deferrals, Qualified
Nonelective Contributions and Qualified Matching Contributions made
on behalf of Highly Compensated Employees in order of their Actual
Deferral Percentages, beginning with the highest of such
percentages).
7.4(a)(5) HIGHLY COMPENSATED EMPLOYEE - means any Employee who is
either a "highly compensated active employee" or a "highly
compensated former employee" as described below.
(i) A "highly compensated active employee" means any Employee who
performs services for the Employer or any Affiliate during the
"determination year" and who, during the "look-back year": (A)
received compensation from the Employer or any Affiliate in
excess of $75,000 (as adjusted pursuant to Code (S)415(d); (B)
received compensation from the Employer or any Affiliate in
excess of $50,000 (as adjusted pursuant to Code (S)415(d) and was
a member of the "top-paid group" for such year; or (C) was an
officer of the Employer or any Affiliate and received
compensation during such year that is greater than 50% of the
dollar limitation in effect under Code (S)415(b)(1)(A). The term
"highly compensated employee" shall also include: (I) an
Employee who is both described in the preceding sentence if the
term "determination year" is substituted for the term "look-back
year" and is one of the 100 Employees who received the most
compensation from the Employer or any Affiliate during the
determination year; and (II) an Employee who is a 5% owner at any
time during the look-back year or determination year. If no
officer has satisfied the compensation requirement of clause (C)
above during either a determination year or look-back year, the
highest paid officer for each such year shall be treated as a
Highly Compensated Employee.
(ii) A "highly compensated former employee" means any Employee
who separated (or was deemed to have separated) from service
prior to the determination year, performs no services for the
Employer or any Affiliate
57
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.
(iii) For purposes of this definition, the "determination year"
shall mean the Plan Year and the "look-back year" shall mean the
12-month period immediately preceding the determination year.
(iv) 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 ("top-ten
Highly Compensated Employee"), then the Family Member and the 5%
owner or top-ten Highly Compensated Employee shall be treated as
a single Employee receiving compensation and Plan contributions
or benefits equal to the sum of such compensation and
contributions or benefits of the Family Member and the 5% owner
or top-ten Highly Compensated Employee.
(v) The determination of who is a Highly Compensated Employee,
including the determination of the number and identity of
Employees in the top-paid group, the top 100 Employees, the
number of Employees treated as officers and the compensation that
is considered,shall be made in accordance with Code (S)414(q)
including any available operational transition rules and any
elections provided in the regulations under Code (S)414(q) and
specified in the Adoption Agreement.
7.4(b) ADP LIMIT. The ADP for Highly Compensated Employees for any Plan
Year shall not exceed
7.4(b)(1) the ADP for Nonhighly Compensated Employees for such
Plan Year multiplied by 1.25, or
7.4(b)(2) the ADP for Nonhighly Compensated Employees for such
Plan Year multiplied by 2, provided that the ADP for Highly
Compensated Employees does not exceed the ADP for Nonhighly
Compensated Employees by more than 2 percentage points.
7.4(c) SPECIAL RULES.
7.4(c)(1) OTHER PLANS. The Actual Deferral Percentage for any
Participant who is a Highly Compensated Employee for the Plan Year
and who is eligible to participate in more than one cash or
deferred arrangement maintained by the Employer or an Affiliate
shall be determined by treating all such arrangements as a single
arrangement. If a Highly Compensated Employee participates in two
or
58
more cash or deferred arrangements that have different plan years,
all such arrangements ending with or within the same calendar year
shall be treated as a single arrangement. Notwithstanding the
foregoing, plans which are mandatorily disaggregated under
regulations under Code (S)401(k) shall be treated as separate.
7.4(c)(2) AGGREGATION. In the event that this Plan satisfies the
requirements of Code (S)410(b) only if aggregated with one or more
other plans, or if one or more other plans satisfy the requirements
of such Code section only if aggregated with this Plan, then this
(S)7.4 shall be applied by determining the Actual Deferral
Percentages and ADP as if all such plans were a single plan. For
Plan Years beginning on and after the Final Compliance Date, such
plans may be aggregated only if they have the same plan years and
are not mandatorily disaggregated under regulations under Code
(S)401(k),
7.4(c)(3) FAMILY MEMBERS. For purposes of determining the Actual
Deferral Percentage of a Participant who is a 5% owner or one of
the 10 most highly paid Highly Compensated Employees and who is an
Eligible Employee at any time during the Plan Year, the Employer
Contributions and Compensation of such Participant shall include
the Employer Contributions and Compensation of his or her Family
Members, and such Family Members shall be disregarded as separate
Participants in determining the ADP both for Nonhighly Compensated
Employees and for Highly Compensated Employees.
7.4(c)(4) TIMING. For purposes of determining the Actual Deferral
Percentages for any Plan Year, Elective Deferrals, Qualified
Nonelective Contributions and Qualified Matching Contributions
shall be considered made for such Plan Year only if such
contributions are allocated as of a date within such Plan Year and
are actually paid to the Fund by the last day of the 12 month
period immediately following such Plan Year.
7.4(c)(5) RECORDS. The Plan Administrator shall maintain records
which are sufficient to demonstrate that the Plan complied with the
ADP limits, including the extent to which Qualified Nonelective
Contributions and Qualified Matching Contributions are taken into
account to satisfy such ADP limits.
7.4(c)(6) OTHER REQUIREMENTS. The determination and treatment of
the Elective Deferrals and Actual Deferral Percentage of any
Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
7.4(d) DISTRIBUTION OF EXCESS CONTRIBUTIONS.
7.4(d)(1) GENERAL. Notwithstanding any other provision of this
Plan restricting the timing of distributions, Excess Contributions
for any Plan Year, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of the
immediately following Plan Year to Participants on whose behalf
59
such Excess contributions were made. If such Excess Contributions
are distributed more than 2 1/2 months after the last day of the
Plan Year in which such excess occurred, a 10% excise tax shall be
imposed under Code(S)4979 on the Employer with respect to such
excess. Such distributions shall be made to such Participants on
the basis of the respective portions of the Excess Contributions
attributable to each such Participant. Excess Contributions shall
be allocated to Participants who are subject to the Family Member
aggregation rules under Code (S)414(q)(6) in the manner prescribed
by the regulations under Code (S)401(k).
7.4(d)(2) DETERMINATION OF INCOME OR LOSS. A corrective
distribution of Excess Contributions under this (S)7.4 shall
include the income or loss allocable to such Excess Contributions
for the Plan Year in which such excess occurred and, if so
specified in the Adoption Agreement, for the period between the end
of such Plan Year and the date of distribution ("gap period"). The
income or loss for such Plan Year and gap period, if applicable,
shall be determined in accordance with the regulations under Code
(S)401(k). In lieu of using the safe harbor method or the
alternative method in the regulations for allocating such income or
loss, the Plan Administrator may use any reasonable method for
computing such income or loss, provided that such method does not
violate Code (S)401(a)(4), is used consistently for all
Participants and for all corrective distributions under the Plan
for the Plan Year, and is used by the Plan for allocating income or
loss to Participant's Accounts.
7.4(d)(3) ORDER FOR DETERMINING EXCESS CONTRIBUTIONS. Excess
Contributions shall be determined after first determining Excess
Elective Deferrals under (S)7.3. The Excess Contributions which
would otherwise be distributed to the Participant shall be reduced,
in accordance with regulations, by the Excess Elective Deferrals
distributed to the Participant under (S)7.3.
7.4(d)(4) ACCOUNTING FOR EXCESS CONTRIBUTIONS. Excess
Contributions shall be distributed proportionately from the
Participant's Elective Deferral Account and Qualified Matching
Account in the same ratio that such Participant's Elective
Deferrals and Qualified Matching Contributions for the Plan Year in
which such Excess Contributions were made bears to the sum of the
Participant's Elective Deferrals and Qualified Matching
Contributions for such Plan Year. Excess Contributions shall be
distributed from the Participant's Qualified Nonelective Account
only to the extent that such Excess Contributions exceed the
balance in the Participant's Elective Deferral Account and
Qualified Matching Account. Notwithstanding the foregoing, Excess
Contributions may be distributed from the applicable subaccounts in
accordance with procedures established by the Plan Administrator
provided such procedures do not result in discrimination in favor
of Highly Compensated Employees which would be prohibited under
Code (S)401(a)(4).
7.4(e) RECHARACTERIZATION. If the Employer specifies in the Adoption
Agreement that Excess Contributions may be recharacterized, a Participant
may elect to treat Excess
60
Contributions as an amount distributed to the Participant and then
contributed as an Employee Contribution to the Plan. Any such Excess
Contribution which is so recharacterized as an Employee Contribution shall
remain nonforfeitable and shall thereafter be subject to the same
distribution restrictions applicable to Elective Deferrals under (S)9.2(b).
Excess Contributions shall not be recharacterized by a Participant to the
extent that such amounts, in combination with other Employee Contributions,
would exceed any limits on Employee Contributions set forth in the Plan or
in the Adoption Agreement.
Any such recharacterization must occur no later than 2 1/2 months after the
end of the Plan Year in which such Excess Contribution occurred and shall
be deemed to occur no earlier than the date on which the last Highly
Compensated Employee is informed in writing of the amount recharacterized
and the consequences of such recharacterization. Any Excess Contributions
which are so recharacterized shall be taxable to the Participant for the
taxable year in which the Participant would have received such amount in
cash but for the deferral election.
7.5 LIMITATIONS ON EMPLOYEE CONTRIBUTIONS AND MATCHING CONTRIBUTIONS UNDER CODE
(S)401(M).
7.5(a) SPECIAL DEFINITIONS. For purposes of this (S)7.5, the terms
defined in this (S)7.5(a) shall have the meanings shown opposite such
terms.
7.5(a)(1) AGGREGATE LIMIT - means the sum of
(i) 125% of the greater (or lesser, if it would result in a
larger Aggregate Limit) of
(A) the ADP for Nonhighly Compensated Employees under the
plan subject to Code (S)401(k) for the plan year or
(B) the ACP for Nonhighly Compensated Employees under the
plan subject to Code (S)401(m) for the plan year beginning
with or within the plan year of the plan which is subject
to Code (S)401(k) and
(ii) the lesser of
(A) 200% of such ADP or ACP or
(B) two plus the lesser (or greater, if it would result in
a larger Aggregate Limit) of such ADP or ACP.
7.5(a)(2) ACP (OR AVERAGE CONTRIBUTION PERCENTAGE) - means for each
Plan Year separately for the group of Participants who are Highly
Compensated Employees during such Plan Year and for the group of
Participants who are Nonhighly Compensated Employees during such Plan
Year, the average (expressed
61
as a percentage) of the Contribution Percentages of the Participants
in each such group who are Eligible Employees at any time during such
Plan Year.
7.5(a)(3) CONTRIBUTION PERCENTAGE - means for each Plan Year for
each Participant who is an Eligible Employee at any time during such
Plan Year, the ratio (expressed as a percentage and determined in
accordance with(S)7.5(c)) of such Participant's Contribution
Percentage Amount for such Plan Year to such Participant's
Compensation for such Plan Year. The Contribution Percentage of a
Participant who is eligible to, but does not, make Employee
Contributions or Elective Deferrals and who, as a result of such
failure to make such contributions, does not receive an allocation of
a Matching Contribution or Qualified Matching Contribution shall be
zero.
7.5(a)(4) CONTRIBUTION PERCENTAGE AMOUNT - means for each Plan Year
for each Participant who is an Eligible Employee at any time during
such Plan Year the sum of
(i) The Employee Contributions, Matching Contributions and
Qualified Matching Contributions (to the extent not taken into
account for purposes of the ADP test described in (S)7.4) made on
behalf of such Participant for such Plan Year, other than
Matching Contributions which are forfeited either to correct
Excess Aggregate Contributions or because the contributions to
which they relate are Excess Elective Deferrals, Excess
Contributions or Excess Aggregate Contributions,
(ii) the Forfeitures allocated to such Participant's Account
for such Plan Year which are attributable to Matching
Contributions and Excess Aggregate Contributions,
(iii) at the election of the Employer, the Qualified Nonelective
Contributions made on behalf of such Participant for such Plan
Year (to the extent not taken into account for purposes of the
ADP test described in (S)7.4), and
(iv) at the election of the Employer, Elective Deferrals
(provided the ADP limit described in (S)7.4 is met both including
and excluding the Elective Deferrals that are used to meet the
ACP limit).
7.5(a)(5) EMPLOYEE CONTRIBUTION - means for purposes of determining
a Participant's Contribution Percentage Amount any contributions made
by the Participant which are included in gross income for the taxable
year in which made and which are maintained in a separate account to
which earnings and losses are allocated.
62
7.5(a)(6) EXCESS AGGREGATE CONTRIBUTION - means for each Plan Year
for each Highly Compensated Employee the excess of the aggregate
Contribution Percentage Amounts actually taken into account in
computing the ACP of such Highly Compensated Employee for such Plan
Year over the maximum Contribution Percentage mounts permitted for
such Plan Year under the ACP limit as set forth in (S)7.5(b)
(determined by reducing contributions and Forfeitures on behalf of
Highly Compensated Employees in order of their Contribution
Percentages, beginning with the highest of such percentages).
7.5(a)(7) MATCHING CONTRIBUTION - means for purposes of
determining a Participant's Contribution Percentage Amount any
Employer contribution made to this Plan or any other defined
contribution plan on account of an Employee Contribution or
Elective Deferral made by or on behalf of the Participant under a
plan maintained by the Employer.
7.5(b) ACP LIMIT. The ACP for Participants who are Highly Compensated
Employees for any Plan Year shall not exceed
7.5(b)(1) the ACP for Participants who are Nonhighly Compensated
Employees for such Plan Year multiplied by 1.25, or
7.5(b)(2) the ACP for Participants who are Nonhighly Compensated
Employees for such Plan Year multiplied by 2, provided that the ACP
for Participants who are Highly Compensated Employees does not
exceed the ACP for Participants who are Nonhighly Compensated
Employees by more than 2 percentage points.
7.5(c) SPECIAL RULES.
7.5(c)(1) MULTIPLE USE. For Plan Years beginning after the Final
Compliance Date, if
(i) one or more Highly Compensated Employees participates both
in a plan with a qualified cash or deferred arrangement which is
subject to the ADP limitations under Code (S)401(k) as described
in (S)7.4 and in a plan which is subject to the ACP limitations
under Code (S)401(m) as described in this (S)7.5,
(ii) the sum of the ADP of the eligible Highly Compensated
Employees in the plan subject to Code (S)401(k) and the ACP of
the eligible Highly Compensated Employees in the plan subject to
Code (S)401(m) exceeds the Aggregate Limit, and
(iii) both the ADP and the ACP of the eligible Highly
Compensated Employees in such plans exceed 125% of the ADP or ACP
respectively of the eligible Nonhighly Compensated Employees in
such plans,
63
then the Contribution Percentages of the Highly Compensated Employees
who participate in both such plans shall be reduced (beginning with
the highest of such percentages) so that the Aggregate Limit for such
plans is not exceeded. Any such reduction shall be treated as an
Excess Aggregate Contribution. The determination of the limitations
under this special rule shall be made after any corrections required
to meet the ADP limits and the ACP limits and in accordance with the
regulations under Code (S)401(m).
7.5(c)(2) OTHER PLANS. The Contribution Percentage for any
Participant who is a Highly Compensated Employee for the Plan Year
and who is eligible to participate in more than one plan maintained
by the Employer or an Affiliate to which "employee contributions"
(within the meaning of Code (S)401(m)) or "matching contributions"
(as described in Code (S)401(m)(4)) are made shall be determined by
treating all such plans as one plan. If a Highly Compensated
Employee participates in two or more such plans that have different
plan years, all such plans ending with or within the same calendar
year shall be treated as a single plan. Notwithstanding the
foregoing, plans which are mandatorily disaggregated under
regulations under Code (S)401(m) shall be treated as separate.
7.5(c)(3) AGGREGATION. In the event that this Plan satisfies the
requirements of Code (S)410(b) only if aggregated with one or more
other plans, or if one or more other plans satisfy the requirements
of such Code sections only if aggregated with this Plan, then this
(S)7.5 shall be applied by determining the Contribution Percentages
and ACP as if all such plans were a single plan. For Plan Years
beginning on and after the Final Compliance Date, such plans may be
aggregated only if they have the same plan years and they are not
mandatorily disaggregated under regulations under Code (S)401(m).
7.5(c)(4) FAMILY MEMBERS. 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 of
his or her Family Members, and such Family Members shall be
disregarded as separate Participants in determining the ACP both for
Participants who are Nonhighly Compensated Employees and for
Participants who are Highly Compensated Employees.
7.5(c)(5) TIMING. For purposes of determining the ACP for any Plan
Year, Employee Contributions shall be considered made in the Plan
Year in which they are actually contributed to the Fund and Matching
Contributions (and, if applicable, Qualified Matching Contributions
and Qualified Nonelective Contributions) shall be considered made for
such Plan Year only if such contributions are allocated as of a date
within such Plan Year and are actually paid to the Fund by the last
day of the 12-month period immediately following such Plan Year.
64
7.5(c)(6) RECORDS. The Plan Administrator shall maintain records
which are sufficient to demonstrate that the Plan complied with the
ACP limits, including the extent to which Elective Deferrals,
Qualified Nonelective Contributions and Qualified Matching
Contributions are taken into account to satisfy such ACP limits.
7.5(c)(7) OTHER REQUIREMENTS. 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.
7.5(d) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
7.5(d)(1) GENERAL. Notwithstanding any other provision of this
Plan restricting the timing of distributions, Excess Aggregate
Contributions for any Plan Year, plus any income and minus any loss
allocable thereto, shall be forfeited (if otherwise forfeitable
under the Plan) or distributed (if not forfeitable) from the
Accounts of Participants on whose behalf such Excess Aggregate
Contributions were made no later than the last day of the
immediately following Plan Year. 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 occurred, a 10% excise
tax shall be imposed under Code (S)4979 on the Employer with
respect to such excess. Excess Aggregate Contributions shall be
allocated to Participants who are subject to the Family Member
aggregation rules under Code (S)414(q)(6) in the manner prescribed
by the regulations under Code (S)401(m).
7.5(d)(2) DETERMINATION OF INCOME OR LOSS. A corrective
distribution of Excess Aggregate Contributions under this (S)7.5
shall include the income or loss allocable to such Excess Aggregate
Contributions for the Plan Year in which such excess occurred and,
if so specified in the Adoption Agreement, for the period between
the end of such Plan Year and the date of distribution ("gap
period"). The income or loss for such Plan Year and gap period, if
applicable, shall be determined in accordance with the regulations
under Code (S)401(m). In lieu of using the safe harbor method or
the alternative method in the regulations for allocating such
income or loss, the Plan Administrator may use any reasonable
method for computing such income or loss, provided that such method
does not violate Code (S)401(a)(4), is used consistently for all
Participants and for all corrective distributions under the Plan
for the Plan Year, and is used by the Plan for allocating income or
loss to Participant's Accounts.
7.5(d)(3) ORDER FOR DETERMINING EXCESS AGGREGATE CONTRIBUTIONS.
Excess Aggregate Contributions shall be determined after first
determining Excess Elective Deferrals under (S)7.3 and then
determining Excess contributions under (S)7.4.
7.5(d)(4) ACCOUNTING FOR EXCESS AGGREGATE CONTRIBUTIONS. Excess
Aggregate Contributions shall be forfeited (if otherwise
forfeitable) or distributed (if not forfeitable) to the Highly
Compensated Employee from the Participant's Employee
65
Account, Matching Account, Qualified Matching Account, Qualified
Nonelective Account and Elective Deferral Account in the same ratio
that the contributions made on the Participant's behalf to such
account (to the extent such contributions are used in the ACP test)
for the Plan Year in which such Excess Aggregate Contributions were
made bears to the total of all such contributions. Notwithstanding
the foregoing, Excess Aggregate Contributions may be distributed
from the applicable subaccounts in accordance with procedures
established by the Plan Administrator provided such procedures do
not result in discrimination in favor of Highly Compensated
Employees which would be prohibited under Code (S)401(a)(4).
7.5(d)(5) ALLOCATION OF FORFEITURES. Amounts forfeited by Highly
Compensated Employees under this (S)7.5 shall be allocated or
applied in accordance with (S)6.3(c)(2); provided, no Forfeitures
arising under this (S)7.5 shall be allocated to the Account of any
Highly Compensated Employee.
SECTION 8. VESTING AND FORFEITURES
8.1 DETERMINATION OF NONFORFEITABLE PERCENTAGE.
8.1(a) FULLY VESTED ACCOUNTS. Each Rollover Account, Employee Account,
Elective Deferral Account, Qualified Matching Account and Qualified
Nonelective Account shall be completely nonforfeitable at all times.
8.1(b) DEATH, DISABILITY AND RETIREMENT. The Employer Account and
Matching Account of each Participant who reaches Early Retirement Age or
Normal Retirement Age while an Employee shall become completely
nonforfeitable on such date. The Employer Account and Matching Account of
each Participant who dies while an Employee or who becomes Disabled while
an Employee
8.1(b)(1) STANDARD OPTION - shall become completely nonforfeitable
on such date.
8.1(b)(2) ALTERNATIVE - if so specified in the Adoption Agreement,
shall be determined in accordance with the vesting schedule under
(S)8.1(c).
8.1(c) OTHER SEPARATION FROM SERVICE. Subject to (S)12.4, the
nonforfeitable percentage of the Employer Account and Matching Account of a
Participant other than a Participant described in (S)8.1(b) shall be based
on the Participant's Years of Service and on the following vesting
schedule:
8.1(c)(1) STANDARD OPTION - the full and immediate vesting schedule.
8.1(c)(2) ALTERNATIVE - the alternative vesting schedule specified
in the Adoption Agreement;
66
provided, however, if the Participation Requirement (or the requirement to
receive an allocation of Employer contributions under a 401(k) Plan)
consists of a minimum period of service which exceeds one year, the full
and immediate vesting schedule shall automatically apply notwithstanding
any election to the contrary in the Adoption Agreement.
8.1(d) EMPLOYEE CONTRIBUTION WITHDRAWALS. No Forfeiture shall occur
solely as a result of a Participant's withdrawal of Employee Contributions.
8.2 FORFEITURE AND SPECIAL REEMPLOYMENT RULES.
8.2(a) BUY BACK RULE (STANDARD OPTION).
8.2(a)(1) FORFEITURE. The forfeitable portion, if any, of the
Employer Account and Matching Account of a Participant who
separates from service shall become a Forfeiture on the earlier of
(i) the date as of which the Participant receives (or is
deemed to receive under (S)8.2(c)) a distribution of the
Participant's entire nonforfeitable Account balance derived from
Employer Contributions, or
(ii) the date he or she has 5 consecutive Breaks in Service (6
consecutive Breaks in Service if the Alternative
Maternity/Paternity Rule applies).
If a Participant elects to have distributed less than the entire
nonforfeitable balance of the Participant's Employer Account and Matching
Account, the part of such accounts that shall be treated as a Forfeiture is
the total forfeitable portion of such Accounts multiplied by a fraction,
the numerator of which is the amount of the distribution from the
Participant's Employer Account or Matching Account and the denominator of
which shall be the total nonforfeitable balance of the Participant's
Employer Account or Matching Account at the time of the distribution.
Any such Forfeiture shall be allocated or applied in accordance with (S)6
on the Valuation Date specified in (S)8.2(e).
8.2(a)(2) REEMPLOYMENT. If a Participant receives a distribution and
resumes employment covered under this Plan before the Participant has 5
consecutive Breaks in Service (6 consecutive Breaks in Service if the
Alternative Maternity/Paternity Rule applies), the Employer shall restore
to the Participant's Employer Account and Matching Account an amount equal
to the dollar amount of the Forfeitures from such accounts if the
Participant repays to the Plan an amount equal to the dollar amount of the
distributions from the Participant';s Employer Account and Matching Account
in accordance with this (S)8.2(a). Such repayment must be made before the
earlier of (a) 5 years after the first date on which the Participant is
subsequently reemployed by the Employer or a Participating Affiliate or (b)
the date the Participant incurs 5 consecutive Breaks in Service (6
consecutive
67
Breaks in Service if the Alternative Maternity/Paternity Rule
applies) following the date of the distribution.
If a Participant whose nonforfeitable Account balance is zero is
deemed to receive a distribution under (S)8.2(c) and he or she
resumes employment covered under this Plan before he or she has 5
consecutive Breaks in Service (6 consecutive Breaks in Service if
the Alternative Maternity/Paternity Rule applies), the forfeitable
portion of the Participant's Employer Account and Matching Account
shall automatically be restored by the Employer upon the
Participant's reemployment.
Any amount restored by the Employer under this (S)8.2(a) shall be
restored upon repayment from the sources specified in (S)8.2(d).
Such restored or repaid amount shall not be treated as an Annual
Addition under (S)7.2 and shall be credited to the Participant's
Employer Account and Matching Account in the same proportion as
the distribution was made from such accounts.
8.2(b) AUTOMATIC RESTORATION (ALTERNATIVE). This (S)8.2(b) shall apply if
the Employer specifies the use of the "Alternative to the Buy Back Rule" in
the Adoption Agreement.
8.2(b)(1) FORFEITURE. The forfeitable portion, if any, of the
Employer Account and Matching Account of a Participant who
separates from service shall become a Forfeiture on the earlier of
(i) the date as of which payment of the nonforfeitable
percentage of the Participant's Account derived from
Employer contributions begins or is deemed to begin under
(S)8.2(c) or
(ii) the date he or she has 5 consecutive Breaks in
Service (6 consecutive Breaks in Service if the Alternative
Maternity/Paternity Rule applies)
and such Forfeiture shall be allocated or applied in accordance
with (S)6 on the allocation date specified in (S)8.2(e) unless he
or she is reemployed on or before such allocation date.
8.2(b)(2) REEMPLOYMENT. If a Participant is reemployed before the
Participant incurs 5 consecutive Breaks in Service (6 consecutive
Breaks in Service if the Alternative Maternity/Paternity Rule
applies) but after the date of a Forfeiture under (S)8.2(b)(1),
the Employer shall restore to such Participant as of the last day
of the Plan Year in which he or she is reemployed an amount equal
to the dollar amount of such Forfeiture.
Any amount restored by the Employer under this (S)8.2(b) shall be
restored from the sources specified in (S)8.2(d). Such restored
amount shall not be treated as an Annual Addition under (S)7.2 for
such Plan Year. The restored amount, together with any remaining
balance of the nonforfeitable portion of the Employer Account
68
and Matching Account attributable to the Participant's service prior
to reemployment, shall be maintained thereafter as separate special
subaccounts of the Participant's Employer Account and Matching
Account (until such time as it becomes completely nonforfeitable or
again becomes a Forfeiture), and the dollar amount of the
Participant's nonforfeitable percentage in each such special
subaccount thereafter shall be determined in accordance with Formula
A unless Formula B is specified in the Adoption Agreement:
(i) FORMULA A (STANDARD OPTION): X = P(AB + D) - D
(i) FORMULA B (ALTERNATIVE): X = P(AB + (R x D)) - (R x D)
For purposes of these formulas:
X = The current dollar amount, if any, of the nonforfeitable
percentage in the Participant's special subaccount;
P = The Participant's current nonforfeitable percentage as
determined under (S)8.1;
AB = Such dollar amount, if any, as evidenced by the last balance
posted to the Participant's special subaccount;
D = The collar amount previously paid to the Participant under
(S)9 from the Participant's original Employer Account or Matching
Account, as applicable; and
R = The ratio of AB to the dollar amount, if any, posted to the
Participant's Employer Account or Matching Account, as
applicable, immediately after the distribution.
8.2(c) DEEMED DISTRIBUTION. If the nonforfeitable portion of a
Participant's Account balance derived from Employer and Employee
contributions is zero, the Participant shall be deemed to have
received a distribution of the nonforfeitable portion of the
Participant's Account upon the Participant's separation from service.
A Participant's nonforfeitable Account balance derived from Employee
contributions shall not include accumulated deductible employee
contributions within the meaning of Code (S)72(o)(5)(B) for Plan
Years beginning prior to January 1, 1989.
8.2(d) RESTORATION SOURCES. Any amount restored under this (S)8.2
shall be restored from the following sources in the following order:
first, from Forfeitures occurring in the Plan Year in which such
amounts are restored, if any; second, from Employer Contributions for
such Plan Year, if any; third from Fund Earnings
69
for such Plan Year; and finally, from additional Employer
Contributions. However, at the election of the Employer, such
amounts shall be restored entirely from additional Employer
Contributions.
8.2(e) DATE FORFEITURES APPLIED OR ALLOCATED. Any amounts which
become a Forfeiture under this (S)8.2 shall be allocated or applied
as of the allocation date specified in (S)6 which coincides with or
immediately follows the date such Forfeiture occurs, except that the
Employer may specify in the Adoption Agreement that Forfeitures which
are applied to reduce Employer Contributions, Matching Contributions,
Qualified Matching Contributions or Qualified Nonelective
Contributions shall be so applied as of the allocation date for such
contributions which immediately follows the last day of the Plan Year
in which such Forfeiture occurs.
8.2(f) IN-SERVICE DISTRIBUTIONS. The provisions of this (S)8.2(f)
shall apply if the Plan permits in-service distribution under (S)9.2.
If a distribution is made at a time when a Participant has a
nonforfeitable right to less than 100% of his or her Employer Account
or Matching Account and the Participant may increase the
nonforfeitable percentage in such Account:
8.2(f)(1) A separate special subaccount of the Participant's
Employer Account and Matching Account shall be established to
record the Participant's interest in such accounts as of the time
of the distribution; and
8.2(f)(2) At any relevant time the Participant's nonforfeitable
portion of each such special subaccount shall be determined in
accordance with the formula specified in (S)8.2(b).
SECTION 9. ACCOUNT DISTRIBUTION - GENERAL RULES
9.1 AFTER SEPARATION FROM SERVICE. Subject to the rules in this (S)9, (S)10,
Benefit Payment Forms - JOINT AND SURVIVOR ANNUITY REQUIREMENTS, and (S)11,
MINIMUM DISTRIBUTION REQUIREMENTS, the nonforfeitable portion of each
Participant's Account (as determined in accordance with (S)8) shall not be
payable to such Participant before he or she separates from service with the
Employer and all Affiliates.
9.1(a) TIMING. A Participant who has separated from service with the
Employer and all Affiliates
9.1(a)(1) STANDARD OPTION - may request a distribution of the
nonforfeitable portion of his or her Account as soon as practicable
after such separation from service.
70
9.1(a)(2) ALTERNATIVE - if so specified in the Adoption Agreement,
may not request a distribution of the nonforfeitable portion of his
or her Account until Normal Retirement Age, Early Retirement Age or
Disability, whichever is earlier.
9.1(b) REEMPLOYMENT. Except as required in (S)11, no payment shall be
made under this (S)9.1 if the Participant who separates from service is
reemployed as an Employee before payment is made. If a Participant is
reemployed as an Employee after payment of the nonforfeitable portion of
the Participant's Account has begun but before the entire balance
attributable to such nonforfeitable portion has been paid (or applied to
purchase an annuity), payments to the Participant from such balance shall
be terminated on the date he or she is so reemployed and no further
payments shall be made to the Participant until he or she is subsequently
entitled to such payments in accordance with the terms of this Plan.
9.1(c) $3500 CASHOUT. The nonforfeitable portion of a Participant's
Account shall be distributed in a single sum to such Participant (or to the
Participant's Beneficiary in the event of the Participant's death) as soon
as administratively practicable following the Participant's separation from
service with the Employer and all Affiliates for any reason if the
nonforfeitable portion of such Account is (and at the time of any prior
distribution was) $3500 or less. Any such distributions made on or after
January 1, 1993 shall be made in accordance with any applicable rules
regarding the period for providing notices under Code (S)402(f) and for
making direct rollover elections under Code (S)401(a)(31).
9.1(d) CLAIM. Except as provided in this (S)9 and (S)11, no payment shall
be made until a written claim for such payment is filed with the Plan
Administrator on an Election Form. The Plan Administrator shall process
each such claim in accordance with the claims procedure described in the
summary plan description for this Plan. If no such claim is submitted and
the Participant does not defer payment pursuant to (S)9.1(e), payment may
be made as soon as the benefit is not immediately distributable (within the
meaning of (S)9.3) and shall, in any event, begin no later than 60 days
following the end of the Plan Year in which
9.1(d)(1) the Participant separates from service as an Employee,
9.1(d)(2) the Participant reaches age 65 or Normal Retirement Age,
if earlier, or
9.1(d)(3) occurs the 10th anniversary of the year in which the
Participant commenced participation in the Plan, whichever occurs
last.
9.1(e) ELECTION TO DEFER PAYMENT. If a Participant has separated from
service with the Employer and all Affiliates and the nonforfeitable portion
of the Participant's Account is (or at the time of any prior distribution
was) more than $3500, the Participant may defer distribution of that
nonforfeitable portion, but in no event beyond
9.1(e)(1) STANDARD OPTION - the Participant's Required Beginning
Date (as defined in (S)11).
71
9.1(e)(2) ALTERNATIVE - if so specified in the Adoption Agreement,
the later of the Participant's Normal Retirement Age or age 62.
The failure of a Participant and his or her Spouse, if applicable, to
consent to a distribution or make a written request to defer payment while
a benefit is immediately distributable (within the meaning of (S)9.3) shall
be deemed to be an election to defer commencement of payment of any benefit
under this (S)9 until the benefit is no longer immediately distributable
or, if (S)9.1(e)(1) applies, until the Required Beginning Date.
Nothing in this (S)9.1(e) shall prevent the Plan Administrator from paying
in the normal form a benefit which is not immediately distributable without
regard to whether the Participant and his or her Spouse consent to such
distribution, unless the Participant has requested a deferral pursuant to
(S)9.1(e)(2).
9.1(f) EARLY RETIREMENT AGE. If the Early Retirement Age includes both an
age and service requirement, any Participant who separates from service
before satisfying such age requirement, but after the Participant has
satisfied the service requirement, may request a distribution of the
nonforfeitable portion of his or her Account upon satisfaction of such age
requirement.
9.1(g) DEATH. In the event of the Participant's death, the nonforfeitable
portion of the Participant's Account shall be payable to the Participant's
Beneficiary as soon as administratively practicable after the Participant's
death.
9.2 BEFORE SEPARATION FROM SERVICE. Subject to the rules in this (S)9, (S)10,
JOINT AND SURVIVOR ANNUITY REQUIREMENTS, and (S)11, MINIMUM DISTRIBUTION
REQUIREMENTS, the nonforfeitable portion of a Participant's Account may be paid
to the Participant before he or she separates from service with the Employer and
all Affiliates if so specified in the Adoption Agreement or by the Board in
accordance with (S)9.2(b)(2) or (S)9.2(e).
9.2(a) MONEY PURCHASE PENSION PLAN OR TARGET BENEFIT PENSION PLAN. If
this Plan is adopted as a Money Purchase Pension Plan or a Target Benefit
Pension Plan,
9.2(a)(1) STANDARD OPTION - except as provided in (S)9.2(d) or (e),
no distributions shall be made before a Participant separates from
service with the Employer and all Affiliates, or
9.2(a)(2) ALTERNATIVE - if so specified in the Adoption Agreement, a
Participant may request a distribution of all or a portion of the
nonforfeitable portion of the Participant's Account on or after he or
she reaches Normal Retirement Age without regard to whether he or she
has separated from service.
9.2(b) 401(K) PLAN.
72
9.2(b)(1) DISTRIBUTION RESTRICTIONS. If this Plan is adopted as a
401(k) Plan, then, except as provided in this (S)9.2(b), a
Participant's Elective Deferral Account, Qualified Nonelective Account
and Qualified Matching Account shall not be distributable to the
Participant or the Participant's Beneficiary earlier than upon the
Participant's separation from service with the Employer and all
Affiliates, death, or Disability.
9.2(b)(2) TERMINATION OF PLAN OR DISPOSITION OF ASSETS OR
SUBSIDIARY. Notwithstanding (S)9.2(b)(1) and subject to the
Participant and spousal consent rules in (S)9.3 and (S)10, the
Employer may, by action of its Board, make lump sum distributions
(within the meaning of Code (S)401(k)(10)(B)(ii) of a Participant's
Account, including the Participant's Elective Deferral Account,
Qualified Nonelective Account and Qualified Matching Account in
accordance with Code (S)401(k) by reason of
(i) the termination of the Plan without the establishment of
another defined contribution plan (other than an employee stock
ownership plan as defined in Code (S)4975(e) or Code (S)409 or a
simplified employee pension as defined in Code (S)408(k);
(ii) the disposition by the Employer or a Participating
Affiliate to an unrelated entity of substantially all of the
assets (within the meaning of Code (S)409(d)(2)) used by the
Employer or such Participating Affiliate in a trade or business
of the Employer or a Participating Affiliate, if the transferor
continues to maintain this Plan after such disposition, but such
distributions shall be made only with respect to a Participant
who continues employment with the entity acquiring such assets;
or
(iii) the disposition by the Employer or a Participating
Affiliate which is a corporation to an unrelated entity of
interest in a subsidiary (within the meaning of Code
(S)409(d)(3)), if the transferor continues to maintain this Plan
after such disposition, but such distributions shall be made only
with respect to a Participant who continues employment with such
former subsidiary.
9.2(b)(3) HARDSHIP DISTRIBUTION.
(iv) GENERAL. If the Employer specifies in the Adoption
Agreement that hardship distributions shall be permitted, a
Participant may request a hardship distribution before he or she
separates from service from the Participant's Elective Deferral
Account (and, if applicable, from the nonforfeitable portion of
the other subaccounts of such Account specified in the Adoption
Agreement). The Plan Administrator shall grant such request if,
and to the extent that, the Plan Administrator determines that
such distribution is "necessary" to satisfy and "immediate and
heavy financial need" of the Participant as determined in
accordance with this (S)9.2(b)(3). Any such
73
request shall be made in writing, shall set forth in detail the
nature of such hardship and the amount of the distribution needed
as a result of such hardship, and shall include adequate
documentation of the type of financial need and the amount of the
need. If the Plan Administrator grants such request, such
application shall be processed and such distribution shall be
made in a single sum as soon as administratively practicable.
(v) SAFE HARBOR TEST FOR FINANCIAL NEED. An "immediate and heavy
financial Need" shall mean one or more of the following, as
specified in the Adoption Agreement,
(A) expenses for medical care described in Code (S)213(d)
incurred by the Participant or the Participant's spouse or
dependents (as defined in Code (S)152) and amounts necessary
for such individuals to obtain such care,
(B) the purchase of (but not the mortgage payments for) a
principal residence of the Participant,
(C) the payment of tuition and related educational fees for
the next 12 months of post-secondary education for the
Participant or the Participant's spouse, children or
dependents (as defined in Code (S)152),
(D) the prevention of the eviction of the Participant from
the Participant's principal residence or the foreclosure on
the mortgage of the Participant's principal residence, or
(E) such other events as the Internal Revenue Service deems
to constitute an "immediate and heavy financial need" under
Code (S)401(k).
(vi) SAFE HARBOR TEST FOR DISTRIBUTION NECESSARY TO SATISFY NEED.
A distribution shall be deemed to be "necessary" to satisfy an
immediate and heavy financial need only if all of the following
requirements are satisfied:
(A) the distribution is not in excess of the amount of such
need, including any amounts necessary to pay any federal,
state or local income taxes or penalties reasonably
anticipated to result from such withdrawal;
(B) the Participant has obtained all distributions (other
than hardship distributions) and all nontaxable loans
currently available under this Plan and all other plans
maintained by the Employer or an Affiliate;
74
(C) the Participant's Elective Deferrals and Employee
Contributions under this Plan and elective deferrals and
employee contributions under all other plans maintained by
the Employer or an Affiliate shall be suspended for the 12-
month period following the date of receipt of such hardship
distribution; and
(D) the Participant's Elective Deferrals under this Plan
and elective deferrals under all other plans maintained by
the Employer or an Affiliate for the Participant's taxable
year immediately following the taxable year in which such
hardship distribution was made shall not exceed the
applicable dollar limitation under Code (S)402(g) for such
following taxable year less the amount of the Participant's
Elective Deferrals under this Plan and elective deferrals
under all such other plans for the taxable year in which
such hardship distribution was made.
(vii) ACCOUNT LIMITATIONS. For Plan Years beginning after
December 31, 1988, no hardship distribution shall be made under
this (S)9.2(b)(3) to a Participant from
(A) the Participant's Qualified Nonelective Account,
(B) the Participant's Qualified Matching Account, or
(C) the Fund Earnings allocated to the Participant's
Elective Deferral Account
except to the extent of amounts credited to such Accounts as of
the end of the last Plan Year ending before July 1, 1989.
9.2(b)(4) DISTRIBUTIONS ON OR AFTER AGE 59 1/2. If the Employer
specifies in the Adoption Agreement that distributions shall be
permitted on or after age 59 1/2, a Participant may request a
distribution of all or a portion of the nonforfeitable portion of the
subaccounts of the Participant's Account specified in the Adoption
Agreement at any time on or after he or she reaches age 59 1/2. Any
such request shall be made in writing on an Election Form and such
distribution shall be made in a single sum as soon as practicable in
accordance with such reasonable nondiscretionary procedures as the
Plan Administrator deems appropriate under the circumstances for the
proper administration of the Plan.
9.2(c) PROFIT SHARING PLAN. If this Plan is adopted as a Profit Sharing
Plan, then, if so specified in the Adoption Agreement, a Participant may
request in accordance with reasonable and nondiscriminatory procedures a
distribution of all or a portion of the nonforfeitable portion of the
Participant's Account after a fixed number of years, the
75
attainment of a stated age or upon the occurrence of some prior event as
specified in the Adoption Agreement.
9.2(d) WITHDRAWALS FROM EMPLOYEE ACCOUNT.
9.2(d)(1) STANDARD OPTION. A Participant may request a withdrawal
of all or a portion of the Participant's Employee Account at any
time. Any such request shall be made in writing on an Election
Form and such withdrawal shall be made in a single sum as soon as
administratively practicable in accordance with such reasonable
nondiscretionary procedures as the Plan Administrator deems
appropriate under the circumstances for the proper administration
of this Plan.
9.2(d)(2) ALTERNATIVE. The Employer may specify in the Adoption
Agreement that withdrawals from Employee Accounts shall not be
permitted before the nonforfeitable portion of a Participant's
Account otherwise becomes distributable under this (S)9 or under
(S)11 or may specify other rules and conditions under which such
withdrawals may be made.
Notwithstanding the foregoing, any portion of a Participant's Employee
Account which is attributable to recharacterized Excess Contributions under
(S)7.4(e) may only be withdrawn in accordance with the rules set forth in
(S)9.2(b) applicable to an Elective Deferral Account.
9.2(e) PLAN TERMINATION. If this Plan is terminated under (S)14.6 and if
the Board so specifies in its written action effecting such termination,
distribution of the nonforfeitable portion of each Account shall be made as
soon as administratively practical after the Plan is terminated subject to
the rules in (S)9.2(b) and to Code (S)411.
9.3 CONSENT.
9.3(a) GENERAL. If the nonforfeitable portion of a Participant's Account
exceeds (or at the time of any prior distribution exceeded) $3500, and such
Account is "immediately distributable", the Participant and the
Participant's Spouse, if any, (or where the Participant has died, the
surviving Spouse, if any) must consent to any distribution from such
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 (as defined in (S)10.1). The Plan Administrator shall notify
the Participant and the Participant's Spouse of the right to defer any
distribution until the Participant's 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 Code (S)417(a)(3) and shall be provided
no less than 30 days and no more than 90 days prior to the Annuity Starting
Date.
9.3(b) EXCEPTIONS. Notwithstanding the foregoing, only the Participant
need consent to the commencement of a distribution in the form of a
Qualified Joint and Survivor Annuity while the Participant's Account is
immediately distributable. Furthermore, if payment in the
76
form of a Qualified Joint and Survivor Annuity is not required with respect
to the Participant pursuant to (S)10, only the Participant need consent to
the distribution from an Account that is immediately distributable. The
consent of the Participant and the Participant's Spouse shall not be
required to the extent that a distribution is required to satisfy Code
(S)401(a)(9), (S)401(k), (S)401(m), (S)402(g) or (S)415. In addition, upon
termination of this Plan if the Plan is not required to offer an annuity
option (purchased from a commercial provider), the nonforfeitable portion
of the Participant's Account shall, without the Participant's consent, be
distributed to the Participant unless the Employer or an Affiliate
maintains another defined contribution plan (other than an employee stock
ownership plan as defined in Code (S)4975(e)(7), in which event, the
Account of a Participant who does not consent to an immediate distribution
shall be transferred to such other plan.
9.3(c) IMMEDIATELY DISTRIBUTABLE. An Account is "immediately
distributable" if any part of the Account could be distributed to the
Participant (or the surviving Spouse) before the Participant reaches (or
would have reached if not deceased) the later of Normal Retirement Age or
age 62.
9.3(d) ACCUMULATED DEDUCTIBLE EMPLOYEE CONTRIBUTIONS. For purposes of
determining the applicability of the consent requirements under this (S)9.3
to distributions made before the first day of the first Plan Year beginning
after December 31, 1988, the nonforfeitable portion of the Participant's
Account shall not include amounts attributable to accumulated deductible
employee contributions within the meaning of Code (S)72(o)(5)(B).
9.4 FORM OF DISTRIBUTION. All distributions (including distributions before
separation from service under (S)9.2 but excluding corrective distributions
under (S)7) shall be made in the form specified in (S)10.
9.5 MINIMUM DISTRIBUTIONS. The Plan shall satisfy the minimum distribution
requirements of Code (S)401(a)(9) as set forth in (S)11.
9.6 MISSING PERSON. In the event that an Account becomes payable under this
Plan pursuant to (S)9.1(c), (S)9.1(d) or (S)9.1(e) and the Plan Administrator is
unable to locate the Participant or his or her Beneficiary after sending written
notice to the last known mailing address and to the United States Social
Security Administration, such Participant or Beneficiary shall be presumed dead
and such Account shall become a Forfeiture on the third anniversary of the date
such Account first became payable under this Plan. However, the amount of such
Forfeiture shall be paid to such missing Participant or Beneficiary in the event
that such person files a claim for such benefit while this Plan remains in
effect and demonstrates to the satisfaction of the Plan Administrator that such
person in fact is such missing Participant or Beneficiary.
9.7 NO ESTOPPEL OF PLAN. No person is entitled to any benefit under this Plan
except and to the extent expressly provided under this Plan. The fact that
payments have been made from this Plan in connection with any claim for benefits
under this Plan does not (1) establish the validity of the claim, (2) provide
any right to have such benefits continue for any period of time, or (3) prevent
this Plan from recovering the benefits paid to the extent that the Plan
Administrator determines that there
77
was no right to payment of the benefits under this Plan. Thus, if a benefit is
paid under this Plan and it is thereafter determined by the Plan Administrator
that such benefit should not have been paid (whether or not attributable to an
error by the Participant, the Plan Administrator, the Employer or any other
person), then the Plan Administrator may take such action as the Plan
Administrator deems necessary or appropriate to remedy such situation, including
without limitation by (1) deducting the amount of any overpayment theretofore
made to or on behalf of such Participant from any succeeding payments to or on
behalf of such Participant under this Plan or from any amounts due or owing to
such Participant by the Employer or any Affiliate or under any other plan,
program or arrangement benefiting the employees or former employees of the
Employer or any Affiliate, or (2) otherwise recovering such overpayment from
whoever has benefitted from it.
If the Plan Administrator determines that an underpayment of benefits has been
made, the Plan Administrator shall take such action as it deems necessary or
appropriate to remedy such situation. However, in no event shall interest be
paid on the amount of any underpayment other than the investment gains (or
losses) credited to the Participant's Account pending payment.
9.8 ADMINISTRATION. All distributions shall be made in accordance with such
uniform and nondiscriminatory administrative and operational procedures for
Account distributions as the Plan Administrator deems appropriate under the
circumstances for the proper administration of the Plan.
SECTION 10. BENEFIT PAYMENT FORMS - JOINT AND SURVIVOR ANNUITY REQUIREMENTS
10.1 APPLICATION AND SPECIAL DEFINITIONS. This (S)10 shall apply to a
Participant who is vested at the time of death or at the time of a distribution
from the Participant's Account in any portion of the Participant's Account,
whether such portion is attributable to Employer contributions, Employee
contributions, or both. For purposes of this (S)10, the terms defined in this
(S)10.1 shall have the meanings shown opposite such terms.
10.1(a) ANNUITY STARTING DATE - means the first day of the first period
for which an amount is paid as an annuity or any other form.
10.1(b) EARLIEST RETIREMENT AGE - means
10.1(b)(1) if distributions are permitted only upon separation
from service, the earliest age at which the Participant could
separate from service and receive a distribution;
10.1(b)(2) if distributions are permitted before separation from
service, the earliest age at which such distribution could be
made; or
10.1(b)(3) if clauses (1) and (2) do not apply, the Early
Retirement Age.
10.1(c) ELECTION PERIOD - means
78
10.1(c)(1) for a Qualified Preretirement Survivor Annuity, the
period which begins on the earlier of (i) the first day of the
Plan Year in which the Participant attains age 35 or (ii) the date
such Participant separates from service and ends on the date of
the Participant's death and
10.1(c)(2) for a Qualified Joint and survivor Annuity or a Life
Annuity, the 90 day period ending on the Annuity Starting Date.
Notwithstanding the foregoing, a Participant who has not yet reached age 35
(and who will not reach age 35 as of the end of the current Plan Year) may
make a special Qualified Election to waive the Qualified Preretirement
Survivor Annuity for the period beginning on the date of such election and
ending on the first day of the Plan Year in which the Participant will
reach 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
(S)10.4. Qualified Preretirement Survivor Annuity coverage shall be
automatically reinstated as of the first day of the Plan Year in which the
Participant reaches age 35. Any new waiver on or after such date shall be
subject to the full requirements of this (S)10.
10.1(d) LIFE ANNUITY - mens a nontransferable immediate annuity payable
for the life of the Participant, which is the amount of benefit which can
be purchased with such Participant's Vested Account Balance as of the
Annuity Starting Date.
10.1(e) QUALIFIED ELECTION - means a Participant's election to waive the
Qualified Joint and Survivor Annuity or the Qualified Preretirement
Survivor Annuity which election shall not be effective unless (1) the
election designates a specific Beneficiary (including any class of
Beneficiaries or any contingent Beneficiaries) and, for an election to
waive a Qualified Joint and Survivor Annuity, the particular form of
benefit payment, which designations cannot be changed without the Spouse's
consent (or the Spouse expressly permits designations by the Participant
without any further spousal consent); (2) such Participant's Spouse
consents in writing to such election on an Election Form; (3) such consent
acknowledges the effect of such election; and (4) such consent is witnessed
by a notary public; provided,
(i) if the Participant establishes to the satisfaction of a
Plan representative that such written consent may not be obtained
because there is no Spouse or the Spouse cannot be located or
because of such other circumstances as may be described in the
regulations under Code (S)417, a Participant's election shall be
deemed to be a Qualified Election;
(ii) a Spouse's written consent under this (S)10.1(e) shall be
irrevocable as to such Spouse and shall be binding only as against
such Spouse;
(iii) no consent shall be valid unless the Participant received
notice as provided in (S)10.4;
79
(iv) a consent that permits designations by the Participant
without any further spousal consent must acknowledge that the
Spouse has the right to limit consent to a specific Beneficiary,
and, if applicable, a specific form of benefit payment, and that
the Spouse voluntarily elects to relinquish either or both of such
rights; and
(v) a Participant may revoke (without the consent of his or her
Spouse) an election to waive the Qualified Joint and Survivor
Annuity or the Qualified Preretirement Survivor Annuity on an
Election Form at any time prior to the date as of which the
Participant's Account becomes payable under (S)9.
10.1(f) QUALIFIED JOINT AND SURVIVOR ANNUITY - means a nontransferable
immediate annuity payable for the life of the Participant which is the
amount of benefit which can be purchased with the Participant's Vested
Account Balance on the Annuity Starting Date with a survivor annuity
payable for the life of the Participant's surviving Spouse which is
10.1(f)(1) STANDARD OPTION - 50% or
10.1(f)(2) ALTERNATIVE - such greater percentage (not to exceed
100%) specified in the Adoption Agreement
of the amount of the annuity which is payable during the joint lives of the
Participant and such Spouse.
10.1(g) QUALIFIED PRERETIREMENT SURVIVOR ANNUITY - means a nontransferable
annuity payable for the life of the surviving Spouse, which is the amount
of benefit which can be purchased with
10.1(g)(1) STANDARD OPTION - 100% of the Participant's Vested
Account Balance as of the Annuity Starting Date or
10.1(g)(2) ALTERNATIVE - such lesser percentage (not less than
50%) specified in the Adoption Agreement of such Participant's
Vested Account Balance (determined by allocating the portion of
such balance which is attributable to employee contributions
proportionately to such annuity and to the remainder of such
balance).
10.1(h) VESTED ACCOUNT BALANCE - means the nonforfeitable portion of a
Participant's Account derived from Employer contributions and Employee
contributions (including Rollover Contributions), whether vested before or
upon death, including the proceeds of insurance contracts, if any, on the
Participant's life and reduced, if applicable, for outstanding loans in
accordance with (S)13.3(d)(1)(iv).
10.2 DISTRIBUTION TO PARTICIPANT. Unless a Participant waives the Qualified
Joint and Survivor Annuity and elects an optional method of distribution (as
described in (S)10.6) on an Election Form pursuant to a Qualified Election
within the Election Period, any distribution of such Participant's Vested
Account Balance shall be paid in the form of (a) a Qualified Joint and Survivor
Annuity for
80
each such married Participant and his or her Spouse or (b) a Life Annuity for
each such unmarried Participant. A Participant may elect that such annuity be
distributed upon attainment of the Earliest Retirement Age.
10.3 DISTRIBUTION TO SURVIVING SPOUSE. Unless a Participant waives the
Qualified Preretirement Survivor Annuity and elects an optional method of
distribution (as described in (S)10.6) on an Election Form pursuant to a
Qualified Election within the Election Period, such Participant's Vested Account
Balance shall, in the event of the Participant's death before the Participant's
Annuity Starting Date, be applied to purchase a Qualified Preretirement Survivor
Annuity for the surviving Spouse. If the Qualified Preretirement Survivor
Annuity is less than 100%, the remaining portion of the Participant's Vested
Account Balance shall be payable to the Participant's Beneficiary under (S)9.
The surviving Spouse may elect that such Qualified Preretirement Survivor
Annuity be distributed to such Spouse within a reasonable period following the
death of the Participant. Notwithstanding the foregoing, a surviving Spouse
entitled to a Qualified Preretirement Survivor Annuity may elect in writing
after the Participant's death to have the Participant's Vested Account Balance
distributed in an optional form of benefit in accordance with (S)10.6.
10.4 NOTICE REQUIREMENTS.
10.4(a) QUALIFIED JOINT AND SURVIVOR ANNUITY AND LIFE ANNUITY. The Plan
Administrator shall no less than 30 days and no more than 90 days before
the Annuity Starting Date provide each Participant with a written
explanation of the Qualified Joint and Survivor Annuity and the Life
Annuity, which explanation shall describe
10.4(a)(1) the terms and conditions of such annuity;
10.4(a(2) the Participant's right to make a Qualified Election to
waive such annuity and the effect of such election;
10.4(a)(3) the rights of the Participant's Spouse, if any;
10.4(a)(4) the right to revoke such election and the effect of
such a revocation; and
10.4(a)(5) the relative values of the various optional forms of
benefits under the Plan.
10.4(b) QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. The Plan Administrator
shall provide to each Participant within the "applicable period" for such
Participant a written explanation of the Qualified Preretirement Survivor
Annuity which includes the type of information described in (S)10.4(a).
The "applicable period" for a Participant is
10.4(b)(1) the period beginning on the first day of the Plan Year
in which such Participant attains age 32 and ending with the close
of the Plan Year preceding the Plan Year in which the Participant
attains age 35,
81
10.4(b)(2) a reasonable period ending after he or she becomes a
Participant, or
10.4(b)(3) a reasonable period ending after this (S)10 applies to
such Participant,
whichever period ends last. However, if a Participant separates from
service before he or she reaches age 35, such notice shall be provided
within the two year period beginning one year before the Participant's
separation from service and ending one year after such separation and if
such Participant is subsequently reemployed, the applicable period for such
Participant shall be redetermined under (S)10.4(b)(1) through
(S)10.4(b)(3). For purposes of (S)10.4(b)(2) and (S)10.4(b)(3), a
"reasonable period" is the two year period which begins one year prior to
the occurrence of the event and ends one year after the occurrence of the
event.
10.5 SAFE HARBOR RULES.
10.5(a) APPLICATION. If so specified in the Adoption Agreement, the
provisions in this (S)10.5 shall apply in lieu of (S)10.1 through (S)10.4
to (1) a Participant in a Profit Sharing Plan or a 401(k) Plan, and (2) 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 Code (S)72(o)(5)(B) and maintained on behalf of a Participant in
a Money Purchase Pension Plan or Target Benefit Pension Plan provided that
the conditions specified in (S)10.5(b) are satisfied.
10.5(b) CONDITIONS. In order to fit within this safe harbor (1) the
Participant does not or cannot elect payments in the form of a Life Annuity
with respect to the Participant's Vested Account Balance; (2) on the death
of a Participant, the Participant's Vested Account Balance shall be paid to
the Participant's surviving Spouse, or if there is no surviving Spouse or
if the surviving Spouse has consented in a manner conforming to a Qualified
Election, to the Participant's Beneficiary; and (3) with respect to a
Participant in a Profit Sharing Plan or a 401(k) Plan, the Plan is not a
direct or indirect transferee of a defined benefit plan,money purchase
pension plan, target benefit pension plan, stock bonus plan, or profit-
sharing plan which is subject to the survivor annuity requirement of Code
(S)401(a)(11) and Code (S)417 ("Transferee Plan"), or the Plan maintains
separate bookkeeping accounts for such Participant's Transferee Plan
benefits and all other benefits of the Participant under the Plan and
gains, losses, withdrawals, contributions, forfeitures, and other credits
or charges are allocated on a reasonable and consistent basis between the
Transferee Plan benefits (which are subject to the survivor annuity
requirements in (S)10.1 through (S)10.4) and the other Plan benefits (which
are subject to the safe harbor rule in this (S)10.5).
10.5(c) SURVIVING SPOUSE. 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 Vested Account
Balance shall be adjusted for Fund Earnings occurring after the
Participant's death in accordance with (S)6.2 in the same manner that
Accounts are adjusted for other types of distributions.
82
10.5(d) WAIVER OF SPOUSAL BENEFIT. The Participant may waive the spousal
death benefit described in this (S)10.5 at any time; provided, no such
waiver shall be effective unless it satisfies the conditions described in
(S)10.1(e) (other than the notification requirement referred to in such
section) that would apply to the Participant's Qualified Election to waive
the Qualified Preretirement Survivor Annuity.
10.5(e) VESTED ACCOUNT BALANCE. For purposes of this (S)10.5, Vested
Account Balance shall mean, (1) in the case of a Money Purchase Pension
Plan or Target Benefit Pension Plan, the Participant's separate account
balance attributable solely to accumulated deductible employee
contributions within the meaning of Code (S)72(o)(5)(B) and (2) in the case
of a Profit Sharing Plan or 401(k) Plan, the Participant's Vested Account
Balance as defined in (S)10.1(h), excluding the portion of such Vested
Account Balance which is attributable to Transferee Plan benefits described
in (S)10.5(b).
10.6 OPTIONAL FORMS.
10.6(a) GENERAL. If a Participant properly and timely waives the
Qualified Joint and survivor Annuity as described in (S)10.2 or to the
extent the safe harbor rules of (S)10.5 apply to a distribution, such
distribution shall be made in the form specified in this (S)10.6 as
selected by the Participant (or his or her Beneficiary in the event of the
Participant's death).
10.6(b) BEFORE SEPARATION FROM SERVICE. Any distribution made pursuant to
(S)9.2 shall, subject to (S)10.2, be made in a single sum.
10.6(c) AFTER SEPARATION FROM SERVICE.
10.6(c)(1) STANDARD OPTION. The optional benefit form available
to any Participant after separation from service with the Employer
and all Affiliates or to his or her Beneficiary in the event of
the Participant's death shall be a single sum.
10.6(c)(2) ALTERNATIVE. If specified in the Adoption Agreement,
the following optional benefit forms shall be available to any
Participant (or to his or her Beneficiary in the event of the
Participant's death):
(i) SINGLE SUM - by payment in a single sum.
(ii) INSTALLMENTS - by payment in annual installments (or
more frequent installments) over a specified period in
accordance with the minimum distribution rules in (S)11.
(iii) ANNUITY - in the form of an annuity contract under
which the amount of benefits shall be that which can be
provided by applying the nonforfeitable portion of such
Participant's Account to the applicable settlement option or
annuity purchase rate under such contract; or
83
(iv) OTHER FORMS - under one of the optional forms of
distribution, if any, under the Pre-Existing Plan or a plan
described in (S)14.5 which are required to be preserved
under Code (S)411(d)(6). Such optional forms shall be
described in the Adoption Agreement and, unless otherwise
specified in the Adoption Agreement, such other forms shall
apply to the Participant's entire Account balance.
Notwithstanding the foregoing, if the Plan Administrator
separately accounts for benefits under a Pre-Existing Plan
or a plan described under (S)14.5 or, if applicable, under
(S)10.5, the optional forms may be limited to such separate
accounts.
10.6(d) NO METHOD SELECTED. If the safe harbor rules of (S)10.5 apply to
a distribution, but the Participant or the Participant's Spouse of
Beneficiary fails to specify the method of distribution, then any
distribution made to such Participant, Spouse or Beneficiary shall be made
in a single sum.
10.6(e) SINGLE SUM. A distribution made on account of a Participant's
death or separation from service with the Employer and all Affiliates which
is made in more than one payment shall be deemed to be a single sum
distribution for purposes of this Plan if the additional payment or
payments are necessary to reflect allocations completed following the
Participant's death or separation from service.
10.6(f) IN KIND DISTRIBUTIONS. A distribution shall be made in kind only
to the extent provided in the Adoption Agreement and only to the extent an
"in Kind" distribution is permissible under ERISA.
10.7 ANNUITY CONTRACTS. Any annuity contract distributed by the Plan to a
Participant or a Beneficiary shall be nontransferable and the terms of such
contract shall comply with the applicable requirements of this Plan and the
Code.
10.8 TRANSITIONAL RULES.
10.8(a) Any living Participant not receiving benefits on August 23, 1984,
who would otherwise not receive the benefits prescribed by the previous
sections of this (S)10 must be given the opportunity to elect to have such
sections apply (1) 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 (2) such Participant had at least 10 years
of vesting service when he or she separated from service.
10.8(b) Any living Participant not receiving benefits on August 23, 1984,
who was credited with at least one Hour of Service under this Plan or a
predecessor plan on or after September 2, 1974, and who is not otherwise
credited with any service in a Plan Year beginning on or after January 1,
1976, must be given the opportunity to have his or her benefits paid in
accordance with (S)10.8(d).
84
10.8(c) The respective opportunities to elect (as described in (S)10.8(a)
and (b) above) must be afforded to the appropriate Participants during the
period commencing on August 23, 1984, and ending on the date benefits would
otherwise commence to such Participants.
10.8(d) Any Participant who has elected pursuant to (S)10.8(b) and any
Participant who does not elect under (S)10.8(a) or who meets the
requirements of (S)10.8(a) except that such Participant does not have at
least 10 years of vesting service when he or she separates from service,
shall have his or her benefits distributed in accordance with all of the
following requirements if benefits would have been payable in the form of a
life annuity:
10.8(d)(1) If benefits in the form of a life annuity become
payable to a married Participant who:
(i) begins to receive payments under the Plan on or after
Normal Retirement Age; or
(ii) dies on or after Normal Retirement Age while still
working for the Employer; or
(iii) begins to receive payments on or after the "qualified
early retirement age"; or
(iv) 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 shall be received under this Plan in the form
of a Qualified Joint and survivor Annuity, unless the Participant
has elected otherwise during the election period. The election
period must begin at least 6 months before the Participant attains
"qualified early retirement age" and end not more than 90 days
before the commencement of benefits. Any such election shall be in
writing and may be changed by the Participant at any time.
10.8(d)(2) A Participant who is employed after attaining the
qualified early retirement age shall be given the opportunity to
elect, during the election period, to have a survivor annuity
payable on death. The election period begins on the later of (i)
the 90th day before the Participant attains the "qualified early
retirement age", or (ii) the date on which participation begins,
and ends on the date the Participant separates from service. Any
such election shall be in writing and may be changed by the
Participant at any time. 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 retire
on the day before the Participant's death.
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10.8(d)(3) For purposes of this (S)10.8(d), "qualified early
retirement age" means the latest of:
(i) the earliest date under the Plan on which the
Participant may elect to receive retirement benefits,
(ii) the first day of the 120th month beginning before the
Participant reaches Normal Retirement Age, or
(iii) the date the Participant begins participation.
10.9 DIRECT ROLLOVERS.
10.9(a) GENERAL. This (S)10.9 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 (S)10, a
Distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution
paid directly by the Plan to an Eligible Retirement Plan specified by the
Distributee in a direct rollover in accordance with Code (S)401(a)(31).
10.9(b) DEFINITIONS.
10.9(b)(1) ELIGIBLE ROLLOVER DISTRIBUTION. An Eligible Rollover
Distribution is any distribution of all or any portion of the
balance to the credit of the Distributee, except that an Eligible
Rollover Distribution does not include: any distribution that is
one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy)
of the Distributee or the 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; any distribution
to the extent such distribution is required under Code
(S)401(a)(9); and the portion of any distribution that is not
includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer
securities).
10.9(b)(2) ELIGIBLE RETIREMENT PLAN. An Eligible Retirement Plan
is an individual retirement account described in Code (S)408(a),
an individual retirement annuity described in Code (S)408(b), an
annuity plan described in Code (S)403(a), or a qualified trust
described in Code (S)401(a), 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.
10.9(b)(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 Code
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(S)414(p), are Distributees with regard to the interest of the
spouse or former spouse.
SECTION 11. MINIMUM DISTRIBUTION REQUIREMENTS
11.1 GENERAL. Subject to (S)10, BENEFIT PAYMENT FORMS - JOINT AND SURVIVOR
ANNUITY REQUIREMENTS, the requirements of this (S)11 shall apply to any
distribution of a Participant's Account and shall take precedence over any
inconsistent provisions of this Plan. Unless otherwise specified, the
provisions of this (S)11 shall apply to calendar years beginning after December
31, 1984. All distributions required under this (S)11 shall be determined and
made in accordance with the proposed regulations under Code (S)401(a)(9),
including the minimum distribution incidental benefit requirement of
(S)1.401(a)(9)-2 of the proposed regulations.
11.2 SPECIAL DEFINITIONS.
11.2(a) APPLICABLE CALENDAR YEAR - means the first Distribution Calendar
Year, and if life expectancy is being recalculated, each succeeding
calendar year.
11.2(b) APPLICABLE LIFE EXPECTANCY - means 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.
11.2(c) DESIGNATED BENEFICIARY - means the individual who is designated as
the Beneficiary under this Plan in accordance with Code (S)401(a)(9) and
the regulations under such Code section.
11.2(d) DISTRIBUTION CALENDAR YEAR - means a calendar year for which a
minimum distribution is required. For distributions beginning before the
Participant's death, the first Distribution Calendar Year shall be 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 shall be the
calendar year in which distributions are required to begin pursuant to
(S)11.6.
11.2(e) LIFE EXPECTANCY - means the life expectancy (or joint and last
survivor expectancy) as computed by use of the expected return multiples in
Tables V and VI of (S)1.72-9 of the Federal Income Tax Regulations. Unless
otherwise elected by the Participant (or Spouse, in the case of
distributions described in (S)11.6(b)(2)) 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.
11.2(f) PARTICIPANT'S BENEFIT - means the nonforfeitable portion of a
Participant's Account determined as of the last Valuation Date in the
calendar year immediately preceding the
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Distribution Calendar Year ("valuation calendar year") increased by the
amount of any contributions or forfeitures allocated to the Account as of
dates in the valuation calendar year after such Valuation Date and
decreased by distributions made in the valuation calendar year after such
Valuation Date. 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.
11.2(g) REQUIRED BEGINNING DATE.
11.2(g)(1) GENERAL RULE. The Required Beginning Date of a
Participant who reach age 70 1/2 after December 31, 1987 is the
first day of April of the calendar year following the calendar
year in which the Participant reaches age 70 1/2.
11.2(g)(2) AGE 70 1/2 BEFORE 1988. The Required Beginning Date of
a Participant who reaches age 70 1/2 before January 1, 1988 shall
be,
(i) for a Participant who is not a 5% owner, the first
day of April of the calendar year following the calendar
year in which occurs the later of retirement or reaching age
70 1/2; or
(ii) for a Participant who is a 5% owner during any year
beginning after December 31, 1979, the first day of April
following the later of:
(A) the calendar year in which the Participant
reaches 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.
11.2(g)(3) AGE 70 1/2 DURING 1988. The Required Beginning Date of
a Participant who is not a 5% owner, who reaches age 70 1/2 during
1988 and who has not retired before January 1, 1989 shall be April
1, 1990. The Required Beginning Date of a Participant who is a 5%
owner or who retired before January 1, 1989 and who reaches age 70
1/2 during 1988 shall be determined in accordance with (S)
11.2(g)(1).
11.2(g)(4) 5% OWNER. A Participant shall be treated as a 5% owner
for purposes of this (S) 11.2(g) if such Participant is a 5% owner
as defined in Code (S) 416(i) (determined in accordance with Code
(S) 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 individual attains age 66 1/2 or any subsequent
Plan Year. Once
88
distributions have begun to a 5% owner under this (S) 11, they
must continue to be distributed, even if the Participant ceases to
be a 5% owner in a subsequent year.
11.3 REQUIRED BEGINNING DATE. The entire nonforfeitable interest of a
Participant must be distributed or begin to be distributed no later than the
Participant's Required Beginning Date. Such distribution shall be made
11.3(a) in the form of a Qualified Joint and Survivor Annuity as described
in (S) 10.2, or
11.3(b) if the Qualified Joint and Survivor Annuity is properly waived or
to the extent the safe harbor rules in (S) 10.5 apply, in the optional
benefit form in (S) 10.6 selected by the Participant.
Notwithstanding the foregoing, even if installment distributions are not
otherwise available as an optional benefit form, a Participant who has not
separated from service with the Employer and all Affiliates as of the Required
Beginning Date (or as of the end of any Distribution Calendar Year thereafter)
may elect to receive the minimum distribution amount for each such Distribution
Calendar Year as described in (S) 11.5.
11.4 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);
11.4(a) the life of the Participant,
11.4(b) the life of the Participant and a Designated Beneficiary,
11.4(c) a period certain not extending beyond the life expectancy of the
Participant, or
11.4(d) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a Designated Beneficiary.
11.5 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:
11.5(a) INDIVIDUAL ACCOUNT.
11.5(a)(1) GENERAL. If a Participant's Benefit is to be
distributed over (i) 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 (ii) 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
89
equal the quotient obtained by dividing the Participant's Benefit
by the Applicable Life Expectancy.
11.5(a)(2) INCIDENTAL DEATH BENEFIT RULES.
(i) 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.
(ii) 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 (A) the Applicable
Life Expectancy or (B) if the Participant's Spouse is not
the Designated Beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of (S)
1.401(a)(9)-2 of the proposed regulations. Distributions
after the death of the Participant shall be distributed
using the Applicable Life Expectancy in (S) 11.5(a)(1) as
the relevant divisor without regard to (S) 1.401(a)(9)-2 of
the proposed regulations.
11.5(b) ANNUITY CONTRACTS. If the Participant's Benefit is distributed in
the form of an annuity purchased from an insurance company, distributions
under such annuity shall be made in accordance with the requirements of
Code (S) 401(a)(9).
11.6 DEATH DISTRIBUTION PROVISIONS.
11.6(a) DISTRIBUTION BEGINNING BEFORE DEATH. If the Participant dies
after distribution of his or her nonforfeitable interest has begun, the
remaining portion of such nonforfeitable interest shall continue to be
distributed at least as rapidly as under the method of distribution being
used prior to the Participant's death.
11.6(b) DISTRIBUTION BEGINNING AFTER DEATH. If the Participant dies
before distribution of his or her nonforfeitable interest begins,
distribution of the Participant's entire nonforfeitable 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 (1) or (2)
below:
11.6(b)(1) if any portion of the Participant's nonforfeitable
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 and shall
commence on or before December 31 of the calendar year immediately
following the calendar year in which the Participant died;
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11.6(b)(2) if the Designated Beneficiary is the Participant's
surviving Spouse, distributions may be made over the period
described in clause (1) above but the required commencement date
may be deferred until the later of (i) December 31 of the calendar
year immediately following the calendar year in which the
Participant died or (ii) December 31 of the calendar year in which
the Participant would have reached age 70 1/2.
If the Participant has not made an election pursuant to this (S) 11.6(b) by
the time of the Participant's death, the Participant's Designated
Beneficiary must elect the method of distribution no later than the earlier
of (A) December 31 of the calendar year in which distributions would be
required to begin under this (S) 11.6 or (B) 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.
11.6(c) SPECIAL RULES.
11.6(c)(1) For purposes of (S) 11.6(b), if the surviving Spouse
dies after the Participant, but before payments to such Spouse
begin, the provisions of (S) 11.6(b), with the exception of (S)
11.6(b)(2), shall be applied as if the surviving Spouse were the
Participant.
11.6(c)(2) For purposes of this (S) 11.6, any amount paid to a
child of the Participant shall 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.
11.6(c)(3) For the purposes of this (S) 11.6, distribution of a
Participant's interest shall be considered to begin on the
Participant's Required Beginning Date (or, if (S) 11.6(c)(1) above
is applicable, the date distribution is required to begin to the
surviving Spouse pursuant to (S) 11.6(b). 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 shall be the date distribution actually commences.
11.7 SPECIAL PRE-TEFRA DISTRIBUTION ELECTION.
11.7(a) GENERAL RULE. Subject to (S) 10, BENEFIT PAYMENT FORMS - JOINT
AND SURVIVOR ANNUITY REQUIREMENTS, the nonforfeitable percentage of the
Account of any Participant (including a "5% owner" as described in (S)
11.2(g)(4)) who has in effect a Special Pre-TEFRA Distribution Election (as
described in (S) 11.7(b)) shall be paid only to the Participant, or in the
case of the Participant's death, only to his or her beneficiary in
accordance with the
91
method of distribution specified in such election without regard to the
distribution rules set forth in (S) 11.1 through (S) 11.6.
11.7(b) SPECIAL PRE-TEFRA DISTRIBUTION ELECTION. For purposes of this (S)
11.7, a Special Pre-TEFRA Distribution Election means a designation in
writing, signed by the Participant or his or her beneficiary, made before
January 1, 1984 by Participant in this Plan or a Participant in a Pre-
Existing Plan who had accrued a benefit under such plan as of December 31,
1983 which designation specifies
11.7(b)(1) a distribution method which was permissible under Code
(S) 401(a)(9) as in effect prior to amendment by the Deficit
Reduction Act of 1984,
11.7(b)(2) the time at which such distribution will commence,
11.7(b)(3) the period over which such distribution will be made,
and
11.7(b)(4) if such designation is to be effective for a
beneficiary, the beneficiaries of the Participant in order of
priority.
A distribution to be made upon the death of a Participant shall not be
covered under this (S) 11.7(b) unless the information in the designation
with respect to such distribution satisfies the requirements of this (S)
11.7(b).
11.7(c) CURRENT DISTRIBUTIONS. Any distribution which began before
January 1, 1984 and continues after such date shall be deemed to be made
pursuant to a Special Pre-TEFRA Distribution Election if the method of
distribution was set forth in writing and such method satisfied the
requirements of (S) 11.7(b)(1) through (4).
11.7(d) REVOCATION. A Participant who made a Special Pre-TEFRA
distribution Election shall have the right to revoke such election by
completing and filing a distribution Election Form under (S) 9.
Furthermore, any change (other than the mere substitution or addition of a
beneficiary not originally designated in such election which does not
directly or indirectly alter the period over which distributions are to be
made) to a Special Pre-TEFRA Distribution Election shall be deemed to be a
revocation of such election. Upon revocation, any subsequent distribution
shall be made in accordance with Code (S) 401(a)(9). 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 Code (S)
401(a)(9), but for the Special Pre-TEFRA Distribution Election. For
calendar years beginning after December 31, 1988, such distributions must
meet the minimum distribution incidental benefit requirements in (S)
1.401(a)(9)-2 of the proposed regulations. If an amount is transferred or
rolled over from one plan to another plan, the rules in Q&A J2 and Q&A J-3
of (S) 1.401(a)(9)-1 of the proposed regulations shall apply.
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SECTION 12. TOP-HEAVY PLAN RULES
12.1 APPLICATION. The rules set forth in this (S) 12 shall supersede any
provisions of this Plan or the Adoption Agreement which are inconsistent with
these rules as of the first day of the first Plan Year beginning after December
31, 1983 during which the Plan is or becomes a Top-Heavy Plan and such rules
shall continue to supersede such provisions for o long as the Plan is a Top-
Heavy Plan unless the Code permits such rules to cease earlier or requires them
to remain in effect for a longer period.
12.2 SPECIAL DEFINITIONS. For purposes of this (S) 12, the terms defined in
this (S) 12.2 shall have the means shown opposite such terms.
12.2(a) DETERMINATION DATE - means
12.2(a)(1) for the first Plan Year of a Plan which is adopted as a
new Plan under the Adoption Agreement, the last day of such Plan
Year, and
12.2(a)(2) for any subsequent Plan Year, the last day of the
immediately preceding Plan Year, and
12.2(a)(3) for any plan year of each other qualified plan
maintained by the Employer or an Affiliate which is part of a
Permissive Aggregation Group or a Require Aggregation Group, the
date determined under this (S) 12.2(a) as if the term "Plan Year"
means the plan year for each such qualified plan.
12.2(b) KEY EMPLOYEE - means any Employee or former Employee (and the
Beneficiaries of such Employee)(as determined in accordance with Code (S)
416(i)(1) who at any time during the Plan Year or any of the four
immediately preceding Plan Years was
12.2(b)(1) an officer of the Employer or an Affiliate whose
compensation for such Plan Year exceeds 50% of the dollar
limitation under Code (S) 415(b)(1)(A),
12.2(b)(2) an owner (or considered to be an owner within the
meaning of Code (S) 318) of one of the ten largest interests in
the Employer or an Affiliate whose compensation for such Plan Year
exceeds the 100% of the dollar limitation under Code (S)
415(c)(1)(A); provided that the value of such Employee's ownership
interest is more than one-half of one percent.
12.2(b)(3) a 5% owner of the Employer or an Affiliate, or
12.2(b)(4) a 1% owner of the Employer or an Affiliate whose
compensation for such Plan Year exceeds $150,000.
93
For purposes of this (S) 12.2(b), an Employee's compensation means
compensation within the meaning of Code (S) 415(c)(3)(as defined in (S)
7.2(a)(2)) but including amounts contributed by the Employer or an
Affiliate pursuant to a salary reduction agreement which are excluded from
gross income under Code (S) 125, (S) 402(e)(3), (S) 402(h) or (S) 403(b).
12.2(c) PERMISSIVE AGGREGATION GROUP - means a required Aggregation Group
and any other qualified plan or plans (as described in Code (S) 401(a))
maintained by the Employer or an Affiliate which, when considered with the
Required Aggregation Group, would continue to satisfy the requirements of
Code (S) 401(a)(4) and Code (S) 410.
12.2(d) REQUIRED AGGREGATION GROUP - means (1) each qualified plan (as
described in Code 401(a)) maintained by the Employer or an Affiliate in
which at least one Key Employee participates or participated at any time
during the 5-year period ending on the Determination Date (without regard
to whether such plan has terminated) and (2) any other qualified plan
maintained by the Employer or an Affiliate which enables any such plan to
satisfy the requirements of Code (S) 401(a)(4) or Code (S) 410.
12.2(e) TOP-HEAVY PLAN - means this Plan if, for any Plan Year beginning
after December 31, 1983, either
12.2(e)(1) this Plan is not part of a Required Aggregation Group
or a Permissive Aggregation Group and the Top-Heavy Ratio for this
Plan exceeds 60%.
12.2(e)(2) this Plan is part of a Required Aggregation Group but
not part of a Permissive Aggregation Group and the Top-Heavy Ratio
for the Required Aggregation Group exceeds 60%; or
12.2(e)(3) this Plan is part of a Required Aggregation Group and
part of a Permissive Aggregation Group and the Top-Heavy Ratio for
the Permissive Aggregation Group exceeds 60%.
12.2(f) TOP-HEAVY RATIO.
12.2(f)(1) if the Employer or an Affiliate maintains one or more
defined contribution plans (including any simplified employee
pension plan) and the Employer or an Affiliate has never
maintained a defined benefit plan under which benefits have been
accrued for a Participant in this Plan during the 5-year period
ending on the Determination Date, "Top-Heavy ratio" means for this
Plan alone or for the Required Aggregation Group or Permissive
Aggregation Group, as appropriate, a fraction, the numerator of
which shall be the sum of the account balances of all Key
Employees as of the Determination date under this and all other
such defined contribution plans and the denominator of which shall
be the sum of the account balances of all employees as of the
Determination date under this and all other such defined
contribution plans.
94
12.2(f)(2) If the Employer or an Affiliate maintains one or more
defined contribution plans (including any simplified employee
pension plan) and the Employer or an Affiliate maintains or has
ever maintained one or more defined benefit plans under which
benefits have been accrued for a Participant in this Plan during
the 5-year period ending on the Determination Date. "Top-Heavy
Ratio" means for the Required Aggregation Group or the Permissive
Aggregation Group, as appropriate, a fraction, the numerator of
which shall be the sum of the account balances for all Key
Employees as of the Determination Date under this and all other
such defined contribution plans and the sum of the present value
of the accrued benefits for all Key Employees as of the
Determination Date under all defined benefit plans maintained by
the Employer or an Affiliate and the denominator of which shall be
the sum of the account balances for all employees as of the
Determination date under this and all other such defined
contribution plans and the sum of the present value of the accrued
benefits for all employees as of the Determination Date under all
defined benefit plans maintained by the Employer or an Affiliate.
12.2(f)(3) The following rules shall apply for purposes of
calculating the Top-Heavy Ratio:
(i) The value of any account balance and the present
value of any accrued benefit shall be determined as of the
most recent Top-Heavy Valuation Date that falls within, or
ends with, the 12-month period ending on the Determination
Date (or, if plans are aggregated, the Determination Dates
that fall within the same calendar year), except as provided
under the regulations under Code (S) 416 for the first and
second years of a defined benefit plan;
(ii) The value of any account balance and the present
value of any accrued benefit shall include the value of any
distributions made during the 5-year period ending on such
Determination Date and any contributions due but as yet
unpaid as of the Determination Date which are required to be
taken into account on that date under Code (S) 416;
(iii) The present value of an accrued benefit under a
defined benefit plan shall be determined in accordance with
the interest rate and mortality assumptions specified in the
Adoption Agreement or, if this Plan and such defined benefit
plan are Paired Plans, as specified in the Adoption
Agreement for such defined benefit Paired Plan;
(iv) The account balance or accrued benefit of a
Participant who is not a Key Employee for the current Plan
Year but who was a Key Employee in a prior Plan Year or who
has not performed an Hour of Service for the Employer or any
Affiliate at any time during the 5-year period ending on the
Determination Date shall be disregarded;
95
(v) Deductible employee contributions shall be
disregarded;
(vi) The calculation of the Top-Heavy Ratio and the extent
to which contributions, distributions, rollovers, and
transfers are taken into account shall be determined in
accordance with Code 416; and
(vii) If the Employer maintains more than one defined
benefit plan, the accrued benefit of a Participant other
than a Key Employee shall be determined under the method, if
any, that uniformly applies for accrual purposes under all
such defined benefit plans maintained by the Employer or an
Affiliate, or 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 Code (S)
411(b)(1)(C).
12.2(g) TOP-HEAVY VALUATION DATE- means for this Plan, the last day of
each Plan Year and for each other qualified plan maintained by the Employer
or an Affiliate,
12.2(g)(1) STANDARD OPTION - the most recent valuation date for
such plan or
12.2(g)(2) ALTERNATIVE - the valuation date specified in the
Adoption Agreement.
12.3 MINIMUM ALLOCATION.
12.3(a) GENERAL. Except as otherwise provided in this (S) 12.3, for any
Plan Year in which this Plan is a Top-Heavy Plan, the "minimum allocation"
for each Participant who is not a Key Employee means an allocation of
Employer Contributions and Forfeitures made in accordance with (S) 12.3(d)
which shall not be less than the lesser of
12.3(a)(1) 3% of such Participant's Compensation for such Plan
Year or
12.3(a)(2) if the Employer or an affiliate has no defined benefit
plan which uses this Plan to satisfy the requirements of Code (S)
401(a)(4) or Code (S) 410, the largest percentage of the Employer
Contributions and Forfeitures allocated on behalf of any Key
Employee (expressed as a percentage of the first $200,000 of
Compensation) for such Plan Year.
12.3(b) DEFINED BENEFIT PAIRED PLAN. If this Plan is adopted in
combination with a defined benefit Paired Plan, the Employer and the
Participating Affiliates shall make a contribution under this Plan (or if
this Plan is adopted in combination with another defined contribution
Paired Plan, under any combination of defined contribution Paired Plans)
for each Participant who is an Eligible Employee at any time during such
Plan Year who is also a Participant in the defined benefit Paired Plan
equal to at least 5% (or such greater percentage as is specified in the
adoption agreement for the defined benefit Paired Plan) of Compensation for
such Plan Year unless the Employer elects under such defined benefit Paired
Plan to provide the minimum benefit accrual under such defined benefit
Paired Plan.
96
If this (S) 12.3(b) applies and the Employer has not elected to provide the
minimum benefit accrual under the defined benefit Paired Plan, the minimum
allocation required under this (S) 12.3(b) for Plan Years beginning on and
after the Final Compliance Date shall, subject to the ordering rules in (S)
12.3(c), be made under this Plan without regard to whether the Participant
also benefits under the defined benefit Paired Plan. Further, if this Plan
and the defined benefit Paired Plan do not benefit the same participants
for such Plan Year, the minimum allocation described in (S) 12.3(a) shall,
subject to the ordering rules in (S) 1.2(c), be made under this Plan for
each Participant described in (S) 12.3(d)(1) and the minimum benefit
accrual shall be made for each participant in the defined Benefit Paired
Plan in accordance with the terms of such Paired Plan.
12.3(c) DEFINED CONTRIBUTION PAIRED PLAN. If this Plan is adopted in
combination with one or more defined contribution Paired Plans, the minimum
allocation required under this (S) 12.3, if any, shall be made under such
Paired Plans in the following order:
12.3(c)(1) STANDARD OPTION - First, under the Money Purchase
Pension Plan, if any; second, under the Target Benefit Pension
Plan, if any; third, under the Profit Sharing Plan; if any; and
finally, under the 401(k) Plan, if any.
12.3(c)(2) ALTERNATIVE - in the order specified in the Adoption
Agreement.
12.3(d) PARTICIPANTS ENTITLED TO ALLOCATION. The minimum allocation
required for any Plan Year under the (S) 12.3
12.3(d)(1) shall be made for each Participant who is not a Key
Employee and who is employed as an Eligible Employee (or on an
authorized leave of absence as an Eligible Employee) on the last
day of such Plan Year, without regard to the number of Hours of
Service actually completed by such Participant in such Plan Year;
and
12.3(d)(2) shall not apply to any Participant (i) who is covered
under any other plan or plans maintained by the Employer or an
Affiliate and the Employer has specified in the Adoption Agreement
that the minimum allocation or the minimum benefit required under
Code (S) 416 for any Plan Year for which this Plan is a Top-Heavy
Plan shall be made under such other plan or plans or (ii) to the
extent such Participant receives such minimum allocation or
minimum benefit under this Plan or any other plans maintained by
the Employer or an Affiliate.
Notwithstanding (S) 12.3(d)(2), if this Plan is adopted as a
nonstandardized Plan that intends to satisfy the safe harbor in the Code
(S) 401(a)(4) regulations, the minimum allocation required under (S) 12.3
for Plan Years beginning on and after the Final Compliance Date must be
made for each Participant described in (S) 12.3(d(1) without regard to
whether the Participant also benefits under another plan, but only to the
extent that such minimum allocation is not otherwise received under this
Plan.
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12.3(e) NONFORFEITABILITY. The minimum allocation required under this (S)
12.3 (to the extent required to be nonforfeitable under Code (S) 416(b)
shall not be forfeited under Code (S) 411(a)(3)(B) or Code (S)
411(a)(3)(D).
12.3(f) COMPENSATION. For purposes of computing the minimum allocation
under this (S) 12.3, the term "Compensation" shall mean Compensation within
the meaning of Code (S) 415(c)(3) as described in (S) 7.2(a)(2).
12.3(g) MULTIPLE PLANS. If the Employer or an Affiliate also maintains
another plan, the Employer shall specify in the Adoption Agreement how the
minimum allocation, if any, required under Code (S)416 will be satisfied
and, if the Employer or an Affiliate maintains or has maintained a defined
benefit plan, the method of satisfying Code (S)416(h).
12.3(h) INTEGRATED PLANS.
12.3(h)(1) STANDARD OPTION. If this Plan is adopted as an
integrated Profit Sharing Plan, the following allocation formula
shall apply in lieu of the formula in (S)6.3(a)(2) for each Plan
Year in which such Plan is a Top-Heavy Plan.
The Forfeitures and the Employer Contribution shall be allocated
(and posted) as of the last day of such Plan Year to the Employer
Account of each Active Participant and each other Participant for
whom a minimum allocation is required to be made under this
(S)12.3 in accordance with the following:
STEP ONE - First, the lesser of (A) the sum of the Employer
Contribution and Forfeitures for such Plan Year or (B) the
product o the Top-Heavy Percentage and the total
Compensation of all such Participants shall be allocated in
the same ratio that each such Participant's total
Compensation for such Plan Year bears o the total
Compensation of all such Participants for such Plan Year.
STEP TWO - Second, the lesser of (A) the remaining Employer
Contribution and Forfeitures for such Plan Year or (B) the
product o the Top-Heavy Percentage (or the Maximum Disparity
Rate, if less) and the total Excess Compensation of all such
Participants shall be allocated in the same ratio that each
such Participant's Excess Compensation for such Plan Year
bear to the total Excess Compensation for such Plan Year
bear to the total Excess Compensation of all such
Participants for such Plan Year.
STEP THREE - Third, the lesser of (A) the remaining Employer
Contribution and Forfeitures for such Plan Year or (B) the
Integration Amount shall be allocated in the same ratio that
the sum of the total Compensation and Excess Compensation of
each such Participant for such Plan Year bears to the sum of
the total Compensation and Excess Compensation of all such
Participations for such Plan Year.
98
STEP FOUR - Finally, the remaining Employer Contribution and
Forfeitures for such Plan Year shall be allocated in the same
ratio that each such Participant's total Compensation for such
Plan Year bears to the total Compensation of all such
Participants for such Plan Year.
12.3(h)(2) MONEY PURCHASE PENSION PLAN. If this Plan is adopted as an
integrated Money Purchase Pension Plan, (i) the "Base Contribution
Percentage" specified in the Adoption Agreement, if less than the Top-
Heavy Percentage, shall be increased to equal the Top-Heavy Percentage
and (ii) the Employer Contribution required under (S)5.2 (as adjusted
in (i) above) shall be made for each Active Participant and each other
Participant for whom an allocation is required to be made under this
(S)12.3.
12.3(h)(3) SPECIAL DEFINITIONS For purposes of this (S)12.3(h),
(i) "Excess Compensation" means the amount, if any, of a
Participant's Compensation for such Plan year which exceeds the
Integration Level for such Plan Year.
(ii) "Integration Amount" means the product of (1) the total
Compensation and the total Excess Compensation of all such
Participants and (2) the excess, if any, of the Integration
Percentage specified in the Adoption Agreement over the Top-Heavy
Percentage.
(iii) "Top-Heavy Percentage" means 3% or such greater
percentage required under this (S)12.3 or specified in the
Adoption Agreement.
12.4 VESTING SCHEDULE. For any Plan Year in which this Plan is a Top-Heavy
Plan, the Top-Heavy vesting schedule specified in the Adoption Agreement
automatically shall apply to all benefits under the Plan within the meaning of
Code (S)411(a)(7) (other than the benefits which are attributable to Employee
Contributions or Rollover Contributions or other contributions which are
nonforfeitable when made), including benefits accrued before the effective date
of Code (S)416 and before this Plan became a Top-Heavy Plan, unless the regular
vesting schedule is at least as favorable as such top-Heavy vesting schedule.
However, the provisions of this (S)12.4 shall not apply to the Account balance
of any Participant who does not complete an Hour of Service after the Plan first
becomes a Top-Heavy Plan and such Participant's Account balance attributable to
Employer contributions and Forfeitures shall be determined attributable to
Employer contributions and Forfeitures shall be determined without regard to
this (S)12.4. Further, no change in the vesting schedule as a result of a
change in this Plan's status to a Top-Heavy Plan or to a plan which si not a
Top-Heavy Plan shall deprive a Participant of the nonforfeitable percentage of
the Participant's Account balance accrued to the date o the change, and any such
change to the vesting schedule shall be subject to the provisions of (S)14.3(c).
12.5 401(K) PLAN. Notwithstanding any contrary provision, the following rules
shall apply if this Plan adopted as 401(k) Plan:
99
12.5(a) Qualified Nonelective Contributions shall be treated as Employer
contributions for purposes of satisfying the minimum allocation under
(S)12.3.
12.5(b) Matching Contributions allocated to the Account of a Key Employee
shall be treated as Employer contributions for purposes of determining the
amount of the minimum allocation required under (S)12.3. The Plan may use
Matching Contributions allocated on behalf of a non-Key Employee to satisfy
the minimum allocation under (S)12.3; provided, however, that for Plan
Years beginning on and after the Final Compliance Date, such contributions
shall not be treated as Matching Contributions for purposes of satisfying
the limitations of (S)7.4 and (S)7.5 but shall instead be subject to the
general nondiscrimination rules of Code (S)401(a)(4).
12.5(c) Elective Deferrals allocated to the Account of a Key Employee
shall be treated as Employer contributions for purposes of determining the
amount of the minimum allocation required under (S)12.3. However, for Plan
Years beginning on and after the Final Compliance Date, Elective Deferrals
allocated Deferrals allocated on behalf of non-Key Employees shall not be
treated as Employer contributions for purposes of satisfying the minimum
allocation required under (S)12.3.
SECTION 13. TOP-HEAVY PLAN RULES
13.1 INSURANCE CONTRACTS.
13.1(a) ELECTION AND EXISTING LIFE INSURANCE CONTRACTS.
13.1(a)(1) STANDARD OPTION. No Participant shall have the right
to elect to have the Trustee purchase an insurance contract on
his or her life for his or her Account under this Plan; however,
any life insurance contract purchased under their terms of a Pre-
Existing Plan, which is acceptable to the Trustee, shall continue
to be held by the Trustee for the benefit of the Participant
subject to the conditions of this (S)13.1.
13.1(a)(2) ALTERNATIVE. If so specified in the Adoption Agreement
each Participant who is an Eligible Employee may elect (subject
to this (S)13.1) to have the Trustee purchase an insurance
contract on his or her life for this or her Account under the
Plan by completing and filing an Election Form with the Plan
Administrator.
13.1(b) PREMIUMS. The aggregate annual premiums on any life insurance
contracts held for a Participant's Account under this Plan shall be subject
to the following limitations:
13.1(b)(1) ORDINARY LIFE. If the life insurance contracts are
ordinary whole life insurance contracts which are contracts with
both nondecreasing death benefits and nonincreasing premiums,
such premiums shall be less than one-half of the
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aggregate Employer Contributions plus Forfeitures credited to the
Participant's Employer Account and Matching Account.
13.1(b)(2) TERM AND UNIVERSAL LIFE. If the life insurance
contracts are term life insurance contracts (other than whole
life), then such premiums shall not exceed one-fourth of the
aggregate Employer Contributions plus Forfeitures credited to the
Participant's Employer Account and Matching Account.
13.1(b)(3) COMBINATION. If the life insurance contracts either
combine features of ordinary whole life and other life insurance
or consist of ordinary whole life and other life insurance
contracts, the sum of one-half of the ordinary whole life
premiums plus all other life insurance premiums shall not exceed
one-forth of the aggregate Employer Contributions plus
Forfeitures credited to the Participant's Employer Account and
Matching Account.
13.1(c) OWNER AND BENEFICIARY. The Trustee shall apply for and be the
owner of each life insurance contract held under this Plan and also shall
be named as the beneficiary of each such life insurance contract. In the
event of the Participant's death prior to the date as of which the
Participant's Account becomes payable under the Plan, the Trustee, as
beneficiary, shall pay the entire proceeds of such life insurance contracts
to the Participant's Account which shall then be distributed to the
surviving Spouse or, if applicable, to the Participant's Beneficiary in
accordance with (S)10. Under no circumstances shall the Fund retain any
part of the proceeds of any life insurance contracts. In the event of a
conflict between the terms of the Plan and the terms o any life insurance
contracts held under this Plan, the Plan provisions shall control.
13.1(d) ALLOCATIONS. Any dividends or credits earned on a life insurance
contract held under this Plan shall be allocated to the Account of the
Participant for whom the contract was purchased and may be applied to pay
the annual premium on such life insurance contract. The amount of the
annual premium on each such insurance contract shall be charged against the
Account of the insured Participant. The value of any such insurance
contract shall be deemed to be zero for the purposes of allocating the
Employer Contribution, Forfeitures or the Fund Earnings for any Plan year
as provided in (S)6.
13.1(e) DISTRIBUTION TO PARTICIPANT. Subject to (S)10, JOINT AND SURVIVOR
ANNUITY REQUIREMENTS, the life insurance contracts held as part of a
Participant's Account shall be distributed in kind to the Participant upon
retirement or other termination of employment as an Employee for reasons
other than death (1) if such Account is completely nonforfeitable or (2) if
the cash surrender value of such contracts is equal to or less than the
nonforfeitable portion of the Participant's Account. If neither one of
these conditions is satisfied and the Participant does not elect to
purchase the life insurance contracts under (S)13.1(f), the Trustee shall
surrender such contracts, add the proceeds to the Participant's Account and
distribute the nonforfeitable percentage of the Participant's Account in
accordance with (S)10.
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13.1(f) TERMINATION OF INSURANCE ELECTION. A Participant may direct the
Trustee to stop making premium payments on a life insurance contract held
as part of the Participant's Account and to surrender such contract or to
sell such contract to the participant by completing and filing and Election
Form with the Plan Administrator. If the Participant purchases the
contract, he or she shall prepare and deliver to the Trustee all papers
needed to properly effect that purchase and shall pay to the Trustee an
amount equal to the cash surrender value of the contract at the time of the
purchase. The amount paid either by the Participant for the purchase or by
the insurance company in connection with the surrender of a contract shall
be credited to the Participant's Account as of the date payment is made to
the Trustee. A Participant automatically shall be deemed to have directed
the Trustee to stop premium payments and to surrender a life insurance
contract immediately before a premium due date if the premium due on the
date would exceed the premium payment limits in (S)13.1(b).
13.2 INDIVIDUALLY DIRECTED INVESTMENTS.
13.2(a) GENERAL.
13.2(a)(1) STANDARD OPTION. No Participant or a Beneficiary may
direct the investment of such individual's Account.
13.2(a)(2) ALTERNATIVE. If so specified in the Adoption
Agreement, a Participant or a Beneficiary may elect how such
individual's Account shall be invested between the investment
alternative available under the Plan from time to time. The Plan
Administrator shall furnish to each Participant and Beneficiary
sufficient information to make informed decisions with regard to
investment alternatives and, if this Plan is intended to satisfy
ERISA (S)404(c), information which satisfied the requirements of
the regulations under ERISA (S)404(c). An individual investment
direction shall apply
(i) STANDARD OPTION - to the individual's entire Account or
(ii) ALTERNATIVE - only to the portion the individual's
Account specified in the Adoption Agreement.
13.2(b) ELECTION RULES. The Plan Administrator from time to time shall
establish and shall communication in writing to such individuals such
reasonable restrictions and procedures for making individual investment
elections as the Plan Administrator deems appropriate under the
circumstances for the proper administration of this Plan. Such
restrictions and procedures shall be applied on a uniform and
nondiscriminatory basis to all similarly situated individuals and, if this
Plan is intended to satisfy ERISA (S)404(c), shall be in accordance with
the regulations under ERISA (S)404(c).
13.2(c) NO ELECTION. The Account of an individual for whom no investment
election is in effect under this (S)13.2, either because such individual
failed to make a proper election or
102
terminated an election under this (S)13.2, shall be invested as designated
by the Plan Administrator.
13.3 PARTICIPANT LOANS. This (S)13.3. shall apply only if the Employer
specifies in the Adoption Agreement that loans shall be permitted. However, if
loans are not permitted in the Adoption Agreement, any outstanding loans made
under the terms of the Pre-Existing Plan shall be subject to this (S)13.3.
13.3(a) ADMINISTRATION AND PROCEDURES. The Plan Administrator shall
establish objective nondiscriminatory written procedures for the
administration of the loan program under this (S)13.3 (which written
procedures, together with any written amendments to such procedures, hereby
are expressly incorporated by reference as a part of this Plan), including,
but not limited to,
13.3(a)(1) the class of Participants and Beneficiaries who are
eligible for a loan;
13.3(a)(2) the identity of the person or position authorized to
administer the loan program;
13.3(a)(3) the procedures for applying for a loan;
13.3(a)(4) the basis on which loans will be approved or denied;
13.3(a)(5) the limitations, if any, on the types of amount of loans
offered;
13.3(a)(6) the procedures for determining a reasonable rate of
interest;
13.3(a)(7) the types of collateral which may be used as security for
a loan; and
13.3(a)(8) the events constituting default and the steps that will
be taken to preserve Plan assets in the event of such default.
13.3(b) NO LOANS TO CERTAIN OWNERS AND FAMILY MEMBERS. No loan shall be
made under this Plan to a Participant or Beneficiary who is
13.3(b)(1) an Owner-Employee,
13.3(b)(2) an employee or officer of an Employer or an Affiliate
which is an electing small business corporation within the meaning of
Code (S)1361 ("S Corporation") who owns (or is considered to won
within the meaning of Code (S)318(a)(1)) on any day during any
taxable year of such corporation for which it is an S Corporation
more than 5% of the outstanding stock of such corporation, or
13.3(b)(3) a member of the family (as defined in Code (S)267(c)(4))
of a Participant or Beneficiary described in clause (1) or (2).
103
13.3(c) GENERAL CONDITIONS. If loans are made available after October 18,
1989 to any Participant or Beneficiary who is a "party in interest" (as
defined in ERISA (S)3(14)) with respect to the Plan, then loans shall be
made available to all Participants and Beneficiaries who are parties in
interest with respect to the Plan. All loans which are made under this Plan
shall comply with the following requirements under Code (S)4975(d)(1) and
ERISA (S)408(b)(1):
13.3(c)(1) such loans shall be made available to Participants and
Beneficiaries who are eligible for a loan on a reasonably equivalent
basis;
13.3(c)(2) such loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount made
available to other Employees;
13.3(c)(3) such loans shall be made in accordance with specific
provisions regarding such loans set forth in the Plana nd the written
procedures described in (S)13.3(a);
13.3(c)(4) such loans shall bear a reasonable rate of interest; and
13.3(c)(5) such loans shall be adequately secured.
13.3(c) OTHER CONDITIONS. All loans made under this Plan shall be subject
to the following conditions:
13.3(d)(1) If the loan is secured by an portion of the
Participant's Account and (S)10.5 does not apply to any portion of
the Participant's Account, the Participant's Spouse, if any, must
consent in writing to the granting of such security interest or to
any increase in the amount of security no earlier than the
beginning of the 90 day period before such loan is made; provided
(i) such consent must be in writing before a notary public and
must acknowledge the effect of such loan;
(ii) such consent shall be irrevocable and shall be binding
against the person, if any, identified as the Participant's Spouse
at the time of such consent and any individual who may
subsequently become the Participant's Spouse;
(iii) a new consent shall be required in the event of any
renegotiation, extension, renewal, or other revision of such a
loan; and
(iv) if a valid spousal consent has been obtained, then,
notwithstanding any other provision of this Plan, the portion of
the Participant's vested Account balance used as a security
interest held by the Plan by reason of a
104
loan outstanding to the Participant shall be taken into account
for purposes of determining (and may reduce) the amount of the
Account balance payable at the time of death or distribution, by
only if the reduction is used as repayment of the loan. If less
than 100% of the Participant's vested Account balance (determined
without regard to the preceding sentence) is payable to the
surviving Spouse, then the vested Account balance shall be
adjusted by first reducing the vested Account balance by the
amount of the security used as repayment of the loan, and then
determining the benefit payable to the surviving Spouse.
13.3(d)(2) The loan shall provide for the repayment of principal and
interest in substantially level installments with payments not less
frequently than quarterly over a period of 5 years or less unless
such loan is classified as a "home loan" (as described in Code
(S)72(p));
13.3(d)(3) If the loan is secured by any portion of the
Participant's Account, such Account balance shall not be reduced as a
result of a default until a distributable event occurs under the
Plan; and
13.3(d)(4) The Participant or Beneficiary shall agree to such other
terms and conditions as are required under the written procedures
described in (S)13.3(a).
13.3(e) CREDITING OF LOAN PAYMENTS.
13.3(e)(1) ACCOUNT ASSET (STANDARD OPTION). The loan to a
Participant whose loan request is granted under this (S)13.3 shall be
made from, and shall be an asset of, the Participant's Account and
all principal and interest payments on such loan shall be credited
exclusively to the Participant's Account.
13.3(e)(2) FUND ASSET (ALTERNATIVE). If the Employer specifies the
Adoption Agreement that loans shall be treated as an asset Fund or,
if any loan which was made under a Pre-Existing Plan was treated as
an asset of the Fund, such loans shall be treated under this Plan as
a general Fund investment and an asset of the Fund, and all principal
and interest payments on such loan shall be credited exclusively to
the fund as general Fund investment.
13.3(f) LIMITATIONS ON AMOUNTS. The principal amount of any loan (when
addressed to the outstanding principal balance of any outstanding loans made
under this Plan or under any other plan which is tax exempt under Code (S)401
and which is maintained by the Employer or an Affiliate) to the Participant
shall not exceed the lesser of (1) and (2) below:
13.3(f)(1) DOLLAR LIMIT - $50,000 reduced by the excess, if any, of
(i) the highest outstanding principal balance of previous loans
to the Participant from the Plan (and any other plan maintained
by the Employer or
105
an Affiliate) during the one year period ending immediately
before the date such current loan is made, over
(ii) the current outstanding principal balance of such previous
loans on the date such current loan is made, or
13.3(f)(2) ACCOUNT LIMIT -
(i) STANDARD OPTION - 50% of the nonforfeitable interest in the
Participant's Account at the time the loan is made or
(ii) ALTERNATIVE - if so specified in the Adoption Agreement,
the greater of $10,000 or the amount specified in
(S)13.3(f)(2)(i), but in no event more than the nonforfeitable
interest in the Participant's Account.
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 shall be treated as a
loan for purposes of the limitations in this (S)13.3(f).
13.3(g) FAILURE TO REPAY. If (1) the terms of the loan provide that it
shall become due and payable in full if the Participant's or Beneficiary's
obligation to repay the loan has been discharged through a bankruptcy or
any other legal process or action which did not actually result in payment
in full and (2) such loan is not actually repaid in full, such loan shall
be cancelled on the Fund's books and records and the amount otherwise
distributable to such Participant or Beneficiary under this Plan shall be
reduced by the principal amount of the loan plus accrued but unpaid
interest due as determined without regard to whether the ban had been
discharged through a bankruptcy or any other legal process or action which
did not actually result in payment in full. The Plan Administrator shall
have the power to direct the Trustee to take such action as the Plan
Administrator deems necessary or appropriate to stop the payment of an
Account to or on behalf of a Participant who fails to repay a loan (without
regard to whether the obligation to repay such loan had been discharged
through a bankruptcy or any other legal process or action) until the
Participants Account has been reduced by the principal plus accrued but
unpaid interest due (without regard to such discharge) on such loan or to
distribute the note which evidences such loan in full satisfaction of that
portion of such Account which is represented by the value of such note.
Notwithstanding the foregoing, in the event of default, foreclosure on the
note and execution of the Plan's security interest in the Account shall not
occur until a distributable event occurs under this Plan and interest shall
continue to accrue only to the extent permissible under applicable law.
13.3(h) DISTRIBUTION. In the event the Participant's Account becomes
distributable before the loan is repaid in full, then the vested Account
balance shall be adjusted by first reducing the vested Account balance by
the amount of the security interest in the Account and then determining the
benefit payable. Nothing shall preclude the Trustee from cancelling the
106
Plan's security interest in the Account and distributing the note in lieu
of any other Plan assets in full satisfaction of that portion of the
Participant's Account represented by the value of the outstanding balance
of the loan or the amount which would have been outstanding but for a
discharge in bankruptcy or through any other legal process.
SECTION 14. ADOPTION, AMENDMENT, WITHDRAWAL AND CONVERSION, MERGER, ASSET
TRANSFERS AND TERMINATION
14.1 ADOPTION
14.1(a) GENERAL. Subject to the terms and conditions of this Plan, the
Trust Agreement and the Adoption Agreement, any sole proprietorship,
partnership or corporation may adopt this Plan by completing and executing
the Adoption Agreement. The Plan as adopted by the Employer shall be
effective for all purposes (other than as a "prototype plan") as of the
Effective Date. However, the status of the Plan as a "prototype plan"
shall be conditioned upon acceptance of the Adoption Agreement by the
Prototype Sponsor and, upon such acceptance, such status as a "prototype
plan" shall be effective retroactive to the Effective Date except as
provided in (S)14.4.
14.1(b) PRE-EXISTING PLAN. If this Plan is adopted as an amendment and
restatement of a Pre-Existing Plan, (1) the Trust Agreement shall be
substitute for the trust or other funding arrangement under the Pre-
Existing Plan, (2) the assets held under such trust or other funding
arrangement shall become assets of the Fund, (3) an Account shall be
established for each person who is a participant or beneficiary in the Pre-
Existing Plan, and (4) the dollar value assigned to such participant's or
beneficiary's Pre-Existing Plan account or accounts shall be credited to
such person's Account under this Plan (or to one or more subaccounts under
such Account). All optional forms of benefit available under the Pre-
Existing Plan which must be preserved under Code (S)411(d)(6) shall be
available to the Participant under this Plan. Further, such optional forms
shall be described in the Adoption Agreement and shall apply to the
Participant's entire Account balance. Notwithstanding the foregoing, if
the Employer so specifies in the Adoption Agreement and separately accounts
for the benefits attributable to the Pre-Existing Plan as described in
(S)14.5(c) or, if applicable, (S)10.5, the optional forms which must be
preserved may be limited to such separate accounts.
14.1(c) PARTICIPATING AFFILIATES. If this Plan is adopted as a
standardized Plan, each Affiliate shall automatically become a
Participating Affiliate effect as of the later of the Effective Date or the
date such entity first becomes an Affiliate. If this Plan is adopted as a
nonstandardized Plan, an Affiliate of the Employer may adopt the Employer's
Plan effective as of any date on or after the Effective Date. An
Affiliate's execution of the Adoption Agreement (or a separate signature
page to the Adoption Agreement) shall evidence the Participating
Affiliate's adoption of the Plan and the effective date of such adoption.
In adopting this Plan, each Participating Affiliate is deemed to have
authorized the Employer to effect all actions under this Plan on its
behalf, including but not limited to the powers reserved to the Employer
under this (S)14 and the power to enter into such agreements with the
Trustee or others as may be necessary or appropriate under the Plan.
107
14.2 AMENDMENT.
14.2(a) PROTOTYPE SPONSOR. Subject to the restrictions of (S)14.3, the
Prototype Sponsor shall have the right at any time and from time to time to
amend this Plan in any respect whatsoever in writing. To the extent
required under the procedures and rules in effect for master and prototype
plans at the time of any such amendment, notice of such amendment shall be
given to the Employer by the Prototype Sponsor as soon as practicable under
the circumstances.
14.2(b) EMPLOYER. Subject to the restrictions of (S)14.3, the Employer
shall have no right to amend this Plan except (1) by entering into a new
Adoption Agreement with the Prototype Sponsor, (2) by adding such language
to the Adoption Agreement as is necessary to allow the Plan to continue to
satisfy the requirements of Code (S)415 or Code (S)416 because of the
required aggregation of multiple plans, (3) by adopting certain model
amendments published by the Internal Revenue Service which specifically
provide that such adoption would not cause the Plan to be treated as an
individually designed plan, or (4) by withdrawing this Plan as a prototype
and converting it into an individually designed plan as provided in
(S)14.4.
14.3 CERTAIN AMENDMENT RESTRICTIONS.
14.3(a) GENERAL. No amendment to the Plan shall be made which would (1)
deprive a Participant of the nonforfeitable percentage of his or her
Account balance accrued to the later of the effective date of the amendment
or the date the amendment is adopted, or (2) decrease a Participant's
Account balance or eliminate an optional form of benefit except to the
extent permissible under Code (S)412(c)(8), (S)401(a)(4) and (S)411(d)(6)
and the regulations under those sections.
14.3(b) CHANGE IN SERVICE CALCULATION METHOD. If an amendment changes the
method of calculating service, each Employee who had any service credit
under such prior method shall be credited with any service for any
computation period during which such amendment was effective in accordance
with the rules in (S)3.
14.3(c) CHANGES IN VESTING SCHEDULE. If an amendment directly or
indirectly affects the computation of a Participant's nonforfeitable
percentage of his or her Account or if the Plan's vesting schedule changes
as a result of a change in the Plan's status as a Top-Heavy Plan (as
described in (S)12.4), each Participant with at least 3 years of service
with the Employer or an Affiliate may elect, within a reasonable period
after the adoption of the amendment, to have the nonforfeitable percentage
of his or her Account computed under this Plan without regard to such
amendment, in the case of a Participant who does not have at least one Hour
of Service in any Plan Year beginning after December 31, 1988, the
preceding sentence shall be applied by substituting 5 years of service for
3 years of service. The period during which the election may be made shall
commence with the date the amendment is adopted and shall end on the later
of
14.3(c)(1) 60 days after the amendment is adopted;
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14.3(c)(2) 60 days after the amendment becomes effective; or
14.3(c)(3) 60 days after the Participant is issued written notice of
the amendment by the Plan Administrator.
Furthermore, if an amendment changes the Plan's vesting schedule, the
nonforfeitable percentage (determined as of the later of the date the
amendment is adopted or the date it becomes effective) of the employer-
derived Account balance of each Employee who is a Participant as of such
date shall not be less than the percentage computed under the Plan without
regard to such amendment.
14.4 WITHDRAWAL AS A PROTOTYPE AND CONVERSION TO INDIVIDUALLY DESIGNED PLAN.
14.4(a) VOLUNTARY CONVERSION. The Employer may voluntarily withdraw this
Plan as a "prototype plan" and convert it to an individually designed plan
by written notice filed with the Trustee and the Prototype Sponsor. For
purposes of this (S)14.4, such withdrawal shall be effective with respect
to the Employer's plan and the Trustee as of the effective date of such
withdrawal, but such withdrawal shall not relieve the Employer of any
responsibilities or liabilities to the Prototype Sponsor until 60 days
after the date the Prototype Sponsor receives written notice of such
withdrawal unless the Prototype Sponsor agrees in writing to an earlier
effective date for such withdrawal.
14.4(b) INVOLUNTARY CONVERSION. The Employer shall be deemed to have
withdrawn this Plan as a "prototype plan" and converted it to an
individually designed plan effective as of the earlier of the date
14.4(b)(1) the Internal Revenue Service or a court determines
that this Plan fails to meet the requirements of Code (S)401;
14.4(b)(2) the Trustee ceases to maintain a brokerage account for
the Plan with the Prototype Sponsor or with an approved subsidiary
of the Prototype Sponsor;
14.4(b)(4) the Employer amends any provision of this Plan or the
Adoption Agreement (other than in accordance with (S)14.2(b)(1)
through (3)) including an amendment because of a waiver of the
minimum funding requirement under Code (S)412(d).
14.4(c) EFFECT OF WITHDRAWAL AND CONVERSION. If this Plan is withdrawn as
a prototype and converted to an individually designed Plan under this
(S)14.4, the Employer as of the effective date of such withdrawal shall
assume the right and responsibility to amend the Plan under (S)14.2(a) and
thereafter only the Employer shall make amendments to this Plan; provided,
(1) no such amendment shall affect the Trustee's rights or duties under
this Plan without the Trustee's prior written consent and (2) any such
amendment shall be subject to the restrictions of (S)14.3.
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14.5 MERGER, CONSOLIDATION OR ASSET TRANSFERS.
14.5(a) GENERAL. In the case of any Plan merger or consolidation with, or
transfer of assets or liabilities to or from, any other employee benefit
plan, each person for whom an Account then is maintained shall be entitled
to receive a benefit from such plan, if it is then terminated, which is
equal to greater than the benefit such person would have been entitled to
receive immediately before such merger, consolidation or transfer, if this
Plan then had been terminated.
14.5(b) AUTHORIZATION. The Plan Administrator may authorize the Trustee
to accept a transfer of assets from or transfer Fund assets to the trustee,
custodian or insurance company of any other plan which satisfies the
requirements of Code (S)401(a) in connection with a merger or consolidation
with, or other transfer of assets and liabilities to or form any such plan,
provided that the transfer will not effect the qualification of this Plan
under Code (S)401(a) and the assets to be transferred are acceptable to the
Trustee.
14.5(c) SEPARATE ACCOUNT. The Plan Administrator may establish separate
bookkeeping accounts for any assets transferred to the Trustee under this
(S)14.5 and shall establish such separate bookkeeping accounts if required
under this Plan. If separate accounts are maintain with respect to
transferred assets, no contributions or Forfeitures under this Plan shall
be credited to such separate accounts, but such accounts shall share in the
Fund Earnings on the same basis as each other Account under (S)6.2. Any
individual for whom an Account is established under this (S)14.5 shall
become a Participant in this Plan as of the effective date of the merger,
consolidation or asset transfer; however, no contributions shall be made by
or on behalf of such individual under this Plan unless such individual is
otherwise entitled to such contributions under the terms of this Plan.
14.5(d) CODE (S)411 (D)(6) PROTECTED BENEFITS. All optional forms of
benefit available under the transferor plan which must be preserved under
Code (S)411 (d)(6) shall be available to the Participant under this Plan
unless such transfer meets the requirements of Code (S)414(1) and the
Participant has made an elective transfer with satisfies the requirements
set forth in O&A-3(b) of (S)1.411(d)-4 of the Federal income Tax
Regulations. Further, such optional forms shall be described in the
Adoption Agreement and, generally, shall apply to Participant's entire
Account balance. Notwithstanding the foregoing, if the Employer so
specifies in the Adoption Agreement and separately accounts for such
transferred assets, the optional forms which must be preserved may be
limited to such separate account.
14.6 TERMINATION.
14.6(a) RIGHT TO TERMINATE. The Employer may terminate or partially
terminate this Plan or discontinue contributions to this Plan at any time
by written action of the Board filed with the Trustee and Prototype
Sponsor. The Employer reserves the right to terminate the participation in
this Plan by any Participating Affiliate at any time written action.
Furthermore, a Participating Affiliate's participation in this Plan
automatically shall terminate if (and at such time as) its status as an
Affiliate terminates for any reason whatsoever (other
110
than through a merger or consolidation into another Participating
Affiliate). However, a Participating Affiliate's termination or
participation in this Plan shall not be deemed to be a termination or
partial termination of the Plan except to the extent required under the
Code. Upon complete termination of this Plan, any unallocated amounts
(other than amounts in a Code (S)415 suspense account described in
(S)7.2(b)) shall be allocated in accordance with the Plan terms but, if the
Plan terms do not address the allocation of such amounts, they shall be
allocated in a nondiscriminatory manner prior to distribution of Plan
assets.
14.6(b) FULL VESTING UPON TERMINATION. If this Plan is terminated or
partially terminated under this (S)14.6 or if there is a complete
discontinuance of contributions under this Plan, the Account of each
affected Employee of the Employer or an Affiliate shall become
nonforfeitable on the effective date of such termination or partial
termination or complete discontinuance of contributions, as the case may
be. In the event of a complete termination of this Plan or a complete
discontinuance of contributions, each other Account (except to the extent
otherwise nonforfeitable under the terms of this Plan) all become a
Forfeiture and shall be allocated as such under (S)6.3 of the effective
date of such complete termination or complete discontinuance as if such
date was the last day of a Plan Year.
SECTION 15. ADMINISTRATION
15.1 NAMED FIDUCIARIES. The Plan Administrator and the Employer (if the Plan
Administrator is not the Employer) shall be the Named Fiduciaries responsible to
the extent of their powers and responsibilities assigned in the Plan for the
control, management and administration of the Plan. The Plan Administrator, the
Employer and the Trustee (other than Xxxxx Xxxxxx Shearson Trust Company) shall
be the Named Fiduciaries responsible to the extent of their respective powers
and responsibilities assigned to them in the Trust Agreement for the safe
keeping, control, management, investment and administration of the assets of the
Fund. Any power or responsibility for the control, management or administration
of the Plan or the Fund which is not expressly assigned to a Named Fiduciary
under the Plan or the Trust Agreement, or with respect to which the proper
assignment is in doubt, shall be deemed to have been assigned to the Employer as
a Named Fiduciary. One Named Fiduciary shall have no responsibility to inquire
into the acts and omissions of another Named Fiduciary in the exercise of powers
or the discharge of responsibilities assigned to such other Named Fiduciary
under the Plan or the Trust Agreement. Any person may serve in more than one
fiduciary capacity under the Plan or the Trust Agreement and a fiduciary may be
a Participant provided such individual otherwise satisfies the requirements of
(S)4.
A Named Fiduciary, by written instrument filed by the Plan Administrator with
the records o the Plan, may designate a person who is not a Named Fiduciary to
carry out any of its responsibility under the Plan or Trust Agreement, other
than the responsibilities of the Trustee for the safekeeping, control,
management, investment and administration of the assets of the Fund, except to
the extent the Trustee's responsibility for investment decisions is delegated to
the Employer, the Plan Administrator, or an investment manager.
15.2 ADMINISTRATIVE POWERS AND DUTIES. Except to the extent expressly reserved
under the Plan or the Trust Agreement to the Employer Board, or the Trustee, the
Plan Administrator shall have
111
the exclusive responsibility and complete discretionary authority to control
operation, management and administration of the Plan, with all powers necessary
to enable it properly to carry out such responsibilities, including (but not
limited to) the power to construe the Plan, the related Adoption Agreement, and
the Trust Agreement, to determine eligibility for benefits and to resolve all
interpretative, equitable or other questions that arise under the Plan or the
Trust Agreement. The decisions of the Administrator on all matters within the
scope of its authority shall be final and binding. To the extent a
discretionary power or responsibility under the Plan or Trust Agreement is
expressly assigned to a person other the Plan Administrator, such person shall
have complete discretionary authority to carry out such power or responsibility
and such persons's decisions on all matters within the scope of such person's
authority be final and binding.
15.3 AGENT FOR SERVICE OF PROCESS. The agent for service of process for this
Plan shall be the person who is identified as the agent for service of process
in the summary plan description for this Plan. Neither Prototype Sponsor nor
any of its affiliates shall be the agent for service of process for the Plan.
15.4 REPORTING AND DISCLOSURE. All records regarding the operation management
and administration of this Plan shall be maintained by the Plan Administrator.
The Plan Administrator shall satisfy any federal or state requirement to report
and disclose any information regarding Plan to any federal or state department
or agency, or to any Participant or Beneficiary.
SECTION 16. MISCELLANEOUS
16.1 SPENDTHRIFT CLAUSE AND QUALIFIED DOMESTIC RELATIONS ORDERS. Except to the
extent permitted by law, no Account, benefit, payment or distribution under the
Plan or Trust Agreement shall be subject to attachment, garnishment, levy,
execution or any claim or legal process of any creditor of a Participant or
Beneficiary, and no Participant Beneficiary shall have any right to alienate,
commute, anticipate, or assign all or any part of such individual's Account,
benefit, payment or distribution under this Plan or Trust Agreement. The
preceding sentence also shall apply to the creation, alienation, 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 ("QDRO") within the meaning of Code (S)414(p)
and such order is entered on or after January 1, 1985. The Plan Administrator
shall establish uniform and nondiscriminatory procedures regarding the
determination of whether a domestic relations constitutes a QDRO, the timing of
distributions made pursuant to a QDRO and the treatment of any separate account
established under Plan pursuant to a QDRO. Unless otherwise expressly specified
in such procedures, (1) the Plan Administrator shall treat a domestic relations
order entered before January 1, 1985 as a QDRO in accordance with Code (S)414(p)
and (2) a distribution may be made to an alternate payee pursuant to a QDRO
prior to the earliest date that a distribution could be made to a Participant
under the terms of this Plan and prior to a Participant's "earlier retirement
age" under Code (S)414(p). The determinations and the distributions made by, or
at the direction of, the Plan Administrator under this (S)16.1 shall be final
and binding on the Participant and on all other persons interested in such
order.
112
16.2 BENEFITS SUPPORTED ONLY BY TRUST FUND. Any person having any claim for any
benefit under this Plan shall look solely to the assets of the Fund for the
satisfaction of that claim. In no event shall the Prototype Sponsor, the
Trustee, the Plan Administrator, the Employer or a Participating Affiliate or
any of their employees, officers, directors or their agents be liable in their
individual capacities to any person whomsoever for the payment of any benefits
under this Plan.
16.3 DISCRIMINATION. The Plan Administration shall administer the Plan in a
manner which it deems equitable under the circumstances for all similarly
situated Employees, Participants, spouses and Beneficiaries; provided the Plan
Administrator shall not permit discriminating in favor of Highly Compensated
Employees of the Employer or any Participating Affiliate which would be
prohibited under Code (S)401(a).
16.4 CLAIMS. Any payment to a Participant or Beneficiary or to the legal
representative or heirs-at-law of any such person made in accordance with the
provisions of this Plan shall to the extent of such payment be in full
satisfaction of all claims under this Plan against the Trustee, Plan
Administrator, a Named Fiduciary, the Employer and any Participating Affiliate,
any of may require such person, such person's legal representative or heirs-at-
law, as a condition precedent to such payment, to execute a receipt and release
in such form as shall be determined by the Trustee, Plan Administrator, a Named
Fiduciary, the Employer or a Participating Affiliates, as the case may be.
16.5 NONVERSION. Except as provided in (S)7.2(b) and in this (S)16.5, neither
the Employer nor any Participating Affiliate shall have any present or
prospective right, claim, or interest in the Fund or in any Employer
contribution made to the Trustee.
To the extent permitted by the Code and ERISA, the Employer contributions
described in this (S)16.5, less any losses on such contributions, shall be
returned by the Trustee to the Employer or to any Participating Affiliate upon
the written direction of the Plan Administrator that:
16.5(a) an Employer contribution is made by a mistake of fact, provided
such return is effected within one year after the payment of such
contribution;
16.5(b) a final judicial or Internal Revenue Service determination is made
that this Plan fails to satisfy the requirements of Code (S)401 with
respect to its initial qualification (provided, if the Employer is not to
entitled to rely on the Prototype Sponsor's opinion letter, the application
for the initial qualification of the Plan is made on or before the date
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 which event all Employer contributions made
before such judicial or administrative determination (whichever last
occurs) plus any earnings and minus any losses shall be ruined within one
year after such determination, all such contributions begin hereby
conditioned upon this Plan satisfying all applicable requirements under
Code (S)401 from and after its adoption; or
16.6(c) a deduction for an Employer contribution is disallowed under Code
(S)404, in which event such contribution shall be returned within one year
after such disallowance, all such contributions being hereby conditioned
upon being deductible under Code (S)404.
113
16.6 EXCLUSIVE BENEFIT. The corpus or income of the Fund shall not be diverted
to or used for any purpose other than the exclusive benefit of Participants or
Beneficiaries.
16.7 EXPENSES. Any expenses of the Fund which are properly allocable to an
individual's Account (including, but not limited to expenses related to an
individual's investment directions, annuity contract purchases and other
transactional fees for processing distributions) may be charged directly against
such individual's Account if so provided in the administrative procedures
established by the Plan Administrator.
16.8 SECTION 16 OF SECURITIES EXCHANGE ACT OF 1934. If this Plan is invested in
employer securities and this Plan permits employees of the Employer who are
subject to the reporting requirements of (S)16 of the Securities Act of 1934, as
amended ("Act") receive awards, then notwithstanding any other provision of this
Plan, the provisions of this Plan that set forth the formula or formulas that
determine the amount, price or timing of awards to such persons and any other
provisions of this Plan of the type referred to in 516b-3(c)(2)(ii) of the Act
shall not be amended more than once every six months, other than to comport with
changes in the Code, ERISA, or the rules thereunder. Further, to the extent
required, the employees described in the preceding sentence shall be subject to
such withdrawal, investment and other restrictions necessary to satisfy Rule
16b-3 under the Act. This (S)16.8 is intended to comply with Rule 16b-3 under
the Act and shall be effective only to the extent required by such rule and
shall be interpreted and administered in accordance with such rule.
16.9 ARBITRATION. Any claims or controversies with the Prototype Sponsor
related to this Plan are subject to arbitration in accordance the arbitration
provisions of the Xxxxx Xxxxxx Shearson Qualified Retirement Plan and XXX Client
Agreement or any successor to such agreement, which provisions hereby are
expressly incorporated herein by reference.
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PART II
XXXXX XXXXXX SHEARSON
PROTOTYPE DEFINED CONTRIBUTION
TRUST AGREEMENT
115
PART II.
PROTOTYPE DEFINED CONTRIBUTION PLAN TRUST AGREEMENT
SECTION 1. INTRODUCTION AND CONSTRUCTION
1.1 INTRODUCTION. This Trust Agreement is a part of the Xxxxx Xxxxxx Shearson
Prototype Defined Contribution Plan and is entered into between the Employer and
the Trustee effective as of the date the Adoption Agreement is executed by the
Employer and the Trustee. If the Plan is adopted as an amendment and
restatement of a Pre-Existing Plan, this Trust Agreement shall amend and restate
the trust agreement or other funding arrangement for the Pre-Existing Plan.
1.2 DEFINITIONS. The terms in this Trust Agreement which begin with a capital
letter shall have the meanings set forth in (S)2 of the Plan. For purposes of
this Trust Agreement, "SBSTC" shall mean Xxxxx Xxxxxx Shearson Trust Company and
any successor in interest to Xxxxx Xxxxxx Shearson Trust Company.
1.3 CONTROLLING LAWS. To the extent such laws are preempted by federal law,
this Trust Agreement shall be construed and interpreted under the laws of the
state specified in the Adoption agreement; provided, if SBSTC has been
appointed as Trustee, this Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
1.4 CONSTRUCTION. The headings and subheadings in this Trust Agreement have
been inserted for convenience of reference only and are to be ignored in the
construction of its provisions. Wherever appropriate, the masculine shall be
read as the feminine, the plural as the singular, and the singular as the
plural. References in this Trust Agreement to a section ((S)) shall be to a
section in this Trust Agreement unless otherwise indicated. References in this
Trust Agreement to a section of the Code, ERISA or any other federal law shall
also refer to the regulations issued under such section.
The Employer intends that the Plan and this Trust Agreement and the related
Adoption Agreement which are part of the Plan satisfy the requirements for tax
exempt status under Code (S)401(a), Code (S)501(a) and related Code sections and
that the provisions of this Trust Agreement, the Plan and the related Adoption
Agreement be construed and interpreted in accordance with the requirements of
the Code and the regulations under the Code.
Further, except as expressly stated otherwise, no provision of the Plan or this
Trust Agreement or the related Adoption Agreement is intended to nor shall grant
any rights to Participants or Beneficiaries or any interest in the Fund in
addition to those minimum rights or interests required to be provided under
ERISA and the Code and the regulations under ERISA and the Code.
Nothing in the Plan or this Trust Agreement or the related Adoption Agreement
shall be construed to prohibit the adoption or the maintenance of the Plan and
Trust Agreement as an individually designed plan and trust agreement or the
adoption of this Trust Agreement in connection with an individually designed
plan, but in such event, the Employer may not rely on the option letter issued
to the Prototype Sponsor and the Prototype Sponsor shall have absolutely no
responsibility for such individually designed plan and trust agreement.
116
Finally, in the event of any conflict between the terms of the Plan and the
terms of this Trust Agreement or the Adoption Agreement, the terms of the Plan
shall control.
SECTION 2. GENERAL
All the Trustee's rights, power, authorities, duties and responsibilities
of any kind or description whatsoever respecting the Fund shall be solely and
exclusively as expressly stated in the Plan and in this Trust Agreement. Except
to the extent the Employer or Plan Administrator also is the Trustee for the
Plan, the Trustee shall have no responsibility whatsoever with respect to the
maintenance, operation and administration of the Plan. No right, power,
authority, duty or responsibility of any kind or description whatsoever
respecting the Fund or the maintenance, operation or administration of the Plan
shall be attributed to the Trustee on account of any ambiguity or inference
which might be interpreted by any person to exist in the terms of the Plan or
this Trust Agreement. Finally, if SBSTC is Trustee, my discretionary powers,
duties or responsibilities assigned to the Trustee in this Trust Agreement shall
be exercised or performed by SBSTC only upon the direction of the Plan
Administrator, the Employer or an Investment Manager, and SBSTC shall exercise
no discretion with respect to the investment or management of the Fund except
tot he extent that Fund Assets are invested in a common or collective group
trust maintained by SBSTC or an affiliate of SBSTC.
SECTION 3. CONTRIBUTIONS AND TRUST FUND
The Employer and the Trustee shall establish reasonable procedures for making
and accepting contributions to the Fund and any asset transfers pursuant to (S)9
of this Trust Agreement. The Trustee shall accept any contributions the Trustee
reasonably believes are paid to in accordance with such procedures, except that
the Trustee may refuse to accept any non-cash contributions or assets which
either are not acceptable tot he Trustee or the acceptance of which the Trustee
reasonably believes would constitute a prohibited transaction under ERISA or the
Code. If this Trust Agreement is an amendment and restatement of a trust
agreement or other funding arrangement for a Pre-Existing Plan, the assets held
under such pre-existing trust agreement or other funding arrangement shall (to
the extent acceptable to the Trustee and permissible under the prohibited
transaction rules of ERISA and the Code) be transferred to the Trustee pursuant
to reasonable transfers procedures established by the Trustee, the Employer and
any predecessor trustee, custodian or insurance carrier and shall become assets
of the Fund. The Trustee shall have no responsibility with respect to such
transferred assets except to receive such assets and to hold and administer the
same thereafter in accordance with this Trust Agreement. The Trustee shall not
be responsible for any act or omission of a predecessor trustee or any other
person with respect to assets that are transferred to the Trustee when the Fund
is a continuation of a trust fund or other funding arrangement under a Pre-
Existing Plan and shall not be required to make any claim or demand against any
of such persons unless the Employer requests in writing that the Trustee make
such claim or demand. The Fund shall consist of all such contributions and
assets together with the income or gains on such contributions and assets, less
any payments, distributions, transfers, assessments and losses from or on such
contributions and assets. The Fund shall be managed and controlled by the
Trustee pursuant to the terms of this Trust Agreement without distinction
between principal and income and without liability for the payment of any
interest on such assets. The Trustee shall not be responsible for the amount
117
or the collection of any contributions to the Fund or for the determination of
the amount or frequency of any contribution required by the Plan, ERISA or the
Code and such responsibilities shall be borne solely by the Employer and the
Participating Affiliates. Further, the Trustee, for investment purposes, many
combine into one fund the Funds created under each Plan maintained by the
Employer and Participating Affiliates and (unless otherwise specified) all
references to the Fund in this Trust Agreement shall be references to the
combined Funds; provided that (a) the Trustee shall maintain separate books and
records of the assets, contributions, distributions and income or losses
allocable to each such Fund and (b) no part of one Fund shall be used to pay the
expenses, benefits or liabilities attributable to any other Fund.
SECTION 4. MANAGEMENT OF TRUST FUND
4.1 PLAN ADMINISTRATOR. With respect to the Fund, the Plan Administrator shall
have those duties and responsibilities specified in this Trust Agreement and,
additionally, shall have the duty to advise the Trustee and any other person of
such facts and issue such directions as may be required to enable the Trustee
and such other person to execute their duties and responsibilities under this
Agreement.
4.2 TRUSTEE. The Trustee shall have the sole and exclusive power (except as
otherwise provided in this Trust Agreement) in the management and control of the
Fund to do all things and execute such instruments as may be deemed necessary or
proper, including the powers described in this section, all of which may be
exercised without order of or report to any court. To the extent the exercise
of any such power would require the exercise of discretion by SBSTC as the
Trustee (other than the management and control of any assets invested in any
common or collective trust maintained by SBSTC or its affiliates), SBSTC as
Trustee shall exercise such power only in accordance with the specific direction
of the Plan Administrator, the Employer or an Investment Manager.
4.2(a) To sell, exchange, or otherwise dispose of any properly at any time
held or acquired by the Fund, at public or private sale, for cash or on
terms, without investment, including the right to lease for any term
notwithstanding the period of the Trust Agreement;
4.2(b) To vote in person or by proxy any corporate stock or other security
and to agree to or take, or refrain from taking, any other action necessary
or appropriate for a shareholder or owner in regard to any
reorganization,merger, consolidation, liquidation, bankruptcy or other
procedure or proceeding affecting any stock, bond,note or other property;
4.2(c) To compromise, settle or adjust any claim or demand by or against
the Fund and to agree to any rescission or modification of any contract or
agreement affecting the Fund;
4.2(d) To borrow money, and to secure the same by mortgaging, pledging, or
conveying the property of the Fund;
4.2(e) To deposit any stock, bond or other security in any depository or
other similar institution and to register any stock, bond or other security
in the name of a nominee or in street name provided such securities are
held on behalf of the Fund by a bank or trust
118
company, subject to supervision by the United States or a State, a broker
or dealer registered under the Securities Exchange Act of 1934 ("Act") or a
"clearing agency" as defined in the Act, or their nominees, without the
addition of words indicating that such security is held in a fiduciary
capacity, but accurate records shall be maintained showing that such
security is a Fund asset and the Trustee shall be responsible for the acts
or such nominee;
4.2(f) To hold cash in such amounts as may be in its opinion reasonable
for the proper operation of the Fund;
4.2(g) To invest any and all monies in such stocks, bonds, securities,
investment company or trust shares or mutual funds, including mutual funds
which invest in commodities, mortgages, notes, choses in action, real
estate, improvements thereon, and other property as the Trustee may deem
appropriate, including "employers securities" (whether or not such
securities are "qualifying employer securities") or "employer real
property" (whether or not such property is "qualifying employer real
property), as such terms are defined for purposes of ERISA (S)407, except
to the extent prohibited under ERISA or the Code;
4.2(h) To grant, sell, purchase, or exercise any option of any kind or
description whatsoever to purchase or sell any security or other property
which is a permissible investment under this (S)4(b), provided the Trustee
in no event shall grant or sell any option under which any person can
require the Fund to sell any security or other property which the Fund at
the time of such grant or sale does not hold in an amount sufficient to
cover such option and any other outstanding option granted or sold by the
Trustee, and the Trustee in no event shall dispose of any such security or
other property covering any such option until such option is exercised or
otherwise expires;
4.2(i) To invest all, or any part, of the assets of the Fund in any
common, collective or group trust fund maintained under Code (S)584 or
Revenue Ruling 81-100, 1981-1 C.B. 326 exclusively for the investment of
the assets of tax exempt pension and profit sharing plans, the provisions
of which upon such investment shall automatically be adopted and made apart
of this Trust Agreement for the period such investment is made in such
common, collective or group trust fund; provided, if SBSTC is the Trustee,
4.2(i)(1) The trustee shall, upon receipt of written investment
directions, invest some or all of the Fund in one or more collective
trust funds (including, without limitation, any collective trust fund
maintained by the Trustee or by any affiliate of the Trustee) that
are exempt from taxation under Code (S)501(a);
4.2(i)(2) any such investment shall be subject to all the provisions
of the declaration of trust creating such collective trust fund which
is adopted in its entirety as an integral part of the Plan and of
this Trust Agreement;
4.2(i)(3) the Employer, Plan Administrator or Investment Manager
shall not have any right to vote or otherwise in any manners control
the operation and
119
management of any such collective trust fund, the operation of
any party to any such collective trust fund, or any beneficiary
of any such collective trust fund;
4.2(i)(4) the Trustee (or its affiliate) is authorized to
utilized investment advice received from investment advisers for
any collective trust fund maintained by the Trustee (or its
affiliate) including, without limitation, such advice received
from [SLH Capital Management and SLH Asset Management, each of
which is a division of] an affiliate of the Trustee, and to
utilize the brokerage services of the Prototype Sponsor, an
affiliate of the Trustee; and
4.2(i)(5) the Employer, Plan Administrator or Investment Manager,
as applicable, shall determine, prior to any direction by either
of them to invest the Fund in any such collective trust fund,
that the services provided to the Plan through the collective
trust fund including, without limitation,any investment advisory
services provided to the Trustee (or its affiliate) by [SLH
Capital Management or SLH Asset Management and brokerage services
provided by the Prototype Sponsor are (A) necessary to the
operation of the Plan, (B) furnished under a declaration of trust
which is reasonable and (C) furnished for reasonable
compensation;
4.2(j) To purchase, hold, sell, surrender or distribute any investment
contract, life insurance contract or annuity contract as directed by a
Participant or the Plan Administrator in accordance with the Plan;
4.2(k) To make a participant loan as directed by the Plan Administrator;
and
4.2(l) To make such other investments as the Trustee in its discretion
shall deem best or if SBSTC is the Trustee or if the Trustee is subject to
the direction of another person, as directed by someone other than the
Trustee, without regard to any law now or hereafter in force (other than
ERISA) limiting the investments of trustees or other fiduciaries.
The Trustee shall not be required to make any inventory or appraisal or report
to any court, nor to secure any order of court for the exercise of any power
contained in this Trust Agreement, and shall not be required to give bond
(except as required by ERISA).
Notwithstanding the foregoing, if SBSTC is the Trustee, SBSTC shall invest all
assets of the Fund which are to be invested on an interim basis pending
reinvestment, distribution or other disbursement either (1) in depository
accounts bearing a reasonable rate of interest which are maintained by SBSTC or
by any affiliate of SBSTC or (2) in commingled short-term investment funds which
are maintained by SBSTC or by any affiliate of SBSTC, in which event the
provisions of (S)4(b)(9) of this Trust Agreement shall apply.
Except as agreed to in writing by the Trustee and the Employer, the Trustee
shall not be liable and shall be indemnified and held harmless by the Employer
for any liability, loss, damage, expense, assessment or other cost of any kind
or description whatsoever, which the Trustee incurs as a result of or arising
out of (1) any action taken at the direction of the Employer, the Plan
Administrator or
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an Investment Manager, (2) any failure to act if, under the terms of this Trust
Agreement, action can be taken only after receipt from the Employer, the Plan
Administrator or an Investment Manager of specific directions, (3) any action or
failure to act based on advice of legal counsel to the Employer or the Plan
Administrator, or (4) any failure to act pending the receipt of direction from
the Employer, the Plan Administrator or an Investment Manager, when the Trustee
has made a written request for such direction, provided such action or failure
to act is not attributable to fraud, misconduct, negligence or error by the
Trustee. Further, if SBSTC is the Trustee, SBSTC may from time to time request
the advice of counsel on any legal matter, including the interpretation of the
Plan and this Trust Agreement, and shall be indemnified and held harmless for
any and all liability, loss, damage, expense, assessment or other cost of any
kind or description resulting from or on account of its services as Trustee
under the Plan, including, but not limited to, any co-fiduciary liability under
ERISA (S)405 and any liability, damage, expense, assessment or other cost
arising out of its actions in accordance with advice of counsel. Except as
agreed to in writing by the Trustee and the Employer, the provisions of this
paragraph shall survive the term of this Trust Agreement and may not be amended
by any person or entity other than the Prototype Sponsor or terminated except
with the consent of the Trustee.
4.3 INVESTMENT MANAGER. The Plan Administrator as a Named Fiduciary at any
time may appoint in writing a person, or more than one person, including,
subject to (S)4(i) of this Trust Agreement, the Prototype Sponsor or any of its
affiliates, who either (1) is registered as an investment adviser under the
investment Advisers Act of 1940 ("Act"), (2) is a bank, as defined in the Act,
or (3) is an insurance company which, within the meaning of ERISA (S)3(38), is
qualified to manage, acquire and dispose of the assets of an employee benefit
plan under the laws of more than one state, as an investment manager pursuant to
ERISA (S)3(38) ("Investment Manager") for all of the Fund or for a specified
portion of the Fund allocated by the Plan Administrator to such Investment
Manager's management account ("Management Account").
The Plan Administrator shall notify the Trustee of such appointment and of the
date such appointment becomes effective, and such Investment Manager shall have
the sole responsibility and duty and the sole power, without prior consultation
with the Board, the Employer, the Plan Administrator, the Trustee, or any other
person, to manage and direct or effect the acquisition and disposition of the
assets of the Fund allocated to such Management Account from the date the
appointment as Investment Manager becomes effective. The Plan Administrator as
a Named Fiduciary also may terminate the appointment of any person as an
Investment Manager and may cause assets of the Fund to be added to or deleted
from any Management Account.
The Investment Manager may exercise his or her power through procedures as
agreed upon with the Trustee which satisfy the requirements of the securities
laws and the rules of the New York Stock Exchange (and any other exchange on
which securities are traded for such manager's Management Account), and the
Trustee shall not be liable in any respect to any person, and shall be
indemnified and held harmless by the Employer, for acting in accordance with
such procedures. Pending receipt of directions from the Investment Manager, any
cash received by the Trustee from time to time for such manager's Management
Account may be retained in the Fund in cash. If an Investment Manager ceases to
have investment responsibility for the Management Account, the Plan
Administrator or the Employer, as authorized in accordance with (S)4(d) of this
Trust Agreement, shall
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manage such assets in accordance with (S)4(d) or shall appoint another
Investment Manager to manage such assets.
4.4 PLAN ADMINISTRATOR OR EMPLOYER INVESTMENT DIRECTIONS. The Board at any
time may authorize in writing the Plan Administrator or the Employer as a Named
Fiduciary to manage and direct the investment of all or any specified portion of
the assets of the Fund as determined by the Board, and the Board at any time may
modify or terminate such authorization in writing. If SBSTC is appointed as
Trustee, the Employer shall automatically be deemed to be so authorized to
manage and direct the investment of the entire Fund; provided, the Employer may
specify in the Adoption Agreement that such direction shall be made by the Plan
Administrator. In the event the Plan Administrator or the Employer is
authorized to manage and direct the investment of Fund assets under this
(S)4(d), the provisions of (S)4(c) of this Trust Agreement shall apply in all
respects as if the Plan Administrator or the Employer, as applicable,was an
Investment Manager and the portion of the assets subject to such management and
direction was a Management Account.
4.5 PARTICIPANT INVESTMENT DIRECTIONS. If the Plan permits a Participant or a
Beneficiary to direct the investment of such individual's Account, the Plan
Administrator shall direct the Trustee to establish the investment alternatives
designated by the Plan Administrator and to accept directions to invest all or
any specified portion of the Participant's Account among such alternatives. The
Plan Administrator in consultation with the Trustee shall establish such
reasonable rules for effecting the investment elections as the Plan
Administrator deems necessary or appropriate and such rules shall be applied on
a uniform and nondiscriminatory basis to all similarly situated individuals.
Except as required under ERISA, neither the Plan Administrator, the Employer nor
the Trustee shall be responsible for any investment decisions made by a
Participant or a Beneficiary. If a Participant or Beneficiary fails to direct
the investment of the Account, then the Employer or Plan Administrator (as
authorized in accordance with (S)4(d) of this Trust Agreement) shall assume the
investment responsibility for such Account.
4.6 CUSTODIAN. The Trustee (including SBSTC) at any time and from time to time
may appoint one, or more than one, person, including, subject to (S)4(i) of this
Trust Agreement, the Prototype Sponsor or any of its affiliates, to perform such
custodial safekeeping, record keeping, securities execution and other
nondiscretionary functions of the Trustee as the Trustee deems appropriate, and
any person who is appointed to perform a custodial safekeeping function may (in
connection with the performance of that function) hold Fund securities in a
street name, provided that the Trustee shall remain the beneficial owner of all
assets held by such person and such person in no event shall be granted any
discretionary authority in the capacity as a custodian to manage and direct the
acquisition and disposition of Fund assets.
4.7 MULTIPLE TRUSTEES. More than one person can serve at the same time as the
Trustee, including any combination of individuals and banks or similar
institutions, and in the event that more than one person does serve at the same
time as Trustee under the Plan and this Trust Agreement, the references to
"Trustee" in the Plan and this Trust Agreement wherever applicable shall be
deemed to be to "Trustees" and such Trustees may allocate among themselves by
unanimous written consent (signed by all Trustees) such specific Trustee duties,
responsibilities and functions in the management of the Fund and otherwise under
the Plan and this Trust Agreement as the Trustees
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deem appropriate under the circumstances. The Trustees in all unallocated
duties, responsibilities and functions shall act by majority vote at a meeting
at which a majority of the Trustees are present or by unanimous written consent
(signed by all Trustees) in lieu of a meeting. Any person shall be entitled to
rely conclusively upon any written action signed by all Trustees or by any one
or more Trustees to whom the power to take such action has been allocated by
unanimous written consent signed by all Trustees. Finally, the provisions of
(S)8 of this Trust Agreement shall apply to the resignation or removal of any
one of the Trustees, provided that (1) all notices required in such (S)8 also
shall be given to any remaining Trustees, (2) the Employer only shall be
required to appoint successor Trustees upon the resignation or removal of all
Trustees then serving, and (3) the Employer or the remaining Trustees may demand
and receive an accounting upon the resignation or removal of one or more of the
Trustees. Notwithstanding the foregoing, if SBSTC is not the sole Trustee under
the Plan, SBSTC shall serve in a nondiscretionary, custodial capacity only
subject to the directions of the Employer or the Plan Administrator and SBSTC
shall have no duties with respect to assets held by any other person including,
without limitation, any other Trustee for the Fund. Further, the Employer
hereby agrees that SBSTC shall not serve as, and shall not be deemed to be, a
co-trustee under any circumstances.
4.8 COMMUNICATIONS. The Employer, the Plan Administrator and each Investment
Manager shall establish with the Trustee such oral, written or electronic
communication procedures (or any combination of such communication procedures)
or such other procedures as such persons and the Trustee deem reasonable and
prudent under the circumstances for the orderly administration of the Fund. The
Trustee and each other person shall be entitled to rely conclusively upon any
and all communication from the Employer, the Plan Administrator and each
Investment Manager reasonably believed to be communicated in accordance with
such established procedures.
If the Trustee receives a direction which in the Trustee's determination is
incomplete, was not communicated in accordance with established procedures or
otherwise cannot reasonably be executed, the Trustee shall promptly inform the
person responsible for such direction and shall take no further action pending
receipt of proper directions from such person.
4.9 PROTOTYPE SPONSOR. Nothing in the Plan or this Trust Agreement shall
prevent the Prototype Sponsor or any of its affiliates from engaging in any
transaction with the Plan or the Fund, provided that such transaction does not
(in the opinion of the Prototype Sponsor) constitute a "prohibited transaction"
under ERISA (S)406 or Code (S)4975, and the Employer shall provide such written
documentation as the Prototype Sponsor deems necessary or appropriate to
determine that any such transaction would not be a "prohibited transaction."
To the extent that ERISA or a prohibited transaction exemption requires action
by an individual independent of the Plan Sponsor and its affiliates or their
employers, officers and directors, then the Employer, the Plan Administrator, an
Investment Manager, a Participant or a Beneficiary shall have full power and
authority to take action on behalf of the Fund as necessary to satisfy ERISA or
such exemption provided such person otherwise is authorized to act under this
Trust Agreement.
4.10 VOTING OF PROXIES. Except as provided in this (S)4(j), the person with the
responsibility to manage and invest all or a portion of the Fund shall have the
exclusive authority and responsibility
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for voting proxies with respect to investments held for such portion of the Fund
and the Trustee shall be obligated to vote such proxies only in accordance with
the directions of such person and shall be precluded from voting such proxies
except in accordance with such directions.
However, the Plan Administrator, as a Named Fiduciary, may reserve to itself the
right to vote proxies with respect to any investments which are otherwise
subject to the management and control of an Investment Manager and, in such
event, the Investment Manager shall be precluded from voting such proxies.
SECTION 5. BENEFIT PAYMENTS
No disbursement from the Fund shall be made by the Trustee for purposes of the
payment of any Plan benefit except on the written direction of the Plan
Administrator, and the Trustee shall have no duty or obligation whatsoever to
inquire as to the accuracy of such direction or its propriety in light of the
provisions of the Plan, ERISA or the Code. Upon written direction (which may be
a continuing direction) from the Plan Administrator as to the name of any person
to who payment is to be made from the Fund and when such payment is to be made
and the amount and manner of such payment, and consistent with the income tax
withholding requirements, the Trustee shall draw checks, purchase annuity
contracts or distribute other assets from the Fund in the name of the person
designated by the Employer and deliver such checks, contracts or other assets in
such manner and in such amounts and at such times as the Plan Administrator
shall direct or, if appropriate, the Trustee shall make an electronic transfer
to the account of such person designated by the Plan Administrator in such
amounts and at such times as the Plan Administrator shall direct.
If SBSTC is the Trustee, all payments to be paid by means of a check from the
Trustee shall be paid from a non-interest bearing checking account to be
maintained with an affiliate of the Trustee. Prior to executing this Trust
Agreement, the Employer shall determine that such checking account services are
(1) necessary to the operation of the Plan, (2) furnished under an arrangement
which is reasonable and (3) furnished for reasonable compensation.
In the event the Trustee shall deem it necessary to withhold any distribution
pending compliance with legal requirements with respect to probate of xxxxx,
appointment of personal representatives, payment or provision for estate or
inheritance taxes, or for death duties or otherwise, the Trustee shall notify
the Plan Administrator and shall thereafter take no action pending receipt of
the Plan Administrator's instructions to distribute and an agreement from the
Plan Administrator, in form satisfactory to the Trustee, protecting it from any
liability arising out of noncompliance with such requirements.
The Plan Administrator may in its discretion direct, and the Trustee shall make
payment on such direction, that Plan payments be made (1) directly to an
incompetent or disabled person, whether because of minority or mental or
physical disability, (2) to the guardian or to the person having custody of such
person if a court of competent jurisdiction has appointed such guardian or
custodian, or (3) to any person designated or authorized under any state statute
to receive such payments on behalf of such incompetent or disabled person
without further liability either on the part of the Employer, the Plan
Administrator or the Trustee for the amount of such payment to the person on
whose account such payment is made.
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In the case of a termination, partial termination, a complete discontinuance of
contributions or the termination of participation by a Participating Affiliate
as described in (S)14.5 of the Plan, the Plan Administrator shall direct the
Trustee precisely as to what action to take and the Trustee (subject to the
terms of this Trust Agreement and the Plan and to such terms and conditions, if
any, as agreed upon between the Plan Administrator and the Trustee) shall follow
such directions.
The Plan Administrator shall determine anticipated liquidity requirements to
meet project benefit payments for each Plan ear and, if any adjustment from the
practices and policies agreed upon between the Plan Administrator and the
Trustee at the adoption of this Trust Agreement is deemed appropriate, notice of
such adjustment shall be communicated by the Plan Administrator in writing as
soon as practicable to the Trustee. The Trustee shall be under no duty to make
any such adjustment prior to receiving notice.
SECTION 6. VALUATION AND ACCOUNTING BY TRUSTEE
The Trustee as of each Valuation Date shall determine the fair market value of
the assets of the Fund (or, if more than one Fund is combined for investment
purposes, of each such Fund) based upon such reasonable accounting principles,
practices and procedures as he Trustee shall adopt and consistently apply for
this purpose, which determination shall be final and binding. At such times as
agreed upon between the Trustee and the Plan Administrator, the Trustee shall
file with the Plan Administrator a written report setting forth such fair market
value and all investments, receipts and disbursements and other transactions of
the Fund since the date of the last such report.
Upon the expiration of 90 days from the filing of the Trustee's report and
except as provided under ERISA, the Trustee shall be forever relieved and
discharged from any liability or accountability to anyone with respect to the
propriety of its actions or the transactions shown by such report except with
respect to those acts or transactions to which the Plan Administrator or the
Employer shall, within such 90 day period, have filed with the Trustee is
written disapproval, and neither the Plan Administrator nor the Employer nor any
other person shall have the right to demand or be entitled to any further or
different accounting by the Trustee.
SECTION 7. EXPENSES
All reasonable and proper expenses of the Plan and the Fund (within the meaning
of ERISA (S) 403(c)(1) and (S)404(a)(1)(A), including any taxes which may be
levied or assessed against the Trustee on account of the Fund and the Trustee's
compensation as agreed upon from time to time by the Employer and the Trustee,
shall be paid from the Fund unless (a) the payment of such expense would
constitute a "prohibited transacted" within the meaning of ERISA (S)406 or Code
(S)4975 or (b) the Employer pays such expenses. Any such expenses of the Fund
which are properly allocable to an individual's Account (including, but not
limited to, expenses related to an individual's investment directions, annuity
contract purchases and other transactional fees for processing distributions)
may be charged directly against such individual's Account if so provided in
administrative procedures established by the Plan Administrator. No payments
shall be made to a Trustee who also receives full-time pay from the Employer or
from a Participating Affiliate except for his or her benefits, if
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any, from the Plan and the reimbursement of his or her reasonable and proper
expenses as a Trustee which are not reimbursed by any other person.
SECTION 8. RESIGNATION OR REMOVAL OF TRUSTEE
The Trustee may resign at any time by delivering its written resignation to the
Employer. The Employer shall within 60 days after receipt of such resignation
appoint a successor trustee in writing (acceptable to this purpose to the
Employer and the successor trustee) delivered to the Trustee and to such
successor trustee. The Employer may remove the Trustee at any time and appoint
a successor trustee or trustees upon 60 days written notice to the Trustee
unless the Trustee agrees to a shorter notice period. In either event, on the
appointment of such successor, the Trustee shall promptly turn over to such
successor all assets held by the Trustee and shall make a final accounting to
the Plan Administrator and the Employer. The successor trustee shall have no
responsibility except to receive such money and property from the Trustee and to
hold and administer the same thereafter in accordance with this Trust Agreement
and shall not be responsible for any act or omission of the Trustee, and shall
not be required to make any claim or demand against the Trustee unless the Plan
Administrator or the Employer shall in writing request the successor trustee to
make a claim or demand against the Trustee. Any such successor trustee shall
have and may exercise all the rights, powers, and duties of the Trustee as fully
and to the same extent as if it had originally been named Trustee herein.
SECTION 9. MERGERS, CONSOLIDATIONS AND ASSET TRANSFERS
The Trustee upon written direction of the Plan Administrator shall transfer and
deliver Fund assets to or accept the transfer to the Fund of assets acceptable
to it from any trustee, custodian or insurance carrier maintaining any
investment medium of a pension or profit sharing plan which is tax exempt under
Code (S)401(a) into which the Plan (or any portion thereof) shall be merged or
consolidated.
In the case of any Plan merger or consolidation with, or transfer of assets or
liabilities to or from, any other employee benefit plan, each person for whom an
Account then is maintained shall be entitled to receive a benefit from such
plan, if it is then terminated, which is equal to or greater than the benefit
such person would have been entitled to receive immediately before such merger,
consolidation or transfer, if the Plan then had been terminated. The Trustee in
connection with either of the above described transfers shall have no liability
or responsibility (1) to determine whether such transfer shall be in conformity
with the provisions of the Plan, any other plan, ERISA or the Code or (2) to
determine the effect of such transfer upon any Accounts. Any direction of the
Plan Administrator respecting any of the foregoing shall constitute a
certification that the transfer so directed is in conformity with the provisions
of the Plan or any other plan, this Trust Agreement, ERISA and the Code, and the
Trustee shall act in accordance with such direction.
SECTION 10. SINGLE TRUST - SEPARATE FUNDS
The assets of the Fund (or, if more than one Fund is combined for investment
purposes, of each such Fund) shall be held, administered, invested and managed
by the Trustee (except to the extent
126
investment responsibility is allocated to another person under the terms of this
Trust Agreement) consistent with the terms of this Trust Agreement in all
respects as a single trust even through portions of such assets may be
attributable to different employers or may be allocable to the payment of
benefits for different employee groups. The Plan Administrator shall be
responsible to maintain and determine the appropriate portion of the Fund held
in respect to any such group of employees in the event that such maintenance or
determination shall become necessary. The determination by the Plan
Administrator of the portion of the Fund held in respect of any such employee
group shall be final and conclusive upon all persons.
SECTION 11. NAMED FIDUCIARIES AND ADMINISTRATION
The Plan Administrator and the Employer (if the Plan Administrator is not the
Employer) shall be the Named Fiduciaries responsible to the extent of their
powers and responsibilities assigned in the Plan for the control, management and
administration of the Plan. The Plan Administrator, the Employer and the
Trustee (other than SBSTC) shall be the Named Fiduciaries responsible to the
extent or their respective powers and responsibilities assigned to them in the
Trust Agreement for the safekeeping, control, management, investment and
administration of the assets of the Fund. Any power or responsibility for the
control, management or administration of the Plan or the Fund which is not
expressly assigned to a Named Fiduciary under the Plan or the Trust Agreement,
or with respect to which the proper assignment is in doubt, shall be deemed to
have been assigned to the Employer as a Named Fiduciary. One Named Fiduciary
shall have no responsibility to inquire into the acts and omissions of another
Named Fiduciary in the exercise of powers or the discharge of responsibilities
assigned to such other Named Fiduciary under the Plan or the Trust Agreement.
Any person may serve in more than one fiduciary capacity under the Plan or the
Trust Agreement and a fiduciary may be a Participant provided such individual
otherwise satisfies the requirements of (S)4.
A Named Fiduciary, by written instrument filed by the Plan Administrator with
the records of the Plan, may designate a person who is not a Named Fiduciary to
carry out any of its responsibilities under the Plan or Trust Agreement, other
than the responsibilities of the Trustee for the safekeeping, control,
management, investment and administration of the assets of the Fund, except to
the extent the Trustee's responsibility for investment decisions is delegated to
the Employer, the Plan Administrator, or an Investment Manager.
Except to the extent expressly reserved under the Plan or the Trust Agreement to
the Employer, the Board, or the Trustee, the Plan Administrator shall have the
exclusive responsibility and complete discretionary authority to control the
operation, management and administration of the Plan, with all powers necessary
to enable it properly to carry out such responsibilities, including (but not
limited to) the power to construe the Plan, the related Adoption Agreement, and
the Trust Agreement, to determine eligibility for benefits and to resolve all
interpretative, equitable or other questions that arise under the Plan or the
Trust Agreement. The decisions of the Plan Administrator on all matters within
the scope of its authority shall be final and binding. To the extent a
discretionary power or responsibility under the Plan or Trust Agreement is
expressly assigned to a person other than the Plan Administrator, such person or
responsibility and such person's decisions on all matters within the scope of
such person's authority shall be final and binding.
127
SECTION 12. MISCELLANEOUS
12.1 SPENDTHRIFT CLAUSE AND QUALIFIED DOMESTIC RELATIONS ORDERS. Except to the
extent permitted by law, no Account, benefit, payment or distribution under the
Plan or this Trust Agreement shall be subject to attachment, garnishment, levy,
execution, or any claim or legal process of any creditor of a Participant or
Beneficiary, and no Participant or Beneficiary shall have any right to alienate,
commute, anticipate, or assign all or any part of such individual's Account,
benefit, payment or distribution under the Plan or this Trust Agreement. The
preceding sentence also shall apply to the creation, alienation, 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 ("QDRO") within the meaning of Code (S)
414(p) and such order is entered on or after January 1, 1985. Notwithstanding
the foregoing, the Plan Administrator may treat a domestic relations order
entered before January 1, 1985 as a QDRO in accordance with Code (S)414(p) and
(S)16.1 of the Plan.
12.2 BENEFITS SUPPORTED ONLY BY TRUST FUND. Any person having any claim for any
benefit under the Plan shall look solely to the assets of the Fund for the
satisfaction of that claim. In no event will the Prototype Sponsor, the
Trustee, the Plan Administrator, the Employer or a Participating Affiliate or
any of their employees, officers, directors or their agents be liable in their
individual capacities to any person whomsoever for the payment of any benefits
under the Plan.
12.3 CLAIMS. Any payment to a Participant or Beneficiary, or to the legal
representative or heirs-at-law of any such person made in accordance with the
provisions of the Plan shall to the extent of such payment be in full
satisfaction of all claims under the Plan against the Trustee, Plan
Administrator, a Named Fiduciary, the Employer and any Participating Affiliate,
any of whom may require such person, such person's legal representative or
heirs-at-law, as condition precedent to such payment, to execute a receipt and
release in such form as shall be determined by the Trustee, Plan Administrator,
a Named Fiduciary, the Employer or a Participating Affiliate, as the case may
be.
12.4 NONREVERSION. Except as provided in (S)7.2(b) of the Plan and in this
(S)12(d), neither the Employer nor any Participating Affiliate shall have any
present or prospective right, claim, or interest in the Fund or in any Employer
contribution made to the Trustee.
To the extent permitted by the Code and ERISA, the Employer contributions
described in this (S)12(d), less any losses on such contributions, shall be
returned by the Trustee to the Employer or to any Participating Affiliate upon
the written direction of the Plan Administrator in the event that:
12.4(a) an Employer contribution is made by a mistake of fact, provided
such return is effected with one year after the payment of such
contribution;
12.4(b) a final judicial or Internal Revenue Service determination is made
that the Plan fails to satisfy the requirements of Code (S)401 with respect
to its initial qualification (provided, if the Employer is not entitled to
rely on the Prototype Sponsor's opinion letter, the application for the
initial qualification of the Plan 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
128
Secretary of the Treasury may prescribe), in which even all Employer
contributions made before such judicial or administrative determination
(whichever last occurs) plus any earnings and minus any losses shall be
returned within one year after such determination, all such contributions
being hereby conditioned upon the Plan satisfying all applicable
requirements under Code (S)401 from and after its adoption; or
12.4(c) a deduction for an Employer contribution is disallowed under Code
(S)404, in which event such contribution shall be returned within one year
after such disallowance, all such contributions being hereby conditioned
upon being deductible under Code (S)404.
The Trustee shall have no obligation or responsibility whatsoever to determine
whether the return of any such Employer contributions is permitted by the Code
or ERISA and shall (to the extent permissible under law) be indemnified and held
harmless by the Employer for acting in accordance with written directions given
by the Plan Administrator pursuant to this (S)12(d).
12.5 EXCLUSIVE BENEFIT. The corpus or income of the Fund shall not be diverted
to or used for any purpose other than the exclusive benefit of Participants or
Beneficiaries.
129
